Shri Vile Parle Kelavani Mandal’s

Narsee Monjee College of Commerce and Economics (Autonomous)

A.Y 2022-2023
Name of the Course: Management Accounting and Auditing - I
S.Y.B.COM
Semester - III

Title of the Project/Assignment

Case Study of Grasim Limited

Submitted by:

Sr. Full name of the SAP ID Division Contact Marks

No. learners Number Roll No. Number
1 Rahil Shah 45208210143 F026 8879768255
2 Reeyan Shah 45208210223 F027 9820837770
3 Rutvi Shah 45208210458 F028 9082096257
4 Saakshar Shah 45208210744 F029 9324228122
5 Saiyam Shah 45208210132 F030 9867121462

Teacher in Charge: MR SHEZAD LALANI

 Table of Contents

Sr. No Particulars Pages

1 Introduction 3
2 History of Company 4
3 Income Statement & Ratio 5-8
4 Conclusion & Comment 9
5

Plagiarism Report
 Introduction

The phrase “profit and loss” (P&L) statement” refers to a financial statement that lists
the receipts, outlays, and costs for a given time frame, typically a quarter or fiscal year. These
documents reveal if a business can produce profit by raising sales, cutting expenses, or doing
both. P&L statements are frequently displayed using the cash or accrual method. P&L
statements are used by investors and corporate managers to assess a company’s financial
condition.

Along with the balance sheet and the cash flow statement, the P&L statement is one
of the three financial statements that every publicly traded company releases on a quarterly
and annual basis. Given that it displays the amount of profit or loss a business made, it is
frequently the most well-known and frequent financial statement in a business plan.

P&L statements are also known as the following:

 Statement of profit and loss

 Statement of operations
 Statement of financial results or income
 Earnings statement
 Expense statement
 Income statement

Vertical Income statement is a detailed income statement which details the various
income sources according to their importance and shows a relative figure to a
comparative year/quarter/ time period taken into consideration. It further shows a column
indicating increase or decrease in current period with respect to the period taken into
consideration, also showing it on a percentage basis taking the period taken as
comparison as the denominator.
 Grasim Industries Limited
A manufacturing business with its headquarters in Mumbai is called Grasim Industries
Limited. Since its founding in 1947 as a textile manufacturer, Grasim has expanded into a
variety of industries, including cement and financial services through its subsidiaries
UltraTech Cement and Aditya Birla Capital, as well as textile raw materials like viscose
staple fibre (VSF) and viscose filament yarn, chemicals, and insulators. The business belongs
to the Aditya Birla Group.
With a market share of roughly 24%, Grasim is the biggest producer of viscose rayon fibre
worldwide.15% of the group’s total revenue comes from textiles and related items.
In 1947, Grasim Industries Limited was established. The Aditya Birla Group’s first business
outside of India was Indo-Thai Synthetics Company Ltd, which was established in Thailand
in 1969 and began operations in 1970.
P.T. Elegant Textiles was established by the Aditya Birla Group in Indonesia in 1973. The
second firm in Thailand to operate in viscose rayon staple fibre, Thai Rayon was founded in
1974.
In 1974, the Aditya Birla Group acquired Century Textiles Co. Ltd., a weaving and dyeing
facility that produced and exported a variety of synthetic fabrics. Incorporated in 1979, PT
Sunrise Bumi Textiles exports yarn to over 30 nations across 6 continents.
Indonesian company P.T Indo Bharat Rayon, founded in 1980, manufactures viscose staple
fibre. Thai Polyphosphates and Chemicals, which was founded in Thailand in 1984 to make
sodium phosphates, later merged in 1995 with Thai Sulphites and Chemicals Company
Limited and 1992 with Thai Epoxy and Allied Products Company Limited to establish Aditya
Birla Chemicals Ltd. This business provides products to industries like food, textiles,
electrical and electronic equipment, composite materials, leather, plastics, and autos. In 1995,
PT Indo Liberty Textiles was established with the goal of producing synthetic spun yarn.
The company’s operations in its Mavoor facility in 1985 encountered controversy after it shut
down, initially temporarily and then ultimately permanently.
Following the termination of the Multi-Fiber Arrangement, the textile industry became the
primary emphasis in the late 1990s and later (MFA).
The Aditya Birla Group and Tembec, Canada’s joint venture, AV Cell Inc., began operations
in 1998 with the goal of producing softwood and hardwood pulp for internal use by the
Group’s various divisions.
In 2012, Grasim Industries Ltd. And Tembec, Canada bought the manufacturer of dissolving
pulp AV Nackawic Inc.

INCOME STATEMENT
 Particulars Amount (in Cr. Rs.)

Revenue from Operations 12,386.36

Less: Returns Nil
Net Sales 12,386.36

Less: Cost of Production

5) Direct Expenses
Cost of Power and Fuel 2075.99

Cost of Materials consumed 5215.57

Purchases of Stock in Trade 56.45

Cost of Goods Sold (COGS) 7348.01

Gross Profit 5038.35

Less: Operating Expenses

Employee Benefits Expense 1391.29

Depreciation and Amortization 828.17

Finance costs 235.95

Less: Other Expenses 1808.88

Total Operating Expenses (excluding interest) 4264.29

Operating profit before interest 774.06

Less: Interest Paid 308.77

Net Profit after Interest 4729.58

Net Non Operating Income

228.83
Dividend Income
58.5
Interest Income
50.24
Gain on Investment
176.11
 Other Income
5243.26
Net Profit Before Tax

COMPUTATIONS

5) Cost of Goods Sold (COGS)

= Costs directly related to manufacturing the goods the company sells in a period

= Cost of power and fuel + Cost of materials consumed + Purchases of Stock in trade

= 2075.99 + 5215.57 + 56.45

= Rs.7348.01 Cr

2) Gross Profit Ratio

Gross Profit = Net Sales- COGS

= 12,386.36 – 7348.01

= Rs. 5038.35 Cr

Gross Profit Ratio = Gross Profit / Net Sales

= 5038.35 / 12,386.36

= 0.4068 or 40.68%
3) Operating Profit Ratio

Operating Profit = Net Profit + Non operating expenses – Non operating incomes

= Gross Profit – Operating expenses

= 5083.35 – 4264.29

= 774.06

Operating Profit Ratio = Operating Profit / Net Sales

= 774.06 / 12386.36

= 0.0625 or 6.25%

4) Operating Expense Ratio

= Operating Expenses – Depreciation / Revenue

= 4264.29 – 828.17 / 12386.36

= 0.2774 or 27.74%

5) Net Profit Ratio

= Net Profit / Total Sales

= 5243.26 / 12386.36

= 0.4233 or 42.33%

COMMENT & CONCLUSION

DETAILS OF GRASIM LTD'S RELATIVE PERFORMANCE FOR 2020–2021
The turbulent last few weeks of the fiscal year had an impact on Grasim Ltd's performance in 
FY20-21. Grasim showed incredible fortitude in this a time of unrest 
This was partially caused by its varied business mix and overall soundness a balance sheet.
Let's take a look at the company's comprehensive performance assessment for the fiscal years 
FY20-21.
According to Grasim's standalone financial statements for FY21, revenues were $12,206.95 c
r.15,856.41 cr in FY20, demonstrating a consistent performance. 
Other costs typically include:Noncore activities of the corporation accounted for $1,042.58 bi
llion in FY21 and increased.This entails costs and losses associated with selling fixed assets.
When Grasim Ltd. not keep track of unusual events. The net profit loss from ceasing
operations was reported, indicating that the company's operations have been sold off or
discontinued. The decline in value and Amortization increased, which suggests a marginal
decline in net income. Employee Benefits include any types of payment made by an
employer to an employee other than salary and salary, which demonstrates a minor change
from FY20. In addition, the consolidated financial accounts of Grasim showed revenues of
Rs. 797,250 m. more than the Rs 790,703 m recorded in FY20, an increase of 0.8%. in FY17
to Rs 328,374 million in FY18 In FY21, Grasim's revenue climbed to 797,250 m. Over the
previous five years, Grasim's sales climbed at a CAGR of 24.8%. The net profit for Grasim in
FY21 was Rs 67,975 m, up 11.9% from the Rs 60,764 m reported in FY20.

Grasim's Analysis of The Income Statement: Operating income increased year over year
(YoY) during the year which means that the company’s management is generating more
revenue while controlling expenses, production costs and overheads. During the fiscal year,
the company's operating profit climbed by 16.3% YoY. Operating profit margins decreased
in FY21. Finance costs declined by 16.9% YoY while depreciation charges climbed by 0.7%.
Other income increased 8.6% YoY which means the company is generating incomes from
sources other than the company’s main business such as interest, rent and gains from the sale
of fixed asset. The year's net profit increased by 11.9% YoY. Net profit margins increased
from 7.8% in FY20 to 8.6% in FY21 throughout the course of the year. 9 Grasim’s Analysis
of the Balance Sheet: The company's current liabilities for the fiscal year (FY) 21 increased
by 11.6% to Rs 520 billion from Rs 466 billion in the prior year. The long-term debt
decreased by Rs 525 billion from Rs 587 billion in FY20, or by 10.6% which shows it is
becoming progressively less dependent and could help a business in the long run. In FY21,
current assets increased by 15% to reach Rs 598 billion which indicates that it is able to meet
its short-term obligations, while fixed assets increased by 8% to reach Rs 2,071 billion.
Overall, the assets and liabilities totaled Rs. 2,669 billion in FY21 compared to Rs. 2,442
billion in FY20, representing a 9% increase. This demonstrates that the business has
recovered more powerfully from the global financial crisis and has kept its long-term
competitive advantage, which is the result of a carefully calibrated strategy of client
orientation, cost optimization, and product development