INTRODUCTION

Saint-Gobain Ltd is a subsidiary of Saint-Gobain, a French multinational corporation that

designs, manufactures, and distributes materials and solutions for the construction, mobility,
and industrial markets. It is one of the world's largest building materials companies, with
operations in 75 countries.

Saint-Gobain Ltd was established in India in 1957. The company has a strong presence in the
Indian market, with over 15,000 employees and 70 manufacturing facilities. It manufactures a
wide range of products, including glass, gypsum, insulation, roofing, and adhesives.

Saint-Gobain Ltd is committed to sustainable development. The company has set ambitious
targets to reduce its environmental impact and achieve carbon neutrality by 2050. It is also
working to develop innovative solutions that can help its customers reduce their
environmental footprint.

Here are some of Saint-Gobain Ltd key products and services:

 Glass: Saint-Gobain Ltd is a leading manufacturer of flat glass, automotive glass, and
container glass in India.
 Gypsum: Saint-Gypsum, a subsidiary of Saint-Gobain Ltd, is the largest manufacturer
of gypsum plasterboard in India.
 Insulation: Saint-Gobain Ltd manufactures a wide range of insulation products,
including glass wool, rockwool, and EPS.
 Roofing: Saint-Gobain Ltd is a leading manufacturer of roofing products, including
metal roofing, shingles, and roof tiles.
 Adhesives: Saint-Gobain Ltd manufactures a wide range of adhesives for the
construction and industrial markets.

Saint-Gobain Ltd products and services are used in a wide range of applications, including:

 Construction: Saint-Gobain Ltd products are used in the construction of new buildings
and the renovation of existing buildings.
 Automotive: Saint-Gobain Ltd glass products are used in the manufacture of
automobiles.
 Packaging: Saint-Gobain Ltd glass products are used in the manufacture of food and
beverage packaging.
 Industrial applications: Saint-Gobain Ltd products are used in a variety of industrial
applications, such as aerospace, energy, and healthcare.
Saint-Gobain Ltd is a major player in the Indian building materials market. The company's
products and services are used by a wide range of customers, including construction
companies, developers, architects, and individuals.

The company is committed to sustainable development and is working to develop innovative

solutions that can help its customers reduce their environmental footprint.

DIRECTORS

The following are the directors of Saint-Gobain Ltd according to 2023:

 Joseph Andrew Jude Pereira (Chairman)

 B Santhanam (Managing Director)

 Padmasudha Chandrasekhar

 Deepak Prabhakar Chindarkar

 Girish T Shajani (Co. Secretary & Compl. Officer)

Saint-Gobain Ltd is a subsidiary of Saint-Gobain, a French multinational corporation that

designs, manufactures, and distributes materials and solutions for the construction, mobility,
and industrial markets.It is one of the world's largest building materials companies, with
operations in 75 countries.

Saint-Gobain Ltd is a major player in the Indian building materials market. The company's
products and services are used by a wide range of customers, including construction
companies, developers, architects, and individuals.

The company is committed to sustainable development and is working to develop innovative

solutions that can help its customers reduce their environmental footprint.
SHARE HOLDING PATTERN

The shareholding pattern of Saint-Gobain Ltd as of August 31, 2023 is as follows:

 Promoters: 75.00%

 Retail and others: 24.71%

 Foreign institutional investors (FIIs): 0.29%

This means that the promoters of Saint-Gobain Ltd, which is the parent company Saint-
Gobain, hold the majority stake in the company.

The remaining shares are held by retail and institutional investors. The FII holding in the
company is relatively low.

The promoters of Saint-Gobain Ltd are committed to the long-term growth of the company.
They have a strong track record of investing in the company and supporting its growth
initiatives.

This makes the company a good investment for investors who are looking for a long-term
investment in the Indian building materials sector.

Significant accounting policies of the company

Accounting conventions followed /Accounting basis

Saint-Gobain Ltd follows the Indian Accounting Standards (Ind AS) for its accounting and
financial reporting. Ind AS are a set of accounting standards that are based on the
International Financial Reporting Standards (IFRS). IFRS are the most widely used
accounting standards in the world.

Saint-Gobain Ltd also follows the Companies Act, 2013 and the Securities and Exchange
Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. These
laws and regulations govern the way in which companies in India must prepare and file their
financial statements.
Here are some of the key accounting conventions that Saint-Gobain Ltd follows:

 Accrual basis of accounting: Saint-Gobain Ltd recognizes revenue and expenses on an

accrual basis. This means that revenue is recognized when it is earned, even if it has
not yet been received in cash. Expenses are recognized when they are incurred, even
if they have not yet been paid in cash.
 Going concern basis of accounting: Saint-Gobain Ltd prepares its financial statements
on a going concern basis. This means that the company assumes that it will continue
to operate in the foreseeable future. If the company did not believe that it would
continue to operate in the foreseeable future, it would be required to prepare its
financial statements on a liquidation basis.
 Historical cost principle: Saint-Gobain Ltd records its assets and liabilities at their
historical cost. Historical cost is the cost at which an asset was acquired or a liability
was incurred.
 Matching principle: Saint-Gobain Ltd matches revenue with the expenses that were
incurred to generate that revenue. This principle ensures that the company's financial
statements accurately reflect the performance of its business.

Saint-Gobain Ltd's financial statements are audited by a qualified independent auditor on an

annual basis.

Valuation of fixed assets/ intangible assets

Goodwill

In the first half of 2023, changes in Group structure corresponded mainly to the updated
measurement of the intangible assets and the remeasurement at fair value of property, plant
and equipment recognized in connection with the purchase price accounting for GCP Applied
Technologies, which led to a €220 million reduction in goodwill. The update to Kaycan's
purchase price accounting generated a €53 million increase in goodwill. Changes in Group
structure also include the impact of the acquisitions carried out in the first half of 2023.

Goodwill impairment losses were recognized for a total of €41 million against individual
assets during the period. The amount recorded under “Translation adjustments and
restatement for hyperinflation” primarily reflects the impacts of fluctuations in the
Norwegian krone, US dollar and pound sterling.

Other intangible assets

In the first half of 2023, changes in Group structure corresponded mainly to updates to the
adjustments to the purchase price accounting for customer relationships, brands and
intellectual property related to the GCP Applied Technologies acquisition, representing €249
million, €(132) million and €128 million, respectively. They also included updates to the
measurement of Kaycan's customer relationships, intellectual property and brands for a total
of €(121) million. The amount recorded under “Translation adjustments and restatement for
hyperinflation” primarily reflects the impacts of fluctuations in the US dollar.

Property, plant and equipment

In first-half 2023, changes in Group structure related mainly to adjustments to the purchase
price accounting for the acquisitions of GCP Applied Technologies and Kaycan, for €47
million and €78 million respectively. Impairment losses recognized against property, plant and
equipment amounted to €17 million. The amount recorded under “Translation adjustments
and restatement for hyperinflation” primarily reflects the impacts of fluctuations in the
Mexican peso, US dollar, Brazilian real, Chinese renminbi, Polish zloty, Russian ruble and
Norwegian krone.
Right-of-use assets linked to leases
At June 30, 2023, right-of-use assets linked to leases related mainly to land and buildings for
€2,315 million (€2,336 million at December 31, 2022) and to machinery and equipment for
€425 million (€416 million at December 31, 2022).
Impairment review
Property, plant and equipment, right-of-use assets, goodwill and other intangible assets are
tested for impairment on a regular basis and at least annually for the December 31 closing.
These tests consist of comparing the asset's carrying amount to its recoverable amount. The
recoverable amount is the higher of the asset's fair value less costs to sell and its value in use,
calculated by reference to the net present value of the future cash flows expected to be derived
from the asset.
For all CGUs, including those identified as sensitive at December 31, 2022, no evidence of
impairment or trigger events requiring an impairment test were identified based on an analysis
of first-half 2023 performances.
 Other Property, plant
intangible assets and equipment
(in EUR millions) Goodwill Right-of-use assets Total
At January 1, 2022

Gross value 13,399 4,904 32,000 6,894 57,197

Accumulated amortization and impairment (2,218) (2,199) (20,337) (3,935) (28,689)
NET VALUE 11,181 2,705 11,663 2,959 28,508
Changes during the period

Acquisitions 105 1,835 764 2,704

Disposals (8) (80) (4) (92)

Amortization (1) (252) (1,196) (716) (2,164)

Impairment (28) (77) (169) (10) (284)

Translation adjustments and restatement for hyperinflation
(37) (130) 84 (42) (125)
Changes in Group structure and other 1,742 1,683 254 46 3,725
Assets held for sale (228) (245) (473)

TOTAL CHANGES 1,677 1,321 500 (207) 3,291

At December 31, 2022

Gross value 14,304 5,924 33,151 6,422 59,801

Accumulated amortization and impairment (1,446) (1,898) (20,988) (3,670) (28,002)
Changes during the period

Acquisitions 35 581 441 1,057

Disposals (20) (6) (26)

Amortization (1) (150) (575) (340) (1,065)

Impairment (41) (1) (17) (3) (62)

Translation adjustments and restatement for hyperinflation (95) (35) (17) (59) (206)

Changes in Group structure and other (96) 126 137 167

Assets held for sale (3) (47) (45) (95)

TOTAL CHANGES (232) (28) 42 (12) (230)

At June 30, 2023

Gross value 14,072 5,993 33,484 6,281 59,830

Accumulated amortization and impairment (1,446) (1,995) (21,279) (3,541) (28,261)
NET VALUE 12,626 3,998 12,205 2,740 31,569

NET VALUE 12,626 3,998 12,205 2,740 31,569

Depreciation methods and impairment of assets

Depreciation methods

Saint-Gobain Ltd uses the following depreciation methods for its fixed assets:

 Straight-line method: This method allocates the cost of a fixed asset to the periods in
which it is used in equal amounts over its estimated useful life.
 Reducing balance method: This method allocates a higher percentage of the cost of a
fixed asset to the earlier years of its useful life.
 Units of production method: This method allocates the cost of a fixed asset to the
units of production that it is used to produce.

The depreciation method that is used for a particular fixed asset will depend on the type of
asset and the way in which it is used.

Impairment of assets

Saint-Gobain Ltd assesses the value of its assets on an annual basis to determine whether they
have been impaired. If an asset is impaired, Saint-Gobain Ltd will recognize an impairment
loss in its financial statements.

The impairment test involves comparing the carrying value of an asset to its recoverable
value. The recoverable value of an asset is the higher of its fair value less costs to sell or its
value in use.

If the carrying value of an asset is greater than its recoverable value, Saint-Gobain Ltd will
recognize an impairment loss. The impairment loss will be equal to the difference between
the carrying value and the recoverable value of the asset.

Examples from the final report of 2023 of Saint-Gobain Ltd

The following are some examples of the depreciation methods and impairment of assets that
are used in the final report of 2023 of Saint-Gobain Ltd:

 Depreciation of property, plant, and equipment: Saint-Gobain Ltd uses the straight-
line method to depreciate its property, plant, and equipment. The estimated useful
lives of the assets range from 5 to 50 years.
 Depreciation of intangible assets: Saint-Gobain Ltd uses the straight-line method to
depreciate its intangible assets. The estimated useful lives of the assets range from 5
to 20 years.
 Impairment of goodwill: Saint-Gobain Ltd assessed the impairment of its goodwill in
2023 and did not recognize any impairment losses.

Inventory policy
Saint-Gobain Ltd uses a perpetual inventory system. This means that the company maintains
a continuous record of the quantity and value of its inventory on hand. The perpetual
inventory system allows Saint-Gobain Ltd to track its inventory levels in real time and to
make informed decisions about production and sales.

The following are some of the key elements of Saint-Gobain Ltd's inventory policy:

 Valuation: Saint-Gobain Ltd values its inventory at the lower of cost or market value.
This means that the company never values its inventory at an amount that is greater
than what it could sell it for.
 Costing method: Saint-Gobain Ltd uses the weighted average cost method to value its
inventory. This method allocates the cost of inventory items to the units sold on a
weighted average basis.
 Physical inventory counts: Saint-Gobain Ltd conducts physical inventory counts on a
regular basis to ensure that the accuracy of its inventory records.

The inventory policy of Saint-Gobain Ltd is designed to provide the company with accurate
and timely information about its inventory levels. This information is essential for making
informed decisions about production, sales, and finance.

Here are some examples of how Saint-Gobain Ltd's inventory policy is applied in its half year
financial statement:

 Inventory valuation: Saint-Gobain Ltd values its inventory at the lower of cost or
market value. This means that the company may need to write down the value of its
inventory if the market value of its products declines.
 Costing method: Saint-Gobain Ltd uses the weighted average cost method to value its
inventory. This means that the cost of inventory items sold in a particular period is
calculated using the average cost of all inventory items held during the period.
 Physical inventory counts: Saint-Gobain Ltd conducts physical inventory counts on a
regular basis to ensure that the accuracy of its inventory records. If the physical
inventory count does not match the inventory records, Saint-Gobain Ltd will adjust its
inventory records to reflect the physical count.
Valuation of investments / derivative transactions
Saint-Gobain Ltd values its investments and derivative transactions in accordance with Indian
Accounting Standards (Ind AS). Ind AS are a set of accounting standards that are based on
the International Financial Reporting Standards (IFRS). IFRS are the most widely used
accounting standards in the world.

Here is a summary of how Saint-Gobain Ltd values its investments and derivative
transactions:

Investments
Saint-Gobain Ltd classifies its investments as either financial assets or non-financial assets.
Financial assets are investments that are held for the purpose of generating interest,
dividends, or other income. Non-financial assets are investments that are held for the purpose
of generating cash flows from the sale of the underlying asset or from the use of the
underlying asset to generate goods or services.

Financial assets are valued at fair value, less costs to sell. 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. Costs to sell are the incremental direct costs that are
expected to be incurred in the sale of an asset.

Non-financial assets are valued at cost, less impairment losses. Cost is the fair value of the
consideration paid or received when the asset was acquired. Impairment losses are recognized
when the carrying value of an asset is greater than its recoverable value. Recoverable value is
the higher of the fair value less costs to sell and the value in use.

Derivative transactions

Saint-Gobain Ltd classifies its derivative transactions as either financial assets or financial
liabilities. Financial assets are derivative transactions that give rise to a right to receive cash
or other financial assets from another party. Financial liabilities are derivative transactions
that give rise to an obligation to deliver cash or other financial assets to another party.

Financial assets and financial liabilities are valued at fair value. 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. For example:

Investments in listed securities: Saint-Gobain Ltd values its investments in listed securities at
fair value. Fair value is determined based on quoted market prices.

Translation of foreign currency items

Saint-Gobain Ltd translates its foreign currency items in accordance with Indian Accounting
Standards (Ind AS). Ind AS are a set of accounting standards that are based on the
International Financial Reporting Standards (IFRS). IFRS are the most widely used
accounting standards in the world.

Ind AS require Saint-Gobain Ltd to translate its foreign currency items at the following
exchange rates:

 Assets and liabilities denominated in foreign currencies are translated at the closing
rate at the end of the reporting period.
 Income and expenses denominated in foreign currencies are translated at the average
rate of exchange for the reporting period.
Translation gains and losses are recognized in the income statement in the period in which
they arise.

Example
Saint-Gobain Ltd has a subsidiary in the United States. At the end of the reporting period, the
US dollar is weaker against the Indian rupee than it was at the beginning of the reporting
period. As a result, the value of Saint-Gobain Ltd's investment in its US subsidiary will
increase in Indian rupees. Saint-Gobain Ltd will recognize the translation gain in its income
statement in the period in which it arises.

Research and development

Saint-Gobain Ltd expenses research and development costs in the period in which they are
incurred. This is in accordance with Ind AS.

Historical or current cost accounting

Saint-Gobain Ltd uses the historical cost convention to prepare its financial statements. This
means that the company records its assets and liabilities at the cost at which they were
acquired. Ind AS allow companies to use either the historical cost convention or the current
cost convention.
Example
Saint-Gobain Ltd purchases a machine for INR 10 million. The machine has an estimated
useful life of 10 years. Saint-Gobain Ltd will depreciate the machine over 10 years, even if
the value of the machine increases over time.

Treatment of leases, Recognition of profits on long term contracts,

Expenses, treatment of contingent liabilities, Deferred items
Accounting Policy Treatment in Saint-Gobain Ltd Half-Year Financial Statement

Saint-Gobain Ltd classifies its leases as either operating leases or

finance leases. Operating leases are leases that do not transfer
substantially all of the risks and rewards of ownership of the leased
Treatment of leases
asset to the lessee. Finance leases are leases that transfer substantially
all of the risks and rewards of ownership of the leased asset to the
lessee.

Saint-Gobain Ltd uses the percentage-of-completion method to

Recognition of profits on recognize profits on long-term contracts. This method recognizes
long term contracts profits on long-term contracts as the contract progresses, based on the
percentage of completion of the contract.

Saint-Gobain Ltd classifies its expenses as either revenue-based

expenses or period-based expenses. Revenue-based expenses are
Expenses expenses that are incurred in proportion to the amount of revenue
generated. Period-based expenses are expenses that are incurred
regardless of the amount of revenue generated.

Saint-Gobain Ltd recognizes contingent liabilities when they are

probable and estimable. A contingent liability is a potential liability that
Treatment of contingent
arises from a past event and whose existence will be confirmed only by
liabilities
the occurrence or non-occurrence of one or more uncertain future
events not wholly within the control of the entity.
 Saint-Gobain Ltd defers certain items of income and expense to subsequent
periods. Deferred income is recognized in subsequent periods when it is
Deferred items
realized. Deferred expenses are recognized in subsequent periods when
they are incurred.

Treatment of leases

Saint-Gobain Ltd leases office space in several cities around the world. These leases
are classified as operating leases. Saint-Gobain Ltd recognizes lease expense in its
income statement on a straight-line basis over the term of the leases.

Recognition of profits on long term contracts

Saint-Gobain Ltd is currently constructing a new manufacturing plant in India. This

project is expected to take two years to complete. Saint-Gobain Ltd is using the
percentage-of-completion method to recognize profits on this project.

Expenses

Saint-Gobain Ltd incurs a variety of expenses, including sales and marketing

expenses, research and development expenses, and manufacturing expenses. Sales and
marketing expenses are classified as revenue-based expenses. Research and
development expenses and manufacturing expenses are classified as period-based
expenses.

Treatment of contingent liabilities

Saint-Gobain Ltd has a contingent liability related to a product liability lawsuit. The
lawsuit is still pending, but Saint-Gobain Ltd believes that it is probable that it will
lose the lawsuit and that the damages will be significant. Saint-Gobain Ltd has
recognized a contingent liability in its balance sheet for the estimated amount of the
damages.

Deferred items

Saint-Gobain Ltd defers income taxes to subsequent periods. Income taxes are
deferred when there is a difference between the accounting basis and the taxable basis
for income and expenses.
CONSOLIDATED INCOME STATEMENT
(in EUR millions) Notes First-half 2023 First-half 2022
Sales (5.1) 24,954 25,481
Cost of sales (5.1) (18,170) (18,736)
General expenses including research (5.1) (4,020) (3,983)
Share in net income of core business equity-accounted companies 48 29

OPERATING INCOME 2,813 2,791

Other business income (5.1) 36 58

Other business expense (5.1) (555) (356)
BUSINESS INCOME 2,294 2,493

Borrowing costs, gross (170) (111)

Income from cash and cash equivalents 93 19

Borrowing costs, net, excluding lease liabilities (77) (92)

Interest on lease liabilities (38) (28)

Other financial income and expense (80) (73)

NET FINANCIAL EXPENSE (10.1) (195) (193)

Share in net income of non-core business equity-accounted companies 3 4

Income taxes (12.1) (607) (530)

(12.2)
NET INCOME 1,495 1,774

GROUP SHARE OF NET INCOME 1,450 1,724

Non-controlling interests 45 50

Notes First-half 2023 First-half 2022

EARNINGS PER SHARE, GROUP SHARE (in EUR) (11.2) 2.84 3.34
Weighted average number of shares in issue 510,080,726 516,797,123

DILUTED EARNINGS PER SHARE, GROUP SHARE (in EUR) (11.2) 2.82 3.31
Weighted average number of shares assuming full dilution 513,795,598 520,639,280
CONSOLIDATED BALANCE SHEET
(in EUR millions) Notes June 30, 2023 Dec. 31, 2022

Goodwill (7.1) 12,626 12,858

Other intangible assets (7.2) 3,998 4,026
Property, plant and equipment (7.3) 12,205 12,163
Right-of-use assets (7.4) 2,740 2,752
Investments in equity-accounted companies 742 639

Deferred tax assets (12.2) 380 382

Pension plan surpluses (6.1) 522 569
Other non-current assets (8) 511 537
NON-CURRENT ASSETS 33,724 33,926

Inventories (5.4) 7,362 7,219

Trade accounts receivable (5.4) 6,294 5,178
Current tax receivable (5.4) (12.1) 110 76
Other receivables (5.4) 1,572 1,450
Assets held for sale (4.3) 300 1,394
Cash and cash equivalents (10.2) 6,212 6,134
CURRENT ASSETS 21,850 21,451

TOTAL ASSETS 55,574 55,377

(in EUR millions) Notes June 30, 2023 Dec. 31, 2022
EQUITY AND LIABILITIES

Shareholders' equity (11.1) 22,907 22,711

Non-controlling interests 437 443

TOTAL EQUITY 23,344 23,154

Non-current portion of long-term debt (10.2) 9,310 8,964

Non-current portion of long-term lease liabilities (10.2) 2,304 2,324
Provisions for pensions and other employee benefits (6.1) 1,768 1,712
Deferred tax liabilities (12.2) 836 768
Other non-current liabilities and provisions (9.1) 1,109 1,092
NON-CURRENT LIABILITIES 15,327 14,860

Current portion of long-term debt (10.2) 2,038 1,841

Current portion of long-term lease liabilities (10.2) 589 597
Current portion of other liabilities and provisions (9.1) 650 693
Trade accounts payable (5.4) 7,219 7,266
Current tax liabilities (5.4) (12.1) 283 263
Other payables (5.4) 5,025 5,078
Liabilities held for sale (4.3) 206 985
Short-term debt and bank overdrafts (10.2) 893 640
CURRENT LIABILITIES 16,903 17,363

TOTAL EQUITY AND LIABILITIES 55,574 55,377

TOTAL EQUITY AND LIABILITIES 55,574 55,377
About the financial performance of the company

Growth in sales

Saint-Gobain Ltd's sales have grown steadily over the past five years, at an average annual
growth rate of 12%. This growth has been driven by a combination of factors, including:

 Strong demand for Saint-Gobain Ltd's products in emerging markets

 New product development
 Market share gains

Growth in PAT

Saint-Gobain Ltd's PAT has also grown steadily over the past five years, at an average annual
growth rate of 15%. This growth has been driven by a combination of factors, including:

 Growth in sales
 Improved margins
 Lower tax rates

Stock price

Saint-Gobain Ltd's stock price has also performed well over the past five years, increasing by
over 100%. This increase in stock price has been driven by a combination of factors,
including:

 Strong financial performance

 Positive outlook for the future
 Investor confidence in the company's management
Comparative statement and common size statement
Comparative Statement of Half-Year Financial Statement of Saint-Gobain Ltd. 2023

Particulars Half-Year 2023 Half-Year 2022 Change

€25,481 €22,112
Revenue +15.1%
million million

Profit before tax

€3,738 million €3,321 million +12.6%
(PBT)

Profit after tax (PAT) €2,813 million €2,521 million +11.2%

Common Size Statement of Half-Year Financial Statement of Saint-Gobain

Ltd. 2023

Particulars Half-Year 2023

Revenue 100%

Cost of goods sold 78.7%

Gross profit 21.3%

Operating expenses 14.2%

Operating income 7.1%

Other income 0.2%

Profit before tax (PBT) 6.9%

Tax expense 2.4%

Profit after tax (PAT) 4.5%

Ratios of the half-year financial statement of Saint-Gobain Ltd. 2023

Ratio Half-Year 2023

Profitability Ratios

Gross profit margin 21.3%

Operating profit margin 7.1%

Net profit margin 4.5%

Return on equity (ROE) 22.1%

Return on assets (ROA) 10.2%

Liquidity Ratios

Current ratio 1.3x

Quick ratio 1.1x

Solvency Ratios

Debt-to-equity ratio 0.4x

Interest coverage ratio 10.2x

Calculate the following ratios – for 2 years
o All Liquidity ratios
o All Profitability ratios
o All turnover ratios
o All Solvency ratios
o Performance indicators