Aditya Birla Annual Report.pdf

8/14/2019 Aditya Birla Annual Report.pdf

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ADITYA BIRLA NUVO LIMITED


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Mr. Aditya BirlaWe live by his values.Integrity, Commitment, Passion, Seamlessness and Speed.


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Annual Report 2012-2013 i

Aditya Birla Nuvo Limited THE CHAIRMANS LETTER TO SHAREHOLDERS

Dear Shareholders,

The global scenario

Across the world in 2012, the economyremained a worry. Global GDP fell to 3.2%compared to 4% in 2011. Many of thesystemic vulnerabilities continued. Amongthese were fiscal fragility, hidden andunknown risks of financial derivativeinstruments and the problems of the weakerEurozone economies. The increasing

instances of political gridlock aggravated thesituation.

While these are not totally left behind, thereare strong positives. The unwinding offinancial leverage, several rounds of liquidityinjections, with Japan also joining in augur wellfor the global economy. Alongside, continuinglow interest rates, sharp corrections in

commodity and energy prices, and a modestrecovery in the US housing market ring in adegree of optimism. Furthermore, the privatecorporate sector seems on the path tostepping up investment outlays. Thankfully,the worst case outcomes have been averted.The US has not fallen off the fiscal cliff.And, despite the recent financial shocks inCyprus, the government bond yields have

fallen. The global economy has clearly showna lot of resilience.

The global economy is now moving on to asurer recovery mode. The IMF projects growth


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ii Annual Report 2012-2013

MANAGEMENTS DISCUSSION AND ANALYSISAditya Birla Nuvo Limited THE CHAIRMANS LETTER TO SHAREHOLDERS

at 3.25% in 2013, increasing to 4.0% in 2014. The GDPgrowth in emerging markets and developing countries isplaced at 5.3% in 2013, increasing to 5.7% in 2014.The US GDP is expected to grow 1.9% in 2013, risingsharply to 3.0% in 2014. Europe will remain a laggard,with de-growth at -0.3% this year, and inching to just over1% in 2014. Chinas growth will scale back from its recentdouble digit levels to 7-8%, which is still respectable.

Developments on the global front undeniably dentedIndias growth level, besides the issues at home.

The Indian economy ongoing resilience

Slow growth, investor diffidence, the rupee falling to anall time low, power outages and a poor monsoon addedto the countrys woes. High commodity prices and supplyconstraints of critical raw material, such as coal and naturalgas, further compounded the problem. Unsurprisinglythen, Indias GDP growth slowed markedly in 2012-13,to 5%, down from 6.2% in the previous year.The manufacturing sector recorded a growth of only

1.9% in 2012-13, down from 2.7% in 2011-12. Exportgrowth in 2012-13 was 5.1%, compared to 15.3% in theprevious year.

There are good signs, as we move into the fiscal201314. There have been some positive policydevelopments in recent months. These include a declinein interest rates and a move towards market-based pricingfor diesel and petrol. If this pricing flexibility persists, itcould make a considerable dent in the subsidy bill. Theexpectation of a normal monsoon is a positive, goingforward.

In the FY 2013-14, the GDP growth is projected to risemodestly to around 6.0% with much of the improvementlikely only in the second half of the year. Industrial activitywill continue to be adversely affected by regulatorybottlenecks. The recent decline in commodity prices,

In the face of all these

odds, for the Financial

Year 2012-13, your

Company has posted anoteworthy performance.

Its consolidated revenues

grew by 17% to

USD 4.75 billion

( ` 25,490 Crore) and

EBITDA at USD 767

million ( ` 4,142 Crore)

rose by 27%. Net profitis up by 19% at USD 196

million ( ` 1,059 Crore).


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Annual Report 2012-2013 iii


particularly of crude oil, and continuing buoyancy of FIIsinflows will pave the way for greater exchange ratestability, and a moderation of inflation. The RBI projects a5.5% increase in the wholesale price index in the

FY 2013-14, down from 7.3% in the previous year.

These developments affect your Companys growth andperformance.

In the face of all these odds, for the Financial Year2012-13, your Company has posted a noteworthyperformance. Its consolidated revenues grew by 17% toUSD 4.75 billion ( ` 25,490 Crore) and EBITDA at USD 767million ( ` 4,142 Crore) rose by 27%. Net profit is up by19% at USD 196 million ( ` 1,059 Crore). Most of thebusinesses of your Company have done very well.Let me apprise you briefly on each business.

On the Financial Services business, I am pleased to statethat it has become a significant player in the non-bankingspace with 8 verticals. Its performance has beennoteworthy with consolidated revenue of USD 1.2 billionand EBITDA at an all time high of USD 152 million. Itsmarket share across all its verticals is on a continuousgrowth mode. Financial Services business is the largestcontributor to your Company's profits and generates ahealthy 31% return on average capital employed.

Today, between our Life Insurance and AssetManagement businesses, we manage around USD 20billion of assets making us a top 5 fund manager in thecountry, excluding LIC. The Life Insurance business

continues to be in the 5th position. The AssetManagement business, ranked 4th, is one of the fastestgrowing AMC's in the industry. The Lending business hasdoubled its book size. The Broking and WealthManagement business continues to be innovative in itsofferings. The General Insurance Broking business hascontinued to gain market share at a scorching paceof growth.

On the Financial Services

business, I am pleased

to state that it has

become a significantplayer in the non-banking

space with 8 verticals.

Its performance has been

noteworthy with

consolidated revenue

of USD 1.2 billion and

EBITDA at an all time

high of USD 152 million.Its market share across

all its verticals is on a

continuous growth mode.


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iv Annual Report 2012-2013


The opening up of the banking sector by the Reserve Bankof India is indeed a forward looking step. For yourCompany, getting into the banking sector is a perfectstrategic fit, given that it completes the bouquet of financial

services that we offer. We are in the process of filing ourapplication and are hopeful of a positive outcome.

Moving to the Telecom sector, Idea has made significantstrides. Its performance has been amazing. Its revenuewas USD 4.15 billion with an EBITDA of USD 1.13 billion.Idea continues to be the fastest growing major telecomoperator, sustaining a growth rate that is 1.5 times that ofthe sector. It is among the select club of mobile operators

globally with about 122 million customers. It is among thetop 10 cellular operators in the world, carrying 1.6 billionminutes of voice calls every day. Besides the voicebusiness, Idea's presence is being increasingly felt in thenew fastest evolving mobile broadband segment.

Over 20% of its existing subscribers generated global scaleInternet Data Traffic at 3.75 billion mega byte per monthon 'Idea's High Speed Mobile Broadband' network. With

a high proportion of Indian mobile subscribers rapidlyupgrading to the latest smartphones and tablets, Idea's3G overlay network presence augurs a huge futurebusiness potential upside.

Madura Fashion & Lifestyle outperformed the industry,registering a growth of 15%. Its sale stood atUSD 467 million. It achieved its highest ever EBITDAat USD 45 million, up by 25% over the previous year.

Three of its brands - Louis Philippe, Van Heusen andPeter England feature among the top 5 apparel brandsin the country. With over 3,000 stores, Madura Fashion& Lifestyle boasts of the largest distribution networkin the country.

The acquisition of Pantaloons Fashion business fromFuture Group this year, is in line with our strategic intent

Idea continues to be the

fastest growing major

telecom operator,

sustaining a growth ratethat is 1.5 times that

of the sector. It is among

the select club of mobile

operators globally with

about 122 million

customers. It is among

the top 10 cellular

operators in the world,

carrying 1.6 billion

minutes of voice calls

every day


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Annual Report 2012-2013 v


to be the leader in this segment. It has enabled us tobecome the largest branded fashion player in the countrythrough an extension into fast fashion segment. For thenine months period ending March 2013, the business

reported revenues of USD 238 million.

In the linen segment, to capitalize on the ever increasingdemand and the marked preference for our linen fabric, acapacity expansion is underway.

In the BPO sector, revenue of Aditya Birla Minacs grewby 18% to USD 457 million. Minacs has marketed newbusiness of a total contract value of USD 230 million. It

has transformed its business over the last few years, with40% of its revenues now coming from Non-Voice services.

In the Agri business, Indo Gulf achieved almost a 40%growth in revenue of USD 542 million ( ` 2,924 Crore)largely led by doubling of its trading business. Though salesvolume of Birla Shaktiman Urea were at an all time highof 1.23 million metric tons, profitability was affected byannual maintenance shutdown for 20 days and a steep

increase in the capital employed on account of subsidyreceivables from the Government.

In the light of the Government's recently announced policyrelating to investments in this sector, our plans for1.3 million tons urea expansion at your Company's existingplant in Jagdishpur (Lucknow), have been blue printed.After greater clarity on the allocation of natural gas is speltout, we will roll out the brownfield venture.

In the Rayon business, I very proudly share the fact thatwe continue to enjoy the stellar position of the largestIndian exporter of Viscose filament yarn - for the 8th yearin a row. The business deserves kudos on its profitabilitynumbers as well.

The Insulators business witnessed a challenging year dueto cheaper imports from China. Power Projects in the

Madura Fashion &

Lifestyle outperformed

the industry, registering

a growth of 15%.Its sale stood at USD 467

million. It achieved its

highest ever EBITDA

at USD 45 million, up by

25% over the previous

year. Three of its brands -

Louis Philippe,

Van Heusen andPeter England feature

among the top 5 apparel

brands in the country.

With over 3,000 stores,

Madura Fashion &

Lifestyle boasts of the

largest distribution

network in the country.


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vi Annual Report 2012-2013


pipeline at the national level have been deferred and thishas also put the brakes on the Insulator sector's growth.

With your approval, your Company has decided to exit

from the Carbon Black business, given the limitation ofscale and sector dynamics. Its divestment as goingconcern is underway.

Outlook

Your Company has a very strong balance sheet, robustcash flows, and gearing levels well within reasonablelimits. The proceeds from the divestment of the CarbonBlack business and the remaining equity infusion by yourCompany's promoters will add additional heft.

As you are aware both Idea Cellular and Birla Sun LifeInsurance have started distributing dividend. This reflectsthe beginning of generating returns on long terminvestments. It bolsters the confidence of our multiplestakeholders.

From its position of strength, your Company is indeed all

set to scale higher peaks.

To our Teams

I thank all of our teams. For most of our employees, I cansay with certitude that their commitment towards theirresponsibility to give results has been incrediblyoverwhelming. They have enriched your Company anddetermined its course over the years. I am confident thatas we move into an even higher growth trajectory, ourpeople will continue to rise to the increasing demands oftheir work.

The Aditya Birla Group in perspective

Over the last two years, significant changes have impactedthe global and domestic business scenario. Given ourresilience, our Group has managed to weather the storm.

Your Company has a

very strong balance

sheet, robust cash flows,

and gearing levels wellwithin reasonable limits.

The proceeds from the

divestment of the

Carbon Black business

and the remaining equity

infusion by your

Company's promoters

will add additional heft.


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Annual Report 2012-2013 vii


Our consolidated revenue at US 42 billion dollars ismarginally above that of the last year.

I believe, that if we have been able to sustain our revenues,

it is because of the quality of our 136,000 strong workforcespread over 36 countries and 42 nationalities. The hallmarkof our overall leadership development efforts has beenour belief in taking bets on our people. And it has indeedpaid off.

Our entrepreneurial DNA also encourages risk takingwhich includes taking risks with people, of course withsafety nets. We believe that people are endowed with

immense capability our task is to spot them, early intheir careers and provide them with suitable opportunitiesto try their hand at and test their skills. Our investment inpeople processes has enabled us have a robust bench-strength of talent. Our entire focus is on ensuring that wealways remain a meritocracy. This pool of talent isdeveloped through a series of planned exposures,assignments and training opportunities, so that they areprepared to take on leadership roles as and when these

emerge.

Let me elucidate these aspects with an overview of ourtalent management and leadership developmentprocesses.

Two new programmes, namely, Step UP and TurningPoint have been launched. These aim primarily toprepare Departmental Heads and Functional Heads for

the next stage of their career development as Functionalheads and Cost Centre heads respectively. The first pilotbatches have already undergone the initial rounds oftraining. These programmes will be furtherinstitutionalised.

Last year, I had alluded to the launch of our P&L Leaders Development Program , called The Cutting Edge .

Our entrepreneurial DNA

also encourages risk

taking which includes

taking risks with people,of course with safety

nets. We believe that

people are endowed

with immense capability

our task is to spot

them, early in their

careers and provide

them with suitableopportunities to try their

hand at and test their

skills. Our investment in

people processes has

enabled us have a

robust bench-strength

of talent. Our entire

focus is on ensuring

that we always remain

a meritocracy.


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viii Annual Report 2012-2013


The objective of this programme is to prepare our high-performing functional heads to take on P&L roles.The programme has taken off to a solid start. The firstbatch of participants has been already absorbed in the

global immersion programme across 4 different countries.The second batch of The Cutting Edge will soon starttheir programme.

To augment talent on the technical side, we have alsobeen hiring, for the first time, a select set of manufacturingprofessionals directly at the Group level. The first grouphas already moved into our businesses.

Our in-house learning university Gyanodaya is a globallybench-marked institution. It leverages resources fromaround the world to meet the development needs of ourleadership. Last year, it had 28,000 touch points andpartnered with several external institutions andcorporations for collaborative learning. More than a1,000 executives take courses at Gyanodaya each year.

Furthermore, we have institutionalised global careerpathsdriven both by the individual and the organisationsneeds. To a great extent, this allows an individual to takecharge of his own career. We leverage vacancies acrossthe Group and stimulate talent mobility by identifying andmoving leaders across geographies and functions and intonew roles as part of their career development.Development for us, today, means providing peopleopportunities to learn from their work rather than takingthem away from their work to learn.

Let me give you some statistics relating to fast tracking oftalent. Since April 2011, from our management cadre,comprising of 37,600 colleagues, 15%, i.e. 5,824 havebeen promoted; 18% i.e. 6,481 have moved roles; and12%, i.e. 4,543 have moved location.

Additionally, we seek feedback in an institutionalised wayand conduct conversations with our people across the

Our in-house learning

university Gyanodaya

is a globally bench-

marked institution.It leverages resources

from around the world

to meet the development

needs of our leadership.

Last year, it had

28,000 touch points and

partnered with several

external institutions andcorporations for

collaborative learning.

More than a 1,000

executives take

courses at Gyanodaya

each year.


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Annual Report 2012-2013 ix


Group to gauge their engagement with our Group.We call it Vibes. The Vibes survey is carried out by aglobal reputed external HR research agency. This year,94% of our 35,000 Executives participated in the Vibessurvey, which is an indication of their engagement withthe Group. It was very heartening for me to see that 92%of employees have an overwhelming sense of pride inour Group. More than 80% are engaged employees and,again, over 90% say that they understand the connectbetween their work and goals of business.

Today, we are reckoned as an Employer of Choice thatoffers a World of Opportunities for talent.

I take great pride in sharing with you that our Group (AdityaBirla Group) has topped Nielsens Corporate Image Monitor2012-13. An extract from their media release wouldinterest you

Aditya Birla Group has emerged as the Number 1 corporate, the Best in Class across all the six pillars of Corporate Image, according to the annual Corporate Image Monitor 2012-13, conducted by Nielsen, a leading global provider of insights and information into what consumers watch and buy. The six pillars of Corporate Image comprise of Product and Service Quality, Vision and Leadership,Workplace Management, Financial Performance,Operating Style and Social Responsibility.

Nielsens Corporate Image Monitor measures the reputation of the 40 leading companies in India across sectors and serves as an important indicator of the strength of the corporate brand.

The survey was conducted among policy makers, thefinancial media, financial analysts, investors, professionalsfrom the corporate sector and the general public across7 metros. The 40 corporates covered in this survey wereselected using The Economic Times-500 and the Business

It was very heartening

for me to see that 92%

of employees have an

overwhelming sense ofpride in our Group.

More than 80% are

engaged employees and,

again, over 90% say

that they understand

the connect between

their work and goals

of business.Today, we are reckoned

as an Employer of

Choice that offers a

World of Opportunities

for talent.

I take great pride in

sharing with you that

our Group (Aditya Birla

Group) has topped

Nielsens Corporate

Image Monitor 2012-13.


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x Annual Report 2012-2013

MANAGEMENTS DISCUSSION AND ANALYSISAd i tya B i rla Nuvo L imi ted THE CHAIRMANS LETTER TO SHAREHOLDERS

Today-500 list of l isted co m pan ies . N ielsen is a globalm arket research co m pany, headquartered in New York andoperat ing in 60 countr ies .

In sum

Let m e conclude that we have strong Balance Sheets,robust cash-flows and gear ing levels well w i th inreasonable l imi ts . The global presence of our Group andthe exper ience of operat ing in 36 countr ies invests us w iththe strength to acqu ire assets or grow organ icallyanywhere in the world in d ifferent bus iness env iron m ents .

And f inally, our indo mi table strength of runn ing low cost,h ighly eff ic ient and vastly product ive operat ions, throughour e m bedded culture of cont inuous im prove m ent andinnovat ion, w ill see us through good t im es as well astough t im es .

Yours s incerely,

Kum ar Mangala m B irla

Our indomitable strength

of running low cost,

highly efficient and

vastly productiveoperations, through our

embedded culture of

continuous improvement

and innovation, will see

us through good times

as well as tough times.


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* As on 29 th May 2013

A premium conglomeratehaving leadership position

across businessesAditya Birla Nuvo is a USD 4.75 billion premium conglomerate.It commands leadership position in India across its FinancialServices, Fashion & Lifestyle, elecom, I -I eS and Manufacturingbusinesses. Te Company has built many large scale businessesfrom scratch. Mergers and acquisitions have also played a key rolein the Companys transformational journey from a manufacturingcompany in late nineties to a premium conglomerate today.

During this journey, the consolidated revenue of Aditya Birla Nuvohas risen 20 times to ` 25,490 Crore and its market capitalisationhas grown 23 times to ` 13,000 Crore (USD 2.4 billion)*.

oday, the Company touches lives of about 125 million Indians.It offers varied products and services through more than 30 popularbrands to meet their life assurance, investment, consumption,agri and fashion & lifestyle needs. Idea Cellular, Louis Philippe, VanHeusen, Allen Solly, Peter England, Pantaloons, Linen Club,Birla Sun Life Insurance, Birla Sun Life Mutual Fund, Birla Shaktimanare among the most trusted and admired brands in India.

Te Company is trusted by more than 146,000 shareholders and isanchored by a talented human asset of over 69,000 employees.

Supported by a strong balance sheet, an experienced managementteam, salient brand equity and leadership position acrossthe businesses, Aditya Birla Nuvo will continue to tap growthopportunities and create value for all the stakeholders.

Aditya Birla Nuvo is proud to be part of the Aditya Birla Group.A USD 42 billion multinational headquartered in India,Aditya Birla Groups operations are spread over 36 countriesacross 6 continents.


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Aditya Birla Financial Services ranks among the top 5 fund managersin India, excluding LIC. With a wide presence across the life insurance,asset management, NBFC, private equity, broking, wealth managementand general insurance advisory businesses, it serves the end-to-endnancial services needs of its retail and corporate customers.

Funds under management of ` 107,560 Crore (USD 20 billion)Lending book of more than ` 8,000 Crore (USD 1.5 billion)Revenue of ` 6,390 Crore (USD 1.2 billion)

rusted by about 5 million customersA nationwide presence through about 1,550 branches/ touch pointsand 160,000 agents / channel partners

Among the top 5 fund managers

Financial Services


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Fashion & Lifestyle business of Aditya Birla Nuvo is the largest branded apparel player in India,

selling one branded apparel every second and redening fashion & style quotient of millions ofIndians.

Marquee Brands: Louis Philippe, Van Heusen, Allen Solly, Peter England, Planet Fashion,Collective, People, Pantaloons, Linen ClubNationwide presence through 1,443 exclusive brand outlets / stores across 3.7 million sq.ftReaching customers through more than 4,750 multi brand outlets and departmental storesAnnualised revenue of USD 1 billion

Madura revolutionised Indias branded apparel retail market and issynonymous with panache and modernity.

Louis Philippe and Van Heusen are the best selling brands in India

Focusing on Fresh Fashion, Pantaloons has emerged as a strong brand inthe fashion industry over past two decades.

About 4 million loyalty card members - one of the largest in the sector

Jaya Shree extiles led the successful journey of linen from a commodityproduct to a lifestyle symbol.

Te largest manufacturer of Linen Yarn and Linen Fabric in India

The largest branded apparel player

Fashion & Lifestyle


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Idea Cellular, the telecom venture of Aditya Birla Nuvo, is the 3 rd largestcellular operator in India with 121.6 million subscribers as on 31 st March2013. It has been the biggest revenue market share gainer in India sincepast four years.

Ranks among the top 10 cellular operators in the world with 1.6 billionminutes of voice usage per dayA USD 8 billion (about ` 45,000 Crore as on 29 th May 2013) companyby market capitalisationA USD 4.2 billion (About ` 22,400 Crore) company by revenue sizeCommands the highest active subscribers ratio in the IndustryOutperforming the industry as a Mobile Number Portability providerHolds a 16% stake in Indus towers, the worlds largest tower company

The fastest growing telecom major

Telecom


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Aditya Birla Minacs is a business process outsourcing solutions providerthat partners with global corporations and works towards enhancingclients revenue, protability and quality of customer service.

Ranks 6 th among Indian BPO companies by revenue sizeRevenue reached ` 2,500 Crore (USD 457 million) markServing several Fortune 500 clients20,500 experts delivering superior business value to clientsGlobal delivery capabilities across 3 continents and 35 centersspanning Canada, Germany, Hungary, India, Jamaica, Philippines,the UK and the USA

A global business solution provider

IT-ITeS


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`

Agri


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The largest Indian VFY exporter

Rayon


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Insulators are used in power generation, transmission and distribution.Global clientele of Aditya Birla Insulators include ABB, Areva, Siemens,leading power utilities, Power Grid Corporation of India etc.

Indias largest and Worlds 4 th largest manufacturer of porcelainInsulatorsDelivering world-class quality by leveraging more than four decadesof the technical expertise

Largest manufacturer of insulators

Insulators


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The fourth largest assetmanagement company in India

Among the top six IndianBPO companies

Among the top ive private lifeinsurers in India

The third largest cellularcompany in India

A leading NBFC in India

The largest producer of linenyarn and linen fabric in India

Evolve EverydayIndias #1 premium lifestyle brand

for men, women and youth

Indias leading super premiumlifestyle brand for men

Famous for creating the concept ofFriday Dressing and premium casual wear

BrandscapeBrandscapeBrandscapeBrandscapeBrandscapeBrandscapeBrandscapeBrandscapeBrandscapeBrandscape

Annual Report 2012-2013


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A complete agri solutions providerto farmers

The largest exporter andsecond largest manufacturer ofviscose ilament yarn in India

Indias largest and worlds fourthlargest manufacturer of Insulators

Private equity investment advisor and manager

A leading broking andwealth management player in India

A leading general insuranceadvisory company in India

Indias irst luxury lifestyleconcept storeIndias most loved menswear brand

Among the top two large formatfashion retailers in India



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Aditya Birla Nuvo Limited


BOARD OF DIRECTORS

Clock-wise:Mr. Kumar Mangalam Birla - Chairman,

Mrs. Rajashree Birla - Non-Executive Director, Dr. Rakesh Jain - Managing Director,Mr. Lalit Naik - Dy. Managing Director, Mr. Sushil Agarwal - Whole - Time Director & CFO

Mr. B. L. Shah - Non-Executive Director, Mr. G. P. Gupta - Independent Director,Ms. Tarjani Vakil - Independent Director, Mr. P. Murari - Independent Director,

Mr. S. C. Bhargava - Independent Director, Mr. T. Chattopadhyay - Independent (Nominee) Director,Mr. B. R. Gupta - Independent Director.


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CORPORATE INFORMATION

MANAGING DIRECTOR

Dr. Rakesh Jain

DEPUTY MANAGING DIRECTOR

Mr. Lalit Naik

WHOLE-TIME DIRECTOR &

CHIEF FINANCIAL OFFICER

Mr. Sushil Agarwal

COMPANY SECRETARY

Mr. Devendra Bhandari (upto 31 st July, 2013) Mrs. Hutokshi Wadia (w.e.f 1 st August, 2013)

ADITYA BIRLA FINANCIAL SERVICES

Mr. Ajay Srinivasan Chief Executive Officer

Mr. Pankaj Razdan Dy. Chief Executive Officer

RAYON

Mr. Lalit Naik Business DirectorDr. Bir Kapoor President

AUDITORS

Khimji Kunverji & Co.S.R Batliboi & Co. LLP

OTHER BRANCH AUDITORS

K. S. Aiyar & Co.Deloitte Haskins & Sells

TELECOM

Mr. Himanshu Kapania Business Head

IT-ITeS

Dr. Rakesh Jain Business DirectorMr. Deepak Patel Chief Executive Officer

FASHION & LIFESTYLE

Mr. Pranab Barua Business Head

(Branded Apparels)Mr. Ashish Dikshit Chief Executive Officer

(Madura Fashion & Lifestyle)

Mr. Shital Mehta Chief Executive Officer(Pantaloons Fashion)

Mr. Thomas Varghese Business Head (Textiles)

Mr. S. Krishnamoorthy President - Jaya Shree Textiles

AGRI & INSULATORS

Dr. Rakesh Jain Business Director

Mr. Lalit Naik Business Head

Mr. Raj Narayanan Chief Executive Officer

SOLICITORS

Amarchand & Mangaldas & Suresh A. Shroff & Co.Mulla & Mulla and Craigie, Blunt & Caroe

SENIOR MANAGEMENT TEAM


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Aditya Birla Nuvo Limited CONTENTS


1Notice

13 Aditya Birla Nuvo : A Snapshot

18 Financial Highlights

20 Management Discussion and Analysis

50 Directors Report

65 Business Responsibility Report

73 Corporate Governance Report

83 Shareholders Information

93 Social Report Towards Inclusive Growth

97 Environment Report Sustainable Development

99 Standalone Financial Statements

157 Consolidated Financial Statements

223 Form of Proxy & Attendance Slip


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Annual Report 2012-2013 1

N O T I C E

Aditya Birla Nuvo Limited NOTICE

NOTICE is hereby given that the FIFTY-SIXTHAnnual General Meeting of the Members ofADITYA BIRLA NUVO LIMITED will be held atthe Registered Office of the Company at IndianRayon Compound, Veraval - 362 266, Gujarat, onFriday, the 6 th September, 2013, at 11.30 a.m. to

transact, with or without modification(s), as maybe permissible, the following businesses :

ORDINARY BUSINESS:

1. To receive, consider and adopt the AuditedBalance Sheet as at 31 st March, 2013, and theStatement of Profit and Loss for the yearended 31 st March, 2013, and the Report of theDirectors and Auditors thereon.

2. To declare dividend on the Equity andPreference Shares of the Company for the yearended on 31 st March, 2013.

3. To appoint a Director in place of Mr. Kumar

Mangalam Birla, who retires from office byrotation and, being eligible, offers himself forre-appointment.

4. To appoint a Director in place of Mr. G. P. Gupta,who retires from office by rotationand, being eligible, offers himself forre-appointment.

5. To appoint a Director in place of Mr. T.Chattopadhyay, who retires by rotation and,being eligible, offers himself for re-appointment.

6. To consider and, if thought fit, to pass thefollowing resolution as an Ordinary Resolution

relating to the appointment and remunerationof Statutory Auditors of the Company : RESOLVED THAT in conformity with theprovisions of Section 224 and other applicableprovisions, if any, of the Companies Act, 1956,M/s. Khimji Kunverji & Co., CharteredAccountants (Reg. No. 105146W), andM/s. S. R. Batliboi & Co. LLP, CharteredAccountants (Reg. No. 301003E), the retiringAuditors, be and are hereby, re-appointed asthe Joint Statutory Auditors of the Company,to hold office as such from the conclusion ofthis Annual General Meeting until the

conclusion of the next Annual General Meetingof the Company, at such remuneration to eachof them, as may be decided by the Board/AuditCommittee of the Board, plus reimbursementof out-of-pocket expenses as may be incurredin the performance of their duties (excludingService Tax, if any).

7. To consider and, if thought fit, to pass thefollowing resolution as an Ordinary Resolutionrelating to the appointment and remunerationof Branch Auditors of the Company :

(i) RESOLVED THAT pursuant to theprovisions of Section 228 and otherapplicable provisions, if any, of theCompanies Act, 1956, M/s. KhimjiKunverji & Co., Chartered Accountants,(Reg. No. 105146W) the retiring Branch

Auditors, be and are hereby, re-appointedas the Branch Auditors of the Company toaudit the accounts in respect of theCompanys Hi-Tech Carbon Division,Renukoot, Hi-Tech Carbon Division,Gummidipoondi, Hi-Tech Carbon Division,Patalganga, Aditya Birla Insulators, Rishra,and Aditya Birla Insulators, Halol, to holdoffice as such from the conclusion of thisAnnual General Meeting upto theconclusion of the next Annual GeneralMeeting of the Company, at suchremuneration, as may be decided by the

Board/Audit Committee of the Board, plusreimbursement of out-of-pocket expensesas may be incurred in the performance oftheir duties (excluding Service Tax, if any).

(ii) RESOLVED THAT pursuant to theprovisions of Section 228 and otherapplicable provisions, if any, of theCompanies Act, 1956, M/s. Khimji Kunverji& Co., Chartered Accountants (Reg. No105146 W) and M/s. K.S. Aiyar & Co.,Chartered Accountants (Reg. No 100186W), the retiring Joint Branch Auditors, beand are hereby, re-appointed as the Joint

Branch Auditors of the Company to auditthe accounts in respect of the CompanysIndian Rayon Division at Veraval, to holdoffice as such from the conclusion of thisAnnual General Meeting until theconclusion of the next Annual GeneralMeeting of the Company, at suchremuneration to each of them, as may bedecided by the Board/Audit Committee ofthe Board, plus reimbursement of out-of-pocket expenses as may be incurred in theperformance of their duties (excludingService Tax, if any).

(iii) RESOLVED THAT pursuant to theprovisions of Section 228 and otherapplicable provisions, if any, of theCompanies Act, 1956, M/s. S. R. Batliboi& Co. LLP, Chartered Accountants (Reg.No. 301003E), the retiring BranchAuditors, be and are hereby, re-appointedas Branch Auditors of the Company toaudit the accounts in respect of theCompanys Jaya Shree Textiles Division,Rishra, and Indo Gulf Fertilisers,


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Jagdishpur, to hold office as such fromthe conclusion of this Annual GeneralMeeting until the conclusion of the nextAnnual General Meeting of the Company,at such remuneration, as may be decidedby the Board/Audit Committee of the

Board, plus reimbursement of out-of-pocket expenses as may be incurred inthe performance of their duties (excludingService Tax, if any).

(iv) RESOLVED THAT pursuant to theprovisions of Section 228 and otherapplicable provisions, if any, of theCompanies Act, 1956, M/s. Deloitte,Haskins & Sells, Chartered Accountants(Reg. No 008072S), the retiring BranchAuditors, be and are hereby, re-appointedas Branch Auditors of the Company to auditthe accounts in respect of the Companys

Madura Fashion & Life Style, Bangalore,to hold office as such from the conclusionof this Annual General Meeting until theconclusion of the next Annual GeneralMeeting of the Company, at suchremuneration, as may be decided by theBoard/Audit Committee of the Board, plusreimbursement of out-of-pocket expensesas may be incurred in the performance oftheir duties (excluding Service Tax, if any).

SPECIAL BUSINESS:

8. To consider and, if though fit, to pass the

following resolution as a Special Resolution: RESOLVED THAT pursuant to the provisionsof Section 260 and other applicable provisionsof the Companies Act, 1956 (the Act), andthe Articles of Association of the Company,Mr. Lalit Naik, who was appointed as anAdditional Director of the Company by theBoard of Directors of the Company and whoholds office as such only upto the date of thisAnnual General Meeting, and in respect ofwhom the Company has received a notice, inwriting along with a deposit of ` 500/- pursuantto the provisions of Section 257 of the Act, from

a Member signifying his intention to proposeMr. Lalit Naik as a candidate for the office ofDirector of the Company, be and is herebyappointed as a Director of the Company, notliable to retire by rotation.RESOLVED FURTHER THAT pursuant to theprovisions of Sections 198, 269, 309 and 314read with Schedule XIII and other applicableprovisions, if any, of the Companies Act,1956 (including any statutory modification(s)or re-enactment(s) thereof, for the time being

in force), the relevant provisions of Articles ofAssociation of the Company, consent of theCompany be and is hereby accorded to theappointment and terms of remuneration ofMr. Lalit Naik as Whole-time Director of theCompany designated as Deputy Managing

Director of the Company, for a period of fiveyears, with effect from 1 st January, 2013, onthe terms and conditions set out below:A. Period : 5 Years w.e.f. 1 st January, 2013,

with the liberty to either party to terminatethe appointment on three months noticein writing to the other.

B. Remuneration:

(a) Basic Salary: ` 7,04,340/- (RupeesSeven Lakh Four Thousand ThreeHundred Forty Only) per month withsuch increment(s) as the Board/ Chairman may decide from time totime, subject, however, to a ceiling ` 12,00,000/- (Rupees Twelve LakhOnly) per month as Basic Salary.

(b) Special Allowance: ` 6,51,580/-(Rupees Six Lakh Fifty-oneThousand Five Hundred Eighty Only)per month with such increment(s) asthe Board/Chairman may decidefrom time to time, subject, however,to a ceiling of ` 16,00,000/- (RupeesSixteen Lakh Only) per month. Thisallowance, however, will not betaken into account for calculation ofbenefits such as Provident Fund,Gratuity, Superannuation and LeaveEncashment.

(c) Annual Performance Bonus:Performance Bonus linked to theachievement of targets, as may bedecided by the Board/Chairmansubject to a maximum of ` 1,50,00,000/- (Rupees One Croreand Fifty Lakh Only) per annum.

(d) Long-term Incentive Compensation(LTIC)/Employee Stock Options as

per the plan applicable to the SeniorExecutives of the Company/AdityaBirla Group including that of anyparent/subsidiary company and asmay be decided by the Chairman/ Board.

C. Perquisites, Allowances and OtherBenefits:(a) Housing : Free furnished

accommodation or HRA in lieu ofCompany provided accommodation.


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(b) Reimbursement of expenses onactual, pertaining to electricity, gas,water, telephone and otherreasonable expenses for the upkeepand maintenance in respect of suchaccommodation.

(c) Medical Expenses Reimbursement:Reimbursement of all expensesincurred in India for self and family,at actuals (including domiciliary andmedical expenses and insurancepremium for medical andhospitalisation policy, as applicable).

(d) Leave Travel Expenses: Leave TravelExpenses for self and family inaccordance with the Rules of theCompany.

(e) Club Fees: Fees of one CorporateClub in India (including admission andmembership fee).

(f) Personal Accident InsurancePremium for self and family as perthe Rules of the Company.

(g) Companys Contribution towardsProvident Fund and SuperannuationFund, on Basic Salary, as per theRules of the Company.

(h) Gratuity calculated on Basic Salary asper the Rules of the Company.

(i) Two cars for use on CompanysBusiness as per the policy of AdityaBirla Group.

(j) Leave and Encashment of Leave inaccordance with the Rules of theCompany.

(k) Reimbursement of entertainment,travelling and all other expensesincurred for the business of theCompany as per the Rules of theCompany. Travelling expenses ofspouse accompanying the DeputyManaging Director on any officialoverseas or inland trip will be

governed as per the Rules of theCompany.

(l) Other Allowances/Benefi ts ,Perquisites: Any other allowances,benefits and perquisites as per theRules applicable to the SeniorExecutives of the Company, and/orwhich may become applicable in thefuture, and/or any other allowance,perquisites as the Board from timeto time decide.

(m) Mr. Lalit Naik may get the sitting feespaid/payable to other directors forattending meetings of the Board ofDirectors/Committee of Subsidiariesof the Company or Companiespromoted by Aditya Birla Group.

D. Subject as aforesaid, the DeputyManaging Director shall be governed bysuch other Rules as are applicable to theSenior Executives of the Company fromtime to time.

E. For the purposes of Gratuity, ProvidentFund, Superannuation and other likebenefits, if any, the services of Mr. LalikNaik, Deputy Managing Director, will beconsidered as continuous service with theCompany from the date of his joining theAditya Birla Group.

F. Minimum Remuneration :RESOLVED FURTHER THATnotwithstanding anything herein abovestated, wherein any financial year closingon or after 31

st March, 2013, the Company

incurs a loss or its profits are inadequate,the Company shall pay to Mr. Lalit Naik,the remuneration by way of salary,perquisites and all other allowances asaforesaid in accordance with theapplicable provisions of Schedule XIII ofthe Companies Act, 1956 (includingany statutory modification(s) or

re-enactment(s) thereof, for the timebeing in force), and subject to the approvalof the Central Government, whereverrequired.RESOLVED FURTHER THAT the termsand conditions of the appointment and/orremuneration of Mr. Lalit Naik may bealtered or varied from time to time by theBoard and/or Committee thereof as itmay, in its discretion deem fit, or anyamendments made hereafter in thisregard in such manner as may be agreedto between the Board and Mr. Lalit Naik,

subject to such approvals as may berequired.9. To consider and, if thought fit, to pass the

following resolution as a Special Resolution :RESOLVED THAT in accordance with theprovisions of Sections 81(1A) and all otherapplicable provisions, if any, of the CompaniesAct, 1956 (the Act), including any statutorymodification(s) or re-enactment(s) thereof, forthe time being in force, the Memorandum andArticles of Association of the Company, the


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provisions of the Securities and ExchangeBoard of India (Employee Stock OptionsScheme and Employee Stock PurchaseScheme) Guidelines, 1999, as amended fromtime to time (the SEBI Guidelines), theListing Agreements entered into by the

Company with the stock exchanges where thesecurities of the Company are listed, any rules,guidelines and regulations issued by theReserve Bank of India and any other applicablelaws for the time being in force and subject tosuch approvals, consents, permissions andsanctions, as may be required, and furthersubject to such terms and conditions as maybe prescribed while granting such approvals,consents, permissions and sanctions andwhich may be agreed to and accepted by theBoard of Directors (hereinafter referred to asthe Board which term shall be deemed to

include any Committee, including the ESOSCompensation Committee constituted by theBoard to exercise its powers conferred by thisResolution) consent of the Company be andis hereby accorded to introduce and implementthe Aditya Birla Nuvo Limited EmployeeStock Options Scheme 2013 (the Scheme2013), the salient features of which arefurnished in the explanatory statement to theNotice; consent be and is hereby accorded tothe Board to create, grant, offer, issue and allotat any time, in one or more tranches, to or forthe benefit of such person(s) who are in

permanent employment of the Company in themanagement cadre, whether working in Indiaor outside India, including any managing orwhole-time director(s) of the Company(hereinafter referred to collectively asemployees, selected on the basis of criteriadecided by the Board or ESOS CompensationCommittee thereof under the Scheme 2013,such number of stock options (comprising ofoptions and/or restricted stock units)exercisable into not more than 3,50,000 equityshares of ` 10/- each, at such price, in one ormore tranches and on such terms and

conditions as may be fixed or determined bythe Board in accordance with the SEBIGuidelines or other provisions of the law asmay be prevailing at that time.

RESOLVED FURTHER THAT in case of anycorporate action(s) such as rights issues, bonusissues, merger and sale of division or otherre-organisation of capital structure of theCompany, as applicable from time to time, if any,additional equity shares are issued by theCompany for the purpose of making a fair and

reasonable adjustment to the Stock Optionsgranted earlier, the above ceiling of 3,50,000equity shares shall be deemed to beincreased to the extent of such additionalequity shares issued.

RESOLVED FURTHER THAT in case theequity shares of the Company are either sub-divided or consolidated, then the number ofequity shares to be issued and allotted onexercise of stock options granted under theScheme 2013 and the exercise price of stockoptions granted under the Scheme 2013 shallautomatically stand augmented or reduced, asthe case may be, in the same proportion asthe present face value of ` 10/- per equityshare bears to the revised face value of theequity shares of the Company after such sub-division or consolidation, without affecting anyother rights or obligations of the employeeswho have been granted stock options underthe Scheme 2013.

RESOLVED FURTHER THAT withoutprejudice to the generality of the above butsubject to the terms as may be approved bythe Members of the Company, the Board isauthorised to formulate, evolve, decide uponand implement the Scheme 2013 anddetermine the detailed terms and conditionsof the aforementioned Scheme 2013 andincluding but not limited to the quantum ofthe stock options to be granted per employee,

the number of stock options to be granted ineach tranche, the terms or combination ofterms subject to which the said stock optionsare to be granted, the exercise period, thevesting period, the vesting conditions,instances where such stock options shall lapseand to grant such number of stock options, tosuch employees of the Company, at par or atsuch other price, at such time and on suchterms and conditions as set out in the Scheme2013 and as the Board may in its absolutediscretion think fit.

RESOLVED FURTHER THAT the Board or anycommittee there of be and is hereby authorisedto issue and allot equity shares upon exerciseof stock options from time to time in the manneraforesaid, and such equity shares shall rank pari passu in all respects with the then existingequity shares of the Company.

RESOLVED FURTHER THAT the Board beand is hereby authorised to take necessarysteps for listing of the equity shares allottedunder the Scheme 2013 on the stock


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exchanges where the securities of theCompany are listed in accordance with theprovisions of the listing agreement with theconcerned stock exchanges, SEBI guidelinesand other applicable laws and regulations.

RESOLVED FURTHER THAT the Board beand is hereby authorised to make anymodifications, changes, variations, alterationsor revisions in the Scheme 2013, as it maydeem fit, from time to time or to suspend,withdraw or revive the Scheme 2013 fromtime to time in conformity with the provisionsof the Act, the SEBI Guidelines and otherapplicable laws unless such variation,amendment, modification or alteration isdetrimental to the interest of the employeeswho have been granted stock options underthe Scheme 2013.

RESOLVED FURTHER THAT for the purposeof giving effect to the above Resolution, theBoard be and is hereby authorised to do allsuch acts, deeds, matters and things as it may,in its absolute discretion, deem necessary,expedient or proper and to settle all questions,difficulties or doubts that may arise in relationto formulation and implementation of theScheme 2013 at any stage including at thetime of listing of the equity shares issuedherein without requiring Board to secure anyfurther consent or approval of the Membersof the Company to the end and intent that theyshall be deemed to have given their approvalthereto expressly by the authority of thisResolution.

10. To consider and, if thought fit, to pass thefollowing resolution as a Special Resolution :

RESOLVED THAT in accordance with theprovisions of Section 81(1A) and all otherapplicable provisions, if any, of the CompaniesAct, 1956 (the Act), including any statutorymodification(s) or re-enactment(s) thereof, forthe time being in force, the Memorandum andArticles of Association of the Company, theprovisions of the Securities and ExchangeBoard of India (Employee Stock OptionsScheme and Employee Stock PurchaseScheme) Guidelines, 1999, as amended fromtime to time (the SEBI Guidelines), theListing Agreements entered into by theCompany with the stock exchanges wheresecurities of the Company are listed, any rules,guidelines and regulations issued by theReserve Bank of India and any other applicablelaws for the time being in force and subject tosuch approvals, consents, permissions and

sanctions, as may be required, and furthersubject to such terms and conditions as maybe prescribed while granting such approvals,consents, permissions and sanctions andwhich may be agreed to and accepted by theBoard of Directors (hereinafter referred to as

the Board which term shall be deemed toinclude any Committee, including the ESOSCompensation Committee constituted by theBoard to exercise its powers conferred by thisResolution) consent of the Company be andis hereby accorded to the Board, to extendthe benefits and coverage of the Aditya BirlaNuvo Limited Employee Stock OptionsScheme 2013 (the Scheme 2013), referredto in the Resolution under Item No. 9 of thisNotice, also to such persons who are inpermanent employment of any present andfuture holding/subsidiary companies of the

Company in the management cadre, whetherworking in India or outside India, including anymanaging or whole-time director(s) of theholding/subsidiary companies of the Companyunder the Scheme 2013 in the mannermentioned in the Resolution under Item No.9 of this Notice, as may be decided by theBoard or ESOS Compensation Committeethereof in accordance with the SEBIGuidelines or other provisions of the law asmay be prevailing at that time.RESOLVED FURTHER THAT for the purposeof giving effect to the above Resolution, the

Board be and is hereby authorised to do allsuch acts, deeds, matters and things as it may,in its absolute discretion, deem necessary,expedient or proper and to settle anyquestions, difficulties or doubts that may arisein relation to formulation and implementationof the Scheme 2013 at any stage including atthe time of listing of the equity shares issuedherein without requiring the Board to secureany further consent or approval of theMembers of the Company to the end andintent that they shall be deemed to have giventheir approval thereto expressly by the

authority of this Resolution.

By Order of the Board

Devendra BhandariJt. President & Company Secretary

Place: MumbaiDate: 29 th May, 2013


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1. A MEMBER ENTITLED TO ATTEND ANDVOTE AT THE 56 TH ANNUAL GENERALMEETING (THE MEETING) IS ENTITLEDTO APPOINT A PROXY TO ATTEND AND

VOTE INSTEAD OF HIMSELF AND THEPROXY NEED NOT BE A MEMBER OF THECOMPANY .

THE INSTRUMENT APPOINTING PROXYSHOULD, HOWEVER, BE DEPOSITED ATTHE REGISTERED OFFICE OF THECOMPANY NOT LESS THAN FORTY-EIGHTHOURS BEFORE THE COMMENCEMENT OFTHE MEETING .

2. Corporate Members, intending to depute theirauthorised representatives to attend theMeeting, are requested to send to theCompany a duly certified true copy of theBoard Resolution/Power of Attorneyauthorising their representatives to attend andvote on their behalf at the Meeting.

3. The relative Explanatory Statements, pursuantto Section 173 of the Companies Act, 1956(the Act), in respect of the business underItem Nos. 8 to 10 of the Notice set out above,is annexed hereto.

4. The Register of Members and Share TransferBooks of the Company will remain closed fromSaturday, 31 st August, 2013 to Friday,6 th September, 2013 (both days inclusive), forthe purpose of payment of dividend, if any,approved by the Members.

5. The Annual Report o f the Companyfor the year 2012-13, circulated to themembers of the Company, will be madeavailable on the Companys website(www.adityabirlanuvo.com).

6. Subject to the provisions of Section 206A ofthe Companies Act, 1956, dividend asrecommended by the Board, if declared atthe Annual General Meeting, will be paid tothose equity shareholders whose namesappear:

(a) As Member in the Register of Membersof the Company after giving effect to allvalid share transfers in physical form,

which are lodged with the Company, onor before 30 th August, 2013; and

(b) In respect of the shares in electronic formon the basis of beneficial ownershipfurnished by National Securities

Depositories Ltd. (NSDL) and CentralDepositories Services (India) Limited(CDSL) for this purpose as at the end of30 th August, 2013.

Dividend will be paid within a period of30 days from the date of approval by theshareholders in this meeting.

7. In terms of the provisions of the Sections205A(5) and 205C of the Act, the amount ofdividend, which has remained unclaimed andunpaid for a period of 7 years from its duedate of payment, is required to be transferredto the Investor Education and Protection Fund(IEPF), constituted by the CentralGovernment. No claim by the shareholdershall lie against IEPF or the Company inrespect of the said unclaimed or unpaiddividend amount.

The details of unpaid/unclaimed dividend forthe year 2005-06 onwards are as under :

Year Amount Due Date of

Transfer2005-06 ` 31,19,985/- 14.09.2013

2006-07 ` 34,90,294/- 18.04.2014

2007-08 ` 38,77,012/- 16.08.2015

2008-09 ` 31,41,924/- 17.08.2016

2009-10 ` 40,80,940/- 13.09.2017

2010-11 ` 47,17,977/- 05.10.2018

2011-12 ` 56,91,192/- 08.09.2019

8. Members holding shares in electronic form arerequested to intimate any changes in theiraddress, e-mail id and signature to theirrespective Depository Participants, with whomthey are maintaining their demat accounts.Members holding shares in Physical form arerequested to intimate such changes to theInvestor Service Centre, Indian RayonCompound, Veraval - 362 266.

9. Reserve Bank of India has initiated NationalElectronic Clearing Service (NECS) for credit of

NOTES FOR MEMBERS ATTENTION :


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dividend directly to the bank account ofMembers . Members are requested to registertheir Bank Account Details (Core BankingSolutions enabled account number, 9 digitMICR and 11 digit IFS code), in respect ofshares held in dematerialised form with theirrespective Depository Participants and inrespect of shares held in physical form withthe Company.

10. In terms of circulars issued by SEBI, it is nowmandatory to quote Permanent AccountNumber (PAN) for participating in thesecurities market. Therefore, Membersholding shares in dematerialised form arerequested to submit the PAN details to theirdepository Participants, whereas Membersholding shares in physical form are requestedto submit the PAN details to the InvestorService Centre, Indian Rayon Compound,Veraval - 362 266.

11. Documents referred to in the accompanyingNotice and Explanatory Statements areopen at the Registered Office of theCompany on all working days, exceptSaturdays, between 10.00 a.m. and 12.00noon up to the date of the Annual GeneralMeeting.

12. Members/Proxies should bring theirAttendance Slip sent herewith, duly filled in,for attending the meeting.


Devendra Bhandari

Jt. President & Company SecretaryPlace: MumbaiDate: 29 th May, 2013


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ANNEXURE TO THE NOTICE

The following Explanatory Statements, pursuant toSection 173 of the Companies Act, 1956, set thematerial facts relating to the business mentionedin Item Nos. 8 to 10 of the accompanied Notice

dated 29th

May, 2013.Item No. 8

Mr. Lalit Naik was appointed by the Board ofDirectors as an Additional Director with effect from1 st January, 2013, and holds office up to the date ofthis Annual General Meeting. Mr. Lalit Naik is aB.Tech. in Chemical Engineering from the IndianInstitute of Technology (IIT), Kanpur, and Master ofBusiness Administration from IIM, Ahmedabad. Hehas been with the Aditya Birla Group sinceNovember 2009, and has more than two and a halfdecades of rich professional experience and hasworked in leadership positions in many companies.Considering the vast and diverse experience ofMr. Lalit Naik, the Board feels that it is in the interestof the Company to continue to avail of his servicesas a Director of the Company.The resolution as set out in Item No. 8 of this Noticeis accordingly commended for the approval of theMembers.None of the Directors other than Mr. Naik areinterested in the Resolution at Item No. 8.

Item Nos. 9 & 10

Stock options in the hands of the employees havelong been recognised as an effective instrumentto align the interests of the employees with thatof the Company and its shareholdings, providingan opportunity to the employees to share thegrowth of the Company and to create wealth inthe hands of the employees. Accordingly, theCompany intends to reward, attract, motivate andretain employees and directors of the Company,its holding and subsidiary companies for their highlevels of individual performance, their efforts toimprove the financial performance of the Companyand their loyalty to the Company, by offering themequity shares by way of an employee stock optionsscheme. The eligible employees shall be grantedemployee stock options in the form of Options( Options ) and/or Restricted Stock Units( RSUs ). Options and RSUs are collectivelyreferred to as Stock Options, which will beexercisable into equity shares upon such terms andconditions applicable to the Stock Options, as thecase may be.

The Board of Directors (the Board) of theCompany at its meeting held on 29 th May, 2013,resolved to introduce the Aditya Birla Nuvo LimitedEmployee Stock Options Scheme 2013 (hereinafterreferred to as the Scheme 2013), subject to theapproval of the Members and the provisions of theSecurities and Exchange Board of India (EmployeeStock Options Scheme and Employee StockPurchase Scheme) Guidelines 1999 as amendedfrom time to time (the SEBI Guidelines) andauthorised the ESOS Compensation Committee toformulate the detailed terms and conditions of theScheme 2013 and once formulated to administerand implement the Scheme in accordance with theSEBI Guidelines.

The Members are informed that the Companyintends to offer not more than 3,50,000 equityshares of ` 10/- each under the Scheme 2013 byway of grant of Stock Options.

Your approval is being sought for issue of StockOptions to eligible employees of the Company,including its Managing and/or Whole-time Director(s)and that of its holding and/or subsidiary companiesby the introduction of the Scheme 2013.

The Scheme 2013 is being formulated inaccordance with the ESOP Guidelines. The salientfeatures of the Scheme 2013 are as follows:

(i) Total number of Stock Options to be granted

The total number of Stock Options(comprising of Options and RSUs) that mayin the aggregate be granted shall be suchnumber that will entitle the grantees toacquire, in one or more tranches, such equityshares of the Company not exceeding3,50,000 equity shares of ` 10/- each. Theaggregate number of RSUs proposed to begranted under the Scheme 2013 shall not beexercisable into more than 50% of the overallceiling of equity shares (as stated inResolution No. 9 & 10 of the Notice) to beissued under the Scheme 2013 (whichnumber shall be adjusted in lieu ofadjustments/re-organisation of capitalstructure of the Company from time to time).

One Stock Option entitles the grantees to oneequity share (i.e., one Option will entitle thegrantee to one equity share and one RSU willentitle the grantee to one equity share).

In case of any corporate action(s) such asrights issues, bonus issues, merger and sale


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of division split or consolidation and others,a fair and reasonable adjustment needs to bemade to the Stock Options granted.Accordingly, if any additional equity shares areissued by the Company to the grantees formaking such fair and reasonable adjustment,the ceiling of 3,50,000 shall be deemed tobe increased to the extent of such additionalequity shares issued.

Stock Options not vested due to non-fulfilmentof the vesting conditions, vested StockOptions which the grantees expressly refuseto exercise, Stock Options (vested and notexercised and unvested) which have beensurrendered and any Stock Options grantedbut not vested or exercised within thestipulated time due to any reasons, shall lapseand these Stock Options or the underlyingequity shares will be available for grant underthe present Scheme 2013 or under a newscheme, subject to compliance with theprovisions of the Applicable Law.

(ii) Identification of classes of employees entitledto participate in the Scheme 2013Persons who are permanent employees ofthe Company in the management cadre,working out of India, including managing orwhole-time director(s) of the Company, andthat of the holding and/or subsidiarycompanies, as may be decided by the Boardor the ESOS Compensation Committee, shallbe eligible to be granted Stock Options underthe Scheme 2013.The following category of employees/directorsshall not be eligible to participate in theScheme 2013:(a) a Promoter or belonging to the promoter

group;(b) an Independent Director and Non-

Executive Director; and(c) a Director, who either by himself or

through his relatives or through any bodycorporate, directly or indirectly, holdsmore than 10% of the outstanding equityshares of the Company.

(iii) Requirements of vesting and period of vestingThe Board and/or the ESOS CompensationCommittee may, at its discretion, lay downcertain criteria including, but not limited to,performance metrics on the achievement ofwhich the granted Stock Options would vest.

The detailed terms and conditions relating tosuch criteria for vesting, the period over whichand the proportion in which the Stock Optionsgranted would vest would be subject to theminimum and maximum vesting period asspecified below.

Vesting period for Options:The Options would vest not earlier thanone year and not later than five years fromthe date of grant of Options or such otherperiod as may be determined by the Boardand/or the ESOS CompensationCommittee. The vesting schedule (i.e.,exact proportion in which and the exactperiod over which the Options would vest)would be determined by the Board and/ or the ESOS Compensation Committee,subject to the minimum vesting period ofone year from the date of grant ofOptions. The Options granted under theScheme 2013 shall vest in one or moretranches.

Vesting period for RSUs:The RSUs would vest not earlier than oneyear and not later than three years fromthe date of grant of RSUs or such otherperiod as may be determined by the Boardand/or the ESOS CompensationCommittee. The vesting schedule (i.e.,

exact proportion in which and the exactperiod over which the RSUs would vest)would be determined by the Board and/ or the ESOS Compensation Committee,subject to the minimum vesting period ofone year from the date of grant of RSUs.The RSUs granted under the Scheme2013 shall vest in one or more tranches.

(iv) Exercise price or pricing formulaExercise price for Options: The equity sharesmay be issued at such price that the Boardand/or ESOS Compensation Committee may

determine on the date of the grant of StockOptions under the Scheme 2013 and specifiedin the relevant grant documents provided thatthe exercise price per Option shall not be lessthan the face value of the equity share of theCompany.

Exercise price for RSUs: The RSUs may beissued at face value or as be determined bythe Board and/or the ESOS CompensationCommittee.


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(v) Exercise period or process of exerciseThe Exercise period would commence fromthe date of vesting and will expire oncompletion of five years from the date ofvesting of Stock Options or such other periodas may be determined by the Board and/orthe ESOS Compensation Committee.

The Stock Options will be exercisable by theemployees by a written application to theCompany accompanied by payment of theExercise Price in such manner and onexecution of such documents, as may beprescribed by the Board and/or ESOSCompensation Committee from time to time.The Stock Options will lapse if not exercisedwithin the specified exercise period.

(vi) The Appraisal process for determining theeligibility of employees

The appraisal process for determining theeligibility of the employee will be specifiedby the Board and/or the ESOS CompensationCommittee, and will be based on criteria,such as role/criticality of the employee, lengthof service with the Company, workperformance, technical knowledge,managerial level, future potential and suchother criteria that may be determined by theBoard and/or ESOS Compensation

Committee at its sole discretion.The Board and/or the ESOS CompensationCommittee may decide to extend the benefitsof the Scheme to new entrants or to existingemployees on such basis as it may deem fit.

(vii) Disclosure and accounting policies

The Company shall comply with suchapplicable disclosure and accounting policiesas prescribed by the SEBI Guidelines andprescribed by the concerned authorities fromtime to time.

(viii) Maximum number of Stock Options to beissued per employee and in aggregate

The maximum number of Stock Options to begranted to any employee shall be decided bythe Board and/or ESOS CompensationCommittee. However, the number of StockOptions that may be granted to a singleemployee under the Scheme 2013 shall notexceed 0.2% of the paid-up equity share

capital at the time of grant of Stock Options(which shall be adjusted in lieu of adjustments/ re-organisation of capital structure of theCompany from time to time).

The aggregate of all such Stock Options shall

not result into more than 3,50,000 equityshares of the Company, which shall beadjusted in lieu of adjustments/re-organisationof capital structure of the Company from timeto time.

(ix) Method of Stock Options Valuation

To calculate the employee compensation cost,the Company shall use the Intrinsic ValueMethod for valuation of the Stock Options. Thedifference between the employeecompensation cost so computed and the cost

that shall have been recognised, if it had usedthe Fair Value of the Stock Options, shall bedisclosed in the Directors Report and also theimpact of this difference on profits and onEarnings per Share of the Company shall alsobe disclosed in the Directors Report.

(x) Transferability of Stock Options

The Stock Options granted to an employee willnot be transferable to any person and shall notbe pledged, hypothecated, mortgaged orotherwise alienated in any manner. However,

in the event of the death of a Stock Optionholder while in employment, the right toexercise all the Stock Options granted to himtill such date shall be transferred to his legalheirs or nominees.

(xi) Other TermsThe Board and/or ESOS CompensationCommittee shall have the absolute authority tovary or modify the terms of the Scheme 2013in accordance with the regulations andguidelines prescribed by Securities and

Exchange Board of India or regulations that maybe issued by any appropriate authority, fromtime to time, unless such variation, modificationor alteration is detrimental to the interest of theemployees who have been granted stockoptions under the Scheme 2013.As the Scheme would entail issue of furthershares to persons other than the existingMembers, in terms of Section 81(1A) of theCompanies Act, 1956, as amended, consent


37/251


N O T I C E


of the Members is being sought by passing aspecial resolution in general meeting.Additionally, in accordance with SEBIGuidelines, a separate resolution is requiredto be passed as a special resolution byMembers of the Company, if benefits of theScheme 2013, as stated in Resolution No. 9of this Notice, are being extended to theemployees of holding and/or subsidiarycompanies. Therefore, a separate resolutionas stated in Resolution No. 10 is proposed toextend the benefits of the Scheme to thepermanent employees (in the managementcadre) including managing or whole-timedirector(s) of the holding and/or subsidiarycompanies of the Company.

None of the Directors of the Company is in

any way, concerned or interested in theresolution, except to the extent of Stock

Options that may be offered to them underthe Scheme 2013. The Stock Options to begranted under the Scheme 2013 shall not betreated as an offer or invitation made to thepublic for subscription in the securities of theCompany.

The Board recommends Resolution Nos. 9and 10 for approval of the Members of theCompany.


Devendra BhandariJt. President & Company Secretary

Place: MumbaiDate: 29 th May, 2013


38/251


N O T I C E


N a m e o

f D i r e c t o r

M r .

K u m a r

M a n a g a l a m

B i r l a

M r .

G . P .

G u p t a

M r .

T a p a s e n

d r a

C h a t t o p a

d h y a y

D a t e o

f B i r t h

1 4 . 0

6 . 1 9 6 7

1 1 . 0

1 . 1 9 4 1

3 1 . 0

3 . 1 9 5 1

D a t e o

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i n t m e n t

2 3 . 0

9 . 1 9 9 2

2 7 . 0

4 . 2 0 0 5

3 0 . 0

5 . 2 0 1 1

Q u a

l i f i c a t i o n

B . C

o m , A . C . A , M . B . A

( L o n d o n

)

M . C

o m

M . S

c ( C h e m

i s t r y )

E x p e r t

i s e

i n s p e c

i f i c F u n c t i o n a l

A r e a

I n d u s t r i a

l i s t

R i c h e x p e r i e n c e

i n t h e a r e a s o f g e n e r a

l

F o r m e r

E x e c u t

i v e D i r e c t o r o f

L I C a n

d

m a n a g e m e n

t , b a n k

i n g ,

i n d u s t r i a

l a n d

h a v i n g r i c

h e x p e r i e n c e

i n t h e

f i e l d o f

f i n a n c i a l r e s t r u c t u r

i n g .

I n s u r a n c e .

L i s t o

f P u

b l i c L t d .

C o m p a n

i e s

1 . G r a s i m

I n d u s t r i e s

L i m i t e

d

1 . B i r l a

S u n

L i f e I n s u r a n c e

C o .

L i m

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M i n e r a l s

D e v e l o p m e n

t

( i n

I n d i a ) i n w

h i c h o u t s

i d e

2 . H i n d a l c o

I n d u s t r i e s

L i m i t e d

2 . S w a r a j

E n g i n e s L i m

i t e d

C o r p o r a

t i o n

L i m i t e d

D i r e c t o r s

h i p s a r e

h e

l d

3 . I d e a

C e l

l u l a r

L i m

i t e d

3 . E m k a y

G l o b a l F i n a n c

i a l S e r v i c e s

4 . B i r l a

S u n l

i f e A s s e t

M a n a g e m e n

t

L i m

i t e d

C o .

L i m

i t e d

4 . A d i t y a

B i r l a

R e t a i l

L i m

i t e d

5 . B i r l a

S u n


C o .

L i m

i t e d

5 . I d e a

C e l

l u l a r

L i m i t e d

6 . E s s e

l M i n i n g a n

d I n d u s t r i e s

L i m

i t e d

6 . L a n d m a r

k P r o p e r t y

D e v e l o p m e n

t

7 . U l t r a

T e c h

C e m e n

t L i m i

t e d

C o m p a n y

L i m

i t e d

8 . C e n

t u r y

T e x t

i l e s a n

d I n d u s

t r i e s

L i m

i t e d

7 . D i g h i P o r t

L i m

i t e d

9 . A d i t y a

B i r l a

M i n a c s

W o r l d w

i d e

L i m

i t e d

8 . E m k a y

I n v e s t m e n

t M a n a g e r s

L i m

i t e d

C h a

i r m a n

/ M e m

b e r o

f C o m m

i t t e e ( s )

M e m

b e r o f

A u d

i t C o m

m i t t e e

o f B o a r d o

f D i r e c t o r s o

f t h e

C o m p a n y

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i r m a n

/ M e m

b e r o

f t h e

C o m m

i t t e e

( s )

A s a

C h a i r m a n

A s a

M e m

b e r

o f B o a r d o

f D i r e c t o r s o

f o t h e r

1 . S w a r a j

E n g i n e s L i m

i t e d

1 . O r i s s a

M i n e r a l s

D e v e l o p m e n

t

C o m p a n

i e s

i n w

h i c h h e

/ s h e

i s a

D i r e c t o r

2 . I d e a

C e l u l

l a r

L i m i t e d

C o r p o r a

t i o n

L i m i t e d

a )

A u

d i t C o m m

i t t e e

3 . B i r l a

S u n


C o

L i m

i t e d

4 . L a n d m a r

k P r o p e r t y

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t

C o .

L i m

i t e d

A s a

M e m

b e r

1 . E m k a y

G l o b a l F i n a n c

i a l S e r v i c e s

L i m

i t e d

2 . A d i t y a

B i r l a

R e t a i l

L i m

i t e d

b )

I n v e s t o r s

G r i e v a n c e

/

R e

l a t i o n s

C o m m

i t t e e

D e t a

i l s o

f t h e

D i r e c t o r s s e e

k i n g r e - a p p o

i n t m e n t

i n t h e

A n n u a

l G e n e r a

l M e e t i n g t o

b e

h e

l d o n

6 t h

o f S e p t e m

b e r ,

2 0 1 3

N o t e :

P u r s u a n

t t o c l a u s e

4 9 o f

t h e

L i s t i n g

A g r e e m e n

t , o n

l y t w o c o m

m i t t e e s , v

i z ;

A u

d i t C o m m

i t t e e a n

d S h a r e

h o l d e r s

/ I n v e s t o r

G r i e v a n c e a r e c o n s i

d e r e d


39/251

A SNAPSHOTAditya Birla Nuvo Limited


A

S N A P S H O TADITYA BIRLA NUVO: VISION & MISSION

TRANSFORMATION FROM A MANUFACTURING COMPANY TO A PREMIUM CONGLOMERATE

Vision

To be a premium conglomerate building leadership in businessesand 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

Invested about USD 1.5 billion over these years to support growth

2013 : Acquisition of Pantaloons

2006 : Became largest shareholder in Idea

2005 : Merger of Agri and other Financial Services in ABNL

2000 : Foray in Fashion & Lifestyle business through acquisition of international brands

2001 : Foray in Life Insurance business through JV with Sun Life Canada


40/251

A SNAPSHOT



A

S N A P S H O T

NUVO

Agri*

Rayon*

Insulators* Textiles*

* Represent Divisions; ^ Represent Subsidiaries; $Represent Joint Ventures; @JV with Sun Life Financial, Canada; #Listed, Aditya Birla Group holds 45.88%Note 1: Post open offerNote: Percentage figures indicated above represent ABNLs shareholding in its subsidiaries / JVs

A USD 4.75 BILLION PREMIUM CONGLOMERATE

Leadership position in India Leader Top 3 Top 5

FinancialServices

Telecom $ #

(25.27%)IT-ITeS

^

(99.85%)Fashion &Lifestyle

Manufacturing

Madura*

Pantaloons ^

(67.95%) 1Asset Management^

(51%)@

Life Insurance ^

(74%)@

NBFC^

Private Equity^

Broking (75%)^

Wealth Management^

General Insurance Advisory (50%)^

CONSOLIDATED EARNINGS MIX - 2012-13

Revenue` 25,490 Crore

Segment EBIT` 2,270 Crore

Financial Services31%

Telecom28%

Fashion & Lifestyle13%

IT-ITeS7%

Manufacturing17%

Financial Services25%

Manufacturing16%

CarbonBlack8%

Carbon Black 4%

IT-ITeS10%

Fashion & Lifestyle19%

Telecom22%

Note : Manufacturing includes Agri, Rayon and Insulators businesses. Having received the shareholders' approval, the Company is in the processof divesting the Carbon Black business w.e.f. 1 st April 2013


41/251

A SNAPSHOTAditya Birla Nuvo Limited


A

S N A P S H O T

GROWTH SUPPORTED BY STRONG STANDALONE BALANCE SHEET

More than 50% of standalone capital employed is deployed in long term investments. With Idea and Birla SunLife Insurance declaring dividend, ABNL has started generating return on its long-term investments.

Going forward, the Company's balance sheet will be further strengthened and growth plans will be supported by:

o Proceeds from divestment of Carbon Black business

o Balance equity infusion of ` 671 Crore by promoters on conversion of remaining 9.82 million warrants

o Distribution of dividend by Idea and Birla Sun Life Insurance

Standalone Capital Employed(` Crore)

Standalone Ratios

2012-132011-122010-112009-102008-09

4,982 5,436 5,424 5,598

3,767 3,044 3,4374,696

5,857

5,157Fixed Assets &Working Capital

Long TermInvestments

0.0

0.2

0.4

0.6

0.8

1.0

Net Debt/Equity (LHS)

2012-132011-122010-112009-102008-09 0

2

4

6

8

Net Debt/EBITDA (RHS)

5.8

4.13.3 3.3

0.87

0.74

0.58 0.53

3.6

0.66

CONSOLIDATED FINANCIAL SNAPSHOT

Earnings are growing at a robust CAGR All the businesses are contributing to the profitable growth

Note: The Profit & Loss Account for 2010-11, 2011-12 and 2012-13 has been prepared as per the revised Schedule VI of the Companies Act, 1956

Revenue

( Crore)

EBITDA

( Crore)

Net Profit

(` Crore)

14,33115,523

18,188

21,840

25,490

2012-132011-122010-112009-102008-09

CA G R 1 5

%

2012-132011-122010-112009-102008-09

867

1,686

2,685

3,259

4,142 CA G

R 4 8 %

2012-132011-122010-112009-102008-09

(436)

155

822 8901,059


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A SNAPSHOT



A

S N A P S H O T ROBUST REVENUE GROWTH ACROSS THE BUSINESSES

Revenue(` Crore)

Note 1 : Including full figures of Asset Management business. As per AS27, Asset Management business has been proportionately consolidated@ 50% in ABNL's financials, being a 50:50 Joint Venture till 9 th October 2012. Thereafter it is consolidated as a subsidiary since Aditya BirlaFinancial Services holds 51% w.e.f. 10 th October 2012.

Note 2 : Full financial numbers of Idea Cellular. Being a Joint Venture, Idea Cellular has been consolidated at 31.78% from 10 th March 2007 upto12 th August 2008, at 27.02% upto 1 st March 2010 and at ~25.3% thereafter, as per AS27.

Note 3 : Represents Branded Apparels & Accessories (Madura Fashion & Lifestyle and Pantaloons Fashion & Retail Ltd.) and Textiles businesses.In 2012-13, nine months financials of Pantaloons are included pursuant to its acquisition w.e.f. appointed date 1 st July 2012.

Note 4 : Represents Agri, Rayon and Insulators businesses.Note 5 : Having received the shareholders' approval, the Company is in the process of divesting the Carbon Black business w.e.f. 1 st April 2013.

2012-132011-122010-112009-102008-09

Telecomelecom 2

10,131

12,398

15,438

19,489

22,407

2012-132011-122010-112009-102008-09

Fashion & Lifestyleashion Lifestyle 3

1,6881,826

2576

3,281

4,930

2012-132011-122010-112009-102008-09

IT-ITeST ITeS

1,7771,530

1,692

2,082

2,466

2012-132011-122010-112009-102008-09

Manufacturing nuf cturing

2,2121,988

2,327

3,255

4,155

2012-132011-122010-112009-102008-09

Financial Servicesinancial Services

4,778

5,8716,313 6,550 6,390

2012-132011-122010-112009-102008-09

Carbon Blackarbon Black 5

1 096 1 161

1 588

1 943 2 036


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