Hil Ltd Management Discussions.

Global Economy

Consequent to the COVID 19 impact and despite severe challenges to mankind and industry, the services and manufacturing sector, the global economy grew an estimated 5.9% in 2021 compared to a de-growth of 3.3% in 2020. This was achieved due to a dedicated focus on vaccination drives world over. Data has more than ever driven the businesses and data and insights on lessons learned from the pandemic, and then using these to prioritise actions to enhance business value today and build strategic resilience for tomorrow. While the global economy was affected by prohibitive shipping freight rates, a shortage of shipping containers and semiconductor chips in 2021, further affected the global economic recovery. Inflation was at its highest since 2011, especially in the advanced economies. The predominant feature in the recovery of the global economic activity during the year under review was the sharp revival in commodity prices to record levels. The commodities that reported a sharp increase in prices comprised steel, coal, oil, copper, food grains, fertilisers and gold. The global economy is projected to grow at a modest 2.6% in 2022 following the Russia- Ukraine crisis. Businesses that take these steps now will be well- placed to capitalise more effectively on the opportunities rising in the post-COVID-19 recovery - and to continue winning in their marketplaces as greater certainty and stability return.

While the year commenced amidst the challenges returned businesses to normalcy at a gradual pace. People safety, business sustainability and growth remained the focus factors. Suitable opportunities, costs and allied factors confronted the businesses world-wide. Digitisation, innovation, eco-friendly cost effective products became the new norms of the business.

The advanced economies were expecting the economic output and investments to restore to pre-pandemic levels. Global inflation was also expected to be comparatively weaker; however, predicted to stay lower in the emerging market and developing economies (notably in small, fragile and conflict affected areas). Rise in food and energy costs, and more serious supply disruptions weaken the near-term outlook for worldwide growth.

The global manufacturing sector has been under pressure. Simultaneously, Covid-19 outbreaks have delayed the production of finished goods throughout complicated global value chains. Other disruptions like severe shortages of natural gas and coal, have slowed power generation in some nations, limiting energy-intensive manufacturing. Industrial production and goods commerce is severely impacted by global supply bottlenecks. Supply chain interruptions hampered worldwide manufacturing in Q3 FY22, particularly in Europe and the United States. Construction/ infrastructure boom is likely to be moderate, targeted fiscal policies, such as tax incentives and subsidies, will continue to encourage investment in innovation, technical advancements, and green businesses and drive economic growth in coming years.


Amidst the challenges, Indian economy as well as the economies all over the world have continued to improve, and commerce has hit record highs. Global GDP is gradually expected to toucRs 3.8% in FY 2023 as a result of eventual fading of pent-up demands and reversal of the supportive fiscal monetary policies of governments and central banks. However, the recent war between Russia and Ukraine dampened the spirit of investors. The eminent issue that the war poses like material crisis, increased gas prices, logistics constraints and increasing inflation do lead to considerable headwinds to many businesses.

Indian Economy

The pandemics impact of 2020-21 on the industrial sector reflected a decline in Index of Industrial Production (IIP) in 2021-22 however, the Government of Indias (GOI) PLI scheme helped speed up the recovery to a very large extent. Several attempts were made to boost infrastructure investment, including the National Infrastructure Pipeline (NIP) and the National Monetisation Plan (NMP), among others. The gradual unlocking of the country, combined with the supportive policy initiatives resulted in a recovery in the industrial growth. The central bank has estimated that Indias real GDP will grow by 78% during 2022-23, with consumer inflation averaging 4.5%, yielding a nominal GDP growth of 12.3%.

On business front measures like the revival of normal business conditions, as well as continued but narrowing monetary and fiscal policy assistance benefited the economy. This successfully reflects an improving investment outlook with private investment, particularly in manufacturing. The investments are aided by Production-Linked Incentive (PLI) Scheme, and improvements in infrastructure investment. Despite the concerns, the growth outlook will be bolstered by ongoing structural reforms, a stronger- than-expected financial sector recovery, and steps to address financial sector issues.

In FY2021-22, the industrial sector showed signs of gradual improvement as compared to a contraction in 2020-21. In view of uncertainties on account of the pandemic and elevated global commodity prices, however, increased FDI inflows and improved overall business environment indicate a promising recovery for the industry.

While the Russia Ukraine war and its implications on Indian economy are visible, India is expected to emerge as the fastest growing economy in coming years and could become the third largest consumer economy as its consumption may triple by 2025, owing to changing consumer behaviour and expenditure habits. It is expected to be the second largest economy surpassing the USA in terms of purchasing power parity (PPP) by 2040.

GDP Growth is expected to increase to 8.7% in FY 2022-23 and 6.8% in FY 2023-24. Even though the manufacturing, construction, and mining sub-sectors experienced a similar swing, the utilities sector saw a more subdued cycle. The contribution of industry to Gross Value Added (GVA) is presently estimated to be 28.2%.

The revival of construction sector (notably steel consumption and production, and cement consumption) can be attributed to increased spending by the government on infrastructure and an upsurge in the housing cycle. According to the RBI and prominent real estate companies statistics, the Indian residential real estate market in FY23 is looking to grow in sales, prices, and new launches. The Indian economy is in a favourable position and encourages the growth of various sectors, with the governments vaccination drive having achieved considerable momentum and breadth.

Roofing Industry: Fibre Cement Sheet Market

India has witnessed strong responsive markets and positive revival of business. Consumer behaviour is returning to pre-pandemic position demanding more from the manufacturers. Increasing global population, gradual rise in disposable income, and the predominance of nuclear families have resulted in a massive increase in residential development projects. In several emerging countries, the residential construction sector has grown significantly in tandem with improved economic conditions. This resulted in the increasing demand for fibre cement.

With the given tax regime applicable to Asbestos Cement sheets (AC), they happen to be driving the markets with rural consumption dominating the AC sheet business. AC sheets are more cost competitive than substituted materials. Cement Fibre sheets find its consumer base mainly in rural India and is interwoven in to the rural economy. Good monsoons and the higher disposable income coupled with rural income supported by government schemes have given a good response for purchasing initiatives in the rural sector.

In India, only the Chrysotile variety of Fibre Cement, which is considered safe, is used in Fibre Cement products, namely, sheets and pipes. The fibres are mixed and bonded with cement and other raw material, with no chance of escaping into the atmosphere on normal usage. Fibre cement products continue to remain as the preferred choice in the construction industry as a convenient and durable product choice. Along with the Companys strong brand presence across rural India and focus on new dealer/sub-dealer recruitment and engagement activities, Digital Connect, focused on inventory planning, logistics, dealer wise targets, helped gain market share.

The roofing business ended the year with impressive double-digit growth in volume terms over the previous year and highest ever revenue. Your Company will continue to further consolidate its leadership position in the industry.

The residential construction sector has grown significantly in tandem with improved economic conditions. This resulted in the increasing demand for fibre cement. By FY2027, the Indian Fibre Cement Boards and Sheets Market is expected to reach USD

963.86 million, increasing at a CAGR of more than 5% over the forecast period of FY2023-FY2027 Fibre cement sheets are being extensively used for roofing, cladding, siding applications, poultry farms, factories and warehouses. Easy availability, affordability and sturdy qualities fuel its demand. This can be owed to the Indian economys continued development, and the growing popularity of fibre cement.

The fibre cement gets preference due to its flexible qualities, low cost, and durability. GDP growth and government investing substantially in infrastructure indicates exponential growth over the next 5 years. For many years, the widespread use of "dry construction" roofing in the industrial sector has been a trend and sparked the demand for various types of sheets in manufacturing facilities across the country. Thus, propelling the Indian Fibre Cement Boards and Sheets Market to new heights.

Corrugated roofing sheets have recurrent folds on their surface in rural buildings. The unique shape offers enduring utility, strength and are employed in a wide range of rural applications. They are stronger due to their corrugated design with ridges and grooves, as well as the wavy structure in small surface regions.

Perpetual Growth drivers

? Monsoon: Good rainfalls in FY22 have paved the way for this business to grow in FY23. Cash with the farmers on account of consistent realisation from crops enables growth in this business.

? Strong rural economy: government schemes, tax subsidies and schemes have provided higher disposable income and purchase opportunities to the rural sector. Our products share a major space in the rural sector given its applicability and brand.

? Construction projects: The construction industry in India is one of the largest in the world and its continuous focus on urban development creates significant demand for quality roofing solutions.

? Non-residential demand: Demand for sturdy roofing solutions in commercial structures like offices, parking lots etc. are substantial growth drivers for the industry.

? Government Support: Numerous government schemes providing financial assistance for building superior quality infrastructure including National Infrastructure Pipeline (NIP), Housing for All and, Affordable Rental Housing Complexes Scheme are likely to provide a major boost to the roofing industry in India.


With the pandemic largely behind us, disposable income is likely to grow at a considerable pace. Further, the Indian economy continues to gather momentum with the governments renewed focus on construction, affordable housing and infrastructure sectors. These tailwinds are anticipated to drive the countrys Fibre Cement Market, which is expected to reach $4.2 million by 2025, rising at a CAGR of 6.7% from 2020 to 2025. Stringent rules prohibiting the use of asbestos in buildings, due to health hazards associated with its use, are also driving the demand for fibre cement boards and sheets in India. Additionally, the growing need for energy-efficient buildings is propelling the industry forward.3

Real Estate Industry in India

Real estate is a vital component of the Indian economy, accounting for a significant portion of construction spending and the nations infrastructure development. The real estate sector in India, particularly the residential segment, has recovered quickly from the crisis. This can be attributed to variables such as low interest rates, lower residential unit prices and impetus from the state governments. Although work-from-home model lowered the demand for business facilities, but raised the demand for affordable residential space.

Housing prices are predicted to rise as raw material prices, land expenses, and labour costs rise. End-user demand has driven the house sales boom in India so far resulting in gradual price increases rather than abrupt changes. The real estate sector will benefit from rapid urbanisation. By 2025, demand for data centres is estimated to grow by 15-18 million square feet. India registered investments worth US$ 2.4 billion in real estate assets in the first half of 2021, an increase of 52% YoY.

Indias real estate sector is predicted to grow to US$ 1 trillion by 2030, up from US$ 120 billion in 2017 During the period 2017-2028, Indias real estate market is expected to increase at a CAGR of 19.5 percent. By 2025, the market is expected to reach US$ 650 billion, accounting for 13% of Indias GDP Increased industrial activity, improved income levels, and urbanisation would all help to boost real estates contribution of GDP.


Rising international real estate development is likely to usher in new growth opportunities in the Indian market. The Union Budget for FY2022-23, highlighted the completion of 80 Lacs homes and the provision of 48000 crore under PMAY for urban and rural areas in FY23. In recent years, there has been an increase in the demand for affordable housing.

India is one of the top ten fastest-growing housing markets in the world. By 2023, organised retail real estate stock is predicted to grow by 28% to 82 million square feet. Focus on affordable housing is expected to drive the nations real estate business. By 2025, real estates contribution to Indias GDP is predicted to rise from $200 billion to $500 billion each year. This accounts for 12% to 15% of Indias GDP and will be the countrys top employer.7

Flooring Industry

Strong industrial and economic development and population growth are looking to boost product demand in the flooring industry. The building and construction industry has been reviving at a rapid pace. Flooring has become the flagship segment and accounts for roughly 10% of total building and construction project expenses.8

Last two decades have proved to be transformative for the flooring industry. This change can be the result of the introduction of various advanced technologies and the growing usage of specialised machinery, notably in the industrial and commercial flooring segments. The emergence of India as a vital market for new technology has significantly helped the expansion of industrial and commercial flooring categories, at a similar rate. The development of simple installation techniques, the availability of novel building solutions, and the increased demand for sustainable products are expected to drive the industrial growth. Increased investments and evolving innovation in flooring solutions have resulted in more durable and stronger flooring materials. Moreover, manufacturers customization possibilities in terms of colour, texture, and finishing have contributed to increased product demand, thus boosting market growth.9


The Indian flooring industrys growth resembles those in other segments of the construction industry as well. The substantial growth can be attributed to industrialization, robust urban infrastructure environment, and the markets rising applications.

By 2027 the Indian wood and laminate flooring market is expected to reach USD 4.32 billion. From FY2021-FY2028, it is expected to grow at a revenue-based CAGR of 6.4%. The markets growth is likely to accelerate in the near future, owing to significant government initiatives. India is rapidly establishing itself as a major global market for flooring products.

Company Overview

The CK Birla group a prestigious name in the national and international industry sector has withstood its vision for quality products, ethical and transparent business practices and strong focus on human aspect. Founded in 1946, HIL Limited is the flagship company of the CK Birla Group. Since more than 7 decades, the company maintains its leadership position in the market with its extensive array of building materials and innovative solutions. HIL is dedicated to delivering sustainable, high quality, and future-ready products to its customers. It has a diversified product portfolio of eco-friendly products that are designed to meet constantly evolving customer requirements. Over the last 5 years, the company management has taken key and determined initiatives towards making HIL as a global building materials one stop solution.

HIL is an acknowledged leader in the Building Material space in India. HIL has been honoured with the title of "Asias Most Trusted Building Material Company for last 2 consecutive years by IBC INFOMEDIA. Founded in 1955, it is the flagship company of the C K Birla Group, which is a growing US$2.4 billion conglomerate with diversified interests. HIL also holds the SuperBrand title and ranks amongst the top 20% of all other SuperBrands across all categories in India. The Company has demonstrated expertise in comprehensive building materials and solutions, for more than seven decades now. Production and marketing of products, that are sustainable, future-ready, innovative and has a high quality has helped the company achieve market leadership. The Company is well on track towards becoming a 1 billion US$ "One Stop Building Solutions Company" in the next few years.

The Company operates 24 state-of -the-art manufacturing facilities in India, and two in Germany and Austria. Through robust R&D centres in India and Germany, it is committed to innovation. HIL Limited fosters a wide reach with an extensive sales and distribution network, stretching across India and 80+ countries globally. This can be owed to its strong focus on customer-centricity. The Groups businesses span five continents, with over 30000 people, 47 manufacturing sites, 21 service delivery locations, and has earned several patents and awards.

HIL aims to build a green world by adopting a unique "five-way green" philosophy. It ensures the overall sustainability of its products and operations. HIL explores a world of possibilities in order to realise its visions for a greener and safer future.

Key Strengths

HIL has a varied and diversified portfolio, it caters to all types of clients in the building material industry. The focus is on building sustainable and eco-friendly products which will be the next leap of growth for the industry.

? Operational Excellence: HIL strives to achieve highest standards of excellence by delivering superior quality products that comply with the norms of the Industry, principles of corporate social responsibility, safety, health and environment. The Company has implemented lean Six Sigma practices, Industry 4.0 and Business Intelligence Tools at its various manufacturing location in India and Europe, which are expected to deliver greater efficiencies in the coming years.

? Innovation: Innovation is at the heart of the business at HIL. Consumer demand and the product alignment is the underlying principle for continuous innovation and product development. In response to a fast-changing business environment, HIL relies on its innovative capabilities to deliver superior quality and advanced products.

? Diversified product portfolio:The Company has a vast product portfolio, ranging from roofing, walling, flooring solutions and polymer solutions to engineering solutions. The Company is also dedicated to offer sustainable products that minimize its impact on the environment. The Company has a keen eye on the consumer need as well the regulatory requirements.

? Robust R&D mechanism: Sustainable, eco-friendly, cost effective product development is the fundamental principle at R&D. Consumer need and demand is the key focus. HIL continuously strives to add value to its existing products while developing new products for the market.The Company believes in strengthening its Research and Development capabilities and utilises advanced technology to improve its manufacturing capacities. The latest eco-friendly roofing solutions developed by the R&D is one of its kind in the world and has huge potentials to grow in Indian and in global markets.

? Diversified Geographic Presence: The Company has a diversified footprint in India witRs 24 manufacturing facilities and an extensive network of more than 6500 retailers and around 40 depots. Additionally, the Company has 2 manufacturing facilities in Europe and a strong international presence in more than 80+ countries around the globe.

? Dedicated and engaged management and workforce:

The committed and dedicated workforce of HIL is one of its greatest strengths and it enables the Company to reach greater heights of success. Being certified Great Place to Work consecutively is confirmation of the Trust by the employees and is a true recognition of the culture created in the company towards harnessing a truly committed ?One HIL Team.

? Product Leadership: Charminar, Birla Aerocon, Parador are all established market leaders in their product segment and have received accolades from well-respected international bodies over the years. Birla-HIL is gaining good traction in the last few years since its inception.

? Governance led practices: Corporate Governance, transparent business practices and ethical values drives HIL towards ensuring all compliances and keep the flag flying high

Robust product portfolio

The Companys product portfolio is diverse ranging from roofing, walling, flooring, and polymer solutions to engineering solutions. The company is also committed towards effective product sustainability.

Product leadership

Charminar, Birla Aerocon, and Parador are all well-known market leaders in their respective product segments and gained recognition from prestigious international organisations throughout the years.

Diversified geographic presence

The company operates 24 state-of-the-art manufacturing facilities in India, as well as two manufacturing facilities in Germany and Austria. It approximately has over 30000 people, 47 manufacturing sites, 21 service delivery locations, and businesses operating on five continents

Governance-led practices

HIL is driven by corporate governance and ethical principles to ensure all compliances and maintain a high standard.

Product portfolio

HIL has established itself well in the markets with strong brand value and consumer trust in the products it offers. HIL has an extensive and diverse portfolio, catering to a trusted and growing clientele in the building material business. The Company will continue improving and expanding its product portfolio based on customer feedback. The Company enables innovation, R&D, agility, and a focus on profitable growth. With its commitment towards an advanced product portfolio, HIL work towards its goal of making HIL a $1 billion company.

? Roofing solutions

Charminar (HILs flagship brand) has been a well-recognised, trusted and well received brand of HIL and is the market leader in Indian roofing and cladding. With its extensive range of innovative and sustainable products, it leads the roofing market.

Fortune - Charminar offers a wide range of products from asbestos cement sheets and colour coated sheets to eco- friendly non-asbestos.

Charminar fibre cement sheets (most used roofing material for all types of structures) are a composite building and construction material, essentially used in roofing and facade applications due to its strength and longevity. In the construction of industrial buildings, warehouses, sheds, and dwellings, fibre cement sheets are employed. They are cost- effective, light, fire-resistant, and are also available in brick red colour.

Charminar Fortune, a non-asbestos, eco-friendly, autoclaved roofing solution, is the Companys most recent breakthrough in response to the global need for sustainable, affordable and durable roofing.

Fortune is aimed for the future of green roofing. Asbestos-free composition, good dimensional stability, strong impact, sound insulation, and low drying shrinkage/moisture movement are all attributes that seeks appreciation.

? Building solutions

Birla Aerocon is the ultimate for all modern construction needs. Walling solutions are part of the Birla Aerocon green building line. Wet walling solutions include Birla Aerocon AAC Blocks and dry mix materials, while dry walling solutions include cement sandwich panels, boards, and jointing compound.

Birla Aerocons Wet Walling solution are affordable and sustainable, like all of its other products. It contains load- bearing and energy-saving building materials that require curing. Birla Aerocons Dry Walling solution includes pre-cured, high-performance, light-weight, easy-to-install walling options.

The Company will continue to evaluate and launch new business lines. Some new launches like tile adhesive, primers, gypsum plasters, water tanks, waterproof putty, Teflon tapes, and others, are currently undergoing test launches. More information will be released as they turn out to be successful.

? Polymer solutions

Birla HIL pipes offer a variety of plumbing solutions that are eco-friendly, anti-microbial, affordable. It includes CPVC, UPVC, column pipes, SWR, and Pressure Pipes and Fittings. These are excellent for residential, industrial, and commercial purposes.

Birla HIL CPVC pipes are an eco-friendly, aesthetic, and light- weight alternative to the commonly used GI pipes. Its suitable for hot and cold potable water applications in residential, commercial, and industrial settings.

Birla HIL column pipes systems have several, first-of-their-kind technological innovations, that make it the product leader in the national market.

Birla HIL UPVC pressure piping systems come in a variety of diameters and pressure classes, making them an excellent choice for water supply and irrigation. Plain and Sol-fit versions are available for both the potable and irrigation sectors. The Company is expanding its product offerings to include additional types of pipe SKUs to secure a prosperous future.

Birla HIL Wall Putty is a fast-moving product in the polymer solutions, in which HIL holds a premium position in terms of quality and brand recognition. It is made using advanced True colour technology, which allows for a real reflection of the chosen paint shade. This makes the wall paint dazzle in its original just as you choose shade. The HIL Putty offers special qualities that help save money and time and does not require paint priming, therefore making it cost-effective.

? Flooring solutions

Parador is a well-known brand for its high-quality wooden floors all around the world. As a German manufacturer of laminate, engineered wood and vinyl flooring, Parador offers people style and taste in a contemporary and effective manner. It offers relevant products and services that caters to peoples needs and wants. This adds actual value to the consumers life through a combination of quality, design, and innovation.

The three product lines - Basic, Classic, and Trend time offer a wide range of decors to morph visions into reality.

Parador has been delivering consistent results since its acquisition almost 2.5 years back. Under HIL, Parador remains aligned with other business verticals and fosters an ambitious growth strategy. The Company has gained a rise in revenue and expects further profit with decline in material costs.

Wind Power

There was no incremental investments in this segment during the year. Existing capacity is of 9.35 MW with Wind Turbine Generators installed at Gujarat, Tamil Nadu and Rajasthan. Electricity Generated from Tamil Nadu and Gujarat generators are used for captive consumption and any excess generation is sold to DISCOMs of the respective states.

Research and Development

HILs is proud to have world class R&D centres in India and in Germany to cater to product development and product innovations round the clock. The state-of-the-art infrastructure testing facility & the in-house pilot plant setup, R&D centre at Hyderabad has been recognised by DSIR (Department of Scientific & Industrial Research), Govt. of India. The state of the art R&D centre the capability of assessing the performance of various products including roofing solutions, building solutions, polymer solutions & putty, construction chemicals & coatings as a new vertical considered. This division is dynamic in supporting the pursuit for continuous improvement and delivering more value to our customers. As a result of the extensive R&D efforts, we have successfully developed and patented our products and processes both in India & overseas. Our dedicated team of scientists and engineers constantly work on product upgradation, optimum utilisation of raw materials, development of environmental friendly substitute materials, new products and applications. The advanced R&D facility and our top-notch team has enabled our pioneering efforts and helped maintain the market leadership position. The Investments in R&D have been a continuous trend to enhance the capability including spectroscopy & accelerated weathering, and in this direction the latest putty lab installed in India enables us to stay ahead of curve in polymer solutions.

Innovation and Digitalization

Innovation and Digitalization continue to be the crucial drivers of HILs evolution. In the year 2021-22, we continue to leverage technologies like IoT (factory automation), data analytics, robotic process automation, Back Office Automation and Sales & Marketing digitization to cater to business needs and accelerate growth. We have digitized four more shop floors and we are proud to say that nine of our plants are completely connected now on Industry 4.0. Further to this, we are focusing on solutions like predictive maintenance, predictive quality to increase throughput and reduce costs.

On the supply chain front, we have introduced transport management system that enhances our logistics processes. With features like digital indenting, truck tracking, electronic proof of delivery, quick transporter payments, this system has helped us simplify our operational hassles. Robotic Process Automation of few processes in operations continue to give savings in man efforts.

Our efforts on making data accessible continue to reap benefits, by enabling and empowering users to take better decisions. We are now investing our energy in extending the same to our front line teams.

We have enabled elastic hyper converged infrastructure to decrease data center complexity and increase scalability, further modernizing our data center infrastructure. With todays business continuity being more dependent on technology than ever, cyber security has gained immense importance. Cyber-attacks can no further be curbed by antivirus software or firewalls. With the no longer a question of "if" cyber-attacks will happen but rather "when" HIL has strengthened its three pillars of Cyber Security (People, Process & Technology) by implementing multiple tools to protect our assets from unwanted cyber-attacks like Zero Trust Application, Enterprise IDS (Intrusion Detection System) & IPS (Intrusion Prevention System).

Key Financial Ratios on Consolidated Basis
Key Financial Ratios* FY 2021-22 FY 2020-21 % Change Comments
Debtors Turnover (No. of Days) 12.57 15.48 (18.77) Improved due to higher focus on collection
Inventory Turnover (No. of Days) 62.35 63.26 (1.44) Improved due to better inventory management using six sigma
Interest Coverage Ratio 49.42 14.35 244 Improved due to higher realisation, cost optimisation resulting to higher EBIT
Current Ratio 1.36 1.28 6.94 Improved due to efficient working capital management
Debt Equity Ratio 0.25 0.41 (40) Improved due to increase in Net Worth, efficient working capital management higher profitability generated higher cash flow resulted into prepayment of debts
Operating Profit Margin (%) 12% 14% (15) Reduced due to Raw Material and Input Price Pressure
Net Profit Margin (%) 6% 7% (15) Reduced due to Raw Material and Input Price Pressure
Return on Net Worth (%) 19% 25% (21) Reduced due to pressure on Margins on account of higher Raw Materials and Input Prices

Note: FY 2021 ratios are calculated after the exclusion of discontinued operations.

?Computation of key ratios have been derived at as follows:

[Debtors Turnover (in days) = 365/(Revenue from Operations/Average Trade Receivables)] [Inventory Turnover (in days) = 365/(Revenue from Operations/Inventories)]

(Interest Service Coverage Ratio = Profit Before Tax and Interest on debt/Interest on debt)

(Current Ratio = Current Assets/Current Liabilities)

(Debt Equity Ratio = Debt /Total Equity including all reserves)

(Operating Profit Margin % = EBITDA/Revenue from Operations)

(Net Profit Margin % = Net Profit after Tax/Revenue from Operations)

(Return on Net Worth % = Net Profit After Tax/ Avg. Net Worth (Total Equity including all reserves))

Environment, Health and Safety

The Company believes that a clean environment in and around the work place fosters health and prosperity for the individual, the group and the community they belong to. HIL system of risk management is designed to reduce environmental incidents and occupational injuries and illnesses. Our EHS Policy formally establishes our focus on environmental protection and occupational health and safety at every level.

A key component of the overall risk management strategy is the implementation of a robust EHS Management thorough set of management and technical standards for key EHS risk areas across our business. To help protect our employees from injuries, we identify high risk areas and invest in a wide range of technological solutions and awareness-raising initiatives. For machine safety, we use virtual design reviews and augmented reality to conduct technical risk assessments to ensure all physical and safety awareness measures are installed. We also invested in ergonomic wearables to address posture behaviors to help reduce ergonomic risk for our associates. We are also digitizing EHS systems so that we can report, track, and implement action plans in real time.

We proactively monitor current and emerging environmental protection legislation and other areas of concerns across our value chain, and follow a risk-based approach leveraging our EHS Management system

We are striving to achieve virtually zero waste to landfill in our direct operations. We approach each site with a tailored approach that takes into account local infrastructure and the greatest opportunities for improvement.

HIL has established Air Quality Management Standard to define minimum requirements and best management practices to ensure that each applicable facility complies with applicable air regulations and applies risk management practices to reduce impacts on human health and the environment.

We are delighted to state that we produce no process waste water and that all of the water used in our operations is recycled. Domestic waste will be treated in a STP to fulfil local pollution control board standards before being repurposed for gardening.

Human Resources

HIL considers its human resource a vital asset. The Company prioritizes the professional as well as personal development of each employee, encouraging them to remain motivated and achieve organisational objectives. HIL aims to create a conducive working environment, upholding the values of diversity, openness and transparent communications across organisational hierarchies. The company remains committed to the welfare of its people and aspires to retain its position as a Great Place to Work.

The company strongly believes that its Human Resources are one of its most valuable resource and it is the quality and dynamism of its human resources that enables it to make a significant contribution to enhance stakeholders value. HIL places employee engagement, development and retention of talent as one of its key priority, to enable achievement of organisational goals. The Company continuously provides Technical, Behaviour and Leadership trainings to employees, so that they become competent enough to advance in their careers in HIL. The company maintains a good work culture, ethics, values and attractive remuneration to keep its staff highly motivated.

The Companys flagship employee engagement program - JOSH - makes learning activities fun by indulging in various programmes like festive celebrations, sports events, health care activities, cultural nights with family events, etc. to create an overall healthy work environment. HIL is committed to build an open and transparent culture, through which employees can provide feedback without any inhibitions. The organization is committed to the welfare and career growth of its people.

HIL has brought all its employee Rewards & Recognition events under an umbrella branded as "Yashotsav?, which is a platform to recognise & reward employees across its plants and offices.

Employee Headcount

As on 31st March, 2022 the permanent employee strength of HIL is 1610 employees.

Recognitions and awards

Some of the special recognition received by the company during this year on Human Resource and Culture front are as under:

? HIL is ranked amongst the Indias 30 Best Workplaces in Manufacturing in 2020, 2021 and 2022;

? It is also ranked amongst the "Indias 100 Best Companies to work for" by the Great Places to Work Institution - 2020, 2021 and 2022.

? HIL secured 57th rank, in "Indias 100 Best Companies to work for - 2022" by the Great Place to Work Institution.

? HIL is also recognised as best workplaces in "Building Material & Cement Industry" by the Great Places to Work Institution in 2020, 2021 and 2022.

? HIL was recognised and awarded as "Indias Most Ethical Companies Award" for the year 2022.

Risk Management

HIL in its endeavour of fulfilling its business objectives is exposed to various market risks however HIL is well positioned to manage and deal with different market risks in a fast-paced ever evolving business environment. The Company has with determined focus traversed a long path from being a market leader in the domestic markets to establishing itself as an emerging global brand.

HIL has implemented a number of measures to assess, identify, and effectively reduce risks that may arise from time to time.

Risks Significance and meaning Mitigation
Commodity and raw material price risks Supply chain disruptions result in the price fluctuation of critical raw materials such as cement, steel, resin, and wood causing incremental costs placing pressure on margins. HIL seeks to preserve long-term partnerships with its suppliers, avoiding the risk of price fluctuations. The company also has a significant global network, that makes easy sourcing of products from various regions at competitive prices.
Macroeconomic risks Political, economic instability, and geopolitical events beyond the companys control have the potential to negatively impact the HILs operations. HILs operations spread across multiple countries and segments, decreasing its reliance on a single country or market..
Financial risks The company is exposed to exchange rate volatility because of its global presence. Currency rate fluctuations may have a detrimental effect on the Companys profitability. HIL enters into forward contracts to hedge foreign exchange risks, thus limiting any negative impact from exchange rate fluctuations.
Technology risks With the advent of technology, the need for enhanced systems and processes to boost operational efficiency and provide better customer satisfaction has surged. HIL may face difficulties if it fails to adapt to a changing environment. HILs manufacturing facilities are equipped with advanced gear and technologies that increases the Companys efficiency. It also maintains and tracks proper functioning of equipment and replaces then when necessary.
Quality risks Failure to maintain product quality and adhere to relevant quality standards may have a damaging effect on the companys reputation as well as financial position. To offer defect-free and high-quality products, HIL follows strict quality management processes. Quality certificates have also been given to the company, establishing its market legitimacy.
Human capital risks The key to an organisations success is having skilled and capable workforce. HILs expansion capability may fluctuate if it is unable to retain or hire qualified and experienced staff. To help its employees professional development, HIL offers a variety of skill development and training programmes. The organisation also has a succession plan in place to ensure that the leadership of the organisation remains strong.
Environment risks HIL struggling to keep its environmental footprints below permitted standards may negatively impact the Companys reputation and result in financial losses. HIL has a well-managed EHS programme. It actively examines the effects on the environment and makes actions to reduce them. It also takes a systematic approach for effective waste management, resource utilisation, and carbon reduction.
COVID risk Although the pandemic is close to being over small eruptions are still witnessed with infections. Amongst them Omicron being the potent driver given the rate of infection on the rise To ensure all employees and their families including eligible children are vaccinated with appropriate vaccines and dosages Continuous awareness at all locations in strictly adhering to the Covid Appropriate Behaviour

Cautionary statement

Certain statements in the MDA section concerning future prospects may be forward-looking statements which involve a number of underlying identified / non-identified risks and uncertainties that could cause actual results to differ materially. The results of these assumptions made, relying on available internal and external information, are the basis for determining certain facts and figures stated in the report. Since the factors underlying these assumptions are subject to change over time, the estimates on which they are based, are also subject to change accordingly. These forward-looking statements represent only the Companys current intentions, beliefs or expectations, and any forward-looking statement speaks only as of the date on which it was made. The Company assumes no obligation to revise or update any forward-looking statements, arising due to new information, future events, or otherwise.