Grasim Industries Annual Report 2017-18 PDF
Grasim Industries Annual Report 2017-18 PDF
visionary and
a passionate
entrepreneur
India’s economy
is emerging
strongly from the
transitory effects of
demonetisation and
implementation of
Goods and Services
Tax (GST).
Dear Shareholders,
Global Economy
The global economy is on a rebound.
The International Monetary Fund
(IMF) estimates indicate that global
real GDP grew 3.8% in 2017. This is
the highest growth pace over the
last six years. It is also the broadest
synchronised global growth upsurge,
since 2010 as underlined by IMF.
01
CORPORATE OVERVIEW THE Chairman’s letter to the Shareholders
Indian Economy:
India’s economy is emerging strongly from the transitory negative effect on countries like India. So the terrain ahead
effects of demonetisation and implementation of Goods and could be a tad bumpy depending on the economic and
Services Tax (GST). Although India’s GDP growth slowed from geopolitical environment.
7.1% in FY 2017 to 6.7% in FY 2018, the economy recorded a
seven-quarter high GDP growth of 7.7% in the exit quarter of Your Company’s performance
FY 2018. This reflects momentum. Despite the challenging environment, your Company recorded
an impressive Revenue of ` 57,338 Cr. with EBITDA of ` 10,881
India’s macroeconomic indicators remain healthy.
Cr. in FY 2017-18 on a consolidated basis.
The fiscal deficit has been cut to 3.5% of GDP. India’s foreign
exchange reserves as at March end stood at a comfortable Viscose:
level of USD 424 Billion.
Your Company’s Viscose Staple Fibre (VSF) business reported
Investors seem to be positive on India’s economic prospects. yet another year of a strong operational and financial
The Foreign Direct Investment (FDI) flows continue to be performance. VSF plants operated at full capacity across
encouraging. India’s global ranking on the ease of doing various locations. Unrelenting focus on product quality,
business notched up to 100 from 142 in barely four years, constant innovation and superior customer service, have been
while that on global competitiveness index has climbed from at the core of your Company’s VSF operations.
71st in 2014-15 to 39th in 2016-17.
Its brand “LIVA” has gained enormous traction. Today, over 29
The prevailing sense of optimism accentuates India’s continuing Million garments feature the LIVA tag, clearly a testament to
economic growth in the future as well. It is attributable to the discerning customer’s choice.
the country’s solid fundamentals, such as deleveraging by
corporates, resulting in much stronger balance sheets, better Through brown field expansion and debottlenecking
capacity utilisation with consumption demand becoming initiatives, we plan to expand VSF capacity to 788 KT from 498
stronger, and insolvency and bankruptcy process weeding KT by FY 2020-21.
out non-performing assets, among others. The Government’s
unwavering push for infrastructure projects – Bharatmala Viscose Sales Revenue grew by 11% YoY to ` 8,538 Cr. in FY
Pariyojana, airports, metros, affordable housing, urbanisation, 2017-18. EBITDA rose to ` 1,680 Cr. up 17% YoY. Despite strong
smart cities and digitisation are excellent stimulators for the headwinds from input costs like caustic soda and sulphur, that
economy’s growth in the medium-term. the business did so well is commendable.
At the same time, we cannot ignore near-term challenges. I am delighted to inform you that your Company’s sensitivity
The bucket of concerns consist of rising oil prices, hardening to environment conservation and sustainable forestry is being
inflation, firming bond yields and widening current account increasingly lauded. The NGO Canopy, in its Hot Button Report
deficit. The ongoing global trade frictions, particularly between ranked your Company as the Number ONE globally for its work
the US and China, are worrisome and can have a spillover on the conservation of ancient and endangered forests.
02
GRASIM
Viscose Filament Yarn (VFY) business, is now a part of your The MDA gives a detailed analysis of your Company’s
Company, consequent to the merger of Aditya Birla Nuvo Ltd. businesses. I am sure you will read it with interest. I believe,
(1st July, 2017). Your Company has also acquired the rights to going forward, your Company will continue its unrelenting
operate and manage the Century Rayon Division of Century pursuit of enhancing shareholder value, and growth in
Textiles and Industries Ltd. from the 1st of February, 2018. earnings and revenues.
It has done well during the year, recording a healthy return of
28% on the capital employed. Outlook
The Company’s leadership position in Viscose and Chemicals
Chemicals: segments will get further strengthened by the new expansion
It has been a remarkable year for the Chlor Alkali industry as plans. I believe, going forward, your Company will continue
it witnessed an improvement in utilisation levels. This was its unrelenting pursuit of enhancing shareholder value, and
led by greater demand from the user industry. Caustic soda growth in earnings and revenues.
prices rose sharply driven by global factors such as (i) Weather
related disruption in the US, bringing a halt on the logistics What Give Us The Edge
side (ii) Phasing out of mercury-based technology in Europe
Undeniably our people, their dedication to work, their sense
by Dec-17 and (iii) Capacity shutdown in China on the back of
of belongingness and pride in the Group, their putting the
environmental-related concerns.
organisation first and living our values. I acknowledge their
contribution and count on their continued commitment to take
While the demand for caustic soda remained firm, barring a
our business far ahead.
brief period during the implementation of GST. The demand for
chlorine was subdued for most part of the year. Going forward,
The Aditya Birla Group: In Perspective
the demand and supply situation for the industry is well
balanced for the next couple of years with a limited visibility of The year 2017-18 has been a momentous year on all counts.
large new capacity additions. We reached a record revenue of USD 43 Billion with an
EBITDA of USD 6 Billion. Our Group’s market cap crossed
The Chemical business saw a record 22% YoY rise in the USD 50 Billion mark. These spectacular achievements
the Revenue to ` 5,105 Cr. and 54% YoY increase in the are a reflection not only of our growing size and scale, the
EBITDA to ` 1,300 Cr. in FY 2017-18, on better realisation and inherent soundness of our strategies and operations,
volumes. With ongoing brownfield capacity expansion, the but importantly the enormous confidence that investors and
Caustic Soda capacity is set to increase by 200 KT to 1,140 KT other stakeholders have reposed in us.
by H1FY 2018-19.
I am delighted to share with you that Aon Hewitt, a reputed
Pulp & Fibre JVs: global consulting firm, in the ‘Best Employers 2018’ study
We have strategic investments in pulp units in Canada and conducted by them, have named our Aditya Birla Group as the
Sweden. These cater to 50% of our pulp requirement. These ‘Best Employer’ in India.
JVs ensure consistency in the supply of prime quality pulp to
our Indian operations.
Other Businesses:
The operational performance of the fertiliser business was The year 2017-18 has been a
satisfactory. The demand for fertiliser remained strong on
account of a good monsoon. momentous year on all counts.
We reached a record revenue of
The linen business with an expanded capacity of 6,250 MTPA
maintained its leadership. It enjoys 39% market share in the USD 43 Billion with an EBITDA
linen yarn segment. of USD 6 Billion. Our Group’s
The overall demand in the Indian Insulator market remained
market cap crossed the USD 50
subdued. Your Company is increasingly diversifying towards Billion mark.
composite insulators, which is in line with the market demand.
03
CORPORATE OVERVIEW THE Chairman’s letter to the Shareholders
Moving on to our people processes, what strikes Development programmes. I take great pride in Gyanodaya
me most is that the development and leadership aspects bagging Gold Award as Best Corporate University – Culture
embedded in it, are all futuristic. I believe, we are headed and Brand in Global CCU Awards 2017, “for operating at the
in the right direction. Let me give you a flavour of what we highest levels of excellence and creating value for people,
have accomplished and how we are constantly refreshing and business and society”.
reengineering our HR initiatives.
The sales, marketing and customer-centricity academy,
Our Group HR has formulated a unique proposition for the HR academy enabled 1,765 managers hone their
leadership development through the 2x2x2 formula. It is expertise to greater heights. The Gyanodaya virtual campus
structured in a manner that accords opportunities to high continues to offer 900+ e-learning modules in multiple
talent to work in two businesses across two geographies languages. During the year nearly 40,000 employees
and in two functions. Such an approach, should give a holistic leveraged the e-learning programme.
experience and help prepare our leaders of the future.
We are enhancing our HR processes for scale, agility
I had apprised you earlier on the talent councils led by and consistent employee experience. A comprehensive
Business Heads and Directors at Group, business and at the HR assurance and excellence framework, the HR portal to
functional levels. So far more than 250 talent council meetings enable the last-mile employee anytime anywhere connect,
have been held with over 8,000 development conversations SeamEx, the Group HR Shared Services Centre are milestones
and actions initiated for these colleagues. I have attended in this journey, as they enthuse and energise our people.
several of these meetings and am much encouraged by the
positivity and enthusiasm they generate among employees In sum
down the line. They rightly believe that talent will always Our Group’s robust revenue growth, healthy EBITDA
bubble to the top. margins, deploying capital efficiently and generating cash
flows, support our ambitious growth plans. Innovation and
More than ever before in the people domain two spirit of entrepreneurship that our employees bring to work is
segments that have grabbed the attention of progressive amazing and a major contributant to our Group scaling newer
corporates, comprise of the millennials and gender diversity heights year after year.
issue. In our Group, 52% of our executives are under
35 years of age. They are the leaders of tomorrow whom we Yours sincerely,
need to groom today.
04
GRASIM
Financial Services
(Protecting, Investing, Financing, Advising)
Cement
Viscose Staple Fibre (VSF) - Liva
Chemicals
05
CORPORATE OVERVIEW VSF: Forest to Fashion
#1
Viscose Staple Fibre (VSF) player in India
VSF
India
Our Fibre
Birla Modal
Birla
Spunshades
Forest
Wood
(Sourced from The comfort and luxury of a natural fibre,
Canada, with the strength and performance
Sweden & India) characteristics of a synthetic one
Birla Excel
06
GRASIM
yARN
Fabric
VSF – Properties
NATURAL
Soothing and comforting. Great breathability due to its natural origin
FALLS WELL
Fabrics are uniquely fluid
Viscose is also the most sustainable fibre, being totally bio-degradable and made
from natural materials.
07
CORPORATE OVERVIEW LIVA - Pioneering Ingredient Branding
LIVA - Pioneering
Ingredient Branding
LIVA is Grasim’s ingredient branding with a natural fluid fashion promise to the
customers. LIVA assures high quality fabric applied through accredited value
chain termed as Liva Accredited Partner forum (LAPF). LIVA Eco system delivers
consumers continuous innovation in top quality fluid fashionable clothing.
LIVA Accredited
Partner Forum LIVA Tagging
(LAPF) LIVA tagging of products and on packing assures customers that the fabric has been
manufactured with authentic LIVA fibres.
LAPF is a forum that connects
the entire textile value chain –
from spinners to processors
and from fabricators to
fashion brands.
400+
Cellulose-based
manufacturers
60+
cities across India
100+
brands endorse LIVA tag
LIVA Studio
with 1000+ Samples of VSF
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GRASIM
09
CORPORATE OVERVIEW Chemicals
#1
Caustic Soda and Epoxy
player in India
Pulp &
29%
Capacity Market share
Textile paper in India
detergent
and
others
Chlor
Viscose Caustic Alkali
Staple Fibre
soda
Alumina
Hydrochloric
acid
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GRASIM
#1
In India #1
In India
PolyAluminium
Chloride Chlorinated
Paraffin
Stable #1
Globally
Chlorine Bleaching
Powder
Aluminium
Phosphoric Chloride
Acid #1
Globally
#1
In India
Other value
added
products
Epoxy
Hydrogen
11
CORPORATE OVERVIEW CEMENT
UltraTech Cement
Through its subsidiary, UltraTech Cement Ltd., the largest cement manufacturer
in India. It also ranks amongst the No. 4 producer globally (ex–China)
Growth
Market Leadership
Cost Leadership
India’s Largest No. 1 RMC player Different products to provide complete No.1 Player of White
Cement Selling in India with Building Solutions ~ 1,600 stores Cement & Cement
Brand ~ 110 plants based Putty
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GRASIM
Financing Advising
Solutions that enable individuals Understand people’s lives and
to fulfil their needs and desires advise the right solutions basis
without delay their money needs
Pan-India
presence with
800+ 1,90,000+
branches Agents and
Channel
Partners
84+
Banks and
240+
national
distributors 14,500+
employees
13
CORPORATE OVERVIEW Sustainability
Sustainability
Water
Reduction of Water Consumption
• New techniques developed leading to 30 litres of
water saving for every metre of Fibre
• VSF operations reduced water consumption by
30% in past 10 years
• Continuous reduction in water consumption aiming for
zero liquid discharge in chemicals plants
KEY INPUTS
• 60% of the wood is certified by FSC®
• Ranked 1st by Canopy’s Hot Button Report (No Wood
Sourcing from endangered forests). This ranking is highly valued by
global brands
• We apply Higg Index to our operations and collaborate with
our customers in the textile and apparel industry which make use
of this tool
• Chemical business has pioneered using washed salt in India, for
reduction in sludge generation
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GRASIM
• Our products Birla Viscose, Birla Modal, Birla Excel & Birla Spunshades are
USDA Biobased Certified
• Gold Level Material Health Certification for Birla Spunshades from Cradle
to Cradle Products Innovation Institute
Renewables
• Promoting use of Renewable sources -
Solar as a source of energy for power
requirements
• 80%-90% of Energy requirements in the
pulp units are renewable sources like bark and
black liquor
Sustainable logistics
• Reduce energy consumption and GHG emission
for transportation of Raw materials and products,
and also to improve transport safely
• DuPont Sustainable Solutions with end-to-end safety
focus – own, transporters, customers
• Continuous training of drivers for safe movement
of vehicles
15
CORPORATE OVERVIEW MAKING A DIFFERENCE
MAKING A DIFFERENCE
Education Healthcare Social
Through the schools in and around our facilities, we provide scholarships and
technical education to children.
16
GRASIM
Create
an articulated
social vision
and embed it
in the business
vision
- Mrs. Rajashree Birla
17
CORPORATE OVERVIEW BOARD OF DIRECTORS
BOARD OF DIRECTORS
Mr. Kumar Mangalam Birla Mrs. Rajashree Birla Mr. Himanshu Kapania
Chairman Non-Executive Director Vice Chairman
Mr. Dilip Gaur Mr. Sushil Agarwal Mr. Shailendra K. Jain Mrs. Usha Sangwan
Managing Director Whole-time Director Non-Executive Director Non-Executive Director
18
GRASIM
Mr. Cyril Shroff Dr. Thomas Connelly, Jr. Mr. O. P. Rungta Mrs. Anita Ramachandran
Independent Director Independent Director Independent Director Independent Director
19
CORPORATE OVERVIEW Financial highlights
EBITDA (` In Crore)
FY 2018 47% 37% 16% 3,542
FY 2017 2,629
FY 2016 1,851
FY 2015 1,013
FY 2014 1,254
VSF Chemicals Others (incl. inter segment elimination)
PAT (` In Crore)
FY 2018 1,769
FY 2017 1,560
FY 2016 971
FY 2015 530
FY 2014 903
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GRASIM
EBITDA (` In Crore)
FY 2018 10,881
FY 2017 8,333
FY 2016 7,066
FY 2015 5,683
FY 2014 5,491
21
CORPORATE OVERVIEW CORPORATE INFORMATION
22
GRASIM
23
CORPORATE OVERVIEW
24
GRASIM
CONTENTS
Financial Highlights
26-28
26 Financial Highlights - Consolidated
28 Financial Highlights - Standalone
Statutory Reports
29-133
29 Board’s Report
86 Management Discussion and Analysis
94 Report on Corporate Governance
109 Shareholder Information
121 Sustainability & Business Responsibility Report
131 Social Report
Financial Statements
134-418
134 Standalone Financial Statements
245 Consolidated Financial Statements
419-444
419 Notice & Proxy Form
25
CORPORATE OVERVIEW Financial highlights
Financial Highlights -
Consolidated
(Results for the year 2017-18, 2016-17 and 2015-16 are as per Ind AS)
Year -----> Unit 2017-18 2016-17 2015-16 2014-15 2013-14
Production
Grey Cement Mn. Tonnes 60.79 51.00 50.57 46.71 43.60
White Cement & Putty Lakh Tonnes 12.95 13.47 13.21 12.04 11.67
Viscose Staple Fibre Lakh Tonnes 4.99 4.93 4.64 4.08 3.61
Caustic Soda Lakh Tonnes 8.86 7.80 7.56 4.12 3.13
Turnover *
Grey Cement (Incl. Clinker) Mn. Tonnes 63.28 52.40 51.33 48.17 44.66
White Cement & Putty Lakh Tonnes 13.19 13.18 13.12 12.24 11.41
Viscose Staple Fibre Lakh Tonnes 5.08 5.00 4.67 4.03 3.67
Caustic Soda Lakh Tonnes 8.79 7.84 7.63 4.09 3.14
* (Including Captive Consumption)
(` in Crore)
Profit & Loss Account USD Million1 ` in Crore
Year -----> 2017-18 2016-17 2015-16 2014-15 2013-14
Revenue from Operations
Cement 5,012 32,305 28,646 28,392 27,403 24,377
Financial Services 1,389 8,953 - - - -
Viscose Staple Fibre 1,325 8,538 7,715 6,536 7,077 6,732
Chemicals 792 5,105 4,180 3,768 1,879 1,198
Others 523 3,372 465 508 636 615
Inter-segment Elimination -145 -935 -759 -669 -527 -377
Total Revenue from Operations 8,896 57,338 40,247 38,535 36,468 32,545
EBITDA
Cement $ 1,044 6,729 5,861 5,365 4,476 4,086
Financial Services 118 758 - - - -
Viscose Staple Fibre 261 1,680 1,439 923 459 716
Chemicals 202 1,300 842 663 292 225
Others/Unallocated/Inter-segment 64 414 191 115 456 464
Elimination
Total EBITDA 1,688 10,881 8,333 7,066 5,683 5,491
Interest 211 1,359 702 718 667 447
Gross Profit (PBDT) 1,477 9,522 7,631 6,348 5,016 5,044
Depreciation 423 2,724 1,808 1,834 1,563 1,457
Profit before Tax and Exceptional Items 1,055 6,798 5,823 4,514 3,453 3,586
Exceptional Items (EI) -67 -433 0 -28 -9 -
Profit before Tax 987 6,365 5,823 4,486 3,443 3,586
Total Tax Expenses 302 1,947 1,707 1,225 1,016 735
Net Profit 685 4,418 4,116 3,262 2,427 2,852
Less: Minority Interest 157 1,009 1,078 987 838 883
Less: Profit attributable to to participating 0.4 2.6 - - - -
policyholders of Life Insurance Business
Add: Share in Profit/(Loss) of Associate -113 -727 129 193 154 103
Net Profit 416 2,678 3,167 2,468 1,744 2,072
Other Comprehensive Income -26 -168 951 210 - -
(Owners of the Company)
Total Comprehensive Income 390 2,511 4,119 2,678 NA NA
(Owners of the Company)
$
Income of UltraTech Cement related to unallocated corporate capital employed included in Unallocated EBITDA
Note 1 - 1 USD = INR 64.46
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(` in Crore)
USD Million2 ` in Crore
Balance Sheet
2017-18 2016-17 2015-16 2014-15 2013-14
Net Fixed Assets 8,839 57,614 33,443 33,550 32,057 26,943
(incl. CWIP and Capital Advances)
Long-Term Loans and Advances 5,994 39,068 650 923 1,648 880
Investments (Non-Current and Current) 4,337 28,267 14,200 10,601 7,255 7,611
Investments of Insurance business 1,997 13,019 - - - -
Goodwill 2,484 16,192 2,994 3,016 3,283 3,277
Assets held to cover linked liabilities 3,791 24,709 - - - -
Current Assets 4,446 28,977 11,460 11,486 9,790 9,025
31,889 207,846 62,747 59,576 54,033 47,737
27
CORPORATE OVERVIEW Financial highlights
Financial Highlights -
Standalone
(Results for FY 2017-18, 2016-17 and 2015-16 are as per Ind AS)
(` in Crore)
USD Million1 ` in Crore
Year ----->
2017-18 2016-17 2015-16 2014-15 2013-14
Profit & Loss Account
Revenue from Operations 2,488 16,035 11,253 9,778 6,819 6,035
EBITDA 549 3,542 2,629 1,851 1,013 1,246
Interest 20 128 58 147 39 41
Gross Profit (PBDT) 530 3,414 2,571 1,704 974 1,205
Depreciation 97 628 446 445 263 220
Profit before Tax and Exceptional Items 432 2,786 2,125 1,259 711 985
Exceptional Items (EI) 42 273 0 -29 -26 -
Profit before Tax 390 2,513 2,125 1,230 685 985
Total Tax Expense 115 744 565 259 155 89
Net Profit 274 1,769 1,560 971 530 896
Equity Dividend (including CTD) 62 0 401 221 169 200
Other Comprehensive Income 157 -222 1,012 92 NA NA
Total Comprehensive Income 399 1,547 2,572 1,062 NA NA
28
GRASIM
Board’s Report
FINANCIAL HIGHLIGHTS
(` in Crore)
Consolidated Standalone
2017-18 2016-17 2017-18 2016-17
Revenue from Operations 57,338.20 40,247.17 16,034.71 11,252.95
Earnings Before Interest, Depreciation/Amortisation and Tax 10,881.09 8,332.89 3,541.54 2,628.70
(EBITDA)
Less: Finance Costs 1,359.13 702.40 128.13 57.62
Less: Depreciation and Amortisation 2,724.36 1,807.59 627.66 446.14
Profit Before Share in Profit/(Loss) of Equity Accounted 6,797.60 5,822.90 2,785.75 2,124.94
Investees, Exceptional Items and Tax
Share in Profit/(Loss) of Equity Accounted Investees (727.44) 129.41 - -
Exceptional Items (432.85) - (272.61) -
Profit Before Tax (PBT) 5,637.31 5,952.31 2,513.14 2,124.94
Tax Expenses 1,947.12 1,706.70 744.48 564.94
Profit After Tax including Share in Profit/(Loss) of Equity 3,690.19 4,245.61 1,768.66 1,560.00
accounted Investees and Profit of Life Insurance Business
attributable to Participating Policyholders
Less: Profit of Life Insurance Business attributable to (2.57) - - -
Participating Policyholders
Attributable to: 3,687.62 4,245.61
Shareholders of the Company 2,678.58 3,167.30 1,768.66 1,560.00
Non-Controlling Interest 1,009.04 1,078.31 - -
Other Comprehensive Income for the Year (278.48) 963.44 (221.69) 1,011.53
Attributable to:
Shareholders of the Company (167.88) 951.48 (221.69) 1,011.53
Non-Controlling Interest (110.60) 11.96 - -
Total Comprehensive Income for the Year 3,409.14 5,209.05 1,546.97 2,571.53
Attributable to:
Shareholders of the Company 2,510.70 4,118.78 1,546.97 2,571.53
Non-Controlling Interest 898.44 1,090.27 - -
29
STATUTORY REPORTS BOARD’S REPORT
In terms of the provisions of Regulation 43A of the Company and Aditya Birla Nuvo Limited (ABNL) and
Securities and Exchange Board of India (Listing Obligations Aditya Birla Financial Services Limited (now known as
and Disclosure Requirements) Regulations (SEBI (LODR)), Aditya Birla Capital Limited) (ABCL) (Scheme). With effect
the Company has formulated a Dividend Distribution from 1st July 2017 (the Effective Date 1), ABNL along with
Policy. This Policy is given in Annexure ‘A’ to this Report its assets, liabilities, contracts, employees, etc., stands
and is accessible from the Company’s website, www. amalgamated, in the manner provided in the Scheme.
grasim.com.
With effect from 4th July 2017, (the Effective Date 2),
TRANSFER TO RESERVES the financial services business of the Company stands
transferred to and vested in ABCL.
The Company proposes to transfer ` 1,000 Crore to the
General Reserves.
With the amalgamation becoming effective, ABCL and its
subsidiaries have become the subsidiary companies of the
PERFORMANCE REVIEW
Company.
On a consolidated basis, the revenue from operations
for FY 2017-18, increased to ` 57,338 Crore, which The restructuring, in terms of the Scheme, has enabled
was 42.46% higher than that of the previous year the Company to extend its presence to the fast growing
(` 40,247 Crore in FY 2016-17). The consolidated EBITDA sectors such as financial services and telecom, and enhance
increased to ` 10,881 Crore for FY 2017-18, which long¬term value for the shareholders. This will also enable
was 30.58% higher than that of the previous year ABCL to grow faster under the Company’s strong parentage,
(` 8,333 Crore in FY 2016-17).The increase in the consolidated and is expected to improve its credit profile and reduce
revenue and consolidated EBITDA was mainly on account its cost of borrowings, thereby enhancing its competitive
of growth in Viscose, Chemicals, Cement businesses and positioning. The merger has also led to consolidation of
inclusion of performance of erstwhile Aditya Birla Nuvo similar businesses of the Company and ABNL.
Ltd. (ABNL), post-merger of ABNL with the Company, with
effect from 1st July 2017, and cement assets acquired by Right to Manage and Operate the Viscose Filament
UltraTech Cement Limited, with effect from 29th June Yarn Business of Century Texiles and Industries
2017. Standalone financials for the current year include the Limited (“CTIL”)
performance of erstwhile ABNL, consequent to the merger
During the financial year 2017-18, the Company entered
with the Company, with effect from 1st July 2017 as stated
into an agreement with CTIL for acquiring the Right to
above. Since the financial statements of the previous
Manage and Operate the Viscose Filament Yarn Business
year do not include the performance of erstwhile ABNL,
(VFY Business) of CTIL, located at Shahad and Kalyan
and that also of the acquired assets by UltraTech Cement
(Maharashtra), with effect from 1st February 2018.
Limited (at consolidated level), the financial performance
The acquisition has also led to consolidation of similar
of the current year is strictly not comparable with that of
businesses, create synergy and leverage brand strength in
the previous year.
value chain, for VFY business of the Company.
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GRASIM
Upon the amalgamation becoming effective, the entire Company allotted 190,462,665 equity share of
business of VIL and VMSL (excluding VIL’s investment in ` 2/- each fully paid-up of the Company to the
Indus Towers Limited, its international network assets shareholders of the erstwhile Aditya Birla Nuvo
and information technology platforms) will vest with Limited, as on the record date fixed on 6th July 2017.
Idea.
· Allotted 71,660 equity shares of ` 2/- each pursuant
CONSOLIDATED FINANCIAL STATEMENTS to the exercise of stock options in terms of the
In accordance with the Companies Act, 2013 (Act), read Employees Stock Option Schemes of the Company.
with the Companies (Accounts) Rules, 2014, SEBI (LODR),
and Ind AS 110 – Consolidated Financial Statements and Ind During the year 2017-18, the Company has not issued shares
AS 28 – Investment in Associates and Joint Ventures – the with differential voting rights and sweat equity shares.
Audited Consolidated Financial Statements are provided
in this Report. The Consolidated Financial Statements DEPOSITS
have been prepared on the basis of the Audited Financial During the year under review, the Company has not
Statements of the Company, its subsidiaries, joint ventures accepted or renewed any deposit within the meaning of
and associate companies, as approved by their respective Section 73 of the Act, read with the Companies (Acceptance
Board of Directors. of Deposits) Rules, 2014, and as such, no amount of
principal or interest was outstanding, as on the date of the
SUBSIDIARIES, ASSOCIATES AND JOINT Balance Sheet.
VENTURE COMPANIES
With effect from 1st July 2017, the subsidiary/associate PARTICULARS OF LOANS, GUARANTEES AND
companies of the erstwhile Aditya Birla Nuvo Limited have INVESTMENTS
become the subsidiaries/associates of the Company. Pursuant to Section 186 of the Act and Schedule V of the
SEBI (LODR), disclosures on particulars relating to loans,
In accordance with the provisions of Section 129(3) of the advances and investments are provided as part of the
Act, read with Rule 5 of the Companies (Accounts) Rules, Financial Statements. There are no guarantees issued or
2014, a report on the performance and financial position securities provided by the Company in terms of Section
of each of the subsidiaries, associates and joint venture 186 of the Act, read with the Rules issued thereunder.
companies is given in Annexure ‘B’ to this Report.
ABRIDGED ANNUAL REPORT
In accordance with the provisions of Section 136(1) of
In terms of the provisions of Section 136(1) of the Act,
the Act, the Annual Report of the Company, containing
Rule 10 of the Companies (Accounts) Rules, 2014, and
inter alia the audited standalone and consolidated
Regulation 36 of SEBI (LODR) Regulations, 2015, the Board
financial statements, has been placed on the website of
of Directors has decided to circulate the Abridged Annual
the Company, www.grasim.com. Further, the audited
Report containing salient features of the Balance Sheet
financial statements, along with related information
and Statement of Profit & Loss and other documents to
and other reports of each of the subsidiary companies,
the shareholders for the Financial Year 2017-18 under the
have also been placed on the website of the Company,
relevant laws.
www.grasim.com.
In accordance with Section 136 of the Act, the financial MANAGEMENT’S DISCUSSION AND ANALYSIS
statements of the subsidiary companies and related REPORT
information are available for inspection by the Members The Management’s Discussion and Analysis Report for the
at the Registered Office of the Company, during business year under review, as stipulated under Regulation 34 of
hours up to the date of the Annual General Meeting (AGM). the SEBI (LODR), forms an integral part of this Report.
Any Member desirous of obtaining a copy of the said
financial statements may write to the Company Secretary CORPORATE GOVERNANCE
at the Registered Office of the Company. Your Directors re-affirm their continued commitment
to best practices of Corporate Governance. Corporate
SHARE CAPITAL Governance principles form an integral part of the core
During the year 2017-18: values of the Company.
· Aditya Birla Nuvo Limited and Grasim Industries
Limited and Aditya Birla Financial Services Limited In terms of Regulation 34 of the SEBI (LODR), a separate
(now known as Aditya Birla Capital Limited), the report on Corporate Governance, along with a certificate
31
STATUTORY REPORTS BOARD’S REPORT
from the Auditors’ on its compliance, forms an integral The following Directors of the Company have/will attain
part of this Report and is given as Annexure ‘C’ to this the age of 75 years, as on 1st April 2019:
Report.
· Mr. M. L. Apte (DIN: 00003656) – Independent Director;
DIRECTORS AND KEY MANAGERIAL · Mr. B. V. Bhargava (DIN: 00001823) – Independent
PERSONNEL Director;
Appointment/Re-appointment of Directors
·
Mr. O. P. Rungta (DIN: 00020559) – Independent
The Board, on the recommendations of the Nomination Director; and
and Remuneration Committee of the Board of Directors of
the Company, has appointed. ·
Mr. Shailendra K. Jain (DIN: 00022454) – Non-
Executive Director.
- Ms. Usha Sangwan (DIN: 02609263) as an Additional
Director of the Company, with effect from 23rd Based on the recommendations of the Nomination
May 2018. In terms of the provisions of the Act, Ms. and Remuneration Committee, the Board has, subject
Sangwan will hold office up to the date of the Annual to the approval of the shareholders, consented to the
General Meeting (AGM); continuation of Directorship of the aforesaid Directors till
the end of each of their respective tenures.
- Mr. Himanshu Kapania (DIN: 03387441) as an Additional
Director of the Company, with effect from 14th August Your Directors commend the Resolutions for your
2018. In terms of the provisions of the Act, Mr. Kapania approval.
will hold office up to the date of the AGM;
Cessation
-
Ms. Anita Ramachandran (DIN: 00118188) as an With effect from 23rd May 2018, Mr. N. Mohan Raj (DIN:
Additional Independent Director of the Company, with 00181969) resigned from the Board of Directors of the
effect from 14th August 2018. In terms of the provisions Company.The Board places on record its deep appreciation
of the Act, Ms. Ramachandran will hold office for a and gratitude for the valuable contribution and advice
period of five years, i.e., up to 13th August 2023. offered by Mr. Mohan Raj during his tenure as Director on
the Board of the Company.
The Directors commend the resolutions for the
appointment of Ms. Usha Sangwan, Mr. Himanshu Kapania Key Managerial Personnel
and Ms. Anita Ramachandran as Directors on the Board of In terms of the provisions of Sections 2(51), 203 of
the Company, as indicated in the Notice of the AGM. the Act, read with the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, Mr.
In accordance with the provisions of the Act and the Dilip Gaur, Managing Director, Mr. Sushil Agarwal, Whole-
Articles of Association of the Company, Mr. Shailendra time Director & Chief Financial Officer and Mrs. Hutokshi
K. Jain (DIN: 00022454) and Mrs. Rajashree Birla (DIN: Wadia, President and Company Secretary are the Key
00022995), Directors of the Company, retire by rotation at Managerial Personnel of the Company.
the AGM and, being eligible, have offered themselves for
re¬appointment. Resolution seeking the re-appointments During the financial year 2017-18, Mr. Dilip Gaur, Managing
of Mr. Shailendra K. Jain and Mrs. Rajashree Birla have Director and Mr. Sushil Agarwal, Whole-time Director &
been included in the Notice of the AGM. Your Directors Chief Financial Officer of the Company, have not received
commend the Resolutions for your approval. any commission / remuneration from the Company’s
Subsidiary Companies.
A brief resume of the Directors being appointed and re-
appointed forms part of the Notice of the AGM. MEETINGS OF THE BOARD
The Board of Directors of your Company met 6 times
Continuation of Directorship during the year, details of which are given in the Corporate
In terms of the Regulation 17(1A) of SEBI (LODR) Governance Report forming, part of this Annual Report.
Regulations, 2015, approval of the shareholders by way
of a special resolution is required for the appointment/ DECLARATION OF INDEPENDENCE
continuation of directorship of non-executive directors, Your Company has received declarations from all the
who have attained the age of 75 years, as on 1st April 2019. Independent Directors of the Company confirming that
32
GRASIM
they meet the criteria of independence as prescribed safeguarding the assets of the Company and for
under the Act, read with Schedules and Rules issued under preventing and detecting fraud and other irregularities;
the SEBI (LODR).
d)
Annual Accounts have been prepared on a ‘going
FORMAL ANNUAL EVALUATION concern’ basis;
The evaluation framework for assessing the performance e) the Company has laid down proper internal financial
of Directors of the Company comprises of contributions controls, and that such internal financial controls are
at the meetings, strategic perspective or inputs regarding adequate and were operating effectively; and
the growth and performance of the Company, among
others. f) your Company has devised proper systems to ensure
compliance with the provisions of all applicable laws,
Pursuant to the provisions of the Act and the SEBI (LODR), and that such systems were adequate and operating
the Directors have carried out the annual performance effectively.
evaluation of the Board, Independent Directors, Non-
Executive Directors, Executive Directors, Committees and ENERGY CONSERVATION, TECHNOLOGY
the Chairman of the Board. ABSORPTION AND FOREIGN EXCHANGE
The Nomination and Remuneration Committee and EARNINGS AND OUTGO
the Board have laid down the manner in which formal The information on conservation of Energy, Technology
annual evaluation of the performance of the Board, its Absorption and Foreign Exchange Earnings and Outgo
Committees and individual Directors has to be made. It stipulated under Section 134(3)(m) of the Companies Act,
includes circulation of evaluation forms separately for 2013, read with the Companies (Accounts) Rules, 2014 is
evaluation of the Board and its Committees, Independent set out in Annexure ‘D’ to this Report.
Directors/Non-Executive Directors/Executive Directors
and the Chairman of the Company. AUDITORS AND AUDIT REPORTS
The details of the programme for familiarisation of Statutory Auditors
Independent Directors of the Company are available on Pursuant to the provisions of Section 139(1) of the Act,
the Company’s website, viz., www.grasim.com. read with the Companies (Audit and Auditors) Rules, 2014,
as amended from time to time:
DIRECTORS’ RESPONSIBILITY STATEMENT
The audited accounts for the year under review are in - the members, at the 69th AGM held on 23rd September
conformity with the requirements of the Act and the 2016, have approved the appointment of B S R & Co.
Accounting Standards. The financial statements reflect LLP, Chartered Accountants (ICAI Firm Registration
fairly the form and substance of transactions carried out No. 101248W/W-100022), as Joint Statutory Auditors
during the year under review, and reasonably present the of the Company for a period of five consecutive years,
Company’s financial condition and results of operations. till the conclusion of the 74th AGM of the Company to
be held in the year 2021, subject to ratification of their
Your Directors confirm that: appointment by the members at every AGM till 73rd
AGM; and
a)
in the preparation of the Annual Accounts, the
applicable accounting standards have been followed, -
the members, at the 70th AGM held on 22nd
along with proper explanations relating to material September 2017, have approved the appointment of
departures, if any;
S R B C & Co. LLP, Chartered Accountants (ICAI Firm
b) the accounting policies selected have been applied Registration No. 324982E), as Joint Statutory
consistently, and judgements and estimates are made
that are reasonable and prudent so as to give a true Auditors of the Company for a period of five consecutive
and fair view of the state of affairs of the Company as years, till the conclusion of 75th AGM of the Company to
at 31st March 2018 and of the profit of the Company be held in the year 2022, subject to ratification of their
for the year ended on that date; appointment by the members at every AGM till 74th
AGM.
c)
proper and sufficient care have been taken for
the maintenance of adequate accounting records, Accordingly, necessary resolutions for ratification of
in accordance with the provisions of the Act for appointment of Auditors are included in the Notice for this
33
STATUTORY REPORTS BOARD’S REPORT
AGM. Your Directors commend the Resolutions for your The Company has received consent from M/s. D. C. Dave
approval. & Co. and M/s. M. R. Dudani & Co., Cost Accountants, to
act as the Cost Auditors of the Company for the financial
Consent of the Auditors and certificate u/s 139 of the year 2018-19 along with separate certificates confirming
Act have been obtained from each of the Auditors to the each of their independence.
effect that their appointment/ratification, if made, shall be
in accordance with the applicable provisions of the Act SECRETARIAL AUDITORS
and the Rules issued thereunder. As required under the Pursuant to the provisions of Section 204 of the Act, read
SEBI (LODR), B S R & Co. LLP and S R B C & Co. LLP have with the Companies (Appointment and Remuneration
confirmed that they hold a valid certificate issued by the of Managerial Personnel) Rules, 2014, the Board has
Peer Review Board of ICAI. re-appointed M/s. BNP & Associates, Company Secretaries,
Mumbai, to conduct the secretarial audit for the financial
Pursuant to the provisions of Section 139(1) of the Act, year 2018-19. The Secretarial Audit Report, issued by
as amended with effect 7th May 2018, ratification of the M/s. BNP & Associates, Company Secretaries, for
appointment of the Statutory Auditors, by the Members the financial year 2017-18, forms part of this Annual
at every AGM during the period of their appointment, has Report and is set out in Annexure ‘E’ to this Report. The
been omitted with effect from that date. In view thereof read Secretarial Audit Report does not contain any qualification,
with the provisions of Section 142 of the Act, consent of reservation, disclaimer or adverse remark.
the members is sought to partially modify the resolutions
passed at the aforesaid AGMs and authorise the Board to DISCLOSURES
ratify the appointments and fix their remuneration for each Contracts and Arrangements with Related Parties
of the Statutory Auditors respective remaining terms. Your During the financial year 2017-18, all contracts/
Directors commend the Resolutions for your approval. arrangements/transactions entered into by the Company
with Related Parties were on arm’s length basis and in
The observations made by the Statutory Auditors on the the ordinary course of business. There are no material
Financial Statements of the Company, in their Report transactions with any Related Party as defined under
for the financial year ended 31st March 2018, read with Section 188 of the Act, read with the Companies (Meetings
the explanatory notes therein, are self-explanatory of Board and its Powers) Rules, 2014. All Related Party
and, therefore, do not call for any further explanation transactions have been approved by the Audit Committee
or comments from the Board under Section 134(3)(f) of the Company. Omnibus approvals are taken for
of the Act. The Auditors’ Report does not contain any transactions, which are repetitive nature. The Company
qualification, reservation, disclaimer or adverse remark. has implemented Related Party transaction manual
and Standard Operating Procedures for the purpose of
COST AUDITORS identification and monitoring of such transactions.
Pursuant to the provisions of Section 148 of the Act, read
with the Companies (Cost Records and Audit) Rules, 2014, The details of contracts and arrangements with Related
as amended, Notifications/Circulars issued by the Ministry Parties of the Company for the financial year ended 31st
of Corporate Affairs from time to time, your Board has, on March 2018, are given in Notes to the Standalone Financial
the recommendation of the Audit Committee, re-appointed Statements, forming part of the Annual Report.
M/s. D. C. Dave & Co., Cost Accountants, Mumbai, as the
Cost Auditors to conduct the audit of the cost records of The Policy on Related Party Transactions, as approved
all the Units of the Company, except VFY-Century Rayon by the Board, is available on the Company’s website,
Unit, for the financial year 2018-19 at a remuneration www. grasim.com.
not exceeding ` 1,500,000/- (Rupees Fifteen Lakh Only),
plus applicable taxes and reimbursement of actual out- VIGIL MECHANISM/WHISTLE BLOWER POLICY
of-pocket expenses in connection with the audit. On the The Company has established a robust Vigil Mechanism for
recommendations of the Audit Committee, your Directors reporting of concerns through the Whistle Blower Policy of
have appointed M/s. M. R. Dudani & Co. as Cost Auditors the Company, which is in compliance of the provisions of
to conduct cost audit at VFY-Century Rayon Unit for the Section 177 of the Act, read with Rule 7 of the Companies
financial year 2018-19 at a remuneration of ` 2.20 Lakh (Meetings of Board and its Powers) Rules, 2014, and SEBI
(Rupees Two Lakh Twenty Thousand only) plus applicable (LODR). The Policy provides for framework and process
taxes and reimbursement of actual out-of-pocket expenses whereby concerns can be raised by its employees against
in connection with the audit. any kind of discrimination, harassment, victimisation or
34
GRASIM
any other unfair practice being adopted against them. Return of your Company for the financial year ended 31st
Adequate safeguards are provided against victimisation March 2018 is given as Annexure ‘G‘ to this Report.
to those who avail of the mechanism, and access to the
Chairman of the Audit Committee in exceptional cases is INTERNAL FINANCIAL CONTROLS
provided to them. The details of the Vigil Mechanism are The Company has in place adequate internal financial
also provided in the Corporate Governance Report and the control system commensurate with the size of its operations.
Whistle Blower Policy has been uploaded on the website Internal control systems, comprising of policies and
of the Company, www.grasim.com. procedures, are designed to ensure sound management
of the Company’s operations, safe keeping of its assets,
CORPORATE SOCIAL RESPONSIBILITY
optimal utilisation of resources, reliability of its financial
In terms of the provisions of Section 135 of the Act, read information and compliance. Systems and procedures are
with the Companies (Corporate Social Responsibility periodically reviewed to keep pace with the growing size
Policy) Rules, 2014, the Board of Directors of the Company and complexity of the Company’s operations. During the
has a Corporate Social Responsibility (CSR) Committee, year under review, no material or serious observation has
which is chaired by Mrs. Rajashree Birla. The other been received from the Auditors of the Company citing
Members of the Committee are Mr. B. V. Bhargava, Mr. inefficiency or inadequacy of such controls.
Shailendra K. Jain and Mr. Dilip Gaur. Dr. Pragnya Ram,
Group Executive President, Corporate Communication REMUNERATION POLICY
and CSR, is a permanent invitee to the Committee. The
The Remuneration Policy of your Company, as formulated
Corporate Social Responsibility Policy (CSR Policy),
by the Nomination and Remuneration Committee of the
indicating the activities to be undertaken by the Company,
Board of Directors, is given in Annexure ‘H’ to this Report.
is available on the Company’s website, www.grasim.com.
35
STATUTORY REPORTS BOARD’S REPORT
relating to the Corporate Social Responsibility Committee experience. We have expanded implementation of
are provided in the Corporate Governance Report forming demonstrated technologies, which reduce in-process
part of this Annual Report. material consumption and increase line productivities.
Work continues to extend the gains through further
STAKEHOLDERS’ RELATIONSHIP COMMITTEE process innovations. Our marketplace-targeted
The Stakeholders’ Relationship Committee comprises of Mr. differentiated offerings agenda has resulted in new
B. V. Bhargava, Mr. M. L. Apte, Mr. Cyril Shroff and Mr. Sushil insights and innovations for improved products in our
Agarwal as its members. Further details of the Stakeholders’ non-wovens and dope-dyed fibre segments. The resulting
Relationship Committee are provided in the Corporate product and process upgrades are being well recognised
Governance Report forming part of this Annual Report. as providing improved customer performance and value.
Our value-added product programme pipeline continues
RESEARCH AND DEVELOPMENT (R&D) to provide ongoing new opportunities at different stages
The R&D investment continues to be focused on of development. A recently commercialised example
enhancing our relative market position in an increasingly is our branded offering, Liva Sno. This product not
competitive environment. Focused programmes are only simplifies the downstream processing, but also
driving innovations in the critical areas of product quality, contributes to processors’ environment-friendly efforts by
cost reduction, new product offerings and environmental reducing water consumption and the generation of waste
sustainability. Our portfolio of programmes addresses effluent. We are planning the continued launch of new
near-term needs through the implementation of recently products in our pipeline in the coming years. The fibre-
developed technologies while filling the pipeline with focused quality improvement work over the last five years
future opportunities to achieve our long-term goals. has been aimed at bringing our production lines to global
benchmark quality levels and achieving product leadership.
Pulp and Fibre Business Application of metrics like first pass yield (FPY) and Uptime,
and systematic Six-Sigma process projects to improve line
Pulp R&D continues to focus on expanding our specialty
performance levels have contributed significantly toward
pulp opportunities at the Domsjo Unit as well as generally
achieving our objectives. The process capability analyses
improving the quality and consistency of supply to our
Viscose Staple Fibre (VSF) manufacturing sites. Tailored of production lines have been broadly completed, and
products have been developed providing expanded sales approximately three quarters of production capacity has
into filament yarn production, and new applications in novel been upgraded and certified as achieving benchmark
new casing products and cellulose acetate end-uses are levels. Projects are ongoing to improve our remaining
being adopted. Advances in pulp quality and consistency assets. A comprehensive fibre quality gradation system
for the internal VSF customers are leading to significant has been developed to more fully specify the product
reductions in contaminate levels like dirt and resins. attributes required to fulfil our customers’ expectations for
Model-based predictive controls are leading to reduced quality and processing performance. This system is being
viscosity and lignin content variations in the process. On- used to guide our improvement projects aimed at ongoing
line pulp viscosity measurement and control technologies product trade leadership.
are being explored to further improve the consistency of
this critical parameter. Implementation of new operating Our businessdevelopmentprocessincludesthe promotion
conditions, such as those associated with alkali extraction, of our cellulose-based comfort fibres throughout the
have enabled the reduced consumption of key raw entire value chain from yarn producers through retail. The
materials at the Domsjo plant. Ongoing collaborations Textile Research and Applications Development Centre
with external laboratories are focused on developing new (TRADC) plays a critical role in this process through the
sustainable technologies and recycling opportunities. Our development of unique fabric designs, continual renewal
digitisation initiative continues to seamlessly connect of our fabric resource library, creation of seasonal design
the pulp plant processes to the consuming fibre plants. collections and launch support for new product offerings.
Access to production data for pulp is being utilised at the Unique fabric design bases were developed to promote
fibre plants allowing the optimisation of blending leading our fibres in textile hubs across India for knitted fabrics
to viscose consistency improvements. Model-based in tops, intimate apparel, legwear and sweaters, and
predictive control systems are being designed to further woven designs for shirts, suits, jackets and women’s
extract value from this approach. wear. Additionally, more than 150 fabric styles from over
50-base designs were created to showcase our products
Fibre-oriented R&D is focused on continuously improving in home textile applications in India and internationally.
production efficiency and enhancing our customers’ TRADC also contributed technical input to the “Sleep
36
GRASIM
37
STATUTORY REPORTS BOARD’S REPORT
The Company intends to reward, attract, motivate and - Platinum Award in “2nd Annual EKDKN EMINENT
retain employees and directors of the Company, its holding Award 2017” under CSR Category in Chemical &
and subsidiary companies for their high level of individual Fertilizer Sector (Ek Din Desh Ke Naam)
performance, by offering them equity shares by way of an
Employee Stock Options Scheme. - Dun & Bradstreet Corporate Award 2018 as the Top
Company for its stellar performance in the textiles
Towards this, the Company has sought approval of the sector. Grasim was honored for being “Champion of
members to approve and adopt the ‘Grasim Industries Ltd. Change” in the transformation of the country.
Employee Stock Option Scheme 2018’ (hereinafter referred
to as the “Scheme 2018”). The Company intends to offer - Ranked # 205 in the list of “Global 2000 – Growth
not more than 3,515,528 Equity Shares of ` 2/- each (which Champions 2018” by Forbes Magazine, USA
represents 0.53% of the paid-up equity capital as on 31st
March 2018) in one or more tranches, in accordance with - Award for Best Export Performance in the Category of
the Scheme 2018, the provisions of the law or regulations Viscose Staple Fibre (Gold Trophy). 2018 - SRTEPC
issued by the relevant authority, as may be prevailing at
that time. -
India Sustainable Leadership Award from World
Sustainability, a Not-For-Profit Organization
The Scheme 2018 shall be implemented through the ESOS advocating for Sustainable Leadership
Trust since it is proposed that the equity shares of the
Company would be acquired by the ESOS Trust from the - Liva - Most admired fashion innovation of the year by
secondary market.The Company proposes to extend financial India Fashion Forum
assistance to the ESOS Trust for this purpose, subject to the
overall limits specified under the applicable laws. -
NCQC (National Convention on Quality Concepts)
2017, Mysuru – “PAR EXCELLENCE” Award - Insulators
The broad framework of the Scheme 2018 is detailed (Rishra)
in the Notice of the AGM. Your Directors commend
the resolutions for approving the grant in terms of the - IMC Ramkrishna Bajaj National Quality Award 2017
Scheme and the implementation of the Scheme through Performance Excellence in Manufacturing Category -
the Trust. Chemicals
38
GRASIM
- Golden Peacock Award - 2018 - Business Excellence under the Sexual Harassment of Women at Workplace
(Indian Rayon) (Prevention, Prohibition and Redressal) Act, 2013. No
cases or complaints were filed pursuant to the Sexual
GENERAL Harassment of Women at Workplace (Prevention,
Your Directors state that no disclosure or reporting is Prohibition and Redressal) Act, 2013.
required in respect of the following items as there were
no transactions on these items during the year under ACKNOWLEDGEMENTS
review: Your Directors express their deep sense of gratitude to
the banks, financial institutions, stakeholders, business
1. Issue of equity shares with differential rights as to associates, Central and State Governments for their co-
dividend, voting or otherwise; operation and support and look forward to their continued
support in future.
2.
Issue of shares (including sweat equity shares) to
employees of the Company under any Scheme save We very warmly thank all of our employees for their
and except ESOS referred to in this Report; contribution to the Company’s performance. We applaud
them for their superior levels of competence, dedication
3. There were no revisions in the financial statements; and commitment to the Company.
4. No significant or material orders were passed by the For and on behalf of the Board
Regulators or Courts or Tribunals which impact the
going concern status and the Company’s operations
in the future;
5. The Company has made and maintained cost records Kumar Mangalam Birla
as specified by the Central Government under Chairman
sub¬section (1) of section 148 of the Companies Act, (DIN: 00012813)
2013 for the Financial Year 2017-18; and
Mumbai, 14th August 2018
6. The Company has complied with provisions relating
to the constitution of Internal Complaints Committee
39
STATUTORY REPORTS BOARD’S REPORT
Introduction
As per the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, the Company is
required to formulate and disclose its Dividend Distribution Policy. Accordingly, the Board of Directors of the Company
(‘the Board’) has approved this Dividend Distribution Policy of the Company at its meeting held on 28th October, 2016.
The objective of this policy is to provide the dividend distribution framework to the stakeholders of the Company.
The Board of Directors shall recommend dividend in compliance with this policy, the provisions of the Companies
Act, 2013, and Rules made thereunder, and other applicable legal provisions.
General
Retained earnings will be used inter alia for the Company’s growth plans, working capital requirements, debt repayments
and other contingencies.
If the Board decides to deviate from this policy, the rationale for the same will be suitably disclosed. This policy would be
subject to revision/amendment on a periodic basis, as may be necessary. This policy (as amended from time to time) will
be available on the Company’s website and in the Annual Report.
40
Annexure ‘B’ to the Board’s Report
STATEMENT CONTAINING SALIENT FEATURES: PURSUANT TO FIRST PROVISO TO SUB SECTION (3) OF SECTION 129 OF
COMPANIES ACT, 2013 READ WITH RULE (5) OF COMPANIES (ACCOUNTS) RULES, 2014
Part “A” - Subsidiaries
(` in Crore)
Sr. Name of the Subsidiary Year Currency Share Capital Reserves Total Assets Total Details of Gross Profit/ Provision Profit / Proposed % of
No. Companies (Including and Surplus (Non-Current Liabilities Current and Turnover# (Loss) for (Loss) Dividend shareholding
Share (Net of Debit Assets (Non- Non-Current Before Taxation After (including
Application Balance +Current Current Investments Taxation Taxation Corporate
Money) of Profit Assets+ Liabilities+ (excluding Dividend
and Loss Deferred Current investments Tax)
Account) Tax Assets) Liabilities in subsidiary
excluding +Deferred Tax companies)-
Current and Liabilities) Treasury Bill
Non-Current
Investments
Samruddhi Swastik Trading 2017-18 6.50 45.78 5.44 1.23 48.07 - 4.13 1.04 3.09 - 100%
1 `
And Investments Limited 2016-17 6.50 38.61 19.29 1.03 26.85 - 4.61 1.16 3.45 - 100%
2017-18 28.14 66.57 113.62 23.51 4.60 - 1.66 0.47 1.19 - 100%
2 ABNL Investments Limited `
2016-17 - - - - - - - - - - 0%
Sun God Trading And 2017-18 0.05 3.92 - 1.00 4.97 - 0.03 0.01 0.02 - 100%
3 `
Investments Limited 2016-17 0.05 0.45 - - 0.50 - 0.04 0.01 0.03 - 100%
Euro EURO 6200 (0.05) 0.04 0.08 - 0.02 (0.01) - (0.01) - 99.97%
2017-18
Aditya Birla Chemicals ` 0.05 (3.90) 2.86 6.71 - 2.30 (1.05) - (1.05) - 99.97%
4
(Belgium) BVBA Euro EURO 6200 (0.03) 0.05 0.09 - 0.06 (0.02) - (0.02) - 99.97%
2016-17
` 0.04 (2.38) 3.65 5.99 - 4.17 (1.70) - (1.70) - 99.97%
Grasim Bhiwani Textiles Limited 2017-18 - - - - - 76.40 (36.60) - (36.60) - 0%
5 `
(GBTL) 2016-17 20.05 75.30 270.45 175.10 - 368.53 (1.70) (0.74) (0.96) - 100%
UltraTech Cement Limited 2017-18 274.61 25,648.41 48,210.10 28,449.98 6,162.90 30,683.93 3,301.84 1,070.56 2,231.28 - 60.21%
6 `
(UTCL) - (Standalone) 2016-17 274.51 23,666.50 31,872.42 15,340.08 7,408.67 26,886.73 3,775.95 1,148.23 2,627.72 - 60.23%
2017-18 0.05 (0.05) 37,774.00 63,734.00 - - (10,000.00) - (10,000.00) - 100%
7 Dakshin Cements Limited `
2016-17 0.05 (0.05) 37,774.00 53,734.00 - - (10,000.00) - (10,000.00) - 100%
8 2017-18 0.25 153.63 156.25 2.37 - - (340.00) - (340.00) - 100%
Harish Cement Limited `
2016-17 0.25 153.48 156.10 2.37 - - (17,037.00) - (17,037.00) - 100%
Gotan Limestone Khanij Udyog 2017-18 2.33 18.67 21.89 0.89 - - (0.43) - (0.43) - 100%
9 `
Pvt. Ltd. 2016-17 2.33 19.10 22.83 1.40 - - (0.52) - (0.52) - 100%
Bhagwati Lime Stone Company 2017-18 0.01 1.76 1.95 0.18 - - (0.05) - (0.05) - 100%
10 `
Pvt. Ltd. 2016-17 0.01 1.81 1.92 0.10 - - (0.09) - (0.09) - 100%
SLR 50.00 140.77 355.85 165.08 - 1,340.87 39.25 12.05 27.20 - 80%
2017-18
UltraTech Cement Lanka Pvt. ` 20.92 58.91 148.89 69.06 - 563.39 16.50 5.06 11.44 -
11
Ltd. SLR 50.00 153.56 308.36 104.80 - 1,266.26 84.48 21.08 63.40 - 80%
2016-17
` 21.28 65.33 128.16 41.55 - 575.57 38.40 9.59 28.81 -
GRASIM
41
(` in Crore)
42
Sr. Name of the Subsidiary Year Currency Share Capital Reserves Total Assets Total Details of Gross Profit/ Provision Profit / Proposed % of
No. Companies (Including and Surplus (Non-Current Liabilities Current and Turnover# (Loss) for (Loss) Dividend shareholding
Share (Net of Debit Assets (Non- Non-Current Before Taxation After (including
Application Balance +Current Current Investments Taxation Taxation Corporate
Money) of Profit Assets+ Liabilities+ (excluding Dividend
and Loss Deferred Current investments Tax)
Account) Tax Assets) Liabilities in subsidiary
STATUTORY REPORTS
Star Cement Co LLC, Ras Al ` 8.86 204.99 1,683.32 1,469.48 - 660.25 7.67 - 7.67 -
15
Khaimah @ 2016-17 AED 0.50 10.73 95.75 84.53 - 36.97 4.80 - 4.80 - 100%
2016-17 ` 8.82 189.26 1,689.69 1,491.60 - 674.90 87.70 - 87.70 -
AED 0.20 1.87 5.00 2.94 - 4.24 0.99 - 0.99 - 100%
2017-18
Al Nakhla Crushers LLC, ` 3.54 33.05 88.64 52.05 - 74.45 17.38 - 17.38 -
16
Fujairah @ 2016-17 AED 0.20 0.88 5.20 4.13 - 4.23 1.16 - 1.16 - 100%
2016-17 ` 3.53 15.46 91.81 72.82 - 77.24 21.14 - 21.14 -
Bahrain 0.03 1.32 1.57 0.22 - 2.03 0.36 - 0.36 - 100%
2017-18 Dirham (BHD)
Arabian Gulf Cement Company ` 5.18 227.59 271.09 38.33 - 346.46 62.44 - 62.44 -
17
WLL, Bahrain @ Bahrain 0.03 1.10 1.42 0.29 - 1.17 0.20 - 0.20 - 100%
2016-17 Dirham(BHD)
` 5.16 188.79 243.54 49.59 - 208.79 36.45 - 36.45 -
Takka 158.93 (99.81) 222.56 163.44 - 286.49 6.40 2.65 3.75 - 100%
2017-18
Emirates Cement Bangladesh ` 124.35 (78.09) 174.14 127.88 - 225.77 5.05 2.09 2.95 -
18
Ltd, Bangladesh @ Takka 158.93 (103.59) 239.72 184.38 - 257.82 5.71 1.55 4.16 - 100%
2016-17
` 129.24 (84.24) 194.94 149.94 - 219.99 4.87 1.32 3.55 -
Takka 27.00 (21.15) 17.41 11.57 - 2.07 - - - - 100%
2017-18
Emirates Power Company Ltd, ` 21.12 (16.55) 13.62 9.05 - 1.63 - - - -
19
Bangladesh @ Takka 27.00 (21.16) 19.72 13.88 - 2.70 - - - - 100%
2016-17
` 21.95 (17.20) 16.04 11.29 - 2.30 - - - -
(` in Crore)
Sr. Name of the Subsidiary Year Currency Share Capital Reserves Total Assets Total Details of Gross Profit/ Provision Profit / Proposed % of
No. Companies (Including and Surplus (Non-Current Liabilities Current and Turnover# (Loss) for (Loss) Dividend shareholding
Share (Net of Debit Assets (Non- Non-Current Before Taxation After (including
Application Balance +Current Current Investments Taxation Taxation Corporate
Money) of Profit Assets+ Liabilities+ (excluding Dividend
and Loss Deferred Current investments Tax)
Account) Tax Assets) Liabilities in subsidiary
excluding +Deferred Tax companies)-
Current and Liabilities) Treasury Bill
Non-Current
Investments
Omani Riyal - - - - - - - - - - 0%
Awam Minerals LLC , Sultanate 2017-18
of Oman @ ` - - - - - - - - - -
20
(Ceased control w.e.f. April Omani Riyal 0.05 (0.09) 0.11 0.16 - 0.21 (0.05) - (0.05) - 51%
24, 2017) 2016-17
` 7.65 (15.12) 18.87 26.33 - 36.20 (8.55) - (8.55) -
Indonesian 1,158.90 (1,037.66) 124.73 3.50 - - (0.19) - (0.19) - 80%
2017-18 Rupee
` 5.49 (4.92) 0.59 0.02 - - - - - -
21 PT UltraTech Mining Indonesia
Indonesian 1,158.90 (1,037.47) 121.43 - - - (1,028.41) - (1,028.41) - 80%
2016-17 Rupee
` 5.64 (5.06) 0.58 - - - (5.21) - (5.21) -
Indonesian 1,992.40 37.30 2,037.24 7.54 - - (0.21) - (0.21) - 100%
2017-18 Rupee
PT UltraTech Investment ` 9.43 0.18 9.65 0.04 - - - - - -
22
Indonesia Indonesian 1,992.40 37.51 2,037.45 7.54 - - (0.30) - (0.30) - 100%
2016-17 Rupee
` 9.70 0.18 9.92 0.04 - - - - - -
Indonesian 2,033.46 (1,416.83) 622.42 5.79 - - 22.54 - 22.54 - 99%
2017-18 Rupee
` 9.62 (6.71) 2.94 0.03 - - 0.11 - 0.11 -
23 PT UltraTech Cement Indonesia
Indonesian 2,033.46 (1,439.37) 596.38 2.29 - - (1,180.92) - (1,180.92) - 99%
2016-17 Rupee
` 9.91 (7.02) 2.90 0.01 - - (5.97) - (5.97) -
Aditya Birla Capital Limited 2017-18 2,201.04 4,943.05 155.11 866.89 7,855.87 174.79 61.49 - 61.49 - 56.00%
24 `
(ABCL) 2016-17 - - - - - - - - - - 0.00%
Aditya Birla PE Advisors Private 2017-18 3.50 24.52 34.45 6.43 20.69 9.73 (8.62) (0.75) (7.87) - 100.00%
Limited (Formerly known - - - - - - - - - -
25 `
Aditya Birla Capital Advisors 2016-17
Private Limited)
Aditya Birla MyUniverse 2017-18 18.00 (240.06) 32.62 254.68 - 15.82 (41.61) - (41.61) - 93.70%
26 Limited (Formerly know as `
Aditya Birla Customer Service 2016-17
Aditya
Limited)Birla Trustee Company 2017-18 0.05 0.32 0.40 0.03 0.38 0.07 0.05 0.01 0.04 - 100.00%
27 `
Private Limited 2016-17
Aditya Birla Insurance Brokers 2017-18 2.70 59.91 154.13 91.52 28.75 260.98 39.15 14.48 24.67 22.53 50.00%
28 `
Limited 2016-17
Aditya Birla Money Mart 2017-18 0.10 (4.86) 30.43 35.19 29.75 0.12 (1.20) - (1.20) - 100.00%
29 `
GRASIM
Limited 2016-17
43
(` in Crore)
44
Sr. Name of the Subsidiary Year Currency Share Capital Reserves Total Assets Total Details of Gross Profit/ Provision Profit / Proposed % of
No. Companies (Including and Surplus (Non-Current Liabilities Current and Turnover# (Loss) for (Loss) Dividend shareholding
Share (Net of Debit Assets (Non- Non-Current Before Taxation After (including
Application Balance +Current Current Investments Taxation Taxation Corporate
Money) of Profit Assets+ Liabilities+ (excluding Dividend
and Loss Deferred Current investments Tax)
Account) Tax Assets) Liabilities in subsidiary
STATUTORY REPORTS
Aditya Birla Money Insurance 2017-18 2.47 (4.29) 1.75 3.57 - 1.18 (1.81) - (1.81) - 100.00%
30 `
Advisory Services Limited 2016-17
ABCAP Trustee Company 2017-18 0.02 (0.02) - - - - ß - ß - 100.00%
31 `
Private Limited 2016-17
Aditya Birla Sun Life Trustee 2017-18 0.02 0.72 0.77 0.03 0.69 0.05 0.07 (0.01) 0.08 - 50.85%
32 `
Company Private Limited 2016-17
Aditya Birla Wellness Private 2017-18 8.33 8.06 22.27 5.88 11.38 2.23 (5.99) - (5.99) - 51.00%
33 `
Limited 2016-17
Aditya Birla Financial Shared 2017-18 0.05 0.62 55.30 54.63 1.82 - 0.06 ß 0.06 - 100.00%
34 `
Services Limited 2016-17
Aditya Birla Health Insurance 2017-18 132.88 (43.48) 334.41 245.01 210.07 247.99 (189.22) - (189.22) - 51.00%
35 `
Company Limited 2016-17
Aditya Birla Commodities 2017-18 5.50 (0.62) 25.63 20.75 - 5.21 0.51 0.01 0.50 - 74.03%
36 `
BOARD’S REPORT
# W
ith effect from 1st July 2017, sales are recorded net of Goods and Service Tax (GST) whereas prior to 1st July 2017 sales were recorded gross of excise duty which formed
part of expenses. Hence, revenue from operations for year ended 31st March, 2018 are not comparable with figures of previous year
@ Subsidiaries of UltraTech Cement Middle East Investment Ltd.
ß Represents that the amount is less than ` 50,000
GRASIM
45
Part “B” : Joint Ventures/Associates
46
(` in Crore)
Sr. Name of the Associates and Joint Ventures Latest Shares of Joint ventures held Networth Profit /
No. audited by the company on year end attributable to (Loss) for
Balance Sheet shareholding the year
Date as per latest
STATUTORY REPORTS
13 Aditya Birla Renewables Limited 31.03.2018 2,79,36,000 27.94 85.59% 23.77 (0.43) (0.22) (0.21)
14 Aditya Birla Solar Limited 31.03.2018 3,03,26,602 30.33 50.10% 32.72 5.61 2.81 2.80
15 Aditya Birla Idea Payments Bank Limited # 31.03.2018 23,06,80,885 230.68 87.86% 139.84 (91.39) (75.35) (16.04)
# Represents Associates
$ Joint Venture and Associate of UltraTech: Numbers are propornate to the extent of Company’s interest through UltraTech
& The company has discontinued recognising its share of further losses as it exceeds the companies interest in AVTB as per Ind AS 28
GRASIM
47
STATUTORY REPORTS BOARD’S REPORT
(e) Stakeholders Relationship Committee; are of the opinion that the Company has complied
(f) Corporate Social Responsibility Committee; with the conditions of Corporate Governance as
stipulated in the Listing Regulations, as applicable
(g) Risk Management Committee;
for the year ended March 31, 2018, referred to in
(h) Independent Directors Meeting; paragraph 1 above.
v.
Obtained necessary representations and
declarations from directors of the Company Other matters and Restriction on Use
including the independent directors ; and 9. This report is neither an assurance as to the
future viability of the Company nor the efficiency
vi.
Performed necessary inquiries with the
or effectiveness with which the management has
management and also obtained necessary
conducted the affairs of the Company.
specific representations from management.
Mumbai Mumbai
23 May 2018 23 May 2018
48
GRASIM
A. CONSERVATION OF ENERGY o
Replacement of conventional
a) The steps taken and impact on Conservation of lighting with energy efficient LEDs
Energy o
Installation of VFDs in critical
The Company is engaged in the process of energy pumps and equipment.
conservation through continuous improvements
• Process improvement to save energy
in operational and maintenance practices.
o
Redesigning and resizing of
Following measures have been taken by different Multi-Stage Flash Evaporators
units of the Company: to increase water evaporation
i) Viscose Staple Fibre (VSF) and Pulp Units economy and save steam
49
STATUTORY REPORTS BOARD’S REPORT
ESP-2/1,2/2 and 2/3 major casing leakages were • Utilisation of leftover pre-hydrolysis liquor
attended. to generate additional biogas resulting in
reduction in consumption of furnace oil.
Soot blowing from 36 ata line instead of 90 ata.
Cooling water pumps B & E impeller anti-friction c)
The capital investment on energy conservation
coating. equipment
• Total investment made ` 45.55 Cr.
iv) Fertiliser Units
• Improvement in power factor of the B. TECHNOLOGY ABSORPTION
electrical system from 0.95 to 0.99 by a) The efforts made towards Technology Absorption
installing capacitor banks at Sapthin Plant Fibre and Pulp
and Customised Fertiliser Plant. • Improving consistency of dope dyed
• Replacement of catalyst in ZnO reactor of superwhite VSF for use in uniforms and
Ammonia Plant other white applications, development and
market seeding of dyed fibre with anti-
• Replacement of 2nd and 3rd stage microbial properties and a new development
separators in Process Air Compressor (PAC) in cationic fibre technology
in Ammonia Plant
• Developing technology capabilities for
• Up-gradation of Mark-V control system of delivering high quality spun shades in both
power generation unit (TG-701) with Mark- India and China markets
Vie control system.
• Improving modal/micro modal quality and
v) Insulator Units productivity - cross section stabilisation at
TRC and improved finish at Vilayat
Installation of LPG-operated direct-fired hot air
generators at 8 nos Mangle dryers by replacing • Quality and productivity improvement
HSD-fired indirect type thermic fluid heater. initiatives on the Excel lines
50
GRASIM
Fertiliser Unit :
IGF, in-house R&D lab has developed 8 CFG grades soil specific formulation based on soil test crop response
model for different districts for different crops, i.e., wheat, paddy, potato, sugarcane, corn etc., and have been
commercialised in UP, Bihar, Bengal, Jharkhand. These grades have helped in improving soil health and improve
defficiency of major and micro-nutrients and increased productivity of grain yield by 10-15%.
51
STATUTORY REPORTS BOARD’S REPORT
Rayon Unit
Quality improvement in existing range, development of new market segments, improvement in process,
productivity and cost control, increase in customer base and yield, improvement in energy consumption and
energy efficiency and reduction in input material consumption.
c) In case of imported technology (imported during the last three years, reckoned from the beginning of the financial
year :
Division Details of Technology Year of Import Whether the If not fully absorbed, areas where
Imported Technology been absorption has not taken place,
fully absorbed and the reasons thereof
Chemical Electrolysis membrane 2015-16 Yes NA
cell technology with 6th
generation electrolyser
Chemical Latest technology, 6th 2016-17 Yes NA
generation electrolyser
Chemical Latest technology, 6th 2017-18 Not yet, as NA
generation electrolyser commissioning
of plant is in
progress
52
GRASIM
53
STATUTORY REPORTS BOARD’S REPORT
b.
The Securities and Exchange Board of India Limited and Aditya Birla Financial Services Limited
(Delisting of Equity Shares) Regulations, 2009; (now known as Aditya Birla Capital Limited) and
their respective shareholders and creditors (the
c.
The Securities and Exchange Board of India
Scheme) was approved by NCLT vide its order dated
(Buyback of Securities) Regulations, 1998; and
1st June 2017 and has become effective from 1st
d.
Foreign Exchange Management Act, 1999 and July 2017. Aditya Birla Nuvo Limited amalgamated
the rules and regulations made thereunder to the with Company w.e.f. 1st July 2017, all the precedent
extent of Foreign Direct Investment and Overseas condition had been satisfied or waived and 4th July
Direct Investment. 2017 was approved as Effective date for Demerger
of Financial Business of the Company to Aditya
We further report that - Birla Capital Limited (Formerly known as Aditya
The Board of Directors of the Company is duly constituted Birla Financial Services Limited).
with proper balance of Non-Executive Directors and
Independent Directors. The changes in the composition of 2. Company has allotted 19,04,62,665 fully paid up
the Board of Directors that took place during the period equity shares of ` 2/- each of the Company to the
under review were carried out in compliance with the shareholders of Aditya Birla Nuvo Limited, whose
provisions of the Act. names appear in the list of allottees prepared by
Karvy Computershare Private Limited, Registrars
Adequate notice is given to all Directors to schedule the and Transfer Agents of the Company in the ratio of
Board Meetings, agenda and detailed notes on agenda 15 (fifteen) fully paid equity share of ` 2/- each of
were sent at least seven days in advance, and a system the Company, credited as fully paid up, for every
exists for seeking and obtaining further information and 10 (ten) fully paid up equity share of ` 10/- each of
clarifications on the agenda items before the meeting and Aditya Birla Nuvo Limited as on Record Date i.e. 6th
for meaningful participation at the meeting. July 2017 pursuant to the Scheme.
Decisions at the meetings of the Board of Directors of the
Company were carried through on the basis of majority.
There were no dissenting views by any members of the
Board of Directors during the audit period.
We further report that there are adequate systems and For BNP & Associates
processes in the Company commensurate with the size Company Secretaries
and operations of the Company to monitor and ensure [Firm Regn. No. P2014MH037400]
compliance with applicable laws, rules, regulations and
guidelines.
54
GRASIM
Annexure I to the Secretarial Audit Report for the financial year ended 31st March 2018
To,
The Members,
Grasim Industries Limited
Our Secretarial Audit Report of even date is to be read along with this letter.
1. The compliance of provisions of all laws, rules, regulations, standards applicable to Grasim Industries
Limited (the ‘Company’) is the responsibility of the management of the Company. Our examination was
limited to the verification of records and procedures on test check basis for the purpose of issue of the
Secretarial Audit Report.
2. Maintenance of secretarial and other records of applicable laws is the responsibility of the management
of the Company. Our responsibility is to issue Secretarial Audit Report, based on the audit of the relevant
records maintained and furnished to us by the Company, along with explanations where so required.
3. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance
about the correctness of the contents of the secretarial and other legal records, legal compliance
mechanism and corporate conduct. The verification was done on test check basis to ensure that correct
facts as reflected in secretarial and other records produced to us. We believe that the processes and
practices we followed, provides a reasonable basis for our opinion for the purpose of issue of the
Secretarial Audit Report.
4. We have not verified the correctness and appropriateness of financial records and Books of Accounts
of the Company.
5. Wherever required, we have obtained the management representation about the compliance of laws,
rules and regulations and major events during the audit period.
6. The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of the
efficacy or effectiveness with which the management has conducted the affairs of the Company.
B. Narasimhan
Place: Mumbai Partner
Date: 23rd May 2018 FCS No.1303/ COP No. 10440
55
STATUTORY REPORTS BOARD’S REPORT
1 A brief outline of the Company’s CSR policy, including : To actively contribute to the social and economic
overview of projects or programs proposed to be development of the communities in which we operate.
undertaken and a reference to the web link to the CSR In so doing build a better, sustainable way of life for
policy and projects or programs the weaker sections of society, to contribute effectively
towards inclusive growth and raise the country’s human
development index.
3 Average net profit of the company for last three : ` 1107.04 Crores
financial years
56
GRASIM
Manner in which the amount spent during the financial year : Details given below
Sr. CSR Projects / Sector in which Project / Amount Outlay Amount Spent Cumulative Amount
No Activities Identified the project Programs (Budget) on the Project/ Spend upto Spent: Direct
covered Local Area / Project or Programmes reporting period or through
others. Specify Programme Subheads : (` in Lakhs) implementing
the Sate / wise (1) Direct agency*
District where (` in Lakhs) expenditure
the Project on project/
Undertaken programs
(2) Overheads
(` in Lakhs)
1 1. Pre school education Project Education Bharuch & 9.66 5.36 878.41 All expenses
Balwadies/play schools/crèches; Surat (Gujarat), incurred
Strengthening Anganwadis Ujjain (MP), directly by the
Centres Company /
Hoogly (WB) Trust through
implementing
Agency
2. School Education Project Bharuch, Surat, 705.41 673.44
Enrolment awareness programs/ Panchmahal &
events; Formal schools outside Gir Somnath
campus; Education Material (Gujarat),
(Study materials, Uniform, Books Ujjain (MP),
etc.); Scholarship (Merit and Haveri
Need based assistance) School (Karnataka),
competitions /Best teacher Rehla
award; Cultural events, Quality (Jharkand),
of Education (support teachers, Renukoot (UP),
improve education methods); Hoogly (WB),
Specialized Coaching; Exposure Amethi (UP)
visits/awareness, Formal schools
inside campus (Company
Schools), Support to Midday Meal
Project
3. Education support programs Bharuch & 16.43 17.81
Knowledge Centre/Library; Gir Somnath
Adult/Non Formal Education; (Gujarat),
Celebration of National days; Ujjain (MP),
Computer education; Reducing Haveri, Karwar
drop out and Continuing (Karnataka),
Education (Kasturba Balika / Ganjam
counseling), Career Counseling (Orissa), Rehla
and orientation. (Jharkhand)
4. Vocational & Technical Ujjain (MP), 63.40 65.79
Education: Strengthening ITI's; Bharuch
Skill Based Individual training (Gujarat),
Program Rehla
(Jharkhand) &
Amethi (UP)
5. School Infrastructure Bharuch & 101.68 116.01
Building & Civil Structure (new), Surat (Gujarat),
Building and Civil structures Ujjain (MP),
(renovation and Maintenance), Haveri
School sanitation /drinking (Karnataka),
water; School facilities and Rehla
fixtures (Furniture / black boards / (Jharkhand),
computers) Renukoot (UP)
57
STATUTORY REPORTS BOARD’S REPORT
Sr. CSR Projects / Sector in which Project / Amount Outlay Amount Spent Cumulative Amount
No Activities Identified the project Programs (Budget) on the Project/ Spend upto Spent: Direct
covered Local Area / Project or Programmes reporting period or through
others. Specify Programme Subheads : (` in Lakhs) implementing
the Sate / wise (1) Direct agency*
District where (` in Lakhs) expenditure
the Project on project/
Undertaken programs
(2) Overheads
(` in Lakhs)
2. 1. Preventive Health Care: Health Care Bharuch, Surat 55.04 45.19 734.77 All expenses
Immunization, Pulse polio & Gir Somnath incurred
immunization, Health Check- (Gujarat), directly by the
up camps, Ambulance Mobile Ujjain (MP), Company /
Dispensary Program, Malaria/ Haveri, Trust through
Diarrhea /Control programs, (Karnataka), implementing
Health & Hygiene awareness Rehla Agency
programs, School health/Eye/ (Jharkhand),
Dental camps, Yoga/fitness Sonebhadra &
classes. Amethi (UP)
2. Curative Health Care program Bharuch, Surat 571.93 514.90
General Health Camps Specialized & Gir Somnath
Health Camps, Eye camps, (Gujarat),
Treatment Camps (Skin, cleft, Ujjain (MP),
etc.), Cleft camp, Homeopathic/ Haveri
Ayurvedic Camps, Surgical (Karnataka),
camps, Tuberculosis Leprosy Rehla
Company operated hospitals/ (Jharkhand),
dispensaries/clinic. Ganjam
(Orissa),
Hoogly (WB) &
Amethi (UP)
3. Reproductive and Child Health Bharuch 8.09 2.99
Mother and Child Health care (Gujarat) &
(Ante Natal Care, Pre Natal Ujjain (MP)
Care and Neonatal care),
Adolescent Health care, Infant
and child health (Healthy baby
competition), Support to family
planning /camps, Nutritional
programs for mother/child.
4. Quality / Support Program Ujjain (MP), 8.01 7.20
Referral services Treatment of Gir Somnath
BPL, old age or needy patient, (Gujarat),
HIV- AIDS Awareness Program, & Ganjam
RTI/ STD Awareness program, (Orissa)
Support for differently abled,
Ambulance services, Blood
donation camps, Blood Grouping.
5. Health Infrastructure & Others Bharuch, Surat 169.35 164.49
Buildings and Civil & Gir Somnath
structures(new), Buildings and (Gujarat),
Civil structures (renovation and Ujjain, Bhind &
maintenance), Village Community Morena (MP),
Sanitation (toilets/drainage), Haveri, Karwar
Individual Toilets, Drinking water (Karnataka),
new sources, (Hand pump /RO/ Rehla
Water Tank/well), Drinking water (Jharkhand),
existing sources (operation/ Ganjam
maintenance), Water source (Orissa),
purification. Hoogly (WB) &
Sonebhadra &
Amethi (UP)
58
GRASIM
Sr. CSR Projects / Sector in which Project / Amount Outlay Amount Spent Cumulative Amount
No Activities Identified the project Programs (Budget) on the Project/ Spend upto Spent: Direct
covered Local Area / Project or Programmes reporting period or through
others. Specify Programme Subheads : (` in Lakhs) implementing
the Sate / wise (1) Direct agency*
District where (` in Lakhs) expenditure
the Project on project/
Undertaken programs
(2) Overheads
(` in Lakhs)
3. 1. Agriculture and Farm Based Environment & Ujjain (MP), 30.80 19.36 297.25 All expenses
Agriculture & Horticulture Livelihood Bharuch incurred
training program/ Farmers (Gujarat), directly by the
group Transfer of Technology- Haveri Company /
Demonstration plots, Support (Karnataka), Trust through
for horticulture plots, Seeds Rehla implementing
Improvement Program, improved (Jharkhand), Agency
agriculture equipment and inputs, Sonebhadra &
Exposure visits / agricultural Amethi (UP)
mela, Integrated agricultural/
horticultural improvement,
program/productivity
improvement programs, soil
health and organic farming.
2. Animal Husbandry Based Ujjain (MP), 20.38 17.68
Treatment and vaccination, Breed Haveri
improvement (Karnataka),
Productivity, Improvement Rehla
programs and training. (Jharkhand),
Bharuch
(Gujarat)
Sonebhadra &
Amethi (UP)
3. Non-farm & Skills Based Income Bharuch, Surat 142.88 129.38
generation Program & Gir Somnath
Capacity Building Program- (Gujarat),
Tailoring, Beauty Parlor, Ujjain, Bhind
Mechanical, Rural Enterprise & Morena
development& Income (MP), Haveri
Generation Programs, Supporting (Karnataka),
SHGs for entrepreneurial Rehla
activities (Jharkhand),
Hoogly (WB) &
Amethi (UP)
4. Natural Resource conservation Ujjain (MP), 95.48 97.69
programs & Non conventional Bharuch &
Energy: Gir Somnath
Biogas program, Solar energy (Gujarat),
and other energy support Haveri
programs - (low smoke wood (Karnataka)
stoves/sky light), Plantation & Rehla
/ Green Belt Development (Jharkhand)
/ Roadside Plantation, Soil
conservation /Land improvement,
Water conservation and
harvesting (small structures/
bigger structures), Community
Pasture Land Development/
Orchard Development.
5. Livelihood Infrastructure & Others Ujjain (MP), 30.77 33.14
Bharuch &
Surat (Gujarat),
Karwar
(Karnathka)
& Rehla
(Jharkhand)
59
STATUTORY REPORTS BOARD’S REPORT
Sr. CSR Projects / Sector in which Project / Amount Outlay Amount Spent Cumulative Amount
No Activities Identified the project Programs (Budget) on the Project/ Spend upto Spent: Direct
covered Local Area / Project or Programmes reporting period or through
others. Specify Programme Subheads : (` in Lakhs) implementing
the Sate / wise (1) Direct agency*
District where (` in Lakhs) expenditure
the Project on project/
Undertaken programs
(2) Overheads
(` in Lakhs)
4 Rural Infrastructure Development Rural Gir Somnath 94.43 106.49 106.49 All expenses
other than for the purpose of Health Development (Gujarat), incurred
/Education/Livelihood & Others Projects Ujjain directly by the
New Roads/Culverts/Bridges/Bus (MP), Rehla Company /
Stands, Repair Roads/Culverts/ (Jharkhand), Trust through
Bridges/Bus Stands / Community Haveri & implementing
Halls/ Housing, Other Community Karwar Agency
assets & shelters and rural (Karnataka),
development projects Bhind &
Morena (MP),
Sonebhadra
& Amethi
(UP), Ganjam
(Orissa)
5 1. Institutional building & Social Bharuch & 2.05 2.69 85.60 All expenses
strengthening Empowerment Surat (Gujarat) incurred
Strengthening/ formation of & Rehla directly by the
community based organization (Jharkhand) Company /
(SHGs), development Trust through
organizations, old age homes, implementing
orphanages Agency
2. Social Security & support to Haveri 7.45 8.67
development organization (Karnataka),
Old age / Widow / physically Ganjam
Challenged Persons/ poor (Orissa) &
Insurance, Pension Scheme. Sonebhadra
(UP)
3. Awareness programs Bharuch & 5.62 5.79
Community Awareness Surat (Gujarat),
programmes, Campaign, social Ujjain (MP),
abuse, Early marriages / HIV Haveri
prevention (Karnataka)
& Rehla
(Jharkhand)
4. Social Events to minimise causes Bharuch, Surat 9.04 15.42
of poverty & Gir Somnath
Support to mass marriages / (Gujarat),
widow remarriages; National days Ujjain (MP),
celebrations with community; Haveri
Support with basic amenities; (Karnataka),
Rehla
(Jharkhand),
Sonebhadra &
Amethi (UP)
5. Promotion of Heritage/Culture / Bharuch 17.72 37.39
Sports (Gujarat),
Rural cultural program, Festivals Ujjain
& Melas support to rural sports. (MP), Rehla
(Jharkhand),
Ganjam
(Orissa),
Hoogly (WB) &
Amethi (UP)
60
GRASIM
Sr. CSR Projects / Sector in which Project / Amount Outlay Amount Spent Cumulative Amount
No Activities Identified the project Programs (Budget) on the Project/ Spend upto Spent: Direct
covered Local Area / Project or Programmes reporting period or through
others. Specify Programme Subheads : (` in Lakhs) implementing
the Sate / wise (1) Direct agency*
District where (` in Lakhs) expenditure
the Project on project/
Undertaken programs
(2) Overheads
(` in Lakhs)
6. Disaster Relief Programmes, Bharuch & 30.24 15.64
Support to development Surat (Gujarat),
organizations & Others Bhind &
Morena
(MP), Rehla
(Jharkhand),
Ganjam
(Orissa)
& Haveri
(Karnataka)
6 Grant to Education Trust (Mpower 700.00 765.50 765.50
Project)
7 Salaries and Overheads 120.00 115.60 115.60
Total (`/- in Lakhs) 3015.85 2983.62 2983.62
* Grasim Jan Seva Trust and Others
Responsibility Statement
The Responsibility Statement of the Corporate Social Responsibility Committee of the Board of Directors of the
Company is reproduced below:
The Implementation and Monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the Company.
61
STATUTORY REPORTS BOARD’S REPORT
62
GRASIM
IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity):
i. Category-wise Share Holding:
Category of No. of Shares held at the beginning No. of Shares held at the end of the Year % of
Shareholders of the Year (1st April 2017) (31st March 2018) Change
during the
Demat Physical Total % of Demat Physical Total % of
year
Total Shares Total Shares
Promoters
Indian
Individuals /HUFs 666860 0 666860 0.14 871162 0 871162 0.13 0.01
Central Govt. 0 0 0 0.00 0 0 0 0.00 0.00
Bodies Corporate 121316220 0 121316220 25.99 238723178 0 238723178 36.31 -10.33
Banks/FIIs 0 0 0 0.00 0 0 0 0.00 0.00
Others 0 0 0 0.00 0 0 0 0.00 0.00
Sub-Total - A(1) 121983080 0 121983080 26.13 239594340 0 239594340 36.45 -10.32
Foreign
NRI-Individuals 0 0 0 0.00 0 0 0 0.00 0.00
Other Individuals 0 0 0 0.00 0 0 0 0.00 0.00
Bodies Corporate 0 0 0 0.00 0 0 0 0.00 0.00
63
STATUTORY REPORTS BOARD’S REPORT
Category of No. of Shares held at the beginning No. of Shares held at the end of the Year % of
Shareholders of the Year (1st April 2017) (31st March 2018) Change
during the
Demat Physical Total % of Demat Physical Total % of
year
Total Shares Total Shares
Banks/FIIS 0 0 0 0.00 0 0 0 0.00 0.00
Others 0 0 0 0.00 0 0 0 0.00 0.00
Sub-Total-A(2) : 0 0 0 0.00 0 0 0 0.00 0.00
Total Shareholding 121983080 0 121983080 26.13 239594340 0 239594340 36.45 -10.32
Promoters (A) =
A(1) + A(2)
Public Shareholding
Institutions
Mutual Funds 25409078 41490 25450568 5.45 34145866 39594 34185460 5.20 0.25
Banks/FIIs 1278967 114310 1393277 0.30 1096853 58085 1154938 0.18 0.12
Central Govt. 0 0 0 0.00 1 0 1 0.00 0.00
State Govt.(s) 0 0 0 0 7905 0 7905 0.00 0.00
Venture Capital 0 0 0 0.00 0 0 0 0.00 0.00
Funds
Insurance Companies 35361741 17930 35379671 7.58 47519119 18452 47537571 7.23 0.35
FIIs 145773064 7955 145781019 31.23 180291940 11830 180303770 27.43 3.80
Foreign Venture 0 0 0 0.00 0 0 0 0.00 0.00
Capital Funds
Others (specify) 0 0 0 0.00 0 0 0 0.00 0.00
Sub-Total - B(1) 207822850 181685 208004535 44.55612687 263061684 127961 263189645 40.04 4.52
Non-Institutions
Bodies Corporate 28884878 295980 29180858 6.25 28356805 404189 28760994 4.38 1.88
Individuals
Individuals 33252972 7377731 40630703 8.70 50723888 7569179 58293067 8.87 -0.16
Shareholders holding
nominal share capital
upto ` 1 lakh
Individual 2530430 0 2530430 0.54 2545639 0 2545639 0.39 0.15
shareholders holding
nominal share capital
in excess of ` 1 lakh
Others(specify)
Foreign Nationals 3346 0 3346 0.00 23019 0 23019 0.00 0.00
IEPF 0 0 0 0.00 2170761 0 2170761 0.33 -0.33
NRIs (Rep.) 1211674 1062500 2274174 0.49 1707014 1295224 3002238 0.46 0.03
NRIs (Non-Rep.) 582442 0 582442 0.12 1279508 0 1279508 0.19 -0.07
OCB 0 13113065 13113065 2.81 0 13115226 13115226 2.00 0.81
Sub-Total- B(2) 66465742 21849276 88315018 18.92 86806634 22383818 109190452 16.61 2.31
Total Public 274288592 22030961 296319553 63.47 349868318 22511779 372380097 56.65 6.83
Shareholding B =
B(1) + B(2)
Total (A+B) 396271672 22030961 418302633 89.60 589462658 22511779 611974437 93.09 -3.49
Shares held by Custodians for GDRs and ADRs
Promoters and 24011520 0 24011520 5.14 24011520 0 24011520 3.65 -1.49
Promoter Group
Public 24522207 750 24522957 5.25 21384728 750 21385478 3.25 -2.00
Total (C) 48533727 750 48534477 10.40 45396248 750 45396998 6.91 3.49
GRAND TOTAL 444805399 22031711 466837110 100.00 634858906 22512529 657371435 100.00
(A+B+C)
64
GRASIM
65
STATUTORY REPORTS BOARD’S REPORT
66
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67
STATUTORY REPORTS BOARD’S REPORT
iv. Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of
GDRs and ADRs):
Sl. Shareholder’s Name Shareholding Date of Increase/ Reason Cumulative Shareholding
No. Transaction Decrease in during the year
Shareholding
No. of % of Total during the No. of Shares % of Total
Shares at the Shares year (31/03/2018) Shares
beginning of the of the
(31/03/2017) Company Company
1 LIFE INSURANCE 28964609 6.20 31/03/2017 Opening 28964609 6.20
CORPORATION OF Balance
INDIA
14/07/2017 9220330 Allotment of 38184939 5.81
Shares due
to Merger of
ABNL
12/01/2018 2000 Purchase 38186939 5.81
12/01/2018 -2000 Sale 38184939 5.81
26/01/2018 6000 Purchase 38190939 5.81
26/01/2018 -6000 Sale 38184939 5.81
09/02/2018 2000 Purchase 38186939 5.81
23/02/2018 -5000 Sale 38181939 5.81
30/03/2018 2000 Purchase 38183939 5.81
30/03/2018 -2000 Sale 38181939 5.81
31/03/2018 Closing 38190901 5.81
Balance
2 EUROPACIFIC 19703301 4.22 31/03/2017 Opening 19703301 4.22
GROWTH FUND Balance
07/04/2017 -792163 Sale 18911138 4.05
14/04/2017 -962000 Sale 17949138 3.84
21/04/2017 -676133 Sale 17273005 3.70
09/03/2018 -180864 Sale 17092141 2.60
16/03/2018 -997623 Sale 16094518 2.45
23/03/2018 -263441 Sale 15831077 2.41
31/03/2018 Closing 15831077 2.41
Balance
3 ABERDEEN GLOBAL 14897065 3.19 31/03/2017 Opening 14897065 3.19
INDIAN EQUITY Balance
LIMITED
07/04/2017 -650000 Sale 14247065 3.05
14/04/2017 -345420 Sale 13901645 2.98
21/04/2017 -254580 Sale 13647065 2.92
12/05/2017 -473662 Sale 13173403 2.82
19/05/2017 -796338 Sale 12377065 2.65
26/05/2017 -1350000 Sale 11027065 2.36
09/06/2017 -703018 Sale 10324047 2.21
16/06/2017 -1710343 Sale 8613704 1.85
23/06/2017 -1611451 Sale 7002253 1.50
30/06/2017 -206249 Sale 6796004 1.46
10/11/2017 -498040 Sale 6297964 0.96
68
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STATUTORY REPORTS BOARD’S REPORT
70
GRASIM
71
STATUTORY REPORTS BOARD’S REPORT
72
GRASIM
73
STATUTORY REPORTS BOARD’S REPORT
74
GRASIM
75
STATUTORY REPORTS BOARD’S REPORT
76
GRASIM
77
STATUTORY REPORTS BOARD’S REPORT
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GRASIM
Sl. For each of the Directors and KMP Shareholding at the Cumulative Shareholding
No. beginning of the Year during the year
No. of % of total No. of % of total
Shares Shares of the Shares Shares of the
Company Company
3 Mr. M. L. Apte (Director)
At the beginning of the year 650 0.00 650 0.00
Date-wise Increase/Decrease:
At the end of the year 650 0.00
4 Mr. B. V. Bhargava (Director)
At the beginning of the year 2000 0.00 2000 0.00
Date-wise Increase/Decrease:
At the end of the year 2000 0.00
5 Mr. Arun Kannan Thiagarajan (Director)
At the beginning of the year 1,475 0.00 1,475 0.00
Date-wise Increase/Decrease:
At the end of the year 1475 0.00
6 Mr. Cyril Shroff (Director)
At the beginning of the year 685 0.00 685 0.00
Date-wise Increase/Decrease:
At the end of the year 685 0.00
7 Dr. Thomas M. Connelly (Director)
At the beginning of the year 0 0.00 0 0.00
Date-wise Increase/Decrease:
At the end of the year 0 0.00
8 Mr. O.P. Rungta (Director)
At the beginning of the year 635 0.00 0 0.00
Date-wise Increase/Decrease:
At the end of the year 1135 0.00
9 Mr. N. Mohan Raj (Director)
At the beginning of the year 500 0.00 0 0.00
Date-wise Increase/Decrease:
At the end of the year 500 0.00
10 Mr. Shailendra K. Jain (Director)
At the beginning of the year 64995 0.01 64995 0.01
Date-wise Increase/Decrease: 435 0.00 65430 0.01
At the end of the year 65430 0.01
11 Mr. Sushil Agarwal
(Whole Time Director & Chief Financial Officer)
At the beginning of the year 390 0.00 390 0.00
Acquisition on 9th July 2017 34232 0.01 34622 0.01
At the end of the year 34622 0.01
12 Mr. Dilip Gaur (Managing Director)
At the beginning of the year 0 0.00 0 0.00
Date-wise Increase/Decrease:
At the end of the year 0 0.00
13 Mrs. Hutokshi Wadia (Company Secretary)
At the beginning of the year 0 0.00 0 0.00
Date-wise Increase/Decrease:
At the end of the year 0 0.00
79
STATUTORY REPORTS BOARD’S REPORT
V. INDEBTEDNESS:
Indebtedness of the Company including Interest Outstanding/Accrued but not due for Payment
(` in Crore)
Sr. Particulars Secured Loans Unsecured Deposits Total
No. Excluding Deposits Loans Indebtedness
Indebtedness at the beginning of the Financial
Year – 1st April, 2017
1) Principal Amount 683.11 24.04 - 707.16
2) Interest Due but not Paid - - - -
3) Interest Accrued but not Due 5.22 - 5.22
Total of 1+2+3 688.34 24.04 - 712.38
Change in Indebtedness during the
Financial Year
+ Addition 686.44 6,437.32 7,123.76
– Reduction 786.99 4,085.26 4,872.26
Net Change (100.55) 2,352.05 - 2,251.50
Indebtedness at the end of the Financial Year –
31st March, 2018
1) Principal Amount 582.56 2,376.09 - 2,958.65
2) Interest Due but not Paid - - - -
3) Interest Accrued but not Due 3.23 20.62 - 23.85
Total of 1+2+3 585.79 2,396.72 - 2,982.51
80
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STATUTORY REPORTS BOARD’S REPORT
82
GRASIM
sustained long-term growth and act as a retention and Other Remuneration Elements:
reward tool. Each of our executives is subject to an employment
We use stock options as the primary long-term agreement. Each such agreement generally provides
incentive vehicles for our executives as we believe that for a total remuneration package for our executives,
they best align executive incentives with stockholder including continuity of service across the Group
interests. Companies.
We grant restricted stock units as a secondary long- We limit other remuneration elements, for example,
term incentive vehicle, to motivate and retain our
Change in Control (CIC) agreements, severance
executives.
agreements, to instances of compelling business need
or competitive rationale, and generally do not provide
VI. Performance Goal Setting
for any tax gross-ups for our executives.
We aim to ensure that, for both annual incentive plans
and long-term incentive plans, the target performance Risk and Compliance:
goals shall be achievable and realistic. We aim to ensure that the Group’s remuneration
Threshold performance (the point at which incentive programmes do not encourage excessive risk taking.
plans are paid out at their minimum, but non-zero, level) We review our remuneration programmes for factors,
shall reflect a base-line level of performance, reflecting such as remuneration mix overly weighted towards
an estimated 90% probability of achievement. annual incentives, uncapped pay-outs, unreasonable
goals or thresholds, steep pay-out cliffs at certain
Target performance is the expected level of performance levels that may encourage short-term
performance at the beginning of the performance decisions to meet pay-out thresholds.
cycle, taking into account all known relevant facts
likely to impact measured performance. Clawback Clause:
In an incident of restatement of financial statements,
Maximum performance (the point at which the due to fraud or non-compliance with any requirement
maximum plan pay-out is made) shall be based on an of the Companies Act, 2013, and the rules made
exceptional level of achievement, reflecting no more thereafter, we shall recover from our executives, the
than an estimated 10% probability of achievement. remuneration received in excess, of what would be
payable to him/her as per restatement of financial
VII. Executive Benefits and Perquisites statements, pertaining to the relevant performance
Our executives are eligible to participate in our broad- year.
based retirement, health and welfare, and other
Implementation:
employee benefits plans. In addition to these broad-
based plans, they are eligible for perquisites and The Group and Business Centre of Expertise teams will
benefits plans commensurate with their roles. These assist the Nomination and Remuneration Committee
benefits are designed to encourage long-term careers in adopting, interpreting and implementing the
with the Group. Executive Remuneration Philosophy/Policy. These
services will be established through “arm’s-length”,
agreements entered into as needs arise in the normal
course of business.
83
STATUTORY REPORTS BOARD’S REPORT
The percentage increase in remuneration of each Director, Chief Financial Officer and Company Secretary during the
financial year 2017-18, ratio of the remuneration of each Director to the median remuneration of the employees of the
Company for the financial year 2017-18:
Sr. Name of the Director/KMP and Designation Ratio of Remuneration % Increase/ (Decrease)
No. of each Director to the in Remuneration in the
Median Remuneration of Financial Year 2017-18
Employees for the Financial
Year 2017- 18(a)
84
GRASIM
a. Remuneration to Non-Executive and Independent in the financial year 2017-18, was 10.15% over
Directors includes commission payable for the year the previous financial year, which is in line with
ended 31st March, 2018, which is subject to the the industry benchmark and cost of living index.
approval of the Members of the Company Sitting However, the average salaries of the managerial
fee paid to Directors is excluded. personnel for the same financial year increased
by 43.31% due to the better performance of
b. During the financial year 2017-18, there was an
the Company as compared to the previous
increase of 3.42% over the previous financial year,
financial year.
in the Median remuneration of the employees.
d. There were 8,669 permanent employees on the For and on behalf of the Board
rolls of the Company as on 31st March 2018.
Kumar Mangalam Birla
e. Average percentage increase made in the salaries Chairman
of employees, other than the managerial personnel Mumbai, 23rd May 2018 (DIN: 00012813)
85
STATUTORY REPORTS Management DISCUSSION AND ANALYSIS
The Indian economy has registered a GDP growth of 6.7% YoY in FY 2017-18 as compared to 7.1% in FY 2016-17 slowing
down due to transitionary impact of implementation of Goods and Services Tax, a historical tax reform in the country.
The pace of economic growth witnessed an improvement towards the end of the year with Q4FY2017-18 recording
GDP growth of 7.7% YoY. The Index of Industrial Production expanded by 4.3% YoY in FY 2017-18 driven by growth in the
Electricity Sector (5.4% YoY) and Manufacturing Sector (4.5% YoY). During the year, public consumption expenditure
recorded a growth of 10.9% and private consumption expenditure grew by 6.6 %.
In the backdrop of prevailing economic conditions, the Company has performed well, during the year, recording all-
around growth in Revenue, EBITDA and PAT as detailed below.
The Company’s financial performance for the year also includes performance of the businesses of erstwhile Aditya Birla
Nuvo Ltd. (ABNL), for 9 months (1st July 2017 to 31st March 2018) consequent to the merger of ABNL with the Company
with effect from 1st July 2017. Also, during the year, the Company has acquired right to Operate and Manage Century
Rayon Division from Century Textiles and Industries Ltd., with effect from 1st February 2018.
The Global VSF demand continues to grow at a solid In FY 2017-18, the global VSF prices maintained a flattish
pace of 6% per annum higher than the demand growth trend while the global cotton and polyester prices
of competing fibres like cotton and polyester, which are witnessed an increase. The rise in global cotton prices was
expected to grow in the range of 1% to 2% per annum. The driven by multiple factors like strong US cotton exports,
VSF demand in India is expected to grow ~8% per annums lower than expected India cotton crop, and depletion in
and outpace the global demand growth rate. The domestic China cotton reserve. The rise in the oil prices has led to
demand growth for VSF has been at an inflexion points a rise in polyester prices. The prices of key raw material
driven by demand in fast fashion, home textile, inner wear like caustic soda, sulphur and other inputs which is key
and other newer areas. raw material for manufacturing of VSF, witnessed a sharp
increase in FY 2017-18. Grasim is in a unique position
The attractive growth profile of VSF industry, globally, compared to all global VSF players as it has backward
led to new capacity additions (upwards of 1MTPA) integration to the tune of 80% of total cost comprising
announcement by the industry players. In FY 2017-18, some of key inputs (Pulp, Caustic Soda, Power, CS2) used
of these capacities came on stream, and we expect ramping for manufacturing.
up of the same to take place in FY 2018-19 and FY 2019-20.
86
GRASIM
LIVA Tagging (Mn-Million) The brand “LIVA”, launched by Grasim in FY 2014-15, stands
for high quality fabric made using natural cellulosic fibres
AW17 17.6 of the Company delivered through accredited value chain.
The usage of VSF in women’s clothing has witnessed a
SS17 11.6
steady rise. Grasim has partnered with 33 brands, amongst
AW16 8.6 the top fashion brands in India, for sale of LIVA tagged
apparels, which are available in more than 3,000 stores in
SS16 7.0
India. The demand for LIVA tagged garments witnessed a
AW15 2.1 sharp increase in SS18 to 26.3 mn.
SS15 1.8
Outlook
The VSF business will continue to focus on expanding the
market in India by partnering with the textile value chain,
achieving better customer connect through brand LIVA,
Domestic Sales Volume (MT) and enriching the product mix through a larger share of
specialty fibre. The Company is increasing capacity from
FY 18 379,722 498 KT to 788 KT (by FY 2020-21) to cater to the growing
FY 17 342,436 demands of VSF in the domestic as well as export markets.
The new capacities likely to come on stream in China may
FY 16 312,238
impact the global VSF prices in the near term.
Chemicals
Unit FY 2017-18 FY 2016-17 % Change
Caustic Soda
Installed Capacity TPA 938 840 12
Production TPA 886 780 14
Sales Volume TPA 879 785 12
Chemical Business
Divisional Revenue ` Crore 5,105 4,180 22
EBITDA ` Crore 1,300 842 54
EBITDA Margin % 25 20
The demand for caustic soda witnessed a CAGR growth In Epoxy resins also we have a leadership position in
of 5% in the last 3 years driven by the demand from key India. Our volumes have grown by 15% in FY 2017-18. Our
user industry like Alumina, VSF and Textile. In India, the customers include leading paint companies, wind mill
firmness in caustic soda price was driven by global factors. manufacturers, electrical machinery manufacturers, etc.
Chlorine prices were very weak due to oversupply in the in India.
market. The demand for chlorine, which is a by-product of
caustic, witnessed signs of pick-up towards the fag end of The improvement in Revenue and EBITDA reflects better
FY 2017-18, creating a positive impact on the prices. realisation and the impact of consolidation of ABNL’s
chemical business. The business witnessed a rise in the
The chlorine Value-Added Products (VAP) consists of input cost of power and salt during FY 2017-18.
products like AlCl3 and stable bleaching powder, where
we have a global leadership. In India, we have a leadership Outlook
position in CP (Chlro Parafin), PAC (Poly Aluminium The demand for caustic soda in India is expected to grow
Chloride) and PA (Phsophoric Acid). We are working with with rising consumption from the Alumina and Textile
large city municipal communities to help them in finding sectors. The demand-supply situation is well balanced for
solutions for sewage treatment using our chlorine VAPs. next couple of years with a limited visibility of large new
The business is focussed on expanding the existing capacity additions.
chlorine VAPs portfolio and improving the level of chlorine
integration.
87
STATUTORY REPORTS Management DISCUSSION AND ANALYSIS
INDO GULF FERTILISERS The size of the Indian insulator market was unchanged
India received a normal monsoon in FY 2017-18 with from the previous year, but there was a change in market
record food production. The global urea prices witnessed share mix between porcelain and composite. The share of
a firm trend during FY 2017-18. In other key development, porcelain dropped to 69% (FY 2017-18) from 72% (FY 2016-
the Direct Benefit Transfer (DBT) project initiated by the 17), while the share of Composites grew to 31% (FY 2017-
Department of Fertiliser was rolled out on pan India basis 18) from 28% (FY 2016-17). The Revenue and EBITDA grew
from 1st February, 2018. to ` 390 Cr. and ` 34 Cr., respectively for FY 2017-18.
The Linen business expanded its Yarn capacity from 3,400 Aditya Birla Capital Ltd. (ABCL a subsidiary of
MTPA to 6,250 MTPA to tap sector growth. JST maintained the Company)
its leadership in the market with 45% market share in linen
ABCL was listed on the stock exchanges on 1st September
fabric and 39% in linen yarn. For 9MFY2017-18, the textile
2017, as the culmination of the composite scheme of
business reported a revenue of ` 1,172 Cr. and EBITDA of
arrangement for merger of Aditya Birla Nuvo Limited with
` 62 Cr.
the Company, and subsequent demerger of the financial
services undertaking into ABCL. ABCL has a significant
The linen business added 28 new ‘Linen Club Fabrics’
presence spanning multiple sectors, namely, non-
EBOs, during FY 2017-18, to 172.
banking financial company (NBFC), asset management,
life insurance, health insurance, housing finance, private
Insulators
equity, general insurance broking, wealth management,
The power generation, transmission and distribution broking, online personal finance management and
sector is the key growth driver for the insulators industry. pension fund management.
Over the past couple of years, demand in domestic
insulator market has been sluggish, primarily due to lack ABCL reported a Revenue of ` 8,953 Cr. and PAT of ` 354.3
of investments. Additionally, increased acceptance of Cr. for the period from 1st July 2017 to 31st March 2018.
alternate technologies continues to adversely impact (both
on volume and price) the domestic porcelain insulator The NBFC lending book (including housing) grew 32% YoY
industry, which is the core of our business. to ` 51,378 Cr. as on 31st March 2018.
88
GRASIM
10,881
222
Fund in India) reported a 27% YoY increase in average
758
assets under the management to ` 2,67,739 Cr. as on 31st
868
459
March 2018. The business reported an overall domestic
241
8,333
market share of 10.75% and equity market share of 9.2%
FY 2018.
57,338
2,907
823
Depreciation
The Depreciation charge increased from ` 1,808 Cr. in
FY 2016-17 to ` 2,724 Cr. in FY 2017-18 on account of
acquisition of assets and capitalisation of new plant in
FY 16-17 VSF Chemical Cement Financial Others Elimination FY 17-18 cement business and depreciation of ABNL businesses.
Service
Tax Expenses
Other Income The total Tax Expenses increased from ` 1,707 Cr. in FY
The other income marginally increased to ` 990 Cr. in FY 2016-17 to ` 1,947 Cr. in FY 2017-18.
2017-18 compared to ` 948 Cr. in FY 2016-17.
Profit after Tax (PAT)
Operating Profit (EBITDA) The Profit after Tax (Before Exceptional items of ` 433 Cr.)
The rise in the EBITDA from ` 8,333 Cr. (FY 2016-17) for the year was at ` 2,991 Cr. in FY 2017-18 compared to
to ` 10,881 Cr. (FY 2017-18) was driven by the Viscose, ` 3,167 Cr. in FY 2016-17. The reduction in PAT is mainly on
Chemicals, Cement businesses and addition of Financial account of share in loss of Idea Cellular Ltd. amounting to
Services businesses to Grasim’s fold. ` 652 Cr.
89
STATUTORY REPORTS Management DISCUSSION AND ANALYSIS
Revenue growth of 22% to ` 5,105 Cr. in FY 2017-18 from Dividend and Interest income
` 4,180 Cr. in FY 2016-17. Your Company received Dividend of ` 227 Cr. in FY 2017-18
and Interest income of ` 55 Cr.
Standalone EBITDA rose by 35% to ` 3,542 Cr. in FY 2017-
18 from ` 2,629 Cr. in FY 2016-17 led by solid EBITDA Uses of Cash
growth reported in the Chemical and VSF businesses. Capital Expenditure
The Reported PAT increased by 13% YoY to ` 1,769 Cr. The Company’s net capital expenditure stood at ` 1,972
in FY 2017-18 (after inclusion of an Exceptional Item of Cr. in FY 2017-18. This amount includes the capex spent in
` 273 Cr.) from ` 1,560 Cr. (FY 2016-17). VSF and Chemicals businesses and amount paid towards
acquisition of right to Operate and Manage VFY business
Sources of Cash of Century Textiles and Industries Ltd.
Cash generated from operations during the year was at
Working Capital
` 2,635 Cr.
The working capital increased by an amount of ` 280 Cr.
(` in Crore)
with the consolidation of erstwhile ABNL businesses.
Particulars FY 2017-18
Sources of Cash Dividend
Cash from Operations 2,635
Cash outflow on account of dividend for the FY 2016-17
Non-Operating Cash Flow 90
was ` 406 Cr. (inclusive of the corporate tax on dividend).
Proceeds from Issues of Share Capital 2
Proceeds from Sale of Investment 13
Proceeds of Borrowings (Net of Repayment) 94
Interest Received 55
Dividend Received 227
3,117
Usage of Cash
Net Capital Expenditure 1,069
Acquisition of Century Rayon Business 903
Increase in Working Capital 280
Increase in Investments 338
Interest (Net of Interest Subsidy) 142
Dividend (Incl. DDT) 406
3,138
Net Decrease in Cash and Cash Equivalents -20
Cash and Cash Equivalents at the Beginning 35
of the Year
Cash and Cash Equivalents Transferred 12
from erstwhile ABNL
Cash and Cash Equivalents at the End of 26
the Year
90
GRASIM
91
STATUTORY REPORTS Management DISCUSSION AND ANALYSIS
Financial Risks are covered in the Financial Statements. (Refer Note 4.10)
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GRASIM
INTERNAL CONTROL SYSTEMS achieving better customer connect through brand Liva
Your Company has a well established and robust internal and enriching the product mix through a larger share of
control systems in place which are commensurate with the specialty fibre.The focus on cost optimisation will continue
size and scale of its operations. Roles and responsibilities relentlessly.
are clearly defined and assigned. Standard operating
procedures are in place and have been designed to provide The capacity de-bottlenecking at multiple plant locations
a reasonable assurance. Internal audits are undertaken on is progressing well, with 44 KTPA of capacity coming
a continuous basis by a reputed CA firm and Corporate on-stream in May 2018. The recently announced
Audit team covering all units and business operations. brownfield capacity expansion plan at Vilayat is under
The internal audit programme is reviewed by the Audit implementation. With capacity expansions underway and
Committee at the beginning of the year to ensure that the focus on expanding market in India, the VSF business is
coverage of the areas is adequate. Reports of the internal poised for substantial growth.
auditors are regularly reviewed by the Management and
The demand for Caustic Soda in India is expected to grow
corrective action is initiated to strengthen the controls
with rising consumption from the Alumina and Textile
and enhance the effectiveness of the existing systems.
sectors. The capacity expansion nearing completion at
Summaries of the reports are presented to the Audit
different plants of the Company will lead to growth in the
Committee of the Board. The Audit Committee reviews the
business.
adequacy and effectiveness of internal control systems
and provides guidance for further strengthening them.
In Cement, Government spending on infrastructure, rural
Your Company also periodically engages outside experts
and affordable housing will be the key demand drivers.
to carry out an independent review of the effectiveness
The Company is well positioned across the country to
of various business processes. The observations and best
cater to this growth in demand.
practices suggested are reviewed by the Management and
Audit Committee and appropriately implemented with a
In Financial Services, ABCL is geared to provide Universal
view to continuously strengthen the internal controls.
Financial Solutions to meet the customers money needs
for life. ABCL’s focussed customer-centric approach under
CONCLUSION a single brand “Aditya Birla Capital” will enable it to
The VSF business will continue to focus on expanding the chart a differentiated, accelerated and disciplined path
market in India by partnering with the textile value chain, to growth.
93
STATUTORY REPORTS Report on Corporate Governance
The details of the Board of Directors of the Company as on 31st March 2018 are as under:
Name of the Directors Executive/ No. of Equity Directorships Membership of Committees
Non-Executive/ Shares Held in other of other Companies3
Independent1 Companies 2
Member Chairman
Mr. Kumar Mangalam Birla, Chairman Non-Executive 1,26,7134
8 - -
Mrs. Rajashree Birla Non-Executive 5,52,850 6 - -
Mr. M. L. Apte Independent 650 6 6 1
Mr. B. V. Bhargava Independent 2,000 3 1 1
Dr. Thomas Martin Connelly Jr. Independent - - - -
Mr. Cyril Shroff Independent 685 - - -
Mr. O. P. Rungta Independent 1,135 - - -
Mr. Arun Thiagarajan Independent 1,475 5 2 4
Mr. Shailendra K. Jain Non-Executive 65,430 2 1 -
Mr. N. Mohan Raj Non-Executive 500 - - -
Director
Mr. Dilip Gaur Managing Director - - - -
Mr. Sushil Agarwal Whole-time 34,622 4 4 -
Director and CFO
1. Independent Director are Non-Executive Directors as defined under Regulation 16(1)(b) of the Listing Regulations and Section 149(6)
of the Act. All the Independent Directors have confirmed that they meet the criteria of independence mentioned under Regulation
16(1)(b) of the Listing Regulations and Section 149(6) of the Act.
2. Excluding Private Limited Companies/Foreign Companies/Section 8 Companies.
3. Includes only Audit Committee and Stakeholders’ Relationship Committee as per Regulation 26(1)(b) of the Listing Regulations.
4. Including the Equity Shares held by HUF.
5. No Director is related to any other Director on the Board, except for Mr. Kumar Mangalam Birla and Mrs. Rajashree Birla, who are
related as son and mother respectively.
6. None of the Directors (i) holds Directorship in more than ten public limited companies and (ii) is a member of more than ten
committees, or chairperson of more than five committees across all the public companies in which he/she is a Director.
The brief profile of the present Directors on the Board is available on the website of your Company, www.grasim.com.
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GRASIM
Role of the Board of Directors reviews and approves financial statements, corporate
Your Company’s Board of Directors plays a primary strategies, business plans, annual budgets, projects
role in ensuring good governance, in smooth and capital expenditure. Your Board monitors the
functioning of the Company and in the creation Company’s overall performance, directs and guides
of shareholder value. The Board’s role, functions, the activities of the Management towards the set
responsibility and accountability are clearly defined. goals and seeks accountability. Your Board also
As the Board’s primary role is fiduciary in nature, it sets standards of corporate behaviour, ensures
is responsible for ensuring that the Company runs transparency in corporate dealings and compliance
on sound ethical business practices and that the with the laws and regulations.
resources of the Company are utilised in a manner
so as to create sustainable growth and value for the Board Meetings
Company’s shareholders and the other stakeholders, During the year under review, the Board met 6 times
and also to fulfil the aspirations of the society and the on 19th May, 2017, 8th July, 2017, 14th August, 2017,
communities in which it operates. 14th November, 2017, 12th December, 2017 and
14th February, 2018. The necessary quorum was
The Board has complete access to any information present for all the meetings. The maximum interval
within your Company. As a part of its function, between any two meetings did not exceed 120 days.
your Board periodically reviews all the relevant Video conference facility is also used to facilitate
information, which is required to be placed before it, the Directors travelling/residing abroad or at other
pursuant to the Listing Regulations, and, in particular, locations to participate in the meeting.
Details of attendance of Directors at the Board Meetings and last Annual General Meeting (AGM) held during the
FY 2017-18 are as under:
Name of the Directors Number of Board Meetings Attended Last AGM Held
Attended in FY 2017-18 on 22nd September, 2017
Mr. Kumar Mangalam Birla 3 No
Mrs. Rajashree Birla 2 No
Mr. M. L. Apte 6 No
Mr. B. V. Bhargava 5 Yes
Dr. Thomas Martin Connelly Jr. 6 No
Mr. Cyril Shroff 2 No
Mr. O. P. Rungta 6 Yes
Mr. Arun Thiagarajan 3 Yes
Mr. Shailendra K. Jain 6 Yes
Mr. N. Mohan Raj 5 Yes
Mr. Dilip Gaur 6 Yes
Mr. Sushil Agarwal 5 Yes
Meetings of Independent Directors Board, that is necessary for the Board to effectively
Separate meetings of Independent Directors of the and reasonably perform its duties. The suggestions
Company were held on 2nd May, 2017 and 14th made by the Independent Directors were discussed at
February, 2018, without the presence of members the Board meeting and are being implemented.
of the Management, to discuss evaluation of the
performance of Non-Independent Directors, of the Code of Conduct
Chairman, taking into account the views of the The Board of Directors has laid down a Code of
Executive and Non-Executive Directors and the Conduct (“the Code”) for all Board Members and Senior
evaluation of the quality, content and timelines of Management Personnel of your Company, which is
flow of information between the Management and the available on the Company’s website, www.grasim.com.
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STATUTORY REPORTS Report on Corporate Governance
All Board Members and Senior Management prevent misuse of unpublished price sensitive
Personnel have confirmed compliance with the Code. information, your Company has formulated and
A declaration to that effect signed by the Managing adopted the Code of Conduct for Trading in Listed
Director is attached, and forms part of this Report. or Proposed to be Listed Securities of the Company
(the Insider Trading Code). The main object of
Training, Induction and Familiarisation Programme the Insider Trading Code is to communicate to all
Letters of appointment, stipulating the terms of concerned a guideline, which they should imbibe
appointment, role, rights and responsibilities are and practice, both in letter and spirit, while trading
issued to the Independent Directors at the time of their in listed or proposed to be listed securities of the
appointment. In terms of the Listing Regulations, the Company. The Code aims at preventing misuse
terms and conditions of appointment of Independent of unpublished price-sensitive information. All
Directors are placed on the website of the Company, Directors, Designated Employees and Connected
viz., www.grasim.com. Your Company conducts Persons of your Company are covered under
introductory familiarisation programme, inter alia the Insider Trading Code and, inter alia, provide
covering the nature of the industry in which the periodical disclosures, and obtain pre-clearance for
Company operates, business model of the Company, trading in securities of your Company.
etc., when a new Independent Director joins the Board
of the Company. III. COMMITTEE OF THE BOARD
A. AUDIT COMMITTEE
On an on-going basis, the Directors are familiarised Composition and Attendance during the Year
with the Company’s business, its operations, strategy, The Audit Committee of the Board comprises of 3
functions, policies and procedures at the Board Non-Executive Independent Directors and 1 Executive
and Committee meetings. Changes in regulatory Director. The members of the Audit Committee are
framework and its impact on the operations of the financially literate and have accounting or related
Company are also presented at the Board/Committee financial management expertise. The composition of
meetings. The Directors are also appraised about risk the Audit Committee complies with the requirements
assessment and minimisation procedures. of the Act and the Listing Regulations.
The details of familiarisation programme, imparted During the year under review, 6 Audit Committee
to the Directors of the Company, are available on the Meetings were held on 19th May, 2017, 14th August,
Company’s website, www.grasim.com. 2017, 14th November, 2017, 27th November, 2017,
12th December, 2017 and 14th February, 2018.
Performance Evaluation
The composition, attendance and the meetings are
A formal Evaluation Framework for evaluation of the
given below:
Board’s performance, performance of its Committees
and individual Directors of the Company, including the Name of the Categories No. of Meetings
Chairman of the Board, in terms of the requirement Members Held Attended
of the Act and the Listing Regulations, is in place. In Mr. Arun Non-Executive – 6 4
terms of the Evaluation Framework, the Board has Thiagarajan, Independent
Chairman
carried out the annual performance evaluation of its
Mr. B. V. Non-Executive – 6 5
own performance, the directors individually and the
Bhargava Independent
working of its Committees. Criteria for evaluation
Mr. M. L. Apte Non-Executive – 6 6
inter alia includes, providing strategic perspective,
Independent
Chairmanship of the Board and its Committees,
Mr. Dilip Gaur1 Managing 6 6
attendance and preparedness for the meetings,
Director
contribution at the meetings, effective decision
1. Appointed as member of the Committee w.e.f.
making and role of the Committees. 12th December, 2017.
Prevention of Insider Trading The Whole-time Director and Chief Financial Officer is
In compliance with the provisions of Securities a permanent invitee to the Audit Committee Meetings.
and Exchange Board of India (Prohibition of Insider The Joint Statutory Auditors and the Internal Auditor of
Trading) Regulations, 2015 (as amended from time the Company are also invited to the Audit Committee
to time), and to preserve the confidentiality and Meetings. Representatives of Cost Auditors are invited to
96
GRASIM
The Company Secretary acts as the Secretary to the Audit (f) disclosure of any related party transactions; and
Committee.
(g) modified opinion(s) in the draft audit report.
The Chairman of the Audit Committee, as on the date of 5. Reviewing, with the Management, the quarterly
last AGM, was present at the last AGM of the Company financial statements before submission to the Board
held on 22nd September, 2017. for approval;
The Audit Committee acts as link between the 6. Reviewing, with the Management, the statement of
Management, the Statutory and Internal Auditor and the uses/application of funds raised through an issue
Board. The Audit Committee monitors and effectively (public issue, rights issue, preferential issue, etc.),
supervises your Company’s financial reporting process the statement of funds utilised for the purposes other
with a view to provide accurate, timely and proper than those stated in the offer document/prospectus/
disclosure, and maintains the integrity and quality of notice and the report submitted by the monitoring
financial reporting. agency monitoring the utilisation of proceeds of
a public or rights issue, and making appropriate
The Audit Committee also reviews from time to time, the recommendations to the Board to take up steps in
audit and internal control procedures, the accounting this matter;
policies of your Company, oversight of your Company’s
financial reporting process, so as to ensure that the 7. Reviewing and monitoring the Auditors’ independence
financial statements are correct, sufficient and credible. and performance, and effectiveness of audit process;
(d)
significant adjustments made in the financial 16. Discussion with Statutory Auditors before the Audit
statements arising out of audit findings; Commence, about the nature and scope of audit as
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STATUTORY REPORTS Report on Corporate Governance
well as post-audit discussion to ascertain any area of employee of the Company was denied access to the
concern; Audit Committee. The said Whistle-Blower Policy has
been uploaded on the website of the Company, www.
17. To look into the reasons for substantial defaults in grasim.com. The Policy is in line with the Company’s
the payment to the depositors, debenture holders, Code of Conduct, Vision and Values & forms part of
shareholders (in case of non-payment of declared good Corporate Governance.
dividends) and creditors;
B. NOMINATION AND REMUNERATION COMMITTEE
18. To review the functioning of the Whistle Blower
Mechanism; Composition, Meetings, Attendance during the Year
The Nomination and Remuneration Committee (NRC)
19. Approval of appointment of Chief Financial Officer, comprises of 3 Non-Executive Directors, of which 2
after assessing the qualifications, experience and are Independent Directors.
background, etc., of the candidate; and
During the year under review, 5 NRC meetings were
20. Carrying out any other function as is mentioned in the held on 19th May, 2017, 8th July, 2017, 14th November,
terms of reference of the Audit Committee. 2017, 8th January, 2018 and 14th February, 2018.
The Audit Committee mandatorily reviews the following The composition, attendance and meetings are given
information: below:
(1) Management Discussion and Analysis of financial Name of the Categories No. of Meetings
condition and results of operations; Members Held Attended
(2) Statement of significant related party transactions (as Mr. M. L. Apte, Independent 5 5
defined by the Audit Committee), submitted by the Chairman
Management; Mr. Cyril Shroff Independent 5 2
(3) Management letters/letters of internal control Mr. Kumar Non-Executive 5 4
weaknesses issued by the Statutory Auditors; Mangalam Birla
(4) Internal audit reports relating to internal control The Company Secretary acts as the Secretary to the
weaknesses; NRC.
b. annual statement of funds utilised for the (2) Formulate the criteria for evaluation of
purposes other than those stated in the offer performance of Independent Directors and the
document/prospectus/notice in terms of Listing Board of Directors;
Regulation.
(3) Devise a policy on diversity of the Board of
Vigil Mechanism/Whistle Blower Policy Directors;
Your Company has a Whistle-Blower Policy that (4) Identify persons who are qualified to become
provides a formal vigil mechanism for Directors and Directors and who may be appointed in Senior
employees to report genuine concerns about the Management in accordance with the criteria laid
unethical behaviour, actual or suspected frauds of down, and recommend to the Board of Directors
violation of the Company’s Code of Conduct or Ethics their appointment and removal;
Policy. The said mechanism also provides for direct
access to the Chairperson of the Audit Committee in (5) To consider whether to extend or continue the
appropriate or exceptional cases. We affirm that no term of appointment of Independent Directors,
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GRASIM
on the basis of the report of performance contributions made by the Directors other than in
evaluation of Independent Directors; meetings, type of the meetings and responsibilities
under various statutes, etc. For the financial year 2017-
(6) Set the level and composition of remuneration, 18, the Board has approved payment of ` 15 Crore
which is reasonable and sufficient to attract, as commission to the Non-Executive/Independent
retain and motivate Directors and Senior Directors.
Management of the quality required to run the
Company successfully; Details of remuneration paid/to be paid to the
Directors for the year under review are as under:
(7) Set the relationship of remuneration to performance;
(` in Lakh)
(8) Check whether the remuneration provided to Name of the Directors Commission1 Sitting Fees
Directors, Key Managerial Personnel and Senior (for Board and
Management includes a balance between fixed its Committees)
and incentives pay reflecting short-term and
Mr. Kumar 1,270.00 2.30
long-term performance objectives appropriate to
Mangalam Birla
the working of the Company and its goals; and
Mrs. Rajashree Birla 66.00 1.60
(9) Review and implement succession plans for Mr. M. L. Apte 40.00 7.80
Managing Director, Executive Directors and Mr. B. V. Bhargava 34.00 5.95
Senior Management. Mr. Cyril Shroff 10.00 1.40
Mr. N. Mohan Raj2 11.00 2.70
Remuneration Policy Dr. Thomas M. 12.00 3.00
Connelly, Jr.
The Company has formulated and adopted Executive
Remuneration Philosophy/Policy, of Directors, Key Mr. O. P. Rungta 19.00 3.70
Managerial Personnel and other Senior Management Mr. Shailendra 13.00 3.60
of the Company, and the same is disclosed in this K. Jain
Annual Report. Mr. Arun Thiagarajan 25.00 3.20
Mr. Dilip Gaur - Nil
Remuneration of Directors Mr. Sushil Agarwal - Nil
Total 1,500.00 35.25
All decisions relating to the remuneration of the
Directors were taken by the Board of Directors of 1. Directors’ Commission amount is exclusive of applicable
the Company in accordance with the Shareholders’ tax, which shall be borne by the Company.
approval on recommendation of Nomination and
2. Commission is payable to LIC, and Sitting Fee is paid to
Remuneration Committee, wherever necessary.
Mr. N. Mohan Raj.
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STATUTORY REPORTS Report on Corporate Governance
Details of remuneration paid/to be paid to the Executive Directors for the year under review are as under:
(` in Lakh)
Executive Directors Salary, Benefits, Performance-linked Service Contract, Stock Option
Bonus, Pension, etc., Incentive Paid Notice Period and Details, if any
Paid during the Year during the Year1 Severance Fee2
Mr. Dilip Gaur (Managing Director) 403.39 181.13 – See Note 3
Mr. Sushil Agarwal (Whole-time 400.18 127.80 – See Note 4
Director and CFO)
1. The Board has approved payment of performance-linked variable pay for the FY 2016-17 as aforesaid to the Managing Director
and Whole-time Director on achievement of the targets.
2. The Managing Director’s and the Whole-time Director and CFO’s appointment may be terminated by three months’ notice in
writing, on either side, and no severance fees are to be paid to the Directors of the Company.
3. Pursuant to the Composite Scheme of Arrangement between Aditya Birla Nuvo Limited with Grasim Industries Limited and
Aditya Birla Financial Services Limited (now known as Aditya Birla Capital Limited), and their respective shareholders and
creditors (Scheme), 17,564 Stock Options and 12,743 Restricted Stock Units (RSUs) have been granted to Mr. Sushil Agarwal
under Company’s Employee Stock Options Scheme-2013.
4. During the year, in terms of the Company’s ESOP Scheme 201, 7,610 Stock Options have vested in Mr. Dilip Gaur.
5. During the year, in terms of the Company’s ESOP Scheme 2013, 30,440 Stock Options have vested in Mr. Sushil Agarwal.
Employee Stock Options Scheme During the year under review, the NRC of the
a. ESOS-2006 Board of Directors vested 2,28,857 Stock Options
and 21,624 RSUs to the eligible employees,
During the year under review, NRC of the Board
subject to the provisions of the ESOS-2013,
of Directors vested 10,660 Stock Options to the
statutory provisions, as may be applicable from
eligible employees, subject to the provisions of
time to time, and the rules and procedures set
the ESOS-2006, statutory provisions, as may be
out by your Company in this regard. Further, the
applicable from time to time, and the rules and
Stakeholders’ Relationship Committee of the
procedures set out by your Company in this
Board of Directors allotted 43,020 Equity Shares
regard. Further, the Stakeholders’ Relationship
of ` 2/- of your Company to Stock Options and
Committee of the Board of Directors allotted
RSUs Grantees, pursuant to the exercise of the
28,640 Equity Shares of ` 2/- of your Company to
Stock Options and RSUs under ESOS-2013.
Options Grantees, pursuant to the exercise of the
Stock Options under ESOS-2006.
C. STAKEHOLDERS’ RELATIONSHIP COMMITTEE
b. ESOS-2013 Composition, Meetings and Attendance during the Year
Pursuant to the Composite Scheme of The Stakeholders’ Relationship Committee comprises
Arrangement between Aditya Birla Nuvo of 3 Independent Directors and 1 Executive Director.
Limited (ABNL) with Grasim Industries
During the year under review, 2 Stakeholders’
Limited (Grasim) and Aditya Birla Financial
Relationship Committee Meetings were held on 27th
Services Limited (now known as Aditya Birla
November, 2017 and 30th March, 2018.
Capital Limited (ABCL)), and their respective
shareholders and creditors (Scheme), during The composition, attendance and meetings are given
the year under review, the Company granted below:
1,08,168 Stock Options and 49,064 RSUs to the
eligible employees of erstwhile ABNL, including Name of the Categories No. of Meetings
Whole-time Director and CFO of the Company. Members Held Attended
Each Option/RSU entitles the holder to apply Mr. B. V. Bhargava, Independent 2 2
for and to be allotted one Equity Share of Chairman
` 2/- each of the Company upon payment of the Mr. Cyril Shroff Independent 2 0
exercise price during the exercisable period. The
Mr. M. L. Apte Independent 2 2
exercisable period commenced from the date of
vesting of the options and expires at the end of 5 Mr. Sushil Agarwal Whole-time 2 2
years from the date of such vesting. Director and CFO
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GRASIM
The Company Secretary acts as Secretary to the Name of the Categories No. of Meetings
Committee, and is the Compliance Officer. Members Held Attended
Your Company’s shares are compulsorily traded in Mrs. Rajashree Non-Executive 3 3
the dematerialised form. To expedite transfers in Birla, Chairperson
the physical segment, necessary authority has been Mr. B. V. Bhargava Independent 3 3
delegated by your Board of Director(s) and Officer(s) Mr. Shailendra Non-Executive 3 3
of your Company to approve transfers/transmissions K. Jain
of shares/debentures. Details of share transfers/
Mr. Dilip Gaur Managing 3 3
transmissions, approved by the Directors and
Director
Officers, are placed before the Board.
The Company Secretary acts as the Secretary to the
Role
Committee.
The Committee looks into:
E. RISK MANAGEMENT COMMITTEE
• issues relating to share/debenture holders
including transfer/transmission of shares/ Your Company has a Risk Management Committee,
debentures; constituted in line with the provisions of the Listing
Regulations, which comprises of Non-Executive
• issue of duplicate share/debenture certificates; Independent Directors and Senior Executives of the
Company.
• non-receipt of dividends;
D.
CORPORATE SOCIAL RESPONSIBILITY Name of the Categories No. of Meetings
COMMITTEE (CSR COMMITTEE) Members Held Attended
The CSR Committee comprises of 3 Non-Executive Mr. B. V. Independent 1 -
Directors and 1 Executive Director. Dr. (Mrs.) Bhargava,
Pragnya Ram, Group Executive President, Corporate Chairman
Communications and CSR, is a permanent invitee to Mr. Arun Independent 1 1
the CSR Committee meetings. Thiagarajan
Mr. M. L. Apte Independent 1 1
During the year under review, 3 CSR Committee
meetings were held on 20th April, 2017, 23rd February, Mr. Dilip Gaur Managing 1 -
2018 and 30th March, 2018. Director
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STATUTORY REPORTS Report on Corporate Governance
Name of the Categories No. of Meetings The composition of the Finance Committee and the
Members details of the meetings attended by the Members are
Held Attended
given below:
Mr. Sushil Whole-time 1 -
Agarwal Director and Name of the Categories No. of Meetings
CFO Members Held Attended
Mr. H. K. Chief Operating 1 1
Mr. B. V. Bhargava, Independent 5 5
Agarwal Officer – Fibre
Chairman
Business
Mr. M. L. Apte Independent 5 5
Mr. E. R. Raj Group 1 1
Narayanan Executive Mr. Sushil Whole-time 5 5
President – Agarwal Director and
Chemical CFO
Business
Mr. Thomas Business Head – 1 -
G. MERGER COMMITTEE
Varghese Textiles Your Company has constituted a Merger Committee of
the Board of Directors to facilitate the implementation
F. FINANCE COMMITTEE of the Composite Scheme of Arrangement between
Aditya Birla Nuvo Limited and Grasim Industries
Your Company has a Finance Committee of the
Limited and Aditya Birla Financial Services Limited
Board of Directors, to facilitate the operations of the
(now known as Aditya Birla Capital Limited), and their
Company. respective shareholders and creditors. This Committee
comprises of 3 Non-Executive, Independent Directors,
Brief Description of Terms of Reference and 2 Executive Director. During the year under
• To avail fund-based and non-fund-based facilities review, the Merger Committee meetings was held on
from the Bank(s)/Financial Institution(s), upto the 20th June, 2017 and 21st June, 2017.
limits fixed by the Board;
Name of the Categories No. of Meetings
• To approve opening and operation of Bank Members Held Attended
Accounts; Mr. M. L. Apte, Independent 2 2
Chairman
• To approve execution of Power of Attorneys, and Mr. Arun Independent 2 2
other agreements and documents; Thiagarajan
Mr. O.P. Rungta Independent 2 2
• To approve signing of routine agreements and to
Mr. Dilip Gaur Managing 2 2
authorise officers of the Company to take such
Director
steps as may be required in this regard.
Mr. Sushil Whole-time 2 2
Composition and Attendance during the Year Agarwal Director and CFO
Finance Committee of the Board of Directors
H. ALLOTMENT COMMITTEE
comprises of 2 Independent Directors, and 1 Executive
Director. Your Company has constituted an Allotment
Committee of the Board of Directors to facilitate the
During the year under review, 5 Finance Committee process of allotment of equity shares after sanction
meetings were held on 19th May, 2017, 23rd June, of the Composite Scheme of Arrangement between
Aditya Birla Nuvo Limited and Grasim Industries
2017, 27th November, 2017, 17th January, 2018 and
Limited and Aditya Birla Financial Services Limited
8th March, 2018.
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GRASIM
(now known as Aditya Birla Capital Limited), and their year under review, the GBTL Divestment Committee
respective shareholders and creditors by Hon’ble meeting was held on 10th July, 2017.
National Company Law Tribunal Bench at Ahmedabad
to the shareholders of erstwhile Aditya Birla Nuvo Name of the Categories No. of Meetings
Limited. This Committee comprises of 2 Independent Members Held Attended
Directors, and 1 Nominee Director. During the year
Mr. O.P. Rungta, Independent 1 1
under review, the Allotment Committee meeting was
Chairman
held on 9th July, 2017.
Mr. M.L. Apte Independent 1 -
Name of the Categories No. of Meetings Mr. Dilip Gaur Managing 1 1
Members Held Attended Director
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STATUTORY REPORTS Report on Corporate Governance
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GRASIM
non-compliance by the Company on any matters d. The Internal Auditors have direct access to
related to capital markets during the last 3 years the Audit Committee, and its representative
and, hence, no penalty or strictures are imposed participates in the Audit Committee of the
by SEBI or the Stock Exchanges or any Statutory Board of Directors of the Company and
Authority. presents Internal Audit observations to the
Audit Committee.
(iii) Details of the Directors seeking appointment/
re-appointment have been provided in the VIII. REPORT ON CORPORATE GOVERNANCE
Notice of the Annual General Meeting. This Corporate Governance Report forms part of the
(iv) Proceeds from Public Issues, Rights Issues, Annual Report. The Company is fully compliant with
Preferential Issues, etc. all the provisions of Listing Regulations, as applicable
During the year under review, the Company has to the Company.
not raised any proceeds by way of public issue,
rights issue or preferential issue. IX. COMPLIANCES
(i) Your Company confirms the compliances with
(v) Management Discussion and Analysis Corporate Governance requirements specified in
Report/Disclosure of Accounting Treatment Regulations 17 to 27 and Clauses (b to i) of Sub-
(a) Management Discussion and Analysis Regulation (2) of Regulation 46 of the Listing
Report is forming part of the Annual Report, Regulations.
and is in accordance with the requirements
laid out in the Listing Regulations. (ii) Certificate from the Statutory Auditors, confirming
compliance with all the conditions of Corporate
(b) Your Company follows all relevant Governance as stipulated in Listing Regulations, is
Accounting Standards while preparing the given as Annexure ‘B’ to the Board’s Report and forms
Financial Statements. part of the Annual Report.
(vi) Status of Compliance of Non-Mandatory (iii) There is a separate section for general ‘Shareholder
Requirement Information’, which forms part of the Annual Report.
a. The Company maintains a separate office
for the Non-Executive Chairman. All (iv) Name and Designation of Compliance Officer: Mrs.
necessary infrastructure and assistance are Hutokshi Wadia, President and Company Secretary.
made available to enable him to discharge
his responsibilities. (v) CEO/CFO Certification:
The Managing Director and the Chief Financial Officer
b. During the year under review, there is of your Company have issued the necessary certificate
no audit qualification on the Financial pursuant to the provisions of Listing Regulations, and
Statements of the Company. the same is attached to this Report.
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STATUTORY REPORTS Report on Corporate Governance
CODE OF CONDUCT
DECLARATION
As provided under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,
2015, the Board of Directors and the Senior Management Personnel have affirmed compliance with the Code of Conduct
of the Board of Directors and Senior Management for the year ended 31st March, 2018.
Dilip Gaur
Mumbai Managing Director
23rd May 2018 [DIN: 02071393]
CEO/CFO CERTIFICATION
The Board of Directors
Grasim Industries Limited
We certify that:
(a) We have reviewed the Financial Statements read with the Cash Flow Statement of Grasim Industries Limited (the
Company) for the year 31st March 2018, and that to the best of our knowledge and belief:
(i) these statements do not contain any materially untrue statement or omit any material fact or contain statements
that might be misleading; and
(ii) these statements together present a true and fair view of the Company’s affairs and are in compliance with the
existing accounting standards, applicable laws and regulations.
(b) There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year
which are fraudulent, illegal or violative of the Company’s Code of Conduct.
(c) We are responsible for establishing and maintaining internal controls for financial reporting and that we have
evaluated the effectiveness of the internal control systems of the Company pertaining to the financial reporting.
We have disclosed to the Company’s Auditors and the Audit Committee of the Company’s Board of Directors,
deficiencies in the design or operation of internal controls, if any, of which we are aware, and the steps taken or
proposed to be taken to rectify the deficiencies.
(i) significant changes in the internal control over financial reporting during the year;
(ii) significant changes in the accounting policies during the year, if any, and that the same have been disclosed in
the Notes to the Financial Statements; and
(iii) instances of significant fraud of which we have become aware and the involvement therein, if any, of the
Management or other employees having a significant role in the Company’s internal control system over
financial reporting.
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GRASIM
Independent Auditors’ Report on compliance with the conditions of Corporate Governance as per
provisions of Chapter IV of Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015
To
The Members of
1. The accompanying Corporate Governance Report prepared by Grasim Industries Limited (hereinafter “the Company”),
contains details as required by the provisions of Chapter IV of Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015, as amended (“the Listing Regulations”) (‘Applicable
criteria’), with respect to the Corporate Governance for the year ended 31st March, 2018. This report is required by
the Company for annual submission to the Stock Exchanges, and to be sent to the Shareholders of the Company.
Management’s Responsibility
2. The preparation of the Corporate Governance Report is the responsibility of the Management of the Company,
including the preparation and maintenance of all relevant supporting records and documents. This responsibility
also includes the design, implementation and maintenance of internal control relevant to the preparation and
presentation of the Corporate Governance Report.
3. The Management along with the Board of Directors are also responsible for ensuring that the Company complies
with the conditions of Corporate Governance as stipulated in the Listing Regulations, issued by the Securities and
Exchange Board of India.
Auditor’s Responsibility
4. Pursuant to the requirements of the Listing Regulations, our responsibility is to express a reasonable assurance in
the form of an opinion whether the Company has complied with the specific requirements of the Listing Regulations
referred to in paragraph 1 above.
5. We conducted our examination of the Corporate Governance Report in accordance with the Guidance Note on
Reports or Certificates for Special Purposes and the Guidance Note on Certification of Corporate Governance, both
issued by the Institute of Chartered Accountants of India (“ICAI”). The Guidance Note on Reports or Certificates for
Special Purposes requires that we comply with the ethical requirements of the Code of Ethics issued by the Institute
of Chartered Accountants of India.
6. We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality
Control for Firms that perform audits and reviews of historical financial information, and other assurance and related
services engagements.
7. The procedures selected depend on the auditor’s judgement, including the assessment of the risks associated in
compliance of the Corporate Governance Report with the applicable criteria. Summary of key procedures performed
include:
i. Reading and understanding of the information prepared by the Company and included in its Corporate
Governance Report;
ii. Obtained and verified that the composition of the Board of Directors w.r.t. Executive and Non-Executive Directors
has been met throughout the reporting period;
iii. Obtained and read the Directors Register as on 31st March, 2018, and verified that at least one Woman Director
was on the Board during the year;
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STATUTORY REPORTS Report on Corporate Governance
iv. Obtained and read the minutes of the following committee meetings held through the period from 1st April,
2017 to 31st March, 2018:
(a) Board of Directors Meeting;
(b)
Audit Committee;
(c) Annual General Meeting;
(d) Nomination and Remuneration Committee;
(e) Stakeholders Relationship Committee;
(f) Corporate Social Responsibility Committee;
(g) Risk Management Committee;
(h) Independent Directors Meeting;
v. Obtained necessary representations and declarations from Directors of the Company including the Independent
Directors; and
vi. Performed necessary inquiries with the Management, and also obtained necessary specific representations
from the Management.
The above-mentioned procedures include examining evidence supporting the particulars in the Corporate
Governance Report on a test basis. Further, our scope of work under this report did not involve us performing audit
tests for the purposes of expressing an opinion on the fairness or accuracy of any of the financial information or the
financial statements of the Company taken as a whole.
Opinion
8. Based on the procedures performed by us as referred in paragraph 7 above, and according to the information and
explanations given to us, we are of the opinion that the Company has complied with the conditions of Corporate
Governance as stipulated in the Listing Regulations, as applicable for the year ended 31st March, 2018, referred to in
paragraph 1 above.
10. This Report is addressed to and provided to the members of the Company solely for the purpose of enabling it
to comply with its obligations under the Listing Regulations with reference to the compliance with the relevant
regulations of the Corporate Governance, and should not be used by any other person or for any other purpose.
Accordingly, we do not accept or assume any liability or any duty of care or for any other purpose or to any other
party to whom it is shown or into whose hands it may come without our prior consent in writing. We have no
responsibility to update this Report for events and circumstances occurring after the date of this Report.
108
GRASIM
Shareholder Information
Note: Annual Listing Fee has been paid to all Stock Exchanges, and no amount is outstanding.
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STATUTORY REPORTS Shareholder Information
(b) Name and Address of Trustees for the Wholesale Debt Market (WDM), segment of BSE
Debentureholders Debenture Trustee: IDBI Trusteeship Services Limited
(for 31st Series Debentures)
Asian Building, Ground Floor
17, R. Kamani Marg, Ballard Estate,
Mumbai - 400001
Tel.: 91 022 40807000; Fax: 91 022 40807080
E-mail: [email protected]
(c) Overseas Depository for GDRs: Citibank N.A.
Depository Receipt Services
388, Greenwich Street, 14th Floor, New York, NY – 10013
Tel: +212 – 723 – 4483; Fax: +212 – 723 – 8023
(d) Domestic Custodian of GDRs: Citibank N.A.
Custody Services
FIFC, 11th Floor, C 54 & 55, Bandra – Kurla Complex
Bandra (East), Mumbai - 400 051
Tel.: 91-22-61757110; Fax: 91-22-26532205
9.
Stock Code:
Stock Code Reuters Bloomberg
BSE 500300 GRAS.BO GRASIM IB
NSE GRASIM GRAS.NS GRASIM IS
LSE - GRAS.LU GRAS LX
ISIN No. of Equity Shares INE047A01021 - -
ISIN No. of GDRs US3887061030
CUSIP No. 388706103
Apr-17 1,193.05 1,045.10 1,153.50 592,791 1,198.90 1,045.10 1,155.05 19,584,150 18.23 15.99 17.76
May-17 1,236.60 1,083.80 1,157.25 2,020,613 1,218.00 1,083.45 1,155.05 34,346,721 18.51 15.84 17.76
Jun-17 1,266.75 1,092.40 1,240.65 870,785 1,267.00 1,091.60 1,242.10 25,787,235 19.05 16.33 19.04
Jul-17 1,331.75 1,013.00 1,068.80 5,479,357 1,375.00 1,012.15 1,070.25 41,683,868 20.19 16.16 16.48
Aug-17 1,199.00 1,043.45 1,192.80 1,189,599 1,200.00 1,039.50 1,195.20 21,699,695 18.67 16.38 18.66
Sep-17 1,274.00 1,103.75 1,133.40 1,868,575 1276.45 1,101.10 1,133.95 31,491,884 19.64 16.98 17.37
Oct-17 1,235.95 1,087.00 1,227.65 796,329 1236.20 1,121.80 1,227.10 11,236,179 19.01 14.50 18.93
Nov-17 1,299.90 1,151.00 1,170.20 2,583,410 1300.00 1,155.05 1,169.90 16,807,007 19.98 17.74 18.15
Dec-17 1,175.00 1,091.45 1,164.05 2,415,650 1177.00 1,090.00 1,165.75 13,420,284 18.23 16.99 18.23
Jan-18 1,258.40 1,124.55 1,157.30 2,484,460 1261.10 1,124.10 1,160.05 16,597,236 19.70 17.80 18.20
Feb-18 1,201.00 999.00 1,152.45 975,841 1201.65 1,027.20 1,152.70 14,567,502 18.70 16.40 17.70
Mar-18 1,186.95 1,029.75 1,054.10 623,991 1187.00 1,040.65 1,050.90 23,427,933 18.10 16.20 16.20
110
GRASIM
11. Stock Performance: Performance of Equity Share Price of the Company in comparison to the BSE
Sensex:
149
Grasim Sensex
139
129
119
109
99
31-Mar-17
30-Apr-17
31-May-17
30-Jun-17
31-Jul-17
31-Aug-17
30-Sep-17
31-Oct-17
30-Nov-17
31-Dec-17
31-Jan-18
28-Feb-18
12. Stock Performance and Returns:
Absolute Returns (In %) (In Percentage) 1 Year 3 Years 5 Years
GRASIM 20.09% 73.88% 123.89%
BSE Sensex 11.30% 17.92% 75.03%
NSE Nifty 10.25% 19.11% 77.98%
111
STATUTORY REPORTS Shareholder Information
Share transfers in physical form are registered and returned within a period of 15 days from the date of receipt, if
the documents are clear in all respects. Officers of the Company have been authorised to approve transfers upto 500
shares in physical form under one transfer deed. One Director jointly with one Officer of the Company have been
authorised to approve the transfers not exceeding 2,500 shares of ` 2/- each under one transfer deed. The Company
obtains from a Company Secretary in Practice, half-yearly certificate of compliance as required under Regulation
40(9) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The RTA attends to investor grievances in consultation with the Secretarial Department of the Company.
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GRASIM
19. Details on use of public funds obtained in the 22. Secretarial Audit:
last three years: (a) Pursuant to Regulation 40(9) of SEBI (Listing
No public funds have been obtained in the last three Obligations and Disclosure Requirements)
years. Regulations, 2015, certificates have been issued,
on a half-yearly basis, by a Company Secretary
20. Outstanding GDRs/Warrants and in Practice, certifying due compliance of share
Convertible Bonds: transfer formalities by the Company.
45,396,998* GDRs (Previous Year 48,534,477) are (b) A Company Secretary in Practice carries out
outstanding as on 31st March, 2018. Each GDR quarterly reconciliation of Share Capital Audit,
represents one underlying equity share. There are to reconcile the total admitted capital with NSDL
no warrants/convertible bonds outstanding as at the and CDSL, and the total issued and listed capital.
year-end. The audit confirms that the total issued/paid up
*representing the adjusted number post sub-division of capital is in agreement with the aggregate of the
equity shares of the Company. total number of shares in physical form and the
total number of shares in demat form (held with
21. Commodity price risk or foreign exchange NSDL and CDSL). The said certificate is submitted
risk and hedging activities: quarterly to stock exchanges, NSDL and CDSL,
The Company hedges its foreign currency exposure and is also placed before the Board of Directors.
in respect of its imports, borrowings and export
(c) Pursuant to Section 204 of the Companies Act,
receivables as per its laid policies. The Company
2013, M/s. BNP & Associates, Practising Company
uses a mix of various derivative instruments like
Secretaries, have conducted a Secretarial Audit
forward covers, currency swaps, interest rate swaps
of the Company for the financial year 2017-18.The
or a mix of all. Further, the Company also hedges its
Audit Report is annexed to the Board’s Report.
Commodity price risk through fixed price swaps.
Further, M/s. BNP & Associates, Practising
Company Secretaries, have been appointed as
the Secretarial Auditor of the Company for the
financial year 2018-19.
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STATUTORY REPORTS Shareholder Information
Plant Locations:
Fibre and Pulp Plants:
Name Address Phone Nos. Fax Nos.
Staple Fibre Division Birlagram, Nagda-456 331, (07366) 246760-66 (07366) 244114/246024
Madhya Pradesh
Harihar Polyfibres and Harihar, Dist. Haveri (08373) 242171-75 (08373) 242875,
Grasilene Divisions Kumarapatnam–581 123, (08192) 247555
Karnataka
Birla Cellulosic Division Birladham, Kharach, (02646) 270001-05 (02646) 270010, 270310
Kosamba–394 120,
Dist. Bharuch, Gujarat
Grasim Cellulosic Plot No. 1, GIDC, (02642) 291214 –
Division Vilayat Industrial Estate
P.O. Vilayat, Taluka: Vagra,
District: Bharuch–392 012
Gujarat
Chemical Plants:
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GRASIM
Epoxy Plant:
Name Address Phone Nos. Fax Nos.
Grasim Epoxy Division Plot No. 1, GIDC, (02641) 273206 –
Vilayat Industrial Estate,
P.O. Vilayat Taluka: Vagra,
District: Bharuch–392 012,
Gujarat
Textile Plants:
Insulator Plants:
Fertiliser Plant:
115
STATUTORY REPORTS Shareholder Information
26. Other Useful Information for Shareholders transfer of shares in physical form, shareholders
should fill in complete and correct particulars in
Process for Important Investor Services
the transfer deed. Wherever applicable, registration
Share Transfer/Dematerialisation
number of Power of Attorney should also be quoted
Share transfer request for physical shares is acted in the transfer deed at the appropriate place.
upon within 15 days from the date of their receipt
at the Share Department of the Company. In case Permanent Account Number (PAN)
no response is received from the Company within Members, who hold shares in physical form, are
30 days of lodgement of transfer request, the lodger advised that SEBI has made it mandatory that a self-
should immediately write to the Company/RTA of attested copy of the PAN card of the transferee(s),
the Company with full details, so that necessary member(s), surviving joint holders/legal heirs be
action can be taken to safeguard the interest of the
furnished to the Company while making request for
concerned against any possible loss/interception
transfer, deletion of name of deceased joint holder,
during postal transit.
transposition of names and transmission of shares,
as the case may be.
Dematerialisation requests, duly completed, in all
respects are normally processed within 7 days from
Nomination Facility for Shareholding
the date of receipt at the Company/RTA.
Section 72 of the Companies Act, 2013, extends
Shareholders are requested to note that if the physical nomination facility to individuals holding shares
documents, viz., Dematerialisation Request Form in physical form. Shareholders, in particular, those
(DRF), Share Certificates, etc., are not received from holding shares in single name, may avail the
their concerned Depositary Participants (DPs) by the above facility by furnishing the particulars of their
Company within a period of 15 days from the date of nominations in the prescribed Nomination Form,
generation of the Dematerialisation Request Number which can be downloaded from the website of the
(DRN) for dematerialisation, the DRN will be treated Company or obtained from the Share Department
as rejected/cancelled. This step is being taken on of the Company/RTA by sending a written request
the advice of National Securities Depository Limited through any mode, including e-mail, on grasim.
(NSDL), so that no demat request remains pending shareproservies.com.
beyond a period of 21 days.
Change of Address and Furnishing of Bank Details
In accordance with the provisions of Section 56(1) of Shareholders holding shares in physical form should
the Companies Act, 2013, shares are required to be notify to the RTA, change in their address with Pin
lodged within a period of 60 days from the date of Code number and Bank Account details by written
execution of instrument of transfer. For expeditious request under the signatures of sole/first joint holder.
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GRASIM
Beneficial Owners of shares in demat form should • Change in their residential status on return to
send their instructions regarding change of address, India for permanent settlement;
bank details, nomination, power of attorney, change
in e-mail address, etc., directly to their DP as the said • Particulars of the Bank Account maintained with
records are maintained by the DPs. a bank in India, if not furnished earlier;
To prevent fraudulent encashment of dividend • E-mail ID and Fax No.(s), if any; and
warrants, Shareholders, who hold shares in physical
form, should provide their Bank Account details to • RBI Permission number with date to facilitate
the RTA, while those Shareholders, who hold shares prompt credit of dividend in their Bank Accounts.
in dematerialised form, should provide their Bank
Unclaimed Shares/Dividend
Account details to their DP, for printing of the same
Pursuant to Sections 124 and 125 of the Act, read
on the dividend warrants.
with the Investor Education and Protection Fund
Registering of E-mail Address: Authority (Accounting, Audit, Transfer and Refund)
Rules, 2016 (“IEPF Rules”), dividends, if not claimed
Shareholders, who have not yet registered their e-mail for a consecutive period of 7 years from the date of
address for availing the facility of e-communication, transfer to Unpaid Dividend Account of the Company,
are requested to register the same with the RTA (in are liable to be transferred to the Investor Education
case the shares are held in physical form) or their DP and Protection Fund (“IEPF”). Further, shares in
(in case the shares are held in dematerialised form) so respect of such dividends, which have not been
as to enable the Company to serve them fast. claimed for a period of 7 consecutive years, are also
liable to be transferred to the demat account of the
Loss of Shares IEPF Authority.
In case of loss/misplacement of shares, investors
should immediately lodge an FIR/Complaint with the The provisions relating to transfer of shares were
police and inform to the Company/RTA along with made effective by the Ministry of Corporate Affairs,
original or certified copy of FIR/Acknowledged copy vide its Notification dated 13th October, 2017, read
of Police Complaint along with a self-attested copy of with the circular dated 16th October, 2017, wherein it
their PAN card. was provided that where the period of 7 consecutive
years, as above, was completed or being completed
Correspondence with the Company during the period from 7th September, 2016 to 31st
October, 2017, the due date of transfer for such shares
Shareholders/Beneficial Owners are requested to
was 31st October, 2017.
quote their Folio No./DP and Client ID Nos., in all
correspondence with the Company/RTA. In the interest of the shareholders, the Company
sends periodical reminders to the shareholders to
All correspondences regarding physical shares claim their dividends in order to avoid transfer of
should be addressed ONLY to the RTA at the address dividends/shares to IEPF Authority. Notices in this
mentioned above and not at any other office(s) of the regard are also published in the newspapers, and
Company, including the Corporate Finance Division. the details of unclaimed dividends and shareholders,
whose shares are liable to be transferred to the IEPF
Shareholders can send such correspondence, which Authority, are uploaded on the Company’s website.
do not require signature verification for processing,
through E-mail on grasim.shareproservies.com. In light of the aforesaid provisions, the Company has,
during the year, transferred to IEPF the unclaimed
Non-Resident Shareholders dividends, outstanding for 7 consecutive years, of
Non-Resident Shareholders are requested to the Company, erstwhile Aditya Birla Nuvo Limited
immediately notify the following to the Company in and Aditya Birla Chemicals (India) Limited (since
respect of shares held in physical form, and to their amalgamated with the Company). Further, shares of
DPs in respect of shares held in dematerialised form: the Company, in respect of which dividend has not
been claimed for 7 consecutive years or more, have
• Indian address for sending all communications, also been transferred to the demat account of IEPF
if not provided so far; Authority.
117
STATUTORY REPORTS Shareholder Information
Unpaid and unclaimed dividend upto the year ended 31st March, 2010, have already been transferred to the said
Fund. Shareholders, who have so far not encashed the dividend warrant(s) for the year ended 31st March, 2011, or
any subsequent years, are requested to make their claims to the Share Department at the Registered Office of the
Company at Nagda.
The details of unpaid/unclaimed dividend for the 2010-11 onwards are as under:
Payment of Dividend through Electronic Mode In case you have already registered your bank
SEBI, vide its Circular dated 21st March, 2013, has details and you wish to change the NECS/ECS
advised usage of approved electronic mode, viz., mandate, then please write to your DP for shares
ECS (Electronic Clearing Services), NECS (National held in demat form or to the Share Department
Electronic Clearing Services) and other modes of of the Company for shares held in physical form
electronic fund transfer for distribution of dividend to by informing your revised bank details.
the shareholders.
Kindly note that there are a number of benefits of
Shareholders, who have not yet opted for remittance payment of dividend, vide electronic mode, viz.:
of Dividends through electronic mode and wish to avail Prompt credit of dividend amount directly
the same, are requested to provide the following bank into your bank account as there will be no
details by a letter signed by the sole/first joint holder mailing or handling delays in receiving the
along with a cancelled copy of your cheque leaf- physical dividend warrant;
• Name of the Bank with its Branch and complete Avoids loss/misplacement of physical
Address; dividend warrant in postal transit;
• Bank Account Number (SB/CC/Current); and Eliminates the need to deposit the physical
warrant in the bank; and
• 9-digit MICR Code (Magnetic Ink Character
Recognition) appearing on the MICR cheque Avoids dividend warrant becoming stale/
issued by your bank to you time barred;
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GRASIM
sent three reminders under Registered Post to steps on unclaimed shares by transferring and
the shareholders, whose share certificates were dematerialising them into one folio in the name
returned undelivered and are lying unclaimed so of “Grasim Industries Limited Unclaimed Share
far. Suspense Account”. In case your shares are lying
unclaimed with the Company, you are requested
In terms of Schedule VI of Securities and to claim the same. The voting rights on the said
Exchange Board of India (Listing Obligations shares shall remain frozen till the rightful owner
and Disclosure Requirements) Regulations, of such shares claims the shares.
2015, your Company has initiated appropriate
Disclosure pursuant to Schedule VI of Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015:
Aggregate number of shareholders and the outstanding 8,326 shareholders holding 645,291 equity
shares in the suspense account lying as at 1st April, 2017 shares of the Company
Number of shareholders who approached issuer for 21 shareholders holding 4,450 equity shares of
transfer of shares from suspense account during the year the Company
Number of shareholders to whom shares were 21 shareholders holding 4,450 equity shares of
transferred from suspense account during the year the Company
Number of shareholders whose shares were transferred 6,217 shareholders holding 378,836 equity
to IEPF account pursuant to the MCA Circular dated shares
5th September, 2016
Aggregate number of shareholders and the outstanding 2,071 shareholders holding 239,425 equity
shares in the suspense account lying as at 31st March, shares of the Company
2018
The voting rights on the shares in the suspense account as on 31st March, 2018, shall remain frozen till the
rightful owners of such shares claim the shares.
• information on investor services being Keeping in view, the aforesaid green initiative
offered by the Company; of MCA, your Company shall send the Annual
Report to its shareholders in electronic form, at
• downloading of various forms/formats, the e-mail address provided by them and made
viz., Nomination Form, ECS Mandate Form, available to it by the Depositories. In case of any
Affidavits, Indemnity Bonds, etc.; and change in your e-mail address, you are requested
119
STATUTORY REPORTS Shareholder Information
to please inform the same to your Depository (in Your Company will make the said documents
case you hold the shares in dematerialised form) available on its website, www.grasim.com/
or to the Company (in case you hold the shares www.adityabirla.com. Please note that physical
in physical form). copies of the above documents shall also be
made available for inspection, during office
Shareholders can avail e-communication facility hours, at the Registered Office of the Company
by registering their e-mail address with the at Birlagram, Nagda-456 331 (M.P.).
Company by sending the request on e-mail to
[email protected] or by logging on In case you wish to receive the same in physical
to the Company’s website, www.grasim.com. form, please write to our Share Department or
send us an e-mail at grasimshares@adityabirla.
Benefits of registering your e-mail address for com Upon receipt of a request from you, physical
availing e-communication: copy shall be provided free of cost.
• it will enable you to receive communication
Feedback:
promptly;
Members are requested to give us their valuable
• it will avoid loss of documents in postal suggestions for improvement of our investor
transit; and services to our Corporate Office at Mumbai.
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GRASIM
Building Sustainable Businesses at the Aditya Birla improvement techniques to help our businesses reach
Group: higher standards of performance. Our Group Sustainable
At the Aditya Birla Group, we endeavour to become the Business Framework is currently certified to 14 international
leading Indian conglomerate for sustainable business standards (http://sustainability.adityabirla.com/) So far,
practices across our global operations. We define a we have had much success with respect to reductions in
“Sustainable Business” as one that can continue to survive accidents, energy use, water use, and have implemented our
and thrive within the growing needs and tightening legal first Biodiversity plans. Our programme to achieve the World
and resource constraints of a “Sustainable World”. We Business Council for Sustainable Development’s Water and
believe that this means that as we go forward towards the Sanitation and Hygiene pledge (WASH) to ensure that we
constrained operating environments of 2030 and 2050 that provide safe drinking water, sanitation and hygiene in all
for a continued “Sustainable World” it can increasingly only our operations has resulted in our building over 600 new
contain “Sustainable Businesses”. bathrooms, many for women and differently abled people.
Each of these achievements helps reduce and mitigate our
To achieve our Group vision, we are innovating away from
impact on the planet and are imperative to building the
the traditional sustainability models to one consistent
with our vision to build sustainable businesses capable of sustainable business platform for our future.
operating in the next three decades. It is in our own interests
If we are to create fully sustainable business models and
to mitigate our own impact in every way we can because this
systems for the future then “Responsible Stewardship” by
is a direct assistance to creating a sustainable planet. It also
itself is not enough. We need other components to help us
prepares us for further mitigation and the cost of adapting to
with a greater transformation. We need to understand the
a world that is a full two degrees or even three or four hotter
global mega-trends and their effect on us; geographically,
than today.
physically, technologically and how the legal system (including
We began our quest with the question, “If everyone and regulations and tax) will need to change in order to motivate
every business followed the law as written today, is the business to create a sustainable world. Our performance will
planet sustainable?” We quickly concluded that around need to be improved further to meet the changes needed to
the year 2050, when the Earth’s population reaches an mitigate and adapt to these External Factors. By talking to our
estimated 9 billion, climate change, water scarcity, pollution, Strategic Stakeholders knowledgeable in these issues, we
biodiversity loss and an overload of waste, if left unchecked, can scan the horizon to better understand their likely risk to
would set the planet on a possibly irreversible unsustainable our business. With this information, we enhance our business
course. It is therefore intuitive that leaders must find ways models, strategies and risk profiles in order to “Future Proof”
to transform industries such that international bodies can them and our value chains in the medium to long term. Since
codify and governments can legislate over time to reduce only “Sustainable” business can exist in a Sustainable World
the damage and it is imperative that the Aditya Birla Group then a Sustainable Value Chain can also only contain these
remains ahead of the curve. businesses and so it becomes imperative to map our value
chains to look for vulnerabilities. Our goal is to create not only
The first step of our programme to build sustainable
Sustainable Businesses but also Sustainable Value Chains of
businesses is focused on increasing the capability of our
which we can be a key member. We are helping our leaders to
business management systems. Under this programme
called “Responsible Stewardship” we try to move from understand which external changes might heavily influence
merely complying with current legal standards to conforming our value chains and business models in the future and what
to the international standards set by the global bodies of the might be expected of our products and brands. For example,
International Finance Corporation (IFC), the Organisation the world will need businesses that are able to mitigate and
for Economic Cooperation and Development (OECD), the adapt to climate change, with robust and sustainable supply
International Standards Organisation (ISO), Occupational chains that are also impervious to all external forces that will
Health and Safety Advisory Services (OHSAS), the Global inevitably begin to affect us in the future.To build sustainable
Reporting Initiative (GRI), the Forestry Stewardship Council businesses will take time, particularly when we consider
and others. To support our businesses in this endeavour, we some of our very complex value chains but by pushing to
have created the Aditya Birla Group’s Sustainable Business be a leader today, we are giving our businesses the best
Framework of Policies, Technical Standards, and Guidance possible chance of achieving long-term success not only for
Notes to give our leaders, managers, employees and contract ourselves but also for our value chains and hence for our
employees the chance to train, learn, understand, and apply planet.
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At Grasim (“the Company”), we are committed to align been deemed hazardous under Basel Convention.
the business strategy with the Aditya Birla Group’s Alternative materials like fly ash, Chemical Gypsum and
sustainability vision. We have developed an Environment slag, which help in conserving natural raw materials,
Management Program with the novel two-pronged are used for cement production. Harihar Unit generates
approach of Environment Protection and Resource Biogas from waste liquor, which is used to replace fossil
Conservation. Sustainability matrix is developed by fuel and down size the carbon footprint of the mill.
Vilayat Unit for CO2 emission/ton of product (VSF) as per Karwar Unit of the Company has succeeded in pilot plant
GRI guidelines and uploaded in Enablon Matrix for data trial of utilizing the ETP sludge of Phosphoric acid plant
compilation, availability, tracking and comparison with in making fertiliser. Renukoot Unit has commissioned
other units of Pulp and Fibre business on monthly basis. the latest 6th generation Electrolyser for manufacturing
of Caustic Soda Lye, resulting in reduction of nearly 100
Safety Units per ton of caustic.
Safety is an indelible part of the Company’s core values,
and is a business imperative. We are maintaining high The Company responds to Climate Change Challenge
degree of safety practices through Work Place Safety and by new product development, increasing absorption by
Processes Safety, under the guidance and collaborations securing availability and overcoming technical constraints;
of world reputed agency, M/s. DuPont. Implementation improving energy efficiency; transport and logistics
of Work Place Safety Standards and Process Safety optimisation, waste-to-energy recovery and emissions
Management Wheel, have yield to continual improvement reduction.
in safe operations of plant, reduction in accidents and
improvement of overall productivity. While we strive hard Ambient Air quality
towards embedding a culture of high safety at our Units, The Company monitors and ensures the emissions and
we also have systems and processes in place to enable discharge under control through Online Continuous
safer operations. Occupational Health and Safety (OHS) ambient air quality monitoring, emission monitoring and
impacts are identified, assessed and addressed through discharge monitoring of SPM, Sox and NOx installed
our integrated HSE management system, which conforms along. Data are linked with DCS system for continuous
to global guidelines, such as the IS/ISO 140001, OHSAS monitoring and available at control room. Efficient Air
18001 and SA 8000. We give thrust on In-built engineering Pollution Control Equipment are installed at all emission
controls and monitoring of safety and environmental sources, and the stack and ambient air quality is well
performance to ensure best-in-class work environment to within the prescribed limits.
employees and stakeholders. These practices have yield to
Zero occupational disease, zero pollution and satisfaction Water conservation
of nearby community. The Company’s water conservation agenda is spearheaded
by a systemic 3R approach: reduce, recycle and reuse.
Resource Management Harvesting rainwater, recharging groundwater, recycling
The Company is aware of its dual responsibility to wastewater and reducing freshwater use are standard
the environment and to the nation’s progress. The key operating procedures at our manufacturing plants.
priorities are energy efficiency, waste heat recovery
and generation of renewable energy. Under continual The Effluent Treatment facility has been continually
and focused improvement projects, we have achieved upgraded. Continuous Effluent Monitoring System
reduction in consumption of water, raw materials and has been adopted for treated effluent for continuous
other resources, resulting reduction in generation of waste monitoring of pH, Suspended Solids, Biochemical Oxygen
and emissions. We are committed to reduction of waste, Demand and Chemical Oxygen Demand of treated effluent
conservation of raw materials and perusing zero pollution and alert system for any deviation in parameters, and
through ongoing energy conservation initiatives, Focused taking preventive action proactively. Treated Effluent is
Improvement projects and technological upgradation. being used for irrigation in field and farmers are being
constantly motivated to use the same for improving crop
The Company believes that resource conservation and yields.
pollution prevention go hand in hand. In this direction,
we have always emphasised on minimising waste The Units of the Company maintain greeneries with full of
generation at source itself. Across its operations, the plantations. We do plantation in and around our Units to
Company does not import or export waste, which has maintain the greenery.
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4. Website : www.grasim.com
5. E-mail ID : [email protected]
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2. Do the Subsidiary Company/Companies : The Business Responsibility initiatives of the Company applies to
participate in the BR Initiatives of the its subsidiaries
parent company? If yes, then indicate the
number of such subsidiary company(s)
3. Do any other entity/entities (e.g. suppliers, : Other entity/entities (e.g., suppliers, distributors, etc.) that the
distributors etc.) that the Company does Company does business with, do not participate in the Business
business with, participate in the BR Responsibility initiatives of the Company.
initiatives of the Company? If yes, then
indicate the percentage of such entity/
entities? [Less than 30%, 30-60%, More
than 60%]
Section D: BR Information
P2 Business should provide goods and services that are safe and contribute to sustainability throughout their life
circle. (Product Responsibility)
P4 Business should respect the interests of, and be responsive towards all stakeholders, especially those who are
disadvantaged, vulnerable and marginalized. (Stakeholder Engagement & CSR)
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P6 Business should respect, protect and make efforts to restore the environment. (Environment)
P7 Business, when engaged in influencing public and regulatory policy, should do so in a responsible manner.
(Public Policy)
P9 Business should engage with and provide value to their customers and consumers in a responsible manner.
(Customer Relations)
b) If answer to the question at serial number 1 against any principle, is ‘No’, please explain why: (Tick up to 2 options)
Sr. Questions P1 P2 P3 P4 P5 P6 P7 P8 P9
No.
1. The Company has not understood the Principles
2. The Company is not at a stage where it finds itself in a position to
formulate and implement the policies on specified principles
3. The Company does not have financial or manpower resources available
for the task Not Applicable
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3. Governance related to BR
a) Indicate the frequency with which the Board of Directors, Committee of the Board or CEO to assess the BR
performance of the Company. Within 3 months, 3-6 months, Annually, More than 1 year
The Management of the Company periodically assesses the BR performance of the Company.
b) Does the Company publish a BR or a Sustainability Report? What is the hyperlink for viewing this report? How
frequently it is published?
Business Responsibility Report and Social Report on Inclusive Growth and Synergizing Growth with Responsibility
(Sustainable Development) are part of the Annual Report. It is published every year. It is also available on the
Company’s website www.grasim.com
PRINCIPLE 1 – Businesses should conduct and the manufacturing processes of these products and
govern themselves with Ethics, Transparency systems, factoring both social and environmental
and Accountability concerns. The emmission control & effluent treatment
1. Does the policy relating to ethics, bribery and corruption measures have been incorporated at various stages
cover only the Company? Yes/No. Does it extend to keep the emissions & effluents well within the
to the Group/Joint Ventures/Suppliers/Contractors/ environment norms. The Company has developed
three-pronged approach of Environment Protection,
NGOs/Others?
Resource Conservation and Social Development. The
The Company’s governance structure guides it keeping
plants of the Company have various certifications
in mind its core values of Integrity, Commitment, including Environmental Management System (ISO
Passion, Seamlessness and Speed. The Corporate 14001), Occupational Health & Safety Assessment
Principles and the Code of Conduct cover the Company System (OHSAS 18001), Quality Management System
and all its subsidiaries, and are applicable to all the (ISO 9001) and Social Accountability (SA 8000).
employees of the Company and its subsidiaries.
2. For each such product, provide the following details in
2. How many stakeholder complaints have been received respect of resource use (energy, water, raw material,
in the past financial year and what percentage was etc.) per unit of product (optional):
satisfactorily resolved by the management? If so,
a) Reduction during sourcing/production/distribution
provide details thereof, in about 50 words or so.
achieved since the previous year throughout the
No stakeholder complaints were received during the value chain?
year on the conduct of business involving ethics,
The Company has achieved reduction in
transparency and accountability
consumption of water, raw materials and other
resources through in-house innovations and
PRINCIPLE 2 – Businesses should provide goods
replicated best practices across the units including
and services that are safe and contribute to
reduction in generation of waste and emissions
sustainability throughout their life circle
through continual and focused improvement
1. List up to 3 of your products or services whose design projects. The Company has worked towards
has incorporated social or environmental concerns, cost optimization, optimization of logistics and
risks and/or opportunities: reduction in input consumption ratio in the
The Company is a responsible corporate citizen and is processes and has reduced the consumption of
committed to sustainable development and looks at major inputs including energy, water, etc., by
ways to preserve the environment and manage resources adoption of new techniques and alternate methods
responsibly. Company strategy is aligned with the showing improved results every passing year.
Aditya Birla Group’s Sustainability Vision & Framework.
For its 3 major products i.e. Viscose Staple Fibre, Rayon b) Reduction during usage by consumers (energy,
Grade Pulp and Chemicals, the Company understands water) has been achieved since the previous year?
its obligations relating to social and environmental The Company has diverse consumers base;
concerns, risks and opportunities associated with their hence it is not feasible to measure the usage of
manufacturing. Accordingly, the Company has devised water, energy by consumers.
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3. Does the Company have procedures in place for The Company fosters local and small suppliers
sustainable sourcing (including transportation)? for procurement of goods and services, including
If yes, what percentage of your inputs was sourced communities in proximity to its plant locations. First
sustainably? Also, provide details thereof, in about 50 preference given to local vendors for input material
words or so. locally available has also encouraged setting up of
many ancillary units around its plants. Training and
The Company has built up highly integrated technical support are being provided to them to
horizontal and vertical integration processes in improve and build their capability, and to educate and
its operations. All the major inputs under the raise their standards.
Company’s control are sourced sustainably. The
5. Does the Company have a mechanism to recycle
internal processes and procedures ensure adequate
products and waste? If Yes what is the percentage of
safety during transportation and optimization of
recycling of products and waste (separately as <5%,
logistics, which, in turn, help to mitigate climate
5-10%, >10%). Also, provide details thereof, in about
change.
50 words or so.
All the incoming and outgoing materials are being The Company believes in 3R hierarchy and follows
transported strictly as per the RTO norms of the Reduce, Recycle & Reuse Principle and implements
load carrying capacity and the Company has strong at all its facilities. The Company has reduced the
internal control and procedures in place to ensure water consumption over the years. Also waste water
that all products are transported in safe manner. recycling has been in place across all its locations. It
recycles products and waste in the range of around
4. Has the Company taken any steps to procure goods 10% at its various locations.
and services from local & small producers, including
communities surrounding their place of work?
If Yes, what steps have been taken to improve their
capacity and capability of local and small vendors?
Please indicate the number of complaints relating to child labour, forced labour, involuntary labour, sexual harassment
in the last financial year and pending, as on the end of the financial year:
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8. What percentage of your under mentioned employees water and sanitation, sustainable livelihood, self-help
were given safety and skill up-gradation training in the groups and income generation, etc., are extended to the
last year? people living near to the Company’s manufacturing units.
(a) Permanent Employees
The safety of the workers is of utmost importance and a
(b) Permanent Women culture of safety is brought in, not just for the Company’s
Employees Continuous employees but also for the other stakeholders.
(c) Casual/Temporary/ Process
Contractual Employees PRINCIPLE 5 – Businesses should respect and
(d) Employees with Disabilities promote Human Rights
1. Does the policy of the Company on Human Rights
Safety is of paramount importance to the Company.
cover only the Company or extend to the Group/Joint
All employees of the Company are provided with
Ventures/Suppliers/Contractors/NGOs/Others?
safety training as part of the induction programme.
The safety induction programme is also critical The Company has a Human Rights Policy which is
requirement for contract workforce before they also applicable to its subsidiaries.
are inducted into the system. The Company has a
structured safety training agenda on an on-going 2. How many stakeholder complaints have been received
basis to build a culture of safety across its workforce. in the past financial year and what percent was
satisfactorily resolved by the management?
The Company believes in continual learning of its
employees and has institutionalized a continual No complaints were received in the past financial
learning model for skill upgradation. The learning and year.
development needs of management cadre employees
are met through various training delivery mechanisms. PRINCIPLE 6 – Business should respect, protect
and make efforts to restore the environment
PRINCIPLE 4 – Businesses should respect 1. Does the policy related to Principle 6 cover only the
the interests of, and be responsive towards Company or extends to the Group/Joint Ventures/
all stakeholders, especially those who are Suppliers/Contractors/NGOs/Others
disadvantaged, vulnerable and marginalised The Company’s Policy on Safety, Health and Environment
1. Has the company mapped its internal and external also extends to its subsidiaries. The Policy covers the
stakeholders? Yes/No whole Group. Common guidelines/frame work for the
Group is being framed by Group Sustainability Cell,
Yes, the Company has mapped its internal as well as
incorporating key points from all businesses.
external stakeholders.
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3. Does the Company identify and assess potential 7. Number of show-cause/legal notices received from
environmental risks? Y/N CPCB/SPCB which are pending (i.e. not resolved to
Yes. The Company follows a structured risk satisfaction) as on the end of the Financial Year
management approach which encompasses No unresolved show cause/legal notices from CPCB/
identifying potential risks, assessing their potential SPCB as on the end of the Financial Year.
impact, mitigating them through taking timely action
and continuous monitoring. PRINCIPLE 7 – Businesses, when engaged in
influencing Public and Regulatory Policy, Should
4. Does the company have any project related to Clean do so in a responsible manner?
Development Mechanism? If so, provide details 1. Is your Company a member of any trade and chamber
thereof, in about 50 words or so. Also, if Yes, whether or association? If Yes, Name only those major ones that
any environmental compliance report is filed? your business deals with:
The Company has undertaken various projects The Company is a Member of
on Clean Development Mechanism (CDM) at its
a. Federation of Indian Chambers of Commerce
manufacturing Units including
and Industry.
• se of renewable energy at Harihar Polyfibres by
U b. Associated Chambers of Commerce and Industry
treating Prehydrolysate (PH) Liquor generated of India.
there by reducing pollution and produce biogas
c. Confederation of Indian Textile Industry
• aste Heat Recovery from all feasible sources
W d. Association of Man-Made Fibre Industry of India.
through eco-viable technologies at all the
e. National Safety Council.
manufacturing sites
f. The Synthetics Rayon & Textile Export Promotion
5. Has the company undertaken any other initiatives on – Council.
clean technology, energy efficiency, renewable energy,
g. Federation of Indian Export Organisation.
etc. Y/N. If Yes, please give hyperlink for web page etc.
Yes, the Company has taken several initiatives on h. Indian Merchant Chamber.
clean technology, energy efficiency, renewable i. Alkali Manufacturing Association of India.
energy, etc.
2. Have you advocated/lobbied through above associations
Clean Technology: Lyocell Fibre Production at for the advancement or improvement of public good?
Pilot scale and initiative to establish production at Yes/No; if Yes specify the broad areas (Drop box:
commercial scale. Governance and Administration, Economic Reforms,
Inclusive Development Policies, Energy security, Water,
Energy Efficiency: This is a continuous exercise. Food Security, Sustainable Business Principles, Others).
Adoption of energy efficient equipment for new Yes, the broad areas are Economic Reforms,
projects are installed, better utilisation of waste heat Environment and Energy issues, and Water and
from main plant as well as ancillary units is undertaken. Sustainable Business Principles.
Renewable Energy: Currently, feasibility studies are being PRINCIPLE 8 - Businesses should support
done to understand the viability of solar energy and use Inclusive Growth and Equitable Development
of alternate fuel such as pet coke in place of fossil fuel. 1. Does the Company have specified programmes/
Please refer Annexure ‘G’ of the Board’s Report of the initiatives/projects in pursuit of the policy related to
Principle 8? If Yes details thereof.
Annual Report for energy conservation initiatives.
The same is also available on Company’s website Yes, the Company has formulated a well-defined CSR
www.grasim.com policy, which focuses on the following major areas:
1. Education
6. Are the Emissions/Waste generated by the company
within the permissible limits given by CPCB/SPCB for 2. Health Care
the financial year being reported? 3. Environment and Livelihood
Yes, the Emissions/Waste generated by the Company
4. Rural Development
are within the permissible limits given by CPCB/SPCB,
and are reported on periodic basis. 5. Social Empowerment
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2. Are the programmes/projects undertaken through in- 2. Does the Company display product information on the
house team/own foundation/external NGO/government product label, over and above, what is mandated as
structures/any other organisation? per local laws? Yes/No/N.A./N Remarks (additional
The Company’s social projects are carried on under information)
the aegis of the Aditya Birla Centre for Community The Company displays product information on the
Initiatives and Rural Development. Collaborative products’ label. The Company also has a website
partnerships are formed with the government, district which provides information about its products and
authorities, village panchayats, NGOs and like- their usage.
minded stakeholders. It also collaborates with District
Authorities, Village Panchayats, NGOs and likeminded 3. Is there any case filed by any stakeholder against the
stakeholders for its CSR initiatives. Company regarding unfair trade practices, irresponsible
advertising and/or anti-competitive behaviour during
3. Have you done any impact assessment of your initiative? the last five years and pending as on the end of the
Yes, the Company has conducted impact assessment financial year. If so, provide details thereof, in about
of its CSR initiatives and has seen positive outcomes 50 words or so.
and benefits for the people in and around the Few investigations are being conducted by the
Company’s plants. Competition Commission of India (CCI) against the
Company for alleged abuse of dominance. One such
4. What is your company’s direct contribution to investigation has already been stayed by the High
community development projects- Amount in INR and Court. The Company believes that it has not indulged
the details of the projects undertaken. in any such activity and is responding to the queries
During the year under review, the Company has spent of Director General of CCI in relation to other ongoing
an amount ` 29.84 Crore on CSR activities mainly on investigations.
education, health care, environment and livelihood,
rural development projects, Women empowerment, Competition Commission of India (CCI) has penalised
etc., and to bring about social change by advocating few Chlor-Alkali companies including the Company,
and supporting various social campaigns and for alleged contravention of the provisions of Section
programmes. 3(3)(d) of the Competition Act, 2002, in respect of
sales of a chemical product. All the companies,
5. Have you taken steps to ensure that this community including the Company, have appealled against the
development initiative is successfully adopted by the decision of CCI and the matter is sub-judice before the
community? Please explain in 50 words, or so. Tribunal authorities, which has, in the interim, stayed
the penalty. The Company believes that it has not
Yes, the Company has taken steps to ensure that the
indulged in any such activity and is defeding its case.
community initiatives benefit the community. Projects
evolve out of the felt needs of the communities and
4. Did your Company carry out any consumer survey/
they are engaged in the implementation of the welfare
consumer satisfaction trends?
driven initiatives, as well. The Communities actively
partner with the Company and take ownership of the Yes, Consumer Satisfaction Surveys are being
projects, eventually as its positive outcome benefits conducted periodically to assess the consumer
them hugely. satisfaction levels. A strong culture of ‘Customer First’
being instilled across functions & beyond hierarchies,
PRINCIPLE 9 – Businesses should engage with using various customer centricity projects pan-
and provide Value to their Customers and business.
Consumers in a responsible manner
1. What percentage of customer complaints/consumer
cases are pending as on the end of the financial year?
The Company has a well-defined system of
addressing customer complaints. All complaints are
appropriately addressed and resolved.
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“As a nation we have embarked on the journey of social change through inclusive growth. A shared sense of
community through shared responsibilities, both by the Government and corporate is apparent today. We have
always been engaged in reaching out to communities through the spirit and culture of giving and caring, the spirit
of compassion and service, which has been a legacy passed on from the Birla family, generation after generation.
Our CSR activities are focused and strategic. We plough in resources, both financial and manpower where our work
truly impacts the lives of the underprivileged. At the Aditya Birla Group level, through our outreach programmes,
we pan out to 7.5 million people across 5,000 villages. Of this, Grasim’s community engagement reaches out to a
rural population of more than spread over 266 villages and 52 urban slums. Our focus is on health care, education,
sustainable livelihood, infrastructure and social reform.
At Grasim, our CSR engagement is concentrated in were examined and treated at Kharach, Harihar, Karwar
Madhya Pradesh, Gujarat, Jharkhand, Uttar Pradesh, West & Indian Rayon. Patients whose ailments needed greater
Bengal, Karnataka and Odisha. attention were referred to our hospitals. Given the
growing interest in alternative treatments, we have linked
Health Care up with the Government on Ayurvedic and Homeopathy
At your company managed hospitals at Nagda (MP), as alternative therapies.
Rehla (Jharkhand), Veraval (Gujarat) and Jagdishpur (UP),
we treated more than 2,66,356 patients. Furthermore, we To generate awareness on Sexually Transmitted Diseases
reached out to 74,430 villagers in hinterland through our (STD), Reproductive Tract Infections (RTI) and AIDS among
rural mobile medical van services. the rural and urban communities, camps for adolescent
youth and sex workers were organized with on the spot
At Harihar, Rehla, Indo Gulf, Indian Rayon, Jay Shree testing facilities. These camps were held at Nagda, Vilayat,
Textile & Vilayat, we organized eye camps in which 1,833 Indian Rayon & ABI Rishra where 3,747 people availed the
patients were operated for cataract. We also distributed services.
spectacles to better the eyesight of senior citizens.
Mother and Child Health Care
At the medical camps organized for the physically In collaboration with the District Health Department,
challenged in Harihar, 220 patients were provided with 3,41,256 children were immunized against polio and
artificial limbs, which enabled them get back on their feet. 7,137 children for diphtheria, typhoid, measles & rubella
Over two decades ago, we began this initiative. Up until at Harihar, Nagda, Kharach, Rehla, Vilayat, Rishra and
now our work has enabled 3,379 persons become self- Ganjam.
reliant, and they have integrated into the mainstream of
society. School health check-up camps were regularly organized
in the village schools at Harihar, Kharach & Indian Rayon
At Blood donation camps in Kharach, Vilayat, Karwar & Jay checking the wellness of 5,632 students.
Shree Textile, we collected 575 units, which were donated
to the blood bank. As part of our Reproductive and Child Health Care
programmes 8,722 women availed of the ante-natal, post-
At several medical camps organised for ailments, such natal, mass immunization, nutrition and escort services for
as Bone & Mass Density, dental problems, 2,592 villagers institutional delivery.
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Safe Drinking Water and Sanitation cropping techniques, which was a fine learning experience.
This year, we have installed 2 Reverse Osmosis (RO) At Rehla, the Model farmer project has benefited 25
plants in Vilayat Bharuch, totalling 24 RO plants up until farmers. These projects were designed to promote
now. These provide safe drinking water to 33,000 villagers. sustainable agriculture with higher returns through better
Additionally, we have provided pipelines, water tanks and yield. We mobilised crop loans of ` 460.52 lakhs from
other channels to supply potable water. Government.
Over 1,150 villagers have access to safe drinking water Over 73,611 saplings of fruit bearing trees and forest
from 10 hand pumps, around the operational area in Rehla. species were planted during the year at Nagda, Vilayat,
Rehla, Indian Rayon, Indo Gulf and Halol.
In our endeavours towards open defecation free villages,
we have facilitated the construction of 1,240 individual Animal Husbandry
toilets around Nagda, Vilayat, Rehla, Renukoot, Kharach The immunization of 32,818 cattle at Harihar, Rehla, Vilayat,
and Harihar. We leveraged the Swachh Bharat Abhiyan. Nagda, Indian Rayon and Renukoot through veterinary
Alongside, we organized awareness camps in these camps went a long way in stoking farmer prosperity.
villages to sensitize the villagers and school children on
the use of sanitation facilities. At Nagda, Vilayat & Indian Rayon, our cattle breed
improvement project is being implemented in collaboration
Education with NGOs. “Integrated Livestock Development Centres
We enlisted 1,868 children – most of whom are first (ILDC)” have been established in the villages. The centre
generation learners – in schools at Kharach, Vilayat, Indian provides livestock breed improvement services to the
Rayon, Indogulf and Nagda. Scholarships were awarded surrounding 62 villages.
to 367 students.
The main activities comprise of green fodder
The girl child is on our radar always. Given our linkages demonstration, vaccination, dry fodder enrichment,
with the Kasturba Gandhi Balika Vidyalayas (KGBV) – extension programs and artificial insemination services at
residential schools for girls, we enrolled 1,167 girls in the door-steps of the farmers. From the start of the project,
the KGBVs and other Government schools around our 7,421 artificial inseminations have been completed and
manufacturing units. Focusing on the girl child, we offered more than 1,500 calves of a higher breed were spawned
a bouquet of interesting incentives such as computer till date. Furthermore, over 1,557 farmers were covered in
education, education material support, career counselling, capacity building activities, which have led to reaping an
special day celebration, etc. We covered 13,369 children at enhanced output.
Nagda, Harihar, Kharach, Rehla, Indian Rayon, Jay Shree
Textile, ABI-Rishra and Vilayat. Organic farming and Vermi-composting have been
encouraged with 93 Units participating in Nagda and
At Harihar, we assisted to organise “Prathibha Karanji” Rehla.
a talent search program in schools, which attracted 718
students. Self Help Groups and Income Generation
Across Grasim, 783 Self Help Groups (SHGs) empower
At Vilayat, we took 560 students of five rural schools from 9,296 households financially and socially. Most of the
grade VI to VIII to Ahmadabad where they visited Gandhi SHGs have been linked with the economic schemes of
Ashram, Science City & Kankaria Zoo. Our objective is to banks and the District Industries Centre. The women SHG
expose students to new scientific developments. members were trained in goatry, dairy, loom weaving,
sutli weaving, tailoring, blanket weaving etc. They have
We provided 1,105 sets of tables and chairs in rural schools, mobilized loans of ` 52.40 lakh from Banks to start income
with a 3,000 student population finding the classrooms generation activities and become self reliant.
much more conducive to learning at Harihar, Nagda,
Renukoot, Indo Gulf, Karwar & Rishra. Vocational Training
Training centres at Nagda, Rehla, Harihar, Indian Rayon,
Sustainable Livelihood
Indo Gulf, Jay Shree Textile and Vilayat were started with
Agriculture the objective of training rural women, particularly from
At Nagda, Rehla, Renukoot, Indian Rayon, Indo Gulf and low income families to be self reliant. At the various
Vilayat, we familiarised 4,589 farmers with innovation centres, 2,269 women were trained in different skills. These
132
GRASIM
comprise of tailoring, crafting, handbags, purses, animal • Runner-up at 6th Awards Manufacturing Today
rearing, vegetable farming as well as shop keeping. So far, Awards: Birla Cellulosic, Kharach
they have enabled more than 5,000 women to stand on
• SKOCH BSE “Order of Merit” Award for project
their feet, supplement the household income and in some
Kaushalya: Indo Gulf Fertilizer, Jagdishpur
instances, run their family.
• ppreciation by District Administration on Swachh
A
At Nagda & Vilayat, these centres were linked with USHA Bharat Mission: Indo Gulf Fertilizer, Jagdishpur
International to provide accreditation for the three month
and six month courses. Furthermore, 195 sewing machines • Appreciation certificate by District Forest Department
were distributed to the beneficiaries, to help them start for plantation initiatives: Staple Fibre Division, Nagda
their business.
Our Partners / Collaborators include
Infrastructure Development • District Rural Development Authorities at various
The 4 dams constructed at Nagda on the River Chambal locations
continue to benefit nearly 200,000 people to drinking water. • Local Hospital and District Health Departments
Your Company has constructed /renovated Community
halls, Schools buildings, Boundary walls, Aganwadi • District Animal Husbandry Department
Centres, Panchayat Office, Primary health Centres around • District Agriculture Department
Harihar, Nagda, Kharach and Vilayat plants.
• District Horticulture Department
Social Welfare • District Forest Department
Yet another aspect of our work includes bringing in a
social reform through behavioural changes. So we work • BAIF Development Foundation
with communities on issues such as illiteracy, child labour, • Sarva Shiksha Abhiyan
the marginalization and abuse of the girl child and women,
alcoholism and poor hygiene among others. • Rotary International
• Sathi, Ujjain
Sports, cultural programmes, celebration of national
events are encouraged by us. Our Investments
For the year 2017-18, Grasim’s CSR spend was
Under the mass marriage programme this year, 112
couples in Harihar were united in wedlock. We aided 176 ` 29.84 crore. In addition, we mobilized ` 29.04 crore
persons in accessing Government Pension Funds. through the various schemes of the Government, acting
as catalysts for the community.
Accolades
In sum
In recognition of our CSR work, several accolades were
bestowed upon us. These include: Our CSR work is aimed at lifting the burden of poverty.
To an extent we have helped lower the level of poverty in
• CSR Activist of the Year Award by FMPCCI, Govt. of
villages and urban slums near our plants. Our Board of
MP: Staple Fibre Division, Nagda
Directors, our Management and our colleagues across the
• Best CSR Impact awards by NGO Box: Vilayat, Bharuch Company are committed to inclusive growth.
133
FINANCIAL STATEMENTS
Standalone & consolidated
GRASIM
This responsibility also includes 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 frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent;
and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the
standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether
due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are
required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan
and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone
Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment
of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In
making those risk assessments, the auditor considers internal financial controls relevant to the Company’s preparation
of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used
and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall
presentation of the standalone Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion
on the standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone
Ind AS financial statements give the information required by the Act, in the manner so required and give a true and fair
135
FINANCIAL STATEMENTS STANDALONE
view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as
at 31 March 2018, its profit (including other comprehensive income), changes in equity and its cash flows for the year
ended on that date.
(a) We have sought and obtained all the information and explanations, which to the best of our knowledge and belief,
were necessary for the purposes of our audit;
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears
from our examination of those books;
(c) The standalone Balance sheet, the standalone Statement of profit and loss (including other comprehensive
income), the standalone Statement of Changes in equity and the standalone Statement of cash flows dealt with by
this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards
(Ind AS)prescribed under Section 133 of the Act;
(e) On the basis of the written representations received from the directors as on 31 March 2018 taken on record by the
Board of Directors, none of the directors is disqualified as on 31 March 2018 from being appointed as a director in
terms of Section 164(2) of the Act;
(f) With respect to the adequacy of the internal financial controls with reference to Ind AS financial statements of the
Company and the operating effectiveness of such controls, refer to our separate report in “Annexure B”; and
(g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies
(Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations
given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS
financial statements - Refer Note 4.1 to the standalone Ind AS financial statements;
ii. The Company has made provision, as required under the applicable law or accounting standards, for material
foreseeable losses, if any, on long-term contracts including derivative contracts – Refer Note 2.25.1 to the
standalone Ind AS financial statements;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and
Protection Fund by the Company; and
iv. The disclosures in the standalone Ind AS financial statements regarding holdings as well as dealings in
specified bank notes during the period from 8 November 2016 to 30 December 2016 have not been made
since the requirement does not pertain to financial year ended 31 March 2018.
Mumbai Mumbai
Dated: 23 May, 2018 Dated: 23 May, 2018
136
GRASIM
Annexure – A
to the Independent Auditors’ Report – 31 March 2018 on the standalone Ind AS financial statements
(Referred to in our report of even date)
With reference to the Annexure A referred to in the Independent Auditor’s Report to the members of the Company on the
standalone Ind AS financial statements for the year ended 31 March 2018, we report the following:
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and
situation, of the fixed assets (property plant and equipment).
(b)
The Company has a regular programme of physical verification of its fixed assets (property plant and
equipment) by which all fixed assets (property plant and equipment) are verified in a phased manner over
a period of two to three years. In accordance with this programme, a portion of the fixed assets (property
plant and equipment) has been physically verified by the management during the year and no material
discrepancies have been noticed on such verification. In our opinion, this periodicity of physical verification is
reasonable having regard to the size of the Company and the nature of its assets.
(c) According to the information and explanations given to us, and on the basis of our examination of the records
of the Company, the title deeds of immovable properties, as disclosed in Note 2.1.1 to the standalone Ind AS
financial statements, are held in the name of the Company, except for the following:
(` in crores)
(ii) The inventory, except good-in-transit, has been physically verified by management at reasonable intervals during
the year. In our opinion, the frequency of such verification is reasonable. In respect of inventory lying with third
parties, these have substantially been confirmed by them. The discrepancies noticed on such verification between
physical stocks and the book records were not material and have been properly dealt with in the books of account.
(iii) In our opinion and according to information and explanations given to us, the Company has not granted any loans,
secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register
maintained under Section 189 of the Act. Accordingly, Clause 3(iii) of the Order is not applicable to the Company.
(iv) The Company has not granted any loans or provided any guarantees or security to the parties covered under
Section 185 of the Act. The Company has complied with the provisions of Section 186 of the Act in respect of
investments made, loans and guarantees to the parties covered under Section 186. The Company has not provided
any security to the parties covered under Section 186 of the Act
(v) According to information and explanations given to us, the Company has not accepted any deposits from the
public within the meaning of the directives issued by Reserve Bank of India, provisions of Sections 73 to 76 of the
Act, any other relevant provisions of the Act and the relevant rules framed thereunder.
(vi) We have broadly reviewed the records maintained by the Company pursuant to the rules prescribed by Central
Government for maintenance of cost records under sub section (1) of Section 148 of the Act and are of the opinion
that prima facie, the prescribed accounts and records have been made and maintained. However, we have not
made a detailed examination of the records.
(vii) (a) According to the information and explanations given to us and the records of the Company examined by
us, in our opinion, the Company is generally regular in depositing the undisputed statutory dues including
Provident fund, Employees’ state Insurance, Income tax, Sales tax, Service tax, Goods and service tax, Duty
of customs, Duty of excise, Value added tax, Cess, Professional tax and other material statutory dues as
applicable, with the appropriate authorities.
137
FINANCIAL STATEMENTS STANDALONE
According to the information and explanations given to us, no undisputed amounts payable in respect of
Provident fund, Employees’ state insurance, Income tax, Sales tax, Service tax, Goods and service tax, Duty
of customs, Duty of excise, Value added tax, Cess, Professional tax and other material statutory dues were in
arrears as at 31 March 2018 for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, there are no dues of Income tax, Sales tax, Service
tax, Goods and service tax, Duty of customs, Duty of excise or Value added tax, which have not been deposited
with the appropriate authorities on account of any dispute other than those mentioned in Appendix I to this
report.
(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in
repayment of loans or borrowings to banks, financial institutions, government and debenture holders.
(ix) In our opinion and according to the information and explanations given to us, the Company has not raised any
moneys by way of initial public offer or further public offer (including debt instruments) and term loans during the
year. Accordingly, the provisions of Clause 3(ix) of the Order is not applicable to the Company.
(x) According to the information and explanations given to us, no material fraud by the Company or on the Company
by its officers or employees has been noticed or reported during the course of our audit.
(xi) According to the information and explanations give to us and based on our examination of the records, the
Company has paid or provided for managerial remuneration in accordance with the requisite approvals mandated
by the provisions of Section 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company.
Accordingly, Clause 3(xii) of the Order is not applicable to the Company.
(xiii) According to the information and explanations given to us and based on our examination of the records of the
Company, transactions with the related parties are in compliance with Sections 177 and 188 of the Act, where
applicable. The details of such related party transactions have been disclosed in the notes to the standalone Ind AS
financial statements as required under Indian Accounting Standard (Ind AS) 24.
(xiv) According to the information and explanations give to us and based on our examination of the records of the
Company, the Company has not made any preferential allotment or private placement of shares or fully or partly
convertible debentures during the year. Accordingly, Clause 3(xiv) of the Order is not applicable to the Company.
(xv) According to the information and explanations given to us and based on our examination of the records, the
Company has not entered into non-cash transactions with directors or persons connected with them. Accordingly,
Clause 3(xv) of the Order is not applicable to the Company.
(xvi) In our opinion and according to the information and explanations given to us, the Company is not required to be
registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, Clause 3(xvi) of the Order is not
applicable to the Company.
138
GRASIM
Name of the Statute Nature of the Dues Amount Period to which Forum where dispute is
(` Crores) the amount relates pending
Income Tax Act, 1961 Income Tax and 248.36 1984-18 Appellate Authority
Interest 0.22 2007-18 Assessing Authority
Sales Tax / Value Added Sales Tax, VAT, 31.27 2000-18 Appellate Authority
Tax Act Interest and Penalty 4.94 1999-15 Assessing Authority
1.95 1999-12 High Court
Entry Tax Act Entry Tax and Interest 1.42 2007-14 Appellate Authority
14.68 2004-18 High Court
5.82 2006-18 Supreme Court
Service Tax under Service Tax, Interest 29.03 1997-18 Appellate Authority
Finance Act, 1994 and Penalty 46.75 1999-18 Assessing Authority
Customs Act, 1962 Customs Duty, 14.65 1985-18 Appellate Authority
Interest and Penalty 0.65 2004-08 Assessing Authority
2.41 1976-02 High Court
Central Excise Act, 1944 Excise duty, Interest 57.62 1985-18 Appellate Authority
and Penalty 38.23 1989-18 Assessing Authority
10.79 1978-18 High Court
0.93 2001-02 Supreme Court
139
FINANCIAL STATEMENTS STANDALONE
Annexure – B
to the Independent Auditor’s Report – 31 March 2018 on the standalone Ind AS financial statements
(Referred to in our report of even date)
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the
Companies Act, 2013 (‘the Act’)
We have audited the internal financial controls with reference to financial statements of Grasim Industries Limited (“the
Company”) as of 31 March 2018 in conjunction with our audit of the standalone Ind AS financial statements of the
Company for the year ended on that date.
Auditor’s Responsibility
Our responsibility is to express an opinion on the Company’s internal financial controls with reference to financial
statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on
Auditing, issued by ICAI and deemed to be prescribed under Section 143(10) of the Act, to the extent applicable to an audit
of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those
Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements
was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls
system with reference to financial statements and their operating effectiveness. Our audit of internal financial controls
with reference to financial statements included obtaining an understanding of internal financial controls with reference
to financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and
operating effectiveness of internal controls based on the assessed risk. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements,
whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion
on the Company’s internal financial controls system with reference to financial statements.
140
GRASIM
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system with reference
to financial reporting and such internal financial controls with reference to financial statements were operating effectively
as at 31 March 2018, based on the internal controls with reference to financial statements criteria established by the
Company considering the essential components of internal controls stated in the Guidance Note issued by ICAI.
141
FINANCIAL STATEMENTS STANDALONE
Balance Sheet
as at 31st March, 2018
(` in Crore)
As at 31st As at 31st
Note No.
March, 2018 March, 2017
ASSETS
Non-Current Assets
Property, Plant and Equipment 2.1 9,539.69 6,857.98
Capital Work-in-Progress 2.1 745.11 375.48
Other Intangible Assets 2.1 1,276.87 28.83
Financial Assets
Investments 2.2 33,586.74 7,424.09
Loans 2.3 138.32 141.80
Other Financial Assets 2.4 36.60 1.36
Non-Current Tax Assets (Net) 32.04 31.69
Other Non-Current Assets 2.5 236.57 57.64
45,591.94 14,918.87
Current Assets
Inventories 2.6 2,591.66 1,732.74
Financial Assets
Investments 2.7 1,959.85 1,572.33
Trade Receivables 2.8 2,609.32 1,189.55
Cash and Cash Equivalents 2.9 26.07 34.59
Bank Balances other than Cash and Cash Equivalents 2.10 15.81 18.15
Loans 2.11 84.90 50.55
Other Financial Assets 2.12 218.01 43.20
Current Tax Assets (Net) 84.53 -
Other Current Assets 2.13 544.23 289.84
Assets Held for Disposal 2.54 1.28
8,136.92 4,932.23
TOTAL 53,728.86 19,851.10
EQUITY AND LIABILITIES
Equity
Equity Share Capital 2.14 131.48 93.37
Other Equity 2.15 44,658.35 16,137.61
44,789.83 16,230.98
Liabilities
Non-Current Liabilities
Financial Liabilities
Borrowings 2.16 853.16 383.68
Other Financial Liabilities 2.17 5.58 2.70
Provisions 2.18 31.32 7.60
Deferred Tax Liabilities (Net) 2.19 1,834.96 662.98
Other Non-Current Liabilities 2.20 38.68 29.49
2,763.70 1,086.45
Current Liabilities
Financial Liabilities
Borrowings 2.21 1,729.32 60.81
Trade Payables 2.22 2,131.79 1,113.93
Other Financial Liabilities 2.23 658.59 364.18
Other Current Liabilities 2.24 920.69 598.00
Provisions 2.25 477.39 154.97
Current Tax Liabilities (Net) 257.55 241.78
6,175.33 2,533.67
TOTAL EQUITY AND LIABILITIES 53,728.86 19,851.10
Significant Accounting Policies and Key Accounting Estimates and Judgements. 1
The accompanying Notes are an integral part of the Financial Statements.
In terms of our report on even date attached For and on behalf of the Board of Directors of
GRASIM INDUSTRIES LIMITED
CIN-L17124MP1947PLC000410
For B S R & Co. LLP For S R B C & CO LLP Sushil Agarwal Dilip Gaur
Chartered Accountants Chartered Accountants Whole-time Director & Managing Director
Firm Registration No.: 101248W/W-100022 Firm Registration No: 324982E/E300003 Chief Financial Officer DIN- 02071393
DIN- 00060017
Mumbai Mumbai
Dated: 23rd May, 2018 Dated: 23rd May, 2018
142
GRASIM
(` in Crore)
Year Ended Year Ended
Note No. 31st March, 2018 31st March, 2017
(Current Year) (Previous Year)
INCOME
Sale of Products and Services 3.1 15,848.34 11,111.06
Other Operating Revenues 3.2 186.37 141.89
Revenue from Operations 16,034.71 11,252.95
Other Income 3.3 461.36 473.93
Total Income (I) 16,496.07 11,726.88
EXPENSES
Cost of Materials Consumed 3.4 7,088.15 4,680.27
Purchases of Stock-in-Trade 3.5 170.48 59.68
Changes in Inventories of Finished Goods, Work-in-Progress and Stock-in-Trade 3.6 51.87 95.47
Employee Benefits Expense 3.7 1,142.72 678.00
Finance Costs 3.8 128.13 57.62
Depreciation and Amortisation Expense 2.1 627.66 446.14
Power and Fuel 2,289.71 1,490.26
Freight and Handling Expenses 256.80 180.32
Excise Duty (refer # of Note 3.1) 246.24 907.30
Other Expenses 3.9 1,708.56 1,006.88
Total Expenses (II) 13,710.32 9,601.94
Profit Before Exceptional Items and Tax 2,785.75 2,124.94
Exceptional Items 3.14 (272.61) -
Profit Before Tax 2,513.14 2,124.94
Tax Expense 3.10
Current Tax 767.10 536.35
Provision for Tax of Earlier Years Written Back (62.77) (7.66)
Deferred Tax 40.15 36.25
Total Tax Expense 744.48 564.94
Profit For The Year (III) 1,768.66 1,560.00
OTHER COMPREHENSIVE INCOME 3.11
A (i) Items that will not be reclassified to profit or loss (182.81) 1,027.01
(ii) Income Tax relating to items that will not be reclassified to profit or loss (39.05) (20.58)
B (i) Items that will be reclassified to profit or loss 0.78 6.63
(ii) Income Tax relating to items that will be reclassified to profit or loss (0.61) (1.53)
Other Comprehensive Income For The Year (IV) (221.69) 1,011.53
Total Comprehensive Income For The Year (III + IV) 1,546.97 2,571.53
Earnings Per Equity Share (Face Value ` 2 each) 3.15
Basic ( ` ) 29.20 33.42
Diluted ( ` ) 29.17 33.38
Significant Accounting Policies and Key Accounting Estimates and Judgements 1
The accompanying Notes are an integral part of the Financial Statements.
In terms of our report on even date attached For and on behalf of the Board of Directors of
GRASIM INDUSTRIES LIMITED
CIN-L17124MP1947PLC000410
For B S R & Co. LLP For S R B C & CO LLP Sushil Agarwal Dilip Gaur
Chartered Accountants Chartered Accountants Whole-time Director & Managing Director
Firm Registration No.: 101248W/W-100022 Firm Registration No: 324982E/E300003 Chief Financial Officer DIN- 02071393
DIN- 00060017
Mumbai Mumbai
Dated: 23rd May, 2018 Dated: 23rd May, 2018
143
FINANCIAL STATEMENTS STANDALONE
B. OTHER EQUITY
(` in Crore)
Reserves and Surplus Other Comprehensive Income (OCI)
Securities Debenture General Capital Retained Debt Equity Hedging Employee
Premium Redemption Reserve Reserve Earnings Instruments Instruments Reserve Stock
Total
Reserve Reserve through Other through Other Options
Comprehensive Comprehensive Reserve
Income Income
As at 31st March, 2018
Opening Balance as at 50.26 - 10,389.08 38.94 3,434.87 8.49 2,195.18 - 20.79 16,137.61
1st April, 2017
Reserves on Merger of erstwhile - 123.33 - 15,380.54 - - - (4.33) 9.80 15,509.34
ABNL as on 1st July, 2017
(Note 4.11A)
- Fair value gain in Investment - - - 588.29 - - - - - 588.29
in ABNL transferred to Capital
Reserve (Note 2.2.7)
Adjustment on demerger of
financial service business as on
4th July, 2017 (Note 4.11A)
- Net Assets transferred to ABCL - - - (1,721.61) - - - - - (1,721.61)
- Dilution of stake in ABCL - - - (10,616.51) - - - - - (10,616.51)
Capital Reserve arising on - - - 0.52 - - - - - 0.52
acquistion of Rights to Manage
and Operate Century Rayon
(Note 4.11B)
Profit for the Year - - - - 1,768.66 - - - - 1,768.66
Other Comprehensive Income - - - - @(12.87) (1.29) (208.99) 1.46 - (221.69)
of the Year
Total Comprehensive Income of - - - - 1,755.79 (1.29) (208.99) 1.46 - 1,546.97
the Year
Transfer from Retained Earnings to - - 1,000.00 - (1,000.00) - - - - -
General Reserve
Transfer from Debenture - (75.00) 75.00 - - - - - - -
Redemption Reserve to General
Reserve
Transfer from Retained Earnings to - 23.75 - - (23.75) - - - - -
Debenture Redemption Reserve
Issue of Equity Shares to 23,619.28 - - - - - - - - 23,619.28
erstwhile ABNL shareholders,
pursuant to the scheme of
arrangement (Note 4.11A)
Dividend (including Corporate - - - - (401.47) - - - - (401.47)
Dividend Tax) pertaining to
FY 2016-17
Gain on sale of non-current - - - - 0.02 - - - - 0.02
investment transferred to retained
earnings from equity instruments
through OCI
Stamp Duty Payment on issue of (0.14) - - - - - - - - (0.14)
Equity Shares to erstwhile ABNL
shareholders, pursuant to the
scheme of arrangement
Employee Stock Option Reserve (7.38) (7.38)
transferred to ABCL
144
GRASIM
(` in Crore)
Reserves and Surplus Other Comprehensive Income (OCI)
Securities Debenture General Capital Retained Debt Equity Hedging Employee
Premium Redemption Reserve Reserve Earnings Instruments Instruments Reserve Stock
Total
Reserve Reserve through Other through Other Options
Comprehensive Comprehensive Reserve
Income Income
Employee Stock Options 3.55 - - - - - - - (1.29) 2.26
Exercised
Employee Stock Options Granted - - - - - - - - 1.17 1.17
(Net of Lapses)
Cancellation of vested Employee - - 0.32 - - - - - (0.32) -
Stock Options
Closing Balance as at 31st 23,672.95 72.08 11,464.40 3,670.17 3,765.46 7.20 1,986.19 (2.87) 22.77 44,658.35
March, 2018
(` in Crore)
Reserves and Surplus Other Comprehensive Income (OCI)
Securities Debenture General Capital Retained Debt Equity Hedging Employee
Premium Redemption Reserve Reserve Earnings Instruments Instruments Reserve Stock
Total
Reserve Reserve through Other through Other Options
Comprehensive Comprehensive Reserve
Income Income
As at 31st March, 2017
Opening Balance as at 44.99 - 9,889.08 38.93 2,604.32 3.39 1,180.14 - 17.64 13,778.49
1st April, 2016
Profit for the Year - - - - 1,560.00 - - - - 1,560.00
Other Comprehensive Income for - - - - @ (8.61) 5.10 1,015.04 - - 1,011.53
the Year
Total Comprehensive Income of - - - - 1,551.39 5.10 1,015.04 - - 2,571.53
the Year
Transfer from Retained Earnings to - - 500.00 - (500.00) - - - - -
General Reserve
Dividend (including Corporate - - - (220.84) - - - - (220.84)
Dividend Tax) pertaining to FY
2015-16
Employee Stock Options 5.27 - - - - - - - (2.65) 2.62
Exercised
Employee Stock Options Granted - - - - - - - - 5.80 5.80
(Net of Lapses)
Equity Shares cancelled from - - - 0.01 - - - - - 0.01
Share Suspense
Closing Balance as at 50.26 - 10,389.08 38.94 3,434.87 8.49 2,195.18 - 20.79 16,137.61
31st March, 2017
@ Represents remeasurement of Defined Benefit Plan
In terms of our report on even date attached For and on behalf of the Board of Directors of
GRASIM INDUSTRIES LIMITED
CIN-L17124MP1947PLC000410
For B S R & Co. LLP For S R B C & CO LLP Sushil Agarwal Dilip Gaur
Chartered Accountants Chartered Accountants Whole-time Director & Managing Director
Firm Registration No.: 101248W/W-100022 Firm Registration No: 324982E/E300003 Chief Financial Officer DIN- 02071393
DIN- 00060017
Mumbai Mumbai
Dated: 23rd May, 2018 Dated: 23rd May, 2018
145
FINANCIAL STATEMENTS STANDALONE
(` in Crore)
146
GRASIM
(` in Crore)
Notes:
(i) Cash Flow Statement has been prepared under the indirect method as set out in Ind AS 7, prescribed under the Companies Act
(Indian Accounting Standard) Rules, 2015, of the Companies Act, 2013.
(ii) The Scheme of Merger of Aditya Birla Nuvo Limited (ABNL) with the Company implemented w.e.f. 1st July, 2017, did not
involve any cash outlflow as the Company issued Equity Shares of the Company to the Shareholders of erstwhile ABNL, in terms
of the Scheme.
(iii) Purchase of Property, Plant and Equipment includes cash flows of Capital Work-in-Progress (including Capital Advances) and
movement in Capital Expenditure Creditors during the year.
In terms of our report on even date attached For and on behalf of the Board of Directors of
GRASIM INDUSTRIES LIMITED
CIN-L17124MP1947PLC000410
For B S R & Co. LLP For S R B C & CO LLP Sushil Agarwal Dilip Gaur
Chartered Accountants Chartered Accountants Whole-time Director & Managing Director
Firm Registration No.: 101248W/W-100022 Firm Registration No: 324982E/E300003 Chief Financial Officer DIN- 02071393
DIN- 00060017
Mumbai Mumbai
Dated: 23rd May, 2018 Dated: 23rd May, 2018
147
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
CORPORATE INFORMATION
Grasim Industries Limited (“the Company”) is a limited company incorporated and domiciled in India. The registered
office is at Birlagram, Nagda - 456 331, Dist. Ujjain (M.P.), India. The Company is a public limited company, and its shares
are listed on the Bombay Stock Exchange (BSE), India, and the National Stock Exchange (NSE), India, and the Company’s
Global Depository Receipts are listed on the Luxembourg Stock Exchange.
The Company is engaged primarily in Viscose (Pulp, Fibre and Yarn), Chemicals (Caustic Soda and allied Chemicals) and
others (Insulators, Textiles, Fertilisers and Solar Power Designing, Engineering Procurement and Commissioning).
The financial statements are authorised for issue by the Board of Directors of the Company at their meeting held
on 23rd May, 2018.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and
the amount recognised for non-controlling interests, and any previous interest held, over the net identifiable
assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate
consideration transferred, the Company re-assesses whether it has correctly identified all of the assets acquired
148
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
and all of the liabilities assumed, and reviews the procedures used to measure the amounts to be recognised at
the acquisition date. If the re-assessment still results in an excess of the fair value of net assets acquired over
the aggregate consideration transferred, then the gain is recognised in Other Comprehensive Income (OCI) and
accumulated in equity as capital reserve. However, if there is no clear evidence of bargain purchase, the entity
recognises the gain directly in equity as capital reserve, without routing the same through OCI.
Consideration transferred includes the fair values of the assets transferred, liabilities incurred by the Company to
the previous owners of the acquiree, and equity interests issued by the Company. Consideration transferred also
includes the fair value of any contingent consideration. Consideration transferred does not include amounts related
to the settlement of pre-existing relationships. Any goodwill that arises on account of such business combination
is tested annually for impairment.
Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent
consideration that meets the definition of a financial instrument is classified as equity, then it is not re-measured
and the settlement is accounted for within equity. Otherwise, other contingent consideration is re-measured at fair
value at each reporting date and subsequent changes in the fair value of the contingent consideration are recorded
in the Statement of Profit and Loss.
A contingent liability of the acquiree is assumed in a business combination only if such a liability represents a
present obligation and arises from a past event, and its fair value can be measured reliably. On an acquisition-by-
acquisition basis, the Company recognises any non-controlling interest in the acquiree either at fair value or at the
non-controlling interest’s proportionate share of the acquiree’s identifiable net assets. Transaction costs that the
Company incurs in connection with a business combination, such as Stamp Duty for title transfer in the name of the
Company, finder’s fees, legal fees, due diligence fees, and other professional and consulting fees, are expensed as
incurred.
Property, plant and equipment are stated at acquisition or construction cost less accumulated depreciation and
impairment loss. Cost comprises the purchase price and any attributable cost of bringing the asset to its location
and working condition for its intended use, including relevant borrowing costs and any expected costs of de-
commissioning.
If significant parts of an item of PPE have different useful lives, then they are accounted for as separate items
(major components) of PPE.
The cost of an item of PPE is recognised as an asset if, and only if, it is probable that the economic benefits
associated with the item will flow to the Company in future periods, and the cost of the item can be measured
reliably. Expenditure incurred after the PPE have been put into operations, such as repairs and maintenance
expenses, are charged to the Statement of Profit and Loss during the period in which they are incurred.
149
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
Items such as spare parts, standby equipment and servicing equipment are recognised as PPE when it is held for
use in the production or supply of goods or services, or for administrative purpose, and are expected to be used
for more than one year. Otherwise, such items are classified as inventory.
An item of PPE is de-recognised upon disposal or when no future economic benefits are expected to arise from the
continued use of the assets. Any gain or loss arising on the disposal or retirement of an item of PPE is determined
as the difference between the sales proceeds and the carrying amount of the asset, and is recognised in the
Statement of Profit and Loss.
Capital work-in-progress includes cost of property, plant and equipment under installation/under development as
at the reporting date.
1.8 Depreciation:
Depreciation is the systematic allocation of the depreciable amount of an asset over its useful life and is provided
on a straight-line basis, except for Viscose Staple Fibre Division (excluding Power Plants), Nagda, and Corporate
Finance Division, Mumbai, for which it is provided on written down value method, over the useful lives as
prescribed in Schedule II of the Companies Act, 2013, or as per technical assessment.
Depreciable amount for PPE is the cost of PPE less its estimated residual value. The useful life of PPE is the period
over which PPE is expected to be available for use by the Company, or the number of production or similar units
expected to be obtained from the asset by the Company.
The Company has used the following useful lives of the property, plant and equipment to provide depreciation.
A. Major assets class where useful life considered as provided in Schedule II:
Sr. Nature of Assets Estimated Useful Life of the Assets
No
1. Plant and Machinery - Continuous Process Plant 25 years
2. Reactors 20 years
3. Vessel/Storage Tanks 20 years
4. Factory Buildings 30 years
5. Buildings (other than Factory Buildings) RCC Frame Structure 60 years
6. Electric Installations and Equipment (at Factory) 10 years
7. Computer and other Hardwares 3 years
8. General Laboratory Equipment 10 years
9. Railway Sidings 15 years
10. - Carpeted Roads - Reinforced Cement Concrete (RCC) 10 years
- Carpeted Roads - other than RCC 5 years
- Non Carpeted Roads 3 years
11. Fences, wells, tube wells 5 years
150
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
In case of certain class of assets, the Company uses different useful life than those prescribed in Schedule II
of the Companies Act, 2013. The useful life has been assessed based on technical advice, taking into account
the nature of the asset, the estimated usage of the asset on the basis of the management’s best estimation of
getting economic benefits from those classes of assets. The Company uses its technical expertise along with
historical and industry trends for arriving the economic life of an asset.
Also, useful life of the part of PPE which is significant to the total cost of PPE, has been separately assessed
and depreciation has been provided accordingly.
Leasehold Assets
The estimated useful lives, residual values and the depreciation method are reviewed at the end of each
reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
Continuous process plant, as defined in Schedule II of the Companies Act, 2013, have been classified on the
basis of technical assessment, and depreciation is provided accordingly.
Depreciation on additions is provided on a pro-rata basis from the month of installation or acquisition and, in
case of a new Project, from the date of commencement of commercial production. Depreciation on deductions/
disposals is provided on a pro-rata basis upto the month preceding the month of deduction/disposal.
151
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
Intangible assets, acquired separately, are measured on initial recognition at cost. The cost of intangible assets
acquired in a business combination is their fair value at the date of acquisition. Following initial recognition,
intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses, if any.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever
there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation
method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period.
Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied
in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as
changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in
the Statement of Profit and Loss unless such expenditure forms part of carrying value of another asset. Intangible
assets are amortised on a straight-line basis over their estimated useful lives.
Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either
individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine
whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is
made on a prospective basis.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net
disposal proceeds and the carrying amount of the asset, and are recognised in the Statement of Profit or Loss
when the asset is derecognised.
152
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
Other development costs, which do not meet the above criteria, are expensed out during the period in which they
are incurred.
To classify any Asset as “Asset held for disposal” the asset must be available for immediate sale and its sale must
be highly probable. Such assets or group of assets are presented separately in the Balance Sheet, in the line
“Assets held for disposal”. Once classified as held for disposal, intangible assets and property, plant and equipment
are no longer amortised or depreciated.
Management must be committed to the sale/ distribution expected within one year from the date of classification.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment
at least annually, and whenever there is an indication then the asset may be impaired.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing the value in
use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset, for which the estimates
of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the
carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss
is recognised immediately in the Statement of Profit and Loss, unless the relevant asset is carried at a revalued
amount, in which case the impairment loss is treated as a revaluation decrease.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is
increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not
exceed the carrying amount that would have been determined had no impairment loss been recognised for the
asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in the
Statement of Profit and Loss, unless the relevant asset is carried at a revalued amount, in which case the reversal
of the impairment loss is treated as a revaluation increase.
153
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
1.13 Inventories:
Inventories are valued at the lower of cost and net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of
completion and the estimated costs necessary to make the sale.
Raw materials, stores and spare parts, and packing materials are considered to be realisable at cost, if the finished
products, in which they will be used, are expected to be sold at or above cost. The cost is computed on weighted-
average basis which includes expenditure incurred for acquiring inventories like purchase price, import duties,
taxes (net of tax credit) and other costs incurred in bringing the inventories to their present location and condition.
Cost of finished goods and work-in-progress includes the cost of conversion based on normal capacity and
other costs incurred in bringing the inventories to their present location and condition. Net realisable value is
the estimated selling price in the ordinary course of business, less the estimated costs of completion, and the
estimated costs necessary to make the sale. The cost is computed on weighted-average basis.
Obsolete, defective, slow moving and unserviceable inventories, if any, are duly provided for.
Proceeds in respect of sale of raw materials/stores are credited to the respective heads.
1.14 Leases:
The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement
at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent
on the use of a specific asset, or assets and the arrangement conveys a right to use the asset or assets, even if that
right is not explicitly specified in an arrangement.
Finance Lease:
As a Lessee:
Leases, where substantially all the risks and benefits incidental to ownership of the leased item are transferred
to the Lessee, are classified as finance lease. The assets acquired under finance lease are capitalised at lower of
fair value and present value of the minimum lease payments at the inception of the lease and disclosed as leased
assets. Such assets are amortised over the period of lease or estimated life of such asset, whichever is less. Lease
payments are apportioned between the finance charges and reduction of the lease liability based on implicit rate
of return. Lease management fees, lease charges and other initial direct costs are capitalised.
Operating Lease:
As a Lessee:
Leases, where significant portion of the risks and rewards of ownership are retained by the lessor, are classified as
operating leases and lease rentals thereon are charged to the Statement of Profit and Loss on a straight-line basis
over the lease term, unless the lease agreement explicitly states that the increase is on account of inflation.
As a Lessor:
The Company has leased certain tangible assets, and such leases, where the Company has substantially retained
all the risks and rewards of ownership, are classified as operating leases. Lease income is recognised in the
Statement of Profit and Loss on a straight-line basis over lease term, unless the lease agreement explicitly states
that the increase is on account of inflation.
154
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
The provident fund contribution, as specified under the law, is paid to the Regional Provident Fund Commissioner.
In respect of certain employees, Provident Fund contributions are made to a Trust, administered by the Company.
The interest rate payable to the members of the Trust shall not be lower than the statutory rate of interest declared
by the Central Government under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, and
shortfall, if any, shall be made good by the Company. The Company’s liability is actuarially determined (using the
Projected Unit Credit Method) at the end of the year, and any shortfall in the Fund size maintained by the Trust set-
up by the Company is additionally provided for. Actuarial losses/gains are recognised in the Other Comprehensive
Income in the year in which they arise.
Re-measurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable)
and the return on plan assets (excluding net interest), is reflected immediately in the Balance Sheet with a charge
or credit recognised in the Other Comprehensive Income in the period in which they occur.
Re-measurement recognised in other comprehensive income is reflected immediately in retained earnings, and
will not be reclassified to profit or loss. Defined benefit costs are categorised as follows:
• s ervice cost (including current service cost, past service cost, as well as gains and losses on curtailments
and settlements);
• net interest expense or income; and
• re-measurement.
The Company presents the first two components of defined benefit costs in Statement of Profit and Loss in the line
item ‘Employee Benefits Expense’.
155
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
The present value of the defined benefit plan liability is calculated using a discount rate, which is determined by
reference to market yields at the end of the reporting period on government bonds.
The retirement benefit obligation, recognised in the Balance Sheet, represents the actual deficit or surplus in the
Company’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any
economic benefits available in the form of refunds from the plans or reductions in the future contribution to the
plans.
The fair value, determined at the grant date of the equity-settled share-based payments, is charged to Statement of
Profit and Loss on the straight-line basis over the vesting period of the option, based on the Company’s estimate
of equity instruments that will eventually vest, with a corresponding increase in equity.
In case of forfeiture/lapse stock option, which is not vested, amortised portion is reversed by credit to employee
compensation expense. In a situation where the stock option expires unexercised, the related balance standing to
the credit of the Employee Stock Options Outstanding Account is transferred within equity.
Cash-settled Transactions
The cost of cash-settled transactions is measured initially at fair value at the grant date using a Black-Scholes Merton
Formula. This fair value is expensed over the period until the vesting date with recognition of a corresponding
liability. The liability is re-measured to fair value at each reporting date upto, and including the settlement date,
with changes in fair value recognised in employee benefits expense.
Exchange differences on monetary items are recognised in the Statement of Profit and Loss in the period in which
these arise, except for:
• xchange differences on foreign currency borrowings relating to assets under construction for future
e
productive use, which are included in the cost of those assets when they are regarded as an adjustment to
interest costs on those foreign currency borrowings; and
• exchange differences relating to qualifying effective cash flow hedges
156
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
are entered into, and are subsequently remeasured to their fair value at the end of each reporting period. The
resulting gain or loss is recognised in the Statement of Profit and Loss immediately, unless the derivative is
designated and effective as a hedging instrument, in which event the timing of the recognition in the Statement of
Profit and Loss depends on the nature of the hedging relationship and the nature of the hedged item.
The Company enters into derivative financial instruments, viz., foreign exchange forward contracts, interest
rate swaps and cross currency swaps to manage its exposure to interest rate, foreign exchange rate risks and
commodity prices. The Company does not hold derivative financial instruments for speculative purposes.
Hedge Accounting:
The Company designates certain hedging instruments in respect of foreign currency risk, interest rate risk and
commodity price risk as cash flow hedges. At the inception of a hedge relationship, the Company formally
designates and documents the hedge relationship to which the Company wishes to apply hedge accounting
and the risk management objective and strategy for undertaking the hedge. The documentation includes the
Company’s risk management objective and strategy for undertaking hedge, the hedging/economic relationship,
the hedged item or transaction, the nature of the risk being hedged, hedge ratio and how the entity will assess the
effectiveness of changes in the hedging instrument’s fair value in offsetting the exposure to changes in the hedged
item’s fair value or cash flows attributable to the hedged risk. Such hedges are expected to be highly effective in
achieving offsetting changes in fair value or cash flows, and are assessed on an ongoing basis to determine that
they actually have been highly effective throughout the financial reporting periods for which they were designated.
The effective portion of changes in the fair value of the designated portion of derivatives that qualify as cash
flow hedges is recognised in the Other Comprehensive Income and accumulated under the heading of cash flow
hedging reserve. The gain or loss relating to the ineffective portion is recognised immediately in the Statement of
Profit and Loss.
Amounts previously recognised in the Other Comprehensive Income and accumulated in equity relating to
(effective portion as described above) are reclassified to the Statement of Profit and Loss in the periods when the
hedged item affects profit or loss. However, when the hedged forecast transaction results in the recognition of a
non-financial asset or a non-financial liability, such gains and losses are transferred from equity and included in
the initial measurement of the cost of the non-financial asset or non-financial liability.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised,
without replacement or rollover (as part of the hedging strategy), or if its designation as a hedge is revoked, or
when it no longer qualifies for hedge accounting. Any gain or loss recognised in other comprehensive income and
accumulated in equity at that time remains in equity and is recognised when the forecast transaction is ultimately
recognised in the Statement of Profit and Loss. When a forecast transaction is no longer expected to occur, the gain
or loss accumulated in equity is recognised immediately in the Statement of Profit and Loss.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The fair value measurement is based on the presumption
that the transaction to sell the asset or transfer the liability takes place either:
In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company.
157
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
The fair value of an asset or a liability is measured using the assumptions that market participants would use when
pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate
economic benefits by using the asset in its highest and best use, or by selling it to another market participant that
would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data
are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
All assets and liabilities (for which fair value is measured or disclosed in the financial statements) are categorised
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair
value measurement as a whole:
Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement
is directly or indirectly observable other than quoted prices included in Level 1.
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement
is unobservable.
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company
determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation
(based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each
reporting period.
The management determines the policies and procedures for both recurring fair value measurement, such as
derivative instruments and unquoted financial assets measured at fair value, and for non-recurring measurement,
such as assets held for disposal in discontinued operations.
At each reporting date, the management analyses the movements in the values of assets and liabilities, which
are required to be re-measured or re-assessed as per the Company’s accounting policies. For this analysis, the
management verifies the major inputs applied in the latest valuation by agreeing the information in the valuation
computation to contracts and other relevant documents.
Financial Assets:
Initial Recognition and Measurement:
All financial assets are recognised initially at fair value. However, in the case of financial assets not recorded at
fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset are
added to the fair value. Purchases or sales of financial assets that require delivery of assets within a time frame
established by regulation or convention in the market place (regular way trades) are recognised on the trade date,
i.e., the date that the Company commits to purchase or sell the asset.
158
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
Subsequent Measurement:
For purposes of subsequent measurement, financial assets are classified in four categories:
• Debt instruments at amortised cost
• Debt instruments, derivatives and equity instruments, mutual funds at fair value through profit or loss (FVTPL)
• Equity instruments measured at Fair Value through Other Comprehensive Income (FVTOCI)
b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal
and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective
interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income
in the profit or loss. The losses arising from impairment are recognised in the profit or loss. This category generally
applies to trade and other receivables.
b) The asset’s contractual cash flows represent SPPI on the principle amount outstanding.
Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at
fair value. Fair value movements are recognised in the Other Comprehensive Income (OCI). However, the Company
recognises interest income, impairment losses and reversals, and foreign exchange gain or loss in the profit and
loss. On derecognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified from the
equity to profit and loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income
using the EIR method.
In addition, the Company may elect to designate a debt instrument, which otherwise meets amortised cost or FVTOCI
criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or
recognition inconsistency (referred to as ‘accounting mismatch’).
Debt instruments included within the FVTPL category are measured at fair value with all changes recognised in the
Statement of Profit and Loss.
159
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
Equity Investments
Investments in Subsidiaries, Associates and Joint ventures are out of scope of Ind AS 109 and, hence, the Company
has accounted for its investment in Subsidiaries, Associates and Joint venture at cost.
All other equity investments are measured at fair value. Equity instruments, which are held for trading, are classified
as at FVTPL. For equity instruments, other than held for trading, the Company has irrevocable option to present in
the Other Comprehensive Income subsequent changes in the fair value. The Company makes such election on an
instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.
Where the Company classifies equity instruments as at FVTOCI, then all fair value changes on the instrument,
excluding dividends, are recognised in the OCI. There is no recycling of the amounts from OCI to the Statement of
Profit and Loss, even on sale of investment.
On de-recognition of a financial asset, the difference between the asset’s carrying amount and the sum of the
consideration received and receivable and the cumulative gain or loss that had been recognised in the Other
Comprehensive Income and accumulated in equity is recognised in the Statement of Profit and Loss.
Equity Instruments:
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting
all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of
direct issue costs.
Financial Liabilities:
Financial liabilities are classified, at initial recognition:
160
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
• Payables, or
All financial liabilities are recognised initially at fair value and in the case of loans and borrowings and payables,
are recognised net of directly attributable transaction costs. The Company’s financial liabilities include trade and
other payables, loans and borrowings including bank overdrafts, financial guarantee contracts and derivative
financial instruments.
Subsequent Measurement:
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities, designated upon initial recognition at FVTPL, are designated as such at the initial date of
recognition, and only if the criteria in Ind AS 109 are satisfied.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that
are an integral part of the EIR. The EIR amortisation is included as finance costs in the Statement of Profit and Loss.
161
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
Embedded Derivatives:
An embedded derivative is a component of a hybrid (combined) instrument, that also includes a non-derivative
host contract – with the effect that some of the cash flows of the combined instrument vary in a way similar to
a standalone derivative. An embedded derivative causes some or all of the cash flows that would otherwise
be required by the contract to be modified according to a specified interest rate, financial instrument price,
commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable,
provided in the case of a nonfinancial variable, that the variable is not specific to a party to the contract. Re-
assessment only occurs if there is either a change in the terms of the contract that significantly modifies the
cash flows that would otherwise be required or a reclassification of a financial asset out of the fair value through
profit or loss. If the hybrid contract contains a host that is a financial asset within the scope of Ind AS 109, the
Company does not separate embedded derivatives. Rather, it applies the classification requirements contained
in Ind AS 109 to the entire hybrid contract. Derivatives embedded in all other host contracts are accounted for as
separate derivatives and recorded at fair value, if their economic characteristics and risks are not closely related
to those of the host contracts, and the host contracts are not held for trading or designated at fair value though
profit or loss. These embedded derivatives are measured at fair value with changes in fair value recognised in
profit or loss, unless designated as effective hedging instruments.
(a) Sales are recognised on transfer of significant risks and rewards of ownership of the goods to the buyer
as per the terms of contract and no uncertainty exists regarding the amount of consideration that will be
derived from sales of goods. It is measured at fair value of the consideration received net of goods and
service tax (GST) w.e.f. 1st July, 2017, discounts and volume rebates. Fertiliser price support under Company
Concession and other Scheme of Government of India is recognised based on the management’s estimate
taking into account the known policy parameters and input price escalation/de-escalation. Sales exclude self-
consumption of finished goods.
(b) Income from services is recognised (net of GST as applicable) as they are rendered, based on agreement/
arrangement with the concerned customers.
(c) Dividend income is accounted for when the right to receive the income is established.
(d) For all financial instruments measured at amortised cost or at fair value through Other Comprehensive Income,
interest income is recorded using the effective interest rate (EIR), which is the rate that exactly discounts the
estimated future cash payments or receipts through the expected life of the financial instrument to the gross
carrying amount of the financial asset.
(e) Interest income for all financial instruments measured at fair value through Other Comprehensive Income is
recognised in the Statement of Profit and Loss.
(f) Export incentives, insurance, railway and other claims, where quantum of accruals cannot be ascertained with
reasonable certainty, are accounted on acceptance basis.
162
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
Borrowing costs, that are attributable to the acquisition or construction or production of a qualifying asset, are
capitalised as part of the cost of such asset till such time the asset is ready for its intended use. A qualifying asset
is an asset that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing
costs are recognised as an expense in the period in which they are incurred.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are
recognised in the Statement of Profit and Loss in the period in which they are incurred.
Government grants, that are receivable towards capital investments under State Investment Promotion Scheme,
are recognised when they become receivable.
The benefit of a government loan at a below-market rate of interest is treated as a government grant, measured as
the difference between proceeds received and the fair value of the loan based on prevailing market interest rates,
and is being recognised in the Statement of Profit and Loss.
When the Company receives grants of non-monetary assets, the asset and the grant are recorded at fair value
amounts and released to profit or loss over the expected useful life in a pattern of consumption of the benefit of
the underlying asset.
Current income tax, relating to items recognised outside profit or loss, is recognised outside profit or loss (either
in Other Comprehensive Income or in equity). Current tax items are recognised in correlation to the underlying
transaction either in OCI or directly in equity. The management periodically evaluates positions taken in the tax
returns with respect to situations in which applicable tax regulations are subject to interpretation and established
provisions, where appropriate.
Deferred Tax:
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and
liabilities, and their carrying amounts for financial reporting purposes at the reporting date.
163
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
Deferred tax liabilities are recognised for all taxable temporary differences, except:
When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction
that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits
and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit
will be available, against which the deductible temporary differences, and the carry forward of unused tax credits
and unused tax losses can be utilised, except:
When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of
an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is
no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be
utilised. Unrecognised deferred tax assets are re-assessed at each reporting date, and are recognised to the extent
that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the
asset is realised or the liability is settled, based on tax rates (and tax laws), that have been enacted or substantively
enacted at the reporting date.
Deferred tax, relating to items recognised outside profit or loss, is recognised outside profit or loss (either in
Other Comprehensive Income or in equity). Deferred tax items are recognised in correlation to the underlying
transaction either in OCI or directly in equity. Deferred tax assets and deferred tax liabilities are offset, if a legally
enforceable right exists to set off current tax assets against current tax liabilities, and the deferred taxes relate to
the same taxable entity and the same taxation authority.
If the effect of the time value of money is material, provisions are determined by discounting the expected future
cash flows to net present value using an appropriate pre-tax discount rate that reflects current market assessments
of the time value of money and, where appropriate, the risks specific to the liability.
164
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
A present obligation that arises from past events, where it is either not probable that an outflow of resources will
be required to settle or a reliable estimate of the amount cannot be made, is disclosed as a contingent liability.
Contingent liabilities are also disclosed when there is a possible obligation arising from past events, the existence
of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not
wholly within the control of the Company.
Claims against the Company, where the possibility of any outflow of resources in settlement is remote, are not
disclosed as contingent liabilities.
Contingent assets are not recognised in the financial statements since this may result in the recognition of income
that may never be realised. However, when the realisation of income is virtually certain, then the related asset is
not a contingent asset and is recognised.
Warranty Provisions:
Provisions for warranty-related costs are recognised when the product is sold or service provided to the
customer. Initial recognition is based on historical experience. The initial estimate of warranty-related costs is
revised annually.
For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity
shareholders and the weighted-average number of shares outstanding during the period are adjusted for the
effects of all dilutive potential equity shares.
(a) Judgements:
In the process of applying the Company’s accounting policies, the management has made the following
judgements, which have the most significant effect on the amounts recognised in the financial statements.
Classification of Aditya Birla Renewables Limited, Aditya Birla Solar Limited and Aditya Birla Idea Payments
Bank Limited as Joint Ventures.
165
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
The Company holds, directly or through its subsidiary, more than half of equity shareholding in the following
entities. However, as per the shareholders’ agreement/statue, the Company needs to jointly decide with other
shareholders of respective entity on certain relevant activities. Hence, the same are being accounted as per
equity method of accounting.
(a) Aditya Birla Renewables Limited
(b) Aditya Birla Solar Limited
(c) Aditya Birla Idea Payments Bank Limited
• Share-based Payments:
The Company measures the cost of equity-settled transactions with employees using Black-Scholes
Model to determine the fair value of the liability incurred on the grant date. Estimating fair value for
share-based payment transactions requires determination of the most appropriate valuation model,
which is dependent on the terms and conditions of the grant.
166
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
This estimate also requires determination of the most appropriate inputs to the valuation model, including
the expected life of the share option, volatility and dividend yield, and making assumptions about them.
The assumptions and models used for estimating fair value for share-based payment transactions are
disclosed in Note 4.8
Leasehold Land
Leasehold land is valued basis the leasehold interest for the remaining duration of the lease.
Other Assets:
The cost approach has been adopted for fair valuing all the assets, The cost approach includes
calculation of replacement cost using price trends applied to historical cost and capitalisation of all
the indirect cost, these trends are on the basis of price indices obtained from recognised sources.
167
2.1 PROPERTY, PLANT AND EQUIPMENT AND OTHER INTANGIBLE ASSETS
168
(` in Crore)
Gross Block Depreciation/Amortisation Net Block
Addition on Assets
Addition Acquisition Transfered
Notes
on Merger of Rights on As at As at
As at of ABNL in Century De-merger As at As at 31st 31st
Current Year Ended 1st April, (Note Rayon of Financial 31st March, 1st April, For the Adjustments/ March, March,
FINANCIAL STATEMENTS
31st March, 2018 2017 4.11A) (Note 4.11B) Additions Services Deductions 2018 2017 Year Deductions Impairment 2018 2018
TANGIBLE ASSETS *
Freehold Land 186.30 589.77 - 1.66 - - 777.73 - - - - 777.73
Leasehold Land# 150.69 242.46 - 9.08 - 2.68 399.55 7.29 4.73 1.92 10.10 389.45
Leasehold Improvements 1.89 - - - - - 1.89 0.72 0.38 - 1.10 0.79
Buildings 1,005.96 357.72 - 91.98 16.63 0.64 1,438.39 126.83 57.82 0.01 184.64 1,253.75
Plant and Equipment 6,556.10 1,364.63 - 601.66 - 32.43 8,489.96 1,027.53 475.87 7.23 30.43 1,526.60 6,963.36
Furniture and Fixtures 30.62 7.38 - 11.79 - 0.24 49.55 13.21 7.60 0.14 20.67 28.88
Vehicles 95.91 7.96 - 19.19 0.01 4.50 118.55 33.32 17.22 2.44 48.10 70.45
Office Equipment 54.02 7.34 - 18.99 0.04 1.82 78.49 21.18 13.15 1.40 32.93 45.56
Salt Pans, Reservoir and 7.41 - - - - - 7.41 7.04 - - 7.04 0.37
Condensers
Railway Sidings 15.68 0.29 - 3.50 - - 19.47 9.48 0.64 - 10.12 9.35
Total Tangible Assets 8,104.58 2,577.55 - 757.85 16.68 42.31 11,380.99 1,246.60 577.41 13.14 30.43 1,841.30 9,539.69
STANDALONE
INTANGIBLE ASSETS
Computer Software 11.22 0.74 - 2.04 - 0.55 13.45 6.65 3.15 0.52 9.28 4.17
Value of Licence/Right to Use 36.11 - - 26.88 - - 62.99 13.44 6.01 - 19.45 43.54
Customer Relationship - 293.60 76.30 - - - 369.90 - 9.64 - 9.64 360.26
Production Formula - 19.00 - - - 19.00 - 1.43 - 1.43 17.57
Distribution - 49.90 - - - 49.90 - 1.50 - 1.50 48.40
Order Back Log - 7.50 9.20 - - - 16.70 - 9.03 - 9.03 7.67
Technical Know-how 2.88 - - - - - 2.88 1.35 0.42 - 1.77 1.11
Trade Mark 0.07 130.10 - 0.06 - - 130.23 0.01 10.53 - 10.54 119.69
Right to Manage and Operate - - 661.50 - - - 661.50 - 7.35 - 7.35 654.15
Manufacturing Faciliites
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
# The Leasehold Land classified as Finance Lease is recognised under PPE as substantially all the significant risk and rewards incidental to ownership of land under lease
have been transferred to the Company.
(` in Crore)
Gross Block Depreciation/Amortisation Net Block
As at As at As at As at As at
Previous Year Ended
1st April, 31st March, 1st April, 31st March, 31st March,
31st March, 2017
2016 Additions Deductions 2017 2016 For the Year Deductions 2017 2017
Notes
TANGIBLE ASSETS
Freehold Land 187.66 - 1.36 186.30 - - - - 186.30
Leasehold Land# 150.31 0.38 - 150.69 4.72 2.57 - 7.29 143.40
Leasehold Improvements 1.83 0.06 - 1.89 0.35 0.37 - 0.72 1.17
Buildings 977.70 29.52 1.26 1,005.96 78.40 48.50 0.07 126.83 879.13
Plant and Equipment 6,261.78 307.96 13.64 6,556.10 675.85 357.43 5.75 1,027.53 5,528.57
Furniture and Fixtures 25.40 5.56 0.34 30.62 8.37 5.05 0.21 13.21 17.41
Vehicles 90.96 10.10 5.15 95.91 21.30 15.20 3.18 33.32 62.59
Office Equipment 41.88 12.73 0.59 54.02 12.25 9.42 0.49 21.18 32.84
Salt Pans, Reservoir and 7.41 - - 7.41 6.57 0.47 - 7.04 0.37
Condensers
Railway Sidings 15.68 - - 15.68 7.92 1.56 - 9.48 6.20
Total Tangible Assets 7,760.61 366.31 22.34 8,104.58 815.73 440.57 9.70 1,246.60 6,857.98
INTANGIBLE ASSETS
Computer Software 8.74 2.48 - 11.22 4.55 2.10 - 6.65 4.57
Licence/Right to Use 22.36 13.75 - 36.11 10.55 2.89 - 13.44 22.67
Technical Know-how 2.88 - - 2.88 0.78 0.57 - 1.35 1.53
Trade Mark 0.07 - - 0.07 - 0.01 - 0.01 0.06
Total Intangible Assets 34.05 16.23 - 50.28 15.88 5.57 - 21.45 28.83
7,794.66 382.54 22.34 8,154.86 831.61 446.14 9.70 1,268.05 6,886.81
Capital Work-in-Progress (including Pre-Operative Expenses) 375.48
Total PPE 7,262.29
# The Leasehold Land classified as Finance Lease is recognised under PPE as substantially all the significant risk and rewards incidental to ownership of land under lease
have been transferred to the Company.
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
GRASIM
169
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
Notes:
(` in Crore)
As at As at
31st March, 2018 31st March, 2017
2.1.1 Leasehold and Freehold land includes cost of land for which lease deeds 75.33 75.74
are in the process of execution (Net Block)
The titles of the immovable assets transferred from ABNL and ABCIL 852.06 102.08
pursuant to the respective Scheme of Merger,
2.1.2 Building includes workers’ quarters mortgaged with State Government
against subsidies received:
Gross Block 0.45 0.45
Net Block 0.26 0.01
2.1.3 Assets Held on Co-ownership with other companies:
Gross Block 218.56 116.84
Net Block 190.98 93.05
The Company’s share in assets held under co-ownership-Leasehold Land ` 129.62 Crore (Previous Year: ` 79.48 Crore),
Buildings ` 72.76 Crore (Previous Year: ` 25.37 Crore), Plant and Equipment ` 0.40 Crore (Previous Year: ` 0.40 Crore),
Furniture and Fixtures ` 4.21 Crore (Previous Year: ` 4.10 Crore), Vehicles ` 0.07 Crore (Previous Year: ` 0.07 Crore ),
Office Equipment ` 7.89 Crore (Previous Year ` 7.43 Crore) .
2.1.4 PPE includes Capital Expenditure for Research and Development
Activities:
Gross Block 147.43 137.39
Net Block 105.15 104.84
Additions during the Year 15.78 32.11
Capital Work-in-Progress 4.70 3.04
2.1.5 Additions to PPE includes Capitalisation on Account of:
Finance Costs 4.78 -
2.1.6 Details of Property, Plant and Equipment capitalised under Finance Lease:
Leased assets are pledged as security for the related finance lease
liabilities {refer Note 2.16.1 (ii)}
Plant and Equipment include Gross Block ` 0.74 Crore and Net block
` 0.03 Crore {refer Note4.7.3 (iii)}
2.1.7 Pre-Operative Expenses Pending Allocation included in
Capital Work-in-Progress:
Expenditure Incurred during the Year:
Raw Materials Consumed 1.43 -
Employee Benefits Expense 8.08 0.50
Finance Costs 0.69 -
Power and Fuel 0.20 0.48
Consumption of Stores, Spare Parts and Components, Packing Materials 0.07 -
and Incidental Expenses
Repairs and Maintenance 5.61 -
Insurance 0.38 0.39
Rent 0.22 0.10
170
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
(` in Crore)
As at As at
31st March, 2018 31st March, 2017
Exchange Rate Difference Loss/(Gain) (Net) (0.02) -
Miscellaneous Expenses 13.81 0.65
30.47 2.12
Less: Income Earned during the Year
Sale of Trial Run Production 0.98 -
0.98 -
Total Pre-Operative Expenses Incurred during the Year 29.49 2.12
Add: Pre-Operative Expenditure Incurred upto Previous Year 2.44 0.32
Add: Transferred from ABNL pursuant to the Scheme of Merger 4.16 -
Less: Pre-Operative Expenditure Allocated to PPE during the Year 9.14 0.32
Less: Pre-Operative Expenditure Charged to the Statement of Profit and - -
Loss during the Year
Total Pre-Operative Expenses Pending Allocation 26.95 2.44
171
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
(` in Crore)
Number of
Face Shares/ As at As at
Value Securities 31st March, 2018 31st March, 2017
Joint Ventures: Carried at Cost
AV Group NB Inc., Canada, Class WPV 204,750 153.04 153.04
‘A’ Shares of aggregate value of
Canadian Dollar 38.25 Million
(Note 2.2.3)
Birla Jingwei Fibres Company WPV - 117.40 117.40
Limited, China, Shares of
aggregate value of RMB 174.53
Million (Note 2.2.3)
Birla Laos Pulp and Plantations US$ 1000 - - 95.71
Company Limited, Laos
(Note 2.2.5)
(Previous Year: 19,520 Shares)
Impairment in Value of - (55.43)
Investments
Bhubaneswari Coal Mining ` 10 33,540,000 33.54 33.54
Limited
AV Terrace Bay Inc., Canada CAD 1 28,000,000 156.36 156.36
(Note 2.2.3)
Aditya Group AB, Sweden SEK 1000 50 274.89 274.89
(Note 2.2.3)
Aditya Birla Renewables Limited* ` 10 27,936,000 27.94 -
Aditya Birla Solar Limited* ` 10 30,326,602 30.33 -
793.50 775.51
Associates: Carried at Cost
Idea Cellular Limited #* (Note ` 10 1,008,540,115 7,310.92 171.01
2.2.3) (Previous Year: 171,013,894
Shares)
Aditya Birla Science & ` 10 9,899,500 11.35 7.80
Technology Company
Private Limited*
(Previous Year: 7,799,500 Shares)
Aditya Birla Idea Payments Bank ` 10 230,680,885 230.68 -
Limited*
7,552.95 178.81
172
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
(` in Crore)
Number of
Face Shares/ As at As at
Value Securities 31st March, 2018 31st March, 2017
Others: Carried at Fair Value
through Other Comprehensive
Income (FVTOCI) {Note 2.2.6 (a)}
Thai Rayon Public Company Thai Baht 1 13,988,570 154.58 123.77
Limited, Thailand #
P.T. Indo Bharat Rayon Co. US$ 100 5,000 505.01 347.11
Limited, Indonesia
Aditya Birla Ports Limited ` 10 - - 0.07
(Previous Year: 50,000 Shares)
Aditya Birla Nuvo Limited # ` 10 - - 509.25
(Previous Year: 3,345,816 Shares)
(Note 2.2.7)
Larsen & Toubro Limited #$ `2 3,947,803 517.52 415.20
(Previous Year: 2,631,869 Shares)
Hindalco Industries Limited `1 88,048,812 1,889.09 1,064.12
#* (Previous Year: 54,542,475
Shares)
Indophil Textile Mills Inc., Peso 10 422,496 2.87 3.30
Philippines
Birla International Limited - Isle CHF 100 2,500 4.01 3.96
of Man
Aditya Birla Fashion and Retail ` 10 87,380,613 1,318.14 267.58
Limited #* (Previous Year:
17,398,243 Shares)
JSW Steel (Salav) Limited ` 10 - - 0.10
(Previous Year: 1,400,000 Shares)
4,391.22 2,734.46
Investments in Preference Shares:
Carried at Fair Value through Profit
or Loss (FVTPL) {2.2.6 (c)}
Joint Ventures:
6% Cumulative Redeemable WPV 6,750,000 22.74 20.58
Retractable, Non-Voting Preferred
Shares of AV Group NB Inc.,
Canada of aggregate value of
Canadian Dollar 6.75 Million
1% Redeemable Preference WPV 160,000 46.32 42.37
Shares of Aditya Group AB,
Sweden of aggregate value of
USD 8 Million
173
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
(` in Crore)
Number of
Face Shares/ As at As at
Value Securities 31st March, 2018 31st March, 2017
Others:
5.25% Cumulative Redeemable ` 100 4,000,000 39.09 22.66
Preference Shares of Aditya
Birla Health Services Limited@*
(Previous Year: 2,500,000 Shares)
11% Redeemable, Cumulative ` 100 500,000 0.85 0.76
Non-Convertible Preference
Shares of TANFAC Industries
Limited
8% Cumulative & Redeemable ` 10 500,000 0.82 -
Preference Shares of Aditya Birla
Fashion & Retail Limited*
8% Preference Shares of Birla ` 10 200 ! -
Management Centre Services
Limited
! Represents amount of ` 2000
109.82 86.37
Investments in Debentures and
Bonds: Carried at FVTOCI #
{Note 2.2.6 (b)}
8.10 % Housing and Urban ` 1000 195,000 20.74 21.04
Development Corporation
Limited - Tax-Free Bond - 2022
7.18 % Indian Railway Finance ` 1000 400,000 41.61 41.82
Corporation Limited - Tax-Free
Bond - 2023
7.34 % Indian Railway Finance ` 1000 600,000 64.91 65.43
Corporation Limited - Tax-Free
Bond - 2028
8.20 % National Highways ` 1000 147,238 15.70 15.94
Authority of India - Tax-Free
Bond - 2022
8.20 % Power Finance ` 1000 119,546 12.74 12.94
Corporation Limited - Tax-Free
Bond - 2022
11.50 % Family Credit Limited ` 1,000,000 112 12.04 12.19
Perpetual Taxable Bond - 2021
9.50% State Bank of India Taxable ` 10,000 107 0.11 0.12
Bond - 2025
167.85 169.48
174
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
(` in Crore)
Number of
Face Shares/ As at As at
Value Securities 31st March, 2018 31st March, 2017
Investments in various Mutual ` 10 659,050,000 742.81 776.56
Funds Units: Carried at Fair Value
through Profit or Loss #
{Note 2.2.6 (c)}
(Previous Year: 711,050,000 units)
33,586.74 7,424.09
All shares are fully paid-up, unless otherwise stated
WPV - Without Par Value
# Quoted Investments
@ Each Preference share is optionally convertible in 10 Equity Shares of ` 10/- each fully paid up on the expiry of a period of 15
years from the date of allotment.
^ Application has been filed for striking off the name of the Company under Section 248 of the Companies Act, 2013.
$ Bonus Shares received during the year in the ratio of 1:2.
* Investment acquired on merger of ABNL {Refer Note no 4.11A(ii)}
175
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
(` in Crore)
As at As at
31st March, 2018 31st March, 2017
Unquoted:
Financial Investments measured at FVTOCI
Equity Shares 511.89 354.54
Sub-Total (a) 511.89 354.54
Financial Investments measured at FVTPL
Preference Shares 109.82 86.37
Sub-Total (b) 109.82 86.37
Financial Investments carried at Cost
Equity Shares 1,150.92 849.96
Government or Trust Securities - -
Sub-Total (c) 1,150.92 849.96
Total (a + b + c) 1,772.63 1,290.87
2.2.3 The Investments in Company’s Joint Ventures, AV Group NB Inc., AV Terrace Bay Inc., Birla Jingwei Fibres
Company Limited, Aditya Group AB; and its Associate, Idea Cellular Limited, are subject to maintenance
of specified holding by the Company until the credit facility provided by certain lenders to the respective
companies are outstanding. Without guaranteeing the repayment to the lenders, the Company has also
agreed that the affairs of the Joint Venture and Associates will be managed through its nominee directors on
the boards of respective borrowing companies, in such a manner that they are able to meet their respective
financial obligations.
2.2.4 Grasim Bhiwani Textiles Limited (GBTL) has ceased to be a subsidiary w.e.f. 10th July, 2017, as the Company
has divested its entire shareholding in GBTL.
The Company has incurred a loss of ` 53.96 Crore on the said divestment, which has been disclosed as
exceptional item in the current year (Note 3.14).
2.2.5 During the current year, Birla Laos Pulp and Plantations Company Limited, Laos, has been reclassified from
non-current investment to current investment, as the Company has entered into an agreement for disposal,
and accordingly the Company has provided impairment in value of investment ` 5.94 Crore (Note 3.9.2).
176
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
2.2.7 The Company previously held around 2.57% stake in Aditya Birla Nuvo Limited, which was classified as
FVTOCI Investment during the previous year, and change in fair value of ` 475.99 Crore was recognised in
OCI as on 31st March, 2017. Total change in fair value till date of merger accumulated in OCI amounted to
` 588.29 Crore (positive change in fair value of ` 112.3 Crore in the current year up to the date of merger)
was transferred to Capital Reserve.
2.3.1 Disclosure as per Regulation 34(3) of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 and Section 186 of the Companies Act, 2013
(a) Loans given to Subsidiaries and Associates (including Current and Non-current Loans):
(` in Crore)
Maximum Balance Amount
Outstanding during the Outstanding
Name of the Companies Terms
Current Previous Current Previous
Year Year Year Year
Subsidiaries:
Samruddhi Swastik Trading and Payable on 0.20 - - -
Investments Limited call, interest
rate 7.5% p.a.
Aditya Birla Chemicals (Belgium) Expenditure - 0.09 - 0.09
BVBA to be
recovered
Grasim Bhiwani Textiles Limited Interest rate 16.29 18.61 - 16.29
8.75% p.a.,
repayment in
3 years
Joint Ventures:
177
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
(` in Crore)
Maximum Balance Amount
Outstanding during the Outstanding
Name of the Companies Terms
Current Previous Current Previous
Year Year Year Year
Aditya Birla Solar Limited Interest rate 4.30 - 4.30 -
8.60% p.a.,
repayment in
72 days
Aditya Birla Renewables Limited Interest rate 16.80 - - -
8.60% p.a.,
repayment
in 90 days
(with early
repayment
option)
Aditya Birla Renewables SPV1 Interest rate 7.15 - - -
Limited 8.60% p.a.,
repayment in
90 days
AV Group NB Inc Interest rate 35.46 35.76 - 32.80
6% p.a.,
repayment on
demand
Associates:
Aditya Birla Science & Technology Payable on 24.94 11.83 22.74 11.35
Company Private Limited call, interest
rate higher
of G Sec and
Bank rate
Aditya Birla Idea Payments Interest rate 17.75 - - -
Bank Limited 8.60% p.a.,
repayment in
90 days
Total 122.89 66.29 27.04 60.53
The Loans have been utilised for meeting their business requirements.
178
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
2.6 INVENTORIES
(Valued at lower of cost and net realisable value, unless otherwise stated)
(` in Crore)
As at 31st March, 2018 As at 31st March, 2017
In Hand In Transit Total In Hand In Transit Total
Raw Materials 1,101.93 521.54 1,623.47 697.66 467.96 1,165.62
Work-in-Progress 161.83 - 161.83 32.40 - 32.40
Finished Goods 422.54 67.06 489.60 235.07 74.22 309.29
Stock-in-Trade 23.03 - 23.03 0.53 - 0.53
Stores and Spare Parts 275.64 12.59 288.23 208.55 12.10 220.65
Waste/Scrap (valued at Net Realisable 5.50 - 5.50 4.25 - 4.25
Value)
1,990.47 601.19 2,591.66 1,178.46 554.28 1,732.74
2.6.1 The Company follows suitable provisioning norms for writing down the value of Inventories towards slow
moving, non-moving and surplus inventory. Provision for the year ` 3.99 Crore (31st March, 2017, ` 1.96
Crore). Inventory values shown above are net of the provisions.
2.6.2 Working Capital Borrowings are secured by hypothecation of inventory of the Company.
179
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
2.7.3 The Company holds 33.33% stake in its Joint Venture, Aditya Birla Elyaf Sanayi Ve Ticaret Anonim Sirketi
(ABEST), Turkey. ABEST has decided not to pursue its project in Turkey. As ABEST plans to return the capital
to its shareholders, the Company has reclassified its investment in ABEST from Non - Current Investment
to Current Investment. In the previous year, ABEST has returned ` 42.68 Crore, and the difference between
Gross investment amount and actual receipt has resulted in an exchange loss of ` 13.52 Crore due to
currency depreciation of Turkey.
180
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
2.8.1 Working Capital Borrowings are secured by hypothecation of Book Debts of the Company.
181
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
(` in Crore)
As at As at
31st March, 2018 31st March, 2017
- There are no restriction with regard to cash and cash equivalents as at
the end of reporting period and prior period .
- There are no amounts due and outstanding to be credited to the
Investor Education and Protection Fund as at 31st March, 2018 and
31st March, 2017.
* Includes
Lodged as Security with Government Departments - 0.51
Unclaimed Fractional Warrants 0.83 0.10
182
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
2.14.3 Reconciliation of the Number of Equity Shares Outstanding (including Share Capital Suspense)
(` in Crore)
Number of Shares As at As at
Current Previous 31st March, 31st March,
Year Year 2018 2017
Outstanding as at the beginning of the year 466,865,405 93,360,985 93.37 93.36
(Pre-split)
Adjustment for Sub-Division of Equity Shares - 373,443,940 - -
Outstanding as at the beginning of the year 466,865,405 466,804,925 93.37 93.36
(Post-split)
183
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
(` in Crore)
Number of Shares As at As at
Current Previous 31st March, 31st March,
Year Year 2018 2017
Issued during the year to the Shareholders of 190,462,665 - 38.09 -
ABNL pursuant to the Scheme of Merger
[Note 4.11 (A)]
Issued during the year under Employee Stock 71,660 106,580 0.02 0.02
Option Scheme
Less: Cancellation from Shares Capital Suspense - 46,100 - 0.01
Account
Outstanding as at the end of the year 657,399,730 466,865,405 131.48 93.37
2.14.6 List of Shareholders holding more than 5% Shares in the Equity Share
Capital of the Company
Current Year Previous Year
No. of Shares % Holding No. of Shares % Holding
Turquoise Investments and Finance Private 42,119,836 6.41% 29,541,705 6.33%
Limited
Trapti Trading and Investments Private 41,525,217 6.32% 27,389,315 5.87%
Limited
Life Insurance Corporation of India 38,176,351 5.81% 28,952,784 6.20%
TGS Investment and Trade Private Limited 35,882,075 5.46% - 0%
IGH Holdings Private Limited 33,491,293 5.09% - 0%
2.14.7 Equity Shares of ` 2/- each (Previous Year: 45,396,998 6.91% 48,534,477 10.40%
` 2/- each) represented by Global Depository
Receipts (GDRs) (GDR holders have voting
rights as per the Deposit Agreement)
2.14.8 Shares reserved for issue under options and contracts, including the terms and amounts:
For details of Shares reserved for issue under the Employee Stock Options Plan (ESOP) of the Company
(Refer Note 4.8).
2.14.9 Aggregate Number of Equity Shares 197,770,950 7,308,420
allotted as fully paid-up during the period
of five years immediately preceding the
reporting date without payment being
received in cash
184
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
The Description of the nature and purpose of each reserve within equity is as follows:
(a.) Securities Premium Reserve: Securities premium reserve is credited when shares are issued at premium. It
can be used to issue bonus shares, to provide for premium on redemption of shares or debentures, write-off
equity related expenses like underwriting costs, etc.
(b.) General Reserve: It is a free reserve which is created by appropriation from profits of the current year and/or
undistributed profits of previous years, before declaration of dividend duly complying with any regulations
in this regard.
(c.) Capital Reserve: Capital Reserve is mainly the reserve created during business combination of erstwhile
Aditya Birla Chemicals (India) Limited and Aditya Birla Nuvo Limited with the Company.
(d.) Debenture Redemption Reserve: The Company has issued redeemable non-convertible debentures.
Accordingly, the Companies (Share capital and Debentures) Rules, 2014 (as amended), requires the
Company to create DRR out of profits of the Company available for payment of dividend. DRR is required to
be created for an amount which is equal to 25% of the value of debentures issued.
(e.) Debt Instrument through OCI: It represents the cumulative gains/(losses) arising on the fair valuation of
debt instruments measured at fair value through OCI, net of amount reclassified to Statement of Proft and
Loss on disposal of such instruments.
(f.) Equity Instrument through OCI: It represents the cumulative gains/(losses) arising on the revaluation of
Equity Shares (other than investments in Subsidiaries, Joint Ventures and Associates, which are carried at
cost) measured at fair value through OCI.
(g.) Hedging Reserve: It represents the effective portion of the fair value of forward contracts, designated as
cash flow hedge.
(h.) Employee Share Option Outstanding: The Company has stock option schemes under which options to
subscribe for the Company’s shares have been granted to certain employees, including key management
personnel. The share-based payment reserve is used to recognise the value of equity-settled share-based
payments provided to employees, as part of their remuneration.
185
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
2.16.1 Nature of Security, Repayment Terms and Break-up of Current and Non-Current
(` in Crore)
Current Year Previous Year
Current * Non-Current Current * Non-Current
Secured Long-term Borrowings:
(i) Rupee Term Loan from Banks
(a) Rupee Term Loan secured by first charge - - 39.38 -
on movable fixed assets acquired facility
with exclusive charge on certain assets,
of the Company located at Nagda (SFD)
under the Kharach (Staple Fibre Division)
and Harihar (Staple Fibre and Pulp
Divisions).
Repayment Terms: 32 quarterly
Instalments starting from 1st July, 2010.
1st Tranch of 8 instalments of ` 5.63 Crore
each, 2nd Tranch of 8 instalments of ` 7.50
Crore each, 3rd Tranch of 8 instalments
of ` 11.25 Crore each, and 4th Tranch of 8
instalments of ` 13.13 Crore each.
(b) Rupee Term Loan secured by first charge 346.50 - 202.50 346.50
on the entire Plant and Machinery of
the Company located at Vilayat (Grasim
Cellulosic Division).
Repayment Terms: 20 quarterly
instalments starting from 4th April, 2014.
1st Tranch of 2 instalments of ` 18 Crore
each, 2nd Tranch of 4 instalments of
` 22.50 Crore each, 3rd Tranch of 4
instalments of ` 33.75 Crore each, 4th
Tranch of 4 instalments of ` 45 Crore
each, 5th Tranch of 4 instalments of
` 56.25 Crore each, and 6th Tranch of 2
instalments of ` 117 Crore each.
186
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
(` in Crore)
Current Year Previous Year
Current * Non-Current Current * Non-Current
(c) Rupee Term Loan secured by exclusive 5.91 23.79 4.23 29.70
charge on specific movable fixed assets
or 1st pari-passu charge on movable
fixed assets of Nagda (Staple Fibre
Division).
Repayment Terms: 20 quarterly
instalments starting from 31st August,
2016. 1st Tranch of 4 instalments of ` 0.82
Crore each, 2nd Tranch of 4 instalments
of ` 1.14 Crore each, 3rd Tranch of 4
instalments of ` 1.59 Crore each, 4th
Tranch of 4 instalments of ` 2.05 Crore
each, and 5th Tranch of 4 instalments of
` 3.50 Crore each.
(d) Term loan secured by way of first pari 1.73 11.99 - -
passu charge over movable assets of
the Company’s Rayon Division Plant
at Veraval and Textile Division Plant at
Rishra.
Repayment Terms: 21 quarterly
instalments from 19th December, 2016.
1st Tranch of 4 instalments of ` 0.32
Crore each, 2nd Tranch of 4 instalments
of ` 0.39 Crore each, 3rd Tranch of 4
instalments of ` 0.47 Crore each, 4th
Tranch of 4 instalments of ` 0.63 Crore
each, and 5th Tranch of 5 instalments of
` 1.70 Crore each.
(e) Term loan secured by way of first pari 18.00 11.00 - -
passu charge on movable fixed assets
(save and except-current assets ) of
the Company’s Rayon Divison Plant at
Veraval, Textile Division Plant at Rishra.
Repayment Terms : 10 half yearly
instalments from 30th June 2015. 1st
Tranch of 4 instalments of ` 0.50 Crore
each, 2nd Tranch of 2 instalments
of ` 1.00 Crore each, 3rd Tranch of 2
instalments of ` 9.00 Crore each, 4th
Tranch of 1 installment of ` 10.00 Crore,
and last installment of ` 1.00 Crore.
(f) Term loan secured by way of first pari
passu charge created by hypothecation
of the entire movable fixed assets of the
Company’s Excel Fiber Divison Plant at
Kharach.
187
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
(` in Crore)
Current Year Previous Year
Current * Non-Current Current * Non-Current
Repayment Terms: 9 half yearly - 62.50 - -
instalments from 1st April 2020. 1st
Tranch of instalment of ` 6.90 Crore, and
2nd Tranch of 8 instalments of ` 6.95
Crore each.
(g) Term loan secured by way of first pari 4.49 12.34 - -
passu charge on existing and future
movable fixed assets of the Indian
Rayon Divison Plant at Gujarat and
Textile Division Plant at West Bengal.
The Charge to be shared with HDFC
Bank and SBI.
Repayment Terms: 20 quarterly
instalments from 3rd September, 2016.
1st Tranch of 4 instalments of ` 0.56
Crore each, 2nd Tranch of 8 instalments
of ` 1.12 Crore each, 3rd Tranch of 4
instalments of ` 1.35 Crore each, and 4th
Tranch of 4 instalments of ` 1.46 Crore
each.
(h) Term loan secured by exclusive charge 9.66 9.66 - -
on the specific assets of the proposed
expansion of the Company’s Rayon
Divison Plant at Veraval and Textile
Division Plant at Rishra.
Repayment Terms: 10 half-yearly
instalments from 29th July, 2015. 1st
Tranch of 3 instalments of ` 0.74 Crore
each, 2nd Tranch of 3 instalments of
` 1.48 Crore each and 3rd Tranch of 4
instalments of ` 4.83 Crore each.
Effective cost for the above loans are in
the range of 4.83% to 4.22% per annum.
(Previous Year: in the range of 6.81% to
4.83% per annum).
(ii) Finance Lease Liability
Finance Lease Obligation is secured by 0.23 - - -
hypothecation of plant and machinery
taken on lease Repayment Terms : Lease
obligation plus interest is payable in 19
quarterly instalments of ` 0.06 Crore
each.
Effective cost for the above loan is 8.98%
per annum.
188
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
(` in Crore)
Current Year Previous Year
Current * Non-Current Current * Non-Current
Unsecured Long-Term Borrowings:
(a) Foreign Currency Term Loan from Banks
Foreign Currency Loan from Bank - 194.07 - -
Repayment Terms: 3 equal yearly
installments of ` 65.25 Crore each from
20th August 2019.
Effective cost for the above loan is 8.19%
per annum.
(b) Non- Convertible Debentures
(i) 9.00% 30th Series Non-Convertible - 209.34 - -
Debentures
Repayment Terms: Redeemable at par
on 10th May 2023.
(ii) 8.68% 31st Series Non- Convertible - 305.35 - -
Debentures
Repayment Terms: Redeemable at par
on 2nd Februray 2020.
- The Company has rights to keep
this debentures alive for the
purpose of reissue.
(c) Deferred Sales Tax Loans (Interest Free)
(Commercial Tax Department)
(from Gujarat State Government)
- Repayable in six annual instalments - - 10.89 -
starting from 31st May, 2012
- Repayable after ten years from the - - - -
respective year in which the actual
tax was collected, starting from 14th
March, 2011
(d) Industrial Investment Promotion Scheme
- 2012
(At Amortised Cost) (from Uttar Pradesh
State Government)
- Repayable on 27th March, 2022 - 0.66 - 0.60
- Repayable on 7th August, 2023 - 3.64 - 3.33
- Repayable on 25th December, 2023 - 3.88 - 3.55
- Repayable on 29th October, 2024 - 4.67 - -
- Repayable on 30th November, 2024 - 0.27 - -
Total Unsecured Borrowings (II) - 721.88 10.89 7.48
Total Borrowings (I + II) 386.52 853.16 257.00 383.68
* Amount disclosed as Current Maturities of Long-term Debts under the head ‘Other Current Financial Liabilities’ (Note 2.23)
189
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
2.16.2 Maturity Profile of Non-Current Borrowings (including Current Maturities) is as set out below:
(` in Crore)
Maturity Profile
Within 1 Years 2-4 Years 5-6 Years 7 Years &
Above
Secured:
Rupee Term Loans from Banks 386.29 131.27 - -
Finance Lease Obligation 0.23 - - -
{Refer Note 4.7.3(iii)}
Unsecured
Deferred Sales Tax Loans - - 0.95 20.33
(includes amount recognised in
Notes 2.20 and 2.24)
Non-Convertible Debentures - 300.00 200.00 -
Foreign Currency Loans - 195.75 - -
Total Current Year 386.52 627.02 200.95 20.33
Previous Year 257.00 372.70 16.65 -
2.16.3 - Foreign Currency Loans have been fully hedged for foreign exchange and interest rate fluctuation.
- The above figures are as per IND AS (including Mark to Market and Amortisation)
190
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
191
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
2.21.1 Working Capital Borrowings are secured by hypothecation of stocks and book debts of the Company.
192
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
193
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
2.25.1
Movement of provisions during the year as required by Ind AS - 37 “Provisions, Contingent Liabilities and
Contingent Asset”.
(a) Provision for Cost of Transfer of Assets:
(` in Crore)
As at As at
31st March, 2018 31st March, 2017
Opening Balance 71.68 83.95
Add: Provision during the year 213.59 -
Less: Utilisation during the year 25.62 12.27
Less: Unused amount reversed 24.78 -
Closing Balance 234.87 71.68
During the current year, provision for asset transfer cost relates to merger of ABNL, which has been made
based on substantial degree of estimation. Outflow against the same is expected at the time of regulatory
process of registration of assets owned by ABNL in the name of the Company.
194
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
195
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
196
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
3.7.1 Expenses on Employee Stock Option Scheme are net of recovery 0.69 0.47
from a Subsidiary Company against options granted to the
employees of the Subsidiary
197
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
3.9.3 Auditors’ Remuneration (excluding Service Tax /GST) Charged to the Statement of Profit and Loss (included
under Miscellaneous Expenses)
(` in Crore)
Current Year Previous Year
Payments to Statutory Auditors:
Audit Fee 2.60 1.52
Tax Audit Fee 0.20 0.11
Fees for Other Services 0.11 0.09
Reimbursement of Expenses 0.07 0.07
198
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
3.12 Revenue Expenditure on Research and Development included in different 55.13 42.07
heads of expenses in the Statement of Profit and Loss
3.13 Donations include contribution to AB General Electoral Trust. The Trust uses 8.00 13.00
such funds for contribution for Political purposes.
199
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
(b) an amount of ` 53.96 Crore towards loss on sale of 100% equity held by the Company in Grasim Bhiwani
Textiles Limited, a wholly owned subsidiary of the Company.
(c) an amount of ` 24.78 Crore towards write back of provision of stamp duty related to merger of Aditya Birla
Chemicals with the Company in earlier years.
(d) an amount of ` 30.43 Crore towards Impairment in value of Property, Plant and Equipment.
200
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
201
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
(` in Crore)
Sr. Nature of Statute Brief Description of Contingent Liabilites As at As at
No. 31st March, 2018 31st March, 2017
-D emand notice disputing availment of Cenvat 2.58 -
Credit on capital goods alleging that the capital
goods were exclusively used for manufacture of
exempted products
-D emand disputing quantum of Cenvat Credit 2.13 -
reversed on clearance of used capital goods
-D epartment appeal against CESTAT order in 1.64 1.55
favour of the Company in the matter of demand
of Excise Duty disputing valuation of Caustic
Soda Lye supplied to other Units
- Appeal before CESTAT against denial of Cenvat 1.77 -
Credit taken suo-moto after reversing in
response to Departmental audit objection
-D epartment appeal before High Court against 1.11 -
the order of CESTAT allowing Cenvat Credit on
opening stock despite procedural lapses
-D emand of duty on bleached fabric captively 1.10 -
consumed during May 1994 to August 1994
- Various cases demanding Excise Duty on 10.27 2.84
removal of capital goods, removal of mercury,
including value of packing material in assessable
value, disallowance of Cenvat Credit on packaing
material used for exempted goods etc
III Service Tax - The - D enial of Cenvat Credit on input services 36.19 -
Finance Act, 1994 alleging not used for providing output services
-D emand of service tax under reverse charge 7.94 -
mechanism alleging import of services
-D emand of service tax on goods transportation 7.18 6.04
agency services through payment in cash/ PLA
instead of payment made by the Company
through Cenvat Balance
-S CN disputing transfer of Cenvat Credit by 6.28 -
Aditya Birla Minacs IT Services Limited and Birla
Technologies Limited to Aditya Birla Minacs
Worldwide Limited on merger
-D emand towards availment of ineligible Cenvat 2.69 -
Credit although reversed subsequently
-D enial of Cenvat Credit on outward 1.77 -
transportation charges
- Appeal before CESTAT against denial of cenvat 1.20 -
credit treating exports as exempt output services
202
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
(` in Crore)
Sr. Nature of Statute Brief Description of Contingent Liabilites As at As at
No. 31st March, 2018 31st March, 2017
- Various cases demanding service tax on banking 7.30 2.14
and financial services availed, Cenvat Credit
availed on goods and transportation agency
services based on transporter's invoice, Cenvat
Credit of services used for renovation and
repairs, rejection of refund claims, reversal of
credit under Rule 6 of Cenvat Credit Rules, 2004,
Cenvat Credit on Rent a Cab services, outdoor
catering, etc
IV Entry Tax laws of - D epartment appeal before the Karnataka High 8.31 7.16
various states Court in the matter of levy of Special Tax on
Entry of Goods
-D emand of entry tax in the State of Uttar 3.75 3.42
Pradesh pending before the High Court
- Other entry tax disputes 0.21 -
V Sales Tax Act/ -D emand towards nonsubmission of various 12.61 -
Commercial Tax forms, disallowance of input credit, short
Act of various reversal of credit and other matters
states
VI The Income Tax -D emand u/s 201(1) & 201(1A) for non-deduction 102.12 -
Act, 1961 of tax at source on payment to non-resident for
purchase of equity shares in Indian Company
-D emand towards various disallowances 21.38 -
contested in appeals (disallowance u/s 14A,
disallowance of additional depreciation, transfer
pricing adjustments, penalty, etc)
VII Other Statutes/ -D emand of water drawal charges and water 182.10 -
Other Claims reservation charges by Irrigation Department
-F uel surcharge demand raised by Bihar State 49.33 59.77
Electricity Board
- Demand of maintenance charges on land allotted 21.32 -
by State Government
-D emand towards contribution to Infrastructure 15.86 13.61
Fund and charges for time limit extension for
use of industrial plot
-L abour re-instatement, back wages, workmen 10.87 4.93
compensation and salary structure cases
-C laims by various suppliers and contractors on 7.07 9.26
terms of contract, moblisation loss, etc
-H igher price demanded in respect of land 3.67 3.54
acquired through State Government
-L ease rent demand at increased rate by Kandla 2.71 10.54
Port Trust
-D emand by Competition Commission of India 2.30 -
for supply of Poly Aluminum Chloride
203
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
(` in Crore)
Sr. Nature of Statute Brief Description of Contingent Liabilites As at As at
No. 31st March, 2018 31st March, 2017
-D emand of liquidated damages by Bihar State 2.27 -
Industrial Development Corporation
-D ispute on price for supply of bamboo by 2.06 -
Government of Kerala
-D emand for supply of water at higher rate 2.03 2.53
contested by the Company
-L and lease rent demand at higher rate 1.78 -
demanded by Uttar Pradesh State Industrial
Development Corporation
-D emand of power charges at higher rate in 1.02 -
respect of power drawn during peak hours
- Various other cases pertaining to Claims by 6.09 3.77
Railways, Electricity Board for lower electricity
consumption, Stamp Duty dispute, Property Tax
Arrears, Industrial Disputes, Railways licence fee
demand, Textile Cess on readymade garments,
Claim by various Customer, etc
Total 638.31 249.18
Cash outflows for the above are determinable only on receipt of judgements pending with various authorities/courts/Tribunals
204
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
205
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
Subsidiaries
Star Cement Co. LLC, Dubai, UAE Subsidiary’s Subsidiary
Star Cement Co. LLC, RAK, UAE Subsidiary’s Subsidiary
Al Nakhla Crusher LLC, Fujairah, UAE Subsidiary’s Subsidiary
Arabian Cement Industry LLC, Abu Dhabi, UAE Subsidiary’s Subsidiary
Arabian Gulf Cement Co. WLL, Bahrain Subsidiary’s Subsidiary
Emirates Power Company Limited, Bangladesh Subsidiary’s Subsidiary
Emirates Cement Bangladesh Limited, Bangladesh Subsidiary’s Subsidiary
UltraTech Cement SA (PTY), South Africa Subsidiary’s Subsidiary
PT UltraTech Mining Indonesia, Indonesia Subsidiary’s Subsidiary
UltraTech Cement Mozambique Limitada, Mozambique Subsidiary’s Subsidiary
PT UltraTech Investments Indonesia, Indonesia Subsidiary’s Subsidiary
PT UltraTech Cement, Indonesia Subsidiary’s Subsidiary
Gotan Lime Stone Khanij Udyog Private Limited Subsidiary’s Subsidiary
Awam Minerals LLC, Oman Subsidiary’s Subsidiary
PT UltraTech Mining Sumatera Subsidiary’s Subsidiary
Bhagwati Lime Stone Company Private Limited Subsidiary’s Subsidiary
Aditya Birla Capital Limited (ABCL) Subsidiary
Aditya Birla PE Advisors Private Limited Subsidiary’s Subsidiary
Aditya Birla My Universe Limited Subsidiary’s Subsidiary
Aditya Birla Trustee Company Private Limited Subsidiary’s Subsidiary
Aditya Birla Money Limited Subsidiary’s Subsidiary
Aditya Birla Commodities Broking Limited Subsidiary’s Subsidiary
Aditya Birla Financial Shared Services Limited Subsidiary’s Subsidiary
Aditya Birla Finance Limited Subsidiary’s Subsidiary
Aditya Birla Insurance Brokers Limited Subsidiary’s Subsidiary
Aditya Birla Housing Finance Limited Subsidiary’s Subsidiary
Aditya Birla Money Mart Limited Subsidiary’s Subsidiary
Aditya Birla Money Insurance Advisory Services Limited Subsidiary’s Subsidiary
Aditya Birla Sun Life Insurance Company Limited Subsidiary’s Subsidiary
Aditya Birla Sun Life Pension Management Limited Subsidiary’s Subsidiary
Aditya Birla Health Insurance Co. Limited Subsidiary’s Subsidiary
ABCAP Trustee Company Private Limited Subsidiary’s Subsidiary
Aditya Birla ARC Limited Subsidiary’s Subsidiary
206
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
207
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
208
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
(` in Crore)
Nature of Transactions Current Year Previous Year
Finance Cost:
Aditya Birla Sun Life Insurance Company Limited 3.26 -
Total 3.26 -
Purchases of Goods/Payment of Other Services (Net of Cenvat
Credit, if available)
Grasim Bhiwani Textiles Limited 0.27 0.53
UltraTech Cement Limited 7.58 3.07
AV Group NB Inc. 727.04 725.07
Aditya Group AB 334.77 504.14
Aditya Birla Science & Technology Company Private Limited 24.62 24.94
Idea Cellular Limited 5.91 1.82
Aditya Birla Sun Life Insurance Company Limited 1.19 -
Aditya Birla Health Insurance Company Limited 1.78 -
Birla Jingwei Fibres Company Limited 0.61 -
Others 0.71 0.27
Total 1,104.48 1,259.84
Managerial Remuneration Paid
Shri Dilip Gaur, Managing Director 6.30 4.23
Shri Sushil Agarwal, Whole-time Director and CFO 6.46 5.46
Total 12.76 9.69
209
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
(` in Crore)
Nature of Transactions Current Year Previous Year
Aditya Birla Renewables Limited 23.95 -
Aditya Birla Solar Limited 2.00 -
Aditya Birla Renewables SPV-1 7.15 -
Aditya Birla Chemicals (Belgium) BVBA 0.09 -
Aditya Birla Idea Payments Bank Limited 17.75 -
Total 102.43 16.09
Purchase of Mutual Funds and Bonds:
Samruddhi Swastik Trading and Investments Limited - 16.00
Total - 16.00
Investments in Equity Shares:
Birla Laos Pulp & Plantation Company Limited - 0.53
Shaktiman Mega Foods Park Private Limited 0.01 -
Aditya Birla Renewables Limited 26.71 -
Aditya Birla Idea Payments Bank Limited 103.20
Aditya Birla Investment Limited 10.00 -
Aditya Birla Elyaf Sanayi Ve Ticaret Anonim Sirketi - (56.20)
Total 139.92 (55.67)
Purchases/(Sales) of Property, Plant and Equipment/
Intangible Assets:
UltraTech Cement Limited 6.57 4.35
Grasim Bhiwani Textiles Limited - 0.68
Aditya Birla Capital Limited (0.09) -
Total 6.48 5.03
Contributions to Post Retirement Fund:
Grasim Industries Limited Employees' Provident Fund 7.78 6.83
Grasim (Senior Executives & Officers) Superannuation Scheme 11.10 6.96
Jayashree Provident Fund Institution 3.00 -
Provident Fund of Aditya Birla Nuvo Limited 3.40 -
Indo Gulf Fertilizer Limited Employee Provident Fund Trust 1.69 -
Century Rayon Provident Fund Trust 1.16 -
Grasim Industries Limited Employees Gratuity Fund 35.74 28.99
Total 63.87 42.78
Receipts from Post-Retirement Fund:
Grasim Industries Limited Employees Gratuity Fund 3.30 1.45
Compensation of Key Management Personnel of the Company*
Short-term Employee Benefits 10.38 6.60
Post-Retirement Benefits 0.75 0.61
Share-Based Payments 1.63 2.48
Total 12.76 9.69
* Expenses towards gratuity and leave encashment provisions are determined actuarially on an overall Company basis
at the end of each year and, accordingly have not been considered in the above information.
210
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
(` in Crore)
As at As at
Outstanding Balances (Unsecured)
31st March, 2018 31st March, 2017
Other Non-Current Liabilities (Financial and Non-Financial):
Aditya Birla Sun Life AMC Limited 0.62 -
Ultra Tech Cement Limited 0.06 0.06
Total 0.68 0.06
Trade Payables:
Aditya Birla Chemicals (Belgium) AVBA 0.06 -
UltraTech Cement Limited 2.47 0.30
Aditya Birla Sun Life Insurance Company Limited 0.43 -
Aditya Birla Health Insurance Company Limited 0.08 -
AV Group NB Inc. 179.24 131.82
Idea Cellular Limited 0.07 -
Aditya Group AB 51.89 43.50
Total 234.24 175.62
Other Current Liabilities (Financial):
Aditya Birla Capital Limited 7.56 -
Aditya Birla Science & Technology Company Private Limited 0.02 -
Total 7.58 -
Trade Receivables:
UltraTech Cement Limited 0.09 0.04
Grasim Bhiwani Textiles Limited - 6.21
Aditya Birla Chemicals (Belgium) AVBA 1.59 2.92
Birla Jingwei Fibres Company Limited 23.33 39.07
AV Terrace Bay Inc Canada 0.05 -
Aditya Birla Renewable Limited 6.77 -
Aditya Birla Solar Limited 32.25 -
Idea Cellular Limited 0.20 1.40
Total 64.28 49.64
Non-Current Financial Assets - Loans:
Grasim Bhiwani Textiles Limited - 10.05
AV Group NB Inc. - 32.80
Aditya Birla Chemicals (Belgium) BVBA - 0.09
Aditya Birla Science & Technology Company Private Limited - 10.43
Total - 53.37
Non Convertable Debentures:
Aditya Birla Sun Life Insurance Company Limited 51.41 -
Total 51.41 -
Current Financial Assets- Loans:
Grasim Bhiwani Textiles Limited - 6.24
Aditya Birla Science & Technology Company Private Limited 22.74 0.92
Aditya Birla Solar Limited 4.30 -
Total 27.04 7.16
Other Current Assets (Financial and Non-financial):
Aditya Birla Sun Life Insurance Company Limited 0.12 -
Aditya Birla Health Insurance Co. Limited 0.89 -
Aditya Birla Sun Life AMC Limited 0.02 -
Aditya Birla Investment Limited 0.43 -
Total 1.46 -
211
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit
Method as prescribed by the Ind AS-19 - ‘Employee Benefits’, which recognises each period of service as
giving rise to additional unit of employee benefit entitlement and measure each unit separately to build up
final obligation.
Inherent Risk:
The plan is defined benefit in nature which is sponsored by the Company and hence it underwrites all the
risks pertaining to the plan. In particular, this exposes the Company to actuarial risk such as adverse salary
growth, changes in demographic experience, inadequate return on underlying plan assets. This may result
in an increase in cost of providing these benefits to employees in future. Since the benefits are lump sum in
nature, the plan is not subject to any longevity risk.
Pension:
The Company provides pension to few retired employees as approved by the Board of Directors of
the Company.
Inherent Risk:
The plan is of a defined benefit in nature which is sponsored by the Company and hence it underwrites all the
risks pertaining to the plan. In particular, there is a risk for the Company that any adverse increase in salary
increases for serving employees/pension increase for pensioners or adverse demographic experience can
result in an increase in the cost of providing these benefits to employees in future. In this case the pension
is paid directly by the Company (instead of pension being bought out from an insurance company) during
the lifetime of the pensioners/beneficiaries and hence the plan carries the longevity risks.
212
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
213
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
(` in Crore)
Gratuity (Funded) Pension
Current Previous Current Previous
Year Year Year Year
(v) Amount recognised in Other Comprehensive
Income (OCI) for the Year:
Changes in Financial Assumptions 3.61 15.67 (1.32) 0.44
Changes in Demographic Assumptions (2.17) - - -
Experience Adjustments 16.34 (0.12) 2.79 0.16
Actual Return on Plan Assets less Interest on 0.44 (2.98) - -
Plan Assets
Recognised in OCI for the Year 18.22 12.57 1.47 0.60
(vi) Maturity Profile of Defined Benefit Obligation:
Within next 12 months (next annual reporting 79.95 40.88 4.75 1.12
period)
Between 1 and 5 years 174.69 84.74 16.69 4.15
Between 5 and 9 years 185.34 81.09 13.12 2.72
10 years and above 629.00 262.57 25.08 5.03
(vii) Quantitative sensitivity analysis for
significant assumptions:
Increase/(Decrease) on present value of defined
benefit obligation at the end of the year
50 bps increase in discount rate (18.22) (8.58) (0.91) (0.21)
50 bps decrease in discount rate 19.50 9.18 0.96 0.22
50 bps increase in salary escalation rate 19.45 9.03 - -
50 bps decrease in salary escalation rate (18.32) (8.51) - -
Increase in Life Expectancy by one year - - 0.94 0.23
Decrease in Life Expectancy by one year - - (0.96) (0.24)
(viii) The major categories of Plan Assets as a % of
total plan:
Government of India Securities 19% 4% N.A. N.A.
Corporate Bonds 4% 6% N.A. N.A.
Insurer Managed Fund 77.8% 84% N.A. N.A.
Others 0.2% 6% N.A. N.A.
Total 100% 100% N.A. N.A.
(ix) Principal Actuarial Assumptions:
Discount Rate 7.80% 7.12% 7.80% 7.12%
Expected Return on Plan Assets 7.80% 7.12% - -
Salary Escalation Rate 5.50%-8% 8.00% - -
Mortality Tables Indian Indian PA (90) PA (90)
Assured Assured annuity annuity
Lives Lives rates rates
(2006-08) (2006-08) adjusted adjusted
mortality mortality suitably suitably
tables tables
214
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
(` in Crore)
Gratuity (Funded) Pension
Current Previous Current Previous
Year Year Year Year
Retirement Age:
Management 60 Years 60 Years
- -
Non-Management 58 Years 58 Years
(x) Weighted Average Duration of Defined Benefit 7.63 Years 7.43 Years 5.23 Years 4.99 Years
obligation:
* Includes Liability of ` 222.30 Crore and Assets of ` 218.26 Crore on account of merger of Aditya Birla Nuvo Limited with
the Company and acquisition of Rights to manage and operate Century Rayon business.
(xii) There are no amounts included in the Fair Value of Plan Assets for:
a) Company’s own financial instrument
b) Property occupied by or other assets used by the Company
(xvii) The best estimate of the expected contribution for the next year amounts to ` 20 Crore (Previous Year:
` 20 Crore).
215
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
4.6.1.3 The details of the Company’s Defined Benefit Plans in respect of the Company-owned Provident
Fund Trust
Amount recognised as expense and included in the Note 3.7 as “Contribution- Company owned
Provident Fund” is ` 18.10 Crore (Previous Year ` 7.33 Crore).
The actuary has provided for a valuation and based on the below provided assumption there is no
interest shortfall as at 31st March, 2018 and 31st March, 2017.
(` in Crore)
As at As at
Particulars
31st March, 2018 31st March, 2017
(a) Plan Assets at Fair Value 1012.44 169.66
(b ) Liability recognised in the Balance Sheet Nil Nil
(c) Assumption used in determining the present value
obligation of interest rate guarantee under the
Deterministic Approach
- Discount Rate for the term of the Obligations 7.80% 7.12%
- Discount Rate for the remaining term of maturity of 7.61% - 7.76% 7.20%
Investment Portfolio
- Average Historic Yield on Investment Portfolio 8.72% – 9.34% 8.96%
- Guaranteed Interest Rate 8.55% 8.65%
216
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
217
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
b. Company as a Lessor
The Company has given certain assets on lease for which rental income earned during the current year
is ` 3.33 Crore (Previous Year: ` 3.04 Crore). These lease arrangement are normally renewed on expiry,
wherever required.
4.7.4 The Company has spent ` 29.84 Crore on Corporate Social Responsibility Projects/Initiatives during the year
(Previous Year ` 18.06 Crore including ` 1.64 Crore towards capital expenditure).
218
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
219
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
4.8 4.8.1 1,039,210 Equity Shares of Face Value of ` 2/- each (Previous Year: 1,152,595 Equity Shares of Face Value of
` 2/- each ) are reserved for issue under Employee Stock Option Scheme-2006 (ESOS-2006) and Employee
Stock Option Scheme, 2013 (ESOS-2013).
Under the ESOS-2006, the Company has granted 1,533,375 Options to its eligible employees, the
a.
details of which are given hereunder:
Options
Tranche I Tranche II Tranche III Tranche IV Tranche V
No. of Options Granted 1,007,650 83,050 356,485 30,185 56,005
Grant Date 23rd 25th 30th 2nd 18th
August, January, August, June, 2011 October,
2007 2008 2010 2013
Grant Price (` Per Share)# 386 577 274 305 532
Revised Grant Price* 305 456 N.A. N.A. N.A.
Market Price on the Date of Grant (`) 546 577 404 466 543
Fair Value on the Date of Grant of 208 174 226 252 197
Option (` Per Share)
Method of Settlement Equity Equity Equity Equity Equity
Method of Accounting Intrinsic value for options vested before 1st April, 2015, and
Fair value for options vested after 1st April, 2015
Graded Vesting Plan 25% every year, commencing after one year from the date of grant
Normal Exercise Period 5 years from the date of vesting
* The Grant Price in respect of Tranches I and II was revised in the Financial Year 2010-11 as per the Scheme of Demerger
of Cement Business.
# The Grant Price in respect of Tranches III, IV and V has been revised in the current Financial Year post-demerger of
Financial Service business of Grasim to ABCL, resulting in reduction of ` 14 per share from the earlier Exercise Price i.e.
Face Value of ABCL’s share X 1.4 (share entitlement ratio).
220
b. Under
the ESOS-2013, the Company has granted 1,044,245 Options and Restricted Stock Units (RSUs) to the eligible employees of
the Company and its subsidiary, the details of which are given hereunder:
Options RSU’s
Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche
Notes
I II III IV V I II III IV V VI
No. of Options / RSU Granted 627,015 59,905 121,750 30,440 17,045 93,495 40,420 31,010 16,665 4,165 2,335
Grant Date 18th 29th 15th 2nd 24th 18th 21st 29th 15th 2nd 24th
October, January, January, April, May, October, November, January, January, April, May,
2013 2014 2016 2016 2016 2013 2013 2014 2016 2016 2016
Market Price on the Date 529 519 686 757 842 529 522 519 686 757 842
of Grant (`)#
Fair value on the date of Grant of 199 191 274 291 315 520 498 495 687 750 821
Option (` per Share)
Method of Settlement Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity
Method of Accounting Intrinsic value for options vested before Fair Fair Fair Fair Fair Fair
1st April, 2015, and Fair Value for options vested Value Value Value Value Value Value
after 1st April, 2015
Graded Vesting Plan 25% every year, commencing Bullet vesting at the end of three years
after one year from the date of grant from the date of grant
Normal Exercise Period 5 years from the date of vesting 5 years from the date of vesting
# The Grant Price and Market Price in respect of Tranches I, III and IV has been revised in the current Financial Year post-demerger of Financial Service
business of Grasim to ABCL, resulting in reduction of ` 14 per share from the earlier Exercise Price, i.e. Face Value of ABCL’s share X 1.4 (share
entitlement ratio).
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
GRASIM
221
4.8.2 (a) U
nder the Employee Stock Options Scheme - 2013 (ESOS-2013), the Company has granted 436,145 Options/SAR
to the eligible employees of erstwhile ABNL, as per the composite scheme of arrangement between the Company and
222
ABNL. The details are as under:
Options RSU’s Notes
Tranche Tranche Tranche IIIA Tranche Tranche Tranche Tranche IIIA Tranche
IA IIA IVA IA IIA IVA
FINANCIAL STATEMENTS
No. of Options Granted 39,887 10,918 6,144 51,219 18,483 3,568 2,229 24,784
Grant Date 7th 29th 12th 24th 7th 29th 12th 24th
December, January, November, May, December, January, November, May,
2013 2014 2014 2016 2013 2014 2014 2016
Grant / Exercise Price 449 380 631 648 2 2 2 2
(` Per Share)
Market Price on the Date of 1240 1054 1727 992 1240 1054 1727 992
Grant
Fair value on the Date of 806 875 693 716 1200 1199 1198 1195
Merger (1st July, 2017)
Method of Settlement Equity Equity Equity Equity Equity Equity Equity Equity
Method of Accounting Fair Value Fair Value
STANDALONE
Graded Vesting Plan 25% every year, commencing after one year Bullet vesting at the end of three years
from the date of grant from the date of grant
Normal Exercise Period 5 years from the date of vesting 5 years from the date of vesting
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
(b) Stock Appreciation Rights (‘SAR’)
SAR’s (Linked with the Company’s Market Price) SAR’s (Linked with Aditya Birla Capital Limited’s
Market Price)
Tranche Tranche Tranche Tranche Tranche - Tranche Tranche Tranche Tranche Tranche
Notes
-I - II - III - IV A IV B -I - II - III - IV A - IV B
Number of SAR's 14,988 8,449 4,032 79,382 8,920 20,986 11,829 5,645 111,137 13,547
Method of Accounting Fair Value Fair Value Fair Value Fair Value Fair Value Fair Value Fair Value Fair Value Fair Value Fair Value
Vesting Plan Graded Graded Graded Graded Bullet Graded Graded Graded Graded Bullet
Vesting - Vesting - Vesting - Vesting - Vesting- Vesting - Vesting - Vesting - Vesting - Vesting-
25% every 25% every 25% every 25% every end of 3 25% every 25% every 25% every 25% every end of 3
year year year year year from year year year year year from
grant date grant date
Exercise Period 3 years from the date of Vesting or 6 years 3Years from the date of Vesting or 6 years
from the date of grant, whichever is earlier. from the date of grant, whichever is earlier.
Grant Date 07.12.2013 29.01.2014 12.11.2014 24.05.2016 24.05.2016 07.12.2013 29.01.2014 12.11.2014 24.05.2016 24.05.2016
Grant Price (` Per Share) 449 380 631 648 2 10 10 10 10 10
Market Price on the 1,239.8 1,053.85 1,726.95 992.4 992.4 NA NA NA NA NA
date of Grant of SAR's
(` Per Share)
# The Fair Value stands revised post the scheme of demerger of the Financial Service business of Grasim to ABCL on 4th July, 2017.
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
GRASIM
223
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
4.8.3 Movement of Options and RSUs Granted along with Weighted Average Exercise Price (WAEP)
224
4.8.4 Fair Valuation
The fair value of options used to compute proforma net income and earnings per equity share has been done by an independent firm
of Chartered Accountants on the date of grant using Black-Scholes Model.
The Key Assumptions in Black-Scholes Model for calculating fair value as on the date of grant are: Notes
4.8.4.1 F
or options referred to in 4.8.1(a) & (b
Options
ESOS-2006 Tranche I Tranche II Tranche III Tranche IV Tranche V
Risk-Free Rate 7.78% 7.78% 7.78% 8.09% 8.58%
Option Life (Years) Vesting Period (1 Year) + Average of Exercise Period
Expected Volatility * 33.00% 36.00% 45.64% 31.73% 24.01%
Dividend Yield 1.84% 1.80% 1.58% 0.61% 1.03%
The weighted-average fair value of the option, as on the date of grant, works out to ` 211 per stock option (Previous Year: ` 211 per
stock option).
Options RSU’s
Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche
ESOS-2013
I II III IV V I II III IV V VI
Risk-Free Rate 8.58% 8.87% 7.87% 7.60% 7.49% 8.66% 8.90% 9.00% 7.96% 7.78% 7.75%
Option Life (Years) Vesting Period (1 Year) + Average of Exercise Period 5.50 5.50 5.50 5.50 5.50 5.50
Expected Volatility * 24.01% 23.47% 28.26% 27.96% 27.43% 24.01% 23.76% 23.47% 28.52% 28.41% 28.01%
Dividend Yield 1.03% 1.10% 0.36% 0.52% 0.48% 1.34% 1.40% 1.43% 0.34% 0.51% 0.47%
The weighted-average fair value of the option and RSU, as on the date of grant, works out to ` 215 per stock option and ` 539 per
RSU. (Previous Year: ` 1,049 per stock option and ` 2,646 per RSU).
* Expected volatility on the Company’s stock price on National Stock Exchange based on the data commensurate with the expected life of the options/
RSUs upto the date of grant.
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
GRASIM
225
4.8.4.2 For options referred to in 4.8.2(a)&(b)
226
Options RSU’s
Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche
ESOS-2013
IA IIA IIIA IVA IA IIA IIIA IVA
Notes
Risk-Free Rate 6.60% 6.50% 6.60% 6.70% 6.50% 6.50% 6.50% 6.70%
Option Life (Years) 2.6 years 2.1 years 2.7 years 4.4 years 2.2 years 2.3 years 2.9 years 4.4 years
FINANCIAL STATEMENTS
Expected Volatility * 27.20% 28.10% 27.80% 27.20% 27.70% 27.40% 27.20% 27.40%
Dividend Yield 0.31% 0.31% 0.31% 0.31% 0.31% 0.31% 0.31% 0.31%
Weighted average fair value
of the option/ RSU on the ` 583 per stock option. ` 1,004 per stock option.
date of grant
SAR’s (Linked with the Company’s Market Price) SAR’s (Linked with Aditya Birla
Capital Limited’s Market Price)
Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche
IA IIA IIIA IVA IVB IA IIA IIIA IVA IVB
Risk-Free Rate 6.71% 6.71% 6.71% 7.09% 7.48% 6.71% 6.71% 6.71% 7.09% 7.48%
Option Life (Years) 0.84 0.75 1.22 2.48 3.65 0.84 0.75 1.22 2.48 3.65
STANDALONE
years years years years years years years years years years
Expected 31.01% 31.01% 31.01% 31.01% 31.01% 19.94% 19.94% 19.94% 19.94% 19.94%
Volatility *
Dividend Yield 0.52% 0.52% 0.52% 0.52% 0.51% 0.39% 0.39% 0.39% 0.37% 0.35%
Weighted average
fair value of the
` 316.60 per stock option. ` 66.75 per stock option.
option/ RSU on the
date of grant
* Expected volatility on the Company’s stock price on National Stock Exchange based on the data commensurate with the expected life of the options/
RSUs upto the date of grant.
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
4.8.5
Employee Stock Option expenses recognised in the Statement of Profit and Loss ` 0.17 Crore (Previous Year:
` 5.33 Crore).
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
The Company uses the following hierarchy for determining and disclosing the fair value of financial
instruments based on the input that is significant to the fair value measurement as a whole:
Level 1: This hierarchy uses quoted (unadjusted) prices in active markets for identical assets or liabilities.
The fair value of all Equity Shares, which are traded on the stock exchanges, is valued using the closing price
at the reporting date.
227
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded
bonds, over the counter derivatives) is determined using valuation techniques, which maximise the use of
observable market data and rely as little as possible on company specific estimates. The mutual fund units
are valued using the closing Net Asset Value. Investments in Debentures or Bonds are valued on the basis
of dealer’s quotation based on fixed income and money market association (FIMMDA).
If all significant inputs required to fair value an instrument are observable, the instrument is included in
Level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is
included in Level 3.
(` in Crore)
Fair Value
As at As at
Particulars
31st March, 2018 31st March, 2017
Financial Assets at Fair Value through Other Comprehensive Income
Investments in Debentures or Bonds (Level 2) 167.85 170.48
Investment in Equity Instruments (other than Subsidiaries, Joint
Ventures and Associates)
- Level 1 3,879.33 2,379.92
- Level 3 511.89 354.54
Financial Assets at Fair Value through Profit and Loss
Investments in Mutual Funds (Level 2) 2,667.85 2,347.42
Investments in Preference Shares (Level 3) 109.82 86.37
Total 7,336.74 5,338.73
Long Term Borrowings (Level 3)
Rupee Term Loans from Banks 500.09 607.73
Deferred Sales Tax Loans 13.12 18.37
Non-Convertible Debentures 557.34 -
External Commercial Borrowing 194.07 -
Total 1,264.62 626.10
Hedging Instruments measured at Fair Value
Derivative Liabilities (Level 2) 24.96 11.15
Total 24.96 11.15
The management assessed that cash and bank balances, trade receivables, loans, trade payables,
borrowings (cash credits, commercial papers, foreign currency loans, working capital loans) and other
financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities
of these instruments.
During the reporting period ending 31st March, 2018 and 31st March, 2017, there was no transfer between
level 1 and level 2 fair value measurement.
228
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
2. Debentures or Bonds: Based on market yield for instruments with similar risk profile/maturity etc.
(Level 2).
3. Listed Equity Investments (other than Subsidiaries, Joint Ventures and Associates): Quoted Bid Price on
Stock Exchange (Level 1).
(b) The fair value of forward foreign exchange contracts is calculated as the present value determined
using forward exchange rates and interest rate curve of respective currencies.
(c) The fair value of currency swap is calculated as the present value determined using forward
exchange rates, currency basis spreads between the respective currencies, interest rate curves
and an appropriate discount factor.
4.9.2 Description of Significant Unobservable Inputs used for Financial Instruments (Level 3)
The following table shows the valuation techniques used for financial instruments:
Investments in Preference Shares Discounted cash flow method using risk adjusted
discount rate
Equity Investments - Unquoted (other than Discounted cash flow method using risk adjusted
Subsidiaries, Joint Ventures and Associates) discount rate/Net worth of Investee Co.
Other Financial Assets (Non-Current) Discounted cash flow method using risk adjusted
discount rate
Other Financial Liabilities (Non-Current) Discounted cash flow method using risk adjusted
discount rate
Long-term Borrowings - Deferred Sales Tax Loans Discounted cash flow method using risk adjusted
and Non-Convertible Debentures discount rate
4.9.3
The following table shows a reconciliation from the opening balances to the closing balances for level
3 fair values:
(` in Crore)
Balances as at 1st April, 2016 355.47
Add: Fair Value Loss recognised in other expense in the Statement of Profit and Loss (2.84)
Add: Fair Value Gain recognised in OCI 88.28
Balances as at 31st March, 2017 440.91
Add: Preference Shares received on merger of ABNL 14.51
Add: Fair Value Loss recognised in other income in the Statement of Profit and Loss 8.93
Less: Sale of Investments (0.15)
Add: Fair Value Gain recognised in OCI 157.51
Balances as at 31st March, 2018 621.71
229
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
B. Equity Investments - Unquoted (For Equity Shares where Net Worth is used):
A 500 bps increase/decrease in the profit or loss while all the other variables were held constant, the
carrying value of the shares would increase/decrease by ` 0.01 Crore or (as at 31st March, 2017: increase/
decrease by ` 0.01 Crore).
C.
Preference Shares - (Significant unobservable input being average cost of borrowings to arrive at
discount rate):
A 100 bps increase/decrease in the discount rate used while all the other variables were held constant,
the carrying value of the shares would decrease by ` 5.36 Crore or increase by ` 5.74 Crore (as at 31st
March, 2017:decrease by ` 5.60 Crore or increase by ` 5.80 Crore).
The Company’s activities exposes it to market risk, liquidity risk and credit risk.
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in
the price of a financial instrument. The value of a financial instrument may change as a result of changes in the
interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that
affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments,
including investments and deposits, foreign currency receivables, payables and borrowings.
The Company’s overall risk management focuses on the unpredictability of financial markets and seeks to minimise
potential adverse effects on the financial performance of the Company. The Company uses derivative financial
instruments, to hedge foreign currency risk exposure. Derivatives are used exclusively for hedging purposes and
not as trading or speculative instruments.
230
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
The sources of risks which the Company is exposed to and their management is given below:
Risks Exposure Arising From Measurement Management
• Market Risk:
- Foreign Exchange Risk Committed commercial Cash Flow Forecasting, Forward Foreign
transactions, Financial Sensitivity Analysis Exchange Contracts,
Assets and Liabilities not Currency Swaps, Foreign
denominated in INR Exchange Options
- Interest Rate Risk Long-term Borrowings Sensitivity Analysis, Interest Rate Swaps
at fixed / variable rates Interest Rate Movements Portfolio Diversification
Investments in Debt
Schemes of Mutual Funds
and Other Debt Securities
- Equity Price Risk Investments (other Financial Performance of Investments are long-
than Subsidiaries, Joint the Investee Company term in nature and /
Ventures and Associates, or in Companies with
which are carried at cost) sound management with
leadership positions
in their respective
businesses
• Credit Risk Trade Receivables, Ageing Analysis, Credit Diversification of mutual
Investments, Derivative Rating fund investments
Financial Instruments, and portfolio credit
Loans monitoring, credit limit
and credit worthiness
monitoring, criteria based
approval process
• Liquidity Risk Borrowings and Other Rolling Cash Flow Adequate unused credit
Liabilities and Liquid Forecasts, Broker Quotes lines and borrowing
Investments facilities
Portfolio Diversification
The Management updates the Audit Committee / Risk Management Committee/ Board of Directors on a quarterly
basis about the implementation of the above policies. It also updates on periodical basis about various risk to the
business and the status of various activities planned to mitigate such risks.
The Company regularly evaluates exchange rate exposure arising from foreign currency transactions. The
Company follows the established risk management policies and standard operating procedures. It uses
derivative instruments like forwards / options to hedge exposure of foreign currency risk.
231
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
When a derivative is entered into for the purpose of hedge, the Company negotiates the terms of those
derivatives to match the terms of the foreign currency exposure.
The Company has taken foreign currency floating rate borrowings, which are linked to LIBOR. For managing
the foreign currency risk and interest rate risk arising from changes in LIBOR on such borrowings, the
Company has entered into cross-currency nterest rate swap (CCIRS) for the entire loan liability. Under
the terms of the CCIRS, the Company pays interest at the fixed rate to the swap counterparty in INR and
receives the floating interest payments based on LIBOR in foreign currency.
232
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
The Company designates the forward exchange contracts to hedge its currency risk and generally applies
a hedge ratio of 1:1. The Company’s policy is to match the tenor of the forward exchange contracts with
the hedged item.
(a). Cash Flow Hedge
Details of Foreign Exchange Forward Contracts Outstanding as on 31st March, 2018
Sr. Type of Hedges Foreign currency Weighted Average Nominal Value Carrying amount Maturity Change in
No. and Risks Amount Foreign (` in Crore) of Hedging Date- Fair Value
(` in Crore) Exchange Rate Instrument Range of Hedging
(` in Crore) Instrument
Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities (` in Crore)
(b). Fair Value Hedge
Details of Foreign Exchange Forward Contracts Outstanding
Sr. Type of Hedges Foreign currency Weighted Nominal Value Carrying amount Maturity
No. and Risks Amount average Foreign (` in Crore) of hedging Date-
(` in Crore) Exchange Rate instrument Range
(` in Crore)
Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities
B FAIR VALUE HEDGE
Foreign Exchange Risk
1) Foreign Exchange
Forward Contracts
(a) USD 3.77 0.17 66.55 64.88 250.88 11.13 - 2.54 10-04-2018
to
22-02-2019
233
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
Sr. Type of Hedges Foreign currency Weighted Nominal Value Carrying amount Maturity
No. and Risks Amount average Foreign (` in Crore) of hedging Date-
(` in Crore) Exchange Rate instrument Range
(` in Crore)
Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities
(b) EUR 1.67 0.14 81.66 78.79 136.29 11.02 2.40 - 05-04-218
to
12-02-2019
(c) GBP - 0.06 - 88.31 - 5.53 - 0.30 23-04-2018
to
27-07-2018
(c) JPY - 1.50 - 0.58 - 0.88 - 0.06 10-04-2018
to
29-12-2018
Interest Rate Sensitivities for Floating Rate Borrowings (Impact of Increase / (Decrease) in 1%):
Interest rate sensitivity has been calculated assuming the borrowings outstanding at the reporting date have
been outstanding for the entire reporting period. Increase/Decrease in interest rates at the balance sheet date
would result in an impact (decrease/increase in case of net income and increase/decrease in case of net loss)
for the respective year(s) is as below.
(` in Crore)
Basis Point Effect on Profit Before Tax
31st March 2018
INR - Increase 100 -4.80
INR - Decrease 100 4.80
USD - Increase 100 -7.15
USD - Decrease 100 7.15
234
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
(` in Crore)
Basis Point Effect on Profit Before Tax
31st March 2017
INR - Increase 100 -6.44
INR - Decrease 100 6.44
Note: If the rate is decreased by 1% profit will increase by an equal amount.
The Company’s manages its interest rate risk by having a balanced portfolio of fixed and variable rate
borrowings, which is monitored on continuos basis. The Company’s exposure to the risk of changes in market
interest rates relates primarily to the Company’s short term borrowings (excluding commercial papers)
with floating interest rates. For certain long-term borrowings with floating rates, the risk of variation in the
interest rates is mitigated through interest rate swaps. These swaps are designated to hedge underlying debt
obligations. The Company constantly monitors the credit markets and rebalances its financing strategies to
achieve an optimal maturity profile and financing cost.
Interest rate sensitivity has been calculated assuming the borrowings outstanding at the reporting date have
been outstanding for the entire reporting period. Further, the calculations for the unhedged floating rate
borrowings have been done on the notional value of the foreign currency (excluding the revaluation).
If equity prices of the quoted investments increase/decrease by 5%, Other Comprehensive Income for the year
ended 31st March, 2018 would increase/decrease by ` 186.61 Crore (for the year ended 31st March, 2017 by
` 118.97 Crore).
D. Credit Risk:
Credit risk arises when a customer or counterparty does not meet its obligations under a customer contract
or financial instrument, leading to a financial loss. The Company is exposed to credit risk from its operating
activities primarily trade receivables and from its financing/ investing activities, including deposits with banks,
mutual fund investments, investments in debt securities and foreign exchange transactions. The Company
has no significant concentration of credit risk with any counterparty.
The carrying amount of financial assets represents the maximum credit risk exposure.
Total Trade receivables as on 31st March, 2018 is ` 2,609.32 Crore (31st March, 2017: ` 1,189.55 Crore)
235
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
The Company does not have higher concentration of credit risks to a single customer. Single largest
customers of all businesses have exposure of 4.20% of total sales (31st March, 2017 5.6%) and in
receivables 2.72% (31st March, 2017: 10%).
The ageing analysis of the receivables (net of provision) has been considered from the date the invoice
falls due.
(` in Crore)
Particulars Neither For less For 1 to 3 For 3 to 6 For more Total
past than 1 Months Months than 6
due nor Month Months
impaired
As at 31st March 2018
Trade Receivables 2,300.72 189.1 62.9 24.4 32.2 2,609.32
Other Financial Assets- 92.5 28.53 17.3 0.81 2.51 141.65
Fertiliser Subsidy and
Gas Pooling
As at 31st March, 2017
Trade Receivables 994.55 105.7 29.9 21.6 37.8 1,189.55
As per simplified approach, the Company makes provision of expected credit losses on trade receivables
using a provision matrix to mitigate the risk of default in payments and makes appropriate provision at
each reporting date wherever outstanding is for longer period and involves higher risk.
However, total write off against receivables are “Nil” of the outstanding receivables for the current year
(0.09% in the previous year).
(ii) Investments, Derivative Instruments, Cash and Cash Equivalents and Bank Deposits:
Credit Risk on cash and cash equivalents, deposits with the banks/financial institutions is generally low
as the said deposits have been made with the banks/financial institutions, who have been assigned high
credit rating by international / domestic rating agencies.
Credit Risk on Derivative Instruments is generally low as the Company enters into the Derivative Contracts
with reputed Banks.
Investments of surplus funds are made only with internally approved Financial Institutions/Counterparty.
Investments primarily include investment in units of quoted Mutual Funds, quoted Bonds, Non-
Convertible Debentures issued by Government/Semi-Government Agencies/PSU Bonds/High Investment
grade Corporates etc. These Mutual Funds and Counterparties have low credit risk.
236
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
The Company has standard operating procedures and investment policy for deployment of surplus
liquidity, which allows investments in debt securities and mutual fund schemes of debt and arbitrage
categories and restricts the exposure in equity markets.
Compliances of these policies and principles are reviewed by internal auditors on periodical basis.
Total Non-current and current investments as on 31st March, 2018 is ` 35,546.59 Crore (31st March, 2017
` 8,996.42 Crore).
E. Liquidity Risk:
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time
or at reasonable price. Prudent liquidity risk management implies maintaining sufficient cash and marketable
securities and the availability of funding through an adequate amount of undrawn credit facilities to meet
obligations when due. The Company’s treasury team is responsible for managing liquidity, funding as well
as settlement management. In addition, processes and policies related to such risks are overseen by senior
management. The Management monitors the Company’s liquidity position through rolling forecasts on the
basis of expected cash flows.
The table below provides details of financial liabilities and investments at the reporting date based on
contractual undiscounted payments.
(` in Crore)
Less than 1 to 5 Years More than Total
As at 31st March, 2018
1 Year 5 Years
Financial Liabilities:
Borrowings (including Current 2115.84 827.97 20.33 2,964.14
Maturities of Long-term Debts)*
Trade Payables 2,131.79 - - 2,131.79
Interest Accrued but not Due on 24.65 - - 24.65
Borrowings
Other Financial Liabilities (excluding 222.46 - 5.58 228.04
Derivative Liability)
Derivative Liability 24.96 - - 24.96
Liquid Financial Assets:
Surplus Investments in Mutual Funds, 1,925.04 1363.27 64.91 3353.22
Bonds, etc.
(` in Crore)
Less than 1 to 5 Years More than Total
As at 31st March, 2017
1 Year 5 Years
Financial Liabilities:
Borrowings (including Current 317.81 376.20 13.15 707.16
Maturities of Long-term Debts)*
Trade Payables 1,113.93 - - 1,113.93
Interest Accrued but not Due on 5.23 - - 5.23
Borrowings
237
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
(` in Crore)
Less than 1 to 5 Years More than Total
As at 31st March, 2017
1 Year 5 Years
Other Financial Liabilities (excluding 90.80 - 2.70 93.50
Derivative Liability)
Derivative Liability 11.15 - - 11.15
Liquid Financial Assets:
Surplus Investments in Mutual Funds, 1,571.86 880.61 65.43 2,517.90
Bonds, etc.
* Contractual amount
b. Access to high growth business: Cash flow of the merged entity from various operating business can be
meaningfully leveraged towards nurturing companies with future growth opportunities.
c. Value unlocking in financial service business: Demerger of Financial service business will unlock value
for shareholders given the business has achieved scale, and listing of ABCL provides flexibility to
independently fund its growth through various sources of capital.
During the year, the merger has become effective from 1st July, 2017, hence ABNL ceased to exist effective
from 1st July, 2017, and demerger of financial services business into ABCL has also become effective from
4th July, 2017 in terms of the scheme. Further, the Company has issued 190,462,665 equity shares on 9th July,
2017 to the shareholders of ABNL in the ratio of 15 (fifteen) equity Shares of ` 2/- each fully paid up against 10
(ten) Equity Shares of ` 10/- each fully-paid up of ABNL, held by them on the record date for this purpose. As
a result the Company’s paid up share capital has increased from ` 93.38 Crore to ` 131.47 Crore.
The Value for the said transaction was ` 23,657.37 Crore based on market price of Company as on 30th
June 2017.
On account of demerger of financial services business, ABCL has issued it’s equity shares in the ratio of 7
(seven) equity shares of ` 10 each fully paid-up in respect of 5 (five) equity shares of ` 2 each fully paid up of
the Company, held by the shareholders of the Company on the record date for this purpose. As a result, the
holding of the Company in ABCL stands reduced to 55.99%.
238
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
For the nine months period ended 31st March, 2018, erstwhile ABNL had contributed revenue of ` 4,062.51
Crore and profit before tax of ` 318.68 Crore to the Company’s results. If the merger had occurred on 1st April,
2017, the consolidated revenue and profit before tax for the year ended would had been ` 5,416.68 Crore and
` 424.91 Crore, respectively, based on the amounts extrapolated by the management.
In determining these amounts, the management had assumed that the fair value adjustments, that arose on
the date of merger, would have been the same if the merger had occurred on 1st April, 2017.
239
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
(` in Crore)
Net assets Dilution of
Particulars As on Transferred on Stake in ABCL As on
1st July, 2017 Demerger on Demerger 4th July, 2017
Less: -
Purchase Consideration (Share 23,657.37 - - 23,657.37
Capital ` 38.09 Crore and Securities
Premium of ` 23,619.28 Crore)
Reserves taken over 119.00 - - 119.00
Replacement of ABNL ESOP with 9.80 - - 9.80
the Company's ESOPs
Capital Reserve 15,380.54 (1,721.61) (10,616.51) 3,042.42
The gross contractual amounts and fair value of Trade and Other Receivables acquired ` 1,287.21 Crore.
However, ` 43.56 of the Trade and Other Receivables are credit impaired and the balance of ` 1,243.65
Crore is expected to be recoverable.
(ii) Details of Investments transferred from erstwhile ABNL to the Company (at Fair Value) as on 1st July, 2017
(` in Crore)
As at 1st July, 2017
Face Value
Number Amount
Trade Investments
Investments in Equity Instruments
Joint Ventures/Associates
Quoted:
Associate
IDEA Cellular Limited ` 10 837,526,221 7,139.91
Unquoted:
Subsidiaries
Aditya Birla Capital Limited ` 10 1,232,240,000 27,693.35
ABNL Investment Limited ` 10 21,000,000 98.79
Aditya Birla Finance Limited ` 10 61,273,146 1,718.73
Shaktiman Mega Food Park Private Limited ` 10 430,000 0.43
Less: Provision for Impairment (0.43)
Joint Ventures
Aditya Birla Renewables Limited ` 10 1,224,000 1.22
Aditya Birla Solar Limited ` 10 30,326,602 30.33
Associate
Aditya Birla Idea Payments Bank Limited ` 10 123,131,860 127.49
Total Investment in Equity Instruments of Subsidiaries/ 36,809.82
Joint Ventures/Associates (A)
240
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
(` in Crore)
As at 1st July, 2017
Face Value
Number Amount
Other Non-Current Investments
Investments in Equity Instruments
Quoted:
Hindalco Industries Limited `1 33,506,337 639.80
Aditya Birla Fashion and Retail Limited ` 10 69,982,370 1,213.50
Unquoted:
Carried at Fair Value through Other Comprehensive
Income
Aditya Birla Science & Technology Limited ` 10 2,100,000 3.55
Investments in Preference Shares - Unquoted
Subsidiaries -
8.00% Cummulative and Redeemable Preference ` 10 10,000,000 10.20
Shares of Aditya Birla Finance Limited
Others
8.00% Cummulative and Redeemable Preference ` 10 500,000 0.79
Shares of Aditya Birla Fashion and Retail Limited
5.25% Cumulative Redeemable Preference Shares of ` 100 1,500,000 13.71
Aditya Birla Health Services Limited
8% Preference Shares of Birla Management Centre ` 10 200 ß
Services Limited
Total Other Non-Current Investments (B) 1,881.55
Total Non-Current Investment (A + B) 38,691.37
ß represents amount of ` 2000
(iii) Note on Capital reserve arising:- Capital reserve has arised as Swap Ratio was decided on the basis of
Share Price as on 11th August 2016 (date of Announcement of Merger) and Purchase Considertion was
determined on the date on which control was transferred, i.e. 1st July 2017.
(v)
The figures given above are provisional as fair valuation of one of the associate is still under progress
due to merger going on with other Company.
241
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
B) Arrangement with Century Textiles and Industries Limited (‘CTIL’) for obtaining right and responsibility
to manage, operate, use and control the Viscose Filament Yarn (‘VFY’) Business of CTIL.
The Board of Directors of the Company at their meeting held on 12th December, 2017, have approved an
arrangement with Century Textiles and Industries Limited (CTIL), under which CTIL will grant the right and
responsibility to manage, operate, use and control the Viscose Filament Yarn (VFY) business of CTIL (without
transferring ownership in the underlying immovable and movable assets other than working Capital) for a
duration of 15 (fifteen) years to the Company for the an agreed consideration. The above said arrangement
has become effective from 1st February, 2018.
The VFY business of CTIL is based out of Shahad in Maharashtra, India, with an annual capacity of 26,500
tonnes. Products manufactured include Pot Spun Yarn, Continuous Spun Yarn, VFY and Rayon Tyre Yarn.
In terms of the agreement, the Company has discharged consideration in the following manner:
(i) Commuted royalty amounting to ` 600 Crore.
(ii) Time value of money of interest free deposit ` 161.40 Crore.
(iii) Net working capital at closing is estimated at approximately ` 103.31 Crore.
For the two months period ended 31st March, 2018, the said VFY business unit has contributed revenue of
` 161.28 Crore and profit before tax of ` 8.58 Crore (including fair valuation impact of Finished Goods Inventory)
to the Company’s results. If the said arrangement had occurred on 1st April, 2017, the consolidated revenue
and profit before tax for the year ended would have been ` 967.68 Crore and ` 51.48. Crore respectively,
based on the amounts extrapolated by the management. In determining these amounts, the management has
assumed that the fair value adjustments, that arose on the date of arrangement have been same the as if the
arrangement occurred on 1st April, 2017.
242
GRASIM
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
(` in Crore)
As on
Particulars
1st February, 2018
Fair value of Interest benefit Receivable 7.93
Other Non Current Assets (Financial and Non-Financial) 0.78
Inventories 127.52
Trade Receivable 61.17
Other Current Assets (Financial and Non-Financial) 16.68
Total Assets (A) 982.58
Deferred Tax Liability 4.96
Derivative Liability 18.30
Trade Payables 71.39
Other Liabilities and Provision 22.70
Total Liabilities (B) 117.35
Total Identifiable Net Assets acquired (A-B) 865.23
Less: Purchase Consideration 864.71
(Goodwill)/Capital Reserve 0.52
The gross contractual amounts and fair value of trade and other receivableacquired ` 69.10 Crore. None of
the trade and other receivables are credit impaired and it is expected that the full contractual amounts will be
recoverable.
The above figures are provisional as the acquisition of rights to manage and operate Century Yarn was carried
out in the last quarter of the current year,hence the fair valuation of assets and liabilities was pending for
finalisation.
The core principle of Ind AS 115 is that an entity should recognise revenue to depict the transfer of promised
goods or services to customers in an amount that reflects the consideration to which the entity expects to be
entitled in exchange for those goods or services. Specifically, the standard introduces a 5-step approach to
revenue recognition:
• Step 1: Identify the contract(s) with a customer
• Step 2: Identify the performance obligation in contract
• Step 3: Determine the transaction price
• Step 4: Allocate the transaction price to the performance obligations in the contract
• Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation
243
FINANCIAL STATEMENTS STANDALONE
Notes
forming part of the Standalone Financial Statements for the year ended 31st March, 2018
Except for the disclosure requirements, the new standard will not materially impact the Company’s financial
statements. The amendment will come into force from 1st April, 2018.
4.14 Previous year’s figures have been regrouped/ reclassified to conform to current year’s presentation.
4.15 Figures less than ` 50,000 have been shown at actual, wherever statutorily required to be disclosed, as the figures
have been rounded off to the nearest lakh.
In terms of our report on even date attached For and on behalf of the Board of Directors of
GRASIM INDUSTRIES LIMITED
CIN-L17124MP1947PLC000410
For B S R & Co. LLP For S R B C & CO LLP Sushil Agarwal Dilip Gaur
Chartered Accountants Chartered Accountants Whole-time Director & Managing Director
Firm Registration No.: 101248W/W-100022 Firm Registration No: 324982E/E300003 Chief Financial Officer DIN- 02071393
DIN- 00060017
Mumbai Mumbai
Dated: 23rd May, 2018 Dated: 23rd May, 2018
244
GRASIM
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated Ind AS financial statements based on our audit. While
conducting the audit, we have taken into account the provisions of the Act, the accounting and auditing standards
and matters which are required to be included in the audit report under the provisions of the Act and the Rules made
thereunder. We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of Chartered
Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated Ind AS
financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the
consolidated Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the consolidated Ind AS financial statements, whether due to fraud
or error. In making those risk assessments, the auditor considers internal financial control relevant to the Holding
Company’s preparation of the consolidated Ind AS financial statements that give a true and fair view in order to design
audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the
accounting policies used and the reasonableness of the accounting estimates made by the Holding Company’s Board of
Directors, as well as evaluating the overall presentation of the consolidated Ind AS financial statements. We believe that
the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred
to in sub-paragraph (b) of the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit
opinion on the consolidated Ind AS financial statements.
245
FINANCIAL STATEMENTS Consolidated
Opinion
In our opinion and to the best of our information and according to the explanations given to us and based on the
consideration of reports of other auditors on separate financial statements and on the other financial information of the
subsidiaries, associates and joint ventures referred below in the Other Matters paragraph, the aforesaid consolidated Ind
AS financial statements give the information required by the Act in the manner so required and give a true and fair view
in conformity with the accounting principles generally accepted in India of the consolidated state of affairs of the Group,
its associates and joint ventures as at 31 March, 2018, their consolidated profit including other comprehensive income,
their consolidated cash flows and consolidated statement of changes in equity for the year ended on that date.
Emphasis of Matter
a. The auditors of Ultratech Cement Limited (‘UTCL’), a subsidiary Company, without qualifying their opinion on the
audited consolidated Ind AS financial statements of UTCL have drawn attention to:
(i) Note 4.5.3 to the Consolidated Ind AS Financial Statements which states that in terms of order dated 31
August, 2016, the Competition Commission of India (‘CCI’) has imposed penalty of Rs. 1,175.49 Crores for
alleged contravention of the provisions of the Competition Act, 2002 by UTCL. UTCL has filed an appeal
against CCI Order before the Competition Appellate Tribunal (‘COMPAT’). COMPAT has granted stay on the CCI
Order on the condition that UTCL deposits 10% of the penalty amounting to Rs. 117.56 Crores which has since
been deposited. Consequent to reconstitution of Tribunals by the government, this matter was transferred to
the National Company Law Appellate Tribunal (‘NCLAT’). NCLAT has completed its hearing on the matter and
order is awaited. Based on a legal opinion and considering the uncertainty relating to the outcome of this
matter, no provision has been considered by UTCL in the books of accounts.
(ii) Note 4.5.3 to the Consolidated Ind AS Financial Statements which states that in terms of order dated 19
January, 2017, the CCI has imposed penalty of Rs. 68.30 Crores pursuant to a reference filed by the Government
of Haryana for alleged contravention of the provisions of the Competition Act, 2002 in August 2012 by UTCL.
UTCL had filed an appeal before COMPAT and received the stay order dated 10 April, 2017. Consequent to
reconstitution of Tribunals by the government, this matter has now been transferred to the NCLAT. Based on
a legal opinion and considering the uncertainty relating to the outcome of this matter, no provision has been
considered by UTCL in the books of accounts.
b. The auditors of Aditya Birla Capital Limited (‘ABCL’), a subsidiary Company, without qualifying their opinion have
drawn attention to Note 4.4.8 c to the Consolidated Ind AS Financial Statements clarifying that there are regulatory
restrictions on transfer to Shareholders’ Account of differences arising on the application of the recognition
and measurement principles of Indian Accounting Standards to the Policyholders’ (Other than Participating
Policyholders’) assets, liabilities, income and expenditure reported on statutory basis. Pending regulatory clarity
in this regard, these differences have been included in the profit for the year ended 31 March, 2018 and within
equity as of that date.
c. The auditors of Idea Cellular Limited (‘Idea’), an associate Company, without qualifying their opinion on the audited
Consolidated Ind AS Financial Statements of Idea have drawn attention to Note 4.5.4 to the Consolidated Ind AS
Financial Statements which describes the uncertainties related to the legal outcome in respect of the Department
of Telecommunication (‘DOT’) demand notices for one time spectrum charges.
Other Matters
a. The auditors of ABCL, without qualifying their opinion on the audited Consolidated Ind AS Financial Statements
of ABCL have stated that determination of the following as at and for the year ended 31 March, 2018 is the
responsibility of the ABCL Groups’ Appointed Actuaries (‘the Appointed Actuaries’):
i. Change in Valuation of Liability in Respect of Insurance Policies” includes charge for actuarial valuation of
liabilities for life policies in force and charge for the policies in respect of which premium has been discontinued
but liability exists as at 31 March, 2018, in respect of one subsidiary and “Benefits Paid – Insurance Business”
246
GRASIM
includes the estimate of claims Incurred But Not Reported (‘IBNR’) and claims Incurred But Not Enough Reported
(‘IBNER’), in respect of another subsidiary. These charges have been determined based on the liabilities duly
certified by the subsidiaries’ Appointed Actuaries’ and in their respective opinions, the assumptions for
such valuations are in accordance with the guidelines and norms issued by the Insurance Regulatory and
Development Authority of India (‘IRDAI’) and the Institute of Actuaries of India in concurrence with the IRDAI.
The respective auditors of these subsidiaries have relied on the Appointed Actuaries’ certificates in this regard
in forming their opinion on the financial statements of the said subsidiaries.
ii. Other adjustments for the purpose of Statement confirmed by the Appointed Actuaries’ in accordance with
Indian Accounting Standard 104 on Insurance Contracts:
a. Assessment of contractual liabilities based on classification of contracts into insurance contracts and
investment contracts;
b. Valuation and Classification of Deferred Acquisition Cost and Deferred Origination Fees on Investment
Contracts;
c. Grossing up and Classification of the Reinsurance Assets; and
d. Liability Adequacy test as at the reporting dates.
The auditors of ABCL have relied upon Appointed Actuaries’ certificates in this regard for forming their opinion on
the aforesaid mentioned items.
b. We did not jointly audit the financial statements and other financial information, in respect of 6 subsidiaries
whose financial statements include total assets of Rs 1,75,076.71 Crore as at 31 March, 2018, total revenues of Rs
41,258.48 Crore and net cash outflows of Rs. 160.08 Crore for the year ended on that date. The consolidated Ind
AS financial statements also include the Group’s share of net loss of Rs. 841.07 Crore for the year ended 31 March,
2018, as considered in the consolidated Ind AS financial statements, in respect of 3 associates and 8 joint ventures.
These financial statements and other financial information have not been jointly audited by us and have been
audited either singly by one of us or jointly by one of us with other auditors or by other auditors, whose financial
statements, other financial information and auditor’s reports have been furnished to us by the management. Our
opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in
respect of these subsidiaries, joint ventures and associates, and our report in terms of sub-sections (3) of Section
143 of the Act, in so far as it relates to the aforesaid subsidiaries, joint ventures and associates, is based solely on
the reports of such other auditors.
c. Certain of these joint ventures and a subsidiary are located outside India whose financial statements and other
financial information have been prepared in accordance with accounting principles generally accepted in their
respective countries and which have been audited by other auditors under generally accepted auditing standards
applicable in their respective countries. The Company’s management has converted the financial statements of
such entities located outside India from accounting principles generally accepted in their respective countries
to accounting principles generally accepted in India. We have audited these conversion adjustments made by
the Company’s management. Our opinion in so far as it relates to the balances and affairs of such subsidiaries
and joint ventures located outside India is based on the report of other auditors and the conversion adjustments
prepared by the management of the Company and audited by us.
d. The accompanying consolidated Ind AS financial statements include unaudited financial statements and other
unaudited financial information in respect of 2 subsidiaries whose financial statements and other financial
information reflect total assets of Rs. 2.86 Crores as at 31 March, 2018, and total revenues of Rs. 82.91 Crores for
the year ended on that date. These unaudited financial statements and other unaudited financial information have
been furnished to us by the management. The consolidated Ind AS financial statements also include the Group’s
share of net loss of Rs. 0.92 Crores for the year ended 31 March, 2018, as considered in the consolidated Ind AS
financial statements, in respect of a joint venture, whose financial statements and other financial information have
not been audited and whose unaudited financial statements and other unaudited financial information have been
furnished to us by the management. Our opinion, in so far as it relates to the affairs of these subsidiaries and
247
FINANCIAL STATEMENTS Consolidated
joint venture, is based solely on such unaudited financial statements and other unaudited financial information.
In our opinion and according to the information and explanations given to us by the management, these financial
statements and other financial information are not material to the Group. Our opinion is not qualified in respect of
this matter.
Our opinion above on the consolidated Ind AS financial statements, and our report on Other Legal and Regulatory
Requirements below, is not modified in respect of the above matters with respect to our reliance on the work done
and the reports of the other auditors and the financial statements and other financial information certified by the
management.
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief
were necessary for the purposes of our audit of the aforesaid consolidated Ind AS financial statements;
(b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated
Ind AS financial statements have been kept so far as it appears from our examination of those books and reports
of the other auditors;
(c) The consolidated Balance Sheet, the consolidated Statement of Profit and Loss including the Statement of Other
Comprehensive Income, the consolidated Cash Flow Statement and consolidated Statement of Changes in Equity
dealt with by this Report are in agreement with the books of account maintained for the purpose of preparation of
the consolidated Ind AS financial statements;
(d) In our opinion, the aforesaid consolidated Ind AS financial statements comply with the Accounting Standards
specified under section 133 of the Act, read with the Companies (Indian Accounting Standard) Rules, 2015, as
amended;
(e) On the basis of the written representations received from the directors of the Holding Company as on 31 March,
2018 taken on record by the Board of Directors of the Holding Company and the reports of the statutory auditors
who are appointed under Section 139 of the Act, of its subsidiary companies, associate companies and joint
ventures incorporated in India, none of the directors of the Group’s companies, its associates and joint ventures
incorporated in India is disqualified as on 31 March, 2018 from being appointed as a director in terms of Section
164 (2) of the Act;
(f) With respect to the adequacy and the operating effectiveness of the internal financial controls over financial
reporting with reference to these consolidated Ind AS financial statements of the Holding Company and its
subsidiary companies, associate companies and joint ventures incorporated in India, refer to our separate report
in “Annexure A” to this report;
(g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies
(Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations
given to us and based on the consideration of the report of the other auditors on separate financial statements
as also the other financial information of the subsidiaries, associates and joint ventures, as noted in the ‘Other
Matters’ paragraph:
i. The consolidated Ind AS financial statements disclose the impact of pending litigations on its consolidated
financial position of the Group, its associates and joint ventures – Refer Note 4.5 to the consolidated Ind AS
financial statements;
248
GRASIM
ii. Provision has been made in the consolidated Ind AS financial statements, as required under the applicable law
or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative
contracts – Refer Note 2.35.1 to the consolidated Ind AS financial statements.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and
Protection Fund by the Holding Company, its subsidiaries, associates and joint ventures incorporated in India
during the year ended 31 March, 2018.
iv. The disclosures in the consolidated Ind AS financial statements regarding holdings as well as dealings in
specified bank notes during the period from 8 November, 2016 to 30 December, 2016 have not been made
since the requirement does not pertain to financial year ended 31 March, 2018.
249
FINANCIAL STATEMENTS Consolidated
Annexure – A
to the Independent Auditor’s Report of even date on the Consolidated ind as Financial Statements of Grasim
Industries Limted
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the
Companies Act, 2013 (“the Act”)
In conjunction with our audit of the consolidated Ind AS financial statements of Grasim Industries Limited as of and for
the year ended 31 March, 2018, we have audited the internal financial controls with reference to financial statements of
Grasim Industries Limited (hereinafter referred to as the “Holding Company”), its subsidiary companies, its associate
companies and its joint ventures, which are companies incorporated in India, as of that date.
Auditor’s Responsibility
Our responsibility is to express an opinion on the Holding Company’s internal financial controls with reference to financial
statements based on our audit. We conducted our audit in accordance the Guidance Note and the Standards on Auditing,
issued by the ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of
internal financial controls, both applicable to an audit of internal financial controls and, both issued by the ICAI. Those
Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements
was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls
system with reference to financial statements and their operating effectiveness. Our audit of internal financial controls
with reference to financial statements included obtaining an understanding of internal financial controls with reference
to financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and
operating effectiveness of internal controls based on the assessed risk. The procedures selected depend on the auditor’s
judgement, including the assessment of the risks of material misstatement of the consolidated Ind AS financial statements,
whether due to fraud or error.
We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors in terms of
their reports referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our
audit opinion on the Holding Company’s internal financial controls system with reference to financial statements.
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GRASIM
the company are being made only in accordance with authorisations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition
of the company’s assets that could have a material effect on the consolidated Ind AS financial statements.
Opinion
In our opinion, the Holding Company, its subsidiary companies, its associate companies and its joint ventures, which are
companies incorporated in India, have, maintained in all material respects, adequate internal financial controls system
with reference to financial reporting and such internal financial controls with reference to financial statements were
operating effectively as at 31 March, 2018, based on the internal controls with reference to financial statements criteria
established by the Holding Company considering the essential components of internal control stated in the Guidance
Note issued by the ICAI.
Other Matters
Our report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls
with reference to financial statements of the Holding Company, insofar as it relates to these 6 subsidiary companies, 3
associate companies and 3 joint ventures, which are companies incorporated in India, is based on the corresponding
reports of the auditors of such subsidiaries, associates and joint ventures incorporated in India.
251
FINANCIAL STATEMENTS Consolidated
(` in Crore)
Note As at As at
No. 31st March, 2018 31st March, 2017
ASSETS
Non-Current Assets
Property, Plant and Equipment 2.1 45,434.02 31,375.64
Capital Work-in-Progress 2.1 2,256.90 1,296.34
Goodwill 2.2 16,191.81 2,994.39
Other Intangible Assets 2.1 7,631.37 416.16
Intangible Assets Under Development 2.1 33.12 0.63
Financial Assets
Investments
- Equity Accounted Investees 2.3 13,867.53 2,151.83
- Investments of Insurance Business 2.4 11,951.36 -
- Other Investments 2.5 7,212.66 5,049.96
Assets held to cover linked liabilities of Life Insurance Business 2.6 21,691.73 -
Loans 2.7 37,512.53 198.99
Other Financial Assets 2.8 64.22 76.26
Deferred Tax Assets (Net) 2.9 21.42 20.44
Non-Current Tax Assets (Net) 245.78 136.62
Other Non-Current Assets 2.10 3,503.90 591.12
167,618.35 44,308.38
Current Assets
Inventories 2.11 5,860.36 4,231.42
Financial Assets
Investments
- Equity Accounted Investees 2.12 65.15 4.46
- Investments of Insurance Business 2.13 1,067.81 -
- Other Investments 2.14 7,121.62 6,994.13
Assets held to cover linked liabilities of Life Insurance Business 2.15 3,017.15 -
Trade Receivables 2.16 5,213.14 3,009.56
Cash and Cash Equivalents 2.17 949.64 93.82
Bank Balances other than Cash and Cash Equivalents 2.18 365.25 2,213.19
Loans 2.19 13,542.59 181.34
Other Financial Assets 2.20 1,050.30 399.71
Current Tax Assets (Net) 117.95 30.90
Other Current Assets 2.21 1,831.95 1,292.95
Assets Held for Disposal 45.94 7.98
40,248.85 18,459.46
TOTAL 207,867.20 62,767.84
252
GRASIM
(` in Crore)
Note As at As at
No. 31st March, 2018 31st March, 2017
EQUITY AND LIABILITIES
Equity
Equity Share Capital 2.22 131.48 93.37
Other Equity 2.23 57,230.37 31,293.71
Equity Attributable to Owners of the Company 57,361.85 31,387.08
Non-Controlling Interest 26,336.88 9,701.93
Total Equity 83,698.73 41,089.01
Liabilities
Non-Current Liabilities
Financial Liabilities
Borrowings 2.24 40,793.44 6,768.71
Trade Payables 2.25 - 8.70
Other Financial Liabilities 2.26 194.54 34.81
40,987.98 6,812.22
Provisions 2.27 416.94 297.11
Deferred Tax Liabilities (Net) 2.28 5,617.75 3,538.82
Policyholder's Liabilities 2.29 34,795.16 -
Other Non-Current Liabilities 2.30 58.71 35.60
Current Liabilities
Financial Liabilities
Borrowings 2.31 20,519.95 1,157.85
Trade Payables 2.32 5,262.41 3,048.19
Other Financial Liabilities 2.33 9,076.00 2,650.95
34,858.36 6,856.99
Other Current Liabilities 2.34 4,203.50 3,006.56
Provisions 2.35 901.20 327.06
Policyholder's Liabilities 2.36 1,578.19 -
Current Tax Liabilities (Net) 750.68 804.47
TOTAL EQUITY AND LIABILITIES 207,867.20 62,767.84
Significant Accounting Policies and Key Accounting Estimates and 1
Judgements
The accompanying Notes are an integral part of the Financial Statements
In terms of our report on even date attached For and on behalf of the Board of Directors of
GRASIM INDUSTRIES LIMITED
CIN-L17124MP1947PLC000410
For B S R & Co. LLP For S R B C & CO LLP Sushil Agarwal Dilip Gaur
Chartered Accountants Chartered Accountants Whole-time Director & Managing Director
Firm Registration No.: 101248W/W-100022 Firm Registration No: 324982E/E300003 Chief Financial Officer DIN- 02071393
DIN- 00060017
Mumbai Mumbai
Dated: 23rd May, 2018 Dated: 23rd May, 2018
253
FINANCIAL STATEMENTS Consolidated
(` in Crore)
Year Ended Year Ended
Note No. 31st March, 2018 31st March, 2017
(Current Year) (Previous Year)
INCOME
Revenue from Operations (Note 4.4.7) 3.1 & 3.2 57,492.85 40,247.17
Re-insurance Ceded (154.65) -
Net Revenue from Operations 57,338.20 40,247.17
Other Income 3.3 990.23 947.76
Total Income (I) 58,328.43 41,194.93
EXPENSES
Cost of Materials Consumed 3.4 11,635.37 8,688.85
Purchases of Stock-in-Trade 3.5 1,060.23 624.41
Changes in Inventories of Finished Goods,
Work-in-Progress and Stock-in-Trade 3.6 (84.95) 161.75
Employee Benefits Expenses 3.7 3,992.41 2,265.59
Power and Fuel 8,631.29 5,795.41
Freight and Handling Expenses 7,569.59 6,092.09
Excise Duty (Note 4.4.7) 1,140.17 4,178.77
Change in Valuation of Liability in respect of Insurance Policies 357.22 -
Benefits Paid - Insurance Business 3,429.59 -
Finance Cost relating to NBFC/HFC's Business 3.8 2,299.49 -
Other Finance Costs 3.9 1,359.13 702.40
Depreciation and Amortisation Expenses 2.1.2 2,724.36 1,807.59
Other Expenses 3.10 7,461.82 5,076.99
51,575.72 35,393.85
Less: Captive Consumption of Cement 44.89 21.82
Total Expenses (II) 51,530.83 35,372.03
Profit Before Share in Profit/(Loss) of Equity Accounted Investees, 6,797.60 5,822.90
Exceptional Items and Tax
Share in Profit/(Loss) of Equity Accounted Investees (727.44) 129.41
Profit Before Tax and Exceptional Items 6,070.16 5,952.31
Exceptional Item 3.15 (432.85) -
Profit Before Tax 5,637.31 5,952.31
Tax Expense 3.11
Current Tax 1,831.69 1,354.39
Provision for Tax of Earlier Years Written Back (97.86) (8.40)
Deferred Tax 213.29 360.71
Total Tax Expense 1,947.12 1,706.70
Profit for the period including profit of Life Insurance Business attributable to 3,690.19 4,245.61
Participating Policyholders
Less : Profit attributable to participating policyholders of Life Insurance Business 2.57 -
Profit for the Year (III) 3,687.62 4,245.61
254
GRASIM
(` in Crore)
Year Ended Year Ended
Note No. 31st March, 2018 31st March, 2017
(Current Year) (Previous Year)
Other Comprehensive Income 3.12
A (i) Items that will not be reclassified to Profit or Loss (147.64) 1,010.61
(ii) Income tax relating to items that will not be reclassified to Profit or Loss (55.98) (18.39)
B (i) Items that will be reclassified to Profit or Loss (64.35) (28.89)
(ii) Income tax relating to items that will be reclassified to Profit or Loss (10.73) 0.11
Other Comprehensive Income before income attributable to participating (278.70) 963.44
policyholders of Life Insurance Business (Net of Tax)
Less : Other Comprehensive Income attributable to participating policyholders (0.22) -
of Life Insurance Business
Other Comprehensive Income for the Year (IV) (278.48) 963.44
Total Comprehensive Income for the Year (III + IV) 3,409.14 5,209.05
Profit Attributable to:
Owners of the Company 2,678.58 3,167.30
Non-Controlling interest 1,009.04 1,078.31
3,687.62 4,245.61
Other Comprehensive Income Attributable to:
Owners of the Company (167.88) 951.48
Non-Controlling interest (110.60) 11.96
(278.48) 963.44
Total Comprehensive Income Attributable to:
Owners of the Company 2,510.70 4,118.78
Non-Controlling interest 898.44 1,090.27
3,409.14 5,209.05
Earnings Per Equity Share (Face Value ` 2 each) 3.16
Basic ( `) 44.22 67.85
Diluted ( `) 44.17 67.77
Significant Accounting Policies and Key Accounting Estimates and Judgements 1
The accompanying Notes are an integral part of the Financial Statements
In terms of our report on even date attached For and on behalf of the Board of Directors of
GRASIM INDUSTRIES LIMITED
CIN-L17124MP1947PLC000410
For B S R & Co. LLP For S R B C & CO LLP Sushil Agarwal Dilip Gaur
Chartered Accountants Chartered Accountants Whole-time Director & Managing Director
Firm Registration No.: 101248W/W-100022 Firm Registration No: 324982E/E300003 Chief Financial Officer DIN- 02071393
DIN- 00060017
Mumbai Mumbai
Dated: 23rd May, 2018 Dated: 23rd May, 2018
255
FINANCIAL STATEMENTS Consolidated
(` in Crore)
Current Year Previous Year
A. Cash Flow from Operating Activities
(a.) Profit Before Tax after Exceptional Items and before Share in Profit/(Loss) of Equity 6,364.75 5,822.90
Accounted Investees
Adjustments for:
Exceptional Items (Note 3.15) 432.85 -
Depreciation and Amortisation 2,724.36 1,807.59
Finance Costs 1,359.13 702.40
Interest Income (114.70) (175.17)
Dividend Income (58.43) (27.15)
Employee Stock Option Expenses 78.71 10.79
Loss Allowance (Net) 40.76 34.22
Provision for Mines Restoration 30.53 -
Change in valuation of Liabilities in respect of Insurance Policies in force 357.22 -
Advances including Contingency Provision for Standard Assets of NBFC and HFC's 116.51 -
Business
Exchange Loss on Capital Reduction in a Joint Venture (Note 2.12.1) - 13.52
Excess Provision Written Back (Net) (136.88) (182.02)
Fair Value Adjustments to Borrowings and Investments (71.38) -
Other Non-Cash Items (5.56) 15.49
(Profit)/Loss on Sale of Property, Plant and Equipment (Net) 17.79 1.47
Profit on Sale of Investments (Net) (255.77) (91.58)
Profit on Sale of Investments routed through OCI 5.24 -
Unrealised Gain on Investments measured at Fair Value through Profit and Loss (Net) (386.96) (495.83)
Discounting of Sales Tax Deferment Loan (3.86) (17.82)
Fair Value Movement in Derivative Instruments (3.07) 15.50
(b.) Operating Profit Before Working Capital Changes 10,491.24 7,434.31
Adjustments for:
Trade Receivables (765.19) (29.22)
Loans of Financing Business (11,295.46) -
Financial and Other Assets (667.09) (135.45)
Inventories (751.26) (82.74)
Trade Payables and Other Liabilities 882.72 1,066.02
Stock of Securities 660.08 -
Investment of Life Insurance Policyholders (248.69) -
(c.) Cash (Used in)/Generated from Operations (1,693.65) 8,252.92
Direct Taxes Paid (Net of Refund) (1,699.57) (965.12)
Net Cash (used in)/from Operating Activities (3,393.22) 7,287.80
B. Cash Flow from Investing Activities
Purchase of Property, Plant and Equipment {Note (iv) below} (3,288.71) (1,839.58)
Acquisition of Rights to Manage and Operate Century Rayon Business (903.31) -
Proceeds from Disposal of Property, Plant and Equipment 242.96 46.58
Investments in Joint Ventures (136.82) (0.51)
Sale of Mutual Fund Units and Bonds (Non-Current) 5,719.46 2,160.30
Purchase of Mutual Fund Units, Bonds and Certificate of Deposits (Current) {Net} (3,983.83) (3,817.53)
Proceeds from Sale of Non-Current Equity Investments (Subsidiary) 6.26 -
Proceeds from (Purchase)/Sale of Investments and Shareholders' Investments (99.29) (246.81)
of Life Insurance Business (Current) {Net}
Investment in Other Bank Deposits 2,018.97 (17.41)
Proceeds from Capital Reduction in a Joint Venture - 42.68
Expenditure for Cost of Assets Transferred (143.13) (13.81)
Loans and Advances given to Joint Ventures and Associates (55.15) -
Receipt against Loans and Advances given to Joint Ventures and Associates 85.85 0.47
Inter-Corporate Deposits 16.29 (13.50)
Interest Received 115.60 166.74
Dividend Received [include dividend from Associate and Joint Venture 163.34 44.73
{` 104.92 Crore (PY ` 17.58 Crore)}]
Net Cash Used in Investing Activities (241.51) (3,487.65)
256
GRASIM
(` in Crore)
Current Year Previous Year
C. Cash Flow from Financing Activities
Proceeds from Issue of Share Capital 85.98 9.25
Share Issue Expenses (3.29) -
Proceeds from Non-Current Borrowings 23,270.67 3,670.50
Repayments of Non-Current Borrowings (9,981.32) (4,116.34)
Proceeds/(Repayments) of Current Borrowings (Net) 2,688.20 (2,313.91)
Repayment of Borrowings Transferred from JAL and JCCL, pursuant to the (10,686.55) -
Scheme of Arrangement
Interest Paid (1,345.03) (678.72)
Dividend Paid (including Corporate Dividend Tax) (574.68) (369.34)
Net Cash From/(Used in) Financing Activities 3,453.98 (3,798.56)
D. Net Increase/(Decrease) in Cash and Cash Equivalents (180.75) 1.59
Cash and Cash Equivalents at the Beginning of the Year (Note 2.17) 93.82 113.34
Add:
Effect of Exchange Rate on Consolidation of Foreign Subsidiaries 4.19 (21.11)
Cash and Cash Equivalents acquired on merger of erstwhile ABNL (Note 4.12 A) 1,032.61 -
Cash and Cash Equivalents transferred on Divestment of Grasim Bhiwani Textiles (0.23) -
Limited (GBTL)
Cash and Cash Equivalents at the End of the Year (Note 2.17) 949.64 93.82
Notes:
(i) Cash Flow Statement has been prepared as per the indirect method set out in Ind AS 7, prescribed under the Companies Act (Indian Accounting
Standard) Rules, 2015, under the Companies Act, 2013.
(ii) The Scheme of Merger of Aditya Birla Nuvo Limited (ABNL) with the Company implemented w.e.f. 1st July, 2017, did not involve any cash outlflow
as the Company issued equity shares of the Company to the Shareholders of the erstwhile ABNL in terms of the Scheme.
(iii) The Scheme of Arrangement between Jaiprakash Associates Limited (JAL) and Jaypee Cement Corporation Limited (JCCL) and the UltraTech Cement
Limited (UTCL) does not involve any cash outflow and the consideration has been discharged through issue of debentures and preference shares.
(iv) Purchase of Property, Plant and Equipment includes movements of Capital Work-in-Progress (including Capital Advances) and Capital Expenditure
Creditors during the year.
(v) Change in liabilities arising from Financing Activities
(` in Crore)
Non-Cash Changes
Others on account of
As at As at
Particulars 31st March, Cashflows Merger of ABNL and Divestment 31st March,
Fair Value
2017 Demerger of Financial of GBTL and 2018
and Other
Adjustment Services and acquisition of inter- Company
JAL and JCCL by UTCL elimination
Non-Current Borrowing (including
current maturities of Non-Current
Borrowings) 8,055.18 3,100.35 (154.25) 35,613.79 (65.21) 46,549.86
Current Borrowings 1,157.85 2,190.65 0.20 17,196.56 (25.31) 20,519.95
9,213.03 5,291.00 (154.05) 52,719.83 (90.52) 67,069.81
In terms of our report on even date attached For and on behalf of the Board of Directors of
GRASIM INDUSTRIES LIMITED
CIN-L17124MP1947PLC000410
For B S R & Co. LLP For S R B C & CO LLP Sushil Agarwal Dilip Gaur
Chartered Accountants Chartered Accountants Whole-time Director & Managing Director
Firm Registration No.: 101248W/W-100022 Firm Registration No: 324982E/E300003 Chief Financial Officer DIN- 02071393
DIN- 00060017
Mumbai Mumbai
Dated: 23rd May, 2018 Dated: 23rd May, 2018
257
A. EQUITY SHARE CAPITAL
258
For the year ended 31st March, 2018 (` in Crore)
Balance as at Changes in Equity Share Capital during the Balance as at
1st April, 2017 year (Note 2.22.4) 31st March, 2018
93.37 38.11 131.48
FINANCIAL STATEMENTS
B. OTHER EQUITY
(` in Crore)
Attributable to Owners of the Company
Reserves and Surplus Other Comprehensive Income (OCI)
Equity Foreign Employee
Component of Securities Debenture Special Debt Equity Currency Share Non-
Other Financial Capital Legal Premium General Redemption Reserve Retained Instruments Instruments Hedging Translation Options Controlling Total
Instruments Reserve Reserve Reserve Reserve Reserve Fund Earnings through OCI through OCI Reserve Reserve Outstanding Total Interest Equity
Current Year
Consolidated
Opening Balance as at
1st April, 2017 3.00 109.79 0.78 708.06 24,608.30 151.56 6.46 3,299.75 8.49 2,195.18 39.01 121.60 41.73 31,293.71 9,701.93 40,995.64
Reserves on Merger of erstwhile
ABNL as on 1st July, 2017
(Note 4.12 A) - - - - - 123.33 - - - - (4.33) - 13.77 132.77 5,152.18 5,284.95
Adjustment on Demerger of
financial Services business as on
4th July, 2017
- Acquisition of additional stake
in Aditya Birla Finance Limited
[Subsidiary Company of Aditya
Birla Capital Limited (ABCL)] - - - - - - - - - - - - - - (1,718.73) (1,718.73)
- Dilution of stake in ABCL
(Company's Subsidiary) - - - - - - - - - - - - - - 12,335.32 12,335.32
Capital Reserve arising on
acquistion of Rights to Manage and
Operate Century Rayon
(Note 4.12 B) - 0.52 - - - - - - - - - - - 0.52 - 0.52
Profit for the Year - - - - - - - 2,678.58 - - - - - 2,678.58 1,009.04 3,687.62
Other Comprehensive Income for
the Year - - - - - - - @15.78 (44.49) (206.82) 18.05 49.60 - (167.88) (110.60) (278.48)
Total Comprehensive income
for the Year - - - - - - - 2,694.36 (44.49) (206.82) 18.05 49.60 - 2,510.70 898.44 3,409.14
Consolidated Statement of Changes in Equity
(` in Crore)
Attributable to Owners of the Company
Reserves and Surplus Other Comprehensive Income (OCI)
Equity Foreign Employee
Component of Securities Debenture Special Debt Equity Currency Share Non-
Other Financial Capital Legal Premium General Redemption Reserve Retained Instruments Instruments Hedging Translation Options Controlling Total
Instruments Reserve Reserve Reserve Reserve Reserve Fund Earnings through OCI through OCI Reserve Reserve Outstanding Total Interest Equity
Gain on sale of non-current
investment transferred to Retained
Earnings from Equity instrument
through OCI - - - - - - - 8.19 (8.17) - - - 0.02 - 0.02
Stamp Duty payment on issue of
equity shares to erstwhile ABNL
shareholders, pursuant to the
Scheme of Arrangement - - - (0.14) - - - - - - - - - (0.14) - (0.14)
Issue of equity shares to erstwhile
ABNL shareholders, pursuant to the
for the year ended 31st March, 2018
Scheme of arrangement
(Note 4.12 A) - - - 23,619.28 - - - - - - - - - 23,619.28 - 23,619.28
Capital Reserve arising on Business
combination in Subsidiary Books
[net of deferred tax ` 11.53 Crore]
(Note 4.12 C) - 17.02 - - - - - - - - - - - 17.02 11.24 28.26
Transfer from Retained Earnings to
General Reserve - - - - 1,963.36 - - (1,963.36) - - - - - - - -
Transfer from Retained Earnings to
Special Reserve Fund - - - - - - 74.39 (74.39) - - - - - - - -
Transfer from Debenture
Redemption reserve to General
Reserve/Retained Earnings - - - - 75.00 (112.63) - 37.63 - - - - - 0.00 - 0.00
Transfer from Retained Earnings to
Debenture Redemption Reserve - - - - - 111.31 - (111.31) - - - - - - - -
Transfer from Retained Earnings to
Legal Reserve - - 0.32 - - - - (0.32) - - - - - - - -
Transfer to General Reserve on
account of lapse of vested options - - - - 0.73 - - - - - - - (0.89) (0.16) 0.16 -
Employee Stock Options excercised - - - 20.07 - - - - - - - - (14.02) 6.05 12.17 18.22
Employee Stock Options granted
(net of lapses) - - - - - - - - - - - 84.00 84.00 - 84.00
Dividend (including Dividend
Distribution Tax of ` 95.83 Crore)
pertaining to FY 2016-17 - - - - - - - (435.07) - - - - - (435.07) (134.83) (569.90)
Issue of equity shares to
Non-Controlling Interest - - - - - - - - - - - - - - 65.15 65.15
Change in Non-Controlling Interest
in the Books of Subsidiary - - - - - - - - - - - - - - 7.38 7.38
Movement during the year (stake
dilution in Subsidiary Companies
and movement in Joint Venture
Companies - - - - 1.80 (0.06) - (0.07) - - - - - 1.67 6.47 8.14
Consolidated Statement of Changes in Equity
Closing Balance as at
31st March, 2018 3.00 127.33 1.10 24,347.27 26,649.19 273.51 80.85 3,455.41 (36.00) 1,980.19 52.73 171.20 124.59 57,230.37 26,336.88 83,567.25
GRASIM
259
(` in Crore)
Attributable to Owners of the Company
260
Reserves and Surplus Other Comprehensive Income (OCI)
Equity Capital Foreign Employee
Component of Reserve Securities Debenture Special Debt Equity Currency Share Non-
Other Financial Capital Legal Premium General Redemption Reserve Retained Instruments Instruments Hedging Translation Options Controlling Total
Instruments Subsidy Reserve Reserve Reserve Reserve Fund Earnings through OCI through OCI Reserve Reserve Outstanding Total Interest Equity
Previous Year
FINANCIAL STATEMENTS
31st March, 2017 3.00 109.79 0.78 708.06 24,608.30 151.56 6.46 3,299.75 8.49 2,195.18 39.01 121.60 41.73 31,293.71 9,701.93 40,995.64
Significant Accounting Policies and Key Accounting Estimates and Judgements- Refer Note 1
The accompanying Notes are an integral part of the Financial Statements
In terms of our report on even date attached For and on behalf of the Board of Directors of
GRASIM INDUSTRIES LIMITED
CIN-L17124MP1947PLC000410
For B S R & Co. LLP For S R B C & CO LLP Sushil Agarwal Dilip Gaur
Chartered Accountants Chartered Accountants Whole-time Director & Managing Director
Firm Registration No.: 101248W/W-100022 Firm Registration No: 324982E/E300003 Chief Financial Officer DIN- 02071393
DIN- 00060017
Mumbai Mumbai
Dated: 23rd May, 2018 Dated: 23rd May, 2018
Consolidated Statement of Changes in Equity
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
CORPORATE INFORMATION
Grasim Industries Limited (“the Group” or “the Company”) is a limited company incorporated and domiciled in India. The
registered office is at Birlagram, Nagda - 456 331, Dist. Ujjain (M.P.), India. The Company is a public limited company and
its shares are listed on the Bombay Stock Exchange (BSE), India, and the National Stock Exchange (NSE), India, and the
Company’s Global Depository Receipts are listed on the Luxembourg Stock Exchange.
The Group along with Subsidiaries, Joint Ventures and Associates is engaged primarily in Viscose (Pulp, Fibre and Yarn),
Chemicals (Caustic Soda and allied Chemicals), Cement, Financial Services, Telecom Business and Others (Insulators,
Textiles, Fertilisers and Solar Power Designing, Engineering, Procurement and Commissioning).The manufacturing
plants of the Company, its Subsidiaries, Joint Ventures and Associates are located in India, Canada, Sweden, China,
Middle East, Sri Lanka and Bangladesh.
The financial statements are authorized for issue by the Board of Directors of the Group at their meeting held on
23rd May, 2018.
261
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
b. Exposure, or rights, to variable returns from its involvement with the investee, and
c. The ability to use its power over the investee to affect its returns.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group
obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities,
income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated
financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.
The Group combines the financial statement of the Parent and its subsidiaries line by line adding together like
items. Inter- Group transactions, balances and unrealised gains on transactions between the Group companies are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the
transferred assets.
Profit or loss and each component of Other Comprehensive Income (OCI) are attributed to the equity holders of the
Parent of the Group and to the non- controlling interests, even if this results in the non-controlling interests having
a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their
accounting policies into line with the Group’s accounting policies. All inter-group assets and liabilities, equity,
income, expenses and cash flows relating to transactions between the members of the Group are eliminated in
full on consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.
When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between
(i) the aggregate of the fair value of consideration received and the fair value of any retained interest; and (ii)
the carrying amount of the assets (including goodwill) and liabilities of the subsidiary and any non-controlling
interests. Amounts previously recognised in OCI in relation to the subsidiary are accounted for (i.e. reclassified to
profit or loss or transferred directly to retained earnings) in the same manner, as would be required, if the relevant
assets or liabilities were disposed of. The fair value of any investment retained in the former subsidiary at the date
when control is lost is regarded as the fair value on initial recognition for subsequent accounting under Ind AS 109
Financial Instruments or, when applicable, the cost on initial recognition of an investment in an associate or joint
venture.
Joint Venture:
A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement
have rights to the net assets of the arrangement. Joint control is the contractually agreed sharing of control of an
arrangement, which exists only when decisions about the relevant activities require unanimous consent of the
parties sharing control.
The Group’s investments in its associates and joint ventures are accounted for using the equity method.
Under the equity method, the investment in an associate or a joint venture is initially recognised at cost and
adjusted thereafter to recognise the Group’s share of the post- acquisition profits / losses of the investee in profit
262
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
or loss, and the Group’s share in other comprehensive income of the investee. Dividend received from associates
and joint ventures are recognized as reduction in the carrying amount of the investments.
Unrealised gains on transactions between the Group and its associates and joint ventures are eliminated to
the extent of the Group’s interest in these entities. Unrealised losses are also eliminated unless the transaction
provides evidence of an impairment of the assets transferred.
After application of the equity method, the Group determines whether it is necessary to recognise an impairment
loss on its investment in associate or joint venture. At each reporting date, the Group determines whether there is
objective evidence that the investment in the associate or joint venture is impaired. If there is such evidence, the
Group calculates the amount of impairment as the difference between the recoverable amount of the associate or
joint venture and its carrying value, and then recognises the loss as ‘Share of profit/loss of an associate and a joint
venture’ in the Statement of Profit and Loss.
Upon loss of significant influence over the associate or joint control over the joint venture, the Group measures and
recognises any retained investment at its fair value. Any difference between the carrying amount of the associate
or joint venture upon loss of significant influence or joint control and the fair value of the retained investment and
proceeds from disposal, is recognised in profit or loss.
If the ownership interest in a joint venture or an associate is reduced but joint control or significant influence is
retained, only a proportionate share of the amounts previously recognised in OCI are reclassified to profit or loss
where appropriate. Changes in investor’s interest in other component of equity in such cases are being directly
recognised in Equity.
Accounting policies of equity accounted investees have been changed where necessary to ensure consistencies
with the policies adopted by the Group.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and
the amount recognised for non-controlling interests, and any previous interest held, over the net identifiable
assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate
consideration transferred, the Company re-assesses whether it has correctly identified all of the assets acquired
and all of the liabilities assumed, and reviews the procedures used to measure the amounts to be recognised at
the acquisition date. If the re-assessment still results in an excess of the fair value of net assets acquired over
the aggregate consideration transferred, then the gain is recognised in Other Comprehensive Income (OCI) and
accumulated in equity as capital reserve. However, if there is no clear evidence of bargain purchase, the entity
recognises the gain directly in equity as capital reserve, without routing the same through OCI.
Consideration transferred includes the fair values of the assets transferred, liabilities incurred by the Company to
the previous owners of the acquiree, and equity interests issued by the Company. Consideration transferred also
includes the fair value of any contingent consideration. Consideration transferred does not include amounts related
to the settlement of pre-existing relationships. Any goodwill that arises on account of such business combination
is tested annually for impairment.
263
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent
consideration that meets the definition of a financial instrument is classified as equity, then it is not re-measured
and the settlement is accounted for within equity. Otherwise, other contingent consideration is re-measured at fair
value at each reporting date and subsequent changes in the fair value of the contingent consideration are recorded
in the Statement of Profit and Loss.
A contingent liability of the acquiree is assumed in a business combination only if such a liability represents a
present obligation and arises from a past event, and its fair value can be measured reliably. On an acquisition-
by-acquisition basis, the Company recognises any non-controlling interest in the acquiree either at fair value or
at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets. Transaction costs
that the Company incurs in connection with a business combination, such as Stamp Duty for title transfer in the
name of the Company, finder’s fees, legal fees, due diligence fees, and other professional and consulting fees, are
expensed as incurred.
A cash generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently
when, there is an indication that the unit may be impaired. If the recoverable amount of the cash generating unit is
less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill
allocated to the unit and then to the other assets of the unit pro - rata based on the carrying amount of each asset
in the unit. Any impairment loss for goodwill is recognised in profit or loss. An impairment loss recognised for
goodwill is not reversed in subsequent periods.
Where goodwill has been allocated to a cash-generating unit and part of the operation within that unit is disposed
of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when
determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the
relative values of the disposed operation and the portion of the cash-generating unit retained.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the
combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete.
Those provisional amounts are adjusted through goodwill during the measurement period, or additional assets
or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed at
the acquisition date that, if known, would have affected the amounts recognised at that date. These adjustments
are called as measurement period adjustments. The measurement period does not exceed one year from the
acquisition date.
Property, plant and equipment are stated at acquisition or construction cost less accumulated depreciation
and impairment loss. Cost comprises the purchase price and any attributable cost of bringing the asset to its
location and working condition for its intended use, including relevant borrowing costs and any expected costs
of decommissioning.
264
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
If significant parts of an item of PPE have different useful lives, then they are accounted for as separate items
(major components) of PPE.
The cost of an item of PPE is recognised as an asset if, and only if, it is probable that the economic benefits
associated with the item will flow to the Group in future periods, and the cost of the item can be measured reliably.
Expenditure incurred after the PPE have been put into operations, such as repairs and maintenance expenses, are
charged to the Statement of Profit and Loss during the period in which they are incurred.
Items such as spare parts, standby equipment and servicing equipment are recognised as PPE when it is held for
use in the production or supply of goods or services, or for administrative purpose, and are expected to be used
for more than one year. Otherwise, such items are classified as inventory.
An item of PPE is de-recognised upon disposal or when no future economic benefits are expected to arise from the
continued use of the assets. Any gain or loss, arising on the disposal or retirement of an item of PPE, is determined
as the difference between the sales proceeds and the carrying amount of the asset, and is recognised in the
Statement of Profit and Loss.
Capital work-in-progress includes cost of property, plant and equipment under installation/under development as
at the reporting date.
1.9 Depreciation:
Depreciation is the systematic allocation of the depreciable amount of an asset over its useful life, and is provided
on a straight-line basis, except for Viscose Staple Fibre Division (excluding Power Plants), Nagda, and Corporate
Finance Division, Mumbai for which it is provided on written down value method, over the useful lives as prescribed
in Schedule II of the Companies Act, 2013, or as per technical assessment.,
Depreciable amount for PPE is the cost of PPE less its estimated residual value. The useful life of PPE is the period
over which PPE is expected to be available for use by the Group, or the number of production or similar units
expected to be obtained from the asset by the Group.
The Group has used the following useful lives of the property, plant and equipment to provide depreciation.
A. Major assets class where useful life considered as provided in Schedule II:
S. No Nature of the Assets Estimated Useful Life of the Assets
1. Plant and Machinery - Continuous Process Plant 25 years
2. Reactors 20 years
3. Vessel / Storage Tanks 20 years
4. Factory Buildings 30 years
5. Buildings (other than Factory Buildings) RCC Frame Structures 60 years
6. Electric Installations and Equipment (at Factory) 10 years
265
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
In case of certain class of assets, the Group uses different useful life than those prescribed in Schedule II of
the Companies Act, 2013. The useful life has been assessed based on technical advice, taking into account
the nature of the asset, the estimated usage of the asset on the basis of the management’s best estimation
of getting economic benefits from those classes of assets. The Group uses its technical expertise along with
historical and industry trends for arriving the economic life of an asset.
Also, useful life of the part of PPE which is significant to the total cost of PPE, has been separately assessed
and depreciation has been provided accordingly.
Leasehold Assets
Leasehold Land and Buildings Over the period of Lease
266
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
The estimated useful lives, residual values and the depreciation method are reviewed at the end of each
reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
Continuous process plants, as defined in Schedule II of the Companies Act, 2013, have been classified on the
basis of technical assessment and depreciation is provided accordingly.
Depreciation on additions is provided on a pro-rata basis from the month of installation or acquisition and, in
case of a new Project, from the date of commencement of commercial production. Depreciation on deductions/
disposals is provided on a pro-rata basis upto the month preceding the month of deduction/disposal.
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets
acquired in a business combination is their fair value at the date of acquisition. Following initial recognition,
intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses, if any.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment,
whenever there is an indication that the intangible asset may be impaired. The amortisation period and the
amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each
reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic
benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and
are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is
recognised in the Statement of Profit and Loss unless such expenditure forms part of carrying value of another
asset. Intangible assets are amortised on a straight-line basis over their estimated useful lives.
Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either
individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine
whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is
made on a prospective basis.
Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net
disposal proceeds and the carrying amount of the asset, and are recognised in the Statement of Profit and Loss
when the asset is derecognised.
267
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
a) The technical feasibility of completing the asset so that it can be made available for use or sell.
b) The Group has intention to complete the asset and use or sell it.
e) The Group has ability to measure the expenditure attributable to the asset during its development reliably.
Other development costs, which do not meet the above criteria, are expensed out during the period in which they
are incurred.
To classify any Asset as “Asset held for disposal” the asset must be available for immediate sale and its sale must
be highly probable. Such assets or group of assets are presented separately in the Balance Sheet, in the line
“Assets held for disposal”. Once classified as held for disposal, intangible assets and property, plant and equipment
are no longer amortised or depreciated. The Management must be committed to the sale / distribution expected
within one year from the date of classification.
268
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment
at least annually, and whenever there is an indication then the asset may be impaired.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing the value in
use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset for which the estimates
of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the
carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss
is recognised immediately in the Statement of Profit and Loss, unless the relevant asset is carried at a revalued
amount, in which case the impairment loss is treated as a revaluation decrease.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is
increased to the revised estimate of its recoverable amount, but, so that, the increased carrying amount does not
exceed the carrying amount that would have been determined had no impairment loss been recognised for the
asset (or cash-generating unit) in the prior years. A reversal of an impairment loss is recognised immediately in the
Statement of Profit and Loss, unless the relevant asset is carried at a revalued amount, in which case the reversal
of the impairment loss is treated as a revaluation increase.
1.15 Inventories:
Inventories are valued at the lower of cost and net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of
completion and the estimated costs necessary to make the sale.
269
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
Raw materials, stores and spare parts, and packing materials are considered to be realisable at cost, if the finished
products, in which they will be used, are expected to be sold at or above cost. The cost is computed on weighted-
average basis which includes expenditure incurred for acquiring inventories like purchase price, import duties,
taxes (net of tax credit) and other costs incurred in bringing the inventory to the present location and condition.
Cost of finished goods and work-in-progress includes the cost of conversion based on normal capacity, and
other costs incurred in bringing the inventories to their present location and condition. The cost is computed on
weighted-average basis.
Obsolete, defective, slow moving and unserviceable inventories, if any, are duly provided for.
Proceeds, in respect of sale of raw materials/stores, are credited to the respective heads.
1.17 Leases:
The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement
at the inception of the lease. The arrangement is, or contains, a lease, if fulfilment of the arrangement is dependent
on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that
right is not explicitly specified in an arrangement.
Finance Lease:
As a Lessee:
Leases, where substantially all the risks and benefits incidental to ownership of the leased item are transferred
to the Lessee, are classified as finance lease. The assets acquired under finance lease are capitalised at lower of
fair value and present value of the minimum lease payments at the inception of the lease and disclosed as leased
assets. Such assets are amortised over the period of lease or estimated life of such asset, whichever is less. Lease
payments are apportioned between the finance charges and reduction of the lease liability based on implicit rate
of return. Lease management fees, lease charges and other initial direct costs are capitalised.
Operating Lease:
As a Lessee:
Leases, where significant portion of the risks and rewards of ownership are retained by the lessor, are classified as
operating leases and lease rentals thereon are charged to the Statement of Profit and Loss on a straight-line basis
over the lease term, unless the lease agreements explicitly states that the increase is on account of inflation.
As a Lessor:
The Group has leased certain tangible assets, and such leases, where the Group has substantially retained all the
risks and rewards of ownership, are classified as operating leases. Lease income is recognised in the Statement
of Profit and Loss on a straight-line basis over lease term, unless the lease agreements explicitly states that the
increase is on account of inflation.
270
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
The provident fund contribution as specified under the law is paid to the Regional Provident Fund Commissioner.
In respect of certain employees, Provident Fund contributions are made to a Trust, administered by the Group. The
interest rate payable to the members of the Trust shall not be lower than the statutory rate of interest declared
by the Central Government, under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952,
and shortfall, if any, shall be made good by the Group. The Group’s liability is actuarially determined (using the
Projected Unit Credit Method) at the end of the year, and any shortfall in the Fund size, maintained by the Trust set-
up by the Group, is additionally provided for. Actuarial losses/gains are recognised in the Other Comprehensive
Income in the year in which they arise.
Re-measurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable)
and the return on plan assets (excluding net interest), is reflected immediately in the Balance Sheet with a charge
or credit recognised in OCI in the period in which they occur.
Re-measurement recognised in OCI is reflected immediately in retained earnings and will not be re-classified to
profit or loss. Defined benefit costs are categorised as follows:
• s ervice cost (including current service cost, past service cost, as well as gains and losses on curtailments
and settlements);
• re-measurement.
271
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
The Group presents the first two components of defined benefit costs in the statement of Profit and Loss in the line
item ‘Employee Benefits Expense’.
The present value of the defined benefit plan liability is calculated using a discount rate, which is determined by
reference to market yields at the end of the reporting period on government bonds.
The retirement benefit obligation recognised in the Balance Sheet represents the actual deficit or surplus in
the Group’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of
any economic benefits available in the form of refunds from the plans or reductions in the future contribution to
the plans.
The fair value determined at the grant date of the equity-settled share-based payments, is charged to profit and
loss on the straight-line basis over the vesting period of the option, based on the Group’s estimate of equity
instruments that will eventually vest, with a corresponding increase in equity.
In case of forfeiture/lapse stock option, which is not vested, amortised portion is reversed by credit to employee
compensation expense. In a situation where the stock option expires unexercised, the related balance standing to
the credit of the Employee Stock Options Outstanding Account is transferred within equity.
Cash-settled Transactions:
The cost of cash-settled transactions is measured initially at fair value at the grant date using a Black Scholes Merton
Formula. This fair value is expensed over the period until the vesting date with recognition of a corresponding
liability. The liability is remeasured to fair value at each reporting date upto and, including the settlement date, with
changes in fair value recognised in employee benefits expense.
Exchange differences on monetary items are recognised in the Statement of Profit and Loss in the period in which
these arise, except for:
• xchange differences on foreign currency borrowings relating to assets under construction for future
e
productive use, which are included in the cost of those assets when they are regarded as an adjustment to
interest costs on those foreign currency borrowings;
• exchange differences relating to qualifying effective cash flow hedges and
272
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
• Exchange difference arising on re-statement of long-term monetary items that in substance forms part of
Group’s net investment in foreign operations, is accumulated in Foreign Currency Translation Reserve
(component of OCI) until the disposal of the investment, at which time such exchange difference is recognised
in the Statement of Profit and Loss.
When a foreign operation is disposed of in its entirety or partially such that control, significant influence or joint
control is lost, the cumulative amount of exchange differences related to that foreign operation recognised in OCI,
is re-classified to the Statement of Profit and Loss as part of the gain or loss on disposal. If the Group disposes of
part of its interest in a subsidiary, but retains control, then the relevant proportion of the cumulative amount of
foreign exchange differences is re-allocated to NCI. When the Group disposes of only a part of its interest in an
Associate or a Joint Venture, while retaining significant influence or joint control, the relevant proportion of the
cumulative amount of foreign exchange differences is re-classified to Statement of Profit and Loss.
The Group enters into derivative financial instruments, viz., foreign exchange forward contracts, interest rate swaps
and cross currency swaps to manage its exposure to interest rate, foreign exchange rate risks and commodity
prices. The Group does not hold derivative financial instruments for speculative purposes.
Hedge Accounting:
The Group designates certain hedging instruments in respect of foreign currency risk, interest rate risk and
commodity price risk as cash flow hedges. At the inception of a hedge relationship, the Group formally designates
and documents the hedge relationship to which the Group wishes to apply hedge accounting and the risk
management objective and strategy for undertaking the hedge. The documentation includes the Group’s risk
management objective and strategy for undertaking hedge, the hedging / economic relationship, the hedged item
or transaction, the nature of the risk being hedged, hedge ratio and how the entity will assess the effectiveness
of changes in the hedging instrument’s fair value in offsetting the exposure to changes in the hedged item’s fair
value or cash flows attributable to the hedged risk. Such hedges are expected to be highly effective in achieving
offsetting changes in fair value or cash flows, and are assessed on an ongoing basis to determine that they actually
have been highly effective throughout the financial reporting periods, for which they were designated.
The effective portion of changes in the fair value of the designated portion of derivatives that qualify as cash flow
hedges is recognised in OCI and accumulated under the heading of cash flow hedging reserve. The gain or loss
relating to the ineffective portion is recognised immediately in the Statement of Profit and Loss.
273
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
Amounts previously recognised in other comprehensive income and accumulated in equity relating to (effective
portion as described above) are re-classified to the Statement of Profit and Loss in the periods when the hedged
item affects profit or loss. However, when the hedged forecast transaction results in the recognition of a non-
financial asset or a non-financial liability, such gains and losses are transferred from equity and included in the
initial measurement of the cost of the non-financial asset or non-financial liability.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised,
without replacement or rollover (as part of the hedging strategy), or if its designation as a hedge is revoked, or
when it no longer qualifies for hedge accounting. Any gain or loss recognised in OCI and accumulated in equity at
that time remains in equity, and is recognised when the forecast transaction is ultimately recognised in Statement
of Profit and Loss. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in
equity is recognised immediately in Statement of Profit and Loss.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The fair value measurement is based on the presumption
that the transaction to sell the asset or transfer the liability takes place either:
In the principal market for the asset or liability, or
In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Group.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when
pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant that
would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, maximizing the use of relevant observable inputs and minimising the use of
unobservable inputs.
All assets and liabilities (for which fair value is measured or disclosed in the financial statements) are categorised
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair
value measurement as a whole:
Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement
is directly or indirectly observable other than quoted prices included in level 1.
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement
is unobservable.
274
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines
whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the
lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
The Management determines the policies and procedures for both recurring fair value measurement, such as
derivative instruments and unquoted financial assets measured at fair value, and for non-recurring measurement,
such as assets held for disposal in discontinued operations.
At each reporting date, Management analyses the movements in the values of assets and liabilities, which are
required to be remeasured or re-assessed as per the Group’s accounting policies. For this analysis, the Management
verifies the major inputs applied in the latest valuation by agreeing the information in the valuation computation
to contracts and other relevant documents.
Financial Assets
Initial Recognition and Measurement:
All financial assets are recognised initially at fair value. However, in the case of financial assets not recorded at
fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset are
added to the fair value. Purchases or sales of financial assets that require delivery of assets within a time frame
established by regulation or convention in the market place (regular way trades) are recognised on the trade date,
i.e., the date that the Group commits to purchase or sell the asset.
Subsequent measurement:
For the purposes of subsequent measurement, financial assets are classified in four categories:
• Debt instruments, derivatives and equity instruments, mutual funds at Fair Value through Profit or Loss (FVTPL)
b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal
and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective
interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income
in the profit or loss. The losses arising from impairment are recognised in the profit or loss. This category generally
applies to trade and other receivables. For more information on receivables, refer to Note 2.16.
275
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
a) The objective of the business model is achieved both by collecting contractual cash flows and selling the
financial assets; and
Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date
at fair value. Fair value movements are recognised in the OCI. However, the Group recognises interest income,
impairment losses and reversals, and foreign exchange gain or loss in the Statement of Profit and Loss. On de-
recognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified from the equity to the
Statement of Profit and Loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income
using the EIR method.
In addition, the group may elect to designate a debt instrument, which otherwise meets amortised cost or FVTOCI
criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or
recognition inconsistency (referred to as ‘accounting mismatch’).
Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the
Statement of Profit and Loss.
Equity Investments
Investment in Associates and Joint ventures are out of scope of Ind AS 109 and hence, the Group has accounted
for its investments in Associates and Joint Ventures at cost.
All other equity investments are measured at fair value. Equity instruments, which are held for trading, are classified
as at FVTPL. For equity instruments, other than held for trading, the Group has irrevocable option to present in OCI
subsequent changes in the fair value. The group makes such election on an instrument-by-instrument basis. The
classification is made on initial recognition and is irrevocable.
Where the Group classifies equity instruments as at FVTOCI, then all fair value changes on the instrument,
excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to Statement of
Profit and Loss, even on sale of investment.
Equity instruments included within the FVTPL category are measured at fair value with all changes recognised in
the Statement of Profit and Loss.
a) Financial assets that are debt instruments, and are measured at amortised cost, e.g., loans, debt securities,
deposits, trade receivables and bank balance.
276
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
b) Financial assets that are debt instruments, and are measured as at FVTOCI.
c) Lease receivables under Ind AS 17.
d) Loan commitments which are not measured as at FVTPL.
e) Financial guarantee contracts which are not measured as at FVTPL.
For recognition of impairment loss allowance on trade receivables; and all lease receivables, resulting from
transactions within the scope of Ind AS 17, the Group follows ‘simplified approach’.
The application of simplified approach does not require the Group to track changes in credit risk. Rather, it recognises
impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition. As a
practical expedient, the Group uses a provision matrix to determine impairment loss allowance on portfolio of
its trade receivables. The provision matrix is based on its historically observed default rates over the expected
life of the trade receivables, and is adjusted for forward-looking estimates. At every reporting date, the historical
observed default rates are updated, and changes in the forward-looking estimates are analysed.
For recognition of impairment loss on other financial assets and risk exposure, the Group determines that
whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not
increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased
significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves, such that
there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising
impairment loss allowance based on 12-month ECL.
ECL is the difference between all contractual cash flows that are due to the Group in accordance with the contract
and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR.
When estimating the cash flows, an entity is required to consider:
1. All contractual terms of the financial instrument (including prepayment, extension, call and similar options)
over the expected life of the financial instrument. However, in rare cases, when the expected life of the
financial instrument cannot be estimated reliably, then the entity is required to use the remaining contractual
term of the financial instrument
2.
Cash flows from the sale of collateral held or other credit enhancements that are integral to the
contractual terms.
ECL impairment loss allowance (or reversal) recognised during the period is recognised as income/ expense in
the Statement of Profit and Loss. This amount is reflected under the head ‘other expenses’ in the P&L. The balance
sheet presentation for various financial instruments is described below:
Financial assets measured as at amortised cost, contractual revenue receivables and lease receivables: ECL is
presented as an allowance, i.e., as an integral part of the measurement of those assets in the Balance Sheet. The
allowance reduces the net carrying amount. Until the asset meets write-off criteria, the Group does not reduce
impairment allowance from the gross carrying amount.
Loan commitments and financial guarantee contracts: ECL is presented as a provision in the Balance Sheet, i.e., as
a liability.
Debt instruments measured at FVTOCI: Since financial assets are already reflected at fair value, impairment
allowance is not further reduced from its value. Rather, ECL amount is presented as ‘accumulated impairment
amount’ in the OCI.
277
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
For assessing increase in credit risk and impairment loss, the Group combines financial instruments on the basis of
shared- credit risk characteristics with the objective of facilitating an analysis that is designed to enable significant
increases in credit risk to be identified on a timely basis.
On de-recognition of a financial asset, the difference between the asset’s carrying amount and the sum of the
consideration received and receivable and the cumulative gain or loss that had been recognised in OCI, and
accumulated in equity is recognised in the Statement of Profit and Loss.
Equity Instruments:
An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting
all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds received, net of
direct issue costs.
Financial Liabilities:
Financial liabilities are classified, at initial recognition:
• at fair value through profit or loss,
• Loans and borrowings,
• Payables, or
• as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value, and in the case of loans and borrowings and
payables are recognised net of directly attributable transaction costs.
The Group’s financial liabilities include trade and other payables, loans and borrowings, including bank
overdrafts, financial guarantee contracts and derivative financial instruments.
Subsequent Measurement:
The measurement of financial liabilities depends on their classification, as described below:
278
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
purpose of repurchasing in the near term. This category also includes derivative financial instruments entered
into by the Group, that are not designated as hedging instruments in hedge relationships as defined by Ind
AS 109. Separated embedded derivatives are also classified as held for trading, unless they are designated as
effective hedging instruments.
Gains or losses on liabilities held for trading are recognised in the Statement of Profit and Loss.
Financial liabilities, designated upon initial recognition at FVTPL, are designated as such at the initial date of
recognition, and only if the criteria in Ind AS 109 are satisfied.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs
that are an integral part of the EIR. The EIR amortisation is included as finance costs in the Statement of Profit
and Loss.
Embedded Derivatives:
An embedded derivative is a component of a hybrid (combined) instrument, that also includes a non-derivative
host contract – with the effect that some of the cash flows of the combined instrument vary in a way similar to
a stand-alone derivative. An embedded derivative causes some or all of the cash flows that would otherwise
be required by the contract to be modified according to a specified interest rate, financial instrument price,
commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable,
provided in the case of a non-financial variable, that the variable is not specific to a party to the contract. Re-
assessment only occurs if there is either a change in the terms of the contract that significantly modifies the cash
flows, that would otherwise be required or a re-classification of a financial asset out of the fair value through
profit or loss. If the hybrid contract contains a host that is a financial asset within the scope of Ind AS 109,
the Company does not separate the embedded derivatives. Rather, it applies the classification requirements
contained in Ind AS 109 to the entire hybrid contract. Derivatives embedded in all other host contracts are
accounted for as separate derivatives and recorded at fair value, if their economic characteristics and risks are
not closely related to those of the host contracts, and the host contracts are not held for trading or designated
at fair value though profit or loss. These embedded derivatives are measured at fair value with changes in fair
value recognised in profit or loss, unless designated as effective hedging instruments.
279
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(a) Sales are recognised on transfer of significant risks and rewards of ownership of the goods to the buyer as per
the terms of contract, and no uncertainty exists regarding the amount of consideration that will be derived from
sales of goods. It is measured at fair value of the consideration received net of Goods and Service Tax (GST)
w.e.f. 1st July, 2017, discounts and volume rebates. Fertiliser price support under Group Concession and other
Scheme of Government of India is recognised based on the Management’s estimate taking into account known
policy parameters and input price escalation/de-escalation. Sales exclude self-consumption of finished goods.
(b) Income from services is recognised (net of GST as applicable) as they are rendered, based on agreement/
arrangement with the concerned customers.
(c) If only one service is identified, the Group recognises revenue when the service is performed. If an ongoing
service is identified, as a part of the agreement the period over which revenue is recognised for that service
generally determined by the terms of agreement with the customers. For practical purposes, where services
are performed by an indeterminate number of acts over a specified period of time, revenue is recognised on a
straight line basis over the specified period unless there is evidence that some other method better represents
the stage of completion. When a specific act is much more significant than any other acts, the recognition of
revenue is postponed until the significant act is executed.
(d) Dividend income is accounted for when the right to receive the income is established.
(e) For all financial instruments measured at amortised cost or at fair value through Other Comprehensive Income,
interest income is recorded using the effective interest rate (EIR), which is the rate that exactly discounts the
estimated future cash payments or receipts through the expected life of the financial instrument to the gross
carrying amount of the financial asset.
(f) Interest income for all financial instruments measured at fair value through other comprehensive income is
recognized in the Statement of Profit and Loss.
(g) Export incentives, insurance, railway and other claims, where quantum of accruals cannot be ascertained with
reasonable certainty, are accounted on acceptance basis.
280
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
Re-insurance Premium
Reinsurance premium ceded is accounted for at the time of recognition of the premium income in accordance with
the terms and conditions of the relevant treaties with the re-insurers. Impact on account of subsequent revisions
to or cancellations of premium is recognised in the year in which they occur.
Death and other claims are accounted for, when notified. Survival and maturity benefits are accounted when due.
Surrenders/Withdrawals under linked - policies are accounted in the respective schemes when the associated
units are cancelled. Repudiated claims disputed before judicial authorities are provided for based on Management
prudence considering the facts and evidences available, in respect of such claims.”
Reinsurance Claims:
Reinsurance claims are recognised when the related gross insurance claim is recognised according to the terms of
the relevant contract.
Investment Contracts:
Liability in respect on Investment Contracts is recognised in accordance with IND AS, taking into account accepted
actuarial practices.
281
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
he origination fees for Investment Contracts, being premium allocation charges pertaining to the 1st, 2nd and 3rd
T
year have been deferred over the period of the policy contract.
Acquisition cost and Origination fees is deferred only for Investment Contracts.
Borrowing costs, that are attributable to the acquisition or construction or production of a qualifying asset, are
capitalised as part of the cost of such asset till such time the asset is ready for its intended use. A qualifying asset
is an asset that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing
costs are recognised as an expense in the period in which they are incurred.
Investment income earned on the temporary investment of specific borrowings, pending their expenditure on
qualifying assets, is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are
recognized in the Statement of Profit and Loss in the period in which they are incurred.
Government grants, that are receivable towards capital investments under State Investment Promotion Scheme,
are recognised when they become receivable.
The benefit of a government loan at a below-market rate of interest is treated as a government grant, measured as
the difference between proceeds received and the fair value of the loan based on prevailing market interest rates,
and is being recognised in the Statement of Profit and Loss.
When the Group receives grants of non-monetary assets, the asset and the grant are recorded at fair value
amounts and released to profit or loss over the expected useful life in a pattern of consumption of the benefit of
the underlying asset.
282
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
Current income tax, relating to items recognised outside profit or loss, is recognised outside profit or loss (either
in Other Comprehensive Income or in equity). Current tax items are recognised in correlation to the underlying
transaction either in OCI or directly in equity. The management periodically evaluates positions taken in the tax
returns with respect to situations in which applicable tax regulations are subject to interpretation and established
provisions, where appropriate.
Deferred Tax:
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and
liabilities, and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction
that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss.
In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests
in joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable
that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits
and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit
will be available, against which the deductible temporary differences, and the carry forward of unused tax credits
and unused tax losses can be utilised, except:
• hen the deferred tax asset relating to the deductible temporary difference arises from the initial recognition
W
of an asset or liability in a transaction that is not a business combination and, at the time of the transaction,
affects neither the accounting profit nor taxable profit or loss.
• In respect of deductible temporary differences associated with investments in subsidiaries, associates and
interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the
temporary differences will reverse in the foreseeable future and taxable profit will be available against which
the temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is
no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be
utilised. Unrecognised deferred tax assets are re-assessed at each reporting date, and are recognised to the extent
that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the
asset is realised or the liability is settled, based on tax rates (and tax laws), that have been enacted or substantively
enacted at the reporting date.
283
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
Deferred tax, relating to items recognised outside profit or loss, is recognised outside profit or loss (either in
Other Comprehensive Income or in equity). Deferred tax items are recognised in correlation to the underlying
transaction either in OCI or directly in equity. Deferred tax assets and deferred tax liabilities are offset, if a legally
enforceable right exists to set off current tax assets against current tax liabilities, and the deferred taxes relate to
the same taxable entity and the same taxation authority.
Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition
at that date, are recognised subsequently if new information about facts and circumstances change. Acquired
deferred tax benefits recognised within the measurement period reduce goodwill related to that acquisition if they
result from new information obtained about facts and circumstances existing at the acquisition date. If the carrying
amount of goodwill is zero, any remaining deferred tax benefits are recognised in OCI / capital reserve depending
on the principle explained for bargain purchase gains. All other acquired tax benefits realised are recognised in
profit or loss.
If the effect of the time value of money is material, provisions are determined by discounting the expected
future cash flows to the net present value using an appropriate pre-tax discount rate that reflects current market
assessments of the time value of money and, where appropriate, the risks specific to the liability.
A present obligation that arises from past events, where it is either not probable that an outflow of resources will
be required to settle or a reliable estimate of the amount cannot be made, is disclosed as a contingent liability.
Contingent liabilities are also disclosed when there is a possible obligation arising from past events, the existence
of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events, not
wholly within the control of the Group.
Claims against the Group, where the possibility of any outflow of resources in settlement is remote, are not
disclosed as contingent liabilities.
Contingent assets are not recognised in the financial statements since this may result in the recognition of income
that may never be realised. However, when the realisation of income is virtually certain, then the related asset is
not a contingent asset, and is recognised.
Warranty Provisions:
Provisions for warranty-related costs are recognised when the product is sold or service provided to the customer.
Initial recognition is based on historical experience. The initial estimate of warranty-related costs is revised annually.
284
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
Operating Segment is identified based on the nature of products and services, the different risks and returns,
and the internal business reporting system.
• Segment Policies:
The Group prepares its segment information in conformity with the accounting policies adopted for preparing
and presenting the financial statements of the Group as a whole.
Further, inter-segment revenue have been accounted for based on the transaction price agreed to between
segments, which is primarily market based.
Unallocated Corporate Items include general corporate income and expenses, which are not attributable
to segments.
Goodwill that arises out of consolidation is tested for impairment at each reporting date. For the purpose of
impairment testing, goodwill is allocated to the respective cash generating unit (‘CGU’). The impairment loss
is recognised if the recoverable amount of the CGU is higher of its value in use and fair value less cost to sell.
Impairment losses are immediately recognized in the Statement of Profit and Loss.
For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity
shareholders and the weighted-average number of shares outstanding during the period are adjusted for the
effects of all dilutive potential equity shares.
285
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
relating to contingent liabilities as of the date of the financial statements. Although these estimates are based
on the Management’s best knowledge of current events and actions, uncertainty about these assumptions and
estimates could result in outcomes different from the estimates. Difference between actual results and estimates
are recognized in the period in which the results are known or materialise. Estimates and underlying assumptions
are reviewed on an ongoing basis. Any revision to the accounting estimates is recognised prospectively in the
current and future periods.
(a) Judgements:
In the process of applying the Group’s accounting policies, the Management has made the following judgements,
which have the most significant effect on the amounts recognised in the consolidated financial statements.
Classification of Aditya Birla Renewable Limited, Aditya Birla Solar Limited and Idea Payments Bank Limited as
Joint Venture/Associate
The Group holds more than half of the equity shareholding in the following entities. However, as per the
shareholders’ agreement / statute, the Group needs to jointly decide with other shareholders of the respective
entity on certain relevant activities. Hence the same are being accounted as per equity method of accounting.
Classification of Aditya Birla Sun Life AMC Limited, Aditya Birla Sun Life Trustee Company Private Limited and
Aditya Birla Wellness Limited as Joint Ventures
Aditya Birla Capital Limited, a subsidiary of the Company holds either directly or through its subsidiaries, more
than half of the equity shareholding in the following entities. However, as per the shareholders’ agreement /
statute, the Group needs to jointly decide with other shareholders of the respective entity on certain relevant
activities. Hence, the same are being accounted as per equity method of accounting
286
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
• ines Restoration Obligation: In determining the fair value of the Mines Restoration Obligation,
M
assumptions and estimates are made in relation to discount rates, the expected cost of mines restoration
and the expected timing of those costs.
• Share-based Payments:
The Group measures the cost of equity-settled transactions with employees using Black-Scholes Model
to determine the fair value of the liability incurred on the grant date. Estimating fair value for share-
287
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
based payment transactions requires determination of the most appropriate valuation model, which is
dependent on the terms and conditions of the grant.
This estimate also requires determination of the most appropriate inputs to the valuation model including
the expected life of the share option, volatility and dividend yield and making assumptions about them.
The assumptions and models used for estimating fair value for share-based payment transactions are
disclosed in Note 4.4.10.
• Business Combination:
(i) Fair Valuation of Intangible Assets:
The Company has used income approach (example relief from royalty, multi - period excess
earnings method and incremental cash flows, etc.) for value analysis of intangible assets. The
method estimates the value of future cash flows over the life of the Intangible assets accruing to the
Company, by virtue of the transaction. The resulting tax adjusted cash flows for each of the years are
recognised at their present value using a Weighted Average Cost of Capital (‘WACC’) adjusted for
risk of achieving the intangible assets projected savings.
Leasehold Land: Leasehold land is valued basis the leasehold interest for the remaining duration of
the lease.
Other Assets: The cost approach has been adopted for fair valuing all the assets.
The cost approach has been adopted for fair valuing all the assets, The cost approach includes
calculation of replacement cost using price trends applied to historical cost and capitalisation of all
the indirect cost, these trends are on the basis of price indices obtained from recognised sources.
The allowance for loan losses, associated with the acquired loans, were evaluated by the management
and recorded.
288
2.1 PROPERTY, PLANT AND EQUIPMENT (PPE) AND OTHER INTANGIBLE ASSETS
(` in Crore)
Gross Block Depreciation/Amortisation Net Block
Divestment
Addition on
of Grasim
Additions Addition on Acquisition Translation
Notes
Bhiwani As at Divestment As at As at
As at on Merger Acquisition of Rights Translation As at Difference Impair- Deduc-
Textiles Deduc- 31st For the of GBTL 31st 31st
1st April, of ABNL of JAL and in Century Additions Difference 1st April, Add/ ment tions
Limited tions March Year [Note March, March,
2017 (refer Note JCCL(refer Rayon Add/(Less) 2017 (Less)
(GBTL) 2018 3.15(ii)] 2018 2018
4.12A) Note 4.12C) (refer Note
[Note
4.12B)
3.15(ii)]
Current Year
ended 31st
March, 2018
TANGIBLE
ASSETS *
Freehold Land 3,734.44 628.01 1,795.74 - 141.30 (0.15) 0.16 54.32 6,244.86 - - - - - - - 6,244.86
Leasehold Land# 387.93 251.50 656.08 - 51.80 (0.03) - 6.13 1,341.15 28.84 32.54 (0.02) - - 2.98 58.38 1,282.77
Leasehold
1.89 10.58 - - 8.88 - - 0.39 20.96 0.72 4.95 - - - 0.39 5.28 15.68
Improvements
Buildings-own 3,792.04 411.05 1,388.03 - 306.55 0.01 13.78 23.44 5,860.46 397.99 221.36 - 1.24 - 4.48 613.63 5,246.83
Leasehold
- 17.55 - - - - - - 17.55 0.26 - - - - 0.26 17.29
Buildings
Plant and
Equipment
@
Own 26,212.58 1,402.58 7,747.57 - 1,503.86 2.43 84.05 194.46 36,590.51 3,087.49 1,940.00 0.50 22.44 30.43 32.25 5,003.73 31,586.8
Given on Lease 143.43 - - - - - - 1.05 142.38 28.83 8.56 - - - - 37.39 104.99
Furniture and
102.74 12.77 2.19 - 28.72 - 1.08 1.44 143.90 43.54 25.17 0.01 0.53 - 1.42 66.77 77.13
Fixtures
Vehicles 159.39 21.20 13.19 - 50.56 (0.06) 0.62 11.12 232.55 52.45 43.16 (0.02) 0.31 - 5.15 90.13 142.42
Office
169.57 33.15 6.25 - 68.04 (0.03) 0.99 4.28 271.71 80.57 44.44 (0.02) 0.64 - 3.39 120.96 150.75
Equipment
Salt Pans,
Reservoir and 7.41 - - - - - - - 7.41 7.04 - - - - - 7.04 0.37
Condensers
Railway Sidings 459.81 0.29 80.64 - 131.80 - - - 672.54 68.12 40.27 - - - - 108.39 564.15
Total Tangible
35,171.23 2,788.68 11,689.69 - 2,291.51 2.17 100.67 296.63 51,545.98 3,795.59 2,360.71 0.45 25.16 30.43 50.06 6,111.96 45,434.02
Assets
INTANGIBLE
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
ASSETS (other
than internally
generated)
Computer
59.94 83.75 0.01 - 83.80 - 0.33 0.56 226.61 39.13 53.58 - 0.09 - 0.54 92.08 134.53
Softwares^
Value of Licence/
Right to use 36.11 - - - 26.88 - - - 62.99 13.44 6.01 - - - - 19.45 43.54
Infrastructure
Power Line
GRASIM
60.85 - - - 0.03 0.19 - 0.01 61.06 8.29 4.08 0.01 - - 0.01 12.37 48.69
Rights
289
(` in Crore)
Gross Block Depreciation/Amortisation Net Block
290
Divestment
Addition on
of Grasim
Additions Addition on Acquisition Translation
Bhiwani As at Divestment As at As at
As at on Merger Acquisition of Rights Translation As at Difference Impair- Deduc-
Textiles Deduc- 31st For the of GBTL 31st 31st
Notes
1st April, of ABNL of JAL and in Century Additions Difference 1st April, Add/ ment tions
Limited tions March Year [Note March, March,
2017 (refer Note JCCL(refer Rayon Add/(Less) 2017 (Less)
(GBTL) 2018 3.15(ii)] 2018 2018
4.12A) Note 4.12C) (refer Note
[Note
FINANCIAL STATEMENTS
4.12B)
3.15(ii)]
Rights to
Manage
and Operate - - - 661.50 - - - - 661.50 7.35 - - - - 7.35 654.15
manufacturing
Facilities
Group
Management - 197.70 - - - - - - 197.70 - - - - - - 197.70
Rights
Customer
- 293.60 - 76.30 - - - - 369.90 9.64 - - - - 9.64 360.26
Relationship
Production
- 19.00 - - - - - - 19.00 1.43 - - - - 1.43 17.57
Formula
Distribution
- 1,562.90 - - - - - - 1,562.90 85.40 - - - - 85.40 1,477.50
Network
Value in Force - 1,649.00 - - - - - 1,649.00 82.45 - - - - 82.45 1,566.55
Order Back Log - 7.50 - 9.20 - - - - 16.70 9.03 - - - - 9.03 7.67
Consolidated
Technical
2.88 - - - - - - - 2.88 1.35 0.42 - - - - 1.77 1.11
Know-how
Trade Mark 0.07 130.10 - - 0.06 - - - 130.23 0.01 10.53 - - - - 10.54 119.69
Mining Rights 164.18 - - - 8.22 - - 10.58 161.82 9.59 4.76 - - - 1.75 12.60 149.22
Non-Compete - - - 21.50 - - - - 21.50 1.19 - - - - 1.19 20.31
Mining Reserves - 2,715.87 - - - - - 2,715.87 39.07 - - - - 39.07 2,676.80
Jetty Rights 182.85 - - - - - - - 182.85 18.91 7.86 - - - - 26.77 156.08
Total Intangible
506.88 3,943.55 2,715.88 768.50 118.99 0.19 0.33 11.15 8,042.51 90.72 322.80 0.01 0.09 - 2.30 411.14 7,631.37
Assets
35,678.11 6,732.23 14,405.57 768.50 2,410.50 2.36 101.00 307.78 59,588.49 3,886.31 2,683.51 0.46 25.25 30.43 52.36 6,523.10 53,065.39
Capital Work-in-Progress (including Pre-Operative Expenses) 2,256.90
Intangible Assets under Development 33.12
Total PPE 55,355.41
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
INTANGIBLE ASSETS
(other than internally
generated)
Computer Software 47.70 12.24 - - 59.94 22.34 16.79 - - 39.13 20.81
Value of Licence/Right to
22.36 13.75 - - 36.11 10.55 2.89 - - 13.44 22.67
use Infrastructure
Power Line Rights 10.30 - (1.27) (51.82) 60.85 0.90 4.24 (0.16) (3.31) 8.29 52.56
Technical Know-how 2.88 - - - 2.88 0.78 0.57 - - 1.35 1.53
Trade Mark 0.07 - - - 0.07 - 0.01 - - 0.01 0.06
Mining Rights 126.81 46.83 - 9.46 164.18 6.09 8.38 - 4.88 9.59 154.59
Jetty Rights 181.18 - - (1.67) 182.85 11.05 7.86 - - 18.91 163.94
Total Intangible
391.30 72.82 (1.27) (44.03) 506.88 51.71 40.74 (0.16) 1.57 90.72 416.16
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
Assets
33,399.39 2,384.56 (35.11) 70.73 35,678.11 2,144.67 1,769.03 (4.72) 22.67 3,886.31 31,791.80
CapitalWork-in-Progress(including Pre-Operative Expenses) 1,296.34
Intangible Assets under development 0.63
Total PPE 33,088.77
# The Leasehold Land classified as Finance Lease, is recognised under PPE as substantially all the significant risk and rewards incidental to ownership of land under lease have
been transferred to the Company.
GRASIM
291
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
Notes:
(` in Crore)
As at As at
31st March, 2018 31st March, 2017
2.1.1 The title of immovable assets are in the process of being transferred in the 3924.23 883.34
name of the Company (Net Block)
2.1.2 Depreciation and Amortisation for the year: 2,683.51 1,769.03
Add: Obsolescence (including impairment of ` 27.39 Crore 42.93 39.01
(Previous Year ` 20.05 Crore) towards Assets classified as Held for Disposal
Add: Impairment of Goodwill on Consolidation - 1.64
Less: Depreciation Transferred to Pre-Operative Expenses 2.08 2.09
Depreciation and Amortisation as per the Statement of Profit and Loss 2,724.36 1,807.59
2.1.3 Property, Plant and Equipment includes assets not owned by Subsidiary 447.86 364.29
Companies (Gross Block)
2.1.4 Property, Plant and Equipment includes assets held on Co-ownership with 227.91 116.84
other Companies (Gross Block)
2.1.5 Buildings include:
-C ost of Debentures and Shares in a Company entitling the right of 34.89 18.88
exclusive occupancy and use of certain premises
-W orkers' quarters mortgaged with state governments against subsidies 0.26 0.01
received
2.1.6 Details of Property Plant and Equipment capitalised under Finance Lease:
Lease Assets are pledged as security for the related finance lease liabilities
Plant and Equipment include Gross Block ` 0.74 Crore and Net Block
` 0.03 Crore (Previous Year ` Nil)
2.1.7 Pre-Operative Expenses Pending Allocation included in
Capital Work-in-Progress:
Expenditure incurred during the year:
Raw Materials Consumed 2.35 1.17
Power and Fuel Consumed 7.32 0.29
Salaries, Wages, Bonus, Ex-Gratia, Gratuity and Provisions 32.19 15.61
Rent and Hire Charges 0.22 0.10
Power and Fuel 0.20 0.48
Insurance 1.76 0.50
Exchange Loss/(Gain) (0.02) -
Depreciation 2.08 2.09
Finance Cost 3.13 8.97
Consumption of Stores, Spare Parts and Components, Packing Materials, etc. 0.07 -
Repairs and Maintenance 5.61 -
Other Expenses 27.14 57.36
82.05 86.57
Less: Sale of Trial Run Production 0.98 -
Add: Pre-Operative Expenditure incurred upto Previous Year 104.11 171.29
Add: Transferred from ABNL pursuant to Scheme of Amalgamation 4.16 -
Less: Trial- Run Production Transferred to Inventory 6.60 1.79
Less: Pre-Operative Expenditure charged to P&L during the Year - 1.87
Less: Capitalised/Charged during the Year 51.26 150.09
Total Pre-Operative Expenses Pending Allocation 131.48 104.11
292
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
293
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(` in Crore)
As at As at
31st March, 2018 31st March, 2017
Investments in Government or Trust Securities
Carried at Amortised cost # 3,991.13 -
Carried at FVTOCI # 2,403.17 -
6,394.30 -
Investments in Debentures
Carried at Amortised cost # 1,966.93 -
Carried at FVTOCI # 2,288.34 -
Carried at FVTPL # 24.88 -
4,280.15 -
Other Non-Current Investments
Carried at Amortised cost 65.23 -
Carried at FVTOCI 84.66 -
149.89 -
11,951.36 -
# Quoted Investments
294
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(` in Crore)
Face As at As at
Value Total Nos. 31st March, 2018 31st March, 2017
Hindalco Industries Limited
#$ (Previous Year: 54,542,475
Shares) `1 88,048,812 1,889.09 1,064.12
Indophil Textile Mills Inc.,
Philippines Peso 10 422,496 2.87 3.30
Birla International Limited -
Isle of Man CHF 100 2,500 4.01 3.96
JSW Steel (Salav) Limited
(Formerly known as Welspun
Maxsteel Limited) ` 10 1,400,000 - 0.10
Aditya Birla Fashion and Retail
Limited # $ (Previous Year:
17,398,243 Shares) ` 10 87,449,940 1,319.19 267.58
Birla Management Centre
Services Limited (Previous Year:
2,000 Shares) ` 10 4,449,800 5.72 0.01
Others - 0.01
4,397.99 2,734.48
Carried at FVTPL {Note 2.5.4 (a)}
AWAM Minerals LLC Omani
Riyal 1 168,035 7.11 -
MOIL Limited# 10 24,490 0.48
Aditya Birla Ports Limited ` 10 50,000 - 0.05
Raj Mahal Coal Mining Limited ` 10 1,000,000 1.00 1.00
Green Infra Wind Power ` 10 144,000 0.14 0.14
NU Power Wind Farm (Previous
Year: 20,000 Shares) ` 10 40,000 0.04 0.02
8.77 1.21
Investments in Preference Shares
Carried at FVTPL {Note 2.5.4 (c)}
Joint Ventures
6% Cumulative Redeemable
Retractable, Non-Voting WPV 6,750,000 22.74 20.58
Preferred Shares of AV Group NB
Inc., Canada, of aggregate value
of Canadian Dollar 6.75 Million
1% Redeemable Preference
Shares of Aditya Group AB,
Sweden, of aggregate value of
USD 8 Million WPV 160,000 46.32 42.37
295
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(` in Crore)
Face As at As at
Value Total Nos. 31st March, 2018 31st March, 2017
Others
5.25% Cumulative Redeemable
Preference Shares of Aditya
Birla Health Services Limited@$
(Previous Year: 2,500,000 Shares) ` 100 4,000,000 39.09 22.66
4.50% Cumulative Non-
Convertible Redeemable
Preference Shares of Aditya Birla
Health Services Limited ` 100 2,000,000 15.30 14.10
11% Redeemable, Cumulative
Non-Convertible Preference
Shares of TANFAC Industries
Limited ` 100 500,000 0.85 0.76
8% Redeemable and Cumulative
Preference Shares of Aditya Birla
Fashion and Retail Limited ` 10 500,000 0.82 -
Vedanta Limited (7.50% Non-
Cumulative Non- Convertible
Redeemable Preference Shares)# ` 10 21,332,924 21.29 -
Tata Motors Finance Limited
(formerly known as Sheba
Properties Limited) (8.20%
Compulsory Convertible
Cumulative Preference Shares) ` 100 10,000,000 206.07 -
8% Preference Shares of Birla
Management Centre Services
Limited $ ! Represents amount of
` 2000 ` 10 200 ! -
352.48 100.47
Investments in Debentures or
Bonds and other Investments
{Note 2.5.4 (b)} #
Carried at FVTOCI
Tax Free Bonds 155.70 157.17
Taxable Corporate Bonds 12.15 12.31
167.85 169.48
Carried at FVTPL
Tax Free Bonds 362.74 500.25
Taxable Corporate Bonds 211.39 105.65
574.13 605.90
296
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(` in Crore)
Face As at As at
Value Total Nos. 31st March, 2018 31st March, 2017
Other Investments
Carried at FVTPL
Aditya Birla Private Equity- Fund I 10.14 -
Aditya Birla Private Equity-
Sunrise Fund 14.78 -
Investment in alternate funds 78.60 -
PMS Investment 15.52 -
119.04 -
Carried at FVTPL
Investments in various Mutual
Funds {Note 2.5.4 (c)}# 703.15 787.57
Investments in various Mutual
Funds (Unquoted) {Note 2.5.4 (c)} 889.25 650.85
7,212.66 5,049.96
WPV - Without Par Value
$ Investment acquired on Merger of ABNL
# Quoted Investments
* Bonus shares received during the year in the ratio of 1:2
@ Each Preference Share is optionally convertible in 10 Equity shares of ` 10/- each fully paid-up on the expiry of a period of 15
years from the date of allotment.
297
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(` in Crore)
As at As at
31st March, 2018 31st March, 2017
Equity Shares 0.48 -
Preference Shares 21.29 -
Sub-Total (b) 1,299.05 1,393.47
Total (a+b) 5,347.28 3,942.87
Unquoted
Financial Investments measured at FVTOCI
Equity Shares 517.61 354.56
Sub-Total (a) 517.61 354.56
Financial Investments measured at FVTPL
Equity Shares 8.29 1.21
Mutual Funds 889.25 650.85
Preference Shares 331.19 100.47
Private Equity Investment Funds 119.04 -
Sub-Total (b) 1,347.77 752.53
Total (a+b) 1,865.38 1,107.09
2.5.3 The Company previously held around 2.57% stake in Aditya Birla Nuvo Limited, which was classified as
FVTOCI Investment during the previous year, and change in fair value of ` 475.99 Crore was recognised in
OCI as on 31st March 2017. Total change in fair value till the date of merger accumulated in OCI amounted to
` 588.29 Crore (positive change in fair value of ` 112.30 Cr in the current year up to the date of merger) was
transferred to Capital Reserve.
298
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
2.5.5 The investments in the Company’s Joint Ventures, AV Group NB Inc., AV Terrace Bay Inc.,Birla Jingwei Fibres
Company Limited, Aditya Group AB; and its Associate, Idea Cellular Limited, are subject to maintenance of
specific holding by the Company until the credit facility provided by certain lenders to respective Companies
are outstanding. Without guaranteeing the repayment to the lenders, the Company has also agreed that the
affairs of the Associates and JVs will be managed through its nominee directors on the boards of respective
borrowing companies, in such a manner that they are able to meet their respective financial obligations.
299
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
300
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
2.11 INVENTORIES
(Valued at lower of cost and net realisable value, unless otherwise stated)
(` in Crore)
As at 31st March, 2018 As at 31st March, 2017
In Hand In Transit Total In Hand In Transit Total
Raw Materials 1,402.67 538.67 1,941.34 961.32 496.46 1,457.78
Work-in-Progress 775.09 - 775.09 491.08 - 491.08
Finished Goods 708.63 85.13 793.76 610.14 91.53 701.67
Stock-in-Trade 35.25 - 35.25 24.54 - 24.54
Stores and Spare Parts 1,890.26 410.56 2,300.82 1,458.16 86.02 1,544.18
Waste/Scrap (valued at Net Realisable 14.10 - 14.10 12.17 - 12.17
Value)
4,826.00 1,034.36 5,860.36 3,557.41 674.01 4,231.42
The cost of inventories recognised during the year is disclosed in Note 3.4 (Cost of Materials Consumed).
The Company follows a suitable provisioning norms for writing down the value of Inventories towards slow
moving, non-moving and surplus inventory.
Provision for the year is ` 3.99 Crore (Previous Year ` 8.17 Crore). Inventory values shown above are net of
the provisions.
2.11.1 Working Capital Borrowings are secured by hypothecation of inventory of the Company.
2.12.1 The Company holds 33.33% stake in its Joint Venture, Aditya Birla Elyaf Sanayi Ve Ticaret Anonim Sirketi
(ABEST),Turkey. ABEST has decided not to pursue its project in Turkey. During the previous year, ABEST
had returned ` 42.68 Crore, and the difference between Gross investment amount and actual receipt has
resulted in an exchange loss of ` 13.52 Crore, due to currency depreciation of Turkey.
301
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
302
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
2.16.1 Working Capital Borrowings are secured by hypothecation of book debts of the Company
303
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
2.18.1 T
here is no restriction with regard to cash and cash equivalents as at the end of the reporting period
and prior periods except for unclaimed dividend and unclaimed fractional warrants, which can be utilised
towards settlement of unclaimed dividend and fractional bonus shares.
2.18.2 T
here are no amounts due and outstanding to be credited to the Investors Education and Protection Fund
as at 31st March, 2018 and 31st March, 2017.
304
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
305
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
2.22.4 Reconciliation of the Number of Equity Shares Outstanding (including Share Capital Suspense)
(` in Crore)
Number of Shares As at As at
Current Previous 31st March, 31st March,
Year Year 2018 2017
Outstanding as at the beginning of the year
(Pre-split) 466,865,405 93,360,985 93.37 93.36
Adjustment for Sub-Division of Equity Shares - 373,443,940 - -
Outstanding as at the beginning of the year
(Post-split) 466,865,405 466,804,925 93.37 93.36
Issued during the year to the Shareholders of
ABNL pursuant to the Scheme of Merger
[Note 4.12 (A)] 190,462,665 - 38.09 -
306
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(` in Crore)
Number of Shares As at As at
Current Previous 31st March, 31st March,
Year Year 2018 2017
Issued during the year under Employee Stock
Option Scheme 71,660 106,580 0.02 0.02
Less: Cancellation from Shares Capital Suspense
Account - 46,100 - 0.01
Outstanding as at the end of the year 657,399,730 466,865,405 131.48 93.37
2.22.7 List of Shareholders holding more than 5% Shares in the Equity Share
Capital of the Company
Current Year Previous Year
No. of Shares % Holding No. of Shares % Holding
Turquoise Investments and Finance Private
Limited 42,119,836 6.41% 29,541,705 6.33%
Trapti Trading and Investments Private
Limited 41,525,217 6.32% 27,389,315 5.87%
Life Insurance Corporation of India 38,176,351 5.81% 28,952,784 6.20%
TGS Investment and Trade Private Limited 35,882,075 5.46% - 0.00%
IGH Holdings Private Limited 33,491,293 5.09% - 0.00%
307
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
The Description of the nature and purpose of each reserve within equity is as follows:
a. Capital Reserve : Capital Reserves are mainly the reserves created during business combination for the
gain on bargain purchase. The Company’s capital reserve is mainly on account of business combination of
erstwhile Aditya Birla Chemcials (India) Limited/Aditya Birla Nuvo limited, Larsen & Toubro cement business
and Gujarat units of Jaypee Cement Corporation Limited (JCCL) and Jaiprakash Associates Limited (JAL).
b. Legal Reserve: Legal Reserve represents, profit transferred as per the legal requirements in a Joint Venture of
the Company.
c. Securities Premium Reserve: Securities premium reserve is credited when shares are issued at premium. It
is utilised in accordance with the provisions of the Companies Act 2013, to issue bonus shares, to provide for
premium on redemption of shares or debentures, write-off equity related expenses like underwriting costs, etc.
d. General Reserve: The Company has transferred a portion of net profit of the Company before declaring
dividend to General Reserve pursuant to the earlier provision of Companies Act, 1956. Mandatory transfer to
general reserve is not required under the Companies Act, 2013.
Debenture Redemption Reserve (DRR): The Group has issued redeemable non-convertible debentures.
e.
Accordingly, the Companies (Share Capital and Debentures) Rules, 2014 (as amended), requires to create
DRR out of the profits available for payment of dividend. DRR is required to be created for an amount which
is equal to 25% of the value of debentures issued.
f. Special Reserve Fund: An amount equivalent to 20% of the profits is transferred to special reserve fund in one
of the subsidiaries as per Prudential Norms of RBI.
308
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
g. Debt Instrument through OCI: It represents the cumulative gains/(losses) arising on the fair valuation of debt
instruments measured at fair value through OCI, net of amount reclassified to profit or loss when those assets
have been disposed of such instruments.
h. Equity Instrument through OCI: It represents the cumulative gains/(Losses) arising on the revaluation of
Equity Shares (other than Investment in Subsidiaries, Joint Ventures and Associates, which are carried at cost)
measured at fair value through OCI.
i. Hedging Reserve: It represents the effective portion of the fair value of forward contracts, designated as cash
flow hedge.
j. Foreign Currency Translation Reserve: Foreign Currency Translation Reserve represents the exchange rate
variation in opening equity share capital and reserves and surplus in respect of Joint Ventures of the Company
and Subsidiaries of UltraTech, being foreign operations.
k. Employee Share Option Outstanding: The Company has share option schemes, under which options to
subscribe for the Company’s shares have been granted to certain executives and senior employees. The
share-based payment reserve is used to recognise the value of equity-settled share-based payments provided
to employees, including key management personnel, as part of their remuneration.
Unsecured
Non-Convertible Debentures {Note (d)} 3,055.01 650.00
Term Loan from Banks
Foreign Currency Loans {Note (e)} 2,807.65 2,958.18
Term Loan from others {Note (f)} 11.07 -
Subsidised Government Loans {Note (g)} 273.13 285.74
Preference Shares classified as Liability {Note (h)} 56.22 -
40,793.44 6,768.71
309
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
2.24.1 Nature of Security, Repayment Terms and Break-up of Current and Non-Current
(` in Crore)
As at As at
Repayment Terms
31st March, 2018 31st March, 2017
Secured Long-Term Borrowings:
(a) Non - Convertible Debentures (NCDs)
(a1i) NCDs of NBFCs and NHFCs
Debentures Secured by way of Repayment Terms : Maturing after
mortgage on the immovable property 3 years, Rate of Interest 7.26% to
and first pari-passu charge on current 10.25% p.a.
assets of the fellow-Subsidiary 2,827.60
Companies: -
Repayment Terms : Maturing
between 1 to 3 years, Rate of 7,128.13
Interest 7.28% to 9.49% p.a. -
Repayment Terms : Maturing
within 1 year, Rate of Interest 1,934.07
7.45% to 9.63% p.a. -
(a1ii) Other NCDs
7.53% NCDs (Redeemable at par on
21st August, 2026) 500.00 500.00
7.15% NCDs (Redeemable at par on
18th October, 2021) 300.00 300.00
7.57% NCDs (Redeemable at par on
6th August, 2021) 250.00 250.00
7.57% NCDs (Redeemable at par on
13th August, 2019) 300.00 300.00
7.57% NCDs (Redeemable at par on
8th August, 2019) 175.00 175.00
7.85% NCDs (Redeemable at par on
18th December, 2018) 200.00 200.00
7.84% NCDs (Redeemable at par on
9th April, 2018) 200.00 200.00
9.15% NCDs (Redeemable at par on
28th August, 2017) - 250.00
13,814.80 2,175.00
Less: Amount disclosed as Current
maturities of long-term debts under 250.00
the head ‘Other Current Financial
Liabilities’ (Note 2.33) 2,434.07
11,380.73 1,925.00
The NCDs are secured by way of first
charge, having pari passu rights, on
the Subsidiary's PPE (save and except
stocks and book debts), both present
and future, situated at certain locations,
in favour of Debenture Trustees.
310
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(` in Crore)
As at As at
Repayment Terms
31st March, 2018 31st March, 2017
(b) Term Loans from Banks
(b1) Rupee Term Loans
(b1i) Borrowings of NBFCs and NHFCs
The term loan from banks are secured Repayment Terms : Maturing after
by way of first pari passu charge 3 years, Rate of Interest 7.57% to
on the receivables of the respective 8.45% p.a. 7,108.86
Subsidiaries Company. -
Repayment Terms : Maturing
between 1 to 3 years, Rate of 5,203.02
Interest 7.35% to 8.45% p.a. -
Repayment Terms : Maturing
within 1 year, Rate of Interest 2,407.10
7.40% to 8.35% p.a. -
(b1ii) Other Borrowings:
Rupee Term Loan secured by first Quarterly ballooning repayment
charge on the PPE, both present and from April 2010, over 8 years
future, of the Company located at
Nagda (Staple Fibre and Chemical
Divisions), Kharach (Staple Fibre
Division) and Harihar (Staple Fibre
and Pulp Divisions) - 39.38
Rupee term loan secured by first Quarterly ballooning repayment
charge on the Plant and Machinery, from April 2014, over 5 years
both present and future, of the
Company located at Vilayat (Staple
Fibre Division) 346.50 549.00
Rupee Term Loan secured by Quarterly ballooning repayment
exclusive charge on certain specific from May 2016, over 5 years
PPE of Nagda (Staple Fibre Division) 29.70 33.93
Rupee Term Loans are secured Quarterly ballooning repayment
by first charge on movable and over 7-10 years
immovable PPE both present and
future at Subsidiary’s location 17.18
State Bank of India 4 semi- annual instalments
beginning from May 2022 300.00 300.00
HDFC Bank Fully repaid in December 2017 - 100.00
Axis Bank Ltd. 80 quarterly instalments
beginning December 2022 ^ 2,664.71 -
ICICI Bank Ltd 80 quarterly instalments
beginning December 2022 ^ 2,000.00 -
HDFC Bank Ltd. 80 quarterly instalments
beginning September 2022 ^ 3,317.92 -
Axis Bank Ltd. 80 quarterly instalments
beginning September 2022 ^ 592.37 -
ICICI Bank Ltd. 80 quarterly instalments
beginning September 2022 ^ 1,614.00 -
311
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(` in Crore)
As at As at
Repayment Terms
31st March, 2018 31st March, 2017
Term Loan secured by exclusive 10 half- yearly instalments from
charge on the specific assets of the 29th July 2015.
Company’s Rayon Divison Plant at First three instalments of ` 0.74
Veraval and Textile Division Plant at Crore each, next 3 instalments
Rishra of ` 1.48 Crore each and next 4
instalments of ` 4.83 Crore each. 19.32 -
Term loan secured by way of 10 half yearly instalments from
first pari passu charge created by 30th June 2015.
hypothecation of the entire movable First four instalments of ` 0.50
properties of the Company’s Rayon Crore each, next 2 instalments
Divison Plant at Veraval and Textile of ` 1.00 Crore each, next 2
Division plant at Rishra. instalments of ` 9.00 Crore each,
next 1 instalment of ` 10.00 Crore
and last instalment of ` 1.00
Crore. 29.00 -
Term loan secured by way of first pari 20 quarterly instalments from 3rd
passu charge on existing and future September 2016.
movable fixed assets of the Indian First four instalments of ` 0.56
Rayon Divison Plant at Gujarat and Crore each, next 8 instalments
Textile Division plant at West Bengal. of ` 1.12 Crore each, next 4
The Charge to be shared with HDFC instalments of ` 1.35 Crore each,
Bank and SBI. and last 4 instalments of ` 1.46
Crore each. 16.83 -
Term loan secured by way of 21 quarterly instalments from
first pari passu charge created by 19th December 2016.
hypothecation of the entire movable 1st four instalments of ` 0.32
properties of the Company’s Rayon Crore each, next four instalments
Divison Plant at Veraval and Textile of ` 0.39 Crore each, next four
Division Plant at Rishra. instalments of ` 0.47 Crore
each, next four instalments of
` 0.63 Crore each and last five
instalments of ` 1.70 Crore each. 13.72 -
Term loan secured by way of 9 half yearly instalments from
first pari passu charge created by 1st April 2020. 1st Tranch of
hypothecation of the entire movable instalment of ` 6.90 Crore, 2nd -
fixed assets of the Company’s Excel Tranch of 8 instalments of ` 6.95
Fibre Divison Plant at Kharach. Crore each. 62.50
25,725.55 1,039.49
Less: Amount disclosed as Current
maturities of long-term debts under
the head ‘Other Current Financial
Liabilities’ (Note 2.33) 2,856.72 350.53
22,868.83 688.96
312
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(` in Crore)
As at As at
Repayment Terms
31st March, 2018 31st March, 2017
(b2) Term Loan from Banks in Foreign
Currency
HSBC Bank (Mauritius) Ltd., Mauritius February 2019
(US Dollar 4.00 Crore; Previous Year
4.00 Crore) 260.71 259.40
Sumitomo Mitsui Banking Fully repaid on 17th November,
Corporation, Singapore (US Dollar: 2017
Nil; Previous Year 2.5) - 162.12
J P Morgan Chase Bank N.A., March 2023
Singapore* (US Dollar: 1.00 Crore;
Previous Year: Nil) 65.18 -
J P Morgan Chase Bank N.A., February 2023
Singapore* (US Dollar: 2.00 Crore;
Previous Year: Nil) 130.35 -
J P Morgan Chase Bank N.A., February 2023
Singapore* (US Dollar: 2.00 Crore;
Previous Year: Nil) 130.35 -
586.59 421.52
Less: Amount disclosed as Current
maturities of long-term debts under
the head ‘Other Current Financial
Liabilities’ (Note 2.33) 260.71 162.12
325.88 259.40
The foreign currency loans are
secured by way of first charge, having
pari passu rights, on the Subsidiary’s
movable and immovable assets (save
and except stocks and book debts),
both present and future, situated at
certain locations, in favour of the
Subsidiary’s lenders/trustees.
(b3) Term Loan from Others
Loan taken against IT hardware by the between 1-16 quarterly
Subsidiary Company instalments from 1st April, 2018
till January 2022 with interest
ranging from 8.41% to 15.64% p.a. 17.81 -
Less: Amount disclosed as current
maturities of long-term debts under
the head
Other Current Financial Liabilities’
(Note 2.33) 5.02 -
12.79 -
* The Group is in the process of creating security against these loans
313
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(` in Crore)
As at As at
Repayment Terms
31st March, 2018 31st March, 2017
(c) Long-Term Finance Lease Obligation
Repayable after 5 years from 1st
August, 2015
Repayable in 1-20 quarterly
instalments 1.66 2.01
Repayment Terms : Between 1 - 16
Quarterly Instalments from 1st
April 2018 till 1st January 2022
with interest ranging from 8.41%
to 15.64% per annum 3.23
Lease obligation plus interest
payable in 19 quarterly 0.23
instalments -
Less: Amount disclosed as Current
maturities of long-term debts under
the head
Other Current Financial Liabilities’
(Note 2.33) 2.99 0.58
2.13 1.43
Total Secured Borrowings (I) 34,590.36 2,874.79
Unsecured Long-Term Borrowings:
(d) Debentures
(d1) Non- Convertible Debentures (NCDs)
9.00% 30th Series NCDs (Redeemable
at par on 10th May, 2023) 209.34 -
6.93% NCDs (Redeemable at par on
25th November, 2021) 250.00 250.00
6.99% NCDs (Redeemable at par on
24th November, 2021) 400.00 400.00
8.68% 31st Series NCDs (Redeemable
at par on 2nd February, 2020) 305.35 -
(d2) Sub Ordinate Debentures
Subordinate Debts - Debentures
8.25% to 10.60% p.a. (Redeemable
from May 2019 to May 2027) 1,890.32 -
Perpetual Debts 8.31% p.a. (Maturing
in July 2027)
3,055.01 650.00
(e) Term Loans from Banks in Foreign
Currency
Mizuho Bank Ltd, Japan * ` 65.25 Crore each from 20th
(US Dollar: 3.00 Crore) August 2019 194.07 -
314
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(` in Crore)
As at As at
Repayment Terms
31st March, 2018 31st March, 2017
Export Development, Canada June 2021
(US Dollar: 4.64 Crore; Previous Year
4.64 Crore) 302.60 301.09
Export Development, Canada May 2021
(US Dollar: 5.00 Crore; Previous Year
5.00 Crore) 325.87 324.25
Mizuho Bank Limited, Singapore * Fully repaid on 22nd December,
(US Dollar Nil; Previous Year 5.00 2017
Crore) - 324.25
Bank of America NA, Taiwan (US 3 equal annual instalments
Dollar 2.50 Crore; Previous Year 5.00 beginning October 2016
Crore) 162.94 324.25
Standard Chartered Bank (US Dollar: July 2020
19.50 Crore; Previous Year 21.50 Crore) 1,269.17 1,392.92
Export Development, Canada (US Starting June 2020
Dollars:11.00 Crore; Previous Year
12.00 Crore) 715.94 777.80
2,970.59 3,444.56
Less: Amount disclosed as Current
maturities of long-term debts under
the head
‘Other Current Financial Liabilities’
(Note 2.33) 162.94 486.38
2,807.65 2,958.18
* Mizuho Bank Limited was formerly known as Mizuho Corporate Bank Limited
(f) Term Loan from Others
Loan taken from Hewlett Packard Between 1-16 Quarterly
Financial Sales India Private Limited Instalments from 1st April,
against IT Hardware of the subsidiary 2018 till 1st January, 2022 with
interest ranging from 10.50% to
13.06% p.a. 15.37 -
Less: Amount disclosed as Current
maturities of long-term debts under
the head
‘Other Current Financial Liabilities’ 4.30
(Note 2.33) -
(g) Subsidised Government Loans
Commercial Tax Department Varied annual payments from 221.29
October 2012 to October 2026 243.98
Payable in FY2019 0.11 0.11
Varied annual payments from
April 2012 to June 2018 4.02 4.02
Repayable in six annual
instalments starting from 31st
May, 2012
315
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(` in Crore)
As at As at
Repayment Terms
31st March, 2018 31st March, 2017
Industrial Investment Promotion Repayable on 27th March, 2022 0.66
Scheme - 2012 (At Amortised cost) 0.60
Repayable on 7th August, 2023 3.64 3.33
Repayable on 25th December,
2023 3.88 3.55
Repayable on 29th October 2024 4.67 -
Repayable on 30th November
2024 0.27 -
Department of Industries and Varied annual payments from 64.26
Commerce, Haryana January 2017 to March 2022 56.12
302.80 322.60
Less: Amount disclosed as Current
maturities of long-term debts under
the head
‘Other Current Financial Liabilities’
(Note 2.33) 29.67 36.86
273.13 285.74
(h) Preference Shares issued by
Subsidaries
CCPS carry cumulative dividend
@0.001% p.a. 56.22 -
The CCPS so issued are convertible
on the occurrence of the earlier of the
two events, namely:
(i) at the option of the holder
(ii) on the occurrence of the
mandatory conversion event
Optional Conversion : Each CCPS
shall be convertible at the option of
the holder thereof, at any time by
a written notice into such number
of Equity Shares, calculated in
such manner as mentioned in the
Shareholders agreement.
Mandatory Conversion : All of the
CCPS shall mandatorily be converted
in such manner and into such number
of fully paid-up
Equity Shares as mentioned in the
agreement, upon the occurrence of
listing of the entity.
316
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(` in Crore)
As at As at
Repayment Terms
31st March, 2018 31st March, 2017
In the event of liquidation before
conversion of CCPS, the holders of
the CCPS should be eligible for such
claim, calculated in such manner as
mentioned in the CCPS agreement.
56.22 -
Total Unsecured Borrowings (II) 6,203.08 3,893.92
Total Borrowings (I + II) 40,793.44 6,768.71
The rate of interest on borrowings ranges from 5% to 11%
Foreign Currency Loans have been fully hedged for foreign exchange and interest rate fluctuation by way of
Currency and Interest Rate
Swaps and Long-term Forward contract.
Effective cost has been calculated with hedged cost in terms of foreign currency loan, and net of interest
subsidy in case of TUF Loans
The above figures are as per Ind AS (including Mark to Market and Amortisation)
317
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
2.28.1 Deferred Tax Liability (DTL) in respect of temporary differences related to undistributed earnings in
subsidiaries has not been recognized, because the Company controls the dividend policy of its subsidiaries.
318
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
319
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
320
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
2.35.1
Movement of provisions during the year as required by Ind AS - 37 “Provisions, Contingent Liabilities and
Contingent Asset”
(a) Provision for Mine Restoration Expenditure*
(` in Crore)
As at As at
31st March, 2018 31st March, 2017
Opening Balance 91.76 83.87
Add: Provision during the year 30.53 -
Add: Unwinding of discount on Mine Restoration Provision 7.30 7.89
Closing Balance (consider as Non-Current) 129.59 91.76
* Provision is recognised for an obligation for restoration and rehabilitation on closure of the mines.
321
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
322
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
323
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(` in Crore)
1st July, 2017 to
31st March, 2018
Profit /(loss) allocated to material non-controlling interest: 182.19
Summarised Financial information for the Statement of Profit and Loss
Revenue from Operations 8,952.57
Profit for the year 354.34
Other Comprehensive Income (178.14)
Total Comprehensive Income 176.20
Summarised Financial information for Cash Flows
Net Cash inflows from Operating activities (7,968.37)
Net Cash inflows from Investing Activities (1,594.44)
Net Cash inflows Financing Activities 9,388.44
Net Cash inflow (outflow) (174.37)
The information above is the amount before inter-company eliminations.
324
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(` in Crore)
As at As at
31st March, 2018 31st March, 2017
Non-Current Liabilities
Financial Liabilities (Excluding Trade Payables) 59,546.97 52,676.01
Other Liabilities 936.80 2,234.98
Total Non- Current Liabilities 60,483.77 54,910.99
Net Assets (excluding ESOP Reserve) 27,182.26 24,598.11
Group Share in% 3.92% 4.74%
Group Share in INR 1,065.37 1,166.07
Goodwill - -
Carrying Amount 1,065.37 1,166.07
(a1) Summarised Balance Sheet as per fair value (additional stake of 19.21% in Current year post Merger with
erstwhile ABNL w.e.f. 1st July, 2017)
(` in Crore)
As at
Particulars
31st March, 2018
Cash and Cash Equivalents 19.32
Other Assets 10,295.73
Total Current Assets 10,315.05
Total Non-Current Assets 98,168.52
Current Liabilities
Financial Liabilities (Excluding Trade Payables) 4,436.40
Other Liabilities 12,789.13
Total Current Liabilities 17,225.53
Non-Current Liabilities
Financial Liabilities (Excluding Trade Payables) 62,673.91
Other Liabilities 1,071.13
Total Non-Current Liabilities 63,745.04
Net Assets (excluding ESOP Reserve) 27,432.80
Group Share in % 19.21%
Group Share in INR 5,341.36
Goodwill 1,254.29
Carrying Amount 6,595.65
325
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(b) Summerised Statement of Profit and Loss (stake of 3.92% in the Current Year, Previous Year 4.74%)
(` in Crore)
Year ended Year ended
Particulars
31st March, 2018 31st March, 2017
Summarised Financial information for the Statement of Profit and Loss
Revenue from Operations 28,278.94 35,575.74
Depreciation and Amortisation 8,409.10 7,827.20
Interest Expense 4,812.97 3,979.44
Income Tax Expense (2,331.07) (463.54)
Profit/(Loss) for the Year (4,168.16) (399.70)
Other Comprehensive Income 28.27 (4.33)
Total Comprehensive Income (4,139.89) (404.03)
Group Share (100.70) (19.16)
Dividend Received - 10.26
(b1) Summerised Statement of Profit and Loss as per fair value (additional stake of 19.21% in Current year post
Merger with erstwhile ABNL w.e.f. 1st July, 2017)
(` in Crore)
1st July, 2017 to
Particulars
31st March, 2018
Summarised Financial information for the Statement of Profit and Loss
Revenue from Operations 20,112.46
Depreciation and Amortisation 6,571.51
Interest Expense 3,160.79
Income Tax Expense (1,779.59)
Profit/(Loss) for the Year (3,168.50)
Other Comprehensive Income 29.26
Total Comprehensive Income (3,139.24)
Group Share (544.26)
(B) Aditya Birla Sun Life AMC Limited (Formerly know as Birla Sun Life Asset Management Company Limited)
(` in Crore)
(1) Proportion of
Quoted Fair Value
Principal Place of Ownership Interest
Name of the Entity
Business As at As at
31st March, 2018 31st March, 2018
Aditya Birla Sun Life AMC Limited
(formerly know as Birla Sun Life Asset India 51.00% *
Management Company Limited)
* Unlisted Equity - no quoted price available
Aditya Birla Sun Life AMC Limited (the “Company” formerly known as Birla Sun Life Asset Managament Company Limited)
was incorporated on 5th September, 1994. The Company is a joint venture between the Aditya Birla Group and Sun Life
Financial, Inc. The share capital of the Company is owned by Aditya Birla Capital Limited (Subsidiary of Grasim Industries
Limited) - and Sun Life (India) AMC Investments Inc., ( wholly owned subsidiary of Sun Life Financial, Inc.).
326
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
The Company is registered with Securities and Exchange Board of India (SEBI) under the SEBI (Mutual Funds) Regulations,
1996, and the principal activity is to act as an Investment Manager to Aditya Birla Sun Life Mutual Fund. The Company
manages the investment portfolios of Aditya Birla Sun Life Mutual Fund, India Advantage Fund Ltd, Mauritius, India Excel
(Mauritius) Fund and Aditya Birla Real Estate Fund. The Company is also registered under the SEBI (Portfolio Managers)
Regulations, 1993, and provides portfolio management services and investment advisory services to offshore funds and
high net worth investors. Aditya Birla Sun Life AMC Limited has set-up two Alternate Investment Fund (AIF) one under
Category III & other under Catregory II with Securities Exchange Board of India (SEBI) under the SEBI AIF Regulations, 2012.
Aditya Birla Sun Life AMC Limited has been appointed as an Investment Manager of the said AIF by the Trustee to the Fund.
327
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(` in Crore)
Aditya Birla Sun Life AMC Limited Period ended
(formerly know as Birla Sun Life Asset Management Company Limited) 31st March, 2018
Profit for the Period 254.42
Group Share 129.75
Other Comprehensive Income 0.25
Group Share 0.13
Total Comprehensive Income 254.67
Group Share 129.88
Dividend Received 101.90
(C) Commitments and Contingent liabilities in respect of Joint Ventures and Associates
(` in Crore)
As at As at
Particulars
31st March, 2018 31st March, 2017
Group share in Commitments in respect of Joint Ventures and Associates 736.91 195.00
not being included in Note 4.6
Group share in Contingent Liability in respect of Joint Ventures and 2,535.85 768.86
Associates not being included in Note 4.5
(` in Crore)
Year ended Year ended
Particulars
31st March, 2018 31st March, 2017
Aggregate amount of Group share of:
Joint Ventures:
Profit/(loss) from Continuing Operations 129.81 148.20
Other Comprehensive Income 57.72 (75.21)
Total Comprehensive Income 187.53 72.99
Associates:
Profit/ (loss) from Continuing Operations (90.24) (18.80)
Other Comprehensive Income 0.69 (0.32)
Total Comprehensive Income (89.55) (19.12)
328
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(2)
Unrecognised share of Profit/(losses) of a Joint Venture as per Ind AS 112
(` in Crore)
Year ended Year ended
Particulars
31st March, 2018 31st March, 2017
Unrecognised Share of Profit/(loss) for the Year 5.45 (10.96)
Unrecognised Share Other Comprehensive Income for the Year (1.79) (7.66)
Cumulative Share of Loss (26.50) (30.72)
Cumulative Share of Other Comprehensive Income (3.58) (1.70)
(3)
Group holds either directly or through its subsidiary, more than half of the equity share holding in the
following entities. However, as per the shareholders’ agreement/statute, Group needs to jointly decide
with other shareholders of the respective entity on certain relevant activities. Hence, the same are being
accounted as per equity method of accounting.
a) Birla Sun Life Asset Management Company Limited
b) Birla Sun Life Trustee Company Private Limited
c) Aditya Birla Renewables Limited
d) Aditya Birla Solar Limited
e) Aditya Birla Wellness Limited
f) Aditya Birla Idea Payments Bank Limited
329
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
330
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
331
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(` in Crore)
Current Year Previous Year
Add : Stock Transfer from Century Rayon pursuant to the Scheme
of Arrangement 61.00 -
Add : Stock Transfer from JAL and JCCL pursuant to the Scheme
of Arrangement 66.79 -
1,696.52 1,378.73
Less : Closing Stock
Finished Goods 783.81 697.73
Stock-in-Trade 35.25 24.54
Work-in-Progress 775.09 491.08
Waste/Scrap 5.50 4.27
1,599.65 1,217.62
(Increase)/Decrease in Stocks 96.87 161.11
Less : (Increase)/Decrease in Excise Duty on Stocks (82.94) -
Less : Effect of Divestment in a Subsidiary (105.57) -
Add : Stock of Trial-Run Production 6.60 1.79
Add : Exchange Translation Difference 0.09 (1.15)
(84.95) 161.75
332
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
333
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(` in Crore)
3.13 Current Year Previous Year
During the current year, Donations include contribution to AB 11.00 26.00
General Electoral Trust.The Trust uses such funds for contribution for
Political purposes
334
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(` in Crore)
3.14 Current Year Previous Year
Revenue expenditure on research and development included in different 69.17 55.38
heads of expenses in the Statement of Profit and Loss
(` in Crore)
Current Year Previous Year
Net Profit for the Year Attributable to Equity Shareholders 2,678.58 3,167.30
Basic EPS:
Weighted-Average Number of Equity Shares Outstanding (Nos.) of 605,701,097 466,800,754
Face Value of ` 2/- each
Basic EPS (`) {for Face Value of Shares of ` 2/- each} 44.22 67.85
Diluted EPS:
Weighted-Average Number of Equity Shares Outstanding (Nos.) 605,701,097 466,800,754
Add: Weighted-Average Number of Potential Equity Shares on exercise
of Options (Nos.) 6,83,430 534,979
Weighted-Average Number of Equity Shares Outstanding for calculation
of Diluted EPS (Nos.) 606,384,527 467,335,733
Diluted EPS (`) {for Face Value of Shares of ` 2/- each} 44.17 67.77
335
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(i) Subsidiaries:
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or
has rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power over the entity. The financial statements of subsidiaries are included in the consolidated
financial statements from the date on which controls commences until the date on which control ceases.
The difference between the costs of investments in the subsidiaries and the Company’s share of net assets
at the time of acquisition of shares in the subsidiaries is recognised in the financial statements as Goodwill
or Capital Reserve, as the case may be. For this purpose, the Company’s share of net worth is determined on
the basis of the latest financial statements prior to the acquisition after making necessary adjustments for
material events between the date of such financial statements and the date of respective acquisition.
a) The amount of equity attributable to non-controlling shareholders at the date on which the investments
in the subsidiary companies were made.
b) The non-controlling share of movements in equity since the date the Parent-Subsidiary relationship
comes into existence.
The total comprehensive income of subsidiaries is attributed to the owners of the Company and to the
non-controlling interests even if this results in the non-controlling interest having deficit balance.
A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement
have rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of
an arrangement, which exists only when decisions about the relevant activities require unanimous consent of
the parties sharing control.
336
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
The considerations made in determining whether significant influence or joint control are similar to those
necessary to determine control over the subsidiaries.
The Group’s investments in its associate and joint venture are accounted for using the equity method. Under
the equity method, the investment in an associate or a joint venture is initially recognised at cost. The carrying
amount of the investment is adjusted to recognise changes in the Group’s share of net assets of the associate
or joint venture since the acquisition date. Goodwill relating to the associate or joint venture is included in the
carrying amount of the investment and is not tested for impairment individually.
When the Group’s share of losses of an equity accounted investee exceed the Group’s interest in that associate
or joint venture (which includes any long-term interest that, in substance, form part of Group’s net investment
in the associate or joint venture), the Group discontinues recognising its share of further losses. Additional
losses are recognised only to the extent that the Group has incurred legal or constructive obligation or made
payments on behalf of the associate or joint venture.
Unrealised gains resulting from the transaction between the Group and joint ventures are eliminated to the
extent of the interest in the joint venture, and deferred tax is made on the same.
After application of the equity method, the Group determines whether it is necessary to recognise an impairment
loss on its investment in its associate or joint venture. At each reporting date, the Group determines whether
there is objective evidence that the investment in the associate or joint venture is impaired. If there is such
evidence, the Group calculates the amount of impairment as the difference between the recoverable amount
of the associate or joint venture and its carrying value, and then recognises the loss as ‘Share of profit of an
associate and a joint venture’ in the statement of profit or loss.
Upon loss of significant influence over the associate or joint control over the joint venture, the Group measures
and recognises any retained investment at its fair value. Any difference between the carrying amount of the
associate or joint venture upon loss of significant influence or joint control and the fair value of the retained
investment and proceeds from disposal is recognised in profit or loss.
The financial statements of the Company and its subsidiary companies are combined on a line-by-line basis
by adding together the book values of like items of assets, liabilities, income and expenses, after eliminating
material intra-group balances and intra-group transactions and resulting unrealised profits or losses on intra-
group transactions. Unrealised losses are eliminated in the same way as unrealised gains, but only to the
extent that there is no evidence of impairment. The Company follows uniform accounting policies for like
transactions and other events in similar circumstances.
337
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
4.2
The CFS are comprised of the Audited Financial Statements (except as mentioned otherwise) of the Company,
its Subsidiaries and its interest in Joint Ventures and Associates for the year ended 31st March, 2018, which are
as under:
% Shareholding and
Grasim’s Ownership Voting Power along with
Country of Interest% Subsidiaries
Name of the Company Note Abbreviation Incorporation 31.3.2018 31.3.2017 31.3.2018 31.3.2017
Subsidiaries:
Sun God Trading And
Investments Limited SGTIL India 100.00 100.00 100.00 100.00
Samruddhi Swastik Trading
And Investments Limited SSTIL India 100.00 100.00 100.00 100.00
Grasim Bhiwani Textiles
Limited **^ GBTL India - 100.00 - 100.00
Aditya Birla Chemicals
(Belgium) BVBA ^ ABCB Belgium 99.97 99.97 99.97 99.97
ABNL Investments Limited “” ABIL India 100.00 - 100.00 -
Aditya Birla Capital Limited “” ABCL India 55.99 - 55.99 -
Aditya Birla PE Advisors “”
Private Limited ^^ ABPEAPL India 55.99 - 100.00 -
Aditya Birla My Universe “”
Limited ^^ ABMU India 52.46 - 100.00 -
Aditya Birla Trustee Company “”
Private Limited ^^ ABTCPL India 55.99 - 100.00 -
Aditya Birla Money Limited “”
^^ ABML India 41.45 - 74.03 -
Aditya Birla Commodities
Broking Limited (100% “”
Subsidiary of ABML) ^^ ABCBL India 41.45 - 74.03 -
Aditya Birla Financial Shared “”
Services Limited ^^ ABFSSL India 55.99 - 100.00 -
Aditya Birla Finance Limited “”
^^ ABFL India 55.99 - 100.00 -
Aditya Birla Insurance Brokers “”
Limited ^^ ABIBL India 28.00 - 50.002 -
Aditya Birla Housing Finance “”
Limited ^^ ABHFL India 55.99 - 100.00 -
Aditya Birla Money Mart “”
Limited ^^ ABMML India 55.99 - 100.00 -
Aditya Birla Money Insurance “”
Advisory Services Limited ^^ ABMIASL India 55.99 - 100.00 -
Aditya Birla Sun Life “”
Insurance Company Limited ^^ ABSLI India 28.55 - 51.00 -
Aditya Birla Sun Life Pension “”
Management Limited ^^ ABSPML India 28.55 - 51.00 -
Aditya Birla Health Insurance “”
Co. Limited ^^ ABHICL India 28.55 - 51.00 -
338
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
% Shareholding and
Grasim’s Ownership Voting Power along with
Country of Interest% Subsidiaries
Name of the Company Note Abbreviation Incorporation 31.3.2018 31.3.2017 31.3.2018 31.3.2017
Aditya Birla ARC Limited “”
^^ ABARC India 55.99 - 100.00 -
UltraTech Cement Limited UltraTech India 60.21 60.23 60.21 60.23
Dakshin Cements Limited * DCL India 60.21 60.23 100.00 100.00
UltraTech Cement Lanka
Private Limited * UTCLPL Sri Lanka 48.17 48.18 80.00 80.00
Harish Cement Limited * HCL India 60.21 60.23 100.00 100.00
UltraTech Cement Middle East
Investments Limited * UCMEIL UAE 60.21 60.23 100.00 100.00
PT UltraTech Mining
Indonesia *^% PUMI Indonesia 48.17 48.18 80.00 80.00
UltraTech Cement SA (PTY) *^ UCSA South Africa 60.21 60.23 100.00 100.00
PT UltraTech Investments
Indonesia *^+ PTUCIA Indonesia 60.21 60.23 100.00 100.00
Star Cement Co. LLC #$ SCCLD UAE 60.21 60.23 100.00 100.00
Star Cement Co. LLC, Ras-Al-
Khaimah #$ SCCLRAK UAE 60.21 60.23 100.00 100.00
Al Nakhla Crusher LLC,
Fujairah #$ ANCL UAE 60.21 60.23 100.00 100.00
Arabian Cement Industry LLC,
Abu Dhabi #$ ACIL UAE 60.21 60.23 100.00 100.00
Arabian Gulf Cement Co WLL,
Bahrain #~ AGCCW Bahrain 60.21 60.23 100.00 100.00
Emirates Power Company
Limited # EPCL Bangladesh 60.21 60.23 100.00 100.00
Emirates Cement Bangladesh
Ltd. # ECBL Bangladesh 60.21 60.23 100.00 100.00
UltraTech Cement #@
Mozambique Limitada ++ UTCMEIL Mozambique - 60.23 - 100.00
Gotan Limestone Khanij
Udyog Private Ltd. * GKU India 60.21 60.23 100.00 100.00
PT UltraTech Cement
Indonesia ^! PTUCI Indonesia 59.61 59.63 99.00 99.00
Bhagwati Lime Stone
Company Private Limited * BLCPL India 60.21 60.23 100.00 100.00
Awam Mineral LLC, Oman # $$ AML Oman 22.28 30.72 37.00 51.00
PT UltraTech Mining
Sumatera ^! PTUMS Indonesia 60.21 60.23 100.00 100.00
Joint Venture Companies
(JVs):
AV Group NB Inc. AVNB China 45.00 45.00 45.00 45.00
339
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
% Shareholding and
Grasim’s Ownership Voting Power along with
Country of Interest% Subsidiaries
Name of the Company Note Abbreviation Incorporation 31.3.2018 31.3.2017 31.3.2018 31.3.2017
Birla Jingwei Fibres Co.
Limited BJFC China 26.63 26.63 26.63 26.63
Birla Laos Pulp & Plantations
Company Limited ^ BLPP Laos 40.00 40.00 40.00 40.00
Bhubaneswari Coal Mining
Limited BCML India 26.00 26.00 26.00 26.00
Aditya Birla Elyaf Sanayi Ve
Ticaret Anonim Sirketi ABEST Turkey 33.33 33.33 33.33 33.33
Bhaskarpara Coal Company
Limited *^ BCCL India 28.52 28.53 47.37 47.37
Aditya Group AB AGAB Sweden 33.33 33.33 33.33 33.33
AV Terrace Bay Inc. AVTB Canada 40.00 40.00 40.00 40.00
Aditya Birla Renewables
Limited “” ABRL India 85.59 - 85.59 -
Aditya Birla Solar Limited “” ABSL India 50.10 - 50.10 -
Aditya Birla Sun Life Trustee “”
Company Private Limited ^^ ABSTPL India 28.47 - 50.85 -
Aditya Birla Wellness Private “”
Limited ^^ ABWPL India 28.55 - 51.00 -
Aditya Birla Sun Life AMC “”
Company Limited ^^ ABSAMC India 28.55 - 51.00 -
Aditya Birla Sun Life AMC
(Mauritius) Ltd. (100% “”
Subsidiary of ABSAMC) ^^ ABSAMCM India 28.55 - 51.00 -
Aditya Birla Sun Life AMC
Ltd., Dubai (100% Subsidiary “”
of ABSAMC) ^^ ABSAMCD India 28.55 - 51.00 -
India Advantage Fund Limited “”
(Subsidiary of ABSAMC) *** IAFL India 28.55 - 51.00 -
Aditya Birla Sun Life AMC
Pte. Ltd., Singapore (100% “”
Subsidiary of ABSAMC) ^^ ABSAMCS India 28.55 - 51.00 -
International Opportunities
Fund SPC (100% Subsidiary of “”
Aditya Birla Sun Life AMC Pte. ****
Ltd., Singapore) ^^ IOF India 28.55 - 51.00 -
Global Clean Energy Fund
SPC (100% Subsidiary of
Aditya Birla Sun Life AMC “”
Pte. Ltd., Singapore (w.e.f 1st $$$
April, 2016) ^^ GCEF India 28.55 - 51.00 -
New Horizon Fund SPC (100% “”
subsidiary of Aditya Birla Sun ###
Life AMC Pte. Ltd., Singapore) ^^ NHF India 28.55 - 51.00 -
340
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
% Shareholding and
Grasim’s Ownership Voting Power along with
Country of Interest% Subsidiaries
Name of the Company Note Abbreviation Incorporation 31.3.2018 31.3.2017 31.3.2018 31.3.2017
Associates:
Aditya Birla Science &
Technology Co. Private Ltd. “” ABSTCL India 49.50 39.00 49.50 39.00
Idea Cellular Ltd. “” Idea India 23.13 4.74 23.13 4.74
Aditya Birla Idea Payments
Bank Limited “” ABIPB India 51.00 - 51.00 -
Aditya Birla Renewables SPV1
Limited *@@ ABRSPV1 India 15.65 - 26.00 -
Madanpur (North) Coal
Company Private Limited *^ MCCPL India 6.73 6.73 11.17 11.17
*** India Advantage Fund Limited (IAFL), wholly owned Subsidiary of Birla Sun Life Asset Management Company
Limited, is a collective investment scheme set-up as a fund in Mauritius with the status of a limited company
under the Mauritius Companies Act. In terms of constitution and private placement memorandum, IAFL has
classes of redeemable participating shares. Each class of participating shares has its own Balance Sheet and
Statement of Profit and Loss. The Profit/Loss of each such class belongs to the participating shareholders
of that class. Birla Sun Life Asset Management Company Limited (BSAMC) owns 100% of the Management
share, and Management shareholder is not entitled to any beneficial interest in the profit/loss of various
classes nor is required to make good any shortfall. In substance, there are no direct or indirect economic
benefits received by the Management shareholders. The substance over form must prevail. Accordingly, the
Group has not consolidated IAFL in the Consolidated Financial Statements.
****Aditya Birla Sun Life AMC Pte Limted, Singapore, has made investment in international Opportunities Fund.
International Opportunities Fund SPC (IOF) is a segregated portfolio company set up as a fund in Cayman
341
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
islands under the Cayman Islands Monetary Act. In terms of constitution and private placement memorandum,
IOF has various segregated portfolio which issue redeemable participating shares. Each Segregated Portfolio
of the participating shares has its own Balance Sheet and Profit and Loss Account. The profit/loss of each such
Portfolio belongs to the participating shareholders of that segregated portfolio. Aditya Birla Sun Life Asset
Management Pte. Limited (ABSLAMC) owns 100% of the management share and management shareholder is
not entitled to any beneficial interest in the profit/loss of various segregated portfolios, nor is required to make
good any shortfall. In substance, there are no direct or indirect economic benefits received by the Management
shareholders. The substance over form must prevail. Accordingly, the Group has not consolidated IOF in the
Consolidated Financial Statements.
$$$ Aditya Birla Sun Life AMC Pte. Limited, Singapore has made investment in Global Clean Energy Fund SPC
(GCEF) is established as a segregated portfolio company in Cayman Islands under the Cayman Islands
Monetary Act. In terms of constitution and private placement memorandum, GCEF has facility to create
multiple segregated portfolio which issue redeemable participating shares. Each Segregated Portfolio of
participating shares will have its own Balance Sheet and Profit and Loss account. The Profit / Loss arising
from each such Portfolio belongs to the participating shareholders of that segregated portfolio. Aditya Birla
Sun Life Asset Management Company Pte Limited (ABSLAMC) owns 100% of the management share and
management shareholder are not entitled to any beneficial interest in the profit / loss of various segregated
portfolios nor is required to make good any shortfall. In substance, there are no direct or indirect economic
benefits received by the management shareholders. The substance over form must prevail. Accordingly, the
Group has not consolidated GCEF in the Consolidated Financial Statements.
### Aditya Birla Sun Life AMC Pte Limited, Singapore, has made investment in New Horizon Fund. New Horizon
Fund is established as a segregated portfolio company in Cayman Islands under the Cayman Islands Monetary
Act. In terms of constitution and private placement memorandum, New Horizon Fund has facility to create
multiple segregated portfolio which issue redeemable participating shares. Each Segregated Portfolio of
participating shares will have its own Balance Sheet and Profit and Loss account. The Profit/Loss arising from
each such Portfolio belongs to the participating shareholders of that segregated portfolio. Aditya Birla Sun Life
AMC Pte Limited owns 100% of the management share and management shareholder are not entitled to any
beneficial interest in the profit/loss of various segregated portfolios, nor is required to make good any shortfall.
In substance, there are no direct or indirect economic benefits received by the Management shareholders.
The substance over form must prevail. Accordingly, the Group has not consolidated New Horizon Fund in the
Consolidated Financial Statements.
4.3.2 The Supreme Court of India has allowed an appeal filed by the State of Rajasthan in a matter relating
to transfer of mining lease in the name of the UltraTech’s wholly-owned subsidiary, Gotan Lime Stone
Khanij Udyog Private Limited (“GKUPL”), and has directed the State of Rajasthan to frame and notify its
policy relating to transfer of mining lease and thereafter pass appropriate order in respect of the mining
lease of GKUPL. State Government has notified the new policy related to the transfer of new mining
lease, based on which the UltraTech has requested the State Government to consider reinstatement of
the mines in its favour.
342
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
4.3.4 Idea Cellular Ltd. (Idea), an associate of the Company has been undergoing merger process with Vodafone
India Limited, which is likely to be completed in first half of FY 2018-19. As a result of the said merger, the
Company’s ownership percentage in Idea will reduce from 23.13% to 11.57%.
343
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(` in Crore)
As at As at
31st March, 2018 31st March, 2017
(d) the amount of interest accrued and remaining unpaid at the
end of each accounting year; and 0.01 -
(f) the amount of further interest remaining due and payable
even in the succeeding years, until such date when
the interest dues above are actually paid to the small
enterprises, for the purpose of disallowance of a deductible
expenditure under Section 23 of the Micro, Small and
Medium Enterprises Development Act, 2006. - -
344
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
b. Group as a lessor
The Group has given certain assets on lease for which the rental income earned during the year is
` 3.15 Crore (Previous Year ` 3.26 Crore). These lease arrangements are normally renewed on expiry,
wherever required.
345
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
Except for the disclosure requirements, the new standard will not materially impact the Company’s
financial statements. The amendment will come into force from 1st April, 2018.
4.4.7
Effective 1st July, 2017, sales are recorded net of GST whereas earlier sales were recorded gross of excise
duty which formed part of expenses. Hence revenue from operations and Excise duty in expenses for the
year ended 31st March, 2018 are not comparable with the previous year corresponding figures.
346
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
4.4.10.1
a. Under the ESOS-2006, the Company has granted 1,533,375 Options to its eligible employees, the details
of which are given hereunder:
Options
Tranche I Tranche II Tranche III Tranche IV Tranche V
No. of Options Granted 1,007,650 83,050 356,485 30,185 56,005
Grant Date 23rd 25th 30th 2nd 18th
August, January, August, June, October,
2007 2008 2010 2011 2013
Grant Price (` Per Share)# 386 577 274 305 532
Revised Grant Price* (`) 305 456 N.A. N.A. N.A.
Market Price on the Date of Grant (`) 546 577 404 466 543
Fair Value on the Date of Grant of
Option (` Per Share) 208 174 226 252 197
Method of Settlement Equity Equity Equity Equity Equity
Method of Accounting Intrinsic value for options vested before 1st April 2015, and
Fair value for options vested after 1st April 2015
Graded Vesting Plan 25% every year, commencing after one year from the date of grant
Normal Exercise Period 5 years from the date of vesting
* The Grant Price in respect of Tranches I and II was revised in the Financial Year 2010-11 as per the Scheme of Demerger
of Cement Business.
# The Grant Price in respect of Tranches III, IV and V has been revised in the current Financial Year post- demerger of
Financial Services business of Grasim to ABCL, resulting in reduction of ` 14 per share from the earlier Exercise Price
i.e. Face value of ABCL’s share X 1.4 (share entitlement ratio).
347
b. U
nder the ESOS-2013, the Company has granted 1,044,245 Options and Restricted Stock Units (RSUs) to the eligible employees of
the Company and its subsidiary, the details of which are given hereunder:
348
Options RSU’s
Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche
Notes
I II III IV V I II III IV V VI
No. of Options / RSU Granted 627,015 59,905 121,750 30,440 17,045 93,495 40,420 31,010 16,665 4,165 2,335
FINANCIAL STATEMENTS
Grant Date 18th 29th 15th 2nd 24th 18th 21st 29th 15th 2nd 24th
October, January, January, April, May, October, November, January, January, April, May,
2013 2014 2016 2016 2016 2013 2013 2014 2016 2016 2016
Method of Settlement Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity
Graded Vesting Plan 25% every year, commencing Bullet vesting at the end of three years
after one year from the date of grant from the date of grant
Normal Exercise Period 5 years from the date of vesting 5 years from the date of vesting
# The Grant Price and Market Price in respect of Tranches I, III and IV has been revised in the current Financial Year post- demerger of Financial Services
business of Grasim to ABCL, resulting in reduction of ` 14 per share from the earlier Exercise Price i.e. Face value of ABCL’s share X 1.4 (share
entitlement ratio).
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
4.4.10.2(a) U
nder the Employee Stock Options Scheme - 2013 (ESOS-2013), the Company has granted 4,36,145 Options/ SAR
to the eligible employees of erstwhile ABNL as per the composite scheme of arrangement between the Company
and ABNL. The details are as under:
Options RSU’s Notes
Tranche Tranche Tranche IIIA Tranche Tranche Tranche Tranche Tranche
IA IIA IVA IA IIA IIIA IVA
No. of Options Granted 39,887 10,918 6,144 51,219 18,483 3,568 2,229 24,784
Grant Date 7th 29th 12th 24th 7th 29th 12th 24th
December, January, November, May, December, January, November, May,
2013 2014 2014 2016 2013 2014 2014 2016
Grant / Exercise Price
(` Per Share) 449 380 631 648 2 2 2 2
Market Price on the Date of
Grant 1240 1054 1727 992 1240 1054 1727 992
Fair value on the Date of
Merger (1st July, 2017) 806 875 693 716 1200 1199 1198 1195
Method of Settlement Equity Equity Equity Equity Equity Equity Equity Equity
Method of Accounting Fair Value Fair Value
Graded Vesting Plan 25% every year, commencing after one year Bullet vesting at the end of three years
from the date of grant from the date of grant
Normal Exercise Period 5 years from the date of vesting 5 years from the date of vesting
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
GRASIM
349
(b) Stock Appreciation Rights (‘SAR’)
350
SAR’s (Linked with the Company’s market price) SAR’s (Linked with Aditya Birla Capital Limited’s
market price)
Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche
Notes
-I - II - III - IV A - IV B -I - II - III - IV A - IV B
Number of SAR's 14,988 8,449 4,032 79,382 8,920 20,986 11,829 5,645 1,11,137 13,547
FINANCIAL STATEMENTS
Method of Accounting Fair Value Fair Value Fair Value Fair Value Fair Value Fair Value Fair Value Fair Value Fair Value Fair Value
Vesting Plan Bullet Bullet
Graded Graded Graded Graded Vesting- Graded Graded Graded Graded Vesting-
Vesting - Vesting - Vesting - Vesting - end of 3 Vesting - Vesting - Vesting - Vesting - end of 3
25% every 25% every 25% every 25% every year from 25% every 25% every 25% every 25% every year from
year year year year grant date year year year year grant date
Exercise Period 3 Years from the date of Vesting or 6 years 3 Years from the date of Vesting or 6 years
from the date of grant whichever is earlier from the date of grant whichever is earlier
Grant Date 07.12.2013 29.01.2014 12.11.2014 24.05.2016 24.05.2016 07.12.2013 29.01.2014 12.11.2014 24.05.2016 24.05.2016
Grant Price
(` Per Share) 449 380 631 648 2 10 10 10 10 10
Consolidated
# The Fair Value stands revised post the scheme of demerger of the Financial Services business of Grasim to ABCL on 4 July 2017.
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
4.4.10.3 Movement of Options and RSUs Granted along with Weighted Average Exercise Price (WAEP)
A. For options referred to in 4.4.10.1(a)&(b)
Number of Options and RSUs
Current Year Previous Year
Nos. WAEP (`) Nos. WAEP (`)
Outstanding at the beginning of the year 1,152,595 472 241,426 2,205
Adjustment for Sub-Division of Equity Shares - - 965,704 -
(Note 2.14.8)
Outstanding at the beginning of the year (Post-split) 1,152,595 472 1,207,130 441
Granted during the year - - 53,985 701
Exercised during the year 71,660 311 106,580 248
Lapsed during the year 41,725 616 1,940 2
Outstanding at the end of the year 1,039,210 463 1,152,595 472
Options: Unvested at the end of the year 104,535 565 339,550 583
Exercisable at the end of the year 934,675 452 813,045 425
The weighted average share price at the date of exercise for options was ` 1086 per share (31st March, 2017
` 944 per share) and weighted average remaining contractual life for the share options outstanding as at
31st March, 2018 was 2.97 years (31st March,2017: 3.1 years).
351
4.4.10.4 Fair Valuation
The fair value of options used to compute proforma net income and earnings per equity share has been done by an independent firm
352
of Chartered Accountants on the date of grant using Black-Scholes Model.
The Key Assumptions in Black-Scholes Model for calculating fair value as on the date of grant are: Notes
A. For options referred to in 4.4.10.1(a)&(b)
FINANCIAL STATEMENTS
Options
ESOS-2006 Tranche I Tranche II Tranche III Tranche IV Tranche V
Risk-Free Rate 7.78% 7.78% 7.78% 8.09% 8.58%
Option Life (Years) Vesting Period (1 Year) + Average of Exercise Period
Expected Volatility * 33.00% 36.00% 45.64% 31.73% 24.01%
Dividend Yield 1.84% 1.80% 1.58% 0.61% 1.03%
The weighted-average fair value of the option, as on the date of grant, works out to ` 211 per stock option (Previous Year ` 211 per
stock option).
Options RSU’s
Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche
ESOS-2013
I II III IV V I II III IV V VI
Consolidated
Risk-Free Rate 8.58% 8.87% 7.87% 7.60% 7.49% 8.66% 8.90% 9.00% 7.96% 7.78% 7.75%
Option Life (Years) Vesting Period (1 Year) + Average of Exercise Period 5.50 5.50 5.50 5.50 5.50 5.50
Expected Volatility * 24.01% 23.47% 28.26% 27.96% 27.43% 24.01% 23.76% 23.47% 28.52% 28.41% 28.01%
Dividend Yield 1.03% 1.10% 0.36% 0.52% 0.48% 1.34% 1.40% 1.43% 0.34% 0.51% 0.47%
The weighted-average fair value of the option and RSU, as on the date of grant, works out to ` 215 per stock option and ` 539 per
RSU. (Previous Year: ` 1,049 per stock option and ` 2,646 per RSU).
* Expected volatility on the Company’s stock price on National Stock Exchange based on the data commensurate with the expected life of the options/
RSUs upto the date of grant.
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
B. For options referred to in 4.4.10.2 (a)&(b)
Options RSU’s
Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche
ESOS-2013
IA IIA IIIA IVA IA IIA IIIA IVA
Notes
Risk-Free Rate 6.60% 6.50% 6.60% 6.70% 6.50% 6.50% 6.50% 6.70%
Option Life (Years) 2.6 years 2.1 years 2.7 years 4.4 years 2.2 years 2.3 years 2.9 years 4.4 years
Expected Volatility * 27.20% 28.10% 27.80% 27.20% 27.70% 27.40% 27.20% 27.40%
Dividend Yield 0.31% 0.31% 0.31% 0.31% 0.31% 0.31% 0.31% 0.31%
Weighted average fair value
of the option/ RSU on the ` 583 per stock option. ` 1,004 per stock option.
date of grant
SAR’s (Linked with the Company’s market price) SAR’s (Linked with Aditya Birla
Capital Limited’s market price)
Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche
IA IIA IIIA IVA IVB IA IIA IIIA IVA IVB
Risk-Free Rate 6.71% 6.71% 6.71% 7.09% 7.48% 6.71% 6.71% 6.71% 7.09% 7.48%
Option Life (Years) 0.84 0.75 1.22 2.48 3.65 0.84 0.75 1.22 2.48 3.65
years years years years years years years years years years
Expected
Volatility * 31.01% 31.01% 31.01% 31.01% 31.01% 19.94% 19.94% 19.94% 19.94% 19.94%
Dividend Yield 0.52% 0.52% 0.52% 0.52% 0.51% 0.39% 0.39% 0.39% 0.37% 0.35%
Weighted average
fair value of the
` 316.60 per stock option. ` 66.75 per stock option.
option/ RSU on the
date of grant
* Expected volatility on the Company’s stock price on National Stock Exchange based on the data commensurate with the expected life of the options/
RSUs upto the date of grant.
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
GRASIM
353
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(B) Employee Stock Option Scheme (ESOS- 2013) including Stock Options and Restricted Stock Units (RSUs):
Particulars RSUs Stock Options RSUs Stock Options RSUs Stock Options
No. of Options 84,056 237,953 12,313 34,859 2,218 6,280
Vesting Plan 100% on Graded Vesting 100% on Graded Vesting 100% on Graded Vesting
19.10.2016 - 25% every 18.10.2017 - 25% every 28.01.2018 - 25% every
year after 1 year year after 1 year year after 1 year
from the date of from the date of from the date of
grant, subject grant, subject grant, subject
to achieving to achieving to achieving
performance performance performance
targets targets targets
Exercise Period 5 years from 5 years from the 5 years from 5 years from the 5 years from 5 years from the
the date of date of Vesting the date of date of Vesting the date of date of Vesting
Vesting Vesting Vesting
Grant Date 19.10.2013 19.10.2013 18.10.2014 18.10.2014 28.01.2015 28.01.2015
Exercise Price (` Per Share) 10 1,965 10 2,318 10 3,122
Fair Value on the date of Grant of
Option (` Per Share) 1,862 750 2,241 870 3,048 1,207
Method of Settlement Equity Equity Equity Equity Equity Equity
354
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
Particulars RSUs Stock Options RSUs Stock Options RSUs Stock Options
Nos. of Options 9,059 25,645 5,313 15,042 10,374 29,369
Vesting Plan 100% on Graded Vesting 100% on Graded Vesting 100% on Graded Vesting
19.10.2018 - 25% every 13.04.2019 - 25% every 27.01.2020 - 25% every
year after 1 year year after 1 year year after 1 year
from the date of from the date of from the date of
grant, subject grant, subject grant, subject
to achieving to achieving to achieving
performance performance performance
targets targets targets
Exercise Period 5 years from 5 years from the 5 years from 5 years from the 5 years from 5 years from the
the date of date of vesting the date of date of vesting the date of date of vesting
vesting vesting vesting
Grant Date 19.10.2015 19.10.2015 13.04.2016 13.04.2016 27.01.2017 27.01.2017
Exercise Price (` Per Share) 10 2,955 10 3,167 10 3,681
Fair Value on the date of Grant of 2,897 1,728 3,108 1,810 3,608 2,080
Option (` Per Share)
Method of Settlement Equity Equity Equity Equity Equity Equity
(C) Movement of Options Granted including RSUs along with Weighted Average Exercise Price (WAEP):
As at As at
Name of the Company March 31, 2018 March 31, 2017
Nos. WAEP (`) Nos. WAEP (`)
Outstanding at the beginning of the year 251,577 1,880.59 315,961 1,441.56
Granted during the year - - 60,098 2,594.43
Exercised during the year (106,079) 1,482.43 (76,529) 862.43
Forfeited during the year (999) 2,134.23 (47,953) 1,507.37
Outstanding at the end of the year 144,499 2,171.13 2,51,577 1,880.59
Options Exercisable at the end of the year 74,262 2,090.76 1,22,191 1,601.16
The weighted average share price at the date of exercise for options was ` 4,123.18 per share
(March 31, 2017 ` 3,621.29 per share) and weighted average remaining contractual life for the share
options outstanding as at March 31, 2018 was 3.9 years (March 31,2017: 4.5 years).
355
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
* Expected volatility on the Company’s stock price on National Stock Exchange based on the data commensurate with the
expected life of the Options/RSUs up to the date of grant.
The intrinsic value of the ESOP i.e. the difference between the fair value of the shares underlying the ESOP
granted on the date of grant of option and the exercise price of the option is expensed over the vesting period.
356
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
Fair Valuation:
The fair value of the options used to compute proforma net profit and earnings per share have been done
by an independent valuer on the date of grant using Black - Scholes Merton Formula. The key assumptions
and the Fair Value are as under:
357
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
Fair Valuation:
The fair value of the options on the date of grant has been done by an independent valuer using Black-
Scholes Formula.
The key assumptions are as under:
Risk-free interest rate (%) 8.13%
Expected life (No. of years) 5
Expected volatility (%) 54.26%
Dividend yield (%) 0
Weighted Average Fair Value per Option (`)Fair Value 19.28
(b) Aditya Birla My Universe Limited (Formerly known as Aditya Birla Customer Services Limited)
Aditya Birla My Universe Limited had formulated the ABMU Employee Stock Option Scheme – 2015
(ABMU ESOP Scheme – 2015) with the approval of the shareholders at the Annual General Meeting
dated 07th July, 2015. The Scheme provides that the total number of options granted there under will
be 1,134,853 equity shares. Each option, on exercise, is convertible into one equity share of the ABMU
having face value of ` 10 each. Subsequently, the Nomination and Remuneration Committee of the Board
of Directors on 04th September, 2015 has granted 9,00,618 stock options to its eligible employees under
the ABMU ESOP Scheme – 2015 at an exercise price of ` 89/-. The Exercise Price was based on the Fair
value method arrived at as per valuation report issued by Independent Valuer.
358
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
The ESOPs granted under the ABCSL ESOP Scheme 2015 to the eligible employee have lapsed on March
31, 2018 on account of non-achievement of vesting criteria. The tenure of ABCSL ESOP scheme 2015 has
also expired on March 31, 2018. The facts of lapse of ESOPs on account of non-achievement of vesting
condition and expiry of ESOP scheme 2015 were noted by Nomination and Remuneration Committee and
Board of Directors in their respective meetings held on April 24, 2018.
Fair Valuation:
The fair value of the options on the date of grant has been done by an independent valuer using Black-
Scholes Formula.
The key assumptions are as under:
Volatility 0%
Risk free rate 7.83%
Exprected life 6 Years
Dividend yield (%) 0%
Vesting Schedule 100%
Weighted Average Fair Value per Option (`)Fair Value ` 20.74
359
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
Grasim - 2013
Particulars
Options RSU’s
Options Outstanding at beginning of the year - -
Granted during the year 1,465,927 252,309
Exercised during the year 98,476 33,921
Lapsed during the year 12,861 -
Options Outstanding at the end of the year 1,354,590 218,388
Options unvested at the end of year 168,433 59,770
Options exercisable at the end of the year 1,186,157 158,618
Since the above grants were part of the acquisition of financial services business as part of Scheme of
Arrangement amongst Aditya Birla Nuvo Limited, Grasim Industries Limited and Aditya Birla Capital
Limited, and these being issued to Grasim and ABNL ESOP and RSU holders there would be no impact
on earning per share arising from differences between intrinsic value and fair value of Options and
RSU’s.
360
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
4.5.3 ltraTech has filed appeals with the Competition Appellate Tribunal (“COMPAT”) against two orders of the
U
Competition Commission of India (“CCI”) dated 31st August, 2016 and 19th January, 2017 respectively,
and as per the directions of COMPAT, deposited ` 117.55 Crore, being 10% of the penalty imposed by CCI
under its order dated 31st August, 2016. COMPAT has since granted a stay on both the CCI orders.
The Government has made changes in the constitution and operations of Tribunals, under which all
matters with COMPAT have been transferred to the National Company Law Appellate Tribunal (NCLAT).
Hearing of order dated 31st August, 2016, is completed at NCLAT and order is awaited.
Based on legal opinion, UltraTech believes that it has a good case and, therefore, no provision has been
made in the accounts.
361
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
In the opinion of Idea, inter-alia, the above demands amount to alteration of financial terms of the licences
issued in the past. Idea had therefore, petitioned the Hon’ble High Court of Bombay, where the matter
was admitted and is currently sub-judice. The Hon’ble High Court of Bombay has directed the DoT not to
take any coercive action until the matter is further heard. No effect has been given in the Consolidated
Financial results for the above.
(` in Crore)
4.5.6 Bills Discounted with Banks fully covered by Buyers’ Letter of - 4.50
Credit
4.5.7 Aditya Birla My Universe (ABMU), a subsidiary of the ABCL has issued 0.001% Compulsorily Convertible
Preference Shares (CCPS) agreegating to ` 60 Crore to International Finance Corporation (IFC) vide
shareholder agreement dated 19th December 2014, and subscription agreement dated 19th December
2014 (SHA).Under the said SHA the ABCL has granted to IFC an option to sell the shares to ABCL at fair
valuation from the period beginning on the expiry of 60 months of subscription by IFC upto a maximum
of 120 months from the date of subscription by IFC, in the event ABCL or ABMU fails to provide an
opportunity to IFC to exit from ABCL within 60 months from date of subscription by IFC in the form of
listing, secondary sale or acquisition, etc. In the event, ABCL fails to fulfill its obligation, the Company
will be obligated to fulfill this obligation.
362
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
* The Board of Directors of Idea Cellular Limited (Idea), an Associate of the Company, has approved the
amalgamation of Vodafone India Limited (VIL) and it’s wholly owned subsidiary Vodafone Mobile Services
Limited with the Idea subject to requisite regulatory and other approvals.
As a promoter of Idea, the Company has undertaken to indemnify (liable jointly and severally with other
promoters of Idea) upto a maximum of US$ 500 Million to the promoters of VIL and its wholly owned subsidiary
VMSL, if Idea fails to meet some of its indemnity obligation under the implementation agreement for proposed
amalgamation of VIL and VMSL with Idea.
* The Company, being the promoter of Aditya Birla Idea Payments Bank Ltd. (ABIPBL), should hold at least 40 per
cent of the paid-up equity capital of ABIPBL for the first five years from the commencement of its business, as per
Reserve Bank of India (RBI) guidelines for licensing of Payments Bank. RBI has granted the licence for payment
bank to ABIPBL on 3rd April, 2017.
b. Other Commitments
1. For commitment under lease contract (Note 4.4.3)
2. For commitment under derivative contract (Note 4.11)
363
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
Financial Services - Non- Bank Financial Services, Life Insurance Services, Housing Finance,
Private Equity, Equity and Commodity Broking, Wealth Management, General
Insurance Advisory and Health Insurance(w.e.f 1st July 2017)
Others - Mainly Textiles, Insulators, Agri-business and Solar Power(w.e.f 1st July 2017)
364
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(` in Crore)
Financial
Viscose Chemicals Cement Others Eliminations
Services Total
Profit for the period
including Profit of Life
Insurance Business
attributable to
Participating Policyholders 3,690.19
Less : Profit/
(loss) attributable
to Participating
policyholders of Life
Insurance Business - - - (2.57) - - (2.57)
Profit for the period before
Non-Controlling Interest 3,687.62
Less: Non-Controlling
Interest (1,009.04)
Profit for the Year 2,678.58
OTHER INFORMATION
Segment Assets 8,419.36 5,251.70 58,884.03 114,103.47 4,122.04 (57.26) 1,90,723.34
Investment in Associates/
Joint Ventures (Allocable to
Operating Segments) 1,073.41 - 10.81 4,886.97 59.97 - 6,031.16
Investment in Associates/
Joint Ventures
(Unallocable) 7,901.52
Unallocated Corporate
Assets 3,211.18
Total Assets 207,867.20
Segment Liabilities 3,240.26 1,298.63 27,134.12 83,923.19 1,926.63 (66.16) 117,456.67
Unallocated Corporate
Liabilities 6,711.80
Total Liabilities 124,168.47
Additions to Non-Current
Assets 1,246.62 553.61 18,287.92 131.64 57.39 - 20,277.18
Unallocated Corporate
Capital Expenditure 14.00
Total Additions Non-
Current Assets 20,291.18
Depreciation and
Amortisation 296.24 211.77 1,847.93 243.45 111.45 - 2,710.84
Unallocated Corporate
Depreciation and
Amortisation 13.52
Total Depreciation and
Amortisation 2,724.36
365
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(` in Crore)
Financial
Viscose Chemicals Cement Others Eliminations
Services Total
Significant Non-Cash
Expenses other than
Depreciation and
Amortisation (Allocable) - 5.65 354.45 89.55 - 449.65
Significant Non-Cash
Expenses other than
Depreciation and
Amortisation (Unallocable) 55.78
Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions
with third parties.
(` in Crore)
Fibre & Pulp Chemicals Cement Others Eliminations Total
REVENUE
Sales (As reported) 7,600.37 3,405.51 28,355.55 445.62 - 39,807.05
Sales (Inter-Segment) 36.80 704.60 7.06 0.60 (749.06) -
Total Sales (Note 3.1) 7,637.17 4,110.11 28,362.61 446.22 (749.06) 39,807.05
Other Income (including Other
Operating Revenues) 101.51 79.15 484.45 24.20 (15.55) 673.76
Unallocated Corporate Other
Income 714.12
Total Other Income 101.51 79.15 484.45 24.20 (15.55) 1,387.88
Total Revenue 7,738.68 4,189.26 28,847.06 470.42 (764.61) 41,194.93
RESULTS
Segment Results (PBIT) 1,206.10 639.94 4,065.23 14.95 (4.63) 5,921.59
Unallocated Corporate Income/
(Expenses) 603.71
Finance Costs (702.40)
Profit Before Tax and Share in
Profit/(Loss) of Equity Accounted
Investees 5,822.90
366
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(` in Crore)
Fibre & Pulp Chemicals Cement Others Eliminations Total
Share in Profit of Joint Ventures
and Associates (allocable to
Operating segments) 134.89 0.02 - - - 134.91
Share in Profit of Joint Ventures
and Associates (Unallocable) (5.50)
Profit Before Tax 5,952.31
Current Tax 1,345.99
Deferred Tax 360.71
Profit After Tax 4,245.61
Less: Non-controlling Interest (1,078.31)
Net Profit 3,167.30
OTHER INFORMATION
Segment Assets 5,960.08 4,418.77 43,984.21 364.99 (14.50) 54,713.55
Investment in Associates/ Joint
Ventures (allocable to operating
segments) 896.69 7.44 - - - 904.13
Investment in Associates/ Joint
Ventures (Unallocable) 1,252.16
Unallocated Corporate Assets 5,898.00
Total Assets 62,767.84
Segment Liabilities 1,886.22 683.28 14,472.24 181.43 (7.08) 17,216.09
Unallocated Corporate Liabilities 4,462.74
Total Liabilities 21,678.83
Additions to Non-Current Assets 204.64 228.52 1,293.70 10.06 - 1,736.92
Unallocated Corporate Capital
Expenditure 3.02
Total Additions Non-Current Assets 1,739.94
Depreciation and Amortisation 232.99 201.05 1,348.41 13.11 - 1,795.56
Unallocated Corporate
Depreciation and Amortisation 12.03
Total Depreciation and
Amortisation 1,807.59
Significant Non-Cash Expenses
other than Depreciation and
Amortisation (Allocable) 2.73 5.87 32.75 1.13 - 42.48
Significant Non-Cash Expenses
other than Depreciation and
Amortisation (Unallocable) 16.05
367
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
368
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
Associates:
Aditya Birla Science & Technology Company Private Limited
Idea Cellular Limited
Madanpur (North) Coal Company Private Limited
Aditya Birla IDEA Payments Bank Limited (w.e.f.1st July, 2017)
Aditya Birla Renewable SPV 1 Limited (Subsidiary’s Associate) (w.e.f. 19th June, 2017)
369
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
370
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(` in Crore)
Current Year Previous Year
(f) Loans Given
Associates
Aditya Birla Idea Payments Bank Limited 17.75 -
Aditya Birla Renewable SPV 1 Limited 7.15 -
Joint Ventures
Aditya Birla Renewables Limited 23.95 -
Aditya Birla Solar Limited 6.30 -
55.15 -
(g) Repayment against Loans Given
Associates
Aditya Birla Science & Technology Company
Private Limited 2.20 -
Aditya Birla Idea Payments Bank Limited 17.75 -
Aditya Birla Renewable SPV 1 Limited 7.15 -
Joint Ventures
AV Group NB Inc. 32.80 -
Aditya Birla Renewables Limited 23.95 -
Aditya Birla Solar Limited 2.00 -
85.85 -
(h) Investment in Equity Shares
Joint Ventures
Aditya Birla Renewables Limited 35.28 -
Aditya Birla Wellness Private Limited - -
Aditya Birla Elyaf Sanayi Ve Ticaret Anonim Sirketi - (56.20)
Birla Laos Pulp & Plantations Company Limited - 0.53
Associates
Aditya Birla Idea Payments Bank Limited 103.20 -
138.48 (55.67)
(i) Contribution to Post-Retirement Funds
Grasim Industries Limited Employees Provident Fund 7.78 6.83
Grasim (Senior Executive and Officers)
Superannuation Scheme 11.10 6.96
Jayashree Provident Fund Institution 3.00 -
Provident Fund of Aditya Birla Nuvo Limited 3.40 -
Indo Gulf Fertilizer Employee Provident Fund Trust 1.69 -
Century Rayon Provident Fund Trust 1.16 -
Grasim Industries Limited Employees' Gratuity Fund 35.74 28.99
63.87 42.78
(j) Receipts from Post Retirement Fund
Grasim Industries Limited Employees' Gratuity Fund 3.30 1.45
371
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(` in Crore)
Current Year Previous Year
(k) Deposit Given
Relatives of KMP - 5.00
(l) Reimbursement of costs (net)
Joint Venures (including Subsididary Joint Ventures)
Aditya Birla Sun Life AMC Limited 46.39 -
Aditya Birla Wellness Private Limited (1.00) -
45.39 -
(m) Compensation of Key Management Personnel
of the Company
Short-Term Employee benefits 57.15 16.08
Post-Retirement benefits 1.42 5.42
Share based Payments 15.59 2.97
74.16 24.47
Based on the recommendation of the Nomination, Remuneration and Compensation Committee,
all decisions relating to the remuneration of the Directors are taken by the Board of Directors of
the Company, in accordance with the shareholders’ approval, wherever necessary.
Expenses towards gratuity and leave encashment provisions are determined actuarially on an
overall Company basis at the end of each year and, accordingly, have not been considered in the
above information.
Outstanding Balances as on the year end
(a) Trade Payables
Joint Ventures
AV Group NB Inc. 179.24 131.82
Aditya Group AB 51.89 43.50
Aditya Birla Sun Life AMC Limited 3.92 -
Aditya Birla Wellness Private Limited 5.80 -
Associates
Idea Cellular Limited 0.07 -
Others 0.19 -
Total 241.11 175.32
(b) Other Current and Non-Current Liabilities
Associates
Aditya Birla Science & Technology Company
Private Limited 0.02 -
Joint Ventures
Aditya Birla Sun Life AMC Limited 0.62 -
Total 0.64 -
(c) Trade Receivables
Joint Ventures
Birla Jingwei Fibres Company Limited 23.33 39.07
AV Terrace Bay Inc. 0.05 -
Aditya Birla Renewables Limited 6.77 -
372
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(` in Crore)
Current Year Previous Year
Aditya Birla Solar Limited 32.25 -
Aditya Birla Sun Life AMC Limited 0.39 -
Aditya Birla Wellness Private Limited 3.77 -
Associates
Idea Cellular Limited 0.20 1.40
Total 66.76 40.47
(d) Loans and Advances
Associate
Aditya Birla Science & Technology Company
Private Limited 55.58 44.19
Joint Ventures
Aditya Birla Solar Limited 4.30 -
AV Group NB Inc. - 32.80
Others 2.49 2.49
Total 62.37 79.48
(e) Other Current Assets (Financial)
Joint Ventures
Aditya Birla Sun Life AMC Limited 0.02 -
(f) Deposit
Relatives of KMP 5.00 5.00
The Board of Directors of Idea Cellular Limited (Idea), an Associate of the Company has approved
the amalgamation of Vodafone India Limited (VIL) and it’s wholly owned subsidiary Vodafone
Mobile Services Limited with the Idea subject to requisite regulatory and other approvals.
As a promoter of Idea, the Company has undertaken to indemnify (liable jointly and severally with
other promoters of Idea) upto a maximum of US$ 500 Million to the promoters of VIL and its wholly
owned subsidiary VMSL, if Idea fails to meet some of its indemnity obligation under the implementation
agreement for the proposed amalgamation of VIL and VMSL with Idea.
The Group has not recorded any impairment of receivables relating to amounts owed by related parties.
This assessment is undertaken each financial year through examining the financial position of the related
party and the market in which the related party operates.
373
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit
Method as prescribed by the Ind AS-19 ‘Employee Benefits’, which recognises each period of service as
giving rise to additional unit of employee benefit entitlement and measure each unit separately to build
up final obligation.
Inherent Risk:
The plan is defined benefit in nature, which is sponsored by the Company, and hence, it underwrites all
the risks pertaining to the plan. In particular, this exposes the Company to actuarial risk such as adverse
salary growth, changes in demographic experience, inadequate return on underlying plan assets. This
may result in an increase in cost of providing these benefits to employees in future. Since the benefits
are lump sum in nature, the plan is not subject to any longevity risk.
Pension:
The Company provides pension to few retired employees as approved by the Board of Directors.
Inherent Risk:
The plan is of a defined benefit in nature, which is sponsored by the Company, and, hence, it underwrites
all the risks pertaining to the plan. In particular, there is a risk for the Company that any adverse increase
in salary increases for serving employees/pension increase for pensioners or adverse demographic
experience can result in an increase in the cost of providing these benefits to employees in future. In
this case, the pension is paid directly by the Company (instead of pension being bought out from an
insurance company) during the lifetime of the pensioners/beneficiaries and, hence, the plan carries the
longevity risks.
374
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
375
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(` in Crore)
Gratuity Pension
Current Year Previous Year Current Year Previous Year
Post- Post-
Retirement Retirement
Funded Others Funded Others Pension Pension
Medical Medical
Benefits Benefits
Fair Value of the Plan
Assets 1,045.48 - 680.38 - - - - -
Net Liabilities/(Assets)
recognised in the Balance
Sheet (27.47) 23.65 (16.43) 20.49 43.28 0.58 16.34 0.61
(iv) Amount recognised
in Salary and Wages
under Employee
Benefits Expenses in the
Statement of Profit and
Loss:
Current Service Cost 64.77 3.05 43.45 3.07 - - - -
Past Service Cost 3.01 - - - 22.98 - - -
Interest on Defined Benefit
Obligations (Net) 29.49 0.95 28.21 0.84 1.39 0.04 1.22 0.04
Expected Return on Plan
Assets (30.96) - (28.55) - - - - -
Net Cost 66.31 4.00 43.11 3.91 24.37 0.04 1.22 0.04
Capitalised as Pre-
Operative Expenses in
respect of Projects and
other adjustments (0.15) - (0.07) - - - - -
Net Charge to the
Statement of Profit and
Loss 66.16 4.00 43.04 3.91 24.37 0.04 1.22 0.04
(v) Amount recognised in
Other Comprehensive
Income (OCI) for the Year
Changes in Financial
Assumptions (18.15) 0.02 41.81 0.10 (1.59) (0.02) 0.84 0.02
Changes in Demographic
Assumptions (10.78) - (11.24) - - - - -
Experience Adjustments 11.49 (0.48) 1.42 (0.78) 3.18 0.01 0.34 0.01
Actual Return on Plan
Assets less Interest on
Plan Assets (6.99) - (6.08) - - - - -
Less: Amount recovered
from Joint Venture
Companies 1.00 - - - - - - -
376
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(` in Crore)
Gratuity Pension
Current Year Previous Year Current Year Previous Year
Post- Post-
Retirement Retirement
Funded Others Funded Others Pension Pension
Medical Medical
Benefits Benefits
Recognised in OCI for the
Year (24.43) (0.46) 25.91 (0.68) 1.59 (0.01) 1.18 0.03
(vi) Maturity Profile of Defined
Benefit Obligation
Within next 12 months
(next annual reporting
period) 140.67 3.03 81.80 1.68 4.82 0.06 1.19 0.06
Between 1 and 5 years 354.13 6.88 207.65 6.03 16.97 0.24 4.43 0.23
Between 5 and 10 years 449.68 6.96 266.71 6.46 13.39 0.23 2.99 0.22
10 years and above 1392.40 21.63 1009.34 19.20 25.92 0.61 5.92 0.64
(vii) Quantitative Sensitivity
Analysis for significant
assumption
Increase/(Decrease) on
present value of Defined
Benefit Obligation at the
end of the year
100bps increase in
Discount rate (79.77) (2.15) (54.28) (1.90) (2.31) (0.04) (0.95) (0.04)
100bps decrease in
Discount rate 84.57 2.52 62.04 2.25 2.47 0.04 1.05 0.04
100bps increase in Salary
Escalation rate 83.88 2.45 60.64 2.20 - - - -
100bps decrease in Salary
Escalation rate (80.19) (2.13) (54.05) (1.89) - - - -
Increase in Life
Expectancy by 1 year - - - - 1.88 - 0.22 -
Decrease in Life
Expectancy by 1 year - - - - (1.92) - (0.23) -
(viii) The major categories of
the Plan Assets as a % of
total plan
Government of India
Securities 9% N.A. 1% N.A. N.A. N.A. N.A. N.A.
Corporate Bonds 2% N.A. 2% N.A. N.A. N.A. N.A. N.A.
Insurer Managed Funds 89% N.A. 95% N.A. N.A. N.A. N.A. N.A.
Others 1% N.A. 2% N.A. N.A. N.A. N.A. N.A.
Total 100% N.A. 100% N.A. N.A. N.A. N.A. N.A.
377
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(` in Crore)
Gratuity Pension
Current Year Previous Year Current Year Previous Year
Post- Post-
Retirement Retirement
Funded Others Funded Others Pension Pension
Medical Medical
Benefits Benefits
(ix) Principal Actuarial
Assumptions
Discount Rate 6.8%- 3.2%- 7.12%- 3.2%- 7.80%- 7.12% to
8.00% 10.5% 7.50% 11.50% 7.90% 7.50% 7.50% 7.50%
Expected Return on Plan 6.80%- 7.12%-
Assets 8.00% N.A. 7.50% N.A. N.A. N.A. N.A. N.A.
Salary Escalation Rate 5.50%- 5%- 5%-
10% 10.00% 8.00% 10.00% - - - -
Mortality Tables GA 1983 GA 1983
Mortality Mortality
Table/UK Table/UK
Mortality Mortality
Table Table
AM92[UK] AM92[UK]
& Indian & Indian
Indian assured Indian assured PA (90) PA (90) PA (90)
Assured lives Assured lives annuity annuity annuity PA (90)
(2006-08) Mortality (2006-08) Mortality rates rates rates annuity rates
mortality (2006-08) mortality (2006-08) adjusted adjusted adjusted adjusted
tables Ult Table tables Ult Table suitably suitably suitably suitably
Retirement Age:
Management- 60 Yrs. 60 Yrs
Non- Management- 58 Yrs. 55-60 Yrs. 58 Yrs 55-60 Yrs - - - -
(x) Weighted Average
Duration of Defined 4 Yrs. to 7 to 10 7.1-13.4 4.99 Yrs. 4.99 Yrs.
Benefit obligation 17 Yrs. 2-17 Yrs. Yrs. Yrs. to 7.4 Yrs. 6.8 Yrs. to 7.4 Yrs. 6.8 Yrs.
(xi) Amounts included in the Fair Value of the Plan Assets for:
• The Company’s own financial instrument: ` 282.04 Crore (Previous year ` Nil)
• Property occupied by or other assets used by the Company: ` Nil (Previous year ` Nil)
There is no compulsion on the part of the Company to fully pre- fund the liability of the Plan. The Company’s
philosophy is to fund the benefits based on its own liquidity and tax position, as well as level of under funding
of the plan.
378
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(xvi) The best estimate of the expected contribution for the next year amounts to ` 20 Crore (Previous Year
` 20.50 Crore).
(xix) The details of the Company’s Defined Benefit Plans in respect of the Company-owned Provident Fund Trust
Amount recognised as expense and included in the Note 3.7 as “Contribution- Company owned Provident
Fund” is ` 50.05 Crore (Previous Year ` 22.17 Crore).
The actuary has provided for a valuation and based on the below provided assumption there is no interest
shortfall as at 31st March, 2018 and 31st March, 2017.
(` in Crore)
As at 31st As at 31st
Particulars
March 2018 March 2017
(a) Plan Assets at Fair Value 1,969.66 940.22
(b) Liability recognised in the Balance Sheet Nil Nil
(c) Assumptions used in determining the present value obligation of
interest rate guarantee under the Deterministic Approach
- Discount Rate for the term of the Obligations 7.80%-7.90% 7.12%-7.50%
-D
iscount Rate for the remaining term of maturity of
Investment Portfolio 7.61% - 8.63% 7.20%-8.72%
- Average Historic Yield on Investment Portfolio 8.72% – 9.34% 8.96%
- Guaranteed Interest Rate 8.55% 8.65%
379
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments
based on the input that is significant to the fair value measurement as a whole:
Level 1: This hierarchy uses quoted (unadjusted) prices in active markets for identical assets or liabilities. The
fair value of all Equity Shares, which are traded in the stock exchanges is valued using the closing price at the
reporting date.
Level 2: Category includes financial assets and liabilities measured using a valuation technique based on
assumptions that are supported by prices from observable current market transactions. These include assets
380
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
and liabilities for which pricing is obtained via pricing services, but where prices have not been determined in
an active market, financial assets with fair values based on broker quotes and assets that are valued using the
Group’s own valuation models whereby the material assumptions are market observable. The majority of the
Company’s over-the-counter derivatives and several other instruments not traded in active markets fall within
this category.
Level 3: Category includes financial assets and liabilities measured using valuation techniques based on non-
market observable inputs. Valuation model based on assumptions that are neither supported by prices from
observable current market transactions in the same instrument nor are they based on available market data.
However, the fair value measurement objective remains the same, that is, to estimate an exit price from the
perspective of the Company. The main asset classes in this category are unlisted equity investments as well
as unlisted funds.
(` in Crore)
Fair Values
As at As at
Particulars
31st March, 2018 31st March, 2017
Financial Assets at Amortised Cost
Investments of Insurance Business (Level 2) 5,732.98 -
Financial Assets at Fair Value through Other Comprehensive Income
Investments of Insurance Business (Level 1) 80.86 -
Investments of Insurance Business (Level 2) 5,244.88 -
Investments of Insurance Business (Level 3) 0.60 -
Other Investments in Debentures or Bonds (Level 2) 167.85 170.48
Other Investments in Equity Instruments (other than Subsidiaries,
Joint Ventures and Associates)
- Level 1 3,880.86 2,379.94
- Level 3 517.61 354.54
Hedging Instruments
Derivative Assets (Level 2) 121.52 215.82
Financial Assets at Fair Value through Profit and Loss
Investments of Insurance Business [including Investments of Assets
held to cover linked liabilities] (Level 1) 12,096.45 -
Investments of Insurance Business [including Investments of Assets
held to cover linked liabilities] (Level 2) 14,035.10 -
Other Investments in Mutual Funds, Bonds and Private Equity
Investment Funds (Level 2) 9,407.19 9,037.45
Other Investment in Equity Instruments (other than Subsidiaries,
Joint Ventures and Associates) (Level 3) 8.29 1.21
Other Investments in Preference Shares
- Level 1 21.29 -
- Level 2 206.07 -
- Level 3 125.12 100.47
Total 51,646.67 12,259.91
381
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(` in Crore)
Fair Values
As at As at
Particulars
31st March, 2018 31st March, 2017
Financial Liabilitiess at Amortised Cost
Non-Current Borrowings (Level 2) 1,077.37 -
Non-Current Borrowings (Level 3) 45,542.27 7,741.87
Hedging Instruments
Derivative Liabilities (Level 2) 56.40 42.30
Total 46,676.04 7,784.17
The Management assessed that cash and bank balances, trade receivables, loans, trade payables, borrowings
(cash credits, commercial papers, foreign currency loans, working capital loans) and other financial assets and
liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
The fair value of loans, security deposits and investments in preference shares were calculated based on
cash flows discounted using a current lending rate. They are classified as Level 3 fair value hierarchy due to
inclusion of unobservable inputs including counter party credit risk.
During the reporting period ending 31st March, 2018 and 31st March, 2017, there was no transfer between
Level 1 and Level 2 fair value measurement.
2. Debentures or Bonds: Based on market yield for instruments with similar risk/maturity, etc. (Level 2)
3. Listed Equity Investment (other than Subsidiaries, Joint Ventures and Associates): Quoted Bid Price on
Stock Exchange (Level 1)
382
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
4.10.2 Description of Significant Unobservable Inputs used for Financial Instruments (Level 3)
The following table shows the valuation techniques and inputs used for financial instruments:
Investments in Preference Shares Discounted cash flow method using risk adjusted
discount rate
Equity Investments-Unquoted (other than Discounted cash flow method using risk adjusted
Subsidiaries, Joint Ventures and Associates) discount rate/net worth of Investee Co.
Private Equity Investment funds Price to Book value method
Fixed Deposit with Corporates Discounted cash flow method using risk adjusted
discount rate
Long-Term Borrowings Discounted cash flow method using risk adjusted
discount rate
Other Financial Instruments Discounted cash flow method using risk adjusted
discount rate
B.
Preference Shares (Significant unobservable input being the Average cost of borrowings to arrive at
discount rate):
A 100 bps increase/decrease in the discount rate used while all the other variables were held constant,
the carrying value of the shares would decrease by ` 6.06 Crore or increase by ` 6.44 Crore (as at 31st
March, 2017: decrease by ` 6.36 Crore or increase by ` 6.56 Crore).
C. Others
Significant Sensitivity of
Valuation
Particulars Unobservable Range the input to
Technique
Inputs the Fair Value
Unquoted Equity Shares Net worth as Not Applicable Not Not
per Books Applicable Applicable
Private Equity Investment funds Price to (Valuation at 0.45-0.55 ß
Book value 10% discount
method compare to
peer group)
ß represents amount is less than ` 50,000
383
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
4.10.3 The following table shows a reconciliation from the opening balances to the closing balances
for Level 3 fair values:
(` in Crore)
Balances as at 1st April, 2016 369.51
Add: Investment in Equity shares measured at FVTPL 0.16
Add: Fair value Loss recognised in other misc. expenses in Profit or Loss (1.73)
Add: Fair value gain recognised in OCI 88.28
Balances as at 31st March, 2017 456.22
Add: Preference shares received on merger of ABNL 20.55
Add: Purchase of investment during the year 0.02
Add: Investment at fair value on loss of control in a subsidiary 7.11
Add: Fair value gain recognised in other income in Profit or Loss 10.13
Less: Sale of Investments (0.20)
Add: Fair value gain recognised in OCI 157.79
Balances as at 31st March, 2018 651.62
Insurance business recognises that information is a critical business asset, and that our ability to operate
effectively and succeed in a competitive market depends on our ability to ensure that business information is
protected adequately through appropriate controls and proactive measures. Accordingly, Insurance business
has an information security framework that ensures all the information assets are safeguarded by establishing
comprehensive management processes throughout the organisation.
Insurance Business Investments Function is governed by the Investment Committee and the Asset Liability
Management Committee appointed by the Board of Directors. Investment Policy and Operating Guidelines
laid down by the Board provide the framework for management and mitigation of the risks associated with
investments. Asset Liability Policy and various Asset Liability Management(ALM) strategies are adopted
to ensure adequate Asset Liability Management. These policies are reviewed at frequent intervals by the
respective Board Committees and approved by the Board.
Insurance Business has a robust Business Continuity framework to ensure resumption of time sensitive
activities within the defined timeframe at defined levels. Insurance Business is certified against ISO 22301
(Globally accepted standard on Business Continuity).
384
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
Insurance Business through its risk management policies has set up systems to continuously monitor its
experience with regard to other parameters that affect the value of benefits offered in the products. Such
parameters include policy lapses, premium persistency, maintenance expenses and investment returns.
1. Risk identification
2. Risk response and risk management strategy
a. Risk Policies
The following risk policies govern and implement effective risk management practices:
Product Design and Pricing Policy, Underwriting and Liability Management Policy, Re-insurance
Ceded Policy, Capital Management Policy, Investment Policies, Dealing Room Policy, Broker
Empanelment Policy, Valuation Policy, Information Security Policies, Internet and email Usage Policy,
Logical Access Security Policy, External Access Security Policy, Physical Access Security Policy,
Business Continuity Policy, Operational Risk Management Policy, Fraud Reporting and Investigating
Policy, Asset Liability Management Policy, Outsourcing Policy and Anti Money Laundering Policy.
385
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
c. Regulatory Framework
Regulators are primarily interested in protecting the rights of policyholders and monitor them closely
to ensure that the Insurance Business is satisfactorily managing affairs for their benefits. At the same
time, regulators are also interested in ensuring that the Company maintains an appropriate solvency
position to meet unforeseeable liabilities arising from economic shocks or natural disasters. The
operations of the Company are subject to regulatory requirements within the jurisdictions in which
it operates.
The risk exposure is mitigated by diversification across a large portfolio of insurance contracts and geographical
areas.The variability of risks is also improved by careful selection and implementation of underwriting strategy
guidelines, as well as the use of re-insurance arrangements.
Life insurance Contracts and Investment Contracts with and without Discretionary Participation Feature (DPF)
Ind AS 104 requires products offered by the Insurance Company to classify them in Insurance Contract and
Investment Contract. Each contract needs to be classified in insurance contract and investment contract based
on the risk they carry.
A contract would be an insurance contract and investment contracts with DPF if the benefit payable on death
is higher by:
at least 5% of the fund value at any time during the life on the contract for unit linked products, or
at 5% of the premium at any time during the life of the contract for other than unit linked products
All other contracts are categorised as Investment contracts
For contracts with DPF, the participating nature of these contracts results in a significant portion of the
insurance risk being shared with the insured party. For contracts without DPF, the Group charges for death
and disability risks on a quarterly basis. Under these contracts, the Group has the right to alter these charges
to take account of death and disability experience, thereby mitigating the risks to the Group.
386
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
vii) Product and pricing Risk – Risk of loss due to incorrect pricing or not adhering to the product regulations
or higher payouts due to ambiguity in terms and conditions
viii) Re-insurance Risk – The Group enters into reinsurance agreements in order to mitigate insurance Risk.
However, this leads to default Risk from the reinsurer at the time of claim payment or also concentration
Risk if all the Risk is insured to one reinsurer.
ix) Concentration Risk – The Group faces concentration Risk by selling business to specific geography or by
writing only single line business etc.
Control Measures
The actuarial department has set up systems to continuously monitor the Group’s experience with regard
to parameters like policy lapses, premium persistency, maintenance expenses and investment returns. The
underwriting team, with actuarial guidance, has set in place processes and procedures to review proposal.
Many products offered by the Group also have an investment guarantee. The Group has set aside additional
reserves to cover this risk.
Further, the possible financial effect of adverse mortality and morbidity experience has been reduced by
entering into re-insurance agreements with multiple re-insurers. The Group has entered into a separate
agreement with reinsurers to cover the catastrophic risks under individual and Group business.
A further element of managing risk is to limit the exposure to individual segments of the population. In essence,
being over-represented in any population segment will increase the variance of the Group’s experience, and so
there are advantages to diversifying across all relevant population segments, at least until the data is available
to confirm which segments can be expected to have relatively favorable experience. At the present stage in the
Group’s development, the focus is on building new distribution and so geographical diversification is actively
taking place. In future, the actuarial team will need to be alert to assess potential risk aggregations.
The Group has a Board approved Risk Management Policy covering underwriting, claims and reserving for
policy liabilities. The Group has a detailed claims processing manual in place. Complicated and large claims
are referred to the Group’s Claims Review Committee.
387
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
Re-insurance Assets
Particulars Current Year
As on 1st July, 2017 940.89
Add/(Less)
Premium 144.00
Unwinding of the Discount /Interest Credited 18.17
Change in Valuation for expected future benefits -
Insurance Liabilities Released (116.95)
Others (experience variations) (428.23)
At the end of the year (March) 557.88
388
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
Key assumptions
The assumptions play vital role in calculating Insurance liabilities for the Group. Material judgement is required
in determining the liabilities and in the choice of assumptions. Best estimate assumptions in use are based on
historical and current experience, internal data, some judgement and as per guidance notes/actuarial practice
standards. However, for the purpose of valuation an additional level of prudence has been kept on all the
best estimate assumptions known as MFAD (Margin for Adverse Deviation).The Company keeps adequate
MFAD, as prescribed in APS 7 issued by the Institute of Actuaries of India (IAI), in all assumptions over the
best estimate value.
Best Estimate Assumptions are further evaluated on a continuous basis in order to ensure realistic and
reasonable valuations.
Assumptions can vary by type of product, duration, gender,etc. if the experience of any category is significantly
different and data is credible for the respective category.
The key assumptions to which the estimation of liabilities is particularly sensitive, are as follows:
An increase in mortality/morbidity rates will usually lead to a larger number/amount of claims (and
claims could occur sooner than anticipated), which will increase the liability and reduce profits for the
shareholders.
ii) Longevity
Assumptions are based on standard industry and national tables, adjusted when appropriate to reflect
the Group’s own risk experience. An appropriate, but not excessive, prudent allowance is made for
expected future improvements. Assumptions are normally differentiated by gender, underwriting
class and contract type. An increase in longevity rates will lead to an increase in the number of annuity
payments to be made, which will increase the liability and reduce profits for the shareholders.
Life insurance liabilities are determined as the sum of the discounted value of the expected benefits and
future administration expenses directly related to the contract, less the discounted value of the expected
theoretical premiums that would be required to meet these future cash outflows. Discount rates are
based on investment strategy of the Group, current industry risk rates, adjusted for the Group’s own risk
exposure.
A decrease in the discount rate will increase the value of the insurance liability and, therefore, reduce
profits for the shareholders.
389
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
An increase in the level of expenses would result in an increase in expenditure, thereby reducing profits
for the shareholders.
An increase in lapse rates early in the life of the policy would tend to reduce profits for shareholders, but
later increases are broadly neutral in effect.
The best estimate assumptions that have the greatest effect on the statement of financial position and
statement of profit or loss of the Company are listed below.
Lapse and
Mortality Investment
Portfolio assumptions by type of business impacting Surrender
Rates Return
net liabilities Rates
31-Mar-18 31-Mar-18 31-Mar-18
Insurance
PY1 : 40%
PY2 : 15%
100% of
With DPF 7.15% p.a. PY3 + : 2% -
IALM2006-08
5% (varying
by product) "
a) 9.5% p.a.
PY1 :
for assets
10% - 23%
backing
PY2 : 5% - 8%
linked
55% of PY3+:
Linked Business liabilities
IALM2006-08 3% -15%
b) 6.7% p.a.
(varying by
for asset
product and
backing non-
duration)
unit liabilities
PY1 : 1% -5%
PY2 :
3% - 15%
30%-385% of 6.6%-8.3%
Others PY3+: 5% -
IALM2006-08 p.a.
15% (varying
by product
and duration)
390
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
Renewal
Partial Per Policy
Portfolio assumptions by type of business impacting Inflation
Withdrawal Expense
net liabilities
Assumptions
31-Mar-18 31-Mar-18 31-Mar-18
Insurance
364-557 Per
With DPF N/A 0.05
Policy
Linked Business 0%- 3% p.a. 557 Per Policy 0.05
N/A Max 557 Per 0.05
Others Policy (varies
by product)
*Commission scales have been allowed in accordance with the product filing with IRDA.
Sensitivity Analysis
The following analysis is performed for reasonably possible movements in key assumptions with all
other assumptions held constant, showing the impact on gross liabilities. The correlation of assumptions
will have a significant effect in determining the ultimate liabilities, but to demonstrate the impact due to
changes in assumptions, assumptions had to be changed on an individual basis. It should be noted that
movements in these assumptions are non–linear. The method used for deriving sensitivity information
and significant assumptions made did not change from the previous period. The sensitivities are same as
shared with Regulators during annual reporting.
Current Year
Insurance Insurance Investment Investment
Sensitivity Parameters
with DPF without DPF with DPF without DPF
Lapses Increased by 10% 1,535.25 24,840.57 3,869.00 5,715.84
Lapses Decreased by 10% 1,691.92 25,053.42 3,869.00 5,716.41
Mortality Increased by 10% 1,640.46 25,105.26 3,869.00 5,716.15
Mortality Decreased by 10% 1,574.70 24,778.90 3,869.00 5,716.08
Expenses Increased by 10% 1,658.18 25,012.66 3,869.00 5,716.41
Expenses Decreased by 10% 1,558.09 24,873.11 3,869.00 5,715.84
Interest Rate Increased by 100 bps 1,237.83 24,143.00 3,869.00 5,707.39
Interest Rate Decreased by 100 bps 1,811.17 26,146.04 3,869.00 5,726.17
Inflation Rate Increased by 100 bps 1,686.62 25,046.25 3,869.00 5,716.50
Inflation Rate Decreased by 100 bps 1,547.75 24,859.35 3,869.00 5,715.81
391
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
Governance structure, inform of the Investment Committee, and well defined investment policies and
processes are in place to ensure that the risks involved in investments are identified and acceptable
levels are defined. Stringent investment norms and approval structure ensures healthy portfolio while
delivering the expected performance. All Regulatory and Internal norms are built in the Investment
system, which monitors the Investment limits and exposure norms on real-time basis. The Company
uses systems like MSCI Barra One to evaluate and monitor risks.
The policyholders’ funds are invested in accordance with regulatory norms, Investment policy, fund
objective of unit linked funds and risk profile of the respective fund in fixed income segment, majority of
the investment is made in the government securities having sovereign rating and debt securities issued
by reputed corporate having appropriate rating as per Investment Committee.
Industry Analysis
As on March 31, 2018
(` in Crore)
Electricity, Gas,
Financial And Information
Steam And
Particulars Insurance Government And Manufacturing Others Total
Air Conditioning
Activities Communication
Supply
1. FVTOCI financial assets
Debt 331.00 1,739.57 - 50.20 201.94 210.41 2,533.12
Equity - 0.60 - - - 85.81 86.41
Government Securities - - 2,453.28 - - - 2,453.28
Others - 148.27 105.26 - - - 253.53
2. Financial Assets At FVTPL
Debt 1,692.89 5,141.70 - 193.02 895.46 25.10 7,948.17
Equity 1,687.23 3,172.80 - 1,447.31 3,994.49 215.28 10,517.11
Government Securities - - 5,343.91 - - - 5,343.91
Mutual Fund Units - 1,552.78 - - - 1.75 1,554.53
Others - 478.14 241.59 - 48.06 - 767.79
3. Amortised Cost Financial
Assets
Debt 426.34 1,411.10 - 42.57 127.09 1.90 2,009.00
Government Securities - - 3,995.16 - - - 3,995.16
Others - 65.23 116.63 - - 6.10 187.96
Total Credit Risk Exposure 4,137.46 13,710.19 12,255.83 1,733.10 5,267.04 546.35 37,649.97
392
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
It is the subsidiary’s policy to maintain accurate and consistent risk ratings across its credit portfolio. This
enables the Management to focus on the applicable risks and the comparison of credit exposures across all
lines of business, geographic regions and products. The rating system is supported by a variety of financial
analytics combined with processed market information to provide the main inputs for the measurement of
counterparty risk. All internal risk ratings are tailored to various categories and are derived in accordance with
the company’s rating policy. The attributable risk ratings are assessed and updated regularly.
The Company actively manages its product mix to ensure that there is no significant concentration of credit risk.
2. Liquidity Risk
Liquidity risk is the possibility that the Company will not be able to fund all cash outflow commitments
as they fall due. The Company’s primary funding obligations arise in connection with the payment of
policyholder benefits Sources of available cash flow include general fund premiums and investment
related inflows (such as maturities, principal repayments, investment income and proceeds of asset sales).
An asset-liability mismatch occurs when the financial terms of a Company’s assets and liabilities do not
correspond. These can lead to non-payment/deferment of claims, expenses, etc. Through effective cash
management and capital planning, the Company ensures that, it is properly funded and maintain adequate
liquidity to meet obligations. Based on the Company’s historical cash flows and liquidity management
processes, we believe that the cash flows from our operating activities will continue to provide sufficient
liquidity for us to satisfy debt service obligations and to pay other expenses as they fall due. A governance
structure, in form of the ALM Committee, and well defined Asset Liability Management framework require
periodic monitoring of the Asset-Liability position of the Company. Insurance business’s Asset Liability
Management Techniques aims to manage the volume, mix, maturity, rate sensitivity, quality and liquidity
393
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
of assets and liabilities as a whole so as to attain a predetermined acceptable risk/reward ratio. Further
the NAV guarantee products use proprietary monitoring mechanisms to ensure adequate ALM.
Maturity profiles
The following table summarises the maturity profile of the financial assets, financial liabilities and
insurance contract liabilities of the company based on remaining undiscounted contractual obligations,
including interest payables and receivables.
For insurance contracts liabilities and reinsurance assets, maturity profiles are determined based on
estimated timing of net cash outflows from the recognised insurance liabilities. Unearned premiums
have been excluded from the analysis as they are not contractual obligations. Unit-linked liabilities are
repayable or transferable on demand and are included in the up-to-a-year column. Repayments which
are subject to notice are treated as if notice were to be given immediately.
The Company maintains a portfolio of highly marketable and diverse assets that can be easily liquidated
in the event of an unforeseeable interruption of cash flow. The company also has committed lines of
credit that it can access to meet liquidity needs.
The Company manages its product mix to ensure that there is no significant concentration of credit risk.
The table below summarises the expected utilisation or settlement of assets and liabilities.
3. Market Risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in market prices. the Company is exposed to financial and capital market risks – the risk that
the fair value or future cash flows of an insurance contract or financial instrument will fluctuate because
of changes or volatility in market prices. Market risk includes equity market and interest rate risks.
394
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
Market risk governance practices are in place, including independent monitoring and reviewing and
reporting to the Senior Management and the Risk Management Committee. The Company has investment
policy in place which deals with guidelines are set for asset allocation and portfolio limit structure, to
ensure that assets back specific policyholders’ liabilities.
The Company issues unit–linked investment policies in a number of its operations. In the unit–linked
business, the policyholder bears the investment risk on the assets held in the unit–linked funds as the
policy benefits are directly linked to the value of the assets in the fund. The Company’s exposure to market
risk on this business is limited to the extent that income arising from asset management charges is based
on the value of assets in the fund.
The following analysis is performed for reasonably possible movements in key variables with all other
variables held constant, showing the impact on profit before tax and equity. The correlation of variables
will have significant effect in determining the ultimate impact of interest rate risk, but to demonstrate the
impact due to changes in variables, variables had to be changed on an individual basis. It should be noted
that movements in these variables are non–linear.
31-Mar-18
Change in
Market Indices Impact on Impact on
Interest Rate
Profit before tax Equity
25 basis point down 95.43 91.54
50 basis point down 190.86 183.08
Interest rate
25 Basis Point Up (95.43) (91.54)
50 Basis Point Up (190.86) (183.08)
The Company’s equity price risk exposure relates to financial assets and financial liabilities, whose values
will fluctuate as a result of changes in market prices, principally investment securities not held for the
account of unit–linked business.
The analysis below is performed for reasonably possible movements in market indices with all other
variables held constant, showing the impact on profit before tax (due to changes in fair value of financial
assets and liabilities whose fair values are recorded in the Statement of Profit or Loss) and equity (that
reflects changes in fair value of FVTPL financial assets). The correlation of variables will have a significant
effect in determining the ultimate impact on price risk, but to demonstrate the impact due to changes in
variables, variables had to be changed on an individual basis.
395
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
31-Mar-18
Market indices Change in Variables Impact on Impact on
Profit before tax Equity
10% rise 25.95 32.45
BSE 100
10% fall (25.95) (32.45)
Operational Risks
Operational risk is the risk of loss arising from system failure, human error, fraud or external events.
When controls fail to perform, operational risks can cause damage to reputation, have legal or regulatory
implications or can lead to financial loss. The Company cannot expect to eliminate all operational risks,
but by initiating a rigorous control framework and by monitoring and responding to potential risks, the
Company is able to manage the risks. Controls include effective segregation of duties, access controls,
authorisation and reconciliation procedures, staff education and assessment processes, including the
use of internal audit. Business risks such as changes in environment, technology and the industry are
monitored through the Company’s strategic planning and budgeting process.
Operational risks are governed through Operational Risk Management Policy. The Company maintains
an operational loss database to track and mitigate risks resulting in financial losses. The Company has
also initiated a Risk Control Self Assessment process to embed the control testing as a part of day to
day operations. To control operational risk, operating and reporting processes are reviewed and updated
regularly. Ongoing training through internal and external programs is designed to equip staff at all levels
to meet the demands of their respective positions. The Company has a Business Continuity Plan in place
to manage any business interruption risk. The Company is one of the few Indian Insurance companies
to be ISO 22301 (Globally accepted standard on Business Continuity) certified. Fraud management is
handled through an internal committee and is governed by the Fraud Reporting and Investigation Policy.
Information Security risks are governed through Information Security Management system aligned and
certified against ISO 27001: 2013 which is a global benchmark. Insurance Business has comprehensive
information security policy designed to comply ISO 27001:2013, privacy and/ or data protection legislations
as specified in Information Technologu Act, 2008 and notification dated 11th April, 2011, on protection of
sensitive personal information and it provides directions to Information Security staff, management and
employees regarding their roles and responsibilities towards Information Security.
Insurance business also has Business Continuity Policy to have a planned response in the event of any
contingency ensuring recovery of critical activities at agreed levels within agreed timeframe thereby
complying with various regulatory requirements and minimising the potential business impact to
Insurance Business. Additionally to create a system that fosters continuous improvement of business
continuity management.
396
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(b) The fair value mark to market (MTM) gains or (losses) in respect of Forward Rate Aggrement outstanding
as at the Balance Sheet date is stated below:
(` in Crore)
Sr. As at
Hedging Instruments
No. 31st March, 2018
i) 7.73% Gsec 19-12-2034 0.73
ii) 8.30% Gsec 31-12-2042 (2.38)
iii) 8.32% Gsec 02-08-2032 (1.51)
397
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
B Financial Risk management and Its Policies for NBFC and HFC Businesses
Financial risk management objectives and Policies
The NBFC and HFC Company’s principal financial liabilities comprise borrowings and trade and other
payables. The main purpose of these financial liabilities is to finance and support the Company’s operations.
The Company’s principal financial assets include loans, cash and cash equivalents, and other receivables that
derive directly from its operations.
The Company is exposed to market risk, credit risk, liquidity risk, and operational and business risk. The
Company’s Senior Management oversees the management of these risks. The Company’s senior management
is supported by a Risk Management Committee that advises on financial risks and the appropriate financial
risk governance framework for the Company. The Risk Committee provides assurance to the Company’s
Senior Management that the Company’s financial risk activities are governed by appropriate policies and
procedures and that financial risks are identified, measured and managed in accordance with the Company’s
policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these
risks, which are summarised below.
Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of
changes in the market prices. In the case of the Company, the market risk primarily comprises of interest rate
risk. Financial instruments affected by market risk include loans and borrowings.
The sensitivity analyses have been prepared on the basis that the amount of net debt, the ratio of fixed to
floating interest rates of the debt are all constant.
The analyses exclude the impact of movements in market variables on: the carrying values of gratuity and
other post-retirement obligations; and provisions.
The sensitivity of the relevant profit or loss item is the effect of the assumed changes in the respective market
risks. This is based on the financial assets and financial liabilities held at 31st March, 2018.
398
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(` in Crore)
31st March, 2018
Change in
Market Indices Impact on Impact on
Interest Rate
Profit before tax Equity
25 Basis Point down 26.24 17.33
50 Basis Point down 52.49 34.65
Interest rate
25 Basis Point Up (26.24) (17.33)
50 Basis Point Up (52.49) (34.65)
Credit Risk
Credit risk is the risk that the NBFC & HFC will incur a loss because its customers or counterparties fail to
discharge their contractual obligations. The NBFC & HFC manages and controls credit risk by setting limits
on the amount of risk it is willing to accept for individual counterparties and for geographical and industry
concentrations, and by monitoring exposures in relation to such limits.
The NBFC & HFC has established a credit quality review process to provide early identification of possible
changes in the creditworthiness of counterparties, including regular collateral revisions. Counterparty limits
are established by the use of a credit risk classification system, which assigns each counterparty a risk rating.
Risk ratings are subject to regular revision. The credit quality review process aims to allow the NBFC & HFC to
assess the potential loss as a result of the risks to which it is exposed and take corrective action.
Liquidity Risk
Liquidity risk is defined as the risk that the NBFC & HFC will encounter difficulty in meeting obligations associated
with financial liabilities that are settled by delivering cash or another financial asset. Liquidity risk arises because
of the possibility that the NBFC & HFC might be unable to meet its payment obligations when they fall due as a
result of mismatches in the timing of the cash flows under both normal and stress circumstances.
NBFC & HFC manages its liquidity requirement by analysing the maturity pattern of NBFC & HFC’s cash flows
of financial assets and financial liabilities. The Asset- Liability Management of the NBFC & HFC is periodically
reviewed by its Risk Management Committee.
The table below summarises the maturity profile of the undiscounted cash flows of the NBFC & HFC’s financial
assets and liabilities as at 31st March, 2018
399
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
The Group’s activities expose it to market risk, liquidity risk and credit risk.
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change
in the price of a financial instrument. The value of a financial instrument may change as a result of changes in
the interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes
that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial
instruments, including investments and deposits, foreign currency receivables, payables and borrowings.
The Group’s overall risk management focuses on the unpredictability of financial markets and seeks to
minimise potential adverse effects on the financial performance of the Group. The Group uses derivative
financial instruments, such as foreign exchange forward contracts, foreign currency option contracts, principal
only swaps that are entered to hedge foreign currency risk exposure, interest rate swaps to hedge variable
interest rate exposure and commodity fixed price swaps to hedge commodity price risks. Derivatives are used
exclusively for hedging purposes and not as trading or speculative instruments.
The sources of risks which the Group is exposed to and their management is given below:
400
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
The Group evaluates exchange rate exposure arising from foreign currency transactions. The Group follows
established risk management policies and standard operating procedures. It uses derivative instruments like
forwards to hedge exposure to foreign currency risk.
When a derivative is entered into for the purpose of hedge, the Group negotiates the terms of those derivatives
to match the terms of the hedged exposure.
401
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(` in Crore)
Currency 31st March 2018
Effect of 5% Effect of 5% Effect of 5% Effect of 5%
strengthening of strengthening of Diminishing of Diminishing of
INR on Profit INR on Equity INR on Profit INR on Equity
USD 21.41 (25.46) (21.41) 25.46
EUR (2.99) - 2.99 -
GBP 0.30 0.00 (0.30) 0.00
JPY 0.01 0.00 (0.01) 0.00
CAD 0.00 0.00 0.00 0.00
AUD 0.00 (0.14) 0.00 0.14
CNY (1.19) 0.00 1.19 0.00
THB 0.00 (7.73) 0.00 7.73
Others* 0.01 - (0.01) -
Increase / (Decrease) 17.55 (33.33) (17.55) 33.33
in Profit/ Equity
*Others represents currency in Bangladeshi Taka, British Pound, Kuwaiti Dinar, Mozambiue New Metical,
Omani Rial, Philippines Peso, Tanzanian Shilingi, etc.
(` in Crore)
Currency 31st March 2017
Effect of 5% Effect of 5% Effect of 5% Effect of 5%
strengthening of strengthening of Diminishing of Diminishing of
INR on Profit INR on Equity INR on Profit INR on Equity
USD (72.76) 17.54 72.76 (17.54)
EUR 1.82 - (1.82) -
CAD (1.73) 0.00 1.73 0.00
CNY 2.92 0.00 (2.92) 0.00
THB 0.00 6.19 0.00 (6.19)
Peso 0.00 0.15 0.00 (0.15)
JPY (0.01) - 0.01 -
Increase / (Decrease) (69.76) 23.88 69.76 (23.88)
in Profit/ Equity
The Company has taken foreign currency floating rate borrowings, which are linked to LIBOR. For managing
the foreign currency risk and interest rate risk, arising from changes in LIBOR on such borrowings, the
Company has entered into Cross Currency Interest Rate Swap (CCIRS) for the entire loan liability. Under the
terms of the CCIRS, the Company pays interest at the fixed rate to the swap counterparty in INR and receives
the floating interest payments based on LIBOR in foreign currency.
402
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
The Company designates the forward exchange contracts to hedge its currency risk, and generally applies
a hedge ratio of 1:1. The Company’s policy is to match the tenor of the forward exchange contracts with
the hedged item.
a) Cash Flow Hedge
Details of Foreign Exchange Forward Contracts and Interest rate and Cross currency Swap
Outstanding as on 31st March, 2018
Carrying amount
Weighted average
Foreign currency Nominal Value of Hedging
Sr. Foreign Exchange
Type of Hedge and Risk Amount (` in Crore) (` in Crore) Instrument
No. Rate
(` in Crore)
Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities
A CASH FLOW HEDGE
Foreign Exchange Risk
1) Foreign Exchange
Forward Contracts
a USD 0.03 8.19 66.44 65.26 1.99 534.46 0.00 (10.98)
b EUR 0.02 2.30 79.21 72.04 1.41 165.42 0.05 22.79
c GBP 0.00 0.22 0.00 91.46 0.00 20.14 0.00 0.58
2) Cross Currency Interest
Rate Swaps
a USD 0.00 3.00 0.00 65.25 0.00 195.75 0.00 1.81
403
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
Interest Rates outstanding on Receive Floating and Pay Fix Contracts:
Average Average Nominal Fair Value
Contracted Exchange Amount Assets
Particulars As at
Fixed Interest Rate (USD/ USD Crore (Liabilities)
Rates* INR) (` in Crore)
2 to 5 years 31st March, 2018 7.79% 67.49 7.32 (23.57)
2 to 5 years 31st March, 2017 7.79% 67.49 7.32 (26.19)
*Includes weighted average rate for Cross Currency Interest Rate Swaps, Principal Only 2Swap and Coupon Swaps.
The line item in the Balance Sheet that includes the above Hedging Instruments is “Other Financial Assets”/ “Other
Financial Liabilities”.
b) Fair Value Hedge
Details of Foreign Exchange Forward Contracts Outstanding as on 31st March, 2018
Carrying amount
Foreign Currency Weighted Nominal Value
of Hedging
Sr. Amount average Foreign (` in Crore) Maturity
Type of Hedge and Risk Instrument
No. (` in Crore) Exchange Rate Date- Range
(` in Crore)
Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities
B FAIR VALUE HEDGE
Foreign Exchange risk
1) Foreign Exchange
Forward Contracts
10-04-2018
a USD 3.77 0.17 66.55 64.88 250.88 11.13 0.00 2.54 to
22-02-2019
05-04-218
b EUR 1.67 0.14 81.66 78.79 136.29 11.02 2.40 0.00 to
12-02-2019
23-04-2018
c GBP 0.00 0.06 0.00 88.31 0.00 5.53 0.00 0.30 to
27-07-2018
10-04-2018
d JPY 0.00 1.50 0.00 0.58 0.00 0.88 0.00 0.06 to
29-12-2018
404
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
Interest Rate Sensitivities for Floating Rate Borrowings (impact of increase in 1%):
(` in Crore)
As at 31st March, 2018 As at 31st March, 2017
Impact on profit Impact on Impact on profit Impact on
Particulars
before tax Equity before tax Equity
INR (110.44) (72.22) (10.81) (7.07)
USD (7.44) (4.87) - -
AED (0.17) (0.11) (0.01) -
BHD (0.02) - (0.01) -
BDT (0.27) (0.18) (0.61) (0.40)
Note: If the rate is decreased by 100 bps the profit before tax will increase by an equal amount.
Interest rate sensitivity has been calculated assuming the borrowings outstanding at the reporting date have
been outstanding for the entire reporting period. Further, the calculations for the unhedged floating rate
borrowings have been done on the notional value of the foreign currency (excluding the revaluation).
405
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
If equity prices of the quoted investments increase/decrease by 5%, Other Comprehensive Income for the year
ended 31st March, 2018, would increase/decrease by ` 186.61 Crore (for the year ended 31st March, 2017 by
` 118.97 Crore).
4. Credit Risk:
Credit risk arises when a customer or counterparty does not meet its obligations under a customer contract
or financial instrument, leading to a financial loss. The Group is exposed to credit risk from its operating
activities primarily trade receivables and from its financing/investing activities, including deposits with banks,
mutual fund investments, and investments in debt securities, foreign exchange transactions. The Group has
no significant concentration of credit risk with any counterparty.
The carrying amount of financial assets represents the maximum credit risk exposure.
Total Trade receivables as on 31st March, 2018 is ` 5,018.19 Crore (excluding ` 194.95 Crore of Insurance
and NBFC/HFC Business) (31st March, 2017: ` 3,009.56 Crore).
Given the diverse nature of the Company’s businesses trade receivables are spread over a number of
customers with no significant concentration of credit risk. No single customer accounted for 10% or
more of the Company’s net sales or for any of the Company’s primary businesses during the year ended
31st March 2018, and in the previous year. Therefore, the Company does not expect any material risk on
account of non-performance by any of its counter parties.
As per simplified approach, the Group makes provision of expected credit losses on trade receivables
using a provision matrix to mitigate the risk of default in payments and makes appropriate provision at
each reporting date, wherever outstanding is for longer period and involves higher risk.
The ageing analysis of the receivables (net of provision) has been considered from the date the invoice
falls due.
(` in Crore)
Neither
For less For more
past For 1 to 3 For 3 to 6
Particulars than 1 than 6 Total
due nor Months Months
Month Months
impaired
As at 31st March 2018
Trade Receivables 4,544.48 298.84 98.15 28.37 48.35 5,018.19
Other Financial Assets- 92.50 28.53 17.30 0.81 2.51 141.65
Freight Subsidy and
Gas Pooling
As at 31st March, 2017
Trade Receivables 2,795.83 105.70 42.69 21.60 43.74 3,009.56
406
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
b. Investments, Derivative Instruments, Cash and Cash Equivalents and Bank Deposit:
Credit Risk on cash and cash equivalents, deposits with banks/financial institutions is generally low, as
the said deposits have been made with banks/financial institutions who have been assigned high credit
rating by international and domestic rating agencies.
Credit Risk on Derivative Instruments is generally low, as the Group enters into the Derivative Contracts
with the reputed banks.
Investments of surplus funds are made only with approved Financial Institutions/Counterparty.
Investments primarily include investments in units of quoted Mutual Funds, quoted Bonds; Non-
Convertible Debentures issued by Government/Semi Government Agencies/PSU Bonds/High Investment
grade Corporates, etc. These Mutual Funds and Counterparties have low credit risk.
The Group has standard operating procedures and investment policy for deployment of surplus liquidity,
which allows investment in debt securities and mutual fund schemes of debt and arbitrage categories,
and restricts the exposure in equity markets.
Compliances of these policies and principles are reviewed by internal auditors on periodical basis.
Total Non-current and current investments (excluding Investment of Insurance Business) as on 31st
March, 2018, is ` 14,334.28 Crore (31st March, 2017 ` 14,200.38 Crore).
5. Liquidity risk:
Liquidity risk is defined as the risk that the Group will not be able to settle or meet its obligations on time or
at reasonable price. Prudent liquidity risk management implies maintaining sufficient cash and marketable
securities, and the availability of funding through an adequate amount of credit facilities to meet obligations,
when due. The Group’s treasury team is responsible for managing liquidity, funding as well as settlement
management. In addition, processes and policies related to such risks are overseen by the senior management.
The Management monitors the Group’s liquidity position through rolling forecasts on the basis of expected
cash flows.
407
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
The table below provides details of financial liabilities and investments at the reporting date based on
contractual undiscounted payments.
(` in Crore)
Less than 1 to 5 Years More than Total
As at 31st March, 2018
1 Year 5 Years
Financial Liabilities
Borrowings (including Current 6,675.41 6,078.18 10,711.91 23,465.50
Maturities of Long-term Debts)
Trade Payables 4,791.29 - - 4,791.29
Interest Accrued but not Due on 192.19 - - 192.19
Borrowings
Other Financial Liabilities (excluding 1,616.50 - 8.03 1,624.53
Derivative Liability)
Derivative Liability 24.96 28.27 - 53.23
Liquid Financial Assets
Surplus Investments in Mutual Funds, 7,121.62 2,537.62 433.34 10,092.58
Bonds, Investment in L&T shares, etc.
(` in Crore)
Less than 1 to 5 Years More than Total
As at 31st March, 2017
1 Year 5 Years
Financial Liabilities
Borrowings (including Current 2,444.32 5,587.40 1,186.99 9,218.70
Maturities of Long-term Debts)
Trade Payables 3,068.82 8.13 - 3,076.95
Interest Accrued but not Due on 149.27 - - 149.27
Borrowings
Other financial liabilities (excluding 241.16 3.66 - 244.82
Derivative Liability)
Derivative Liability 11.15 31.15 - 42.30
Liquid Financial Assets
Surplus Investments in Mutual Funds, 6,994.13 2,148.37 65.43 9,207.93
Bonds, etc.
408
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
ABNL is a premium conglomerate which commands leadership position across its Financial Services, Telecom,
Linen and Manufacturing businesses.
During the year, the merger has become effective from 1st July, 2017, hence ABNL ceased to exist effective
from 1st July 2017. As a part of the Scheme, demerger of financial services business into ABCL has also
become effective from 4th July, 2017.
In terms of the Scheme, the Company has issued 190,462,665 equity shares on 9th July, 2017 to the shareholders
of ABNL in the ratio of 15 (fifteen) equity Shares of ` 2/- each fully paid up against 10 (ten) Equity Shares of `
10/- each fully-paid up of ABNL held by them on the record date for this purpose. As a result, the Company’s
paid up share capital has increased from ` 93.38 Crore to ` 131.47 Crore.
The total purchase consideration for the said transaction was ` 23,657.37 Crore.
On account of demerger of financial services business, ABCL has issued it’s equity shares in the ratio of 7
(seven) equity shares of ` 10 each fully paid-up in respect of 5 (five) equity shares of ` 2 each fully paid up of
the Company held by the shareholders of the Company on the record date for this purpose. As a result, the
holding of the Company in ABCL stands reduced to 55.99%.
For the nine months period ended 31st March, 2018, erstwhile ABNL has contributed revenue of ` 13,006.97
Crore and profit before tax (before non-controlling interest) of ` 937.84 Crore to the Group results. If the
merger had occurred on 1st April, 2017, the consolidated revenue and profit before tax for the year ended
would have been ` 17,342.63 Crore and ` 1,250.46 Crore respectively based on the amounts extrapolated by
the Management. In determining these amounts, management has assumed that the fair value adjustments,
that arose on the date of merger, would have been same if the merger had occurred on 1st April, 2017.
409
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
410
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
The gross contractual amounts and fair value of Trade and Other Receivables acquired ` 41,028.23 Crore. However,
` 54.84 Crore of the trade and other receivables are credit impaired and the balance ` 40,973.39 Crore is expected to
be recoverable.
(iv)
The figures given above are provisional as fair valuation of one of the Associate is still under progress as
its merger was going on with other Company.
B) Arrangement with Century Textiles and Industries Limited (‘CTIL’) for obtaining Right and Responsibility
to Manage, Operate, Use and Control the Viscose Filament Yarn (‘VFY’) Business of CTIL.
The Board of Directors of the Company at their meeting held on 12th December, 2017 has approved an
arrangement with Century Textiles and Industries Limited (CTIL), under which CTIL will grant the right and
responsibility to manage, operate, use and control the Viscose Filament Yarn (VFY) business of CTIL (without
transferring ownership in the underlying immovable and movable assets other than working Capital) for a
duration of 15 (fifteen) years to the Company for the agreed consideration. The above said arrangement has
become effective from 1st February, 2018.
The VFY business of CTIL is based out of Shahad in Maharashtra, India with an annual capacity of 26,500
tonnes. Products manufactured include Pot Spun Yarn, Continuous Spun Yarn, VFY and Rayon Tyre Yarn.
411
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
In terms of the agreement, the Company has discharged consideration in the following manner:
(i) Commuted royalty amounting to ` 600 Crore
(ii) Time value of money of interest free security deposit ` 161.40 Crore
(iii) Net working capital at closing is estimated at approximately ` 103.31 Crore
For the two months period ended 31st March, 2018, the said VFY business unit has contributed revenue of
` 161.28 Crore and profit before tax of ` 8.58 Crore ( including fair valuation impact of Finished goods Inventory)
to the Group results. If the said arrangement had occurred on 1st April, 2017, the consolidated revenue and
profit before tax for the year ended would have been, ` 967.68 Crore and ` 51.48 Crore, respectively based
on the amounts extrapolated by the management. In determining these amounts, the management has
assumed that the fair value adjustments, that arose on the date of arrangement have been the same as if the
arrangement occurred on 1st April, 2017.
412
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
The above figures are provisional as the acquisition of rights to manage and operate Century Yarn was
carried out in the last quarter of the current year, hence, the fair valuation of assets and liabilities was
pending for finalisation.
(C) The Fair Value of identifiable assets acquired and liabilities assumed as on the acquisition date:
(` in Crore)
Particulars Amount
Property, Plant and Equipment 11,689.69
Capital Work-in-Progress 218.78
Intangible Assets 2,715.88
Other Non-Current Assets 1,604.43
Inventories 246.88
413
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(` in Crore)
Particulars Amount
Trade and Other Receivables 16.21
Other Financial Assets 0.86
Other Current Assets 30.49
Total Assets 16,523.22
Non-Current Borrowings 10,189.00
Current Borrowings 497.55
Provisions 28.67
Trade Payables 806.05
Other Financial Liabilities 33.19
Other Current Liabilities 303.97
Total Liabilities 11,858.43
Total Fair Value of the Net Assets 4,664.79
(F)
UTCL runs an integrated operation with material movement across geographies and a common sales
organization responsible for existing business as well as acquired business. Therefore, separate sales
information for the acquired business is not exactly available and accordingly disclosures for revenue
and profit/loss of the acquired business since acquisition date have not been made.
Further, it is impracticable to provide revenue and profit/loss of the combined entity for the current year
as though the acquisition date had been April 01, 2017, since these amounts relating to the acquired
business for the period prior to the acquisition date are not readily available with the Company.
414
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
4.13 Additional Information as required by paragraph 2 of the General Instruction for the preparation
of CFS as per Schedule III of the Companies Act, 2013
Current Year
(` in Crore)
Share in Other
Net Assets (Total Assets Share in Total
Share in Profit or Loss Comprehensive Income
minus Total Liabilities) Comprehensive Income
Sr. (OCI)
Name of the Entities
No. As % of As % of As % of As % of
Consolidated Amount Consolidated Amount Consolidated Amount Consolidated Amount
Net Assets Net Assets Net Assets Net Assets
A Parent (Holding Company) 17.93% 15,003.28 47.31% 1,744.48 80.24% (223.45) 44.62% 1,521.03
B Subsidiaries
Indian
1 UltraTech Cement Limited
(60.21%) 31.52% 26,381.88 60.33% 2,224.59 -16.40% 45.68 66.59% 2,270.27
2 Aditya Birla Capital Limited
(55.99%) 33.73% 28,229.37 6.15% 226.84 64.02% (178.28) 1.42% 48.56
3 Sun God Trading and
Investment Limited (100%) 0.00% 3.97 0.00% 0.02 -1.24% 3.45 0.10% 3.47
4 Samruddhi Swastik Trading
and Investment Limited
(100%) 0.06% 52.84 0.08% 3.09 -1.47% 4.08 0.21% 7.17
5 Grasim Bhiwani Textile
Limited (100%) 0.00% - -0.79% (29.18) -0.47% 1.30 -0.82% (27.88)
6 ABNL Investment Limited
(100%) 0.12% 96.82 0.03% 1.19 -1.41% 3.94 0.15% 5.13
Foreign
1 Aditya Birla Chemicals
(Belgium) BVBA (99.97%) 0.00% (2.11) -0.03% (1.05) 0.17% (0.46) -0.04% (1.51)
Subtotal (B) 65.43% 54,762.77 65.77% 2,425.50 43.20% (120.29) 67.61% 2,305.21
C Associates (As per Equity
Method)
Indian
1 Aditya Birla Science &
Technology Co. Private
Limited (39.00%) 0.02% 15.77 0.04% 1.39 -0.01% 0.04 0.04% 1.43
2 Idea Cellular Limited
(23.13%) 9.15% 7,661.02 -17.67% (651.69) -2.42% 6.73 -18.92% (644.96)
3 Madanpur (North) Coal
Company Limited (6.73%) 0.00% 0.83 0.00% (0.10) 0.00% - 0.00% (0.10)
4 Aditya Birla Renewable
SPV1 Limited (15.65%) 0.00% 3.48 0.00% (0.04) 0.00% - 0.00% (0.04)
5 Aditya Birla Idea Payments
Bank Limited (51.00%) 0.17% 139.84 -2.48% (91.49) -0.23% 0.65 -2.66% (90.84)
Sub-total (C) 9.34% 7,820.94 -20.11% (741.93) -2.66% 7.42 -21.54% (734.51)
415
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(` in Crore)
Share in Other
Net Assets (Total Assets Share in Total
Share in Profit or Loss Comprehensive Income
minus Total Liabilities) Comprehensive Income
Sr. (OCI)
Name of the Entities
No. As % of As % of As % of As % of
Consolidated Amount Consolidated Amount Consolidated Amount Consolidated Amount
Net Assets Net Assets Net Assets Net Assets
D Joint Ventures ( As per
Equity Method)
Indian
1 Bhubaneswari Coal Mining
Limited (26.00%) 0.11% 88.37 0.36% 13.18 0.04% (0.11) 0.38% 13.07
2 Aditya Birla Solar Limited
(50.10%) 0.04% 32.72 0.08% 2.81 0.15% (0.42) 0.07% 2.39
3 Aditya Birla Renewables
Limited (85.59%) 0.03% 23.77 -0.11% (4.02) 0.00% - -0.12% (4.02)
4 Aditya Birla Sunlife AMC
Limited (28.55%) 5.83% 4,878.22 3.52% 129.76 -0.04% 0.12 3.81% 129.88
5 Aditya Birla Wellness
Private Limited (28.55%) 0.01% 8.38 -0.06% (2.29) 0.00% 0.01 -0.07% (2.28)
6 Aditya Birla Sun Life Trustee
Company Private Limited
(28.47%) 0.00% 0.37 0.00% 0.03 0.00% - 0.00% 0.03
7 Bhaskarpara Coal Company
Limited (28.52%) 0.00% 6.50 0.00% 0.01 0.00% - 0.00% 0.01
Foreign -
1 AV Group NB Inc. (45%) 0.62% 521.70 2.28% 84.16 -5.21% 14.51 2.89% 98.67
2 Birla Jingwei Fibres Co.
Limited (26.63%) 0.10% 82.60 0.42% 15.61 -2.49% 6.94 0.66% 22.55
3 Birla Laos Pulp &
Plantations Company
Limited (40%) 0.08% 63.77 -0.14% (4.93) 0.49% (1.37) -0.18% (6.30)
4 Aditya Birla Elyaf Sanayi
Ve Ticaret Anonim Sirketi
(33.33%) 0.00% 1.38 0.00% 0.12 0.04% (0.12) 0.00% -
5 Aditya Group AB (33.33%) 0.48% 403.96 0.68% 25.13 -13.75% 38.28 1.87% 63.41
6 AV Terrace Bay (40%) 0.00% - 0.00% - 0.00% - 0.00% -
Sub-total (D) 7.30% 6,111.74 7.03% 259.57 -20.77% 57.84 9.31% 317.41
TOTAL (A+B+C+D) 100.00% 83,698.73 100.00% 3,687.62 100.00% (278.48) 100.00% 3,409.14
416
GRASIM
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
Previous Year
(` in Crore)
Share in Other
Net Assets (Total Assets Share in Total
Share in Profit or Loss Comprehensive Income
minus Total Liabilities) Comprehensive Income
Sr. (OCI)
Name of the Entities
No. As % of As % of As % of As % of
Consolidated Amount Consolidated Amount Consolidated Amount Consolidated Amount
Net Assets Net Assets Net Assets Net Assets
A Parent (Holding Co.) 35.01% 14,386.91 33.08% 1,404.34 104.81% 1,009.75 46.34% 2,414.09
B Subsidiary
Indian
1 UltraTech Cement Limited
(60.23%) 59.37% 24,393.48 63.91% 2,713.51 3.12% 30.04 52.67% 2,743.55
2 Sun God Trading and
Investment Limited (100%) 0.00% 0.50 0.00% 0.03 0.00% - 0.00% 0.03
3 Samruddhi Swastik Trading
and Investment Limited
(100%) 0.11% 45.47 0.08% 3.45 -0.03% (0.25) 0.06% 3.20
4 Grasim Bhiwani Textile
Limited (100%) 0.26% 105.68 -0.08% (3.42) -0.08% (0.73) -0.08% (4.14)
Foreign
1 Aditya Birla Chemicals
(Belgium) BVBA (99.97%) 0.00% 0.68 -0.04% (1.71) 0.02% 0.16 -0.03% (1.55)
Subtotal (B) 59.74% 24,545.81 63.87% 2,711.87 3.03% 29.22 52.62% 2,741.09
C Associates (Investment as
per Equity Method)
Indian
1 Aditya Birla Science &
Technology Co. Pvt. Ltd
(39%) 0.03% 10.79 0.00% 0.14 -0.01% (0.11) 0.00% 0.03
2 Idea Cellular Limited
(4.74%) 2.84% 1,166.07 -0.45% (18.95) -0.02% (0.21) -0.37% -19.16
3 Madanpur (North) Coal
Company Limited (6.73%) 0.00% 0.95 0.00% 0.01 0.00% - 0.00% 0.01
Subtotal (C) 2.87% 1,177.81 -0.45% (18.80) -0.03% -0.32 -0.37% -19.12
D Joint Ventures ( As
per Proportionate
Consolidation)
Indian
1 Bhubaneswari Coal Mining
Limited (26%) 0.18% 75.30 0.31% 13.31 0.01% 0.12 0.26% 13.43
Foreign
1 AV Group NB Inc. (45%) 1.03% 421.34 1.73% 73.35 -2.88% (27.73) 0.88% 45.62
2 Birla Jingwei Fibres Co.
Limited (26.63%) 0.15% 60.27 0.84% 35.57 -0.45% (4.35) 0.60% 31.22
417
FINANCIAL STATEMENTS Consolidated
Notes
forming part of the Consolidated Financial Statements for the year ended 31st March, 2018
(` in Crore)
Share in Other
Net Assets (Total Assets Share in Total
Share in Profit or Loss Comprehensive Income
minus Total Liabilities) Comprehensive Income
Sr. (OCI)
Name of the Entities
No. As % of As % of As % of As % of
Consolidated Amount Consolidated Amount Consolidated Amount Consolidated Amount
Net Assets Net Assets Net Assets Net Assets
3 Birla Laos Pulp &
Plantations Company
Limited (40%) 0.17% 70.07 -0.02% (1.01) -0.42% (4.07) -0.10% (5.08)
4 Aditya Birla Elyaf Sanayi
Ve Ticaret Anonim Sirketi
(33.33%) 0.01% 4.46 0.10% 4.05 0.90% 8.66 0.24% 12.71
5 Aditya Group AB (33.33%) 0.83% 340.55 0.54% 22.93 -4.97% (47.84) -0.47% (24.91)
6 AV Terrace Bay (40%) 0.00% - 0.00% - 0.00% - 0.00% -
7 Bhaskarpara Coal Company
Limited (28.52%) 0.01% 6.49 0.00% - 0.00% - 0.00% -
Subtotal (D) 2.38% 978.48 3.50% 148.20 -7.81% (75.21) 1.41% 72.99
TOTAL (A+B+C+D) 100.00% 41,089.01 100.00% 4,245.61 100.00% 963.44 100.00% 5,209.05
4.14 The Company has spent ` 90.55 Crore on Corporate Social Responsibility Projects/initiatives during the year
including ` 0.96 Crore towards capital expenditure (Previous Year ` 72.43 Crore including ` 1.64 Crore towards
capital expenditure).
4.15 Figures less than ` 50,000 have been shown at actual, wherever statutorily required to be disclosed, as the figures
have been rounded off to the nearest lakh.
Mumbai Mumbai
Dated: 23rd May, 2018 Dated: 23rd May, 2018
418
GRASIM INDUSTRIES LIMITED
Registered Office: Birlagram, Nagda - 456 331, Dist. Ujjain (M.P.), India
CIN: L17124MP1947PLC000410
Tel. No.: 07366 - 246760; E-mail: [email protected];
Website: www.grasim.com
NOTICE is hereby given that the 71st Annual General 69th Annual General Meeting until the conclusion
Meeting of GRASIM INDUSTRIES LIMITED will be held on of the 74th Annual General Meeting of the Company
Friday, 14th September 2018, at 11.00 a.m. at the Registered to be held in the year 2021, at such remuneration
Office of the Company at Grasim Staff Club, Birlagram, and reimbursement of out-of-pocket expenses in
Nagda - 456331, District Ujjain, Madhya Pradesh, to connection with the audit, as may be mutually agreed
transact the following business: between the Board of Directors of the Company and
the Joint Statutory Auditors.
ORDINARY BUSINESS:
RESOLVED FURTHER THAT Board of Directors of
1. To receive, consider and adopt the Audited Financial
the Company (including its Committee thereof) be
Statements (including the Audited Consolidated
and is hereby authorised to do all such acts, deeds,
Financial Statements) of the Company for the financial
matters and things as may be necessary, desirable or
year ended 31st March 2018, and the reports of the
expedient to give effect to this resolution.”
Directors and the Auditors thereon.
6. To consider and, if thought fit, to pass the following
2.
To declare Dividend on the Equity Shares of the
Resolution as an Ordinary Resolution:
Company for the financial year ended 31st March
2018. “RESOLVED THAT pursuant to Resolution No. 5
passed at the 70th Annual General Meeting held
3. To appoint a Director in place of Mr. Shailendra K. Jain on 22nd September 2017, the Company hereby
(DIN: 00022454), who retires from office by rotation ratifies the appointment of S R B C & Co. LLP,
and, being eligible, offers himself for re-appointment. Chartered Accountants (Registration No. 324982E),
as Joint Statutory Auditors of the Company for
4. To appoint a Director in place of Mrs. Rajashree Birla the period commencing from the conclusion
(DIN: 00022995), who retires from office by rotation of the 70th Annual General Meeting until the
and, being eligible, offers herself for re-appointment. conclusion of the 75th Annual General Meeting of
the Company to be held in the year 2022, at such
5. To consider and, if thought fit, to pass the following remuneration and reimbursement of out-of-pocket
Resolution as an Ordinary Resolution: expenses in connection with the audit, as may be
mutually agreed between the Board of Directors
“RESOLVED THAT pursuant to Resolution No. 6
of the Company and the Joint Statutory Auditors.
passed at the 69th Annual General Meeting held on
23rd September 2016, the Company hereby ratifies RESOLVED FURTHER THAT Board of Directors of
the appointment of B S R & Co. LLP, Chartered the Company (including its Committee thereof) be
Accountants (Registration No. 101248W/W-100022), and is hereby authorised to do all such acts, deeds,
as Joint Statutory Auditors of the Company for the matters and things as may be necessary, desirable or
period commencing from the conclusion of the expedient to give effect to this resolution.”
419
Notice
420
GRASIM
15. To consider and, if thought fit, to pass the following “RESOLVED THAT pursuant to the provisions of
Resolution as a Special Resolution: Section 67 and all other applicable provisions
of the Companies Act, 2013 and the Rules made
“RESOLVED THAT pursuant to the provisions of the
thereunder, as amended from time to time, the
Regulation 17(1A) of the Securities and Exchange Memorandum and Articles of Association of the
Board of India (Listing Obligations and Disclosure Company, the provisions of the Securities and
421
Notice
Exchange Board of India (Share Based Employee and sale of division or other reorganisation of capital
Benefits) Regulations, 2014, as amended from time structure of the Company, as applicable from time to
to time (“the SEBI SBEB Regulations”), the Securities time, the Board be and is hereby authorized to do all
and Exchange Board of India (Listing Obligations such acts, deeds, matters and things as it may deem
and Disclosure Requirements) Regulations, 2015, fit in its absolute discretion and as permitted under
any rules, guidelines and regulations issued by the applicable laws, so as to ensure a fair and reasonable
Reserve Bank of India or any other regulatory or adjustment to the Stock Options granted earlier.
governmental authority, and any other applicable Further, the above ceiling of 0.53% i.e., 35,15,528 Equity
laws for the time being in force and subject to such Shares of ` 2/- each shall be deemed to be increased to
approvals, consents, permissions and sanctions, the extent of such additional Equity Shares issued.
as may be required, and further subject to such
terms and conditions as may be prescribed while RESOLVED FURTHER THAT in case the Equity
granting such approvals, consents, permissions Shares are either sub-divided or consolidated, then
and sanctions, and which may be agreed to and the number of Equity Shares to be transferred on
accepted by the Board of Directors (hereinafter exercise of Stock Options and the exercise price of
referred to as “the Board” which term shall be Stock Options shall automatically stand augmented or
deemed to include any duly constituted committee, reduced, as the case may be, in the same proportion
including the Nomination and Remuneration as the present face value of ` 2/- per Equity Share
Committee constituted by the Board to exercise its bears to the revised face value of the Equity Shares of
powers conferred by this Resolution) consent be the Company after such sub-division or consolidation,
and is hereby accorded to the Board to introduce without affecting any other rights or obligations of
and implement the ‘Grasim Industries Limited the employees who have been granted stock options
Employee Stock Option Scheme 2018’ (“the Scheme under the Scheme 2018.
2018”), the salient features of which are furnished
in the Explanatory Statements to the Notice and the RESOLVED FURTHER THAT the Board is authorised
same be implemented through creation of Grasim to formulate, evolve, decide upon and implement
Employees’ Welfare Trust (“the Trust”). the Scheme 2018 and determine the detailed terms
and conditions of the Scheme 2018, including but not
RESOLVED FURTHER THAT consent be and is
limited to the quantum of the Stock Options to be
hereby accorded to the Board to create, grant, offer, granted per employee in each tranche, the exercise
issue and allot at any time, to or for the benefit of, period, the vesting period, the vesting conditions,
such persons who are in permanent employment instances where such Stock Options shall lapse
of the Company and its subsidiary companies, in and to grant such number of Stock Options, to such
the management cadre, whether working in India or employees and directors of the Company and its
outside India, including any managing or whole time subsidiary companies, at par or at such other price,
directors of the Company, its subsidiary companies at such time and on such terms and conditions as
(selected on the basis of criteria decided by the Board set out in the Scheme 2018 and as the Board may in
or Nomination and Remuneration Committee thereof) its absolute discretion think fit, subject to applicable
under the Scheme 2018, such number of stock options laws.
(comprising of options and/ or restricted stock units,
as the case may be) (the “Stock Options”) exercisable
RESOLVED FURTHER THAT the Board be and is
into not more than 35,15,528 Equity Shares of ` 2/- hereby authorised to make any modifications,
each (the “Equity Shares”) being 0.53% of the paid- changes, variations, alterations or revisions in the
up equity share capital of the Company as on 31st Scheme 2018, as it may deem fit, from time to time
March 2018 (or such other number adjusted in terms or to suspend, withdraw or revive the Scheme 2018
of the Scheme 2018 as per applicable law), at such from time to time in conformity with the provisions
price, in one or more tranches and on such terms and of the Companies Act, 2013, (including any rules
conditions as may be fixed or determined by the Board or regulations made thereunder), the SEBI SBEB
in accordance with the SEBI SBEB Regulations or other Regulations and other applicable laws unless such
provisions of the law as may be prevailing at that time. variation, amendment, modification or alteration
is detrimental to the interest of the Employees who
RESOLVED FURTHER THAT in case of any corporate
have been granted Stock Options under the Scheme
action(s) such as rights issues, bonus issues, merger 2018.
422
GRASIM
RESOLVED FURTHER THAT the Board be and is Disclosure Requirements) Regulations, 2015, any rules,
hereby authorised to do all such acts, deeds and guidelines and regulations issued by the Reserve Bank
things, as may, at its absolute discretion, deems of India or any other regulatory or governmental
necessary including or directing the appointment authority and any other applicable laws, for the time
of various intermediaries, experts, professionals, being in force, and subject to such approvals, consents,
independent agencies and other advisors, consultants permissions and sanctions, as may be required,
or representatives, being incidental to the effective and further subject to such terms and conditions as
implementation and administration of the Scheme may be prescribed while granting such approvals,
2018 as also to prefer applications to the appropriate consents, permissions and sanctions, and which may
authorities, parties and the institutions for their be agreed to and accepted by the Board of Directors
requisite approvals, if any, required by the Securities (hereinafter referred to as “the Board”, which term shall
and Exchange Board of India / the stock exchange(s), be deemed to include any duly constituted committee,
and all other documents required to be filed in the including the Nomination and Remuneration
above connection and to settle all such questions or Committee constituted by the Board to exercise its
difficulties whatsoever which may arise and take all powers conferred by this Resolution) consent be
such steps and decisions in this regard. and is hereby accorded to the Board to extend the
benefits and coverage of the Scheme 2018 (referred to
RESOLVED FURTHER THAT the Board be and is in the Resolution under Item No. 17 of this Notice) to
hereby authorised to delegate all or any powers such persons who are in permanent employment of
conferred herein, to any committee of directors, any present and future subsidiary companies of the
with power to further delegate such powers to any Company in the management cadre, whether working
executives / officers of the Company to do all such in India or outside India, including any Managing or
acts, deeds, matters and things as also to execute Whole-time Directors (selected on the basis of criteria
such documents, writings, etc., as may be necessary decided by the Board) under the Scheme 2018 in the
in this regard. manner mentioned in the Resolution under Item No.
17 of this Notice on such terms and conditions as may
RESOLVED FURTHER THAT for the purpose of giving be fixed or determined by the Board in accordance
effect to the above Resolution, the Board be and is with the SEBI SBEB Regulations or other provisions of
hereby authorised to do all such acts, deeds, matters the law as may be prevailing at that time.
and things as it may, in its absolute discretion,
deem necessary, expedient or proper and to settle RESOLVED FURTHER THAT for the purpose of giving
all questions, difficulties or doubts that may arise effect to the above Resolution, the Board be and is
in relation to formulation and implementation of hereby authorised to do all such acts, deeds, matters
the Scheme 2018 at any stage without requiring the and things as it may, in its absolute discretion, deem
Board to secure any further consent or approval of the necessary, expedient or proper to settle any questions,
Members of the Company to the end, and intent that difficulties or doubts that may arise in this regard.”
they shall be deemed to have given their approval
thereto expressly by the authority of this Resolution.” 19. To consider and, if thought fit, to pass the following
Resolution as a Special Resolution:
18. To consider and, if thought fit, to pass the following
Resolution as a Special Resolution: “RESOLVED THAT pursuant to the provisions of
Section 67 and all other applicable provisions, if
“RESOLVED THAT pursuant to the provisions of
any, of the Companies Act, 2013, and the Rules
Section 67 and all other applicable provisions, if any, made thereunder as amended from time to time,
of the Companies Act, 2013, and the Rules made the Memorandum and Articles of Association of
thereunder (including any statutory modification(s) the Company, the provisions of the Securities and
or re-enactment thereof for the time being in force), Exchange Board of India (Share Based Employee
the Memorandum and Articles of Association of Benefits) Regulations, 2014, as amended from time
the Company, the provisions of the Securities and to time (“the SEBI SBEB Regulations”), the Securities
Exchange Board of India (Share Based Employee and Exchange Board of India (Listing Obligations
Benefits) Regulations, 2014, as amended from time and Disclosure Requirements) Regulations, 2015,any
to time (“the SEBI SBEB Regulations”), the Securities rules, guidelines and regulations issued by the
and Exchange Board of India (Listing Obligations and Reserve Bank of India or any other regulatory or
423
Notice
governmental authority and any other applicable RESOLVED FURTHER THAT the Equity Shares that
laws for the time being in force, and subject to such can be acquired from the secondary market in any
approvals, consents, permissions and sanctions, as financial year by the Trust shall not exceed 2% of the
may be required, and further subject to such terms and paid-up equity share capital (or such other limit as
conditions as may be prescribed while granting such may be prescribed under the SEBI SBEB Regulations
approvals, consents, permissions and sanctions, and from time to time) as at the end of the financial year
which may be agreed to and accepted by the Board preceding the date of the intended acquisition.
of Directors (hereinafter referred to as “the Board”,
which term shall be deemed to include any duly RESOLVED FURTHER THAT in case of any corporate
constituted committee, including the Nomination and action(s) such as rights issue , bonus issues, merger
Remuneration Committee constituted by the Board and sale of division or other reorganisation of capital
to exercise its powers conferred by this Resolution) structure of the Company, the number of shares of
consent of the members be and is hereby accorded to the Company to be acquired from the secondary
the Board to: market by the Trust shall be appropriately adjusted
and in such event the above ceiling of 0.53% Equity
(a)
implement the Grasim Industries Limited Shares shall be deemed to be increased to the extent
Employee Stock Option Scheme 2018 (“the of such additional Equity Shares issued and to give
Scheme 2018”) through the trust to be setup for effect to this resolution, the Board be and is hereby
this purpose in accordance with the SEBI SBEB authorized to do all such acts, deeds, matters and
Regulations; things as it may deem fit in its absolute discretion and
as permitted under applicable laws, so as to ensure a
(b) acquire, hold and deal in such number of equity
fair and reasonable adjustment to the Stock Options
shares of the Company acquired from the
granted earlier.
secondary market through the trust that may be
set up in this regard (“the Trust”), not exceeding
RESOLVED FURTHER THAT the Board be and is
35,15,528 fully paid-up Equity Shares of the
hereby authorised to delegate all or any powers
Company of face value of ` 2/- each (“the Equity
conferred herein, to any committee of directors,
Shares”), being below the ceiling of 5% of the
with power to further delegate such powers to any
paid-up equity share capital of the Company
executives/officers of the Company to do all such
as on 31st March 2018, prescribed under the
acts, deeds, matters and things as also to execute
SEBI SBEB Regulations, for the purpose of
such documents, writings, etc., as may be necessary
implementation of the Scheme 2018, or for any
in this regard.”
other purpose(s) as contemplated under and in
due compliance with the provisions of the SEBI
SBEB Regulations;
424
GRASIM
NOTES FOR MEMBERS’ ATTENTION: Section189 of the Act, will be available for inspection
1.
The relevant Explanatory Statements, pursuant to by the Members at the AGM.
Section 102 of the Companies Act, 2013 (the Act), in
9. In case of joint holders attending the meeting only
respect of the special businesses under Item Nos. 7 to
such joint holder, who is higher in the order of names,
19 of the Notice as set out above, are annexed hereto.
will be entitled to vote.
A MEMBER ENTITLED TO ATTEND AND VOTE AT THE
2.
10. The Register of Members and Share Transfer Books
ANNUAL GENERAL MEETING (THE MEETING / AGM)
of the Company will remain closed from Tuesday,
IS ENTITLED TO APPOINT A PROXY TO ATTEND AND
4th September 2018 to Friday, 14th September 2018
VOTE INSTEAD OF HIMSELF / HERSELF, AND THE
(both days inclusive), for the purpose of payment of
PROXY NEED NOT BE A MEMBER OF THE COMPANY.
dividend, if any, approved by the Members.
3. HE INSTRUMENT APPOINTING A PROXY SHOULD,
T
11.
Subject to the provisions of the Act, Dividend as
HOWEVER, BE DEPOSITED AT THE REGISTERED
recommended by the Board, if approved at the
OFFICE OF THE COMPANY NOT LESS THAN FORTY-
EIGHT HOURS BEFORE THE COMMENCEMENT OF Meeting, will be paid within a period of 30 days
THE MEETING. A PROXY FORM FOR THE MEETING IS from the date of declaration, to those Members or
ATTACHED TO THIS NOTICE. their mandates, whose names are registered in the
Company’s Register of Members:
A PERSON CAN ACT AS PROXY ON BEHALF OF NOT
4.
EXCEEDING FIFTY (50) MEMBERS AND HOLDING IN a) as Beneficial Owners as at the end of the business
AGGREGATE NOT MORE THAN TEN (10) PER CENT hours on Monday, 3rd September 2018, as per
OF THE TOTAL SHARE CAPITAL OF THE COMPANY the lists to be furnished by National Securities
CARRYING VOTING RIGHTS. A MEMBER, HOLDING Depositories Limited (NSDL) and Central
MORE THAN TEN (10) PER CENT OF THE TOTAL Depository Services (India) Limited (CDSL) in
SHARE CAPITAL OF THE COMPANY CARRYING respect of the equity shares held in electronic
VOTING RIGHTS, MAY APPOINT A SINGLE PERSON form; and
AS PROXY AND SUCH PERSON SHALL NOT ACT AS
b) as Members after giving effect to all valid equity
PROXY FOR ANY OTHER MEMBER.
share transfers in physical form which are lodged
5.
Corporate members, intending to depute their with the Company or its Registrar & Transfer
authorised representatives to attend the meeting Agent (“RTA”) Karvy Computershare Private
pursuant to Section 113 of the Act, are requested to Limited on or before Monday, 3rd September
send to the Company a duly certified true copy of the 2018.
Board Resolution/Power of Attorney authorising their
Equity shares that may be allotted upon exercise
representatives to attend and vote on their behalf at
of stock option granted under the Employee
the Meeting. Proxies submitted on behalf of limited
Stock Option Scheme(s) before the book closure
companies, societies, etc., must be supported by
date shall rank pari passu with the existing equity
appropriate resolutions/authorities, as applicable.
shares, and shall also be entitled to receive the
6. During the period, beginning 24 hours before the time dividend, if approved at the Meeting.
fixed for commencement of the Meeting and ending
12. a) Members are advised to avail of the facility for
with the conclusion of the Meeting, a Member would
receipt of future dividends through National
be entitled to inspect the proxies lodged at any time
Electronic Clearing Service (NECS). Members
during the business hours of the Company, provided
that not less than 3 days of notice in writing is given holding shares in dematerialised mode are
to the Company. requested to contact their respective Depository
Participants (DPs) for availing NECS facility.
7.
The Register of Directors and Key Managerial Members holding shares in physical form are
Personnel and their shareholding, maintained under requested to download the NECS form from
Section 170 of the Act, will be available for inspection the website of the Company, and the same duly
by the Members at the AGM. filled up and signed along with a photo copy of a
cancelled cheque may be sent to the Company’s
8. The Register of Contracts or Arrangements, in which RTA, Unit: Grasim Industries Limited. To avoid
the Directors are interested, maintained under the incidence of fraudulent encashment of the
425
Notice
15.
Members, desirous of obtaining any information/ If there is any change in the e-mail address already
clarification on the Accounts and Operations of registered with the Company, Members are requested
the Company, are requested to address their to immediately notify such change to the Company’s
communication to the Company at its registered Registrar and Share Transfer Agents in respect of
office, so as to reach at least one week before the shares held in physical form, and to their DPs in
date of the Meeting, so that the required information respect of shares held in electronic form.
can be made available at the Meeting, to the extent
possible. 19. In terms of the provisions of Section 136(1) of the
Companies Act, 2013, Rule 10 of the Companies
16.
Additional information, pursuant to the Regulation (Accounts) Rules, 2014, and Regulation 36 of the
36(3) of the Securities and Exchange Board of India Securities and Exchange Board of India (Listing
(Listing Obligations and Disclosure Requirements) Obligation and Disclosure Requirements) Regulations,
Regulations, 2015 [SEBI (LODR)], and Secretarial 2015 “Listing Regulations”, the Board of Directors
Standards on General Meetings, in respect of the has decided to circulate the Abridged Annual Report
426
GRASIM
containing the salient features of the Balance Sheet & system will prompt you to change your
Statement of Profit and Loss, and other documents to password and update your contact details
the shareholders for the Financial Year 2017-18 under like mobile number, e-mail ID, etc., on first
the relevant laws. login. You may also enter a secret question
and answer of your choice to retrieve your
Members, who desire to obtain the full version of the password in case you forget it. It is strongly
Annual Report, may write to the Company Secretary recommended that you do not share your
at the Registered Office. Full version of the Annual password with any other person and that
Report is also available on the Company’s website you take utmost care to keep your password
www.grasim.com. confidential.
20. Instructions for Remote E-voting v.
You need to login again with the new
credentials.
In compliance with the provisions of Section 108 and
other applicable provisions of the Act, read with Rule 20 vi. On successful login, the system will prompt
of the Companies (Management and Administration) you to select the “EVENT”, i.e., Grasim
Rules, 2014, as amended, and Regulation 44 of SEBI Industries Limited.
(LODR), the Company is providing its Members
facility to exercise their right to vote on resolutions vii.
On the voting page, enter the number of
proposed to be considered at the Annual General shares (which represents the number of
Meeting (“AGM”) by electronic means, and the votes) as on the Cut-Off date under “FOR/
business may be transacted through remote e-voting AGAINST” or alternatively, you may partially
platform provided by Karvy Computershare Private enter any number in “FOR” and partially in
Limited (“Karvy”). The Members may cast their votes “AGAINST” but the total number in “FOR/
using an electronic voting system from a place other AGAINST” taken together should not exceed
than the venue of the AGM (remote e-voting). your total shareholding as mentioned
hereinabove. You may also choose the
The procedure and instructions for remote e-voting option ABSTAIN. If the shareholder does
are as follows: not indicate either “FOR” or “AGAINST” it
will be treated as “ABSTAIN” and the shares
A.
In case a Member receives an e-mail from
held will not be counted under either head.
Karvy (for Members whose e-mail addresses
are registered with the Company/Depository viii. Shareholders holding multiple folios/demat
Participants): accounts shall choose the voting process
separately for each folio/demat account.
i. Launch internet browser by typing the URL:
https://evoting.karvy.com. ix. Voting has to be done for each item of the
Notice separately. In case you do not desire
ii. Enter the login credentials (i.e., User ID and to cast your vote on any specific item, it will
Password).Your Folio No./DP ID-Client ID will be treated as abstained.
be your User ID. However, if you are already
registered with Karvy for e-voting, you can x. You may then cast your vote by selecting an
use your existing User ID and Password for appropriate option and click on “Submit”.
casting your vote.
xi. A confirmation box will be displayed. Click
iii.
After entering these details appropriately, “OK” to confirm, else “CANCEL” to modify.
Click on “LOGIN”. Once you confirm, you will not be allowed to
modify your vote. During the voting period,
iv. You will now reach password change Menu Members can login any number of times till
wherein you are required to mandatorily they have voted on the Resolution(s).
change your password. The new password
shall comprise of minimum 8 characters xii. Corporate/Institutional Members (i.e., other
with at least one upper case (A-Z), one than Individuals, HUF, NRI, etc.) are also
lower case (a-z), one numeric value (0-9) required to send scanned certified truecopy
and a special character (@,#,$, etc.). The (PDF Format) of the Board Resolution/
427
Notice
Authority Letter, etc., together with attested Members who are present but have not cast
specimen signature(s) of the duly authorised their vote electronically using the remote
representative(s), to the Scrutiniser at e-mail e-voting facility.
ID: [email protected] with
a copy marked to [email protected]. The v.
The voting rights of Members shall be in
scanned image of the abovementioned proportion to their shares in the paid-up
documents should be in the naming format equity share capital of the Company as on
“Corporate Name_ EVENT NO.” Cut-Off date, i.e., Friday, 7th September 2018.
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GRASIM
vii.
The Scrutiniser shall, after the conclusion unclaimed dividend upto the year ended 31st March
of voting at the AGM, first count the votes 2010 has already been transferred to the said Account/
cast at the meeting, thereafter unblock the Fund. Shareholders who have so far not en-cashed
votes cast through remote e-voting in the the dividend warrant(s) for the year ended 31st March
presence of at least two witnesses, not in 2011 or any subsequent years are, requested to make
employment of the Company, and make, their claims to the Company’s RTA on or before 30th
not later than three days of the conclusion of September 2018, failing which the unpaid/unclaimed
the AGM, a consolidated scrutiniser’s report amount will be transferred to the IEPF.
of the total votes cast in favour or against,
In terms of the Investor Education and Protection
if any, to the Chairman of the Meeting or
Fund Authority (Accounting, Audit, Transfer and
a person authorised by the Chairman in
Refund) Rules, 2016 (“IEPF Rules”), in addition to the
writing, who shall countersign the same and
unpaid or unclaimed dividend, which is required to
declare the result of the voting forthwith.
be transferred by the Company to IEPF, equity shares
The Scrutiniser’s decision on the validity of
relating to such unpaid / unclaimed dividend are also
the vote shall be final and binding.
required to be transferred to an account, viz., the IEPF
The results declared by the Chairman of Suspense Account. Members are requested to take
the Meeting or a person authorised by note of the aforesaid newly notified sections of the
him along with the Scrutiniser’s Report Act, and claim their unclaimed dividends immediately
shall be displayed on the Notice Board at to avoid transfer of the underlying shares to the IEPF
the registered office of the Company, and Suspense Account.
shall be communicated to BSE Limited and
Details of unpaid / unclaimed dividend is uploaded
National Stock Exchange of India Limited,
on the website of the Company and also on the
where the shares of the Company are
website of the Ministry of Corporate Affairs (“MCA”),
listed, and the same shall simultaneously
Government of India, before transferring to IEPF. The
be placed on the Company’s website, www.
Company provides opportunity to the shareholders
grasim.com, and on the website of Karvy
to claim the unpaid/unclaimed dividend due to
www.evoting.karvy.com.
them, failing which shares (held either in physical
viii. The resolution shall be deemed to be passed or electronic mode) shall be transferred by the
on the date of the AGM, subject to receipt Company to IEPF Suspense Account. Shareholders
of sufficient votes through a compilation of can, however, claim both, the unclaimed dividend
remote e-voting and the voting held at the amount and the equity shares transferred to IEPF
Suspense Account from the IEPF Authority by making
AGM.
an application in the manner specified under the IEPF
21. Members/Proxies should bring their Attendance Slip Rules.
sent herewith, duly filled in, for attending the Meeting.
Pursuant to the provisions of Sections 124 and 125 of
22.
Members are requested to contact Karvy the Act, and the IEPF Rules, as amended, all shares
Computershare Private Limited/Share Department of on which dividend has not been paid or claimed for
the Company for en-cashing the unclaimed dividends seven consecutive years or more shall be transferred
standing to the credit of their accounts. The detailed to an IEPF Suspense Account after complying with
dividend history and due dates for transfer to IEPF are the procedure laid down under the IEPF Rules. The
available on ‘Investor Centre’ page on the website of Company, in compliance with the aforesaid IEPF Rules,
the Company, www.grasim.com. has sent individual notices to those shareholders
whose shares are liable to be transferred to IEPF
Pursuant to Section 124 and other applicable Suspense Account, and has also published notice
provisions, if any, of the Companies Act, 2013, all in the newspapers. The Company has also uploaded
unpaid and unclaimed dividend remaining unpaid full details of such shares due for transfer, as well as
and unclaimed for a period of 7 (seven) years from unclaimed dividends on the website of the Company
the date they became due for payment, have been www.grasim.com. Shareholders are requested to
transferred to the General Reserve Account/Investor verify the detailsof unclaimed dividends and the
Education and Protection Fund (IEPF), established shares liable to be transferred to the IEPF Suspense
by the Central Government. Accordingly, unpaid and Account.
429
Notice
23.
Members may utilise the facility extended by the the Company’s subsidiary companies and the related
Registrar and Transfer Agent for redressal of queries. detailed information shall be made available to
Members may visit http://karisma.karvy.com and click shareholders of the holding and subsidiary companies
on Members option for query registration through seeking such information at any point of time.
free identity registration process.
The route map of the venue of the Meeting is annexed to
24.
The Audited Accounts of the Company and its the Notice. The prominent landmark for the venue is that
subsidiary companies are available on the Company’s it is close to Indubhai Parekh Memorial Hospital, Nagda -
website, www.grasim.com The annual accounts of 456 331, Madhya Pradesh.
430
GRASIM
ANNEXURE TO THE NOTICE and fix the remuneration for the remaining term of the
appointment of S R B C & Co. LLP, Chartered Accountants
EXPLANATORY STATEMENT SETTING OUT MATERIAL (Registration No. 324982E), as Joint Statutory Auditors of
FACTS PURSUANT TO SECTION 102 OF THE COMPANIES the Company, i.e., for the years 2019-2020, 2020-2021 and
ACT, 2013 2021-2022, as mentioned in the Resolution.
Item Nos. 7 & 8 None of the Directors and/or Key Managerial Personnel of
Pursuant to the provisions of Section 139(1) of the Act, the Company and their relatives is concerned or interested,
as amended with effect 7th May 2018, ratification of the financially or otherwise, in the resolution. The Resolution
appointment of the statutory auditors, by the members at Item Nos. 7 & 8 of the accompanying Notice is set out
at every AGM during the period of their appointment, has as an Ordinary Resolution for approval and ratification by
been omitted with effect from that date. the Members.
At the 69th Annual General Meeting held on 23rd September Item No. 9
2016, Resolution No. 6, was passed for appointment of B
As recommended by the Nomination and Remuneration
S R & Co. LLP, Chartered Accountants (Registration No.
101248W/W-100022), as Joint Statutory Auditors of the Committee, the Board of Directors, at its meeting held
Company, for a term of five years, subject to ratification on 23rd May 2018, appointed Ms. Usha Sangwan as an
of the appointment and fixation of remuneration for the Additional Director of the Company, w.e.f. 23rd May 2018.
relevant year at the Annual General Meeting in each of As an Additional Director, Ms. Usha Sangwan holds office
the subsequent years during the aforesaid term of their up to the date of this Annual General Meeting (AGM) and
appointment. As a result of the amendment of section is eligible to be appointed as a Director of the Company.
139(1) of the Companies Act, 2013, it is no longer necessary Ms. Usha Sangwan has consented to act as a Director of
in law to have the appointment of the statutory auditor the Company.
ratified at every annual general meeting.
Ms. Usha Sangwan is not related to any other Director
In view thereof, consent of the shareholders is sought to of the Company. The disclosures relating to Ms. Usha
partially modify the said Resolution No. 6 passed at the 69th Sangwan, as required under the provisions of Securities
Annual General Meeting as provided in the Resolution and and Exchange Board of India (Listing Obligations and
authorise the Board of Directors to ratify the appointment Disclosure Requirements) Regulation, 2015, is set out as an
and fix the remuneration for the remaining term of the Annexure to the Notice. Considering her vast experience
appointment of BSR & Co. LLP, Chartered Accountants and knowledge in diverse areas, the Board recommends
(Registration No.101248W/W-100022), as Joint Statutory the Resolution, in relation to the appointment of Ms. Usha
Auditors of the Company, i.e., for the years 2019-2020 and Sangwan as a Director, for the approval by the Members
2020-2021, as mentioned in the Resolution. of the Company by way of an Ordinary Resolution.
At the 70th Annual General Meeting held on 22nd Except Ms. Usha Sangwan, being an appointee, none of
September 2017, Resolution No. 5 was passed for the other Directors, Key Managerial Personnel or their
appointment of S R B C & Co. LLP, Chartered Accountants respective relatives is, in any way, concerned or interested,
(Registration No. 324982E), as Joint Statutory Auditors of financially or otherwise, in the Resolution set out at Item
the Company, for a term of five years, subject to ratification No. 9 of the Notice.
of the appointment and fixation of remuneration for the
relevant year at the Annual General Meeting in each of
Item No. 10
the subsequent years during the aforesaid term of their
appointment. As a result of the amendment of Sections As recommended by the Nomination and Remuneration
139(1) of the Companies Act, 2013, it is no longer necessary Committee, the Board of Directors, at its meeting held on
in law to have the appointment of the Statutory Auditor 14th August 2018 appointed Mr. Himanshu Kapania as an
ratified at every Annual General Meeting. Additional Director of the Company, w.e.f. 14th August
2018. As an Additional Director, Mr. Himanshu Kapania
In view thereof, consent of the shareholders is sought to holds office up to the date of this Annual General Meeting
partially modify the said Resolution No. 5 passed at the 70th (AGM), and is eligible to be appointed as a Director of
Annual General Meeting as provided in the Resolution and the Company. Mr. Himanshu Kapania has consented to
authorise the Board of Directors to ratify the appointment act as a Director of the Company. Mr. Himanshu Kapania
431
Notice
is not related to any other Director of the Company. The Ms. Anita Ramachandran is not related to any other
disclosures relating to Mr. Himanshu Kapania, as required Director of the Company. The disclosure relating to Ms.
under the provisions of Securities and Exchange Board of Anita Ramachandran, as required under SEBI (LODR), is
India (Listing Obligations and Disclosure Requirements) set out as an Annexure to the Notice.
Regulation, 2015, is set out as an Annexure to the Notice.
Considering the rich experience and vast knowledge in The Board commends the Ordinary Resolution set out at
diverse areas, the Board recommends the Resolution, in Item No. 11 of this Notice for the approval by the Members.
relation to the appointment of Mr. Himanshu Kapania as a
Director, for the approval by the Members of the Company Except Ms. Anita Ramachandran, being an appointee,
by way of an Ordinary Resolution. none of the Directors, Key Managerial Personnel or their
respective relatives is, in any way, concerned or interested,
Except Mr. Himanshu Kapania, being an appointee, none financially or otherwise, in the Resolution set out at Item
of the other Directors, Key Managerial Personnel or their No. 11 of the Notice.
respective relatives is, in any way, concerned or interested,
financially or otherwise, in the Resolution set out at Item
Item Nos. 12 to 15
No. 10 of the Notice.
As per the provisions of the Securities and Exchange Board
of India (Listing Obligations and Disclosure Requirements)
Item No. 11 Regulations, 2018, notified on 9th May 2018 and effective
As recommended by the Nomination and Remuneration from 1st April 2019, approval of the Members by way
Committee, the Board of Directors, at its meeting held on of a special resolution is required for continuation of
14th August 2018, appointed Ms. Anita Ramachandran as directorship of non-executive directors of the Company
an Additional (Independent) Director of the Company for a who have attained the age of 75 years.
term of five (5) consecutive years, w.e.f. 14th August 2018,
not liable to retire by rotation, subject to the approval of Four of the Company’s Non-Executive Directors, Mr. M. L.
the Members. Apte, Mr. B. V. Bhargava, Mr. O. P. Rungta and Mr. Shailendra
K. Jain, have/will have attained the age of 75 years on 1st
Ms. Anita Ramachandran has consented to act as an April 2019.
Independent Director of the Company.
Mr. M. L. Apte was appointed as an Independent Director
Pursuant to the provisions of Section 149 and other of the Company by the Board of Directors of the Company
applicable provisions of the Act and as per the criteria set at its meeting held on 2nd May 2014 and approved by
out under the provisions of Securities and Exchange Board shareholders in the Annual General Meeting held on 6th
of India (Listing Obligations and Disclosure Requirements) September 2014, under Section 149 and Schedule IV of the
Regulations, 2015 [SEBI (LODR)], Ms. Anita Ramachandran Companies Act, 2013, for a term of five consecutive years
is eligible to be appointed as an Independent Director of till the conclusion of the 72nd AGM to be held in the year
the Company, and has given a declaration to the Board 2019. Mr. Apte holds a Bachelor of Arts degree from Mumbai
that she meets the criteria of independence as provided University. Mr. Apte is an industrialist and is presently the
under the Act and SEBI (LODR). Chairman of Apte Group of industries, and has served as
the President of the Bombay Chamber of Commerce. He
In the opinion of the Board, Ms. Anita Ramachandran was selected to be the Sheriff of Mumbai in 1983. He was
fulfils the conditions specified in the Act, the Rules also the President of Cricket Club of India.
made thereunder and SEBI (LODR) for the appointment
as an Independent Director, and is independent of the Mr. B. V. Bhargava was appointed as an Independent Director
Management. by the Board of Directors of the Company at its meeting
held on 2nd May 2014 and approved by shareholders in
The terms and conditions of the appointment of Ms. the Annual General Meeting held on 6th September 2014,
Anita Ramachandran are available for inspection by the under Section 149 and Schedule IV of the Companies Act,
Members at the Registered Office of the Company during 2013, for a term of for a term of five consecutive years till
the business hours on any working day of the Company, the conclusion of the 72nd AGM to be held in the year 2019.
and the letter of appointment is also available on the Mr. B. V. Bhargava holds a Master of Commerce and LLB
website of the Company, www.grasim.com. degree.
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GRASIM
Mr. Bhargava served as the Managing Director of ICICI confident about them being able to function and discharge
Bank Ltd. until 1st May 1996. Mr. Bhargava served at Tariff their duties in an able and competent manner till the end of
Commission of India, the Indian Investment Centre, New their respective current tenure.
York, and as Chairman of ICICI, Telecom Group Advisory
to the Government of India. He served as an Assistant Considering their seniority, expertise and vast experience
Director of New York at Indian Investment Centre. He has in their respective fields, and their contributions to the
a distinguished career in development banking and project Company, the Board recommends their continuation as
finance for nearly three decades. Mr. Bhargava served as Directors till the end of their respective current terms.
the Non-Executive Chairman of the Board of National
Commodity and Derivatives Exchange Limited. He served Except Mr. M. L. Apte, Mr. B. V. Bhargava, Mr. O. P. Rungta
as the Chairman of CRISIL Ltd. until July 2008. Mr. Bhargava and Mr. Shailendra K. Jain, none of the other Directors/Key
is also on the Board of various companies. Managerial Personnel of the Company or their relatives is,
in any way, concerned or interested, in the said Resolutions.
Mr. O. P. Rungta was appointed as an Independent Director
on 25th September 2014. His appointment was approved
by shareholders in the Annual General Meeting held on Item No. 16
19th September 2015, under Section 149 and Schedule IV The Board of Directors, on the recommendation of the Audit
of the Companies Act, 2013, for a term of five consecutive Committee, approved the appointment and remuneration
years commencing from 25th September 2014 and ending
of the following Cost Accountants to conduct the audit
on 24th September 2019.
of the cost records of the Company for the financial year
ending 31st March 2019:
Mr. Rungta is a Chartered Accountant and also holds
a degree in Law. Mr. Rungta has vast experience in
manufacturing industry and is a Finance and Management Name of the Cost Division of the Remuneration
Consultant. Auditor Company
M/s. D. C. Dave All Divisions of ` 15.00 Lakh
Academically, Mr. Shailendra K. Jain is a B. Sc. (gold & Co., Cost the Company, plus applicable
medalist) from Vikram University, Ujjain, and a B.E. Hons. Accountants, except Viscose taxes and
(gold medalist) from the University of Mumbai and S. M. Mumbai FibreYarn reimbursement
from Massachusetts Institute of Technology, U.S.A. (Registration No. -Century Rayon of out-of-pocket
000611) Division expenses
Mr. Shailendra K. Jain joined the Company at its SFD, M/s. M. R. Dudani Viscose Fibre ` 2.20 Lakh
Nagda in 1965. He became the President of the Company & Co., Cost Yarn – Century plus applicable
in December 1993 and was appointed as a Whole-time Accountants, Rayon Division taxes and
Director in 2001. He was also the Chairman of Business Mumbai reimbursement
Review Council of Aditya Birla Group. (Registration No. of out-of-pocket
FRN - 100017) expenses
Besides being a Director of Pulp and Fibre business of
Aditya Birla Group covering Grasim Industries and its
In accordance with the provisions of Section 148 of the
subsidiaries, Mr. Jain is also the Chairman of Aditya Birla
Companies Act, 2013, read with the Companies (Audit
Cellulosic (Egypt) Co. SAE and a Commissioner at PT
and Auditors) Rules, 2014, remuneration payable to the
Sunrise in Indonesia.
Cost Auditors needs to be ratified by the Members of the
For his contribution, he has been honoured with the ABG Company. Accordingly, consent of the Members is sought
Ratna Award in 2017. He has received many honour and for ratification of the remuneration payable to the Cost
accolades in his professional journey. He was the first Indian Auditors for the financial year ending 31st March 2019.
to chair a TAPPI session in USA. He has authored several
articles based on his practical and research experience in The Board commends the Ordinary Resolution set out at
the field of environment, forestation, productivity, rayon Item No. 16 of the Notice for the approval by the Members.
fibre and wood pulp.
None of the Directors, Key Managerial Personnel or their
Though the incumbents have / will have attained the age of respective relatives is, in any way, concerned or interested,
seventy-five years on or before 1st April 2019, they are in financially or otherwise, in the said Resolution set out at
good health and of sound and alert mind, and the Board is Item No. 16 of the Notice.
433
Notice
The Members are informed that the Company intends Stock Options not vested due to non-fulfilment of
to offer not more than 35,15,528 Equity Shares under the vesting conditions, vested Stock Options which
the Scheme 2018 by way of grant of Options and RSUs. the grantees expressly refuse to exercise, Stock
Options and RSUs are collectively referred to as “Stock Options (vested and not exercised and unvested)
Options”. The Scheme 2018 will be administered by the which have been surrendered and any Stock
Nomination and Remuneration Committee of the Board Options granted but not vested or exercised within
constituted pursuant to the provisions of Section 178 of the stipulated time due to any reasons, shall lapse,
the Companies Act, 2013, through a trust, viz., the Grasim and these Stock Options or the underlying Equity
Employees’ Welfare Trust to be set up for the purpose. Shares will be available for grant under the present
Scheme 2018 or under a new scheme, subject to
To promote the culture of employee ownership, approval compliance with applicable laws.
of Members is also being sought for grant of Stock Options
to certain employees and directors of the Company, it’s (ii) Identification of classes of employees entitled to
subsidiary companies. participate in the Scheme 2018
Persons who are permanent employees of the
The Scheme 2018 is being formulated in accordance Company in the management cadre, working in
with the Securities and Exchange Board of India (Share or out of India, including managing or whole-
Based Employee Benefits) Regulations, 2014 (“SEBI time directors of the Company, and that of its
SBEB Regulations”). Relevant details with respect to the subsidiary companies, will be entitled to participate
aforementioned Scheme 2018 are as follows: in the Scheme 2018, subject to fulfilment of the
eligibility criteria, as may be specified in terms of
(i) Total number of Stock Options to be granted the SEBI SBEB Regulations or as may be decided
The total number of Stock Options, that may in the by the Board or the Nomination and Remuneration
aggregate be granted, shall be such number that Committee, from time to time.
434
GRASIM
The following category of employees/directors shall at the market price of the Equity Shares as at the
not be eligible to participate in the Scheme 2018: date of the grant of the Options or at such other price
as may be decided by the Board from time to time,
(a)
promoter or person belonging to the
in compliance with the SEBI SBEB Regulations,
Promoter Group;
provided that the exercise price per Option shall not
(b) an Independent Director; be less than the face value of the Equity Share of
the Company.
(c) a Director who either by himself or through
his relatives or through any body corporate,
Exercise price for RSUs: Upon exercise of the
directly or indirectly holds more than 10% of
RSUs, the Equity Shares may be transferred at
the outstanding equity shares of the Company.
face value of the Equity Share of the Company or
at such price as may be determined by the Board
(iii) Requirements of vesting and period of vesting
and / or Nomination and Remuneration Committee,
The Board or the Nomination and Remuneration
provided that the exercise price per RSU shall not
Committee may, at its discretion, lay down
be less than the face value of the Equity Share of
certain criteria including, but not limited to, the
the Company.
performance metrics on the achievement, of which
the granted Stock Options would vest and which
(v) Exercise period or process of exercise
may be specified in the respective grant letters or
The exercise period would commence from the
the vesting letters to be issued in this regard. The
date of vesting and will expire on completion of
detailed terms and conditions relating to such
five years from the date of vesting of Stock Options
criteria for vesting, the period over which and the
or such other period as may be determined by
proportion in which the Stock Options granted
the Board or the Nomination and Remuneration
would vest would be subject to the minimum and
Committee.
maximum vesting period as specified below.
Vesting period for Options: The Options would During the exercise period relating to each vesting,
vest not earlier than one year and not later than vested Options and vested RSUs can be exercised
four years from the date of grant of Options or in one or more tranches, such that each tranche will
such other period as may be determined by the be a minimum of 500 Options or 100 RSUs, as the
Nomination and Remuneration Committee. The case may be, except in cases where the number
vesting schedule (i.e., exact proportion in which of vested Options is less than 500 or where the
and the exact period over which the Options would number of outstanding vested RSUs is less than
vest) would be determined by the Nomination and 100 in which event the vested Options and vested
Remuneration Committee, subject to the minimum RSUs will be exercised in a single tranche.
vesting period of one year from the date of grant
of Options. The Options granted under the Scheme The Stock Options will be exercisable by the
2018 shall vest in one or more tranches. Employees through a written application to the
Company accompanied by payment of the exercise
Vesting period for RSUs: The RSUs would vest not price in such manner and on execution of such
earlier than one year and not later than three years documents, as may be prescribed by the Board
from the date of grant of RSUs or such other period or the Nomination and Remuneration Committee,
as may be determined by the Nomination and from time to time. The Stock Options will lapse if
Remuneration Committee. The vesting schedule (i.e., not exercised within the specified exercise period.
exact proportion in which and the exact period over
which the RSUs would vest) would be determined (vi) The Appraisal process for determining the eligibility
by the Nomination and Remuneration Committee, of employees
subject to the minimum vesting period of one year The appraisal process for determining the eligibility
from the date of grant of RSUs. The RSUs granted of the employee will be specified by the Board or
under the Scheme 2018 shall vest in one or more the Nomination and Remuneration Committee, and
tranches. will be based on criteria, such as role / criticality
of the employee, length of service with the
(iv) Exercise price or pricing formula Company, work performance, technical knowledge,
Exercise price for Options: The Equity Shares may managerial level, future potential and such other
be transferred pursuant to the exercise of Options criteria that may be determined by the Board or
435
Notice
the Nomination and Remuneration Committee, as to the Trust for this purpose, in accordance with
applicable, at its sole discretion. the applicable laws.
436
GRASIM
(xiii) Method of Stock Options’ valuation the extent of the Equity Shares that may be offered
To calculate the employee compensation cost, to them under the Scheme 2018. The Stock Options
the Company shall use the Fair Value Method for to be granted under the Scheme 2018 shall not be
valuation of the Options granted or such valuation treated as an offer or invitation made to the public
method as may be prescribed from time to time, in for subscription in the securities of the Company.
accordance with the applicable laws.
The Board recommends Resolutions No. 17 and 18
for approval of the Members of the Company.
In the event the Company undertakes valuation
as per the intrinsic value method, the difference
between the employee compensation cost so Item No. 19
computed and the cost that shall have been As indicated in the Explanatory Statement pertaining to
recognized if it had used the fair value of the Stock Item No. 17 and Item No. 18, the Board of Directors of
Options, shall be disclosed in the Directors’ Report the Company, at its meeting held on 14th August 2018,
and also the impact of this difference on profits and approved the broad framework of the Grasim Industries
on Earnings per Share of the Company shall also be Limited Employee Stock Option Scheme 2018 (“the Scheme
disclosed in the Directors’ Report. 2018”). Further, the Scheme 2018 shall be administered by
the Nomination and Remuneration Committee through a
(xiv) Transferability of Stock Options trust. Further, in terms of the Scheme and in accordance
The Stock Options granted to an employee will not be with the Securities and Exchange Board of India (Share
transferable to any person and shall not be pledged, Based Employee Benefits) Regulations, 2014, as amended
hypothecated, mortgaged or otherwise alienated in (“the SEBI SBEB Regulations”), the trust may acquire
any manner. However, in the event of the death of a Equity Shares through secondary acquisition, such that
Stock Option holder while in employment, the right secondary acquisition in a financial year shall not exceed
to exercise all the Stock Options granted to him till 2% of the paid-up equity share capital of the Company
such date shall be transferred to his legal heirs or as at the end of the previous financial year. As at 31st
nominees,as prescribed. March 2018, 2% of the paid-up equity share capital of the
Company comprised 1,31,47,429 Equity Shares. Further,
(xv) Other Terms in terms of the SEBI SBEB Regulations, the total Equity
Shares to be held by the Trust shall not exceed 5% of the
The Board or the Nomination and Remuneration
paid-up equity share capital of the Company as at the end
Committee shall have the absolute authority to
of the financial year immediately prior to the year in which
vary or modify the terms of the Scheme 2018, in
the shareholders’ approval is obtained, i.e., FY2018. As at
accordance with the regulations and guidelines
31st March 2018, 5% of the paid-up equity share capital of
prescribed by Securities and Exchange Board of India,
the Company comprised 3,28,68,572 Equity Shares.
including in terms of the SEBI SBEB Regulations or
regulations that may be issued by any appropriate
In accordance with the SEBI SBEB Regulations, a separate
authority, from time to time, unless such variation,
Resolution is required to be passed as a Special Resolution
modification or alteration is detrimental to the
by Members of the Company, if the implementation of
interest of the employees, who have been granted
the Scheme 2018 involves setting up of a trust, secondary
stock options under the Scheme 2018.
acquisition of Equity Shares and provision of money
The SEBI SBEB Regulations also require separate whether by way of a loan or otherwise. Therefore, a
approval of Members by way of Special Resolution separate resolution is proposed for secondary acquisition
to grant Stock Options to the employees of the of Equity Shares for the implementation of the Scheme
Company’s subsidiary company(ies). Accordingly, 2018, through a trust to be setup for this purpose, and
a separate Resolution under Item No. 18 is provision of money for such acquisition in accordance with
proposed, to extend the benefits of the Scheme applicable laws in accordance with the applicable laws.
2018 to the employees of the Company’s subsidiary
company(ies), as may be decided by the Nomination Upon approval of the Members and after complying
and Remuneration Committee from time to time, with the procedural and statutory formalities, the Trust
under the applicable laws. is empowered to acquire in one or more tranches,
up to 35,15,528 Equity Shares of the Company from
None of the Directors of the Company is in any way the secondary market through the stock exchanges,
concerned or interested in the Resolution, except to representing 0.53% of the paid-up equity share capital
437
Notice
of the Company for the implementation of the Scheme 3. Mr. Indrajit Birla Centurion, Service Indian
2018. Pathak Pandurang
Budhkar Road,
Worli, Mumbai
The Company proposes to provide to the Trust the - 400 030
requisite funds up to ` 407 Crore (Rupees Four Hundred
and Seven Crore only) to undertake the secondary
4. Mr. Ashok Aditya Birla Service Indian
acquisition. The funds to be provided to the Trust will be
Ramachandran Centre, S. K.
interest-free and be utilised for implementation of the Ahire Marg,
Scheme 2018. As and when the exercise price is recovered Worli, Mumbai
400 030
from the employees, from time to time, upon exercise of
options, the Trust may repay the amount to the Company.
None of the above Trustees and their respective
The relevant disclosures, as required under Section 67, relatives is related to Promoters, Directors or Key
read with Rule 16 of the Companies (Share Capital and Managerial Personnel of the Company. Subject to
Debentures) Rules, 2014, are as follows: the compliance of the provisions of applicable law,
the aforesaid Trustees may be changed at any time.
a) The class of employees for whose benefit the In accordance with the SEBI SBEB Regulations,
Scheme is being implemented and money is being none of the trustees hold 10% or more beneficial
provided for subscription to shares: interest in the Company.
Refer point (ii) in the Explanatory Statement relating d) Any interest of the Key Managerial Personnel,
to Item Nos.17 & 18 above.
Directors or Promoters in such Scheme or Trust and
effect thereof:
b) The particulars of the trustee in whose favour such
shares are to be registered: Directors and KMP may be deemed to be interested
to the extent of Equity Shares as may be granted
Same as (c) below.
to them under the Scheme 2018. None of the
Promoters are interested in the Scheme 2018 or in
c)
The particulars of trust and name, address,
the Trust.
occupation and nationality of trustees and their
relationship with the Promoters, Directors or Key
e) The detailed particulars of benefits which will
Managerial Personnel :
accrue to the employees from the implementation
Name of the Trust: Grasim Employees’ Welfare Trust of the Scheme 2018:
Address of the Trust: A-2, Aditya Birla Centre, S. K. The Employees can exercise Options granted to
Ahire Marg, Worli, Mumbai 400 030. them to get Equity Shares.
Particulars of the Trustees are given below :- f) Details about who would exercise and how the
voting rights in respect of the shares to be acquired
Sr. Name Address Occupation Nationality
No. under the Scheme 2018 would be exercised:
1. Mr. Anil Malik Birla Centurion, Service Indian
Pandurang The SEBI SBEB Regulations provides that the
Budhkar Road, Trustee of an Trust, which is governed under the
Worli, Mumbai
- 400 030 SEBI SBEB Regulations, shall not vote in respect of
the shares held by such Trust, so as to avoid any
2. Mr. Skyline Icon Service Indian
Chandrashekhar Building 86/92, misuse arising out of exercising such voting rights.
Chavan off Andheri
Kurla Road, In line with the requirements of the SEBI SBEB
Marol Village,
Andheri (E) Regulations, the trustees shall not exercise voting
Mumbai rights in respect of the Equity Shares held by the
400059
Trust pursuant to the Scheme 2018.
438
GRASIM
Regulation 6 of the SEBI SBEB Regulations Resolution set out in Item No. 17 and 18 are placed
requires that any ESOS for offering Options to the for approval of the Members.
employees must be approved by the Members
by way of a Special Resolution. Accordingly, the None of the Directors of the Company is in any way,
Resolutions set as Item Nos.17, 18 & 19 are being concerned or interested in the Resolution and in
placed for the approval of the members pursuant appointment of Trustee, except to the extent of the
to the provisions of the Companies Act, 2013, and Equity Shares that may be offered to them under
Regulation 6 of the SEBI SBEB Regulations and all the Scheme 2018. The Stock Options to be granted
other applicable provisions of the law, for the time under the Scheme 2018 shall not be treated as an
being in force. offer or invitation made to the public for subscription
in the securities of the Company.
As per Regulation 17 of the Securities and
Exchange Board of India (Listing Obligations The Board recommends Resolution No. 19 for approval of
and Disclosure Requirements) Regulations, 2015 the Members of the Company.
all fees/compensation (including stock options)
By Order of the Board
paid to Non-Executive Directors, including
Independent Directors, shall require previous
approval of shareholders in general meeting. Since
it is proposed to grant Options to Directors of the
Company whether Whole-time Directors or not (but
excluding Promoter, Promoter Group, Independent Hutokshi Wadia
Directors, and a Director, who either himself or President & Company Secretary
through his relative or through any body-corporate,
directly or indirectly, holds more than ten per cent Place: Mumbai
of the outstanding equity shares of the Company) Date: 14th August 2018
439
DISCLOSURES RELATING TO DIRECTORS PURSUANT TO REGULATION 36(3) OF SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS)
REGULATIONS, 2015, AND SECRETARIAL STANDARD ON GENERAL MEETINGS:
440
Name of the Director Mr. Shailendra K. Jain Mrs. Rajashree Birla Ms. Usha Sangwan Mr. Himanshu Kapania Ms. Anita Ramachandran
Date of Birth 04.12.1943 15.09.1945 1.10.1958 23.04.1961 28.04.1955
Date of First Appointment 01.04.2010 14.03.1996 23.05.2018 14.08.2018 14.08.2018
Expertise in specific functional Management Industrialist Vast experience in Insurance, Vast experience in Management Consultant
areas Sector and Managing Telecom Industry and
Director of Life Insurance General Management
Corporation of India
Qualification B.Sc, B.E. (Hons.) SM B.A. Master's Degree in 1. B.Tech. in Electrical M.B.A. (Finance), Jamnalal Bajaj
(MIT) Economics and a Post Engineering from Birla Institute, Mumbai
Graduate Diploma Institute ofTechnology,
in Human Resource Mesra
Management 2. PGDBM (Marketing)
from IIM, Banglore
No. of Equity Shares held 65,430 5,52,850 - 340 -
(31.03.2018)
List of outside Company 1. Samruddhi Swastik 1. Idea Cellular Limited 1. Axis Bank Ltd. 1. Idea Cellular Limited 1. Godrej and Boyce Mfg. Co. Limited
Directorships held in Indian Trading and 2. Hindalco Industries 2. Ambuja Cement 2. IndusTowers Limited 2. 3D PLM Software Solutions Limited
Public Limited Company Investments Ltd. Limited Limited 3. Idea Cellular Services 3. Kotak Mahindra Old Mutual Life
2. Sun GodTrading 3. Aditya Birla Health 3. LIC Housing Finance Limited Insurance Limited
and Investments Services Limited Limited 4. Aditya Birla Telecom 4. Aditya Birla MyUniverse Limited
Ltd. 4. UltraTech Cement 4. LIC Cards Services Limited 5. Aditya Birla Retail Limited
Limited Limited 5. Idea Telesystems 6. Aditya Birla Housing Finance Limited
5. Century Enka Limited 5. BSE Limited Limited 7. IDFC Asset Management Company
6. CenturyTextiles and 6. GIC of India 6. Aditya Birla Idea Limited
Industries Limited Payments Bank Limited 8. Utkarsh Small Finance Bank Limited
Notice
AGM Venue
AGM Venue
AGM Venue
AGM Venue
Birlagram Market
AGM Venue
AGM Venue
SFD Plant
Memorial Hospital
Indubhai Parekh
AGM Venue:
Grasim Staff Club
as Villa
Mehatw
16
GRASIM INDUSTRIES LIMITED
Registered Office: Birlagram, Nagda - 456 331, Dist. Ujjain (M.P.), India
CIN: L17124MP1947PLC000410
Tel No.: 07366 - 246760; Fax: 07366 - 244114; E-mail: [email protected];
Website: www.grasim.com
PROXY FORM
[Pursuant to Section 105(6) of the Companies Act, 2013, and Rule 19(3) of the Companies
(Management and Administration) Rules, 2014]
as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 71st Annual General
Meeting of the Company, to be held on Friday, 14th September 2018 at 11.00 A.M. at Grasim Staff Club,
Birlagram, Nagda - 456 331, District Ujjain, Madhya Pradesh, and at any adjournment thereof in respect of
such resolutions and as indicated below:
Item No. Description of the Resolution FOR AGAINST
1. Adoption of the Audited Financial Statements (including the Audited Consolidated Financial
Statements) of the Company for the financial year ended 31st March 2018, together with the Reports
of the Board of Directors and Auditors thereon.
2. Declaration of Dividend on Equity Shares for the financial year ended 31st March 2018.
3. Appointment of Director in place of Mr. Shailendra K. Jain (DIN: 00022454), who retires by rotation and,
being eligible, offers himself for re-appointment.
4. Appointment of Director in place of Mrs. Rajashree Birla (DIN: 00022995), who retires by rotation and,
being eligible, offers herself for re-appointment.
5. Ratification of appointment of B S R & Co. LLP, Chartered Accountants (Registration No. 101248W/W-
100022), as the Joint Statutory Auditors of the Company, and to fix their remuneration.
6. Ratification of appointment of S R B C & Co., LLP, Chartered Accountants (Registration No. 324982E),
as the Joint Statutory Auditors of the Company and to fix their remuneration.
7. Partial modification of Resolution No. 6 passed at the 69th Annual General Meeting held on 23rd
September 2016, for appointment and remuneration of B S R & Co. LLP, Chartered Accountants
(Registration No. 101248W/W-100022), as the Joint Statutory Auditors of the Company
8. Partial modification of Resolution No. 5 passed at the 70th Annual General Meeting held on 22nd
September 2017, for appointment and remuneration of S R B C & Co., LLP, Chartered Accountants
(Registration No. 324982E), as the Joint Statutory Auditors of the Company
9. Appointment of Ms. Usha Sangwan (DIN: 02609263) as Non-Executive Director of the Company
10. Appointment of Mr. Himanshu Kapania (DIN: 03387441) as Non-Executive Director of the Company
11. Appointment of Ms. Anita Ramachandran (DIN: 00118188) as an Independent Director of the Company
12. Approval for continuation of Directorship of Mr. M. L. Apte (DIN: 00003656)
13. Approval for continuation of Directorship of Mr. B. V. Bhargava (DIN: 00001823)
14. Approval for continuation of Directorship of Mr. O. P Rungta (DIN: 00020559)
15. Approval for continuation of Directorship of Mr. Shailendra K. Jain (DIN: 00022454)
16. Ratification of the remuneration of the Cost Auditor M/s D.C. Dave & Co., Cost Accountants (Registration
No. 000611) and M/s. M. R. Dudani & Co., Cost Accountants, (Registration No. FRN- 100017 for the
financial year ending 31st March 2019.
17. Approve and Adopt Grasim Industries Limited Employee Stock Option Scheme 2018.
18. Approve the Extension of Benefits of the Grasim Industries Limited Employee Stock Option Scheme
2018 to the permanent employees in the management cadre, including Managing and Whole-time
Directors, of the Subsidiary Companies of the Company.
19. Approve the use of the trust route for the implementation of the Grasim Industries Limited Employee
Stock Option Scheme 2018 and secondary acquisition of the equity shares of the Company by the
trust to be set up.
Affix
Signed this .......... day of .................. 2018 Revenue
Stamp
........................................
Signature of Member(s)
Note:
a. This form of proxy, in order to be effective, should be duly completed and deposited at the Registered Office of the
Company, not less than 48 hours before the commencement of the Meeting.
b. For the Resolutions, Explanatory Statement and Notes, please refer to the Notice of the 71st Annual General Meeting.
c. It is optional to put an “X” in the appropriate column against the Resolution indicated in the Box. If you leave the
‘For’ or ‘Against’ column blank against the Resolutions, your Proxy will be entitled to vote in the manner as he/she
thinks appropriate.
d. Please complete all details, including details of member(s), in the above box before submission.
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