TO THE SHAREHOLDERS OF GRASIM INDUSTRIES LIMITED,
Your Directors have pleasure in presenting the 66th Annual Report and the AuditedAccounts of the Company for the year ended 31st March, 2013. As the Management Discussionand Analysis Section of the Annual Report focuses on your Companys strategies forgrowth and the performance review of the businesses/operations of the Company in depth,your Board is providing only a brief overview in this Report.
Acquisition of Terrace Bay, a Canadian Pulp Mill
In July 2012, in line with your Companys strategy to secure key inputs, theassets of Terrace Bay, a closed pulp mill in Ontario, Canada, was acquired by AV TerraceBay, Canada, the pulp JV, with Grasim holding a 40% stake and the remaining 60% held byThai Rayon Public Company Ltd., Thailand. The operations at this paper grade pulp millwere restarted in October 2012, as planned. This acquisition will help in meeting theincreasing pulp requirement for your Companys VSF business after the mill isconverted into dissolving grade pulp mill.
GROWTH OF THE EXISTING BUSINESSES
Expansion of VSF/Chemical Capacities
At Harihar (Karnataka), the 36,500 TPA VSF brownfield expansion was commissionedphase-wise. In Phase I, in September 2012, the plants capacity was expanded by18,250 TPA. In Phase II, in May 2013, the balance capacity of 18,250 TPA becameoperational with the commissioning of the Power Plant.
The 120,000 TPA greenfield VSF project at Vilayat (Gujarat) is nearing completion andis expected to go on stream in the 2nd Quarter of the FY 2013-14. To improvethe technology and efficiency of your Companys VSF plant at Nagda, a major revamp inphases, spread over the next three years is underway.
The Chemical plant (Caustic Soda - 182,500 TPA), also at Vilayat, commenced commercialproduction in May 2013. There will be a gradual ramp up in capacity in the first half ofthe FY 2013-14.
Work on the Epoxy project (51,500 TPA) at Vilayat is progressing, and the same islikely to be commissioned by September 2013.
Expansion of Cement Capacity
Your Companys subsidiary, UltraTech Cement Limited (UltraTech), has initiatedseveral projects across its locations. Of these, the following projects have beencommissioned
- Clinkerisation plant of 3.30 Mn. TPA at Rawan, Chhattisgarh
- Grinding unit of 1.55 Mn.TPA at Hotgi, Maharashtra
- Increase in cement grinding capacity by 0.60 Mn. TPA at Gujarat plant
- Bulk terminal at Cochin, Kerala
- Wall-care putty plant at Katni, Madhya Pradesh.
With the commissioning of these projects, the cement capacity of UltraTech hasincreased from 51.75 Mn. TPA to 53.90 Mn. TPA. The clinkerisation plant of 3.30 Mn. TPA inKarnataka is expected to go on stream in Q1 of the FY 2013-14.
UltraTech is committed to growth and towards this end, its Board has approved theexpansion of capacity at its Aditya Cement Works in Rajasthan by 2.9 Mn. TPA, includingthe setting up of two grinding units. This expansion envisages a capital outlay of aroundRs. 2,000 crore to be funded through a mix of internal accruals and borrowings. Theadditional facility is expected to be commissioned by March 2015.
With the commissioning of these and other projects in the pipeline, UltraTechscement capacity will stand augmented to 64.45 Mn. TPA by March 2015.
Your Company has reported improved performance for the year, achieving higher Revenueand PBIDT, despite the economic slowdown as reflected in decline in the Indian GDP growthto ~5%. The Companys Revenue increased by 11% at Rs. 27,904 crore (Rs. 25,245crore). PBIDT was up from Rs. 6,321 crore to Rs. 6,543 crore, a growth of 4%, led byimproved volumes in the VSF business and cost optimisation. Net Profit was Rs. 2,704 croreas compared to Rs. 2,647 crore in the FY 2011-12. Your Companys subsidiary,UltraTech, reported a net profit of Rs. 2,678 crore vis--vis Rs. 2,403 crore, reflectinga growth of 11%. The pressure on input and logistic cost continued, though there was somerelief on account of the softening in prices of imported coal.
| || || || ||(Rs. in Crore) |
| ||Consolidated ||Standalone |
| ||2012-13 ||2011-12 ||2012-13 ||2011-12 |
|Revenue from Operations (Net) ||27,904.32 ||25,244.89 ||5,255.01 ||4,973.56 |
|Profit before Interest, Depreciation/ Amortisation and Tax (PBIDT) ||6,543.12 ||6,320.60 ||1,522.75 ||1,721.81 |
|Less: Finance Costs ||324.14 ||313.99 ||39.09 ||35.82 |
|Less: Depreciation and Amortisation ||1,252.06 ||1,154.41 ||159.21 ||144.20 |
|Profit before Exceptional Item and Tax ||4,966.92 ||4,852.20 ||1,324.45 ||1,541.79 |
|Add: Exceptional Item ||204.43 || ||204.43 || |
|Profit Before Tax ||5,171.35 ||4,852.20 ||1,528.88 ||1,541.79 |
|Tax Expense ||1,467.21 ||1,320.77 ||302.89 ||364.79 |
|Profit After Tax ||3,704.14 ||3,531.43 ||1,225.99 ||1,177.00 |
|Add: Share in Profit/(Loss) of Associates ||73.65 ||63.16 || || |
|Less: Minority Interest ||1,073.40 ||947.13 || || |
|Profit for the Year ||2,704.39 ||2,647.46 ||1,225.99 ||1,177.00 |
|Balance brought forward from Previous Year ||778.77 ||1,520.49 ||662.34 ||703.72 |
|Surplus available for Appropriation ||3,483.16 ||4,167.95 ||1,888.33 ||1,880.72 |
|Appropriations: || || || || |
|- Reserve Fund ||0.77 ||0.50 || || |
|- General Reserve ||2,424.51 ||3,206.23 ||122.60 ||1,000.00 |
|- Debenture Redemption Reserve ||9.36 ||(71.50) || || |
|- Proposed Dividend ||206.52 ||206.36 ||206.52 ||206.36 |
|- Corporate Dividend Tax ||51.75 ||47.59 ||9.81 ||12.02 |
|- Share of Appropriation related to Associates ||2.16 || || || |
|- Balance carried to Balance Sheet ||788.09 ||778.77 ||1,549.40 ||662.34 |
| ||3,483.16 ||4,167.95 ||1,888.33 ||1,880.72 |
Your Directors have recommended a dividend of Rs. 22.50 per equity share, same as perlast year.
The dividend, if approved by the members, would involve a cash outflow of Rs. 216 crore(inclusive of Corporate Dividend Tax).
Equity shares that may be allotted upon exercise of Options granted under the EmployeeStock Option Scheme and out of the Share Capital Suspense, and before the Book Closure forpayment of dividend will rank pari passu with the existing shares and shall also beentitled to receive the aforesaid dividend.
EMPLOYEE STOCK OPTION SCHEME (ESOS)
During the year:
- 19,334 Options were vested out of the Options granted in the earlier years; and
- 66,764 Options were exercised and, accordingly, 66,764 shares were allotted to theconcerned option holders.
The details of Employee Stock Options granted pursuant to the Employee Stock OptionScheme -2006 (ESOS - 2006), as also the disclosures in compliance with Clause 12 of theSecurities and Exchange Board of India (Employee Stock Option Scheme and Employee StockPurchase Scheme) Guidelines, 1999, are set out in the Annexure "A" to thisReport. Your Board has also approved formulation of a new Employee Stock Option Scheme.Items seeking your approval for introduction and implementation of the new ESOS Schemeexercisable into not more than 2,30,000 equity shares of Rs. 10/- each by the permanentemployees, including any managing or whole-time director(s), of your Company and itssubsidiary companies, are included in the Notice convening the AGM together with theExplanatory Statement. A certificate from the Statutory Auditor on the implementation ofyour Companys Employee Stock Option Scheme will be placed at the ensuing AnnualGeneral Meeting for inspection by the Members.
Your Company raised long-term rupee loan of Rs. 537 crore for financing its VSFexpansion projects.
Term loans aggregating Rs. 73 crore were repaid during the year.
Your Company has adequate liquidity and a strong balance sheet. CRISIL Limited hasre-affirmed the "CRISIL AAA/Stable" and "CRISIL A1+" rating for yourCompanys long-term borrowings and short-term bank loan facilities, respectively,aggregating to Rs. 2,900 crore. Credit Analysis & Research Limited (CARE) has alsore-affirmed the "CARE AAA" and "CARE A1+" rating for yourCompanys long-term and short-term borrowings respectively, aggregating to Rs. 3,000crore.
AWARDS AND ACCOLADES
Some of the significant accolades earned by your Company during the year include:
> Certificate of Excellence Award for the year 2011-12 from Container Corporationof India Limited for achieving the largest volume as importers in terms of Twenty FootEquivalent Units (TEUs) at Railway Container Terminal, Vadodara: Birla CellulosicDivision, Kharach
> Gold Award for the year 2012 from Greentech Foundation, New Delhi, foroutstanding achievement in Environment Management in the Chemical Sector: ChemicalDivision, Nagda
> Bhamashah Award for the year 2011-12 from Commercial Tax Dept., Govt. of MadhyaPradesh, for being the third largest tax payer: Caustic Soda Membrane Cell Division, Nagda
RESEARCH AND DEVELOPMENT
Significant progress was made during the FY 2012-13 in building the technologycapabilities to address competitive market threats and begin laying the groundwork forsignificant profitable growth. Key technology programmes were developed in the areas offibre and cellulose pulp quality and towards enhanced product performance, reducedproduction costs and improved environmental sustainability. There is progress on buildingenabling capabilities in the areas of facilities and infrastructure, technologyorganisation staffing and development, and the engagement of external knowledge networksto complement internal capabilities. The recruitment of professional staff and leadershipis ongoing and the programme and staff managing processes have been defined and are beinginstituted. Some key highlights are outlined to illustrate the progress being made.
A comprehensive quality improvement approach, centred on instituting statisticalprocess control and Six Sigma continuous improvement techniques, has been launched in bothfibre and cellulose pulp sites. Significant reductions in process variation are beingaccomplished, and a robust customer monitoring and a feedback process are enabling theassessment of ongoing quality performance versus competition. Common metrics are beingdeveloped across all sites to track improvement and to enable the sharing of bestoperating practices to accelerate progress. Chronic process and fibre finish issues havebeen defined, which require additional technology development. Business and corporateR&D resources have been engaged to provide this support. These advances are aimed atsignificantly enhancing our customers satisfaction levels.
A number of programmes, aimed at enhanced fibre product performance, were launched forproducing dyed fibres, higher wet modulus and tenacity products, and the incorporation ofhigh value attributes into viscose staple fibres.
Technology developments aimed at reduced costs and improved environmentalsustainability are underway. These aim at increasing process productivity and reducingchemical material and energy requirements in the existing processes. Programmes exploringalternative process concepts with superior environmental performance are on, includingcontributions by external knowledge network partners.
Structured Forestry Plantation R&D programmes commenced at Harihar and Laos.Suitable genetic materials adapted to local edaphic-climatic conditions were selected, andare being used to establish base populations for future genetic selection and breeding. Amulti-disciplinary approach to create sustainable and eco-efficient forestry was started.This included programmes in genetic tree improvement, development of site specificsilviculture best practices, integrated pest and disease management and the use ofimproved genetic material and management of genetic diversity at each site.
Extensive new capabilities for pulp R&D were added as part of the Domsjoacquisition, strengthening the existing infrastructure for developments along the entirevalue chain. This group has now developed a portfolio of programmes aimed at enhancing thevalue of pulp supplies and improving their use in the fibre facilities. The Wood and PulpResearch Centre at Harihar has been strengthened, and is contributing to better treestocks for local wood supplies. The contribution of Birla Research Institute for AppliedSciences (for fibres) at Nagda and the Textile Research and Application Development Centre(TRADC) at Kharach to new process and product development, and expanded applications forfibres are commendable. The India-based Centres have accreditations from the Ministry ofScience and Technology, Government of India. The project to expand fibre R&D at theAditya Birla Science & Technology Company Ltd., an Associate of your Company atTaloja, is nearing completion. It will provide significantly enhanced laboratory andsemi-works capabilities for fibre research. The semi-commercial scale Fibre ResearchCentre at Kharach is under construction, and is expected to contribute significantly tothe fibre process and product R&D programmes in 2013. These investments along withsignificant increases in R&D resources and the growing analytical and research supportavailable through the corporate R&D organisation at Taloja, are integral to yourCompanys growth.
The technology organisation for the business has been strengthened with the recruitmentof R&D professionals with diverse backgrounds, capabilities and experiences. A coreteam of 20 R&D professionals are actively engaged in various technology programmes andinitiatives. External knowledge networks to complement internal capabilities have beendeveloped, providing access to advanced technologies in the areas of cellulose pulp andnovel new fibres. Many key technology leadership positions have been filled and work iscontinuing to staff the remaining opportunities.
Systematic programme and intellectual property management processes, engaging all thekey business stakeholders, have been developed and are being implemented across allaspects of R&D. An organisation structure and associated personnel management systemhave been developed and are in the process of being adopted.
All our R&D Centres are being further strengthened with new equipment andanalytical instruments.
In summary, significant progress has been accomplished in the areas of programmeportfolio development, infrastructure project execution, staff recruiting and development,and the creation of the overall R&D function operating systems. We look forward to thesignificant contributions and this R&D capability will deliver to the Pulp and Fibrebusiness.
Several innovative people - focused initiatives have been instituted at the Grouplevel, and these are translated into action at all of the Group Companies. Our basicobjective 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 retainour competitive edge.
Your Directors reaffirm their continued commitment to good corporate governancepractices. Your Company fully adheres to the standards set out by the Securities andExchange Board of India for Corporate Governance practices and has implemented all of itsstipulations.
As required by Clause 49 of the Listing Agreement of Stock Exchanges, a separatesection on Corporate Governance, together with a certificate from your Companysstatutory auditors, forms part of this Annual Report.
BUSINESS RESPONSIBILITY REPORT
As per Clause 55 of the Listing Agreement with the Stock Exchanges, a separate sectionof Business Responsibility Report forms part of this Annual Report.
DIRECTORS RESPONSIBILITY STATEMENT
As stipulated in Section 217(2AA) of the Companies Act, 1956, your Directors subscribeto the "Directors Responsibility Statement" and confirm that:
i) in the preparation of the annual accounts, the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
ii) the accounting policies selected have been applied consistently, and judgements andestimates are made that are reasonable and prudent so as to give a true and fair view ofthe state of affairs of your Company as at the end of the financial year and of the profitor loss of your Company for that period;
iii) proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of your Company and for preventing and detecting fraud, and other irregularities;and
iv) the annual accounts have been prepared on a going concern basis.
CONSOLIDATED FINANCIAL STATEMENTS AND RESULTS OF SUBSIDIARY COMPANIES
Consolidated Financial Statements have been prepared by your Company in accordance withthe applicable Accounting Standards (AS-21, AS-23 and AS-27) issued by the Institute ofChartered Accountants of India and the provisions of the listing agreement with the StockExchanges. Together with the Auditors Report, these form part of the Annual Report.
In terms of the General Circular of the Ministry of Corporate Affairs (MCA), Governmentof India, the copy of Balance Sheet, Statement of Profit and Loss, Directors Report,Auditors Report, etc., of the subsidiary companies is not attached with the AnnualReport of the Company. The related information on the Annual Accounts of the subsidiarycompanies shall be made available to the shareholders of the Company and of the subsidiarycompanies, who shall seek such information at any point of time. The Annual Accounts ofthe subsidiary companies will also be kept for inspection by any shareholder at theRegistered Office of the Company and that of the subsidiary companies concerned. TheStatement pursuant to Section 212 of the Companies Act, 1956, containing the details ofthe Companys subsidiaries and the gist of the financial performance of thesubsidiary companies forms part of the Consolidated Financial Statements of this AnnualReport.
PARTICULARS AS PER SECTION 217 OF THE COMPANIES ACT, 1956
Information on Conservation of Energy, Technology Absorption and Foreign ExchangeEarnings and Outgo, stipulated under Section 217(1)(e) of the Companies Act, 1956, is setout in a separate statement, attached to this Report and forms part of it as Annexure"B".
In accordance with the provisions of Section 217(2A) of the Companies Act, 1956, readwith the Companies (Particulars of Employees) Rules, 1975, as amended, the names and otherparticulars of employees are to be set out in the annexure to the Directors Report.Having regard to the provisions of Section 219(1)(b)(iv) of the said Act, the Report andAccounts as set out therein are being sent to all members of the Company excluding theinformation about the employees. Any member, interested in obtaining such particulars, maywrite to the Company Secretary at the Registered Office of the Company.
Mr. Shailendra K. Jain, Dr. Thomas M. Connelly, Mr. M.L. Apte and Mr. R.C. Bhargava,the existing Directors of the Company, retire from office by rotation and, being eligible,offer themselves for re-appointment.
A brief resume of the Directors, being re-appointed, has been incorporated in thenotice of the ensuing Annual General Meeting.
The Board, on the recommendation of the Audit Committee, has proposed that M/s. G.P.Kapadia & Co., Chartered Accountants, Mumbai, and M/s. Deloitte Haskins & Sells,Chartered Accountants, Mumbai, be re-appointed as the Joint Statutory Auditors of theCompany, to hold office from the conclusion of the ensuing Annual General Meeting till theconclusion of the next Annual General Meeting of the Company. M/s. G.P. Kapadia & Co.,Chartered Accountants, Mumbai, and M/s. Deloitte Haskins & Sells, CharteredAccountants, Mumbai, have forwarded their certificates to the Company, stating that theirre-appointment, if made, will be within the limit specified in that behalf in Sub-section(1B) of Section 224 of the Companies Act, 1956.
The Board, on the recommendation of the Audit Committee, has also proposed that M/s.Vidyarthi & Sons, Chartered Accountants, Gwalior, be re-appointed as the BranchAuditors of Vikram Woollens, a Division of your Company, from the conclusion of theensuing Annual General Meeting till the conclusion of the next Annual General Meeting ofthe Company.
Resolutions seeking your approval on these items are included in the Notice of theensuing Annual General Meeting.
The observations made in the Auditors Report are self-explanatory, and,therefore, do not call for any further comments under Section 217(3) of the Companies Act,1956.
In pursuance of Section 233-B of the Companies Act, 1956, your Directors have appointedM/s. R. Nanabhoy & Co., Mumbai, as the Cost Auditors to conduct the Cost Audit for theyear 2013-14.
Pursuant to Cost Audit (Report) Rules, 2001, the Cost Audit Report of the Company forthe financial year ended 31st March, 2012, was filed on 30th January, 2013, vide SRN No.S20083218 with the Ministry of Corporate Affairs, New Delhi.
Your Directors record their sincere appreciation of the Central and State Governments,banks, financial institutions, stakeholders and business associates for theirwhole-hearted support and co-operation.
For and on behalf of the Board
Kumar Mangalam Birla
Mumbai, 4th May, 2013
TO THE DIRECTORS REPORT
Disclosure pursuant to the provisions of the Securities and Exchange Board of India(Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999
|Particulars ||Details of Employee Stock Options as on 31st March, 2013 |
| ||Tranche 1 ||Tranche 2 ||Tranche 3 ||Tranche 4 |
|a) Number of Stock Options Granted ||2,01,530 ||16,610 ||71,297 ||6,037 |
|b) The pricing Formula ||Exercise price was determined by averaging the daily closing price of the Companys equity shares during the 7 days immediately preceding the date of grant and discounting it by 30%. ||Exercise price was determined by averaging the daily closing price of the Companys equity shares during the 7 days immediately preceding the date of grant and discounting it by 5%. ||Exercise price was determined by averaging the daily closing price of the Companys equity shares during the 7 days immediately preceding the date of grant and discounting it by 30%. ||Exercise price was determined by averaging the daily closing price of the Companys equity shares during the 7 days immediately preceding the date of grant and discounting it by 30%. |
| ||Exercise Price: Rs. 1,928/- ||Exercise Price: Rs. 2,885/- ||Exercise Price: Rs. 1,440/- ||Exercise Price: Rs. 1,594/- |
|c) Options Vested ||1,62,654 ||14,345 ||35,649 ||1,509 |
|d) Options Exercised ||87,426 ||1,444 ||12,020 ||1,037 |
|e) The total number of shares arising as a result of exercise of options ||87,426 ||1,444 ||12,020 ||1,037 |
|f) Options forfeited/cancelled/lapsed ||38,876 ||2,265 || || |
|g) Variation of terms of options ||Pursuant to the Scheme of Arrangement for demerger of Cement Business of the Company to Samruddhi Cement Limited ("Samruddhi") (a subsidiary of the Company, which has since been merged with UltraTech Cement Limited (another subsidiary of the Company)), the Exercise Price of stock options of the Company issued under Tranche 1 and Tranche 2 was divided between the stock options issued by the Company and the stock options issued by Samruddhi under its Compensatory Stock Options Scheme. ||None ||None |
| ||Accordingly, the Exercise Price of stock options issued by the Company stands revised as under: || || |
| ||Rs. 1,523/- ||Rs. 2,279/- || || |
|h) Money realised by exercise of options ||Rs. 13,67,91,558/- ||Rs. 32,90,876/- ||Rs. 1,73,08,800/- ||Rs. 16,52,978/- |
|i) Total number of options in force ||75,228 ||12,901 ||59,277 ||5,000 |
|j) Employee-wise details of options granted || || || || |
|i) Senior Managerial personnel ||Mr. Shailendra K. Jain #: || ||Mr. K.K. Maheshwari: || |
| ||16,980* || ||43,932 || |
| ||Mr. D.D. Rathi #: || ||Mr. Adesh Gupta: || |
| ||7,550* || ||6,981 || |
|ii) Any other employee who received a grant in any one year of option amounting to 5% or more of options granted during that year || || ||Dr. Prakash Maheshwari: ||Dr. Raju Mistry: |
| || || ||12,090 ||4,147 |
| || || ||Mr. Sunay Kamat: ||Mr. D.P. Modani: |
| || || ||4,147 ||1,890 |
| || || ||Mr. Gerard DCunha: || |
| || || ||4,147 || |
|iii) Identified employees who were granted option during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant || || || || |
|k) Diluted earnings per share ||Rs. 133.51 || |
|l) Difference between the employee compensation cost, computed using the intrinsic value of the stock options and the employee compensation cost that shall have been recognised if the fair value of the options was used ||Particulars ||Rs. in Crore |
| ||Net Profit ||1,225.99 |
| ||Add: Intrinsic Value Compensation Cost ||1.00 |
| ||Less: Fair Value Compensation Cost ||1.83 |
| ||Adjusted Net Profit ||1,225.16 |
| || || |
| ||Earnings Per Share (Rs.) || |
|The impact of this difference on profits and on EPS of the Company ||As reported: Basic ||133.62 |
| ||Diluted ||133.51 |
| ||As adjusted: Basic ||133.53 |
| ||Diluted ||133.42 |
| || || |
# Ceased to be in employment of the Company
* Net of Options cancelled/lapsed
|Particulars ||Details of Employee Stock Options as on 31st March, 2013 |
| ||Tranche 1 ||Tranche 2 ||Tranche 3 ||Tranche 4 |
|m) (i) Weighted-average exercise prices and weighted-average fair values of options whose exercise price equals the market price of the stock ||N.A. ||N.A. ||N.A. ||N.A. |
|(ii) Weighted-average exercise prices and weighted-average fair values of options whose exercise price is less than the market price of the stock ||Revised Weighted- average exercise price: Rs. 1,523/- ||Revised Weighted- average exercise price: Rs. 2,279/- ||Weighted-average exercise price: Rs. 1,440/- ||Weighted-average exercise price: Rs. 1,594/- |
| ||Revised Weighted-average fair value: Rs. 1,038.81 ||Revised Weighted-average fair value: Rs. 872.13 ||Weighted-average fair value: Rs. 1,130.00 ||Weighted-average fair value: Rs. 1,259.39 |
|(iii) Weighted-average exercise prices and weighted-average fair values of options whose exercise price exceeds the market price of the stock ||N.A. ||N.A. ||N.A. ||N.A. |
|n) A description of the method and significant assumptions used during the year to estimate the fair values of options, including the following weighted-average information: On the Date of Grant || || || || |
|(i) risk-free interest rate (%) ||7.78 ||7.78 ||8.09 ||8.09 |
|(ii) expected life (No. of years) ||5 ||5 ||5 ||5 |
|(iii) expected volatility (%) ||33 ||36 ||45.64 ||31.73 |
|(iv) dividend yield (%) ||1.84 ||1.80 ||1.58 ||0.61 |
|(v) the price of the underlying share in market at the time of option grant ||Rs. 2,728/- ||Rs. 2,885/- ||Rs. 2,018/- ||Rs. 2,330/- |
TO THE DIRECTORS REPORT
Information under Section 217(1)(e) of the Companies Act, 1956, read with Companies(Disclosure of Particulars in the Report of Board of Directors) Rule, 1988, and formingpart of the Directors Report for the year ending 31st March, 2013.
A CONSERVATION OF ENERGY
a) Energy Conservation Measures Taken
The Company is continuously engaged in the process of energy conservation throughimproved operational and maintenance practices. Following measures have been taken bydifferent units of the Company:
i) Viscose Staple Fibre and Pulp Units
- Installation of energy efficient screw chiller in place of reciprocating typecompressor in Viscose and CS2 Refrigeration System
- Rottary Vacuum Filter (RVF) Backwashing using RVF mother liquor in place of softwater.
- Replacement of conventional surface aerators with energy-efficient surface aeratorsin Effluent Treatment Plant
- Up-gradation of Caustic Dilution Plant resulting in lower power consumption
- Low voltage transformer for plant lighting (Viscose, Spinning and Auxiliary)
- Adoption of Triple Effect Anhydrous Evaporator in place of double effect in Auxiliary
ii) Chemical Unit
- Conversion of Electrolyser from 2nd Generation to 5thGeneration
- Remembraning of inefficient Electrolysers
- Installation of new screw Compressor
iii) Textile Unit
- Optimisation in Humidification plant and chiller operation
- Saving of power by optimum utilisation and seasonal benefit in Humidification plants
- Optimisation in TFO speeds
b) Additional Investment and Proposals, if any, being implemented for reduction ofconsumption of energy:
i) Viscose Staple Fibre and Pulp Units
- Installation of Caustic Dilution Plant for power saving
- Motorised valves for TG3 cooling tower pump delivery line to conserve electricalenergy
- Variable Frequency Drive for product liquor flash tank pump in evaporator to reducepower consumption
- LP ejector and Vacuum pump combination in place of HP ejector system for MSFE
iii) Chemical Unit
- Conversion of balance Electrolyser from 2nd Generation to 5thGeneration
- Remembraning of inefficient Electrolysers
iii) Textile Unit
- Installation of LED lights
- Replacement of repeated burnt motors
c) Impact of Measures at (a) and (b) above for reduction of energy consumption andconsequent impact on the cost of production of goods:
- The above measures have resulted/will result in reduction in energy consumption,increase in productivity and reduction in energy cost
d) Total Energy Consumption and Energy Consumption per Unit of Production
As per form A attached
Total Energy Consumption and Energy Consumption per Unit of Production
(A) POWER AND FUEL CONSUMPTION
| ||Unit ||Current Year ||Previous Year ||Reason for Deviation |
|1. Electricity || || || || |
|a) Purchased - Unit ||000 ||3,99,970 ||3,68,653 ||Increased due to higher production |
|Total amount ||Rs.in Cr. ||195.83 ||171.58 || |
|Rate per Unit ||Rs./Unit ||4.90 ||4.65 ||Rate increased by the State Electricity Board |
|b) Own Generation || || || || |
|i) Through Diesel Generator - Unit ||000 ||139 ||183 ||Lower use of DG set |
|Unit per Litre of Diesel Oil ||Units/Ltrs. ||3.31 ||3.36 || |
|Cost/Unit ||Rs./Unit ||16.20 ||12.97 ||Increase in diesel price |
|ii) Through Steam Turbine - Units ||000 ||7,26,284 ||7,37,539 || |
|Units per Kg. of Steam ||Kg./Kg. ||5.65 ||5.46 || |
|Units of Electricity per Kg. of Coal ||KWh/Kg. ||0.30 ||0.30 || |
|Cost/Unit ||Rs./Unit ||3.59 ||3.61 || |
|(Cost of Fuel, Fixed Cost and Govt. Levies) || || || || |
|2. Coal (Slack, Steam and ROM including Lighting Coal) || || || || |
|For Co-generation of Steam and Power ||Tonne ||10,45,096 ||10,66,381 ||Lower captive power generation |
|Total Amount ||Rs. in Cr. ||458.08 ||437.13 || |
|Average Rate ||Rs./Tonne ||4,383 ||4,099 ||Increase in coal prices |
|3. Furnace Oil (Including LSHS) || || || || |
|Quantity ||K. Ltrs. ||5,954 ||6,453 || |
|Total Amount ||Rs. in Cr. ||24.44 ||23.79 || |
|Average Rate ||Rs./K.Ltrs. ||41,050 ||36,869 ||Increase in market rate |
|4. Light Diesel Oil (LDO) || || || || |
|Quantity ||K. Ltrs. ||664 ||965 || |
|Total Amount ||Rs. in Cr. ||4.01 ||4.56 || |
|Average Rate ||Rs./K.Ltrs. ||60,396 ||47,229 ||Increase in market rate |
|5. High Speed Diesel Oil (HSD) || || || || |
|Quantity ||K. Ltrs. ||42 ||54 || |
|Total Amount ||Rs. in Cr. ||0.22 ||0.24 || |
|Average Rate ||Rs./K.Ltrs. ||53,686 ||43,609 ||Increase in market rate |
|6. Internal Generation || || || || |
|Steam || || || || |
|a) From Chemical Recovery Boiler in Rayon Pulp Plant || || || || |
|Quantity ||Tonne ||6,17,760 ||5,81,216 || |
|Total Cost ||Rs. in Cr. ||1.09 ||1.21 || |
|Rate/Unit (Cost of Oil used for firing support in Boiler) ||Rs./Tonne ||17.65 ||20.88 ||Less use of F.Oil in Recovery Boiler during the FY13 as compared to the FY12 |
|b) From Waste-Heat Boiler in Sulphuric Acid Plants || || || || |
|Quantity ||Tonne ||3,40,623 ||3,23,917 || |
|Total Cost ||Rs. in Cr. ||N.A. ||N.A. || |
|Rate/Unit ||Rs./Tonne ||N.A. ||N.A. || |
(B) CONSUMPTION PER UNIT OF PRODUCTION:
| || || ||Actual |
|Particulars ||Unit ||Standard ||Current Year ||Previous Year |
|VSF || || || || |
|Electricity ||Units/Tonne ||1,500 ||1,185 ||1,208 |
|Steam ||Tonne/Tonne ||12.50 ||8.87 ||9.15 |
|Caustic Soda || || || || |
|Electricity ||Units/Tonne ||2,400 ||2,173 ||2,215 |
|Steam ||Tonne/Tonne ||0.09 ||0.17 ||0.19 |
|Textiles: || || || || |
|Yarn || || || || |
|Electricity ||Units/100 Kg. || ||744 ||722 |
|Steam ||Tonne/100 Kg. || ||0.20 ||0.16 |
|Fibre Dyeing || || || || |
|Steam ||Tonne/100 Kg. || ||0.56 ||0.64 |
|Stable Bleaching Powder (SBP) || || || || |
|Electricity ||Units/Tonne ||128 ||120 ||125 |
|Steam ||Tonne/Tonne ||0.13 ||0.12 ||0.13 |
|Poly Aluminium Chloride || || || || |
|Electricity ||Units/Tonne ||77 ||62 ||58 |
|Steam ||Tonne/Tonne ||0.27 ||0.28 ||0.28 |
|Chlorosulphonic Acid || || || || |
|Electricity ||Units/Tonne ||35 ||33 ||38 |
|Steam ||Tonne/Tonne ||0.11 ||0.09 ||0.10 |
|Caustic Fusion Plant || || || || |
|Electricity ||Units/Tonne ||60 ||63 ||63 |
|Steam ||Tonne/Tonne ||0.09 ||0.05 ||0.06 |
|Chlorinated Paraffin || || || || |
|Electricity ||Units/Tonne ||85 ||68 ||88 |
|Steam ||Tonne/Tonne ||0.08 ||0.07 ||0.08 |
B. TECHNOLOGY ABSORPTION
Efforts made in Technology Absorption in Form "B"
RESEARCH & DEVELOPMENT (R&D) FORM "B"
1 Specific areas in which R&D carried out by the Company:
Viscose Staple Fibre Units
- Key Technology programmes were developed in the areas of fibre and cellulose pulpquality, enhanced product performance, reduced production cost and improved environmentalsustainability
- A number of programmes aimed at enhanced fibre product performance were launched fordyed fibres, higher wet modulus and tenacity products, and the incorporation of high valueattributes into viscose staple fibres
- Development of fire resistant Fibre in collaboration with technology supplier
- Set up a pilot plant for Chlorinated Paraffin application to make Poly Vinyl Chloride(PVC) compounds
2 Future Plan of Action Viscose Staple Fibre Units
- Development of R&D infrastructure and strengthening R&D team with requiredcapabilities and experiences
- Continuous programme to improve processes and quality
- A multi-disciplinary approach to create sustainable and eco-efficient forestry
- A pilot plant for brine treatment to be set at Nagda unit for testing the quality ofbrine, using salt from different sources and varying impurities level in the salt
- A pilot scale electrolyser in collaboration with UHDE-Germany is being set up atAditya Birla Science & Technology Company Ltd. (ABSTCL) to develop optimum operationalstandards
- A Pilot scale plant being set up based on Oxyzen Depolarized Cathode (ODC) technologyfor achieving lower energy consumption
|3 Expenditure on R&D || |
|Expenditure ||Rs. in Crore |
|a. Capital ||12.36 |
|b. Recurring ||13.73 |
| ||26.09 |
|c. Total R&D Expenditure as a percentage of turnover ||0.50% |
4 Technology Absorption, Adoption and Innovation
The Company continuously strives to adopt latest technology for improving productivity,product quality and reducing consumption of scarce raw material, energy and other inputs.
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company is exporting Viscose Staple Fibre, Chemicals, Textiles and Plant andMachinery, and has taken successful initiatives for increasing exports.
(a) Activities related to Exports
Exports on F.O.B. basis during the year: Rs. 1,263.14 crore (b) Total Foreign Exchangeused and earned Foreign Exchange used: Rs. 1,828.61 crore Foreign Exchange earned: Rs.1,284.48 crore