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Company : Business Wire 
Thursday, May 2, 2002 5:00PM IST (11:30AM GMT)
 
Grasim, the Aditya Birla group's flagship company reports excellent performance for FY 2002
Mumbai, Maharashtra, India

Profit after Current Tax for FY 2002 : Rs. 438 Crores, up by 18%
(Rs. Crores)

 FinancialYear ended31.03.2002(Audited) Financial Year ended 31.03.2001 (Audited)  Variation(%) 
Net Turnover  4386.6 4471.5 (-) 1.9 
PBIDT 936.8 911.5 2.8 
Interest 190.3 238.8 (-) 20.3 
Gross Profit 746.5 672.7 11.0 
Depreciation 251.7 251.9 
Profit before Taxes and Exceptional Items  494.8 420.8 17.6 
Provision for Current Tax 56.5 50.0 13.0 
Profit after Current Tax but before Exceptional Items 438.3 370.8 18.2 
Provision for Deferred Tax 51.5  
Net Profit after total taxes but before Exceptional Items 386.8  


Exceptional items    
- Excess provision for income tax of earlier years written back 68.1 --  
- Loss on sale of investment/ Profit on sale of Undertaking (-) 18.1 18.4  
- Loss on closure of Mavoor Plants  (-) 74.3 --  
- Loss on sale of Textile Division, Gwalior (-) 31.9 --  
- Employees' separation cost  (-) 27.6 (-) 11.3  
Net Profit after Total Taxes and Exceptional Items  303.0 # 377.9  

# Deferred tax not provided in FY 01, as AS-22 was not applicable in that year. To that extent, the figures are not comparable.

Grasim, the flagship Company of the Aditya Birla Group, has posted excellent results for the financial year ended 31st March 2002. Net Profit (after current tax) at Rs.438 Crores for the financial year 2002, is higher by 18% over the previous year.

Three major factors have contributed to Grasim's improved performance. These are, firstly, growth in turnover volumes along with higher realization in cement; secondly, improvement in operational efficiency resulting from ongoing modernization efforts, plant up-gradation and energy optimization; and thirdly, reduction in financing cost through reduction/substitution of high cost debts coupled with effective working capital management.
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.

To rationalize its manpower, the Company has offered a VRS. A total of 1004 persons have opted for voluntary retirement. They were paid Rs.28 Crores besides their regular retirement benefits.

Q4 FY 02 PERFORMANCE
(Rs. Crore)

 Quarter ended 31.3.2002 Quarter ended 31.3.2001 Variation(%) 
Net Turnover  1111.1 1156.3 (-) 3.9 
PBIDT 262.8 278.6 (-) 5.7 
Interest 43.5 57.8 (-) 24.7 
Gross Profit 219.3 220.8 (-) 0.7 
Depreciation 63.7 63.2 0.8 
Profit before Taxes and Exceptional Items  155.6 157.6 (-) 1.3 
Provision for Current Tax 19.5 30.0 (-) 35.0 
Profit after Current Tax but before Exceptional Items 136.1 127.6 6.7 


When compared on a quarter to quarter basis, the Q4 results have also been quite satisfactory. Net profit after current taxes, but before exceptional items, was at Rs.136 Crores, which is higher by 7%, despite impact of losses sustained in textile business and under performance of Sponge Iron and Chemical businesses.

Exceptional Items
This year has witnessed a series of restructuring, which have impacted the bottom line on a one-time basis, but it is important to bear in mind that these will result in recurring savings year after year and enhance the Company's financial strength from a long term perspective.

The Company has had to make provision for three exceptional items, viz., the shut down of Mavoor plants, disposal of the Gwalior unit and divestment of shares of Birla Technologies Ltd..

A charge of Rs.55 Crores has been provided for payment made to the 2300 employees at its Mavoor Plants, which have been shut down, and an obsolescence charge of Rs.19 Crores towards value of fixed assets retired from active use at these plants. Importantly, the closure of its Mavoor plants translates into savings in recurring expenditure on employees and other standing charges to the tune of Rs.27 Crores annually.

Consequent to the disposal of its loss making Textile unit at Gwalior, the Company has provided for an exceptional charge of Rs.32 crores, accounting for loss on sale of the undertaking and payment of a negative consideration to the buyer. This will help mitigate the losses of its Textile Division.

The Company has written back the excess provision for taxation no longer required, amounting to Rs.68 Crores.

As these items are exceptional and non-recurring in nature, these have been indicated separately below the line, so that the result for the current period and corresponding period is comparable.

Dividend

The Board of Directors has, at its meeting held today, recommended a dividend of 90% (Last year : 88%, inclusive of Corporate Tax on Dividend) aggregating Rs.82.5 Crores (Rs.80.8 Crores).

The tables below highlight Grasim's operations:
PRODUCTION/TURNOVER
Products  FY 2002 FY 2001 Variation 
Production –     
Viscose Staple Fibre M.T. 176462 218847 (-) 19% 
Cement Mn. M.T. 9.53 9.10 5% 
White Cement  M.T. 267915 251594 6% 
Sponge Iron  M.T. 559567 663998 (-) 16% 
Caustic Soda  M.T. 129784 131253 (-) 1% 
Sales Volumes –     
Viscose Staple Fibre M.T. 181520 203854 (-) 11% 
Cement  Mn. M.T. 9.68 9.16 6% 
White Cement  M.T. 266105 251291 6% 
Sponge Iron  M.T. 562334 673852 (-) 17% 
Caustic Soda M.T. 129051 133450 (-) 3% 


NET REALISATION
Products  FY 2002 FY 2001 Variation 
Viscose Staple Fibre Rs./M.T. 68511 69733 (-) 2% 
Cement Rs./M.T. 1917 1846 4% 
White Cement Rs./M.T. 5317 5268 1% 
Sponge Iron Rs./M.T. 5606 5733 (-) 2% 
Caustic Soda (ECU) Rs./M.T. 14564 15097 (-) 4% 

 
 
 
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AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED ON 31st MARCH , 2002