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Grasim Industries Ltd.

BSE: 500300 Sector: Industrials
NSE: GRASIM ISIN Code: INE047A01021
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NSE 00:00 | 21 Sep 1051.15 -17.05
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OPEN 1075.00
PREVIOUS CLOSE 1067.05
VOLUME 63290
52-Week high 1299.90
52-Week low 915.00
P/E 30.40
Mkt Cap.(Rs cr) 68,943
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1075.00
CLOSE 1067.05
VOLUME 63290
52-Week high 1299.90
52-Week low 915.00
P/E 30.40
Mkt Cap.(Rs cr) 68,943
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Grasim Industries Ltd. (GRASIM) - Director Report

Company director report

TO THE MEMBERS OF GRASIM INDUSTRIES LIMITED

Your Directors are pleased to present the 71st Annual Report of the Company along withthe Audited Financial Statements

for the financial year ended 31st March 2018.

FINANCIAL HIGHLIGHTS

Consolidated Standalone
2017-18 2016-17 2017-18 2016-17
Revenue from Operations 57338.20 40247.17 16034.71 11252.95
Earnings Before Interest Depreciation/Amortisation and Tax (EBITDA) 10881.09 8332.89 3541.54 2628.70
Less: Finance Costs 1359.13 702.40 128.13 57.62
Less: Depreciation and Amortisation 2724.36 1807.59 627.66 446.14
Profit Before Share in Profit/(Loss) of Equity Accounted 6797.60 5822.90 2785.75 2124.94
Investees Exceptional Items and Tax
Share in Profit/(Loss) of Equity Accounted Investees (727.44) 129.41 - -
Exceptional Items (432.85) - (272.61) -
Profit Before Tax (PBT) 5637.31 5952.31 2513.14 2124.94
Tax Expenses 1947.12 1706.70 744.48 564.94
Profit After Tax including Share in Profit/(Loss) of Equity accounted Investees and Profit of Life Insurance Business attributable to Participating Policyholders 3690.19 4245.61 1768.66 1560.00
Less: Profit of Life Insurance Business attributable to Participating Policyholders (2.57) - - -
Attributable to: 3687.62 4245.61
Shareholders of the Company 2678.58 3167.30 1768.66 1560.00
Non-Controlling Interest 1009.04 1078.31 - -
Other Comprehensive Income for the Year (278.48) 963.44 (221.69) 1011.53
Attributable to:
Shareholders of the Company (167.88) 951.48 (221.69) 1011.53
Non-Controlling Interest (110.60) 11.96 - -
Total Comprehensive Income for the Year 3409.14 5209.05 1546.97 2571.53
Attributable to:
Shareholders of the Company 2510.70 4118.78 1546.97 2571.53
Non-Controlling Interest 898.44 1090.27 - -

The financial statements have been prepared in accordance with IndianAccounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards)Rules 2015 as amended by the Companies (Indian Accounting Standards) (Amendment) Rules2016 and the relevant provisions of the Companies Act 2013 (‘the Act') andguidelines issued by the Securities and Exchange Board of India (‘SEBI'). TheCompany has adopted Ind AS with effect from 1st April 2015 i.e. the date of transitionas applicable for the Company.

DIVIDEND

Based on the Company's performance the Directors are pleased torecommend for your approval a dividend of Rs 6.20 (Rupees Six and Paise Twenty Only) perequity share of Rs 2/- each of the Company for the financial year ended 31st March 2018.The dividend if approved by the members would involve a cash outflow of Rs 455.66 Crore(inclusive of Dividend Distribution Tax).

In terms of the provisions of Regulation 43A of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations(SEBI (LODR)) the Company has formulated a Dividend Distribution Policy. This Policy isgiven in Annexure ‘A' to this Report and is accessible from theCompany's website www. grasim.com.

TRANSFER TO RESERVES

The Company proposes to transfer Rs 1000 Crore to the GeneralReserves.

PERFORMANCE REVIEW

On a consolidated basis the revenue from operations for FY 2017-18increased to Rs 57338 Crore which was 42.46% higher than that of the previous year (Rs 40247 Crore in FY 2016-17). The consolidated EBITDA increased to Rs 10881 Crore forFY 2017-18 which was 30.58% higher than that of the previous year ( Rs8333CroreinFY2016-17).Theincreaseintheconsolidated revenue and consolidated EBITDA wasmainly on account of growth in Viscose Chemicals Cement businesses and inclusion ofperformance of erstwhile Aditya Birla Nuvo Ltd. (ABNL) post-merger of ABNL with theCompany with effect from 1st July 2017 and cement assets acquired by UltraTech CementLimited with effect from 29th June 2017. Standalone financials for the current yearinclude the performance of erstwhile ABNL consequent to the merger with the Company witheffect from 1st July 2017 as stated above. Since the financial statements of the previousyear do not include the performance of erstwhile ABNL and that also of the acquiredassets by UltraTech Cement Limited (at consolidated level) the financial performance ofthe current year is strictly not comparable with that of the previous year.

On a standalone basis revenue from operations for FY 2017-18increased to Rs 16035 Crore which was 42.50% higher than that of the previous year ( Rs11253 Crore in FY 2016-17). The standalone EBITDA increased to Rs 3542 Crore forFY 2017-18 which was 35% higher than that of the previous year ( Rs 2629 Crore in FY2016-17).

The Management Discussion and Analysis section focuses on theCompany's strategies for growth and the performance review of thebusinesses/operations in depth.

STRATEGIC INITIATIVES

Composite Scheme of Arrangement

Vide its Order dated 1st June 2017 the National Company Law TribunalBench at Ahmedabad (NCLT) has sanctioned the Composite Scheme of Arrangement between theCompany and Aditya Birla Nuvo Limited (ABNL) and Aditya Birla Financial Services Limited(now known as Aditya Birla Capital Limited) (ABCL) (Scheme). With effect from 1st July2017 (the Effective Date 1) ABNL along with its assets liabilities contractsemployees etc. stands amalgamated in the manner provided in the Scheme.

With effect from 4th July 2017 (the Effective Date 2) the financialservices business of the Company stands transferred to and vested in ABCL.

With the amalgamation becoming effective ABCL and its subsidiarieshave become the subsidiary companies of the Company.

The restructuring in terms of the Scheme has enabled the Company toextend its presence to the fast growing sectors such as financial services and telecomand enhance longterm value for the shareholders. This will also enable ABCL to growfaster under the Company's strong parentage and is expected to improve its creditprofile and reduce its cost of borrowings thereby enhancing its competitive positioning.The merger has also led to consolidation of similar businesses of the Company and ABNL.

Right to Manage and Operate the Viscose Filament Yarn Business ofCentury Texiles and Industries Limited ("CTIL")

During the financial year 2017-18 the Company entered into anagreement with CTIL for acquiring the Right to Manage and Operate the Viscose FilamentYarn Business (VFY Business) of CTIL located at Shahad and Kalyan (Maharashtra) witheffect from 1st February 2018. The acquisition has also led to consolidation of similarbusinesses create synergy and leverage brand strength in value chain for VFY business ofthe Company.

Idea Cellular Limited

Idea Cellular Limited (Idea) is an Associate of the Company and theshare of the Company in Profit of Idea has been consolidated in the Consolidated FinancialStatements. Post-merger of Aditya Birla Nuvo Limited with the Company the holding of theCompany in Idea increased to 27.96% which got revised to 23.13% on issue of additionalequity capital by Idea in February 2018.

A scheme of amalgamation of Vodafone India Limited (VIL) and its whollyowned subsidiary Vodafone Mobile Services Limited (VMSL) with Idea is underimplementation under which VIL will get amalgamated with Idea subject to requisiteregulatory and other approvals. On effectiveness of the scheme the holding of the Companyin Idea will be revised to ~11.5%.

Upon the amalgamation becoming effective the entire business of VILand VMSL (excluding VIL's investment in Indus Towers Limited its internationalnetwork assets and information technology platforms) will vest with Idea.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Companies Act 2013 (Act) read with theCompanies (Accounts) Rules 2014 SEBI (LODR) and Ind AS 110 – ConsolidatedFinancial Statements and Ind AS 28 – Investment in Associates and Joint Ventures– the Audited Consolidated Financial Statements are provided in this Report. TheConsolidated Financial Statements have been prepared on the basis of the Audited FinancialStatements of the Company its subsidiaries joint ventures and associate companies asapproved by their respective Board of Directors.

SUBSIDIARIES ASSOCIATES AND JOINT VENTURE COMPANIES

With effect from 1st July 2017 the subsidiary/associate companies ofthe erstwhile Aditya Birla Nuvo Limited have become the subsidiaries/associates of theCompany.

In accordance with the provisions of Section 129(3) of the Act readwith Rule 5 of the Companies (Accounts) Rules 2014 a report on the performance andfinancial position of each of the subsidiaries associates and joint venture companies isgiven in Annexure ‘B' to this Report.

In accordance with the provisions of Section 136(1) of the Act theAnnual Report of the Company containing inter alia the audited standalone andconsolidated financial statements has been placed on the website of the Companywww.grasim.com. Further the audited financial statements along with related informationand other reports of each of the subsidiary companies have also been placed on thewebsite of the Company www.grasim.com.

In accordance with Section 136 of the Act the financial statements ofthe subsidiary companies and related information are available for inspection by theMembers at the Registered Office of the Company during business hours up to the date ofthe Annual General Meeting (AGM). Any Member desirous of obtaining a copy of the saidfinancial statements may write to the Company Secretary at the Registered Office of theCompany.

SHARE CAPITAL

During the year 2017-18:

Aditya Birla Nuvo Limited and Grasim Industries Limited and AdityaBirla Financial Services Limited (now known as Aditya Birla Capital Limited) the Companyallotted 190462665 equity share of Rs 2/- each fully paid-up of the Company tothe shareholders of the erstwhile Aditya Birla Nuvo Limited as on the record date fixedon 6th July 2017.

Allotted 71660 equity shares of Rs 2/- each pursuant to theexercise of stock options in terms of the Employees Stock Option Schemes of the Company.

During the year 2017-18 the Company has not issued shares withdifferential voting rights and sweat equity shares.

DEPOSITS

During the year under review the Company has not accepted or renewedany deposit within the meaning of Section 73 of the Act read with the Companies(Acceptance of Deposits) Rules 2014 and as such no amount of principal or interest wasoutstanding as on the date of the Balance Sheet.

PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS

Pursuant to Section 186 of the Act and Schedule V of the SEBI (LODR)disclosures on particulars relating to loans advances and investments are provided aspart of the Financial Statements. There are no guarantees issued or securities provided bythe Company in terms of Section 186 of the Act read with the Rules issued thereunder.

ABRIDGED ANNUAL REPORT

In terms of the provisions of Section 136(1) of the Act Rule 10 of theCompanies (Accounts) Rules 2014 and Regulation 36 of SEBI (LODR) Regulations 2015 theBoard of Directors has decided to circulate the Abridged Annual Report containing salientfeatures of the Balance Sheet and Statement of Profit & Loss and other documents tothe shareholders for the Financial Year 2017-18 under the relevant laws.

MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT

The Management's Discussion and Analysis Report for the year underreview as stipulated under Regulation 34 of the SEBI (LODR) forms an integral part ofthis Report.

CORPORATE GOVERNANCE

Your Directors re-affirm their continued commitment to best practicesof Corporate Governance. Corporate Governance principles form an integral part of the corevalues of the Company.

In terms of Regulation 34 of the SEBI (LODR) a separate report onCorporate Governance along with a certificate from the Auditors' on its complianceforms an integral part of this Report and is given as Annexure ‘C' tothis Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Appointment/Re-appointment of Directors

The Board on the recommendations of the Nomination and RemunerationCommittee of the Board of Directors of the Company has appointed.

- Ms. Usha Sangwan (DIN: 02609263) as an Additional Director of theCompany with effect from 23rd May 2018. In terms of the provisions of the Act Ms.Sangwan will hold office up to the date of the Annual General Meeting (AGM);

- Mr. Himanshu Kapania (DIN: 03387441) as an Additional Director of theCompany with effect from 14th August 2018. In terms of the provisions of the Act Mr.Kapania will hold office up to the date of the AGM;

- Ms. Anita Ramachandran (DIN: 00118188) as an Additional IndependentDirector of the Company with effect from 14th August 2018. In terms of the provisions ofthe Act Ms. Ramachandran will hold office for a period of five years i.e. up to 13thAugust 2023.

The Directors commend the resolutions for the appointment of Ms. UshaSangwan Mr. Himanshu Kapania and Ms. Anita Ramachandran as Directors on the Board of theCompany as indicated in the Notice of the AGM.

In accordance with the provisions of the Act and the Articles ofAssociation of the Company Mr. Shailendra K. Jain (DIN: 00022454) and Mrs. RajashreeBirla (DIN: 00022995) Directors of the Company retire by rotation at the AGM and beingeligible have offered themselves for reappointment. Resolution seeking there-appointments of Mr. Shailendra K. Jain and Mrs. Rajashree Birla have been included inthe Notice of the AGM. Your Directors commend the Resolutions for your approval.

A brief resume of the Directors being appointed and reappointed formspart of the Notice of the AGM.

Continuation of Directorship

In terms of the Regulation 17(1A) of SEBI (LODR) Regulations 2015approval of the shareholders by way of a special resolution is required for theappointment/ continuation of directorship of non-executive directors who have attainedthe age of 75 years as on 1st April 2019.

The following Directors of the Company have/will attain the age of 75 years as on 1stApril 2019:

• Mr. M. L. Apte (DIN: 00003656) – Independent Director;

• Mr. B. V. Bhargava (DIN: 00001823) – Independent Director;

• Mr. O. P. Rungta (DIN: 00020559) – Independent Director; and

• Mr. Shailendra K. Jain (DIN: 00022454) – Non- Executive Director.

Based on the recommendations of the Nomination and RemunerationCommittee the Board has subject to the approval of the shareholders consented to thecontinuation of Directorship of the aforesaid Directors till the end of each of theirrespective tenures.

Your Directors commend the Resolutions for your approval.

Cessation

With effect from 23rd May 2018 Mr. N. Mohan Raj (DIN: 00181969)resigned from the Board of Directors of the Company. The Board places on record its deepappreciation and gratitude for the valuable contribution and advice offered by Mr. MohanRaj during his tenure as Director on the Board of the Company.

Key Managerial Personnel

In terms of the provisions of Sections 2(51) 203 of the Act read withthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 Mr.Dilip Gaur Managing Director Mr. Sushil Agarwal Whole-time Director & ChiefFinancial Officer and Mrs. Hutokshi Wadia President and Company Secretary are the KeyManagerial Personnel of the Company.

During the financial year 2017-18 Mr. Dilip Gaur Managing Directorand Mr. Sushil Agarwal Whole-time Director & Chief Financial Officer of the Companyhave not received any commission / remuneration from the Company's SubsidiaryCompanies.

MEETINGS OF THE BOARD

The Board of Directors of your Company met 6 times during the yeardetails of which are given in the Corporate Governance Report forming part of this AnnualReport.

DECLARATION OF INDEPENDENCE

Your Company has received declarations from all the IndependentDirectors of the Company confirming that they meet the criteria of independence asprescribed under the Act read with Schedules and Rules issued under the SEBI (LODR).

FORMAL ANNUAL EVALUATION

The evaluation framework for assessing the performance of Directors ofthe Company comprises of contributions at the meetings strategic perspective or inputsregarding the growth and performance of the Company among others.

Pursuant to the provisions of the Act and the SEBI (LODR) theDirectors have carried out the annual performance evaluation of the Board IndependentDirectors Non-Executive Directors Executive Directors Committees and the Chairman ofthe Board.

The Nomination and Remuneration Committee and the Board have laid downthe manner in which formal annual evaluation of the performance of the Board itsCommittees and individual Directors has to be made. It includes circulation of evaluationforms separately for evaluation of the Board and its Committees IndependentDirectors/Non-Executive Directors/Executive Directors and the Chairman of the Company.

The details of the programme for familiarisation of IndependentDirectors of the Company are available on the Company's website viz.www.grasim.com.

DIRECTORS' RESPONSIBILITY STATEMENT

The audited accounts for the year under review are in conformity withthe requirements of the Act and the Accounting Standards. The financial statements reflectfairly the form and substance of transactions carried out during the year under reviewand reasonably present the Company's financial condition and results of operations.

Your Directors confirm that:

a) in the preparation of the Annual Accounts the applicable accountingstandards have been followed along with proper explanations relating to materialdepartures if any;

b) the accounting policies selected have been applied consistently andjudgements and estimates are made that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st March 2018 and of the profitof the Company for the year ended on that date;

c) proper and sufficient care have been taken for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventinganddetectingfraudandotherirregularities;

d) Annual Accounts have been prepared on a ‘going concern'basis;

e) the Company has laid down proper internal financial controls andthat such internal financial controls are adequate and were operating effectively; and

f) your Company has devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.

ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO

The information on conservation of Energy Technology Absorption andForeign Exchange Earnings and Outgo stipulated under Section 134(3)(m) of the CompaniesAct 2013 read with the Companies (Accounts) Rules 2014 is set out in Annexure‘D' to this Report.

AUDITORS AND AUDIT REPORTS

Statutory Auditors

Pursuant to the provisions of Section 139(1) of the Act read with theCompanies (Audit and Auditors) Rules 2014 as amended from time to time:

- the members at the 69th AGM held on 23rd September 2016 haveapproved the appointment of B S R & Co. LLP Chartered Accountants (ICAI FirmRegistration No. 101248W/W-100022) as Joint Statutory Auditors of the Company for aperiod of five consecutive years till the conclusion of the 74th AGM of the Company to beheld in the year 2021 subject to ratification of their appointment by the members atevery AGM till 73rd AGM; and

- the members at the 70th AGM held on 22nd September 2017 haveapproved the appointment of S R B C & Co. LLP Chartered Accountants (ICAI FirmRegistration No. 324982E) as Joint Statutory

Auditors of the Company for a period of five consecutive years tillthe conclusion of 75th AGM of the Company to be held in the year 2022 subject toratification of their appointment by the members at every AGM till 74th AGM.

Accordingly necessary resolutions for ratification of appointment ofAuditors are included in the Notice for this AGM. Your Directors commend the Resolutionsfor your approval.

Consent of the Auditors and certificate u/s 139 of the Act have beenobtained from each of the Auditors to the effect that their appointment/ratification ifmade shall be in accordance with the applicable provisions of the Act and the Rulesissued thereunder. As required under the SEBI (LODR) B S R & Co. LLP and S R B C& Co. LLP have confirmed that they hold a valid certificate issued by the Peer ReviewBoard of ICAI.

Pursuant to the provisions of Section 139(1) of the Act as amendedwith effect 7th May 2018 ratification of the appointment of the Statutory Auditors bythe Members at every AGM during the period of their appointment has been omitted witheffect from that date. In view thereof read with the provisions of Section 142 of the Actconsent of the members is sought to partially modify the resolutions passed at theaforesaid AGMs and authorise the Board to ratify the appointments and fix theirremuneration for each of the Statutory Auditors respective remaining terms. Your Directorscommend the Resolutions for your approval.

The observations made by the Statutory Auditors on the FinancialStatements of the Company in their Report for the financial year ended 31st March 2018read with the explanatory notes therein are self-explanatory and therefore do not callfor any further explanation or comments from the Board under Section 134(3)(f) of the Act.The Auditors' Report does not contain any qualification reservation disclaimer oradverse remark.

COST AUDITORS

Pursuant to the provisions of Section 148 of the Act read with theCompanies (Cost Records and Audit) Rules 2014 as amended Notifications/Circulars issuedby the Ministry of Corporate Affairs from time to time your Board has on therecommendation of the Audit Committee re-appointed M/s. D. C. Dave & Co. CostAccountants Mumbai as the Cost Auditors to conduct the audit of the cost records of allthe Units of the Company except VFY-Century Rayon Unit for the financial year 2018-19 ata remuneration not exceeding Rs 1500000/- (Rupees Fifteen Lakh Only) plus applicabletaxes and reimbursement of actual out-of-pocket expenses in connection with the audit. Onthe recommendations of the Audit Committee your Directors have appointed M/s. M. R.Dudani & Co. as Cost Auditors

to conduct cost audit at VFY-Century Rayon Unit for the financial year2018-19 at a remuneration of Rs 2.20 Lakh (Rupees Two Lakh Twenty Thousand only) plusapplicable taxes and reimbursement of actual out-of-pocket expenses in connection with theaudit.

The Company has received consent from M/s. D. C. Dave & Co. andM/s. M. R. Dudani & Co. Cost Accountants to act as the Cost Auditors of the Companyfor the financial year 2018-19 along with separate certificates confirming each of theirindependence.

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Act read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Boardhas re-appointed M/s. BNP & Associates Company Secretaries Mumbai to conductthe secretarial audit for the financial year 2018-19. The Secretarial Audit Report issuedby M/s. BNP & Associates Company Secretaries for the financial year 2017-18forms part of this Annual Report and is set out in Annexure ‘E' to thisReport. The Secretarial Audit Report does not contain any qualification reservationdisclaimer or adverse remark.

DISCLOSURES

Contracts and Arrangements with Related Parties

During the financial year 2017-18 all contracts/arrangements/transactions entered into by the Company with Related Parties were onarm's length basis and in the ordinary course of business. There are no materialtransactions with any Related Party as defined under Section 188 of the Act read with theCompanies (Meetings of Board and its Powers) Rules 2014. All Related Party transactionshave been approved by the Audit Committee of the Company. Omnibus approvals are taken fortransactions which are repetitive nature. The Company has implemented Related Partytransaction manual and Standard Operating Procedures for the purpose of identification andmonitoring of such transactions.

The details of contracts and arrangements with Related Parties of theCompany for the financial year ended 31st March 2018 are given in Notes to the StandaloneFinancial Statements forming part of the Annual Report.

The Policy on Related Party Transactions as approved by the Board isavailable on the Company's website www. grasim.com.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has established a robust Vigil Mechanism for reporting ofconcerns through the Whistle Blower Policy of the Company which is in compliance of theprovisions of

Section 177 of the Act read with Rule 7 of the Companies (Meetings ofBoard and its Powers) Rules 2014 and SEBI (LODR). The Policy provides for framework andprocess whereby concerns can be raised by its employees against any kind ofdiscrimination harassment victimisation or any other unfair practice being adoptedagainst them. Adequate safeguards are provided against victimisation to those who avail ofthe mechanism and access to the Chairman of the Audit Committee in exceptional cases isprovided to them. The details of the Vigil Mechanism are also provided in the CorporateGovernance Report and the Whistle Blower Policy has been uploaded on the website of theCompany www.grasim.com.

CORPORATE SOCIAL RESPONSIBILITY

In terms of the provisions of Section 135 of the Act read with theCompanies (Corporate Social Responsibility Policy) Rules 2014 the Board of Directors ofthe Company has a Corporate Social Responsibility (CSR) Committee which is chaired byMrs. Rajashree Birla. The other Members of the Committee are Mr. B. V. Bhargava Mr.Shailendra K. Jain and Mr. Dilip Gaur. Dr. Pragnya Ram Group Executive PresidentCorporate Communication and CSR is a permanent invitee to the Committee. The CorporateSocial Responsibility Policy (CSR Policy) indicating the activities to be undertaken bythe Company is available on the Company's website www.grasim.com.

The Company is a caring corporate citizen and lays significant emphasison development of the host communities around which it operates. The Company with thisintent has identified several projects relating to Social Empowerment and WelfareInfrastructure Developments Sustainable Livelihood Health Care and Education during theyear and initiated various activities in neighbouring villages around its plantlocations. The Annual Report on CSR activities is given in Annexure ‘F'to this Report.

RISK MANAGEMENT

Pursuant to the requirement of SEBI (LODR) the Company has constitutedRisk Management Committee which is mandated to review the risk management plan/ processof the Company. Risk evaluation and management is an ongoing process within theOrganisation. The Company's Risk Management Committee periodically assesses risk inthe internal and external environment and incorporates Risk Mitigation Plans in itsstrategy business and operation plans. The Company has comprehensive risk managementpolicy which is periodically reviewed by the Risk Management Committee.

BUSINESS RESPONSIBILITY REPORT

As per SEBI (LODR) a separate section of Business ResponsibilityReport forms part of this Report.

ANNUAL RETURN

The Copy of Annual Return is available on the Company's websitewww.grasim.com.

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial control systemcommensurate with the size of its operations. Internal control systems comprising ofpolicies and procedures are designed to ensure sound management of the Company'soperations safe keeping of its assets optimal utilisation of resources reliability ofits financial information and compliance. Systems and procedures are periodically reviewedto keep pace with the growing size and complexity of the Company's operations. Duringthe year under review no material or serious observation has been received from theAuditors of the Company citing inefficiency or inadequacy of such controls.

REMUNERATION POLICY

The Remuneration Policy of your Company as formulated by theNomination and Remuneration Committee of the Board of Directors is given in Annexure‘G' to this Report.

COMMITTEES OF THE BOARD AUDIT COMMITTEE

During the year under review the Audit Committee was reconstituted andcomprises of Mr. Arun Thiagarajan Mr. B.V. Bhargava Mr. M.L. Apte and Mr. Dilip Gaur.The Committee comprises of majority of Independent Directors with Mr. Arun Thiagarajanbeing the Chairman. Mr. Sushil Agarwal Whole-Time Director & CFO is the permanentinvitee.

Further details relating to the Audit Committee are provided in theCorporate Governance Report forming part of this Annual Report.

All the recommendations made by the Audit Committee during the yearwere accepted by the Board of Directors of the Company.

NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee comprises of Mr. M. L. ApteMr. Cyril Shroff and Mr. Kumar Mangalam Birla as its members. Further details relating tothe Nomination and Remuneration Committee are provided in the Corporate Governance Reportforming part of this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The Corporate Social Responsibility Committee comprises of Mrs.Rajashree Birla Mr. B. V. Bhargava Mr. Shailendra K. Jain and Mr. Dilip Gaur as itsmembers. Further details relating to the Corporate Social Responsibility Committee areprovided in the Corporate Governance Report forming part of this Annual Report.

STAKEHOLDERS' RELATIONSHIP COMMITTEE

The Stakeholders' Relationship Committee comprises of Mr. B. V.Bhargava Mr. M. L. Apte Mr. Cyril Shroff and Mr. Sushil Agarwal as its members. Furtherdetails of the Stakeholders' Relationship Committee are provided in the CorporateGovernance Report forming part of this Annual Report.

RESEARCH AND DEVELOPMENT (R&D)

The R&D investment continues to be focused on enhancing ourrelative market position in an increasingly competitive environment. Focused programmesare driving innovations in the critical areas of product quality cost reduction newproduct offerings and environmental sustainability. Our portfolio of programmes addressesnear-term needs through the implementation of recently developed technologies whilefilling the pipeline with future opportunities to achieve our long-term goals.

Pulp and Fibre Business

Pulp R&D continues to focus on expanding our specialty pulpopportunities at the Domsjo Unit as well as generally improving the quality andconsistency of supply to our Viscose Staple Fibre (VSF) manufacturing sites. Tailoredproducts have been developed providing expanded sales into filam entyarn production andnew applications in novel new casing products and cellulose acetate end-uses are beingadopted. Advances in pulp quality and consistency for the internal VSF customers areleading to significant reductions in contaminate levels like dirt and resins. Model-basedpredictive controls are leading to reduced viscosity and lignin content variations in theprocess. Online pulp viscosity measurement and control technologies are being explored tofurther improve the consistency of this critical parameter. Implementation of newoperating conditions such as those associated with alkali extraction have enabled thereduced consumption of key raw materials at the Domsjo plant. Ongoing collaborations withexternal laboratories are focused on developing new sustainable technologies and recyclingopportunities. Our digitisation initiative continues to seamlessly connect the pulp plantprocesses to the consuming fibre plants. Access to production data for pulp is beingutilised at the fibre plants allowing the optimisation of blending leading to viscoseconsistency improvements. Model-based predictive control systems are being designed tofurther extract value from this approach.

Fibre-oriented R&D is focused on continuously improving productionefficiency and enhancing our customers' experience. We have expanded implementationof demonstrated technologies which reduce in-process material consumption and increaseline productivities. Work continues to extend the gains through further processinnovations. Our marketplace-targeted differentiated offerings agenda has resulted in newinsights and innovations for improved products in our non-wovens and dope-dyed fibresegments. The resulting product and process upgrades are being well recognised asproviding improved customer performance and value. Our value-added product programmepipeline continues to provide ongoing new opportunities at different stages ofdevelopment. A recently commercialised example is our branded offering Liva Sno. Thisproduct not only simplifies the downstream processing but also contributes toprocessors' environment-friendly efforts by reducing water consumption and thegeneration of waste effluent. We are planning the continued launch of new products in ourpipeline in the coming years.

The fibre-focused quality improvement work over the last five years hasbeen aimed at bringing our production lines to global benchmark quality levels andachieving product leadership. Application of metrics like first pass yield (FPY) andUptime and systematic Six-Sigma process projects to improve line performance levels havecontributed significantly toward achieving our objectives. The process capability analysesof production lines have been broadly completed and approximately three quarters ofproduction capacity has been upgraded and certified as achieving benchmark levels.Projects are ongoing to improve our remaining assets. A comprehensive fibre qualitygradation system has been developed to more fully specify the product attributes requiredto fulfil our customers' expectations for quality and processing performance. Thissystem is being used to guide our improvement projects aimed at ongoing product tradeleadership.

Our business development process includes the promotion of ourcellulose-based comfort fibres throughout the entire value chain from yarn producersthrough retail. The Textile Research and Applications Development Centre (TRADC) plays acritical role in this process through the development of unique fabric designs continualrenewal of our fabric resource library creation of seasonal design collections and launchsupport for new product offerings. Unique fabric design bases were developed to promoteour fibres in textile hubs across India for knitted fabrics in tops intimate apparellegwear and sweaters and woven designs for shirts suits jackets and women's wear.Additionally more than 150 fabric styles from over 50-base designs were created toshowcase our products in home textile applications in India and internationally. TRADCalso contributed technical input to the "Sleep

Soft" marketing catalogue showcased in the USA during HomeTextile Week. These efforts are key to new adoptions like our polyester/Modal blend forbed linens currently in commercial production. Earlier this year the Digital LIVA FabricLibrary was launched providing online product information vendor contacts and detailedinput on products and fabrics developed by TRADC over many years. This provides a valuableresource for customers to access when developing their future offerings with our products.Also by analysing the inquiries we can better anticipate market trends and newopportunities to fulfil our customers' needs. LIVA Season Collections have beendeveloped for the Spring/Summer and Autumn/Winter periods and a dozen story lines wereprepared which describe the values of these innovative concepts. These collections andassociated information are a critical part of promoting the LIVA brand with our partners.

Significant strides were made in our in-house technology advancementfor the Excel project. Selective upgrades to one Excel line at Nagda based on our newtechnology has enabled the achievement of near benchmark product quality and improvedrealisation. Data generation and improved understanding of solvent recovery has led to theprototype demonstration of a new resin chemistry improving our solvent quality.

Enabling Capabilities

Our R&D facilities are geared to support the innovation needs ofthe Pulp and Fibre Business. The sequence of development is initiated in laboratoryfacilities for small scale preparation experiments and analysis equipment. Successfulconcepts are taken through the scale-up facilities for spinning dope making and fibrespinning and ultimately through the downstream facilities of yarn fabric and garmentmaking.

This complete process and product development capability put in placeover the years now supports the creation and execution of our process development and newproduct pipelines which are creating significant value for the business. Once atechnology is proven the solid process and product data are available to support robustcommercialisation on large lines in partnership with the Operations and Marketing teams.

Chemical Business

The Company's Chemical business focus has been to develop variousproduct variants as to meet different customer segments improving and optimising keyoperating processes and practices enhance equipment reliability and asset integrity andsignificantly upgrade the health safety and environment systems and processes.

Products: Differentiation in Products by making product variants inflakes stable bleaching powder Chlorinated paraffin's poly aluminium chloridehydrochloric acid and food grade phosphoric acid product as to meet the specific customersegments.

Processes: Process improvements and optimization of Key and criticalprocess operations such removal trace impurities in salt chlorine and hydrogen streams ofthe manufacturing cycle.

Health Safety and Environment Monitoring and controllingequipment's such to minimise process and stack emissions reduction of solid wastesand Zero liquid discharge approach with a view to progress towards efficiencies beyondlegal compliances.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OFTHE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THEFINANCIAL STATEMENT RELATES AND THE DATE OF THE REPORT

Except as disclosed elsewhere in this Report no material changes andcommitments which could affect the Company's financial position have occurredbetween the end of the financial year of the Company and the date of this Report.

PARTICULARS OF EMPLOYEES

In accordance with the provisions of Section 197(12) of the Act readwith Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 the names and other particulars of employees drawing remunerationin excess of the limits set off in the aforesaid Rules are to be set out in theBoard's Report as an annexure thereto. In line with the provisions of Section 136(1)of the Act the Report and Accounts as set out therein are being sent to all Members ofthe Company excluding the aforesaid information about the employees. Any Member who isinterested in obtaining these particulars about employees may write to the CompanySecretary at the Registered Office of the Company. The aforesaid addendum is alsoavailable for inspection by the members at the Registered Office of the Company 21 daysbefore the AGM and up to the date of the ensuing AGM during business hours on workingdays.

Disclosures pertaining to remuneration and other details as requiredunder Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment andRemuneration of

Managerial Personnel) Rules 2014 are given in Annexure ‘H'to this Report.

EMPLOYEE STOCK OPTION SCHEMES (ESOS)

The Company has Employee Stock Option Scheme-2006 (ESOS-2006) andEmployee Stock Option Scheme-2013 (ESOS-2013) which provides for grant of Stock Optionsand/or Restricted Stock Units (RSUs) to the eligible employees of the Company.

The details of Employee Stock Options granted pursuant to ESOS-2006 andthe Employee Stock Options and RSUs granted pursuant to ESOS-2013 as also the otherdisclosures in compliance with the provisions of the Securities and Exchange Board ofIndia (Employee Share Based Employee Benefits) Regulations 2014 are available on theCompany's website www.grasim.com.

A certificate from the Statutory Auditors with respectiveimplementation of the Company's Employees Stock Option Schemes will be placed at theensuing AGM for inspection by the Members and a copy will also be available forinspection at the Registered Office of the Company.

The Company intends to reward attract motivate and retain employeesand directors of the Company its holding and subsidiary companies for their high level ofindividual performance by offering them equity shares by way of an Employee Stock OptionsScheme.

Towards this the Company has sought approval of the members to approveand adopt the ‘Grasim Industries Ltd. Employee Stock Option Scheme 2018'(hereinafter referred to as the "Scheme 2018"). The Company intends to offer notmore than 3515528 Equity Shares of Rs 2/- each (which represents 0.53% of the paid-upequity capital as on 31st March 2018) in one or more tranches in accordance with theScheme 2018 the provisions of the law or regulations issued by the relevant authority asmay be prevailing at that time.

The Scheme 2018 shall be implemented through the ESOS Trust since it isproposed that the equity shares of the Company would be acquired by the ESOS Trust fromthe secondary market.The Company proposes to extend financial assistance to the ESOS Trustfor this purpose subject to the overall limits specified under the applicable laws.

The broad framework of the Scheme 2018 is detailed in the Notice of theAGM. Your Directors commend the resolutions for approving the grant in terms of the Schemeand the implementation of the Scheme through theTrust.

HUMAN RESOURCES

The Company's human resources is the strong foundation forcreating many possibilities for its business. During the year the Company added greateremployee talent through seamless integration of acquired assets. The efficient operationsof manufacturing units and market development and expansion for various products was thehighlight of our people effort.

Continuous people development for developing knowledge and skillscoupled with the Talent Management practices will deliver the talent needs of theOrganisation. The Company's employee engagement score reflects high engagement andpride in being part of the Organisation.

The Group's Corporate Human Resources plays a critical role in theCompany's talent management process.

AWARDS AND ACCOLADES

Some of the significant accolades earned by the Company during the yearinclude:

- Platinum Award in "2nd Annual EKDKN EMINENT Award 2017" under CSR Categoryin Chemical & Fertilizer Sector (Ek Din Desh Ke Naam)

- Dun & Bradstreet Corporate Award 2018 as the Top Company for its stellarperformance in the textiles sector. Grasim was honored for being "Champion ofChange" in the transformation of the country.

- Ranked # 205 in the list of "Global 2000 – Growth Champions 2018" byForbes Magazine USA

- Award for Best Export Performance in the Category of Viscose Staple Fibre (GoldTrophy). 2018 - SRTEPC

- India Sustainable Leadership Award from World Sustainability a Not-For-ProfitOrganization advocating for Sustainable Leadership

- Liva - Most admired fashion innovation of the year by India Fashion Forum

- NCQC (National Convention on Quality Concepts) 2017 Mysuru – "PAREXCELLENCE" Award - Insulators (Rishra)

- IMC Ramkrishna Bajaj National Quality Award 2017 Performance Excellence inManufacturing Category - Chemicals

- Golden Peacock Award - 2018 - Business Excellence (Indian Rayon)

GENERAL

Your Directors state that no disclosure or reporting is required inrespect of the following items as there were no transactions on these items during theyear under review:

1. Issue of equity shares with differential rights as to dividend voting or otherwise;

2. Issue of shares (including sweat equity shares) to employees of the Company underany Scheme save and except ESOS referred to in this Report;

3. There were no revisions in the financial statements;

4. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and the Company's operations in thefuture;

5. The Company has made and maintained cost records as specified by the CentralGovernment under subsection (1) of section 148 of the Companies Act 2013 for theFinancial Year 2017-18; and

6. The Company has complied with provisions relating to the constitution of InternalComplaints Committee under the Sexual Harassment of Women at Workplace

(Prevention Prohibition and Redressal) Act 2013. No cases orcomplaints were filed pursuant to the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.

ACKNOWLEDGEMENTS

Your Directors express their deep sense of gratitude to the banksfinancial institutions stakeholders business associates Central and State Governmentsfor their cooperation and support and look forward to their continued support in future.

We very warmly thank all of our employees for their contribution to theCompany's performance. We applaud them for their superior levels of competencededication and commitment to the Company.

For and on behalf of the Board
Kumar Mangalam Birla
Chairman
Mumbai 14th August 2018 (DIN: 00012813)