Grasim Industries

Rs. in Crores
 
 1.1   Contingent Liabilities not 
 provided for in respect of:                                   Previous
                                                                   Year
 
 (a)   Claims not acknowledged as debts 
 (Net of tax Rs.259.05 Crores,                   387.57          266.42
 Previous Year Rs.182.91 Crores)
 
 (b) Custom Duty which may arise if obligation for exports is not
 fulfilled against import of raw materials and machinery (Net of Tax Rs.
 Nil, Previous Year Rs.0.28 Crores)               -                0.43
 
 (c)    Custom Duty on import of technical know-how and other services
 relating to projects against which Bank Guarantee/Bond of
 Rs.5.36 Crores (Previous Year 
 Rs.5.36 Crores) is furnished                    10.81            10.81
 
 1.2   Letter of Undertaking-cum-Indemnity, 
 Corporate Guarantee given to
 Bank/FI for finance provided 
 to subsidiary company                           80.00            80.00
 
 2.  The Ministry of Textiles, vide its orders dated 30th June, 1997,
 and 1st July, 1999, has deleted cement from the list of commodities to
 be packed in Jute bags under the Jute Packaging (Compulsory use in
 Packing Commodities) Act, 1987. In view of this, the Company does not
 expect any liability for non-despatch of cement in Jute bags in respect
 of earlier years.
 
 3.  Estimated amount of Contracts remaining to be executed on capital
 account and not 363.30 910.69 provided (net of advance paid Rs.91.84
 Crores, Previous Year Rs.360.87 Crores)
 
 4.  Land, Building and Plant & Machinery of some of the Units were
 revalued on 1st April, 1974, 1st April, 1980, 1st April, 1982, and 1st
 April, 1985, by approved valuers on the basis of assessment about the
 then current value of 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, out of which unamortised balance is
 only Rs.3.36 Crores.
 
 5.  Profit on Sale of Shares of Shree Digvijay Cement Co. Ltd., which
 ceased to be a subsidiary w.e.f. 25th March, 2008, amounting to
 Rs.180.27 Crores, is reported as extra ordinary item in Profit and Loss
 account in previous year.
 
 6.  The Profit and Loss Account of the Company for the year ended 31st
 March, 2009, do not include the financial results of the erstwhile
 textile units at Bhiwani, as the same were transferred to Grasim
 Bhiwani Textiles Ltd. (GBTL), a subsidiary of the Company, w.e.f. 1st
 October, 2007. The impact of the same on the Companys Profit and Loss
 Account for the year ended 31st March, 2009, is not material.
 
 7.  Pursuant to the Framework Agreement dated 10th June, 2008, between
 the Company and Welspun Power and Steel Ltd. (Welspun), a scheme of
 Arrangement u/s 391-394 of the Companies Act, 1956, is under
 implementation for transfer of Sponge Iron Unit of the Company on a
 ‘going concern basis for a consideration of Rs.1030 Crores to Vikram
 Sponge Iron Ltd. (VSIL), a subsidiary of the Company, incorporated
 during the current year. In terms of the subject Agreement, the
 consideration payable by VSIL to the Company shall be funded by way of
 infusion of funds into VSIL by Welspun through a combination of equity
 and debts. Pursuant to such funding by Welspun, and upon the Scheme
 becoming effective, Welspun will own substantial majority stake in
 VSIL.
 
 The Scheme has been sanctioned by the Honble High Court of Madhya
 Pradesh, Indore Bench, vide its order dated 29th April, 2009. Necessary
 steps are being taken for making the above Scheme effective.
 
 The transaction is expected to be completed by June 2009.
 
 8.  During the year, the Company has invested
 
 - Rs.23.81 Crores for acquiring 36000 ‘A Class equity shares of AV
 Cell Inc., Canada, a joint venture of the Company, resulting in
 increase in the Companys holding from 25% to 45%.
 
 - 33750 ‘A Class equity shares of AV Nackawic Inc., Canada, a joint
 venture of the Company, against advance paid in Previous Year Rs.27.91
 Crores.
 
 - Rs.26.65 Crores for acquiring 6.75 million 6% Cumulative Redeemable
 Retractable Non-voting Preferred Shares.  of AV Nackawic Inc., Canada.
 
 - Rs.8.71 Crores for acquiring 2000 shares of Birla Lao Pulp &
 Plantation Company Ltd.
 
 9.  The Ministry of Coal, Government of India, has alloted a Coal block
 in Jharkhand to the Company together with one other allottee for
 meeting captive consumption requirement. The Company together with
 other allottees have formed a Joint Venture Company, i.e., Bhaskarpara
 Coal Co. Ltd. (BCCL) for the aforesaid purpose. In terms of Joint
 Venture agreement, the Company has been alloted 23682 equity shares of
 Rs.10 each aggregating to 47.37% of the paid-up capital of BCCL.
 
 10.  Advances recoverable in cash or in kind include:
 
 (a) Payments made to/on behalf of Bhaskarpara Coal Co. Limited Rs.0.10
 Crores (Previous Year Nil) and Bina Power Supply Co. Ltd. Rs. Nil
 (Previous Year Rs.9.34 Crores), are intended to be adjusted against the
 value of the Equity Shares to be issued in the event of implementation
 of the related project after getting all regulatory approvals.
 
 (b) Advance in nature of loan to AV Cell Inc., Canada, Rs.26.79 Crores
 bearing interest @ 6% p.a.
 
 11.  During the current year, the Company has revised estimated useful
 life of some of the assets, on account of which depreciation charge is
 higher by Rs.24.06 Crores. with corresponding decrease in profit for
 the current year.
 
 12.  All the amounts in rupees have been rounded off to Rupees Crores
 with lacs in decimals as approved under Section 211(1) of the Companies
 Act, 1956 vide approval letter No.3/62/81-CL-VI dated 03-09-1981 of the
 Government of India, Ministry of Law, Justice and Company Affairs.
 Figures of Rs.50,000 or less have been shown at actuals in brackets.
 
 13.  Previous years figures have been regrouped and rearranged
 wherever necessary to conform to this years classification.