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Notes to Accounts of Grasim Industries Ltd.

Mar 31, 2023

The Description of the nature and purpose of each reserve

within equity is as follows:

a. Securities Premium: Securities Premium is credited when shares are issued at premium. It can be used to issue bonus shares, write-off equity related expenses like underwriting costs, etc.

b. General Reserve: Under the erstwhile Companies Act, 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that if a dividend distribution in a given year is more than 10% of the paid-up capital of the Company for that year, then the total dividend distribution is less than the total distributable results for that year. Consequent to introduction of the Companies Act 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the general reserve can be utilised only in accordance with the specific requirements of the Companies Act, 2013.

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. Treasury Shares : The reserve for shares of the Company held by the Grasim Employees Welfare Trust (ESOP Trust). The Company has issued employees stock option scheme for its employees. The shares of the Company have been purchased and held by ESOP Trust to issue and allot to employees at the time of exercise of ESOP by Employees.

e. 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.

f. Retained Earnings: Amount of retained earnings represents accumulated profit and losses of the Company as on reporting date. Such profits and losses are after adjustment of payment of dividend, transfer to any reserves as statutorily required and adjustment for realised gain/loss on derecognition of equity instruments measured at FVTOCI. Actuarial Gain/(Loss) arising out of Actuarial valuation is immediately transferred to Retained Earnings.

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 and loss on disposal of such instruments.

h. Equity Instrument through OCI: It represents the cumulative gains/(losses) arising on the fair valuation of Equity Shares (other than investments in Subsidiaries, Joint Ventures and Associates, which are carried at cost) measured at fair value through OCI, net of amounts reclassified to Retained Earnings on disposal of such instruments.

i. Hedging Reserve: It represents the effective portion of the fair value of forward contracts, designated as cash flow hedge.

(i) Term loan (Subsidised Government Loan) secured by way of first pari passu charge created by hypothecation of the entire movable Property Plant and Equipments of the Company''s Excel Fibre Division Plant at Kharach. Repayment Terms is 9 halfyearly instalments from 1^st April 2020. Remaining 2 Installments of H 27.80 crore.

Effective cost for the above loans is at 5% per annum. (Previous Year: 5% per annum.)

II: Unsecured Borrowings:

Bank loans contain certain debt covenants relating to limitation on indebtedness, debt-equity ratio, net Borrowings to EBITDA ratio and debt service coverage ratio. The limitation on indebtedness covenant gets suspended if the Company meets certain prescribed criteria. The debt covenant related to limitation on indebtedness remained suspended as of the date of the authorisation of the financial statements. The Company has also satisfied all other debt covenants prescribed in the terms of bank loan. The other bank loans do not carry any financial debt covenant.

(i) The amounts receivable from customers become due after expiry of credit period which on an average upto 120 days. There is no significant financing component in any transaction with the customers.

(ii) The Company provides agreed upon performance warranty for all range of products. The amount of liability towards such warranty is immaterial.

(iii) The Company does not have any remaining performance obligation as contracts entered for sale of goods are for a shorter duration. There are no contracts for sale of services wherein, performance obligation is unsatisfied to which transaction price has been allocated.

(iv) Revenue recognised from Contract liability (Advances from Customers):

The Contract liability outstanding at the beginning of the year was H 379.92 crore (Previous year H 97.60 crore), out of which H 327.32 crore (Previous year H 87.76 crore) has been recognised as revenue during the year ended 31^st March 2023 and balance amount are refunded during the year.

The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of the matters stated above to have a material adverse impact on the company''s financial condition, results of operations or cash flows. It is not practicable to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings as it is determinable only on receipt of judgements/decisions pending with various forums/authorities.

4.2 Competition Commission of India (CCI) has passed an order dated 16^th March 2020 under section 4 of the Competition Act, 2002, imposing a penalty of H 301.61 crore in respect of the Viscose Staple Fibre turnover of the Company. The Company filed an appeal before the National Company Law Appellate Tribunal (NCLAT) and NCLAT, vide Order dated November 04, 2020, stayed the recovery of the penalty amount during the pendency of the Appeal and directed the Company to deposit 10% of the penalty amount by November 19, 2020, which the Company has complied. The Appeal is pending before the NCLAT.

Without considering that an Appeal is already pending against the aforesaid Order, the CCI passed another Order dated 3 ^rd June, 2021, levying a penalty of H 3.49 crores for non-compliance with the Order passed on March 16, 2020. The Company filed Writ Petition before the Hon''ble Delhi High Court against the Order of the CCI. The CCI appeared before the Hon''ble Delhi High Court and assured that no precipitative steps shall be taken against the Company till the disposal of the matter.

Based on legal opinion, Company believes that it has strong grounds against both these said orders, on merit and accordingly no provision has been made in the accounts.

4.4 ASSETS / DISPOSAL GROUP HELD FOR SALE (IND AS 105)

During the previous year, the Company entered into a Scheme of Arrangement (the Scheme) under sections 230-232 of the Companies Act, 2013 with Indorama India Private Limited (Indorama) for slump sale of its Indo Gulf Fertiliser Business (comprising of manufacture, trading and sale of inter alia urea, soil health products and other agri-inputs) to Indorama.

On 1^st January 2022, the Company consummated the sale and transfer of Indo Gulf Fertiliser Business to Indorama as contemplated in the Scheme of Arrangement and recognised pre-tax gain of H 540.15 crore for the year ended 31^st March 2022, included under discontinued operations as exceptional items. The Company has provided H 29.36 Crore towards outstanding liabilities of land maintenance charges of UPSIDC pertaining to Indo Gulf Fertiliser business, included under discontinued operations as exceptional items.

Segment Measures:

The Chief Operating Decision Maker ("CODM") primarily uses Earnings Before Interest, Tax, Depreciation and Amortisation ("EBITDA") as performance measure to assess segment''s performance and periodically receives information about the Segment''s Revenue, Assets and Liabilities.

During the year, in line with the review process adopted by Chief Operating Decision Maker, the Company has changed its segment disclosure related to the segment''s performance measure as per Ind AS 108 - Operating Segments. EBITDA is considered to be the revised measure of segment performance. However, assets pertaining to the segments are considered as part of the segment assets. The corresponding segment information of previous year have been restated accordingly.

Segment Profit and Loss:

Segment''s performance is measured based on Segment EBITDA for all the Segments.

Segment Revenue:

For all the segments, the segment revenue is measured in the same way as measured in the Statement of Profit and Loss.

Segment Assets:

Segment assets are allocated based on the operations of the segment. However, certain assets like ''Investments'', ''Current Tax Assets'' and ''Deferred Tax Assets'', are not considered to be segment assets, since these are being monitored at corporate level, accordingly, forms part of corporate/unallocated assets.

Segment Liabilities:

Segment liabilities are allocated based on the operations of the segment. Certain liabilities identified below are not considered to be part of segment liabilities, since those liabilities are managed at corporate level, accordingly, forms part of corporate/unallocated liabilities:

Segment Liabilities exclusions: Current Tax Liabilities'', ''Deferred Tax Liabilities'' and ''Borrowings''

4.6.3 Disclosure of Related Party Transactions :

Terms and Conditions of Transactions with Related Parties

The transactions with related parties are made in the normal course of business and on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest-free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. The below transactions are as per approval of Audit Committee.

The Company 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.

4.7. RETIREMENT BENEFITS:4.7.1 Defined Benefit Plans as per Actuarial Valuation:

Gratuity (funded by the Company):

The Company operates a Gratuity plan through a trust for its all employees. The Gratuity plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of service, whichever is earlier, of an amount equivalent to 15 to 30 days'' salary for each completed year of service as per rules framed in this regard. Vesting occurs upon completion of five continuous years of service in accordance with Indian law. In case of majority of employees, the Company''s scheme is more favourable as compared to the obligation under payment of Gratuity Act, 1972.

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 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.

(xii) Basis used to determine Discount Rate:

Discount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet date, applicable to the period over which the obligation is to be settled.

(xiii) Asset Liability matching Strategy:

The money contributed by the Company to the fund to finance the liabilities of the plan has to be invested.

The trustees of the plan are required to invest the funds as per the prescribed pattern of investments laid out in the income tax rules for such approved schemes. Due to the restrictions in the type of investments that can be held by the fund, it is not possible to explicitly follow an asset-liability matching strategy to manage risk actively.

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.

(xiv) Salary Escalation Rate:

The estimates of future salary increases are considered taking into account inflation, seniority, promotion, increments and other relevant factors.

(xv) Sensitivity Analysis:

Sensitivity Analysis have been calculated to show the movement in defined benefit obligation in isolation and assuming there are no other changes in market condition at the accounting date. There have been no changes from the previous periods in the methods and assumptions used in preparing the sensitivity analysis.

(xvi) The best estimate of the expected Contribution for the next year amounts to Nil (Previous Year Nil).

4.7.1.2 Compensated Absences:

The obligation for compensated absences is recognised in the same manner as gratuity, amounting to charge of H 51.58 crore (Previous Year: H 33.59 crore) which includes compensated absences of discontinued operations was Nil crore (previous year: H 2.61 crore).

4.7.1.3 The details of the Company''s Defined Benefit Plans in respect of the Company managed Provident Fund Trust:

Contribution to the recognised provident fund are substantially defined contribution plan. The Company is liable for any shortfall in the fund assets based on the Government specified rate of return. Such shortfall, if any, is recognised in the Statement of Profit and Loss as an expense in the year of incurring the same. The Company does not expect any shortfall.

Amount recognised as expense and included in the Note 3.6 as "Contribution- Company owned Provident Fund" is H 34.36 crore (Previous Year H 30.03 crore) and Amount recognized as preoperative expense and included in note 2.1.5 as "Contribution- Company owned Provident Fund" is H 1.60 crore (Previous Year H 1.02 crore).

4.8.2 Government Grant (Ind AS 20)

As at 31^st March 2023, the Company has outstanding interest-free loans of H 43.79 crore (Contractual Value H 53.09 crore) from a State Government, repayable in full in next one to five years. Company has done the initial recognition of loan at fair value Using prevailing market interest rate for an equivalent loan. As at 31^st March 2023, the difference of H 9.30 crore between contractual Value and fair value of loan is the government grant which will be recognised in the Statement of Profit and Loss over the remaining period of loan.

4.8.3 Corporate Social Responsibility

The Company has spent H 54.19 crore on Corporate Social Responsibility Projects/initiatives during the year (Previous Year H 42.47 crore) which are included in different heads of expenses in the Statement of Profit and Loss.

The amount required to be spent under Section 135 of the Companies Act, 2013 for the year ended 31^st March 2023 is H 29.95 crore (Previous Year H 35.97 crore) i.e. 2% of average net profits for last three financial years, calculated as per Section 198 of the Companies Act, 2013.

4.10 FINANCIAL INSTRUMENTS-DISCLOSURE, ACCOUNTING CLASSIFICATIONS AND FAIR VALUE MEASUREMENTS (IND AS 107)

A. Disclosure of Financial Instruments:

i. Investments in Equity Instruments (Other than Subsidiaries, Joint Ventures and Associates) designated at FVTOCI

These investments have been designated on initial recognition to be measured at FVTOCI as these are strategic investments and are not intended for sale.

ii. Investment in Debentures and Bonds measured at FVTOCI

Investments in Debentures or Bonds meet the contractual cash flow test as required by Ind AS 109- Financial Instruments. However, the business Model of the Company is such that it does not hold these investments till maturity as the Company intends to sell these investments as and when need arises. Hence, the same have been measured at FVTOCI.

iii. Investment in Mutual Fund Units and Preference Shares measured at FVTPL

Preference Shares and Mutual Funds have been measured on initial recognition at FVTPL as these financial assets do not pass the contractual cash flow test as required by Ind AS 109- Financial Instruments, for being measured at amortised cost or FVTOCI, hence, classified at FVTPL.

C. Fair Value Measurements (Ind AS 113):

The fair values of the Financial Assets and Liabilities are included at the amount, at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

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.

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.

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 year ending 31^st March 2023 and 31^st March 2022, there was no transfer between level 1 and level 2 fair value measurement.

4.10.1 Key Inputs for Level 1 and 2 Fair valuation Technique :

1. Mutual Funds : Based on Net Asset Value of the Scheme (Level 2)

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)

4. Derivative Liabilities (Level 2)

(a) The fair value of interest rate swaps is calculated as the present value of estimated future cash flows based on observable yield curves and an appropriate discount factor.

(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.

B. Preference Shares:

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 H 1.68 crore or increase by H 1.64 crore (as at 31^st March 2022:decrease by H 3.97 crore or increase by H 3.74 crore).

4.11 FINANCIAL RISK MANAGEMENT OBJECTIVES (IND AS 107)

The Company''s principal financial liabilities, other than derivatives, comprise of borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets, other than derivatives, include trade and other receivables, investments and cash and cash equivalents that arise directly from its operations.

The Company''s activities expose it to market risk, liquidity risk and credit risk and foreign exchange.

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.

4.10.4 Relationship of Unobservable Inputs to Level 3 fair values (Recurring):

A. Equity Investments - Unquoted:

A 100 bps increase/decrease in the net worth, the carrying value of the shares would increase/decrease by H 6.76 crore (as at 31^st March 2022: decrease by H 7.49 crore or increase by H 7.82 crore using Weighted Average Cost of Capital (WACC) or discount rate used while all other variables were held constant).

Foreign exchange risk is the risk of impact related to fair value or future cash flows of an exposure in foreign currency, which fluctuate due to changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates to import of fuels, raw materials and spare parts, plant and equipment, exports, foreign currency borrowings and net investment in foreign subsidiaries /Joint ventures.

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 forward covers to hedge exposure to foreign currency risk.

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.

(i) Foreign Currency Sensitivity:

The sensitivities are based on financial assets and liabilities held at 31^st March 2022 that are not denominated in Indian Rupees. The sensitivities do not take into account the Company''s sales and costs and the results of the sensitivities could change due to other factors such as changes in the value of financial assets and liabilities as a result of non-foreign exchange influenced factors.

(ii) Hedging Activities and Derivatives:

The Company evaluates exchange rate exposure arising from foreign currency transactions. The Company uses various derivative financial instruments, such as foreign exchange forward contracts, option contracts, future contracts and currency swaps to manage and mitigate its exposure to foreign exchange risk. The Company reports periodically to its risk management committee, the foreign exchange risk and compliance of the policies to manage its foreign exchange risk.

The Company assesses hedge effectiveness based on the following criteria:

(i) an economic relationship between the hedged item and the hedging instrument;

(ii) the effect of credit risk; and

(iii) assessment of the hedge ratio

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in prevailing market interest rates. For all long-term borrowings in foreign currency with floating interest rates, the risk of variation in the interest rates is mitigated through interest rate swaps. The Company constantly monitors the credit markets and revisits its financing strategies to achieve an optimal maturity profile and financing cost.

The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate borrowings, which is monitored on continuous basis. For foreign currency 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.

C. Equity Price Risk:

The Company is exposed to equity price risk arising from Equity Investments (other than Subsidiaries, Joint Ventures and Associates, which are carried at cost).

Equity Price Sensitivity Analysis:

The Sensitivity analysis below has been determined based on the exposure to equity price risk at the end of the reporting period.

If equity prices of the quoted investments increase/decrease by 5%, Other Comprehensive income for the year ended 31^st March 2023 would increase/decrease by H 400.29 crore (for the year ended 31^st March 2022 by H 579.20 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 maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets.

(i) Trade Receivables:

Trade receivables are consisting of a large number of customers. The Company has credit evaluation policy for each customer and, based on the evaluation, credit limit of each customer is defined. Wherever the Company assesses the credit risk as high, the exposure is backed by either bank, guarantee/letter of credit or security deposits.

Total Trade receivables as on 31^st March 2023 is H 1597.26 crore (31^st March 2022 is H 1,690.42 crore)

The Company does not have higher concentration of credit risks to a single customer.

Single largest customers of the Company have exposure of 5.31% of total sales (31^st March 2022: 4.51%) and in receivables 3.48% (31^stMarch 2022: 4.22%).

The ageing analysis of the receivables (net of provision) has been considered from the date the invoice falls due, refer note 2.11.2.

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 H 1.99 crore of the outstanding receivables for the current year (Previous Year H 0.22 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 credit facilities to meet obligations when due. The Company''s treasury team is responsible for managing liquidity, funding as well as settlement. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company''s liquidity position through rolling forecasts and long range business forecasts on the basis of expected cash flows.

(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 and domestic rating agencies. Credit Risk on Derivative Instruments is generally low as the Company enters into the Derivative Contracts with the reputed Banks.

Investments of surplus funds are made only with 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.

The Company 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 as on 31^st March 2023 is H 33,897 crore (31^st March 2022 H 38,691 crore).

F. Capital Management:

The Company''s objectives when managing capital are to (a) maximise shareholder value and provide benefits to other stakeholders and (b) maintain an optimal capital structure to reduce the cost of capital.

For the purposes of the Company''s capital management, capital includes issued capital, securities premium and all other equity reserves attributable to the equity holders.

The Company monitors capital using debt-equity ratio, which is total debt less investments divided by total equity.

(ii) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(iii) As on 31^st March 2023 there is no unutilised amounts in respect of any issue of securities and long term borrowings from banks and financial institutions. The borrowed funds have been utilised for the specific purpose for which the funds were raised.

(iv) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

(v) The Company has not traded or invested in Crypto Currency or Virtual Currency during the financial year.

(vi) The Company has not any such transaction which is not recorded in the books of account that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961)

(vii) The Company is in compliance with the number of layers prescribed under Clause (87) of Section 2 of the Companies Act read with the Companies (Restriction on number of Layers) Rules, 2017.

(viii) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(ix) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

Mar 31, 2022

The Description of the nature and purpose of each reserve within equity is as follows:

a. Securities Premium: Securities Premium is credited when shares are issued at premium. It can be used to issue bonus shares, write-off equity related expenses like underwriting costs, etc.

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. However, this requirtment is no more applicable w.e.f April 1, 2018 as per the amendment in the Companies (Share Capital and Debentures) Rules, 2014 vide dated August 16, 2019, accordingly the Company has not made any new addition in the said reserve and transferred outstanding balance to general reserve in the earlier years.

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 Profit or loss on disposal of such instruments.

f. Equity Instrument through OCI: It represents the cumulative gains/(losses) arising on the fair valuation of Equity Shares (other than investments in Subsidiaries, Joint Ventures and Associates, which are carried at cost) measured at fair value through OCI, net of amounts reclassified to Retained Earnings on disposal of such instruments.

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.

i. Treasury Shares: The reserve for shares of the Company held by the Grasim Employees Welfare Trust (ESOP Trust).

The Company has issued employees stock option scheme for its employees. The shares of the Company have been purchased and held by ESOP Trust to issue and allot to employees at the time of exercise of ESOP by Employees.

(i) Rupee term loan secured by way of first pari passu charge over movable assets of the Company''s Rayon Division Plant at Veraval and Textile Division Plant at Rishra. Repayment Terms was 21 quarterly instalments from 19^th December, 2016 To 19^th December, 2021, which is repaid during the current year.

(ii) Rupee term loan secured by way of first pari passu charge on existing and future movable Property Plant and Equipments of the Indian Rayon Division Plant at Gujarat and Textile Division plant at Rishra. The Charge to be shared with HDFC Bank. Repayment Terms was 20 quarterly instalments from 3^rd September 2016 to 3^rd June, 2021, which is repaid during the current year.

(iii) Rupee term Loan secured by exclusive charge on specific movable Property Plant and Equipments or 1^st pari-passu charge on movable Property Plant and Equipments of Nagda (Staple Fibre Division) Repayment Terms was 20 Quarterly instalments starting from 31^st August 2016 to 28^th May, 2021, which is repaid during the current year.

(iv) Term loan (Subsidised Government Loan) secured by way of first pari passu charge created by hypothecation of the entire movable Property Plant and Equipments of the Company''s Excel Fiber Division Plant at Kharach. Repayment Terms is 9 half yearly instalments from 1^st April 2020. Remaining 4 Installments of C 27.80 Crore.

Effective cost for the above loans is at 5% per annum. (Previous Year: in the range of 1.90% to 5% per annum.)

External Commercial Borrowing Terms: 3 equal yearly instalments of USD 10,000,000 each were payable on 20^th August, which is repaid during the current year.

# Foreign Currency Loans is hedged by way of Currency and Interest Rate Swaps.

- Effective cost has been calculated with hedged cost in terms of foreign currency loan.

Effective cost for the above loan was 8.23% per annum.

(ii) The Company provides agreed upon performance warranty for all range of products. The amount of liability towards such warranty is immaterial.

(iv) Revenue recognised from Contract liability (Advances from Customers):

The Contract liability outstanding at the beginning of the year was C 97.6 Crore, out of which C 87.76 Crore has been recognised as revenue during the year ended 31^st March, 2022 and balance amount are refunded during the year.

4.1.1 Competition Commission of India (CCI) has passed an order dated 16^th March 2020 under section 4 of the Competition Act, 2002, imposing a penalty of C 301.61 Crore in respect of the Viscose Staple Fibre turnover of the Company. The Company filed an appeal before the National Company Law Appellate Tribunal (NCLAT) and NCLAT, vide Order dated November 04, 2020, stayed the recovery of the penalty amount during the pendency of the Appeal and directed the Company to deposit 10% of the penalty amount by November 19, 2020, which the Company has complied. The Appeal is pending before the NCLAT.

Without considering that an Appeal is already pending against the aforesaid Order, the CCI passed another Order dated June 03, 2021, levying a penalty of C 3.49 Crores for non-compliance with the Order passed on March 16, 2020. The Company filed Writ Petition before the Hon''ble Delhi High Court against the Order of the CCI. The CCI appeared before the Hon''ble Delhi High Court and assured that no precipitative steps shall be taken against the Company till the disposal of the matter.

Based on legal opinion, the Company believes that it has strong grounds against both these said orders, on merit and accordingly no provision has been made in the accounts.

@ As per the agreement with the Joint Ventures, the Company is committed to make additional contribution in proportion to their interest in Joint Ventures, if required. These commitments have not been recognised in the financial statements.

(iii) Uncalled Liability on partly paid up shares of Aditya Birla Fashion and Retail Limited for previous year it was C 28.09 Crore.

4.4 ASSETS / DISPOSAL GROUP HELD FOR SALE (IND AS 105)

On 1^st January, 2022, the Company consummated the sale and transfer of Indo Gulf Fertiliser Business to Indorama as contemplated in the Scheme of Arrangement and recognised pre-tax gain of C 540.15 Crore for the year ended 31^st March, 2022, included under discontinued operations as exceptional items. The Company has provided C 29.36 Crore towards outstanding liabilities of maintenance charges of UPSIDC pertaining to Indo Gulf Fertiliser business, included under discontinued operations as exceptional items.

4.6.3 DISCLOSURE OF RELATED PARTY TRANSACTIONS:

Terms and Condition of Transaction with Related Parties

The transaction with related parties are made in the normal course of business and on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest-free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. The below transactions are as per approval of Audit Committee.

4.7. RETIREMENT BENEFITS:

4.7.1 Defined Benefit Plans as per Actuarial Valuation:

Gratuity (funded by the Company):

Inherent Risk:

Pension:

The Company provides pension to few retired employees as approved by the Board of Directors of the Company.

Inherent Risk:

(xi) 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

(xii) Basis used to determine Discount Rate:

Discount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet date, applicable to the period over which the obligation is to be settled.

(xiii) Asset Liability matching Strategy:

The money contributed by the Company to the fund to finance the liabilities of the plan has to be invested.

(xiv) Salary Escalation Rate:

The estimates of future salary increases are considered taking into account inflation, seniority, promotion, increments and other relevant factors.

(xv) Sensitivity Analysis:

(xvi) The best estimate of the expected Contribution for the next year amounts to Nil (Previous Year Nil).

4.7.1.2 Compensated Absences:

The obligation for compensated absences is recognised in the same manner as gratuity, amounting to charge of C 33.59 Crore (Previous Year C 23.70 Crore) which includes compensated absences of discontinued operations were C 2.61 Crore (previous year C 1.22 Crore).

4.7.1.3 The details of the Company''s Defined Benefit Plans in respect of the Company managed Provident Fund Trust:

Amount recognised as expense and included in the Note 3.6 as "Contribution- Company owned Provident Fund" is C 30.03 Crore (Previous Year C 27.56 Crore) and Amount recognized as preoperative expense and included in note 2.1.5 as "Contribution- Company owned Provident Fund" is C 1.02 Crore (Previous Year C 0.43 Crore).

4.8.2 Government Grant (Ind AS 20)

The Company has received interest-free loans in Previous Year of C 15.87 Crore from a State Government, repayable in full after six years. Using prevailing market interest rate 7.45% p.a. for an equivalent loan, the fair value of loan at initial recognition is estimated at C 10.07 Crore. The difference of C 5.80 Crore between gross proceeds and fair value of loan is the government grant which will be recognised in the Statement of Profit and Loss over the period of loan.

4.8.3 Corporate Social Responsibility

The Company has spent C 42.47 Crore on Corporate Social Responsibility Projects/initiatives during the year (Previous Year C 84.66 Crore) which are included in different heads of expenses in the Statement of Profit and Loss.

The amount required to be spent under Section 135 of the Companies Act, 2013 for the year ended 31^st March 2022 is C 35.97 Crore (Previous Year C 45.06 Crore) i.e. 2% of average net profits for last three financial years, calculated as per Section 198 of the Companies Act, 2013.

Nature of CSR activities:

Education, Health Care, Sustainable Livelihoods, Infrastructure Development, Social Empowerment, Rural Development & COVID related CSR.

Details of related party transactions: Aditya Birla Education Trust of C 8 Crore and Aditya Birla Health Service Private Limited C 0.98 Crore.

4.9 SHARE BASED PAYMENTS

4.9.1 1,696,470 Equity Shares of Face Value of C 2 each (Previous Year 1,712,882 Equity Shares of Face Value of C 2 each) are

reserved for issue under Employee Stock Option Scheme-2006 (ESOS-2006)

Employee Stock Option Scheme, 2013 (ESOS-2013) and Employee Stock Option Scheme, 2018 (ESOS-2018).

4.9.6 Employee Stock Option expenses (including SAR) recognised in the statement of Standalone Profit and Loss C 34.68 Crore (Previous Year C 11.96 Crore) and recognised in pre-operative expense C 0.32 Crore (Previous Year C 0.23 Crore) Apart from above Employee Stock Option expenses (including SAR) towards discontinued operations were C 0.19 Crore (Previous year C 0.55 Crore).

4.10 FINANCIAL INSTRUMENTS-DISCLOSURE, ACCOUNTING CLASSIFICATIONS AND FAIR VALUE MEASUREMENTS (IND AS 107)

A. Disclosure of Financial Instruments:

i. Investments in Equity Instruments (Other than Subsidiaries, Joint Ventures and Associates) designated at FVTOCI

These investments have been designated on initial recognition to be measured at FVTOCI as these are strategic investments and are not intended for sale.

ii. Investment in Debentures and Bonds measured at FVTOCI

iii. Investment in Mutual Fund Units and Preference Shares measured at FVTPL

C. Fair Value Measurements (Ind AS 113):

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 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 maximize 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.

During the reporting year ending 31^st March, 2022 and 31^st March, 2021, there was no transfer between level 1 and level 2 fair value measurement.

4.10.1 Key Inputs for Level 1& 2 Fair valuation Technique:

1. Mutual Funds: Based on Net Asset Value of the Scheme (Level 2)

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)

4. Derivative Liabilities (Level 2)

(a) The fair value of interest rate swaps is calculated as the present value of estimated future cash flows based on observable yield curves and an appropriate discount factor.

(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.

4.10.4 Relationship of Unobservable Inputs to Level 3 fair values (Recurring):

A. Equity Investments - Unquoted (for Equity Shares where Discounted Cash Flow Method is used):

A 100 bps increase/decrease in the Weighted Average Cost of Capital (WACC) or discount rate used while all other variables were held constant, the carrying value of the shares would decrease by C 7.49 Crore or increase by C 7.82 Crore (as at 31^st March, 2021: decrease by C 44.43 Crore or increase by C 99.23 Crore).

B. Preference Shares:

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 C 3.97 Crore or increase by C 3.74 Crore (as at 31^st March, 2021:decrease by C 3.74 Crore or increase by C 4.01 Crore).

4.11 FINANCIAL RISK MANAGEMENT OBJECTIVES (IND AS 107)

The Company''s activities expose it to market risk, liquidity risk and credit risk and foreign exchange.

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.

Details relating to the risks are provided here below:

A. Foreign Exchange Rate Risk:

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.

(i) Foreign Currency Sensitivity:

(ii) Hedging Activities and Derivatives:

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 currency interest rate swap (CIRS). Under the terms of the CIRS, 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.

The Company assesses hedge effectiveness based on the following criteria:

(i) an economic relationship between the hedged item and the hedging instrument;

(ii) the effect of credit risk; and

(iii) assessment of the hedge ratio

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.

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.

Effect on Profit Before Tax Basis Point 31^st March, 2022 31^st March, 2021

INR - Increase 100 - (0.10)

INR - Decrease 100 - 0.10

The Company''s manages its interest rate risk by having a balanced portfolio of fixed and variable rate borrowings, which is monitored on continuous basis. For foreign currency 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.

C. Equity Price Risk:

The Company is exposed to equity price risk arising from Equity Investments (other than Subsidiaries, Joint Ventures and Associates, which are carried at cost).

Equity Price Sensitivity Analysis:

The Sensitivity analysis below has been determined based on the exposure to equity price risk at the end of the reporting period.

If equity prices of the quoted investments increase/decrease by 5%, Other Comprehensive income for the year ended 31^st March 2022 would increase/decrease by C 579.2 Crore (for the year ended 31^st March 2021 by C 399.08 Crore).

D. Credit Risk:

The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets.

(i) Trade Receivables:

Total Trade receivables as on 31^st March 2022 is C 1,690.42 Crore (31^st March 2021 is C 1,312.03 Crore)

The Company does not have higher concentration of credit risks to a single customer.

Single largest customers of the Company have exposure of 1.17% of total sales (31^st March 2021: 2.44%) and in receivables 4.22% (31^st March 2021: 5.66%).

The ageing analysis of the receivables (net of provision) has been considered from the date the invoice falls due, refer note 2.11.2.

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 C 0.22 Crore of the outstanding receivables for the current year (Previous Year C 0.36 Crore).

(ii) Investments, Derivative Instruments, Cash and Cash Equivalents and Bank Deposits:

Compliances of these policies and principles are reviewed by internal auditors on periodical basis.

Total Non-current and current investments as on 31^st March 2022 is C 38,691 Crore (31^st March 2021 C 33,639.73 Crore).

E. Liquidity Risk:

F. Capital Management:

For the purposes of the Company''s capital management, capital includes issued capital, securities premium and all other equity reserves attributable to the equity holders.

4.13 OTHER STATUTORY INFORMATION

(i) The Company does not have any transaction with struck off Companies.

(ii) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(iii) As on 31^st March, 2022 there is no unutilised amounts in respect of any issue of securities and long term borrowings from banks and financial institutions. The borrowed funds have been utilised for the specific purpose for which the funds were raised.

(iv) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

(v) The Company has not traded or invested in Crypto Currency or Virtual Currency during the financial year.

(vi) The Company has not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961)

(vii) The Scheme of Arrangements has been approved by the Hon''ble National Company Law Tribunal (NCLT) in terms of sections 230 to 232 of the Companies Act, 2013. Effect of such Scheme of Arrangements has been accounted for in the books of account of the Company ''in accordance with the aforesaid Schemes'' and ''in accordance with accounting standards''.

(viii) The Company is in compliance with the number of layers prescribed under Clause (87) of Section 2 of the Companies Act read with the Companies (Restriction on number of Layers) Rules, 2017.

(ix) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(x) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

4.14 Previous years'' figures have been regrouped/rearranged wherever necessary to conform to the current year classification in order to comply with the requirements of the amended Schedule III to the Companies Act, 2013 effective from 1^st April, 2021.

4.15 AUTHORISATION OF FINANCIAL STATEMENTS:

The financial statements for the year ended 31^st March, 2022 were approved by the Board of Directors on 24^th May, 2022.

Mar 31, 2021

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 BSE Ltd., India, and the National Stock Exchange of India Ltd., 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, Epoxy and allied Chemicals) and others (Insulators, Textiles, Fertilisers and Solar Power Designing, Engineering Procurement and Commissioning).

1. SIGNIFICANT ACCOUNTING POLICIES

1.1 Statement of Compliance:

These financial statements are prepared and presented in accordance with the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time as notified under section 133 of Companies Act, 2013, the relevant provisions of the Companies Act, 2013 ("the Act") and the guidelines issued by the Securities and Exchange Board of India (SEBI), as applicable.

1.2 Basis of Preparation:

The financial statements have been prepared and presented on the going concern basis and at historical cost, except for the following assets and liabilities, which have been measured as indicated below:

â¢ Derivative Financial Instruments at fair value (covered under para 1.20)

â¢ Certain financial assets and liabilities at fair value [refer accounting policy regarding financial instruments (covered under para 1.22)]

â¢ Assets held for disposal - measured at the lower of its carrying amount and fair value less cost to sell; and

â¢ Employee''s Defined Benefit Plan measured as per actuarial valuation.

â¢ Employee Stock Option Plans measured at fair value.

â¢ Assets and Liabilities acquired under Business Combination measured at fair value.

1.3 Functional and Presentation Currency:

The financial statements are presented in Indian Rupees, which is the functional currency of the Company and the currency of the primary economic environment in which the Company operates, and all values are rounded to the nearest Crore, utpo 2 decimal places except as otherwise indicated.

..4 Business Combination and Goodwill/Capital Reserve:

The Company uses the acquisition method of accounting to account for business combinations. The acquisition date is the date on which control is transferred to the acquirer. Judgement is applied in determining the acquisition date and determining whether control is transferred from one party to another. Control exists when the Company is exposed to or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through power over the entity. In assessing control, potential voting rights are considered only if the rights are substantive.

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 other equity as capital reserve. However, if there is no clear evidence of bargain purchase, the entity recognises the gain directly in other 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 other 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 noncontrolling 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.

1.5 Classification of Assets and Liabilities as Current and Non-Current:

All assets and liabilities are classified as current or noncurrent as per the Company''s normal operating cycle, and other criteria set out in Schedule III of the Companies Act, 2013. Based on the nature of products and the time lag between the acquisition of assets for processing and their realisation in cash and cash equivalents, 12 month period has been considered by the Company as its normal operating cycle.

1.6 Property, Plant and Equipment (PPE):

On transition to Ind AS, the Company has elected to continue with the carrying value of all its property plant and equipment recognised as at 1^st April 2015 measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment.

Property, plant and equipment are stated at acquisition or construction cost less accumulated depreciation and impairment loss. Freehold land is stated at cost less impairment losses, if any. 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 borrowings 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 Standalone Statement of Profit and Loss during the year in which they are incurred.

I tems such as spare parts, standby equipment and servicing equipment are recognised as PPE when these are 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 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.

1.7 Treatment of Expenditure during Construction Period:

Expenditure, net of income earned, during construction (including financing cost related to borrowed funds for construction or acquisition of qualifying PPE) period is included under capital work-in-progress, and the same is allocated to the respective PPE on the completion of construction. Advances given towards acquisition or construction of PPE outstanding at each reporting date are disclosed as Capital Advances under "Other NonCurrent Assets".

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:
S.	Nature of Assets	Estimated Useful Life of
No.	Nature of Assets	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.	Building (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

I n 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 at 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.

B. Assets where useful life differs from Schedule II:

S. Useful Life as Prescribed by Schedule II Estimated Useful Life of the Nature of Assets

No. of the Companies Act, 2013 Assets

1. Plant & Machinery:-

1.1 Other Than Continuous Process Plant (Single Shift) 15 Years 15-20 years

1.2 Other Than Continuous Process Plant (Double Shift) Additional 50% depreciation over 20 years

single shift (10 Years)

1.3 Other Than Continuous Process Plant (Triple Shift) Additional 100% depreciation over 7.5-15 years

single shift (7.5 Years)

2. Motor Vehicles 6-10 Years 4-5 years

3. Electronic Office Equipment 5 Years 4 years

4. Furniture, Fixtures and Electrical Fittings 10 Years 5-7 years

5. Building (other than Factory Buildings) other than RCC 30 Years 60 years Frame Structures

6. Power Plant 40 Years 25 years

7. Servers and Networks 6 Years 3 years

8. Spares in the nature of PPE 10 years

9. Assets individually costing less than or equal to Fully depreciated in the year of '' 10,000/- purchase

10. Separately identified Component of Plant and 2-25 years Machinery

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 prorata 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 up to the month preceding the month of deduction/disposal.

1.9 Intangible Assets acquired separately and Amortisation:

On transition to Ind AS, the Company has elected to continue with the carrying value of all its Intangible Assets recognised as at 1^st April 2015, measured as per the previous GAAP and use that carrying value as the deemed cost of the Intangible Assets.

I ntangible 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.

I ntangible 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 de-recognised.

Intangible Assets and their useful lives are as under:

S. Estimated Useful Nature of Assets

No. Life of the Assets

1. Computer Software 3 years

2. Trademarks, Technical Know-how 10 years

3. Value of License/Right to use 10 years infrastructure

4. Customer Relationship 15-25 years

5. Brands 10 years

6. Production Formula 10 years

7. Distribution Network 5-25 years

8. Right to Manage and Operate 15 years Manufacturing Facility

9. Non-compete fees 3 years

10. Order Backlog 3 months - 1 year

1.10 Internally Generated Intangible Assets - Research and Development Expenditure:

Revenue expenditure on research is expensed under the respective heads of the account in the period in which it is incurred. Development expenditure is capitalised as an asset, if the following conditions can be demonstrated:

a) The technical feasibility of completing the asset so that it can be made available for use or sell.

b) The Company has intention to complete the asset and use or sell it.

c) I n case of intention to sell, the Company has the ability to sell the asset.

d) The future economic benefits are probable.

e) The Company 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.

PPE procured for research and development activities are capitalised.

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 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 in the Statement of Profit and Loss. Defined benefit costs are categorised as follows:

â¢ service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);

â¢ net interest expense or income; and

â¢ 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''.

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.

Other Long-Term Benefits:

Long-term compensated absences are provided for on the basis of an actuarial valuation at the end of each financial year. Actuarial gains/losses, if any, are recognised immediately in the Standalone Statement of Profit and Loss.

1.17 Employee Share Based Payments:

Equity-settled Transactions

Equity-settled share-based payments to employees are measured by reference to the fair value of the equity instruments at the grant date using Black-Scholes Model and Binomial Model.

1.11 Discontinued operations and non-current assets held for sale:

Discontinued operation is a component of the Company that has been disposed of or classified as held for sale and represents a major line of business.

Non-current assets and disposal groups are classified as held for sale if their carrying amount is intended to be recovered principally through a sale (rather than through continuing use) when the asset (or disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sale of such asset (or disposal group) and the sale is highly probable and is expected to qualify for recognition as a completed sale within one year from the date of classification.

Non-current assets and disposal groups classified as held for sale are measured at lower of their carrying amount and fair value less costs to sell.

1.12 Impairment of Non-Financial Assets:

At the end of each reporting period, the Company reviews the carrying amounts of non-financial assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units, for which a reasonable and consistent allocation basis can be identified.

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.

13 Inventories:

I nventories 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. The cost of finished goods and work-in-progress is computed on weighted-average basis.

In the absence of cost, waste/scrap is valued at estimated net realisable value.

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 Cash and Cash Equivalents

Cash and Cash Equivalents comprise cash on hand and cash at banks, including fixed deposit with original maturity period of three months or less and short-term highly liquid investments with an original maturity of three months or less.

1.15 Cash Flow Statement

Cash flows are reported using the indirect method, whereby the net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

1.16 Employee Benefits:

Short-Term Employee Benefits:

Short-term employee benefits are recognised as an expense on accrual basis.

Defined Contribution Plans:

Contribution payable to the recognised provident fund and approved superannuation scheme, which are substantially defined contribution plans, is recognised as expense in the Standalone Statement of Profit and Loss, when employees have rendered the service entitling them to the contribution.

The provident fund contribution as specified under the law is paid to the Regional Provident Fund Commissioner.

Defined Benefit Plans:

The obligation in respect of defined benefit plans, which covers Gratuity, Pension and other post-employment medical benefits, are provided for on the basis of an actuarial valuation at the end of each financial year using projected unit credit method. Gratuity is funded with an approved trust.

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.

''- Exchange differences on monetary items are recognised in

e the Standalone Statement of Profit and Loss in the period

t in which these arise except for:

t, â¢ exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those J, assets when they are regarded as an adjustment to

e interest costs on those foreign currency borrowings; and

_g â¢ exchange differences relating to qualifying effective ^gg cash flow hedges.

1.20 Derivative Financial Instruments and Hedge Accounting:

The Company enters into forward contracts to hedge the y foreign currency risk of firm commitments and highly

n probable forecast transactions. Derivatives are initially

il recognised at fair value at the date the derivative contracts

g are entered into and are subsequently re-measured to their

h fair value at the end of each reporting period. The resulting

T gain or loss is recognised in the Standalone Statement

s 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 Standalone Statement of Profit and Loss depends on the nature of '') the hedging relationship and the nature of the hedged

e item.

e The Company enters into derivative financial instruments

ir viz. foreign exchange forward contracts, interest rate

s swaps and cross currency swaps to manage its exposure to

y interest rate, foreign exchange rate risks and commodity

prices. The Company does not hold derivative financial instruments for speculative purposes.

:r Hedge Accounting:

e The Company designates certain hedging instruments

e in respect of foreign currency risk, interest rate risk

s. and commodity price risk as cash flow hedges. At the

n 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 y, the hedge. The documentation includes the Company''s

e risk management objective and strategy for undertaking

s hedge, the hedging/ economic relationship, the hedged item

s. or transaction, the nature of the risk being hedged, hedge

d ratio and how the entity will assess the effectiveness of

d changes in the hedging instrument''s fair value in offsetting

s the exposure to changes in the hedged item''s fair value or

n cash flows attributable to the hedged risk. Such hedges

are expected to be highly effective in achieving offsetting

The fair value, determined at the grant date of the equity-settled share-based payments, is charged to Standalone Statement of Profit and Loss on a systematic 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 other 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 other 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 up to, and including the settlement date, with changes in fair value recognised in employee benefits expense.

1.18 Treasury Shares:

The Company has created an Employee Benefit Trust (ebt) for providing share-based payment to its employees. The Company uses ebt as a vehicle for distributing shares to employees under the Employee Stock Option Scheme. The ebt purchase shares of the Company from the market, for giving shares to employees. The Company treats ebt as its extension and shares held by ebt are treated as treasury shares.

Own equity instruments that are re-acquired (treasury shares) are recognised at cost and deducted from other equity. No gain or loss is recognised in the Standalone statement of profit and loss on the purchase, sale, issue or cancellation of the Company''s own equity instruments. Share options whenever exercised, would be settled from such treasury shares.

1.19 Foreign Currency Transactions:

I n preparing the financial statements of the Company, transactions in foreign currencies, other than the Company''s functional currency, are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary assets and liabilities denominated in foreign currencies are translated at the rate prevailing at that date. Non-monetary items that are measured in terms of historical cost in a foreign currency are not re-translated.

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 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 Standalone Statement of Profit and Loss.

Amounts previously recognised in Other Comprehensive Income and accumulated in other 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 Other Comprehensive Income and accumulated in other equity at that time remains in other equity and is recognised when the forecast transaction is ultimately recognised in Standalone Statement of Profit and Loss. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in other equity is recognised immediately in Standalone Statement of Profit and Loss.

1.21 Fair Value Measurement:

The Company measures financial instruments, such as investments (other than equity investments in Subsidiaries, Joint Ventures and Associates) and derivatives at fair values at each Balance Sheet date.

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 Company.

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.

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 re-measured orre-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 informationinthevaluationcomputationtocontractsand other relevant documents.

1.22 Financial Instruments:

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

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.

Subsequent Measurement

For purposes of subsequent measurement, financial assets are classified in four categories:

â¢ Debt instruments at amortised cost

â¢ Debt instruments at fair value through Other Comprehensive Income (FVTOCI)

â¢ Debt instruments, derivatives and equity instruments, mutual funds at fair value

â¢ through profit or loss (FVTPL)

â¢ Equity instruments measured at fair value through other comprehensive income (FVTOCI)

Debt Instruments at Amortised Cost

A ''debt instrument'' is measured at the amortised cost if both the following conditions are met:

a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and

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.

Debt Instrument at FVTOCI

A ''debt instrument'' is classified as at the FVTOCI if both of the following criteria are met:

a) The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and

b) The asset''s contractual cash flows represent SPPI on the principal 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 & 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 re-classified from the equity to Statement of Profit and Loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method.

Debt Instrument at FVTPL

FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorisation as at amortised cost or as FVTOCI, is classified as at FVTPL.

I n 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 Standalone Statement of Profit and Loss.

Equity Instruments

Investment 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 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 of profit or loss 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 Standalone Statement of Profit and Loss.

Impairment of Financial Assets:

Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period. In case of financial assets, the Company follows the simplified approach permitted by Ind AS 109 -Financial Instruments - for recognition of impairment loss allowance. The application of simplified approach does not require the Company to track changes in credit risk of trade receivable. The Company calculates the expected credit losses on trade receivables using a provision matrix on the basis of its historical credit loss experience.

De-recognition of Financial Assets:

The Company de-recognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the

Company continues to recognise the financial asset and also recognises an associated liability.

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 Other Comprehensive Income and accumulated in other equity is recognised in Standalone Statement of Profit and Loss.

Financial Liabilities and Equity Instruments:

Classification as Debt or Equity:

Debt and equity instruments, issued by the Company, are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

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 as fair value through profit or loss:

â¢ Loans and borrowings,

â¢ Payables, or

â¢ 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 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 at FVTPL:

purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Company 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 Standalone 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.

Loans and Borrowings:

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the Effective Interest Rate (EIR) method. Gains and losses are recognised in the Statement of Profit and Loss when the liabilities are de-recognised as well as through the EIR amortisation process.

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 Standalone Statement of Profit and Loss.

Financial Guarantee Contracts:

Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the holder for a loss it incurs, because the specified debtor fails to make a payment when due, in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109, and the amount recognised less cumulative amortisation.

De-recognition of Financial Liabilities:

The Company de-recognises financial liabilities when and only when, the Company''s obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability de-recognised and the consideration paid and payable is recognised in Standalone 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 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 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 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.

Offsetting of Financial Instruments:

Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet, if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

.23 Revenue Recognition:

(a) Revenue from contracts with customers;

â¢ Revenue is recognised on the basis of approved contracts regarding the transfer of goods or services to a customer for an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services.

â¢ Revenue is measured at the fair value of consideration received or receivable taking into account the amount of discounts, incentives, volume rebates, outgoing taxes on sales. Any

amounts receivable from the customer are recognised as revenue after the control over the goods sold are transferred to the customer which is generally on dispatch of goods.

â¢ Variable consideration - This includes incentives, volume rebates, discounts etc. It is estimated at contract inception considering the terms of various schemes with customers and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved. It is reassessed at end of each reporting period.

â¢ Significant financing component - Generally, the Company receives short-term advances from its customers. Using the practical expedient in Ind AS 115, the Company does not adjust the promised amount of consideration for the effects of a significant financing component if it expects, at contract inception, that the period between the transfer of the promised good or service to the customer and when the customer pays for that good or service will be one year or less.

(b) Dividend income is accounted for when the right to receive the income is established.

(c) 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.

(d) Insurance, railway and other claims, where quantum of accruals cannot be ascertained with reasonable certainty, are accounted on acceptance basis.

1.24 Leases:

The Company assesses whether a contract contains a lease, at the inception of the contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration, To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether -the contract involves the

use of identified asset; -the Company has substantially all of the economic benefits from the use of the asset through the period of lease and; -the Company has the right to direct the use of the asset.

As a lessee

The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain re-measurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, Company''s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

Mar 31, 2019

CORPORATE INFORMATION

Grasim Industries Limited (âthe Companyâ) 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 Companyâs Global Depository Receipts are listed on the Luxembourg Stock Exchange.

1.1.1 Details of Property Plant and Equipment capitalised under Finance Lease:

Leased assets are pledged as security for the related finance lease liabilities {refer Note 2.18.1 (ii)}

Plant and Equipment is Nil (Previous Year Gross Block Rs. 0.74 Crore and Net block Rs. 0.03 Crore) {refer Note4.7.3 (iii)}

1.1.2 Shaktiman Mega Food Park Limited has ceased to a subsidiary w.e.f. 22^nd February 2019 as the companyâs name struck off under section 248 of the Companies Act, 2013.

1.1.3 Aditya Birla Chemicals (Belgium) BVBA has ceased to be subsidiary w.e.f. 21^st January 2019 as the Company has divested its entire holding in Aditya Birla Chemicals (Belgium) BVBA.

1.1.4 During the year ended 31^st March 2019, the Company has acquired stakes in Aditya Birla Solar Limited and Aditya Birla Renewables Limited from its Joint Venture partners, hence status of Aditya Birla Solar Limited and Aditya Birla Renewables Limited has changed from Joint Venture to Subsidiary of the Company w.e.f. 15^th May 2018.

1.1.5 The Company has acquired 100% equity shareholding of Grasim Premium Fabric Private Limited [formerly known as Soktas India Private Limited (SIPL)] from its promoters SOKTAS Tekstil Sanayi Ve Ticaret A.S., Turkey against cash consideration. Consequent to acquisition, SIPL has become a wholly owned Subsidiary of the Company, w.e.f. 29^th March 2019.

1.1.6 The investments in the Companyâs Joint Ventures, AV Group NB Inc., AV Terrace Bay Inc., Birla Jingwei Fibres Company Limited and Aditya Group AB are subject to maintenance of specified 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 Joint Ventures 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.

1.2.1 The Company follows suitable provisioning norms for writing down the value of Inventories towards slow moving, non-moving and surplus inventory.

Write down of Inventories (Net of reversals) for the year Rs. 3.01 Crore (Previous year Rs. 3.99 Crore). Inventory values shown above are net of the write down.

1.2.2 Working Capital Borrowings are secured by hypothecation of inventories of the Company.

1.3.1 Working Capital Borrowings are secured by hypothecation of Book debts of the Company

1.4.1 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, Joint Ventures and Associates:

The Loans have been utilised for meeting the business requirements by respective companies.

(b) Refer Note 2.3 and Note 2.4 for investments in Subsidiaries, Associates and Joint Ventures.

Shares kept in Abeyance

Pursuant to provisions of Section 126 of the Companies Act, 2013, the issue of 61,985 Equity Shares (previous year 61,985 Equity Shares) are kept in abeyance.

1.5.1 Rights, Preferences and Restrictions attached to Equity Shares

The Company has only one class of Equity Shares having a par value of Rs. 2 per share. Each holder of the Equity Shares is entitled to one vote per share. The Company declares dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of Equity Shares held by the Shareholders.

1.5.2 The Company does not have any Holding Company.

1.5.3 List of Shareholders holding more than 5% Shares in the Equity Share Capital of the Company

The Description of the nature and purpose of each reserve within equity is as follows:

a. Securities Premium: Securities Premium is credited when shares are issued at premium. It can be used to issue bonus shares, to provide for premium on redemption of shares, write-off equity related expenses like underwriting costs, etc.

b. General Reserve: It is a free reserve, which is created by appropriation from 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.

g. Hedging Reserve: It represents the effective portion of the fair value of forward contracts, designated as cash flow hedge.

h. Employee Stock Option Reserve: The Company has stock option schemes under which options to subscribe for the Companyâs 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.

i. Treasury Shares: The reserve for shares of the Company held by the Grasim Employees Welfare Trust (ESOP Trust).

The Company has issued employees stock option scheme for its employees. The Equity Shares of the Company have been purchased and held by ESOP Trust.

Trust to issue and allot to employees at the time of exercise of ESOP by Employees.

1.6.1 Working Capital Borrowings are secured by hypothecation of stocks and book debts of the Company.

1.6.2 Loan of Rs. 345.82 Crore has been availed by the Company under the Special Banking Arrangement (SBA) of Department of Fertiliser, Government of India, and has been secured against subsidy recoverable from the Government of India. As per the arrangement, the loan will be repaid directly by the Government of India to the Bank and corresponding adjustment will be made in Subsidies recoverable. Rate of interest is 8.20% per annum, out of which interest @ 7.78% per annum will be borne by the Government of India.

1.6.3 The Company had available Undrawn Facility of Rs. 488.74 Crore as on 31^st March 2019 and Rs. 403.93 Crore as on 31^st March 2018.

2.1 Exceptional Items are:

(i) an amount of Rs. 2,368.01 Crore was reported as Exceptional Item. Details of the same are as follows:

(a) During the year, the Companyâs holding in Idea Cellular Limited (Idea), has reduced from 23.13% to 11.55% consequent to the merger of Vodafone India Limited and Vodafone Mobile Services Limited with Idea Cellular Limited effective from 31^st August 2018. The merged entity has been named as Vodafone Idea Limited (VIL). Consequent to reduction of the shareholding of the Company in VIL, it has ceased to be an âAssociateâ of the Company and is considered as a financial investment under Ind AS 109 w.e.f. 31^st August 2018. As a result, the investment in VIL has been fair valued as per Ind AS 28 and the difference in the book value and fair value as on 30^th August 2018 of the said investment amounting to Rs. 2,283.35 Crore has been charged to Statement of Profit and Loss and has been disclosed as an exceptional item. Subsequent change in fair value of investment in VIL has been accounted in Other Comprehensive Income, as per Ind AS 109 âFinancial Instrumentsâ.

(b) t he implementation of Modified NPS-III for payment on account of additional fixed cost to Urea Units by Ministry of Chemicals and Fertilisers, Government of India, has been delayed inordinately, leading to uncertainty in some of aspects of this policy. Accordingly, the Company has provided for Rs. 135.00 Crore.

(c) an amount of Rs. 50.34 Crore towards write-back of provision of Stamp Duty related to merger of Aditya Birla Nuvo Limited and Aditya Birla Chemicals with the Company in earlier years.

(ii) in previous financial year, an amount of Rs. 272.61 Crore was reported as exceptional item. Details of the same are as follows:

(a) an amounts of Rs. 213 Crore for provision made towards acquisition related cost (including Stamp Duty on asset transferred from erstwhile ABNL to the Company).

(b) an amount of Rs. 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 Rs. 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 Rs. 30.43 Crore towards Impairment in value of Property, Plant and Equipment.

3.1 OTHER MONEY FOR WHICH THE COMPANY IS CONTINGENTLY LIABLE:

(b) The Honâble Supreme Court of India (âSCâ) by their order dated February 28, 2019, in the case of Surya Roshani Limited v/s EPFO, set out the principles based on which allowances paid to the employees should be identified for inclusion in basic wages for the purposes of computation of Provident Fund contribution. Subsequently, a review petition against this decision has been filed and is pending before the SC for disposal

The Company is awaiting the outcome of the review petition, and also directions from EPFO, if any, to assess any potential impact on the Company and consequently no adjustments have been made in the books of account

3.2 OPERATING SEGMENTS

The Company has presented segment information in its Consolidated Financial Statements, which are part of the same annual report. Accordingly, in terms of provisions of Accounting Standard on Segment Reporting (Ind AS 108), no disclosure related to the segment are presented in the Standalone Financial Statements.

3.2.1 Disclosure of Related Party Transactions:

Terms and Conditions of Transaction with Related Parties

The transaction with related parties are made in the normal course of business and on terms equivalent to those that prevail in armâs length transactions. Outstanding balances at the year-end are unsecured and interest-free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. The above transactions are as per approval of Audit Committee.

3.3. RETIREMENT BENEFITS:

3.3.1 Defined Benefit Plans as per Actuarial Valuation:

Gratuity (funded by the Company):

The Company operates a Gratuity Plan through a Trust for its all employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of service, whichever is earlier, of an amount equivalent to 15 to 30 daysâ salary for each completed year of service as per rules framed in this regard. Vesting occurs upon completion of five continuous years of service in accordance with Indian law. In case of majority of employees, the Companyâs scheme is more favourable as compared to the obligation under payment of Gratuity Act, 1972.

The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method as prescribed by the Ind AS-19 - âEmployee Benefitsâ, 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:

Pension:

The Company provides pension to few retired employees as approved by the Board of Directors of the Company.

Inherent Risk:

The Company provides pension to few retired employees as approved by the Board of Directors of the Company.

(i) There are no amounts included in the Fair Value of Plan Assets for:

a) The Companyâs own financial instrument

b) Property occupied by or other assets used by the Company

(ii) Basis used to determine Discount Rate:

Discount rate is based on the prevailing market yields of Indian Government securities as at the Balance Sheet date, applicable to the period over which the obligation is to be settled.

(iii) Asset Liability matching Strategy:

The money contributed by the Company to the fund to finance the liabilities of the plan has to be invested.

The trustees of the plan are required to invest the funds as per the prescribed pattern of investments laid out in the Income Tax Rules for such approved schemes. Due to the restrictions in the type of investments that can be held by the fund, it is not possible to explicitly follow an asset-liability matching strategy to manage risk actively.

There is no compulsion on the part of the Company to fully pre fund the liability of the Plan. The Companyâs philosophy is to fund the benefits based on its own liquidity and tax position as well as level of under funding of the plan.

(iv) Salary Escalation Rate:

The estimates of future salary increases are considered taking into account inflation, seniority, promotion, increments and other relevant factors.

(v) Sensitivity Analysis:

Sensitivity Analysis have been calculated to show the movement in Defined Benefit Obligations in isolation and assuming there are no other changes in market condition at the accounting date. There have been no changes from the previous periods in the methods and assumptions used in preparing the sensitivity analysis.

(vi) The best estimate of the expected contribution for the next year amounts to Rs. 20 Crore (Previous Year Rs. 20 Crore).

3.3.1.1 Compensated Absences:

The obligation for compensated absences is recognised in the same manner as gratuity, amounting to charge of Rs. 33.61 Crore (Previous Year Rs. 11.40 Crore).

3.3.1.2 The details of the Companyâs Defined Benefit Plans in respect of the Company managed Provident Fund Trust:

Contribution to the recognised provident fund are substantially defined contribution plan.The Company is liable for any shortfall in the fund assets based on the Government specified rate of return. Such shortfall, if any, is recognised in the Statement of Profit and Loss as an expense in the year of incurring the same.

Amount recognised as expense and included in the Note 3.6 as âContribution- Company owned Provident Fundâ is Rs. 24.77 Crore (Previous Year Rs. 17.03 Crore) and Amount recognized as preoperative expense and included in Note 2.1.7 as âContribution-Company owned Provident Fundâ is Rs. 0.76 Crore.

The actuary has provided for a valuation and based on the below provided assumption there is no interest shortfall as at 31^st March 2019 and 31^st March 2018.

3.4.1 Government Grants (Ind AS 20)

The Company has received interest-free loans of Rs. 18.03 Crore (Previous Year Rs. 8.13 Crore) from a State Government, repayable in full after seven years. Using prevailing market interest rate in range of 7.66%-8.70% p.a. (Previous Year 7.66% p.a.) for an equivalent loan, the fair value of loan at initial recognition is estimated at Rs. 9.95 Crore (Previous Year Rs. 4.76 Crore).The difference of Rs. 8.08 Crore (PreviousYear Rs. 3.37 Crore) between gross proceeds and fair value of loan is the government grant which will be recognised in the Statement of Profit and Loss over the period of loan.

The Company has also received a subsidised loan of Rs. 100 Crore (Previous Year Rs. 62.50 Crore) @ 5% p.a. and 0.50% royalty on net sale from a Central Government, repayable in nine equal half yearly installments starting from 01.04.2020. Using prevailing market interest rate of 7.94% p.a. for an equivalent loan, the fair value of loan at initial recognition is estimated at Rs. 92.99 Crore (Previous Year Rs. 56.19 Crore). The difference of Rs. 7.01 Crore (Previous Year Rs. 6.31 Crore) between gross proceeds and fair value of loan is the government grant which will be recognised in the Statement of Profit and Loss over the period of loan.

Cumulative loan interest-free and interest at subsidised rate received from the government is Rs. 118.03 Crore (Previous Year Rs. 86.28 Crore). Accordingly, an amount of Rs. 1.46 Crore (Previous Year Rs. 0.88 Crore) has been recognised as income in the current year and correspondingly equivalent amount has been accounted as an interest expense.

Further, it also includes savings in Import Duty on procurement of capital goods and export incentives under MEIS scheme.

III) General Description of Leasing Agreements:

(i) Lease Assets: Godowns, Offices, Residential Flats, Showroom and Others.

(ii) Future Lease Rentals are determined on the basis of agreed terms.

(iii) At the expiry of lease terms, the Company has an option to return the assets or extend the term by giving notice in writing.

The Company had entered into finance lease arrangements for computer servers from a vendor. The finance obligation is secured by a charge against the said assets.

B. Company as a Lessee

The Company has given certain assets on lease for which rental income earned during the current year is Rs. 3.12 Crore (Previous year Rs. 3.33 Crore). These lease arrangement are normally renewed on expiry, wherever required.

3.4.2 Corporate Social Responsibility:

The Company has spent Rs. 47.14 Crore on Corporate Social Responsibility Projects/Initiatives during the year (Previous Year Rs. 29.84 Crore).

The amount required to be spent under Section 135 of the Companies Act, 2013, for the year ended 31^st March 2019 is Rs. 33.97 Crore (Previous Year Rs. 29.01 Crore) i.e. 2% of average net profits for last three financial years, calculated as per Section 198 of the Companies Act, 2013.

3.4.3 Assets Held for Disposal (Ind AS 105):

The Company has identified certain assets amounting to Rs. 1.23 Crore (Previous Year Rs. 2.54 Crore) to be disposed off likeTurbo Generator, Field Breaker, Wound Stator, Mould Holding System, Fork Lift, Hydraulic Pallet Truck, Water Cooler, Electric Motor, Cement Mixer, Heat exchanger, etc. which are not in use by the Company. The Company is in the process of discussion with various potential buyers and expects the same to be disposed off within next twelve months.

3.4.4 Revenue (Ind AS 115)

I) The Company has adopted Ind AS 115 âRevenue from Contracts with Customersâ effective from 1^st April 2018, adhering to the full retrospective approach. The application of Ind AS 115 did not have any significant impact in these financial statements. All sales are made at a point in time and revenue recognised upon satisfaction of the performance obligations which is typically upon dispatch/delivery. The Company has a credit evaluation policy based on which the credit limits for the trade receivables are established, the Company does not give significant credit period, resulting in no significant financing component.

II) Revenue recognised from Contract Liabilities (Advances from Customers):

The contract liabilities outstanding at the beginning of the year have been recognised as revenue during the year ended March 31, 2019.

3.5 SHARE BASED PAYMENTS (Ind AS 102)

3.5.1 21,72,121 Equity Shares of Face Value of Rs. 2 each (Previous Year 10,39,210 Equity Shares of Face Value of Rs. 2 each) are reserved for issue under Employee Stock Option Scheme-2006 (ESOS-2006), Employee Stock Option Scheme, 2013 (ESOS-2013) and Employee Stock Option Scheme, 2018 (ESOS-2018)

a. Under the ESOS-2006, the Company has granted 4,42,675 Options to its eligible employees, the details of which are given hereunder:

c. During the year, the Committee of the Board of Directors of the Company granted 1,398,864 Options and Restricted Stock Units (RSUs) to the eligible employees of the Company, under the Grasim Employee Stock Options Scheme 2018 (âthe Schemeâ).

The Scheme is being implemented through a trust, viz. Grasim Employeeâs Welfare Trust (âthe Trustâ). The Trust has purchased 1,357,375 equity shares of the Company from market as per the Scheme. The details of the Scheme are given hereunder:

3.5.2 Movement of Options and RSUs Granted along with Weighted-Average Exercise Price (WAEP)

3.5.3.1 For Options referred to in 4.8.1(a), (b) and (c)

The weighted-average share price at the date of exercise for options was Rs. 602.09 per share (31^st March 2018 Rs. 1,086 per share) and weighted-average remaining contractual life for the share options outstanding as at 31^st March 2019, was 2.35 years (31^st March 2018: 2.97 years).

The weighted-average share price at the date of exercise for options was Rs. 1,035.75 per share and weighted average remaining contractual life for the share options outstanding as at 31^st March 2019 was 2.76 years (31^st March 2018: 3.41 years).

The weighted average share price at the date of exercise for SARs was Rs. 354.64 per share (31^st March 2018 Rs. 1083.5 per share) and weighted-average remaining contractual life for the SARâs outstanding as at 31^st March 2019, was 2.2 years (31^st March 2018: 3.4 years).

3.6 FINANCIAL INSTRUMENTS - DISCLOSURE, ACCOUNTING CLASSIFICATIONS AND FAIR VALUE MEASUREMENTS (Ind AS 107)

A. Disclosure of Financial Instruments:

i. Investments in Equity Instruments (other than Subsidiaries, Joint Ventures and Associates) designated at FVTOCI

These investments have been designated on initial recognition to be measured at FVTOCI as these are strategic investment and are not intended for sale.

ii. Investment in Debentures and Bonds measured at FVTOCI

Investments in Debentures or Bonds meet the contractual cash flow test as required by Ind AS 109-Financial Instruments. However, the business Model of the Company is such that it does not hold these investments till maturity as the Company intends to sell these investments as an when need arises. Hence, the same have been measured at FVTOCI.

iii. Investment in Mutual Fund Units and Preference Shares measured at FVTPL

C. Fair Value Measurements (Ind AS 113):

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.

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 maximize 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 dealerâs 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.

During the reporting period ending 31^st March 2019 and 31^st March 2018, there was no transfer between level 1 and level 2 fair value measurement.

3.6.1 Key Inputs for Level 1 and 2 Fair valuation Technique :

1. Mutual Funds : Based on Net Asset Value of the Scheme (Level 2)

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)

4. Derivative Liabilities (Level 2)

(a) The fair value of interest rate swaps is calculated as the present value of estimated future cash flows based on observable yield curves and an appropriate discount factor.

(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.

3.6.4 Relationship of Unobservable Inputs to Level 3 fair values (Recurring):

A. Equity Investments - Unquoted (for Equity Shares where Discounted Cash Flow Method is used):

A 100 bps increase/decrease in the Weighted Average Cost of Capital (WACC) or discount rate used while all other variables were held constant, the carrying value of the shares would decrease by Rs. 16.49 Crore or increase by Rs. 21.75 Crore (as at 31^st March 2018: decrease by Rs. 12.35 Crore or increase by Rs. 16.21 Crore).

B. Preference Shares:

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 Rs. 4.25 Crore or increase by Rs. 4.57 Crore (as at 31^st March 2018: decrease by Rs. 5.36 Crore or increase by Rs. 5.74 Crore).

3.7 FINANCIAL RISK MANAGEMENT OBJECTIVES (IND AS 107)

The Companyâs principal financial liabilities, other than derivatives, comprise of borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Companyâs operations. The Companyâs principal financial assets, other than derivatives, include trade and other receivables, investments and cash and cash equivalents that arise directly from its operations.

The Companyâs activities expose it to market risk, liquidity risk and credit risk.

The Companyâs 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.

Details relating to the risks are provided here below:

A. Foreign Exchange Risk:

Foreign exchange risk is the risk of impact related to fair value or future cash flows of an exposure in foreign currency, which fluctuate due to changes in foreign exchange rates. The Companyâs exposure to the risk of changes in foreign exchange rates relates to import of fuels, raw materials and spare parts, plant and equipment, exports and foreign currency borrowings.

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.

(i) Foreign Currency Sensitivity:

The sensitivities are based on financial assets and liabilities held at 31^st March 2019 are not denominated in Indian Rupees. The sensitivities do not take into account the Companyâs sales and costs and the results of the sensitivities could change due to other factors such as changes in the value of financial assets and liabilities as a result of non-foreign exchange influenced factors.

(ii) Hedging Activities and Derivatives:

The Company evaluates exchange rate exposure arising from foreign currency transactions. The Company uses various derivative financial instruments, such as foreign exchange forward contracts, option contracts, future contracts and currency swaps to manage and mitigate its exposure to foreign exchange risk. The Company reports periodically to its risk management committee, the foreign exchange risks and compliance of the policies to manage its foreign exchange risk.

The Company assesses hedge effectiveness based on the following criteria:

(i) an economic relationship between the hedged item and the hedging instrument;

(ii) the effect of credit risk; and

(iii) assessment of the hedge ratio

The Company designates the forward exchange contracts to hedge its currency risk and generally applies a hedge ratio of 1:1. The Companyâs policy is to match the tenor of the forward exchange contracts with the hedged item.

B. Interest Rate Risk:

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in prevailing market interest rates.The Companyâs exposure to the risk due to changes in interest rates relates primarily to the Companyâs short-term borrowings (excluding commercial paper) with floating interest rates. For all long-term borrowings in foreign currency with floating interest rates, the risk of variation in the interest rates is mitigated through interest rate swaps. The Company constantly monitors the credit markets and revisits its financing strategies to achieve an optimal maturity profile and financing cost.

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.

The Companyâs manages its interest rate risk by having a balanced portfolio of fixed and variable rate borrowings, which is monitored on continuous basis. The Companyâs exposure to the risk of changes in market interest rates relates primarily to the Companyâs short term borrowing (excluding commercial paper) 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).

C. Equity Price Risk:

The Company is exposed to equity price risk arising from Equity Investments (other than Subsidiaries, Joint Ventures and Associates, which are carried at cost).

Equity Price Sensitivity Analysis:

The Sensitivity analysis below has been determined based on the exposure to equity price risk at the end of the reporting period.

If equity prices of the quoted investments increase/decrease by 5%, Other Comprehensive income for the year ended 31^st March 2019 would increase/decrease by Rs. 306.12 Crore (for the year ended 31^st March 2018 by Rs. 186.61 Crore).

D. Credit Risk:

The carrying amount of financial assets represents the maximum credit risk exposure.

(i) Trade Receivables:

Total Trade receivables as on 31^st March 2019 is Rs. 3,484.07 Crore (31^st March 2018: Rs. 2,609.32 Crore)

The Company does not have higher concentration of credit risks to a single customer. Single largest customers of all businesses have exposure of 3.26% of total sales (31^st March 2018: 4.20%) and in receivables 2.29% (31^st March 2018: 2.72%).

The ageing analysis of the receivables (net of provision) has been considered from the date the invoice falls due.

However, total write off against receivables are Rs. 3.65 Crore of the outstanding receivables for the current year (previous year Nil).

(ii) Investments, Derivative Instruments, Cash and Cash Equivalents and Bank Deposits:

Credit Risk on Derivative Instruments is generally low as the Company enters into the Derivative Contracts with the reputed Banks.

Compliances of these policies and principles are reviewed by internal auditors on periodical basis.

Total Non-current and current investments as on 31^st March 2019 is Rs. 31,127.57 Crore (31^st March 2018 Rs. 35,546.59 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 credit facilities to meet obligations when due. The Companyâs 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. Management monitors the Companyâs 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.

F. Capital Management:

For the purposes of the Companyâs capital management, capital includes issued capital, share premium and all other equity reserves attributable to the equity holders.

The Company monitors capital using debt-equity ratio, which is total debt less investments divided by total equity.

In addition, the Company has financial covenants relating to the borrowing facilities that it has taken from the lenders like interest coverage service ratio, Debt to EBITDA, etc. which is maintained by the Company.

3.8 BUSINESS COMBINATION (IND AS 103)

A) Scheme of Arrangement for Merger of Aditya Birla Nuvo Ltd. (ABNL) with the Company and demerger of Financial Services business into Aditya Birla Capital Ltd.(ABCL) (earlier known as Aditya Birla Financial Services Ltd.)

On 11^th August 2016,the Board of Directors of the Company had approved a composite Scheme of Arrangement between the Company, ABNL and ABCL (a wholly owned Subsidiary of ABNL) and their respective shareholders and creditors for merger of ABNL with the Company and the subsequent demerger of itâs financial services business into ABCL and consequent listing of equity shares of ABCL.

The Major Rationale for merger of ABNL:

a. Stronger parentage for financial service business : Financial service business is likely to benefit from lower cost of funds, given strong credit rating of the Company.

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 previous year, the merger had become effective from 1^st July 2017, hence ABNL ceased to exist effective from 1^st July 2017 and demerger of financial services business into ABCL had also become effective from 4^th July 2017 in terms of scheme.

Further, the Company had issued 19,04,62,665 equity shares on 9^th July 2017 to the shareholders of ABNL in the ratio of 15 (fifteen) equity Shares of Rs. 2/- each fully paid up against 10 (ten) equity shares of Rs. 10/- each fully-paid up of ABNL held by them on the record date for this purpose. As a result the Companyâs paid up share capital has increased from Rs. 93.37 Crore to Rs. 131.47 Crore.

The Value for the said transaction was Rs. 23,657.37 Crore based on market price of company as on 30^th June 2017.

On account of demerger of financial services business, ABCL has issued itâs equity shares in the ratio of 7 (seven) equity shares of Rs. 10 each fully paid-up in respect of 5 (five) equity shares of Rs. 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 31^st March 2018, erstwhile ABNL had contributed revenue of Rs. 4,062.51 Crore and profit before tax of Rs. 318.68 Crore to the Group results. If the merger had occurred on 1^st April 2017, the consolidated revenue and profit before tax for the year ended 31^st March 2018 would have been Rs. 5,416.68 Crore and Rs. 424.91 Crore respectively based on the amounts extrapolated by the management. In determining these amounts, management had assumed that the fair value adjustments, that arose on the date of merger would have been same if the merger had occurred on 1^st April 2017

(i) Identifiable Assets acquired and Liabilities Assumed

The following table summarises the recognised amounts for the assets acquired and liabilities assumed at the date of acquisition of ABNL and subsequent demerger of ABCL.

The gross contractual amounts and fair value of Trade and Other receivable acquired Rs. 1,287.21 Crore. However, Rs. 43.56 Crore of the Trade and Other Receivables are credit impaired and the balance Rs. 1,243.65 Crore is expected to be recoverable.

(iii) Note on Capital reserve arising:-

Capital reserve had arised as Swap Ratio was decided on the basis of Share price as on 11^th August 2016 (date of Announcement of Merger) and Purchase Consideration was determined on date on which control was transferred i.e. 1^st July 2017.

(v) The figures given above are based on fair valuation completed during the year for one of associate which was under progress in previous year.

B) Arrangement with Century T extiles and Industries Limited (âCTILâ) for obtaining right and responsibility to manage, operate, use and control the Viscose Filament Yarn (âVFYâ) business of CTIL.

The Board of Directors of the Company at their meeting held on 12^th December 2017 had 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 FilamentYarn (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 had become effective from 1^st 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.

The major rationale for such arrangement:

a. Grasim with its new SSY technology & CTILâs presence in Rayon tyre yarn would offer significant growth prospects.

b. Synergy potential in plant and sales operations would provide additional benefits

c. Potential to leverage brand strength in value chain

d. Capex light capacity expansion compared to a Greenfield expansion

In terms of the agreement, the Company has discharged consideration in the following manner:

(i) Commuted royalty amounting to Rs. 600 Crore.

(ii) Time value of money of interest free deposit Rs. 161.40 Crore.

(iii) Net working capital at closing is Rs. 103.31 Crore.

For the two months period ended 31^st March 2018, the said VFY business unit had contributed revenue of Rs. 161.28 Crore and profit before tax of Rs. 8.58 Crore (including fair valuation impact of Finished goods Inventory) to the Group results. If the said arrangement had occurred on 1^st April 2017, the consolidated revenue and profit before tax for the year ended 31^st March 2018 would have been Rs. 967.68 Crore and Rs. 51.48 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 arrangement had been same as if the arrangement occurred on 1^st April 2017.

The gross contractual amounts and fair value of trade and other receivable acquired Rs. 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 based on the fair valuation of assets and liabilities completed during the year which was under progress in previous year.

Acquisition Related Costs

Acquisition related costs of Rs. 1.77 Crore (including stamp duty) had been recognised under Miscellaneous Expenses and Rates and Taxes in the previous yearâs Statement of Profit and loss.

3.9 Acquisition of Asset from KPR Industries India Limited (KIIL)

The Company has acquired the Chlor Alkali business of KPR Industries India Limited by way of slump sale, for a cash consideration of Rs. 253 Crore. The business consist of an under-construction ChlorAlkali plant of 200 TPD capacity at Balabhadrapuram, Andhra Pradesh. The Company has taken over the identified assets and identified liabilities associated with the business.

The following table summarises the apportionment of amounts of assets and identified liabilities acquired based on fair valuation on the date of acquisition.

(b) Ind AS 21 - The effect of changes in Foreign Exchange Rates:

The amendment clarifies on the accounting of transactions that include the receipt or payment of advance consideration in a foreign currency. The appendix explains that the date of the transaction, for the purpose of determining the exchange rate, is the date of initial recognition of the non-monetary prepayment asset or deferred income liability. If there are multiple payments or receipts in advance, a date of transaction is established for each payment or receipt. The Company is evaluating the impact of this amendment on its financial statements.

3.10 Recent Accounting Pronouncements

Ministry of Corporate Affairs (âMCAâ) has notified following amendments to Ind AS on 30^th March 2019 which is effective for the annual period beginning on or after 1^st April 2019.

(a) Ind AS 116 âLeasesâ:

On 30^th March 2019, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) Amendment Rules, 2019, notifying Ind AS 116 âLeasesâ which replaces Ind AS 17 âLeasesâThe new standard (Ind AS 116) introduces a single on-balance sheet lease accounting model for lessee. This will result in the company recognising right of use assets & lease liability in the books.

The Company is in the process of analysing the impact of Ind AS 116 on its financials.

(b) Ind AS 12 - Appendix C, Uncertainty over Income Tax Adjustments

The amendment requires an entity to determine probability of the relevant tax authority accepting the uncertain tax treatment that the Company has used in tax computation or plan to use in their income tax filings.

The amendment clarifies that an entity shall recognise the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the entity originally recognised those past transactions or events.

(d) Ind AS 19 - Plan amendment, curtailment or settlement

The amendments require an entity to use updated assumptions to determine current service cost and net interest for the remainder of the period after a plan amendment, curtailment or settlement and to recognise in profit or loss as part of past service cost, or a gain or loss on settlement, any reduction in a surplus, even if that surplus was not previously recognised because of the impact of the asset ceiling.

Based on preliminary assessment, the Company does not expect any significant impact on its financial statements on account of above (b), (c) and (d) amendments.

3.11 Other income for previous year ended 31^st March 2018 includes reversal of earlier yearsâ provision of Rs. 9.10 Crore related to contribution towards District Mineral Fund (DMF) under the Mines and Mineral (Development and Regulation) Amendment Act, 2015, on the basis of Supreme Court Judgment dated 13^th October 2017.

3.12 Previous yearâs figures have been regrouped/ reclassified to conform to current yearâs presentation and not comparable due to the merger of ABNL with the Company in previous year w.e.f. 1^st July 2017 and for arrangement for rights and responsibility to manage, operate, use and control were acquired by the Company with CTIL in previous year w.e.f. 1^st February 2018.

3.13 Figures less than Rs. 50,000 have been shown at actual, wherever statutorily required to be disclosed, as the figures have been rounded off to the nearest lakh.

Mar 31, 2018

The provident fund contribution, as specified under the law, is paid to the Regional Provident Fund Commissioner. Defined Benefit Plans:

The obligation in respect of defined benefit plans, which covers Gratuity, Pension and other post-employment medical benefits, are provided for on the basis of an actuarial valuation at the end of each financial year using project unit credit method. Gratuity is funded with an approved trust.

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 setup by the Company is additionally provided for. Actuarial losses/gains are recognized 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 recognized in the Other Comprehensive Income in the period in which they occur.

Re-measurement recognized in other comprehensive income is reflected immediately in retained earnings, and will not be reclassified to profit or loss. Defined benefit costs are categorized as follows:

- service 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''.

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, recognized 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.

Other Long-term Benefits:

Long-term compensated absences are provided for on the basis of an actuarial valuation at the end of each financial year. Actuarial gains/losses, if any, are recognized immediately in the Statement of Profit and Loss.

1.18 Employee Stock Options:

Equity-settled Transactions

Equity-settled share-based payments to employees are measured by reference to the fair value of the equity instruments at the grant date using Black Scholes Model.

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, amortized 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

1.19 Foreign Currency Transactions:

In preparing the financial statements of the Company, transactions in foreign currencies, other than the Company''s functional currency, are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary assets and liabilities denominated in foreign currencies are translated at the rate prevailing at that date. Non-monetary items that are measured in terms of historical cost in a foreign currency are not re-translated.

Exchange differences on monetary items are recognized in the Statement of Profit and Loss in the period in which these arise, except for:

- exchange differences on foreign currency borrowings relating to assets under construction for future 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

1.20 Derivative Financial Instruments and Hedge Accounting:

The Company enters into forward contracts to hedge the foreign currency risk of firm commitments and highly probable forecast transactions. Derivatives are initially recognized at fair value at the date the derivative contracts are entered into, and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized 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 recognized 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 recognized immediately in the Statement of Profit and Loss.

Amounts previously recognized 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 recognized in other comprehensive income and accumulated in equity at that time remains in equity and is recognized when the forecast transaction is ultimately recognized 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 recognized immediately in the Statement of Profit and Loss.

1.21 Fair Value Measurement:

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 Company.

The Company 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 minimizing the use of unobservable inputs.

All assets and liabilities (for which fair value is measured or disclosed in the financial statements) are categorized 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 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

Level 2 â 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 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For assets and liabilities that are recognized 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.

1.22 Financial Instruments:

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Financial Assets:

Initial Recognition and Measurement:

All financial assets are recognized 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 recognized on the trade date,

i.e., the date that the Company commits to purchase or sell the asset.

Subsequent Measurement:

For purposes of subsequent measurement, financial assets are classified in four categories:

- Debt instruments at amortized cost

- Debt instruments at Fair Value through Other Comprehensive Income (FVTOCI)

- 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)

Debt Instruments at Amortized Costs:

A ''debt instrument'' is measured at the amortized cost, if both the following conditions are met:

a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and

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 amortized cost using the effective interest rate (EIR) method. Amortized 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 amortization is included in finance income in the profit or loss. The losses arising from impairment are recognized in the profit or loss. This category generally applies to trade and other receivables.

Debt instrument at FVTOCI

A ''debt instrument'' is classified as at the FVTOCI, if both of the following criteria are met:

a) The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and

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 recognized in the Other Comprehensive Income (OCI). However, the Company recognizes 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 recognized 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.

Debt Instrument at FVTPL

FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.

In addition, the Company may elect to designate a debt instrument, which otherwise meets amortized 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

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 recognized in the OCI. There is no recycling of the amounts from OCI to the Statement of Profit and Loss, even on sale of investment.

Impairment of Financial Assets:

Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period. In case of trade receivables and other financial assets, the Company follows the simplified approach permitted by Ind AS 109 - Financial Instruments - for recognition of impairment loss allowance. The application of simplified approach does not require the Company to track changes in credit risk of trade receivable. The Company calculates the expected credit losses on trade receivables using a provision matrix on the basis of its historical credit loss experience.

De-recognition of Financial Assets:

The Company de-recognizes a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognizes its retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognize the financial asset and also recognizes an associated liability.

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 recognized in the Other Comprehensive Income and accumulated in equity is recognized in the Statement of Profit and Loss.

Financial Liabilities and Equity Instruments:

Classification as Debt or Equity:

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 recognized 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 recognized initially at fair value and in the case of loans and borrowings and payables, are recognized 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 at FVTPL:

Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as at FVTPL. Financial liabilities are classified as held for trading, if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Company 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 recognized 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.

Loans and Borrowings:

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the Effective Interest Rate (EIR) method. Gains and losses are recognized in the Statement of Profit and Loss when the liabilities are derecognized as well as through the EIR amortization process.

Amortized 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 amortization is included as finance costs in the Statement of Profit and Loss.

Financial Guarantee Contracts:

Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the holder for a loss it incurs, because the specified debtor fails to make a payment when due, in accordance with the terms of a debt instrument. Financial guarantee contracts are recognized initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109, and the amount recognized less cumulative amortization.

De-recognition of Financial Liabilities:

The Company de-recognizes financial liabilities when, and only when, the Company''s obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability de-recognized and the consideration paid and payable is recognized 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 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. Reassessment 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 recognized in profit or loss, unless designated as effective hedging instruments.

Offsetting of Financial Instruments:

Financial assets and financial liabilities are offset, and the net amount is reported in the Balance Sheet, if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.

1.23 Revenue Recognition:

Revenue is recognized to the extent that it is probable that the economic benefit will flow to the Company and the revenue can be reliably measured.

(a) Sales are recognized 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. Fertilizer price support under Company Concession and other Scheme of Government of India is recognized 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 recognized (net of GST as applicable) as they are rendered, based on agreement/ arrangement with the concerned customers.

(d) For all financial instruments measured at amortized 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 recognized 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.

1.24 Borrowing Costs:

Borrowing cost includes interest expense, amortization of discounts, hedge related cost incurred in connection with foreign currency borrowings, ancillary costs incurred in connection with borrowing of funds and exchange difference, arising from foreign currency borrowings, to the extent they are regarded as an adjustment to the interest cost.

Borrowing costs, that are attributable to the acquisition or construction or production of a qualifying asset, are capitalized 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 recognized 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 capitalization. All other borrowing costs are recognized in the Statement of Profit and Loss in the period in which they are incurred.

1.25 Government Grants and Subsidies:

Government Grants are recognized when there is a reasonable assurance that the same will be received and all attached conditions will be complied with. When the grant relates to an expense item, it is recognized in the Statement of Profit and Loss by way of a deduction to the related expense on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, it is recognized as income on a systematic basis over the expected useful life of the related asset.

Government grants, that are receivable towards capital investments under State Investment Promotion Scheme, are recognized 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 recognized 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.

1.26 Provision for Current and Deferred Tax:

Current Income Tax:

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the countries where the Company operates and generates taxable income.

Current income tax, relating to items recognized outside profit or loss, is recognized outside profit or loss (either in Other Comprehensive Income or in equity). Current tax items are recognized 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 recognized 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 recognized for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognized 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 utilized. Unrecognized deferred tax assets are re-assessed at each reporting date, and are recognized 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 realized 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 recognized outside profit or loss, is recognized outside profit or loss (either in Other Comprehensive Income or in equity). Deferred tax items are recognized 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.

1.27 Minimum Alternate Tax (MAT):

MAT is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal Income Tax during the specified period. In the year in which the MAT credit becomes eligible to be recognized, it is credited to the Statement of Profit and Loss and is considered as (MAT Credit Entitlement). The Company reviews the same at each Balance Sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay normal Income Tax during the specified period. Minimum Alternate Tax (MAT) Credit are in the form of unused tax credits that are carried forward by the Company for a specified period of time, hence, it is presented with Deferred Tax Asset.

1.28 Provisions and Contingent Liabilities:

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

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.

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 recognized in the financial statements since this may result in the recognition of income that may never be realized. However, when the realization of income is virtually certain, then the related asset is not a contingent asset and is recognized.

Warranty Provisions:

Provisions for warranty-related costs are recognized 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.

1.29 Earnings Per Share (EPS):

Basic earnings per share are calculated by dividing the net profit for the year attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted-average number of equity shares outstanding during the period. The weighted-average number of equity shares outstanding during the period and for all periods presented is adjusted for events such as bonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.

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.

1.30 Significant Accounting Judgments, Estimates and Assumptions:

The preparation of financial statements, in conformity, with the Ind AS requires judgments, estimates and assumptions to be made, that affect the reported amounts of assets and liabilities on the date of the financial statements, the reported amounts of revenues and expenses during the reporting period and the disclosures 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 materialize. Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision to accounting estimates is recognized prospectively in the current and future periods.

(a) Judgments:

I n the process of applying the Company''s accounting policies, the management has made the following judgments, which have the most significant effect on the amounts recognized in the financial statements.

Classification of Aditya Birla Renewable Limited, Aditya Birla Solar Limited and Aditya Birla Idea Payments Bank Limited as Joint Ventures.

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 Renewable Limited

(b) Aditya Birla Solar Limited

(b) Estimates and Assumptions:

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of asset and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

- Useful Lives of Property, Plant and Equipment:

The Company uses its technical expertise along with historical and industry trends for determining the economic life of an asset/component of an asset. The useful lives are reviewed by the management periodically and revised, if appropriate. In case of a revision, the unamortized depreciable amount is charged over the remaining useful life of the assets.

- Measurement of Defined Benefit Obligations:

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

- Recognition of Deferred Tax Assets:

Availability of future taxable future profit against which the tax losses carried forward can be used.

- Recognition and Measurement of Provisions and Contingencies:

Key assumptions about the likelihood and magnitude of an outflow of resources.

- Fair Value Measurement of Financial Instruments:

When the fair value of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair values are measured using valuation techniques including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable market where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include consideration of input such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

- 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.

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

- Business Combination and Goodwill/Capital Reserve:

(a) Fair Valuation of Intangible Assets:

The Company has used income approach (e.g., 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 cashflows over the life of the intangible assets accruing to the Company, by virtue of the transaction. The resulting post-tax cash flows for each of the years are recognized at their present value using a Weighted-Average Cost of Capital (''WACC'') relating to the risk of achieving the intangible assets projected savings.

(b) Fair Valuation of Tangible Assets:

Freehold Land:

Freehold land is fair valued using the sales comparison method using prevailing rates of similar plots of land, circle rates provided by relevant regulatory authorities and other acceptable valuation techniques.

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 capitalization of all the indirect cost, these trends are on the basis of price indices obtained from recognized sources.

The fair value of loans given/borrowed has been estimated by considering the cash flows, future credit losses and the rate of prepayments for each loan. Projected annual cash flows were then discounted to present value based on a market rate for similar loans.

The allowance for loan losses, associated with the acquired loans, were evaluated by the management and recorded.

The Current Assets and Liabilities are taken at fair value on the date of acquisition .

1.31 Cash Dividend to Equity Holders of the Company:

The Company recognizes a liability to make cash distributions to equity holders of the Company when the distribution is authorized and the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is authorized when it is approved by the shareholders. A corresponding amount is recognized directly in equity.

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.

a 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)}

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 Rs, 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 Rs, 5.94 Crore (Note 3.9.2).

2.2.6 Disclosure requirement of Ind AS 107- "Financial Instruments: Disclosure":

(a.) Equity Instruments (other than Subsidiaries, Joint Ventures and Associates) designated at FVTOCI

These investments have been designated on initial recognition to be measured at FVTOCI as these are strategic investments and are not intended for sale.

(b.) Debentures and Bonds Measured at FVTOCI

I nvestments in Debentures or Bonds meet the contractual cash flow test as required by Ind AS 109 -Financial Instruments. However, the business model of the Company is such that it does not hold these investments till maturity as the Company intends to sell these investments as an when need arises. Hence, the same have been Measured at FVTOCI.

(c.) Mutual Fund Units and Preference Shares measurd at FVTPL

Preference Shares and Mutual Funds have been measured on initial recognition at FVTPL as these financial assets do not pass the contractual cash flow test as required by Ind AS 109 - Financial Instruments, for being measured at amortized cost or FVTOCI, hence, classified at FVTPL.

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 Rs, 475.99 Crore was recognized in OCI as on 31st March, 2017. Total change in fair value till date of merger accumulated in OCI amounted to Rs, 588.29 Crore (positive change in fair value of Rs, 112.3 Crore in the current year up to the date of merger) was transferred to Capital Reserve.

* Includes deposit of Rs, 10.95 Crore (Previous Year: Rs, 5.25 Crore) given to Aditya Birla Management Corporation Private Limited (ABMCPL), a company limited by guarantee. Directors of which include Directors of the Company. The Company is one of the Promoter members of ABMCPL, which has been formed to provide a common pool of facilities and resources to its members, with a view to optimize the benefits of specialization and minimize cost to each member. The Company''s share of expenses, under the common pool, has been accounted for under the appropriate heads.

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):

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 Rs, 42.68 Crore, and the difference between Gross investment amount and actual receipt has resulted in an exchange loss of Rs, 13.52 Crore due to currency depreciation of Turkey.

For Reserve Movement: Refer Statement of Changes in Equity

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 recognize the value of equity-settled share-based payments provided to employees, as part of their remuneration.

Cash outflows for the above are determinable only on receipt of judgments pending with various authorities/courts/Tribunals

4.2 OTHER MONEY FOR WHICH THE COMPANY IS CONTINGENTLY LIABLE:

(a) Under the Jute Packaging Material (Compulsory Use of Packing Commodities) Act, 1987, a specified percentage of fertilizers dispatched was required to be supplied in jute bags up to 31st August, 2001. The Company made conscious efforts to use jute packaging material as required under the said Act. However, due to non-availability of material as per the Company''s product specifications, as well as due to strong customer resistance to use of jute bags, the specific percentage could not be adhered to. The Company has received a show cause notice, against which a writ petition has been filed with the Hon''ble High Court, which is awaiting for hearing. The Jute Commissioner, Kolkata, had filed transfer petition, various writ petitions have been filed in different High Courts by other aggrieved parties, including the Company, before the Hon''ble Supreme Court of India, praying for consolidation of all cases at one Court. The transfer petition is pending before the Hon''ble Supreme Court. The Company has been advised that the said levy is bad in law.

* Commitment on account of partly paid up equity shares in Aditya Birla Chemicals Belgium (BVBA)

* The Board of Directors of Idea Cellular Limited (Idea), an Associate of the Company have 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) up to 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 Limited (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.

(d) For Commitment under lease (refer Note 4.7.3)

(e) For Commitment under derivative contract (refer Note 4.10)

4.4 OPERATING SEGMENTS

The Company has presented segment information in its Consolidated Financial Statements, which are part of the same annual report. Accordingly, in terms of provisions of Accounting Standard on Segment Reporting (Ind AS 108) no disclosure related to the segment are presented in the Standalone Financial Statements.

4.5 RELATED PARTY DISCLOSURE

4.5.1 Parties where control exists: Subsidiaries

Samruddhi Swastik Trading and Investments Limited Wholly Owned Subsidiary

Grasim Bhiwani Textiles Limited Wholly Owned Subsidiary (upto 10th July, 2017)

Sun God Trading and Investments Limited Wholly Owned Subsidiary

ABNL Investment Limited Wholly Owned Subsidiary

Shaktiman Mega Food Park Limited Wholly Owned Subsidiary

Aditya Birla Chemicals (Belgium) BVBA Subsidiary

UltraTech Cement Limited Subsidiary

UltraTech Cement Lanka Private Limited, Sri Lanka Subsidiary''s Subsidiary

Dakshin Cements Limited Subsidiary''s Subsidiary

Harish Cement Limited Subsidiary''s Subsidiary

UltraTech Cement Middle East Investments Limited, Subsidiary''s Subsidiary

Dubai, UAE

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

4.5.2 Other Related Parties: Parties Relationship

AV Group NB Inc., Canada Joint Venture

Birla Jingwei Fibres Company Limited, China Joint Venture

Birla Laos Pulp & Plantations Company Limited, Laos Joint Venture

AV Terrace Bay Inc., Canada Joint Venture

Aditya Group AB, Sweden Joint Venture

Aditya Birla Sun Life AMC Limited Joint Venture

Aditya Birla Elyaf Sanayi Ve Ticaret Anonim Sirketi, Turkey Joint Venture

Bhubaneswari Coal Mining Limited Joint Venture

Aditya Birla Renewable Limited Joint Venture

Aditya Birla Renewable - SPV-1 Joint Venture''s Subsidiary

Aditya Birla Solar Limited Joint Venture

Aditya Birla Wellness Private Limited Joint Venture

Birla Sun Life Trustee Company Private Limited Joint Venture

Aditya Birla Science & Technology Company Private Limited Associate

Idea Cellular Limited Associate

Aditya Birla Idea Payments Bank Limited Associate

Shri Kumar Mangalam Birla - Non-Executive Director Key Management Personnel (KMP)

Smt. Rajashree Birla - Non-Executive Director Key Management Personnel (KMP)

Shri Dilip Gaur - Managing Director (w.e.f. 1st April 2016) Key Management Personnel (KMP)

Shri B.V. Bhargava - Non-Executive Director Key Management Personnel (KMP)

Shri R.C. Bhargava (upto 1st October, 2016) - Key Management Personnel (KMP) Non-Executive Director

Shri K.K. Maheshwari (upto 27th December, 2016) - Key Management Personnel (KMP) Non-Executive Director

Shri Sushil Agarwal, Whole-time Director and CFO Key Management Personnel (KMP)

Shri M.L. Apte - Non-Executive Director Key Management Personnel (KMP)

Shri Cyril Shroff - Non-Executive Director Key Management Personnel (KMP)

Dr. Thomas Connelly, Jr - Non-Executive Director Key Management Personnel (KMP)

Shri Shailendra K Jain - Non-Executive Director Key Management Personnel (KMP)

Shri N. Mohan Raj - Non - Executive Director Key Management Personnel (KMP)

Shri O.P Rungta- Non - Executive Director Key Management Personnel (KMP)

Shri Arun Thaiagarajan - Non - Executive Director Key Management Personnel (KMP) (w.e.f. 7th May 2016)

Grasim Industries Limited Employees Provident Fund Post-Employment Benefit Plan

Provident Fund of Aditya Birla Nuvo Limited Post-Employment Benefit Plan

Indo gulf Fertilisers Limited Employee Provident Fund Trust Post-Employment Benefit Plan

Jayashree Provident Fund Institution Post-Employment Benefit Plan Grasim (Senior Executives'' & Officers) Superannuation Scheme Post-Employment Benefit Plan

Grasim Industries Limited Employees Gratuity Fund Post-Employment Benefit Plan

Century Rayon Provident Fund Trust Post-Employment Benefit Plan

4.5.3 Other Related Parties in which Directors are interested:

Shailendra Jain & Co.

Prafulla Brothers

Birla Group Holding Private Limited Shri Suvrat Jain Shri Devarat Jain

Shardul Amarchand Mangaldas & Co.

4.5.4 Disclosure of Related Party Transactions: Terms and Condition of Transaction with Related Parties

The transaction with related parties are made in the normal course of business and on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest-free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. The above transactions are as per approval of Audit Committee.

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.

4.6 RETIREMENT BENEFITS:

4.6.1 Defined Benefit Plans as per Actuarial Valuation:

Gratuity (funded by the Company):

The Company operates a Gratuity Plan through a trust for its all employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of service, whichever is earlier, of an amount equivalent to 15 to 30 days'' salary for each completed year of service, as per rules framed in this regard. Vesting occurs upon completion of five continuous years of service in accordance with Indian law. In case of majority of employees, the Company''s scheme is more favorable as compared to the obligation under payment of Gratuity Act, 1972.

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 recognizes 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:

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.

* Includes Liability of Rs, 222.30 Crore and Assets of Rs, 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

(xiii) Basis used to determine Discount Rate:

Discount rate is based on

Mar 31, 2017

GENERAL INFORMATION

Grasim Industries Limited (âthe Companyâ) is a limited company incorporated and domiciled in India. The address of its registered office and principal place of business are disclosed in the introduction to the annual report.

The Company is engaged primarily in three businesses, Viscose Staple Fibre (VSF), Chlor-Alkali Chemicals and in Cement, through its subsidiary UltraTech Cement Limited. It also produces Rayon Grade Pulp and allied Chemicals which are used in the manufacture of VSF. The manufacturing plants of the Company, its Subsidiaries and Joint Ventures are located in India, Canada, Sweden, China, Middle East, Sri Lanka and Bangladesh. 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 Companyâs Global Depository Receipts are listed on the Luxembourg Stock Exchange.

1.1.1 details of Gross block and Accumulated depreciation as per previous GAAp as at 1st April, 2015, are as follows:

The Deemed cost as on 1st April, 2015 as per the last column of above Table has been considered as the cost for opening financial statements as per Ind AS as on 1st April 2015 as per transition provision in Ind AS 101, accordingly accumulated depreciation as per Previous GAAP as on 1st April 2015 is not carried forward for Ind AS financial statements.

1.1.2 Value of PPE acquired (Ganjam, Odisha and Pundi, Andhra Pradesh, Units of Jayshree Chemicals Ltd.) during the previous year at a consideration of Rs.206.20 Crore.

1.1.3 During the previous year, the Company has componentised PPE transferred to it on amalgamation of ABCIL, and has separately assessed the life of major components, forming part of the main asset. Consequently, the depreciation charge for the previous year is higher by Rs.28.87 Crore on account of higher depreciation on components.

1.2.1 The investments in Companyâs Subsidiary, Grasim Bhiwani Textiles Limited; its 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 respective companies are outstanding. Without guaranteeing the repayment to the lenders, the Company has also agreed that the affairs of the Subsidiary and Joint Ventures 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.

1.2.2 The Company holds 40% stake in Birla Lao Pulp and Plantations Company Ltd. (BLPP), a joint venture of the Company to secure pulp requirement for its VSF business at a cost of Rs.95.71 Crore. Considering the overcapacity in both pulp and fibre businesses, itâs strategic importance to the Company had diminished. Therefore, the Company provided Rs.55.43 Crore (Current Year: Rs.Nil Crore; Previous Year: Rs.29.19 Crore during the previous year), towards diminution, other than temporary, in the value of the said investment being the excess of the cost over the estimated enterprise value. It has been disclosed as exceptional item in the previous year.

1.2.3 During previous year, pursuant to the Composite Scheme of Arrangement, Aditya Birla Nuvo Limited (ABNL) has transferred itâs branded apparel retailing division to Aditya Birla Fashion and Retail Limited (ABFRL). In terms of the Scheme, 26 fully paid up equity shares of Rs.10 each of ABFRL has been allotted for every 5 equity shares of ABNL. Accordingly, 17,398,243 shares have been allotted to the Company.The carrying cost of equity shares of ABNL has been apportioned to equity shares of ABFRL as acquisition cost on the basis of decrease in market value of shares of ABNL as the effect of said Composite Scheme.

1.2.4 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 itâs project in Turkey. As ABEST plans to return the capital to itâs shareholders, the Company has reclassified its investment in ABEST from Non-current Investment to current investment during previous year. In the current year, ABEST has returned Rs.42.68 Crore and the difference between Gross investment amount and actual receipt has resulted in an exchange loss of Rs.13.52 Crore due to currency depreciation of Turkey.

1.2.5 The Company has opted to measure its Investments in Associates at cost in terms of the exemption available in Ind AS 101- First Time Adoption of Ind AS. Accordingly, the book value of Investments in Associates as on 1st April 2015 (the transition date), as per previous GAAP has been now considered as deemed cost. These investments were measured at fair value till 31st December, 2016. Therefore, the previous periodsâ amount of OCI have been recasted w.e.f. 1st April, 2015 to align with the accounting policy adopted, as stated above.

1.2.6 AV Cell Inc. and AV Nackawic Inc. have been merged into AV Group NB Inc. w.e.f. 1st April 2016 and accordingly shares of AV Group NB Inc. have been received in lieu of shares held in AV Cell Inc. and AV Nackawic Inc.. There has been no change in the Companyâs ownership in AV Group NB Inc. on account of merger.

1.2.7 disclosure requirement of Ind AS 107- Financial Instruments: disclosure:

a. Equity Instruments (Other than Subsidiaries, Joint venture and Associates) designated at FvTOcI

These investments have been designated on initial recognition to be measured at FVTOCI as these are strategic investments and are not intended for sale.

b. debentures and bonds designated at FvTOcI

Investments in Debentures or Bonds meet the contractual cash flow test as required by Ind AS 109-Financial Instruments. However, the business model of the company is such that it does not hold these investments till maturity as the Company intends to sell these investments as an when need arises. Hence, the same have been designated at FVTOCI.

c. mutual Fundsâ units and preference Shares designated at fvtpl

Preference Shares and Mutual Funds have been designated on initial recognition at FVTPL as these financial assets do not pass the contractual cash flow test as required by Ind AS 109- Financial Instruments, for being designated at amortised cost or FVTOCI, hence, classified at FVTPL.

* Includes deposit of Rs.5.25 Crore (Previous Year Rs.5.25 Crore) given to Aditya Birla Management Corporation Pvt. Limited (ABMCPL), a company limited by guarantee. Directors of which include Directors of the Company. The Company is one of the Promoter members of ABMCPL, which has been formed to provide a common pool of facilities and resources to its members, with a view to optimise the benefits of specialisation and minimise cost to each member. The Companyâs share of expenses, under the common pool, has been accounted for under the appropriate heads.

1.3.1 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 Rs.1.96 Crore (31st March 2016 Rs.2.78 Crore). Inventory values shown above are net of the provisions.

1.3.2 Working Capital Borrowings are secured by hypothecation of stocks of the Company.

1.3.1 Working Capital Borrowings are secured by hypothecation of Book debts of the Company

1. 4.1 Rights, preferences and Restrictions attached to Equity Shares

The Company has only one class of Equity Shares having a par value of Rs.2 per share. Each holder of the Equity Shares is entitled to one vote per share. The Company declares dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts.The distribution will be in proportion to the number of Equity Shares held by the Shareholders.

1.4.2 During the current year, the shareholders of the Company have approved sub-division of equity shares of the Company from one (1) equity share of face value Rs.10 each fully paid up to five (5) equity shares of face value Rs.2 each fully paid up. Accordingly, Earnings Per Share of previous year has been recasted.

# Net of Deferred Employeesâ Compensation Expenses Rs.3.58 Crore (Previous Year Rs.7.54 Crore, 1st April 2015 Rs.9.77 Crore)

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 mainlythe reserve created during business combination oferstwhile ABCIL with the Company.

d. 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 Proft or loss on disposal of such instruments.

e. 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, net of amounts reclassified to Retained Earnings on disposal of such instruments.

f. hedging Reserve: It represents the effective portion of the fair value of forward contracts, designated as cash flow hedge.

g. employee Share option outstanding: The Company has two share option schemes under which options to subscribe for the Companyâs 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.

1.5.1 The rate of interest on borrowings ranges from 9% to 11%.

1.6.1 Working Capital Borrowings are secured by hypothecation of stocks and book debts of the Company.

1.7.1 movement of provisions during the year as required by Ind As - 37 âProvisions, contingent Liabilities and contingent Assetâ

During previous year, provision for asset transfer cost related to amalgamation of ABCIL 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 ABCIL in the name of the Company.

2.1 During current year, Donations include contribution of Rs.13.00 Crore (Previous year Rs.Nil Crore) to Satya Electoral Trust. The Trust uses such funds for contribution for Political purposes.

During the previous year, the Company has received refund of Rs.0.21 Crore from General Electoral Trust, being undistributed balance related to earlier years.

3.1 OPERATING SEGMENTS

3.1.1 Details of products included in each of the segments are as under: Fibre and Pulp - Viscose Staple Fibre and Rayon Grade Pulp Chemicals - Caustic Soda, Epoxy and Allied Chemicals Others - Mainly Textiles

A letter of maintaining minimum shareholding and intention to provide financial support has been issued by the Company in respect of Aditya Birla Chemicals (Belgium) BVBA, a subsidiary of the Company.

In the previous year, a letter of Undertaking-cum-Indemnity was given to Banks for finance provided to Aditya Birla Chemicals (Belgium) BVBA of Rs.3.77 Crore (amount outstanding against letter of undertaking-cum-indemnity Rs.2.14 Crore)

The Board of Directors of Idea Cellular Limited (Idea), an Associate of the Company have approved the amalgamation of Vodafone India Limited (VIL) and itâs 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.

Terms and conditions of Transaction with Related Parties:

The transaction with related parties are made in the normal course of business and on terms equivalent to those that prevail in armâs length transactions. The above transactions are as per the approval of Audit Committee.

The Company 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.

3.2 RETIREMENT BENEFITS :

3.2.1 Defined benefit Plans as per Actuarial Valuation: Gratuity (funded by the company):

The Company operates a Gratuity plan through a trust for its all employees. The Gratuity plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of service, whichever is earlier, of an amount equivalent to 15 to 30 daysâ salary for each completed year of service as per rules framed in this regard. Vesting occurs upon completion of five continuous years of service in accordance with Indian law. In case of majority of employees, the Companyâs scheme is more favourable as compared to the obligation under payment of Gratuity Act, 1972.

Inherent 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 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.

(xiii) There are no amounts included in the Fair value of plan Assets for:

a) Companyâs own financial instrument

b) Property occupied by or other assets used by the Company

(xiv) basis used to determine Discount Rate:

Discount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet date, applicable to the period over which the obligation is to be settled.

(xv) Asset Liability matching Strategy:

The money contributed by the Company to the fund to finance the liabilities of the plan has to be invested.

(xvi) Salary Escalation Rate:

The estimates of future salary increases are considered taking into account inflation, seniority, promotion, increments and other relevant factors.

(xvii) Sensitivity Analysis:

(xviii)The best estimate of the expected Contribution for the next year amounts to Rs.20 Crore (Previous YearRs.15 Crore).

3.2.1.2 compensated Absences:

The obligation for compensated absences is recognised in the same manner as gratuity, amounting to charge of Rs.18.80 Crore (Previous Year Rs.2.01 Crore).

3.2.2 defined contribution plans:

Amount recognised as expense and included in the Note 3.7 as âContribution to Provident and Other Fundsâ is Rs.36.40 Crore (Previous Year Rs.33.27 Crore).

The actuary has provided for a valuation and based on the below provided assumption there is no interest shortfall as at 31st March, 2017; 31st March, 2016 and 1st April, 2015.

3.3.1 Government Grant (Ind AS 20)

The Company has received an interest-free loan of Rs.13.15 Crore from a State Government, repayable in full after seven years. Using prevailing market interest rate of 8.9% p.a. for an equivalent loan, the fair value of loan at initial recognition is estimated at Rs.7.07 Crore. The difference of Rs.6.08 Crore between gross proceeds and fair value of loan is the government grant which will be recognised in the Statement of Profit and Loss over the period of loan. Accordingly, an amount of Rs.0.41 Crore has been recognised as income in the current year and correspondingly equivalent amount has been accounted as an interest expense.

3.3.2 The Company has spent Rs.18.06 Crore on Corporate Social Responsibility Projects/initiatives during the year including Rs.1.64 Crore towards capital expenditure. (Previous Year Rs.15.05 Crore including Rs.1.17 Crore towards capital expenditure).

The amount required to be spent under Section 135 of the Companies Act, 2013 for the year ended 31st March 2017 is Rs.15.80 Crore (31st March 2016 Rs.15.82 Crore) i.e. 2% of average net profits for last three financial years, calculated as per Section 198 of the Companies Act, 2013.

3.3.3 Assets held for disposal (Ind AS 105)

The Company has identified certain assets to be disposed off like Chimneys, Hot Gas filter, Heat exchanger, Waste Heat boilers, Pipelines, Sulphur furnace, etc. which are not in use by the Company.The Company is in the process of discussion with various potential buyers and expects the same to be disposed off within next twelve months.

3.3.4 capital Management (Ind AS 1)

The Companyâs objectives when managing capital are to (a) maximise shareholder value and provide benefits to other stakeholders and (b) maintain an optimal capital structure to reduce the cost of capital. For the purposes of the Companyâs capital management, capital includes issued capital, share premium and all other equity reserves attributable to the equity holders.

The Company monitors capital using debt-equity ratio, which is total debt less investments divided by total equity.

3.3.5 disclosure of Specified bank Notes

During the year, the Company had specified bank notes or other denomination note as defined in the MCA notification G.S.R. 308(E) dated 31st March, 2017 on the details of Specified Bank Notes (SBN) held and transacted during the period from 8th November, 2016 to 30th December, 2016, the denomination wise SBNs and other notes as per the notification is given below:

3.4 1,152,595 Equity Shares of Face Value of Rs.2 each (Previous Year 241,426 shares of Rs.10 each) are reserved for issue under Employee Stock Option Scheme-2006 (ESOS-2006) and Employee Stock Option Scheme, 2013 (ESOS-2013)

3.4.1 a. Under the ESoS-2006, the company has granted 1,533,375 options to its eligible employees, the details of which are given hereunder:

The number of options have been adjusted for the sub-division of face value of shares from Rs.10 each to Rs.2 each during the current financial year.

3.4.2 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:

3.4.3 Employee Stock Option expenses recognised in the statement of Profit and Loss Rs. 5.33 Crore (Previous Year Rs. 5.62 Crore).

3.5 financial instruments-accounting classifications and fair value measurements (ind AS 107) A. classification of Financial Assets and Liabilities:

A. Fair value Measurements (Ind AS 113):

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.

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 maximize 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 dealerâs 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.

During the reporting period ending 31st March, 2017 and 31st March, 2016, there was no transfer between level 1 and level 2 fair value measurement.

3.5.1 Key Inputs for Level 1 and 2 Fair valuation Technique :

1. Mutual Funds : Based on Net Asset Value of the Scheme (Level 2)

2. Debentures or Bonds: Based on Fixed Income and Money Market Association (FIMMDA) valuation (Level 2)

3. Listed Equity Investments (other than Subsidiaries, Joint Ventures and Associates): Quoted Bid Price on Stock Exchange (Level 1)

3.5.2 description of Significant Unobservable Inputs used for Financial Instruments (Level 3)

The following table shows the valuation techniques used for financial instruments :

3.5.3 The following table shows a reconciliation from the opening balances to the closing balances for level 3 fair values :

3.5.4 Relationship of unobservable Inputs to Level 3 fair values (Recurring):

A. Equity Investments - unquoted (for Equity Shares where Discounted cash Flow Method is used):

A 100 bps increase/decrease in the Weighted Average Cost of Capital (WACC) or discount rate used while all other variables were held constant, the carrying value of the shares would decrease by Rs.7.50 Crore or increase by Rs.11.00 Crore (as at 31st March, 2016: decrease by Rs.3.50 Crore or increase by Rs.5.50 Crore ; as at 1st April, 2015: decrease by Rs.1.50 Crore or increase by Rs.2.50 Crore).

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 Rs.0.01 Crore or (as at 31st March, 2016: increase/ decrease by Rs.0.01 Crore; as at 1st April, 2015: increase/decrease by Rs.0.01 Crore).

C. preference Shares:

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 Rs.5.60 Crore or increase by Rs.5.80 Crore (as at 31st March, 2016: decrease by Rs.6.60 Crore or increase by Rs.7.00 Crore; as at 1st April, 2015: decrease by Rs.6.80 Crore or increase by Rs.6.60 Crore).

3.6 financial RISK management objectives (ind AS 107)

The Companyâs activities expose it to market risk, liquidity risk and credit risk.

The Companyâs 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, such as foreign exchange forward contracts to hedge foreign currency risk exposure. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.

The Management updates the Audit Committee on a quarterly basis about the implementation of the above policies. It also updates to the Internal Risk Management Committee of the Company on periodical basis about various risk to the business and the status of various activities planned to mitigate such risks.

Details relating to the risks are provided here below:

A. Foreign Exchange Risk:

Foreign exchange risk is the risk of impact related to fair value or future cash flows of an exposure in foreign currency, which fluctuate due to changes in foreign exchange rates. The Companyâs exposure to the risk of changes in foreign exchange rates relates to import of fuels, raw materials and spare parts, plant and equipments, exports of VSF and Chemicals, and the Companyâs net investments in foreign Subsidiaries and Joint Ventures.

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.

Forward Exchange contracts:

a. Derivatives for Hedging Foreign currency Outstanding are as under:

b. cash Flow Hedges: The Company assesses hedge effectiveness based on the following criteria:

(i) an economic relationship between the hedged item and the hedging instrument;

(ii) the effect of credit risk; and

(iii) assessment of the hedge ratio

B. Interest Rate Risk:

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in prevailing market interest rates. The Companyâs exposure to the risk due to changes in interest rates relates primarily to the Companyâs short-term borrowings (excluding commercial paper) with floating interest rates. For all long-term borrowings in foreign currency with floating interest rates, the risk of variation in the interest rates is mitigated through interest rate swaps. The Company constantly monitors the credit markets and revisits its financing strategies to achieve an optimal maturity profile and financing cost.

Note: If the rate is decreased by 1% profit will increase by an equal amount.

c. Equity price Risk:

The Company is exposed to equity price risk arising from Equity Investments (other than Subsidiaries, Joint Ventures and Associates, which are carried at cost).

Equity price Sensitivity Analysis:

The Sensitivity analysis below has been determined based on the exposure to equity price risk at the end of the reporting period.

If equity prices of the quoted investments increase/decrease by 5%, Other Comprehensive income for the year ended 31st March, 2017 would increase/decrease by Rs.118.97 Crore (for the year ended 31st March, 2016 by Rs.71.43 Crore).

D. credit Risk:

The carrying amount of financial assets represents the maximum credit risk exposure.

a. Trade Receivables

Total Trade receivables as on 31st March, 2017 is Rs.1,189.55 Crore (31st March, 2016: Rs.992.37 Crore, 1st April, 2015: Rs.687.49 Crore)

The Company does not have higher concentration of credit risks to a single customer. Single largest customers of all businesses have exposure of 5.6% of total sales (31st March, 2016 5.4%) and in receivables 10% (31st March, 2016: 9.6%, 1st April, 2015: 1.4%).

However, total write off against receivables are ânilâ of the outstanding receivables for the current year (0.09% in the previous year).

b. Investments, Derivative Instruments, cash and cash Equivalents and bank Deposits:

Credit Risk on Derivative Instruments is generally low as the Company enters into the Derivative Contracts with the reputed Banks.

Investments of surplus funds are made only with approved Financial Institutions/Counterparty. Investments primarily include investment in units of quoted Mutual Funds, quoted Bonds, NonConvertible Debentures issued by Government/Semi-Government Agencies/PSU Bonds/High Investment grade Corporates etc. These Mutual Funds and Counterparties have low credit risk.

Compliances of these policies and principles are reviewed by internal auditors on periodical basis.

Total Non-current and current investments as on 31st March, 2017 is Rs.8,996.42 Crore (31st March, 2016 Rs.7,099.62 Crore; 1st April, 2015: Rs.6,588.74 Crore).

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 credit facilities to meet obligations when due. The Companyâs 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. Management monitors the Companyâs 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.

3.7 FIRST TIME Adoption of IND AS (IND AS 101):

The Company has prepared financial statements for the year ended 31st March, 2017, in accordance with Ind AS for the first time. For the periods upto and including the year ended 31st March, 2016, the Company prepared its financial statements in accordance with the accounting standards notified under Section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Previous GAAP).

Accordingly, the Company has prepared its financial statements to comply with Ind AS for the year ending 31st March, 2017, together with comparative information as at and for the year ended 31st March, 2016, as described in the summary of significant accounting policies. In preparing these financial statements, the Companyâs opening Balance Sheet was prepared as at 1st April, 2015 i.e. the transition date to Ind AS for the Company. This note explains the principal adjustment made by the Company in restating its previous GAAP financial statements, including the Balance Sheet as at 1st April, 2015, and the financial statements as at and for the year ended 31st March, 2016.

Exemptions availed:

- Deemed Cost for Property, Plant and Equipment and Intangible Assets:

The Company has elected to continue with the carrying value of all of its property, plant and equipment and intangible assets recognised as of 1st April, 2015 (the transition date), measured as per the Previous GAAP and use that carrying value as its deemed cost as of the transition date under Ind AS.

- Share-Based Payments:

The Company has not applied Ind AS 102 to equity instruments that vested before the date of transition to Ind AS.

- Investments in Subsidiaries, Joint Ventures and Associates:

The Company has elected to apply Previous GAAP carrying amount of its investments in Subsidiaries, Joint Ventures and Associates as deemed cost as on the date of transition to Ind AS.

- Sales Tax Deferment Loan:

The Company has used its Previous GAAP carrying amount of the loan at the date of transition to Ind AS as the carrying amount of the loan in the opening Ind AS Balance Sheet.

- Past Business Combinations:

The Company has elected not to apply Ind AS 103 Business Combinations retrospectively to past business combinations that occurred before the transition date of 1st April, 2015. Consequently,

- the Company has kept the same classification for the past business combinations as in its Previous GAAP financial statements;

- the Company has not recorded assets and liabilities that were not recognised in the previous GAAP; and

- the Company has not excluded from its opening Balance Sheet those items recognised in accordance with Previous GAAP that do not qualify for recognition as an asset or liability under Ind AS.

The above exemptions in respect of business combinations have also been applied to past acquisitions of investments in Associates and Joint Ventures.

- Classification and Measurement of Financial Assets:

The Company has classified the financial assets in accordance with Ind AS 109 on the basis of facts and circumstances that exist at the date of transition to Ind AS.

- Fair Value of Financials Assets and Liabilities:

As per Ind AS exemption, the Company has not fair valued the financial assets and liabilities retrospectively and has measured the same prospectively.

3.8 NOTES TO the REcONciLIATION OF equity AS AT 1ST April, 2015 AND 31ST march, 2016 AND TOTAL comprehensive income for THE year ended 31ST march, 2016

A. Fair valuation of Non-current Investments [bonds/ preference Shares/Equity Investments (other than Investments in Subsidiaries, Joint ventures and Associates)]:

i. bonds/Equity Investments (Other than Investments in Subsidiaries, Joint ventures and Associates):

Under Previous GAAP, long- term investments were measured at cost less diminution in value other than temporary. Under Ind AS, these financial assets have been classified as fair value through Other Comprehensive Income (FVTOCI). On the date of transition to Ind AS, these financial assets have been measured at their fair value which is higher than the cost as per the previous GAAP. As a result there has been:

ii. Preference Shares:

Under Previous GAAP, Preference Shares were measured at cost less diminution in value, which is other than temporary. Under Ind AS, these financial assets have been classified as fair value through Profit and Loss (FVTPL). On the date of transition to Ind AS, these financial assets have been measured at their fair value which is lower than the cost as per previous GAAP As a result there has been:

B. Fair Valuation of Investments (Mutual Funds):

Under previous GAAP, current investments were measured at lower of cost or fair value. Under Ind AS, these financial assets have been classified as FVTPL on the date of transition. The fair value changes are recognised in the Statement of Profit and Loss. On transitioning to Ind AS, these financial assets have been measured at their fair values which is higher than cost as per previous GAAP As a result there has been:

C. Share-based Payments:

Under Previous GAAP, the cost of equity-settled employee share-based payments was recognised using the intrinsic value method. Under Ind AS, the cost of equity-settled employee share-based payments is recognised based on the fair value of the options as on the grant date. The change does not affect total equity, but there is a decrease in profit before tax as well as profit for the year ended 31st March, 2016 by Rs.3.27 Crore. On account of the above, amount recoverable from wholly owned subsidiary has increased by Rs.0.43 Crore as on 31st March 2016 (Rs.0.29 Crore as on 1st April, 2015).

D. other comprehensive Income (oci):

Under Previous GAAP, there was no concept of OCI. Under Ind AS, fair valuation of Bonds and Equity Investments not held for trade (other than Subsidiaries, Joint Ventures and Associates) and re-measurement of defined benefit plan liability are recognised in OCI.

E. proposed Dividend:

Under Previous GAAP, proposed dividend including Corporate Dividend Tax (CDT), was recognised as liability in the period to which it relates, irrespective of period of declaration of the dividend. Under Ind AS, proposed dividend is recognised as a liability when approved by shareholders in a General Meeting.

Therefore, dividend liability (proposed dividend) including CDT amounting to Rs.220.81 Crore as at 31st March, 2016 and Rs.168.70 Crore as at 1st April, 2015 was derecognised and recognised in Retained Earnings during the year ended 31st March, 2016 as declared and paid.

F. Excise Duty:

Under Previous GAAP, revenue from sale of products was presented net of excise duty under revenue from operations. Whereas, under Ind AS, revenue from sale of products is inclusive of excise duty amounting to Rs.809.16 for the year ended 31st March, 2016. Accordingly, Excise duty has been included in the cost of production, as it is a liability of the manufacturer, irrespective of whether the goods are sold or not.

G. cash Discount:

Under Previous GAAP, cash discount of Rs.7.52 Crore was recognised as part of other expenses, which has been adjusted against the revenue from operations under Ind AS during the year ended 31st March, 2016.

H. Defined Benefit obligation:

Both under Previous GAAP and Ind AS, the Company recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under Previous GAAP, the entire cost, including actuarial gain and losses, are charged to profit or loss. Under Ind AS, remeasurements (comprising of actuarial gains and losses, the effect of assets ceiling, excluding amounts included in net interest on the net defined benefit liability and return on plan assets excluding amount included in net interest on the net defined benefit liability) are recognised in the Balance Sheet through Other Comprehensive Income (OCI). Thus, employee benefit expense is reduced by Rs.3.85 Crore and is recognised in OCI during the year ended 31st March, 2016.

The current tax amounting to Rs.1.33 Crore is also regrouped from profit or loss to OCI for the year ended 31st March, 2016. The above change does not affect total equity as at 31st March, 2016. However, profit before tax and profit for the year ended 31st March, 2016, is reduced by Rs.3.85 Crore and Rs.2.52 Crore respectively.

I. Exchange Difference on a loan given to a Joint venture (Net investment in a Non-Integral Foreign operations):

Under previous GAAP, exchange difference on a monetary item (Loan to a Joint Venture) is accumulated in foreign currency translation reserve (FCTR). On disposal of investment, such exchange difference is recognised in profit or loss. Whereas, as per Ind AS, exchange difference on such monetary item shall be recognised in profit or loss.

Exchange gain of Rs.3.54 Crore as on 31st March, 2016 (Rs.2.05 Crore as on 1st April, 2015) is regrouped from FCTR to Retained Earnings.

The above change does not affect total equity as at 1st April, 2015 and 31st March, 2016. However, profit before tax and profit for the year ended 31st March, 2016 is increased by Rs.1.49 Crore.

J. Stamp duty on Transfer of Assets of erstwhile ABcIL to companyâs name in a business combination:

Under Previous GAAP, stamp duty/registration charges payable on transfer of assets in a business combination was allowed to be capitalised as it was considered as cost incurred on bringing the asset to location and working condition for its intended use.

However, Ind AS 103 specifically does not allow to capitalise such cost incurred on transfer of asset as it is considered as acquisition related cost.

Thus, stamp duty amounting to Rs.83.95 Crore payable on transfer of Assets of erstwhile ABCIL to Companyâs name has been decapitalised from property, plant and equipment and charged to profit or loss for the year ended 31st March, 2016. Depreciation of Rs.0.81 Crore charged on account of above capitalisation under Previous GAAP has also been reduced. Accordingly, deferred tax liability has been reversed by Rs.26.01 Crore.

The above change has resulted in decrease in total equity as at 31st March, 2016 and profit for the year ended 31st March, 2016 by Rs.57.13 Crore.

K. capitalisation of major spares as Property, plant and Equipment (PPE):

As per Ind AS 16, spare parts, stand-by equipment and servicing equipment are recognised as Property, Plant and Equipment (âPPEâ) when they meet the following criteria:

- are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes; and

- are expected to be used during more than one period.

Based on the above provision, stores and spares satisfying above criteria are de-recognised from Inventory and capitalised as PPE from the date of purchase. Accordingly,

- Spares inventory amounting to Rs.2.95 Crore as at 1st April, 2015 and Rs.6.10 Crore as at 31st March, 2016 have been capitalised as part of PPE.

- Spares consumption amounting to Rs.5.00 Crore charged to Profit or Loss for the year ended 31st March, 2016, has been reversed in Profit or Loss as per Ind AS.

- Depreciation of Rs.0.35 Crore has been charged to Retained Earnings as at 1st April, 2015, and Rs.1.01 Crore has been charged to Profit or Loss for the year ended 31st March, 2016.

- Deferred tax asset of Rs.0.12 Crore has been credited to Retained Earnings as at 1st April, 2015 and Rs.1.38 Crore has been charged to Profit or Loss for the year ended 31st March, 2016

The above change has resulted in increase in total equity by Rs.2.38 Crore as at 31st March, 2016 and decrease in total equity by Rs.0.23 Crore as at 1st April, 2015 and increase in profit before tax by Rs.3.99 Crore and profit for the year ended 31st March, 2016 by Rs.2.61 Crore.

L. Loss on sale of Non-current Investment:

Under Previous GAAP, Loss on sale of Non-current Investment was charged to profit and loss. Under Ind AS, the loss has been routed through OCI as per the accounting policy adopted for equity investments (other than Subsidiaries, Joint Ventures and Associates) and thereafter transferred to retained earnings.

M. Minimum Alternate Tax (MAT) credit Entitlement:

As per Ind AS 12, the Company has considered MAT credit entitlement as deferred tax asset being unused tax credit entitlement.

N. Deferred Tax:

IGAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS12 requires entities to account for deferred taxes using the Balance Sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the Balance Sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under IGAAP

In addition, the various transitional adjustments lead to temporary differences. According to the accounting policies, the Company has to account for such differences. Deferred tax adjustments are recognised in correlation to the underlying transaction either in retained earnings, OCI or profit and loss respectively.

O. Re-classification of Assets and Liabilities as per Schedule III of the companies Act, 2013:

1. As per Schedule III, Security Deposits which are financial in nature are to be classified under Loans and other deposits are classified under Other Non-Current/Current Assets respectively.

2. Under Previous GAAP, Loans as well as Advances were shown together under heading âLoans and Advancesâ. However, as per Schedule III, Loans are classified under Financial Assets.

3. Fixed deposits with banks with maturity greater than twelve months have been reclassified from Cash and Cash equivalents to other non-current financial assets as per Schedule III of the Companies Act, 2013.

4. Fixed deposit with banks with maturity less than twelve months and those earmarked for specific purpose have been reclassified from Cash and Cash equivalents to Other Bank Balances as per Schedule III of the Companies Act, 2013.

5. Capital Advances have been reclassified from Long-term loans and advances to other Non-Current Assets.

6. Current and Non-Current Liabilities have been reclassified into financial and non-financial liabilities as per the nature of liabilities.

3.9 In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7, âStatement of Cash Flowsâ and Ind AS 102, âShare-based Payment.â These amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB) to IAS 7, âStatement of cash Flowsâ and IFRS 2, âShare- based Payment,â respectively. The amendments are applicable to the company from 1st April, 2017.The Company is evaluating the requirements of the amendment and the effect on the consolidated financial statements is being evaluated.

(A) Amendment to Ind AS 7:

The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of the financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the Balance Sheet for liabilities arising from financing activities, to meet the disclosure requirement.

(B) Amendment to Ind AS 102:

The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards, modification of cash-settled awards and awards that include a net settlement feature in respect of withholding taxes.

3.10 AMALGAMATION OF ADITYA BIRLA CHEMICALS (INDIA) LTD.

During the previous year, the Honâble High Courts of Madhya Pradesh and Jharkhand have by their respective orders, approved the Scheme of Amalgamation of Aditya Birla Chemicals (India) Limited (ABCIL), a leading manufacturer of Chlor Alkali and allied chemicals, with the Company and their respective Shareholders and Creditors. ABCIL has been amalgamated with the Company on 4th January, 2016 w.e.f. the appointed date of 1st April, 2015.

All the assets and liabilities have been accounted for in the books of account of the Company at the value appearing in the books of account of ABCIL as on 1st April, 2015 under the âPooling of Interestâ method as per the Court approved scheme of Amalgamation.

In terms of the Scheme, the Company has issued 14.62 lakh equity shares to the shareholders of the erstwhile ABCIL in the ratio of 1 (one) share of Rs.10/- each fully paid-up against 16 (sixteen) shares of Rs.10/- each fully paid up of ABCIL held by them. As a result, issued and paid up Equity Share Capital of the Company has increased by Rs.1.46 Crore to Rs.93.33 Crore.

Difference between Share Capital of ABCIL of Rs.23.39 Crore and Equity Share Capital issued by Company of Rs.1.46 Crore to ABCIL shareholders amounting to Rs.21.93 Crore has been disclosed as âCapital Reserveâ

Further, Chlor Alkali plant and related assets of Ganjam, Odisha and Salt Works at Pundi, Andhra Pradesh were acquired during the previous year at a total consideration of Rs.212 Crore as per the Business Transfer Agreement between the ABCIL and Jayshree Chemicals Ltd.

The Company has followed the accounting treatment prescribed in the court approved Scheme of Amalgamation of ABCIL which is at deviation from the treatment for the amalgamation as per the Ind AS 103 (Business Combinations) in terms of general instruction clause (1) of notification dated 16th February, 2015 of Ministry of Corporate Affairs.

Disclosure of Assets and Liabilities recognised at the appointed date of Business Combination as per the Scheme of Amalgamation of ABCIL:

3.11 SCHEME OF ARRANGEMENT FOR AMALGAMATION OF ADITYA BIRLA NUVO LTD.(ABNL) WITH THE COMPANY AND DEMERGER OF FINANCIAL SERVICES BUSINESS INTO ADITYA BIRLA FINANCIAL SERVICES LTD. (ABFSL).

During the year, the Board of Directors of the Company approved a composite Scheme of Arrangement between the Company, ABNL and ABFSL - a wholly owned Subsidiary of ABNL and their respective shareholders and creditors (âSchemeâ). The Scheme provides for Amalgamation of ABNL with the Company and the subsequent demerger of financial services business into ABFSL and consequent listing of equity shares of ABFSL.

In terms of the Scheme, the Company will issue equity shares to the shareholders of ABNL in the ratio of 15 (fifteen) equity Shares of Rs.2/- each fully paid up against 10 (ten) equity shares of Rs.10/- each fully-paid up of ABNL held by them on the record date for this purpose in the first stage.

Subsequently in the second stage, on demerger of financial services business into ABFSL, the Shareholders of the Company will be issued equity shares of ABFSL in the ratio of 7 (seven) equity shares of Rs.10/- each fully paid-up in respect of 5 (five) equity shares of Rs.2/- each fully paid up of the Company held by them on the record date for this purpose.

The Scheme has been approved by the Equity Shareholders and Creditors of the Company at their meeting held on 6th April, 2017. Shareholders and Creditors of ABNL and ABFSL have also approved the Scheme. Other regulatory approvals such as from Competition Commission of India, Stock Exchanges have also been received. The proceedings for sanction of the Scheme by the National Company LawTribunal (NCLT) are in progress. Pending sanction of the Scheme by NCLT and the Scheme becoming effective with other regulatory requirements, no effect has been given for the Scheme in these financial statements. In terms of the Scheme, the effective date will be the appointment date and there is no separate appointment date for the Scheme. The Scheme is expected to become effective by second quarter of the financial year 2017-18.

The Audited Financial Statements (Standalone and Consolidated) of ABNL for the year ended 31st March, 2017 have been duly approved by its Board of Directors at its meeting held on 18th May, 2017, extracts of which are as under:

3.12 Figures less than Rs.50,000 have been shown at actual, wherever statutorily required to be disclosed, as the figures have been rounded off to the nearest lakh.

Mar 31, 2015

GENERAL INFORMATION

Grasim Industries Limited (the "Company") is engaged primarily in two businesses, Viscose Staple Fibre (VSF) and in Cement, through its subsidiary UltraTech Cement Limited. It also produces Rayon Grade Pulp, Caustic Soda and allied Chemicals which are used in the manufacture of VSF. The manufacturing plants of the Company, its Subsidiaries and Joint Ventures are located in India, Canada, Sweden, China, Middle East, Sri Lanka and Bangladesh. 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.

1.1.1 Carrying value of the assets whose useful life is already exhausted as on 1st April, 2014, amounting to Rs. 14.14 Crore net off deferred tax credit of Rs. 4.89 Crore has been recognised in Surplus as per Statement of Profi t and Loss as per Schedule II to the Companies Act, 2013. (Refer Note No 2.11.8)

1.1.2 The Board of Directors has recommended a dividend of Rs. 18 per share for the year ended, 31st March, 2015 (Previous Year Rs. 21 per share). The total cash outfl ows on account of the dividend would be Rs. 165.33 Crore (Previous Year Rs. 192.84 Crore) and on account of Corporate Dividend Tax Rs. 3.37 Crore (Previous Year Rs. 7.48 Crore).

1.1.3 Proposed Dividend (including Corporate Dividend Tax) includes Rs. 0.04 Crore (Previous Year Rs. 0.03 Crore) related to Previous Year.

1.2.1 From 1st April, 2014 as per applicable provisions of Schedule II to the Companies Act, 2013, the depreciation has been provided as per the useful life specifi ed in the Act or as re-assessed by the Company. Carrying value of the assets whose useful life is already exhausted as on 1st April, 2014, amounting to Rs. 14.14 Crore and deferred tax credit of Rs. 4.89 Crore has been recognised in the Surplus as per Statement of Profi t and Loss. Had there been no change as stated above, depreciation would have been higher by Rs. 43.47 Crore for the year ended 31st March, 2015

1.3.1 97,142,856 Equity Shares of Rs. 10 each, received in terms of the Scheme of Amalgamation of Samruddhi Cement Limited with UltraTech Cement Limited, were locked in for a period of 3 years from the date of allotment, i.e. 26th August, 2010.

1.3.2 The investment in Company''s Subsidiary, Grasim Bhiwani Textiles Limited; its Joint Ventures, AV Cell Inc., AV Nackawic Inc., AV Terrace Bay Inc., Birla Jingwei Fibres Company Limited, Aditya Group AB; and its Associate, Idea Cellular Limited, are subject to maintenance of specifi ed 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 Subsidiary 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 fi nancial obligations.

1.3.3 Investment in shares of Larsen & Toubro Limited are non-transferable, pending disposal of appeal fi led in earlier year by Larsen & Toubro Limited and others in Hon''ble Bombay High Court against the single bench order of the court in favour of the Company.

1.3.4 Provision for diminution in previous year represents diminution in value of shares of Aditya Birla Power Ventures Limited, which has been dissloved under section 560 of the Companies Act, 1956 during the current year.

1.3.5 The Company holds 40% stake in Birla Lao Pulp and Plantations Company Ltd. (BLPP), a joint venture of the Company to secure pulp requirement for its VSF business at a cost of Rs. 91.24 Crore. Considering the present overcapacity in both pulp and fi bre businesses, it''s strategic importance to the Company is diminished. Therefore the Company has provided Rs. 26.24 Cr. (being the excess of the cost over the estimated enterprise value) towards diminution, other than temporary, in the value of the said investment which has been disclosed as Exceptional Item.

Rs. in Crore Current Previous Year Year

2.1 CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF:

2.1.1 Claims/Disputed Liabilities not acknowledged as Debts:

(a) Custom Duty 11.02 7.06

(b) Sales Tax/Purchases Tax/VAT 0.27 0.10

(c) Excise Duty/Cenvat Credit/Service Tax 86.25 83.16

(d) Water Cess - 17.69

(e) Income Tax 156.88 144.36

(f) Various claims in respect of disputed liabilities of discontinued 34.26 34.26 business in earlier year

(g) Others 32.98 26.95

2.1.2 Out of the 4.1.1 above, disputes pending with revenue and other government authorities challenged/appealed by the Company are:

(a) Income tax demand raised on completion of assessment for 156.88 144.36 Financial Year 2009-10

(b) Excise Duty demanded against Cenvat credit availed in respect of 58.91 54.82 electricity not used for manufacturing

(c) Transfer of Cenvat credit on merger of excise registration of two 21.97 19.44 units disputed by Excise Department

(d) Custom classifi cation dispute on import of coal 9.29 5.11

(e) Water charges for water not made available as per agreement - 17.69

(f) Penalty for not utilising the land within the time limit prescribed 7.93 6.96 as per the sanction document, utilisation of which is delayed due to non-fulfi llment of condition by Gujarat Industrial Development Corporation

(g) Claims arising from disputes of vendors / contractors 7.60 8.26

Cash outfl ows for the above are determinable only on receipt of judgments pending with various authorities/Courts/Tribunals etc.

2.1.3 Other Money for which the Company is contingently liable :

(a) Custom Duty Liability (Net of Cenvat credit), which may arise if 12.41 37.48 obligation for exports is not fulfi lled against import of raw materials and machinery

(b) Bills discounted with banks fully covered by buyers'' letters of - 7.37 credit

2.2 SEGMENT REPORTING

2.2.1 Primary Segment Reporting (by Business Segment)

Primary Segment has been identifi ed based on the nature of products and services, the different risks and returns, and the internal reporting structure. The Company considers Business Segment as the Primary Segment for disclosure. Details of products included in each of the segments are as under:- Fibre and Pulp - Viscose Staple Fibre and Rayon Grade Pulp Chemicals - Caustic Soda, Epoxy and Allied Chemicals

Others - Mainly Textiles

Inter-segment transfers of independent marketable products are at market rates.

Unallocated items include general corporate income, expense, assets and liabilties which are not allocated to any business segment.

(viii) Gratuity:

The Employees'' gratuity fund is managed by a Trust. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method as prescribed by the Accounting Standard (AS)-15 (Revised) - ''Employee Benefi ts'', which recognises each period of service as giving rise to additional unit of employee benefi t entitlement and measure each unit separately to build up fi nal obligation.

(ix) There are no amounts included in the Fair Value of Plan Assets for:

a) Company''s own fi nancial instrument

b) Property occupied by or other assets used by the Company

(x) Basis used to determine Expected Rate of Return on Plan Assets:

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

(xi) Salary Escalation Rate:

The estimates of future salary increases are considered taking into account infl ation, seniority, promotion, increments and other relevant factors.

2.3.1.1 Compensated Absences:

The obligation for compensated absences is recognised in the same manner as gratuity, amounting to charge of Rs. 11.91 Crore (Previous Year Rs. 0.38 Crore).

2.3.2 Defined Contribution Plans:

Amount recognised as expense and included in the Note 3.7 as "Contribution to Provident and Other Funds" Rs. 26.53 Crore (Previous Year Rs. 23.77 Crore).

2.4.1 The Company has spent Rs. 16.71 Cr. on Corporate Social Responsibility Projects/initiatives during the year including Rs. 0.87 Cr. towards capital expenditure.

2.5 The Board of Directors of the Company at its meeting held on 11th February, 2015 has approved a Scheme of Amalgamation (''the Scheme'') for the merger of Aditya Birla Chemicals (India) Limited (''ABCIL'') with the Company w.e.f. 1st April 2015 (the appointed date) in terms of the provisions of sections 391 to 394 of the Companies Act, 1956 read with other applicable provisions of the Companies Act, 1956 and the Companies Act, 2013.

The Scheme will be effective upon obtaining requisite approvals inter alia, approval of shareholders and creditors, sanction of the Scheme of Arrangement by the Hon''ble High Courts, approval of the Competition Commission of India and other regulatory approvals.

On merger of ABCIL with the Company, the shareholders of ABCIL will receive 1 (one) equity share of the Company of face value Rs. 10 each fully paid-up for every 16 (sixteen) equity shares of ABCIL of face value Rs. 10 each fully paid-up.

2.6 Previous year (Year ended 31st March, 2014) fi gures have been regrouped/reclassifi ed, wherever necessary, to correspond with the current year (31st March 2015) classifi cation/disclosure.

2.7 Figures less than Rs. 50,000 have been shown at actual, wherever statutorily required to be disclosed, as the figures have been rounded off to the nearest lakh.

Mar 31, 2014

GENERAL INFORMATION

Grasim Industries Limited (the "Company") is engaged primarily in two businesses, Viscose Staple Fibre (VSF) and in Cement, through its subsidiary UltraTech Cement Limited. It also produces Rayon Grade Pulp, Caustic Soda and allied Chemicals, which are used in the manufacture of VSF. The manufacturing plants of the Company, its Subsidiaries and Joint Ventures are located in India, Canada, Sweden, China, Middle East, Sri Lanka and Bangladesh. 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.

Rs.in Crore

Current Previous Year Year

1.1 CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF:

1.1.1 Claims/Disputed Liabilities not acknowledged as Debts:

(a) Custom Duty 7.06 2.07

(b) Sales Tax/Purchases Tax/VAT 0.10 0.01

(c) Excise Duty/Cenvat Credit/Service Tax 83.16 1.98

(d) Water Cess 17.69 23.96

(e) Income Tax 144.36 -

(f) Various claims in respect of disputed liabilities of discontinued 34.26 70.00 business in earlier year

(g) Others 26.95 25.37

1.1.2 Out of the 4.1.1 above, disputes pending with revenue and other government authorities challenged/appealed by the Company are:

Cash outflows for the above are determinable only on receipt of judgements pending at various forums/ authorities.

1.3 SEGMENT REPORTING

1.3.1 Primary Segment Reporting (by Business Segment)

Primary Segment has been identified based on the nature of products and services, the different risks and returns, and the internal reporting structure. The Company considers Business Segment as the Primary Segment for disclosure. Details of products included in each of the segments are as under:

Fibre and Pulp - Viscose Staple Fibre and Rayon Grade Pulp

Chemicals - Caustic Soda, Epoxy and Allied Chemicals

Others - Mainly Textiles

Inter-segment transfers of independent marketable products are at market rates.

Unallocated items include general corporate income, expense, assets and liabilties, which are not allocated to any business segment.

1.4.1 Secondary Segment Reporting (by Geographical Segment):

The Company''s operating facilities are located in India.

(viii) Gratuity:

The Employees'' gratuity fund is managed by a Trust. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method as prescribed by the Accounting Standard (AS)-15 (Revised) - ''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.

(ix) There are no amounts included in the Fair Value of the Plan Assets for:

a) Company''s own financial instrument

b) Property occupied by or other assets used by the Company

(x) Basis used to determine Expected Rate of Return on Plan Assets:

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

(xi) Salary Escalation Rate:

The estimates of future salary increases are considered taking into account inflation, seniority, promotion, increments and other relevant factors.

(xiii) The best estimate of the expected Contribution for the next year amounts to Rs. 7.50 Crore (Previous Year Rs. 7.50 Crore).

2.1 Compensated Absences:

The obligation for compensated absences is recognised in the same manner as gratuity, amounting to charge of Rs. 0.38 Crore (Previous Year Rs. 2.88 Crore).

2.2 Defined Contribution Plans:

Amount recognised as expense and included in the Note 3.7 as "Contribution to Provident and Other Funds" Rs. 23.77 Crore (Previous Year Rs. 22.50 Crore).

3 General Description of Leasing Agreements:

(i) Lease Assets: Godowns, Offices, Flats and Others

(ii) Future Lease rentals are determined on the basis of agreed terms

(iii) At the expiry of lease terms, the Company has an option to return the assets or extend the term by giving notice in writing

4. Previous year figures have been regrouped/reclassified, wherever necessary, to correspond with the current year classification/disclosure.

5. Figures less than Rs. 50,000 have been shown at actual, wherever statutorily required to be disclosed, as the figures have been rounded off to the nearest lakh.

Mar 31, 2013

GENERAL INFORMATION

Grasim Industries Limited (the "Company") is engaged primarily in two businesses, Viscose Staple Fibre (VSF) and in Cement, through its subsidiary. It also produces Rayon Grade Pulp, Caustic Soda and allied Chemicals, which are used in the manufacture of VSF. The manufacturing plants of the Company, its Subsidiaries and Joint Ventures are located in India, Canada, Sweden, China, Middle East, Sri Lanka and Bangladesh. 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 GDRs are listed on the Luxembourg Stock Exchange.

1.1.1.1 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.

2.1.1 The Board of Directors has recommended a dividend of Rs. 22.50 per share for the year ended, 31st March, 2013 (Previous Year Rs. 22.50 per share). The total cash outflows on account of the dividend would be Rs. 206.52 Crore (Previous Year Rs. 206.36 Crore) and on account of Corporate Dividend Tax Rs. 9.81 Crore (Previous Year Rs. 12.02 Crore).

2.1.2 Proposed Dividend (including Corporate Dividend Tax) includes Rs. 0.02 Crore (Previous Year Rs. 0.01 Crore) related to Previous Year.

# Net of Deferred Employees'' Compensation Expenses Rs. 0.65 Crore (Previous Year Rs. 1.65 Crore).

3.1 CAPITAL COMMITMENTS

Estimated amount of contracts remaining to be executed on capital account and not provided {(Net of Advance paid of Rs. 268.23 Crore (Previous Year Rs. 488.20 Crore)}

3.2 SEGMENT REPORTING

3.2.1 Primary Segment Reporting (by Business Segment)

Primary Segment have been identified based on the nature of products and services, the different risks and returns and the Internal reporting structure. The Company considers Business Segment as the Primary Segment for disclosure. Details of products included in each of the segments are as under:

Fibre and Pulp - Viscose Staple Fibre and Rayon Grade Pulp

Chemicals - Caustic Soda and Allied Chemicals

Others - Mainly Textiles

Inter-segment transfers of independent marketable products are at market rates.

(viii) Gratuity:

The Employee''s gratuity fund is managed by a Trust. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method as prescribed by the Accounting Standard (AS) 15 - Revised ''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.

(ix) 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

(x) Basis used to determine Expected Rate of Return on Plan Assets:

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

(xi) Salary Escalation Rate:

The estimates of future salary increases are considered taking into account inflation, seniority, promotion, increments and other relevant factors.

(xiii) The best estimate of the expected Contribution for the next year amounts to Rs. 7.50 Crore (Previous Year Rs. 7.50 Crore).

3.3.1.1 Compensated Absences:

The obligation for compensated absences is recognised in the same manner as gratuity, amounting to charge of Rs. 2.88 Crore (Previous Year Rs. 2.12 Crore).

3.3.2 Defined Contribution Plans:

Amount recognised as expense and included in the Note 3.7 as "Contribution to Provident and Other Funds" Rs. 22.50 Crore (Previous Year Rs. 20.04 Crore).

3.3.3 Previous year figures have been regrouped/reclassified, wherever necessary, to correspond with the current year classification/disclosure.

3.3.4 Figures less than Rs. 50,000 have been shown at actual, wherever statutorily required to be disclosed, as the figures have been rounded off to the nearest lakh.

Mar 31, 2012

GENERAL INFORMATION

Grasim Industries Limited (the "Company") is engaged primarily in two businesses, Viscose Staple Fibre (VSF) and in cement through its subsidiary. It also produces Caustic Soda and allied Chemicals and Rayon Grade Pulp which are used in the manufacture of VSF. The manufacturing plants of the Company, its Subsidiaries and its Joint Ventures are located in India, Middle East, Sri Lanka, Canada, Bangladesh and China. The Company is a public limited company and its shares are listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), and the Company's GDR's are listed on the Luxembourg Stock Exchange.

1.1.1 The Board of Directors has recommended a dividend of Rs 22.50 per share for the year ended 31st March, 2012 (Previous Year Rs 20 per share).

The total cash outflows on account of the dividend Rs 206.36 Crore (Previous Year Rs 183.40 Crore) and on account of Corporate Dividend Tax Rs 12.02 Crore (Previous Year Rs 13.66 Crore).

1.1.2 Proposed Dividend (including Corporate Dividend Tax) for the Current Year includes Rs 0.01 Crore related to Previous Year.

Rs in Crore Current Previous Year Year

2.1 Contingent Liabilities not provided for in respect of :

2.1.1 Claims/Disputed Liabilities not acknowledged as debt:

Custom Duty 3.70 3.70

Sales Tax/Purchase Tax/VAT 0.20 2.01

Excise Duty/Cenvat Credit/Service Tax 7.58 7.65

Water Cess 24.17 22.53

Various claims in respect of disputed liabilities of discontinued business in earlier year 70.00 -

Others 26.81 36.05

Out of the above matter disputes pending with Revenue and other Government authorities challenged/appealed by the Company are:

(a) Water charges for water not made available as per agreement 22.32 20.68

(b) Penalty for not utilising the land within the time limit prescribed as per the sanction document, utilisation of which 5.34 - is delayed due to non-fulfilment of condition by Gujarat Industrial Development Corporation

(c) Claims arising from disputes of vendors/contractors 7.16 7.56

(d) Service Tax on Goods Transport Agency on full amount of service instead on 25% of value of services 5.90 4.81

Cash outflows for the above are determinable only on receipt of judgements pending at various forums/authorities

2.1.2 Custom Duty (Net of Cenvat Credit) which may arise if obligation for exports is not fulfilled against import of raw materials and machinery 8.06 0.85

2.1.3 Letter of Undertaking-cum-Indemnity, Corporate Guarantees given to Bank/ Financial Institutions for finance provided to subsidiary and joint venture 207.61 378.68

- Amount Outstanding against above 96.69 178.36

2.2 Estimated amount of contracts remaining to be executed on capital account and not provided (Net of Advance paid of Rs 488.20 Crore, Previous Year Rs 44.43 Crore) 1,427.14 226.17

2.3 Segment Reporting

2.3.1 Primary Segment Reporting (by Business Segment)

Segments have been identified in line with the Accounting Standard on Segment Reporting (AS-17), taking into account the organisational reporting structure as well as the differential risks and returns of these segments. Details of products included in each of the segments are as under:

Fibre and Pulp - Viscose Staple Fibre and Rayon Grade Pulp

Chemicals - Caustic Soda and Allied Chemicals

Others - Mainly Textiles

Inter-segment transfers of independent marketable products are at market rates.

Unallocated items include general corporate income, expense, assets and liabilities which are not allocated to any business segment.

2.4.1 During the year ended 31st March, 2012, the revised format of accounts was notified by modifying Schedule VI under the Companies Act, 1956. The new format has been followed for preparation and presentation of the financial statements. The adoption of revised Schedule VI, as aforesaid does not impact recognition and measurement principles followed for preparation of the financial statements. The Company has reclassified the previous year's figures in accordance with the requirements applicable in the current year.

2.4.2 Figures less than Rs 50,000 have been shown at actual, wherever statutorily required to be disclosed, as the figures have been rounded off to the nearest lakh.

Mar 31, 2011

(Rs. in Crore)

1. Contingent Liabilities not provided for in respect of:

Current Year Previous Year

(a)Claims/Demands against the Company challenged by the Company and not acknowledged as debts

- Excise Duty/Cenvat Credit/Service Tax 7.65 33.18

- Water Cess 22.53 19.05

- Custom Duty 3.70 1.97

- Sales Tax/VAT 2.01 0.17

- Others 36.05 38.14

(b) Custom Duty which may arise if obligation for exports is not fulfilled against import of raw materials and machinery 0.85 1.43

(c) Letter of Undertaking-cum-Indemnity, Corporate Guarantees given to Bank/ Financial Institutions for finance provided to subsidiaries and joint ventures 378.68 84.00

- Amount outstanding against the above 178.36 65.00

2. Estimated amount of contracts remaining to be executed on capital account and not provided (Net of advance paid Rs. 43.60 crore, Previous Year Rs. 14.63 crore) 226.17 25.74

3. The reported numbers for the previous year ended 31st March, 2010, are not comparable as same include results of the discontinued Sponge Iron and Cement business of the Company, sold/demerged during the Financial Year 2009-10, effective from 22nd May, 2009, and 1st October, 2009, respectively.

4. Idea Cellular Limited (Idea), an Associate of the Company, was originally a tripartite joint venture between A.V. Birla Group, Tata Group and AT&T Group. With the exit of AT&T and the Tata Group, Idea is now part of A.V. Birla Group. Prior to its exit, Tata Group had alleged that the A.V. Birla Group had committed material breach of the Shareholders Agreement and the Tata Group invoked the arbitration clause, pursuant to which an Arbitral Tribunal has been constituted, which has taken up the claims of the Tata Group and the counter-claims of the A.V. Birla Group and proceedings are on going. The Company believes that it has a strong case to counter the allegations of breach and it does not contemplate any liability to arise on this matter.

5. During the year, the Company has entered into a Joint Venture agreement with Essel Mining and Industries Ltd. to form a Joint Venture Company namely Bhubneshwari Coal Mining Company Limited to undertake contract coal mining business.

6. During the year, under a Scheme of Amalgamation under Sections 391 to 394 of the Companies Act, 1956, Samruddhi Cement Limited (SCL), a subsidiary of the Company, has been amalgamated with UltraTech Cement Ltd. (UTCL), another subsidiary of the Company, w.e.f. 1st July, 2010. Accordingly, the shareholders of SCL have been issued 4 (four) equity shares of UTCL of the face value of Rs. 10 each credited as fully paid up, in lieu of 7 (seven) equity shares of SCL of the face value of Rs. 5 each (fully paid up). As a result, shareholding of the Company in UTCL stands increased to 60.34%.

In the previous year, under a scheme of Arrangement under Sections 391 to 394 of the Companies Act, 1956 (the scheme), the erstwhile Cement Business of the Company (Net Asset Value Rs. 4,088.26 crore) was transferred to SCL w.e.f. 1st October, 2009. In term of the scheme, SCL issued one equity share of the face value of Rs. 5 each fully paid for every one fully paid-up equity share of the Company on record date.

7. During the year, the Company has acquired 4,000 additional shares of Birla Lao Pulp and Plantation Company Limited, a Joint Venture of the Company, at a cost of Rs. 17.86 crore.

8. There are no Micro, Small and Medium Enterprises, as defined in the Micro, Small and Medium Enterprises Development Act, 2006, to whom the Company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made. The above information regarding Micro, Small and Medium Enterprises have been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the Auditors.

9. Segment Reporting:

(a) Primary Segment Reporting (by Business Segment)

(i) Segments have been identified in line with the Accounting Standard on Segment Reporting (AS-17), taking into account the organisational structure as well as the differential risks and returns of these segments. Details of products included in each of the segments are as under: Fibre and Pulp - Viscose Staple Fibre and Rayon Grade Pulp

Chemicals - Caustic Soda and Allied Chemicals

Cement - Grey and White Cement (upto 30th September, 2009)

Sponge Iron - Sponge Iron (upto 22nd May, 2009)

Textiles -Yarn

10. Related Party Transactions:

(a) Parties where control exists Ã Subsidiaries:

Sun God Trading and Investments Limited Samruddhi Swastik Trading and Investments Limited Samruddhi Cement Limited (w.e.f. 4th September, 2009 and upto 30th June, 2010) UltraTech Cement Limited Dakshin Cement Limited UltraTech Cement Lanka Private Limited (previously known as UltraTech Ceylinco (Private) Limited)

UltraTech Cement Middle East Investment Limited (w.e.f. 3rd March, 2010)

Star Cement Co. LLC, Dubai, UAE

Star Cement Co. LLC, RAK, UAE

Al Nakhla Crusher LLC, Fujairah, UAE

Arabian Cement Industry LLC, Abu Dhabi, UAE

Arabian Gulf Cement Co. WLL, Bahrain

Emirates Power Company Ltd., Bangladesh

Emirates Cement Bangladesh Ltd., Bangladesh

Harish Cement Limited

Grasim Bhiwani Textiles Limited

Vikram Sponge Iron Limited (upto 21st May, 2009)

(b) Other Related Parties with whom transactions have taken place during the year:

Joint Ventures:

A.V. Cell Inc., Canada

A.V. Nackawic Inc., Canada

Birla Jingwei Fibres Company Limited

Birla Lao Pulp & Plantations Company Limited

Bhaskarpara Coal Company Limited;

Madanpur (North) Coal Company (Private) Limited; and

Bhubaneswari Coal Mining Limited

Associates:

Aditya Birla Science & Technology Company Limited

Idea Cellular Limited

Key Management Personnel:

Shri Shailendra K. Jain, Whole-Time Director

(upto 31st March, 2010)

Relatives of Shri Shailendra K. Jain:

- Smt. Niharika Jain, Wife

- Shri Suvvrat Jain, Son

- Shri Devavrat Jain, Son

Shri Adesh Gupta, Whole-Time Director and Manager (w.e.f. 3rd October, 2009) Relative of Shri Adesh Gupta:

- Smt. Usha Gupta, Wife

Shri K.K. Maheshwari, Whole-Time Director

(w.e.f. 20th May, 2010)

Shri D.D. Rathi, Whole-Time Director

(upto 31st May, 2009)

Enterprise where significant influence exists:

- Vishal Industries and Chemicals Private Limited

11. Previous yearÃs figures have been regrouped and rearranged wherever necessary to conform to this yearÃs classification.

12. Additional information required under Part II of Schedule VI to the Companies Act, 1956, is as per Schedule 23.

Mar 31, 2010

Rs.in Crores

1.1 Contingent Liabilities not provided for in respect of: Previous Year

(a) Claims not acknowledged as debts 92.51 387.57 (Includes demands in respect of Excise Duty, Cenvat Credit, Water Cess, Sales Tax/VAT, Electricity Duty etc.)

(b) Custom Duty which may arise if obligation for exports is not fulfilled against import of raw materials and machinery 1.43 --

(c) Custom Duty on import of technical know-how and other services relating to projects against which Bank Guarantee/Bond of Rs.Nil Crores ( Previous Year Rs. 5.36 Crores) is furnished. -- 10.81

1.2 Letter of Undertaking-cum Indemnity, Corporate Guarantee given to Bank/ Financial Institutions for finance provided to subsidiary and joint venture. 84.00 80.00

2. The Ministry of Textiles, vide its orders dated 30th June, 1997 and 1st July, 1999, has deleted cement from the list of commodities to be packed in Jute bags under the Jute Packaging (Compulsory use in Packing Commodities) Act 1987. In view of this, the Company does not expect any liability for non-despatch of cement in Jute bags in respect of earlier years.

3. Estimated amount of contracts remaining to be executed on capital account and not provided (Net of advance paid Rs.14.63 Crores,

Previous Year Rs. 91.84 Crores). 25.74 363.30

4. Land, Building and Plant and Machinery of some of the Units were revalued on 1st April, 1974, 1st April, 1980, 1st April, 1982 and 1st April, 1985, by approved valuers on the basis of assessment about the then current value of similar assets. As a result, book value of such assets was increased, which had been transferred to Capital Reserve.

In the current period the Company has reinstated revalued amounts (net of withdrawals) at their original cost to bring them in line with its accounting policy of valuing at cost. Accordingly unamortised revaluation amount of Rs. 3.24 Crores has been adjusted from fixed assets with corresponding adjustment to revaluation reserve. This change does not have any impact on the profits for the year.

5. A Scheme of Arrangement for sale of Sponge Iron Unit of the Company has become effective on 22nd May, 2009, on completion of the necessary formalities.

In terms of the scheme, on effective date:

(a) Welspun Power and Steel Limited (Welspun) has infused the required funds into Vikram Sponge Iron Limited (VSIL) for payment of consideration to the Company and has accordingly acquired 99.75% equity share capital of VSIL and as such VSIL has ceased to be a Subsidiary of the Company.

(b) The Company has transferred the Sponge Iron Unit of the Company to VSIL, on going concern basis, on receipt of the consideration of Rs. 1,030 crores and the Unit ceases to be part of the Company.

(c) The profit of sale of the Sponge Iron Unit amounting to Rs. 336.07 Crores (Net of Tax Rs. 8.65 Crores) has been accounted for as an extraordinary item.

6. The Scheme of Arrangement under Sections 391 to 394 of the Companies Act, 1956 (the scheme) to transfer Cement Business (inter-alia comprising of Grey Cement, White Cement, Ready Mix Concrete Businesses) on a going concern basis to its subsidiary Samruddhi Cement Limited (SCL) w.e.f. 1st October, 2009, the appointed date has become effective on 18th May, 2010, on getting requisite approvals and completion of necessary formalities.

In terms of the Scheme, the shareholders of the Company will receive 1 (one) equity share of SCL of the face value of Rs. 5 each, credited as fully paid up, for every 1 (one) fully paid up equity share of the Company held on 28th May, 2010, the record date to be fixed for the purpose.

Consequent to vesting of the Cement Business of the Company in terms of the Scheme, the Financial Statements of the Company for the year ended 31st March, 2010, do not include the operations of the Cement Business for the period of six months from 1st October, 2009 to 31st March, 2010, and are therefore strictly not comparable with the figures of the previous year ended 31st March, 2009.

All the assets and liabilities of the Cement Business of the Company, on the appointed date, have been transferred to SCL. The excess of assets over liabilities relating to the cement business (net of Debenture Redemption Reserve of Rs. 27.50 Crores and Capital Subsidy Reserve of Rs. 0.30 Crores transferred as liabilities pertaining to Cement Business) transferred as on 1st October, 2009, has been adjusted in terms of the Scheme against the Reserves of the Company as under:

7. Idea Cellular Limited (Idea), an Associate of the Company, was originally a tripartite joint venture between A.V. Birla Group, Tata Group and AT&T Group. With the exit of AT&T and the Tata Group, Idea is now part of A.V. Birla Group. Prior to its exit, Tata Group had alleged that the A.V. Birla Group had committed material breach of the Shareholders Agreement and the Tata Group invoked the arbitration clause, pursuant to which an Arbitral Tribunal has been constituted, which has taken up the claims of the Tata Group and the counter- claims of the A.V.Birla Group and proceedings are on going. The Company believes that it has a strong case to counter the allegations of breach and it does not contemplate any liability to arise on this matter.

8. During the year, the shareholding of the Company in Idea, has changed from 5.26% to 5.18% w.e.f. from 1st March, 2009, as Idea has issued new shares to the shareholders of Spice Communication Limited on merger of Spice Communication Limited with Idea.

9. During the year, the Company has purchased 5,077,603 equity shares of Rs 10 each of UltraTech Cement Limited from Samruddhi Swastik Trading and Investments Limited, a wholly owned subsidiary of the Company at book value of Rs. 172.04 Crores.

The Company has also acquired additional shares in its joint ventures as under:

(a) 45,000 ÃA class equity shares of A V Nackawic, Canada at a cost of Rs. 39.96 Crores.

(b) 2,000 shares of Birla Lao Pulp & Plantation Company Ltd at a cost of Rs. 9.68 Crores.

10. Research and Development Expenditure

Revenue Expenditure on Research and Development included in the different heads of expenses in the Profit and Loss Account is Rs. 4.39 Crores (Previous Year Rs. 5.50 Crores).

11. In terms of the Scheme of Arrangement as mentioned in Note 6 of Schedule 21(B), a Compensatory Employee Stock Option Scheme (CESOS) will be formulated by SCL under which the stock option holders, of the Company will be entitled to one employee stock option of SCL for every employee stock option held by them in the Company. The CESOS is an outcome of the Scheme and is in no way a modified or a new ESOS.

The impact on account of CESOS has been accounted for on provisional basis, based on the divided grant price of the stock options to be issued by SCL under CESOS, as per the division of stock option grant price under the Employee Stock Option Scheme, 2006 (ESOS 2006) recommended by the Merchant Bankers to ESOS 2006. Adjustments, if any, required on final approval of grant price by Compensation Committee of the Board of Directors of the Company in consultation with the Board of Directors of SCL, will be carried out in the next year.

The provisional revised grant price considered for the Company s stock option under ESOS 2006 is Rs. 1,523 per stock option granted under the Tranche I and Rs. 2,279 per stock option granted under Tranche II of ESOS 2006.

12. Segment Reporting

a . Primary Segment Reporting (by business segment)

(i) Segments have been identified in line with the Accounting Standard on Segment Reporting (AS 17), taking into account the organizational structure as well as the differential risks and returns of these segments. Details of products included in each of the segments are as under:- Fibre & Pulp - Viscose Staple Fibre & Rayon Grade Pulp Chemicals - Caustic Soda & Allied Chemicals Cement - Grey & White Cement (upto 30th September, 2009) Sponge Iron - Sponge Iron (upto 22nd May, 2009) Textiles -Yarn

(ii) Inter-segment transfers of independent marketable products are at market rates.

13. Related Party Transactions:

a. Parties where control exists - Subsidiaries:

Sun God Trading And Investment Limited

Samruddhi Swastik Trading And Investment Limited

Samruddhi Cement Limited (w.e.f. 4th September, 2009)

UltraTech Cement Limited

Dakshin Cement Limited

UltraTech Cement Lanka Private Limited (previously known as UltraTech Ceylinco (Private) Limited)

UltraTech Cement Middle East Investment Limited (w.e.f. 3rd March, 2010)

Harish Cement Limited

Grasim Bhiwani Textiles Limited

Vikram Sponge Iron Limited (upto 21st May 09)

b. Other Related Parties with whom transactions have taken place during the year: Joint Ventures:

AV Cell Inc., Canada

A V Nackawic Inc., Canada,

Birla Jingwei Fibres Co. Limited

Birla Lao Pulp & Plantations Company Limited

Bhaskarpara Coal Co. Limited

Madanpur (North) Coal Company (Pvt.) Limited Associates:

Aditya Birla Science & Technology Company Limited

Idea Cellular Limited Key Management Personnel: i) Shri Shailendra K. Jain, Whole-Time Director

Relatives of Shri Shailendra K. Jain:

- Smt. Niharika Jain, Wife

- Shri Suvvrat Jain, Son

- Shri Devavrat Jain, Son

ii) Shri Adesh Gupta, Whole-Time Director (w.e.f. 3rd October, 2009) Relatives of Shri Adesh Gupta

- Smt. Usha Gupta, Wife

iii) Shri D. D. Rathi, Whole-Time Director (upto 31st May, 2009) Enterprise where significant influence exists:

- Vishal Industries and Chemicals Private. Limited (upto 31st May, 2009)

(vii) There are no amounts included in the Fair Value of Plan assets for:

b) The obligation for compensated absence is recognised in the same manner as gratuity, amounting to Rs. 9.32 Crores (Previous Year Rs. 13.30 Crores) for the year ended 31st March, 2010.

B Defined Contribution Plans :

Amount recognised as expense and included in the Schedule 18 - "Contribution to Provident and Other Funds" - Rs. 29.21 Crores (Previous Year Rs. 38.80 Crores).

14. Previous years figures have been regrouped and rearranged wherever necessary to conform to this years classification.

15. Additional information required under Part II of Schedule VI to the Companies Act, 1956 is as per Schedule 22.

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