The Directors are pleased to present the 54th Annual Report along with
the audited annual standalone and consolidated accounts of your Company
for the year ended 31st March, 2013.
1. Financial Performance
The FY 13 was one of the toughest years for non-ferrous metal industry.
Globally Aluminum prices continued to remain depressed, plagued with
overcapacity, inventory overhang to add to the weak sentiments for the
In the Indian context, slowdown in manufacturing sector and power
sector impacted demand in a low pricing (LME) scenario, the cost
continued to remain high, primarily driven by high crude prices. While
the prices of crude and its derivatives continued to remain globally
high, depreciating rupee resulted in an additional burden. The coal
prices continued to increase in India, even as the Global coal prices
Financial Performance Summary (Rs. Crore)
Year Year Year Year
Ended Ended Ended Ended
Particulars 31/03/2013 31/03/2012 31/03/2013 31/03/2012
Revenue from Operations 26,057 26,597 80,193 80,821
EBITDA 2,204 3,105 7,837 8,184
Other income 983 616 1,012 783
Profit Before Interest,
Tax, Depreciation and
Amortisation 3,187 3,721 8,849 8,967
Depreciation 704 690 2,861 2,864
Finance Costs 436 294 2,079 1,758
Profit Before Tax 2,047 2,737 3,909 4,345
Tax Expenses 348 500 886 786
Net Profit Before
Minority Interest and
Share in Associates 1,699 2,237 3,023 3,559
Share in Profit/(Loss)
of Associates (Net) (16) 50
Minority Interest (20) 211
Net Profit for the Period 1,699 2,237 3,027 3,397
Basic EPS 8.88 11.69 15.81 17.74
2. Standalone Results
The Standalone revenue for the year is flat at Rs. 26,057 crore as in
FY 12. Profit before interest and depreciation was Rs. 3,187 crore vs.
Rs. 3,721 crore in FY 12. This was achieved despite a significantly
lower LME and a constant escalation of input costs, largely mitigated
by improved efficiencies and higher other income.
Net profit for the year stood at Rs. 1,699 crore vs. Rs. 2,237 crore in
The Financial Year 2013 was marked by consistently low Aluminium LME
and constantly increasing costs. As a result, Aluminium companies
across the globe suffered during this year. However, Hindalco was able
to mitigate impact of the above factors by improved efficiencies and
higher volumes. Consequently, the Company''s results in this business
segment stand out on almost every parameter in the peer group - both
domestic and international.
3. Consolidated Results
Despite a sluggish market and headwinds in all businesses of the
Company, the Consolidated Revenue as well as Profit before
Depreciation, Interest and Tax for the year at Rs. 80,193 and Rs. 8,849
crore, respectively, compare well with last year''s corresponding
figures. With regard to segment results, Aluminium Segment has done
particularly well by maintaining its EBIT at Rs. 4,388 crore on
Net profit attributable to the shareholders stood at Rs. 3,027 crore.
For the year ended 31st March, 2013, the Board of Directors of the
Company have recommended dividend of Rs. 1.40 per share (Previous year
Rs. 1.55 per share) to equity shareholders aggregating to Rs. 313.60
crore (Previous year Rs. 344.89 crore) including Dividend Distribution
Tax of Rs. 45.56 crore for the year ended 31 st March, 2013.
Allocation and Appropriations of surplus in the statement of Profit and
Loss account in FY13 are as under:
Summary of appropriation FY 13 FY 12
of Profit and Loss Account
Balance as at the beginning of the year 400.00 350.00
Add: Profit for the year 1,699.20 2,237.20
Less: Transferred to Debenture
Redemption Reserve (150.00) -
Less: Dividend on Equity Shares - (a) (268.05) (296.76)
Less: Dividend Distribution
Tax - (a) & (b) (31.67) (38.41)
Less: Transferred to General Reserve (899.48) (1,852.03)
Balance as at the end of the year 750.00 400.00
(a) Dividend on Equity Shares and Tax on Dividend include Rs. 0.01
crore (Previous year Rs. 0.01 crore) pertaining to previous year for
Equity shares issued before the record date of dividend.
(b) Tax on Dividend is net of Rs. 13.89 crore (Previous year Rs. 9.73
crore) being dividend distribution tax paid by a subsidiary.
6. Growth Plans underway in Aluminium
Your Company is pursuing various brownfield and greenfield growth
oppurtunities in Aluminium as described below:
Projects - in India
Estimated Actual or estimated
Location Description of Expansion (at full Commission Date/
capacity) Progress Update
Odisha Smelter Expansion 52 Kt
Captive Power Plant 100 MW Under Commissioning
Rolling Plant 135 Kt Partially
Odisha Alumina Refinery 1500 Kt
Alumina) Under Commissioning
Captive Power Plant 90 MW
Bargawan, Aluminium Smelter 360 Kt First Metal Tapped,
Pradesh commissioning being
Aluminium) Captive Power Plant 900 MW undertaken in phased
Odisha Aluminium Smelter 360 Kt 2013
Aluminium) Captive Power Plant 900 MW
All these ongoing projects of the Company with a cumulative investment
of around Rs. 28,000 crores have either been commissioned or are in
advanced stages of commissioning/implementation.
Project - Overseas
Estimated Actual or
Location Description of Expansion (at full Commission Date/
capacity) Progress Update
Oswego, NY Automotive Sheet 200 Kt Mid CY 2013
Germany Recycling Expansion 250 Kt Mid CY 2014
Yeoungiu, Rolling Expansion 350 Kt Mid CY 2013
South Korea Recycling Expansion 265 Kt October 12
China Automotive Sheet 120 Kt End CY 2014
Pinda Brazil Rolling Expansion 220 Kt December 12
Pinda, Brazil Can coating line 100 Kt End CY 2013
Pinda, Brazil Recycling expansion 190 Kt End CY 2013
Financial closure of Aditya Smelter was achieved of Rs. 9,896 crore.
The tenure of the loan has been kept at 12.50 years to allow the
project to have enough operational cash surplus for servicing the loan.
The Company received an overwhelming response from the lenders despite
a tight credit market.
Debenture Issue: To further augment financial resources, the Company
has issued 10-year 9.55 per cent and 9.60 per cent secured redeemable
non-convertible debentures for a total amount of Rs. 4,500 crore and
Rs. 1,500 crore respectively on private placement basis. These
debentures are listed on the wholesale debt market segment of National
Stock Exchange (NSE). Repayment of Term Loan: During the year, your
Company also repaid the loan taken earlier of Rs. 5,143 crore.
8. Consolidated Financial Statements
In accordance with Accounting Standards AS-21 on Consolidated Financial
Statements read with Accounting Standard AS-23 on Accounting for
investments in Associates and AS-27 on Financial Reporting of Interest
in Joint Ventures, the audited Consolidated Financial Statements are
provided in the Annual Report.
9. Management Discussion and Analysis Report
The Management Discussion and Analysis Report forming part of
Directors'' Report for the year under review, as stipulated under Clause
49 of the Listing Agreement with the Stock Exchange(s), forms part of
the Annual Report. The report provides a strategic direction and a
more detailed analysis on the performance of individual businesses and
10. Corporate Governance
Your Directors reaffirm their commitment to the corporate governance
standards as prescribed by the Listing Agreement with the Stock
Exchange(s). A separate section on Corporate Governance together with a
certificate from the Auditors of the Company regarding full compliance
of conditions of Corporate Governance as stipulated under Clause 49 of
the Listing Agreement forms part of the Annual Report.
11. Directors'' Responsibility Statement
Your Directors affirm that the audited accounts containing financial
statements for the financial year 2012-13 are in full conformity with
the requirements of the Companies Act, 1956. They believe that the
financial statements reflect fairly, the form and substance of
transactions carried out during the year, and reasonably present the
Company''s financial condition and results of operations. These
statements were audited by the statutory auditors of the Company, M/s.
Singhi & Co., Chartered Accountants.
Your Directors further confirm that:
(i) In the preparation of the annual accounts, the applicable
accounting standards have been followed, along with proper expl
anations rel ating to material departures, if any;
(ii) the accounting policies have been selected and applied
consistently and judgements and estimates have been made that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the
profit of the Company for the financial year;
(iii) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities; and
(iv) the annual accounts have been prepared on a going-concern basis.
Your Company''s internal Auditors have conducted periodic audits to
provide reasonable assurance that the established policies and
procedures have been followed.
12. Novelis Inc. (wholly owned subsidiary)
The performance of Novelis was negatively impacted by pricing pressures
from competitors, supply chain disruptions due to the implementation of
a new ERP system in two North American plants, as well as production
challenges and softer demand.
Shipments of flat rolled products are marginally lower at 2,786 Kt for
the year ended 31st March, 2013, compared to 2,838 Kt in the prior
year. Net sales was 11% lower, primarily driven by a 15% decline in
average aluminium prices and a fall in flat rolled product volumes by
13. Aditya Birla Minerals Limited (51 per cent subsidiary)
The Company''s copper production extended by 16% mainly on account of
restart of Mt Gordon mine. Sales volume is up by 14% compared to the
previous year. The revenue in value terms was sustained. Profitability
was adversely affected given lower realisation of copper compared to
the previous year and higher average unit cost of production, because
of higher volume from Mt Gordon operations at higher cost.
At Nifty, the ore mined was 2.27 million tonnes up by 8% over the
previous year. At Mt Gordon, the ore mined was 1.10 million tonnes
representing a step up of 59% over the previous year.
Mt Gordon mines operations is currently placed under care and
14. Employee Stock Options Scheme ESOS-2006
The shareholders of the Company has approved an Employee Stock Options
Scheme (ESOS-2006), formulated by the Company, under which the
Company may issue 6,475,000 options to its permanent employees in the
management cadre, in one or more tranches, whether working in India or
out of India, including the Whole-Time Directors of the Company. Each
option when exercised would be converted into one fully paid-up equity
share of Rs. 1/- each of the Company. The ES0S-2006 is administered
by the Compensation Committee of the Board of Directors of the Company
(the Committee). Under the ESOS 2006, the Committee has granted
3,545,550 options to its eligible employees in three tranches.
Disclosure pursuant to the provisions of the Securities and Exchange
Board of India (Employee Stock Options Scheme) Guidelines, 1999, is
given in Annexure-A.
At a meeting held on 28th May, 2013, the Board of Directors approved
the formulation of a new Employee Stock Options Scheme, viz., Hindalco
Industries Limited Employee Stock Options Scheme-2013 (ESOS-2013) in
terms of the SEBI Guidelines. The Board mandated the existing ESOS
Compensation Committee to implement and administer the ESOS-2013.
Resolutions seeking your approval for introduction and implementation
of ESOS- 2013 and granting such number of Stock Options exercisable
into not more than 54,62,000 equity shares of Rs. 1/- each to the
permanent employees, including any Managing or Whole-time Director(s)
of your Company and its holding and/or subsidiary companies are
included in the Notice convening the Annual General Meeting together
with the Explanatory Statement.
15. Particulars as per Section 217 of the Companies Act, 1956
The information relating to the conservation of Energy, Technology
Absorption and Foreign Exchange Earnings and Outgo required under
Section 217 (1)(e) of the Companies Act, 1956, is set out in a separate
statement attached to this report (Annexure B).
In accordance with the provisions of Sections 217 (2A), read with the
Companies (Particulars of Employees) Rules, 1975, the names and other
particulars of employees are to be set out in the Directors'' Report, as
an addendum thereto. However, as per the provisions of Section 219
(1)(b)(iv) of the Companies Act, 1956, the report and accounts, as
therein set out, are being sent to all members of the Company excluding
the aforesaid information about employees. Any member, who is
interested in obtaining such particulars about employees, may write to
the Company Secretary at the Registered Office of the Company.
16. Fixed Deposits
The Company has not accepted any public deposits and, as such, no
amount on account of principal or interest on public deposits was
outstanding as on the date of the Balance Sheet.
In accordance with Article 146 of the Articles of Association of the
Company, Mr. Kumar Mangalam Birla, Mr. Askaran Agarwala retire from
office by rotation and, being eligible, offer themselves for
Mr. Jagdish Khattar was appointed as a Director in casual vacancy
caused due to demise of Mr. E.B. Desai and holds office upto the
forthcoming Annual General Meeting, and is eligible for reappointment.
The term of appointment of Mr. D. Bhattacharya as Managing Director is
expiring on 30th September, 2013. The Board has reappointed him as
Managing Director for the further period of five years w.e.f 30th
September, 2013. The approval of the members in the ensuing Annual
General Meeting would be sought for his reappointment.
During the year, Mr. Satish Pai was appointed as an Additional Director
under Section 260 of the Companies Act, 1956, and as a Whole-time
Director for a period of five years. The approval of the members in the
ensuing Annual General Meeting would be sought for his appointment,
subject to approval of Central Government.
18. Awards and Recognitions
Several accolades have been conferred upon your Company, in recognition
of its contribution in diverse fields. A selective list:
- Renukoot Complex wins Greentech Safety Gold Award-2012 in the
Mining & Metals category, for exemplary efforts towards Occupational
Health and Safety, presented by Greentech Foundation, New Delhi.
- Renukoot Complex wins the Safety Innovation Award-2012, for
implementing innovative safety management systems, presented by the The
Institute of Engineers (India).
- Renukoot Complex wins the Greentech CSR Gold Award-2012, presented
by Greentech Foundation, New Delhi. The award recognises the noteworthy
efforts towards Land and Watershed Management carried out in
various villages surrounding Renukoot, Renusagar and Mines Division -
Jharkhand & Chattisgarh.
- Renukoot Complex wins the Greentech Environment Excellence Gold
Award-2012 under the category of Mining & Metal Sector for its
outstanding efforts towards Environment Management by Greentech
Foundation, New Delhi.
- Renukoot Complex is conferred the Golden Peacock National Quality
Award- 2012, in the Mining & Metals sector, presented by the Institute
of Directors, for its efforts towards Quality, meeting international
- Renukoot Complex wins Greentech Platinum Award for Best HR
Practices 2012-13, in the Best Strategy category, presented by
Greentech Foundation, New Delhi.
- Renusagar Power Plant wins the Greentech Environment Excellence
Gold Award-2012, for the fifth consecutive year, for its outstanding
contribution towards Environment Management System, presented by
Greentech Foundation, New Delhi.
- Renusagar Power Plant wins Greentech Safety Gold Award-2012, in the
power Plant category, for exemplary efforts in Occupational Health and
Safety, presented by Greentech Foundation, New Delhi.
- Renusagar Power Division wins the Safety Innovation Award-2012, in
the Power Sector category, for outstanding achievement in safety
management, presented by Institute of Directors.
- Renusagar was awarded the Greentech Training Excellence Gold
Award-2012 and 3rd Annual Greentech HR Award-2013 for Training
Excellence, by Greentech Foundation, Delhi.
- Dahej Harbour & Infrastructure Ltd. (DHIL), wins the Gujarat Star
Award (Runners Up) 2011-12, as the Dry Bulk/ Break Bulk Handling Port
of the Year, for its impressive performance and improvements in the
areas of vessel turnaround time in port, increased productivity and
- Dahej Copper Complex wins the Greentech Gold Environment Award-
2012, for its outstanding achievement in Environment Management.
- Muri Alumina Plant wins the Greentech Gold Environment Award-2012,
presented by Greentech Foundation, New Delhi.
- Hirakud Power Plant wins CII Odisha Award- 2012 (2nd Runners Up),
for Best Practices in Environment, Safety and Health.
- Taloja Rolling Plant wins the overall title for Maharashtra Safety
Awards-2011, competition organised by the National Safety Council -
Maharashtra Chapter, in the Heavy Engineering category for its
commendable safety performance, Scheme-I, Lowest Average Accident
- The Quality Circles from Renukoot earned Six Gold Medals and one
Silver Medal at the Kanpur Chapter Convention.
- The Quality Circles of Renusagar earned Par Excellence awards at
the national convention of Quality Circle Forum of India.
- Quality Circle of Birla Copper Dahej won the Bronze medal at
Gujarat State Level Quality Circle Competition-2012, organised by
Quality Circle Forum of India.
- Hirakud Quality Circle won the Best Analysis & Process Award at the
17th All Odisha Quality Circle Convention.
- Hirakud members earned the Certificate of Appreciation at the 12th
CII National Supervisory Skill Competition in Repair & Maintenance
Jharkhand & Chhattisgarh Mines Division
- National Safety Awards for 2009-10 and 2010-11 presented to Samri
Mines Division during 2012.
- Overall Best in Mines Safety Week-2012 and Minerals Exploration &
Minerals Conservation Week-2012 Award to Bagru Hill Bauxite Mines
during 2012-13, for Ranchi region.
- Mr. D Bhattacharya, Managing Director, received the Fray
International Sustainability Award for leadership in developing &
applying new innovative business plans & operations for sustainability
development of the Company in the environmental economic & social point
19. Environment Protection and Pollution Control
Your Company is committed to sustainable development. A separate
chapter in this report deals at length with your Company''s initiatives
and commitment to environment conservation.
The observations made in the Auditors'' Report are self-explanatory and
do not call for any further comments under Section 217 (3) of the
Companies Act, 1956.
M/s. Singhi & Company, Chartered Accountants and Auditors of the
Company, retire, and being eligible, offer themselves for appointment.
For the Financial Year 2012-13 M/s R. Nanabhoy & Co. and M/s Mani &
Co. were joint cost auditors of the Company. For timely completion of
Company level audit as per the new cost audit rules and to avoid
coordination and logistical issues, your directors have appointed a
single cost auditor, M/s. R. Nanabhoy & Co.
In pursuance to Section 233 B (2) of the Companies Act, 1956, read with
Ministry of Corporate Affairs, Cost Audit Branch Order dated 6th
November 2012, your directors have appointed M/s. R. Nanabhoy & Co,
cost accountants as Cost Auditors, subject to approval of the Central
Government, to conduct cost audit of the Company, for the financial
year 2013-14, pertaining to products or activities related to Aluminium
and Aluminium Products, Inorganic Chemical and their Derivatives,
Mineral Products, Miscellaneous Chemical Products, Copper and Copper
Products, Pearl, Diamonds, Stones and Jewellery Articles, Mineral /
Chemical Fertilizers - Others, and any other products as are covered
under the subject Order of Ministry of Corporate Affairs.
The due date for filing Cost Audit Reports for the Financial Year
2011-12 was February 28, 2013 and the same was filed by the Cost
Auditors on January 20, 2013.
21. General Exemption under Section 212(8) of the Companies Act, 1956
The Ministry of Corporate Affairs, Government of India vide its
Circular No.5/12/2007-CL-III dated 8th February , 2011 has granted
general exemption under Section 212(8) of the Companies Act, 1956, from
attaching the balance sheet, profit and loss account and other
documents of the subsidiary companies to the balance sheet of the
Company provided certain conditions are fulfilled. The Company has
satisfied the conditions stipulated in the Circular and hence is
entitled to the exemption. However annual accounts of the subsidiary
companies and the related detailed information will be made available
to the holding and subsidiary companies investor''s seeking such
information at any point of time. The annual accounts of the subsidiary
companies are available for inspection by any shareholder''s at the
Registered office of the Company. The annual accounts of the subsidiary
companies are also available for inspection at their respective
registered office. Further, in line with the Listing Agreement and in
accordance with the Accounting Standard 21 (AS-21), the Consolidated
Financial Statements prepared by the Company include financial
information of its subsidiaries.
Your Directors place on record their sincere appreciation for the
assistance and guidance provided by the Honorable Ministers,
Secretaries and other officials of the Ministry of Mines, Ministry of
Coal, the Ministry of Chemicals and Fertilizers and various State
Governments. Your Directors thank the Financial Institutions and Banks
associated with your Company for their support as well.
Your Company''s employees are instrumental in your Company scaling new
heights, year after year. Their commitment and contribution is deeply
Your involvement as Shareholders is greatly valued. Your Directors look
forward to your continuing support.
For and on behalf of the Board
Dated 13th August, 2013