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THE MEMBERS OF
GRASIM INDUSTRIES LIMITED
Your Directors take pleasure in presenting the 68th Annual Report together with the Audited Financial Statements of your Company for the financial year ended 31st March 2015.
For the year under review, your Directors have recommended a dividend of Rs. 18/– per equity share of Rs. 10/– each. The dividend, if approved by the members, would involve a cash outflow of 1168.7 Crore (inclusive of Corporate Dividend Tax).
Your Company's strategic intent continues to be strengthening of its leadership position in both the Viscose Staple Fibre (VSF) and businesses.
In this regard, significant progress has been made on its expansion/acquisition plans.
As the Management Discussion and Analysis section, which forms part of the Annual Report, focuses on your Company's strategies for growth and the performance review of the businesses/ operations in depth, we are providing only a brief overview of these matters in this Report.
Growth Plans implemented / initiated during the year ended 31st March 2015
During the year under review, your Company has commissioned the Greenfield VSF Project (120K TPA) at Vilayat in Gujarat, thereby enhancing its total capacity to 498K TPA. Of the four lines, two lines (43K TPA) are geared to produce specialty fibre. This will enable ramping up of VSF volumes and will also augment your Company's presence into the specialty fibre market.
The Board of Directors of your Company has approved the amalgamation of Aditya Birla Chemicals (India) Limited (ABCIL) with your Company w.e.f. 1st April 2015, subject to requisite shareholders, court and R regulatory approvals. ABCIL is one of the leading O p Chlor–Alkali companies in India with an installed ER capacity of ~293K TPA of caustic soda. Upon the effectiveness of the Scheme of Amalgamation, your ' Company's total caustic soda capacity will stand A enhanced at 804K TPA. The merger will allow O B your Company to strengthen its existing portfolio of VSF, Chlor–Alkali & allied chemicals and textiles by bringing in Chlor–Alkali and value added product business of ABCIL.
In Cement Business, your Company's subsidiary, UltraTech Cement Limited (UltraTech) completed the acquisition of the Gujarat units (4.8 Mn. TPA) of Jaypee Cement Corporation Limited (JCCL) in June 2014, at an enterprise value of t 3,800 Crore, besides the actual net working capital at closing.
During the year under review, UltraTech commissioned cement capacity of 1.4 Mn. TPA, clinker capacity of 2.0 Mn. TPA and Captive Power Plants / Waste Heat Recovery System aggregating 72.5 MW.
Further, UltraTech has entered into an agreement with Jaiprakash Associates Limited (JAL) for acquiring JAL's Cement business at Bela and Sidhi in Madhya Pradesh, consisting of Cement capacity of 4.9 Mn. TPA and Thermal Power Plant of 180 MW. On completion of the ongoing expansion projects and acquisition of JAL's business as stated above, the total capacity of UltraTech will stand expanded from 63.2 Mn. MT to 74.8 Mn. MT per annum.
In VSF, the global weakening of competing fibres (Polyester and Cotton) and the current overcapacity scenario, especially in China, exerted pressure on realizations. The impact was partially offset by lower pulp cost.
In Cement, the prices in the industry were under pressure due to sluggish demand. Input material and logistic costs continued to rise during the year. UltraTech reported net revenue for the year at Rs. 24,349 Crore, which was up by 12%, over the previous year. UltraTech's PBIDT was up by 10% at t 4,776 Crore, while the increase in finance cost and tax expenses resulted in lower PAT of Rs. 2,098 Crore.
Your Company's Consolidated revenue rose by 12% from Rs. 29,323 Crore to Rs. 32,847 Crore. Volumes grew in all the businesses led by expansions and acquisitions. PBIDT grew by 4% at t 5,683 Crore with improved performance from Cement and Chemical businesses. Net profit for the year was Rs. 1,744 Crore as against Rs. 2,072 Crore in the last year as a result of higher interest, depreciation and tax expense.
Your Company's Standalone revenue stood at Rs. 6,333 Crore vis–a–vis t 5,604 Crore in the previous year. Depreciation increased due to commissioning of VSF plant at Vilayat. Tax expense which was lower at Rs. 89 Crore in the last year due to tax holiday for newly commissioned power plant, increased to Rs. 155 Crore during the year. Net profit was at t 530 Crore as against Rs. 896 Crore.
SALE OF CONSUMER PRODUCT DIVISION
During the current financial year 2015–16, your Company has sold its Consumer Products Division (the Division) to Future Consumer Enterprise Limited on a slump sale basis for a total consideration of Rs. 10.03 Crore, w.e.f. 16th July 2015. The Division was engaged in the manufacture of Face Care Wipes, Baby Wipes and other products in the Baby/ House care segments and for the financial year 2014–15 its net sale was at Rs. 9.52 Crore.
During the year under review, your Company raised Long Term Rupee Loan of t 36 Crore for financing modernization of its VSF plant at Nagda in Madhya Pradesh. Term loans aggregating t 152 Crore were repaid during the year.
Your Company has adequate liquidity and a strong Balance Sheet. CRISIL Limited (CRISIL) and Credit Analysis & Research Limited (CARE) have re–affirmed the ratings of "CRISIL AAA/Stable" and "CARE AAA" respectively, for your Company's long term borrowings and "CRISIL A1+" and "CARE A1 +" respectively, for your Company's short term borrowings.
During the year under review, the Company has not accepted or renewed any amount falling within the purview of provisions of Section 73 of the Companies Act, 2013 (the Act) read with the Companies (Acceptance of Deposits) Rules, 2014. Hence, the requirement for furnishing details of deposits which are not in compliance with Chapter V of the Act is not applicable.
SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES
During the year under review, Aditya Birla Power Ventures Limited, a wholly owned subsidiary of the Company, ceased to be a subsidiary of the Company. No company has become/ ceased to be a joint venture or associate of the Company during the financial year 2014–15.
In accordance with Section 129(3) of the Act read with the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of the subsidiaries, associate and joint venture companies in Form AOC–1 is given in Annexure 'A' to this Report. The audited accounts / financial statements in respect of each of the Subsidiary Companies are available on the Company's website, www.grasim.com. Any Member, who is interested in obtaining a copy of the Audited Financial Statements of your Company's subsidiaries, may write to the Company Secretary at the Registered Office of your Company.
The Company has framed a Policy for determining material subsidiaries, which has been uploaded on the Company's website www.grasim.com.
CONSOLIDATED FINANCIAL STATEMENT
In accordance with the Act, read with the Companies (Accounts) Rules, 2014 and Accounting Standard (AS)–21 on Consolidated Financial Statements read with AS–23 on Accounting for Investments in Associates and AS–27 on Financial Reporting of Interest in Joint Ventures, the Audited Consolidated Financial Statement is provided in the Annual Report.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Act, in relation to the Audited Financial Statements of the Company for the year ended 31st March 2015, the Directors of your Company hereby state that: a. in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
b. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates 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 that period;
c. the Directors have taken proper and sufficient care 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;
d. the Directors have prepared the Annual Accounts of the Company on a 'going concern' basis;
e. the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
f. the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
MANAGEMENT'S DISCUSSION & ANALYSIS REPORT
Management's Discussion & Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report.
Your Directors reaffirm their continued commitment to good corporate governance practices. During the year under review, your Company was in compliance with the provisions of Clause 49 of the Listing Agreement with the Stock Exchanges relating to Corporate Governance.
The compliance report is provided in the Corporate Governance section of the Annual Report. The Auditors' Certificate on compliance with the provisions of Clause 49 of the Listing Agreement is given in Annexure 'B' to this Report.
BUSINESS RESPONSIBILITY REPORT
As per Clause 55 of the Listing Agreement with the Stock Exchanges, a separate section of Business Responsibility Report describing the initiatives taken by the Company from environmental, social and governance perspective forms part of the Annual Report.
CORPORATE SOCIAL RESPONSIBILITY
In terms of the provisions of Section 135 of 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. B. V. Bhargava, Mr. Shailendra K. Jain and Mr. K. K. Maheshwari. Dr. Pragnya Ram, Group Executive President, Corporate Communication & CSR is a permanence invitee to the Committee. The Committee has q_E formulated and recommended to the Board a cc Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the § Company, which has been approved by the Board q and the same is available on your Company's m website, www.grasim.com.
The Company is a caring corporate citizen and lays significant emphasis on development of the host communities around which it operates. The Company, with this intent, has identified several projects relating to Social Empowerment & Welfare, Infrastructure Developments, Sustainable Livelihood, Health Care and Education during the year and initiated various activities in neighboring villages around its plant locations. The work on several initiatives has picked up momentum during the year, resulting in a spend of Rs. 16.71 Crore (1.69% of the average net profits of the last 3 years as defined for the purposes of CSR). The Company has identified promotion and development of handloom, handicrafts, and related projects, the work on which was started last year and will be intensified in the current year.
The Annual Report on CSR activities is given in Annexure 'C' to this Report.
DIRECTORS AND KEY MANAGERIAL
During the year under review, Members approved the appointment of Mr. Cyril Shroff (DIN: 00018979), Mr. B. V. Bhargava (DIN: 00001823), Dr. Thomas M. Connelly Jr. (DIN: 03083495), Mr. M. L. Apte (DIN: 00003656) and Mr. R. C. Bhargava (DIN: 00007620) as Independent Directors of the Company, for a period of five consecutive years with effect from 6th September, 2014, whose offices are not liable to retire by rotation. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under the Act and Clause 49 of the Listing Agreement with the Stock Exchanges.
Mr. D. D. Rathi resigned as a Director of the Company with effect from 25th September 2014 due to preoccupation. Your Board has placed on record its deep appreciation of the valuable services rendered by Mr. Rathi during his association with the Company.
Mr. O. P. Rungta (DIN: 00020559) was appointed as an Additional Director and an Independent Director of the Company for a period of five consecutive years w.e.f. 25th September, 2014, subject to the approval of the Members. As per Section 161 of the Act, Mr. Rungta being an Additional Director, holds office upto the date of the ensuing Annual General Meeting (AGM) and is eligible to be appointed a Director of the Company. The Company has received a notice in writing from Mr. Rungta along with the deposit of requisite amount under Section 160 of the Act signifying his candidature for the office of the Director of the Company. The resolution seeking Mr. O. P. Rungta's appointment has been included in the Notice of the AGM together with his brief details. Your Directors commend the Resolutions for your approval.
In accordance with the provisions of the Act and the Articles of Association of the Company, Mr. Kumar Mangalam Birla (DIN: 00012813) and Mr. N. Mohan Raj (DIN: 00181969), Directors of the Company, will retire by rotation at the Company's ensuing AGM and being eligible, have offered themselves for re–appointment. Resolutions seeking their appointment together with their brief profile have been included in the Notice of the AGM. Your Directors commend the Resolutions for your approval.
The Board has accepted the request of Mr. Adesh Kumar Gupta for an early retirement with effect from the close of business hours on 30th June 2015, from the office of the Whole–time Director & Chief Financial Officer, to pursue some of his areas of personal interest beyond business. Mr. Gupta ceased to be a Whole Time Director & Chief Financial Officer and Director on the Board of the Company with effect from 30th June 2015. Mr. Gupta had been with the Group for 36 years and has made an exceptional contribution to various businesses in a variety of roles and capacities. The Board places on record its deep appreciation of Mr. Gupta's contribution to the Group, spanning over three decades.
Subject to the approval of the shareholders, the Board has on the recommendation of the Nomination and Remuneration Committee appointed Mr. Sushil Agarwal (DIN: 00060017) as an Additional Director and Whole Time Director & Chief Financial Officer (CFO) of the Company for a period of five years, w.e.f. 1st July 2015. As an Additional Director, Mr. Sushil Agarwal holds office up to the date of the ensuing AGM and is eligible to be appointed a Director of the Company. The Company has received a notice from Mr. Sushil Agarwal along with the requisite deposit signifying his candidature for appointment as the Director at the ensuing AGM. The resolution seeking Mr. Sushil Agarwal's appointment has been included in the Notice of the AGM together with his brief details. Your Directors commend the Resolution for your approval.
A brief resume of the Directors being appointed / re–appointed forms part of the Notice of the ensuing AGM.
Mr. Adesh Kumar Gupta, who was the Whole–time Director & CFO of your Company up to 30th June 2015, was paid sitting fees of Rs. 2.30 Lakh by UltraTech for attending its Board meetings and commission of Rs. 1.00 Lakh will be paid by UltraTech, subject to the approval of its shareholders. Barring this, none of the managerial personnel of the Company is in receipt of remuneration / commission from the subsidiary companies of the Company.
Mrs. Hutokshi Wadia was appointed as a Key Managerial Personnel designated as Sr. Vice President and Company Secretary of the Company in place of Mr. Ashok Malu, with effect from 1st March 2015.
In terms of the provisions of Section 203 of the Act, Mr. K. K. Maheshwari, Managing Director, Mr. Sushil Agarwal, Whole–time Director & CFO and Mrs. Hutokshi Wadia, Sr. Vice President & Company Secretary are the Key Managerial Personnel of your Company.
FORMAL ANNUAL EVALUATION
Pursuant to the provisions of the Act and Clause 49 of the Listing Agreement, a Framework of the Board Performance Evaluation has been formulated. In terms of this Framework, the Nomination and Remuneration Committee and the Board has carried out an annual performance evaluation of its own performance, the performance of the various Committees of the Board, individual Directors and the Chairman. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report
The details of programme for familiarization of the Independent Directors of your Company are available on your Company's website, www.grasim.com
The Board has, on the recommendation of the Nomination and Remuneration Committee, formulated the Remuneration policy of your Company which is given in Annexure 'D' to this report.
COMMITTEES OF THE BOARD
The Board has constituted an Audit Committee comprising of Mr. B. V. Bhargava, Mr. R. C. Bhargava and Mr. M. L. Apte as its members. The Managing Director and Whole Time Director & CFO are the permanent invitees to the meetings of the Audit Committee. Further details relating to the Audit Committee are provided in the Corporate Governance Report forming part of this Annual Report.
All the recommendations made by the Audit Committee during the year, were accepted by the Board of Directors of the Company.
NOMINATION AND REMUNERATION COMMITTEE
The Board has constituted a Nomination and Remuneration Committee comprising of Mr. M. L. Apte, Mr. Cyril Shroff and Mr. Kumar Mangalam Birla as its members. Further details relating to the Nomination and Remuneration Committee are provided in the Corporate Governance Report forming part of this Annual Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Board has constituted a Corporate Social Responsibility Committee comprising of Mrs. Rajashree Birla, Mr. B. V. Bhargava, Mr. Shailendra K. Jain and Mr. K. K. Maheshwari as its members. Further details relating to the Corporate Social Responsibility Committee are provided in the Corporate Governance Report forming part of this Annual Report.
STAKEHOLDERS' RELATIONSHIP COMMITTEE
The Board has constituted a Stakeholders' Relationship Committee comprising of Mr. B. V. Bhargava, Mr. M. L. Apte, Mr. Cyril Shroff and Mr. Sushil Agarwal (w.e.f. 7th August 2015) as its members. Further details of the Stakeholders' Relationship Committee are provided in the Corporate Governance Report forming part of this Annual Report.
The Board has constituted a Risk Management Committee to review the risk management plan/ process of your Company which was hitherto being i—r carried out by the Audit Committee. The Risk Management Committee identifies potential risks, assesses their potential impact and takes timely action to mitigate the same. The Company has a comprehensive risk management policy / framework which is reviewed by the Audit Committee / Risk Management Committee. More details on risk management are covered in the Management Discussion and Analysis forming part of this Annual Report.
RELATED PARTY TRANSACTIONS
During the financial year under review, all contracts/ arrangements / transactions entered into by your Company with Related Parties were on arm's length basis and in the ordinary course of business. The Company has not entered into contracts / arrangements / transactions with Related Parties which could be considered material in accordance with Section 188 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 and the Policy of the Company on Related Party Transactions. All Related Party transactions have been approved by the Audit Committee of your Company.
The Policy on Related Party Transactions as approved by the Board is available on your Company's website, www.grasim.com
Since all the contracts / arrangements / transactions with Related Parties during the year under review, were in the ordinary course of business and at arm's length and were not considered material, disclosure in Form AOC–2 under Section 134(3)(h) of the Act read with Companies (Accounts of Companies) Rules, 2014, is not applicable. The details of contracts and arrangement with Related Parties of your Company for the financial year ended 31st March, 2015 are given in Note 4.5 to the Financial Statements of your Company.
INTERNAL FINANCIAL CONTROLS
The Internal Financial Controls designed and implemented by the Company are commensurate with the size of its operations. During the year under review, no material or serious observation has been received from the Auditors of the Company citing inefficiency or inadequacy of such controls.
AUDITORS AND AUDIT REPORTS STATUTORY AUDITORS
Pursuant to the provisions of Section 139 of the Act and the Companies (Audit and Auditors) Rules, 2014, Deloitte Haskins & Sells LLP, Mumbai and M/s G. P. Kapadia & Co., Mumbai, the Joint Statutory Auditors of the Company, hold office upto the conclusion of the ensuing AGM and are eligible for re–appointment. The consent of the Auditors and certificate u/s 139 of the Act have been obtained from each of the Auditors to the effect that their re–appointment, if made, would be in accordance with the prescribed conditions and that they are eligible to hold the office of the Auditors of the Company.
The observations made by the Statutory Auditors on the Financial Statements of the Company, in their Report for the financial year ended 31st March 2015 read with the explanatory notes therein, are self–explanatory and therefore, do not call for any further explanation or comments from the Board under Section 134(3)(f) of the Act. The Auditors' Report does not contain any qualification, reservation or adverse remark.
M/s Vidyarthi & Sons, Branch Auditors for Vikram Woollens Division, hold office upto the conclusion of the ensuing AGM. M/s Vidyarthi & Sons have expressed their inability to continue as Branch Auditors and accordingly, their appointment is not being considered. The Statutory Auditors of the Company will carry out the audit of the said Division.
Pursuant to the provisions of Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, as amended, Notifications/ Circulars issued by the Ministry of Corporate Affairs from time to time, your Board has appointed
M/s. R. Nanabhoy & Co., Cost Accountants, Mumbai, as the Cost Auditors to conduct the cost audit of the Company for the financial year 2015–16 at a remuneration as mentioned in the Notice convening the AGM. Post the merger of ABCIL with your Company, M/s R. Nanabhoy & Co. will also conduct Cost Audit of the Units of ABCIL.
Pursuant to the provisions of Section 204 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, of the Act, the Company had appointed M/s BNP & Associates, Company Secretaries, Mumbai to conduct secretarial audit for the financial year 2014–15. The Secretarial Audit Report issued by M/s. BNP & Associates, Company Secretaries for the financial year 201415 forms part of this Report and is set out in Annexure 'E' to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
RESEARCH AND DEVELOPMENT
While continuing to build our technology capabilities during FY 2014–15, we turned most of our efforts to executing a portfolio of technology projects aimed at addressing competitive market challenges in the areas of product quality, cost reduction and new product offerings.
PULP & FIBRE PLANTS
Your Company recently commissioned state–of–the–art clonal sapling production facility, which is currently operating at full capacity and will go a long way in supporting your Company's plan to ensure pulpwood availability for long term sustainability and meeting the ever growing demand for high quality saplings from the farming community. It also aids in making farm forestry an attractive and sustainable land use option to improve the productivity & profitability of pulpwood plantations.
Pulp and Fibre plants are implementing Statistical Process Control (SPC) and Six Sigma based continuous improvement techniques to improve product quality. The concept of Uptime has been adopted across several fibre sites. It measures the ability of a process to provide name plate capacity at intended design conditions, and identifies chronic mechanical conditions, leading to process disturbances, for root cause analysis and resolution by maintenance teams. This approach of combining SPC and Uptime has significantly improved quality and consistency of our product.
Cost reduction efforts focus on reducing raw material and energy consumption in the existing processes. Our emphasis is on the development and commercialization of these advances through technology networks across the fibre and pulp sites. Reducing consumption ratios for raw materials is a key focus area including ways to utilize waste heat and reduce steam consumption. New finishes have been developed to address foaming and fibre wetting issues enabling growth in non–woven markets.
The Excel® lyocell project, developing alternative fibre process concepts with superior environmental performance, continues with in–house technology developments and engagement of external A knowledge network partners. The Technology co organization is increasing its process, product and applications development portfolios to expand its impact on the quality, cost, differentiated products and new business development strategies aimed at improved business performance and growth.
At your Company's joint venture, Domsjo's pulp R&D team is improving process and pulp performance. Alternative additive technologies leading to improved viscose uniformity and lower costs are under development. The Pulp and Fibre Innovation Centre (PFIC) at Taloja and the Birla Research Institute (BRI) are utilizing bench–scale capabilities to explore new, high–value product concepts and improved processes. It has collaborative support from Aditya Birla Science & Technology Company Pvt. Ltd. (ABSTCPL): corporate R&D with advanced facilities and skills in areas such as analytical science, materials, process and design engineering, modelling and control technologies. The Textile Research and Application Development Centre (TRADC) at Kharach is engaged in developments in downstream processing of the fibres into yarns and fabrics. Working closely with the business development team, it has enhanced the innovative component of its proactive fabric collections offered to customers.
The technology talent pool has been increasing with the addition of skilled R&D professionals with diverse backgrounds, capabilities and experience. We now have a core team of R&D professionals actively engaged in important technology programs and initiatives. External knowledge networks are continuing to be developed to complement internal capabilities, and are actively contributing to advanced technologies in the areas of cellulose pulp and novel new fibres.
In summary, significant milestones have been achieved in the areas of program portfolio development and execution, infrastructure project execution, staff development, and the creation of the overall R&D function operating systems.
Your Company's Chemical business has set up a pilot scale plant based on Oxygen Depolarization Cathode (ODC) technology with different generation's anode and cathode elements. This gives us an idea about how each generation will have current and voltage requirement. In this pilot plant, hydrogen generation R is there by consuming only 70% of the power 'RD consumption as compared to the conventional A Membrane cell technology. However, pure liquid OB oxygen is used for reduction of power consumption. This technology has been established and in second phase, experiments are being carried to use PSA generated oxygen gas in place of liquid oxygen to optimize the higher cost of liquid oxygen.
The business has also finalized to set up a pilot lab scale electrolyzer in collaboration with ThyssenKrupp Udhe Chlorine Engineers GmbH, Germany who are the pioneers in the Chlor– Alkali technology development and technology suppliers of latest state of the art Electrolyzer at ABSTCPL. This facility will provide it with an opportunity to run the electrolyzer at various current densities with varying electrolyte parameters which will help in understanding and applications of processes and scaling the experience & knowledge for optimizing the performance of plants where similar electrolyses are in use for bulk manufacturing.
All the chlor–alkali plants of the Company require high quality brine which is very critical for Optimum performance of Membrane cell plant. To support this, it is proposed to install a Pilot brine plant at Nagda to study the suitability of slat from various sources and also various conditions / parameters that affect the brine quality. The learning and experiences can be scaled up and incorporated in the plant sites for continual improvements.
Demonstrating its commitment for uses of solid wastes, you Company regularly engages with premier institutes such CSMCRI, Bhavnagar, Gujarat; MINT, Bhopal, Madhya Pradesh and ICT, Mumbai.
The Centre of Excellence for Application and Product Development in the field of water and waste water treatment is under establishment at Vilayat. The Centre envisages to have expertise in mainly three key areas of water i.e. drinking water, municipal water and industrial waste water treatment. The activities include identification, development and characterization of new chemicals and support for resolution of issues at customer end by identification/ development of suitable product/application for the issue. The Centre will also be engaged in analyzing various additives to enhance the functionalities of existing chemicals and improvement in the existing water treatment chemicals.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
Your Company has established a robust Vigil Mechanism for reporting of concerns through the Whistle Blower Policy of the Company. Adequate safeguards are provided against victimization to those who avail of the mechanism and access to the Chairman of the Audit Committee in exceptional cases is provided to them. The details of the Vigil Mechanism are also provided in the Corporate Governance Report and the Whistle Blower Policy has been uploaded on the website of the Company www.grasim.com.
MEETINGS OF THE BOARD
During the year ended 31st March, 2015, five Board Meetings were held, on 2nd May, 2014, 2nd August, 2014, 29th October, 2014, 31st January, 2015 and 11th February, 2015. Further details on the Board Meetings are provided in the Corporate Governance Report forming part of the Annual Report.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Details of loans given, investments made, guarantees given and securities provided and investments covered under the provisions of Section 186 of the Act are covered in the Notes to the Financial Statements.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
Information relating to the conservation of energy, technology absorption and foreign exchange earnings and outgo, as stipulated under Section 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014, is given in Annexure 'F' to this Report.
EXTRACT OF ANNUAL RETURN
In accordance with the provisions of Section 134(3) (a) of the Act, an extract of the Annual Return of the Company for the financial year ended 31st March 2015 is given in Annexure 'G' to this Report.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THE FINANCIAL STATEMENT RELATES AND THE DATE OF THE REPORT
Except as disclosed elsewhere in this Report, no material changes and commitments which could affect the Company's financial position have occurred between the end of the financial year of the Company and the date of this Report.
PARTICULARS OF EMPLOYEES
In accordance with the provisions of Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees are to be set out in the Board's 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 Office of your Company. The aforesaid addendum is also available for inspection by the members at the Registered Office of the Company 21 days before the AGM and up to to the date of the ensuing AGM during business hours on working days.
Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure 'H' to this Report.
EMPLOYEE STOCK OPTION SCHEMES (ESOS)
The Company has Employee Stock Option Scheme 2006 (ESOS–2006) and Employee Stock Option Scheme 2013 (ESOS–2013) which provides for grant of Stock Options and/or Restricted Stock Units (RSUs) to eligible employees of the Company.
The Shareholders have approved ESOS–2006 through postal ballot on 20th January, 2007 and ESOS–2013 at the 66th Annua l Genera l Meeting of the Company he l d on 17th August, 2013.
The details of Employee Stock Options granted pursuant to ESOS–2006 and the Emp l oyee Stock Options and RSUs granted pursuant to ESOS–2013, as a l so the other disc losures in comp liance with the provisions of the Securities and Exchange Board of India (Employee Share based Employee Benefits) Regulations, 2014 are available on the Company's website, www.grasim.com.
A certificate from the Statutory Auditor on the imp lamentation of your Company's Employees Stock Option Schemes will be p l aced at the ensuing AGM for inspection by the Members.
Your Company believes that Human Resources will play a significantrol e in its future growth. With an unswerving focus on nurturing and retaining talent, your Company provides avenues for l earning and development through functional , behavioral and leadership training programs, knowledge exchange conferences, communication channels for information sharing to name a few.
The Group's Corporate Human Resources playsacriticalrole in your Company's talent management process.
AWARDS AND ACCOLADES
Some of the significant accolades earned by your Company during the year inc l ude:
> "SAMMAAN PATRA" for remarkable contribution in the category of Customs–Imports in financia l year 2014–15 from the Government of India, Ministry of Finance, Department of Revenue, Central , Excise and Service Tax, Gwalior to Staple Fibre Division, Nagda;
> Grasilene Division was awarded the 1st Prize for "Best Fuel Efficient Boiler" category for adopting the Best Safe Practices in the year 2014, by the Karnataka State Safety Institute, Department of Factories, Boilers, Industrial Safety & Health Bengaluru, Government of Karnataka;
> Runner–up – Best Project of the Year (Medium) category awarded at PMI (Project Management Institute) India Awards 2014 to the Green Fie l d Epoxy Project, Vi l ayat.
> StapleFibre Division, Nagda, was awarded the "Amity CSR Conclave 14" Award, conducted under the aegis of the Amity Global Business School , Indore.
Your Directors state that no disc losure or reporting is required in respect of the fol l owing items as there were no transactions on these items during the year under review:
1. Issue of equity shares with differentia l rights as to dividend, voting or otherwise;
2. Issue of shares (including sweat equity shares) to employees of the Company under any Scheme save and except ESOS referred to in O this report;
3. There were no revisions in the financial co statements;
4. No significant or material orders were passed OC by the Regulators or Courts or Tribuna l s which impact the going concern status and Company's operations in the future; and
5. No cases or complaints were filed pursuant to the Sexual Harassment of Women at Workpl ace (Prevention, Prohibition and Redressal ) Act, 2013.
Your Directors express their deep sense of gratitude to the banks, financial institutions, stakehol ders, business associates, Central and State Governments for their co–operation and support and look forward to their continued support in future.
We very warmly thank all of our employees for their contribution to your Company's performance. We applaud them for their superior l eve l s of competence, dedication and commitment to your Company.
For and on behalf of the Board
Kumar Mangalam Birla
Chairman (DIN: 00012813)
date : 7th August 2015