The provident fund contribution, as specified under the law, is paid to the Regional Provident Fund Commissioner. Defined Benefit Plans:

The obligation in respect of defined benefit plans, which covers Gratuity, Pension and other post-employment medical benefits, are provided for on the basis of an actuarial valuation at the end of each financial year using project unit credit method. Gratuity is funded with an approved trust.

In respect of certain employees, Provident Fund contributions are made to a Trust, administered by the Company. The interest rate payable to the members of the Trust shall not be lower than the statutory rate of interest declared by the Central Government under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, and shortfall, if any, shall be made good by the Company. The Company's liability is actuarially determined (using the Projected Unit Credit Method) at the end of the year, and any shortfall in the Fund size maintained by the Trust setup by the Company is additionally provided for. Actuarial losses/gains are recognized in the Other Comprehensive Income in the year in which they arise.

Re-measurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the Balance Sheet with a charge or credit recognized in the Other Comprehensive Income in the period in which they occur.

Re-measurement recognized in other comprehensive income is reflected immediately in retained earnings, and will not be reclassified to profit or loss. Defined benefit costs are categorized as follows:

- service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);

- net interest expense or income; and

- re-measurement.

The Company presents the first two components of defined benefit costs in Statement of Profit and Loss in the line item 'Employee Benefits Expense'.

The present value of the defined benefit plan liability is calculated using a discount rate, which is determined by reference to market yields at the end of the reporting period on government bonds.

The retirement benefit obligation, recognized in the Balance Sheet, represents the actual deficit or surplus in the Company's defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in the future contribution to the plans.

Other Long-term Benefits:

Long-term compensated absences are provided for on the basis of an actuarial valuation at the end of each financial year. Actuarial gains/losses, if any, are recognized immediately in the Statement of Profit and Loss.

1.18 Employee Stock Options:

Equity-settled Transactions

Equity-settled share-based payments to employees are measured by reference to the fair value of the equity instruments at the grant date using Black Scholes Model.

The fair value, determined at the grant date of the equity-settled share-based payments, is charged to Statement of Profit and Loss on the straight-line basis over the vesting period of the option, based on the Company's estimate of equity instruments that will eventually vest, with a corresponding increase in equity.

In case of forfeiture/lapse stock option, which is not vested, amortized portion is reversed by credit to employee compensation expense. In a situation where the stock option expires unexercised, the related balance standing to the credit of the Employee Stock Options Outstanding Account is transferred within equity.

Cash-settled Transactions

The cost of cash-settled transactions is measured initially at fair value at the grant date using a Black-Scholes Merton Formula. This fair value is expensed over the period until the vesting date with recognition of a corresponding liability. The liability is re-measured to fair value at each reporting date up to, and including the settlement date, with changes in fair value recognized in employee benefits expense.

1.19 Foreign Currency Transactions:

In preparing the financial statements of the Company, transactions in foreign currencies, other than the Company's functional currency, are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary assets and liabilities denominated in foreign currencies are translated at the rate prevailing at that date. Non-monetary items that are measured in terms of historical cost in a foreign currency are not re-translated.

Exchange differences on monetary items are recognized in the Statement of Profit and Loss in the period in which these arise, except for:

- exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings; and

- exchange differences relating to qualifying effective cash flow hedges

1.20 Derivative Financial Instruments and Hedge Accounting:

The Company enters into forward contracts to hedge the foreign currency risk of firm commitments and highly probable forecast transactions. Derivatives are initially recognized at fair value at the date the derivative contracts are entered into, and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in the Statement of Profit and Loss immediately, unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in the Statement of Profit and Loss depends on the nature of the hedging relationship and the nature of the hedged item.

The Company enters into derivative financial instruments, viz., foreign exchange forward contracts, interest rate swaps and cross currency swaps to manage its exposure to interest rate, foreign exchange rate risks and commodity prices. The Company does not hold derivative financial instruments for speculative purposes.

Hedge Accounting:

The Company designates certain hedging instruments in respect of foreign currency risk, interest rate risk and commodity price risk as cash flow hedges. At the inception of a hedge relationship, the Company formally designates and documents the hedge relationship to which the Company wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge. The documentation includes the Company's risk management objective and strategy for undertaking hedge, the hedging/economic relationship, the hedged item or transaction, the nature of the risk being hedged, hedge ratio and how the entity will assess the effectiveness of changes in the hedging instrument's fair value in offsetting the exposure to changes in the hedged item's fair value or cash flows attributable to the hedged risk. Such hedges are expected to be highly effective in achieving offsetting changes in fair value or cash flows, and are assessed on an ongoing basis to determine that they actually have been highly effective throughout the financial reporting periods for which they were designated.

The effective portion of changes in the fair value of the designated portion of derivatives that qualify as cash flow hedges is recognized in the Other Comprehensive Income and accumulated under the heading of cash flow hedging reserve. The gain or loss relating to the ineffective portion is recognized immediately in the Statement of Profit and Loss.

Amounts previously recognized in the Other Comprehensive Income and accumulated in equity relating to (effective portion as described above) are reclassified to the Statement of Profit and Loss in the periods when the hedged item affects profit or loss. However, when the hedged forecast transaction results in the recognition of a non-financial asset or a non-financial liability, such gains and losses are transferred from equity and included in the initial measurement of the cost of the non-financial asset or non-financial liability.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, without replacement or rollover (as part of the hedging strategy), or if its designation as a hedge is revoked, or when it no longer qualifies for hedge accounting. Any gain or loss recognized in other comprehensive income and accumulated in equity at that time remains in equity and is recognized when the forecast transaction is ultimately recognized in the Statement of Profit and Loss. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognized immediately in the Statement of Profit and Loss.

1.21 Fair Value Measurement:

The Company measures financial instruments, such as investments (other than equity investments in Subsidiaries, Joint Ventures and Associates) and derivatives at fair values at each Balance Sheet date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

In the principal market for the asset or liability, or

In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use, or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities (for which fair value is measured or disclosed in the financial statements) are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable other than quoted prices included in Level 1.

Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

The management determines the policies and procedures for both recurring fair value measurement, such as derivative instruments and unquoted financial assets measured at fair value, and for non-recurring measurement, such as assets held for disposal in discontinued operations.

At each reporting date, the management analyses the movements in the values of assets and liabilities, which are required to be re-measured or re-assessed as per the Company's accounting policies. For this analysis, the management verifies the major inputs applied in the latest valuation by agreeing the information in the valuation computation to contracts and other relevant documents.

1.22 Financial Instruments:

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Financial Assets:

Initial Recognition and Measurement:

All financial assets are recognized initially at fair value. However, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset are added to the fair value. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognized on the trade date,

i.e., the date that the Company commits to purchase or sell the asset.

Subsequent Measurement:

For purposes of subsequent measurement, financial assets are classified in four categories:

- Debt instruments at amortized cost

- Debt instruments at Fair Value through Other Comprehensive Income (FVTOCI)

- Debt instruments, derivatives and equity instruments, mutual funds at fair value through profit or loss (FVTPL)

- Equity instruments measured at Fair Value through Other Comprehensive Income (FVTOCI)

Debt Instruments at Amortized Costs:

A 'debt instrument' is measured at the amortized cost, if both the following conditions are met:

a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and

b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR.The EIR amortization is included in finance income in the profit or loss. The losses arising from impairment are recognized in the profit or loss. This category generally applies to trade and other receivables.

Debt instrument at FVTOCI

A 'debt instrument' is classified as at the FVTOCI, if both of the following criteria are met:

a) The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and

b) The asset's contractual cash flows represent SPPI on the principle amount outstanding.

Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the Other Comprehensive Income (OCI). However, the Company recognizes interest income, impairment losses and reversals, and foreign exchange gain or loss in the profit and loss. On derecognition of the asset, cumulative gain or loss previously recognized in OCI is reclassified from the equity to profit and loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method.

Debt Instrument at FVTPL

FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.

In addition, the Company may elect to designate a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as 'accounting mismatch').

Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit and Loss.

Equity Investments

Investments in Subsidiaries, Associates and Joint ventures are out of scope of Ind AS 109 and, hence, the Company has accounted for its investment in Subsidiaries, Associates and Joint venture at cost.

All other equity investments are measured at fair value. Equity instruments, which are held for trading, are classified as at FVTPL. For equity instruments, other than held for trading, the Company has irrevocable option to present in the Other Comprehensive Income subsequent changes in the fair value. The Company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.

Where the Company classifies equity instruments as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to the Statement of Profit and Loss, even on sale of investment.

Impairment of Financial Assets:

Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period. In case of trade receivables and other financial assets, the Company follows the simplified approach permitted by Ind AS 109 - Financial Instruments - for recognition of impairment loss allowance. The application of simplified approach does not require the Company to track changes in credit risk of trade receivable. The Company calculates the expected credit losses on trade receivables using a provision matrix on the basis of its historical credit loss experience.

De-recognition of Financial Assets:

The Company de-recognizes a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognizes its retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognize the financial asset and also recognizes an associated liability.

On de-recognition of a financial asset, the difference between the asset's carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in the Other Comprehensive Income and accumulated in equity is recognized in the Statement of Profit and Loss.

Financial Liabilities and Equity Instruments:

Classification as Debt or Equity:

Debt and equity instruments, issued by the Company, are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

Equity Instruments:

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments issued by the Company are recognized at the proceeds received, net of direct issue costs.

Financial Liabilities:

Financial liabilities are classified, at initial recognition:

- at fair value through profit or loss,

- Loans and borrowings,

- Payables, or

- as derivatives designated as hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognized initially at fair value and in the case of loans and borrowings and payables, are recognized net of directly attributable transaction costs. The Company's financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts and derivative financial instruments.

Subsequent Measurement:

The measurement of financial liabilities depends on their classification, as described below:

Financial Liabilities at FVTPL:

Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as at FVTPL. Financial liabilities are classified as held for trading, if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by Ind AS 109. Separated embedded derivatives are also classified as held for trading, unless they are designated as effective hedging instruments.

Gains or losses on liabilities held for trading are recognized in the Statement of Profit and Loss.

Financial liabilities, designated upon initial recognition at FVTPL, are designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied.

Loans and Borrowings:

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the Effective Interest Rate (EIR) method. Gains and losses are recognized in the Statement of Profit and Loss when the liabilities are derecognized as well as through the EIR amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the Statement of Profit and Loss.

Financial Guarantee Contracts:

Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the holder for a loss it incurs, because the specified debtor fails to make a payment when due, in accordance with the terms of a debt instrument. Financial guarantee contracts are recognized initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109, and the amount recognized less cumulative amortization.

De-recognition of Financial Liabilities:

The Company de-recognizes financial liabilities when, and only when, the Company's obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability de-recognized and the consideration paid and payable is recognized in the Statement of Profit and Loss.

Embedded Derivatives:

An embedded derivative is a component of a hybrid (combined) instrument, that also includes a non-derivative host contract - with the effect that some of the cash flows of the combined instrument vary in a way similar to a standalone derivative. An embedded derivative causes some or all of the cash flows that would otherwise be required by the contract to be modified according to a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable, provided in the case of a nonfinancial variable, that the variable is not specific to a party to the contract. Reassessment only occurs if there is either a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required or a reclassification of a financial asset out of the fair value through profit or loss. If the hybrid contract contains a host that is a financial asset within the scope of Ind AS 109, the Company does not separate embedded derivatives. Rather, it applies the classification requirements contained in Ind AS 109 to the entire hybrid contract. Derivatives embedded in all other host contracts are accounted for as separate derivatives and recorded at fair value, if their economic characteristics and risks are not closely related to those of the host contracts, and the host contracts are not held for trading or designated at fair value though profit or loss. These embedded derivatives are measured at fair value with changes in fair value recognized in profit or loss, unless designated as effective hedging instruments.

Offsetting of Financial Instruments:

Financial assets and financial liabilities are offset, and the net amount is reported in the Balance Sheet, if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.

1.23 Revenue Recognition:

Revenue is recognized to the extent that it is probable that the economic benefit will flow to the Company and the revenue can be reliably measured.

(a) Sales are recognized on transfer of significant risks and rewards of ownership of the goods to the buyer as per the terms of contract and no uncertainty exists regarding the amount of consideration that will be derived from sales of goods. It is measured at fair value of the consideration received net of goods and service tax (GST) w.e.f. 1st July, 2017, discounts and volume rebates. Fertilizer price support under Company Concession and other Scheme of Government of India is recognized based on the management's estimate taking into account the known policy parameters and input price escalation/de-escalation. Sales exclude self consumption of finished goods.

(b) Income from services is recognized (net of GST as applicable) as they are rendered, based on agreement/ arrangement with the concerned customers.

(c) Dividend income is accounted for when the right to receive the income is established.

(d) For all financial instruments measured at amortized cost or at fair value through Other Comprehensive Income, interest income is recorded using the effective interest rate (EIR), which is the rate that exactly discounts the estimated future cash payments or receipts through the expected life of the financial instrument to the gross carrying amount of the financial asset.

(e) Interest income for all financial instruments measured at fair value through Other Comprehensive Income is recognized in the Statement of Profit and Loss.

(f) Export incentives, insurance, railway and other claims, where quantum of accruals cannot be ascertained with reasonable certainty, are accounted on acceptance basis.

1.24 Borrowing Costs:

Borrowing cost includes interest expense, amortization of discounts, hedge related cost incurred in connection with foreign currency borrowings, ancillary costs incurred in connection with borrowing of funds and exchange difference, arising from foreign currency borrowings, to the extent they are regarded as an adjustment to the interest cost.

Borrowing costs, that are attributable to the acquisition or construction or production of a qualifying asset, are capitalized as part of the cost of such asset till such time the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are recognized as an expense in the period in which they are incurred.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization. All other borrowing costs are recognized in the Statement of Profit and Loss in the period in which they are incurred.

1.25 Government Grants and Subsidies:

Government Grants are recognized when there is a reasonable assurance that the same will be received and all attached conditions will be complied with. When the grant relates to an expense item, it is recognized in the Statement of Profit and Loss by way of a deduction to the related expense on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, it is recognized as income on a systematic basis over the expected useful life of the related asset.

Government grants, that are receivable towards capital investments under State Investment Promotion Scheme, are recognized when they become receivable.

The benefit of a government loan at a below-market rate of interest is treated as a government grant, measured as the difference between proceeds received and the fair value of the loan based on prevailing market interest rates, and is being recognized in the Statement of Profit and Loss.

When the Company receives grants of non-monetary assets, the asset and the grant are recorded at fair value amounts and released to profit or loss over the expected useful life in a pattern of consumption of the benefit of the underlying asset.

1.26 Provision for Current and Deferred Tax:

Current Income Tax:

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the countries where the Company operates and generates taxable income.

Current income tax, relating to items recognized outside profit or loss, is recognized outside profit or loss (either in Other Comprehensive Income or in equity). Current tax items are recognized in correlation to the underlying transaction either in OCI or directly in equity. The management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and established provisions, where appropriate.

Deferred Tax:

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities, and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognized for all taxable temporary differences, except:

When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available, against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except:

When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each reporting date, and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws), that have been enacted or substantively enacted at the reporting date.

Deferred tax, relating to items recognized outside profit or loss, is recognized outside profit or loss (either in Other Comprehensive Income or in equity). Deferred tax items are recognized in correlation to the underlying transaction either in OCI or directly in equity. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities, and the deferred taxes relate to the same taxable entity and the same taxation authority.

1.27 Minimum Alternate Tax (MAT):

MAT is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal Income Tax during the specified period. In the year in which the MAT credit becomes eligible to be recognized, it is credited to the Statement of Profit and Loss and is considered as (MAT Credit Entitlement). The Company reviews the same at each Balance Sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay normal Income Tax during the specified period. Minimum Alternate Tax (MAT) Credit are in the form of unused tax credits that are carried forward by the Company for a specified period of time, hence, it is presented with Deferred Tax Asset.

1.28 Provisions and Contingent Liabilities:

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows to net present value using an appropriate pre-tax discount rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

A present obligation that arises from past events, where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made, is disclosed as a contingent liability. Contingent liabilities are also disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company.

Claims against the Company, where the possibility of any outflow of resources in settlement is remote, are not disclosed as contingent liabilities.

Contingent assets are not recognized in the financial statements since this may result in the recognition of income that may never be realized. However, when the realization of income is virtually certain, then the related asset is not a contingent asset and is recognized.

Warranty Provisions:

Provisions for warranty-related costs are recognized when the product is sold or service provided to the customer. Initial recognition is based on historical experience. The initial estimate of warranty-related costs is revised annually.

1.29 Earnings Per Share (EPS):

Basic earnings per share are calculated by dividing the net profit for the year attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted-average number of equity shares outstanding during the period. The weighted-average number of equity shares outstanding during the period and for all periods presented is adjusted for events such as bonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted-average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

1.30 Significant Accounting Judgments, Estimates and Assumptions:

The preparation of financial statements, in conformity, with the Ind AS requires judgments, estimates and assumptions to be made, that affect the reported amounts of assets and liabilities on the date of the financial statements, the reported amounts of revenues and expenses during the reporting period and the disclosures relating to contingent liabilities as of the date of the financial statements. Although these estimates are based on the management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in outcomes different from the estimates. Difference between actual results and estimates are recognized in the period in which the results are known or materialize. Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision to accounting estimates is recognized prospectively in the current and future periods.

(a) Judgments:

I n the process of applying the Company's accounting policies, the management has made the following judgments, which have the most significant effect on the amounts recognized in the financial statements.

Classification of Aditya Birla Renewable Limited, Aditya Birla Solar Limited and Aditya Birla Idea Payments Bank Limited as Joint Ventures.

The Company holds, directly or through its subsidiary, more than half of equity shareholding in the following entities. However, as per the shareholders' agreement/statue, the Company needs to jointly decide with other shareholders of respective entity on certain relevant activities. Hence, the same are being accounted as per equity method of accounting.

(a) Aditya Birla Renewable Limited

(b) Aditya Birla Solar Limited

(c) Aditya Birla Idea Payments Bank Limited

(b) Estimates and Assumptions:

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of asset and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

- Useful Lives of Property, Plant and Equipment:

The Company uses its technical expertise along with historical and industry trends for determining the economic life of an asset/component of an asset. The useful lives are reviewed by the management periodically and revised, if appropriate. In case of a revision, the unamortized depreciable amount is charged over the remaining useful life of the assets.

- Measurement of Defined Benefit Obligations:

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

- Recognition of Deferred Tax Assets:

Availability of future taxable future profit against which the tax losses carried forward can be used.

- Recognition and Measurement of Provisions and Contingencies:

Key assumptions about the likelihood and magnitude of an outflow of resources.

- Fair Value Measurement of Financial Instruments:

When the fair value of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair values are measured using valuation techniques including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable market where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include consideration of input such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

- Share-based Payments:

The Company measures the cost of equity-settled transactions with employees using Black-Scholes Model to determine the fair value of the liability incurred on the grant date. Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant.

This estimate also requires determination of the most appropriate inputs to the valuation model, including the expected life of the share option, volatility and dividend yield, and making assumptions about them.

The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 4.8

- Business Combination and Goodwill/Capital Reserve:

(a) Fair Valuation of Intangible Assets:

The Company has used income approach (e.g., relief from royalty, multi-period excess earnings method and incremental cash flows, etc.) for value analysis of intangible assets. The method estimates the value of future cashflows over the life of the intangible assets accruing to the Company, by virtue of the transaction. The resulting post-tax cash flows for each of the years are recognized at their present value using a Weighted-Average Cost of Capital ('WACC') relating to the risk of achieving the intangible assets projected savings.

(b) Fair Valuation of Tangible Assets:

Freehold Land:

Freehold land is fair valued using the sales comparison method using prevailing rates of similar plots of land, circle rates provided by relevant regulatory authorities and other acceptable valuation techniques.

Leasehold Land

Leasehold land is valued basis the leasehold interest for the remaining duration of the lease.

Other Assets:

The cost approach has been adopted for fair valuing all the assets, The cost approach includes calculation of replacement cost using price trends applied to historical cost and capitalization of all the indirect cost, these trends are on the basis of price indices obtained from recognized sources.

(c) Fair Valuation of Loans:

The fair value of loans given/borrowed has been estimated by considering the cash flows, future credit losses and the rate of prepayments for each loan. Projected annual cash flows were then discounted to present value based on a market rate for similar loans.

The allowance for loan losses, associated with the acquired loans, were evaluated by the management and recorded.

(c) Fair Valuation of Current Assets and Liabilities :

The Current Assets and Liabilities are taken at fair value on the date of acquisition .

1.31 Cash Dividend to Equity Holders of the Company:

The Company recognizes a liability to make cash distributions to equity holders of the Company when the distribution is authorized and the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is authorized when it is approved by the shareholders. A corresponding amount is recognized directly in equity.

All shares are fully paid-up, unless otherwise stated WPV - Without Par Value

# Quoted Investments

@ Each Preference share is optionally convertible in 10 Equity Shares of ' 10/- each fully paid up on the expiry of a period of 15 years from the date of allotment.

a Application has been filed for striking off the name of the Company under Section 248 of the Companies Act, 2013.

$ Bonus Shares received during the year in the ratio of 1:2.

* Investment acquired on merger of ABNL {Refer Note no 4.11A(ii)}

2.2.3 The Investments in Company's Joint Ventures, AV Group NB Inc., AV Terrace Bay Inc., Birla Jingwei Fibres Company Limited, Aditya Group AB; and its Associate, Idea Cellular Limited, are subject to maintenance of specified holding by the Company until the credit facility provided by certain lenders to the respective companies are outstanding. Without guaranteeing the repayment to the lenders, the Company has also agreed that the affairs of the Joint Venture and Associates will be managed through its nominee directors on the boards of respective borrowing companies, in such a manner that they are able to meet their respective financial obligations.

2.2.4 Grasim Bhiwani Textiles Limited (GBTL) has ceased to be a subsidiary w.e.f. 10th July, 2017, as the Company has divested its entire shareholding in GBTL.

The Company has incurred a loss of Rs, 53.96 Crore on the said divestment, which has been disclosed as exceptional item in the current year (Note 3.14).

2.2.5 During the current year, Birla Laos Pulp and Plantations Company Limited, Laos, has been reclassified from non-current investment to current investment, as the Company has entered into an agreement for disposal, and accordingly the Company has provided impairment in value of investment Rs, 5.94 Crore (Note 3.9.2).

2.2.6 Disclosure requirement of Ind AS 107- "Financial Instruments: Disclosure":

(a.) Equity Instruments (other than Subsidiaries, Joint Ventures and Associates) designated at FVTOCI

These investments have been designated on initial recognition to be measured at FVTOCI as these are strategic investments and are not intended for sale.

(b.) Debentures and Bonds Measured at FVTOCI

I nvestments in Debentures or Bonds meet the contractual cash flow test as required by Ind AS 109 -Financial Instruments. However, the business model of the Company is such that it does not hold these investments till maturity as the Company intends to sell these investments as an when need arises. Hence, the same have been Measured at FVTOCI.

(c.) Mutual Fund Units and Preference Shares measurd at FVTPL

Preference Shares and Mutual Funds have been measured on initial recognition at FVTPL as these financial assets do not pass the contractual cash flow test as required by Ind AS 109 - Financial Instruments, for being measured at amortized cost or FVTOCI, hence, classified at FVTPL.

2.2.7 The Company previously held around 2.57% stake in Aditya Birla Nuvo Limited, which was classified as FVTOCI Investment during the previous year, and change in fair value of Rs, 475.99 Crore was recognized in OCI as on 31st March, 2017. Total change in fair value till date of merger accumulated in OCI amounted to Rs, 588.29 Crore (positive change in fair value of Rs, 112.3 Crore in the current year up to the date of merger) was transferred to Capital Reserve.

* Includes deposit of Rs, 10.95 Crore (Previous Year: Rs, 5.25 Crore) given to Aditya Birla Management Corporation Private Limited (ABMCPL), a company limited by guarantee. Directors of which include Directors of the Company. The Company is one of the Promoter members of ABMCPL, which has been formed to provide a common pool of facilities and resources to its members, with a view to optimize the benefits of specialization and minimize cost to each member. The Company's share of expenses, under the common pool, has been accounted for under the appropriate heads.

2.3.1 Disclosure as per Regulation 34(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section 186 of the Companies Act, 2013

(a) Loans given to Subsidiaries and Associates (including Current and Non-current Loans):

2.7.3 The Company holds 33.33% stake in its Joint Venture, Aditya Birla Elyaf Sanayi Ve Ticaret Anonim Sirketi (ABEST), Turkey. ABEST has decided not to pursue its project in Turkey. As ABEST plans to return the capital to its shareholders, the Company has reclassified its investment in ABEST from Non - Current Investment to Current Investment. In the previous year, ABEST has returned Rs, 42.68 Crore, and the difference between Gross investment amount and actual receipt has resulted in an exchange loss of Rs, 13.52 Crore due to currency depreciation of Turkey.

For Reserve Movement: Refer Statement of Changes in Equity

The Description of the nature and purpose of each reserve within equity is as follows:

(a.) Securities Premium Reserve: Securities premium reserve is credited when shares are issued at premium. It can be used to issue bonus shares, to provide for premium on redemption of shares or debentures, write-off equity related expenses like underwriting costs, etc.

(b.) General Reserve: It is a free reserve which is created by appropriation from profits of the current year and/or undistributed profits of previous years, before declaration of dividend duly complying with any regulations in this regard.

(c.) Capital Reserve: Capital Reserve is mainly the reserve created during business combination of erstwhile Aditya Birla Chemicals (India) Limited and Aditya Birla Nuvo Limited with the Company.

(d.) debenture Redemption Reserve: The Company has issued redeemable non-convertible debentures. Accordingly, the Companies (Share capital and Debentures) Rules, 2014 (as amended), requires the Company to create DRR out of profits of the Company available for payment of dividend. DRR is required to be created for an amount which is equal to 25% of the value of debentures issued.

(e.) debt Instrument through oCI: It represents the cumulative gains/(losses) arising on the fair valuation of debt instruments measured at fair value through OCI, net of amount reclassified to Statement of Proft and Loss on disposal of such instruments.

(f.) Equity Instrument through oCI: It represents the cumulative gains/(losses) arising on the revaluation of Equity Shares (other than investments in Subsidiaries, Joint Ventures and Associates, which are carried at cost) measured at fair value through OCI.

(g.) Hedging Reserve: It represents the effective portion of the fair value of forward contracts, designated as cash flow hedge.

(h.) Employee Share option outstanding: The Company has stock option schemes under which options to subscribe for the Company's shares have been granted to certain employees, including key management personnel. The share-based payment reserve is used to recognize the value of equity-settled share-based payments provided to employees, as part of their remuneration.

Cash outflows for the above are determinable only on receipt of judgments pending with various authorities/courts/Tribunals

4.2 OTHER MONEY FOR WHICH THE COMPANY IS CONTINGENTLY LIABLE:

(a) Under the Jute Packaging Material (Compulsory Use of Packing Commodities) Act, 1987, a specified percentage of fertilizers dispatched was required to be supplied in jute bags up to 31st August, 2001. The Company made conscious efforts to use jute packaging material as required under the said Act. However, due to non-availability of material as per the Company's product specifications, as well as due to strong customer resistance to use of jute bags, the specific percentage could not be adhered to. The Company has received a show cause notice, against which a writ petition has been filed with the Hon'ble High Court, which is awaiting for hearing. The Jute Commissioner, Kolkata, had filed transfer petition, various writ petitions have been filed in different High Courts by other aggrieved parties, including the Company, before the Hon'ble Supreme Court of India, praying for consolidation of all cases at one Court. The transfer petition is pending before the Hon'ble Supreme Court. The Company has been advised that the said levy is bad in law.

* Commitment on account of partly paid up equity shares in Aditya Birla Chemicals Belgium (BVBA)

@ As per the agreement with the Joint Ventures, the Company is committed to make additional contribution in proportion to their interest in Joint Ventures, if required. These commitments have not been recognized in the financial statements.

* The Board of Directors of Idea Cellular Limited (Idea), an Associate of the Company have approved the amalgamation of Vodafone India Limited (VIL) and it's wholly owned subsidiary Vodafone Mobile Services Limited with the Idea subject to requisite regulatory and other approvals.

As a promoter of Idea, the Company has undertaken to indemnify (liable jointly and severally with other promoters of Idea) up to a maximum of US$ 500 Million to the promoters of VIL and its wholly owned subsidiary VMSL, if Idea fails to meet some of its indemnity obligation under the implementation agreement for proposed amalgamation of VIL and VMSL with Idea.

* The Company, being the promoter of Aditya Birla Idea Payments Bank Limited (ABIPBL), should hold at least 40 per cent of the paid-up equity capital of ABIPBL for the first five years from the commencement of its business, as per Reserve Bank of India (RBI) guidelines for licensing of Payments Bank. RBI has granted the licence for payment bank to ABIPBL on 3rd April, 2017.

(d) For Commitment under lease (refer Note 4.7.3)

(e) For Commitment under derivative contract (refer Note 4.10)

4.4 OPERATING SEGMENTS

The Company has presented segment information in its Consolidated Financial Statements, which are part of the same annual report. Accordingly, in terms of provisions of Accounting Standard on Segment Reporting (Ind AS 108) no disclosure related to the segment are presented in the Standalone Financial Statements.

4.5 RELATED PARTY DISCLOSURE

4.5.1 Parties where control exists: Subsidiaries

Samruddhi Swastik Trading and Investments Limited Wholly Owned Subsidiary

Grasim Bhiwani Textiles Limited Wholly Owned Subsidiary (upto 10th July, 2017)

Sun God Trading and Investments Limited Wholly Owned Subsidiary

ABNL Investment Limited Wholly Owned Subsidiary

Shaktiman Mega Food Park Limited Wholly Owned Subsidiary

Aditya Birla Chemicals (Belgium) BVBA Subsidiary

UltraTech Cement Limited Subsidiary

UltraTech Cement Lanka Private Limited, Sri Lanka Subsidiary's Subsidiary

Dakshin Cements Limited Subsidiary's Subsidiary

Harish Cement Limited Subsidiary's Subsidiary

UltraTech Cement Middle East Investments Limited, Subsidiary's Subsidiary

Dubai, UAE

Subsidiaries

Star Cement Co. LLC, Dubai, UAE Subsidiary's Subsidiary

Star Cement Co. LLC, RAK, UAE Subsidiary's Subsidiary

Al Nakhla Crusher LLC, Fujairah, UAE Subsidiary's Subsidiary

Arabian Cement Industry LLC, Abu Dhabi, UAE Subsidiary's Subsidiary

Arabian Gulf Cement Co. WLL, Bahrain Subsidiary's Subsidiary

Emirates Power Company Limited, Bangladesh Subsidiary's Subsidiary

Emirates Cement Bangladesh Limited, Bangladesh Subsidiary's Subsidiary

UltraTech Cement SA (PTY), South Africa Subsidiary's Subsidiary

PT UltraTech Mining Indonesia, Indonesia Subsidiary's Subsidiary UltraTech Cement Mozambique Limitada, Mozambique Subsidiary's Subsidiary

PT UltraTech Investments Indonesia, Indonesia Subsidiary's Subsidiary

PT UltraTech Cement, Indonesia Subsidiary's Subsidiary

Gotan Lime Stone Khanij Udyog Private Limited Subsidiary's Subsidiary

Awam Minerals LLC, Oman Subsidiary's Subsidiary

PT UltraTech Mining Sumatera Subsidiary's Subsidiary

Bhagwati Lime Stone Company Private Limited Subsidiary's Subsidiary

Aditya Birla Capital Limited (ABCL) Subsidiary

Aditya Birla PE Advisors Private Limited Subsidiary's Subsidiary

Aditya Birla My Universe Limited Subsidiary's Subsidiary

Aditya Birla Trustee Company Private Limited Subsidiary's Subsidiary

Aditya Birla Money Limited Subsidiary's Subsidiary

Aditya Birla Commodities Broking Limited Subsidiary's Subsidiary

Aditya Birla Financial Shared Services Limited Subsidiary's Subsidiary

Aditya Birla Finance Limited Subsidiary's Subsidiary

Aditya Birla Insurance Brokers Limited Subsidiary's Subsidiary

Aditya Birla Housing Finance Limited Subsidiary's Subsidiary

Aditya Birla Money Mart Limited Subsidiary's Subsidiary Aditya Birla Money Insurance Advisory Services Limited Subsidiary's Subsidiary

Aditya Birla Sun Life Insurance Company Limited Subsidiary's Subsidiary

Aditya Birla Sun Life Pension Management Limited Subsidiary's Subsidiary

Aditya Birla Health Insurance Co. Limited Subsidiary's Subsidiary

ABCAP Trustee Company Private Limited Subsidiary's Subsidiary

Aditya Birla ARC Limited Subsidiary's Subsidiary

4.5.2 Other Related Parties: Parties Relationship

AV Group NB Inc., Canada Joint Venture

Birla Jingwei Fibres Company Limited, China Joint Venture

Birla Laos Pulp & Plantations Company Limited, Laos Joint Venture

AV Terrace Bay Inc., Canada Joint Venture

Aditya Group AB, Sweden Joint Venture

Aditya Birla Sun Life AMC Limited Joint Venture

Aditya Birla Elyaf Sanayi Ve Ticaret Anonim Sirketi, Turkey Joint Venture

Bhubaneswari Coal Mining Limited Joint Venture

Aditya Birla Renewable Limited Joint Venture

Aditya Birla Renewable - SPV-1 Joint Venture's Subsidiary

Aditya Birla Solar Limited Joint Venture

Aditya Birla Wellness Private Limited Joint Venture

Birla Sun Life Trustee Company Private Limited Joint Venture

Aditya Birla Science & Technology Company Private Limited Associate

Idea Cellular Limited Associate

Aditya Birla Idea Payments Bank Limited Associate

Shri Kumar Mangalam Birla - Non-Executive Director Key Management Personnel (KMP)

Smt. Rajashree Birla - Non-Executive Director Key Management Personnel (KMP)

Shri Dilip Gaur - Managing Director (w.e.f. 1st April 2016) Key Management Personnel (KMP)

Shri B.V. Bhargava - Non-Executive Director Key Management Personnel (KMP)

Shri R.C. Bhargava (upto 1st October, 2016) - Key Management Personnel (KMP) Non-Executive Director

Shri K.K. Maheshwari (upto 27th December, 2016) - Key Management Personnel (KMP) Non-Executive Director

Shri Sushil Agarwal, Whole-time Director and CFO Key Management Personnel (KMP)

Shri M.L. Apte - Non-Executive Director Key Management Personnel (KMP)

Shri Cyril Shroff - Non-Executive Director Key Management Personnel (KMP)

Dr. Thomas Connelly, Jr - Non-Executive Director Key Management Personnel (KMP)

Shri Shailendra K Jain - Non-Executive Director Key Management Personnel (KMP)

Shri N. Mohan Raj - Non - Executive Director Key Management Personnel (KMP)

Shri O.P Rungta- Non - Executive Director Key Management Personnel (KMP)

Shri Arun Thaiagarajan - Non - Executive Director Key Management Personnel (KMP) (w.e.f. 7th May 2016)

Grasim Industries Limited Employees Provident Fund Post-Employment Benefit Plan

Provident Fund of Aditya Birla Nuvo Limited Post-Employment Benefit Plan

Indo gulf Fertilisers Limited Employee Provident Fund Trust Post-Employment Benefit Plan

Jayashree Provident Fund Institution Post-Employment Benefit Plan Grasim (Senior Executives' & Officers) Superannuation Scheme Post-Employment Benefit Plan

Grasim Industries Limited Employees Gratuity Fund Post-Employment Benefit Plan

Century Rayon Provident Fund Trust Post-Employment Benefit Plan

4.5.3 Other Related Parties in which Directors are interested:

Shailendra Jain & Co.

Prafulla Brothers

Birla Group Holding Private Limited Shri Suvrat Jain Shri Devarat Jain

Shardul Amarchand Mangaldas & Co.

4.5.4 Disclosure of Related Party Transactions: Terms and Condition of Transaction with Related Parties

The transaction with related parties are made in the normal course of business and on terms equivalent to those that prevail in arm's length transactions. Outstanding balances at the year-end are unsecured and interest-free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. The above transactions are as per approval of Audit Committee.

The Group has not recorded any impairment of receivables relating to amounts owed by related parties. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

4.6 RETIREMENT BENEFITS:

4.6.1 Defined Benefit Plans as per Actuarial Valuation:

Gratuity (funded by the Company):

The Company operates a Gratuity Plan through a trust for its all employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of service, whichever is earlier, of an amount equivalent to 15 to 30 days' salary for each completed year of service, as per rules framed in this regard. Vesting occurs upon completion of five continuous years of service in accordance with Indian law. In case of majority of employees, the Company's scheme is more favorable as compared to the obligation under payment of Gratuity Act, 1972.

The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method as prescribed by the Ind AS-19 - 'Employee Benefits', which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measure each unit separately to build up final obligation.

Inherent Risk:

The plan is defined benefit in nature which is sponsored by the Company and hence it underwrites all the risks pertaining to the plan. In particular, this exposes the Company to actuarial risk such as adverse salary growth, changes in demographic experience, inadequate return on underlying plan assets. This may result in an increase in cost of providing these benefits to employees in future. Since the benefits are lump sum in nature, the plan is not subject to any longevity risk.

Pension:

The Company provides pension to few retired employees as approved by the Board of Directors of the Company.

Inherent Risk:

The plan is of a defined benefit in nature which is sponsored by the Company and hence it underwrites all the risks pertaining to the plan. In particular, there is a risk for the Company that any adverse increase in salary increases for serving employees/pension increase for pensioners or adverse demographic experience can result in an increase in the cost of providing these benefits to employees in future. In this case the pension is paid directly by the Company (instead of pension being bought out from an insurance company) during the lifetime of the pensioners/beneficiaries and hence the plan carries the longevity risks.

* Includes Liability of Rs, 222.30 Crore and Assets of Rs, 218.26 Crore on account of merger of Aditya Birla Nuvo Limited with the Company and acquisition of Rights to manage and operate Century Rayon business.

(xii) There are no amounts included in the Fair Value of Plan Assets for:

a) Company's own financial instrument

b) Property occupied by or other assets used by the Company

(xiii) Basis used to determine Discount Rate:

Discount rate is based on the prevailing market yields of Indian Government securities as at the Balance Sheet date, applicable to the period over which the obligation is to be settled.

(xiv) Asset Liability matching Strategy:

The money contributed by the Company to the fund to finance the liabilities of the plan has to be invested.

The trustees of the plan are required to invest the funds as per the prescribed pattern of investments laid out in the income tax rules for such approved schemes. Due to the restrictions in the type of investments that can be held by the fund, it is not possible to explicitly follow an asset-liability matching strategy to manage risk actively.

There is no compulsion on the part of the Company to fully pre fund the liability of the plan. The Company's philosophy is to fund the benefits based on its own liquidity and tax position as well as level of underfunding of the plan.

(xv) Salary Escalation Rate:

The estimates of future salary increases are considered taking into account inflation, seniority, promotion, increments and other relevant factors.

(xvi) Sensitivity Analysis:

Sensitivity Analysis have been calculated to show the movement in defined benefit obligation in isolation and assuming there are no other changes in the market condition at the accounting date. There have been no changes from the previous periods in the methods and assumptions used in preparing the sensitivity analysis.

(xvii) The best estimate of the expected contribution for the next year amounts to Rs, 20 Crore (PreviousYear: Rs, 20 Crore).

4.6.1.2 Compensated Absences:

The obligation for compensated absences is recognized in the same manner as gratuity, amounting to charge of Rs, 11.40 Crore (Previous Year Rs, 18.80 Crore).

4.6.1.3 The details of the Company's Defined Benefit Plans in respect of the Company-owned Provident Fund Trust

Amount recognized as expense and included in the Note 3.7 as "Contribution- Company owned Provident Fund" is Rs, 18.10 Crore (Previous Year Rs, 7.33 Crore).

The actuary has provided for a valuation and based on the below provided assumption there is no interest shortfall as at 31st March, 2018 and 31st March, 2017.

4.7.2 Government Grants (Ind AS 20)

The Company has received an interest-free loan of Rs, 8.13 Crore (Previous Year: Rs, 13.15 Crore) from a State Government, repayable in full after seven years. Using prevailing market interest rate of 7.66% p.a. (Previous Year: 8.9% p.a.) for an equivalent loan, the fair value of loan at initial recognition is estimated at Rs, 4.76 Crore (PreviousYear: Rs, 7.07 Crore).The difference of Rs, 3.37 Crore (Previous Year: Rs, 6.08 Crore) between gross proceeds and fair value of loan is the government grant which will be recognized in the Statement of Profit and Loss over the period of loan.

Cumulative interest- free loan received from the state government is Rs, 21.28 Crore. Accordingly, an amount of Rs, 0.88 Crore (Previous Year: Rs, 0.41 Crore) has been recognized as income in the current year and correspondingly equivalent amount has been accounted as an interest expense.

Further it also includes savings in import duty on procurement of capital goods and export incentives under MEIS scheme

b. Company as a Lessor

The Company has given certain assets on lease for which rental income earned during the current year is Rs, 3.33 Crore (Previous Year: Rs, 3.04 Crore). These lease arrangement are normally renewed on expiry, wherever required.

4.7.4 The Company has spent Rs, 29.84 Crore on Corporate Social Responsibility Projects/Initiatives during the year (Previous YearRs, 18.06 Crore including Rs, 1.64 Crore towards capital expenditure).

4.7.5 Assets Held for Disposal (Ind AS 105)

The Company has identified certain assets amounting to Rs, 2.54 Crore (Previous year Rs, 1.28 Crore) to be disposed off like Chimneys, Hot Gas Filter, Heat Exchanger, Waste Heat Boilers, Pipelines, Sulphur Furnace, etc., which are not in use by the Company.The Company is in the process of discussion with various potential buyers, and expects the same to be disposed off within next twelve months.

* Amount of dividend distribution for the previous year was subject to change on account of issue of equity shares by the Company to the shareholders of Aditya Birla Nuvo Limited (ABNL) in terms of the Scheme of Arrangement for amalgamation of ABNL with the Company (Note 4.11 A).

4.7.7 Capital Management (Ind AS 1)

The Company's objectives when managing capital are to (a) maximize shareholder value and provide benefits to other stakeholders and (b) maintain an optimal capital structure to reduce the cost of capital. For the purposes of the Company's capital management, capital includes issued capital, share premium and all other equity reserves attributable to the equity holders.

The Company monitors capital using debt-equity ratio, which is total debt less investments divided by total equity.

In addition the Company has financial covenants relating to the borrowing facilities that it has taken from the lenders like interest coverage service ratio, Debt to EBITDA, etc. which is maintained by the Company.

4.8 4.8.1 1,039,210 Equity Shares of Face Value of Rs, 2/- each (Previous Year: 1,152,595 Equity Shares of Face Value of Rs, 2/- each ) are reserved for issue under Employee Stock Option Scheme-2006 (ES0S-2006) and Employee Stock Option Scheme, 2013 (ES0S-2013).

*The Grant Price in respect of Tranches I and II was revised in the Financial Year 2010-11 as per the Scheme of Demerger of Cement Business.

#The Grant Price in respect of Tranches III, IV and V has been revised in the current Financial Year post-demerger of Financial Service business of Grasim to ABCL, resulting in reduction of Rs, 14 per share from the earlier Exercise Price i.e. Face Value of ABCL's share X 1.4 (share entitlement ratio).

Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over the counter derivatives) is determined using valuation techniques, which maximize the use of observable market data and rely as little as possible on company specific estimates. The mutual fund units are valued using the closing Net Asset Value. Investments in Debentures or Bonds are valued on the basis of dealer's quotation based on fixed income and money market association (FIMMDA).

I f all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.

The management assessed that cash and bank balances, trade receivables, loans, trade payables, borrowings (cash credits, commercial papers, foreign currency loans, working capital loans) and other financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

During the reporting period ending 31st March, 2018 and 31st March, 2017, there was no transfer between level 1 and level 2 fair value measurement.

4.9.1 Key Inputs for Level 1& 2 Fair Valuation Technique:

1. Mutual Funds : Based on Net Asset Value of the Scheme (Level 2).

2. Debentures or Bonds: Based on market yield for instruments with similar risk profile/maturity etc. (Level 2).

3. Listed Equity Investments (other than Subsidiaries, Joint Ventures and Associates): Quoted Bid Price on Stock Exchange (Level 1).

4. Derivative Liabilities (Level 2)

(a) The fair value of interest rate swaps is calculated as the present value of estimated future cash flows based on observable yield curves and an appropriate discount factor.

(b) The fair value of forward foreign exchange contracts is calculated as the present value determined using forward exchange rates and interest rate curve of respective currencies.

(c) The fair value of currency swap is calculated as the present value determined using forward exchange rates, currency basis spreads between the respective currencies, interest rate curves and an appropriate discount factor.

4.9.2 Description of Significant Unobservable Inputs used for Financial Instruments (Level 3)

The following table shows the valuation techniques used for financial instruments:

Investments in Preference Shares Discounted cash flow method using risk adjusted

discount rate

Equity Investments - Unquoted (other than Discounted cash flow method using risk adjusted

Subsidiaries, Joint Ventures and Associates) discount rate/Net worth of Investee Co.

Other Financial Assets (Non-Current) Discounted cash flow method using risk adjusted discount rate

Other Financial Liabilities (Non-Current) Discounted cash flow method using risk adjusted discount rate

Long-term Borrowings - Deferred Sales Tax Loans Discounted cash flow method using risk adjusted and Non-Convertible Debentures discount rate

4.9.3 The following table shows a reconciliation from the opening balances to the closing balances for level 3 fair values:

When a derivative is entered into for the purpose of hedge, the Company negotiates the terms of those derivatives to match the terms of the foreign currency exposure.

(i) Foreign Currency Sensitivity:

The sensitivities are based on financial assets and liabilities held at 31st March 2018 which are not denominated in Indian Rupees. The sensitivities do not take into account the Company's sales and costs and the results of the sensitivities could change due to other factors such as changes in the value of financial assets and liabilities as a result of non-foreign exchange influenced factors.

(ii) Hedging Activities and Derivatives:

The Company evaluates exchange rate exposure arising from foreign currency transactions. The Company uses various derivative financial instruments, such as foreign exchange forward contracts, option contracts, future contracts and currency swaps to manage and mitigate its exposure to foreign exchange risk. The Company reports periodically to its risk management committee, the foreign exchange risks and compliance of the policies to manage its foreign exchange risk.

The Company has taken foreign currency floating rate borrowings, which are linked to LIBOR. For managing the foreign currency risk and interest rate risk arising from changes in LIBOR on such borrowings, the Company has entered into cross-currency interest rate swap (CCIRS) for the entire loan liability. Under the terms of the CCIRS, the Company pays interest at the fixed rate to the swap counterparty in INR and receives the floating interest payments based on LIBOR in foreign currency.

B. Interest Rate Risk:

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument fluctuates because of changes in prevailing market interest rates. The Company's exposure to the risk due to changes in interest rates relates primarily to the Company's short-term borrowings (excluding commercial paper) with floating interest rates. For all long-term borrowings in foreign currency with floating interest rates, the risk of variation in the interest rates is mitigated through interest rate swaps. The Company constantly monitors the credit markets and revisits its financing strategies to achieve an optimal maturity profile and financing cost.

The Company's manages its interest rate risk by having a balanced portfolio of fixed and variable rate borrowings, which is monitored on continues basis. The Company's exposure to the risk of changes in market interest rates relates primarily to the Company's short term borrowings (excluding commercial papers) with floating interest rates. For certain long-term borrowings with floating rates, the risk of variation in the interest rates is mitigated through interest rate swaps. These swaps are designated to hedge underlying debt obligations. The Company constantly monitors the credit markets and rebalances its financing strategies to achieve an optimal maturity profile and financing cost.

Interest rate sensitivity has been calculated assuming the borrowings outstanding at the reporting date have been outstanding for the entire reporting period. Further, the calculations for the unhedged floating rate borrowings have been done on the notional value of the foreign currency (excluding the revaluation).

C. Equity Price Risk:

The Company is exposed to equity price risk arising from Equity Investments (other than Subsidiaries, Joint Ventures and Associates, which are carried at cost).

Equity Price Sensitivity Analysis:

The Sensitivity analysis below has been determined based on the exposure to equity price risk at the end of the reporting period.

If equity prices of the quoted investments increase/decrease by 5%, Other Comprehensive Income for the year ended 31st March, 2018 would increase/decrease by Rs, 186.61 Crore (for the year ended 31st March, 2017 by Rs, 118.97 Crore).

D. Credit Risk:

Credit risk arises when a customer or counterparty does not meet its obligations under a customer contract or financial instrument, leading to a financial loss. The Company is exposed to credit risk from its operating activities primarily trade receivables and from its financing/ investing activities, including deposits with banks, mutual fund investments, investments in debt securities and foreign exchange transactions. The Company has no significant concentration of credit risk with any counterparty.

The carrying amount of financial assets represents the maximum credit risk exposure.

(i) Trade Receivables:

Trade receivables are consisting of a large number of customers. The Company has credit evaluation policy for each customer and, based on the evaluation, credit limit of each customer is defined. Wherever the Company assesses the credit risk as high, the exposure is backed by either bank, guarantee/letter of credit or security deposits.

Total Trade receivables as on 31st March, 2018 is Rs, 2,609.32 Crore (31st March, 2017: Rs, 1,189.55 Crore)

The Company does not have higher concentration of credit risks to a single customer. Single largest customers of all businesses have exposure of 4.20% of total sales (31st March, 2017 5.6%) and in receivables 2.72% (31st March, 2017: 10%).

The ageing analysis of the receivables (net of provision) has been considered from the date the invoice falls due.

As per simplified approach, the Company makes provision of expected credit losses on trade receivables using a provision matrix to mitigate the risk of default in payments and makes appropriate provision at each reporting date wherever outstanding is for longer period and involves higher risk.

However, total write off against receivables are "Nil" of the outstanding receivables for the current year (0.09% in the previous year).

(ii) Investments, Derivative Instruments, Cash and Cash Equivalents and Bank Deposits:

Credit Risk on cash and cash equivalents, deposits with the banks/financial institutions is generally low as the said deposits have been made with the banks/financial institutions, who have been assigned high credit rating by international / domestic rating agencies.

Credit Risk on Derivative Instruments is generally low as the Company enters into the Derivative Contracts with reputed Banks.

Investments of surplus funds are made only with internally approved Financial Institutions/Counterparty. Investments primarily include investment in units of quoted Mutual Funds, quoted Bonds, NonConvertible Debentures issued by Government/Semi-Government Agencies/PSU Bonds/High Investment grade Corporates etc. These Mutual Funds and Counterparties have low credit risk.

The Company has standard operating procedures and investment policy for deployment of surplus liquidity, which allows investments in debt securities and mutual fund schemes of debt and arbitrage categories and restricts the exposure in equity markets.

Compliances of these policies and principles are reviewed by internal auditors on periodical basis.

Total Non-current and current investments as on 31st March, 2018 is Rs, 35,546.59 Crore (31st March, 2017 Rs, 8,996.42 Crore).

E. Liquidity Risk:

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of undrawn credit facilities to meet obligations when due. The Company's treasury team is responsible for managing liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. The Management monitors the Company's liquidity position through rolling forecasts on the basis of expected cash flows.

The table below provides details of financial liabilities and investments at the reporting date based on contractual undiscounted payments.

4.11 BUSINESS COMBINATION (IND AS 103)

A) Scheme of Arrangement for Merger of Aditya Birla Nuvo Limited (ABNL) with the Company and demerger of Financial Services business into Aditya Birla Capital Limited (ABCL) (earlier known as Aditya Birla Financial Services Limited)

On 11th August 2016,the Board of Directors of the Company had approved a composite Scheme of Arrangement between the Company, ABNL and ABCL (a wholly owned Subsidiary of ABNL), and their respective shareholders and creditors for merger of ABNL with the Company, and the subsequent demerger of it's financial services business into ABCL and consequent listing of equity shares of ABCL.

The Major Rationale for merger of ABNL:

a. Stronger parentage for financial service business: Financial service business is likely to benefit from lower cost of funds, given strong credit rating of the Company.

b. Access to high growth business: Cash flow of the merged entity from various operating business can be meaningfully leveraged towards nurturing companies with future growth opportunities.

c. Value unlocking in financial service business: Demerger of Financial service business will unlock value for shareholders given the business has achieved scale, and listing of ABCL provides flexibility to independently fund its growth through various sources of capital.

During the year, the merger has become effective from 1st July, 2017, hence ABNL ceased to exist effective from 1st July, 2017, and demerger of financial services business into ABCL has also become effective from 4th July, 2017 in terms of the scheme. Further, the Company has issued 190,462,665 equity shares on 9th July,

2017 to the shareholders of ABNL in the ratio of 15 (fifteen) equity Shares of Rs, 2/- each fully paid up against 10 (ten) Equity Shares of Rs, 10/- each fully-paid up of ABNL, held by them on the record date for this purpose. As a result the Company's paid up share capital has increased from Rs, 93.38 Crore to Rs, 131.47 Crore.

The Value for the said transaction was Rs, 23,657.37 Crore based on market price of Company as on 30th June 2017.

On account of demerger of financial services business, ABCL has issued it's equity shares in the ratio of 7 (seven) equity shares of ' 10 each fully paid-up in respect of 5 (five) equity shares of ' 2 each fully paid up of the Company, held by the shareholders of the Company on the record date for this purpose. As a result, the holding of the Company in ABCL stands reduced to 55.99%.

For the nine months period ended 31st March, 2018, erstwhile ABNL had contributed revenue of Rs, 4,062.51 Crore and profit before tax of Rs, 318.68 Crore to the Company's results. If the merger had occurred on 1st April, 2017, the consolidated revenue and profit before tax for the year ended would had been Rs, 5,416.68 Crore and Rs, 424.91 Crore, respectively, based on the amounts extrapolated by the management.

In determining these amounts, the management had assumed that the fair value adjustments, that arose on the date of merger, would have been the same if the merger had occurred on 1st April, 2017.

(i) Identifiable Assets acquired and Liabilities Assumed

The following table summarises the recognized amounts for the assets acquired and liabilities assumed at the date of acquistion of ABNL and subsequent demerger of ABCL .

B) Arrangement with Century Textiles and Industries Limited ('CTIL') for obtaining right and responsibility to manage, operate, use and control the Viscose Filament Yarn ('VFY') Business of CTIL.

The Board of Directors of the Company at their meeting held on 12th December, 2017, have approved an arrangement with Century Textiles and Industries Limited (CTIL), under which CTIL will grant the right and responsibility to manage, operate, use and control the Viscose Filament Yarn (VFY) business of CTIL (without transferring ownership in the underlying immovable and movable assets other than working Capital) for a duration of 15 (fifteen) years to the Company for the an agreed consideration. The above said arrangement has become effective from 1st February, 2018.

The VFY business of CTIL is based out of Shahad in Maharashtra, India, with an annual capacity of 26,500 tonnes. Products manufactured include Pot Spun Yarn, Continuous Spun Yarn, VFY and Rayon Tyre Yarn.

The major rationale for such arrangement:

a. Grasim with its new SSY technology and CTIL's presence in RayonTyreYarn would offer significant growth prospects.

b. Synergy potential in plant and sales operations would provide additional benefits.

c. Potential to leverage brand strength in value chain.

d. Capex light capacity expansion compared to a Greenfield expansion.

In terms of the agreement, the Company has discharged consideration in the following manner:

(i) Commuted royalty amounting to Rs, 600 Crore.

(ii) Time value of money of interest free deposit Rs, 161.40 Crore.

(iii) Net working capital at closing is estimated at approximately Rs, 103.31 Crore.

For the two months period ended 31st March, 2018, the said VFY business unit has contributed revenue of Rs, 161.28 Crore and profit before tax of Rs, 8.58 Crore (including fair valuation impact of Finished Goods Inventory) to the Company's results. If the said arrangement had occurred on 1st April, 2017, the consolidated revenue and profit before tax for the year ended would have been Rs, 967.68 Crore and Rs, 51.48. Crore respectively, based on the amounts extrapolated by the management. In determining these amounts, the management has assumed that the fair value adjustments, that arose on the date of arrangement have been same the as if the arrangement occurred on 1st April, 2017.

Identifiable Assets acquired and Liabilities Assumed

The following table summarises the recognized amounts of assets acquired and liabilities assumed at the date of acquistion:

The gross contractual amounts and fair value of trade and other receivableacquired Rs, 69.10 Crore. None of the trade and other receivables are credit impaired and it is expected that the full contractual amounts will be recoverable.

The above figures are provisional as the acquisition of rights to manage and operate Century Yarn was carried out in the last quarter of the current year,hence the fair valuation of assets and liabilities was pending for finalization.

Acquisition Related Costs

Acquisition related costs of Rs, 1.77 Crore (including Stamp Duty) have been recognized under Miscellaneous Expenses, and Rates and Taxes in the Statement of Profit and Loss.

!(a) Ind AS 115 Revenue from Contracts with Customers:

In March 2018, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) Amendment Rules, 2018, notifying Ind AS 115 'Revenue from Contracts with Customers', which replaces Ind AS 11 'Construction Contracts' and Ind AS 18 'Revenue'.

The core principle of Ind AS 115 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Specifically, the standard introduces a 5-step approach to revenue recognition:

- Step 1: Identify the contract(s) with a customer

- Step 2: Identify the performance obligation in contract

- Step 3: Determine the transaction price

- Step 4: Allocate the transaction price to the performance obligations in the contract

- Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation

Except for the disclosure requirements, the new standard will not materially impact the Company's financial statements. The amendment will come into force from 1st April, 2018.

(b) Ind AS 21 - The effect of changes in Foreign Exchange Rates:

The amendment clarifies on the accounting of transactions that include the receipt or payment of advance consideration in a foreign currency. The appendix explains that the date of the transaction, for the purpose of determining the exchange rate, is the date of initial recognition of the non-monetary prepayment asset or deferred income liability. If there are multiple payments or receipts in advance, a date of transaction is established for each payment or receipt. The Company is evaluating the impact of this amendment on its financial statements.

4.13 Other Income:

Other income for the financial year ended 31st March, 2018 includes reversal of earlier yearsRs, provision of Rs, 9.10 Crore related to contribution towards District Mineral Fund (DMF) under the Mines and Mineral (Development and Regulation) Amendment Act, 2015, on the basis of the Supreme Court Judgment dated 13th October, 2017.

4.14 Previous year's figures have been regrouped/ reclassified to conform to current year's presentation.

4.15 Figures less than ' 50,000 have been shown at actual, wherever statutorily required to be disclosed, as the figures have been rounded off to the nearest lakh.