Grindwell Norton Ltd Directors Report.

Dear Members,

Your Directors are pleased to present the 71st Annual Report of the Company along with the audited financial statements for the year ended March 31, 2021.




2020-21 2019-20 2020-21 2019-20
Sale of Products (Gross) 1493.32 1429.16 1498.76 1456.56
Service & Other Operating Income 139.58 123.19 139.15 123.01
Revenue from Operations 1632.90 1552.35 1637.92 1579.57
Operating Profit 322.88 243.65 320.69 247.10
Interest 3.24 4.28 3.42 4.47
Profit before share of profit/(loss) from Join Venture 319.64 239.37 317.27 242.63
Share of profit/(loss) in Joint Venture - - (0.07) 0.01
Provision for Tax 77.56 56.42 79.46 58.74
Profit for the year 242.07 182.95 237.74 183.89
Other Comprehensive Income (Net) 19.59 (14.64) 19.59 (14.64)
Total Comprehensive Income for the year 261.66 168.31 257.33 169.25
Less: Share of Minority Interest - - 1.44 (1.37)
Total Comprehensive Income attributable to owners 261.66 168.31 258.78 167.88


Your Directors are pleased to recommend for approval of the Members a dividend of 9.50/- per equity share of face value of

5/- each for the financial year ended March 31, 2021. The dividend on equity shares, if approved by the Members, would involve a cash outflow of 105.18 crores, as against the cash outflow of 83.04 crores in the previous year.


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


In the backdrop of once-in-a-century global pandemic crisis, Indias GDP for the financial year 2020-21 likely to end with a contraction of between 7.5% to 8% compared to a modest growth rate of 4% in 2019-20. The severe, nation-wide lockdown imposed to control the spread of COVID-19 had a huge and adverse impact on lives and livelihoods, especially during the April-June quarter, which witnessed a 24.4% contraction of GDP. As the economy opened up, growth recovered, moderately at first, but the revival gathered strength in the second half. The Industrial activity followed a similar pattern. After a massive contraction of 35.6% in the April-June quarter, the Index of Industrial Production (IIP), witnessed positive growth in the second half. The industrial recovery was fairly widespread. Despite this, the financial year has seen the IIP contracting by about 8.6%. Against this backdrop, your Companys performance was creditable with consolidated revenue from operations and operating profit increasing by 3.7% and 29.8%, respectively. The significant increase in profits coupled with tight control over working capital resulted in your Company adding significantly to its cash balance.


The year began in the midst of a complete and severe lockdown. Economic activity came to a near-standstill with markets being closed and all movement being stopped. Operations were adversely impacted and the business made a loss in the April-June quarter. From the end of the first quarter, however, the easing of supply side restrictions and pent-up demand spurred a revival in growth. The revival started first with large accounts in Auto and Steel before extending to other sectors and channels like Paint,

Construction and the SMEs. Consumer sentiment continued to improve and domestic demand was robust before and during the festive season and even in the months that followed. Meanwhile, the business gained market share and significantly increased exports. Consequently, overall sales increased by 0.9% over the previous year. With input costs being stable for much of the year, expenses being under control and prices holding firm, the operating margin saw a small improvement and the operating profit increased by 5%. During the year, the business commenced construction of a new Coated Maker.

Ceramics and Plastics

The severe lockdown at the start of the year adversely impacted the operations and results of all the businesses in this segment. The revival commenced in June and was sustained over the subsequent quarters. The Silicon Carbide business witnessed a decline in sales and profits. This was partly due to weak demand (domestic and exports) in the first half and partly due to supply constraints. The operations of your Companys subsidiary in Bhutan were severely impacted by restrictions imposed by the Government to control COVID-19 and, as a result, there was a substantial decline in production. During the year, your Company made a further investment in the equity capital of APGPCL which entitled it to receive additional electricity. This enabled increased production at the Tirupati plant. The Performance Refractory business maintained its sales mainly due to the increased demand from the end user industry. Despite sales being flat, there was a substantial increase in the operating profit on account of lower raw material costs for much of the year and the significant increase in plant efficiencies. The Performance Plastics business had an excellent year with a significant increase in sales (domestic and, in particular, exports) and operating profit. This was mainly due to the outstanding results of the Life Sciences segment. As the year progressed demand from passenger cars and the construction sector also improved resulting in higher sales of bearings and composites. Overall on a consolidated basis, the sales and operating profit of the Ceramics & Plastics segment increased by 5.8% and 63.8% respectively.

IT Services and Others

The captive IT development centre (INDEC) and the Projects business had a good year. The IT services segment witnessed an increase in revenue and profits in 2020-21.


COVID-19 pandemic had a disastrous impact globally and India was no exception to this. During these unprecedented times, your

Company attached the highest priority to ensuring the safety, security and well-being of its employees and took various measures in this regard, including facilitating work-from-home for all its office staff, creating the necessary infrastructure and changes in operations at its plants and supporting employees and their families in dealing with COVID-19. At the same time, your Company also took various steps to support its channel partners, its base of small vendors and sub-contractors and also vulnerable sections of society.


The Company has one subsidiary in Bhutan, Saint-Gobain Ceramic Materials Bhutan Private Limited. 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"), it is not a material subsidiary. The operations of your Companys subsidiary in Bhutan was severely affected due to restrictions imposed for containing the spread of COVID-19.

SG Shinagawa Refractories India Private Limited is a Joint Venture between Shinagawa Refractories Co. Ltd., Japan, and Grindwell Norton Limited, set up to manufacture tap hole clay for the steel industry. The project work has concluded at the Halol (Gujarat) site of your Company and commercial production commenced in April 2021.

In accordance with Section 129 (3) of the Companies Act, 2013 ("Act") and Rule 5 of the Companies (Accounts) Rules, 2014 and relevant Accounting Standards ("AS"), the Company has prepared consolidated financialstatements (incorporating the financial results of the subsidiary company 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 company 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 the



At the time of writing, the second wave of COVID-19 is spreading rapidly throughout India. The severity of the spread may force the government to re-impose stricter virus management controls. Having said this, the ground reality is very differentfrom the previous year and industrial activity is continuing in most parts of the country. Thus, while the second wave will have an adverse impact in the first quarter, demand is expected to revive as and when this wave subsides. As such, while your Companys management will prioritize the safety and well-being of your Companys employees and all its associates, it will also focus on servicing its customers, on growth led by new products and new markets (especially, export markets) and on ensuring the margins are maintained, by increasing prices and improving operating efficiencies to offset the recent escalation in commodity and industrial input prices.

Besides, its large cash balance will enable your Company to progress its capital expenditure programme aimed at building capacities and capabilities. While the outlook for the very short term is uncertain, your Directors and the Companys management have immense confidence in your Companys future.


There have been no material changes or commitments, affecting the financialposition of the Company, which have occurred between the end of the financial year and the date of the Report.


The particulars of loans, guarantees andinvestmentshavebeendisclosedinthefinancial . statements


Confronted with a global pandemic and consequent lockdowns, your Company and its employees had to quickly adapt to a very uncertain and fast-changing environment. The employees went out of their way to support their colleagues as also the Company.

At all times, they showed a high degree of professional commitment and often went beyond the call of duty to keep operations running and to meet the needs of its customers. In this unique year, GNOs employees have been exceptional in every respect. Your Directors place on record their appreciation for the huge contribution made by all its employees in this difficult . More generally, employee relations were cordial and productive at all sites of your Company. At the end of the financial were 2006 employees.

The Company follows the best practices in hiring and on-boarding of employees. The Company adopts a fair and transparent performance evaluation process. In order to improve organizational efficiency and levels, employees participate in various training programmes and complete mandatory e-learning courses.

Your Company is committed to create and sustain a positive workplace environment, free from discrimination and harassment of any nature. The Company believes that all employees have a right to be treated with respect and dignity and has zero tolerance towards violations of its Code of Conduct, in general, and its sexual harassment policy, in particular. The Company has constituted an Internal Complaints Committee ("ICC") under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year, no complaint under the sexual harassment policy has been received by the Company.



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. Your Company strictly abides by the Saint-Gobain Groups Environment, Health and Safety Charter and the policies and procedures framed under it. All the plants of your Company are certified under ISO 9001, ISO OHSAS 18001. These certifications and various awards are recognition of the efforts made and results achieved by your Company in improving the Environment, Health and Safety at 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 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 Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in Annexure 2(B) forming part of this Report. The Annual Report including the aforementioned information is available on the website of the Company,


The Company has not accepted any public deposits and, as such, no amount on account of principal or interest on public deposits were outstanding as on the date of the balance sheet.


In accordance with the Act and the Articles of Association of the Company, Mr. Sreedhar Natarajan (Director Identification No. 08320482), Non-Executive, retires by rotation and, being eligible, has offered himself for re-appointment. The Board of Directors recommends the re-appointment of Mr. Sreedhar Natarajan. A resolution seeking shareholders approval for his re-appointment along with other required details forms part of 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. They have also completed the registration with the Independent Directors Databank and requisite disclosures have been received from them in this regard.

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 attention of the Members is also invited to the relevant items 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 Alternate Director to Ms. Isabelle Hoepfner, Non-Executive Director with effect from May 20, 2020, 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 programme is aimed to familiarise the Independent Directors with the Company, the nature of the industry in which the Company operates and the business model of the Company. The details of the familiarisation programme imparted to the Independent Directors are available on the Companys website at The Independent

Directors are regularly briefed with respect to the developments that are taking place 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, six board meetings were held and one meeting of Independent Directors was also held. The maximum interval between the board meetings did not exceed the period prescribed under the Act and the Listing Regulations.


During the year, in accordance with the Act and Regulation 18 to 21 of the Listing Regulations, the Board has constituted or reconstituted its Committees. Currently, the Board has the following Committees:

? Audit Committee

? Nomination and Remuneration Committee

? Stakeholders Relationship Committee

? Corporate Social Responsibility Committee

? Risk Management Committee

Details of the Committees, their constitution, meetings and other details are provided in the Corporate Governance Report.


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, 2021, 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, 2021, 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 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 controlsare financialcontrols are adequateplace and are operating thatsuchinternal

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 a process in place to continuously identify such gaps and implement newer and/or improved controls wherever the effect of such gaps would have a material effect on the Companys operations.


The Nomination and Remuneration Committee has laid down the criteria for Directors appointment and remuneration. These are set out in the Nomination and Remuneration Policy which is annexed as Annexure 3 to this Report and is also available on the Companys website at


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 specificduties, 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 were reviewed by the Nomination and Remuneration Committee and the Board. The Independent Directors evaluated the performance of Non-Independent Directors, Chairperson, and the Board, as a whole. The Board of Directors evaluated the performance of the Independent Directors, their fulfillment of independence criteria in terms of the Act and Listing Regulations, and independence from the 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

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, 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


It is your Companys belief that its primary goal is to serve the needs of its customers and, in the process of doing so, to generate employment, livelihood and income for all its stakeholders (suppliers, vendors, service providers, employees, lenders, shareholders etc.) and, at the same time, to contribute to the revenues of the Government. Further, it is your Companys belief that by pursuing its primary goal and by ensuring that its business practices meet the highest standards of corporate governance and ethics, it best fulfills its obligations and responsibility to society. Against the backdrop of this belief, your Company is committed to implementing the agenda set out 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, a 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 2020-21 was around 2.13% 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 financialposition 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 Significant audit observations and follow-up actions thereon are reported to theAudit Committee.


Your Company has adopted and disseminated its Whistle Blower Policy to provide a secure environment and 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 available on the website of the Company,

AUDITORS a. Statutory Auditors

M/s. Price Waterhouse Chartered Accountants LLP (Firm Registration No. 012754N/N500016) were appointed as Statutory

Auditors of your Company at the 67th AGM of the Company held on July 26, 2017 till the conclusion of the 72nd AGM of the

Company to be held in the year 2022. The Statutory Auditors have confirmed they are not disqualified from continuing as Auditors of the Company

b. 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, 2022. M/s. Rao, Murthy & Associates, Cost Accountants, have under Section 139(1) of the ActandtheRulesframedthereunderfurnished certificateof 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 financialyear ending March 31, 2022. 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.

c. 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, to undertake the Secretarial

Audit of the Company for the financialyear ended March 31, 2021. The Secretarial Audit Report for the financial year ended March 31, 2021, 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 2021-22.

Comments on Auditors Report

There are no qualifications, reservations or adverse remarks or disclaimers made by M/s. Price Waterhouse Chartered Accountants LLP, Statutory Auditors, in their Auditors Report and by M/s. Parikh & Associates, Secretarial Auditor, in their Secretarial Audit Report.

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, the Annual Return as on March 31, 2021 is available on the

Companys website,


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 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 available on the Companys website,

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.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS orders passed by the regulators or courts or tribunals impacting the going concern Therehavebeennosignificant 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 continued support and co-operation from its employees, Bankers and the loyalty of the large family of the Companys Dealers, Suppliers and valued Shareholders.

For and on behalf of the Board of Directors
Chairman Managing Director
Mumbai, May 7, 2021