Grasim Industries Limited
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the standalone financial statements of Grasim Industries Limited ("the Company") and its Employee Welfare Trust ("Trust") which comprise the standalone balance sheet as at 31st March 2025, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including material accounting policies and other explanatory information (hereinafter referred to as "standalone financial statements").
In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of report of one of the joint auditors of the Company on standalone financial statements of such Trust as were audited by one of the joint auditors of the Company, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March 2025, and its profit and other comprehensive loss, changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor's Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us along with the consideration of report of one of the joint auditors of the Company referred to in the "Other Matters" section below, is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.
Key Audit Matter
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
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Assessment of Impairment of Investments in subsidiaries, associates and joint ventures
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The key audit matter
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How the matter was addressed in our audit
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As disclosed in Note 2.4 of standalone financial statements, the Company has investments in subsidiaries, associates and joint venture companies of H 23,155.11 crore (P.Y -H 23,168.85 crore). The said investments are carried at cost less allowance for impairment.
The Company analyses indicators of impairment of the said investments by reference to the requirements under relevant Ind AS.
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Our audit procedures included the following:
• Assessed the Company's accounting policy for impairment of investments in subsidiaries, associates and joint ventures with applicable accounting standards.
• Tested the design and operating effectiveness of key internal financial controls over the impairment assessment process, including the approval of forecasts and valuation models in subsidiaries, associates and joint ventures.
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Assessment of Impairment of Investments in subsidiaries, associates and joint ventures
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The key audit matter
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How the matter was addressed in our audit
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We identified the annual impairment assessment as a significant risk because carrying value of these investments is significant, assessment process is complex, judgemental by nature, significant changes in business environment and further based on the inherent subjectivity, uncertainty and judgement involved in the following key assumptions:
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• Examined the Company's assessment for indicators of impairment of such investments. In cases where such indicators existed, tested the estimates and assumption made by the Company of the recoverable amounts, and the allowance for impairment for these investments, where applicable.
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• projected future cash inflows;
• expected growth rate;
• discount rate;
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• We challenged the key assumptions used by management in developing the forecasts by applying sensitivities and evaluating plausible downside scenarios, where applicable.
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• terminal growth rate;
Refer Note 1.30 - Material accounting policy for impairment of investments and Note 3.10 on Exceptional Items.
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• Evaluated competence, capabilities and independence of the specialist engaged by the Company and analysed the valuation reports issued by such specialist, where applicable.
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• Involved our internal valuation expert to assist in evaluating the key assumptions and methodology of the valuations, where applicable.
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• Tested the arithmetical accuracy of the computation of recoverable amounts of investments.
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• Evaluated past performance where relevant and assessed historical accuracy of the forecast produced by management.
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Other Information
The Company's Management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company's annual report, but does not include the financial statements and auditor's report thereon. The Company's annual report is expected to be made available to us after the date of this auditor's report.
Our opinion on the standalone financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
When we read the Company's annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take necessary actions, as applicable under the relevant laws and regulations.
Management's and Board of Directors'/ Trustees' Responsibilities for the Standalone Financial Statements
The Company's Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. The respective Management and Board of Directors
of the Company/Trustees of the Trust are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of Company/Trust and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, the respective Management and Board of Directors/Trustees are responsible for assessing the ability of the Company/ Trust to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the respective Board of Directors/Trustees either intends to liquidate the Company/Trust or to cease operations, or has no realistic alternative but to do so.
The respective Board of Directors/ Trustees of the Trust are responsible for overseeing the financial reporting process of the Company/Trust.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement
of the standalone financial statements, whether due to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management and Board of Directors.
• Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting in preparation of standalone financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial statements of the Trust of the Company to express an opinion on the standalone financial statements. For the Trust included in the standalone financial statements, which have been audited by one of the joint auditors of the Company, such one of the
joint auditors of the Company, remain responsible for the direction, supervision and performance of the audit carried out by them. We remain solely responsible for our audit opinion. Our responsibilities in this regard are further described in the section titled "Other Matters" in this audit report.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Other Matters
The standalone annual financial statements include the audited financial statements of one trust whose financial statements reflects total assets (before consolidation adjustments) of H 309.84 crore as at 31st March 2025, total revenue (before consolidation adjustments) of H Nil crore, total net profit after tax (before consolidation adjustments) of H 1.30 crore and net cash inflows (before consolidation adjustments) of H 0.14 crore for the year ended on that date, as considered in the standalone financial statements, which has been audited by one of the joint auditors of the Company. The independent auditor's report on the financial statements of such trust has been furnished to us by the management and our opinion on the standalone financial statements, in so far as it relates to the amounts and disclosures included in respect of this entity, is based solely on the report of such auditor and the procedures performed by us as stated in the paragraph above.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2020 ("the Order") issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. A. As required by Section 143(3) of the Act, we
report, to the extent applicable, that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b. I n our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books, except for the matters stated in paragraph 2B(f) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 and that the back-up of two accounting software which form part of the books of account and other relevant books and papers in electronic mode have not been maintained on the servers physically located in India, on a daily basis.
c. The standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account.
d. I n our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.
e. On the basis of the written representations received from the directors of the Company as on 31st March 2025 and 1st April 2025 taken on record by the Board of Directors of the Company, none of the directors of the Company is disqualified as on 31st March 2025 from being appointed as a director in terms of Section 164(2) of the Act.
f. The modifications relating to the maintenance of accounts and other matters connected therewith are as stated in the paragraph
2A(b) above on reporting under Section 143(3)(b) of the Act and paragraph 2B(f) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.
g. With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".
B. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us.
a. The Company has disclosed the impact of pending litigations as at 31st March 2025 on its financial position in its standalone financial statements - Refer Note 4.1 to the standalone financial statements.
b. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts -Refer Note 2.28 and 4.10 to the standalone financial statements.
c. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
d. (i) The management of the Company
represented to us that, to the best of its knowledge and belief, as disclosed in the Note 4.12 (viii) to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any
other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(ii) The management of the Company represented to us that, to the best of its knowledge and belief, as disclosed in the Note 4.12 (ix) to the standalone financial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Parties ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(iii) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (i) and (ii) above, contain any material misstatement.
e. The final dividend paid by the Company during the year, in respect of the same declared for the previous year, is in accordance with Section 123 of the Act to the extent it applies to payment of dividend.
As stated in Note 4.7.4 to the standalone financial statements, the Board of Directors of the Company has proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with Section 123 of the Act to the extent it applies to declaration of dividend.
f. Based on our examination which included test checks, except for the instances mentioned below, the Company has used accounting software for maintaining its books of account, which have a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the respective software:
i) In case of accounting software used for maintaining the general ledger and order fulfilment portal owned and managed by the Company, the feature of recording audit trail (edit log) facility was not enabled at database level to log any direct data changes for eight software's up to 15th May 2024, 16th May 2024, 19th May 2024, 21st May 2024, 5th August 2024 and 12th February 2025.
ii) I n case of the accounting software used for maintaining the books of account relating to general ledger for two divisions, the feature of recording audit trail (edit log) was not enabled at the database level to log any direct data changes up to 25th February 2025. Further, this was not enabled for one of the user throughout the year.
iii) In case of an accounting software relating to general ledger for a division, the feature of recording audit trail (edit log) facility was not enabled up to 31st December 2024.
iv) In case of an accounting software used for maintaining the general ledger owned and managed by the third party, the feature of recording audit trail (edit log) facility has not been enabled at database level up to 12th February 2025. Further, in the absence of sufficient and appropriate reporting on the audit trail requirements in the independent auditor's report in relation to controls at the service organisation for accounting software used for maintenance of customer master, we are unable to comment whether the audit trail (edit log) facility was enabled at the database level to log any direct data changes and operated throughout the year for all relevant transactions recorded in the software.
v) In the case of an accounting software used for maintaining the general ledger for a unit of a division, the feature of recording the audit trail (edit log) was not enabled throughout the year. Further, in the case of an accounting software used for maintaining the general ledger for a Division, the feature of recording the audit trail (edit log) was not enabled for certain changes made at the application level by a user having privileged access rights for debugging.
Further, for the periods where audit trail (edit log) facility was enabled and operated, we did not come across any instance of audit trail feature being tampered with during the course of our audit. Additionally, other than for the software where audit trail (edit log) facility was not enabled in the previous year and up to the date mentioned above in current year or where independent auditors' reports on audit trail for software operated by third party service providers were not available in the previous year, the audit trail has been preserved by the Company as per the statutory requirements for record retention.
C. With respect to the matter to be included in the Auditor's Report under Section 197(16) of the Act:
In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director by the Company is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are required to be commented upon by us.
For B S R & Co. LLP For KKC & Associates LLP
(Chartered Accountants) (Chartered Accountants)
Firm's Registration No.: 101248W/W-100022 (formerly known as Khimji Kunverji & Co LLP)
Firm's Registration No.: 105146W/W100621
Vikas R Kasat Gautam Shah
Partner Partner
Membership No.: 105317 Membership No.: 117348
ICAI UDIN: 25105317BMOOEQ5102 ICAI UDIN: 25117348BMOBCP4835
Place: Mumbai Place: Mumbai
Date: 22nd May 2025 Date: 22nd May 2025
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