Current Year Previous Year
1. Contingent Liabilities not
provided for:
a) Claims against the Company not
acknowledged as debts:
i) Income-tax 61.69 82.52
ii) Custom Duty 0.24 0.23
iii) Excise Duty 34.88 29.06
iv) Sales Tax 184.18 85.72
v) Service Tax 4.74 1.04
vi) Others 36.41 35.05
b) Bills discounted with Banks 89.99 66.16
c) Corporate Guarantees given to Banks
for Loans taken by subsidiaries 510.58 356.39
d) Corporate Guarantees given in
connection with performance obligation
of the subsidiaries 87.07 88.88
e) Customs Duty on capital goods and raw
materials imported under advance
licensing/EPCG Scheme, against which
export obligation is to be fulfilled 18.71 42.96
f) 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.
g) Idea Cellular Ltd. (Idea), in which the Company has the largest
shareholding, was originally a tripartite joint venture between Aditya
Birla Group, Tata Group and AT&T Group. With the exit of AT&T and the
Tata Group, Idea is now part of the Aditya Birla Group. Prior to its
exit, Tata Group had alleged that the Aditya Birla Group had committed
material breach of the Shareholders'' Agreement and the Tata Group
invoked the arbitration clause, pursuant to which an Arbitral Tribunal
has been constituted, which will take up the claims of the Tata Group
and the counter-claims of the Aditya Birla Group.
When the Tata Group sold its shares in Idea to the Company, they
claimed to have reserved certain rights under the Share Purchase
Agreement, which contained a clause for arbitration by the London Court
of International Arbitration (LCIA). The Company, along with another
Aditya Birla Group Company, has questioned the reservation and the LCIA
is seized of the matter. The Company believes that it has a strong case
to counter the allegations of breach and it does not contemplate any
liability to arise on this matter.
b) Aditya Birla Minacs Worldwide Ltd. (ABMWL), a subsidiary of the
Company, has issued Zero Coupon Compulsorily Convertible Debentures
(CCD) aggregating Rs. 250 Crore to be converted into Equity of ABMWL on
the expiry of a period of 60 months from the date of allotment of such
CCD. The Company has entered into an option agreement with the
subscribers of such CCD pursuant to which the subscribers has put
option on the Company and the Company has call option on the
subscribers on expiry of 24, 36, 48 and 60 months from the date of
allotment of CCD at a pre-agreed price. Further, on happening of
certain events, the put option can also be exercised by the subscribers
on the Company on any other date on happening of such events.
c) Madura Garments Lifestyle Retail Company Ltd. (MGLRCL), a subsidiary
of the Company, has issued 0.01% Coupon Compulsorily Convertible
Preference Shares (CCPS) aggregating Rs. 300 Crore to be converted into
Equity of MGLRCL on the expiry of a period of 60 months from the date
of allotment of such CCPS. The Company has entered into an option
agreement with the subscribers of such CCPS pursuant to which the
subscribers has put option on the Company, and the Company has call
option on the subscribers on expiry of 24, 36, 48 and 60 months from
the date of allotment of CCPS at a pre- agreed price. Further, on
happening of certain events, the put option can also be exercised by
the subscribers on the Company on any other date on happening of such
events.
2. Disclosure pursuant to Clause 49 of the Listing Agreement
(Disclosure related to Proceeds from Public Issues, Rights Issues,
Preferential Issues, etc.)
In accordance with approval of the shareholders in the extraordinary
general meeting of the Company held on 17th June, 2009, the Company
had, on a preferential basis, issued 1.85 Crore Warrants of Rs. 10 each
to the Promoter and/or Promoter Group at a price of Rs. 541.19 each.
The holder of each Warrant was entitled to apply for and obtain
allotment of 1 Equity Share against each Warrant at any time after the
date of allotment but on or before the expiry of 18 months from the
allotment in one or more tranches. Out of the above 1.85 Crore
Warrants, 80 Lakh Warrants had been converted and corresponding shares
were issued on 30th October, 2009. On 20th December, 2010, the Company
has allotted balance 1.05 Crore Equity Shares of the Company against
the conversion of equivalent number of Warrants. The total amount
received from the preferential allotment has been fully utilised.
4. Disclosure under Clause 12 of SEBI Employee Stock Option Scheme
(ESOS) Guidelines, 1999
a) Under the Employee Stock Options Scheme-2006 (ESOS-2006), the
Company has granted options to the eligible employees of the Company
and its Subsidiaries.
During the year under ESOS-2006, 17,174 options have been granted as
''Tranche III'' on 20th August, 2010 and 11,952 options have been granted
as ''Tranche IV'' on 8th September, 2010 to the eligible employees of the
Company.
During the year, the ESOS Compensation Committee of the Board of
Directors has approved the repricing of the existing outstanding Stock
Options, viz., 113,544 and 63,047 granted under Tranche I on 23rd
August, 2007 and Tranche II on 25th January, 2008, respectively, at an
exercise price of Rs. 687 per option, without any change in the vesting
schedule. and terms and conditions governing the said Stock Options.
The same has been approved by the Annual General Meeting on 6th August,
2010.
In respect of repricing of the existing Outstanding Stock Options, the
incremental intrinsic value of the options is accounted as employee
cost over the remaining vesting period.
The ESOP compensation cost is amortised on a straight-line basis over
the total vesting period of the options. Accordingly, Rs. 1.96 Crore
{net of recovery of Rs. 0.05 Crore from the subsidiaries} (Previous
Year: Rs. 0.10 Crore net of recovery of Rs. 0.01 Crore from the
subsidiaries) has been charged to the current year Profit and Loss
Account.
b) Employee Stock Options Outstanding account Rs. 4.53 Crore (Previous
Year: Rs. 2.51 Crore) and Deferred Employee Compensation account Rs.
0.39 Crore (Previous Year: Rs. 0.38 Crore).
3. i) Pursuant to the Composite Scheme of Arrangement (the Scheme)
under Sections 391 and 394 of the Companies Act, 1956, with effect from
1st January, 2010 (the appointed date), Madura Garments Exports Limited
(MGEL), MG Lifestyle Clothing Company Private Limited (MGCCPL) and
domestic garment business of Peter England Fashions and Retail Limited
(PEFRL) had been merged with the Company. The effective date of the
Scheme was 22nd February, 2010.
ii) As consequence of the Scheme, the Company has issued and allotted
to the preference shareholder(s) of PEFRL (other than the Company) one
fully paid-up 6% Redeemable Preference Share of Rs. 100 each of the
Company as fully paid-up for every one 6% Redeemable Preference Share
of Rs. 100 each fully paid-up and held in PEFRL.
iii) In view of the aforesaid Scheme effective from 1st January, 2010,
the previous year numbers are not comparable with current year.
III) Foreign Currency Loans have been fully hedged for foreign exchange
and interest rate fluctuation by way of Currency and Interest Rate
Swaps, Interest Swaps and Long Term Forward Contracts.
4. a) Book values of certain long term unquoted investments
aggregating to Rs. 2,271.56 Crore (Previous Year: Rs. 2,311.47 Crore)
are lower than its cost.
Considering the strategic and long-term nature of the aforesaid
investments and asset base and business plan of the investee companies,
in the opinion of the management, the decline in the book value of the
aforesaid investments is of temporary nature, requiring no provision.
An amount of Rs. 19.95 Crore is lying in Investment Reserve is to be
used to meet the diminution other than temporary, if any, that may
arise in future, in the value of present and future long term strategic
investments.
b) 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 Minacs Worldwide Ltd., Aditya Birla Minacs IT
Services Limited and Madura Garments Lifestyle Retail Company Limited
investments have also been provided to certain Banks for respective
credit facilities extended by them.
c) 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.
5. a) Disclosure pursuant to Clause 32 of Listing Agreement
b) The Company is one of the Promoter Members of Aditya Birla
Management Corporation Pvt. 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 minimise cost to each member. The Company''s share of
expenses under the common pool has been accounted for under the
appropriate heads. Total outstanding receivable as on 31st March, 2011,
is Rs. 3.12 Crore (Previous Year: Rs. 3.12 Crore).
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.
Employee Compensation under Employee Stock Option Scheme has also not
been considered in the above information.
6. Disclosure in respect of Related Parties pursuant to Accounting
Standard 18 – refer Annexure II.
7. For Derivative Information — refer Annexure III.
8. The Company has fertilisers bonds of Rs. 65.5 Crore received from
the Ministry of Fertilisers, the Government of India against the
outstanding amount of subsidy receivable, out of which bonds amounting
to Rs. 20.30 Crore (Previous Year: Rs. 29.33 Crore) are outstanding at
the year end. The market value of above bonds are lower than book
value, therefore the diminution in the value of above bonds amounting
to Rs. 0.47 Crore (Previous Year: Rs. 0.46 Crore) has been accounted
under Miscellaneous Expenses. The aforesaid bonds have been classified
as Other Current Assets in the financial statements.
9. Other Interest include Interest on Income Tax Refund of Rs. 0.92
Crore (Previous Year: Rs. 2.34 Crore).
10. In September 2005, the Company had purchased 37.18 Crore equity
shares of IDEA Cellular Ltd. (IDEA) from M/s. AT&T Cellular Pvt. Ltd.,
Mauritius, and paid consideration of US$ 150 Million without deduction
of tax at source after obtaining an order under Section 195(2) of the
Income Tax Act from the Income Tax Department. The Deputy Director of
Income Tax (International Taxation), (DDIT), Mumbai, has issued order
under Section 163(1) of the Income Tax Act dated 25th March, 2009,
treating the Company as an agent of New Cingular Wireless Services Inc.
for the sale of shares of IDEA by its subsidiary AT&T Cellular Private
Limited, Mauritius. The Company has challenged the order of DDIT before
the appropriate authority and based on the opinion of Tax Expert, the
Company is reasonably certain that no tax liability would devolve.
11. For additional information as required under paras 3, 4C and 4D of
Part II of Schedule VI to the Companies Act, 1956 — refer Annexure IV.
12. 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.
Fashion and Lifestyle Branded Apparels and Accessories
Rayon Yarn Viscose Filament Yarn, Caustic Soda and Allied Chemicals
Carbon Black Carbon Black
Insulators Insulators
Textiles Spun Yarn and Fabrics
Agri-business Urea, Ammonia, Argon Gas, Pesticides and Seeds
The Company considers secondary segment based on revenues within India
as Domestic Revenues and outside India as Export Revenues. Since assets
are used interchangeably, carrying amount of assets and cost incurred
during the year to acquire assets based on secondary segment have not
been disclosed.
For Segment Information — refer Annexure V.
13. Figures of Rs. 50,000 or less have been denoted by ß.
14. Previous Year''s figures have been regrouped/rearranged wherever
necessary.
The Guidance Note on implementation of AS-15 (Revised), Employee
Benefits issued by the ICAI states that Provident Fund set up the
employers, which requires interest shortfall to be met by the employer,
needs to be treated as defined benefits plan. The Company set up
Provident Fund does not have existing deficit of interest shortfall.
With regards to future obligations arising due to interest shortfall
(i.e., government interest to be paid on the Provident Fund Scheme
exceeding rate of interest earned on investment) pending issuance of
the Guidance Note from Actuarial Society of India, the Company''s
actuary has expressed its inability to reliably measure the Provident
Fund liability.
The Company contributes 12% of salary for all eligible employees
towards Provident Fund managed either by approved trusts or by the
Central Government.
a) List of Related Parties:
I. Parties where control exists — Subsidiaries:
1. Aditya Birla Financial Services Private Limited (ABFSPL)
1.1 Aditya Birla Capital Advisors Private Limited (ABCAPL)
1.2 Aditya Birla Customer Services Private Limited (ABCSPL)
1.3 Aditya Birla Trustee Company Private Limited (ABTCPL)
1.4 Aditya Birla Financial Shared Services Limited (ABFSSL)
1.5 Aditya Birla Money Limited (ABML)
1.5.i) Aditya Birla Commodities Broking Limited (ABCBL)
1.6 Aditya Birla Insurance Brokers Limited (ABIBL)
1.7 Aditya Birla Finance Limited (ABFL)
1.7.i) Aditya Birla Securities Private Limited (ABSPL)( w.e.f. 31st
July, 2010)
1.8 Aditya Birla Money Mart Limited (ABMML)
1.8.i) Aditya Birla Money Insurance Advisory Services Limited (ABMIASL)
2. Aditya Birla Minacs Worldwide Limited (ABMWL)
2.1 Transworks Inc. (TW Inc.)
2.2 Aditya Birla Minacs Philippines Inc. (ABMPI)
2.3 AV TransWorks Limited (AVTL)
2.3.i) Aditya Birla Minacs Worldwide Inc. (ABMWI)
2.3.i(a) Aditya Birla Minacs BPO Limited (formerly known as Compass BPO
Limited, U.K. (w.e.f. 9th March, 2010)
2.3.i(a)i) Compass BPO, Inc. (w.e.f. 9th March, 2010)
2.3.i(a)ii) Aditya Birla Minacs BPO Private Limited (formerly known as
Compass Business Process Outsourcing Limited) (w.e.f. 9th March, 2010)
2.3.i(a)iii) Compass BPO FZe (w.e.f. 9th March, 2010 upto 24th
February, 2011)
2.3.i(b) Minacs Worldwide SA de CV
2.3.i(c) The Minacs Group (USA) Inc.
2.3.i(c)i) Bureau of Collection Recovery, LLC (w.e.f. 2nd June, 2010)
2.3.i(d) Minacs Limited
2.3.i(d)i) Minacs Worldwide GmbH
2.3.i(d)i)a) Minacs Kft.
2.3.i(e) Bureau of Collections Recovery (BCR) Inc. (w.e.f. 4th March,
2011)
3. Aditya Vikram Global Trading House Limited (AVGTHL)
4. Birla Sun Life Insurance Company Limited (BSLICL)
5. ABNL Investment Limited (ABNLIL)
6. Madura Garments Lifestyle Retail Company Limited (MGLRCL)
7. Peter England Fashions and Retail Company Limited (PEFRL)
8. Indigold Trade and Services Limited (ITSL) (formerly known as
Madura Garments International Brand Company Limited) (on becoming
Associate, ceased to be an subsidiary w.e.f. 27th November, 2009 and
again become subsidiary w.e.f. 30th June, 2010)
8.1 LIL Investment Limited (LIL) (w.e.f. 27th July, 2009 and on
becoming Associate, ceased to be an subsidiary w.e.f. 27th November,
2009 and again became subsidiary w.e.f. 30th June, 2010)
9. Aditya Birla Minacs IT Services Limited (ABMITS) (formerly known as
PSI Data Systems Limited)
9.1 Aditya Birla Minacs Technologies Limited (ABMTL) (formerly known as
Birla Technologies Limited)
10. Shaktiman Mega Food Park Private Limited (w.e.f. 2nd December,
2010)
11. Madura Garments Exports Limited (MGEL) (merged with the Company
w.e.f. 1st January, 2010)
12. Madura Garments Exports US, Inc. (ceased to be a Subsidiary from
9th February, 2010)
13. MG Lifestyle Clothing Company Private Limited (MGCCPL) (merged
with the Company w.e.f. 1st January, 2010)
II. Joint Ventures:
1. Birla Sun Life Asset Management Company Limited (BSAMC) (Directly
held by the Company till 22nd March, 2010, thereafter Joint Venture of
ABFSPL)
2. Birla Sun Life Trustee Company Private Limited (BSTPL) (Directly
held by the Company till 22nd March, 2010 thereafter Joint Venture of
ABFSPL)
3. IDEA Cellular Limited
III. Associates:
1. Birla Securities Limited
2. Indigold Trade and Services Limited (formerly known as Madura
Garments International Brand Company Limited) (w.e.f. 27th November,
2009, upto 29th June, 2010)
3. LIL Investment Limited (w.e.f. 27th November, 2009, upto 29th June,
2010)
IV. Key Management Personnel:
1. Dr. Bharat K. Singh — Managing Director (Upto 30th June, 2009)
2. Mr. Adesh Gupta — Whole-time Director (Upto 30th April, 2009)
3. Mr. K.K. Maheshwari — Whole-time Director (Upto 20th May, 2010)
4. Dr. Rakesh Jain — Managing Director
5. Mr. Pranab Barua — Whole-time Director (w.e.f. 1st May, 2009)
V. Relatives of Key Management Personnel:
1. Mrs. Usha Gupta (Wife of Mr. Adesh Gupta)
2. Mrs. Sharda Maheshwari (Wife of Mr. K.K. Maheshwari) |