2007-08 - Aditya Birla Nuvo, Ltd

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MANAGEMENT’S DISCUSSION AND ANALYSISForeign Exchange RiskThe Company has a policy to hedge its long-term as well as short-term foreign exchange exposures tominimise foreign exchange risk. While long-term foreign currency borrowings are fully hedged, short-termexposures are hedged as per the policy formulated by the Company in this regard.Interest Rate RiskThe Company has a mixed basket of fixed and floating rate borrowings, both in Indian Rupees and foreigncurrency. The Company continuously monitors its interest rate exposures and whenever required, usesderivative instruments to minimise interest rate risk and interest cost.Commodity Price RiskThe Company is exposed to the risk of price fluctuation on raw materials as well as finished goods in all itsproducts. However, the risk is mitigated well considering the inventory levels and normal correlation in theprice of raw materials and finished goods.INTERNAL CONTROL SYSTEMThe Company has adequate internal control systems for business processes across various profit centres,with regard to efficiency of operations, financial reporting, compliance with applicable laws and regulations,etc. The Internal control system is supplemented by extensive audits conducted by the Corporate Audit Cell.Clearly defined roles and responsibilities for all managerial positions have been institutionalised. Regularinternal audits and checks ensure that responsibilities are executed effectively. The Audit Committee of theBoard of Directors actively reviews the adequacy and effectiveness of the internal control systems andsuggests improvements.The Management Information System (MIS) is the backbone of the Company’s control mechanism. Alloperating parameters are monitored and controlled. Any material change in the business outlook is reportedto the Board. Material deviations from the annual planning and budgeting, if any, are reported on a quarterlybasis to the Board. An effective budgetary control on all capital expenditure ensures that actual spending isin line with the capital budget.HUMAN RESOURCE MANAGEMENTAt present, the Company has 10,326 employees on its rolls. These human resource assets are integral to theCompany’s ongoing successes and enable the Company to deliver superior performance year after year. TheCompany’s Human Resource processes have been covered in depth in the Directors’ Report.CONCLUSIONWith its various investments and growth initiatives your Company has a well-diversified, balanced portfolioof “value” and “high growth” businesses. Against the backdrop of the initiatives taken and strong performanceby the individual businesses during the year, Aditya Birla Nuvo is travelling on the path of superior performance.Our strategy will be to focus on all-around growth and consolidation across the diversified businesses. As aresult of the transformation, the high growth businesses contributed 75% to our total revenues. The positiveimpact of high growth businesses would be more prominent in the coming years, helped by the success ofstrategic plans.The overall outlook for the Company’s future is bright.CAUTIONARY STATEMENTStatements in this “Management’s Discussion and Analysis” describing the Company’s objectives, projections,estimates, expectations or predictions may be “forward looking statements” within the meaning of applicablesecurities, laws and regulations. Actual results could differ materially from those expressed or implied. Importantfactors that could make a difference to the Company’s operations include global and Indian demand-supplyconditions, finished goods prices, feed stock availability and prices, cyclical demand and pricing in the Company’sprincipal markets, changes in Government regulations, tax regimes, economic developments within India and thecountries within which the Company conducts business and other factors such as litigation and labour negotiations.(30)
CORPORATE GOVERNANCE REPORTGovernance PhilosophyThe Aditya Birla Group is committed to the adoption of best governance practices and its adherence in thetrue spirit, at all times. Our governance practices are a product of self-desire, reflecting the culture of thetrusteeship that is deeply ingrained in our value system and reflected in our strategic thought process. At amacro level, our governance philosophy rests on five basic tenets viz., Board accountability to the Companyand shareholders, strategic guidance and effective monitoring by the Board, protection of minority interestsand rights, equitable treatment of all shareholders as well as superior transparency and timely disclosure.In line with this philosophy, Aditya Birla Nuvo Limited, one of the flagship Companies of the Aditya BirlaGroup, is striving for excellence through adoption of best governance and disclosure practices. The Company,as a continuous process, strengthens the quality of disclosures, on the Board composition and its functioning,remuneration paid and level of compliance with various Corporate Governance Codes.Compliance with Corporate Governance GuidelinesThe Company is fully compliant with the requirements of the prevailing and applicable corporate governancecode and is committed to ensuring compliance with any proposals for modifications well ahead of theirimplementation timelines. Your Company’s compliance with requirements is presented in the subsequentsections of this Report.I. BOARD OF DIRECTORSComposition of the Board:The Company has a balanced Board, comprising Executive and Non- Executive Directors which includesindependent professionals. The Chairman being Non- Executive, the total strength of IndependentDirectors exceeds one- third of the total strength of the Board. Securties and Exchange Board of India(SEBI) vide its circular dated April 08, 2008 has amended Clause 49 of the Listing Agreement which hasinteralia, stipulated that if the non-executive Chairman is a promoter or is related to promoters, at leastone-half of the board of the company should consist of independent directors. In view of the abovechange introduced by SEBI, the Company will have to have at least 50% independent Directors. Presently,out of the 14 Directors on the Board, 6 are Independent, 5 are Whole-time (including Managing Director)and 3 are other Directors. Steps are being taken to comply with the above change proposed by SEBI.The details of the directors with regards to the other Indian directorships (other than Section 25Companies), positions in either Audit Committee or Shareholder’s/ Investor Grievance Committee as wellas attendance at board meeting/ Annual General Meeting are as follows:Director Category No. of Other Other Committee No. of Board AttendedDirectorship(s) Positions Meetings LastHeld Held 2 AGMPublic Private Chairman/ Member Held AttendedChairpersonMr. Kumar Mangalam Birla Non-Executive 10 12 - - 5 5 NoMrs. Rajashree Birla Non-Executive 6 12 - - 5 5 NoMr. H. J. Vaidya Independent - - - - 5 5 NoMr. B. L. Shah Non-Executive 5 - - 1 5 5 YesMr. P. Murari Independent 10 - - 4 5 4 NoMr. B. R. Gupta Independent 4 - 3 - 5 5 NoMs. Tarjani Vakil Independent 5 1 3 2 5 5 YesMr. Vikram Rao Whole –time Director 5 4 - - 5 4 NoMr. S. C. Bhargava Independent 14 - 1 3 5 5 NoMr. G. P. Gupta Independent 12 1 5 4 5 5 YesDr. Bharat K. Singh Managing Director 7 - - - 5 5 YesMr.Rakesh Jain Whole –time Director - - - - 5 5 NoMr. S.K. Mitra 1 Whole –time Director - - - - 2 2 NoMr .K.K. Maheshwari Whole –time Director 4 - 2 3 5 5 YesMr. Adesh Kumar Gupta Whole –time Director & CFO 10 - - 7 5 5 Yes1. Resigned w.e.f. 1 st August, 2007.2. Only two Committees viz. Audit Committee and Shareholders’/ Investors’ Grievance Committee are considered.(31)
Page 2 and 3: Mr. G. D. Birla and Mr. Aditya Birl
Page 4 and 5: THE CHAIRMAN’S LETTER TO SHAREHOL
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Page 9 and 10: ADITYA BIRLA NUVO LIMITEDBOARD OF D
Page 11 and 12: FINANCIAL HIGHLIGHTS - STANDALONERs
Page 13 and 14: MANAGEMENT’S DISCUSSION AND ANALY
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SCHEDULESSCHEDULE 2RESERVES & SURPL
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SCHEDULESRs. CroresAs atAs atFace V
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SCHEDULESSCHEDULE 7INVENTORIESAs at
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SCHEDULESRs. CroresYear EndedYear E
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SEGMENT DISCLOSURES FOR THE YEAR EN
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CASH FLOW STATEMENT FOR THE YEAR EN
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AUDITORS’ REPORT ON THE CONSOLIDA
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CONSOLIDATED PROFIT & LOSS ACCOUNT
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SCHEDULES FORMING PART OF CONSOLIDA
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SEGMENT DISCLOSURES FOR THE YEAR EN
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CONSOLIDATED CASH FLOW STATEMENT AS
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ANNEXURE ‘1’ OF STATEMENT PURSU
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STATEMENT PURSUANT TO SECTION 212(8
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ANNEXURE ‘A’ OF STATEMENT U/S 2
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ANNEXURE ‘A’ OF STATEMENT U/S 2
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ADITYA BIRLA NUVO LIMITEDRegistered
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2007-08 - Aditya Birla Nuvo, Ltd

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