Dear Members,
Your Directors are pleased to present the 73rd Annual Report of the Company
along with the audited financial statements for the year ended March 31, 2023.
FINANCIAL HIGHLIGHTS
( crores)
|
Standalone |
Consolidated |
|
2022-23 |
2021-22 |
2022-23 |
2021-22 |
| Sale of Products (Gross) |
2,175.46 |
1,854.22 |
2,348.20 |
1,861.54 |
| Service & Other Operating Income |
193.27 |
151.40 |
193.14 |
151.22 |
| Revenue from Operations |
2,368.73 |
2,005.62 |
2,541.34 |
2,012.76 |
| Operating Profit |
475.84 |
403.58 |
495.56 |
400.99 |
| Finance costs |
6.66 |
3.96 |
7.80 |
4.12 |
| Profit before share of profit/(loss) from Joint Venture |
469.18 |
399.62 |
487.76 |
396.87 |
| Share of profit/(loss) in Joint Venture |
|
- |
(1.86) |
(0.98) |
| Provision for Tax |
118.49 |
101.63 |
124.38 |
100.81 |
| Profit for the year |
350.69 |
298.00 |
361.52 |
295.08 |
| Other Comprehensive Income (Net) |
6.88 |
11.60 |
6.82 |
11.60 |
| Total Comprehensive Income for the year |
357.57 |
309.60 |
368.34 |
306.68 |
| Less: Share of Minority Interest |
- |
- |
(0.38) |
(0.57) |
| Total Comprehensive Income attributable to owners |
357.57 |
309.60 |
368.72 |
307.25 |
DIVIDEND
Your Directors are pleased to recommend for approval of the Members a dividend of 14.50
per equity share of the face value of 5 each for the financial year ended March 31, 2023.
The dividend on equity shares, if approved by the Members, would involve a cash outflow of
160.54 crores, as against the cash outflow of 132.86 crores in the previous year.
TRANSFER TO RESERVES
Your Directors do not propose to transfer any amount to the reserves.
OPERATIONS
The Indian economy has shown sustained growth in the financial year 2022-23 with the
GDP growth estimated at 6.50% to 7% as compared to 8.70% growth in the previous financial
year. The Russia-Ukraine conflict that started during February 2022, triggered the swing
in the commodity prices, accelerating the inflationary pressures, However, the recovery
was maintained. The monetary policy measures taken by the Reserve Bank of India to reign
in the inflation resulted in slight slowdown in the economy and had impact on the exchange
rate. The growth in the Indian economy has been principally led by private consumption and
capital formation. The Index for Industrial Production ("IIP"), witnessed a
growth of 5.50% in the financial year 2022-23. The growth in the IIP was broad based and
all the sectors registered growth over the previous year. Reflecting this, your Companys
consolidated revenue from operations and operating profit increased by 26% and 24%
respectively.
Abrasives
After two years of COVID related disturbances, financial year 2022-23 was relatively
stable year for the Abrasive Business. Demand was stable but somewhat subdued. While the
supply chain was normal, the input cost witnessed significant increase and stayed at high
level for most part of the year. During the year, the Paper maker unit was commissioned
successfully. The improved product-mix, gain in market share and continued control
over cost helped the business grow sales and operating profit by modest 13% and 11%
respectively.
Ceramics and Plastics
The Performance Ceramics and Refractories ("PCR") business witnessed 41%
increase in sales over 2021-22 mainly due to increased demand from the end user industry
like foundry, steel and non-ferrous segments. The substantial increase in profit is mainly
due to improved realization and improvement in the plant efficiencies. The growth in
Performance Plastics business was mainly due to improved demand in automotive and life
science segment. While there has been increase in the input cost, better product mix
helped to maintain the margins. The Silicon Carbide business witnessed good growth in
terms of sales due to relatively higher domestic demand from refractory industry, however
the steep increase in input cost and also reduction in selling price resulted in lower
margins. With the easing of COVID curbs in Bhutan, there was an overall increase in the
output of the plant. Overall sales and operating profit of the Ceramics and Plastics
segment increased by 25% and 20% respectively.
Digital Services & Others
The Captive IT Development Centre ("INDEC") had a stable year. The Digital
services segment witnessed increase in revenue in 2022-23.
SUBSIDIARY COMPANY/JOINT VENTURE/ASSOCIATE
Subsidiaries
The Company has a subsidiary in Bhutan, Saint-Gobain Ceramic Materials Bhutan Private
Limited ("SGCMBPL") and during the year, the Company acquired 100% shareholding
in PRS Permacel Private Limited, ("PRS") an unlisted company that produces
aesthetic decals and other adhesive tapes, etc. in India.
With the improvement in the COVID situation and the relaxation provided by the
Government of Bhutan, the operations in your Companys subsidiary in Bhutan is
stabilizing. PRS recorded sales of around 158 crores and Profit before tax of 18 crores
for the period ended March 31, 2023.
In order to consolidate operations, improve management, achieve unified control, and
benefit from operational efficiencies a application of PRS with your Company was filed in
August 2022. The merger application is currently awaiting approval from National Company
Law Tribunal ("NCLT"). The merger will not result in any changes in the
Companys shareholding. In terms of sub-regulation (1) (c) of Regulation 16 of Securities
and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,
2015 ("Listing Regulations"), both SGCMBPL and PRS are not material
subsidiaries.
Joint Venture
The Joint Venture Company in Gujarat, SG Shinagawa Refractories India Private Limited
has achieved stable commercial production in the FY 2022-23.
Associate Company
The Company had invested in Cleanwin Energy Three LLP in the last financial year for
purchase of wind power for its Mora unit and during the year, the supply of power has
commenced, which will result in cost optimization and will promote sustainability. In
accordance with Section 129(3) of the Companies Act, 2013 ("Act"), Rule 5 of the
Companies (Accounts) Rules, 2014 and relevant
Accounting Standards ("AS"), the Company has prepared consolidated financial
statements (incorporating the financial results the subsidiary companies and Joint
Venture), which forms part of the Annual Report. A statement in Form AOC-1 containing
salient features of the financial statements of the subsidiary companies and Joint Venture
are also included in the Annual Report. In accordance with the provisions of Section
136(1) of the Act, the Annual Report of the Company, containing therein the standalone and
consolidated financial statements and audited financial statements of the subsidiary have
been placed on the website of Company,
https://www.grindwellnorton.co.in/investor-information > Financial Performance.
FUTURE PROSPECTS
While the global geo-political and economic situation could bring in uncertainties, the
overall economic growth in general and industrial growth in particular is neutral to
positive. Indias strong infrastructure push, logistics development and industrial
corridor development will contribute significantly to raising industrial competitiveness
and boosting future growth. Your Companys management will focus on growth led by new
products and new markets. While the geopolitical tensions and weather related shocks could
bring in short term risk, the Directors and the Companys Management have immense
confidence in your Companys future.
MATERIAL CHANGES AND COMMITMENTS AFTER THE END OF THE FINANCIAL YEAR
No material changes or commitments that have had an impact on the financial position of
the Company have emerged between financial year-end and the date of this Report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The particulars of loans, guarantees and investments have been disclosed in the
financial statements.
HUMAN RESOURCES
The Companys primary focus is to provide a professional work culture that fosters
innovation, ensures high performance, and empowers employees to grow and develop
individually. The Company strives to become a leader in all the businesses it operates in
and places a strong emphasis on enhancing employee capabilities through training. The
hiring and onboarding practices of the Company adhere to the best industry standards, and
a fair and transparent performance evaluation process is followed. To improve
organizational efficiency, employee engagement, and skill levels, the Company encourages
participation in various training programs and mandatory e-learning courses.
More generally, employee relations were cordial and productive at all sites of your
Company. At the end of the financial year, there were 2322 permanent employees on the
rolls of the Company.
PREVENTION OF SEXUAL HARASSMENT
The Company is dedicated to establishing and maintaining a positive work environment
that is free from any kind of discrimination or harassment. The Company firmly believes
that all employees have the right to be treated with dignity and respect, and it maintains
a zero-tolerance policy towards any violations of its Code of Conduct, particularly with
regards to sexual harassment. To address any such issues, the Company has formed an
Internal Complaints Committee (ICC) in accordance with the Sexual Harassment of Women at
Workplace (Prevention, Prohibition, and Redressal) Act, 2013. The Company did not receive
any complaint related to sexual harassment during the year.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO AND
ENVIRONMENT
The information on conservation of energy, technology absorption and foreign exchange
earnings and outgo stipulated under Section 134(3)(m) of the Act and read with Rule 8 of
the Companies (Accounts) Rules, 2014, is set out in the Annexure 1 of this Report. Your
Company is committed to ensure a clean and green, pollution-free environment as well as a
safe and healthy workplace at all plant locations and work sites. The Company adheres
strictly to the Environment, Health, and Safety Charter, policies, and procedures
established under the Saint-Gobain Group. The Companys plants have been certified under
ISO 9001, ISO 14001, and ISO 45001. These certifications and various awards acknowledges
the efforts put in and outcome achieved in enhancing the Environment, Health and Safety
("EHS") across all its work sites.
PARTICULARS OF EMPLOYEES
Disclosures pertaining to remuneration and other details as required under Section 197
of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 ("Rules") is annexed as Annexure 2(A) to this Report. The
Statement containing names of top ten employees in terms of remuneration drawn and the
particulars of employees as required under Section 197(12) of the Act read with
Rule 5(2) of the above Rules, is provided in Annexure 2(B) forming part of this Report.
PUBLIC DEPOSITS
The Company has not accepted any public deposits, and thus, there were no outstanding
amounts due on account of principal or interest on public deposits as on the date of the
balance sheet.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Cessation
Mr. Anand Mahajan (Director Identification No. 00066320), Non-Executive Director of the
Company relinquished the position of Non-Executive Director effective July 29, 2022, owing
to his other commitments. The Board of Directors placed on record their appreciation for
the significant contribution made by Mr. Anand Mahajan during his tenure as a Director.
Mr. Laurent Tellier (Director Identification No. 08587279), Non-Executive Director of
the Company relinquished the position of Non-Executive Director effective February 13,
2023, owing to his other commitments. The Board of Directors placed on record their
appreciation for the valuable contribution made by Mr. Laurent Tellier, during his tenure
as a Director.
Appointment/Re-appointment
Mr. Aakil Mahajan (Director Identification No. 09682529) was appointed as an Additional
Director under Non-Executive category with effect from July 30, 2022. The Members approved
his appointment through Postal Ballot, the results of which were declared on September 16,
2022.
As per the Act and the Articles of Association of the Company, Non-Executive Director
Mr. Sreedhar Natarajan (Director Identification No. 08320482) will retire by rotation and
has been eligible and offered himself for re-appointment. The Board of Directors
recommends his re-appointment and a resolution seeking shareholders approval, along with
other essential details, is included in the Notice. Mr. Keki Elavia, Dr. Archana Hingorani
and Mr. Subodh Nadkarni have submitted declarations that each of them meets the criteria
of independence as provided in Section 149(6) of the Act and Regulation 16(1) and 25(8) of
the Listing Regulations. There has been no change in circumstances affecting their status
as Independent, Non-Executive Directors of the Company during the year. The disclosures
required pursuant to Regulation 36 of the Listing Regulations, Clause 1.2.5 of the
Secretarial Standard on General Meetings are given in the Notice of AGM, forming part of
the Annual Report and Schedule V of the Listing Regulations are given in the Corporate
Governance Report, forming part of the Annual Report. The Members are also requested to
refer to the pertinent items listed in the Notice of the AGM.
Pursuant to Section 203 of the Act, the Key Managerial Personnel of the Company are:
Mr. B. Santhanam, Managing Director, Mr. Krishna Prasad, Executive, Whole-Time
Director, Mr. Deepak Chindarkar, Chief Financial Officer and Mr. K. Visweswaran, Company
Secretary.
None of the Directors or Key Managerial Personnel has any pecuniary relationships or
transactions with the Company, other than salaries, commission, sitting fees and
reimbursement of expenses incurred by them for the purpose of attending meetings of the
Company.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
The purpose of the familiarisation programme is to acquaint the Independent Directors
with the Companys business model and the industry in which it operates. Details of the
familiarisation programme are accessible on the Companys website, www.grindwellnorton.co.in/investor-information
> Corporate Governance > Familiarisation Programme for Independent Directors.
Furthermore, the Independent Directors are periodically briefed on the latest developments
in the Company and its operations.
NUMBER OF MEETINGS OF THE BOARD
The Board meets at regular intervals to review the Companys businesses and to discuss
strategy and plans. A tentative annual calendar of meetings is circulated to the Directors
in advance to enable them to plan their schedule and to ensure effective participation.
During the year, five board meetings and one meeting of Independent Directors were held.
The maximum interval between the board meetings did not exceed the period stipulated under
the Act and the Listing Regulations.
COMMITTEES OF THE BOARD
The Board has constituted or reconstituted its committees in compliance with the Act
and Regulation 18 to 21 of the Listing Regulations during the year. The Committees
currently in place are the Audit Committee, Nomination and Remuneration Committee,
Stakeholders Relationship Committee, Corporate Social Responsibility Committee and Risk
Management Committee. The Corporate Governance Report provides information about the
Committees, their composition, meetings and other relevant details.
DIRECTORS RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information and
explanations obtained, your Directors make the following statements in terms of Section
134 of the Act:
i. that in the preparation of the annual financial statements for the financial year
ended on March 31, 2023, the applicable accounting standards have been followed along with
proper explanations relating to material departures, if any;
ii. that such accounting policies have been selected and applied consistently and
judgments and estimates have been made, that are reasonable and prudent, so as to give a
true and fair view of the state of affairs of the Company at the end of the financial year
on March 31, 2023, and of the profit of the Company for the year ended on that date;
iii. that proper and sufficient care has been taken for the maintenance of adequate
accounting records in accordance with the provisions of the Companies Act, 2013, for
safeguarding the assets of the Company and for preventing and detecting fraud and other
irregularities;
iv. that the annual financial statements have been prepared on a ‘going concern
basis; v. that proper internal financial controls are in place and that such internal
financial controls are adequate and are operating effectively;
vi. that systems to ensure compliance with the provisions of all applicable laws are in
place and that such systems are adequate and are operating effectively.
With reference to the point number (v), the Board believes that the Company has sound
Internal Financial Controls ("IFC") commensurate with the nature and size of its
business. However, business is dynamic and the IFCs are not static, and evolve over time
as the business, technology and fraud environment changes in response to competition,
industry practices, legislation, regulation and current economic conditions. There will,
therefore, be gaps in the IFC as the business evolves. The Company has established a
mechanism to consistently detect such deficiencies and implement updated or enhanced
controls wherever the potential impact of such gaps on the Companys operations is
significant.
DIRECTORS APPOINTMENT AND REMUNERATION
The Nomination and Remuneration Committee has laid down the criteria for Directors
appointment and remuneration. These are set out in the Policy for Appointment of Director,
Key Managerial Personnel ("KMP") and Senior Management Appointment Criteria,
Performance Evaluation and Removal which is annexed as Annexure 3 to this Report and is
also accessible on the Companys website at
https://www.grindwellnorton.co.in/investor-information > Policies.
ANNUAL EVALUATION OF PERFORMANCE BY THE BOARD
The Board of Directors, on the recommendation of the Nomination and Remuneration
Committee has adopted a framework for performance evaluation of the Board, its committees,
individual directors, and the chairperson through a survey questionnaire. The survey
questionnaire broadly covers various aspects of Board functioning, the composition of
Board and its committees, culture, execution and performance of specific duties,
obligations and governance. The evaluation parameters are based on the execution of
specific duties, quality, deliberation at the meeting, independence of judgement, decision
making, the contribution of Directors at the meetings and functioning of the Committees.
The performance of the Board, its committees, individual directors, and chairperson was
assessed by the Nomination and Remuneration Committee and the Board. In addition, the
Independent Directors conducted an evaluation of the performance of Non-Independent
Directors, Chairperson, and the Board, as a whole. The Board of Directors also appraised
the performance of the Independent Directors, their fulfillment of independence criteria
specified by the Act and Listing Regulations, and well as their independence from
management. The Director being evaluated did not participate in the evaluation process.
RELATED PARTY TRANSACTIONS
All related party transactions entered during the financial year were in the ordinary
course of business and on an arms length basis.
During the year, no material related party transactions were entered by your Company.
Prior approval of the Audit Committee is obtained for all related party transactions. The
Audit Committee monitors, on a quarterly basis, the related party transactions entered
vis-?-vis the related party transactions approved by the Audit Committee. The policy on
related party transactions, as approved by the Board, is available on the website of the
Company, https://www.grindwellnorton.co.in/investor-information > Policies. There are
no transactions that are required to be reported in Form AOC-2. The details of the
transactions with related parties pursuant to Ind AS-24 are provided in the accompanying
financial statements.
CORPORATE SOCIAL RESPONSIBILITY ("CSR")
Your Companys believes that its primary objective is to cater to the requirement of
its customers, while simultaneously create job opportunities, providing livelihood and
income for all its stakeholders (including suppliers, vendors, service providers,
employees, lenders, shareholders etc.). In addition, it aims to contribute to the
governments revenue. According to your Companys belief, meeting its obligations to
society entails pursuing its main objective while upholding the highest standards of
corporate governance and ethical conduct in its business operations. Against the backdrop
of this belief, your Company is committed to executing the objectives outlined in its CSR
policy. The CSR policy and initiatives were undertaken during the year, in the format
prescribed under the Companies (Corporate Social Responsibility Policy) Rules, 2014, as
amended, are set out in Annexure 4 to this Report. In accordance with Section 135 of the
Act, Corporate Social Responsibility Committee of the Board, having an Independent Chair,
has been constituted to monitor the CSR policy and programs. The amount spent on eligible
CSR activity for the financial year 2022-23 was around 2.02% of the average profit of the
Company during the immediately preceding three financial years.
RISK MANAGEMENT POLICY AND INTERNAL FINANCIAL CONTROLS
Your Company recognises that managing risk is an integral part of good management
practice and an essential element of good corporate governance. It aims to have a common,
formalized, and systematic approach for managing risk and implementing a risk management
process across the Company. The intent of the policy is to ensure the effective
communication and management of risk across all risk categories. The Company has
identified elements of risk, which may threaten the existence and financial position of
the Company, which are set out in the Management Discussion and Analysis Report. The
Companys Internal Financial Control systems are commensurate with the nature of its
business, financial statements, and the size and complexity of its operations. These are
routinely tested and certified by the Statutory as well as Internal Auditors. Significant
audit observations and follow-up actions thereon are reported to the Audit Committee.
WHISTLE BLOWER POLICY AND VIGIL MECHANISM
Your Company has adopted and disseminated its Whistle Blower Policy to provide a secure
environment and to encourage employees and others to report unethical, unlawful or
improper practices, acts or activities including a leak or suspected the leak of
Unpublished Price Sensitive Information and to prohibit any adverse personnel action
against those who report such practices, acts or activities, in good faith. The Whistle
Blower Policy is accessible on the website of the Company, https://www.grindwellnorton.
co.in/investor-information > Policies.
AUDITORS Statutory Auditors
M/s. Kalyaniwalla & Mistry LLP, Chartered Accountants (Firm Registration No.
104607W / W100166) were appointed as Statutory Auditors of your Company at the 72nd
AGM of the Company held on July 29, 2022, till the conclusion of the 77th AGM
of the Company. The Statutory Auditors confirmed they are not disqualified from continuing
as Auditors of the Company.
Cost Auditor
In accordance with Section 148 of the Act and Rules framed thereunder, the cost audit
records are maintained by the Company in respect of the products which are required to be
audited. Your Directors, on the recommendation of the Audit Committee, appointed M/s. Rao,
Murthy & Associates, Cost Accountants (Firm Registration No. 000065), to conduct the
audit of the cost records maintained by the Company for the financial year ending March
31, 2024. M/s. Rao, Murthy & Associates, Cost Accountants, have under Section 139(1)
of the Act and the Rules framed thereunder furnished a certificate of their eligibility
and consent for the appointment.
In accordance with the provisions of Section 148(3) of the Act read with Rule 14 of the
Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditor
as recommended by the Audit Committee and approved by the Board of Directors have to be
ratified by the Members of the Company. Accordingly, an appropriate resolution forms part
of the Notice convening the AGM. The Board of Directors seeks your support in approving
the proposed remuneration of 2,00,000/- (Rupees two lakhs only) plus taxes and out of
pocket expenses at actuals payable to the Cost Auditor for the financial year ending March
31, 2024. M/s. Rao, Murthy & Associates, Cost Accountants, have vast experience in the
field of cost audit and have conducted the audit of the cost records of the Company for
the past several years.
Secretarial Auditor
In accordance with Section 204 of the Act and Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014, the Company had appointed M/s. Parikh &
Associates, Company Secretaries (Peer Review No.1129/2021), a firm of Company Secretaries
in Practice to undertake the Secretarial Audit of the Company for the financial year ended
March 31, 2023. The Secretarial Audit Report for the financial year ended March 31, 2023,
in Form No. MR-3 is set out in Annexure 6 of this Report.
The Board has also appointed M/s. Parikh & Associates, Company Secretaries as
Secretarial Auditor to conduct Secretarial Audit of the Company for the financial year
2023-24.
Comments on Auditors Report
There are no qualifications, reservations or adverse remarks or disclaimers made by
M/s. Kalyaniwalla & Mistry LLP, Statutory Auditors, in their Auditors Report by M/s.
Parikh & Associates, Secretarial Auditor, in their Secretarial Audit Report and by M/s.
Rao, Murthy & Associates, Cost Accountants,. The Auditors have not reported any
incident of fraud to the Audit Committee of the Company in the year under review.
ANNUAL RETURN
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act and Rule 12 of the
Companies (Management and Administration) Rules, 2014 as amended, the Annual Return as on
March 31, 2023 is accessible on the Companys website, https://www.grindwellnorton.co.in/investor-information
> Annual Reports.
DISCLOSURE REQUIREMENTS
As per Listing Regulations, the Corporate Governance Report with the Auditors
Certificate thereon, and the Management Discussion and Analysis Report are attached, which
forms part of this Report.
As per Regulation 34 of the Listing Regulations, a Business Responsibility and
Sustainability Report is attached and is a part of this Annual Report.
The Dividend Distribution Policy of the Company as required under the Listing
Regulations was adopted to set out the parameters and the circumstances that will be taken
into account by the Board of Directors in determining the distribution of dividend to its
shareholders. The policy is annexed as Annexure 5 of this Report and is also accessible on
the Companys website, https://www.grindwellnorton.co.in/investor-information >
Policies.
SECRETARIAL STANDARDS
Your Company has devised proper systems to ensure compliance with the provisions of all
applicable Secretarial Standards issued by The Institute of Company Secretaries of India
and that such systems are adequate and operating effectively.
The Company has complied with relevant compliances relating to Foreign Exchange
Management Act, 1999.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
There have been no significant and material orders passed by the regulators or courts
or tribunals impacting the going concern status of the Companys operations in the future.
ACKNOWLEDGEMENTS
Your Directors take this opportunity to acknowledge, with sincere gratitude, the
support of its esteemed customers, the strength it derives from its association with
Compagnie de Saint-Gobain and its subsidiaries, the unwavering support and collaboration
of the employees and bankers, and the loyalty of the large family of the Companys
dealers, suppliers and esteemed shareholders.
For and on behalf of the Board of Directors
|
KEKI ELAVIA |
B. SANTHANAM |
|
Chairman |
Managing Director |
|
DIN 00003940 |
DIN 00494806 |
| Mumbai, May 6, 2023 |
|
|
+91-9892691696
