Grindwell Norton Director Discussions

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.


( 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


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.


Your Directors do not propose to transfer any amount to the reserves.


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.


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.



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, > Financial Performance.


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.


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.


The particulars of loans, guarantees and investments have been disclosed in the financial statements.


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.


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.


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.


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.


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.



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.


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.


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, > Corporate Governance > Familiarisation Programme for Independent Directors. Furthermore, the Independent Directors are periodically briefed on the latest developments in the Company and its operations.


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.


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.


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.


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 > Policies.


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.


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, > 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.


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.


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.


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. > 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.


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, > Annual Reports.


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, > Policies.


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.


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.


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

Chairman Managing Director
DIN 00003940 DIN 00494806
Mumbai, May 6, 2023