Grasim Industries Limited - iias.in · PDF filePROXY SERVICES 14 September 2011 Grasim Industries Limited 3 | P a g e SUMMARY and IIAS Recommendations Grasim Industries Limited

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14 September 2011 Grasim Industries Limited 1 | P a g e

Grasim Industries Limited

Sector: Diversified Ticker: Grasim Index: BSE100/NIFTY

Meeting Type: Annual General Meeting Meeting date: 17 September 2011 Meeting Time: 12.30 PM Proxy deadline: 15 September 2011, 12.30 PM Notice date: 30 July 2011 Meeting Venue: Grasim Staff Club, Birlagram, Nagda, District Ujjain, Madhya Pradesh - 456 331

Financial Profile Grasim Industries Ltd v/s Sensex v/s Nifty (3 year price performance)

In Rs. Cr (YE) FY09 FY10 FY11

Net Sales 18,404 19,933 21,269

Growth Y/Y 8% 8% 7%

EBITDA 4,779 6,322 5,397

Growth Y/Y -12% 32% -15%

EBITDA margin 26% 32% 25%

PAT 2,187 3,096 2,279

Growth Y/Y -24% 42% -26%

PAT Margin 12% 16% 11%

Gross cash acrruals 3,053 4,090 3,417

ROCE 32% 29% 20%

ROE 19% 25% 16%

Shareholder Equity 11,570 12,525 14,573

Loan funds 5,916 5,599 6,783

EBIT 5,645 5,328 4,258

Source: Company filings and IIAS research Source: Reuters

EXECUTIVE SUMMARY:

Resolution Brief

Ord/Spl*

Description of resolution IIAS Recommends

1.

Consider and adopt the Financial Statements as of 31 March 2011

Ord.

Consider and adopt: the Balance Sheet as at 31 March 2011; Profit and Loss Account for FY11; and the reports of the Directors and the Auditors of the company

FOR

2. Declaration of Dividend

Ord. To declare a dividend on equity shares FOR

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3. Re-appointment of a Director.

Ord. To re-appoint ML Apte, who retires by rotation

AGAINST Tenure on board

4. Re-appointment of a Director

Ord. To re-appoint RC Bhargava, who retires by rotation

AGAINST Tenure on board

5. Re-appointment of Director

Ord. To re-appoint Mrs. Rajashree Birla, who retires by rotation

FOR

6. Re-appointment of Director

Ord. To re-appoint Cyril Shroff, who retires by rotation

AGAINST Attendance in board meetings

7.

Re-appointment and remuneration of Company Auditors

Ord.

Re-appointment and remuneration of GP Kapadia & Co and Deloitte Haskins & Sells as Joint Statutory Auditors of the company to hold office from the conclusion of this annual general meeting to the conclusion of the next annual general meeting of the Company.

AGAINST

Length of GP Kapadia & Co’s engagement

8.

Re-appointment and remuneration of Branch Auditors

Ord.

Re-appointment and remuneration of Vidyarthi & Sons as Branch Auditors of the company to hold office from the conclusion of this annual general meeting to the conclusion of the next annual general meeting of the Company.

FOR

9. Appointment of Manager of the company

Spl.

Appointment of Adesh Gupta, Whole-Time Director and CFO of the company, as the Manager of the Company with effect from 22 March 2011 till 2 October 2014

FOR

10.

Remuneration of Whole-time Director

Spl.

Remuneration of KK Maheshwari, Whole-time Director with effect from 1 January, 2011 to 31 December 2014.

FOR

11. Remuneration of Directors.

Spl.

Commission to the Directors of the Company (other than the Whole-Time Directors), for a period of five years commencing from 1 April 2011, at a rate not exceeding one per cent per annum of the net profits of the company

FOR

*Ord/Spl: Ordinary/Special resolution.

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SUMMARY and IIAS Recommendations

Grasim Industries Limited (Grasim) has 12 directors on board, six are independent directors including LIC’s nominee. Of the remainder six, two are whole-time directors and two who were whole-time directors of the company till very recently (- the last three years, consequently IIAS does not treat them as independent). The remainder two represents the ‘promoter’ group. Three independent directors are in their mid to late seventies. ML Apte, 78, has been on the board for close to 25 years whereas BV Bhargava, 75, has been on the board for over 14 years. RC Bhargava, 77, and Cyril Shroff have served the board for over 10 years. Cyril Shroff has attended only one of the four board meetings in FY11 and two out of five meetings in each of the previous two years. IIAS would like the company to announce its policy regarding the number of years its directors will serve on the board. Although there is no statutory limit on the age of directors, IIAS would like Grasim to put in place a formal policy for the retirement age of whole-time directors as also non-executive directors. The company currently does not have a remuneration committee. We recommend Grasim appoints a remuneration committee. IIAS recommends that companies should follow a policy of rotation of audit firms every six years, with the change in the audit partner every third year. Attendance of the directors at the annual general meeting is a concern and IIAS would like all directors to attend this.

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Resolution and IIAS recommendations: Resolution 1- Adoption of Accounts: To consider and adopt the financial statements for the financial year 2011, and the reports of Board of Directors and Auditors attached thereon IIAS Recommends: FOR The Auditor’s report on the accounts for FY11 does not contain any qualifications. The auditor’s report mentions ~ Rs.29 cr in dispute with the Government authorities under the various acts of sales tax and value added act, central excise act, customs act, service tax under finance act and the cess act. The amount under dispute is not significant when compared to the net-worth of the company at ~ Rs.14,573 cr as at the end of 31 March 2011 (Consolidated level). Resolution 2: Declaration of Dividend: To declare a dividend on equity shares IIAS Recommends: FOR Grasim Industries Limited does not have a stated dividend policy. The company has proposed a dividend of Rs.20 per share (- lower than Rs.30 per share, paid in the previous year). Although the per share dividend has gone down, the payout ratio has increased from 15% in FY10 to 17% in FY11 (at a standalone level):

The gross cash accruals has fallen from Rs.2,443 cr in FY10 to Rs.1,358 cr in FY11 (fall by 44%)

The ROE has fallen from 29.3% in FY10 to 14.5% in FY11, and

Higher cash was utilized in financing utilities (Rs.575 cr) resulting in Rs.1.3 cr of decrease in cash and cash equivalents for FY11

Grasim invested its cash earnings from operations. It made investments of Rs.595 cr of which Rs.484 cr was towards units in debt schemes of various mutual funds. The company has also repaid loans worth Rs.224 cr in FY11. The company has close to Rs.7,000 cr as investments (non-strategic), on its balance sheet, a part of which will be utilized towards capex announced. Thus given the utilization of cash we believe that the dividend payout is appropriate ( - refer table 1).

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Table 1: Select Ratios All figures in Rs Cr FY10 FY11

Profit after Tax 2,092 1,182

Proposed Dividend 275 183

Corporate Tax on Dividend 34 14

Total Distribution 309 197

Payout ratio % 15% 17%

Net cash used in investing activities

-1,232 -433

Net purchase of fixed assets 704.81 -43

Net purchase of fixed assets (consolidated level)

1,455 1,433

Net cash from financing Activities

-670 -575

Cash and Bank Balances 16 15

Investments (non-strategic) 6325 6910

Loan Funds 1,038 814

Shareholders’ Equity 7,145 8,134

ROE %* 29% 15%

*Based on year-end balances.

Resolution 3 - Re-appointment of Director, ML Apte (Independent) To re-appoint ML Apte, who retires by rotation

IIAS Recommends: AGAINST ML Apte, 78, is an independent director at Grasim Industries Limited. He attended three of the four board meetings during the FY11. ML Apte is an industrialist. He holds a Bachelor of Arts from Elphinstone College, Mumbai University. He has been on the board for close to 25 years and holds 130 equity shares as of 31 March 2011. He is also a member of the audit and ESOS compensation committee at Grasim Industries Limited. ML Apte was paid a compensation of ~ Rs.16 lakhs for FY11 (inclusive of Rs.15 lakhs as commissions). He is on the board of seven other listed companies and a member of five committees; including audit, investors grievance and share transfer committee. See box below. Considering his tenure served on board, close to 25 years, we recommend voting AGAINST this resolution. (Refer to Table 2 for details on directors)

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Directorships: i. Listed Companies: Apte Amalgamations Ltd., Bajaj Hindustan Ltd., Kulkarni Power Tools Ltd., Standard Industries Ltd., The Bombay Burmah Trading Corpn. Ltd., The Raja Bahadur International Ltd., Zodiac Clothing Co. Ltd., Grasim Industries Ltd. Membership in Committees: i. Audit Standard Industries Ltd., The Bombay Burmah Trading Corpn. Ltd., Zodiac Clothing Co. Ltd. and Grasim Industries Ltd. ii. Shareholders/Investors grievance/Share transfer committee: The Bombay Burmah Trading Corpn. Ltd., Zodiac Clothing Co. Ltd. iii. Employee Stock Option Scheme compensation committee: Grasim Industries Ltd.

Resolution 4 - Re-appointment of Director, RC Bhargava (Independent) To re-appoint RC Bhargava, who retires by rotation IIAS Recommends: AGAINST RC Bhargava, 77, is an independent director at Grasim Industries Ltd. He has been on the board for over 11 years. RC Bhargava is an M.A, Developmental Economics from Williams College, USA and a master in science (Mathematics) from Allahabad University. He served as the managing director of Maruti Suzuki since 1985 and as its chairman and managing director of Maruti Suzuki India Ltd since 1990. He is currently Maruti Suzuki’s non-executive chairman. (Refer to Table 2 for details on directors) He is on the board of 11 companies (six listed Indian companies, four unlisted Indian companies and one foreign company). See box below.

Directorships: i. Listed Indian Companies: Dabur India Ltd., Grasim Industries Ltd., Idea Cellular Ltd., Maruti Suzuki India Ltd., Polaris Software Lab Ltd., Ultratech Cement ltd. ii. Unlisted Indian Companies: Infrastructure Leasing & Financial Services Ltd., Optimus Global Services Ltd., RCB Consulting (P).Ltd., Thomson Press (India) Ltd. iii. Foreign Companies: Taj Hotels and resorts Ltd.

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He has attended all the board meetings held in FY11 and holds 227 shares in the company as of 31 March 2011. He was paid a remuneration of ~ Rs.18 lakhs (including Rs.17 lakhs as commission) for FY11. RC Bhargava is 77 years of age. Considering his tenure on the board for over 11 years, we recommend voting AGAINST this resolution.

Resolution 5: Re-appointment Director, Mrs. Rajashree Birla (Non-executive) To re-appoint Rajashree Birla, who retires by rotation

IIAS Recommends: FOR Mrs. Rajashree Birla, 65, is a promoter and non-executive director of Grasim Industries Ltd. She is the wife of (Late) AV Birla, former chairman of the Aditya Birla Group. She holds 72,280 equity shares of the company as of 31 March 2011. She is a Bachelor of Arts from Calcutta University. Mrs. Birla attended two of the four board meeting in FY11. (Refer table 2 for more details on directors) Mrs. Birla is a director on the board of 32 companies (of these five are listed companies, 16 are unlisted Indian companies and 11 are foreign companies. Shareholders should note that these are ‘group’ companies). She has served on board of Grasim Industries Ltd. for over 15 years. Mrs. Birla was paid a remuneration of ~ Rs.48.4 lakhs in FY 11 (- of this almost the entire portion, Rs.48 lakhs, was paid as commissions).

Directorships: i. Listed Companies: Aditya Birla Nuvo Ltd., Grasim Indusatries Ltd., Hindalco Industries Ltd., Idea Cellular Ltd., Ultratech Cement Ltd. ii. Unlisted Indian Companies/Organisations: Aditya birla health Services Ltd., Birla Group Holdings (P) Ltd., Essel Mining & Industries Ltd., GD Birla Medical Research and Education Foundation, Global Holding (P) Ltd., Gwalior Properties & Estates (P) Ltd., IGH Holdings (P) Ltd., Kanishtha Finance & Investments (P) Ltd., Rajratna Holdings (P) Ltd., TGS Investment & Trade (P) Ltd., Trapti Trading & Investments Ltd., Turquoise Investments & Finance (P) Ltd., Vaibhav Holdings (P) Ltd., Vaibhav Medical & Education Foundation, Vikram Holdings (P) Ltd. and Seshasayee Properties (P) Ltd. iii. Foreign Companies: Aditya Birla Chemicals (Thailand) Ltd.; Alexandria Carbon Black Co.,Sae Egypt; Indo-Phil Textile Mills Inc., Philippines; Indo-Thai Synthetics Co..Ltd, Thailand; P.T.Elegant Textile Industry, Indonesia; P.T.Indo Bharat Rayon, Indonesia; Thai Acrylic Fiber Co..Ltd, Thailand; Thai Carbon Black Public Co..Ltd, Thailand; Thai Peroxide Co..Ltd, Thailand; Thai Polyphosphate & Chemicals Co .Ltd., Thailand; Thai Rayon Public Co.Ltd., Thailand

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Table 2: Details of the Board of Directors:

Sl.No Name of Director Director Type/ Designation

on Board

Independent Director

Relationship with another

Director Age Occupation

First date of Appointment as Director

No.of meetings attended

% of meetings attended

No.of directorships

in listed companies

1 Kumar Mangalam

Birla Non-Executive

Chairman No Yes 44 Industrialist 14-10-1992 4 100% 6

2 Madhav Laxman

Apte Non-Executive

Director Yes No 78 Industrialist 06-05-1987 3 75% 8

3 Bhupendranath

Vidyanath Bhargava

Non-Executive Director

Yes No 75 Financial

Consultant 26-03-1997 4 100% 5

4 Ravindra Chandra

Bhargava Non-Executive

Director Yes No 77

General Management

25-07-2000 4 100% 6

5 Ms. Rajashree

Birla Non-Executive

Director No Yes 65 Industrialist 14-03-1996 2 50% 5

6 Arun Kanti Dasgupta

Nominee Director

Yes No 59 Managing Director,

Life Insurance Corp. of India

23-10-2008 3 75% 2

7 Adesh Kumar

Gupta Whole-time

Director No No 55

Whole-time Director & Chief Financial Officer,

Manager

03-10-2009 4 100% 2

8 Shailendra Kumar

Jain Non-Executive

Director No No 67

Company Executive

01-12-2003 3 75% 2

9 Krishna Kishore

Maheshwari Whole-time

Director No No 56

Whole-time Director

20-05-2010 4 100% 2

10 Dwarka Dass

Rathi Non-Executive

Director No No 64

Company Executive

01-08-2004 4 100% 2

11 Cyril Suresh

Shroff Non-Executive

Director Yes No 51

Solicitor & Advocate

25-07-2000 1 25% 1

12 Dr. Thomas M.

Connelly Non-Executive

Director Yes No 58

Exec. VP – Du Pont Automotive

Co 20-08-2010 1 50% 1

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Resolution 6: Re-appointment Director, Cyril Shroff (Non-executive) To re-appoint Cyril Shroff, who retires by rotation. IIAS Recommends: AGAINST Cyril Shroff, 51, is an independent director at Grasim Industries Ltd. He is also the Managing Partner of the law firm - Amarchand & Mangaldas & Suresh A.Shroff & Co. He is not on the board of any other company. Cyril Shroff, a bachelor in commerce and law, has been on the board for over 11 years and holds 137 shares of the company as of 31 March 2011. Cyril Shroff was paid a remuneration of ~ Rs.6 lakhs (Including commissions of Rs.6 lakhs) He has attended only one of the four board meetings in FY11. He attended two of the five meetings in each of the previous two years. Given his poor attendance, we recommend voting against the resolution.

Year Total board meetings

No. of meetings held No. of meetings attended % of Attendance

FY 11 4 1 25%

FY 10 5 2 40%

FY 09 5 2 40%

Resolution 7: Re-appointment and remuneration of joint statutory auditors, GP Kapadia & Co and Deloitte Haskins & Sells. Re-appointment and remuneration of GP Kapadia & Co and Deloitte Haskins & Sells as Joint Statutory Auditors of the company to hold office from the conclusion of this annual general meeting to the conclusion of the next annual general meeting of the Company at such remuneration to each of them, plus service tax as applicable and reimbursement of actual out of pocket expenses as may be incurred in the performance of their duties, to be fixed by the board. IIAS Recommends: AGAINST GP Kapadia & Co and Deloitte Haskins & Sells (Deloitte) have been Joint Statutory Auditors of Grasim Industries Ltd since FY09. We believe GP Kapadia & Co. have been statutory auditors for over 20 years if not longer (- annual reports available on the company website archive back to FY00, and mention them as auditors). IIAS favours the institution of joint statutory auditors. Each serves as a check on the other and such appointments enable rotation of both - functions and signing partners; the rotating functions forces

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proper record-keeping as one firm hands over to the other. Appointing joint auditors is also better for ‘continuity’ as one of the firms is re-appointed and the other retires. IIAS recommends companies following a policy of rotation of audit firms every six years, with the change in the audit partner every third year. The analysis of the fees paid to Auditors for FY10 and FY11 shows that the Audit fees as a percentage of Total fees is 86% and 61% respectively (Refer table 3). Deloitte has been an auditor since 2009, and IIAS favors their re-appointment. However, given GP Kapadia & Company’s tenure as auditors we do not support their re-appointment. As the resolution is for re-appointing both firms, we recommend voting AGAINST this resolution. Table 3: Fees paid to statutory auditors: Audit and Audit related fees* (Rs Lakhs)

FY 10 FY 11

Audit Fee 61.0 38.0 Tax audit fee 2.6 2.5

For Certification and Other work 7.4 21.3

Reimbursement of Expenses 0.0 0.0

Total 71.0 61.8

Audit fees to Total fees (%) 85.9% 61.4%

*excluding service Tax

Resolution 8: Re-appointment and remuneration of branch auditors, Vidyarthi & Sons Re-appointment and remuneration of Vidyarthi & Sons as branch auditors of the company, to audit the Accounts of the Company’s Vikram Woollens Division (Malanpur, MP), to hold office from the conclusion of this annual general meeting to the conclusion of the next annual general meeting of the Company at such remuneration, plus service tax as applicable and reimbursement of actual out of pocket expenses as may be incurred in the performance of their duties, to be fixed by the board. IIAS Recommends: FOR Vidyarthi & Sons have been branch auditors of the company since FY08. IIAS recommends companies following a policy of rotation of auditing firms every six years, with the change in the audit partner every third year. For the last two financial years analysed, we find that the audit fees to total fees is only 10% for FY10 and 57% for FY11.

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Table 4: Fees paid to branch auditors

Audit and Audit related fees* (Rs Lakhs)

FY 10 FY 11

Audit Fee 0.75 0.75

Tax audit fee 0.3 0.3

For Certification and Other work 6.03 0.25

Reimbursement of Expenses 0.17 0.02

Total 7.25 1.32

Audit fees to Total fees (%) 10.34% 56.82%

*excluding service Tax

Resolution 9: Appointment of Manager of the company, Adesh Gupta Appointment of Adesh Gupta, Whole-Time Director and CFO of the company, as the Manager of the Company with effect from 22 March 2011 till 2 October 2014 without any additional payment in compensation. IIAS Recommends: FOR Adesh Gupta, 55, is a whole-time director and Chief financial officer of Grasim Industries Ltd since October, 2009 for a period of five years. He held 980 equity shares of the company as on 31 March 2011 and has attended all the board meeting in FY11. Adesh Gupta is a Chartered Accountant and Company Secretary. He has held many senior positions in the Aditya Birla Group mainly in Corporate Restructuring and Financial Services. He was paid a compensation of Rs.2.3 cr for the FY11 including performance linked bonuses. Apart from these, he was also granted employee stock options of 6,981 shares with an exercise price of Rs.1,440. He is on the board of 19 companies in the Aditya Birla group (Of these two are listed companies, 15 are Indian unlisted companies and two are foreign companies). See box below.

Directorships: i. Listed Companies: Grasim Industries Ltd., Ultratech Cement Ltd. ii. Unlisted Companies Aditya Birla Minacs Worldwide Ltd., Aditya Birla Telecom Ltd., Aditya Birla Trustee Co. (P) Ltd., Aditya Vikram Global Trading House Ltd., Birla Consultants Ltd., Birla Industrial Finance (India) Ltd., Birla Industrial Investments (India) Ltd., Birla Insurance Advisory & Broking Services Ltd., Birla Ngk Insulators (P) Ltd., Birla Technologies Ltd., Grasim Bhiwani Textiles Ltd., Laxminarayan Investments Ltd., PSI Data Systems Ltd., Samruddhi Swastik Trading & Investments Ltd., Sun God Trading & Investments Ltd iii. Foreign Companies: Birla Lao Pulp & Plantations Co.Ltd., Ultratech Cement Lanka (P) Ltd

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Resolution 10: Remuneration of Whole-time Director, KK Maheshwari Remuneration of KK Maheshwari, Whole-time Director with effect from 1 January 2011 to 31 December 2014. This is in partial modification of the Resolution passed by the members of the Company at the Annual General Meeting held on 20th August 2010 He shall be entitled to:

1) Basic Salary: upto an overall limit of Rs.25 lakhs per month 2) Special Allowance: upto an overall limit of Rs.30 lakhs per month 3) Performance Bonus linked: upto an overall limit of Rs.4 crores in a year as decided by the board

payable on a pro-rata basis either monthly or annually or partly monthly and partly annually. IIAS Recommends: FOR KK Maheshwari, 56, is a whole-time director at Grasim Industries Limited and was appointed on 20 May, 2010 for a period of five years. He has an M. Com degree and a fellow member of institute of chartered accountants of India. KK Maheshwari is on the board of eight companies in the Aditya Birla Group (- of these two are listed, three are unlisted Indian companies and three are foreign companies). He was paid a salary of Rs.3.6 cr for the period FY11 including benefits, bonuses etc. as against the ceiling of Rs.6.3 cr set vide resolution 10 in the annual general meeting held on 20 August 2010. The ceiling is now being revised Rs.10.6 cr. He holds 14 shares of the company as of 31 March 2011. He was granted employee stock options of 43,932

shares with an exercise price of Rs.1,440. He attended all the four board meetings of Grasim in FY11. (Please refer table 2 for more details on directors)

Resolution 11: Remuneration of Directors, (other than Whole-Time Directors) Commission to the directors of the Company (other than the Whole-Time Directors), for a period of five years commencing from 1 April, 2011, at a rate not exceeding one per cent per annum of the net profits of the company to be divisible amongst the Directors of the Company in such proportion and in such manner as may be decided by the Board

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IIAS Recommends: FOR

The board of Grasim Industries Ltd. currently has ten non-executive directors. The commissions paid to these directors for FY11 is detailed in table 5 below. Table 5: Commissions to directors

Name of Director Commissions (In Rs. lakhs)

Percentage paid

Kumar Mangalam Birla 970.0 88.2%

Mrs. Rajashree Birla 48.0 4.4%

ML Apte 15.0 1.4%

BV Bhargava 22.0 2.0%

RC Bhargava 17.0 1.5%

AK Dasgupta* 2.5 0.2%

Dr. Thomas Martin Connelly Jr. 1.0 0.1%

Cyril Shroff 6.0 0.5%

SG Subrahmanyan 8.0 0.7%

Shailendra K. Jain 8.5 0.8%

DD Rathi 2.0 0.2%

Total 1,100 100.0%

*Paid/Payable to Life Insurance Corporation of India.

As per the AGM held on 25th August, 2006, the shareholders had approved payment of commission not exceeding 1% per annum of the net profits of the Company to the Non-Executive Directors. According to the company’s annual report, the amount of commission payable is determined after assigning weightage to attendance, type and significance of the meetings to the overall functioning of the company. The company currently does not have a remuneration committee. We recommend Grasim set-up a remuneration committee to evaluate the contribution of each non-executive director towards achievement of the company’s targets.

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Disclaimer

This document has been prepared by Institutional Investor Advisory Services India Limited (IIAS). IIAS is a full service Institutional Shareholder Advisory Service Company. The information contained herein is from publicly available data or other sources believed to be reliable, but we do not represent that it is accurate or complete and it should not be relied on as such. IIAS shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. This document is provided for assistance only and is not intended to be and must not alone be taken as the basis for any Voting or investment decision. The user assumes the entire risk of any use made of this information. Each recipient of this document should make such investigation as it deems necessary to arrive at an independent evaluation of the individual resolutions which may affect their investment in the securities of companies referred to in this document (including the merits and risks involved). The discussions or views expressed may not be suitable for all investors. This information is strictly confidential and is being furnished to you solely for your information. This information should not be reproduced or redistributed or passed on directly or indirectly in any form to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject IIAS to any registration or licensing requirements within such jurisdiction. The distribution of this document in certain jurisdictions may be restricted by law, and persons in whose possession this document comes, should inform themselves about and observe, any such restrictions. The information given in this document is as of the date of this report and there can be no assurance that future results or events will be consistent with this information. This information is subject to change without any prior notice. IIAS reserves the right to make modifications and alterations to this statement as may be required from time to time. However, IIAS is under no obligation to update or keep the information current. Nevertheless, IIAS is committed to providing independent and transparent recommendation to its client and would be happy to provide any information in response to specific client queries. Neither IIAS nor any of its affiliates, group companies, directors, employees, agents or representatives shall be liable for any damages whether direct, indirect, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information. . The disclosures of interest statements incorporated in this document are provided solely to enhance the transparency and should not be treated as endorsement of the views expressed in the report. IIAS generally prohibits its analysts, persons reporting to analysts and their dependents from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover. The analyst for this report certifies that all of the views expressed in this report accurately reflect his or her personal views about the subject company or companies and its or their securities, and no part of his or her compensation was, is or will be, directly or indirectly related to specific recommendations or views expressed in this report. . The information provided in these reports remains, unless otherwise stated, the copyright of IIAS. All layout, design, original artwork, concepts and other Intellectual Properties, remains the property and copyright of IIAS and may not be used in any form or for any purpose whatsoever by any party without the express written permission of the copyright holders.

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Annexure 1

Shareholding pattern of the company: Shareholding Pattern (in %)

Particulars June-11 March-11 December-10

Promoter 25.6 25.5 25.5

FII 23.6 23.6 23.6

DII 17.8 18.2 19.6

Others 33.1 32.7 31.3

Total 100.0 100.0 100.0

Shareholding distribution June 2011:

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Annexure 2

Notice as given by the company:

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Grasim Industries Limited - iias.in · PDF filePROXY SERVICES 14 September 2011 Grasim Industries Limited 3 | P a g e SUMMARY and IIAS Recommendations Grasim Industries Limited