The Directors have pleasure in presenting the 57th Annual Report and
the audited standalone and consolidated financial statements of your
company for the year ended 31st March, 2016.
FY16 FY15 FY16 FY15
Revenue from Operations 34,318 34,525 1,00,042 1,04,281
Other Income 1,066 882 1,215 1,105
Profit Before Interest, Tax
and Depreciation (PBITDA) 4,384 4,299 10,007 10,049
Depreciation 1,277 837 4,287 3,591
Finance Costs 2,375 1,637 5,049 4,178
Profit before Exceptional
Items and Tax 732 1,825 671 2,280
Exceptional Items - 578 577 1,940
Profit before Tax 732 1,247 94 340
Tax Expenses 125 322 515 256
Profit/ (Loss) for the
period from Continuing
Operations 607 925 (421) 84
Profit/ (Loss) from
Discontinuing Operations - - (158) -
Share in Profit/ (Loss)
of Associates (Net) - - 175 175
Minority Interest in Profit/
(Loss) (Net) - - (449) (596)
Net Profit 607 925 45 854
Basic EPS -Rs. 2.94 4.48 0.22 4.14
The amounts proposed to carry to any reserves:
Standalone Accounts :
Surplus in the Statement As at As at
of Profit and Loss 31/03/2016 31/03/2015
Balance as at the 1279.35 750.00
beginning of the year
Add: Profit for the year 607.25 925.16
Less: Transferred to (150.00) (150.00)
Debenture Redemption Reserve
Less: Dividend on Equity (206.50) (206.52)
Shares - (a)
Less: Dividend (21.07) (39.29)
Distribution Tax - (a) & (b)
Balance as at the end of 1509.03 1279.35
a) Dividend on Equity Shares and Tax on Dividend include Rs. Nil
(Previous year Rs. 0.02 crore) pertaining to previous year for Equity
shares issued before the record date of dividend.
b) Dividend Distribution Tax is net of Rs. 20.97 crore (Previous year
Rs. 0.30 crore) being dividend distribution tax paid by subsidiaries.
For the year ended 31st March,2016, the Board of Directors of your
Company have recommended dividend of Rs. 1 per share (Previous year Rs.
1 per share) to equity shareholders aggregating to Rs. 249 crore
(Previous year Rs. 246 crore) including Dividend Distribution Tax.
Equity shares that may be allotted upon exercise of Options granted
under the Employee Stock Option Scheme and before the Book Closure for
payment of dividend will rank pari passu with the existing shares and
shall also be entitled to receive the aforesaid dividend.
OVERVIEW AND STATE OF THE COMPANY''S AFFAIRS
For the year ended March 31, 2016, the Company''s revenue at Rs. 34,318
crore was broadly stable at FY 15 level notwithstanding the sharp fall
in both aluminium and copper realisations. The steep fall in copper
revenues was offset by increased revenues from aluminium business. The
aluminium higher revenues were achieved primarily on the back of higher
volumes and improved product mix despite a sharp decline in
Profit before Interest, Tax, Depreciation and Amortisation (PBITDA) for
the year was marginally higher by 2%. This reflects a robust
operational performance in a challenging year, when average
realisations were much lower. PBIDTA was also augmented by higher other
As anticipated, depreciation and finance cost increased by Rs. 1,178
crore over FY 15 following progressive capitalisation of the projects.
The PBT during FY 16 (before exceptional items) was lower by 60% at Rs.
733 crore. Net Profit for the year at Rs. 607 crore was lower by 34% as
compared with that delivered in FY 15.
Standalone Segmental Results:
Net Sales 17,125 14,105
Earnings Before Interest & Tax (EBIT) 880 1,349
Net Sales 17,209 20,451
Earnings Before Interest & Tax (EBIT) 1,419 1,516
During FY 16, our primary focus was on ramping up the Greenfield
projects to their designed capacities and stabilise these operations.
This objective was achieved during the year and all plants are now
running at their designed capacities.
For the year, Alumina production (including Utkal refinery) was 2.7 Mn
tonnes, an increase of 19% over FY 15. Aluminium production for the
year reached a record high. It crossed the 1 Mn tonnes mark for the
first time reaching 1.13 Mn tonnes an increase of 36% or almost 300 KT
over that produced during the previous financial year. In spite of
higher volumes, the EBIT of Aluminium segment declined because of
higher depreciation following progressive capitalisation of the
projects. The standalone financials do not include Utkal''s financial
Though copper production for the year was steady at 388 KT, Fertiliser
production rose by 8%. Our continued thrust on Value addition led to
higher production of Continuous cast (CC) rods. The production of CC
rods was higher by 5%. Despite all these initiatives for value
maximisation, EBIT was 6% lower as compared with that achieved in FY15.
This was primarily on account of the abolition of certain export
incentive scheme during the year and challenging market conditions.
Consolidated revenue decreased by 4% while Profit before interest,
depreciation and taxes was at same level compared to the last year''s
corresponding fi gures.
Net Profit was lower at Rs. 45 crore on back of adverse macroeconomic
conditions, higher interest cost, depreciation and loss from
Novelis Inc. (A wholly owned subsidiary):
Revenues decreased 11% to .9 billion in FY 2016, as higher shipments
were more than offset by a 16% decrease in average base aluminium
prices and a 58% decrease in local market premiums.
For fiscal year 2016, the company recorded a net loss of million.
Excluding tax effected special items, net income was 1 million for
the full year.
The rapid decline in local market premiums over the early months of FY
2016 resulted in 2 million in negative metal price lag for the full
year, and was primarily responsible for the 12% decrease in EBITDA to
1 million in FY 2016. Excluding the impact of metal price lag in
both years, EBITDA was 3 million in FY 2016, up 7% compared to 6
million in FY 2015.
The company more than doubled its free cash fl ow as compared to the
prior year, generating 0 million in FY 2016 after investing 0
million in capital expenditure. As of March 31, 2016, the company
reported a strong liquidity of .2 billion.
Utkal Alumina International Limited (UAIL) (A wholly owned subsidiary):
The alumina refinery at UAIL produced 1.4 Mn tonne of alumina in FY 16
compared to 1 Mn tonne in FY 15. Of this, 130 KT of alumina was sold
outside and the balance was supplied to smelters at Hindalco. The cost
of production of alumina at UAIL is comparable to the world benchmark
cost of production.
UAIL reported an EBITDA of Rs. 714 crore. Its net loss stood at Rs. 93
crore after accounting for interest charge of Rs. 518 crore and
depreciation of Rs. 289 crore.
Aditya Birla Minerals Limited:
Aditya Birla Minerals Limited (ABML), Australia, a subsidiary of the
Company, has sold 100% of the shares in Birla Mt Gordon Pty Ltd to M/s
Lighthouse Minerals Holdings Pty Ltd on 27th October, 2015.
Further, Metals X Ltd, a listed company in Australia, made a takeover
offer for shares of ABML. As per the offer, the Shareholders of ABML
will receive A$ 0.08 per share of ABML in cash and 1 share of Metals X
Limited for every 4.5 shares of ABML. The Company has accepted the said
offer on 19th July, 2016 in respect of its entire shareholding of ABML.
There were no other material changes and commitments affecting the
financial position of your Company between end of financial year and
the date of report.
Business Reconstruction Reserve:
The Company had formulated a scheme of financial restructuring under
Sections 391 to 394 of the Companies Act 1956 (the Scheme) between
the Company and its equity shareholders approved by the High Court of
judicature of Bombay to deal with various costs associated with its
organic and inorganic growth plan. Pursuant to this, a separate reserve
account titled as Business Reconstruction Reserve (BRR) was created
during the year 2008-09 by transferring balance standing to the credit
of Securities Premium Account of the Company for adjustment of certain
expenses as prescribed in the Scheme. Accordingly, the Company had
transferred Rs. 8,647.37 crore from Securities Premium Account to BRR
and till 31st March, 2015, Rs. 250.33 crore and Rs. 2,165.80 crore have
been adjusted against BRR in stand-alone and consolidated accounts
respectively. During the year, following expenses has been adjusted
with BRR in both accounts:
(a) Rs. 279.46 crore towards expenses on exited Projects.
(b) Impairment loss of Rs. 367.31 crore (Net of deferred tax Rs. 194.39
(c) Provision of Rs. 35.50 crore towards diminution in value of
Had the Scheme not prescribed aforesaid treatment, the impact on
results and Earnings per Share (EPS) would have been as under:
i) Standalone and Consolidated Net Profit for the year ended 31st
March, 2016 lower by Rs. 682.27 crore.
(ii) Standalone and Consolidated Basic and Diluted EPS for the year
ended 31st March, 2016 lower by Rs. 3.30.
Several innovative people focused initiatives have been instituted at
the Group level, and these are translated into action at all of the
Aditya Birla Group Companies. Our basic objective is to ensure that a
robust talent pipeline and a high-performance culture, centred around
accountability is in place. We feel this is critical to enable us
retain our competitive edge.
RESEARCH AND DEVELOPMENT
Your Company''s Research & Development (R&D) activities are focused on
providing innovative, cost-effective and sustainable solutions to
support consistent growth of business.
The R&D activities of your Company include process, product and
application development, to develop short term as well as long term
solutions to the issues faced by nonferrous sector, such as raw
material quality, cost effective management of waste generated during
processing, recovery of value from byproduct as well as any waste
products, developing better understanding of the science of processes,
reducing the specific energy consumption and carbon footprint etc.
Specific programs have also been initiated to foster better
understanding of the requirement of existing and prospective customers,
and to provide a better service through application development, so as
to increase your company''s market share in the chosen market space.
Technical competencies developed by your company will go a long way in
terms of quick absorption of technologies, enabling pushing boundaries
of our processes, so as to increase the economic performance and
improve our new product/new application pipeline to address the
impending market opportunities.
Your Company already operates two Hindalco Innovation Centres (HIC),
one HIC-Alumina at Belagavi working on R&D of bauxite, alumina and
specialty alumina products, and one HIC-SemiFab located at Taloja, near
Mumbai, working in the area of aluminium fabricated products. In
addition, your company engages the Aditya Birla Group''s corporate
research and development centre, Aditya Birla Science and Technology
Company Private Limited (ABSTCPL), for conducting R&D in select areas
of work through chartered R&D projects. These are based on the domain
expertise and R&D facilities available in ABSTCPL. The engagement has
resulted into some patent applications, which have been and will be
assigned to your company on the grant of the patent. ABSTCPL''s forte of
having multi- disciplinary teams of technical experts, scientists and
engineers, enables your company to develop building competencies in
select areas, as a long term value to business.
AWARDS & RECOGNITIONS
Several accolades have been conferred upon your Company, in recognition
of its contribution in diverse field. A selective list:
Hindalco awarded the Top Exporter - Gold Trophy in the category of
large enterprise for outstanding performance in financial year 201314.
This was the second consecutive year that Hindalco has won the top
award in this category. This recognition of excellence in exports, is
an award administered by EEPC (formerly Engineering Export Promotion
Council), an export promotion council under Union Ministry of Commerce
and Industry, Government of India.
The London Metal Exchange in March, 2016 approved Aluminium Ingots &
Sows produced at Aditya and Mahan Smelters as good delivery brands
against its high grade primary Aluminium contracts.
Aditya Aluminium wins Safety Award by the National Safety Council of
India - Certificate of Appreciation in recognition of appreciable
achievement in Occupational Safety and Health.
Belagavi Alumina wins the State Safety Award Unnatha Suraksha
Puraskara - by the National Safety Council of Karnataka State for
outstanding work in safety performance and management systems in the
manufacturing sector category.
Belur Rolling Plant:
Belur Rolling Plant wins First Prize in Industrial Relations category,
for the 16th Long Term Settlement signed at a 78 year old unit, which
has contributed towards survival and profitability of the plant,
presented by the National HRD Network Eastern Regional Zenith Awards &
Recognition Programme held in January 2016.
Birla Copper Dahej wins the Greentech Environment Gold Award for 2015,
in the Metal & Mining sector, for continual sustainable development
approach, presented by the Greentech Foundation, New Delhi.
Birla Copper Dahej awarded the Greentech Gold Safety Award 2015 in the
Metal & Mining Sector for outstanding achievement in Safety Management.
Birla Copper Dahej wins the FAI Environmental Protection Award 2015
constituted by the Fertilizer Association of India for control of
Gare Palma Coal Mines:
Gare Palma Coal Mines wins First Prize in the HR Best Practices
category, for cultural change brought about in the newly acquired
mines, presented by the National HRD Network Eastern Regional Zenith
Awards & Recognition Programme held in January 2016.
Hirakud Complex awarded the Greentech Safety Gold Award 2015 in Metal,
Mining & CPP Sector category presented by the Greentech Foundation, New
Hirakud Power wins the CII Odisha State Award 2015, First Prize, for
Best Practices in Environment, Health & Safety.
Utkal Alumina International Limited:
(wholly owned subsidiary)
Utkal Alumina awarded the OTV (Odisha Television) CSR Award 2015 in the
category of Women''s Empowerment.
Mr. D. Bhattacharya, Managing Director Hindalco and Vice Chairman,
Novelis, named Global Leader of the Year by CEO India, for his multiple
distinctions achieved on the world stage and leading the Aditya Birla
Group''s metals business in a highly volatile environment.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements for the year ended 31st March,
2016 have been prepared by your Company in accordance with the
provisions of the Companies Act, 2013, read with the Companies
(Accounts) Rules, 2014, applicable Accounting Standards and the
provisions of Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015 Listing
Regulations and forms part of the full Annual Report.
Consolidated Financial Statements (CFS) were approved by the Board of
Directors on 28th May, 2016 which incorporated accounts of Aditya Birla
Minerals Limited (ABML), Australia, a subsidiary of the Company, for
six months ended 30th September, 2015, as full year accounts of ABML
were not available at that time. ABML has subsequently finalized its
accounts for the year ended 31st March, 2016. Accordingly, the Board
of Directors in the meeting held on 21st July, 2016 approved updated
CFS based on full year accounts of ABML which is a part of full Annual
EMPLOYEE STOCK OPTION SCHEMES
During the year ended 31st March, 2016, the Company has allotted 3,185
fully paid-up equity share of Rs. 1/- each (Previous year 373,666) on
exercise of options under ESOS 2006 for which the Company has realised
Rs. 0.03 crore (Previous year Rs. 3.83 crore) as exercise money. The
weighted average share price at the exercise date was Rs. 134.70 per
share (Previous year Rs. 168.73 per share).
During the year ended 31st March, 2016, the Company has allotted 2,193
fully paid-up equity share of Rs. 1/- each (Previous year 18,848) on
exercise of options under ESOS 2013 for which the Company has realised
Rs. 0.03 crore (Previous year Rs. 0.22 crore) as exercise money. The
weighted average share price at the exercise date was Rs. 114.30 per
share (Previous year Rs. 154.54 per share).
The details of Stock Options and Restricted Stock Units granted under
the above mentioned Schemes are available on your Company''s website
A certificate from the statutory auditor on the implementation of your
Company''s Employees Stock Option Schemes will be placed at the ensuing
Annual General Meeting for inspection by the members.
Your Directors reaffirm their continued commitment to good corporate
governance practices. Your Company fully adheres to the standards set
out by the Securities and Exchange Board of India for Corporate
Governance practices and has implemented all of its stipulations.
The entire report on Corporate Governance forms part of full Annual
ABRIDGED ANNUAL REPORT
In terms of the provision of Section 136(1) of the Companies Act, 2013,
Rule 10 of Companies (Accounts of Companies) Rules, 2014 and Regulation
36 of the Listing Regulations, the Board of Directors has decided to
circulate the Abridged Annual Report containing salient features of the
balance sheet and statement of profit and loss and other documents to
the shareholders for the Financial Year 2015-16, under the relevant
The Abridged Annual Report is being circulated to the members excluding
the ''Annual Report on CSR Activities'', ''Remuneration Philosophy/
Policy'', ''Secretarial Audit Report'', ''Extract of Annual Return'', ''Full
Report on Corporate Governance and Shareholders'' Information''.
Members who desire to obtain the full version of the Annual Report may
write to the Company Secretary at the registered office. Full version
of the Annual Report is also available on the Company''s website
DIRECTORS'' RESPONSIBILITY STATEMENT
As stipulated in Section 134(3)(c) of the Companies Act, 2013 the
Act, your Directors subscribe to the Directors'' Responsibility
Statement and confirm that:
a) in the preparation of the annual accounts, applicable accounting
standards have been followed along with proper explanations relating to
b) the accounting policies selected have been applied consistently and
judgments 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 as at 31st March, 2016 and of the Profit of your company for
c) 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 your company and for preventing and
detecting fraud and other irregularities;
d) the annual accounts of your Company have been prepared on a going
e) your Company had laid down internal financial controls and that such
internal financial controls are adequate and were operating
f) your Company has devised proper system to ensure compliance with the
provisions of all applicable laws and that such systems were adequate
and operating effectively.
ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE
The information on conservation of Energy, Technology Absorption and
Foreign Exchange Earnings and Outgo stipulated under Section 134(3)(m)
of the Companies Act, 2013, read with Companies (Accounts) Rules, 2014
is set out in Annexure I to the full and Abridged Annual Report.
PARTICULARS OF EMPLOYEES
In accordance with the provisions of Section 197(12) of the Companies
Act, 2013 the Act, read with the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, the names and other
particulars of employees are to be set out in the Directors'' Report, as
an addendum thereto. However, in line with the provisions of Section
136(1) of the Act, the Report and Accounts as set out therein, are
being sent to all Members of your Company excluding the aforesaid
information about the employees. Any Member, who is interested in
obtaining these particulars about employees, may write to the Company
Secretary at the Registered Offi ce of your Company.
Disclosures pertaining to remuneration and other details as required
under section 197(12) read with Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014 are attached as Annexure II to the
full and Abridged Annual Report.
Board constitution and changes:
Mr. Y.P. Dandiwala (DIN:01055000), was appointed as an Independent
Director of the Company for a term of five years which was also
approved by the members in the Annual General Meeting held on 16th
September, 2015. At the same Annual General Meeting, Mr. Kumar Mangalam
Birla and Mr. Satish Pai were reappointed as the Directors of the
Mr. N. J. Jhaveri passed away, hence ceased to be a Director w.e.f. 6th
Mr. D. Bhattacharya (DIN:00033553) will demit the office as the
Managing Director w.e.f. the close of business hours of 31st July 2016.
He is appointed as the Vice Chairman of the Board.
Mr. Satish Pai (DIN:06646758) is appointed as the Managing Director for
a term of 5 years w.e.f. opening hours of 1st August 2016.
Mr. Praveen Kumar Maheshwari (DIN:00174361) is appointed as the
Whole-time Director for a term of 5 Years w.e.f. 28th May,2016. He is
also the Chief Financial Officer of the Company.
Mr. Girish Dave (DIN:00036455) is appointed as an Independent Director
for a term of 5 years w.e.f. 28th May, 2016.
These changes are based on recommendation of the Nomination and
Remuneration Committee. The Board places on record its deep
appreciation for the services rendered by Mr. Bhattacharya as the
Managing Director of your Company.
Notices pursuant to Section 160 of the Companies Act, 2013, have been
received from members proposing Mr. Praveen Kumar Maheshwari and Mr.
Girish Dave as Directors of the Company.
Smt. Rajashree Birla (DIN:00022995) and Mr. D. Bhattacharya
(DIN:00033553) will retire from offi ce by rotation at the ensuing
Annual General Meeting, and being eligible, offers themselves for
The Board recommends the appointment of Mr. Satish Pai, Mr. Praveen
Kumar Maheshwari and Mr. Girish Dave and reappointment of Smt.
Rajashree Birla and Mr. D. Bhattacharya. Items seeking your approval on
the above are included in the Notice convening the Annual General
Brief resume of the directors being appointed/ reappointed forms part
of the notice of the ensuing Annual General Meeting.
All the directors being appointed/reappointed have given required
declaration under Companies Act, 2013 and Listing Regulations.
All Independent Directors have given declarations that they meet the
criteria of Independence as laid down under Section 149(6) of the
Companies Act, 2013 and Listing Regulations.
Policy on appointment and remuneration of Directors and Key Managerial
The Nomination and Remuneration Committee has formulated the
remuneration policy of your company which is attached as Annexure III
to the full Annual Report.
Meetings of the Board:
The Board of Directors of your Company met 5 times during the year
details of which are given in the Corporate Governance Report forming
part of the full Annual Report.
Pursuant to the provisions of the Companies Act, 2013 and Listing
Regulations, the Directors have carried annual performance evaluation
of Board, Independent Directors, Non executive Directors, Executive
Directors, Committee and Chairman of the Board.
The evaluation framework focused on various aspects of the Board and
Committees such as review, timely information from management etc.
Also, the performance of individual directors was divided into
Executive, Non Executive and Independent Directors and based on the
parameters such as contribution, attendance, decision making, action
oriented, external knowledge etc.
Board members have evaluated Independent Directors, Non executive
Directors, Executive Directors, Committee and Chairman of the Board.
The result of evaluation was satisfactory and meets the requirements of
the Company. Board fully agreed and rated 100% on its functioning,
skill sets and working atmosphere. Independent Directors scored well
on expressing their views and in understanding the Company and its
requirements. Non-Executive Directors scored well in understanding the
Company and its requirement. Executive Directors are action oriented
and ensures timely implementation of the Board decisions. Board is
completely satisfied with the functioning of various Committees. Board
has full faith in the Chairman in leading the Board effectively and
ensuring contribution from all its members.
The Audit Committee comprises of Mr. M.M. Bhagat, Mr. K.N. Bhandari,
Mr. Y.P. Dandiwala, Independent Directors of your Company. Mr. D.
Bhattacharya: Managing Director, Mr. Satish Pai: Deputy Managing
Director and Mr. Praveen Kumar Maheshwari: Chief Financial Officer are
the permanent invitees. Further details relating to the Audit Committee
are provided in the Corporate Governance Report forming part of the
full Annual Report.
KEY MANAGERIAL PERSONNEL
In terms of provisions of Section 203 of the Companies Act,2013, Mr. D.
Bhattacharya: Managing Director, Mr. Satish Pai: Deputy Managing
Director, Mr. Praveen Kumar Maheshwari: Chief Financial Officer and Mr.
Anil Malik: Company Secretary are the Key Managerial Personnel of your
Your Company has in place a vigil mechanism for directors and employees
to report concerns about unethical behaviour, actual or suspected fraud
or violation of your Company''s Code of Conduct. Adequate safeguards
are provided against victimisation to those who avail of the mechanism
or access to the Chairman of the Audit Committee.
The vigil mechanism is available on your Company''s website viz.
Pursuant to provisions of Section 139 of the Companies Act, 2013 read
with the Companies (Audit and Auditors) Rules, 2014, M/s Singhi & Co,
Chartered Accountants were appointed as Statutory Auditors of the
Company from the conclusion of fifty fifth Annual General Meeting held
on 24th September, 2014, until the conclusion of fifty-eighth Annual
General meeting to be held in the calendar year 2017, subject to
ratification of their appointment at every Annual General Meeting.
Resolution seeking your ratification is included in the Notice
convening the Annual General Meeting. The observation made in the
Auditor''s Report are self explanatory and thereofore, do not call for
any further comments under Section 134(3)(f) of the Act.
In terms of the provisions of Section 148 of the Act read with the
Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of
Directors of your Company have on the recommendation of the Audit
Committee, appointed M/s. Nanabhoy & Co., Cost Accountants, Mumbai as
Cost Auditors, to conduct the cost audit of your Company for the
financial year ending 31st March, 2017, at a remuneration as mentioned
in the Notice convening the Annual General Meeting. As required under
the Act, the remuneration payable to the cost auditor is required to be
placed before the Members in a general meeting for their ratification.
Accordingly, a resolution seeking Member''s ratification for the
remuneration payable to Cost Auditors forms part of the Notice of the
ensuing Annual General Meeting.
Pursuant to provisions of Section 204 of the Companies Act, 2013 read
with the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Company had appointed BNP & Associates,
Company Secretaries, Mumbai as Secretarial Auditor for conducting the
Secretarial Audit of your Company for the financial year ended 31st
March, 2016. The Report of the Secretarial Auditor is annexed as
Annexure IV to the full Annual Report.
The Secretarial Audit Report does not contain any qualification,
reservation or adverse remark.
ENVIRONMENT PROTECTION AND POLLUTION CONTROL
Your Company is committed to sustainable development. A detailed report
of the Company''s initiatives and commitment to environment conservation
is part of Sustainability & Business Responsibility Report forming part
of the full and Abridged Annual Report.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:
Details of Loans, Guarantee and Investments covered under the
provisions of Section 186 of the Companies Act, 2013 read with
Companies (Meetings of Board and its Powers) Rules, 2014 are given in
the notes to Financial Statements of the full Annual Report.
CORPORATE SOCIAL RESPONSIBILITY:
In terms of the provisions of Section 135 of the Companies Act, 2013
(the Act) read with Companies (Corporate Social Responsibility
Policy) Rules, 2014, the Board of Directors of your Company has
constituted a Corporate Social Responsibility (CSR) Committee which
is chaired by Mrs. Rajashree Birla. The other Members of the Committee
are Mr. Jagdish Khattar, Independent Director, Mr. A.K. Agarwala, Non
Executive Director and Mr. D. Bhattacharya, Managing Director. Dr.
Pragnya Ram, Group Executive President, Corporate Communication & CSR
is a permanent invitee to the Committee. Your Company also has in place
a CSR Policy and the same is available on your Company''s website viz.
www.hindalco.com. The Committee recommends to the Board activities to
be undertaken during the year.
Your Company is a caring corporate citizen and lays significant
emphasis on development of the communities around which it operates.
Your Company has identified several projects relating to Social
Empowerment & Welfare, Infrastructure Development, Sustainable
Livelihood, Health Care and Education during the year and initiated
various activities in neighbouring villages around plant locations.
During the Financial Year 2015-16 the Company has spent Rs. 34.15 crore
under Section 135 of the Companies Act, 2013 on CSR Activities, which
represent 2.20% of average net Profits of the Company for last three
The Annual Report on CSR activities is attached as Annexure V to the
full Annual Report.
Pursuant to the requirement of Listing Regulations, the Company has
constituted Risk Management Committee, to review the risk management
plan/ process of your company.
Risk evaluation and management is an ongoing process within the
Organization. Your Company has comprehensive risk management policy
which is periodically reviewed by the Risk Management Committee.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
During the financial year, your Company entered into related party
transactions which were on arm''s length basis and in the ordinary
course of business. There are no material transactions with any
related party as defined under Section 188 of the Act read with
Companies (Meetings of Board and its Powers) Rules, 2014 and Listing
Regulations. All related party transactions have been approved by the
Audit Committee of your Company.
The policy on Related Party Transactions as approved by the Audit
Committee and the Board is available on your Company''s website viz.
EXTRACT OF ANNUAL RETURN:
In terms of the provisions of Section 92 (3) of the Companies Act, 2013
(the Act) read with the Companies (Management and Administration)
Rules, 2014, an extract of the Annual Return of your Company for the
financial year ended 31st March, 2016 is given in Annexure VI to the
full Annual Report.
BUSINESS RESPONSIBILITY REPORT:
As per Listing Regulations, a separate section of Business
Responsibility Report forms part of the full and Abridged Annual
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:
Your Company has an Internal Control System, commensurate with the
size, scale and complexity of its operations. The scope and authority
of the Internal Audit (IA) function is defined by the Audit Committee.
The Internal Audit Department monitors and evaluates the efficacy and
adequacy of internal control system in the Company, its compliance with
operating systems, accounting procedures and policies at all locations
of the Company.
Based on the report of internal auditors, the process owners undertake
corrective action in their respective areas and thereby strengthen the
controls. Significant audit observations and corrective actions thereon
are presented to the Audit Committee.
INTERNAL FINANCIAL CONTROL
Your directors confirm having laid down internal financial controls and
that such internal financial controls are adequate and were operating
SUBSIDIARY, JOINT VENTURES OR ASSOCIATE COMPANIES:
The financial statements of your Company''s subsidiaries and related
information have been placed on the website of your Company viz.
www.hindalco. com and also available for inspection during business
hours at the registered office of your Company. Any Member, who is
interested in obtaining a copy of financial statements of your
Company''s subsidiaries, may write to the Company Secretary at the
Registered Office of your Company.
In accordance with the provisions of the section 129 (3) of the Act,
read with the Companies (Accounts) Rules, 2014, a statement on the
performance and financial position of each of the subsidiaries,
associates and Joint Venture is attached as Annexure VII to the full
and Abridged Annual Report.
The names of Companies which have become or ceased to be subsidiaries,
Joint Ventures and associates are also provided in the aforesaid
- Your Company has not issued any shares with differential voting.
- There was no revision in the financial statements. However the Board
of Directors in the meeting held on 21st July, 2016 approved
Consolidated Financial Statements (updated) as disclosed in the
- Your Company has not issued any sweat equity shares.
- Mr. D. Bhattacharya and Mr. Satish Pai are directors on the Board of
Novelis Inc, wholly owned subsidiary. They are in receipt of annual fee
of US$ 1,50,000 and US$ 1,50,000 respectively in the calendar year
- There was no change in the nature of business.
- During the year under review, your Company has not accepted any fixed
deposits from the public falling under Section 73 of the Act read with
the Companies (Acceptance of Deposits) Rules, 2014. Thus, as on 31st
March, 2016, there were no deposits which were unpaid or unclaimed and
due for repayment.
- There are no significant and material orders passed by the regulators
or courts or tribunals impacting the going concern status and company''s
operations in future.
- There were no frauds reported by the Auditors u/s 143(12) of the
Companies Act, 2013.
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
Kumar Mangalam Birla
Dated : 21st July, 2016 (DIN: 00012813)