2 Grasim - Annual - Report - FY023

GRASIM INDUSTRIES LIMITED
BOARD OF DIRECTORS Cement Divisions

Mr. Saurabh Misra – Business Head
MR. KUMAR MANGALAM BIRLA – Chairman Mr. O. P. Puranmalka – Sr. President (Chief of Marketing)
MRS. RAJASHREE BIRLA Mr. S. K. Maheshwari – Sr. Executive President (Chief of
MR. M. L. APTE Manufacturing)
MR. M. C. BAGRODIA Vikram Cement, Jawad and Aditya Cement, Shambhupura
Mr. K. C. Jhanwar – Executive President
MR. B. V. BHARGAVA
Mr. M. K. Parasrampuria – Jt. Executive President (F&C)
MR. R. C. BHARGAVA Mr. S. Kumar – Jt. Executive President (Technical)
MR. Y. P. GUPTA Mr. M. C. Agarwal – Jt. Executive President (Technical)
MR. CYRIL SHROFF Mr. R. A . Somani – Jt. Executive President (Technical)
MR. S. G. SUBRAHMANYAN Grasim Cement, Raipur
MR. V. VENKATESWARLU Mr. L. N. Rawat – Sr. Executive President
MR. SHAILENDRA K. JAIN – Whole Time Director Rajashree Cement, Malkhed
Mr. D. P. Somani – Executive President
Adviser Mr. D. D. Atal – Jt. Executive President (Technical)
Mr. D. P. Mandelia Cement South – Reddipalayam
Mr. K. C. Birla – Jt. President
Chief Financial Officer
Mr. D. D. Rathi – Group Executive President & CFO Birla White, Kharia Khangar
Mr. S. N. Jajoo – Executive President
Company Secretary Mr. D. M. Mehta – Jt. Executive President (Technical)
Mr. Ashok Malu Vikram Ispat
Mr. Ratan K. Shah – President
Fibre & Pulp Divisions
Chemical Division
Mr. Shailendra K. Jain – President & Business Head
Mr. G. K. Tulsian – Executive President
Staple Fibre Division, Nagda Mr. Sunil Kulwal - Executive President
Mr. S. K. Saboo – Group Executive President Textile Divisions
Mr. O. P. Rungta – Sr. Executive President Mr. Vikram D. Rao – Group Executive President (Textiles)
Mr. Thomas Varghese – Executive President (Mktg.) Mr. R. M. Gupta – Sr. Executive President (Textile Operation)
Mr. S. Krishnamoorthy – Executive President (Marketing)
Mr. P. P. Agarwal – Jt. Executive President (F&C)
Mr. J. C. Soni – Executive President (Bhiwani Textiles)
Mr. D. N. Makharia – Jt. Executive President (Commercial)
Auditors
Pulp & Grasilene Divisions, Harihar M/s. G. P. Kapadia & Co., Mumbai
Mr. S. S. Maru – Sr. Executive President M/s. Lodha & Co., New Delhi
Birla Cellulosic Division, Birladham, Kharach Solicitors
Mr. Vijay Kaul – Sr. Executive President M/s. Mulla & Mulla & Craigie Blunt & Caroe, Mumbai
Contents
Chairmans’ Letter ......................................................................... 2 Schedules ........................................................................................ 48
Financial Highlights ..................................................................... 7 Cash Flow Statement .................................................................... 75
Management Discussion and Analysis ........................................ 8 Statement Relating to Subsidiary Companies ............................. 76
Report on Corporate Governance .............................................. 19 Auditors’ Report on Consolidated Financial Statement ............ 77
Consolidated Balance Sheet ......................................................... 78
Social Report ................................................................................ 24
Consolidated Profit and Loss Account ........................................ 79
Environment Report .................................................................... 27 Schedules forming part of Consolidated Financial Statements . 80
Shareholder Information .............................................................. 29 Consolidated Cash Flow Statement ............................................. 94
Directors’ Report .......................................................................... 36 Subsidiary Companies’ Reports & Accounts
Auditors’ Report ........................................................................... 43 Shree Digvijay Cement Company Limited ......................... 95
Balance Sheet ............................................................................... 46 Sun God Trading and Investments Limited ........................ 108
Profit and Loss Account ............................................................... 47 Samruddhi Swastik Trading and Investments Limited ....... 110
REGISTERED OFFICE: Birlagram, Nagda 456331 (M.P.)

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Dear Fellow Shareholders,
The year 2001-2002 will be remembered for long, not necessarily for all the
right reasons. It has been a year of aberrations. With the attack on the World
Trade Centre in September, dark clouds encircled the global economy. Given
the preponderance of the U.S, worldwide business faced great uncertainty.
The sudden drop in consumer confidence was no surprise. Stock markets
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CHAIRMAN'S
LETTER TO
SHAREHOLDERS
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of these seismic events. Your Company is no exception.
In the face of these setbacks your Company has displayed a remarkable Your Company has
resilience and notched up an impressive performance. While revenues at displayed a remarkable
Rs.4386.7 crores are marginally lower by 2 per cent, gross profit is up by 11 resilience and notched up an
per cent from Rs.672.7 crores to Rs.746.5 crores. Net profit after current tax
impressive performance.
has risen by 18 per cent from Rs.370.8 crores to Rs.438.3 crores and after
factoring in of the total taxes and exceptional items, it stood at Rs.303.0
crores, as against Rs.347.6 crores.
The year has witnessed a string of restructuring initiatives, such as the closure
of the Mavoor Plants, the disposal of the Gwalior Unit and the divestment
of shares of Birla Technologies Limited, which have impacted the bottom-
line. Importantly, these costs incurred on a one-time basis, will yield recurring
savings year after year and bolster your Company’s profitability in the long-
term, apart from enhancing its competitiveness.
I am sure I have your understanding and support on these issues.
To keep stoking growth in revenues and shore profits, we have taken a slew
of radical yet focused initiatives while leveraging our distinct strategic
architecture. Let me now dwell upon our business sectors and share with you
our plans for taking these ahead despite the challenging times.
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Cement
To sustain your Company’s leadership position, our thrust is on increasing

capital and manpower productivity, expanding volumes, and vigorous cost
reduction per tonne of cement.
The aggregrate cement capacity today is 11.4 Million MT per annum. Through
improving throughput, we expect to raise it by another 1.8 Million MT
during the year, taking our total capacities to 13.2 Million M.T.
The commissioning of two power plants at Aditya Cement in Rajasthan and

Grasim Cement in Tamilnadu, will lower power costs considerably, giving us
an edge.
As you are well aware, we have acquired 12.89% equity in Larsen and Toubro.
This initiative represents a strategic investment by us, in what I believe, is
India’s premier infrastructure company.
Viscose Staple Fibre
Our thrust is on increasing In Viscose Staple Fibre (VSF) we have outpaced competition not only in
capital and manpower productivity, India but in the Asian region too, commanding as we do nearly 25% of the
global pie. To retain our hold and grow further, given the changing market
expanding volumes, and vigorous
dynamics, we are exploring the possibility of foraying into selective cellulose
cost reduction per tonne of
fibres like Highwet Modular Fibres and Lyocal.
cement.
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Simultaneously your Company’s focus on enlarging VSF usage, given its

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inherent strengths, and expanding the markets will continue.
Textiles
To turn around the textile business in the foreseeable future and to stem
recurring losses, we have divested our textile unit at Gwalior to Meledeon
Exports Ltd, as a going concern, as the unit made losses continuously. Our
premier brands “Grasim and Graviera” are now being manufactured at a
single location in Bhiwani. Besides bringing in better synergies, fixed costs
and the value of current assets have been significantly pared. This is the first
major step to reverse the downturn of the fabric business.
Sponge-iron
Capacity utilisation of the Sponge Iron Plant at 559,567 tonnes was lower by
16 per cent year on year, mainly on account of the disruption in the supply of
natural gas, which is a concern area. However, given the increase in global
scrap price and signs of revival in the steel industry, the outlook appears
Going forward, cement will stable.
continue to be the key growth
Outlook
driver, admirably complemented by
the robust cash flows from the I believe, going forward, cement will continue to be the key growth driver, admirably
Viscose Staple Fibre business. complemented by the robust cash flows from the Viscose Staple Fibre business. Together
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these account for more than 80 per cent of your Company’s revenues and 90
per cent of operating profit. I am also confident that both these businesses
will continue to score very well in the future too on growth and earnings.
Further, positives will flow in the foreseeable future from a continual stress
on operational excellence, cost optimization, effective financial management
and the benefits that stem from the restructuring of business processes. The
Government’s renewed focus on infrastructure development and the upswing
in the housing sector bode well for your Company’s cement business. Grasim
then is well set for yet another era of growth. Our overall outlook for your
Company continues to be bright.
At the end of the day, despite the strong economic undercurrents, your
Company has managed to maintain profits, by and large outperforming their
competitors in most of the sectors in which they operate. This is a matter of
satisfaction for all of us. To my mind, more than anything else, it is the
culture of meritocracy that we espouse, it is the ebullience, the perseverance
and the commitment of practically all of your Company’s employees that has
made your Company what it is today. I wish to record my sincere appreciation
of their contribution.
They know fully well that creating and enhancing shareholder value is at the
core of your Company’s agenda.
The Aditya Birla Group – In Perspective
That said, I would like to dwell on the proactive measures taken on various
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counts to keep our Group attuned to the shifting realities of today’s hyper-
competitive landscape, and importantly to make sure that we continue to
remain successful.
Over the last four years, we have embarked on a continual process of renewal We have embarked on a
with a single-minded strategic focus on creation of customer and shareholder continual process of renewal with
value.
a single-minded strategic focus on
Being among the top three players, in the sectors in which we operate or creation of customer and
exiting; offering superior value addition to our customers, being continually shareholder value.
focused on targeted, cost-effective commercial innovations that drive us
unflinchingly towards global benchmarks in every operation of ours and
building upon the Aditya Birla brand form the contours of our strategic
structure.
Our strategic architecture
Value creation is the raison d’etre underpinning all of our businesses.
Growth in our key businesses has been pegged on consolidation, acquisition

and mergers. In so far as it relates to acquisitions, we are very clear that we
will bid at values and prices that make sense for us, depending on what value
we see in the asset and at what price we think we will create value for our
shareholders.
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At Hindalco, the Rs. 1,800 crores brownfield expansion is well on track. The
9th Potline in the smelter has been commissioned. The phased implementation
of the expansion programme will make much headway during this financial
year and should be completed by the year 2003-2004.
Enhancing the smelter capacity at Hirakud and merging Annapurna Foils

with Indal are calculated steps taken to entrench our Group’s stronghold in
the aluminium sector.
In the copper business of Indo Gulf while we have grown the smelter capacity
from 100,000 TPA to 150,000 TPA at Birla Copper, with a view to attain a
global scale, a further expansion is on the anvil.
To achieve a fair balance in terms of portfolio at Indian Rayon, in the recent

past we have forayed into the ready-to-wear apparel segment and the insurance
sector. This year we have ventured into the software sector, given its growth
potential. The acquisition of PSI Data Systems from Groupe Bull S.A. of
France, is a step in this direction.
To ensure Indian Rayon’s competitiveness in good times and tough times as

well, we had to recourse to rightsizing of its textile operations. The VRS
floated at Jayashree Textiles was responded to positively by 370 employees.
In the telcom sector, the three-way joint venture between AT&T, Tata
Cellular and our Group, newly christened “Idea Cellular Limited” is progressing
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growth of 135 percent this year, outpacing the industry average of 80 percent, Y K
and commanding a teledensity in excess of 30 percent in the country.
Birla Sun Life, our insurance venture, is gaining ground. As you may be
aware in this sector we have to factor a gestation period of atleast five years
before returns accrue.
Regrettably up until now we have not been able to exit from petroleum
refinery given the complexities of this J.V.
CVA (Cash Value Added) is Structural Processes / People Processes

indeed well entrenched as our
CVA (Cash Value Added) is indeed well entrenched as our measurement
measurement metric across
metric across the Group. We are now in the third planning cycle of the
the Group. CVA. Over the last three years we have successfully met with its objective -
essentially the streamlining and refinement of management decision making
processes which necessitate understanding business variables in depth and
quantifying their effect on value creation.
As a proactive response to today’s competitive global landscape and changing

times, we are continuously ensuring that our Group remains customercentric,
nimble footed, performance-driven and accountable on all fronts. To do so,
we spawn a culture of creativity and continuous innovation that can best the
competition.
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We are endeavouring to foster an environment in which our people are

enthused to work with an entrepreneurial spirit, creating that enabling
ambience where passion becomes embedded in the genetic coding.
Unleashing people potential in a balanced manner through a razor sharp

focus on competence enhancement and learning is happening at Gyanodaya,
the Aditya Birla Institute of Management Learning. Our aim here is also to
convert our people into global managers, to create entrepreneurs out of
them, to encourage them to think out-of-the-box. I believe it is only new
ideas and new thoughts that prevent obsolescence, create value for
shareholders and enable the Group to achieve ongoing profitable growth.
Yours sincerely,
KUMAR MANGALAM BIRLA
31st May, 2002
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FINANCIAL HIGHLIGHTS
Year ——> Unit 2001-02 2000-01 1999-00 1998-99# 1997-98 1996-97 1995-96 1994-95 1993-94 1992-93
Production
Viscose Staple Fibre Tonnes 176462 218847 188002 164355 174281 155385 162470 143421 158674 143202
Grey Cement Mn Tonnes 9.53 9.10 8.40 5.82 4.71 4.10 3.27 2.55 2.32 1.92
White Cement Tonnes 267915 251594 240492 131979 — — — — — —
Turnover
Viscose Staple Fibre Tonnes 175902 197825 186885 159526 166402 147162 157123 140366 148827 134621
Grey Cement Mn Tonnes 9.56 9.14 8.39 5.87 4.68 4.10 3.10 2.52 2.28 1.91
White Cement Tonnes 266105 251291 240014 133660 — — — — — —
Profit & Loss Account

Gross Sales Rs. Crs. 5070 5582 4982 4325 4023 3602 3199 2399 2202 1746
Net Sales Rs. Crs. 4372 4822 4273 3757 3500 3089 2742 2061 1865 1440
Other Income Rs. Crs. 129 108 88 110 124 135 211 113 116 62
Operating Profit (PBIDT) Rs. Crs. 937 911 756 678 698 706 773 558 433 280
Interest Rs. Crs. 190 239 256 292 256 259 230 142 118 60
Gross Profit (PBDT) Rs. Crs. 747 673 500 386 443 447 543 416 316 220
Depreciation Rs. Crs. 252 252 237 210 167 148 124 75 66 66
Profit before Tax & Exceptional Items Rs. Crs. 495 421 263 176 276 300 420 341 250 154
Current Tax Rs. Crs. 57 50 12 8 45 41 88 32 22 16
Deferred Tax Rs. Crs. 52 — — — — — — — — —
Net Profit after Tax (before Exceptional Items) Rs. Crs. 387 371 251 168 231 259 332 309 228 138
Exceptional Items Rs. Crs. –84 7 –18 –4 — 16 — — — —
Net Profit after Exceptional Items & Total Taxes Rs. Crs. 303 378 233 164 231 275 332 309 228 138
Equity Shares Dividend (including CTD) Rs. Crs. 83 81 72 63 54 52 45 41 32 25
Balance Sheet
Net Fixed Assets* Rs. Crs. 3263 3303 3401 3354 2633 2473 2222 1866 1438 991
Investments Rs. Crs. 1416 682 683 680 717 507 619 899 490 237
Net Current Assets Rs. Crs. 733 991 967 1002 1092 1250 1012 634 529 774
5412 4976 5052 5037 4442 4230 3853 3400 2457 2001
Share Capital Rs. Crs. 92 92 92 92 72 72 72 72 67 67
Reserve & Surplus* Rs. Crs. 2615 2984 2685 2524 2243 2068 1845 1558 991 795
Deferred Tax Balance Rs. Crs. 641 — — — — — — — — —
Loan Fund Rs. Crs. 2065 1900 2275 2421 2127 2090 1936 1769 1398 1139
Net Worth* 3347 3075 2777 2616 2316 2140 1917 1630 1059 863
5412 4976 5052 5037 4442 4230 3853 3400 2457 2001
*Excluding Revaluation Reserve Rs. Crs. 7 18 20 22 25 28 31 34 37 41
Ratios & Statistics

PBIDT Margin (%) 21.43 18.90 17.70 18.06 19.96 22.86 28.19 27.06 23.24 19.44
Interest Cover (PBIDT-Tax/Interest) (x) 4.63 3.61 2.91 2.29 2.56 2.57 2.98 3.70 3.50 4.40
ROACE (PBIT/Avg.CE) @ (%) 12.88 13.47 10.53 10.14 13.06 15.04 19.19 18.65 19.26 14.65
RONW (PAT/NW) @ (%) 12.78 12.30 8.64 6.63 10.36 12.76 18.71 22.95 23.72 20.40
Debt Equity Ratio (x) 0.62 0.62 0.82 0.93 0.92 0.98 1.01 1.09 1.32 1.32
Dividend per Share Rs./ Sh. 9.00 8.00 7.00 6.75 6.75 6.50 6.25 5.75 4.75 4.00
Earning per Share @ Rs./ Sh. 42 40 27 20 32 36 46 43 34 20
Cash Earning per Share @ Rs./ Sh. 75 68 53 45 55 56 63 53 44 30
Book Value per Share Rs./ Sh. 365 335 303 285 320 296 265 225 157 128
No. of Equity Shareholders No. 263549 279207 298232 199083 206851 213619 219859 229892 231243 240566
No. of Employees No. 16912 21473 23345 24407 23157 23397 22144 21582 22533 21998
# In FY 1998-99 Company acquired the Cement business of Indian Rayon and Industries Ltd. pursuant to a scheme of arrangement.
@ Before Exceptional Items
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MANAGEMENT’S DISCUSSION AND ANALYSIS
OVERVIEW
For Grasim it has been an eventful year. The Company’s two key businesses – Cement and Viscose Staple Fibre have performed
well. The performance of the Chemicals, Sponge Iron and Textile businesses has been constrained due to the economic slowdown.
Overall the results have been satisfactory.
Revenues declined marginally on lower VSF and Sponge Iron volumes. Improved profitability of the Cement business and reduced
finance costs offset the impact. Gross profits improved by 11% and pre-tax profits by 18% in FY02. Profit after current and
deferred taxes before exceptional charges due to business restructuring have grown 14% to Rs.386.8 crores in FY02.
In the context of the prevailing difficult environment, the Company’s performance is indeed commendable. The year was sluggish
on several counts. GDP grew by 5.7% only because of the recovery in the agriculture sector, which benefited from a well-
precipitated monsoon. The industrial sector suffered the most with growth rates nearly halving to a decade low level of 2.7%
taking a serious toll on consumer sentiment. The deepening of recession in the US following the 9/11 attacks added further
pressure. Reflecting weak sentiment and the resultant reduction in consumer spending, demand contracted across the sectors, both
in India and abroad.
AN EVENTFUL YEAR, STRATEGICALLY

It was an eventful year strategically. The Company closed the loss making Pulp and Fibre Plants at Mavoor (Kerala) and sold its
loss-making fabric unit at Gwalior (Madhya Pradesh). The stake in its software subsidiary was divested as well. Apart from these
restructuring moves, the Company strengthened its cement operations by commissioning a grinding plant at Bhatinda (Punjab)
and made strategic investments in Larsen & Toubro Limited.
Mavoor Plant Closure

The Company has been pursuing for closure of its Pulp and Fibre plants at Mavoor with the Government, primarily due to non-
availability of raw materials, the resultant poor quality of fibre and overall unviable operations. The plant operations were
suspended from May 1999. Subsequently, the Company reached a settlement with its Labour Unions for the closure of Mavoor
from 1st July 2001.
The Company incurred a sum of Rs.55.3 crores towards employee retrenchment compensation and provided an additional Rs.19.0
crores towards the shortfall in realisation from fixed assets retired from active use. Following the closure, the Company’s workforce
stands reduced by 2300, which accounts for 11% of its aggregate workforce. An annual savings of Rs.27.0 crores towards employee
costs and fixed overheads will accrue in future.
Textile Unit at Gwalior Divested

The Textile business of the Company consisted of fabrics unit at Gwalior (Madhya Pradesh), a composite unit at Bhiwani
(Haryana) and a spinning unit at Malanpur (Madhya Pradesh). The textile business has been under pressure due to adverse market
conditions and rising cost of operations in recent years. Given that the domestic textile industry is not showing definite signs of
recovery, the Company decided to restructure operations to prevent value erosion in future.
As part of a carefully chosen strategy, the Company decided to sell its textiles manufacturing units / undertakings at Gwalior and
centralise fabric operations at Bhiwani. The operation at Gwalior been the biggest drag and accounted for operating losses of
Rs.27.3 crores against operating profit of Rs. 6.7 crores at other textile units. A turnaround in the unit’s operations appeared
unlikely due to in-efficient operations, higher overheads and growing costs. The Company thus decided to sell the fabrics unit at
Gwalior as a going concern.
The Company reached an agreement with Melodeon Exports Limited for the sale of the textile manufacturing units at Gwalior for
a consideration of Rs.1.0 lac. The Company also agreed to pay Rs.15.0 crores to the Buyer for taking over the liabilities relating to
employees. The Company has incurred Rs.31.9 crores as an exit cost, which is charged to revenue account as an exceptional cost
in FY02.
With brands remaining under its fold and the high cost operation sold-off, the Company hopes to improve its position and overall
profitability of the business.
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Divestment of Stake in Software subsidiary
In another important move, the Company divested its entire holding in its software subsidiary - Birla Technologies
Limited. With a view to bring focus on key businesses and divest its smaller businesses, Company’s software division was
hived off last year into a subsidiary, named Birla Technologies Limited. The Company sold its entire stake in Birla
Technologies to PSI Data Systems for a consideration of Rs.11.3 crores in FY02. This was against its capitalised value of
Rs.29.4 crores and thus resulted in a non-cash loss of Rs.18.1 crores in FY02. The erosion in value of its software
subsidiary needs to viewed in the light of the deterioration in the industry environment and the sharp fall in sector
valuations. As you are aware, the Company had booked a non-cash profit of Rs.18.4 crores last year thru the corporatisation.
Hence even with the non-cash loss at present, the Company made a net gain of Rs. 0.3 crores from the divestment efforts,
which is satisfactory.
Commissioning of Cement Grinding Unit in Punjab

As part of its effort to strengthen presence in the profitable markets/regions, the Company set up a new 1.0 million tonnes per
annum (Mn TPA) grinding unit at Bhatinda, Punjab. The plant was completed within a record time and commissioned in
December 2001.
Operations have been stabilized and the plant has contributed significantly towards strengthened market presence and
volumes. Given the advantages of strategic location and superior technology, this environment friendly plant will boost the
Company’s presence in the lucrative markets of Punjab and Himachal Pradesh while also ensuring superior volumes and
realisation.
Strategic Investment in equity of Larsen & Toubro Limited

In another landmark initiative, the Company chose to acquire a 10.05% stake in Larsen & Toubro Limited, the largest cement
producer and a premium infrastructure solutions provider in India. The Company acquired 2.5 crore shares from Reliance
Industries Limited for a sum of Rs.766.5 crores, funded through internal sources.
Larsen & Toubro has a strong brand equity in Cement Industry and a 11% share of the domestic market. L&T also has enviable
strengths in the Engineering & Construction sector. In fact, L&T is a premium infrastructure solutions provider in the country
and thus is the best bet on infrastructure in India. The Company is exploring synergies that can stem from this relationship, for
mutual benefit.
SEGMENTAL REVIEW AND ANALYSIS

The Company’s key business viz., VSF and Cement together accounted for 81% of net revenues and 91% of operating profits in
FY02. This compares well with a respective share of 77% and 91% in FY01.
Textile
Other -2% VSF
Textile Other
6% 38%
6%
Sponge Iron VSF Sponge Iron 6%
7% 30% 5%
Cement Chemicals Cement Chemicals

46% 5% 50% 3%
Revenue Mix - FY02 PBDIT Mix - FY02
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VISCOSE STAPLE FIBRE (VSF)
2001-02 2000-01 %Change
Installed Capacity (TPA) 220,775 220,775 —

Production (Tonnes) 176,462 218,847 (-) 19
Sales Volume (Tonnes) 181,520 203,854 (-) 11
Net Divisional Turnover (Rs. Crores) 1328.5 1,472.7 (-) 10
VSF Realisation (Rs./Kg) 68.5 69.7 (-) 2
Operating Margins (%)* 26.7 29.0 —
*
Before Employee Separation Costs
Review of Operations
It was the challenging period for the VSF business, both in terms of operations and market conditions. While operations suffered
on account of water shortage at Nagda, market conditions for most of the year were unfavourable due to the worldwide recession.
The international trade in the textile sector was particularly affected. Simultaneously, the economic slow down on the home front
also adversely impacted the Textile industry. Viewed against this backdrop, the VSF business performance is satisfactory.
Water Shortage led to Plant Closure, Situation Likely to Recur in FY03

In the previous year, Western Madhya Pradesh had received scanty rainfall. As a result, the Nagda plant had to be shut down for
54 days during the first quarter of FY02, with a corresponding production loss. Under difficult market conditions, production had
to be regulated. On the whole, production had to be scaled down by 19%. This did not affect supplies to its customers as the
Company had built up sufficient inventory in anticipation of the water shortage.
As the western parts of Madhya Pradesh have received less rainfall in last monsoon, it is faced with water shortage this year as
well. Consequently, the Company is likely to shut down its Nagda operations sometime beginning of June 2002 till the onset of
the monsoon. To meet customer requirements, sufficient inventories have already been built up. No significant impact on the
profitability of the fibre business is expected.
The listlessness in the export/deemed export segments affected lower volumes, as they account for over 30% of aggregate sales
volumes traditionally. The deepening of recessionary pressures in the global markets resulted in reduced demand for yarns, fabrics
and made-ups from India. On top of this, the industry faced intense price competition from regional producers, who benefited from
a sharp fall in the value of Euro and Indonesian Rupiah against the US$. This increased their relative competitiveness in the
market, which was restored with the strengthening of Euro and Indonesian Rupiah against US$, during last quarter of FY02
helping offset volume impact only partially. VSF sales in the export/deemed-export markets declined by over 20% in FY02.
Domestic volumes fell by 7% reflecting the apathy in the user segments and downturn in the textile industry. The aggregate VSF
sales volumes are lower by 11% to 181,520 tonnes in FY02.
This fall masks the sequential improvement witnessed from the second quarter onwards. After a weak first quarter, VSF sales
volumes have improved gradually over the quarters, both in the domestic and export/deemed-export markets. During the fourth
quarter, the Company marketed 52657 tonnes of VSF, up by 9% over the fourth quarter of last year. This also compares favourably
with a mere 39011 tonnes sold during first quarter of FY02.
The average realisation was down by 2% YoY to Rs 68.5/Kg in FY02, which is in line with the trend of falling prices of competing
fibres. To a great extent this was offset by the reduction in pulp prices.
Operating margins suffered due to poor economies of scale and a sharp rise in caustic soda prices. The closure of pulp and fibre
plants for 54 days dragged plant utilisation from 99% in FY01 to 80% in FY02, seriously impacting the per unit fixed costs and
affecting margins significantly. Caustic soda prices shot up 20% reflecting global trends and skewed domestic supplies. With
caustic soda being a key cost driver, the steep rise in its costs affected production costs significantly. Operating margins declined
from 29.0% to 26.7% in FY02. The fall would have been greater but for enhanced efficiencies and reduced consumption norms at
the plant.
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Sector Outlook
The outlook for the VSF sector is positive and is predicated on a recovery in the US and the impending pick-up in global
economic activity. Based on early signs, experts predict the US recovery to gain momentum from the second half of the calendar
year 2002 and blow into a full-fledged recovery by 2003. This raises confidence levels over the likely improvement in the global
textile sector and its positive impact on the VSF industry. The Company’s sequential improvement is slated to continue
supported by improved demand from exports and deemed export segments, which are likely be key beneficiaries of forecast
recovery in the US.
The industry will also gain from the impending recovery in the domestic economy. The Company’s efforts in the areas of
application development and market enlargement are also showing positive results and should contribute towards bolstering
domestic demand in the future as well.
Outlook for Grasim’s VSF Business

Grasim will be a key beneficiary of the forecast recovery in the domestic and international textile markets, being the largest
producer with over 90% market share and being amongst the lowest cost producers in the world. To ensure sustained growth, the
Company will remain focussed on market expansion through development of new applications. In this regard, its strategic
alliances with end-product manufacturers is beginning to yield positive results.
A favourable change in blend ratios positioning VSF at the premium end of the fibre market as “Fibre for Feel, Fashion and
Comfort”, are other steps to take this business forward. Energies will be spent simultaneously on strengthening of the brand equity
of “Birla Viscose” amongst user segments by leveraging its superior quality, wide range, excellent support services and logistic
strengths. Speciality fibres such as spun dyed, micro and macro denier, which would not only add volumes but enhance profitability
as well will continue to be promoted aggressively. While doing so, the Company will continue its thrust on efficiency improvement
and cost reduction in all areas.
Such a strategy coupled with the benefits of the Company’s fundamental strength in the business will enable it to overcome the
adverse macro environment and stave competition from competing fibres as well as regional producers.
CHEMICALS
2001-02 2000-01 % Change

Production (Tonnes) 129,784 131,253 (-) 1%
Sales Volumes (Tonnes) 129,051 133,450 (-) 3%
Net Turnover (Rs. Crores) 2,19.3 2,35.9 (-) 7%
Average ECU Realisation (Rs. / Ton) 14,564 15,097 (-) 4%
Operating Margins (%) 12.6% 33.5% —
Review of Operation
The Chemical business remained under pressure due to sluggish demand, weak pricing environment, intense competition and
rising costs. Profitability suffered as a result and demonstrated improvement only during fourth quarter of financial year.
Aggregate caustic sales volumes declined from 133,450 tonnes to 129,051 tonnes in FY02 reflecting reduced demand from user
industries and increased competition from global producers. The improved demand for chlorine based products during the last
quarter warranted increased production and sales of caustic soda during this period.
The average ECU realisation was down by 4%. The levy of an energy development cess on captive power generation pushed
aggregate power costs significantly. The Company had also to make provision for “minimum tariff demand” pertaining to the
earlier years. Consequently, operating margins declined from 33.5% to 12.6% in FY02.
Outlook
The chlor alkali industry has shown early signs of improvement. Industry experts forecast a rise in demand from end-use segments.
The caustic soda demand is thus expected to grow by 2 to 3% during the current fiscal.
(11)
Pricing environment is also expected to improve. The rising global trends in chlorine and HCL prices, coupled with improved
demand in the local markets should help local producers improve ECU realisation marginally added also by the benefits of the
imposition of Anti Dumping Duty on the Caustic Soda.
The Company will concentrate on its strengthening presence in the domestic caustic soda markets and explore export opportunities
especially for Chlorine, HCL and Poly Aluminium Chloride. Development of ancillary products towards ensuring superior value
addition and optimum asset utilisation will help the Company maintain its competitive edge and ensure better overall performance
in the coming years.
CEMENT
2001-02 2000-01 % Change
GREY CEMENT
Installed Capacity (Mn TPA)* 11.36 9.86 15
Production (Mn Tonnes) 9.53 9.10 5
Sales Volumes (Mn Tonnes) 9.68 9.16 6
Net Turnover (Rs. Crores)** 1,926.3 1,718.9 12
Average Realisation (Rs. / Ton) 1,917.0 1,846.0 4
WHITE CEMENT
Installed Capacity (TPA) 400,000 360,000 11
Production (Tonnes) 2,67,915 251,594 6
Sales Volumes (Tonnes) 2,66,105 251,291 6
Net Turnover (Rs. Crores) 143.6 133.2 8
Average Realisation (Rs. / Ton) 5,317.0 5,268.0 1
NET DIVISIONAL TURNOVER (Rs. Crores) 2,069.8 1,852.0 12
DIVISIONAL MARGINS (%) 22.7 17.0 —
* Capacity increased by 0.5 Mn TPA in June 2001 and by an additional 1.0 Mn TPA with commissioning of grinding unit at Bhatinda in
December 2001
** Includes Rs.60.0 Crores (Previous year – Rs.19.0 Crores) for Ready Mix Concrete
The performance of the Cement Business showed an improvement with growth in volumes, realisations and margins. This
was possible as the Business improved capacity utilisation at its Plant in Tamil Nadu, commissioned last year; and commenced
commercial production at a new Grinding Unit in Punjab during the Financial Year under review. This improved the
penetration in to the lucrative markets of Tamil Nadu and Kerala in the South, Punjab and Himachal Pradesh in the
North.
These investments were further supported by improvements in capital productivity through the progressive upgradation of existing
production lines and a planned shift to blended cement.
Moreover, the Business was able to reduce its cost of sales per tonne through expanded use of alternative fuels, a reduction in the
freight cost, a voluntary retirement scheme at one of its major plants and various other process initiatives.
Concurrently, the Business has focused on developing a portfolio of National Brands led by Birla Ready Mix, Birla Super and Birla
Plus, while nurturing its regional brands - Vikram Cement and Rajashree Cement.
The Business has also enhanced its investment in Ready Mix Concrete, with excellent customer response in the markets being
served.
A two stage programme to improve throughput from existing lines was initiated. During the year aggregate cement capacity
increased from 9.86 Mn tpa to 10.36 Mn. tpa from existing facilities, and this capacity is expected to rise further by 1.8 Mn. tpa
during the current Financial Year.
(12)
In addition, the Company commissioned its new 1.0 Mn.tpa Grinding Unit at Bhatinda in Punjab.
Overall volume growth during the year was lower than the Industry. This must be viewed in the context of marked outperformance
in the previous year; the commissioning of new capacities by other Industry participants in the Company’s main markets; and
relatively lower industry growth in Maharashtra and Rajasthan compared to all India cement consumption.
The Company’s retail brands were repositioned under the Aditya Birla Group Logo to leverage the strong equity and goodwill of
the housemark. Such a step reinforces the strong quality association built up over the years, both in terms of product and service.
Based on extensive R&D efforts, the Company launched a premium composite cement under the name of “Birla Plus”. Within just
one year of launch, the brand is contributing to over 20% of the annual Sales volumes. This brand is positioned as a superior input
for the construction sector and met with excellent response.
Birla Ready Mix has been further strengthened through improved availability in Hyderabad, Chennai, Bangalore and Greater
Delhi. This segment is likely to be the primary form of Cement consumption in Metros by the end of the decade. The commissioning
of 4 new RMC Plants has expanded aggregate capacities to 1.14 Mn. cubic metres.
Sector Outlook
Cement consumption is expected to double to 200 Mn. tpa, at the current level of economic growth. Any acceleration in GDP
growth will be reflected in an even higher rate of growth in Cement.
In the near term, supply and demand is in balance in North India, with the gap narrowing in East India as well, though supply is
expected to be significantly higher than demand in the Southern/Western markets. The overall demand continues to be driven by
the housing sector and is supplemented by the large spending on roads by the Government.
Outlook for Grasim’s Cement Business

The Company has focused on a three pronged strategy with a thrust on increasing capital productivity, expanding volume/revenue
mix and continuous reduction in per tonne costs.
An outlay of over Rs. 460 Crores in the last 2 years was committed towards capital investment in support of these priorities; and
this programme is being continued in the current fiscal. Improved throughput, reduced power costs and increased process
efficiencies are the targeted outcome of this Programme.
SPONGE IRON
2001-02 2000-01 % Change
Sales Volume (Tonnes) 562,334 673,852 (-) 17
Net Divisional Turnover (Rs. Crores) 331.6 401.0 (-) 17
Average Realisation (Rs./ Ton) 5,606.0 5,733.0 (-) 2
Operating Margins (%) 15.2 21.3
Lower production, sales and falling realisation has affected the profitability of the Sponge Iron Business. The Company faced
continued problems because of the erratic supplies of Natural Gas from the Gas Authority of India Limited. This interrupted
plant operations, dragging utilisation from 74% to 62% in FY02. Production volumes declined by 16% to 559,567 tonnes in
FY02. As a result, the Company’s market share declined from 31% to 19%, leading to a 17% fall in sales volumes to 562,334
tonnes in FY02.
The large producers, who were earlier manufacturing for their captive consumption, re-entered the commercial market intensifying
competition. Alongside subdued global scrap prices also put pressure on average realisation during first half. Realisations improved
only towards the latter part of the year with the rising trend in global scrap prices. The average realisation was thus lower by 2%
at Rs.5,606.0 per tonne in FY02.
(13)
Operating margins declined from 21.3% in FY01 to 15.2% in FY02. The fall would have been even higher but for focus on
efficiency improvement and lower costs. The Company improved iron ore - pellet ratio from 39% to 50% in FY02. This helped in
reducing raw material costs significantly since iron-ore is at least 30% cheaper than pellets. The Company also reduced iron oxide
consumption ratio from 1.50 tonnes-per-tonne of sponge iron to 1.48 tonnes. These measures contributed significantly towards
reducing costs, but could only partially balance the impact of poor economies of scale and lower volumes, leading to lower
margins.
Sector Outlook
The steel industry is showing signs of recovery. The forecast recovery in the US economy and its impact on other large economies
will have a positive bearing too. Though the global steel sector witnessed a 7.5% fall in output during 2001, it was largely due to
global slump in steel prices and escalation of natural gas prices in the NAFTA region. Industry experts forecast a modest rise in
global steel production during calendar 2002 and a further enhancement in 2003. Against this, global scrap supplies are likely to
remain under pressure. Experts forecast firm scrap prices during this period. We are confident of improving outlook for global
sponge iron industry in FY03.
The domestic sector is building on the back of a modest growth in steel production during FY02 and is slated to pick up further
given the impending economic recovery. Against the improving demand outlook, competition from imported scrap is likely to
subside given forecast firm prices and higher customs duty on ship-breaking scrap imposed during the year. Overall, the Company
sees a rise in demand and prices over the next two years.
The biggest challenge facing gas based sponge iron producers is the unstable and unreliable supplies of natural gas and the
expected sharp revision in prices of natural gas. Any substantial revision in natural gas prices will have a direct impact on the
profitability of gas based sponge iron producers in the country.
Outlook for Grasim’s Sponge Iron Business

Towards ensuring profitable operations within the forecast challenging environment, the Company’s primary focus will be
on ensuring further cost reduction through an increase in the ore-pellet ratio as well as lowering iron oxide consumption
from the already stretched levels. Paring costs of key inputs and better logistics management is an ongoing priority, as is asset
sweating.
In the event of any substantial rise in the price of natural gas or sharp deterioration in availability, the Company’s performance
will suffer significantly.
TEXTILES
2001-02 2000-01 % Change
FABRICS
Production (Lac Meters) 163 167 (-) 2
Sales Volumes (Lac Meters) 181 187 (-) 3
Net Turnover (Rs. Crores) 179.9 164.7 (-) 9
Average Realisation (Rs./Meter) 99.4 88.1 13
YARN
Sales Volumes (Tonnes) 7,625 7,641 —
Net Turnover (Rs. Crores) 88.3 100.5 (-) 12
Average Realisation (Rs./Kg) 115.8 131.6 (-) 12
NET DIVISIONAL TURNOVER (Rs. Crores) 268.2 265.2 1
**
OPERATING MARGINS (%) (-) 7.7 (-) 8.6 —
** Before Employee Separation Costs
(14)
The Textile Business remained under pressure due to the deteriorating market environment in the suitings fabrics sector, stagnancy
in consumer demand and intense price competition from smaller producers. To facilitate the revival, the Company restructured its
fabric operations during the year.
The Company’s fabric sales volumes declined marginally from 187 lac meters to 181 lac meters in FY02. Marketing and promotional
efforts arrest the fall. “Uncrushables and Ice Touch”, novel products launched under the Grasim brand, the introduction of
“Purista” under the Graviera brand, along with strengthening of market presence of the Coolers and Aquasoft brands launched
earlier, enabled bring in stable volumes even in challenging market conditions.
Running up the value chain and an optimised product-mix, resulted in improved average realisation by an impressive 14% from
Rs.88 per meter in FY01 to Rs.100 per meter in FY02.
Sector Outlook
The outlook for textile business remains challenging due to the structural weaknesses suffered by the organised producers. The
changing consumer preference in favour of ready-to-wear products, mushrooming brands, spurious products, intense price competition
from the unorganised sector producers and cheaper imports only add to the problems this industry faces.
There are signs of a modest improvement in demand, which may go up depending on the resurgence of the economy. An across-
the-board reduction in excise duty will strengthen demand in the near future. Pricing will remain under pressure due to intense
competition. The profitability of manufacturers will thus be governed by their ability to grow volumes and cut costs even in future.
Outlook for Grasim’s Textiles Business
Going forward, the Company will produce both brands, Grasim and Graviera, at Bhiwani and leverage its superior cost structure
optimally. While reaping benefits of composite operations, the Company will aim to improve economies of scale and operational
efficiencies through upgradation of processing capacity, when needed. Leveraging its brand equity and distribution assets to reap
the full benefits of the restructuring moves made in FY02 will be a thrust area. These moves will help the Company in turning
around the textile business.
FINANCIAL REVIEW AND ANALYSIS
Highlights
(In Rs. Crores) FY02 FY01 % Change
Gross Turnover 5,069.8 5,183.9 (-) 2
Net Turnover 4,371.9 4,453.5 (-) 2
Other Income 129.3 107.7 20
Total Expenditure 3,564.4 3,649.7 (-) 2
Operating Profit (PBDIT) 936.8 911.5 3
Interest 190.3 238.8 (-) 20
Gross Profit 746.5 672.7 11
Depreciation 251.7 251.9 —
Profit Before Tax and Exceptional Items 494.8 420.8 18
Exceptional Items
— Profit /(Loss) on transfer of undertaking (-) 18.1 18.4 —
— Excess IT Provisions of earlier years written-back 68.1 — —
— Loss on closure of Mavoor units (-) 74.3 — —
— Loss on sale of Textile Unit, Gwalior (-) 15.0 — —
— Loss on sale of Assets of Textile Unit (-) 16.9 — —
— Employee Separation Costs at other units (-) 27.6 (-) 11.3 —
(-) 83.8 7.1
Profit Before Tax 411.0 427.9 (-) 4
Provision for Current Tax 56.5 50.0 13
Profit After Current Tax 354.5 377.9 (-) 6
Deferred Tax 51.5 — —
Net Profit 303.0 377.9 (-) 20
(15)
Net Turnover
Net turnover has declined by 2% from Rs.4453.5 crores to Rs.4371.9 crores in FY02, due to the various factors as explained earlier
under Segmental Review and Analysis.
Other Income
The Company reported a 20% rise in its other income from Rs.107.7 crores to Rs.129.3 crores. The increase is attributed to the
interest on IT Refund received from the Income Tax Department.
OPERATING PROFIT (PBIDT)

The PBDIT is up by 3% to Rs.936.8 crores due to various factors as explained under Segmental Review and Analysis.
INTEREST
Interest charges declined by 20% from Rs.238.8 crores to Rs.190.3 crores even after factoring of fresh charges associated with new
debts raised during the year. Continuing benefits of debt repayment, pre-payment carried out in the earlier years, raising of low
cost funds and benefits of reduced interest rates on working capital borrowings have made this possible.
DEPRECIATION
Depreciation charges remained nearly flat at Rs.251.7 crores in FY02. The Company has added a sum of Rs. 260.0 crores to the
Gross Block in FY02, a large part of which was associated with the grinding mill at Bhatinda and four RMC plants commissioned
during the year.
EXCEPTIONAL CHARGES
The Company made several restructuring moves aimed at creating value for shareholders. These moves led to certain charges,
which were of non-recurring in nature. The Company has made provisions for charges associated with closure of pulp and fibre
plants at Mavoor, losses arising from sale of textile unit at Gwalior and its entire holding in software subsidiary, Birla
Technologies Limited. After adjustments of these costs and employee separation costs at other locations as well as gains arising
from write-back of excess tax provision made for earlier years, the Company has provided a net exceptional charge of Rs.83.8
crores in FY02.
INCOME TAX
Consequent to an 18% rise in pre-tax profits (before exceptional items), tax provisions have gone up from Rs.50.0 crores to Rs.
56.5 crores – reflecting an increase of 13% YoY in FY02.
DEFERRED TAX
In line with the Accounting Standard 22 (AS-22) relating to “Accounting for Taxes on Income” which has become mandatory
from 1st April 2001, the Company has provided Rs. 51.5 crores for the year ended 31st March 2002. No provision for Deferred Tax
was made in the corresponding year ended 31st March 2001 but on a comparable basis, deferred tax provision for the previous year
would have been Rs. 30.3 crores.
In accordance with AS-22, the cumulative net deferred tax liability upto 31st March 2001 works out to Rs.589.0 crores, which is
met out of the revenue reserves. The Deferred Tax Liability has arisen substantially on account of the timing difference between
the Depreciation admissible under Income Tax Laws and Accounting Depreciation. Though, provision is being made in accordance
with the AS -22 having regard to the normal capital expenditure which the company is expected to make in the future years, the
timing difference is not expected to be reversed and no cash outgo is expected to materialise towards such a balance in the
foreseeable future.
NET PROFIT
Net profit excluding exceptional charges has risen by 14% in FY02 from Rs. 340.5 crores to Rs. 386.8 crores. However, consequent
to the exceptional charges, net profit stands at Rs.303.0 crores in FY02. Earning Per Share before exceptional charges (EPS) has
risen from Rs. 37.1 in FY01 to Rs. 42.2 in FY02.
(16)
Cash Flow Analysis
FY2002
Amount %
(Rs. Crores)
Sources of Cash
Cash from Operations 818.3 64
Decrease in Working Capital 193.3 15
Non-operating cashflows 68.7 5
Increase in Debt 181.4 15
Decrease in Cash and Cash Equivalents 10.0 1
1271.7 100
Use of Cash
Net Increase in Investments 750.8 59
Net Capital Expenditure 245.7 20
Interest 195.8 15
Dividend (incl Corporate Dividend Tax) 79.4 6
1271.7 100
Sources of Cash
Cash from Operation
Cash from operations was higher by 3% at Rs.818.3 crores as against Rs. 791.7 crores in FY01. Despite the increased outflow on
account of the exceptional charges. Cash from operations accounted for 64% of aggregate cashflows, highlighting Grasim’s ability
to generate substantial cash from operations.
Decrease in Working Capital

The liquidation of VSF inventories and scaling down of trading operations have contributed significantly towards the sharp fall in
working capital. Tightening of working capital across other business segments too has yielded results. Overall, Rs.193.3 crore was
released from working capital, accounting for nearly 15% cash flows in FY02.
Non-operating Cash flows

Income from investment activities consists primarily of interest and dividend income. Interest received during the year was higher
by 14% at Rs.57.4 crores on account of interest on IT refund and enhanced interest receipts earned on deployment of surplus
funds during the year.
Increase in Debt
Net longterm debts increased by Rs. 105.90 crores which included interest free sales tax loan of Rs. 51.8 crores. Short term
working capital borrowings have gone by Rs. 75.5 crores. These have been utilised to fund capex and working capital requirements.
Net debt flows are to the tune of Rs.181.4 crores, accounting for 15% of aggregate cash flows in FY02. Despite higher debts, the
Company’s debt-equity has remained unchanged at 0.62x as at the year-end.
Uses of Cash
Net increase in Investments:
The Company made fresh investments of Rs.776.1 crores towards a strategic 10.05% stake in Larsen & Toubro Limited.
Selling of its entire stake in its subsidiary, Birla Technologies Limited, has led to a Rs.29.4 crore reduction in its
investment portfolio. The net investments have gone up by Rs.750.8 crores and accounted for 59% of aggregate cash
utilisation in FY02.
(17)
Net Capital Expenditure:
The Company invested Rs.50.8 crores towards a new grinding unit at Bhatinda. In addition, a sum of Rs.12.7 crores was spent
towards three new RMCs and Rs.24.3 crores towards augmenting capacities.. An addition of Rs.28.5 crores was invested in
thermal power plants at two locations. The balance of Rs.143.7 crores was the normal capex during the year. Against a total capex
of Rs.260.0 crores, the company realised a sum of Rs.14.3 crores from sale of assets. The aggregate capital expenditure thus stood
at Rs.245.7 crores and accounted for 20% of cash utilisation in FY02.
Interest
The Company has effected interest payments (net of capitalised interests) of Rs. 191.0 crores in FY02, which is 15% of the
aggregate cash utilisation during the year.
Dividend
The Company utilised a sum of Rs.79.4 crores towards dividend and corporate dividend tax for FY01. For the current year, the
Board has recommended a dividend of Rs.9.0 per share which on approval, would lead to an outflow of Rs.82.5 crores, which is
accounting for 27% of net profits in FY02.
RISK MANAGEMENT
The Company is exposed to risks from market fluctuations of foreign exchange and interest rate.
Foreign Exchange Risk

The Company’s policy is to hedge its long-term foreign exchange risk as well as short-term exposures within defined parameters.
Currently, the Company has a small long-term foreign exchange liability of Rs. 20 crores which is partially hedged. The short-term
exposures are covered from time to time. The Company’s aggregate exports stood at Rs.101.8 crores and imports at Rs.400.6 crores
in FY02. Due to the excess of imports over exports, the Company has suitably hedged the differential exposure.
Interest Rate Risk

The Company is exposed to interest rate fluctuations on its Rupee denominated borrowings. The Company uses judicious mix of
fixed and variable rate debts within the stipulated parameters. The company does not perceive interest rate fluctuations as a
significant risk, having any material impact on its profitability
INTERNAL CONTROL SYSTEM

Management Information Systems (MIS) is the backbone of our control mechanism. Clearly defined roles and responsibilities
down the line for all managerial positions have been institutionalised. All operating parameters are monitored and controlled.
Regular internal audits and checks ensure that responsibilities are executed effectively and that the MIS is flawless among a well-
conceived annual planning and budgeting system.
Any material change in the business outlook is reported to the Board. Material deviations from the annual planning and budgeting
are informed to the Board on a quarterly basis. An effective budgetary control on all capital expenditure ensures that actual
spending is in line with the capital budget.
CONCLUSION
Despite various factors affecting the economy, Grasim has recorded a good performance during the year. Grasim’s inherent
strength, strong fundamentals, a continual stress on operational excellence, cost optimisation measures, effective financial
management, continuous restructuring of business processes, aided by an expected improvements in the cement sector bode well
for the Company.
CAUTIONARY STATEMENT
Statement in this “Management’s Discussion and Analysis” describing the Company’s objectives, projections, estimates, expectations or predictions may be “forward looking
statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could
make a difference to the Company’s operations include global and Indian demand supply conditions, finished goods prices, feed stock availability and prices, cyclical demand and
pricing in the Company’s principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries within which the Company
conducts business and other factors such as litigation and labour negotiations.
(18)
REPORT ON CORPORATE GOVERNANCE
CORPORATE GOVERNANCE
Corporate Governance is concerned with creation of long-term value for shareholders while also balancing interests of other
stakeholders, viz., Employees, Creditors, Government and the Society, at large. Corporate Governance is crucial to the very
existence of a company as it builds confidence and trust, which eventually leads to a more stable and sustained resource flows and
long-term partnership with its investors and other stakeholders.
The corporate governance framework will thus encourage efficient use of resources and ensures accountability for the stewardship
of these resources. Its importance lays in the contribution it makes to the overall growth and direction of the business, management
accountability and transparency and above all, equitable treatment for its stakeholders.
In sum, corporate governance reinforces the concept of “Your Company” and emphasise that the Chairman and Board of Directors
are your fiduciaries and trustees, engaged in pushing the business forward and maximising value for you, the shareholders.
CORPORATE GOVERNANCE AT GRASIM
Grasim Industries Limited, part of the Aditya Birla Group, believes in adopting the best corporate governance practices and
protecting rights and interests of stakeholders. We further believe that the shareholders have the right to know complete
information on the Board of Directors and the management, their interests in the organisation as well as governance practices
followed by them.
Towards this end, Grasim has been making extensive disclosures on the Company and its Board of Directors and also have been
benchmarking its practices with the recommendations of the SEBI Committee on Corporate Governance since 1999-2000. We
have continued the practice even during the year and are highlighted in this report.
Compliance with the SEBI Code on Corporate Governance
The recommendations of the Kumar Mangalam Birla Committee on Corporate Governance have been accepted by the Securities
and Exchange Board of India (SEBI) in December 1999 and have since formed part of Clause 49 of the Listing Agreement with
Stock Exchanges. They are mandatory for the company from 2000-01 onwards and your company is fully compliant with these
recommendations, as detailed in this report.
1. The Board should have an optimum combination of Executive and Non-executive Directors and at least 50% of the Board
should comprise of Non-executive Directors. Further, at least one-third of the Board should comprise of independent Directors
where Chairman is non-executive and at least half of the Board should be independent in case of an executive Chairman.
Grasim’s Board consists of 11 directors comprising of 10 Non-Executive and Independent Directors and 1 Whole Time Director. The
Non-Executive and Independent Directors together account for 91% of the Board. Of this, 7 Directors are Independent, as defined by
SEBI, and have no personal / professional relationship with the Company and includes two nominee directors, one each representing
Industrial Development Bank of India (Lender) and Life Insurance Corporation of India (Investor).
Directors Executive / Non- No. of Outside No. of Outside Committee
Executive/ Independent Directorship(s) held Positions Held
Public Private Member Chairman
Mr. Kumar Mangalam Birla Non-Executive 9 6 — —
Mrs. Rajashree Birla Non-Executive 5 6 — —
Mr. M C Bagrodia Non-Executive2 9 — 1 1
Mr. J N Godbole 4 Independent 3 * * * *
Mr. V Venkateswarlu 5 Independent 3 1 1 3 —
Mr. Y P Gupta Independent 6 5 — 6 —
Mr. R C Bargava Independent 6 — 6 1
Mr. Cyril Shroff Independent 4 — — —
Mr. S G Subrahmanyan Independent 2 — 1 —
Mr. B V Bhargava Independent 9 — 4 3
Mr. M L Apte Independent 10 2 4 —
Mr. Shailendra K Jain 7 Whole-time Director 4 — — —
1 Independent director, as defined in Clause 49 of the Listing Agreement, is one, who apart from receiving Director’s remuneration, do not have any
other material pecuniary relationship or transactions with the Company, its promoters, management or its subsidiaries, which in judgement of the
Board may affect independence of judgement of the Director.
(19)
2 Employee of another company of the Aditya Birla Group
3 Nominee of Industrial Development Bank of India (Lender) (IDBI)
4 Nomination withdrawn by Industrial Development Bank of India w.e.f. 30th July, 2001
5 Nominated by IDBI in place of Mr. J.N. Godbole w.e.f. 30th July, 2001
6 Nominee of Life Insurance Corporation of India (Investor) (LIC)
7 Appointed as Whole-Time Director w.e.f. 1 st November, 2001.
Hitherto he was Manager of the Company and President & Business Head of Fibre & Pulp Divisions.
* Not available since he ceased to be the Director of the Company
2. The Board should set up a committee under the chairmanship of a Non-executive/Independent Director to specifically look
into shareholder issues including share transfer and redressing of shareholder complaints.
The Company has a “ Shareholders Grievance / Allotment & Transfer Committee” at the Board level to look into various issues relating
to Investors Grievances including non-receipt of dividend, annual report, shares after transfer as well as delays in transfer of shares etc.
The composition of Committee is as follows:
• Mr. Cyril Shroff, Chairman
• Mr. S G Subrahmanyan, Member
• Mr. Y P Gupta, Member
3. To expedite the process of share transfers, the Board should delegate the power of share transfer to an officer or a committee
or to the registrar and share transfer agents. The delegated authority should attend to share transfer formalities at least once in
a fortnight.
The Company’s shares are compulsorily traded in the dematerialised form and have to be delivered in the dematerialised form in all Stock
Exchanges. To expedite the transfer in the physical segment, officers of the Company have been authorised to approve transfers of up to
5000 shares in physical form under one transfer deed and one Director jointly with 2 officers have been authorised to approve transfers
of above 5000 shares under one transfer deed.
The Board has designated Mr. Ashok Malu, Company Secretary, as Compliance Officer.
Details of complaints received, number of shares transferred during the year as well as time taken for effecting transfers are highlighted
in the “Shareholder Information” section of the Annual Report.
4. The Corporate Governance Section of the Annual Report should make disclosures on remuneration paid to directors in all
forms including salary, benefits, bonuses, stock options, pension and other fixed as well as performance linked incentives paid
to the Directors.
Details of remuneration paid to the Non –Executive and Independent Directors are given in Para 5 of this section. Grasim has a policy
of not advancing any loans to its Non-Executive and Independent Directors.
5. The Board meetings should be held at least four times in a year, with a maximum time gap of four months between any two
meetings and all information recommended by the SEBI Committee should be placed at the Board.
The Board met 7 times during the past year and agenda papers were circulated well in advance of each meeting of the Board of
Directors. The Company placed before the Board, the working of all units and statements containing status of various matters pursuant
to Corporate Governance practices, as required by Clause 49 of the Stock Exchange Listing Agreement.
Date of Board Meeting City No. of Directors Present
30th April 2001 Mumbai 10
31st July 2001 Mumbai 7
31st October 2001 Mumbai 8
18th November 2001 Mumbai 9
31st January 2002 Mumbai 10
26th February 2002 Mumbai 8
5th March 2002 Mumbai 9
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Directors’ interests in the Company and Attendance Record
Grasim believes that the shareholders must know the details of Directors’ interest in the Company, their attendance record and
contributions made by them. Your company has therefore decided to make full disclosure on the attendance record as well as of all
Directors on the Board.
A. Non-Executive Directors:
Relationship with Commission Sitting Fees No. of Board Attended

Other Directors Fees Paid Meetings Last AGM@
(Rs.) ( Rs.) Held Attended
Mr. Kumar Mangalam Birla Son of Mrs Rajashree Birla 66,38,000 32,000 7 7 No
Mrs. Rajashree Birla Mother of Mr Kumar 2,85,000 27,000 7 6 No
Mangalam Birla
Mr. M C Bagrodia — 3,84,000 32,000 7 7 No
1
Mr. J N Godbole — 47,000 2,000 1* 1 No
2 **
Mr. V Venkateswarlu — 2,37,000 25,000 6 5 No
Mr. Y P Gupta — 3,46,000 32,000 7 7 Yes
Mr. R C Bhargava — 5,69,000 27,000 7 6 Yes
Mr. Cyril Shroff — 1,56,000 12,000 7 3 No
Mr. S G Subrahmanyan — 3,51,000 27,000 7 6 Yes
Mr. B V Bhargava — 5,60,000 22,000 7 5 No
Mr. M L Apte — 4,27,000 27,000 7 6 No
1 Nomination withdrawn by IDBI w.e.f. 30th July, 2001

2 Nominated by IDBI in place of Mr J.N. Godbole w.e.f. 30th July, 2001
@ Annual General Meeting (AGM) held at the Registered Office at Nagda, Madhya Pradesh on 30th June 2001
* No. of Board Meetings held prior to withdrawal of his nomination by IDBI
** No. of Board Meetings held after his nomination by IDBI
Note: The Company has a policy of not offering any loans and advances to its Non-Executive / Independent Directors and hence is not highlighted
separately.
B. Executive/Whole-Time Director:
Executive Director Relationship Business relation ship Remuneration paid during 2001-2002
with other with the Company
Directors if any All elements of Fixed component & Service Stock option
remuneration performance linked contracts, details, if any
package i.e. salary, incentives, along notice period,
benefits, bonus, with performance severance fee
pension etc. paid criteria
during the year
Mr Shailendra K. Jain — Whole –Time Director Rs. 90,12,451/- Ref. Note (a) Ref. Note (b) Ref. Note (c)
a) Performance Bonus is linked to the achievement of targets to be decided by the Board or Committee thereof.
Mr. Shailendra K. Jain was paid a sum of Rs. 12,26,000/- for the current financial year and an additional sum of
Rs. 6,47,462/- was paid towards Long Term Incentive Compensation pertaining to the previous year.
b) The appointment is subject to termination by three months notice in writing on either side. Mr. Jain was appointed to
the Board w.e.f 1st November 2001 and the appointment is valid up to 30th November 2003.
c) The Company does not have any scheme for grant of stock options to its Directors or Employees.
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6. As a part of disclosures related to management, in addition to the Directors’ Report, Management’s Discussion and Analysis
should form part of the Annual Report.
Management’s Discussion and Analysis forms part of this Annual Report. The Company has been providing a detailed Management’s
Discussion and Analysis in its Annual Report from 1998-99 onwards.
7. All company related information like quarterly results, presentation made by companies to analysts may be put on the
Company’s web-site or may be sent in such a form so as to enable the stock exchange on which the company is listed to put
it on its own web-site.
The Company makes presentation to institutional investors and equity analysts on a half yearly basis. Copies of the Press Release and
Presentations are made available on the websites of the Company (www.grasim.com) as well as the Aditya Birla Group
(www.adityabirla.com).
8. There should be a separate section on Corporate Governance in the Annual Report, with details on the level of compliance
by the Company. Non-compliance of any mandatory recommendation with reasons thereof and the extent to which the non-
mandatory recommendations have been adopted should be specifically highlighted.
Grasim introduced a separate section on Corporate Governance in its Annual Report for the year 1999-2000 and the practice has been
continued even during the year.
9. The Non-Executive Chairman of the Company should be entitled to maintain a office at the Company’s expense and also
allowed reimbursement of expenses incurred in performance of his duties. This will enable him to discharge the responsibilities
effectively (This is a non-mandatory recommendation).
At present, the Chairman does not have a separate office in the Company. However, the Corporate Office of the Company supports the
Chairman for discharging his responsibilities.
10. A qualified and an independent “Audit Committee” should be set up at the Board level as it would go a long way in
enhancing credibility of the financial disclosures and promoting transparency.
Grasim has an Audit Committee at the Board level and consists of three Independent Directors. The details of its composition are as
follows:
• Mr. B V Bhargava, Chairman
• Mr. R C Bhargava, Member
• Mr. M L Apte, Member
CFO is Permanent Invitee to the Audit Committee.
The Company Secretary is Secretary of the Committee.
The Audit Committee met 6 times during the past year.
11. The Board should set up a “Remuneration Committee” to determine on their behalf and on behalf of the shareholders with
agreed terms of reference, the company’s policy on specific remuneration packages for executive directors including pension
rights and any compensation payment.
Grasim does not have a Remuneration Committee. The Board determines the remuneration of the Whole Time Director.
(This is a non-mandatory recommendation).
12. No Director should be a member in more than 10 committees or act as chairman of more than five committees across all
companies in which he/she is a Director. Furthermore, it should be a mandatory requirement for every Director to inform the
company about the committee positions he occupies in other companies and changes on an annual basis.
None of the Directors of the Company is a member of more than 10 committees or Chairman of more than 5 committees across all
companies in which he/she is a Director.
13. The Company should provide a brief resume, expertise in specific functional areas and names of companies, in which he/she
holds Directorship and the membership of Committees of the Board, while appointing a new Director or re-appointing an
existing Director. These should form part of notice to shareholders.
Relevant details form part of the explanatory statement of the Notice of the Annual General Meeting, annexed to this report.
14. Disclosures to be made to the Board by the management relating to all material, financial and commercial transactions, where
they have personal interest, that may have a potential conflict with the interest of the company at large. These include dealing
in company shares, commercial dealings with bodies, which have shareholding of management and their relatives, etc.
Transactions with the related parties are disclosed in Note No.21of Part B of Schedule 22 to the Accounts in the Annual Report.
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15. The half-yearly declaration of financial performance including summary of the significant events in last six-months, should be
sent to each household of shareholders.
The Company sends a detailed “Performance Update” consisting of financial performance as well as Management Discussion and
Analysis Report on a half yearly basis. The Company initiated the process last year and continued the practice even during the year.
16. The financial institutions should, under normal circumstances, have no direct role in the decision making of the Board of the
Company. They should not have nominees on the Board, merely by virtue of their financial exposure in the company. There
is however a ground for the term lending financial institutions to have nominees on the Boards of the borrower companies, to
protect their interests as creditors. In such cases, the nominee directors should take an active interest in the activities of the
Board and assume equal responsibility, as any other director on the Board.
Not a Company level issue.
At present, the Board has two nominee directors, one each representing a lender and an investor. Details of the nominee directors are as follows:
• Mr. V Venkateswarlu, a nominee of Industrial Development Bank of India (IDBI) – a Lender
• Mr. Y P Gupta, a nominee of Life Insurance Corporation of India (LIC) – an Investor
OTHER DISCLOSURES RECOMMENDED BY THE SEBI COMMITTEE
1. Details of Annual General Meetings
1.1. Location and time, where last three AGMs held
Year Type Location Date Time
1998-1999 AGM Registered Office, Birlagram, Nagda, M.P 11.09.99 11.00 a.m.
2000-2001 EOGM Registered Office, Birlagram, Nagda, M.P 27.01.01 11.00 a.m.
1.2. Whether special resolutions were put through postal ballot last year?
Yes. For disposal of Textile undertaking at Gwalior, as required u/s 293(1(a) of the Companies Act, 1956, approval of the
Shareholders was sought through Postal Ballot.
1.3. Are votes proposed to be conducted through postal ballot this year?
No
2. Disclosures on materially significant related party transactions of material nature, with its Promoters, the Directors or the
management, their subsidiaries or relatives etc. that may have potential conflict with the interests of company at large.
Transactions with the related parties are disclosed in Note No.21of Part B of Schedule 22 to the Accounts in the Annual Report.
3. Details of non-compliance by the Company, penalties, strictures imposed on the company by Stock Exchange or SEBI or any
statutory authority, on any matter related to capital markets, during the last three years.
None
4. Means of communication
4.1 Half-yearly report sent to each household of shareholders Yes
4.2 Quarterly results
4.2.1. Which newspapers normally published in Business Standard (All
Editions) Nai Dunia, Indore (Hindi)
4.2.2. Any website, where displayed www.grasim.com
www.adityabirla.com
4.3. Whether the Company Website displays
4.3.1. All official news releases Yes
4.3.2. Presentation made to Institutional Investors/Analysts Yes
4.4. Whether MD&A is a part of Annual Report Yes
4.5. Whether Shareholder Information section forms
part of the Annual Report Yes
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SOCIAL REPORT
BEYOND BUSINESS, REACHING OUT TO COMMUNITIES
For us in the Aditya Birla Group success is measured by how well we fulfill our economic,
environmental and social responsibility. This “triple-bottom-line” accountability lies at
the heart of our Group, factoring as it does holistically the interest of all of our stakeholders-
shareholders, customers, employees and the community at large.
For over a decade, we have been involved in working with the weaker sections of society,
who live close to our plants through “The Aditya Birla Centre for Community Initiatives
and Rural Development”.This Centre, which is led by your Director, Mrs. Rajashree Birla,
is the glue that holds all of the Group’s projects.
At Grasim we work predominantly in the areas of education, health-care inclusive of
family planning, capacity building through sustainable livelihood programmes and
empowerment of the people, land and watershed management.
We have adopted over 1500 villages in proximity to our plants at Nagda, Jawad, Raipur in
Madhya Pradesh, Bhiwani in Haryana, Kharia Khangar and Shambhupura in Rajashthan,
Harihar and Malkhed in Karnataka, Kharach in Gujarat, Raigad (Salav) and Hotgi in
Maharashtra and Reddipalayam in Tamil Nadu.
Women self help groups in action at Harihar Health Care

Towards better health-care for the populace as also to raise the Human Development
Index, immunization against polio, measles, mumps, hepatitis B, tuberculosis and
administering the BCG vaccine is an ongoing endeavour.
In collaboration with the District Health Authorities, our teams have immunized 11,320
children. At the cataract operation camps, 5000 patients were examined while nearly
1200 senior citizens who were operated upon have gained better sight. Likewise in more
than 400 medical camps organized by our Units, 40,000 villagers were given a thorough
health check as well. At these camps over 5000 patients suffering from different ailments
were treated.
Additionally in the hospitals at our Plants over 1,50,000 villagers registered themselves
not only for treatment in the Out Patient Departments (OPD) but also for major and
minor operations and child birth. As most of these patients come from families below the
poverty line, they are treated free of cost.
More than 300 tuberculosis-afflicted patients are being treated at Khor in Madhya Pradesh
by Vikram Cement.
In tandem with the Mahaveer Viklang Sahayata Samiti, 143 persons have been fitted with
artificial limbs at Harihar.
Over 2000 patients have been attended to by our Nagda Unit’s well-equipped mobile
health-care vans. At Reddipalayam, Kharia Khangar and Salav as well mobile health
clinics tend to the villagers, practically every week.
Mother and Child Health Care

To stem the population tide, our teams have intensified their efforts. At Nagda, a holistic
Mother and Child Health Care Project spanning 30 villages, over a three year time frame,
has been launched.
Elsewhere at Harihar, Jawad, Kharia Khangar, Malkhed, Shambhapura, Reddipalayam and
Raipur, our focus on planned small healthy families continues unrelentingly.
Through our involvement, more than 3500 couples have opted for planned families,
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favouring the two-child family norm. It might interest you to learn that the Gulbarga Zilla
Panchayat and the District Health and Family Welfare Department have given a special
award to our team at Rajashree Cement for family welfare services rendered in Gulbarga.
Spreading Literacy
Our adult-education programmes, balwadis and other projects, which are headed by
professionally trained teachers to raise the literacy level, are becoming increasingly popular.
To arrest the dropout rate in schools in the interiors, 32 programmes were conducted at
Malkhed where the benefits of education and literacy were impressed upon on the parents
and village elders.
To encourage meritorious students of the village, special scholarships have been instituted
at Harihar, Malkhed, Khor, Bhiwani and Kharach, reaching out to nearly 150 students.
Besides providing clothes to adivasi children at Salav, Vikram Ispat have helped craft Villagers in Nagda learning under the shade
specially designed tables for a school run in Alibag for physically challenged children. of a tree
Their endeavours have benefited 200 children.
Financial assistance has been extended to foster the education of 50 destitute girls under
the Dattak Putri Yojana, operating in Khor.
Women Empowerment Processes

To help women become self reliant, we hone their skills through extensive training in
different vocations. For example, at Grasim Cement at Rawan, Vikram Cement at Khor
and Aditya Cement at Shambhupura, women are being trained in the craft of tailoring,
dyeing of fabrics and carpet making. To develop their skills, Training Centres have been
organised at Shambhupura.
A Mahila Sewing Centre has been set up at our Plant in Shambhupura, for training 80
women. For purchase of sewing machines, an interest free soft loan facility has been
extended to 25 women here.
To empower women attain self-reliance through income generating programmes, availing
of the facilities and funds offered by NABARD, SIDBI and other Banks to Self-Help
Groups, we have helped organise them. Already more than 100 Self-Help Groups have
been formed, with women from 200 villages.
Over the last one year, we have begun facilitating the setting up of Women Self-help
Groups. At Reddiyapalam and Vlipringiyam 200 women have successfully started micro
enterprises. They make chalk, phenyl and soap oil. Additionally, to enable them sustain
their enterprise, we identified their potential markets and customers. So their products are
by and large sold out. Women engaged in the Sahyog Papad Udyog and the Gokul Dugdha
Pariyojana Projects at Aditya Nagar in Shambhupura, today market their entire output
locally. Amazing as it may seem, so far 3000 kilos of Gokul ghee and 1,85,000 litres of milk
have been processed, valued at Rs.22 lacs.
Towards Sustainable Livelihood

Through education and training, we encourage the building of skills in a number of
enterprises that can provide villagers with the leeway to stand on their feet. Our stress on
farmer training is ongoing. Through the seed multiplication programme, quality seeds
have been distributed to farmers at Nagda, we also support them with irrigation facilities.
Likewise, helping procure healthy milch cattle for the villagers and backing them with
marketing support has enabled 1800 villagers eke a livelihood. They run 18 milk collection
centers at Nagda.
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So that farmers prosper, in tandem with the Government, we organise veterinary camps,
where besides health check-up, artificial insemination for their animals, is done by
professional veterinaries. More than 20,000 farmers availed of this facility.
Basic Amenities
To mitigate the acute water shortage faced at Nagda, and to enable us run our operations,
we have built four dams on the river Chambal, which together stores 803 mcft of water.
Nearly one-fourth of this water is used by the farming community, the Mandi, the Railway
and Khachrod Township, which is yet another service done.
At Harihar too, we have set up a potable water system at one village and maintained it at
3 villages. Working with the Tamil Nadu Water and Drainage Board, we brought in safe
drinking water in 2 villages.
“Over the years, we have Nagda has embarked on a phased programme of providing drinking water to 20 villages
endeavoured to understand the while at Salav, we cater to 31 villages through our water pipeline.
problems of the communities. We
To sensitise villagers to hygiene, and indoctrinate them on cleanliness, we have provided
have put them on the same 126 dry toilets in and around the villages surrounding Nagda. These facilities have been
pedestal as our customers – so set up in five schools as well. Here we partner with Rotary International. A community
that there is no contentious toilet for women and children has been constructed at Reddipalyam as well.
relationship with them. Our In collaboration with the Government of Karnataka through the Swasthi Grama Yojana
guiding philosophy is that — Scheme, we have been able to change the face of the Malkhed village. We have already
having gauged their major issues, built the cement-concrete drainage system, bettered the road through concretizing, renovated
our aim should always be to work primary health-care centers and set up community toilets. Through a massive tree plantation
out projects that are sustainable drive, we have beautified the village as well. At Nagda too we have developed “Nayan” as
a model village where we have provided safe drinking water, decent sanitation facilities,
by the beneficiaries over the long
homes for the poorest of the poor, promoted education and strengthened the overall
haul, and that we then withdraw. infrastructure. These projects have touched the lives of nearly 30,000 villagers.
Our reasoning is that this way
we will not build a culture of Garnering Development Aid
dependency and instead, after the For the year 2002, we have mobilized Rs.1900 lakhs, apart from our own contribution.
hand-holding, make them self- Garnering aid through the Government’s different development programmes, we touched
reliant”. the lives of over 4,15,000 people collectively across all our Units.
Mrs. Rajashree Birla — Making A Difference

Chairperson The Aditya Birla Knowing that our Projects in their own small manner make a difference to people’s lives,
Centre for Community Initiatives gives us a humble sense of fulfillment. It is also a way of living our values, and in all
and Rural Development. humility, playing a leadership role even as a caring corporate citizen.
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ENVIRONMENT REPORT
ENVIRONMENTAL PROTECTION - A WAY OF LIFE AT GRASIM
As a business house, we are fully committed to sustainable development. In our view it is

extremely vital to meet the needs of today without compromising the welfare of the future
generations. We see a tremendous intrinsic linkage between economic growth and
environmental protection. Therefore running our Plants at Nagda, Jawad and Raipur in
Madhya Pradesh, Bhiwani in Haryana, Kharia Khangar and Shambhupura in Rajashthan,
Harihar and Malkhed in Karnataka, Kharach in Gujarat, Raigad, (Salav) and Hotgi in
Maharashtra and Reddipalayam in Tamil Nadu in an eco-efficient manner, comes naturally
to us.
Barring Vikram Ispat and Bhiwani Textile Mills, all of our Plants are ISO 14001 EMS
certified. Bhiwani and Vikram Ispat are stepping up their efforts to get the ISO 14001
authenticated.
We also seek validation of our Environment Management Systems, ongoingly. KPMG

Peat Marwick, supported by a team of internal and external auditors are engaged in the
auditing of our processes at our various Plants. Likewise the State Pollution Control Board
Certified auditors carry out an intensive Environmental Audit at our Plants. Their reports
confirm our commitment to environment conservation.
In recognition of our outstanding contribution towards environment protection, the Indo-

German Greentech Environment Excellence Award was conferred upon our Viscose Stable
Fibre Plant at Nagda. They were named the benchmark company in the Man-made Fibre
Industry sector.
The Government of India’s Ministry of Power, have bestowed the National Energy
Conservation Award upon our Viscose Staple Fibre Plant in Nagda as well.
We are pleased to inform you that Viscose Staple Fibre produced by our Company has
received the Oeko-Tex –100 certification by BTTG, U.K, stating that the fibre is eco-
friendly and free from any harmful substance.
Another accolade showered upon us is by the Tata Energy Research Institute (TERI), who
have bestowed their Corporate Environment Award on our Pulp Plant at Harihar.
At our cement, viscose staple fibre and pulp Units, state-of-the-art Industrial Effluent
Treatment Plants are in operation. A major quantity of the treated effluent is recycled for
the use at the Plants. The sludge that emerges out of the process works as a soil conditioner
for the lawns and the gardens that beautify the plants.
At full-fledged sophisticated laboratories in the Units, effluents, water emissions and air
quality is continually tested.
The quest to innovatively dispose wastes generated is ceaseless. At Nagda, this year we
The Secondary treatment plant at Harihar
have installed and commissioned Sludge Drivers at the Effluent Treatment Plant to facilitate
incineration in the Boilers.
To convert electrical energy and to avoid the use of ammonia at our Pulp Division at
Harihar, vapour absorption chillers have been set up, replacing the ammonia boiler.
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To lower furnace oil consumption and the steam purchased externally, a slow motion
slaker has also been put up. Additionally, we have incorporated the crystallizer technology
in the evaporator to enhance boiler efficiency and reduction in steam consumption, leading
also to savings in the purchase of coal. An inbuilt vent condenser de-aerator helps to
arrest the escape of vapour.
Importantly, in the conventional fibre processes, we have totally discarded the use of
heavy metals like zinc. At Kharach, we have opted for the vermi-composting technique
which converts treated effluent into an excellent nutrient for agriculture.
At Birla Cellulosic, which is a relatively new plant, we are working towards a zero effluent
status.
Given that cement manufacturing is largely a dry process, no process waste water is
generated. The waste water thrown up by the power plant is used for gardening. Sewage
Water Treatment Plants, based on the activated sludge process, treat waste water and
other solids emanating from our colonies and plants. The treated water is used innovatively
for cooling plant machinery besides watering thousands of saplings.
Fly ash engendered in the captive power plant is utilized for manufacturing cement.
Desilting of mines water generated from strata seepage is used for industrial cooling, for
spraying in the mines and for dust suppression at our cement plant at Rawan. Here fine
iron particles segregated from slag in the slag grinding process are collected and sold as
scrap.
To prevent particles from being released in the environment, at our cement plants, we
have installed bag filters at the coal crusher conveyor belts and limestone crushes.
Additionally spray systems in the lime stone area and in close proximity to the coal
crusher dump hopper are instrumental in ensuring the ambient air quality.
While water sprinkling arrangements have been made at the plant locations, to stop the
dust from going into the environment, tree plantations act as dust-filters as well.
To conserve heat and also reduce the emission of dust, a six stage preheater cyclone is in
operation at Aditya Cement.
At our Sponge Iron unit at Salav in Alibag, great attention is paid to Environment
Management Systems as well. Based on the most modern technology, the plant has built-
in pollution abatement systems. The nominal quantity of liquid effluents generated is
recirculated. Separation of solids from the effluents is achieved through the Supa flow
system installed at the plant. Given that our Sponge Iron facility uses natural gas as its
prime source of its energy, devoid of sulphur, the few gases released from the stack carry no
pollutant. Dry bag filters and wet scrubbers render the environment dust free.
Even as eco-efficiency is built into all of our operations, we sensitize our employees on the
importance of sustainable development in continuum. The township for our employees at
our plants is housed within the campus. Thousands of employees live within the complex.
Not surprisingly, more than a quarter of the land in all of our plants, is verdant with tens
of thousands of trees, swaying with the wind.
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SHAREHOLDER INFORMATION
1. Annual General Meeting
– Date and Time : 3rd August, 2002 at 11:30 a.m.
– Venue : Grasim Staff Club
Registered Office: Birlagram-456 331
Nagda, (Madhya Pradesh)
2. Financial Calendar
– Financial reporting for the quarter ending June 30, 2002 : End July 2002
– Financial reporting for the half year ending September 30, 2002 : End October 2002
– Financial reporting for the quarter ending December 31, 2002 : End January 2003
– Financial reporting for the year ending March 31, 2003 : End April/May 2003
– Annual General Meeting for the year ended March 31, 2003 : End July/August 2003
3. Dates of Book Closure : 19th July, 2002 to 3rd August, 2002
(Both days inclusive)
4. Dividend Payment Date : On or after 3rd August, 2002
5. Registered Office & Share Department : Birlagram – 456331
Nagda, Madhya Pradesh
Tel: (07366) 46760-46766
Fax: (07366) 44114/46024
E-Mail: [email protected]
Web: www.grasim.com / www.adityabirla.com
6. (a) Listing Details
Equity Shares Global Depository Receipts (GDRs) Non-Convertible Debentures

1. The Stock Exchange Ahmedabad Societe de la Bourse de Luxembourg National Stock Exchange of
Kamadhenu Complex, Societe Anonyme India Limited, “Exchange
Near Polytechnic, Panjara Pole, R.C.B 6222, B P 165 Plaza” Bandra-Kurla Complex
Ahmedabad - 380 015 L- 2011, Luxembourg Bandra (East), Mumbai400051
2. Bangalore Stock Exchange Ltd.,
Stock Exchange Tower, 51 - 1st Cross,
J.C. Road, Bangalore - 560 027
3. The Calcutta Stock Exchange Assn. Ltd.,
7, Lyons Range, Kolkata - 700 001
4. Cochin Stock Exchange Ltd.,
Veekshanam Road, Post Box No.3529,
Ernakulam, Cochin - 682 035
5. Madras Stock Exchange Ltd.,
Stock Exchange Building,
11, Second Line Beach,
Post Box No.183, Chennai - 600 001
6. Madhya Pradesh Stock Exchange,
201 Palika Plaza II, M.T.H. Compound,
Indore – 452 001
7. The Stock Exchange, Mumbai
Phiroze Jeejeebhoy Towers, Dalal Street,
Mumbai - 400 023
8. National Stock Exchange of India Limited
”Exchange Plaza” Bandra-Kurla Complex
Bandra (East), Mumbai 400051
9. The Delhi Stock Exchange Assn. Ltd.,
DSE House, 3-1, Asaf Ali Road,
New Delhi - 110 002.
Note: Listing fees for the year 2002-03 has been paid to the respective Indian Stock Exchanges. Listing fees for the GDRs has been paid to
Societe de la Bourse de Luxembourg for the calendar year 2002.
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6. (b) Overseas Depository for GDRs Citibank N.A
Depository Receipts
111, Wall Street, 21st Floor
NEW YORK, NY – 10043
Tel.: 1-212-657-8782
Fax: 1-212-825-5398
6. (c) Domestic Custodian of GDRs Citi Bank N.A.
Custody Services, 77 Ramnord House,
Dr. Annie Besant Road, Worli
Mumbai 400025
Tel.: 91-22-4944167, 4949275
Fax: 91-22-4943400
7. Stock Code :
Reuters Bloomberg
Bombay Stock Exchange GRAS.BO GRASIM IN
National Stock Exchange GRAS.NS NGRASIM IN
Luxembourg Stock Exchange (GDRs) GRASq.L GRDS LI
8. Stock Price Data

Bombay Stock Exchange National Stock Exchange Luxembourg Stock Exchange
High Low Close Av. Volume High Low CloseAv. Volume High Low Close
(In Rs.) (In Nos) (In Rs.) (In Nos) (In US$)
Apr-01 322.0 230.0 290.0 656,247 321.7 230.9 287.7 490,844 7.8 6.0 7.2
May-01 348.0 282.0 338.5 538,950 356.0 275.0 337.9 478,139 8.0 7.2 7.9
Jun-01 342.8 287.5 300.6 129,206 343.1 287.3 309.9 140,006 8.3 7.5 7.8
Jul-01 340.0 293.0 314.5 60,344 336.0 295.1 315.1 62,497 8.4 7.8 8.1
Aug-01 326.5 268.1 269.1 80,239 327.0 269.1 270.4 108,453 8.1 6.9 6.9
Sep-01 278.0 235.6 260.0 142,401 279.0 235.0 260.0 136,915 6.9 5.1 5.7
Oct-01 294.3 241.0 283.6 121,769 294.0 244.1 283.7 116,075 6.3 5.4 6.2
Nov-01 305.4 261.6 297.7 197,170 306.0 261.5 297.7 196,733 6.6 6.1 6.4
Dec-01 330.0 255.0 274.6 162,717 329.9 253.3 274.1 196,500 6.9 5.9 6.0
Jan-02 298.0 272.6 282.1 104,792 301.0 272.6 281.7 117,444 6.5 5.9 6.1
Feb-02 320.0 275.0 289.3 215,630 320.0 276.1 289.2 252,651 6.4 6.0 6.3
Mar-02 309.9 285.0 288.9 83,853 309.5 284.1 287.3 96,666 6.4 6.1 6.1
9. Stock Performance
Grasim - Stock Performance (Indexed)

150
140
130
120
110
100
90
80
70
60
Apr-01
May-01
Jun-01
Jul-01
Aug-01
Sep-01
Oct-01
Nov-01
Dec-01
Jan-02
Feb-02
Mar-02
Grasim Sensex Nifty
(30)
10. Stock Performance over the past few years:
(In %) 1 Year 3 Years 5 Years
GRASIM 16.0 83.0 (-) 15.4
Sensex (-) 3.7 (-) 7.2 3.2
Nifty (-) 1.6 4.8 16.7
11. Registrar and Transfer Agents : In-house Share Transfer

(For share transfers and other communication Registered with SEBI as Category II - Share Transfer Agent
relating to share certificates, demat/remat, Share Department
dividend and change of address etc.) Grasim Industries Limited
PO Birlagram 456331, Nagda, Madhya Pradesh
Tel: (07366) 46760-46766
Fax: (07366) 44114/46024
E-Mail: [email protected]
12. Share Transfer System :

Share transfers in physical form are registered normally within 15 days from the date of receipt, if the documents are clear
in all respects. Officers of the Company have been authorized to approve transfers upto 5000 shares in physical form under
one transfer deed and above 5000 shares, one Director jointly with two Officers have been authorized to approve the
transfers.
Transfer Period 2001-02 2000-01

(in days)
No. of Transfers No. of Shares % No. of Transfers No. of Shares %
1-15 6859 480285 89.5 3082 296209 50.4
16-20 239 26665 5.0 2244 192711 32.8
21-30 85 29390 5.5 1194 97864 16.7
Above 30* — — — 5 424 0.1

Total 7183 536340 100.0 6525 587208 100.0
* Due to signature mismatch and other deficiencies, notices for which had to be sent to the sellers.
13. Investor Services :

Complaints received during the year
Nature of Complaints 2001-02 2000-01

Received Cleared Received Cleared
Relating to Transfer, Transmission, Dividend,
Interest, Demat & Remat and Change of address 100 100 215 215
Others 2 2 25 25
Total 102 102 240 240
Legal proceedings on share transfer issues, if any : There are no major legal proceedings relating to transfer of shares.
(31)
14. Distribution of Shareholding as on 31st March:
No. of equity 2002 2001

shares held
No. of % of No. of % Share No. of % of No. of % Share
share share Shares holding share share Shares holding
holders holders held holders holders held
1-100 230,109 87.31 7,072,476 7.72 245,456 87.91 7,481,709 8.16
101-200 17,925 6.80 2,570,389 2.80 18,377 6.58 2,628,829 2.87
201-500 10,533 3.99 3,282,341 3.58 10,508 3.77 3,246,463 3.54
501-1000 2,919 1.11 2,040,991 2.23 2,872 1.02 1,985,228 2.17
1001-5000 1,619 0.62 3,242,909 3.54 1,560 0.56 3,055,732 3.33
5001-10000 160 0.06 1,129,746 1.23 148 0.05 1,079,450 1.18
10001 & above 284 0.11 72,330,833 78.90 286 0.11 72,192,274 78.75
Total 263,549 100.00 91,669,685 100.00 279,207 100.00 91,669,685 100.00
15. Categories of Shareholding as on 31st March:

Category 2002 2001
No. of % of No. of % Share No. of % of No. of % Share
share share Shares holding share share Shares holding
holders holders held holders holders held
Promoters 37 0.02 18,718,445 20.42 38 0.02 18,688,981 20.39
Mutual Funds &UTI 100 0.04 8,723,306 9.52 84 0.03 8,476,768 9.25
Banks and FIs 340 0.13 14,087,200 15.37 469 0.17 13,419,339 14.64
FIIs 94 0.04 11,563,413 12.61 90 0.03 10,631,478 11.59
GDRs 1 0.00 10,382,333 11.33 1 0.00 10,382,533 11.33
Corporates 2,402 0.91 5,555,670 6.06 2,216 0.79 7,593,232 8.28
NRIs/OCBs 6,122 2.32 3,826,589 4.17 6,258 2.24 3,815,319 4.16
Indian Public 254,453 96.54 18,812,729 20.52 270,051 96.72 18,662,035 20.36
Total 263,549 100.00 91,669,685 100.00 279,207 100.00 91,669,685 100.00
16. Dematerialisation of Shares and Liquidity : 78.06% of outstanding equity (including 11.33% of capital
in the form of Global Depository Receipts) have been
dematerialised as on 31st March, 2002. Trading in equity
shares of the Company is permitted only in the
dematerialized form with effect from 5th April 1999, as per
notifications issued by SEBI.
17. Details on use of public funds obtained in the last three years : Not Applicable
18. Outstanding GDR/Warrants and Convertible Bonds : 10,382,333 GDRs (Previous Year 10,382,533) are
outstanding as on 31st March 2002. Each GDR represents
one underlying equity share.
There are no warrants/convertible bonds outstanding as at
the year-end.
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19. Plant Locations:
Fibre, Pulp & Chemical Plants Cement Plants Others Plants
Staple Fibre Division & Vikram Cement Vikram Woollens
Chemical Division Dist. Neemuch, Khor 458470 (M.P.) GH I to IV, Ghironghi,
Birlagram 456 331, Nagda (M.P.) Tel : (07420) 35605 Malanpur
Tel : (07366) 46760-46766 Fax : (07420) 35524 Dist. Bhind (M.P.) 477117
Fax : (07366) 44114 / 46024 Tel : (07539) 83602, 83603
Fax : (07539) 83339
Harihar Polyfibres & Aditya Cement Bhiwani Textile Mills/
Grasilene Division Adityapuram Sawa – Shambhupura Elegant Spinners
Harihar, Dist. Haveri Dist. Chittorgarh, Rajasthan 312613 Birla Colony, Bhiwani 125 021
Kumarapatnam 581 123, Karnataka Tel : (01472) 87446 , 87470 Haryana
Tel : (08373) 32637-39 Fax : (01472) 87288 Tel : (01664) 43126, 42577
Fax : (08373) 32465, 32875 Fax : (01664) 42575, 43717
Birla Cellulosic Grasim Cement Sponge Iron Division

Birladham, Kharach, Grasim Vihar, Village P.O., Rawan Vikram Ispat
Kosamba 394120 Tehsil: Sigma, Dist. Raipur (M.P.) Salav, Dist. Raigad 402 202
Dist. Bharuch (Gujarat) Tel : (07726) 88213 Maharashtra
Tel : (02629) 31891 – 5 Fax : (07726) 88215, 88209 Tel : (02141) 60110 / 60119
Fax : (02629) 31892, 32562 Fax : (02141) 60104, 60122
Pulp and Fibre Divisions Rajashree Cement

Birlakootam, Kozhikode Aditya Nagar, Malkhed Road,
Mavoor 673 661, Kerala Gulbarga 585292, Karnataka
Tel : (0495) 483161 – 3 Tel : (08441) 687221-24
Fax : (0495) 483116 Fax : (08441) 687225
Grasim Cement Division – South

Reddipalayam PO: Perambalur
Ariyalur 621704, T.N.
Tel : (04329) 49240
Fax : (04329) 49253
Birla White
Rajashree Nagar, Bhopalgarh
Kharia Khangar Dt. Jodhpur 342606 (Raj.)
Tel : (02920) 64223
Fax : (02920) 64225
20. Investor Correspondence: The Company Secretary

Grasim Industries Limited
Registered Office: Birlagram 456331, Nagda (M.P.)
Tel: (07366) 46760-46766
Fax: (07366) 44114/46024
E-Mail- [email protected]
(33)
21. Per Share Data:
2001-02 2000-01 1999-2000 1998-1999 1997-1998
Net Earning (Rs. Cr.)@ 386.8 370.8 250.9 168.4 230.8

Cash Earning (Rs. Cr.)@ 690.0 622.7 487.9 378.1 397.8
EPS (Rs)@ 42.2 40.4 27.4 20.1 31.9
EPS Growth (%) 4.5 47.8 36.2 (-)37.0 (-)10.8
CEPS (Rs.)@ 75.3 67.9 53.2 45.2 55.0
Dividend Per Share (Rs) 9.0 8.0 7.0 6.8 6.8
Dividend Payout (%) 21.3 19.8 25.5 33.6 21.2
Book Value Per Share (Rs.) 365.0 335.4 303.0 285.3 320.2
Price to Earning* 6.8 6.2 11.1 7.9 9.8
Price to Cash Earnings* 3.8 3.7 5.7 3.5 5.7
Price to Book Value* 0.8 0.7 1.0 0.6 1.0
* Based on Stock Price as on 31st March
@ Before exceptional items
22. Other Useful Information for Shareholders

Unpaid/Unclaimed Dividends
1. Shareholders who have not yet encashed their dividend warrants for the years 1995-96 to 2000-2001 may approach the
Company for revalidation/issue of duplicate dividend warrant quoting reference of their Ledger Folio numbers.
2. In terms of Section 205A of the Companies Act 1956, unclaimed equity dividend for the financial year(s) up to 1994-
95 has been transferred to the General Revenue Account of the Central Government. Shareholders who have so far not
claimed or collected their dividend for the said financial year(s), may claim the same from the Registrar of Companies
– Madhya Pradesh, Sanjay Complex, 3rd Floor, ‘A’ Block, Jayendraganj , Gwalior Pin-474 009 (M.P.) by submitting an
application in the prescribed form.
3. Shareholders are advised that dividends for the financial year ended 31st March, 1996 onwards which remains unpaid/
unclaimed over a period of 7 years have to be transferred by the Company to Investor Education & Protection Fund (IEPF)
constituted by the Central Government under Section 205A & 205C of the Companies Act, 1956. Shareholders who
have not claimed the dividend for this period are requested to lodge their claim with the Company, as under the amended
provisions of Section 205B of the Act, no claim shall lie for the unclaimed dividends from IEPF by the Members.
ECS Facility
It is tentatively proposed to introduce ‘Electronic Clearing Service’ (ECS) mode of payment of dividend to shareholders
residing in some selected cities, depending on the number of requests received from the shareholders in this respect.
Shareholders are requested to provide particulars of their bank account details for availing this facility in the form
attached. Further, ECS facility is also available to the beneficial owners of shares in demat form. Those desirous of
availing the facility may provide their mandate to the Company in writing, in the form attached with the AGM Notice.
Share Transfer/Dematerialisation
1. Share transfer requests are acted upon within 7-10 days from the date of their receipt at the Share Department. In case
no response is received from the Company within 35 days of lodgement of transfer request, the lodger may write to the
Company with full details so that necessary action could be taken to safeguard interest of the concerned against any
possible loss/interception during postal transit.
(34)
2. Dematerialisation requests duly completed in all respects are normally processed within 7-10 days from the date of their
receipt at the Share Department of the Company.
3. Equity Shares of the Company are under compulsory demat trading by all investors, with effect from 5th April, 1999.
Considering the advantages of scripless trading, shareholders are requested to consider dematerialisation of their
shareholding so as to avoid inconvenience in future.
Correspondence with the Company
Shareholders/Beneficial Owners are requested to quote their Folio No./DP & Client ID Nos., as the case may be, in all
correspondence with the Company. All correspondences regarding shares & debentures of the Company should be
addressed to the Share Department of the Company at the Registered Office at Birlagram, Nagda (456 331) and not to
any other office(s) of the Company.
Non-Resident Shareholders
Non-resident members are requested to immediately notify :-
● Indian address for sending all communications, if not provided so far;
● change in their residential status on return to India for permanent settlement;
● particulars of their NRE Bank Account with a bank in India, if not furnished earlier.
Others
1. Beneficial Owners of shares in demat form are advised that in terms of the regulations of NSDL & CDSL, their Bank
Account details, as furnished to the Depository Participants(DP), will be printed on their dividend warrants. The
Company will not entertain requests for change of such bank details printed on their dividend warrants.
2. Shareholders holding shares in physical form are requested to notify to the Company, change in their address/Pin Code
number and Bank Account details promptly by written request under the signatures of sole / first joint holder. Beneficial
Owners of shares in demat form are requested to send their instructions regarding change of name, change of address,
bank details, nomination, power of attorney, etc. directly to their DP as the same are maintained by the DPs.
3. To prevent fraudulent encashment of dividend warrants, members are requested to provide their Bank Account Details
(if not provided earlier) to the Company (if shares held in physical form) or to DP (if shares held in demat form), as the
case may be, for printing of the same on their dividend warrants.
4. In case of loss/misplacement of shares, investors should immediately lodge a FIR/Complaint with the police and inform
to Company along with original or certified copy of FIR/acknowledged copy of complaint.
5. For expeditious transfer of shares, shareholders should fill in complete and correct particulars in the transfer deed.
Wherever applicable, registration number of Power of Attorney should also be quoted in the transfer deed at the
appropriate place.
6. Shareholders are requested to keep record of their specimen signature before lodgement of shares with the Company to
obviate possibility of difference in signature at a later date.
7. Shareholders(s) of the Company who have multiple accounts in identical name(s) or holding more than one Share
Certificates in the same name under different Ledger Folio(s) are requested to apply for consolidation of such Folio(s)
and send the relevant Share Certificates to the Company.
8. Section 109A of the Companies Act, 1956 extends nomination facility to individuals holding shares in physical form in
companies. Shareholders, in particular those holding shares in single name, may avail of the above facility by furnishing
the particulars of their nominations in the prescribed Nomination Form which can be obtain from the Share Department
of the Company or send your request for the said Form on email on [email protected]
9. Shareholders are requested to give us their valuable suggestions for improvement of our investor services.
10. Shareholders are requested to quote their E-mail Ids, Telephone/Fax numbers for prompt reply to their communication.
(35)
DIRECTORS’ REPORT
Dear Shareholders,
Your Directors have pleasure in submitting the 55th Annual Report and Audited Accounts of the Company for the year ended
31st March 2002.
FINANCIAL RESULTS (Rs. in Crores)

2001-2002 2000-2001
Gross Turnover 5069.8 5183.9
Gross Profit 746.5 672.7
Less : Depreciation 251.7 251.9
Profit before exceptional items and tax expenses 494.8 420.8
Exceptional Items
Profit on transfer of Undertaking — 18.4
Retrenchment Compensation (55.3) —
Write Down of Fixed Assets on retirement from active use (19.0) —
Loss on sale of Shares in Subsidiary (18.1) —
Loss on sale of a Textile Unit (15.0) —
Loss on sale of Assets of a Textile Unit (16.9) —
Employees Separation Compensation (27.6) (11.3)
Profit before Tax 342.9 427.9
Tax Expenses
Provision for Current Tax (56.5) (50.0)
Tax provision of earlier years written back 68.1 —
*Deferred Tax (51.5) *
Profit after Tax 303.0 *377.9
Add: Balance brought forward from Previous Year 1457.0 1216.0
Surplus available for Appropriation 1760.0 1593.9
Appropriations :
General Reserve 700.0 50.0
Debenture Redemption Reserve 48.2 6.0
Proposed Dividend (subject to tax) 82.5 73.4
Corporate Tax on Dividend — 7.5
Balance carried to Balance Sheet 929.3 1457.0
1760.0 1593.9
[* In the year 2000-2001, there was no requirement to provide for Deferred Tax and accordingly no provision was made in previous year for
the deferred tax. To that extent figures are not comparable].
Your Company’s performance during the year has indeed been impressive. While turnover has been maintained, gross profit and
net profit (before exceptional items) have gone up. The cement business has been a major growth driver – recording enhanced
turnover in volumes and higher realisations. The VSF sector has also been a major contributor. While in the first quarter VSF
output has had a setback due to the water shortage, in the ensuing three quarters, its performance has been noteworthy.
A sharp focus on continuously optimizing operational efficiencies through de-bottlenecking, plant up gradation, energy reduction
and modernisation processes have led to a significant upsurge in productivity. The economic slowdown has constrained the
working of the Company’s Chemical, Textiles and Sponge Iron businesses during the year under review. This was offset by the
enhanced performance of the Cement business. Paring financing costs considerably through bringing down high cost debts,
substituting them, and ensuring effective working capital management, has contributed in a great measure to up scaling your
Company’s net profit. Collectively, these factors have had a positive bearing on your Company’s results.
(36)
DIVIDEND
Considering these good results, your Board has recommended a dividend of Rs.9 per share. Your Board seeks your approval for the
same.
The total outgo of the dividend to be paid to the shareholders will be Rs.82.5 crores as against Rs.80.8 crores (inclusive of
Corporate Tax on Dividend) paid in the previous year.
DEBENTURES
During the year under review, your Company issued long term Secured Redeemable Non-Convertible Debentures of an aggregate
value of Rs.275 crores [comprising Rs.75 crores (Series XXVIII), Rs.50 crores (Series XXIX) and Rs.150 crores (Series XXX)] on
private placement basis. The funds were utilised to meet the requirements of capital expenditure, modernisation, working capital
and general corporate purposes.
The Directors confirm that the funds raised through the issue of debentures have been utilised for the purposes stated.
Additionally, during the year, the Company repaid debentures and term loans aggregating to Rs.226 crores.
BUSINESS RESTRUCTURING
Your Company has taken a series of restructuring measures, which will enhance shareholder value. While apparently these have
impacted the bottom line of the current year on a one-time basis, it is important to bear in mind that these will result in recurring
savings year after year and enhance your Company’s financial strength from a long-term perspective. In this regard, your Directors
have had to make provisions for the shut down of Mavoor plants, the disposal of its Textile unit at Gwalior and the divestment of
its shares in Birla Technologies Limited.
An exceptional charge of Rs.55 crores has been provided for payment to the 2300 employees at its Mavoor Plants, which has been
shut down, and an obsolescence charge of Rs.19 crores towards value of fixed assets retired from active use. Importantly, the
closure of the Mavoor plants translates into savings in recurring expenditure on employees and other standing charges to the tune
of Rs.27 crores annually.
Your Company has divested its stake in Birla Technologies Limited (BTL) which was a subsidiary company engaged in software
business. This move is yet another step to keep your Company’s focus on its main businesses viz. VSF and Cement.
Your Company has divested the Company’s loss making fabric-manufacturing operation at Gwalior, as a going concern. The
written down value of its fixed assets as shown in the books of accounts were approximately Rs.12.9 crores as on 31st March 2002.
This under performing unit has been incurring losses for the past several years. Despite your management’s best efforts, the
turnaround was not possible and the unit was dragging down the profitability of the Company, eroding shareholder value.
Consequent upon the sale of Gwalior fabric unit, your Company will now manufacture both of its brands “Grasim” and “Graviera”,
at a single location at Bhiwani. This is a strategic move to bring in better synergy, which will help your Company to considerably
reduce its fixed costs, substantially bring down its current assets and improve the performance of its textile business.
Since this tantamounts to the sale / disposal of an Undertaking of the Company in terms of Section 293 (1) (a) of the Companies
Act, 1956, your Board sought the approval of shareholders under the provisions of Section 192A of the Act read with provisions
of Companies (Passing of Resolution by Postal Ballot) Rules, 2001 through a resolution. This has since been passed through a
Postal Ballot.
RESEARCH AND DEVELOPMENT

To remain a cutting edge Company, your Company has and continues to build upon product innovations and invests considerably
of management time and effort in R&D activities. Your Company aims to constantly provide superior quality products to its
customers and bring in better efficiencies at its Plants.
At your Company’s Birla Research Institute of Applied Sciences (Nagda), considerable progress has been attained in developing
new technologies for the production of fourth generation fibres. These would aid your Company in making inroads into new
markets.
(37)
Your Company is working in tandem with the National Council for Cement and Building Materials for superior cement grades.
Collaboration with HOLTEC for process improvement is ongoing. Simultaneously, at your Cement divisions’ Central R&D lab
(recognized by the Govt. of India’s Scientific and Industrial Research), we are ceaselessly working on the development of masonry,
slag and other grades of blended cement. These efforts have paid off not only in customer preference of its products but
recognition at the national level as well.
Your Company’s Staple Fibre Division received encomiums from the renowned Indo-German Environment body “Greentech”.
They eulogized Grasim’s efforts by according them the “Indo-German Greentech Award For Environment Excellence and the First
position in Man-made Fabric Industry Sector, for outstanding achievement in the field of Environment Protection.”
Your Company’s Rajashree Cement has been the recipient of the first “Best Quality Excellence Award for the year 2001” recently
instituted by the National Council for Cement and Building Materials.
The Birla Super Cement at Hotgi in Maharashtra was honoured by the CII who conferred upon it “The National Award for
Excellence in Energy Management”. It might interest you to know that most of your Company’s units have received National
Recognition for Energy Conservation Measures.
HUMAN RESOURCE DEVELOPMENT
Your Company believes in people power. It recognizes the fact that people are key to its sustainable success. Consequently, an HR
vision forms an integral part of your Company’s overall business vision and strategy.
Your Company is fully committed to people development. We therefore strive to create a working environment that is challenging
and motivates people to be performance-oriented and customer-focused.
Building, developing and upgrading employee competencies in line with business needs and strategies is now an institutionalised
process.
At Gyanodaya, the Aditya Birla Institute of Management Learning, customised training programmes, at which your Company’s
managers and executives are nominated, help hone their competencies. This is a very enabling training process as participants are
exposed to the latest trends and practices in related fields, and emerge more self-assured.
Delegation, empowerment and decentralisation are being pushed downward, dependent on competency levels, to foster the sense
of intrapreneurship. Performance-linked reward mechanisms and pay systems have and continue to generate the desire to do better
among employees. Additional recognition mechanisms have been instituted too. To move towards a leaner delayered organisation
so as to build speed of response, your Company’s drive towards manpower optimisation is on.
Committed to good corporate governance practices, your Company fully prescribes to the standards set out by the Securities And
Exchange Board of India’s (SEBI) Corporate Governance practices. Your Company has implemented all of its major stipulations.
Your Company’s Statutory Auditors Certificate dated 2nd May, 2002 in line with Clause 49 of the Stock Exchange Listing
Agreement, validates our claim. This certificate is annexed to and forms part of the Directors’ Report.
As stipulated in Section 217(2AA) of Companies Act, 1956, your Directors subscribe to the “Directors’ Responsibility Statement”
and confirm as under:
i) that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper
explanation relating to material departures;
ii) that the directors have selected such accounting policies and applied them consistently and made judgments and estimates
that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the
financial year and of the profit or loss of the company for that period ;
iii) that the directors have taken proper and sufficient care of the maintenance of adequate accounting records in accordance with
the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other
irregularities;
iv) That the directors have prepared the annual accounts on a going concern basis.
(38)
SUBSIDIARY COMPANIES
As required under Section 212 of the Companies Act, 1956, the audited statement of accounts along with report of the Board of
Directors and Auditors’ Report of your Company’s subsidiaries, namely, Samruddhi Swastik Trading and Investments Limited, Sun
God Trading And Investments Limited and Shree Digvijay Cement Company Limited, are annexed to this report.
PARTICULARS AS PER SECTION 217 OF THE COMPANIES ACT, 1956
The particulars of employees, as required under Section 217(2A) of the Companies Act, 1956, are given as an Annexure to this
report.
The additional information regarding conservation of energy, technology absorption and foreign exchange earnings and outgo,
stipulated under Section 217(1)(e) of the Companies Act, 1956 is set out in a separate statement, attached to this report and
forms part of it.
DIRECTORS
Mr. V. Venkateswarlu, Executive Director, Industrial Development Bank of India (IDBI) was appointed as a nominee Director on
the Board in place of Mr. J.N. Godbole. Your Directors record their appreciation for the valuable services rendered by
Mr. Godbole during his tenure in office.
Mr. Shailendra K. Jain, hitherto Manager and President & Business Head of Fibre and Pulp Divisions of the Company, has been
appointed as Whole Time Director of the Company w.e.f. from 1st November, 2001, for the remaining period of his appointment
as Manager expiring on 30th November, 2003.
Mr. Kumar Mangalam Birla, Mr. M.L. Apte, Mr. B.V. Bhargava and Mr. S.G. Subrahmanyan retire from office by rotation and
being eligible offer themselves for reappointment.
AUDITORS/AUDITORS’ REPORT
Your Directors request you to appoint Auditors for the current financial year and fix their remuneration. The observations made in
the Auditors’ Report are self-explanatory and therefore do not call for any further comments.
APPRECIATION
Your Directors wish to place on record their appreciation of the dedication and commitment of your Company’s employees to the
growth of your Company during a challenging year. Their unstinted support has been and continues to be integral to your
Company’s ongoing success.
Your Directors express their gratitude to the Central and State Governments, banks, financial institutions, shareholders and
business associates for their continued co-operation and guidance.
On behalf of the Directors

Mumbai, 2nd May, 2002 Chairman
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ANNEXURE TO THE DIRECTORS’ REPORT
Information under Section 217(1) (e) of the Companies Act, 1956 read with Companies Act, 1956 read with Companies
(Disclosure of Particulars in the Report of Board of Directors Rules, 1988 and forming part of the Directors’ Report for the year
ending 31st March, 2002.
A. CONSERVATION OF ENERGY
a) Energy Conservation measures taken
The Company is engaged in the continuous process of further energy conservation through improved operational and
maintenance practices:
i) Viscose Staple Fibre Units
— Transferring Slurry from Pulper to Homogenizer by Gravity, thus eliminating Transfer Pumps
— Reduction of one Wagner filter in each slurry system
— Modified taper impeller for dissolvers
— Pre-cooling of Soft Water by Cooling Tower in Caustic Dilution Plant
— Removal of dry end blower of Fibre dryer by modifying hopper
— Reduction in Double effect Evaporator run by improving the Multi Stage flash Evaporator capacity & economy
— Installation of Pressure reducing De-superheating Station in EC4 for HP Steam supplies to SFD
— Installation of Frequency Drives on PA Fans for boiler No. 1 & 2 in EC4
— Installation of Desuperheating Station in Steam Line & Modified Condensate Handling system of Fibre Dryer
— Introduction of Static Separator in place of Conventional Cylinders for Cooling Towers Fans in Viscose, CS2
and Power Plant Departments
— Introduction of Static Separator in place of Rotary Separator for Fibre Bailing Press
— Use of HP Ejector in place of LP Ejector for Viscose Deaeration
— Introduction of Flat Belts in place of V Belts for Air Compressor Drive System in Power Plant
— Elimination of Air Washer Chilled Water Spray Pumps by rerouting pipelines
— Elimination of Cooling Tower Spray Pump by lifting the Mixing Condenser of Anhydrous Evaporator & Inter
Condensers of MSFE, AAC and Anhydrous Evaporator
— Minimizing the use of Electrical Heater for producing Distilled water by utilizing Demin water in Chemical Laboratory
— Auto Temperature Controller for maintaining Salt Dryer outlet air temperature
ii) Pulp Units
— Replacement of old inefficient motors (18 Nos.) with higher efficiency IP 55 protection motors
— Improvements in chemical preparation plant by :
: incorporating higher efficiency chlorine scrubber
: larger capacity sulphuric acid and sodium chlorate service tanks to reduce pump running hours
— II Phase Automation for blow line steam control in Digester & other process controls in brown stock washing
— Replacement of primary clarifier sludge pump with suitable capacity higher efficiency pump
— Installation of vapour absorption chiller in place of Ammonia Compressor
— Crystalizer technology in evaporator plant for improved availability of high dry solids
— Slow motion slaker in causticizing
— Inbuilt vent condenser deaerator
iii) Cement Units
— Installation of frequency converter and variable frequency drives
— Installation of online Energy monitoring system
— Raw mill Classifier Modification
— Installation of belt bucket elevator for feeding raw meal in place of pneumatic conveying
— Installation of water spray system in top cyclone of calciner string
— Upgradation of U-I Preheater from 5th stage to 6th stage
— Installation of Kiln outlet seal
— Retrofitting of Process fan impeller with high efficiency impeller
— Introduction of agriculture and other wastes low cost fuels in kiln firing
— Installation of storage, handling, conveying and firing of pet coke to maximize the usage
— Installation of high efficiency water pumps for raw and soft waters in Skoda generators
— Installation of SPRS for Raw Mill fan
b) Additional investment and proposals, if any, being implemented for reduction of consumption of energy:
i) Viscose Staple Fibre Units
— Installation of additional Frequency drive for Slurry press & GCF feed pumps
— Elimination of reject pump of GCF by adopting control valves
— Lifting of Mixing Condenser of Crystalliser and Anhydrous Evaporators in Aux. 1
— Installation of Variable Frequency drive on FD fan for Boilers in EC1 & 2
(40)
— Installation of Variable Frequency drive for pumping station
— Replacement of Desiccant type Air Dryer by Refrigerated Air Dryer for Compressed Air
— Automatic level and Temperature Controllers for Desulph Bath in after treatment
— Installation of De-aerator in Acid Plant
— Installation of Energy Efficient induced Draft Fan for IJT # 1 in Power Plant
ii) Pulp Units
— Replacement of existing lower capacity white liquor supply pump no. 2 with higher capacity and higher efficiency
pump to conserve electrical power
— Replacement of primary clarifier sludge pump No. 2 with optimum capacity & higher efficiency pump to save
electrical power
— Replacement of existing lower efficiency filter water pump with higher efficiency pump to save electrical power
— Replacement of old inefficient motors (22 Nos.) with higher efficiency, IP55 protection motors for electrical
energy conservation
— Replacement of purged type air dryer with non purging type air dryer to conserve electric power in non
lubricating type air compressor
— Variable frequent drive for vacuum filters to replace existing dyno drive system to conserve electric power
— Improved screening system for the bleached centricleaner rejects to save power
— Medium consistency pumping system with modern mixer in CI02 stage
iii) Cement Units
— Close circuiting of Cement Mill for producing high Blaine Blended Cements
— Installation of recirculation duct and bypassing Booster fan in coal mill
— Installation of energy efficient water pumps for water supply
— Retrofit of Grate Cooler by IKN / CFG technology
— Installation of Low pressure Cyclone in Preheater with Triplet
— Installation of V Separator in Raw Mill
— Mechanical Transport in place of Pneumatic transport
— Intermediate controller for compressors
c) Impact of Measures at (a) and (b) above for reduction of energy consumption and consequent impact on the cost of
production of goods:
The above measures have resulted in energy saving and consequent reduction in cost of production
d) Total Energy Consumption and Energy Consumption per Unit of Production:
As per Form “A” attached.
B. TECHNOLOGY ABSORPTION
Efforts made in Technology Absorption in Form “B”
RESEARCH & DEVELOPMENT (R&D)
FORM “B”
1 Specific areas in which R&D carried out by the Company:
(i) VSF & Pulp Units
— Close collaboration with Birla Research Institute for Applied Science (BRIAS) for various R &D activities
(ii) Cement Units
— Use of low-grade limestone & reduction of screen rejects for mineral conservation
— Usage of more petroleum refinery waste i.e. pet coke as a replacement for fossil fuel in clinkerisation
— Optimisation in usages of fly ash with suitable improvement in clinker quality
— Raw material handling has been optimized indigenously
2 Future Plan of Action
— Cement - Utilisation of marginal grade limestone /Optimisation of Raw mix with coal mix / Development of
Application specific cements / Utilisation of alternative waste fuels
3 Expenditure on R & D
Expenditure on in-house Research & Development has been shown under respective heads of expenditure in the Profit &
Loss Account. Further, a total sum of Rs. 111.19 Lacs was paid to various Research Institutes for carrying out Research
and Development work related to Company’s products.
4 Technology Absorption, Adoption and Innovation
The latest technology adopted for improving productivity and product quality and reducing consumption of scarce raw
material and fuels.
Information regarding technology imported during the last five years : Nil
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on Foreign Exchange earnings and outgo is contained in Schedule 24 (4) and (5) of accounts. The Company
is exporting Viscose Staple Fibre, Chemicals, Sponge Iron, Cement, Textiles and Sophisticated Plant & Machinery of non-
traditional nature.
(41)
FORM ‘A’
Total Energy Consumption and Energy Consumption per unit of Production
(A) POWER & FUEL CONSUMPTION
Unit Current Year Previous Year
1. Electricity
a) Purchased — Units ‘000 254469 236703
Total amount Rs in lacs 11177.76 10394.20
Rate per Unit Rs./Unit 4.39 4.39
b) Own Generation
I) Through Diesel Generator — Units ‘000 496922 462051
Unit per Litre of Diesel Oil Units/Ltr. 3.93 3.89
Cost / Unit Rs./Unit 2.75 3.09
II) Through Steam Turbine — Units ‘000 832471 933854
Units per Kg. of Steam Co-generation of Steam & Power
Cost / Unit Rs./Unit 1.93 1.68
(Cost of fuel and duties only)
2. Coal (Slack, Steam & ROM including Lighting Coal)
For Co-generation of Steam & Power Tonnes 920032 972829
For Process in Cement Plants Tonnes 1118112 1094958
Average rate Rs./Tonne 1999.30 2049.19
3. Furnace Oil (Including LSHS)
Quantity K. Ltrs. 138954 134559
Average rate Rs./K. Ltr. 8827 9756
4. Light Diesel Oil (LDO)
5. High Speed Diesel Oil (HSD)
6. Internal Generation
Steam
a) From Chemical Recovery Boiler in Rayon Pulp plants
Quantity Tonnes 561091 545135
Total Cost Rs in lacs 37.61 38.99
Rate/Unit Rs./Tonne 6.70 7.15
(Cost of Oil used for firing support in Boiler)
b) From Waste Heat Boiler in Sulphuric Acid Plants
Quantity Tonnes 186657 213437
Total Cost Rs in lacs N.A. N.A.
Rate/Unit Rs./Tonne N.A. N.A.
(B) CONSUMPTION PER UNIT OF PRODUCTION

(Electricity units) (Furnace Oil (Kgs.) Coal (Kgs.) Steam (Tonnes)
Current Previous Current Previous Current Previous Current Previous
Name of the Product Unit Year Year Year Year Year Year Year Year
1. Viscose Staple Fibre
(incl. for intermediate &
by products)
Standard Per Tonne 1,500.00 1,500.00 — — — — 12.50 12.50
Actual Per Tonne 1,133.95 1,160.97 — — — — 7.99 8.54
2. Caustic Soda
(For Cell House only)
a. Mercury Plant
Standard Per Tonne 3,400.00 3,400.00 — — — — — —
Actual Per Tonne 2,828.00 2,820.00 — — — — — —
b. Membrane Cell Plant
Standard Per Tonne 2,400.00 2,400.00 — — — — — —
Actual Per Tonne 2,135.00 2,112.00 — — — — — —
3. Cement
Grey
Standard Per Tonne 120.00 120.00 — — 220.00 220.00 — —
Actual Per Tonne 90.86 89.67 — — 129.51 122.75 — —
White
Actual Per Tonne 108.25 104.35 0.09 0.12 — — — —
4. Textiles
Actual
Yarn Per 100 Kgs. 590.95 419.52 — — — — — —
Fibre Dyeing Per 100 Kgs. — — — — — — 0.40 0.37
Cloth Per 100 Kgs. 370.32 518.88 — — — — 0.49 0.61
5. Stable Bleaching Powder (SBP)
Standard Per Tonne 230.00 230.00 — — — — 0.28 0.28
Actual Per Tonne 144.00 160.00 — — — — 0.15 0.15
6. Poly Aluminium Chloride
Actual Per Tonne 55.00 53.00 — — — — 0.26 0.26
7. Chlorosulphonic Acid
Actual Per Tonne 140.00 125.00 — — — — 0.15 0.19
Note : Form ‘A’ is not applicable to Sponge Iron Division
(42)
AUDITORS’ REPORT
TO THE MEMBERS’ OF GRASIM INDUSTRIES LIMITED
We have audited the attached Balance Sheet of GRASIM INDUSTRIES LIMITED as at 31 st March, 2002 and also the Profit and
Loss Account of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility
of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
We report that-
(a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for
the purposes of our audit;
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our
examination of those books. Proper returns adequate for the purposes of our audit have been received from the branches not
visited by us;
(c) The reports on the accounts of the Branches audited by other Auditors, have been forwarded to us and have been
appropriately dealt by us in preparing our report;
(d) The Balance Sheet and Profit and Loss Account referred to in this report are in agreement with the books of account and
with the audited returns from the branches;
(e) In our opinion, the Profit and Loss Account and Balance Sheet comply with the accounting standards referred to in Section
211(3C) of the Companies Act, 1956;
(f) On the basis of information and explanations given to us and representations received from the directors of the Company,
we report that no director is disqualified from being appointed as director of the Company under clause (g) of sub section (1)
of section 274 of the Companies Act, 1956.
(g) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read
together with notes appearing in Schedule of Significant Accounting Policies and Notes on Accounts give the information
required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles
generally accepted in India.
i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2002
and
ii) in the case of the Profit and Loss Account, of the Profit for the year ended on that date.
As required by the Manufacturing and Other Companies (Auditor’s Report) Order 1988 issued by the Company Law Board in
terms of Section 227 (4A) of the Companies Act, 1956 (‘the Act’) and on the basis of such checks as considered appropriate, we
further report that :
1. The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed
Assets. All Fixed Assets have been physically verified by the Management according to the regular programme of periodical
verification in phased manner which in our opinion is reasonable having regard to the size of the Company and the nature
of its Fixed Assets. The discrepancies noticed on such physical verification were not material.
2. None of the Fixed Assets have been revalued during the year.
3. The Stocks of Finished Goods, Stores, Spare Parts, Packing Material, Fuel and Raw Materials of the Company at all its
locations (except stocks lying with third parties and in transit) have been physically verified by the Management at
reasonable intervals.
4. The procedures of physical verification of stocks followed by the Management are reasonable and adequate in relation to the
size of the Company and nature of its business.
(43)
5. The discrepancies noticed on such physical verification of stocks as compared to book records were not material.
6. On the basis of our examination of stock records, the valuation of stocks is fair and proper in accordance with the normally
accepted accounting principles and is on the same basis as in the preceding year.
7. In our opinion the rate of interest and other terms and conditions on which unsecured loans have been taken from
companies or other parties listed in the register maintained under Section 301 of the Act are not prima facie, prejudicial to
the interest of the Company.
8. In respect of unsecured loans, granted to Companies, listed in the register maintained under section 301 of the Act the rate
of interest and other terms and conditions of such loans are not prima facie prejudicial to the interest of the Company.
9. The parties to whom the loans, or advances in the nature of loans have been given by the Company are repaying the
principal amount as stipulated and are also regular in payment of interest , where applicable.
10. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its business with regard to purchase of stores, raw materials
including components, plant and machinery, equipment and other assets and for the sale of goods.
11. According to the information and explanations given to us, purchases of goods and materials and sale of goods, materials and
services aggregating during the year to Rs.50,000 or more in respect of each party in pursuance of contracts or arrangements
entered into the register maintained under section 301 of the Act have been made at prices which are reasonable having
regard to prevailing market prices for such goods, materials or services or the prices at which transactions for similar goods,
materials or services have been made with other parties.
12. As explained to us the Company has regular procedure for determination of unserviceable or damaged stores, raw materials
and finished goods. Adequate provision has been made in the accounts for the loss arising on items so determined.
13. In our opinion and according to the information and explanations given to us, the Company has complied with the
provisions of Section 58A of the Act and the Companies (Acceptance of Deposit) Rules, 1975framed thereunder with
regards to the deposits accepted.
14. In our opinion, reasonable records have been maintained by the Company for the sale and disposal of realizable by-products
and scrap.
15. In our opinion, the Company has an internal audit system commensurate with the size of the Company and nature of its
business.
16. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central
Government for the maintenance of cost records under Section 209 (1) (d) of the Companies Act, 1956 in respect of the
Company’s products to which the said rules are made applicable and are of the opinion that prima facie the prescribed
records have been made and maintained. We have, however, not made a detailed examination of the said records with a
view to determine whether they are accurate or complete.
17. According to the records of the Company, Provident Fund and Employees State Insurance dues have been regularly
deposited during the year with the appropriate authorities.
18. According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax,
Wealth Tax, Sales Tax, Customs duty and Excise duty were outstanding as at the last day of the financial year for a period of
more than six months from the date they became payable.
19. During the course of our examination of books of account carried out in accordance with the generally accepted auditing
practices, we have not come across any personal expenses other than expenses under contractual obligations and/or generally
accepted business practices, which have been charged to revenue account.
20. The Company is not a sick Industrial Company within the meaning of Clause (o) of sub section (1) of Section 3 of the Sick
Industrial Companies (Special Provisions ) Act, 1985.
21. In respect of Service activities we report that : (a) the Company has a reasonable system of recording receipts, issues and
consumption of material commensurate with its size and the nature of its business, (b) as the Processing jobs are undertaken
(44)
at prices agreed with the parties, allocation of labour to individual jobs is not considered necessary , and (c) the Company
has a reasonable system of authorization at proper levels and an adequate system of internal control on issue and allocation
of stores.
22. In respect of the Company’s trading activities we are informed that there are no damaged stocks.
For LODHA & CO., For G.P.KAPADIA & CO.,

Chartered Accountants Chartered Accountants
Place : Mumbai NARENDRA LODHA ATUL B. DESAI

Dated: 2nd May, 2002 Partner Partner
AUDITORS’ CERTIFICATE
TO THE MEMBERS OF GRASIM INDUSTRIES LIMITED

We have examined the compliance of conditions of Corporate Governance procedures implemented by Grasim Industries Limited
for the year ended on March 31, 2002, as stipulated in Clause 49 of the Listing Agreement of the said Company with the Stock
Exchanges in India.
The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to
a review of procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of
Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.
We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or
effectiveness with which the management has conducted the affairs of the Company.
On the basis of our review and according to the information and explanations given to us, the conditions of Corporate Governance
as stipulated in Clause 49 of the Listing Agreement(s) with the Stock Exchange have been complied with in all material respect
by the Company and that no investor grievance(s) is/are pending for a period exceeding one month against the company as per
the records maintained by the Shareholders Grievance/Allotment & Transfer Committee of the Board.


(45)
BALANCE SHEET AS AT 31ST MARCH, 2002
Rs. in Crores
Previous
Schedules Year
SOURCES OF FUNDS
Shareholders’Funds
Share Capital 1A 91.67 91.67
Share Capital Suspense 1B 0.02 0.02
Reserves and Surplus 2 2622.51 3001.66
2714.20 3093.35
Deferred Tax Balance 640.50
Loan Funds
Secured Loans 3 1484.50 1411.68
Unsecured Loans 4 475.09 366.39
Deferred Payment Credits — 0.08
Documentary Bills Discounted with Banks 5 105.15 122.29
2064.74 1900.44
TOTAL 5419.44 4993.79
APPLICATION OF FUNDS
Fixed Assets
Gross Block 6 5249.21 5246.24
Less: Depreciation 2108.06 2008.82
Net Block 3141.15 3237.42
Capital Work-in-Progress 102.90 83.06
3244.05 3320.48
Fixed Assets held for disposal 26.48
Investments 7 1416.04 682.48
Current Assets, Loans and Advances
Interest accrued on Investments 0.01 0.17
Inventories 8 548.89 725.91
Sundry Debtors 9 497.85 616.46
Cash and Bank Balances 10 148.32 158.35
Loans and Advances 11 363.90 408.27
1558.97 1909.16
Less:
Current Liabilities and Provisions
Liabilities 12 723.60 747.31
Provisions 13 102.50 171.02
826.10 918.33
Net Current Assets 732.87 990.83
TOTAL 5419.44 4993.79
Accounting Policies and Notes on Accounts 22
As per our separate report attached KUMAR MANGALAM BIRLA
Chairman
For LODHA & Co., For G. P. KAPADIA & Co.,
Chartered Accountants Chartered Accountants M. L. APTE
M. C. BAGRODIA
B. V. BHARGAVA
NARENDRA LODHA ATUL B. DESAI D. D. RATHI SHAILENDRA K. JAIN R. C. BHARGAVA
Partner Partner Group Executive President & CFO Whole-time Director Y. P. GUPTA
S. G. SUBRAHMANYAN
Mumbai ASHOK MALU V. VENKATESWARLU
Dated: 2nd May, 2002 Secretary Directors
(46)
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2002
Rs. in Crores
Previous
Schedules Year
INCOME
Sales 5069.80 5183.92
Interest and Dividend Income 14 66.60 61.20
Other Income 15 62.74 46.54
Increase / (Decrease) in Stocks 16 (95.42) 67.36
5103.72 5359.02
EXPENDITURE
Raw Materials Consumed 17 996.15 1237.05
Manufacturing Expenses 18 1082.67 1089.89
Purchases of Finished and Other Products 245.71 297.25
Payments to and Provisions for Employees 19 321.87 312.57
Selling, Distribution, Administration and Other Expenses 20 822.66 780.30
Excise Duty 697.88 730.47
Interest 21 190.25 238.78
Depreciation [Note A of Schedule 6] 251.70 251.90
4608.89 4938.21
Profit before Tax & Exceptional Items 494.83 420.81

Profit on transfer of Undertaking – 18.44
Retrenchment Compensation (55.33) –
Write-down of fixed assets on retirement from active use (19.01) –
Loss on Sale of Shares in Subsidiary (18.11) –
Loss on Sale of a Textile Unit (15.00) –
Loss on Sale of Assets of a Textile Unit (16.93) –
Employee Separation Compensation (27.60) (11.35)
Profit before Tax 342.85 427.90
Provision for Current Tax (56.50) (50.00)
Deferred Tax (51.50)
Tax Provision of earlier years written back 68.11
Profit after Tax 302.96 377.90
Balance brought forward from Previous Year 1457.01 1215.99
Profit available for Appropriation 1759.97 1593.89
Appropriations
Debenture Redemption Reserve 48.23 6.06
Proposed Dividend (subject to tax) 82.50 73.34
Corporate Dividend Tax – 7.48
General Reserve 700.00 50.00
Balance carried to Balance Sheet 929.24 1457.01
1759.97 1593.89
Basic and diluted earnings per share (in Rs.) 33.04 41.22

Chairman
M. L. APTE
M. C. BAGRODIA
B. V. BHARGAVA
S. G. SUBRAHMANYAN
(47)
SCHEDULES FORMING PART OF ACCOUNTS
SCHEDULE 1 Rs. in Crores
A. SHARE CAPITAL Previous
Year
Authorised
95000000 Equity Shares of Rs.10 each 95.00 95.00
Redeemable Cumulative
Preference Shares of Rs.100 each
150000 15 % “A” Series 1.50 1.50
100000 8.57 % “B” Series 1.00 1.00
300000 9.30 % “C” Series 3.00 3.00
100.50 100.50
Issued, Subscribed and Paid up
91669685 Equity Shares of Rs.10 each fully paid
(Previous year 91669685 Equity Shares) 91.67 91.67
Of the above, 29532500 Equity Shares were issued as fully paid up Bonus Shares
by way of Capitalisation of Share Premium and Reserves and 19355679 Equity
Shares of Rs.10 each issued as fully paid up for acquiring the cement business
pursuant to Scheme of Arrangement without payment being received in cash.
B. SHARE CAPITAL SUSPENSE

19800 Equity Shares (Previous year 19800) of Rs. 10 each to be issued as fully paid up
pursuant to acquiring of cement business of Indian Rayon and Industries Limited
under Scheme of Arrangement without payment being received in cash. 0.02 0.02
SCHEDULE 2
RESERVES AND SURPLUS Rs. in Crores
Balance Addition Deduction/ Balance
as at during Adjust- as at
31st the year ments 31st
March, during March,
2001 the year 2002
1. Capital Reserve
— On Revaluation of Fixed Assets 17.95 10.63* 7.32
— Capital Subsidy 1.51 0.02 1.53
2. Amalgmation Reserve 1.38 — 1.38
3. Preference Share Capital Redemption Reserve 1.48 1.48
4. Debenure Redemption Reserve 360.28 48.23 408.51
5. Share Premium Account 823.32 823.32
6. General Reserve 330.00 700.00 589.00 441.00
7. Investment Allowance Reserve 8.73 8.73
8. Surplus as per Profit and Loss Account 1457.01 — 527.77 929.24
3001.66 748.25 1127.40 2622.51
Previous year 2704.57 298.76 1.67 3001.66
* Deduction/adjustment on account of : -
a) assets sold/discarded Rs.9.40 Crores
b) Depreciation provided on revalued block Rs.1.23 Crores
Rs.10.63 Crores
(48)
SCHEDULES
Previous
SECURED LOANS Year
Non-Convertible Debentures 1263.53 1,088.75
Other Loans:
Term Loans from Financial Institutions:
Rupee Loans
Secured by first pari passu charge on assets of Caustic Soda Plant at Nagda
and Cement Plant at Raipur 95.19 202.02
Secured by hypothecation of the machineries/movable assets purchased
there against — 3.75
Deferred Sales-tax Loan secured by first available charge on assets of

Cement Units I & II at Jawad [subject to charge referred in Note 1 (c) & (f)] 30.79 33.82
Dharani Cement at Reddipalayam 0.55 0.81
Working Capital Borrowings from Banks secured by hypothecation of stocks and
book debts of the Company. 94.44 82.53
1484.50 1,411.68
Notes:
1) Non-Convertible Debentures are secured by first legal/equitable mortgage on immovable assets,hypothecation
of movable assets and floating charge on other assets, both present and future, of the specified divisions,
ranking pari passu with the charges created in favour of Financial Institutions for their term loans. This
charge is subject to hypothecation/charge in favour of Banks on stocks and bookdebts for working capital
borrowings (except XXII, XXIII, XXVI, XXVII,XXVIII, XXIX and XXX Series debentures which do not
have any charge on current assets)
a) 11% - XIII Series Non-convertible Debentures (redeemable in three equal

annual instalments commenced from 11.7.2000) are secured on assets of 15.00 30.00
Caustic Soda plant at Nagda and CementPlant at Raipur.
b) 11% - XVI Series Non-Convertible Debentures (redeemable at par in three

equal annual instalments commenced from 3.12.2000) are secured on assets of 16.67 33.34
40MW Power Plant at Nagda.
c) 11% - XVII Series Non-Convertible Debentures (redeemable at par in three

equal annual instalments commenced from 1.1.2002) are secured on assets of 56.67 85.00
Cement Units - I, II and III at Jawad.
d) i) 14.75% - XVIII Series Non-Convertible Debentures (redeemable at par on

5.6.2002) and 50.00 50.00
ii) 14.50% - XIX Series Non-Convertible Debentures (redeemable at par

on 16.7.2002) 50.00 50.00
are secured on assets of Staple Fibre Division (excluding 40 MW Power Plant
at Nagda)
e) 12.25% - XX Series Non-Convertible Debentures (redeemable at par in three

annual instalments of 35%, 35% and 30% respectively of the face value of the
debentures, commencing from 10.12.2002) are secured on assets of Staple 200.00 200.00
Fibre Division at Kharach.
f) 13.50% - XXI Series Non-Convertible Debentures (redeemable at par on

15.7.2003) are secured on assets of Cement Plants at Jawad and Shambhupura 150.00 150.00
(49)
SCHEDULES
SCHEDULE 3 (contd.) Rs. in Crores
Previous
Year
g) i) 13.25% - XXII Series Non-convertible Debentures (redeemable at par in three

equal annual instalments commencing from 31.3.2005); and 80.00 80.00
ii) 12.6% - XXIII Series Non-convertible Debentures (redeemable at par in three

debentures, commencing from 17.8.2005) 130.00 130.00
are secured on a plot of land situate in Maharashtra and on the assets of Cement
Division- South at Reddipalayam.
h) i) 11% - XXIV Series Non-convertible Debentures (redeemable at par in three
equal annual instalments commenced from 31.7.2000); and 40.19 80.41
ii) 11% - XXV Series Non-convertible Debentures (redeemable at par in three

equal annual instalments commenced from 29.11.2000) 10.00 20.00
are secured on assets of Birla Super Cement division at Hotgi, Rajashree Cement
Division at Malkhed and Birla White Cement Division at Kharia Khangar.
i) i) 10.75% - XXVI Series Non-convertible Debentures (redeemable at par on

07.06.2005); 120.00 120.00
ii) 11.25% - XXVII Series Non-convertible Debentures (redeemable at par on

15.12.2007 with put and call option at the end of 3rd & 5th year
from the date of allotment i.e. 15.12.2000); 60.00 60.00
iii) 10.10% - XXVIII Series Non-Convertible Debentures (redeemable at par

on 01.06.2006); and 75.00 —
iv) 9.70% - XXIX Series Non-Convertible Debentures (redeemable at par on
03.07.2008 with put and call option at the end of 5th year from the date
of allotment i.e. 03.07.2001) 50.00 —
are secured on assets of Sponge Iron division at Salav.
j) 8.85% - XXX Series Non-Convertible Debentures (redeemable at par on

04.12.2008 with put and call option at the end of 5th year from the date of
allotment i.e. 04.12.2001) are secured on plot of land situate in Maharashtra and 150.00 —
on the assets of Caustic Soda Plant at Nagda and Cement Plant at Raipur.
k) Series 2002-B Short term Mibor Linked Debentures (Redeemed on 02.04.2002) 10.00 —
1,263.53 1,088.75
2) In the case of Term Loans which carry pari passu charge on the movable assets, such charge on movable assets
is subject to prior charge of Banks on stocks and book debts for the working capital borrowings.
(50)
SCHEDULES
Previous
UNSECURED LOANS
Year
Fixed Deposits 1.16 1.64
Short Term Loans and Advances:
From Banks:
Commercial Paper
(Maximum Balance Rs.270 Crores, Previous Year Rs. 100 Crores) 95.00
Buyers’ Import Credit 18.50 39.78
Cash Credit Account with Overseas Banks 5.63 27.83
119.13 67.61
Other Loans and Advances:
From Banks 26.77 18.73
From Others:
Deferred Sales tax Loan 328.03 272.96
Other Loans 5.45
328.03 278.41
354.80 297.14
475.09 366.39
SCHEDULE 5
DOCUMENTARY BILLS DISCOUNTED WITH BANKS
Against Demand/ Usance Bills under Letter of Credit (Secured) 104.55 105.87
Against Usance Bills (Unsecured) 0.60 16.42
105.15 122.29
SCHEDULE 6
FIXED ASSETS Rs. in Crores
PARTICULARS GROSS BLOCK DEPRECIATION NET BLOCK
S. No. As at Additions Deductions As at Upto Deductions For the Upto As at As at
31.3.01 and/or and/or 31.3.02 31.3.01 and/or Year 31.3.02 31.3.02 31.3.01
transfers transfers transfers
1. Freehold Land 54.16 12.07 2.11 64.12 — — — — 64.12 54.16
2. Leasehold Land 51.82 1.08 0.01 52.89 2.17 — 0.70 2.87 50.02 49.65
3. Buildings 438.95 23.64 20.62 441.97 74.33 9.91 10.45 74.87 367.10 364.62
4. Workers’ Quarters
under Government
Subsidised Schemes 2.15 — 1.60 0.55 1.16 0.70 0.01 0.47 0.08 0.99
5. Railway Sidings 101.03 0.41 0.19 101.25 18.98 0.06 4.90 23.82 77.43 82.05
6. Plant & Machinery 4318.49 182.11 188.88 4311.72 1802.36 130.33 217.20 1889.23 2422.49 2516.13
7. Ships 108.23 — — 108.23 26.86 — 5.30 32.16 76.07 81.37
8. Furniture, Fittings & 144.82 13.95 16.29 142.48 72.04 10.54 11.83 73.33 69.15 72.78
Office Equipments
9. Livestock 0.01 — — 0.01 — — — — 0.01 0.01
10. Vehicles etc. 26.58 3.45 4.04 25.99 10.92 2.24 2.63 11.31 14.68 15.66
5246.24 236.71 233.74 5249.21 2008.82 153.78 253.02 2108.06 3141.15 3237.42
Previous Year 4911.23 417.22# 82.21 5246.24 1804.58 49.24 253.48 2008.82
(including Advances & Pre-operative Expenses) 3244.05 3320.48
# Includes Assets of Rs.49.24 CroresTaken over, persuant to the Scheme of Amalgamation of Dharani Cement Limited with the Company
(51)
SCHEDULES
SCHEDULE 6 (Contd.)
Notes: Rs. in Crores
Previous
Year
A. Depreciation for the year
Total Depreciation 253.02 253.48
Less:
Additional depreciation on revalued assets withdrawn from capital reserve 1.23 1.53
Depreciation included under other heads of expenses 0.04 0.02
Transferred to Pre-operative expenses 0.05 0.03
1.32 1.58
251.70 251.90
B. 1. Freehold/Leasehold Land includes -
a) Value of Shares of Rs.3750 (Previous year Rs. 3750) issued by the Co-Operative Housing Society under its Bye-laws, in the name
of Company’s nominees.
b) Execution of documents in respect of Land at Malkhed, Shambhupura, Veraval and Cochin amounting toRs.0.06 Crore, Rs.0.12
Crores andRs.2.78 Crores and Rs.1.92 Crores respectively, is still pending.
c) Rs.0.88 Crores jointly owned with other corporates
2. The title deeds of some of the immovable properties transferred pursuant to the Scheme of Arrangement are yet to be transferred in the
name of company.
3. Buildings and Workers’ Quarters include -
a) Those mortgaged with State Governments against subsidies received.

b) Cost of Ownership Flat/Office Premises Rs.1.53 Crores (Previous Year Rs. 1.53 Crores) (including Electrical Installations) held
singly and jointly in Formed/Proposed Co- operative Housing Societies including value of Shares of Rs.500 (Previous year Rs. 500)
issued by the Societies under their Bye-laws.
c) Cost of Land and Buildings (including Electrical Installations) amounting to Rs.0.12 Crore (Previous Year Rs. 0.12 Crore) held on
Co-ownership with Other Companies.
d) Buildings of Rs.0.61 Crores (Previous Year Rs. 0.61 Crores), yet to be registered in the name of the Company.
e) Building include Rs.15.13 crores towards shares and debentures for right of exclusive use, possession and occupation of office
space.
4. Railway siding amounting to Rs.14.98 Crores (Previous Year Rs. 14.57 Crores) is held on Co-ownership with other Company for which
documents are being executed
5. Addition to Plant & Machinery/Capital work-in-progress include Loss on Cancellation of Forward Covers, Increase due to Foreign
Exchange fluctuation on loans/liabilities and Roll-over charges of Rs. NIL (Previous Year Rs.1.21 Crores).
6. Fixed Assets include assets of Rs.7.01 Crores (Previous year Rs.6.25 Crores) not owned by the Company
7. Plant and Machinery include assets given on operating lease amounting to Rs.25.53 crores (Previous year Rs.25.53 crores)
8. Capital work in progress include advance against Capital Orders, Technical know-how and Supervision fees,Machinery under installation/
in transit; construction materials purchases and other assets under erection; and pre-operative expenses.
9. Leasehold Land include mining rights.
(52)
SCHEDULES
SCHEDULE 6 (Contd.)
Rs. in Crores
Previous
Year
C Pre-operative Expenses pending Allocation / Appropriation :
1. Raw Material Consumed — 0.35
2. Power & Fuel 0.96 0.63
3. Repairs to Other Assets 0.02 0.01
4. Salaries, Wages, Bonus, Gratuity, etc. 0.82 0.48
5. Contribution to Providend & Other Funds 0.14 (42101)
6. Employee’s Welfare Expenses 0.07 0.01
7. Insurance 0.15 0.11
8. Rent and Hire Charges 0.03 0.04
9. Rates & Taxes 0.02 (400)
10. Stationery, Printing, Postage and Telephone Expenses 0.04 0.03
11. Travelling & Conveyance 0.45 0.33
12. Legal and Professional Charges 8.07 0.09
13. Miscellaneous Expenses 1.78 1.04
14. Interest
— On Loans and Debentures 4.83 5.62

Less :
— Interest Received (Tax deducted at source Rs.0.40 Crore Previous year Rs.0.93 Crores) 1.95 4.10
2.88 1.52
15. Depreciation 0.05 0.03
15.48 4.67
Less :
Stock of Finished Goods under Trial Run — 0.15
Sale of Trial Run Production — 0.18
Waste/scrape 0.04 —
15.44 4.34
Add: Pre-operative Expenditure incurred upto Previous Year 2.17 35.46
Total Pre-operative Expenditure 17.61 39.80

Less:Allocated/transferred to Fixed Assets/Capital Work-in-progress 7.34 37.53
Charged to Profit & Loss Account 0.10
Balance transferred to Capital Work-in-progress 10.27 2.17
(53)
SCHEDULES
SCHEDULE 7
INVESTMENTS - Long Term Rs. in Crores
Previous
Year
1. Government and Trust Securities
i) Government Securities
Unquoted -
Securities deposited with Government Departments 0.02 0.03
ii) Trust securities - In Units
Quoted (Unquoted in Previous Year) -
500000 Units of Rs.10 each in Units (1964 Scheme) of Unit Trust of India 0.76 0.76
2. Shares, Bonds and Debentures
A TRADE INVESTMENTS
Equity Shares - Fully paid
a) Quoted - Rs.10 each
2964111 Indian Rayon and Industries Limited 38.10 38.10
996000 TANFAC Industries Limited 1.00 1.00
27641445 Indo Gulf Corporation Limited 61.18 61.18
150379023 Mangalore Refinery & Petrochemicals Ltd. 238.70 238.70
338.98 338.98
b) Unquoted -
1398857 Thai Rayon Public Company Limited, Thailand of Thai Baht 10 each. 1.07 1.07
5000 P.T. Indo Bharat Rayon Co. Limited, Indonesia of Indonesian
Rph 62625 (US $100) each. 0.40 0.40
15000 A.V Cell Inc., Canada Class ‘A’ Share of total value of Canadian
Dollar 2.5 Million 6.88 6.88
149250 Alexandria Carbon Black Co., S.A.E. of L.E. 100 each 14.99 14.99
157013894 Birla Tata AT & T Communications Limited (Pledged with Toronto
Dominion Bank (South East Asia) Limited and Bank of America) 157.01 157.01
180.35 180.35
519.33 519.33
B OTHER INVESTMENTS
a) Quoted - Fully Paid :
i) Equity Shares of Rs. 10 each.
15 Mysore Cement Limited
(Rs.117, Previous Year Rs. 117)
2117170 Century Enka Limited 1.35 1.35
400000 Mangalam Cement Limited 1.15 1.15
1001440 Industrial Development Bank of India 8.02 8.02
25000000 Larsen & Toubro Ltd. 776.13
ii) Optionally Convertible
Cumulative Preference Shares of Rs.10 each
400000 Mangalam Cement Limited 0.40 0.40
787.05 10.92
b) Unquoted - Fully Paid:
i) Equity Shares
422496 Indophil Textile Mills Inc.,Philippines of peso 10 each 0.04 0.04
825000 Thai Carbon Black Public Company Limited, Thailand of
Thai Baht 10 each 2.18 2.18
2500 Birla International Ltd. - Isle of Man of CHF 100 each 0.53 0.53
1300 Gwalior Rayon Consumers Co- operative Stores Limited of Rs.100 each — 0.01
468 Industry House Limited of Rs. 100 each (Rs.31200)
(Previous year Rs.31200)
500 Super Bazar Co-operative Society Limited of Rs.10 each (Rs.5000,
Previous year Rs.5000)
(54)
SCHEDULES
SCHEDULE 7 (Contd.)
Rs. in Crores
Previous
Year
ii) Unquoted - Fully Paid - Equity Shares of Rs.10 each
12000 Birla Consultants Limited 0.01 0.01
100 Eastern Spg.Mills & Industries Limited — 0.01
1982125 Gwalior Properties and Estates Pvt. Limited 6.41 6.41
1982125 Seshasayee Properties Pvt. Limited 6.41 6.41
1909550 Turquoise Investments and Finance Pvt. Limited 15.21 15.21
1911500 Trapti Trading & Investments Pvt. Limited 15.22 15.22
iii) Others
— 15.50% Secured Redeemable Non-Convertible Bond
of Rs.500000 each in Sardar Sarovar Narmada Nigam Limited — 0.03
— 13.50% IDBI 2003 of Rs.5000000 each — 2.08
— 13.50% SIDBI 2003 of Rs.10000000 each — 1.06
46.01 49.20
833.06 60.12
3. Shares In Subsidiary Companies
Quoted - Fully Paid - Equity Shares of Rs.10 each
4652870 Shree Digvijay Cement Company Limited 56.37 66.37
56.37 66.37
Unquoted -
a) Fully Paid - Equity Shares of Rs.10 each
9791350 Birla Technologies Limited — 29.37
6500000 Samruddhi Swastik Trading And Investments Limited 6.50 6.50
520 Sun God Trading And Investments Limited
(Rs.5200, Previous Year Rs.5200)
b) Partly Paid:
100 Preference Shares of Rs.100 each, Paid up Rs.25 each
in Samruddhi Swastik Trading And Investments Limited
(Rs.2500, Previous Year Rs.2500)
100 Preference Shares of Rs.100 each, Paid up Rs.25 each
in Sun God Trading And Investments Limited
(Rs.2500, Previous Year Rs.2500) —
6.50 62.87 102.24
1416.04 682.48
Aggregate Book Value of :

a) Quoted Investments 1183.16 416.27
b) Unquoted Investments 232.88 266.21
1416.04 682.48
Aggregate Market Value of Quoted Investments 713.51 335.85
Notes:
1. The Company has earmarked 500000 units of the Unit Trust of India (UTI) 1964 Scheme of Rs. 10 each Cost being Rs. 0.76 Crores
(Market Price Rs. 0.32 crores) in compliance with the provisions of Rule 3A of the Companies (Acceptance of Deposits) Rules, 1975
2. 7841445 Equity Shares of Indo Gulf Corporation Ltd. And 95379023 Equity Shares of Mangalore Refinery And Petrochemicals Limited are
not transferrable for a period of 5 years from 7th January, 1998 and 26th December, 1998 respectively.
3. During the year the Company has purchased and sold units of Mutual Funds as under:
Name of Mutual Fund No. of units Face Value
Birla Cash Plus Growth Fund 199470011 10
Birla Income Plus - Growth Mutual Fund 14077747 10
Alliance Cash Manager 997427 1000
(55)
SCHEDULES
SCHEDULE 7 (Contd.)
No. of Units Face Value
Alliance Term Plan 70000 1000
Grindlays Super Saver Income Fund 9502207 10
Grindlays Super Saver Income Fund - I.P. 8650836 10
Grindlays Cash Fund 20036738 10
HDFC Liquid Fund 176863358 10
HDFC Fixed Investment Plan 45000000 10
HDFC Income Fund 4286694 10
Prudential ICICI Liquid Plan 190234178 10
Prudential ICICI Fixed Maturity Plan 37944486 10
Prudential ICICI Income Fund 6695772 10
Prudential ICICI Short Term Plan 18760815 10
Templeton India Liquid Fund 14844528 10
Birla Fixed Maturity Plan 31000000 10
4. During the year the Company has purchased and sold following Bonds :
10.25% ICICI 2006 1500 100000
10.25% IDBI Omni Bonds (series 2001/A) 2000 100000
9% NTPC 2002 (Tax free Bonds) 100000 1000
5. Pursuant to undertaking given to some financial institutions and others, the company can
not dispose of shareholding without their prior approval (till such time the loans given
to these companies by these institutions are repaid in full.) in following companies:
(a) Indo Gulf Corporation Ltd.
(b) Mangalam Cements Ltd.
(c) Century Enka Limited and
(d) Mangalore Refinery and Petrochemicals Ltd.
Rs. in Crores
Previous
Year
SCHEDULE 8
INVENTORIES
(As valued and certified by the Executives of the respective Divisions)
At lower of cost and net realisable value unless otherwise stated
Stores and Spare parts, Packing Materials and Fuels 195.61 220.09
Raw Materials 146.95 204.11
Finished Goods 163.61 239.40
By Products 1.98 7.08
Process Stock 39.07 54.09
Waste/Scrap (at net realisable value) @ 1.67 1.14
548.89 725.91
@ Include Rs.0.04 Crores (Previous Year Nil) generated in trial run.
(56)
SCHEDULES
Rs. in Crores
SCHEDULE 9 Previous
SUNDRY DEBTORS Year
Exceeding six months :
Good and Secured 0.42 1.03
Good and Unsecured 58.01 88.27
Doubtful and Unsecured 1.70 0.50
60.13 89.80
Less: Provision for Doubtful Debts 1.70 0.50
58.43 89.30
Others
Good and Secured 139.68 125.33
Good and Unsecured 299.74 401.83
439.42 527.16
497.85 616.46
SCHEDULE 10
CASH AND BANK BALANCES
Cash balance on hand 4.75 0.92
Bank Balances:
With Scheduled Banks:
Current Accounts (including cheques under collection) 140.93 53.76
Saving Accounts (Earmarked for Employees
Security Deposits and others) (Rs.33265, Previous year Rs.65730)
Deposit Accounts (Note 1) 2.61 103.54
143.54 157.30
With Others (Note 2) 0.10
143.54 157.40
In Post Office Savings & Deposit Accounts (Rs.2336, previous year Rs.389)
In Government Treasury Saving Account 0.03 0.03
148.32 158.35
Notes :
1. Deposits include (a) Rs.0.19 Crore (Previous Year Rs.0.29 Crore) lodged as security with Government
Department (b) Rs.0.15 Crore (Previous year Rs. 0.17 Crore) earmarked for Employees’ Security
Deposit and (c) Rs.0.12 Crore (Previous Year Rs.1.19 Crore) as Interest accrued.
2. Balances with Others represents :
Rs. in Crores
Name of the Bank Bank Maximum
Nature of Account Balance Outstanding
As at As at Previous
31.3.02 31.3.01 Year
Current Account with :

Mashreq Bank, Dubai (48617) — 0.49 —
Standard Chartered Bank, Dubai — — 0.01 —
British Bank of Middle East, Dubai — 0.10 — 0.10
(57)
SCHEDULES
Rs. in Crores
Previous
Year
SCHEDULE 11
LOANS AND ADVANCES (Considered Good)
Secured Loan 0.09 0.10
Unsecured-
Deposits with Bodies Corporate 31.92 69.21
Deposits and Balances with Government and
other Authorities (including accrued interest ) 41.86 31.68
Other Deposits 24.66 27.59
Advances to Subsidiaries 60.58 23.58
Advances recoverable in cash or in kind or for value
to be received (Due from Officers of the Company
Rs.0.11 Crore, Previous Year Rs.0.06 Crore, Maximum
outstanding during the Year Rs.0.14 Crore, Previous Year Rs. 0.06 Crore) 144.77 152.29
Advance Income tax (Net of Provision) 60.02 103.82
363.81 408.17
363.90 408.27
SCHEDULE 12
CURRENT LIABILITIES
Sundry Creditors :
a) Small scale industrial undertakings *
(To the extent identified with available information) 0.35 0.38
b) Others 503.53 543.91
503.88 544.29
Security and Other Deposits 82.05 65.32
Unclaimed Dividends 4.35 2.99
Other Liabilities 43.50 44.18
Interest accrued but not due on debentures/loans 89.82 90.53
723.60 747.31
* Names of small scale industrial undertakings to whom an amount of Rs. 1.00 lac or more was outstanding for more than 30days are as
under:
Fine polycolloids P. Ltd. and Sankalp Chemical, Mumbai
SCHEDULE 13
PROVISIONS
Retirement Benefits 20.00 90.20
Interim & Proposed Final Dividends 82.50 73.34
Corporate Dividend tax — 7.48
102.50 171.02
(58)
SCHEDULES
INTEREST AND DIVIDEND INCOME Previous
Year
i) On Long Term Investments
Interest (Gross) on :
a) Government and other Securities 0.25 0.04
b) Other Investments 0.38 0.01
(Tax deducted at source Rs.0.06 Crores, Previous Year Rs.Nil)
Dividend (Gross) from :
a) Trade Investments 8.99 12.29
b) Other Investments 2.32 2.41
ii) Others : Interest (Gross) on:
Bank and Other Accounts (Tax deducted at
source Rs.5.07 Crores, Previous Year Rs.5.95 Crores) 54.66 46.45
66.60 61.20
SCHEDULE 15
OTHER INCOME
Export Incentives 8.78 11.49
Rent Received (Tax deducted at source Rs.0.11 Crore, Previous Year Rs.0.09 Crore) 1.44 1.22
Lease Rent 4.03 4.03
Processing Charges (Tax deducted at source Rs.0.01 Crore, Previous Year Nil) 0.32 0.26
Insurance Claims 4.84 6.42
Profit on Sale of Long Term Investments (Net) — 0.23
Profit on Sale of Current Investments (Net) 10.87 0.09
Excess Provisions written back (Net) 19.03 10.79
Prior period Adjustments (Net) 0.30
Commission Income 0.33 1.03
Miscellaneous Receipts 12.80 10.98
62.74 46.54
SCHEDULE 16
INCREASE / (DECREASE) IN STOCKS
Closing Stock
By-Products 1.98 7.08
Process Stock @ 39.07 54.24
Waste/Scrap 1.63 1.14
206.29 301.86
Opening Stock
By-Products 7.08 8.29
Process Stock 54.09 48.19
Waste/Scrap 1.14 1.28
301.71 231.34
Add: Stock of transferred business of Dharni Cement pursuant to the
Scheme of arrangement & stock of trial run production
Finished Goods 0.66
Process Stock 2.50
301.71 234.50
Increase in Stocks (95.42) 67.36
@ Includes Rs. Nil (Previous Year Rs.0.15 Crores) of transferred Software Division.
(59)
SCHEDULES
Rs. in Crores
Previous
Year
SCHEDULE 17
RAW MATERIALS CONSUMED
Opening Stock 204.11 191.85
Add: Stock of transferred business of Dharni Cement pursuant to the
Scheme of arrangement & stock of trial run production — 2.68
204.11 194.53
Purchases and Incidental Expenses
(includes cost of Lime Stone raised) 943.23 1250.98
1147.34 1445.51
Less:
Sales 4.24 4.35
Closing Stock 146.95 204.11
151.19 208.46
996.15 1237.05
SCHEDULE 18
MANUFACTURING EXPENSES
Consumption of Stores, Spare Parts and Components, Packing
Materials and Incidental Expenses - Less sales
Rs.0.24 Crore (Previous year Rs.0.82 Crore) 259.01 261.99
Power & Fuel 739.28 720.19
Processing Charges 20.68 48.16
Technical Know-how fees — 2.35
Repairs to Buildings 18.66 19.49
Repairs to Machinery (excluding Spare Parts and Components) 34.57 27.56
Repairs to Other Assets 10.47 10.15
1082.67 1089.89
SCHEDULE 19
PAYMENTS TO AND PROVISIONS FOR EMPLOYEES
Salaries, Wages & Bonus, etc. 254.83 246.57
Contribution to Provident and Other Funds 25.01 25.10
Welfare Expenses 42.03 40.90

321.87 312.57
(60)
SCHEDULES
Rs. in Crores
Previous
Year
SCHEDULE 20
SELLING, DISTRIBUTION, ADMINISTRATION AND OTHER EXPENSES
Commission to Selling Agents 26.74 28.55
Brokerage and Discount 10.61 9.26
Freight, handling and other expenses 510.56 480.47
Advertisements & Publicity 68.98 47.24
Insurance 19.20 19.33
Rent (including Lease Rent) 13.03 14.87
Rates and Taxes 11.47 11.90

Stationery, Printing, Postage and Telephone Expenses 19.17 20.14
Travelling and Conveyance 27.07 27.71
Legal and Professional charges 13.44 9.88
Bad debts written off 25.51 19.81
Provision for Bad & Doubtful Debts 1.20 —
Research contribution (including Expenses) 1.11 1.04
Donations (including Political Contribution Rs.0.01 Crores, Previous Year Rs. Nil) 1.65 3.50
Directors’ Fee 0.04 0.01
Directors’ Commission 1.00 —
Exchange Rate difference (Net) 3.35 7.92
Prior period Adjustments (Net) — 2.14
Loss on Sale and/or discard of Fixed Assets (Net) 5.39 9.86
Loss on Sale of Long Term Investments (Net) 0.02 —
Miscellaneous Expenses 63.12 66.67
822.66 780.30
SCHEDULE 21
INTEREST
On Fixed Loans and Debentures 161.40* 203.04*
On Other Accounts 28.85 35.74

190.25 238.78
* Includes Rs.Nil (Previous Year Rs.0.03 Crore) paid to the Manager of the Company in respect of Fixed Deposits/Debentures.
(61)
SCHEDULES
SCHEDULE 22
ACCOUNTING POLICIES AND NOTES ON ACCOUNTS
A Significant Accounting Policies:
1. Accounting Concepts:
The financial statements are prepared under the historical cost convention (except for certain fixed assets which are revalued) on an
accrual basis and in accordance with the applicable mandatory Accounting Standards.
2. Fixed Assets:
Fixed assets are stated at cost (including other expenses related to acquisition and installation) adjusted by revaluation of certain fixed
assets.
3. Translation of foreign currency items:

Foreign currency assets and liabilities covered by forward contracts are stated at the forward contract rates while those not covered are
restated at year end rate. Exchange differences relating to fixed assets are adjusted in the cost of the asset. Any other exchange
difference is dealt with in the profit and loss account.
Premium in respect of forward contracts is recognised over the life of contracts.
Transactions relating to overseas offices have been converted as under:
i) Net revenues at the average rate for the year.
ii) Fixed assets at rates prevailing on the dates of addition. Depreciation is accounted for at the same rate at which assets are
converted.
iii) Other current assets and liabilities, at rates prevailing at the end of the year.
4. Treatment of expenditure during construction period:

Expenditure during construction period is included under Capital Work in Progress and the same is allocated to the respective Fixed
Assets on the completion of its construction.
5. Investments:
Current investments are stated at lower of cost and fair value. Long term investments are stated at cost after deducting provisions made
for permanent diminution in the value.
6. Inventories:
Inventories are valued at the lower of cost and net realisable value except waste/scrap which is valued at net realisable value.
The cost is computed on weighted average/FIFO basis.
Finished goods and process stock include cost of conversion and other costs incurred in bringing the inventories to their present
location and condition. Obsolete, defective and unserviceable stocks are duly provided for.
7. Research and development expenditure: Revenue expenditure is charged to the profit and loss account and capital expenditure is added
to the cost of fixed assets in the yearin which it is incurred.
8. Depreciation:
Depreciation is charged in the Accounts on the following basis:
a) On fixed assets (other than Revalued Assets) - on written down value method in respect of Viscose Staple Fibre Division and
Engineering Division at Nagda;
(62)
SCHEDULES
SCHEDULE 22 (Contd.)
Textiles Division at Gwalior,Bhiwani Textiles Mills at Bhiwani, BirlaInternational Marketing Corporation,
and
on Straight Line Method in other Divisions including Power Plants at Nagda applying the rates of Schedule XIV of the
Companies Act, 1956.
Continuous process plant as defined in Schdule XIV has been taken on technical assessment.
b) In respect of Revalued Fixed Assets, on straight line method on the gross value of assets as increased by the amount of revaluation
at lower rates, based on life of assets, as ascertained by the valuers.
c) In respect of the amounts capitalised during the year on account of foreign exchange fluctuation is provided prospectively over the
residual life of the assets.
d) In respect of assets added/disposed of during the year on pro-rata basis with referenceto the month of addition/deduction except in
case of new projects where it is provided for the period of use.
e) Leasehold land is being amortised over the period of lease.
f) Capital expenditure on assets not owned by the company is amortised over a period of five years.
9. Retirement Benefits:
The Company makes regular contribution to provident fund and superannuation fund and these contributions are charged to Profit &
Loss Account.
Contributions to the Gratuity Fund and provision for leave encashment are made on the basis of actuarial valuation and charged to
Profit & Loss Account.
10. Government Grants:

Capital grants relating to specific assets are reduced from the gross value of the Fixed Assets and capital grants for Project Capital
Subsidy are credited to Capital Reserve.
Other revenue grants are credited to Profit and Loss account or deducted from the relatedexpenses.
11. Borrowing Cost:

Interest and other costs in connection with the borrowing of the funds to the extent related/attributed to the acquisition/construction
of qualifying fixed assets are capitalised upto the date when such assets are ready for its intended use and other borrowing costs are
charged to Profit & Loss Account.
12. Provision for Current and Deferred Tax:

Provision for Current Tax is made on the basis of estimated taxable income for the current accounting period and in accordance with
the provisions as per Income Tax Act, 1961.
Deferred Tax resulting from “timing difference” between book and taxable profit for the year is accounted for using the tax rates and
laws that have been enacted or substantially enacted as on the balance sheet date. The deferred tax asset is recognized and carried
forward only to the extent that there is a reasonable certainty that the assets will be adjusted in future.
13. Contingent Liabilities:

Contingent liabilities are not provided for and are disclosed by way of Notes.
(63)
SCHEDULES
SCHEDULE 22 (Contd.) Rs. in Crores
Previous
Year
B NOTES ON ACCOUNTS
1. Contingent Liabilities not provided for in respect of :
a) Claims not acknowledged as debts (Net of tax Rs. 80.61 Crores,

Previous YearRs.249.05 Crores) 158.72 305.84
b) Uncalled liability on partly paid shares (Rs.15000, Previous year Rs. 15000)
c) Custom duty which may arise if obligation for exports is not fulfilled against
import of raw materials and machinery (Net of tax Rs. 2.94 Crores, Previous
year Rs. 6.10 Crores) 4.65 10.09
d) Custom duty on import of technical know-how and other services relating to

projects against which Bank Guarantee/Bond of Rs. 5.68 Crores is furnished 10.81 10.81
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 181.91 105.18
not provided (advance paid Rs. 30.60 Crores, Previous year Rs. 20.07 Crores).
4 Value of Assets taken on Lease 41.48 41.60

Future obligation of Lease Rent as Lessee 9.73 20.72
5 Land, Building and Plant & Machinery of some of the Units were revalued on 1.4.1974, 1.4.1980,1.4.1982 and 1.4.1985 by approved
valuers on the basis of assessment about the current value of the similar assets. As a result book value of such assets was increased by
Rs. 116.40 Crores which had been transferred to Capital Reserve.
6 The Company has sold its entire holdings of 97,91,350 equity shares in Birla Technologies Limited, its subsidiary at Rs. 11.50 per equity
share. The resultant loss of 18.11 Crores has been charged to Profit & Loss Account.
7 The Company has sold, as on the closing 31st March 2002, its textiles manufacturing units/undertakings at Gwalior as a going concern
at a consideration for Rs.1 lac, pursuant to the resolution passed at its Board Meeting held on 26th February 2002 and subsequent
approval of its shareholders by Postal Ballot on 27th April 2002.The Company has also agreed to pay Rs.15 Crores to Purchasers for
taking over of certain liabilities including the employees’ liabilities. The total resultant loss of Rs.31.93 Crores (including Rs. 15
Crores) has been charged to Profit and Loss Account.
8 During the year, the Company entered into a Memorandum of Settlement with the Workers’ and Staff Unions of its Pulp and Fibre
Units situated at Mavoor (Kerala) (“the units”) for closure of the units effective 1st July2001 . The Company paid retrenchment
compensation Rs. 55.33 Crores to the employees of the units in terms of the said settlement. On closure of the units some of the assets
of the units stand retired from active use; and, accordingly, the difference between the book value and the net realizable value (as
estimated by the management) amounting to Rs.19.01 Crores is charged to the profit and loss account in addition to the amounts so
paid to the employees. The net realizable value of these assets of the units is reflected separately under the head “Assets held for
disposal”.
9 The Company had filed a Scheme of Arrangement under Section 391/394 of the Companies Act, 1956 in the High Court of Madhya
Pradesh in October, 2000 inter alia providing for sale/ transfer of assets of the Mavoor Units, which is pending for disposal.
(64)
SCHEDULES
10 As it is not possible to ascertain with reasonable certainty the quantum of accruals in respectof certain insurance and railway claims,
export incentives and interest on overdue bills from customers, the same are accounted on acceptance basis.
11 The Company has discontinued the practice of including Inter divisional transfer of goods as independent marketable products of
separate divisions for captive consumption in respective head of accounts. The change in accounting treatment has no impact on the
profits for the year.
12 Advances recoverable in cash or in kind include the payments made to / on behalf of Rosa Power Supply Co. Ltd. Rs. 2.05 Crores
(Previous year Rs.1.79 Crores) and paymentsmade to / on behalf of Bina Power Supply Co. Ltd. Rs.14.59 Crores (Previous yearRs.14.59
Crores) which are intended to be adjusted against the value of the Equity Shares to be issued by such Co-promoted Companies in the
event of relative projects are implemented after procuring all regulatory approvals.
13 The Company has an investment of Rs.56.37 crores in share capital of Shree Digvijay Cement Company Limited (SDCC), a subsidiary
company. SDCC is a sick company and a Scheme of revival is under consideration. This being the long term strategic investment, in
the opinion of the management, no provision is required to be made for diminution in the value of this investment as the same is of
temporary nature.
14 The Company has an investment of Rs.238.70 crores in share capital of Manglore Refinery & Petrochemicals Limited (MRPL). This
being the long term strategic investment, in the opinion of the management, no provision is required to be made for diminution in the
value of this investment as the same is of temporary nature.
15 The Following are included under other heads of expenses in the Profit and Loss account : Rs. in Crores
Previous Year
i) Stores and Spares Consumed 24.76 28.65
ii) Power & Fuel 7.10 5.77
iii) Repairs to Machinery 5.71 3.63
iv) Repairs to Buildings 0.14 0.11
v) Repairs to Other Assets 0.56 0.97
vi) Salaries, Wages, Bonus & Gratuity 5.84 5.41
vii) Contribution to Provident and Other Funds 0.53 0.53
viii) Welfare Expenses 1.16 0.99
ix) Insurance 0.66 0.84
x) Hire Charges 0.59 0.39
xi) Royalty & Cess 50.69 46.64
xii) Rates & Taxes 6.88 3.11
xiii) Ship Operation and Management charges 5.43 3.49
xiv) Depreciation 0.04 0.02
xv) Lease Rent 0.23 9.11
(65)
SCHEDULES
Previous Year
SCHEDULE 22 (Contd.) Rs.
16 Auditors’ remuneration
a) Statutory Auditors:
Audit Fee 1840000 1680000
Tax Audit Fee 287000 262500
For Certification and Other Work 267775 506800
Reimbursement of Expenses 511546 584236
b) Branch Auditors:
Audit Fee 1189640 1427675
Tax Audit Fee 103000 45875
For Certification and Other Work 201791 207697
c) Cost Auditors:
Audit Fee 311602 266300
For Certification and other work 18,798 —
17 Manager’s / Whole Time Directors remuneration *: Rs. in Lacs

Salary 90.89 38.96
Contribution to Provident Fund & Other Funds 11.56 9.17
Perquisites 6.41 22.51
108.86 70.64
* appointment and remuneration of whole-time director is subject to shareholders’ approval
Commission to other than whole-time directors 100.00 —
Rs. in Crores
Computation of net profit in accordance with Section 198 of the Companies Act, 1956
Profit before taxation as per profit and loss account 342.85
Add :
Managerial Remuneration 1.09
Directors’ Fee 0.04
Commission to other than whole-time directors 1.00
Provision for Bad & Doubtful Debts 1.20
Loss on Sale of Shares in Subsidiary 18.11
Loss on Sale of Long Term Investments (Net) 0.02
364.31
Less :
Profit on Sale of Current Investments (Net) 10.87
Net Profit 353.44
Commission
— Amount 1.00
— Percentage to net profit 0.28%
(66)
SCHEDULES
Previous
Year
18 Earnings per share:
Net profit for the period attributable to equity shareholder’s (Rs. in Crores) 302.96 377.90
Weighted average number of equity shares outstnding Numbers 91689485 91689485
Basic and diluted earnings per share (face value of Rs.10 each) (Rs.) 33.04 41.22
19 Accounting Standard 22 (“Accounting for Taxes on Income”)

has been brought into effect from this accounting year. The accumulated
net deferred tax as on 1st April, 2001 amounting to Rs.589 crores has been
debited to General Reserve. Deferred Tax Assets and Liabilitties as on
31st March, 2002 are as under:
Deferred Tax Assets:
Accrued Expenses deductible on payment basis 26.33
Expenses allowable in installments in Income Tax 13.52
Others 3.66
43.51
Deferred Tax Liabilty :
Accumulated Depreciation 684.01
Net Deferred Tax Balance 640.50
The deferred tax balance has arisen principally on account of the timing difference between the depreciation admissible under Income
Tax and the depreciation adjusted in the accounts. Though adjustment is being made in terms of Accounting Standard 22, having
regard to the normal capital expenditure which the Company is expected to continue to make in future years, the “timing difference”
is not expected to be effectively reversed and no cash outgo likely to materialize on account thereof.
Deferred tax asset is recognised and carried forward only to the extent that there is reasonable certainity that sufficient future taxable
income will be available against which such deferred tax asset can be adjusted.
20 Segment Reporting
a. Primary Segment Reporting (by business segment)
1 Segment 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 risk 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
Sponge Iron — Sponge Iron

Textiles — Fabrics & Yarn
2 Inter-segment transfers of independent marketable products are at market rates
(67)
SCHEDULES
3 Information about Business Segments (For the year 2001-2002):
Rs. in Crores
Fibre & Pulp Chemicals Cement Sponge Textiles Others Eliminations Total
Iron Company
A REVENUE
1a Gross Sales (External) 1489.81 173.63 2452.94 383.17 300.22 270.03 5069.80
1b Gross Sales (Inter-segment) 52.67 80.09 1.01 — 0.47 (134.24) —
Total Gross Sales 1542.48 253.72 2453.95 383.17 300.69 270.03 (134.24) 5069.80
2a Other Income 6.79 2.51 23.92 10.82 12.78 5.14 61.96
2b Unallocated Corporate Other Income 67.38
Total Other Income 6.79 2.51 23.92 10.82 12.78 5.14 — 129.34
3 Total Revenue 1549.27 256.23 2477.87 393.99 313.47 275.17 (134.24) 5199.14
B RESULTS
1 Segment Result (PBIT) 305.89 11.42 338.67 11.86 (37.71) 0.22 630.35
2 Unallocated CorporateIncome / (Expenses) 54.73
3 Interest Expense (190.25)
4 Profit from ordinary activities 494.83
5 Exceptional Items:
— Loss on Sale of Shares in Subsidiary (18.11)
— Loss on Sale of Undertaking (31.93) (31.93)
— Write-down of fixed assets on
retirement from active use (19.01) (19.01)
— Retrenchment Compensation (55.33) (55.33)
— Employee Separation Compensation (9.10) (1.63) (13.49) (3.38) (27.60)
6 Profit Before Tax 342.85
7 Provision for Current Tax (56.50)
8 Deferred Tax (51.50)
9 Tax Provision of earlier year written back 68.11
10 Profit after Tax 302.96
C OTHER INFORMATION
1 Segment Assets 999.05 253.52 2404.00 590.57 209.64 68.36 4525.14
2 Unallocated Corporate Assets 1720.40
3 Total Assets 6245.54
4 Segment Liabilities 119.81 26.01 348.90 20.19 76.51 33.21 624.63
5 Unallocated Corporate Liabilities 2266.21
6 Total Liabilities 2890.84
7 Capital Expenditure 31.00 4.51 210.95 1.36 8.41 1.92 258.15
8 Depreciation 48.21 16.26 130.30 38.71 17.15 0.13 250.76
9 Non Cash Expenses other than
Depreciation 19.01 19.01
b. Secondary Segment Reporting (by geographic segment) - Being insignificant, hence not given.
(68)
SCHEDULES
21 Related Party Transactions :
a. Parties where control exists -
Birla Technologies Limited (Subsidiary till 31.01.2002)
Sun God Trading & Investment Ltd.
Samruddhi Swastik Trading & Investment Ltd.
Shree Digvijay Cement Co. Ltd.
b. Other Related Parties with whom transactions have taken place during the year :
Joint Ventures :
Mangalore Refinery & Petrochemicals Ltd.
Birla Tata AT&T Ltd.
Indo-Gulf Corporation Limited
AV Cell Inc. , Canada
TANFAC Industries Limited
Key Management Personnel & Relatives :
Shri Shailendra K. Jain, Manager / Whole Time Director
Relatives of Shri Shailendra K.Jain
Smt. Niharika Jain, Wife
Shri Suvvrat Jain, Son
Shri Devavrat Jain, Son
c. Nature of Transaction
Rs. in Crores
i) Sales & Services
Subsidiaries 9.51
Joint Venture 1.81
ii) Interest and other Income Received / Receivable
Subsidiaries 4.58
Joint Venture 2.46
Key Management Personnel & Relatives (28202)
iii) Purchases of goods / Payment for other services
Subsidiaries 13.02
Joint Ventures 88.64
Key Management Personnel & Relatives 1.12
iv) Interest paid
Joint Ventures (19726)
v) Sale of Fixed Assets
Subsidiaries 0.01
Joint Ventures 8.69
vi) Outstanding Balances as at 31st March , 2002
Debtors :
Subsidiaries 0.52
Joint Ventures 0.04
Loans & Advances :
Subsidiaries 60.58
Joint Ventures 20.24
Creditors :
Subsidiaries 0.59
Joint Ventures 0.46
Unsecured Loan :
22 Previous year’s figures have been regrouped and rearranged whereever necessary to confirm to this year’s classification.
23 All the amounts in rupees have been rounded off to crores with lacs in decimals as approved under Section 211 (1) of the Companies
Act, 1956. Figures of Rs.50,000 or less have been shown at actuals in brackets.
24 Additional information required under Part II of Schedule VI to the Companies Act, 1956 (as certified by the Executives of the
respective Divisions) is as per Schedule 23.
(69)
SCHEDULES
SCHEDULE 23
ADDITIONAL INFORMATION UNDER PART II OF SCHEDULE VI TO THE COMPANIES ACT, 1956
1. CAPACITY & PRODUCTION

Products Unit Licensed/ Registered * Installed Capacity Production #
Capacity (Quantity)
2001-02 2000-01 2001-02 2000-01 2001-02 2000-01
1. Viscose Staple Fibre/Polynosic/ Tonne

HWM/ /Hi-Performance/ Speciality Fibre
— At Nagda, Mavoor, Harihar & Kharach 322100 354950 220775 246775 176462 218847
2. Sulphuric Acid Tonne
(Captive & Intermediate Products)
3. Carbon-di-Sulphide Tonne
(Captive & Intermediate Products)
4. Rayon Grade Pulp (At Mavoor & Harihar) Tonne 72000 108000 70000 130000 71251 69729
5. Paper Tonne 2700 — 2700 — —

6. Rayon Grade Caustic Soda Tonne 175800 175800 160600 160600 129784 131253
7. Stable Bleaching Powder Tonne 45000 45000 15000 15000 17523 17528
8. Man-Made Fibre Fabrics Mtr. (in 000’s) 600 1598 126 244 15478 15762
(At Gwalior & Bhiwani) Looms Looms Looms Looms
Kg. (in 000’s) 307 348
9. Man-Made Fibre Yarn Kg. (in 000’s) 117500 117500 43488 43488 9203 11029
(At Bhiwani & Malanpur) Spindles Spindles Spindles Spindles
10. Cement Tonne

At Jawad, Raipur, Shambhupura, 17166000 15166000 11366000 9866000 9528418 9098622
Malkhed & Reddipalayam
At Reddipalayam (Under Implementation)
11. White Cement (At Khariakhangar) Tonne 400000 400000 400000 400000 267915 251594
12. Industrial Machinery Tonne 25000 25000 15950 15950 ## ##
13. Poly Aluminium Chloride Tonne 66000 66000 13860 13860 20587 21805
14. Chloro Sulphonic Acid Tonne 49500 49500 16500 16500 11106 15054
15. Sponge Iron Tonne 600000 600000 900000 900000 559567 663998
Notes:
(a) * Registered capacities are those capacities for which registrations granted pursuant to the schemes of delicensing.
(b) The Installed Capacities are certified by the Management and accepted by the Auditors as correct, being a technical matter.
(c) # Includes third party processing

(d) Installed capacities for the year indicated above include those vested in the Company consequent to the Scheme of arrangement. Necessary applications
have been submitted to obtain endorsement of the name of the Company.
(e) ## Quantitative data can not be given as production represents fabrication,machining, etc. against individual tailor made orders.
(70)
SCHEDULES
2. TURNOVER AND STOCKS (Value Rs. in Crores)
Products Unit Turnover Stock

2001-02 2000-01 As on 31.3.2002 As on 31.3.2001 As on 31.3.2000
Quantity Value Quantity Value Quantity Value Quantity Value Quantity Value
1. Viscose Staple Fibre Tonne 175902 1400.39 197825 1597.47 14333 78.97 19391 116.23 4398 23.41
(At Nagda,Mavoor,
Harihar & Kharach) 5618* 6029*
2. Rayon Grade Pulp Tonne 71397* 70148* 1015 1.57 1161 1.73 1580 2.37
(At Mavoor & Harihar)
3. Rayon Grade Caustic Soda Tonne 73306 109.03 60580 81.61 2551 2.63 1818 1.65 4015 3.92
55745* 72870*
4. Stable Bleaching Powder Tonne 17213 14.74 17844 17.32 417 0.25 180 0.14 568 0.37
73* 72*
5. Man-Made Fibre Fabrics Mtr. 17213 196.90 17738 184.14 2558 30.98 3567 41.19 4489 42.48
(At Gwalior & Bhiwani) (in 000’s)
Kg. 325 } 358
} 25
} 43
} 53
}
(in 000’s)
6. Man-Made Fibre Yarns Kg.
— At Bhiwani & Malanpur (in 000’s) 7625 101.76 7641 113.27 854 11.87 1349 19.79 1453 18.67
2073* 3492*
7. Industrial Machinery Tonne 2.25 — 0.72 — — —
(At Nagda & Harihar) 3.03# 1.32#
8. Poly Aluminium Chloride Tonne 20190 11.86 20958 12.58 336 0.16 688 0.32 858 0.44
749* 1017*
9. Chlorosulphonic Acid Tonne 11002 4.07 15066 8.27 180 0.06 76 0.04 88 0.03
10. Cement Tonne 9556830 2176.45 9139467 1989.26 166484 25.74 138188 21.88 193550$ 31.28$
(At Jawad, Raipur, 121101* 2.42# 24141* 1.83#
Shambhupura & Malkhed)
11. White Cement Tonne 266105 191.87 251291 166.47 3681 1.59 1871 0.89 1568 0.60
(At Khariakhangar)
12. Sponge Iron Tonne 562334 365.67 673852 448.13 7848 4.49 10615 5.97 20469 11.26
13. Trading Activities :
Spices Tonne 667 5.13 1786 25.61 409 3.40 174 3.41
Sulphur Tonne 268,692 37.12 425322 90.00 13998 2.29 6763 1.62
Coal Tonne 458,569 140.54 470769 77.73 39984 7.29 17999 2.34
S. Kerosene oil Tonne 33,495 39.21 72280 86.73 4680 4.44 25103 25.76
Coffee, Rice, Oil, Sugar etc. 41.91 46.94 5.30 11.88 4.56
14. Others @ 225.45 234.52 0.27 1.72
5064.35 5180.77
5.45# 3.15#
5069.80 5183.92 163.61 239.40 174.24
Notes:
1. * Inter-Divisional transfers
2. # Inter-Divisional transfers to Fixed Assets at Cost
3. @ Includes Service Income Rs.15.41 Crores (Previous Year Rs.27.36 Crores), Tax deducted at source Rs 0.31 Crore (Previous Year Rs.0.64 Crore).
4. $ Includes Stock of transferred business of Dharni Cement as on 1.11.2000 pursuant to the Scheme of arrangement & stock of trial run production
(71)
SCHEDULES
3. RAW MATERIALS, STORES, SPARE PARTS AND COMPONENTS (Value Rs. in Crores)
Unit 2001-02 2000-01
Quantity Value Quantity Value
a) Raw Materials Consumed:
Pulp Wood Tonne 217303 59.37 212659 50.81
Dissolving Pulp Tonne 107737 314.62 153174 480.49
71367* 70146*
Caustic Soda Tonne 47499 68.56 53969 60.55
53430* 70478*
Sulphur Tonne 77824 19.00 93111 27.69
Salt Tonne 204054 17.19 206813 17.69
Hydrated Lime Tonne 13273 3.77 13638 3.82
Man-made Fibre Yarn Kg.(in 000’s) 2201 23.89 2666 31.18
2022* 2350*
Cotton Man-made Fibres Kg.(in 000’s) 5497 27.67 6722 38.50
5617* 6028*
Lime Stone Tonne 12433301 97.10 12606300 94.07
Steel Plates, Sheets etc. Tonne 587 1.51 500 1.34
Natural Gas SMQ(‘000) 192547 58.29 216599 65.10
Naptha Tonne 8185 8.97 7765 9.96
Iron Ore Pellets Tonne 413229 83.62 589559 120.00
Iron Ore Lumps Tonne 414357 58.23 402764 55.44
Others 154.36 180.41
996.15 1237.05
* Consumption of own Production
b) Purchase of Finished Goods:

Fabrics Mtr.(in 000’s) 726 5.33 1054 9.16
Cement Tonne 177809 35.22 9624 2.26
Spices Tonne 258 1.97 2021 24.44
Sulphur Tonne 254694 25.10 432557 79.37
Coal Tonne 418585 101.37 492754 74.83
S. Kerosene oil Tonne 28815 37.09 51857 55.98
Coffee, Rice, Oil, Sugar etc. Tonne 39.63 51.21
245.71 297.25
c) Imports at CIF Value :

Raw Materials 210.25 374.26
Spare Parts, Components & Coal 52.74 118.89
Capital Goods 5.93 3.72
(72)
SCHEDULES
d) Total Value of Raw Materials, Stores, Spare Parts and Components consumed:
(Value Rs. in Crores)
Raw Materials Stores, Spare parts, Components etc.
2001-02 2000-01 2001-02 2000-01
Value % Value % Value % Value %
Imported 283.23 28.43 401.72 32.47 38.64 13.62 35.51 12.22
Indigenous 712.92 71.57 835.33 67.53 245.13 86.38 255.13 87.78
996.15 100.00 1237.05 100.00 283.77 100.00 290.64 100.00
4. EXPENDITURE IN FOREIGN CURRENCY: 2001-02 2000-01
i) Technical know-how and Services 0.35 2.89

ii) Professional and Consultancy Fees 0.69 0.99
iii) Interest and Commitment Charges on Foreign Currency Loans/Debentures 2.38 11.48
iv) others 6.00 28.08
5. EARNINGS IN FOREIGN EXCHANGE: 2001-02 2000-01

i) Export of Goods - On F.O.B basis 101.78 177.32
ii) Technical Know-how & Service charges 0.44 0.23
iii) Interest and Dividend 1.50 5.99
iv) Others 4.44 10.93
6. DIVIDEND TO NON-RESIDENT SHAREHOLDERS:

For 2000-01 For 1999-00
No. of Shares held * Gross Amount No. of Shares held *Gross Amount of
Shareholders of Dividends Shareholders Dividends
(Rs.in lacs) (Rs.in lacs)
Equity —Interim 6166 30758424 1845.50
—Final 6373 26619548 2130.00 6083 29737529 297.38
2130.00 2142.88
* Includes Rs. 2126.35 Lacs ( Previous Year, Interim Rs.1845.50 Lacs and Final Rs.297.38 Lacs) pertaining to Dividend Warrants of Non-Resident
shareholders sent to their Bankers/Mandates in India.
Signatures to Schedules ‘1’ to ‘23’

Chairman
M. C. BAGRODIA
NARENDRA LODHA ATUL B. DESAI D. D. RATHI SHAILENDRA K. JAIN B. V. BHARGAVA
R. C. BHARGAVA
Partner Partner Group Executive President & CFO Whole-time Director
Y. P. GUPTA
S. G. SUBRAHMANYAN
(73)
ADDITIONAL INFORMATION UNDER PART IV OF SCHEDULE VI TO THE COMPANIES ACT, 1956
Balance Sheet abstract and General Business Profile
1 Registration Details
Registration No. 1 0 - 0 0 4 1 0 State Code 1 0
Balance Sheet Date 3 1 - 0 3 - 0 2
2 Capital raised during the year (Amount in Rs. Thousands)
Public Issue Rights Issue
N I L N I L
Bonus Issue Private Placement
N I L N I L
3 Position of mobilisation and deployment of funds (Amount in Rs. Thousands)
Total Liabilities Total Assets
5 4 1 4 8 6 7 5 5 4 1 4 8 6 7 5
Sources of Funds :
Paid up Capital Reserves & Surplus
9 1 6 8 9 5 3 2 5 8 4 2 7 5
Secured Loans Unsecured Loans
1 5 8 9 6 6 4 6 4 7 5 0 8 5 9
Application of Funds :
Net Fixed Assets Investments
3 2 7 0 5 4 7 1 1 4 1 6 0 4 3 0
Net Current Assets Miscellaneous Expenditure
7 2 8 2 7 7 4 N I L
Accumulated Losses
N I L
4 Performance of the Company (Amount in Rs. Thousands)
Turnover Total Expenditure
5 0 6 9 7 9 9 2 4 8 5 6 3 0 9 7
+ - Profit / (Loss) before Tax + - Profit / (Loss) after Tax
+ 3 4 2 8 4 9 3 + 3 0 2 9 5 9 3
Earnings per Share (Rs.) Dividend Rate (%)
3 3 . 0 4 9 0 . 0 0
5 Generic names of three principal products / services of the Company (As per monetary terms)
a) Item Code No. 5 5 0 4 1 0 - 0 0
Product Description S T A P L E F I B R E
b) Item Code No. 2 5 2 3 2 9 - 0 1
Product Description G R E Y P O R T L A N D C E M E N T
c) Item Code No. 7 2 0 3 1 0 - 0 0
Product Description S P O N G E I R O N
Chairman
M. L. APTE
M. C. BAGRODIA
B. V. BHARGAVA
R. C. BHARGAVA
Y. P. GUPTA
S. G. SUBRAHMANYAN
Mumbai ASHOK MALU D.D.RATHI SHAILENDRA K. JAIN V. VENKATESWARLU
Dated: 2nd May, 2002 Secretary Group Executive President & CFO Whole-time Director Directors
(74)
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2002
Rs.in Crores
Current Year Previous Year
A. Cashflow from Operating Activities
a. Net profit before tax and exceptional item 494.83 420.81
Adjustment for :
Interest expenses 190.25 238.78
Interest Income (55.29) (46.50)
Dividend Income (11.31) (14.70)
Provision for Bad and Doubtful debts 1.20
Profit/Loss on sale of Fixed Assets 5.39 9.86
Profit on sale of Investments (10.85) (0.32)
b. Operating profit before working capital changes 865.92 859.83
Adjustments for :
Trade and other receivables 100.81 (44.13)
Inventories 177.02 (77.57)
Trade Payables (84.56) 78.64
c. Cash generated from Operations 1,059.19 816.77
Direct Taxes Paid ( Net ) 55.41 (56.75)
Cash from operating activities before exceptional item 1,114.60 760.02
d. Exceptional items (103.04) (11.35)
Net Cash from operating activities 1,011.56 748.67
B. Cashflow from investing activities
Purchase of fixed assets (253.56) (134.75)
Sale of fixed assets 7.86 15.30
Purchase of investments (776.13) (3.16)
Sale of Shares in Subsidiary 11.26
Sale of Investments 3.18 1.28
Investments/Advances in Joint Ventures, Subsidiaries & Others 0.03 27.39
Gain on sale of current investments 10.87 0.09
Interest received 57.40 50.46
Dividend received 11.31 14.70
Net Cash from / (used in) investing activities (927.78) (28.69)
C. Cashflow from financing activities
Proceeds from borrowings 455.02 238.85
Repayments of borrowings (273.58) (573.20)
Interest paid (195.79) (206.72)
Dividends paid (71.98) (68.14)
Corporate dividend tax (7.48) (8.07)
Net Cash from / (used in) financing activities (93.81) (617.28)
D. Net increase/(Decrease) in Cash and Cash equivalent (10.03) 102.70
Cash and Cash equivalent at beginning of the year 158.35 56.76
Add: Cash of Dharani Cement Ltd. amalgamated w.e.f. 1-11-2000 — 0.08
Less: Cash of Undertaking Transferred on 1-2-2001 — 1.19
Cash and Cash equivalent at end of the year 148.32 158.35
(Cash and cash equivalent represent Cash and Bank balances)
Note :
1 Previous year figures have been regrouped/recast wherever necessary
2 Retirement of fixed assets of Mavoor units is a non-cash transaction. Loss on such retirement Rs. 19.01 Crs. has been dealt accordingly.
Chairman
M. L. APTE
For LODHA & Co., For G. P. KAPADIA & Co., M. C. BAGRODIA
Chartered Accountants Chartered Accountants B. V. BHARGAVA
S. G. SUBRAHMANYAN
Auditor’s Certificate
We have examined the above Cash Flow Statement of Grasim Industries Limited for the year ended 31st March, 2002. The Statement has been
prepared by the Company in accordance with the requirements of listing agreement with Stock Exchanges and is based on and in agreement with
the corresponding Profit and Loss Account and Balance Sheet of the Company covered by our report of 2nd May, 2002 to the Members of the
Company.
For G.P.KAPADIA & CO., For LODHA & CO.
Chartered Accountants, Chartered Accountants,
Mumbai, ATUL B.DESAI NARENDRA LODHA
Dated : 2nd May, 2002 Partner Partner
(75)
Statement pursuant to Section 212 of the Companies Act, 1956 relating to Subsidiary Companies
Name of the Subsidiary Company Shree Digvijay Sun God Samruddhi
Cement Trading And Swastik Trading
Company Investments And Investments
Limited Limited Limited
1 Financial year of the Subsidiary ended on 30.9.2001 31.03.2002 31.03.2002
2 Holding Company’s Interest
i) Equity Shares of Rs.10 each
a) Number of Shares Fully paid 4652870 520 6500000
b) Extent of holding 62.42% 100% 100%
ii) 15% Redeemable Cumulative Preference Shares
a) Number of Shares (Face Value Rs.100 each)
Partly Paid (Rs.25 per share paid up) — 100 100
b) Extent of holding — 100% 100%
Rs. in Lacs Rs. in Lacs Rs. in Lacs

3 Net aggregate amount of Profit/(Losses) of the Subsidiary, so far as they
concern members of Grasim Industries Limited
i) For the Financial Year of Subsidiary
a) Dealt with in the accounts of the Holding Company NIL NIL NIL
b) Not dealt with in the accounts of the Holding Company (1801.92) (0.02) 22.06
ii) For the previous Financial years of the Subsidiary since it became the
holding Company’s Subsidiary
a) Dealt with in the accounts of the Holding Company NIL NIL NIL
b) Not dealt with in the accounts of the Holding Company (7848.28) (0.14) 79.24
4 As the Financial Year of the Subsidiary Companies coincide with the

Financial Year of the Holding Company, Section 212(5) of the Companies
Act, 1956, is not applicable. * N.A. N.A.
* Changes in the interest of the Holding Company between the end of the
subsidiary’s financial year and 31st March, 2002 :
Number of shares acquired NIL
Material changes between the end of the subsidiary’s financial year and
31st March, 2002
a) Fixed assets (net additions) NIL
b) Investments (Net) NIL
c) Moneys lent by the subsidiary NIL
d) Moneys borrowed by the subsidiary company other than for meeting current liabilities NIL

Chairman
M. L. APTE
M. C. BAGRODIA
B. V. BHARGAVA
R. C. BHARGAVA
Y. P. GUPTA
S. G. SUBRAHMANYAN
Mumbai ASHOK MALU D.D.RATHI SHAILENDRA K. JAIN V. VENKATESWARLU
Dated: 2nd May, 2002 Secretary Group Executive President & CFO Whole-time Director Directors
(76)
AUDITORS’ REPORT ON CONSOLIDATED FINANCIAL STATEMENTS
REPORT OF THE AUDITORS TO THE BOARD OF DIRECTORS OF GRASIM INDUSTRIES LIMITED
1. We have audited the attached Consolidated Balance Sheet of Grasim Industries Limited and its subsidiary companies as at March 31, 2002
and also the related Profit & Loss Account and the Cash Flow Statement for the year then ended. These financial statements are the
responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
We did not audit the financial statements of the subsidiary companies Sun God Trading and Investments Limited and Samruddhi Swastik
Trading and Investments Limited for the year ended March 31, 2002 (except of Shree Digvijay Cement Company Limited whose Financial
Statements were audited by M/s Lodha & Co.). These Statements were audited by their auditors whose reports has been furnished to us, and
our opinion, so far as it relates to this Company is based solely on the report of the their auditors.
2. We conducted our audit in accordance with generally accepted auditing standards in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting, the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principle used and significant estimate made by management, as well as evaluating the overall financial statement presentation.
We believe that our audit and the report of other auditors provide a reasonable basis for our opinion.
3. We report that the consolidated financial statement have been prepared by the Company in accordance with the requirements of Accounting
Standard 21, Consolidated Financial Statements’ issued by the Institute of Chartered Accountants of India, on the basis of individual
financial statements of Grasim Industries Limited and its subsidiary companies included in the aforesaid Consolidation.
4. In our opinion, based on our audit and the reports of other auditors, the Consolidated Financial Statements referred to above give a true and
fair view of the financial position of Grasim Industries Limited and its subsidiary companies as at March 31, 2002 and of the results of their
operations and their cash flows for the year ended in conformity with generally accepted accounting principles in India.


(77)
CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2002
Rs.in Crores
Schedules
SOURCES OF FUNDS
Shareholders’Funds
Share Capital 1A 91.67
Share Capital Suspense 1B 0.02
Reserves and Surplus 2 2518.49
2610.18
Deferred Tax Balance 25 640.86
Loan Funds
Secured Loans 3 1616.65
Unsecured Loans 4 506.01
Documentary Bills Discounted with Banks 5 105.15
2227.81
TOTAL 5478.85
Fixed Assets
Gross Block 6 5451.86
Less: Depreciation 2191.98
Net Block 3259.88
Capital Work-in-Progress 103.83
3363.71
Fixed Assets held for disposal 26.48
Investments 7 1353.21
Goodwill 23 87.08
Interest accrued on Investments 0.01
Inventories 8 577.72
Sundry Debtors 9 516.27
Cash and Bank Balances 10 153.94
Loans and Advances 11 319.34
1567.28
Less:
Current Liabilities and Provisions
Liabilities 12 834.29
Provisions 13 104.54
938.83
Net Current Assets 628.45
Deffered Tax Assets 25 19.92
TOTAL 5478.85

Chairman
M. C. BAGRODIA
B. V. BHARGAVA
S. G. SUBRAHMANYAN
(78)
CONSOLIDATED PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2002
Rs.in Crores
Schedules
INCOME
Sales 5249.10
Interest and Dividend Income 14 62.49
Other Income 15 65.93
Increase / ( Decrease ) in Stocks 16 (95.81)
5281.71
EXPENDITURE
Raw Materials Consumed 17 1026.68
Manufacturing Expenses 18 1122.13
Purchases of Finished and Other Products 246.68
Payments to and Provisions for Employees 19 341.59
Selling, Distribution, Administration and Other Expenses 20 872.64
Excise Duty 723.49
Interest 21 217.48
Depreciation [Note A of Schedule 6] 260.34
4811.03
Profit before Tax & Exceptional Items 470.68

Retrenchment Compensation (55.33)
Write-down of Assets on Retirement from Active Use (19.01)
Loss on Sale of Shares in a Subsidiary (18.11)
Loss on Sale of a Textile Unit (15.00)
Loss on Sale of Assets of a Textile Unit (16.93)
Employee Separation Compensation (27.60)
Profit before Tax 318.70
Provision forCurrent Tax (56.52)
Deferred Tax (42.85)
Tax Provision of earlier years written back 68.13
Profit after Tax 287.46
Investment Allowance Reserve Written Back 0.15
Deferred Tax Credit for earlier years on initial adoption 11.16
Balance brought forward from Previous Year 1356.61
Profit available for Appropriation 1655.38
Appropriations
Transferred to Deffered Tax Balance 0.25
Debenture Redemption Reserve 48.23
Proposed Dividend (Subject to Tax) 82.50
General Reserve 700.00
Balance carried to Balance Sheet 824.40
1655.38
Basic and diluted earnings per share (in Rs.) 31.35

Chairman
M. C. BAGRODIA
B. V. BHARGAVA
S. G. SUBRAHMANYAN
(79)
SCHEDULES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS
Rs.in Crores
SCHEDULE 1
A. SHARE CAPITAL
Authorised
95000000 Equity Shares of Rs.10 each 95.00
Redeemable Cumulative
Preference Shares of Rs.100 each
150000 15 % “A” Series 1.50
100000 8.57 % “B” Series 1.00
300000 9.30 % “C” Series 3.00
100.50
Issued, Subscribed and Paid up

91669685 Equity Shares of
Rs.10 each fully paid 91.67
Of the above, 29532500 Equity Shares were issued as fully paid up
Bonus Shares by way of Capitalisation of Share Premium and
Reserves and 19355679 Equity Shares of Rs.10 each issued as fully
paid up for acquiring the cement business pursuant to Scheme of
Arrangement without payment being received in cash.
B. SHARE CAPITAL SUSPENSE

19800 Equity Shares of Rs. 10 each to be issued as fully paid up
pursuant to acquiring of cement business of Indian Rayon and
Industries Limited under Scheme of Arrangement without
payment being received in cash. 0.02
SCHEDULE 2
RESERVES AND SURPLUS Rs in Crores
Balance Addition Deduction/ Balance
as at during Adjust- as at
31st the year ments 31st
March, during March,
2001 the year 2002
1. Capital Reserve
— On Revaluation of Fixed Assets 17.95 10.63* 7.32
— Capital Subsidy 1.78 0.02 1.80
2. Amalgmation Reserve 1.38 — 1.38
3. Preference Share Capital Redemption Reserve 1.83 1.83
4. Debenure Redemption Reserve 360.28 48.23 408.51
5. Share Premium Account 823.52 823.52
6. General Reserve 330.00 700.00 589.00 441.00
7. Investment Allowance Reserve 8.88 0.15 8.73
8. Surplus as per Profit and Loss Account 1356.61 532.21 824.40
2902.23 748.25 1131.99 2518.49
* Deduction/adjustment on account of : -
a) assets sold/discarded Rs.9.40 Crores
b) Depreciation provided on revalued block Rs.1.23 Crores
Rs.10.63 Crores
(80)
SECURED LOANS
Non-Convertible Debentures 1303.53
Interest accrued and due on above 0.77
Other Loans:
Term Loans from Financial Institutions:
Rupee Loans
Secured by first pari passu charge on assets of Caustic Soda Plant at Nagda and
Cement Plant at Raipur 95.19
Secured by first pari passu charge on fixed assets of SDCC Limited 80.00
Deferred Sales-tax Loan secured by first available charge on assets of
Cement Units I & II at Jawad [subject to charge referred in Note 1 (c) & (f)] 30.79
Dharani Cement at Reddipalayam 0.55
Working Capital Borrowings from Banks secured by hypothecation of
stocks and book debts of the Company. 105.82
Total 1616.65
Notes:
1) Non-Convertible Debentures are secured by first legal/equitable mortgage on immovable
assets,hypothecation of movable assets and floating charge on other assets, both present and future,
of thespecified divisions, ranking pari passu with the charges created in favour of Financial Institutions
for their term loans. This charge is subject to hypothecation/charge in favour of Banks on stocks and
bookdebts for working capital borrowings (except XXII, XXIII, XXVI, XXVII, XVIII, XXIX and
XXX Series debentures which do not have any charge on current assets)
a) 11% - XIII Series Non-convertible Debentures (redeemable in three equal

annual instalments commenced from 11.7.2000) 15.00
are secured on assets of Caustic Soda plant at Nagda and CementPlant at Raipur.
b) 11% - XVI Series Non-Convertible Debentures (redeemable at par in

three equal annual instalments commenced from 3.12.2000) 16.67
are secured on assets of 40MW Power Plant at Nagda.
c) 11% - XVII Series Non-Convertible Debentures (redeemable at par in three

equal annual instalments commenced from 1.1.2002) 56.67
are secured on assets of Cement Units - I, II and III at Jawad.
d) i) 14.75% - XVIII Series Non-Convertible Debentures

(redeemable at par on 5.6.2002); 50.00
and
ii) 14.50% - XIX Series Non-Convertible Debentures (redeemable at par on 16.7.2002) 50.00
are secured on assets of Staple Fibre Division (excluding 40 MW
Power Plant) at Nagda)
e) 12.25% - XX Series Non-Convertible Debentures (redeemable at par in three

debentures, commencing from 10.12.2002) 200.00
are secured onassets of Staple Fibre Division at Kharach.
f) 13.50% - XXI Series Non-Convertible Debentures (redeemable at par on 15.7.2003) 150.00

are secured on assets of Cement Plants at Jawad and Shambhupura
(81)
SCHEDULE 3 (Contd.)
Rs. in Crores
g) i) 13.25% - XXII Series Non-convertible Debentures (redeemable at par in three
equal annual instalments commencing from 31.3.2005); 80.00
and
ii) 12.6% - XXIII Series Non-convertible Debentures (redeemable at par in three
annual instalmentsof 33%, 33% and 34% respectively of the face value of the
debentures, commencing from 17.8.2005) 130.00
are secured on a plot of land situate in Maharashtra and on the assets of
Cement Division-South at Reddipalayam.
h) i) 11% - XXIV Series Non-convertible Debentures (redeemable at par in three
equal annual instalments commenced from 31.7.2000); 40.19
and
ii) 11% - XXV Series Non-convertible Debentures (redeemable at par in three
equal annual instalments commenced from 29.11.2000) 10.00
are secured on assets of Birla Super Cement division at Hotgi, Rajashree Cement
Division at Malkhed and Birla White Cement Division at Kharia Khangar.
i) i) 10.75% - XXVI Series Non-convertible Debentures (redeemable at par
on 07.06.2005); 120.00
ii) 11.25% - XXVII Series Non-convertible Debentures (redeemable at par
on 15.12.2007 with put and call option at the end of 3rd & 5th year from the date
of allotment i.e. 15.12.2000); 60.00
iii) 10.10% - XXVIII Series Non convertible debentures (redeemable at par on 01.06.2006); 75.00
and
iv) 9.7% - XXIX Series Non Convertible Debentures (redeemeble at par on
allotment i.e 03.07.2001) 50.00
are secured on assets of Sponge Iron Division at Salav.
j) 8.85% - XXX series Non Convertible Debentures (redeemable at par on
allotment i.e 04.12.2001) are secured on plot of land situate in Maharashtra and
on the assets of Caustic Soda plant at Nagda and Cement plant at Raipur. 150.00
k) Series 2002-B Short term Mibor Linked Debentures (Redeemed on 02.04.2002) 10.00
l) i) 12.25% Non Convertible Debentures privately placed with a Bank are redeemable on
expiry of 12 months from the date of subscription i.e 19.09.1999 are secured by a
residual charge on fixed assets of Shree Digvijay Cement Company Ltd.. 5.00
ii) 12.25% Non Convertible Debentures privately placed with a Bank (redeemable in
four equal instalments commencing from 01.07.2002 pending execution of documents for
revised terms ) are secured by first mortgage on fixed assets of Shree Digvijay Cement
Company Ltd. and shall rank pari passu with other charges. 20.00
iii) 12.25% Non Convertible Debentures privately placed with a Bank (redeemable in
seven half yearly instalments during the period 1st July 2002 to 1st July 2005)
are secured by first mortgage on fixed assets of Shree Digvijay Cement Company Ltd. and
shall rank pari passu with other charges. 15.00
1,303.53
2) In the case of Term Loans which carry pari passu charge on the movable assets, such charge on movable assets
is subject to prior charge of Banks on stocks and book debts for the working capital borrowings.
(82)
UNSECURED LOANS
Fixed Deposits 1.16
Short Term Loans and Advances:
From Banks:
Commercial Paper 95.00
(Maximum Balance Rs.270 Crores)
Buyers’ Import Credit 18.50
Cash Credit Account with Overseas Banks 5.63
119.13
Other Loans and Advances:
From Banks: 26.77
From Others:
Deferred Sales tax Loan 328.03
Other Loans ( including interest accrued & due Rs. 0.92 Crs.) 30.92
358.95
385.72
506.01
SCHEDULE 5
DOCUMENTARY BILLS DISCOUNTED WITH BANKS
Against Demand/ Usance Bills under Letter of Credit (Secured) 104.55
Against Usance Bills (Unsecured) 0.60
105.15
SCHEDULE 6
FIXED ASSETS Rs. in Crores
S. PARTICULARS GROSS BLOCK DEPRECIATION NET BLOCK
No. As at Additions Deductions As at Upto Deductions For the Upto As at
31.3.01 and/or and/or 31.3.02 31.3.01 and/or Year 31.3.02 31.3.02
transfers transfers transfers
1. FREEHOLD LAND 54.30 12.07 2.12 64.25 — — 64.25
2. LEASEHOLD LAND 51.82 1.08 0.01 52.89 2.17 0.70 2.87 50.02
3. BUILDINGS 454.24 23.64 20.62 457.26 77.42 9.91 10.97 78.48 378.78
4. WORKERS’ QUARTERS
UNDER GOVERNMENT
SUBSIDISED SCHEMES 2.15 1.60 0.55 1.16 0.70 0.01 0.47 0.08
5. RAILWAY SIDINGS 102.70 0.41 0.19 102.92 19.79 0.06 4.94 24.67 78.25
6. PLANT & MACHINERY 4457.78 223.60 188.88 4492.50 1871.32 130.33 224.94 1965.93 2526.57
7. SHIPS 108.23 — 108.23 26.86 — 5.30 32.16 76.07
8. FURNITURE, FITTINGS & 148.53 14.09 16.33 146.29 74.10 10.57 12.09 75.62 70.67
OFFICE EQUIPMENTS
9. LIVESTOCK 0.01 0.01 — — 0.01
10. VEHICLES ETC. 27.59 3.46 4.09 26.96 11.33 2.26 2.71 11.78 15.18
5407.35 278.35 233.84 5451.86 2084.15 153.83 261.66 2191.98 3259.88
CAPITAL WORK-IN-PROGRESS 103.83
(including Advances & Pre-operative Expenses) 3363.71
(83)
SCHEDULE 6 (Contd.)
Rs. in Crores
Notes:
A. Depreciation for the year
Total Depreciation 261.66
Less:
Additional depreciation on revalued
assets withdrawn from capital reserve 1.23
Depreciation included under other heads of expenses 0.04
Transferred to Pre-operative expenses 0.05
1.32
260.34
B. 1. Freehold/Leasehold Land includes -

a) Value of Shares of Rs.3750 issued by the Co-Operative Housing Society under its Bye-laws, in the name of Company’s nominees.
b) Execution of documents in respect of Land at Malkhed, Shambhupura Veraval and Cochin amounting to Rs.0.06 Crore,
Rs.0.12 Crores, Rs.2.78 Crores and Rs. 1.92 Crores, respectively, is still pending.
c) Rs.0.88 Crores jointly owned with other corporates.
2. The title deeds of some of the immovable properties transferred pursuant to the Scheme of Arrangement are yet to be transferred in the
name of company.
3. Buildings and Workers’ Quarters include -
a) Those mortgaged with State Governments against subsidies received.
b) Cost of Ownership Flat/Office Premises Rs.1.53 Crores (including Electrical Installations) held singly and jointly in Formed/
Proposed Co- operative Housing Societies including value of Shares of Rs.500 issued by the Societies under their Bye-laws.
c) Cost of Land and Buildings (including Electrical Installations) amounting to Rs.0.12 Crore held on Co-ownership with Other Companies.
d) Buildings of Rs.0.61 Crores , yet to be registered in the name of the Company.
e) Building include Rs.15.13 crores towards shares and debentures for right of exclusive use, possession and occupation of office space.
4. Railway siding amounting to Rs.14.98 Crores is held on Co-ownership with other Company for which documents are being executed.
5. Fixed Assets include assets of Rs.7.01 Crores not owned by the Company.
6. Plant and Machinery include assets given on operating lease amounting to Rs.25.53 crores.
7. Capital work in progress include advance against Capital Orders, Technical know-how and Supervision fees,Machinery under installation/
in transit; construction materials purchases and other assets under erection; and pre-operative expenses.
8. Leasehold Land include mining rights.
C. Pre-operative Expenses pending Allocation /Appropriation :
1. Power & Fuel 0.96
2. Repairs to Other Assets 0.02
3. Salaries, Wages, Bonus, Gratuity, etc. 0.82
4. Contribution to Providend & Other Funds 0.14
5. Employee’s Welfare Expenses 0.07
6. Insurance 0.15
7. Rent and Hire Charges 0.03
8. Rates & Taxes 0.02
9. Stationery, Printing, Postage and Telephone Expenses 0.04
10. Travelling & Conveyance 0.45
11. Legal and Professional Charges 8.07
12. Debenture Issue Expenses —
13. Miscellaneous Expenses 1.78
(84)
SCHEDULE 6 (Contd.)
Rs. in Crores
14. Interest -
— On Loans and Debentures 4.83
Less :
— Interest Received (Tax deducted at source Rs.0.40 Crore) 1.95
2.88
15. Depreciation 0.05
15.48
Less :
Miscellaneous Receipts 0.04
15.44
Add: Pre-operative Expenditure incurred upto Previous Year 2.17
Total Pre-operative Expenditure 17.61
Less:Allocated/transferred to Fixed Assets/Capital Work-in-progress 7.34
Balance transferred to Capital Work-in-progress 10.27
SCHEDULE 7
INVESTMENTS - Long Term
1. Government and Trust Securities
i) Government Securities
Unquoted -
Securities deposited with Government Departments 0.03
ii) Trust securities - In Units
Quoted
508685 Units of Rs.10 each in Units (1964 Scheme) of Unit Trust of India 0.77
2. Shares, Bonds and Debentures
A TRADE INVESTMENTS
Equity Shares - Fully paid
a) Quoted - Rs.10 each
2964111 Indian Rayon and Industries Limited 38.10
996000 TANFAC Industries Limited 1.00
27641445 Indo Gulf Corporation Limited 61.18
150379023 Mangalore Refinery & Petrochemicals Ltd. 238.70
338.98
b) Unquoted —
1398857 Thai Rayon Public Company Limited, Thailand of Thai Baht 10 each. 1.07
5000 P.T. Indo Bharat Rayon Co. Limited, Indonesia
of Indonesian Rph 62625(US $100) each. 0.40
15000 A.V Cell Inc., Canada Class ‘A’ Share of
total value of Canadian Dollar 2.5 Million 6.88
149250 Alexandria Carbon Black Co., S.A.E. of L.E. 100 each 14.99
157013894 Birla AT & T Communications Limited Pledged with TorontoDominion Bank
(South East Asia) Limited and Bank of America 157.01
180.35
519.33
(85)
SCHEDULE 7 (Contd.)
Rs. in Crores
B OTHER INVESTMENTS
a) Quoted - Fully Paid :
i) Equity Shares of Rs. 10 each.
15 Mysore Cement Limited (Rs.117)
2117170 Century Enka Limited 1.35
400000 Mangalam Cement Limited 1.15
1001440 Industrial Development Bank of India 8.02
25000000 Larsen & Toubro Ltd. 776.13
ii) Optionally Convertible Cumulative Preference Shares of Rs.10 each
400000 Mangalam Cement Limited 0.40
787.05
b) Unquoted - Fully Paid:

i) Equity Shares
422496 Indophil Textile Mills Inc.,Philippines of peso 10 each 0.04
825000 Thai Carbon Black Public Company Limited,
Thailand of Thai Baht 10 each 2.18
2500 Birla International Ltd. - Isle of Man of CHF 100 each 0.53
1300 Gwalior Rayon Consumers Co-operative Stores Limited of Rs.100 each —
468 Industry House Limited of Rs. 100 each (Rs.31200)
500 Super Bazar Co-operative Society Limited of Rs.10 each (Rs.5000)
ii) Unquoted - Fully Paid - Equity Shares of Rs.10 each

12000 Birla Consultants Limited 0.01
100 Eastern Spg.Mills & Industries Limited —
1982125 Gwalior Properties and Estates Pvt. Limited 6.41
1982125 Seshasayee Properties Pvt. Limited 6.41
1909550 Turquoise Investments and Finance Pvt. Limited 15.21
1911500 Trapti Trading & Investments Pvt. Limited 15.22
9000 Birla Technologies Limited 0.02
46.03
833.08
1353.21
Aggregate Book Value of :

a) Quoted Investments 1126.03
b) Unquoted Investments 227.18
1353.21
Aggregate Market Value of Quoted Investments 708.96
Notes:
1. The Company has earmarked 500000 units of the Unit Trust of India (UTI) 1964 Scheme of Rs. 10 each Cost being Rs. 0.76 Crores
(Market Price Rs. 0.32 crores) in compliance with the provisions of Rule 3A of the Companies (Acceptance of Deposits) Rules, 1975.
2. 7841445 Equity Shares of Indo Gulf Corporation Ltd. And 95379023 Equity Shares of Mangalore Refinery And Petrochemicals Limited are
not transferrable for a period of 5 years from 7th January, 1998 and 26th December, 1998 respectively.
(86)
SCHEDULE 7 (Contd.)
Rs. in Crores
3. During the year the Company has purchased and sold units of Mutual Funds as under:
Name of Mutual Fund No. of Units Face Value
Birla Cash Plus Growth Fund 199470011 10
Birla Income Plus - Growth Mutual Fund 14077747 10
Alliance Cash Manager 997427 1000
Alliance Term Plan 70000 1000
Grindlays Super Saver Income Fund 9502207 10
Grindlays Super Saver Income Fund - I.P. 8650836 10
Grindlays Cash Fund 20036738 10
HDFC Liquid Fund 176863358 10
HDFC Fixed Investment Plan 45000000 10
HDFC Income Fund 4286694 10
Prudential ICICI Liquid Plan 190234178 10
Prudential ICICI Fixed Maturity Plan 37944486 10
Prudential ICICI Income Fund 6695772 10
Prudential ICICI Short Term Plan 18760815 10
Templeton India Liquid Fund 14844528 10
Birla Fixed Maturity Plan 31000000 10
4. During the year the Company has purchased and sold units of following Bonds :
10.25% ICICI 2006 1500 100000
10.25% IDBI Omni Bonds (series 2001/A) 1000 100000
9% NTPC 2002 (Tax free Bonds) 10000 1000
5. Pursuant to undertaking given to some financial institutions and others, the company can not dispose of
shareholding without their prior approval (till such time the loans given to these companies by these
institutions are repaid in full.) in following companies:
(a) Indo Gulf Corporation Ltd. (b) Mangalam Cements Ltd. (c) Century Enka Limited and (d) Mangalore
Refinery and Petrochemicals Ltd.
SCHEDULE 8
INVENTORIES
(As valued and certified by the Executives of the respective Divisions)
At lower of cost and net realisable value unless otherwise stated
Stores and Spare parts, Packing Materials and Fuels 209.65
Raw Materials 149.36
Finished Goods 167.16
By Products 1.98
Process Stock 47.71
Waste/Scrap (at net realisable value) @ 1.86
577.72
@ Include Rs.0.04 Crores generated in trial run.
(87)
SUNDRY DEBTORS
Exceeding six months :
Good and Secured 0.53
Good and Unsecured 60.53
Doubtful and Unsecured 6.63
67.69
Less: Provision for Doubtful Debts 6.63
61.06
Others
Good and Secured 142.78
Good and Unsecured 312.43
455.21
516.27
SCHEDULE 10
CASH AND BANK BALANCES
Cash balance on hand 4.77
Bank Balances:
With Scheduled Banks:
Current Accounts (including cheques under collection and staff security deposit Rs.960) 144.73
Saving Accounts (Earmarked for Employees
Security Deposits and others) (33265)
Deposit Accounts (Note 1) 4.41
149.14
With Others (Note 2) (48617)
149.14
In Post Office Savings & Deposit Accounts (2336)
In Government Treasury Saving Account 0.03
153.94
Notes :
1. Deposits include (a) Rs.0.19 Crore lodged as security with Government Department (b) Rs.0.17 Crore earmarked for Employees’ Security Deposit and
(c) Rs.0.12 Crore as Interest accrued.
2. Balances with Others represents : Rs. in Crores
Name of the Bank Bank Balance Maximum
As at Outstanding
Nature of Account 31.3.02 Current Year
Current Account with :
Mashreq Bank, Dubai (48617) 0.49
Standard Chartered Bank, Dubai 0.01
SCHEDULE 11
LOANS AND ADVANCES (Considered Good) Rs. in Crores
Secured Loan 0.09
Unsecured-
Deposits with Bodies Corporate 31.92
Deposits and Balances with Government and other Authorities
(including accrued interest ) 52.95
Other Deposits 24.96
Advances recoverable in cash or in kind or for value to be received (Due from Officers of the Company Rs.0.11 Crore,
Maximum outstanding during the Year Rs.0.14 Crore) 148.20
Advance Income tax (Net of Provision) 61.22
319.25
319.34
(88)
CURRENT LIABILITIES
Sundry Creditors :
a) Small scale industrial undertakings *
(To the extent identified with available information) 0.51
b) Others 563.12
563.63
Security and Other Deposits 86.53
Unclaimed Dividends 4.35
Other Liabilities 87.87
Interest accrued but not due on debentures/loans 91.91
834.29
* Names of small scale industrial undertakings to whom an amount of Rs. 1.00 lac or more was outstanding for more than 30days are as under:
Fine polycolloids P. Ltd.
Sankalp Chemical, Mumbai
VRW Refractories
Bright Star Industries
SCHEDULE 13
PROVISIONS
Retirement Benefits 22.04
Interim & Proposed Final Dividends 82.50
104.54
SCHEDULE 14
INTEREST AND DIVIDEND INCOME
i) On Long Term Investments
Interest (Gross) on :
a) Government and other Securities 0.25
b) Other Investments 0.38
(Tax deducted at source Rs.0.06 Crores)
Dividend (Gross) from :
a) Trade Investments 8.99
b) Other Investments (Tax deducted at source Nil) 2.32
ii) Others : Interest (Gross) on:
Bank and Other Accounts (Tax deducted at source Rs.5.07 Crores) 50.55
62.49
SCHEDULE 15
OTHER INCOME
Export Incentives 8.78
Rent Received (Tax deducted at source Rs.0.11 Crore) 1.82
Lease Rent 4.03
Processing Charges (Tax deducted at source Rs.0.01 Crore) 0.32
Insurance Claims 5.36
Profit on Sale of Long Term Investments (Net) —
Profit on Sale of Current Investments (Net) 10.87
Excess/Short Provisions (Net) 19.96
Prior period Adjustments (Net) 0.30
Commission Income 0.33
Miscellaneous Receipts 14.16
65.93
(89)
INCREASE / ( DECREASE ) IN STOCKS
Closing Stock
By-Products 1.98
Process Stock 47.71
Waste/Scrap 1.82
218.67
Opening Stock
By-Products 7.08
Process Stock 64.02
Waste/Scrap 1.14
314.48
Increase/ ( Decrease ) in Stocks (95.81)
SCHEDULE 17
RAW MATERIALS CONSUMED
Opening Stock 206.26
Add:
Purchases and Incidental Expenses
(includes cost of Lime Stone raised) 974.02
1180.28
Less:
Sales 4.24
Closing Stock 149.36
153.60
1026.68
SCHEDULE 18
MANUFACTURING EXPENSES
Consumption of Stores, Spare Parts and Components, Packing
Materials and Incidental Expenses - Less sales Rs.0.24 Crore 269.73
Power & Fuel 765.83
Processing Charges 20.68
Repairs to Buildings 18.89
Repairs to Machinery (excluding Spare Parts and Components) 36.43
Repairs to Other Assets 10.57
1122.13
SCHEDULE 19
PAYMENTS TO AND PROVISIONS FOR EMPLOYEES
Salaries, Wages & Bonus, etc. 272.09
Contribution to Provident and Other Funds 26.62
Welfare Expenses 42.88
341.59
(90)
SELLING, DISTRIBUTION, ADMINISTRATION AND OTHER EXPENSES
Commission to Selling Agents 29.49
Brokerage and Discount 10.61
Freight, handling and other expenses 546.61
Advertisements 69.59
Insurance 20.24
Rent (including Lease Rent) 13.21
Rates and Taxes 11.93
Stationery, Printing, Postage and Telephone Expenses 19.94
Travelling and Conveyance 28.14
Legal and Professional charges 16.37
Bad debts written off 26.53
Provision for Bad & Doubtful Debts 2.74
Research contribution (including Expenses) 1.17
Donations 1.65
Directors’ Commission 1.00
Directors’ Fee 0.05
Exchange Rate difference (Net) 3.35
Loss on Sale and/or discard of Fixed Assets (Net) 5.39
Loss on Sale of Long Term Investments (Net) 0.02
Miscellaneous Expenses 64.61
872.64
SCHEDULE 21
INTEREST
On Fixed Loans and Debentures 173.06
On Other Accounts 44.42
217.48
SCHEDULE 22
Segment Reporting
a. Primary Segment Reporting (by business segment)
1 Segment 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 risk 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
Sponge Iron — Sponge Iron
Textiles — Fabrics & Yarn
2 Inter-segment transfers of independent marketable products are at market rates
3 Information about Business Segments (For the year 2001-2002):
Rs. in Crores
Iron Company
A REVENUE
1a Gross Sales (External) 1489.81 173.63 2632.40 383.01 300.22 270.03 5249.10
1b Gross Sales (Inter-segment) 52.67 80.09 1.01 0.16 0.47 (134.40) 0.00
Total Gross Sales 1542.48 253.72 2633.41 383.17 300.69 270.03 (134.40) 5249.10
2a Other Income 6.79 2.51 26.73 10.82 12.78 5.80 (0.19) 65.24
2b Unallocated Corporate Other Income 63.18
Total Other Income 6.79 2.51 26.73 10.82 12.78 5.80 (0.19) 128.42
3 Total Revenue 1549.27 256.23 2660.14 393.99 313.47 275.83 (134.59) 5377.52
(91)
Iron Company
B RESULTS
1 Segment Result (PBIT) 305.89 11.42 345.82 11.86 (37.71) 0.53 (0.19) 637.62
2 Unallocated Corporate Income / (Expenses) 50.54
3 Interest Expense (217.48)
4 Profit from ordinary activities 470.68
5 Exceptional Items:
— Loss on Sale of Shares in Subsidiary (18.11)
— Loss on Sale of Undertaking (31.93) (31.93)
— Write-down of fixed assets on
retirement from active use (19.01) (19.01)
— Retrenchment Compensation (55.33) (55.33)
— Employee Separation Compensation (9.10) (1.63) (13.49) (3.38) (27.60)
6 Profit Before Tax 318.70
7 Provision for Current Tax (56.52)
8 Deferred Tax (42.85)
9 Tax Provision of earlier year written back 68.13
10 Profit after Tax 287.46
C OTHER INFORMATION
1 Segment Assets 999.05 253.52 2584.85 590.57 209.64 76.26 (0.19) 4713.70
2 Unallocated Corporate Assets 1684.06
3 Total Assets 6397.76
4 Segment Liabilities 119.81 26.01 459.27 20.19 76.51 33.64 735.43
5 Unallocated Corporate Liabilities 2431.21
6 Total Liabilities 3166.64
7 Capital Expenditure 31.00 4.51 234.12 1.36 8.41 1.92 281.32
8 Depreciation 48.21 16.26 138.60 38.71 17.15 0.47 259.40
9 Non Cash Expenses other than Depreciation 19.01 19.01
b. Secondary Segment Reporting (by geographic segment) - Being insignificant, hence not given.

GOODWILL
Goodwill has been derived in accordance with AS-21 for which calculations are as under:
Carrying Cost of Investment for Subsidiaries 62.87

Less : Grasim’s Share in Net Worth of Subsidiaries on acquisition (24.21)
Goodwill 87.08
SCHEDULE 24
CONTINGENT LIABILITIES
Contingent Liabilities not provided for in respect of :
1) a) Claims not acknowledged as debts (Net of tax Rs. 80.61 Crores) 129.29
b) Uncalled liability on partly paid shares (Rs.15000)
c) Custom duty which may arise if obligation for exports is not fulfilled against import of
raw materials and machinery (Net of tax Rs. 2.94 Crores) 7.11
d) Custom duty on import of technical know-how and other services relating to projects
against which Bank Guarantee/Bond of Rs. 5.68 Crores is furnished. 10.81
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 packaging 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
(Advance paid Rs. 30.65 Crores.). 182.54
(92)
DEFERRED TAX ASSETS AND LIABILITIES
Deferred Tax Assets and Liabilitties are as under:
Deferred Tax Assets: Grasim Samruddhi SDCC Consolidated
Accrued Expenses deductible
on payment basis 26.33 21.39 47.72
Unabsorbed Depreciation 5.41 5.41
Carried Forward Losses 5.06 5.06
Expenses allowable in installments in Income Tax 13.52 13.52
Others 3.66 1.96 5.62
43.52 — 33.82 77.34
Deferred Tax Liabilty :
Accumulated Depreciation 684.02 0.36 13.90 698.28
Net Deferred Tax Balance 640.50 0.36 (19.92) 620.94
SCHEDULE 26
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Principles of Consolidation:
(a) The Consolidated Financial Statements (CFS) comprise the financial statements of Grasim Industries Limited and its following
subsidiaries as on 31.03.2002:
Name of the Company Country of % Shareholding
Incorporation & Voting Power
Shree Digvijay Cement Company Limited India 62.42%
Samruddhi Swastik Trading and Investment Limited India 100.00%
Sun God Trading and Investment Limited India 100.00%
The Financial Statements of Birla Technologies Ltd (BTL), erstwhile subsidiary of the Company, are excluded in consolidation, [the
entire share holding in said company was sold on 31st January 2002]. The Company’s control over BTL was temporary and the
investment was held for disposal.
(b) The consolidated financial statements have been prepared using uniform accounting policies, in accordance with the generally
accepted accounting policies.
(c) The effects of intra group transactions are eliminated in consolidation.
(d) As this is the first year of reporting consolidated financial statement, figures for the previous year are not given.
2. The reporting financial year for Shree Digvijay Cement Co Ltd is for 12 months ending 30th September. However, the financial statements
for the year ended 31st March 2002 are made, audited and considered for consolidation.
3. Demand raised by Gujarat Electricity Board ( GEB ) contested by Shree Digvijay Cement Company Limited in Gujarat High Court
Rs. 715.20 Lacs including delayed payment charges. Sum of Rs. 715.20 Lacs has been deposited with GEB under protest.
4. The Company has an investment of Rs.238.70 crores in share capital of Manglore Refinery & Petrochemicals Limited (MRPL).In view of
the long term strategic investment of the Company, in the opinion of the management, no provision is required to be made for diminution
in the value of this investment as the same is of temporary nature.
5. Accounting Policies and Notes on Accounts of the financial statement of the Company and all the subsidiaries are set out in their
respective financial statement.

Chairman
M. C. BAGRODIA
B. V. BHARGAVA
S. G. SUBRAHMANYAN
(93)
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2002
Rs.in Crores
Current Year
A. Cashflow from Operating Activities
a. Net profit before tax and exceptional item 470.68
Adjustment for :
Depreciation 260.34
Interest expenses 217.48
Interest Income (51.18)
Dividend Income (11.31)
Provision for doubtful debts and advances 2.75
Profit/Loss on sale of Fixed Assets 5.39
Profit on sale of Investments (10.85)
b. Operating profit before working capital changes 883.30
Adjustments for :
Trade and other receivables 100.81
Inventories 178.57
Trade Payables (82.31)
c. Cash generated from Operations 1,080.37
Direct Taxes Paid (Net) 55.27
Cash from operating activities before exceptional item 1,135.64
d. Exceptional items (103.04)
Net Cash from operating activities 1,032.60
B. Cashflow from investing activities

Purchase of fixed assets (275.25)
Sale of fixed assets 7.91
Purchase of investments (776.13)
Sale of Shares in Subsidiary 11.26
Sale of Investments 3.18
Investments/Advances in Joint Ventures, Subsidiaries & Others 41.03
Gain on sale of current investments 10.87
Interest received 53.27
Dividend received 11.31
Net Cash from/(used in) investing activities (912.55)
C. Cashflow from financing activities

Proceeds from borrowings 445.02
Repayments of borrowings (273.87)
Interest paid (221.61)
Dividends paid (71.98)
Corporate dividend tax (7.48)
Net Cash from/(used in) financing activities (129.92)
D. Net increase/(Decrease) in Cash and Cash equivalent (9.87)

Cash and Cash equivalent at beginning of the year 163.81
Cash and Cash equivalent at end of the year 153.94
(Cash and cash equivalent represent Cash and Bank balances)
Note : Retirement of fixed assets of Mavoor units is a non-cash transaction. Loss on such retirement Rs. 19.01 Crs. has been dealt accordingly.

Chairman
M. C. BAGRODIA
B. V. BHARGAVA
S. G. SUBRAHMANYAN
(94)
SHREE DIGVIJAY CEMENT COMPANY LIMITED
DIRECTORS’ REPORT MODERNISATION
To The modernisation of the Company’s cement mill, with close circuiting and installation
The Members of a pre-grinding system is now complete. This is now yielding significant power savings,
the impact of which will be reflected in the working results of the current year.
Your Directors present the fifty-sixth Annual Report together with the audited accounts
of the Company for the year ended 30th September, 2001.
BIFR REFERENCE
FINANCIAL RESULTS:
(Rs. in lacs) The Rehabilitation Package submitted to the Operating Agency, under the directive of
the Board for Industrial and Financial Re-construction (BIFR) is in the process of
Current year Previous year
finalisation.
Ended Ended
30.9.2001 30.9.2000
DIRECTORS
Turnover 15668 17556
Shri M.C.Bagrodia and Shri S.G.Subrahmanyan resigned from the Board of the Company.
The Board records, with appreciation, their advice and guidance.
Gross Operating Profit (PBDIT) 1312 1031
Less: Interest 3442 3193 Shri C. P. Jajoo and Shri O. P. Puranmalka were appointed as Additional Directors of
the Company. They hold office up to the date of ensuing annual general meeting and
Cash Loss (2130) (2162) are eligible for re-appointment.
Add: Depreciation 757 755
Shri S.Misra, who retires by rotation under Article 167 of the Articles of Association of
Net Operating Loss, before the Company, being eligible, offers himself for re-appointment.
extraordinary items (2887) (2917)
Add: Loss to assets due to earthquake (341) — AUDITORS
Less: Provision written back — 650
M/s Lodha & Co., Chartered Accountants, New Delhi, the existing Auditors of the
Company will retire at the forthcoming Annual General Meeting and are available for a
Net Loss after extraordinary items (3228) (2267)
fresh term, and have furnished certificate of their eligibility for re-appointment.
Add: Balance brought forward from
previous year (12573) (10306) AUDITORS’ REPORT
Loss carried over (15801) (12573) The observations made in the Auditors’ report are self explanatory and do not require
The turnover of the Company was adversely affected by heavy damage to the dry process any further comments u/s 217(3) of the Companies Act, 1956.
clinker line, as a result of the earthquake on 26th January 2001. As a consequence, the
main production line was inoperative for 8 months, during which period the Company PARTICULARS AS PER SECTION 217 OF THE COMPANIES ACT, 1956
endeavoured to partially meet the cement requirements of its customers by outsourcing
clinker and running the wet process plant at full capacity. This enabled the Company to Particulars of employees, as required under Section 217 (2A) of the Companies Act,
retain a presence in the market, though with reduced volumes and earnings. 1956; and information relating to conservation of Energy, Technology Absorption and
Foreign Exchange Earning/Outgo, required under Section 217(1)(e) of the Companies
Despite this adverse circumstance, the Gross Operating Profit (PBDIT) during the year Act, 1956 are annexed and form part of this Report.
registered a growth of 27% over the previous year.
The dry process clinker line has since been restored, with operations now stable. This
was made possible with financial assistance from the promoter company. The Company
The Company has initiated steps to strengthen management through formation of Audit
has since successfully regained market share in its core market of Gujarat. Re-construction
Committee of the Board and a Shareholder Grievance Committee.
activity in Gujarat, supported by a favourable monsoon, has led to a resurgence of
demand in the State.
As stipulated in Section 217(2AA) of the Companies Act, 1956, Directors subscribe to
PLANT PERFORMANCE the “Directors Responsibility Statement” and confirm that:
Production and sale of clinker during the year has been as follows: i) in the preparation of annual accounts, the applicable accounting standards have
(Qty. in lac MT) been followed along with proper explanation relating to material departures;
Current year Previous year ii) the directors have selected such accounting policies and applied them consistently
Ended Ended and made judgments and estimates that are reasonable and prudent, so as to give a
30.9.2001 30.9.2000 true and fair view of the state of affairs of the Company at the end of the financial
Production year and of the profit and loss of the Company for that period;
Clinker 4.15 9.56 iii) the directors have taken proper and sufficient care of the maintenance of adequate
Cement 6.41 8.91 accounting records in accordance with the provisions of this Act for safeguarding
Sales the assets of the Company and for preventing and detecting fraud and other
irregularities;
Clinker 0.18 0.28
Cement 6.77 8.96 iv) the directors have prepared the annual accounts on a going concern basis.
ACKNOWLEDGEMENT
EXPORTS
The Directors take this opportunity to express their appreciation for the support and co-
The Company has outstanding Export Obligation of 1.95 lac tonnes of Clinker and operation received from the State and Central Government, the financial institutions,
Cement as of 30-09-2001 against duty free imports of coal and packing materials. The lenders and the promoter company. The Directors also recognise the commitment and
Government of India, through Public Notice No.48(RE-01)/1997-2002 dated 7th dedication of the Company’s employees.
November 2001 has extended the time limit to fulfill the export obligation by 6th May
2002.
On Behalf of the Board
Your Company’s export effort suffered a set back due to the dis-location of its production
facilities, consequent to the earthquake; but the Company has since finalised a long Mumbai K.D.AGRAWAL
term export order to meet its export commitments. 27th December, 2001 Chairman
(95)
Information Under Section 217(1)(e) of the Companies Act, 1956 read with Companies 2. In co-operation with Regional Training Centre, technical employees
(Disclosure of particulars in the report of the Board of Directors) Rules, 1988 and forming are being trained in various fields where latest technology is
part of the Directors’ Report for the year ended 30th September, 2001. being taught and employees are trained to utilize.
3. Conversion of Daihatsu DG Set for operation on LDO instead of

Particulars
HSD as at present.
(A) CONSERVATION OF ENERGY
(b) Benefits derived as a result of the
(a) Energy conservation measures taken
1. Consistency in product quality above R & D
1. Installation of Belt Bucket Elevators for Kiln Feed System in replacement of
2. Manufacturing of Special Cements as import substitutes.
existing FK Pumps.
3. Motivation towards technical development among employees.
2. Installation of high efficiency multi channel burner with low
requirement of primary air in replacement of existing low efficiency (c) Future plan of action
conventional burner. 1. Further improvement in raw-meal design and quality of Clinker
and Cement.
3. Automation of plant operation by incorporating PLC System for
full plant operation from common CCR. 2. Incorporation of pre-heater low pressure cyclone to reduce
pressure drop and improve productivity.
4. Upgradation of electrical infrastructure.
(d) Expenditure on R & D (Rs in lacs)
5. Optimisation of plant operation 1. Capital NIL
6. Installation of soft start system in various drives. 2. Recurring 4.82
Total 4.82
7. Incorporation of pre-grinding system and close circuiting system
in KCP Cement Mill. 3. Total R & D expenditure as a percentage of total turnover – Negligible
(b) Additional investments and proposals, Technology Absorption, Adaption & Innovation:
1. Magnetic fuel saver for Wartsila DG Sets if any, being implemented for (a) Efforts in brief, made towards technology
reduction absorption and innovation
2. New generation LV technology high efficiency separator for (b) Benefits derived as a result of the
UBE Raw Mill and Atox Coal Mill. of consumption of energy above efforts e.g product improvement,
cost reduction, product development,
3. Increasing the size of TA duct , Riser duct and Calciner vessel. import substitution etc.
4. Replacement of Wet process cooler fans with high efficiency fans. (c) In case of imported technology (imported
during the last 5 years reckoned from Not applicable
5. Automation & upgradation of Wet process plant operation. the beginning of the financial year)
(c) Impact of the measures at (a) & (b) Reduction in electrical power Technology imported
consumption by around 10 units / tonne of cement and thermal Year of import
above for reduction of energy energy consumption upto
10 K Cal / Kg of Clinker consumption and consequent impact on Has technology been fully absorbed
the cost of production of goods. If not fully absorbed areas where this
has not taken place. The reason thereof,
(d) Total energy consumption and energy Form ‘A’ attached. and future plans of action.
consumption per unit of production.
(C) FOREIGN EXCHANGE EARNING AND OUTGO
(B) TECHNOLOGY ABSORPTION
(a) Activities relating to export, initiatives Company’s efforts are on to increase the
Research & Development (R & D):
level of exports. There is, however, a set-back due to take in ncrease exports,
development crises in south east economies of new export markets for products
(a) Specific areas in which
and services and export plans:
1. Company is associated with National Council for Cement & (b) Total foreign exchange used
Building Materials for research and R & D carried out by the and earned Used Rs. 2348.67 lacs
Company development activities. Earned Rs. 200.31 lacs
(96)
FORM “A”
Form for disclosure of particulars with respect to Conservation of Energy
CEMENT
Current Year Previous Year
2000-2001 1999-2000
A) POWER & FUEL CONSUMPTION :
1) Electricity:
(a) Purchased:
Units KWH lac NIL 57
Total amount Rs. lacs NIL 436
Rate per Unit Rs. NIL 7.71
(b) Own Generation:
Through Diesel / Furnace Oil Genset
Units KWH lacs 627 962
Units per Ltrs. of Diesel / Furnace Oil Kwh 4.05 4.20
Cost per Unit Rs. 3.06 2.99
2) Coal for Kilns (various grades)
Quantity In thousand Tonnes 64 136
Total Cost Rs. in lacs 1258 2401
Average rate Rs. per tone 1969 1767
3) HSD/Furnace Oil/LDO
Total Cost Rs. in lacs 1452 2404
Average rate Rs./K Ltr. 9.79 10.48
B) CONSUMPTION PER UNIT OF PRODUCTION:

Standard Current Year Previous Year
(If any) 2000-01 1999-2000
a) Electricity/Kwh/Tonne of Cement
Wet process 120 100 99
Dry process 120 104 101
c) Coal
Cement (K.Cal/Kg. Clinker)
Wet Process 1350-1450 1423 1376
Dry Process 800 808 769
INFORMATION UNDER SECTION 217 (2A) OF THE COMPANIES ACT, 1956 READ WITH THE COMPANIES PARTICULARS OF EMPLOYEES
(AMENDMENT) RULES, 1988 AND FORMING PART OF DIRECTORS’ REPORT FOR THE YEAR ENDED 30TH SEPTEMBER, 2001.
Name of Employee Age Designation / Remune- Qualification Date of Last employment /
(Years) Nature of duties ration & Experience Commence- Position held
Rs. (years) ment of
employment
(A) Employed throughout the Financial year under review and were in receipt of remuneration for the financial year in
aggregate of not less than Rs.12.00 lacs p.a.
NIL
(B) Employed for the part of the Financial year under review and were in receipt of remuneration at the rate not less than
Rs.1,00,000/- per month.
Shri J.K. Moondra 58 Jt. President 14,85,329 B.E. (Elect.) 1.11.98 Grasim Industries Ltd.
(Tech.) (32) VP (Tech.)
NOTES :
1. Remuneration includes Salary, Contribution to Provident Fund, Gratuity and Superannuation Funds, Allowances and taxable value of perquisites as per Income Tax Rules, 1962.
2. He was not related to any Director or Manager of the Company.
(97)
AUDITORS’ REPORT xviii) As explained to us, there were no undisputed amounts payable in respect of
Income-tax, Wealth-tax, Sales Tax, Customs duty and Excise duty, which
TO THE MEMBERS OF SHREE DIGVIJAY CEMENT COMPANY LIMITED were outstanding as at 30.09.2001 for a period of more than six months
We have audited the attached Balance Sheet of Shree Digvijay Cement Company Limited from the date they became payable, except Rs.1966.80 lacs and interest
as at 30th September, 2001 and the annexed Profit and Loss Account of the Company thereon (excluding Rs. 2513.84 lacs payable in installments with interest)
for the year ended on that date which are in agreement with the Company’s books of in respect of Sales Tax for which representations have been made to the
accounts and report that: concerned authorities for re-schedulement.
1. As required by the Manufacturing and other Companies (Auditor’s Report) Order, xix) As explained to us and on the basis of the records of the Company examined
1988 issued by the Company Law Board in terms of Section 227 (4A) of the by us, no personal expenses have been charged to revenue account other
Companies Act, 1956 and on the basis of such checks as we considered appropriate, than those payable under contractual obligations or in accordance with the
we report that: generally accepted business practices.
i) The Company has maintained proper records to show full particulars, xx) The Company is a Sick Industrial Company within the meaning of Clause
including quantitative details and situation of fixed assets. As explained to (o) of Sub-section (1) of Section 3 of Sick Industrial Companies (Special
us, the fixed assets have been physically verified by the management at Provisions) Act, 1985 and as informed to us, the Board for Industrial and
reasonable intervals during the year and no material discrepancies between Financial Reconstruction has appointed the Operating Agency for preparation
the physical balance and book records have been found on such verification. of rehabilitation package for the Company. However, these accounts have
been prepared on “going concern basis”.
ii) None of the fixed assets have been revalued during the year.
xxi) In respect of Service activities, the Company has a reasonable system of
iii) As explained to us, the stock of finished goods, stores & spares, trading recording receipts, issues and consumption of materials commensurate with
goods and raw materials have been physically verified by the management its size and nature of its business along with a reasonable system for
during the year, except stock-in-transit and material lying with third parties. authorization at proper level and with necessary controls. The allocation of
iv) According to the information given to us, the procedures of physical materials and man-hours consumed to relative jobs is not made by the
verification of stocks followed by the management are in our opinion Company since it is not material and control is exercised on total materials
reasonable and adequate in relation to the size of the Company and the consumed and the labour deployed on the job. The Company has a system
nature of its business. of internal control commensurate with the size and nature of its business on
v) The discrepancies noticed on physical verification of stocks as compared to issue of stores.
book records were not material. xxii) In respect of Company’s trading activities, we are informed that there are no
vi) On the basis of our examination of stock records, we are of the opinion that damaged stocks.
the valuation of stocks is fair and proper and is in accordance with the 2. Further to our comments in paragraph (1) above:
normally accepted accounting principles and is on the same basis as in the a) We have obtained all the information and explanations which to the best of
preceding year. our knowledge and belief were necessary for the purpose of our audit;
vii) In our opinion, the rate of interest and other terms and conditions on b) In our opinion, proper books of accounts as required by law have been kept
which loans have been taken from Companies, firms or other parties listed by the Company so far as appears from our examination of those books;
in the register maintained under Section 301 of the Companies Act, 1956
are not prima facie prejudicial to the interest of the Company. c) The Balance sheet and Profit and Loss Account dealt with by this report are
in agreement with the books of accounts;
viii) The Company has not granted any loans to Companies, firms or other
parties listed in the register maintained under Section 301 of the Companies d) In our opinion, the Balance Sheet and Profit and Loss account comply with
Act, 1956. the Accounting Standards referred to in Section 211 (3C) of the Companies
Act, 1956;
ix) The Company has given loans and advances in the nature of loans to its
employees, employees societies and other parties, who are generally repaying e) On the basis of information and explanations given to us and representations
the principal amount and interest, wherever applicable, as stipulated except received from the Directors of the Company, we report that no Director is
in few cases where time limits are extended on merits. disqualified from being appointed as Director of the Company under clause
(g) of sub-section (1) of Section 274 of the Companies Act, 1956.
x) The Company invites tenders / quotations etc. in respect of purchases other
than items which are of specialized nature and where the user departments f) Depreciation include provision for depreciation Rs.50.48 lacs on revalued
show a preference for a particular brand, taking into consideration the quality, portion on fixed assets resulting in higher charge to Profit and Loss Account
urgency and such other factors. In our opinion, the internal control procedure as stated in Note No.7.
is, therefore, adequate and commensurate with the size of the Company and g) Attention is drawn to Note No. 12 regarding demand raised by Mumbai
the nature of its business with regard to purchase of stores, raw materials Port Trust (MPT) in connection with Leasehold Land assigned in favour of
including components, plant and machinery, equipments and other assets as a body corporate in earlier years.
also for the sale of goods. h) Further attention is invited to:
xi) The transactions of purchase of goods and materials and sale of goods, i) Non provision against demand of Gujarat Electricity Board as stated
materials and services made in pursuance of contracts or agreements entered in Note No. 3(a) & 10 (amount unascertainable).
in the register maintained under section 301 of the Companies Act, 1956 ii) Non provision against shortfall in recovery against debts as referred in
and aggregating during the year to Rs.50,000 or more in value in respect of Note No.15 for which appropriate recovery actions have been initiated,
each party have been made at prices which are reasonable having regard to since in the opinion of the management these debts are good for
prevailing market prices for such goods, materials and services or the prices recovery (amount unascertainable).
at which transactions for similar goods or services have been made with
other parties. iii) Non provision against penal interest and liquidated damages (amount
unascertainable) as stated in Note No. 6.
xii) The Company has a regular procedure for determination of unserviceable or
damaged stores, raw materials and finished goods and adequate provision for iv) Non provision for Custom duty and interest on duty free imports
the loss in this respect has been made in the accounts. made in earlier years against pending export obligations as stated in
Note No. 3(e) (amount unascertained).
xiii) The Company has not accepted any deposits from public during the year in
terms of provisions of Section 58A of the Companies Act, 1956 and the v) We further report that the loss for the year and balance in Profit and
Rules framed there-under. Loss Account are without considering items mentioned in para 2h)i)
to 2h)iv) above, the effect of which could not be determined.
xiv) In our opinion the Company is maintaining reasonable records for the sale
and disposal of realizable scraps. We are informed that the Company has no Subject to the foregoing, in our opinion and to the best of our information
realizable by-products. and according to the explanations given to us, the said accounts read together
with notes thereon, give the information required by the Companies Act,
xv) The Company has an Internal Audit system commensurate with its size and 1956 in the manner so required and give a true and fair view.
nature of its business.
a) In the case of the Balance Sheet, of the state of affairs of the Company
xvi) We have broadly reviewed the books of accounts maintained by the Company as at 30th September, 2001.
pursuant to the rules made by the Central Government for maintenance of
cost records under Section 209(1)(d) of the Companies Act, 1956 and are b) In the case of the Profit and Loss account, of the loss for the year
of the opinion that prima-facie, the prescribed accounts and records have ended on that date.
been made and maintained. We have not, however, made a detailed
examination of the records. For LODHA & CO.
Chartered Accountants
xvii) According to the records of the Company, Provident Fund and Employees’
State Insurance dues have been generally regularly deposited during the Mumbai N.K. LODHA
year with the appropriate authorities. 27th December, 2001 Partner
(98)
BALANCE SHEET AS AT 30TH SEPTEMBER, 2001 PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30TH SEPTEMBER, 2001
As at As at As at As at
Schedule 30.09.2001 30.09.2000 Schedule 30.09.2001 30.09.2000
(Rs. in lacs) (Rs. in lacs)
SOURCES OF FUNDS INCOME
SHAREHOLDERS' FUNDS Sales & Services 12 19844.15 26162.26
Share Capital 1 745.54 745.54 Interest Income 12A 14.11 66.33
Reserves and Surplus 2 96.90 96.90 Other Income 13 218.98 111.05
LOAN FUNDS Increase / (Decrease) in Stocks 14 (532.13) 758.62
Secured Loans 3 14204.74 14352.32 TOTAL 19545.11 27098.26
Unsecured Loans 4 7865.80 7305.12
TOTAL 22912.98 22499.88
FIXED ASSETS 5 EXPENDITURE
Gross Block 18875.46 16077.48 Cost of Traded Goods Sold 14A 1140.77 1196.67
Less: Depreciation 7828.70 7454.23 Raw Materials Consumed 2866.21 2624.16
Net Block 11046.76 8623.25 Manufacturing Expenses 15 4374.70 7605.36
Capital Work in Progress 453.26 1107.20 Excise Duty 2303.54 3237.45

Personnel, Administrative and Selling Expenses 16 7547.88 11403.20
11500.02 9730.45
Interest 17 3441.84 3193.14
INVESTMENTS 6 1.81 1.81
Depreciation 5 756.94 755.32
CURRENT ASSETS, LOANS AND ADVANCES
22431.88 30015.30
Inventories 7 3358.93 3929.53
Sundry Debtors 8 1492.84 3062.75
Cash and Bank Balances 9 335.51 421.45 Profit/(Loss) before extra-ordinary item (2886.77) (2917.04)
Loans and Advances 10 1713.55 2255.31 Extra ordinary item -
6900.83 9669.04 Add:Interest on Royalty no longer required — 650.06
LESS : CURRENT LIABILITIES AND PROVISIONS
Less:Damage / Loss of Assets due to
Liabilities 11A 11037.98 9292.28 Earthquake (Note No. 4) (341.05) —
Provisions 11B 252.86 182.48
Profit/(Loss) for the year (3227.82) (2266.98)
11290.84 9474.76
NET CURRENT ASSETS (4390.01) 194.28
Balance brought forward from previous year (12573.34) (10306.36)
PROFIT AND LOSS ACCOUNT 15801.16 12573.34
Balance Carried to Balance Sheet TOTAL (15801.16) (12573.34)
TOTAL 22912.98 22499.88
Significant Accounting Policies and Notes on Accounts 18 Significant Accounting Policies and Notes on Accounts. 18
As per our report of even date

For LODHA & CO. K.D. AGRAWAL Chairman
}
S. MISRA
N.K. LODHA
Partner
C.P. JAJOO Directors
Mumbai S.N.MALPANI
27th December, 2001 Secretary & Manager O.P.PURANMALKA
(99)
SCHEDULES FORMING PART OF ACCOUNTS
SCHEDULE 1 SCHEDULE 3
(Rs. in lacs)
As at As at SECURED LOANS (Rs. in lacs)
SHARE CAPITAL 30.09.2001 30.09.2000 As at As at
30.09.2001 30.09.2000
1. Debentures
Authorised
(a) 5,00,000 12.25% Non-convertible debentures of
2,50,00,000 Equity Shares of Rs.10/- each 2,500.00 2,500.00
Rs.100/- each privately placed with a Bank. 500.00 500.00
1,00,00,000 Cumulative Preference Shares of
(b) 15,00,000 12.25% Non-convertible debentures of
Rs.100/- each 10,000.00 10,000.00
Rs.100/- each privately placed with a Bank. 1,500.00 1,500.00
12,500.00 12,500.00 (c) 20,00,000 12.25% Non-convertible debentures of
Rs.100/- each privately placed with
Financial Institution. 2,000.00 2,000.00
Issued
Interest accrued and due on above 180.36 280.10
74,58,865 Equity Shares of Rs.10/- each 745.89 745.89
(Details as per notes given below in seriatim of debentures)
2. Term Loan from ICICI Ltd. 8,000.00 8,000.00
Subscribed & Paid-up Interest accrued and due on above 781.49 653.91
74,55,830 Equity Shares of Rs.10/- each fully paid 745.58 745.58 3. Loans from a Bank
Less : 1,120 Equity Shares of Rs.10/- each Cash / Packing credit facilities 1,242.89 1,418.31
forfeited (0.11) (0.11)
TOTAL 14,204.74 14,352.32
745.47 745.47
Add : Forfeited Shares (amount originally
paid-up) on Equity Shares 0.06 0.06 NOTES :
(1) (i) Debentures under Sr. No. (a) and (c) redeemable as under:
Add : Application and Allotment money
on 21 Equity coupons 0.01 0.01 (a) 5,00,000 Debentures on expiry of twelve months from the date of subscription i.e. on 19th
November, 1999 (requested for reduction in interest rate from 14.25% to 12.25%
TOTAL 745.54 745.54
and reschedulement of redemption period).
Note (c) 20,00,000 Debentures are redeemable in four equal annual installments commencing from
1st July, 2002 - pending execution of documents for revised terms.
Of the above: -
(ii) Debentures under Sr. No. (b) are redeemable in seven half yearly installments during the
(i) 9,97,540 Equity Shares ( Previous Year 9,97,540 ) were allotted as fully paid-up bonus shares by
period 1st July 2002 to 1st July 2005, (rescheduled.)
capitalistation from General Reserve.
(2) The Debentures [except in 1(a)] and term loan under Sr. No. 2 are secured by first mortgage on
(ii) 4,00,000 Equity Shares ( Previous Year 4,00,000 ) were allotted pursuant to a contract without
fixed assets of the Company and shall ranking pari passu with the charges. The debentures
payment being received in cash.
referred to in 1(a) are secured by a residual charge on fixed assets of the Company.
(iii) 46,52,870 Equity Shares (Previous Year 46,52,870 ) are held by holding company M/s. Grasim
(3) Secured by hypothecation of Stocks and a second charge on fixed assets of the Company.
Industries Ltd.
SCHEDULE 2
(Rs. in lacs)
RESERVES AND SURPLUS As at As at
30.09.2001 30.09.2000
SCHEDULE 4
Capital Reserve
As per last Balance Sheet 26.87 26.87 UNSECURED LOANS
(Rs. in lacs)
Capital Redemption Reserve
As at As at
As per last Balance Sheet 35.00 35.00
30.09.2001 30.09.2000
Share Premium
Inter Corporate Deposits 7,500.00 5,700.00
As per last Balance Sheet 20.43 20.43
Buyers Import Credit from Banks — 1,343.56
Investment Allowance Reserve (Utilised)
As per last Balance Sheet 14.60 14.60 Interest Accrued and Due on above 365.80 261.56
TOTAL 96.90 96.90 TOTAL 7865.80 7,305.12
(100)
SCHEDULE 5
FIXED ASSETS
(Rs. in lacs)
GROSS BLOCK DEPRECIATION NET BLOCK

Sr. Particulars As at Additions Adjustments/ As at Upto For the Adjustments/ Upto As at As at
No. 1.10.2000 Deductions 30.9.2001 30.9.2000 Year Deductions 30.9.2001 30.9.2001 30.9.2000
1. LAND # 13.94 — 0.56 13.38 — — — — 13.38 13.94
2. BUILDINGS 776.64 0.82 — 777.46 223.60 18.41 — 242.01 535.45 553.04
3. RAILWAY SIDINGS 167.07 — — 167.07 79.01 4.05 — 83.06 84.01 88.06
4. PLANT AND MACHINERY 13447.36 3517.07 ### 727.71 16236.72 6520.63 644.45 351.91 6813.17 9423.55 6926.73
5. ELECTRIC INSTALLATIONS 645.95 30.64 ### 35.00 641.59 320.18 27.54 25.49 322.23 319.36 325.77
6. ROLLING STOCKS AND
LOCOMOTIVES 74.79 — — 74.79 65.15 3.51 — 68.66 6.13 9.64
7. FURNITURE, FIXTURES &
OFFICE EQUIPMENTS 366.38 11.96 7.05 371.29 192.04 27.27 3.24 216.07 155.22 174.34
8. VEHICLES ETC. 93.77 8.31 4.51 97.57 36.73 8.26 1.83 43.16 54.41 57.04
9. JETTY & WHARF ## 491.58 4.01 — 495.59 16.89 23.45 — 40.34 455.25 474.69
TOTAL 16077.48 3572.81 774.83 18875.46 7454.23 756.94 382.47 7828.70 11046.76 8623.25
GRAND TOTAL 16077.48 3572.81 774.83 18875.46 7454.23 756.94 382.47 7828.70 11500.02 9730.45
PREVIOUS YEAR 11212.64 5124.54 259.70 16077.48 6952.68 755.32 253.77 7454.23 9730.45
# In case of leasehold land the Company pays ground rent.

## Title with Gujarat Maritime Board (GMB), the Company is, however, entitled to use on payment of port charges at concessional rate which is pending for approval.
### Represents assets damaged due to earthquake Gross Rs.762.71 lacs Net Rs.385.31 lacs.
SCHEDULE 6
INVESTMENTS (AT COST)

(Rs. in lacs)
Description Face Value As at 30.09.2001 As at 30.09.2000
(Rs./Unit) Nos. Value Value

Long Term
In Government Securities (fully paid up)
Quoted (Non-trade)
5.5% 1999 Govt.of India loan (deposited with 1.00 300 0.01 0.01
Mumbai Port Trust against Leasehold Land)
Unquoted (Non-trade)
7 Year National Savings Certificates — — 0.55 0.55
(deposited with Mumbai Port Trust, Customs, Central Excise and others)
7 Year National Plan Savings Certificates — — 0.02 0.02
(deposited with Central Excise, Calcutta)
Units of Unit Trust of India 10.00 8,685 1.01 1.01
(deposited with Mumbai Port Trust)
12 Year National Plan Savings Certificates — — 0.02 0.02
(deposited with the Commissioner of Commercial
Taxes and Central Excise, Calcutta)
12 Year National Defence Certificates — — 0.01 0.01
(deposited with Central Excise, Calcutta)
5-1/2 Year Kissan Vikas Patra 1,000.00 7 0.07 0.07
Others
Debentures ( Non-trade ) ( Unquoted )
Fully paid perpetual debentures:
2% Bharat Chamber of Commerce 500.00 20 0.10 0.10
8% Indian Chamber of Commerce 100.00
25.00 } 12
2 } 0.01 0.01
Shares ( Non-trade ) ( Unquoted )

Fully paid ordinary shares
Bajeegar Co-operative Housing Society Ltd. 51.00 10 0.01 0.01
TOTAL 1.81 1.81
As at 30.09.2001 As at 30.09.2000
Book Value Market Value Book Value Market Value

(Rs. in lacs) (Rs. in lacs) (Rs. in lacs) (Rs. in lacs)
Quoted Investments 0.01 0.01 0.01 0.01
Unquoted Investments 1.80 — 1.80 —
TOTAL 1.81 0.01 1.81 0.01
(101)
(Rs. in lacs) (Rs. in lacs)
As at As at As at As at
30.09.2001 30.09.2000 30.09.2001 30.09.2000
SCHEDULE 7 SCHEDULE 11
INVENTORIES (As taken, valued CURRENT LIABILITIES AND PROVISIONS
and certified by the Management) A. Current Liabilities
(At lower of cost and net realisable value) Sundry creditors
Stores & Spares 1,093.09 1,108.38 a) Small Scale Industrial undertakings *
Fuel, packing material and raw materials (To the extent identified with available
including in-transit Rs. 0.22 lacs 931.09 900.82 information) 18.10 20.78
(Previous Year Rs.15.26 lacs) b) Others 1,806.45 1,786.78
Finished Goods including in Transit Other Liabilities 6,182.42 4,024.87
Rs.43.97 lacs (Previous Year Rs.20.50 lacs) 408.00 278.37 Trade and Other Deposits 264.77 219.39
Trading Goods — 17.57 Unclaimed Dividends 0.12 0.12
Process Stock 915.76 1,624.39 Unclaimed Non-convertible secured debentures 0.38 0.38
Waste / Scrap (at net realisable value) 10.99 — Interest accured but not due on debentures/loans 251.90 265.34
Sales tax (Note No. 5) 2,513.84 2,974.62
TOTAL 3,358.93 3,929.53
TOTAL 1,1037.98 9,292.28
B. Provisions
Retirement Benefits 252.86 182.48
SCHEDULE 8 TOTAL 252.86 182.48
SUNDRY DEBTORS
Debts outstanding for a period *Names of small scale industrial undertakings to
exceeding six months whom an amount of Rs.1 Lac or more was
Considered Good 304.15 435.40 outstanding for more than 30 days are : VRW
Considered Doubtful 492.89 402.12 Refractories, Bright Star Industries, Mico Machineries.
Less : Provision for Doubtful Debts (492.89) (402.12)
304.15 435.40
SCHEDULE 12
Other Debts SALES & SERVICES
Considered Good 1,188.69 2,627.35 Sales 15,667.79 17,556.00
Income from Services (Tax deducted at source
TOTAL 1,492.84 3,062.75 Rs. 12.67 lacs, Previous Year Rs. 35.84 lacs) 4,176.36 8,606.26
TOTAL 19,844.15 26,162.26
SCHEDULE 9 SCHEDULE 12A

CASH AND BANK BALANCES INTEREST INCOME
Cash balance on hand 2.93 4.65 On long term Investments 0.01 0.01
Bank Balances : Others 14.10 66.32
With Scheduled Banks : TOTAL 14.11 66.33
in current accounts including in transit
(including Rs. 0.30 lacs for staff security
deposit, Previous Year Rs. 0.30 lacs) 257.42 344.17
in fixed deposit accounts (including SCHEDULE 13
Rs.1.72 lacs for staff security deposit, 75.16 72.63 OTHER INCOME
Previous Year Rs.1.41 lacs) Dividend from long term investment 0.09 0.12
Liabilities no longer required written back and
TOTAL 335.51 421.45
refunds of previous years 92.58 4.12
Miscellaneous income 126.31 106.81
TOTAL 218.98 111.05
SCHEDULE 10
SCHEDULE 14
LOANS AND ADVANCES
INCREASE/(DECREASE) IN STOCKS
(Unsecured, considered good
Closing Stock
except stated otherwise)
Process Stock 915.76 1,624.39
Advance recoverable in cash
or in kind or for value to be received.
Waste / Scrap 10.99 —
Considered Good 511.98 1,038.25
(Capital advance Rs.136.75 lacs, Previous Year 1,334.75 1,902.76
Rs.330.19 lacs, Due from Officer/Manager of the Add : Loss of raw meal due to earthquake
Company Rs.0.89 lacs, Previous Year Rs.1.54 lacs (Note No. 4) 35.88 —
Maximum outstanding during the Year Rs.1.37 lacs,
1370.63 1902.76
Previous Year Rs.3.45 lacs)
Considered Doubtful 40.77 40.77
Opening Stock
Less : Provision for Doubtful Advances (40.77) (40.77)
Process Stock 1,624.39 779.72
Deposits and Balances with Government &
other Authorities 1,138.34 1,165.28
Tax Deducted at Source/Advance Tax 63.23 51.78 1,902.76 1,144.14
TOTAL 1,713.55 2,255.31 Increase / (Decrease) in Stocks TOTAL (532.13) 758.62
(102)
(Rs. in lacs) SCHEDULE 18
As at As at
ACCOUNTING POLICIES AND NOTES
30.09.2001 30.09.2000
(A) SIGNIFICANT ACCOUNTING POLICIES
SCHEDULE 14A
COST OF TRADED GOODS SOLD 1. Accounting Concepts
Opening Stock 17.57 — The company follows the mercantile system of accounting and recognises income and
Add : Purchases 1,123.20 1,214.24 expenditure on accrual basis. The accounts are prepared on historical cost basis as a going
1,140.77 1,214.24 concern. Accounting policies are consistent with generally accepted accounting principles.
Less : Closing Stock — 17.57 2. Sales / Service Income
TOTAL 1,140.77 1,196.67 Sales are inclusive of excise duty and packing charges and includes self consumption of
goods produced. Service Income are inclusive of service tax.
3. Valuation of inventories
Inventories are valued at the lower of cost and net realisable value except waste / scrap
SCHEDULE 15 which is valued at net realisable value. The cost is computed on weighted average basis.
MANUFACTURING EXPENSES Finished Goods and Process Stock include cost of conversion and other costs incurred in
Packing Materials, Stores and Spares consumed 975.22 1,519.99 bringing the inventories to their present location and condition.
Power and Fuel 3,213.89 5,822.77
4. Investments
Repairs to Building 16.63 46.67
Repairs to Machinery 160.67 202.31 Long term investments are stated at cost.
Other Repairs 8.29 13.62 5. Research & Development
TOTAL 4,374.70 7,605.36 Revenue expenditure on research and development is charged out in the year in which it
is incurred. Capital expenditure on research and development is shown as an addition to
fixed assets.
6. Fixed Assets
SCHEDULE 16 Fixed assets are stated at cost of acquisition inclusive of freight, duties and taxes and
PERSONNEL, ADMINISTRATIVE & incidental expenses and adjusted by revaluation of certain assets and benefit of MODVAT/
SELLING EXPENSES CENVAT/duty draw-back. Original cost of fixed assets acquired through foreign currency
Salaries, Wages, Bonus, Gratuity etc. 1,639.83 1,663.39 loan is adjusted by foreign currency rate fluctuation.
Contribution to Provident and Other funds 152.70 150.29
7. Treatment of expenditure
Employees welfare expenses 82.31 104.32
Rent 36.36 52.61 Expenditure during construction period is included under Capital Work-In-Progress during
Rates and Taxes 112.28 217.94 construction period and the same is allocated to the respective Fixed Assets on the
(including Rs.63.84 lacs under West Bengal completion of its construction.
(Settlement of Dispute) Act, 1999) 8. Borrowing Costs
Insurance 63.93 43.23
Interest and other costs in connection with the borrowing of the funds to the extent
Miscellaneous Expenses 412.93 421.68
related/attributed to the acquisition / construction of qualifying Fixed Assets are capitalised
Advertisement and Publicity 44.61 93.46
upto the date when such assets are ready for its intended use and other borrowing costs are
Directors’ Fees 0.62 0.26
charged to Profit & Loss Account.
Transportation, Forwarding & other expenses 4,495.40 8,345.37
Bad Debts/Advances Written off 165.65 0.29 9. Accounting of claims and subsidies
Less : Provision taken in earlier years (63.70) 101.95 — i) Claims/subsidies receivable are accounted at the time of lodgement depending on
Loss on Sale/Discard of Fixed Assets (Net) 0.44 0.12 the certainty of receipt, claims payable are accounted at the time of acceptance.
Provisions for doubtful debts and advances 154.53 47.27 ii) Claims raised by Government authorities regarding taxes and duties and of other
Sales Expenses including service charges 237.33 233.14 parties which are disputed by the Company are accounted based on the merits of
Exchange Rate Fluctuation (net) 12.66 29.83 each claim. Adjustments, if any, are made in the year in which disputes are settled.
TOTAL 7,547.88 1,1403.20 10. Depreciation
Depreciation on fixed assets is provided on straight line method at the rates prescribed in
Schedule XIV to the Companies Act, 1956. Depreciation in respect of assets added/
disposed-off during the year has been charged on pro-rata basis with reference to the
SCHEDULE 17 month of addition/ deduction. Continuous process plant as defined in Schedule XIV has
INTEREST been taken on technical assessment. Depreciation on increase in value of fixed assets due
On fixed loan and Debentures 1,627.96 1,737.79 to exchange rate fluctuations is provided on straight line method during the residual life of
On Other Accounts 1,813.88 1,455.35 the assets.
11. Transaction of foreign currency items
TOTAL 3,441.84 3,193.14
Foreign currency Assets / Liabilities (other than covered by forward contract which are
stated at contracted rates) in respect of fixed assets have been restated into Rupees at the
Exchange Rate prevailing at the year end and increase/decrease arising out of it are
adjusted to the cost of the Fixed Assets and those relating to other items are adjusted in the
Profit & Loss account. Exchange rate difference in respect of forward exchange contract
(other than for acquisition of Fixed Assets) is recognised as an income or expense over the
life of the contract.
12. Retirement benefits
The company makes contribution to provident fund and superannuation fund. Liability for
gratuity has been actuarially ascertained and funded. Liability for Leave Encashment is
accounted on actuarial valuation basis.
13. Contingent Liabilities
Contingent liabilities are not provided for and are disclosed by way of note.
(103)
(B) NOTES ON ACCOUNTS
1. Quantitative information pursuant to the provisions of part II of Schedule VI to The Companies Act, 1956.
A. Licensed and installed capacity and production :
2000-2001 1999-2000
Installed* Production Installed* Production
Cement (Tonnes) Dry Process Unit 875,000 472,429 875,000 853,197
Wet Process Unit 200,000 168,393 200,000 37,891
TOTAL 1,075,000 640,822 1,075,000 891,088
Notes :
(1) Licence capacity per annum not indicated due to abolition of Industrial licence as per Notification No. S.O. 477(E) dt. 25th July, 1991, issued under the Industrial (Development and
Regulation) Act, 1951.
(2) * As certified by the Management and accepted by the Auditors as correct, being a technical matter.
B. Sales
2000-2001 1999-2000
(Tonnes) (Rs.) (Tonnes) (Rs.)
Cement * 6,77,372 1,52,44,48,551 8,96,871 1,60,60,81,100
Clinker 18,146 2,24,89,137 32,940 2,97,54,048
Coal 8,049 1,98,41,578 72,988 11,97,64,426
TOTAL 1,56,67,79,266 1,75,55,99,574
*Includes self consumption 1622.610 MT, value Rs. 36,84,578 (previous year 2085 MT, value Rs.40,67,633 ) and transit loss, damages, shortages etc.
C. Stocks Opening Stock Closing Stock
1.10.2000 01.10.1999 30.09.2001 30.09.2000

Quantity Value Quantity Value Quantity Value Quantity Value
(Tonnes) (Rs.) (Tonnes) (Rs.) (Tonnes) (Rs.) (Tonnes) (Rs.)
Cement 17,513 2,75,58,327 23,296 3,53,63,557 21,353 4,05,22,649 17,513 2,75,58,327

Clinker 2,658 2,79,090 10,268 10,78,140 2,642 2,77,370 2,658 2,79,090
Coal 1,000 17,57,340 — — — — 1,000 17,57,340
TOTAL 2,95,94,757 3,64,41,697 4,08,00,019 2,95,94,757
D. Purchase for Re-Sale

2000-2001 1999-2000
Cement 40,390 9,81,85,712 — —

Coal 7,049 1,41,33,985 73,988 12,14,23,752
TOTAL 11,23,19,697 12,14,23,752
E. Raw materials consumed

2000-2001 1999-2000
Quantity *Value Quantity *Value
Limestone 5,95,342 10,99,58,030 13,58,366 22,13,62,202
Gypsum 28,611 1,62,23,876 45,518 2,75,56,363
Others — 60,72,001 — 1,34,97,268
TOTAL 13,22,53,907 26,24,15,833

*Excluding clinker Purchase 1,24,495 MT of Rs. 15,43,66,772/- (previous year Nil)
F. Value of imported and indigeneous raw materials, spare parts and components consumed.
2000-2001 1999-2000
Raw Material Stores Spare parts & Raw Material Stores Spare parts &
Components etc. Components etc.
Value % of total Value % of total Value % of total Value % of total
Rs. Consumption Rs. Consumption Rs. Consumption Rs. Consumption
Imported — — 42,27,574 4.34 — — 24,34,183 1.60
Indigeneous 28,66,20,679 100.00 9,32,94,065 95.66 26,24,15,833 100.00 14,95,64,801 98.40
TOTAL 28,66,20,679 100.00 9,75,21,639 100.00 26,24,15,833 100.00 15,19,98,984 100.00
(104)
G. C.I.F. value of imports 8. The following are included under other heads of expenses in the Profit and Loss Account:
(Rs in lacs)
2000-2001 1999-2000
Rs. Rs. 2000-2001 1999-2000
(a) C.I.F. value of imports a) Salaries , Wages and Bonus etc. 113.46 94.68
Coal (including trading goods b) Contribution to provident fund and other funds 6.24 6.01
Rs. 50,48,943 previous year Rs. 3,51,51,843) 6,27,72,605 16,04,19,588 c) Welfare Expenses 3.51 3.04
Capital goods 50,437 4,31,09,868 d) Stores & spares Consumed 79.30 128.05
Components & Spare parts 26,76,082 20,33,526 e) Royalty and Cess Charges 139.84 290.73
Others - — 71,40,235 f) Power and Fuel 14.39 19.62
g) Repair and maintenance 0.35 1.27
(b) Expenditure in Foreign currencies h) Rates & taxes 0.94 0.73
(in rupee equivalent) i) Miscellaneous expenses 3.12 6.58
Travelling 4,85,391 8,69,173
TOTAL 361.15 550.71
Others 23,43,81,424 17,28,11,564
(c) Earnings in foreign currencies 9. Capital Work in Progress / Addition to Fixed Assets include Plant and Machinery under
F.O.B. value of exports 2,00,30,696 1,95,02,413 installation/transit, building under construction, advance for plant and machinery and pre-
Others - — 2,19,03,426 operative expenditure pending allocation / capitalisation :
(Rs. in lacs) (Rs in lacs)

2000-2001 1999-2000 30.09.2001 30.09.2000
2. Estimated amount of contracts remaining to be a) Interest 204.99 113.88

executed on capital account and not provided - 280.54 329.60 b) Stores and Spares 425.13 182.47
advance paid Rs.136.75 lacs (previous year Rs.103.77 lacs). c) Others 57.84 —
3. Contingent liabilities not provided for in respect of : 687.96 296.35

Add : Expenditure upto Previous Year 232.26 679.52
a) Demand raised by Gujarat Electricity Board (GEB) contested by the Company in Gujarat
920.22 975.87
High Court Rs.715.20 Lacs (previous year Rs. 715.20 lacs) including delayed payment
Less: Transferred to Fixed Assets 762.03 743.61
charges. A sum of Rs.715.20 lacs (previous year 715.20 lacs) has been deposited with GEB
under protest. (Refer Note No.10) TOTAL 158.19 232.26
b) Rent on Water pipelines by Panchayat, Irrigation Deptt., Govt. of Gujarat Rs. 102.37 lacs
10. Gujarat Electricity Board (GEB) had raised demand of Rs.1336.79 lacs by way of Supplementary
(previous year Rs.102.37 lacs). bill based on their own assumption and calculation, which was challenged by the Company in the
Gujarat High Court as unfounded and baseless. As per direction of the Court, the Company had
c) Sales Tax and Excise Duty demand disputed by the Company - Rs. 265.62 lacs (previous
filed its appeal with the Appellate Committee of GEB, who after hearing both the parties, reduced
year Rs. 493.74 lacs) and Rs. Nil (previous year Rs. 29.92 lacs) respectively.
the demand to Rs.447.88 lacs. The Company had again approached the Gujarat High Court and
d) Interest demand of Rs. 70.44 lacs for earlier years under Central Sales Tax Act under the matter is sub-judice. GEB has also raised demand of Rs.267.32 lacs (provious year Rs.267.32
appeal. lacs) being delayed payment charges which has not been accepted by the Company pending
decision of the Court. According to the Company, no amount on this account is payable and
e) Custom Duty and Interest, which may arise if obligation for export is not fulfilled against
therefore, no provision there against is considered necessary.
import of inputs made under Advance Licence Scheme in earlier years - Rs.231.58 lacs
(previous year Rs.206.70 lacs). The Company has represented for extension of time for 11. In the absence of profits, debenture redemption reserve has not been created.
fulfillment of export obligation, which is pending with concerned authorities. 12. In earlier years, the Company has assigned its rights, title and interest in the leasehold land and
premises at Sewree, Mumbai from Mumbai Port Trust (MPT) at a consideration of Rs.65.00 lacs
f) Outstanding Bank Guarantees Rs.257.94 lacs (previous year Rs.302.54 lacs). net of
subject to MPT approval to be arranged by the Assignee. On receipt of payment, possession of the
Rs. 213.55 lacs against export obligation.
land and premises was handed over, pending approval of MPT. Recently MPT has issued notice for
g) Claims against the company not acknowledged as debts Rs. 86.55 lacs (Previous year surrender of vacant possession of the land and has raised the demand towards arrears of lease rent,
Rs. 9.90 lacs ) interest etc. amounting to Rs.531.66 lacs, based on their own assumptions and calculation. As per
the assignment terms, the assignee is responsible and accountable to such demands and are to
4. There was devastating earthquake on 26th January, 2001 in Gujarat causing damages to company’s attend/settle the matter with MPT. Accordingly, the Company has asked the assignee to deal in
assets. This resulted in suspension of partial production. The consequential damages to assets the matter with MPT.
aggregating to Rs. 341.05 lacs (net of insurance claim received ) has been written off.
13. Income from services include - inter divisional income of Rs. Nil (previous year Rs. 41.81 lacs)
5. Pursuant to consent decree filed in earlier years in the High Court of Gujarat, Sales Tax earlier Unrealised profit on unsold stock has been eliminated while valuing the inventories. This
claimed as benefit aggregating to Rs.4940.38 lacs pertaining to earlier years had been provided for accounting treatment has no impact on the loss of the company.
in the year 1998-99. Accordingly, as per consent decree, down payment of Rs.1500 lacs including
14. Tax deducted at source from interest Rs.0.69 lacs (previous year Rs.0.67 lacs), from rent Rs.3.16
interest has been made and balance is payable in 10 half yearly equal installments starting from
lacs (previous year Rs.3.06 lacs) and from Others Rs.0.68 lacs (Previous year Rs.0.59 lacs)
31.03.1999 along with interest @ 9% thereon w.e.f. 01.04.1998. Due to financial stringencies there
has been delay in payment of installments due from March ,2000 to September, 2001. 15. In the opinion of the management, sundry debtors exceeding 6 months of Rs.28.18 lacs (previous
year Rs.14.44 lacs) and advance of Rs.NIL (written off during current year - previous year Rs.87.50
6. Provision for Penal Interest / liquidated damages ( amount unascertainable ) on overdue payment lacs), pending confirmation, for which necessary legal/persuasive action for recovery has been
of Non Convertible Debentures and loans has not been made pending finalisation of taken are good and recoverable.
rehabilitation package.
16. Previous year expenses / income (net) amounting to Rs.93.60 lacs (previous year Rs.145.38 lacs
7. In compliance of High Court Orders, loss arisen out of transfer of units, pursuant to scheme of net) have been debited / credited to respective heads of accounts includes : , Rates & Taxes (incl.
arrangement between the Company and Gujarat Composite Ltd. was adjusted against the Reserve Sales Tax ) ; Dr. Rs 64.19 lacs (previous year Rs.119.95 lacs ) , Misc. Expenses ;Dr. Rs.7.86 lacs
on Revaluation of Fixed Assets. Consequently, depreciation for the current year includes Rs.50.48 (previous year Rs. 8.13 lacs ), Packing Materials, Stores & Spares consumed ; Dr. Rs.2.50 lacs
lacs (previous year Rs.55.08 lacs) pertaining to depreciation on revalued portion of fixed assets for (previous year Dr. Rs.10.42 lacs ), Advertisement & sales promotion Exp.; Dr. Rs.15.42 lacs
current year with consequent increase in loss for the year. (previous year Rs. Nil).
(105)
17. Sundry creditors include Rs.17.21 lacs (previous year Rs. 17.21 lacs) pending reconciliation of 2000-2001 1999-2000
Cement Regulation Account with claims / counterclaims and Rs. 73.06 lacs (previous year Rs. Rs.
Rs.73.06 lacs) being provision made against demand in said account which is contested. 21. Manager’s Remuneration
18. The Ministry of Textile vide its order 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 Salary* 2,42,178 10,34,400
in packaging commodities) Act, 1987. In view of this, the Company does not expect any liability Contribution to PF & Other funds 65,388 2,79,288
for non despatch of cement in jute bags in respect of earlier years.
Perquisites 1,37,043 6,06,644
19. Despite negative networth and continuous losses the accounts of the Company for the year have
TOTAL 4,44,609 19,20,332
been prepared on the assumption of “Going Concern Basis”; as the rehabilitation package is under
finalisation with the Operating Agency.
* Excluding Gratuity provision of Rs.45,509/- (previous year Rs.45,000/-)
20. Auditors Remuneration:
2000-2001 1999-2000 22. Balances of certain debtors, creditors, loans and advances are subject to confirmation.
a) Statutory Auditors Rs. Rs.
23. Previous year figures have been recast/regrouped wherever considered necessary.
Audit Fees 1,50,000 1,50,000
Tax Audit Fees 50,000 50,000 Signature to Schedules ‘1’ to ‘18’
For certification & other works including service tax 66,750 74,222
Reimbursement of expenses 1,47,022 1,54,129 As per our report of evendate K.D.AGRAWAL Chairman
TOTAL 4,13,772 4,28,351 For LODHA & CO.
}
Chartered accountants S.MISRA
b) Cost Auditors
Audit Fees 40,000 40,000 N.K.LODHA
Partner C.P. JAJOO Director
Service tax 2,000 3,000
TOTAL 42,000 43,000 Mumbai S.N.MALPANI

BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE
I. Registration Details
Registration No. 749/TA State Code : 04
Balance Sheet Date 30.09.2001
II. Capital Raised during the period

(Amount in Rs. Thousands)
Public Issue Nil Right Issue : Nil
Bonus Issue Nil Private Placement : Nil
III. Position of Mobilisation and Deployment of Funds

(Amount in Rs. Thousands)
Total Liabilities 22,91,298 Total Assets : 22,91,298
Sources of Funds
Paid up Capital 74,554 Reserves & Surplus : 9,690
Secured Loans 14,20,474 Unsecured Loans : 7,86,580
Application of Funds
Net Fixed Assets 11,50,002 Investments : 181
Net Current Assets (4,39,001) Misc. Expenditure : Nil
Accumulated Losses 15,80,116
IV. Performance of Company (Amount in Rs. Thousands)

Turnover 15,66,779 Total Expenditure : 22,96,401
Profit/Loss before Tax (2,88,677) Profit/(Loss) after Tax : (2,88,677)
Earning per Share (in Rs.) Nil Dividend Rate % : Nil
V. Generic Names of three Principal Products of the Company

Item Code No. (ITC Code) Products Description
1. 252329.01 Grey Portland Cement
2. 252310.00 Cement, Clinker
K.D.AGRAWAL Chairman
S.MISRA
Mumbai
27th December, 2001
S.N.MALPANI
Secretary & Manager
C.P. JAJOO
O.P.PURANMALKA
} Director
(106)
CASH FLOW STATEMENT ANNEXED TO THE BALANCE SHEET FOR THE YEAR ENDED 30TH SEPTEMBER, 2001
2000-2001 1999-2000
(Rs. in lacs)
(A) Cash flow from Operating Activities
a. Net Profit /(Loss) before tax and extra-ordinary items (2886.77) (2917.04)
Adjustment for:
Interest 3441.84 3193.14
Provisions for doubtful debts and advances 154.53 47.27
Loss on sale/discard of fixed assets (Net) 0.44 0.12
Interest Income (14.11) (66.33)
Dividend Income (0.09) (0.12)
1452.78 1012.36
b. Operating profit before working capital changes

Adjustment for:
Trade and other receivables 1958.56 (1047.29)
Inventories 570.60 (239.70)
Trade payables 863.76 468.30
c. Cash generated from operations 4845.70 193.67
Direct taxes paid — —
Cash from operating activities before extra-ordinary items 4845.70 193.67
d. Extra-ordinary items 44.26 650.06
Net Cash flow from operating activities 4889.96 843.73
(B) Cash flow from Investing Activities
Sale of Fixed Assets 6.61 5.82
Interest received 12.69 65.68
Dividend received 0.09 0.12
Purchase of fixed assets (2713.88) (1383.22)
Net Cash from/(used in) Investing Activities (2694.49) (1311.60)
(C) Cash flow from Financing Activities
Proceeds from borrowings 1800.00 2771.28
Repayment for borrowings (1518.98) —
Interest paid (2562.43) (2190.97)
Net Cash from/(used in) Financing Activities (2281.41) 580.31
(D) Net increase/(decrease) in Cash & Cash equivalents (85.94) 112.44
Cash & Cash equivalents at beginning of the year 421.45 309.01
Cash & Cash equivalents at end of the year 335.51 421.45
(Cash and cash equivalents represent Cash and Bank balances)
Note : Previous years figures have been regrouped / recast wherever necessary.
As per our separate report attached K.D. AGRAWAL Chairman

For LODHA & CO.
}
S. MISRA
N.K. LODHA
Partner
C.P. JAJOO Directors
Mumbai S.N.MALPANI
AUDITORS’ CERTIFICATE
We have examined the attached Cash Flow Statement of Shree Digvijay Cement Company Limited, for the year ended 30th September, 2001. The Statement has been prepared by the
Company in accordance with the requirements of listing agreement Clause 32 with Stock Exchange and is based on and in agreement with the corresponding Profit and Loss Account
and Balance Sheet of the Company covered by our report of the even date to the members of the Company.
For LODHA & CO.
Mumbai N.K. LODHA

27th December, 2001 Partner
(107)
SUN GOD TRADING AND INVESTMENTS LIMITED
DIRECTORS’ REPORT iii) that the Directors have taken proper and sufficient care of the maintenance of
TO THE MEMBERS adequate records in accordance with the provisions this Act for safeguarding the
Assets of the company and for preventing and detecting fraud and other
The Directors have pleasure in presenting the Eighth Annual Report of your Company irregularities:
together with the Audited Statement of Accounts for the year ended 31st March, 2002.
iv) that the Directors have prepared the annual accounts on a going concern basis.
During the year under review the financial results of the Company show a loss of Rs. 0.02
lac (Previous Year Rs. 0.02 lac) after meeting all expenses. In view of loss, no dividend for AUDITORS
the year is recommended. Messers Amritlal H. Jain & Co., Chartered Accountants, the Auditors of the Company,
retire and being eligible offer themselves for re-appointment.
DIRECTORS
In accordance with the provisions of the Companies Act 1956 and pursuant to the Articles PARTICULARS OF EMPLOYEES
of Association of the Company, Shri Shailendra K. Jain retires from the Board by rotation The Company had no employee in the Category specified Under Section 217 (2A) of the
and being eligible offers himself for re-appointment. Companies Act, 1956.
DIRECTORS’ RESPONSIBILITY STATEMENT CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN

As stipulated in Section 217(2AA) of the Companies Act, 1956, your Directors subscribe EXCHANGE EARNINGS AND OUTGO
to the “Directors Responsibility Statement” and confirm as under : In view of the nature of operations, we have nothing to report on these matters.
i) that in the preparation of the Annual Accounts, the applicable Accountings standards
have been followed along with proper explanation relating to material departures;
On behalf of the Directors,
ii) that the Directors have selected such accounting policies and applied them consistently
and made judgements and estimates that are reasonable and prudent so as to give a
true and fair view of the state of affairs of the company at the end of the financial Birlagram, Nagda SHAILENDRA K. JAIN
year and of the profit or loss of the company for that period; Dated: 4th April, 2002 Chairman
AUDITORS’ REPORT As required by the Manufacturing and Other Companies (Auditor’s Report) Order, 1988,
TO THE MEMBERS OF SUN GOD TRADING AND INVESTMENTS LIMITED and on the basis of such checks of the books and records as we considered appropriate, we
further report on the matters specified in Paragraphs 4 & 5 of the said order to the extent
We have audited the attached Balance Sheet of Sun God Trading and Investments Limited
applicable as under :
as at 31st March, 2002 and also the Profit and Loss Account of the Company for the year
ended on that date annexed thereto and we report that - 1. The Company has not taken any loans, secured or unsecured from companies, firms
or other parties listed in the register maintained Under Sections 301 and 370 (1B) of
(a) We have obtained all the information and explanations which to the best of our
the Companies Act, 1956.
knowledge and belief were necessary for the purpose of our audit.
2. The Company has not given any loans to Companies, Firms or other parties listed in
(b) In our opinion, proper books of account as required by law have been kept by the
the register maintained Under Sections 301 and 370 (1B) of the Companies Act,
Company so far as appears from our examination of such books.
1956.
(c) The Balance Sheet and Profit and Loss Account dealt with by this Report are in
3. The Company has not accepted any deposit from the public within the meaning of
agreement with the books of account.
Section 58 A of the Companies Act, 1956, and Rules framed thereunder.
(d) In our opinion, the Profit and Loss Account and Balance Sheet comply with the
4. There are adequate internal control procedures commensurate with the size of the
Accounting Standards referred in sub-section 3 (c ) of Section 211 of the Companies
Company and the nature of its business for the purpose of assets.
Act, 1956
5. According to the information and explanations given to us and records examined by
(e) On the basis of written representations received from Directors and taken on record
us, no personal expenses have been charged to Revenue Account.
by the Board of Directors, we report that none of the Directors of the Company are
disqualified from being appointed as Director of the Company under clause (g) of 6. No undisputed amounts payable in respect of Income Tax, Sales Tax, Custom Duty,
Sub-Section 274 of the Companies Act, 1956 Excise Duty and Wealth Tax at the last date of the financial year were outstanding
for the period of more than six months from the date they become payable.
(f) In our opinion and to the best of our information and according to the explanations
given to us, the accounts read with notes appearing thereon give the information
required by the Companies Act, 1956, in the manner so required and give a true and
fair view :
For AMRITLAL H. JAIN & CO.
i) In the case of Balance Sheet, of the State of Affairs of the Company as at 31st
March, 2002.
ii) In the case of Profit and Loss Account, of the Loss for the year ended on that Birlagram, Nagda AMRITLAL H. JAIN
date. Dated: 4th April, 2002 Partner
(108)
SUN GOD TRADING AND INVESTMENTS LIMITED
BALANCE SHEET PROFIT AND LOSS ACCOUNT
as at 31st March, 2002 Rs. Lacs for the year ended 31st March, 2002 Rs. Lacs
Previous Previous
year year
SOURCES OF FUNDS INCOME Nil Nil

Shareholders’ Funds Nil Nil
SHARE CAPITAL
Authorised : EXPENDITURE
49000 Equity Shares of Rs. 10 each 4.90 4.90 Bank Commission (Rs. Nil, Previous year Rs. 210)
100 15% Redeemable Cumulative Auditors’ Remuneration
Audit Fee 0.01 0.01
Preference Shares of Rs. 100 each 0.10 0.10 Preliminary Expenses written off 0.01 0.01
5.00 5.00 0.02 0.02
Issued and Subscribed : Balance carried to Balance Sheet 0.02 0.02

520 Equity Shares of Rs. 10 each 0.05 0.05
Notes on Accounts Schedule ‘A’
100 15% Redeemable Cumulative
Preference Shares of Rs. 100 each 0.10 0.10 SCHEDULE FORMING PART OF ACCOUNTS
0.15 0.15 SCHEDULE ‘A’
Notes on Accounts
Paid up : 1. Contingent Liability not provided for arrears of dividend on Cumulative Preference
520 Equity Shares of Rs. 10 each fully paid up 0.05 0.05 Shares from 5.11.1994 to 31.3.2002 is Rs. 0.03 lac (Previous Year Rs. 0.02 lac).
(520 Shares held by Grasim Industries Limited.) 2. Significant Accounting Policies
100 15% Redeemable Cumulative Preference Shares of i) Revenues are accounted for on accrual basis.
ii) Amortisation of Preliminary Expenses :
Rs. 100 each partly paid up Rs. 25 each 0.03 0.03 Preliminary Expenses are amortised over a period of ten years.
{Redeemable not later than 12th July, 2004 by virtue 3. Additional information required under Paragraphs 3 and 4D of Part II of Schedule
of Section 80 A of the Companies Act, 1956 as VI to the Companies Act, 1956 : — Nil
amended by the Companies (Amendment) Act, 1988.} 4. As per AS 18 issued by the Institute of Chartered Accountants of India, the related
party is Grasim Industries Ltd. which is the holding Company of your Company.
TOTAL 0.08 0.08 Name of related party : Grasim Industries Limited
Description of relation : Holding Company
Nature of transactions : Advances
Amount of transactions : Rs.0.01 lac
Amount Outstanding : Rs.0.07 lac
Provision for doubtful debts : Nil
Amount written off / written back : Nil
APPLICATION OF FUNDS in respect of debts
Current Assets, Loans and Advances 5. The figures have been rounded off to the nearest thousand Rupees.
Current Assets : 6. Figures appearing in brackets denotes negative values.
Balances with Scheduled Banks : Additional Information under Part IV of Schedule VI to the Companies Act, 1956
Current Accounts (Rs.5, Previous Year Rs.5) Balance Sheet Abstract and General Business Profile
1. Registration Details :
— — Registration No. : 10-8446 State Code : 10
Less: Balance Sheet Date : 31 03 2002
Current Liabilities & Provisions Date Month Year
Current Liabilities : 2. Capital Raised during the year (Amount in Rs.Thousands)
Sundry Creditors Public Issue : NIL Right Issue : NIL
Due to holding Company 0.07 0.06 Bonus Issue : NIL Private Placement : NIL
Other Liabilities 0.02 0.02 3. Position of Mobilisation and Deployment of Funds (Amount in Rs.Thousands)
Total Liabilities : 17 Total Assets : 17
Net Current Assets (0.09) (0.08) Sources of Funds : Paid Up Capital : 8 Reserves & Surplus : NIL
Miscellaneous Expenditure Secured Loans : NIL Unsecured Loans : NIL
(To the extent not written off or adjusted) Application of Funds : Net Fixed Assets : NIL Investments : NIL
Preliminary expenses 0.01 0.02 Net Current Assets : (-)9 Miscellaneous Expenditure : 1
Profit and Loss Account Accumulated Lossses : 16
Loss as per last Balance Sheet 0.14 0.12 4. Performance of the Company (Amount in Rs.Thousands)
Add: As per Profit and Loss Account annexed 0.02 0.02 Turnover : NIL Total Expenditure : 2
+ - Profit/(Loss) before Tax : (-)2 + - Profit/(Loss) after tax : (-)2
0.16 0.14 Earnings per Share (Rs) : (-)0.03 Dividend Rate (%) : N.A.
5. Generic Names of Three Principal Products/Services of the Company (as per monetary
TOTAL 0.08 0.08 terms)
a) Item Code No. N.A. Product Description N.A.
Notes on Accounts Schedule ‘A’ b) Item Code No. N.A. Product Description N.A.
c) Item Code No. N.A. Product Description N.A.
As per our Report annexed.
For AMRITLAL H. JAIN & CO., SHAILENDRA K. JAIN
Chartered Accountants G.K. TULSIAN
D.N. MAKHARIA
AMRITLAL H. JAIN Directors
Partner
Birlagram, Nagda
Dated : 4th April, 2002
(109)
SAMRUDDHI SWASTIK TRADING AND INVESTMENTS LIMITED
DIRECTORS’ REPORT DIRECTORS
TO THE MEMBERS In accordance with the provisions of the Companies Act 1956 and pursuant to the Articles
of Association of the Company, Shri G.K. Tulsian retires from the Board by rotation and
The Directors have pleasure in presenting the Eighth Annual Report of your Company being eligible offers himself for re-appointment.
together with the Audited Statement of Accounts for the year ended 31st March, 2002.
FINANCIAL RESULTS Rs. lacs DIRECTORS’ RESPONSIBILITY STATEMENT
Current Previous As stipulated in Section 217(2AA) of the Companies Act, 1956, your Directors subscribe
Year Year to the “Directors Responsibility Statement” and confirm as under :
i) that in the preparation of the Annual Accounts, the applicable Accounting standards
Profit Before Tax 32.03 74.12 have been followed along with proper explanation relating to material departures;
Less: Provision for Tax ii) that the Directors have selected such accounting policies and applied them consistently
Current Tax 2.45 7.16 and made judgements and estimates that are reasonable and prudent so as to give a
Add : Deferred Tax 9.42 11.87 — true and fair view of the state of affairs of the company at the end of the financial
20.16 66.96 year and of the profit or loss of the company for that period;
Provision of Tax for earlier year written back 1.90 — iii) that the Directors have taken proper and sufficient care of the maintenance of
adequate records in accordance with the provisions this Act for safeguarding the
22.06 66.96 Assets of the company and for preventing and detecting fraud and other irregularities:
Balance brought forward from earlier year 79.22 12.28 iv) that the Directors have prepared the annual accounts on a going concern basis.
101.28 79.24 AUDITORS
Appropriations Messers Amritlal H. Jain & Co., Chartered Accountants, the Auditors of the Company,
Transferred to Deferred Tax Liability 26.32 — retire and being eligible offer themselves for re-appointment.
Proposed Preference Dividend (Rs. 375) 0.02
PARTICULARS OF EMPLOYEES
Corporate Dividend Tax thereon
(Rs. Nil, Previous Year Rs. 241) The Company had no employee in the Category specified Under Section 217(2A) of the
Balance Carried to Balance Sheet 74.96 79.22 Companies Act, 1956.
101.28 79.24 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN
EXCHANGE EARNINGS AND OUTGO
DIVIDEND
In view of the nature of operations, we have nothing to report on these matters.
Your Directors are glad to recommend the following dividend for the year ended 31st
March, 2002 for your consideration for which necessary provision has been made in the
accounts: On behalf of the Directors,
On 15% Redeemable Cumulative Preference Shares of Rs. 100 each partly paid up Rs. 25
each. 15 % Dividend (Rs. 375) (Previous Year Rs. 0.02 Lac) Birlagram, Nagda O.P. RUNGTA
Dividend Tax thereon @ 10% (Rs. Nil) (Previous year Rs. 241) Dated: 4th April, 2002 Chairman
AUDITORS’ REPORT further report on the matters specified in Paragraphs 4 & 5 of the said order to the extent
applicable as under :
TO THE MEMBERS OF SAMRUDDHI SWASTIK TRADING AND
INVESTMENTS LIMITED 1. The Company has maintained proper records showing full particulars including
quantitative details and situation of Fixed Assets.
We have audited the attached Balance Sheet of Samruddhi Swastik Trading and Investments
Limited as at 31st March, 2002 and also the Profit and Loss Account of the Company for 2. None of the Fixed Assets have been revalued during the year.
the year ended on that date annexed thereto and we report that -
3. The Company has not taken any loans, secured or unsecured from companies, firms
(a) We have obtained all the information and explanations which to the best of our or other parties listed in the register maintained Under Sections 301 and 370 (1B) of
knowledge and belief were necessary for the purpose of our audit. the Companies Act, 1956.
(b) In our opinion, proper books of account as required by law have been kept by the 4. The Company has not given any loans to Companies, Firms or other parties listed in
Company so far as appears from our examination of such books. the register maintained Under Sections 301 and 370 (1B) of the Companies Act,
1956.
(c) The Balance Sheet and Profit and Loss Account dealt with by this Report are in
agreement with the books of account. 5. The Company has not accepted any deposit from the public within the meaning of
Section 58 A of the Companies Act, 1956, and Rules framed thereunder.
(d) In our opinion, the Profit and Loss Account and Balance Sheet comply with the
Accounting Standards referred in sub-section 3 (c) of Section 211 of the Companies 6. There are adequate internal control procedures commensurate with the size of the
Act, 1956 Company and the nature of its business for the purpose of assets.
(e) On the basis of written representations received from Directors and taken on record 7. According to the information and explanations given to us and records examined by
by the Board of Directors, we report that none of the Directors of the Company are us, no personal expenses have been charged to Revenue Account.
disqualified from being appointed as Director of the Company under clause (g) of
Sub-Section 274 of the Companies Act, 1956 8. No undisputed amounts payable in respect of Income Tax, Sales Tax, Custom Duty,
Excise Duty and Wealth Tax at the last date of the financial year were outstanding
(f) In our opinion and to the best of our information and according to the explanations for the period of more than six months from the date they become payable.
given to us, the accounts read with notes thereon give the information required by
the Companies Act, 1956, in the manner so required and give a true and fair view :
For AMRITLAL H. JAIN & CO.
i) In the case of Balance Sheet, of the State of Affairs of the Company as at 31st
March, 2002.
ii) In the case of Profit and Loss Account, of the Profit for the year ended on that date.
As required by the Manufacturing and Other Companies (Auditor’s Report) Order, 1988, Birlagram, Nagda AMRITLAL H. JAIN
and on the basis of such checks of the books and records as we considered appropriate, we Dated: 4th April, 2002 Partner
(110)
BALANCE SHEET PROFIT AND LOSS ACCOUNT
as at 31st March, 2002 Rs. Lacs for the year ended 31st March, 2002 Rs. Lacs
Previous Previous
year year
SOURCES OF FUNDS
Shareholders’ Funds INCOME
SHARE CAPITAL
Authorised : Interest (Gross) on :
6999000 Equity Shares of Rs. 10 each 699.90 699.90
100 15% Redeemable Cumulative Bank and Other Accounts 8.54 0.85
Preference Shares of Rs. 100 each 0.10 0.10 (Tax deducted at source Rs. 1.57 lacs,
700.00 700.00 Previous year Rs. 0.19 lac)
Issued and Subscribed :
6500000 Equity Shares of Rs. 10 each 650.00 650.00 Rent Received 57.28 108.85
100 15% Redeemable Cumulative
Preference Shares of Rs. 100 each 0.10 0.10 (Tax deducted at source Rs.11.70 Lacs,
650.10 650.10 Previous year Rs. 24.42 Lacs)
Paid up :
6500000 Equity Shares of Rs.10 each fully paid up Miscellaneous Receipts 0.04 —
(6500000 Shares held by
Grasim Industries Limited.) 650.00 650.00 65.86 109.70
100 15% Redeemable Cumulative Preference Shares of
Rs.100 each partly paid-up Rs.25 each 0.03 0.03
{Redeemable not later than 12th July, 2004 by virtue
of Section 80 A of the Companies Act,1956 as
amended by the Companies (Amendment) Act, 1988.}
RESERVES AND SURPLUS
Profit and Loss Account
Opening Balance 79.22 12.29 EXPENDITURE
Less: Transferred to Deferred Tax Liability 26.32 —
Auditors’ Remuneration
52.90 12.29
Transferred from Profit & Loss Account 22.06 66.93 Audit Fee 0.01 0.01
74.96 79.22
DEFERRED TAX LIABILITY Tax Audit Fee 0.02 0.02
Transferred from Reserves 26.32 —
Transferred from Profit & Loss Account 9.42 — 0.03 0.03
35.74 —
TOTAL 760.73 729.25 Bank Commission (Previous Year Rs. 295) 0.02
APPLICATION OF FUNDS Miscellaneous Expenses 0.01 —
Fixed AssetsSchedule ‘A’ Preliminary Expenses written off 0.01 0.01
Gross Block 752.02 752.02
Less: Depreciation 110.49 76.73 Depreciation 33.76 35.54
Net Block 641.53 675.29
Investments (At cost) 33.83 35.58
Shares
Unquoted - Fully Paid
9000 Equity Shares of Rs. 10 each in Profit before Tax 32.03 74.12
Birla Technologies Ltd. 2.72 2.72 Provision for Tax 11.87 7.16
Current Assets Current Tax 2.45
Sundry Debtors 0.28 0.31 Add : Deferred Tax 9.42
( Unsecured, considered Good, Less than six months)
Cash and Bank Balances
Balances with Scheduled Banks : Provision for tax earlier year written back 1.90 —
Current Accounts 2.85 0.25
Deposit Account 101.92 104.77 52.66 Profit after Tax 22.06 66.96
(Including Accrued Interest Rs. 1.60 Lacs Profit / (Loss) for the last year Brought forward 79.22 12.28
Previous year Rs. 0.85 Lac)
Loans and Advances
Advance Income tax - Less Provisions 54.57 41.18 Profit available for Appropriation 101.28 79.24
159.62 94.40
Less:
Current Liabilities & Provisions
Liabilities :
Sundry Creditors :
Due to Holding Company — 0.01
Security and other Deposits 42.96 42.96
Other Liabilities 0.19 0.19 Appropriations
43.15 43.16 Transferred to Deferred Tax Liability 26.32 —
Provisions: Proposed Preference Dividend (Rs. 375) 0.02
Proposed Preference Dividend (Rs.375) 0.02
Corporate Dividend Tax (Nil) Corporate Dividend Tax thereon
(Previous Year Rs. 241) (Rs. Nil, Previous year Rs. 241)
43.15 0.02 Balance Carried to Balance Sheet 74.96 79.22
Net Current Assets 116.47 51.22
Miscellaneous Expenditure
(To the extent not written off / adjusted) 101.28 79.24
Preliminary expenses 0.01 0.02
TOTAL 760.73 729.25 Notes on Accounts Schedule ‘B’
Notes on Accounts Schedule ‘B’

As per our separate report attached. For AMRITLAL H. JAIN & CO., O.P. RUNGTA
AMRITLAL H.JAIN KUNDAN LODHA P.P. AGARWAL
Birlagram, Nagda Partner Manager Directors
(111)
SCHEDULE FORMING PART OF ACCOUNTS SCHEDULE ‘B’ (Contd.)
SCHEDULE ‘A’
2. Building includes Rs. 674.86 lacs being cost of equity shares and debentures of a
FIXED ASSETS
Company, entitling the Company the right of exclusive occupation and use of certain
Rs. Lacs
office premises.
Particulars Gross Block Depreciation Net Block
3. Additional information required under Paragraphs 3, and 4D of Part II of Schedule
As at Additions As at Upto For the Upto As at As at VI to the Companies Act, 1956 : — Nil
01.04.01 31.03.02 31.03.01 Year 31.03.02 31.03.02 31.03.01 4. As per AS 18 issued by the Institute of Chartered Accountants of India, the related
party is Grasim Industries Ltd. which is the holding Company of your Company.
Buildings 752.02 — 752.02 76.73 33.76 110.49 641.53 675.29
Name of related party : Grasim Industries Limited
752.02 — 752.02 76.73 33.76 110.49 641.53 675.29
Description of relation : Holding Company
Previous
Nature of transactions : Offices/Garages given on rent
year 752.02 752.02 41.19 35.54 76.73
Amount of transactions : Rs. 21.17 Lacs
Amount Outstanding : Interest free deposit of Rs. 14.00 Lacs
SCHEDULE ‘B’ given by Grasim Industries Ltd. as per
Notes on Accounts Lease agreement
1. Significant Accounting Policies : Provision for doubtful debts : Nil
a) Revenues are accounted for on accrual basis.
Amount written off / written back : Nil
b) Fixed Assets & Investments are stated at Cost.
in respect of debts
c) Amortisation of Preliminary Expenses :
5. Previous year’s figures have been regrouped wherever necessary to make them
Preliminary Expenses are amortised over a period of ten years.
comparable
d) Depreciation is charged on Written Down Value Method applying rates of
Schedule XIV of the Companies Act 1956. 6. The figures have been rounded off to the nearest thousand Rupees.
As per our separate report attached. For AMRITLAL H. JAIN & CO., O.P. RUNGTA
P.P. AGARWAL
AMRITLAL H.JAIN KUNDAN LODHA Directors
Birlagram, Nagda Partner Manager
Additional Information under Part IV of Schedule VI to the Companies Act, 1956 Balance Sheet Abstract and General Business Profile
1. Registration Details :
Registration No. 10-8447 State Code : 10
Balance Sheet Date 31 03 2002
Date Month Year
2. Capital Raised during the year (Amount in Rs.Thousands)
Public Issue : NIL Right Issue : NIL
Bonus Issue : NIL Private Placement : NIL
3. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)
Total Liabilities : 80388 Total Assets : 80388
Sources of Funds :
Paid Up Capital : 65003 Reserves & Surplus : 7496
Secured Loans : NIL Unsecured Loans : NIL
Application of Funds :
Net Fixed Assets : 64153 Investments : 272
Net Current Assets : 11647 Miscellaneous Expenditure : 1
Accumulated Lossses : NIL
4. Performance of the Company (Amount in Rs. Thousands)
Turnover : 6586 Total Expenditure : 3383
+ - Profit/(Loss) before Tax : (+) 3203 + - Profit/(Loss) after tax : (+) 2206
Earnings per Share (Rs.) : 0.34 Dividend Rate (%) : 15
5. Generic Names of Three Principal Products/Services of the Company (as per monetary terms)
a) Item Code No. N.A.
Product Description N.A.
b) Item Code No. N.A.
c) Item Code No. N.A.
(112)

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GRASIM INDUSTRIES LIMITED

BOARD OF DIRECTORS Cement Divisions

REGISTERED OFFICE: Birlagram, Nagda 456331 (M.P.)

of these seismic events. Your Company is no exception.

I am sure I have your understanding and support on these issues.

CMYK Spl Cyan

To sustain your Company’s leadership position, our thrust is on increasing

The commissioning of two power plants at Aditya Cement in Rajasthan and

Viscose Staple Fibre

Simultaneously your Company’s focus on enlarging VSF usage, given its

inherent strengths, and expanding the markets will continue.

The Aditya Birla Group – In Perspective

Our strategic architecture

Value creation is the raison d’etre underpinning all of our businesses.

Growth in our key businesses has been pegged on consolidation, acquisition

CMYK Spl Cyan

Enhancing the smelter capacity at Hirakud and merging Annapurna Foils

To achieve a fair balance in terms of portfolio at Indian Rayon, in the recent

To ensure Indian Rayon’s competitiveness in good times and tough times as

and commanding a teledensity in excess of 30 percent in the country.

CVA (Cash Value Added) is Structural Processes / People Processes

As a proactive response to today’s competitive global landscape and changing

We are endeavouring to foster an environment in which our people are

Unleashing people potential in a balanced manner through a razor sharp

KUMAR MANGALAM BIRLA

31st May, 2002

CMYK Spl Cyan

Profit & Loss Account

Ratios & Statistics

AN EVENTFUL YEAR, STRATEGICALLY

Mavoor Plant Closure

Textile Unit at Gwalior Divested

Commissioning of Cement Grinding Unit in Punjab

Strategic Investment in equity of Larsen & Toubro Limited

SEGMENTAL REVIEW AND ANALYSIS

Cement Chemicals Cement Chemicals

2001-02 2000-01 %Change

Installed Capacity (TPA) 220,775 220,775 —

Water Shortage led to Plant Closure, Situation Likely to Recur in FY03

Outlook for Grasim’s VSF Business

Installed Capacity (TPA) 160,600 160,600 —

Outlook for Grasim’s Cement Business

Outlook for Grasim’s Sponge Iron Business

OPERATING PROFIT (PBIDT)

Decrease in Working Capital

Non-operating Cash flows

Foreign Exchange Risk

Interest Rate Risk

INTERNAL CONTROL SYSTEM

Relationship with Commission Sitting Fees No. of Board Attended

(Rs.) ( Rs.) Held Attended

1 Nomination withdrawn by IDBI w.e.f. 30th July, 2001

Women self help groups in action at Harihar Health Care

Mother and Child Health Care

Women Empowerment Processes

Towards Sustainable Livelihood

Mrs. Rajashree Birla — Making A Difference

As a business house, we are fully committed to sustainable development. In our view it is

We also seek validation of our Environment Management Systems, ongoingly. KPMG

CVA (Cash Value Added) is Structural Processes / People Processes