TRIBUTE TO A VISIONARY AND A PASSIONATE ENTREPRENEUR Mr. Aditya Vikram Birla (14.11.1943 - 01.10.1995) We live by his values. Integrity, Commitment, Passion, Seamlessness and Speed. THE CHairman’s LETTER TO THE SHAREHOLDERS Growth in the emerging markets is pegged at 4.5%, driven largely by China, India and the ASEAN region. Dear Shareholders, Global Economy The global economy continued to be subdued in 2016. The slowdown in the advanced economies of the West adversely impacted growth levels, resulting in the slowing of the world economic growth to 3.1% from 3.4% in the earlier year. The growth in emerging markets and developing economies was encouraging. However, China and India experienced a deceleration. Financial markets reflected a broad uptrend, notwithstanding Brexit and the rate hikes by the US Fed. 01-27 CORPORATE OVERVIEW FINANCIAL HIGHLIGHTS STATUTORY REPORTS FINANCIAL STATEMENTS Recent data reveals that the global That said, if there is one subject that needs The merger of Aditya Birla Nuvo Limited economy is gaining momentum. PMIs greater attention on the government’s (ABNL) with your Company, and the (Purchasing Managers’ Indexes), radar for the ensuing years, it is the subsequent de-merger and listing of accelerating trade flows and better revival of investment activity and creation financial service business as approved by business and consumer confidence are of quality jobs in large measure. The you is a major milestone. This merger has the key pointers. The IMF has projected Government is seized of these issues. created a mega entity in manufacturing global growth to notch up to 3.5% in The Government has taken many steps, and service businesses commanding 2017 from 3.1% last year. Growth in including a sharp focus on improving leadership position across the textiles, the advanced economies is estimated at ease of doing business, speeding of cement, chemical, financial services and 2%, with US growth at 2.3%, the Euro green clearances and stepping up telecom sectors. Merger of ABNL with area at 1.7% and Japan at 1.2%. Growth public sector outlays for infrastructure. I your Company brings in fast growing in the emerging markets is pegged at believe, it is a matter of time before the sectors such as financial and telecom 4.5%, driven largely by China, India and private sector investments pick up – as services in your Company’s fold. Very the ASEAN region. Latin America is NPAs are resolved and corporate balance strong balance sheet of your Company expected to grow only 1.1%, affected by sheets are deleveraged. will enable faster growth of the financial the weak trend in Brazil. services business. Listing of financial service businesses envisaged by Q2 of Indian Economy Your Company’s Performance current financial year will unlock value for India is on a roll. There is a buzz about I am pleased to share with you that this is a milestone year in the history of the combined set of shareholders post India, as it blazes forth as the fastest ABNL merger with your Company. growing economy in the world at 7.1%. your Company. Established in 1947, for The trade deficit in 2016-17 was USD 106 70 years now, your Company has been UltraTech has also marked a major billion, lower by 11% over the previous engaged in the task of servicing the milestone during the year. Under duly year. The current account deficit has needs of the people of our nation, through approved scheme of arrangement been significantly pared. India’s foreign a multitude of products, coupled with between Jaiprakash Associate Ltd. (JAL) exchange reserves as at March end projects that take the country’s economy and Jaiprakash Cement Corporation 2017 were USD 370 billion. Investors ahead. Your Company’s commitment as Ltd. (JCCL), a wholly owned subsidiary are bullish. Foreign investment flows, a nation builder continues relentlessly. of JAL, UltraTech has completed the which were at over USD 60 billion in FY- Your Company recorded a consolidated acquisition of the cement plants of JAL 17 are scaling new records. Markets are revenue of USD 6.14 Billion (` 41,195 and JCCL, located in Madhya Pradesh, buoyant. Stock index is at a historic peak. Crore) in the financial year 2016-17. Uttar Pradesh, Himachal Pradesh, India’s global ranking has jumped up in EBITDA at USD 1.24 Billion (` 8,333 Uttarakhand and Andhra Pradesh with competitiveness and on the innovation Crore) was higher by 18% compared a total capacity of 21.20 MTPA at an index. to last year. All three main businesses enterprise value of ` 16,189 Crore. The various initiatives and reforms of the of your Company namely, Pulp & Fibre, Modi Government have built the platform Chemicals and Cement have performed for a quantum leap ahead. High impact well, seen in the backdrop of economic national projects, coming to grips with slowdown witnessed in the second half structural issues, which were holding of the year. back the country’s progress, innovative approaches in policy making – have Strategic moves collectively contributed in driving India on The big-bold strategic initiative by your India’s global ranking a high growth trajectory. Going forward Company during the year and that of its has jumped up in the abiding sense is one of immense cement subsidiary, UltraTech Cement competitiveness and optimism and confidence in the future Ltd. (UltraTech) have catapulted your with the nation slated to grow at 7.5% Company in a different league in terms on the innovation to 8%. India’s narrative is unmatchable. of scale, size and scope of operations. index. Grasim Industries Limited 02 Annual Report 2016-17 GRASIM This move of UltraTech will lead to Pulp & Fibre JVs: The overseas Pulp & geographic market expansion, especially Fibre Joint Ventures of your Company in the central India, for UltraTech. With have recorded all round improvement this acquisition and completion of performance during the year. Especially, expansion plans under implementation, the performance of Birla Jingwei Fibre the total capacity of UltraTech will stand Co. Ltd., China has been outstanding. UltraTech has augmented to 95.3 MTPA including its Share of your Company in the profit of completed the overseas operations. It is with great Birla Jingwei Fibre Co. Ltd. has grown pride I record that UltraTech is the fourth significantly from ` 1.2 Crore last year to acquisition of the largest cement player globally (excluding ` 35.6 Crore this year. On overall basis, cement plants of JAL the Chinese players) and the largest the Company’s share in Profit after Tax and JCCL, located in player in India by an even larger margin. of the operating Pulp & Fibre JV’s has increased from ` 45 Crore in last year to Madhya Pradesh, Uttar Business Performance ` 135 Crore during the year. Pradesh, Himachal Pulp & Fibre Business: Viscose Staple Pradesh, Uttarakhand Fibre (VSF) Business has continued Chemical Business: Chlor Alkali sector its focus on expanding the usage and witnessed subdued demand growth and Andhra Pradesh applications of VSF in the domestic during the year as the Caustic Soda as with a total capacity market through Liva initiative. The well as Chlorine consuming industries of 21.20 MTPA at an “Liva” brand for Company’s VSF based were impacted by high value currency products, launched in 2014-15 has been note replacement programme of the enterprise value of well established in the textile value chain Government. The business has recorded ` 16,189 Crore and is creating a huge pull for viscose a volume growth of 2% during the year. fibre in the market. The reach of Liva Epoxy Resins, a product of your Company has expanded manifolds, starting with is now well accepted by the user 16 brands & 2.1 million Liva tagged industries and it has recorded a volume garments in Autumn-Winter to 15 to growth of 24%. Similarly, chlorine value segment coupled with the absence 34 brands & 12.8 million Liva tagged added products have also recorded a of private sector capital expenditure, garments in Spring-Summer 17. This has volume growth of 15%. Focus on cost impacted cement demand. led to double digit growth in VSF demand reduction initiatives coupled with volume in India, VSF business has recently growth and high realization have resulted Against this backdrop, during FY 2016-17 launched brand Liva Crème, a premium into 13% increase in EBITDA from ` 747 UltraTech recorded net revenues of US$ variant of Liva to move up the value Crore (on like to like basis) last year to 3.78 Billion (` 25,375 Crore) and EBITDA ladder. On overall basis, the business ` 842 Crore during the year. The capacity of US$ 0.873 Billion (` 5,861 Crore) a rise has recorded a volume growth of 6% expansion plans at different plants are of 9%. during the year and EBIDTA growth of progressing well and by end of the 56% from ` 923 Crore in FY 2015-16 current financial year, capacity of Caustic A big thank you to all of our employees: to ` 1,439 Crore in the FY 2016-17, on Soda will cross 1 MTPA, the largest in Organisational agility, excellence in the back of better realizations in line India and among top 3 in Asia. The execution, customer centricity and cost with global prices, improved operating business team is continuing its focus on optimization are a given. I believe to efficiencies and higher specialty share expanding the markets for Chlorine value drive business growth in a sustainable in the product mix. The business team added products. manner, the criticality of our people – our is actively working on cost effective intellectual capital, is beyond expression.