Annual report 2012-2013 - Grasim

MANAGEMENT DISCUSSION AND ANALYSIS
Grasim Industries Limited - Annual Report 2012-2013
Operating Profit (PBIDT)
PBIDT at ` 6,543 crore increased by 4% primarily led by better performance of Cement business.
MANAGEMENT DISCUSSION AND ANALYSIS
Finance Cost
The finance cost increased marginally from ` 314 crore in the previous year to ` 324 crore. Finance cost
is net of subsidy received in Cement business in terms of State Investment Promotion Scheme amounting
to ` 66.6 crore and concessional interest rate on loans secured by VSF business under the Scheme of
TUF loans. Interest cover (including interest capitalised) is high at 10.6 times.
Depreciation
Gross Fixed Assets increased from ` 24,546 crore in on 31st March, 2012 to ` 28,332 crore on
31st March, 2013, with the commissioning of Harihar Phase-I in VSF business, 25 MW thermal power
plant in Awarpur and clinkerisation unit at Rawan in Cement business, besides other normal capex.
Consequently, depreciation has increased by 8% to ` 1,252 crore.
Exceptional Item
In line with the long term strategy of exiting from unrelated investments, your Company sold its entire
holding of 15% unquoted equity shares in Alexandria Carbon Black Co. and 2.75% quoted equity shares
in Thai Carbon Black Public Company Limited to another Aditya Birla Group Company, at fair price
determined by the independent valuer. A gain of ` 204 crore has been realised from these transactions.
Tax Expenses
Tax expenses were higher by 11%. The Current tax decreased to ` 1,287 crore vis-à-vis ` 1,314 crore in
the previous year. On standalone basis, your Company has made tax payment under the Minimum
Alternate Tax (MAT) provision during the year and has accounted for MAT credit amounting to ` 64 crore.
This will be utilised against the future tax liability. Deferred tax liability increased from ` 18 crore in the
previous year to ` 251 crore in the current year. The increase in tax surcharge from 5% to 10% for the
FY 2013-14 resulted in increase in the deferred tax liabilities by ` 102 crore.
Profit for the Year
The profit for the year increased by 2% from ` 2,648 crore to ` 2,704 crore.
Standalone Financial Performance
(` in Crore)
FY 2012-13 FY 2011-12 % Change
Revenue from Operations (Net) 5,255.0 4,973.6 6
Profit before Interest, Depreciation and Tax 1,522.7 1,721.8 (12)
Profit for the Year (Before Exceptional Item) 1,021.6 1,177.0 (13)
Exceptional Item – Gain on sale of Long Term Investments 204.4 — —
Profit for the Year (After Exceptional Item) 1,226.0 1,177.0 4
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