Directors Report of Grasim Industries Ltd.
Mar 31, 2023
Your Directors are pleased to present the 76th Annual Report in the form of Fourth Integrated Report of your Company along with the Audited Financial Statements for the year ended 31st March 2023.
FINANCIAL HIGHLIGHTS
The financial performance of the Company for the year ended 31st March 2023 is summarised below:
|
Particulars |
Consolidated 2022-23 2021-22 |
C in crore Standalone 2022-23 2021-22 |
||
|
Continuing Operations Revenue from Operations |
||||
|
117,627.08 |
95,701.13 |
26,839.71 |
20,856.84 |
|
|
Other Income Total Revenue Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) |
3,612.05 |
821.34 |
1,018.34 |
895.31 |
|
121,239.13 |
96,522.47 |
27,858.05 |
21,752.15 |
|
|
20,477.64 |
17,772.41 |
4,198.23 |
4,111.47 |
|
|
Less: Finance Costs |
(1,320.27) |
(1,295.70) |
(367.67) |
(247.24) |
|
Less: Depreciation and Amortisation Expenses Profit Before Share in Profit of Equity Accounted Investees, Exceptional Items and Tax Share in Profit of Equity Accounted Investees |
(4,551.59) |
(4,161.07) |
(1,097.29) |
(913.96) |
|
14,605.78 |
12,315.64 |
2,733.27 |
2,950.27 |
|
|
208.96 |
380.33 |
- |
- |
|
|
Exceptional Items Profit Before Tax (PBT) from Continuing Operations |
(88.03) |
(69.11) |
(88.03) |
(69.11) |
|
14,726.71 |
12,626.86 |
2,645.24 |
2,881.16 |
|
|
Tax Expenses from continuing operations Profit for the Period from Continuing Operations Attributable to: Shareholders of the Company |
3,648.51 |
1,936.31 |
521.51 |
185.71 |
|
11,078.20 |
10,690.55 |
2,123.73 |
2,695.45 |
|
|
6,827.26 |
7,102.37 |
2,123.73 |
2,695.45 |
|
|
Non-Controlling Interest |
4,250.94 |
3,588.18 |
- |
- |
|
Discontinued Operations |
||||
|
Profit Before Tax (PBT) from Discontinued Operations |
- |
352.52 |
- |
155.98 |
|
Exceptional Items |
- |
670.71 |
- |
510.79 |
|
Tax Expenses from Discontinued Operations |
- |
(440.07) |
- |
(310.95) |
|
Provision of Impairment of Assets Classified as Held for Sale Profit for the Period from Discontinued Operations Attributable to: Shareholders of the Company |
- |
(67.42) |
- |
- |
|
- |
515.74 |
- |
355.82 |
|
|
- |
447.41 |
- |
355.82 |
|
|
Non-Controlling Interest Other Comprehensive Income for the Year Attributable to: Shareholders of the Company |
- |
68.33 |
- |
- |
|
(3,180.78) |
3,280.80 |
(3,074.01) |
3,219.07 |
|
|
(3,104.23) |
3,281.85 |
(3,074.01) |
3,219.07 |
|
|
Non-Controlling Interest Total Comprehensive Income for the Year Attributable to: Shareholders of the Company |
(76.55) |
(1.05) |
- |
- |
|
7,897.42 |
14,487.09 |
(950.28) |
6,270.34 |
|
|
3,723.03 |
10,831.63 |
(950.28) |
6,270.34 |
|
|
Non-Controlling Interest Profit for the Period Attributable to Shareholders of the Company Opening Balance in Retained Earnings |
4,174.39 |
3,655.46 |
- |
- |
|
6,827.26 |
7,549.78 |
2,123.73 |
3,051.27 |
|
|
10,159.72 |
6,021.21 |
8,013.25 |
5,529.53 |
|
|
- Gain/(Loss) on Re-measurement of Defined Benefit Plans |
49.01 |
23.18 |
(2.57) |
24.71 |
|
- Gain on Sale of Non-Current Investments transferred to Retained Earnings from equity instruments through OCI |
1.37 |
(1.37) |
- |
- |
|
- Stake Dilution in Subsidiary Companies Amount Available for Appropriation Add/Less: Transfer (to)/from Debenture Redemption Reserve |
(10.85) |
(14.82) |
- |
- |
|
17,026.51 |
13,577.98 |
10,134.41 |
8,605.51 |
|
|
- |
110.60 |
- |
- |
|
|
Less: Transfer to General Reserve |
(3000.00) |
(2,752.48) |
- |
- |
|
Less: Transfer to Special Reserve Fund |
(387.20) |
(190.75) |
- |
- |
|
Less: Dividend Paid on Equity Shares |
(657.65) |
(592.26) |
(657.65) |
(592.26) |
|
Other movements during the year |
(1.62) |
6.63 |
- |
- |
|
Closing Balance in Retained Earnings |
12,980.04 |
10,159.72 |
9,476.76 |
8,013.25 |
Based on your Company''s performance, your Directors have recommended dividend of H 10 per equity share of face value of H 2 each for the year ended 31st March 2023.
The dividend, if approved by the members, would involve a cash outflow of H 658 crore.
In terms of the provisions of the Income Tax Act, 1961, dividend shall be taxed in the hands of shareholders at applicable rate of taxes and your Company shall withhold tax at source appropriately.
The recommended dividend is in line with your Company''s Dividend Distribution Policy. Dividend Distribution Policy, in terms of the provisions of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (''Listing Regulations''), is available on your Company''s website at https://www.grasim.com/upload/pdf/ Grasim_Dividend_Policy_16.pdf
The Board of Directors of your Company has decided not to transfer any amount to the General Reserves, for the year ended 31st March 2023.
On a consolidated basis, the revenue from operations for FY 2022-23, stood at H 117,627 crore registering a growth of -23% as compared to the previous year of H 95,701 crore. The Consolidated EBITDA increased to H 20,478 crore for FY 2022-23, which was 15.22% higher than that of previous year of H 17,772 crore.
On a standalone basis, revenue from operations for FY 2022-23 stood at H 26,840 crore, registering a growth of 28.69% as compared to the previous year of H 20,857 crore. The standalone EBITDA is H 4,198 crore for FY 2022-23 which was 2.11% higher than that of the previous year of H 4,111 crore.
STRATEGIC INITIATIVES AND SIGNIFICANT DEVELOPMENTS Update on Paints Business
The decorative paints industry size is ~ H 67K crore of which -75% is organised sector. In FY 2022-23 organised decorative revenue grew by -22% over FY 2021-22.
The project work is progressing at all 6 sites namely Panipat (Haryana), Ludhiana (Punjab), Chamarajanagar (Karnataka), Cheyyar
(Tamil Nadu), Mahad (Maharashtra) and Kharagpur (West Bengal). Commissioning of plants will start in phases from last quarter of FY 2023-24, and all the plants are expected to be commissioned by end of FY 2024-25 with a total project cost of approximately H10,000 crore. R&D Centre of global standards and a Pilot plant has been commissioned which will help in scaling of lab tested formulations.
With total planned capacity of 1,332 million liters per annum, the Company aims to be number two player by capacity in decorative paints industry in India. Entry in the paints sector will add size, scale, and diversity to the existing business portfolio of the Company.
The Company has spent H 2,592 crore cumulatively up to FY 2022-23.
Update on B2B E-commerce Business
The Go-to-Market strategy and outreach plan have been finalised. The technology partners have been engaged and platform is being developed. The Company has already onboarded a leadership team across sales, marketing, category and operations for the full-scale launch scheduled in Q2 FY24. This launch will be in a phased manner beginning with the states of Maharashtra and Madhya Pradesh.
Amalgamation of Aditya Birla Solar Limited with Aditya Birla Renewables Limited
Aditya Birla Solar Limited (''ABSL'') and Aditya Birla Renewables Limited (''ABReL'') are wholly-owned Subsidiaries of your Company, both engaged in the business of Renewable energy. ABReL and ABSL had filed the Application and the Scheme of Arrangement with the Hon''ble National Company Law Tribunal, Mumbai (''NCLT'') on 27th March 2020 for the amalgamation of ABSL with ABReL under Sections 230 and 232 of the Companies Act, 2013. Subsequent to directions received from the Hon''ble NCLT, the meetings of shareholders and unsecured creditors of both the Companies were dispensed with and both the Companies complied with the directions of the Hon''ble NCLT order. The Companies filed the petition on 18th June 2021 seeking sanction on the said scheme. The said petition got transferred to Bench II of the Hon''ble NCLT Bench, Mumbai and was admitted on 27th April 2022 and was reserved for the orders. Hon''ble NCLT''s order is awaited.
CONSOLIDATED FINANCIAL STATEMENTS (CFS)
In accordance with the Companies Act, 2013 (''the Act''), read with the Companies (Accounts) Rules, 2014, Listing Regulations and Ind AS 110 - Consolidated Financial Statements and Ind AS 28 -Investments in Associates and Joint Ventures, the Audited Consolidated Financial Statements forms integral part of this Annual Report. CFS include financial performance of the Company''s subsidiaries, Associates and Joint Ventures, which inter-alia includes UltraTech Cement Limited, Aditya Birla Capital Limited, Aditya Birla Solar Limited, Aditya Birla Renewables Limited and other entities as mentioned in notes to CFS.
SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES
During the year, Grasim Business Services Private Limited was incorporated as a wholly-owned subsidiary of the Company on 4th January 2023 to provide business support service including Staffing solutions.
Apart from this, there are no change in the direct Subsidiaries, Associates and Joint Venture Companies of your Company.
In accordance with the provisions of Section 129(3) of the Act, read with the Companies (Accounts) Rules, 2014, a report on the performance and financial position of each of the subsidiaries, associates and joint venture Companies is provided, in the prescribed Form AOC-1, in Annexure ''A'' to this Report.
In accordance with the provisions of Section 136 of the Act, the Audited Standalone and Consolidated Financial Statements and related information of the Company and audited accounts of each of its subsidiaries are available on the website of the Company at https://www.grasim.com/investors/results-reports-and-presentations
UltraTech Cement Limited and Aditya Birla Capital Limited are the material listed Subsidiary Companies of your Company. Your Company does not have any material unlisted Subsidiary. The Audit Committee and the Board reviews the financial statements, significant transactions and working of all Subsidiary Companies, and the minutes of unlisted subsidiary Companies/Joint Venture are placed before the Board.
Your Company has in accordance with the Listing Regulations adopted the Policy for determining material subsidiaries. The said Policy is available on your Company''s website at https://www. grasim.com/upload/pdf/Grasim_Policy_Material_Subsidiary_Cos. pdf
ULTRATECH CEMENT LIMITED (UltraTech)
The country''s cement production is expected to climb by around 6% to 8% over financial years 2023 and 2024, following a 21% jump for the financial year ended March 2022, as reported by a leading ratings agency. The growing housing sector, which typically accounts for 60% to 65% of India''s cement consumption, will remain a key demand driver. Also, continued large investments in roads and infrastructure projects will fuel cement demand.
During the year, UltraTech recorded net revenues of H 63,240 crore and EBITDA of H 11,123 crore. UltraTech achieved the unique distinction of registering 100 million tons of production, dispatches and sales in FY 2022-23. This was backed by an effective capacity utilisation of 84% for the year.
During the year, UltraTech commissioned 12.4 mtpa additional capacity of grey cement. It further commissioned a 2.2 mtpa brownfield cement capacity at Patliputra in April 23. Work on the next phase of growth of 22.6 mtpa has already commenced. Commercial production from these new capacities is expected to go on stream in a phased manner by FY25/FY26.
Upon completion of these expansions, UltraTech''s capacity will grow to 160.45 mtpa, reinforcing its position as the third largest cement company in the world, outside of China and the largest in India by far.
ADITYA BIRLA CAPITAL LIMITED (''ABCL'')
ABCL reported a Consolidated Revenue of H 27,416 crore (grew 23% year on year) and Net Profit was H 2,057crore (grew 33% year on year). On a Standalone basis, revenue of ABCL was H 219 crore and Net Profit was H 141 crore. Active customer base at ~38 million (grew 8% year on year) aided by focus on granular retail growth across all businesses of the subsidiaries of ABCL. Overall AUM across asset management, life insurance and health insurance at over H 3.6 lakhs crore (de-grew 3% year on year). Overall lending book (NBFC and Housing Finance) at H 94,364 crore (grew 40% year on year). Gross premium (across Life and Health Insurance) at H 17,787 crore (grew 28% year on year).
The Authorised Share Capital of the Company stood at H 4,235,000,000 comprising of 2,062,500,000 Equity Shares of H 2 each and 1,100,000 Redeemable Cumulative Preference Shares of H 100 each as at 31st March 2023.
Issued, subscribed and paid-up capital of the Company stood at H 1,316,864,252 comprising of 658,432,126 Equity Shares of H 2 each fully paid up as at 31st March 2023.
During the year, your Company allotted 1,36,700 equity shares of H 2 each pursuant to the exercise of Stock Options in terms of the Employees Stock Option Schemes of your Company.
GLOBAL DEPOSITARY RECEIPTS (''GDRs'')
During the year, the Company had amended the GDRs Deposit Agreements effective from 26th April 2023. In terms of the said amendment, the Company''s GDR holders will be able to exercise the voting rights in the equity shares underlying the GDRs held by them, by way of providing instructions to the Depositary in terms of the Deposit Agreements and applicable laws.
During the year, Grasim Employees'' Welfare Trust (''Trust'') acquired 6,34,509 equity shares of your Company from the secondary market. As per Ind AS, purchase of own equity shares are treated as treasury shares. The Trust constituted in terms of the Company''s Employee Stock Option Scheme 2018 (''ESOS 2018'') holds 19,95,127 equity shares of your Company as on 31st March 2023 for transfer to the eligible employees under ESOS 2018.
During the year, your Company has not accepted or renewed any deposits within the meaning of Section 73 of the Act, read with the Companies (Acceptance of Deposits) Rules, 2014, and, as such, no amount of principal or interest was outstanding, as on the date of the Balance Sheet.
ISSUE OF NON-CONVERTIBLE DEBENTURES
During the year, your Company has issued 20,000 fully paid-up, Unsecured, Listed, Rated, Redeemable, Non-Convertible Debentures of face value of H 1,000,000 each aggregating to H 2,000 crore, at par, on private placement basis.
Your Company has redeemed 10,000 fully paid-up, Unsecured, Listed, Rated, Redeemable, Non-Convertible Debentures of face value of H 1,000,000 each aggregating to H 1,000 crore during the year.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Pursuant to Section 186 of the Act read with the Companies (Meetings of the Board and its Powers) Rules, 2014, disclosures relating to loans and investments as on 31st March 2023 are given in the Notes to the Financial Statements. During the year, there are no guarantees issued or securities provided by your Company in terms of Section 186 of the Act read with the Rules issued thereunder.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis for the year, as stipulated under the Listing Regulations, is presented in a separate section and forms an integral part of this Annual Report.
Your Directors re-affirm their continued commitment to the best practices of Corporate Governance. Corporate Governance principles form an integral part of the core values of your Company. Your Company was compliant with the provisions relating to Corporate Governance.
The Corporate Governance Report for the year, as stipulated under Regulation 34 of the Listing Regulations, is presented in a separate section, and forms an integral part of this Annual Report. A certificate from the Statutory Auditors on its compliance is given in Annexure ''B'' to this Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL Appointment/Re-appointment of Directors
In accordance with the provisions of the Act and the Articles of Association of the Company, Mr. Kumar Mangalam Birla and Dr. Santrupt Misra, Non-executive Directors of your Company, are liable to retire by rotation at the ensuing AGM and, being eligible, have offered themselves for re-appointment. Brief profiles of Mr. Kumar Mangalam Birla and Dr. Santrupt Misra are provided in the Corporate Governance Report and Notice of AGM.
The Board of Directors:
⢠Appointed Ms. Ananyashree Birla (DIN: 06625036) and Mr. Aryaman Vikram Birla (DIN: 08456879) as Additional Directors (Non-executive Directors) of the Company, liable to retire by rotation, with effect from 6th February 2023. The members of the Company have approved their appointment as Non-executive Directors of the Company through Postal Ballot on 21st March 2023.
⢠Appointed Mr. Yazdi Piroj Dandiwala (DIN: 01055000) as an Additional Director (Independent Director) of the Company, not liable to retire by rotation, with effect from 6th February 2023. The members of the Company have approved his appointment as an Independent Director of the Company, through Postal Ballot on 21st March 2023.
⢠Re-appointed Mr. Harikrishna Agarwal (DIN: 09288720) as the Managing Director and Key Managerial Personnel of the Company, in terms of the provisions of the Act for a period of 2 years with effect from 1st December 2023 up to 30th November 2025, subject to the approval of the members of the Company.
⢠Mr. Shailendra Kumar Jain (DIN: 00022454) has stepped down
as a Non-executive Director of the Company with effect from 1st February 2023, due to advancing age and need to devote time for family affairs including succession planning and pursue personal interest. There was no other material reason for his resignation except as stated.
The Board of Directors placed on record its sincere appreciation for the valuable contribution and services rendered by Mr. Shailendra Kumar Jain during his tenure with
the Company.
There is no pecuniary or business relationship between the Nonexecutive Directors and the Company, except for the sitting fees and commission payable to the Non-executive Directors, in accordance with the applicable laws and approval of the shareholders of the Company.
Pursuant to the provisions of Sections 2(51) and 203 of the Act, Mr. Harikrishna Agarwal, Managing Director, Mr. Pavan Kumar Jain, Chief Financial Officer (''CFO'') and Mr. Sailesh Kumar Daga, Company Secretary are the Key Managerial Personnel (''KMP'') of the Company as on 31st March 2023.
Mr. Pavan Kumar Jain has been appointed as CFO and KMP of the Company with effect from 15th August 2022 in place of Mr. Ashish Adukia, who was CFO and KMP of the Company up to 14th August 2022.
The Board of Directors of the Company met 7 (Seven) times during the year to deliberate on various matters. The meetings were held on 24th May 2022, 16th June 2022, 19th July 2022, 12th August 2022, 14th November 2022, 6th February 2023 and 14th February 2023.
Further details are provided in the Corporate Governance Report, which forms an integral part of this Annual Report.
Your Company has received declarations from all the Independent Directors of your Company, confirming that:
a) they meet the criteria of independence as prescribed under Section 149(6) of the Act and Regulation 16(1 )(b) of the Listing Regulations;
b) they are not aware of any circumstance or situation which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective
of independent judgement and without any external influence; and
c) they have registered their names in the Independent Directors Databank.
Your Company''s Board is of the opinion that the Independent Directors possess requisite qualifications, experience and expertise in Corporate Governance, Legal & Compliance, Financial Literacy, General Management, Human Resource Development, Industry Knowledge, Technology, digitisation & innovation, Marketing, Risk Management, Strategic Expertise and Sustainability and they hold highest standards of integrity.
Pursuant to the provisions of the Act and the Listing Regulations, the Board of Directors has carried out an annual evaluation of its own performance, its Committees, Independent Directors, Non-executive Directors, Executive Director and the Chairman of the Board.
The Nomination and Remuneration Committee ('' N RC'') of the Board has laid down the manner in which formal annual evaluation of the performance of the Board, its Committees and Individual Directors has to be made. It includes circulation of evaluation forms separately for evaluation of the Board and its Committees, Independent Directors/Non-executive Directors/ Executive Director and the Chairman of your Company.
The performance of Non-independent Directors, the Board, as a whole, and the Committees of the Board has been evaluated by Independent Directors in a separate meeting. At the same meeting, the Independent Directors also evaluated the performance of the Chairman of your Company, after taking into account the views of Executive Director and Non-executive Directors. Evaluation as done by the Independent Directors was submitted to the NRC and subsequently to the Board.
Thereafter, the Board at its meeting discussed the performance of the Board, as a whole, its Committees and Individual Directors. The Board expressed satisfaction on the overall functioning of the Board and its Committees. The Board was also satisfied with the contribution of the Directors, in their respective capacities, which reflected the overall engagement of the Individual Directors.
The new Director inducted on the Company''s Board attends an orientation programme. The details of the programme for familiarisation of Independent Directors are provided in the Corporate Governance Report, which forms an integral part of this Annual Report and is also available on your Company''s website at https://www.grasim.com/Upload/PDF/familiarisation-programme-independent-directors.pdf
DIRECTORS'' RESPONSIBILITY STATEMENT
The audited accounts for the year are in conformity with the requirements of the Act and the Accounting Standards. The financial statements reflect fairly the form and substance of transactions carried out during the year and reasonably present your Company''s financial condition and results of operations.
Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of its knowledge and ability, confirms that:
a) i n the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
b) the accounting policies selected have been applied consistently, and judgements and estimates are made that are reasonable and prudent, so as to give a true and fair view of the state of affairs of your Company as at 31st March 2023, and of the profit of your Company for the year ended on that date;
c) proper and sufficient care have been taken for the maintenance of adequate accounting records, in accordance with the provisions of the Act, for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;
d) annual accounts have been prepared on a ''going concern'' basis;
e) the Directors have laid down proper internal financial controls, and that such internal financial controls are adequate and were operating effectively; and
f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo stipulated under Section 134(3)(m) of the Act, read with the Companies (Accounts) Rules, 2014, is given in Annexure ''C'' to this Report.
The Company has published its Integrated Report for the Financial Year 2022-23. This report is prepared in alignment with the Integrated Reporting Framework laid down by the International Integrated Reporting Council and aims at presenting the value creation approach for our stakeholders.
AUDITORS AND AUDIT REPORTS Statutory Auditors
M/s. B S R & Co. LLP, Chartered Accountants (ICAI Firm Registration No. 101248W/W-100022) and M/s. KKC & Associates LLP, Chartered Accountants (Registration No. 105146W/W100621) (formerly known as Khimji Kunverji & Co. LLP), were appointed as Joint Statutory Auditors of the Company for a term of 5 (five) consecutive years, to hold office till the conclusion of the 79th AGM and 80th AGM of the Company, respectively.
The observations made by the Joint Statutory Auditors on the Financial Statements (Standalone and Consolidated) of the Company, in their Report for the financial year ended 31st March 2023, read with the Notes therein, are self-explanatory and, therefore, do not call for any further explanation or comments from the Board of Directors under Section 134(3)(f) of the Act. The Auditors'' Report does not contain any qualification, reservation, disclaimer or adverse remark.
Your Company is required to prepare and maintain the cost accounts and cost records pursuant to Section 148(1) of the Act read with rules made thereunder.
Based on the recommendation of the Audit Committee, the Board of Directors appointed M/s. D. C. Dave & Co., Cost Accountants, Mumbai (Registration No. 000611), as the Cost Auditors to conduct the cost audit of the Company for FY 2023-24 at a remuneration of H 20 lakh plus applicable taxes and reimbursement of out-ofpocket expenses.
The Company has received consent from M/s. D. C. Dave & Co., Cost Accountants, to act as the Cost Auditor of your Company for FY 2023-24, along with the certificate confirming their eligibility.
In accordance with the provisions of Section 148(1) of the Act and Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditor is required to be ratified by the members of the Company. Accordingly, an Ordinary Resolution, for ratification of remuneration payable to the Cost Auditor for FY 2023-24, forms part of the Notice of the 76th AGM of the Company.
The Secretarial Audit Report, issued by M/s. BNP & Associates, Company Secretaries, Mumbai, for the financial year 2022-23, is given in Annexure ''D'' to this Report. The Secretarial Audit Report does not contain any qualification, reservation, disclaimer or adverse remark. The Secretarial Compliance Report for the financial year
VIGIL MECHANISM / WHISTLE-BLOWER POLICY
Your Company has established a mechanism for directors and employees to report instances and concerns about unethical behaviour, actual or suspected fraud, or violation of your Company''s Code of Conduct. It also provides adequate safeguards against the victimisation of employees, who avail the mechanism and allows direct access to the Chairman of the Audit Committee in exceptional cases. During the year, no person was denied access to the Audit Committee.
The details of the Vigil Mechanism are also provided in the Corporate Governance Report, which forms an integral part of this Annual Report and the Vigil Mechanism / Whistle-Blower Policy is available on the website of your Company at https://www.grasim. com/Upload/PDF/whistle-blower-policy.pdf
CORPORATE SOCIAL RESPONSIBILITY
In terms of the provisions of Section 135 of the Act and Rules made thereunder, the Board of Directors has a Corporate Social Responsibility (''CSR'') Committee, which is chaired by Smt. Rajashree Birla. The other Members of the Committee as on 31st March 2023, are Ms. Anita Ramachandran, Independent Director and Mr. Harikrishna Agarwal, Managing Director. Dr. Pragnya Ram, Group Executive President - CSR is a permanent invitee to the Committee. The Corporate Social Responsibility Policy (''CSR Policy''), indicating the activities undertaken by your Company, is available on your Company''s website at https://www.grasim.com/ upload/pdf/Grasim_CSR_Policy_2013.pdf
Your Company is a caring corporate citizen and lays significant emphasis on development of the host communities around which it operates. Your Company, with this intent, has identified several projects relating to Social Empowerment and Welfare, Rural Development, Sustainable Livelihood, Health Care and Education, during the year, and initiated various activities in neighbouring villages around its plant locations.
During the year, the Company has spent H 54.19 crore, of which H34.16 crore (excluding an amount of H 4.50 crore which remained unspent and classified as ongoing project by the Board and it has been transferred to separate bank account in April 2023) was spent towards obligatory CSR of the Company and an amount of H 20.03 crore was voluntarily spent for CSR activities.
The initiatives undertaken by your Company on CSR activities, during the year, are given in Annexure ''E'' to this Report, in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended.
ended 31st March 2023, in relation to compliance of all applicable SEBI Regulations/circulars/guidelines issued thereunder, pursuant to the requirement of Regulation 24A of the Listing Regulations, is available on the website of the Company at https://www.grasim. com/Upload/PDF/annual-secretarial-compliance-report-fy23-31!L-march-2023.pdf
Pursuant to the provisions of Section 204 of the Act and Rules made thereunder, M/s. BNP & Associates, Company Secretaries, Mumbai, are appointed as Secretarial Auditor to conduct the Secretarial Audit of the Company for FY 2023-24.
During the year, your Company is in compliance with the applicable Secretarial Standards specified by the Institute of Company Secretaries of India.
REPORTING OF FRAUDS BY AUDITORS
No instances of fraud were reported by the Auditors under Section 143(12) of the Act.
DISCLOSURESContracts and Arrangements with Related Parties
During the year, all contracts/arrangements/transactions entered into by your Company with Related Parties were on arm''s length basis and in the ordinary course of business. There are no material transactions with any Related Party as defined under Section 188 of the Act, read with the Companies (Meetings of Board and its Powers) Rules, 2014.
In line with the requirements of the Act and amendment to the Listing Regulations, all Related Party Transactions have been approved by the Audit Committee and reviewed by it on a periodic basis. Your Company has formulated a ''Policy on Related Party Transactions'', which is also available on the Company''s website at https://www.grasim.com/ upload/pdf/Grasim_policy_on_RPT.pdf. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties.
The details of contracts and arrangements with Related Parties of your Company for the financial year ended 31st March 2023, are given
in Notes to the Standalone Financial Statements, forming part of this Annual Report.
The Board of Directors at its meeting held on 14th February 2023 has approved entering into material RPTs with Hindalco Industries Limited, a promoter group company for an aggregate value of up to ''1,200 crore. As per Listing Regulations, the Company has also sought approval of the Shareholders through Postal Ballot and the same was approved on 21st March 2023.
RISK MANAGEMENT AND SUSTAINABILITY
Your Company has constituted Risk Management and Sustainability Committee (''RMSC''), which is inter alia, mandated to review the risk management and sustainability plan of your Company. Risk evaluation and management is an ongoing process within the organisation. Your Company has a comprehensive Enterprise Risk Management framework to periodically assess risks in the internal and external environments (including Cyber Security) and incorporate mitigation plans in its business strategy and operation plans. Risks are identified at multiple levels - unit level, business level and corporate level. During the year, the RMSC met twice to review the key risks faced by the Company and steps being taken to mitigate the same.
Based on the aforesaid review, there are no risks, which in the opinion of the Board, threaten the existence of the Company. However, key risks are set out in the Management Discussion and Analysis, which forms part of this Annual Report.
The Risk Management Policy is available on the Company''s website at https://www.grasim.com/Upload/PDF/risk-management-policy.pdf
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
As per Regulation 34(2)(f) of the Listing Regulations, a separate section on Business Responsibility and Sustainability Report, describing the initiatives taken by your Company from environmental, social and governance perspective, forms an integral part of this Annual Report.
Pursuant to Sections 92 and 134 of the Act, and the Rules made thereunder, the Annual Return of your Company as on 31st March 2023 is available on the Company''s website at https://www.grasim. com/Upload/PDF/form-MGT-7-annual-return-fy-22-23.pdf
Your Company has in place adequate internal control systems (including internal financial control system) commensurate with the size and complexity of its operations. Internal control systems comprising of policies and procedures are designed to ensure sound management of your Company''s operations, safe keeping of its assets, optimal utilisation of resources, reliability of its financial information and compliance. Systems and procedures are periodically reviewed to keep pace with the growing size and complexity of your Company''s operations. During the year, no material or serious observation has been received from the Joint Statutory Auditors of your Company, citing inefficiency or inadequacy of such controls.
The Company''s remuneration policy is directed towards rewarding the performance based on review of achievements. The remuneration policy is in consonance with the existing industry practice. There has been no change in the policy during the year.
The Remuneration Policy of your Company, as formulated by the Nomination and Remuneration Committee of the Board of Directors, is given in Annexure ''F'' to this Report and is also available on your Company''s website at https://www.grasim.com/upload/ pdf/ABG-executive-remuneration-philosophy-policy.pdf
STATUTORY COMMITTEES OF THE BOARD Audit Committee
The Audit Committee comprises of Mr. N. Mohan Raj, Chairman, Dr. Thomas M. Connelly Jr., Mr. V. Chandrasekaran and Mr. Harikrishna Agarwal as its members. Majority of the members including Chairman of Audit Committee are Independent Directors. The CFO of your Company is a permanent invitee at the Audit Committee Meetings.
Further details relating to the Audit Committee are provided in the Corporate Governance Report, which forms an integral part of this Annual Report.
All the recommendations made by the Audit Committee, during the year, were accepted by the Board of Directors of your Company.
Nomination and Remuneration Committee
The Nomination and Remuneration Committee (''NRC'') comprises of Ms. Anita Ramachandran, Chairperson, Mr. Kumar Mangalam Birla, Mr. Adesh Kumar Gupta and Mr. Cyril Shroff as its members. Majority of the members including Chairperson of NRC are Independent Directors.
Further details relating to the NRC are provided in the Corporate Governance Report, which forms an integral part of this Annual Report.
Corporate Social Responsibility Committee
The Corporate Social Responsibility (''CSR'') Committee comprises of Smt. Rajashree Birla, Chairperson, Ms. Anita Ramachandran and Mr. Harikrishna Agarwal as its members.
Further details relating to the CSR Committee are provided in the Corporate Governance Report, which forms an integral part of this Annual Report.
Central Pulp & Paper Research Institute (CPPRI) for Bamboo/Jute pulping, Manmade Textiles Research Association (MANTRA) for developing viscose-based non-wovens. Birla Cellulose acquired advisory board membership of the Renewable Bio-resources Institute (RBI) of the University of Georgia, which helps in gathering early view to promising new de-carbonisation technologies. Similarly, memberships with Fashion-for-Good (FFG) and The Microfibre Consortium (TMC) help the Business stay intimately connected with global recycling innovators as well as regulatory eco-systems.
Amongst the New Products, we are glad to note that the short-cut fibres developed by Birla Cellulose for flushable wipes have met with commercial acceptance, and have now transitioned from ''under commercialisation'' to regular manufacture stage. The novel short-cut fibre process was fully developed in-house and is the culmination of innovations in chemistry, process and equipment that made the manufacture possible with minimal changes in plant hardware. Furthermore, this process produces fibres with superior product characteristics compared to established conventional short-cut fibres. Several new fibres were successfully validated at the pilot stage, and are undergoing market-seeding and market validation stages. These include FIR viscose fibre (FIR-VSF) for thermal ware and wellness application, anionic viscose fibre (Liva IntelliColour) that will enable single-bath dyeing with acrylic and cationically dyeable polyester fibres, and viscose fibres for hygiene application (Purocel Ecodry). Such innovative products are not only helping in consolidating the Business''s reputation as an innovation based customer-centric fibre manufacturer but also secured the national level prestigious ''Golden Peacock Innovation Management Award'' for 2022.
VISCOSE FILAMENT YARN (VFY)
Your Company has developed a range of new products that are tailored to meet the diverse needs of our customers. Four products have been produced on commercial scale in PSY and CSY with careful consideration of our customers'' specific needs and preferences.
To expand the range of products offered in SSY, have developed and produced three new products on a commercial scale for different application segment. In addition to product diversification, your Company has been focused on deriving benefits through product improvement. Your Company has also successfully developed microfilament and hybrid yarn in CSY, which has enabled company to create a new market/product segment with enriched fabric (better feel) that meets evolving customer tastes.
Stakeholders'' Relationship Committee
The Stakeholders1 Relationship Committee (''SRC'') comprises of Ms. Anita Ramachandran, Chairperson, Mr. Yazdi Piroj Dandiwala and Mr. Harikrishna Agarwal as its members.
Further details relating to SRC are provided in the Corporate Governance Report, which forms an integral part of this Annual Report.
Risk Management and Sustainability Committee
The Risk Management and Sustainability Committee (''RMSC'') comprises of Mr. N. Mohan Raj, Chairman, Dr. Thomas M. Connelly, Jr., Mr. V. Chandrasekaran, Mr. Harikrishna Agarwal, Mr. Kapil Agarwal, Mr. Jayant V. Dhobley and Mr. Rakshit Hargave.
The CFO and Chief Sustainability Officer of your Company are permanent invitees at the RMSC Meetings.
Further details relating to the RMSC are provided in the Corporate Governance Report, which forms an integral part of this Annual Report.
RESEARCH AND DEVELOPMENT (R&D)
The R&D projects undertaken by the Company focus on developing and commercialising premium differentiated products, improving our competitive cost position, product quality and environmental sustainability. To support these goals, the businesses are managing a pipeline of projects that are addressing near and mid-term needs, as well as the exploration of future opportunities.
PULP AND VISCOSE STAPLE FIBRE (VSF)
The VSF business of the Company consistently pursues excellence in customer centricity and product quality. Key enablers in this journey are relentless focus on process consistency, operational efficiency and an innovative approach of leveraging new scientific advancements.
One such advancement is Digitalisation that has ushered the Industry 4.0 revolution. We strongly believe that Digitalisation will enable our Business to achieve a step improvement in process capability and reliability. An increasingly connected workforce is now routinely utilising Digital dashboards providing real-time process information and trends. AI/ML based models have been implemented for better control of some of the important and difficult-to-control process variables, e.g., OPU in VSF manufacturing lines, and pulp viscosity and whiteness in the Harihar pulp plant. Several AI/ML based soft sensors e.g. real-time contamination detection/removal, early blade breakage detection in fibre cutters, real-time ball fall viscosity measurement, etc., were
successfully implemented in commercial lines and will contribute towards reducing off-spec generation while increasing process consistency. A computer-vision based spinneret inspection system was implemented at Vilayat and BC Kharach units, and is enabling plants to monitor spinneret quality with high resolution. The R&D team combined fundamental physics models with computational fluid dynamics and in partnership with Kharach and Harihar plants helped in debottlenecking fibre dryers, thereby achieving benefits such as throughput enhancement and reductions in steam and soft finish consumption fibre lines. We are confident that as more Digitalisation work-products are implemented, they will usher a transformational change in our Operations'' capabilities.
Sustainability continued to be a high priority for us. For a third consecutive year, Birla Cellulose was awarded the highest rating of Dark Green Shirt by the global NGO Canopy, recognising your Business''s Sustainability efforts. In the arena of textile recycling and circularity, significant progress was made in the form of successful commercial runs of Liva Reviva made from 30% textile waste, and the commissioning of a mechanical recycling facility at TRADC. With both chemical as well as mechanical recycling capabilities, your Business has become the established industry front-runner in textile recycling. The fibre production units achieved significant progress in reducing consumption ratios of key raw materials. Backed by innovative optimisation concepts and digitalisation, Birla Cellulose Kharach achieved a ~10% increase in MSFE evaporation efficiency. This allowed the unit to increase the recycling of intermediate streams, thereby reducing raw water usage and effluent generation. While the productivity of assets such as MSFEs is being maximised, it is also important to inculcate new and potentially superior technologies. Birla Cellulose Kharach is collaborating with Memsift Technologies for the pilot testing of the cutting-edge membrane evaporation technology. Once implemented, membrane evaporation can lead to ~30% reduction in evaporation energy compared to MSFEs. The pilot scale prototype is expected to be ready this year, and will be extensively tested at Birla Cellulose Kharach. This would constitute the first ever pilot scale demonstration of this novel technology in the MMCF sector.
The uncertainties emanating from Covid-19 and subsequent supply-chain disruptions brought to sharp focus, the need to develop wood pulp alternatives. Birla Cellulose''s collaboration with the Australian start-up Nanollose to develop ''tree-free'' Excel fibres from food industry waste derived bacterial cellulose has received international recognition The companies jointly won the ''Cellulose Fibre Innovation of the Year'' award by Nova Institute, Germany for successful pilot scale demonstration of this innovative technology. This work highlights the power of collaboration for fast-tracking commercial innovation. Birla Cellulose is pursuing collaborative research with several frontline scientific bodies, e.g.
CHLOR-ALKALI & CHLORINE DERIVATIVES
Your Company''s Research and Development (''R&D'') efforts stand on the five pillars of - Customers, Innovation, Quality, Sustainability and Profitability. We are focusing efforts on cost optimisation, developing new products after understanding customers latent needs and further enhancing our chlorine derivate portfolio
Water Treatment Business being focus, your Company leveraged its R&D Centre for solving water treatment problems in potable water, some major health problems (removal of fluoride from ground water-jointly with MNIT), working on STP supporting the ''Namami Gange'' project, providing water & waste-water treatment solutions to Oil & Gas, Power, Pulp & Paper, rubber pyrolysis, quarries, economical solutions for Effluent Treatment Plants.
We have expanded R&D centre in on the Vilayat Site by inaugurating new plastic application lab spread in 5000 sq ft area by on boarding technical experts and high end equipment to offer greener and sustainable solutions to the plastic manufacturing customers. We have filed 1 patent and got approval for 2 patents in the last 12 months.
Your Company''s R&D Centre has been approved by the Dept. of Scientific and Industrial Research (DSIR) and is executing collaborative project with many renowned institutes like CSMCRI, CEPT, DST, NEERI, CIFE, CIBA, CLRI, MNIT, IITs, IICT, NCL, etc. Your Company received NSF/ANSI and Kosher certifications for its operating Units, certifications from FSSAI for food grade calcium chloride products, Eco-Passport by OEKO-TEX for new product range developed for textile industry and EU-REACH / UK-REACH for long chain chlorinated paraffins. You became first company granted by BIS for aluminum chlorohydrate product. R&D Centre published research articles/papers and presentations in the area of Water Treatment and Cleaning solutions at various forums like Finest-50 Global Case Studies - Smart Water & Waste World Magazine, CII-ICPC, Chemcon''22, Clean India, Clean Rail solutions and many more.
Your Company''s R&D Centre has also collaborated with the Aditya Birla Science and Technology Company Private Limited (''ABSTCPL'') and the academia in the scientific and technical forums. R&D Centre has also, worked with the Industry to develop multiple coagulants for water treatment with unique specifications like low cost product for CETP, decolourant for coloured effluent, new product for coating and PVC sheets based on long chain chlorinated paraffin for export markets. Your Company is also developing specialty blends (plastics, water treatment, etc.), new formulations for home and personal care FMCG segment and chemicals for pharmaceutical applications.
Various enhancements in production process have also been undertaken by the team to enhance its efficacy and quality of deliverables. Your Company observed an improvement in production in HSBP plant, resolution of issues in Phosphoric Acid plant, modified recipes in PAC liquid production for better product and standardisation of shelf life for all products.
SPECIALITY CHEMICALS (EPOXY POLYMERS & CURING AGENTS)
Your Company''s R&D team is leading and driving the Sustainability portfolio through New Product Development in the area of BioBased products, waterless, solvent free, green processes and chemistries, as well as innovation in the area of Recyclability & Circularity of Materials. The teams are also involved in synthesising new molecules and in developing products and applications that drive growth of specialty segment for the business.
R&D team is working with leading Universities, Institutes and Global experts in building the innovation footprint and speeding up the research to market phase.
R&D team is engaged in development of various bio-based products. Bio-based and high performing molecules are developed via combination of the Company''s formulation expertise and properties brought by new bio-based chemistries. Sustainability is one of key drivers of ABG, which has a long standing commitment to sustainability by using bio-products. Various reactive bio-based epoxy diluents of desired viscosities, Epoxy Equivalent Weight (''EEW'') and Hydrolyzable chloride (''HyCl'') content, mono-, di- and multi-functional epoxy building blocks are developed by R&D.
R&D team is involved in application development in epoxy system solutions for composite segment, wind segment, pipes, LPG gas storage tanks, products for electrical and electronic industries, powder coating segment, adhesives products development, in construction segment, water soluble coating solution for can coating applications, developing products for floor coating and construction segments.
Your Company''s R&D efforts focus on innovation, cost optimisation and introduction of new products to meet customer requirements. Developments during the year included the following:
- New products for HVDC (High Voltage Direct Current Transmission) transmission as per the challenging requirements of the end user.
- Optimised design products for 120 kN and 160 kN A/F.
- Performance enhancement by grade selection and optimisation for metal parts.
- Cost Optimisation and Import Substitution by development of alternate suppliers while maintaining our quality standards.
Your Company is involved in driving innovation, servicing new customers with focus on sustainability and customers emerging needs, and constantly improving its processes.
Your Company has launched:
1. FabroStretch - Comfort Stretch linen range, for tight fit fashion apparels. FabroStretch provides comfort stretch, better recovery and durability.
2. Fabroma- Aroma fragrance linen range, an innovative encapsulated technology-based aroma finish releases fresh aroma upon friction and it is ecofriendly and durable.
Your Company continues to develop blends in both linen and wool with sustainable fibres, such as Silk, Cashmere, Lyocell, Bamboo, etc., we offer organic certified Linen and wool with complete traceability from farm to fashion.
In collaboration with Birla Cellulose, your Company developed Cotton blends with sustainable fibres like Liva Eco, Viscose and Lyocell/Excel fibres.
As a customer centric initiative, your Company has developed wool and wool blends for athleisure/active wear using Super wash technology (First in India).
Your Company is continuously working in collaboration with Aditya Birla Science and Technology Company Private Limited (''ABSTCPL'') and other vendors to examine feasibility of developing a hemp value chain in India. Your Company is also working with global partners, e.g., CELC, Wool Mark, Trevira, NanoTex etc., and other specialty fibres and chemical suppliers to explore and develop innovative yarns and fabrics.
Thus, the wide span of the R&D activities addresses the present and future needs of the Textile business.
Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is given in Annexure ''G'' to this Report.
In accordance with the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees drawing remuneration in excess of the limits, set out in the aforesaid rules, forms part of this Report. In line with the provisions of Section 136(1) of the Act, the Report and Accounts, as set out therein, are being sent to all the Members of your Company, excluding the aforesaid information about the employees. Any Member, who is interested in obtaining these particulars about employees, may write to the Company Secretary at [email protected].
EMPLOYEE STOCK OPTION SCHEMES (ESOS)
ESOS-2006
During the year, the SRC of the Board of Directors allotted 4,510 equity shares of H 2 each of the Company to Stock Option Grantees, pursuant to the exercise of the Stock Options under ESOS-2006. During the year, ESOS-2006 has been completed.
ESOS-2013
During the year, the SRC of the Board of Directors allotted 1,32,190 equity shares of H 2 each of the Company to Stock Option Grantees, pursuant to the exercise of the Stock Options under ESOS-2013.
ESOS-2018
During the year, the NRC approved grant of 5,77,185 Stock Options and 1,82,193 Restricted Stock Units (''RSUs'') to the eligible employees, including Managing Director of the Company, under ESOS-2018. The ESOS-2018 is being administered through the Grasim Employees'' Welfare Trust (Trust).
1,73,169 equity shares were transferred from the Trust account to the employees account on account of exercise of Stock Options and RSUs by the grantees.
ESOS-2022
Pursuant to the approval of the shareholders at the AGM held on 29th August 2022, a new scheme viz. ''Grasim Industries Limited Employee Stock Option and Performance Stock Unit Scheme 2022'' (''ESOS-2022'') has been adopted in terms of the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (''SEBI SBEB & SE Regulations''). The ESOS-2022 is being administered through the Grasim Employees'' Welfare Trust (''Trust'').
During the year, no Stock Options or PSUs were granted under ESOS-2022.
The details of Stock Options granted pursuant to ESOS-2006 and the Stock Options and RSUs granted pursuant to ESOS-2013 and ESOS-2018, and the other disclosures in compliance with the provisions of the SEBI SBEB & SE Regulations, is available on your Company''s website at https://www.grasim.com/Upload/PDF/ esos-disclosure-2023.pdf
A certificate from the Secretarial Auditors with respect to implementation of your Company''s ESOS, will be available at the ensuing AGM for inspection by the Members.
POLICY ON PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company has zero tolerance for sexual harassment at workplace. Your Company has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at Workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (''POSH Act''), and the Rules framed thereunder. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
Your Company has constituted Internal Complaints Committee to redress and resolve any complaints arising under the POSH Act. There were 4 (four) complaints received during the year, out of which 2 (two) were outstanding as on 31st March 2023. The Company is committed to providing a safe and conducive work environment to all its employees and associates.
Your Company''s human resource is the strong foundation for creating many possibilities for its business. The efficient operations of manufacturing units, market development and expansion for various products were the highlight of our people effort.
Continuous people development for developing knowledge and skills coupled with the Talent Management practices will deliver the talent needs of the Organisation. Your Company''s employee engagement score reflects high engagement and pride in being part of the Organisation.
The Group''s Corporate Human Resources plays a critical role in your Company''s talent management process.
AWARDS AND ACCOLADES
Some of the significant accolades earned by your Company during
the year include:
⢠Economic Times - Sustainable Organisation 2022.
⢠Ranks #1 in Apparel/Textile Sector by BW Most Reputed Companies List 2022.
⢠Domestic Textile Business certified as Great Workplace by Great Place to Work® Institute.
⢠Gold Shield for Integrated Reporting - Manufacturing Sector of ''ICAI Sustainability Reporting Awards 2021-22'', by the Institute of Chartered Accountants of India.
⢠Annual Report awards under categories 1) Manufacturing, and 2) Integrated Reporting from South Asian Federation of Accountants (SAFA) 2021.
⢠NW18 Sustainability100 Award in Water Stewardship.
⢠CRISIL Sustainability Report 2022 assigns ''Strong'' rating with and ESG score of 63.
⢠''Golden Peacock Innovation Management Award'' for the year 2022 (Birla Cellulose).
⢠Golden Peacock Award in Occupational Health & Safety 2022. (Harihar unit)
⢠CFBC Boiler won Best Co-Gen Boiler by Director of factories and Boiler, Karnataka for 52nd National Safety Day 2023 (Harihar unit).
⢠''Top Performer - Designated Consumer in Textile sector'' by Power Ministry of Indian Government (Harihar unit).
⢠Future Enterprise of the Year -IDC Future Enterprise Awards 2022 (Birla Cellulose).
⢠Economic Times - Promising Plant 2022 to GCD Vilayat.
⢠''Excellence in Environment Management'' by CII-ITC Sustainability Awards 2022 (GCD Vilayat).
⢠Hot Button Report 2022, Canopy, an environment not-for-profit, has awarded Birla Cellulose with a ''Dark Green Shirt''.
⢠ESG Ratings for 2022 upgraded to ''BBB'' from ''BB'' by MSCI (Morgan Stanley Capital International).
⢠''The CSR Journal Excellence Awards 2022'' (1st Runner-up) Agriculture and Rural Development.
⢠I ndia''s most Sustainable firm 2021 by Capri Global Capital Hurun India -Impact 50 with the highest sustainability score.
⢠Appreciation plaque for commendable CSR work by FICCI CSR awards- Textiles.
⢠Outstanding Accomplishment in Corporate Excellence Award by CII-ITC Sustainability Awards 2022 - Textiles.
⢠Linen club was awarded ''Brand Of The Year 2022'' by Marksmen Daily in association with India Today.
UPDATE ON MATERIAL ORDERS PASSED BY THE REGULATORS
⢠Competition Commission of India (''CCI'') had passed an order under Section 4 of the Competition Act, 2002, dated 16th March 2020, imposing a penalty of H 301 crore on your Company in respect of its domestic man-made fibre turnover for the period from 2008-09 to 2011-12. Your Company had filed an appeal against the order before the Hon''ble National Company Law Appellate Tribunal (''NCLAT''), and has obtained a stay by depositing H 30 crore with NCLAT. While the matter is pending before the NCLAT, CCI has passed another order dated 3rd June 2021, and levied a penalty of H 3.49 crore on your Company (@ H 1 lakh per day for a period of 349 days and continuing thereafter) for non-compliance with its order passed on 16th March 2020. Your Company has filed a writ petition with the Hon''ble Delhi High Court, and the Hon''ble Delhi High Court has stayed the operation of the CCI order.
⢠The CCI has passed another order dated 6th August 2021, under Section 4 of the Competition Act, 2002, for the period of 2017-18. However, because of the penalty of H 301 crore has already been imposed on the Company in a previous order; the CCI deemed it appropriate not to impose any further monetary penalty on the Company. The Company filed an appeal before the Hon''ble NCLAT.
⢠Your Company, backed by independent expert''s opinion, believes that the above orders are not tenable in law. Accordingly, no provision has been made in the books of account on account of these matters.
⢠The Deputy Commissioner of Income Tax (''Assessing Officer'') had vide order dated 14th March 2019 raised a demand of H 5,872 crore on account of dividend distribution tax (including interest) alleging that the demerger of Financial Services Business is not a qualified demerger and holding that the value of shares allotted by Aditya Birla Capital Limited (''ABCL'') to the shareholders of the Company in consideration of the transfer and vesting of the Financial Services Business into ABCL pursuant to duly approved Scheme of Arrangement, amounted to distribution of dividend by the Company.
In first appeal the Commissioner of Income Tax (''C IT'') (Appeal) had upheld the order of the Assessing Officer and reduced the quantum of demand from H 5,872 crore to H 3,786 crore. In second appeal, the Hon''ble Tribunal vide order dated 30th November 2022 held that the demerger qualifies the
conditions laid down under the Income Tax Act. Following the order of the Hon''ble Tribunal, the Assessing Officer vide order dated 5th January 2023 deleted the demand of H 3,786 crore.
⢠Further, the Assessing Officer had passed draft assessment order for the AY 2018-19 on 30th September 2021 and corollary to the earlier order referred above, proposed addition of H 22,772 crore towards capital gains.
Your Company had filed objections before Dispute Resolution Panel (''DRP'') against the draft order passed by the Assessing Officer. The DRP had vide order dated 30th June 2022 allowed
the objection of the Company that the demerger was a tax compliant demerger as all the conditions of Section 2(19AA) of the Act are fulfilled. The Assessing Officer has passed final assessment order dated 26th July 2022 and dropped the proposed addition of capital gains.
⢠Your Company has not made any provision in the books of account in view of the decision of the Hon''ble Tribunal.
CONVENING ANNUAL GENERAL MEETING (AGM) THROUGH AUDIO-VISUAL MEANS FACILITY
The Ministry of Corporate Affairs (''MCA'') has vide its General Circulars No. 14/2020 dated 8th April 2020, No. 17/2020 dated 13th April 2020, No. 20/2020 dated 5th May 2020, No. 02/2021 dated 13th January 2021, No. 2/2022 dated 5th May 2022 and No. 10/2022 dated 28th December 2022 and SEBI Circulars No. SEBI/HO/CFD/ CMD1/CIR/P/2020/79 dated 12th May 2020 and No. SEBI/HO/ CFD/CMD2/CIR/P/2021/11 dated 15th January 2021, No. SEBI/HO/ CFD/CMD2/CIR/P/2022/62 dated 13th May 2022 and No. SEBI/ HO/CFD/PoD-2/P/CIR/2023/4 dated 5th January 2023 issued by the Securities and Exchange Board of India (''SEBI'') (collectively referred to as ''MCA and SEBI Circulars'') permitted convening the AGM through Video Conference (''VC'')/Other Audio-Visual Means (''OAVM''), without the physical presence of the Members at a common venue. In compliance with the MCA and SEBI Circulars, applicable provisions of the Act and the Listing Regulations, the 76th AGM of your Company is being convened and conducted through VC / OAVM.
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these matters during the year:
1. No material changes and commitments affected the financial position of your Company between the end of the financial year and the date of this Report.
2. I ssue of equity shares with differential rights as to dividend, voting or otherwise;
3. Issue of shares (including sweat equity shares) to employees of your Company under any Scheme save and except ESOS referred to in this report;
4. The Managing Director of the Company does not receive any remuneration or commission from any of its subsidiaries;
5. There were no revisions in the financial statement(s);
6. There has been no change in the nature of business of your Company;
7. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and your Company''s operations in the future. The update on the status of material orders passed by the Regulators or Court or Tribunals is provided in this Report;
8. There were no proceedings initiated under the Insolvency and Bankruptcy Code, 2016;
9. There was no instance of one time settlement with any Bank or Financial Institution; and
10. There was no failure to implement any Corporate Action. ACKNOWLEDGEMENT
Your Directors express their deep sense of gratitude to the shareholders, banks, financial institutions, stakeholders, business associates, Central and State Governments for their co-operation and support and look forward to their continued support in future.
Your Directors very warmly thank all our employees for their contribution to your Company''s performance. We applaud them for their superior levels of competence, dedication and commitment to your Company.
For and on behalf of the Board
Chairman
New Delhi, 26th May 2023 (DIN: 00012813)
Mar 31, 2022
Your Directors are pleased to present the 75th Annual Report in the form of Third Integrated Report of your Company along with the Audited Financial Statements for the year ended 31st March 2022.
The financial performance of the Company for the year ended 31st March 2022 is summarised below:
|
(C in Crore) |
||||
|
Particulars |
Consolidated |
Standalone |
||
|
2021-22 |
2020-21 |
2021-22 |
2020-21 |
|
|
Amount Available for Appropriation |
13,577.98 |
8,984.37 |
8,605.51 |
5,792.18 |
|
Add/Less: Transfer (to)/from Debenture Redemption Reserve |
110.60 |
(11.50) |
- |
- |
|
Less: Transfer to General Reserve |
(2,752.48) |
(2,581.87) |
- |
- |
|
Less: Transfer to Special Reserve Fund |
(190.75) |
(107.14) |
- |
- |
|
Less: Dividend Paid on Equity Shares |
(592.26) |
(262.65) |
(592.26) |
(262.65) |
|
Other movements during the year |
6.63 |
- |
- |
- |
|
Closing Balance in Retained Earnings |
10,159.72 |
6,021.21 |
8,013.25 |
5,529.53 |
Based on your Company''s performance, your Directors have recommended dividend of C 5/- per equity share and a special dividend of C 5/- per equity share, taking total dividend to C 10/- per equity share of face value of C 2/- each for the year ended 31st March 2022.
The dividend, if approved by the members, would involve a cash outflow of C 658 Crore.
In terms of the provisions of the Finance Act, 2020, dividend shall be taxed in the hands of shareholders at applicable rates of tax and your Company shall withhold tax at source appropriately.
The recommended divided is in line with your Company''s Dividend Distribution Policy. Dividend Distribution Policy, in terms of the provisions of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (''Listing Regulations'') is available on your Company''s website at https://www.grasim.com/upload/pdf/ Grasim Dividend Policy 16.pdf
The Board of Directors of your Company has decided not to transfer any amount to the General Reserves, for the year ended 31st March 2022.
On a consolidated basis, the revenue from operations for FY 2021-22, stood at C 95,701 Crore registering a growth of 25% as compared to the previous year (C 76,404 Crore in FY 2020-21). The Consolidated EBITDA increased to C 17,772 Crore for FY 2021-22, which was 13% higher than that of the previous year (C 15,766 Crore in FY 2020-21).
On a standalone basis, revenue from operations for FY 2021-22 stood at C 20,857 Crore, registering a growth of 68% as compared to the previous year (C12,386 Crore in FY 2020-21). The standalone EBITDA is C 4,111 Crore for FY 2021-22 which was 98% higher than that of the previous year (C 2,078 Crore in FY 2020-21).
STRATEGIC INITIATIVES AND SIGNIFICANT DEVELOPMENTSDivestment of Indo Gulf Fertiliser Business
The Scheme of Arrangement between the Company and Indorama India Private Limited ('' IIPL'') and their respective shareholders and creditors (''Scheme'') under Sections 230 to 232 of the Companies Act, 2013 (''the Act'') was approved by the Board of Directors of your Company and IIPL and necessary application/petitions for approving divestment of Business Undertaking (as defined in the Scheme) were filed with respective jurisdictional National Company Law Tribunals (''NCLT''). The Hon''ble NCLT Indore Bench at Ahmedabad approved the Scheme vide its order dated 2nd September 2021 along with the order for condonation of delay to file the requisite e-form with the Ministry of Corporate Affairs on 23rd December 2021. Your Company has filed the copy of the order with Registrar of Companies (''ROC''), Gwalior on 1st January 2022. The Scheme has been effective from 1st January 2022.
Update on Paints Business
The organised decorative paints industry has grown by 32% in terms of revenue during FY 2021-22 over previous year. It has grown at 12% CAGR from FY 2017-18 to FY 2021-22.
Considering the changing market dynamics of the decorative paints sector, the Company has accelerated the execution of paints capacity of 1,332 MLPA with commissioning of plants in phases from Q4 FY 2023-24 at 6 locations namely Panipat (Haryana), Ludhiana (Punjab), Chamarajanagar (Karnataka), Cheyyar (Tamil Nadu), Mahad (Maharashtra) and Kharagpur (West Bengal). The project cost is likely to be C 10,000 Crore by FY25.
The Company has got the land possession at all these sites and civil works have commenced at Panipat, Ludhiana, Cheyyar and Chamarajanagar sites. The project work at other sites will be started as soon as all relevant statutory approvals are received. Basic and detailed engineering contracts have been awarded for all the 6 sites. Ordering for equipment and other works for the project is going on. R&D Pilot plant is expected to be commissioned at Taloja by Q3 of FY 2023-24.
The Company aims to be number two player in decorative paint industry. Entry in the paints sector will add size, scale, and diversity to the existing business portfolio of the Company.
The Company has spent C605 Crore cumulatively up to FY 2021-22 primarily on acquisition of 6 land parcels for the Paints Business.
Update on B2B e-commerce platform
The Board of Directors of your Company has approved a foray into B2B e-commerce platform for the Building Materials segment with an investment of C2,000 Crore over the next 5 years. This investment adds a new high-growth engine with clear adjacencies within Company''s standalone businesses as also that of its subsidiaries and associate companies.
Aditya Birla Power Composites Limited
Aditya Birla Power Composites Limited (''ABPCL''), is a joint venture between the Company and Maschinenfabrik Reinhausen Gmbh, Germany (''MR''), wherein the Company holds 51% of share capital and the balance share capital (49%) is held by MR. The Company has set up a state-of-the-art Composite Hollow Core Insulators (''CHCI'') manufacturing plant (Phase-I) at Halol, Gujarat, India at a project cost of about C 74 Crore for the manufacture and sale of CHCI to serve the power transmission and distribution industry. The plant commissioned from February 2022.
Amalgamation of Grasim Premium Fabric Private Limited with your Company
The Scheme of Arrangement between Grasim Premium Fabric Private Limited (''GPFPL'') and Grasim Industries Limited and their respective shareholders and creditors (''Scheme'') under Sections 230 to 232 of the Companies Act, 2013 was approved by the Board of Directors of your Company and GPFPL respectively and necessary application/petitions for amalgamation were filed with jurisdictional National Company Law Tribunals (NCLTs). The Hon''ble NCLT Indore Bench at Ahmedabad approved the Scheme vide its order dated 12th November 2020 as amended vide its order dated 28th January 2021. Your Company had filed the copy of the order with Registrar of Companies (''ROC''), Gwalior. The Hon''ble NCLT Mumbai Bench approved the Scheme vide its order dated 23rd March 2021. The certified copy of the order of the Hon''ble NCLT Mumbai Bench was filed with the ROC, Pune by GPFPL. The Scheme has become effective from 21st June 2021 with appointed date being 1st April 2019.
Amalgamation of Sun God Trading and Investment Limited with ABNL Investment Limited
The Board of Directors of ABNL Investment Limited (wholly-owned subsidiary of your Company) and Sun God Trading and Investment Limited (wholly-owned subsidiary of ABNL Investment Limited) had approved the Scheme of Amalgamation between Sun God Trading and Investment Limited (Transferor Company) and ABNL
Investment Limited (Transferee Company) and their respective shareholders and creditors (''Scheme'') under Section 233 of the Companies Act, 2013. The Scheme was approved by the Hon''ble Regional Director (North-Western Region), Ahmedabad (Regional Director) vide its order dated 3rd February 2021. Transferee Company had filed copy of the order of Regional Director with the Registrar of Companies, Ahmedabad. A copy of the order of the Regional Director was received by the Transferor Company on 15th June 2021 and filed with Registrar of Companies, Gwalior on 29th June 2021. The Scheme has become effective from 29th June 2021 with appointed date being 1st April 2019.
Amalgamation of Aditya Birla Solar Limited with Aditya Birla Renewables Limited
Aditya Birla Solar Limited (''ABSL'') and Aditya Birla Renewables Limited (''ABReL'') are wholly-owned subsidiaries of your Company, both engaged in the business of electric power generation using solar energy. ABReL and ABSL had filed the Application and the Scheme of Arrangement with the Hon''ble National Company Law Tribunal, Mumbai (''NCLT'') on 27th March 2020 for the amalgamation of ABSL with ABReL under Sections 230 and 232 of the Companies Act, 2013. Subsequent to directions received from the Hon''ble NCLT, the meetings of shareholders and unsecured creditors of both the Companies were dispensed with and both the Companies complied with the directions of the Hon''ble NCLT order. The Companies filed the petition on 18th June 2021 seeking sanction on the said scheme. The said petition got transferred to Bench II of the Hon''ble NCLT Bench, Mumbai and was admitted on 27th April 2022 and is reserved for the orders.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the Companies Act, 2013 (''the Act'') read with the Companies (Accounts) Rules, 2014, Listing Regulations and IND AS 110 - Consolidated Financial Statements and IND AS 28 - Investment in Associates/Joint Ventures, the Audited Consolidated Financial Statements forms integral part of this Annual Report.
SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES
Following were the additions during the year:
⢠Birla Advanced Knits Private Limited became a Joint Venture of the Company w.e.f. 14th July 2021 and the Company holds 50% of the paid-up equity share capital.
⢠Renew Surya Uday Private Limited became an associate Company of the Company w.e.f. 25th November 2021 and the Company holds 26% of the paid-up equity share capital.
⢠ABReL Solar Power Limited (ABRSPL) was incorporated on 31st August 2021 as a wholly owned subsidiary of Aditya Birla Renewables Limited (ABReL) and the Company acquired 26% stake in ABRSPL w.e.f. 22nd October 2021.
H2FY 2020-21 witnessed a steady demand recovery. The uptick in demand for cement was driven by affordable housing projects and Government infrastructure projects like roads, metro, irrigation projects and others.
The cement demand growth in FY 2022-23 is expected to remain strong considering the Government''s thrust on infrastructure and roads development, housing, and rural infrastructure.
UltraTech reported net revenue of C52,599 Crore and EBITDA of C12,022 Crore during FY 2021-22. UltraTech has approved a fresh capex of C5,477 Crore towards increasing capacity by 12.8 MTPA with a mix of brownfield and greenfield expansion, in addition to a 6.7 MTPA capacity expansion currently underway. Upon completion of the latest round of expansion, UltraTech''s capacity will grow to 136.25 MTPA, reinforcing its position as the third-largest cement company in the world, outside of China.
ADITYA BIRLA CAPITAL LIMITED (''ABCL'')
ABCL reported a Consolidated Revenue of C 22,230 Crore (grew 15% year on year) and Net Profit was C 1,706 Crore (grew 51% year on year). On a Standalone basis, revenue of ABCL was C 453 Crore and Net Profit was C 345 Crore.
Active customer base at 35 Million (grew 36% year on year) aided by focus on granular retail growth across all businesses of the subsidiaries of ABCL. Overall AUM across asset management, life insurance and health insurance at over C 3,70,608 Crore (grew 10% year on year). Overall lending book (NBFC and Housing Finance) at C 67,185 Crore (grew 11% year on year). Gross premium (across Life and Health Insurance) at C 13,867 Crore (grew 25% year on year).
SHARE CAPITAL
Pursuant to the Scheme of Arrangement between Grasim Premium Fabric Private Limited and the Company, the Authorised Equity Share Capital of the Company has increased from C 294,50,00,000/- (147,25,00,000 equity shares of C 2/-each) to C 412,50,00,000/- (206,25,00,000 equity shares of C 2/- each).
Accordingly, the Authorised Share Capital of the Company stood at C 423,50,00,000/- comprising of 206,25,00,000 equity shares of C 2/- each and 11,00,000 Redeemable Cumulative Preference Shares of C 100/- each as at 31st March 2022.
Issued, subscribed and paid-up capital of the Company stood at C 1,31,65,90,852/- comprising of 65,82,95,426 equity shares of C 2/- each fully paid up as at 31st March 2022.
During the year, your Company allotted 2,50,582 equity shares of C 2/- each pursuant to the exercise of Stock Options and Restricted Stock Units in terms of the Employees Stock Option Schemes of your Company.
Grasim Premium Fabric Private Limited ceased to be the subsidiary of the Company with effect from 21st June 2021.
Apart from this, there were no changes in the direct subsidiaries, associates and joint venture Companies of your Company.
In accordance with the provisions of Section 129(3) of the Act, read with the Companies (Accounts) Rules, 2014, a report on the performance and financial position of each of the subsidiaries, associates and joint venture companies is provided, in the prescribed Form AOC-1, in Annexure ''A'' to this Report.
In accordance with Section 136 of the Act, the Audited Standalone and Consolidated Financial Statements and related information of the Company and audited accounts of each of its subsidiaries are available on the website of the Company at https://www. grasim.com/investors/results-reports-and-presentations
UltraTech Cement Limited and Aditya Birla Capital Limited are the material listed subsidiary Companies of your Company. Your Company does not have any material unlisted subsidiary Company. The Audit Committee and the Board reviews the financial statements, significant transactions and working of all subsidiary Companies, and the minutes of unlisted subsidiary Companies/Joint Venture are placed before the Board.
Your Company has in accordance with the Listing Regulations adopted the Policy for determining material subsidiaries. The said Policy is available on your Company''s website at https://www. grasim.com/upload/pdf/Grasim Policy Material Subsidiary Cos.pdf
CONVENING ANNUAL GENERAL MEETING (AGM) THROUGH AUDIO-VISUAL MEANS FACILITY
The Ministry of Corporate Affairs (''MCA'') has vide its General Circular No. 20/2020 dated 5th May 2020, General Circular No. 14/2020 dated 8th April 2020; General Circular No. 17/2020 dated 13th April 2020; and General Circular No. 02/2021 dated 13th January 2021 and General Circular No. 2/2022 dated 5th May 2022 and Circular No. SEBI/HO/CFD/CMD1/CIR/P/2020/79 dated 12th May 2020 and Circular No. SEBI/HO/CFD/CMD2/CIR/P/2021/11 dated 15th January 2021 and SEBI circular No. SEBI/HO/CFD/CMD2/CIR/P/2022/62 dated 13th May 2022 issued by the Securities and Exchange Board of India (''SEBI'') (collectively referred to as ''MCA and SEBI Circulars'') permitted convening the Annual General Meeting through Video Conference (''VC'')/Other Audio-Visual Means (''OAVM''), without the physical presence of the Members at a common venue. In compliance with the MCA and SEBI Circulars, applicable provisions of the Act and the Listing Regulations, the 75th Annual General Meeting of your Company will be convened and conducted through VC / OAVM.
ULTRATECH CEMENT LIMITED (''ULTRATECH'')
The Indian Cement demand contracted by 10-12% in FY 2020-21, given the economic standstill in H1FY 2020-21. However,
During the year, Grasim Employees'' Welfare Trust (''Trust'') acquired 4,21,880 equity shares of your Company from the secondary market. As per IND AS, purchase of own equity shares are treated as treasury shares. The Trust constituted in terms of the Company''s Employee Stock Option Scheme 2018 (''ESOS 2018'') holds 15,33,787 equity shares of your Company as on 31st March 2022 for allotment to the eligible employees under ESOS 2018.
During the year, your Company has not accepted or renewed any deposits within the meaning of Section 73 of the Act, read with the Companies (Acceptance of Deposits) Rules, 2014, and, as such, no amount of principal or interest was outstanding, as on the date of the Balance Sheet.
ISSUE OF NON-CONVERTIBLE DEBENTURES
During the year, your Company has issued 10,000 fully paid-up, Unsecured, Listed, Rated, Redeemable, Non-convertible Debentures of face value of C 10,00,000/- each aggregating to C1,000 Crore, at par, on private placement basis.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Pursuant to Section 186 of the Act read with the Companies (Meetings of the Board and its Powers) Rules, 2014, disclosures relating to loans, advances and investments as on 31st March 2022 are given in the Notes to the Financial Statements. There are no guarantees issued or securities provided by your Company in terms of Section 186 of the Act read with the Rules issued thereunder.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year, as stipulated under the Listing Regulations, is presented in a separate section and forms an integral part of this Annual Report.
Your Directors re-affirm their continued commitment to the best practices of Corporate Governance. Corporate Governance principles form an integral part of the core values of your Company. Your Company was compliant with the provisions relating to Corporate Governance.
The Corporate Governance Report for the year, as stipulated under Regulation 34 of the Listing Regulations, is presented in a separate section, and forms an integral part of this Annual Report. A certificate from the Statutory Auditors on its compliance is given in Annexure ''B'' to this Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Appointment/Re-appointment of Directors
In accordance with the provisions of the Act and the Articles of Association of the Company, Smt. Rajashree Birla and Mr. Shailendra K. Jain, Non-executive Directors of your Company, are liable to retire by rotation at the AGM and, being eligible, have offered themselves for re-appointment. Brief profiles of Smt. Rajashree Birla and Mr. Shailendra K. Jain are provided in the Corporate Governance Report.
The Board of Directors at its meeting held:
⢠On 1st September 2021, has appointed Mr. Harikrishna Agarwal (DIN: 09288720) as an Additional Director and Managing Director and Key Managerial Personnel (''KMP'') of the Company, not liable to retire by rotation, with effect from 1st December 2021. The members of the Company have approved his appointment as Managing Director and KMP of the Company for a period of 2 years through Postal Ballot on 16th November 2021.
⢠On 12th November 2021, has appointed Mr. Raj Kumar (DIN: 06627311) as an Additional Non-executive Non-Independent Director, liable to retire by rotation, with effect from 12th November 2021. The members of the Company have approved his appointment as Non-executive Non-Independent Director of the Company, through Postal Ballot on 30th December 2021.
⢠Ms. Anita Ramachandran (DIN: 00118188) was appointed as an Independent Director at the AGM of your Company, held on 14th September 2018, for a period of 5 consecutive years.
Based on the report of performance evaluation and the recommendation of the Nomination and Remuneration Committee, the Board at its meeting held on 19th July 2022, has, subject to the approval of the shareholders, approved the appointment of Ms. Anita Ramachandran, Independent Director, for a second term of 5 years, commencing from 14th August 2023.
Resolution seeking the appointment of Ms. Anita Ramachandran as an Independent Director for a second term along with the brief profile, forms part of the Notice of the Annual General Meeting.
Your Directors recommend the resolution pertaining to appointment of Ms. Anita Ramachandran as an Independent Director for a second term for your approval.
Cessation of Directors
⢠Mr. Vipin Anand, Non-executive Non-independent Director resigned from the Board of Directors of the Company with effect from 14th October 2021, to avoid any potential conflict
of interest consequent to his appointment as an Insurance Ombudsman, Bengaluru. There was no other material reason for his resignation except as stated.
⢠Mr. Dilip Gaur, Managing Director of the Company, took an early retirement and ceased to be the Managing Director and Key Managerial Personnel of the Company with effect from the close of business hours of 30th November 2021.
The Board placed on record its sincere appreciation for the valuable contribution and services rendered by Mr. Vipin Anand and Mr. Dilip Gaur during their tenure with the Company.
There is no pecuniary or business relationship between the Non-executive Directors and the Company, except for the sitting fees and commission payable to the Non-executive Directors, in accordance with the applicable laws and approval of the shareholders of the Company.
Pursuant to the provisions of Section 203 of the Act, Mr. Harikrishna Agarwal, Managing Director, Mr. Ashish Adukia, Chief Financial Officer (''CFO'') and Mr. Sailesh Daga, Company Secretary are the Key Managerial Personnel (''KMP'') of the Company as on 31st March 2022.
Mr. Pavan Jain has been appointed as CFO and KMP of the Company with effect from 15th August 2022. The appointment comes in the wake of Mr. Ashish Adukia''s plan to pursue career opportunities outside the Aditya Birla Group. He will be relieved from his current responsibilities as CFO and KMP of the Company with effect from 14th August 2022.
The Board placed on record its sincere appreciation for the valuable contribution made by Mr. Ashish Adukia during his tenure as the CFO and KMP of the Company.
The Board of Directors of the Company met 6 (six) times during the year to deliberate on various matters. The meetings were held on 24th May 2021, 13th August 2021, 1st September 2021, 12th November 2021, 31st December 2021 and 14th February 2022.
Further details are provided in the Corporate Governance Report, which forms an integral part of this Annual Report.
Your Company has received declarations from all the Independent Directors of your Company, confirming that:
(a) they meet the criteria of independence as prescribed under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations; and
(b) they have registered their names in the Independent Directors Databank.
Your Company''s Board is of the opinion that the Independent Directors possess requisite qualifications, experience and expertise in Corporate Governance, Legal, Compliance, Financial literacy, General Management, Human Resource Development, Industry knowledge, Innovation, technology & digitisation, Marketing, Risk Management, Strategy and Sustainability and they hold highest standards of integrity.
Pursuant to the provisions of the Act and the Listing Regulations, the Board of Directors has carried out an annual evaluation of its own performance, its Committees, Independent Directors, Non-executive Directors, Executive Director and the Chairman of the Board.
The Nomination and Remuneration Committee (''NRC'') of the Board has laid down the manner in which formal annual evaluation of the performance of the Board, its Committees and Individual Directors has to be made. It includes circulation of evaluation forms separately for evaluation of the Board and its Committees, Independent Directors/ Non-executive Directors/ Executive Director and the Chairman of your Company.
The performance of Non-independent Directors, the Board, as a whole, and the Committees of the Board has been evaluated by Independent Directors in a separate meeting. At the same meeting, the Independent Directors also evaluated the performance of the Chairman of your Company, after taking into account the views of Executive Director and Non-executive Directors. Evaluation as done by the Independent Directors was submitted to the NRC and subsequently to the Board.
The performance of the Board and its Committees was evaluated by the NRC after seeking inputs from all the Directors, on the basis of criteria such as the Board/ Committee composition and structure, effectiveness of the Board/ Committee process, information and functioning, etc.
The performance evaluation of all the Directors of your Company (including Independent Directors, Executive Director and Non-executive Directors and Chairman), is done at the NRC meeting and the Board meeting by all the Board Members, excluding the Director being evaluated on the basis of criteria, such as contribution at the meetings, strategic perspective or inputs regarding the growth and performance of your Company, among others. Following the meetings of Independent Directors and of NRC, the Board at its meeting discussed the performance of the Board, as a whole, its Committees and Individual Directors.
The Board expressed satisfaction on the overall functioning of the Board and its Committees. The Board was also satisfied with the contribution of Directors, in their respective capacities, which reflected the overall engagement of the Individual Directors.
The new Director inducted on the Company''s Board attends an orientation programme. The details of the programme for familiarisation of Independent Directors are provided in the Corporate Governance Report, which forms an integral part of this Annual Report and is also available on your Company''s website at https://www.grasim.com/Upload/PDF/familiarisation-programme-independent-directors.pdf
DIRECTORS'' RESPONSIBILITY STATEMENT
The audited accounts for the year are in conformity with the requirements of the Companies Act, 2013 (''the Act'') and the Accounting Standards. The financial statements reflect fairly the form and substance of transactions carried out during the year and reasonably present your Company''s financial condition and results of operations.
Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of its knowledge and ability, confirms that:
a) i n the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
b) the accounting policies selected have been applied consistently, and judgements and estimates are made that are reasonable and prudent, so as to give a true and fair view of the state of affairs of your Company as at 31st March 2022, and of the profit of your Company for the year ended on that date;
c) proper and sufficient care have been taken for the maintenance of adequate accounting records, in accordance with the provisions of the Act, for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;
d) annual accounts have been prepared on a ''going concern'' basis;
e) the Directors have laid down proper internal financial controls, and that such internal financial controls are adequate and were operating effectively; and
f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo stipulated under Section l34(3)(m) of the Act, read with the Companies (Accounts) Rules, 2014, is given in Annexure ''C'' to this Report.
The Company has provided Integrated Report. This report is prepared in alignment with the Integrated Reporting Framework laid down by the International Integrated Reporting Council and aims at presenting the value creation approach for our stakeholders.
AUDITORS AND AUDIT REPORTS Statutory Auditors
M/s. B S R & Co. LLP, Chartered Accountants (ICAI Firm Registration No. 101248W/W-100022), were appointed as Statutory Auditors of the Company for a term of 5 (five) consecutive years, to hold office till the conclusion of the 79th Annual General Meeting of the Company. The Auditors have confirmed that they are not disqualified from continuing as Statutory Auditors of the Company.
Pursuant to the provisions of the Act, the term of office of M/s. S R B C & Co. LLP, Chartered Accountants (ICAI Firm Registration No. 324982E/E300003), shall complete at the conclusion of the ensuing Annual General Meeting.
Based on the recommendation of the Audit Committee, the Board has recommended the appointment of M/s. KKC & Associates LLP, Chartered Accountants (formerly known as Khimji Kunverji & Co. LLP) (Registration No. 105146W/ W100621), as a Joint Statutory Auditors of the Company, for a first term of 5 consecutive years from the conclusion of 75th AGM till the conclusion of 80th AGM of the Company, subject to the approval of the Members in the ensuing AGM.
They have confirmed their eligibility and qualification required under the Act for holding the office, as Statutory Auditors of the Company.
Accordingly, an Ordinary Resolution, proposing the appointment of M/s. KKC & Associates LLP, Chartered Accountants (Registration No. 105146W/ W100621), forms part of the Notice of the 75th AGM of the Company.
The observations made by the Joint Statutory Auditors on the Financial Statements (Standalone and Consolidated) of the Company, in their Report for the financial year ended 31st March 2022, read with the Explanatory Notes therein, are self-explanatory and, therefore, do not call for any further
explanation or comments from the Board under Section l34(3)(f) of the Act. The Auditors'' Report does not contain any qualification, reservation, disclaimer or adverse remark.
Your Company is required to prepare and maintain the cost accounts and cost records pursuant to Section 148(1) of the Act read with rules made thereunder (including any statutory modification(s) or re-enactment thereof for the time being in force).
Based on the recommendation of the Audit Committee, the Board of Directors appointed M/s. D. C. Dave & Co., Cost Accountants, Mumbai (Registration No. 000611), as the Cost Auditors to conduct the cost audit for all divisions of the Company for FY 2022-23 at a remuneration of C18.50 lakh plus applicable taxes and reimbursement of out-of-pocket expenses.
The Company has received consent from M/s. D. C. Dave & Co., Cost Accountants, to act as the Cost Auditors of your Company for FY 2022-23, along with certificate confirming their eligibility.
In accordance with the provisions of Section 148(1) of the Act and Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors is required to be ratified by the members of the Company. Accordingly, an Ordinary Resolution, for ratification of remuneration payable to the Cost Auditors for FY 2022-23, forms part of the Notice of the 75th AGM of the Company.
The Secretarial Audit Report, issued by M/s. BNP & Associates, Company Secretaries, Mumbai, for the financial year 2021-22, is given in Annexure ''D'' to this Report. The Secretarial Audit Report does not contain any qualification, reservation, disclaimer or adverse remark. The Secretarial Compliance Report for the financial year ended 31st March 2022, in relation to compliance of all applicable SEBI Regulations/ circulars/ guidelines issued thereunder, pursuant to the requirement of Regulation 24A of the Listing Regulations, is available on the website of the Company at https://www.grasim.com/Upload/PDF/secretarial-compliance-report-aug22.pdf
Pursuant to the provisions of Section 204 of the Act and Rules made thereunder, M/s. BNP & Associates, Company Secretaries, Mumbai, are appointed as Secretarial Auditors to conduct the Secretarial Audit of the Company for FY 2022-23.
During the year, your Company is in compliance with the Secretarial Standards specified by the Institute of Company Secretaries of India.
REPORTING OF FRAUDS BY AUDITORS
During the year, none of the Auditors of your Company, i.e, the Statutory Auditors, Cost Auditors and Secretarial Auditors has reported to the Audit Committee under Section 143(12) of the Act any instances of fraud committed against your Company by its officers and/or employees, details of which would need to be mentioned in the Board''s Report.
Contracts and Arrangements with Related Parties
During the year, all contracts/ arrangements/ transactions entered into by your Company with Related Parties were on arm''s length basis and in the ordinary course of business. There are no material transactions with any Related Party as defined under Section 188 of the Act, read with the Companies (Meetings of Board and its Powers) Rules, 2014.
In line with the requirements of the Act and amendment to the Listing Regulations, all Related Party Transactions have been approved by the Audit Committee and reviewed by it on a periodic basis. Your Company has formulated a ''Policy on Related Party Transactions'', which is also available on the Company''s website at https://www.grasim.com/upload/pdf/ Grasim policy on RPT.pdf . The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties.
The details of contracts and arrangements with Related Parties of your Company for the financial year ended 31st March 2022, are given in Notes to the Standalone Financial Statements, forming part of this Annual Report.
VIGIL MECHANISM / WHISTLE-BLOWER POLICY
Your Company has established a mechanism for directors and employees to report instances and concerns about unethical behaviour, actual or suspected fraud, or violation of your Company''s Code of Conduct. It also provides adequate safeguards against the victimisation of employees who avail the mechanism and allows direct access to the Chairman of the Audit Committee in exceptional cases. During the year, no person was denied access to the Audit Committee.
The details of the Vigil Mechanism are also provided in the Corporate Governance Report, which forms an integral part of this Annual Report and the Whistle-Blower Policy is available on the website of your Company at https://www.grasim.com/ upload/pdf/whistle âblower policv.pdf
CORPORATE SOCIAL RESPONSIBILITY
In terms of the provisions of Section 135 of the Act and Rules made thereunder, the Board of Directors has a Corporate
Social Responsibility (''CSR'') Committee, which is chaired by Smt. Rajashree Birla. The other Members of the Committee as on 31st March 2022, are Ms. Anita Ramachandran, Independent Director, Mr. Shailendra K. Jain, Non-executive Director and Mr. Harikrishna Agarwal, Managing Director. Dr. Pragnya Ram, Group Executive President - CSR is a permanent invitee to the Committee. The Corporate Social Responsibility Policy (''CSR Policy''), indicating the activities undertaken by your Company, is available on your Company''s website at https://www.grasim. com/investors/policies-and-code-of-conduct.
Your Company is a caring corporate citizen and lays significant emphasis on development of the host communities around which it operates. Your Company, with this intent, has identified several projects relating to Social Empowerment and Welfare, Rural Development, Sustainable Livelihood, Health Care and Education, during the year, and initiated various activities in neighbouring villages around its plant locations. Your Company undertook several initiatives to help nation fight against COVID-19 crisis including supply of healthcare equipment, oxygen concentrators, organisation of medical camps, distributing face masks, hand gloves, sanitiser bottles, COVID-19 testing kits, PPE kit, creating COVID-19 related awareness, etc.
During the year, the Company spent C42.47 Crore, of which C38.40 Crore (excluding CSR of C4.75 Crore which remained unspent and has been transferred to separate bank account in April 2022 and classified as ongoing project by the Board) was spent towards mandatory CSR obligations of the Company and additionally C4.07 Crore was spent towards voluntary CSR activities.
The initiatives undertaken by your Company on CSR activities, during the year, are given in Annexure ''E'' to this Report, in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended.
RISK MANAGEMENT AND SUSTAINABILITY
Your Company has constituted Risk Management and Sustainability Committee, which is inter alia, mandated to review the risk management plan/process of your Company. Risk evaluation and management is an ongoing process within the organisation. Your Company has a comprehensive Enterprise Risk Management framework to periodically assess risks in the internal and external environments and incorporates mitigation plans in its business strategy and operation plans. The same is periodically reviewed by the Committee. The scope of the Committee has been enhanced to include activities pertaining to overseeing sustainability activities, advising the Board on sustainability practices, etc, and accordingly, the Risk Management Committee was renamed as Risk Management and Sustainability Committee (''RMSC'') effective from 24th May 2021. During the year, the RMSC met twice to review the risk management activities of
the Company which includes Risk Identification, Assessment, Evaluation and Mitigation plans.
Based on the aforesaid review, there are no risks, which in the opinion of the Board, threaten the existence of the Company. However, key risks are set out in the Management Discussion and Analysis, which forms part of this Annual Report.
The Risk Management Policy is available on the Company''s website at https://www.grasim.com/Upload/PDF/risk-management-policv.pdf
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
As per Regulation 34(2)(f) of the Listing Regulations, a separate section on Business Responsibility and Sustainability Report, describing the initiatives taken by your Company from environmental, social and governance perspective, forms an integral part of this Annual Report.
ANNUAL RETURN
Pursuant to Section 92 and Section 134 of the Act, read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of your Company as on 31st March 2022 is available on Company''s website at https://www. grasim.com/Upload/PDF/annual-return-aug22.pdf
INTERNAL CONTROLS
Your Company has in place adequate internal control systems (including internal financial control system) commensurate with the size and complexity of its operations. Internal control systems comprising of policies and procedures are designed to ensure sound management of your Company''s operations, safe keeping of its assets, optimal utilisation of resources, reliability of its financial information and compliance. Systems and procedures are periodically reviewed to keep pace with the growing size and complexity of your Company''s operations. During the year, no material or serious observation has been received from the Joint Statutory Auditors of your Company, citing inefficiency or inadequacy of such controls.
REMUNERATION POLICY
The Company''s remuneration policy is directed towards rewarding performance based on review of achievements. The remuneration policy is in consonance with existing industry practice. There has been no change in the policy during the year.
The Remuneration Policy of your Company, as formulated by the Nomination and Remuneration Committee of the Board of Directors, is given in Annexure ''F'' to this Report and is also available on your Company''s website at https://www.grasim.com/ upload/pdf/ABG-executive-remuneration-philosophv-policv.pdf
Further details relating to the RMSC are provided in the Corporate Governance Report, which forms an integral part of this Annual Report.
RESEARCH AND DEVELOPMENT (R&D)
The R&D projects portfolio is focused on improving the relative market position of your Company''s businesses in the face of increasingly volatile and competitive business environment. The focus is on developing and commercialising premium differentiated products, improving our competitive cost position, product quality and environmental sustainability. To support these goals, the businesses are managing a pipeline of projects that are addressing near and mid-term needs, as well as the exploration of future opportunities.
PULP AND VISCOSE STAPLE FIBRE (VSF)
The Pulp Technology team continues with the quality improvement drive. Implementation of advanced quality assurance practices like first pass yield and uptime have been initiated in the pulp manufacturing units to ensure continual improvement. AI and machine learning based models and tools continue to be explored to improve consumption ratios the performance on major quality parameters like pulp viscosity, brightness, and purity. Considering the abundance of agro-waste in India, your Company has initiated exploration of alternate sustainable cellulosic feedstocks at R&D scale for manufacturing of dissolving grade pulp.
Fibre production units have created new benchmarks in releasing hidden capacity. Your Company has also set new global benchmarks in consumption ratios. This was facilitated by developing new recipes, piloting them quickly and gradually implementing at commercial scale while sustaining best in class Fibre quality. The novel recipes integrated with improved digitalisation-based process control strategies helped challenge the conventional norms and resulted in significant productivity increase in some of our units, while paving way of similar initiatives in other units. Your Company has progressed on sustainability initiatives of reducing freshwater consumption and at the same time, recovering and recycling chemicals from effluent streams. These schemes are now thoroughly tested and are being implemented at multiple sites. Your Company progressed further on commitments for reducing its environmental footprint and commissioned a state-of-the-art effluent RO system at Vilayat and Nagda. This enabled Vilayat to effectively double capacity without significant change in freshwater usage or effluent load.
Aditya Birla Science and Technology Company Private Limited (''ABSTCPL'') actively provided fundamental R&D support to the business in the areas of process intensification, digitalisation, sustainability, and value-added products. Post successful piloting, these novel processes are moving to advanced stages of engineering for commercialisation. Process fundamentals-based solutions have been developed for the improvement of
STATUTORY COMMITTEES OF THE BOARD Audit Committee
The Audit Committee comprises of Mr. N. Mohan Raj, Chairman, Mr. V. Chandrasekaran, Dr. Thomas M. Connelly Jr. and Mr. Harikrishna Agarwal as its members. Majority of the members including Chairman of Audit Committee are Independent Directors. The CFO of your Company is the permanent invitee at the Audit Committee Meetings.
Further details relating to the Audit Committee are provided in the Corporate Governance Report, which forms an integral part of this Annual Report.
All the recommendations made by the Audit Committee, during the year, were accepted by the Board of Directors of your Company.
Nomination and Remuneration Committee
The Nomination and Remuneration Committee (''NRC'') comprises of Ms. Anita Ramachandran, Chairperson, Mr. Kumar Mangalam Birla, Mr. Cyril Shroff and Mr. Adesh Kumar Gupta as its members. Majority of the members including Chairperson of NRC are Independent Directors.
Further details relating to the NRC are provided in the Corporate Governance Report, which forms an integral part of this Annual Report.
Corporate Social Responsibility Committee
The Corporate Social Responsibility (''CSR'') Committee comprises of Smt. Rajashree Birla, Chairperson, Ms. Anita Ramachandran, Mr. Shailendra K. Jain and Mr. Harikrishna Agarwal as its members.
Further details relating to the CSR Committee are provided in the Corporate Governance Report, which forms an integral part of this Annual Report.
Stakeholders'' Relationship Committee
The Stakeholders'' Relationship Committee (''SRC'') comprises of Ms. Anita Ramachandran, Chairperson, Mr. Shailendra K. Jain and Mr. Harikrishna Agarwal as its members.
Further details relating to SRC are provided in the Corporate Governance Report, which forms an integral part of this Annual Report.
Risk Management and Sustainability Committee
The Risk Management and Sustainability Committee (''RMSC'') comprises of Mr. N. Mohan Raj, Chairman, Mr. V. Chandrasekaran, Dr. Thomas M. Connelly, Jr., Mr. Harikrishna Agarwal, Mr. Kalyan Ram Madabhushi, Mr. Jayant Dhobley and Mr. Thomas Varghese.
Mr. Surya Valluri was appointed as Chief Sustainability Officer (''CSO'') of the Company w.e.f. 16th June 2022. He is the permanent invitee at the RMSC.
H2S treatment and the CS2 recovery process. Combined with the plant''s operational know-how, these solutions are being tested at the plant for improving efficiency and robustness of emission control processes. Similarly, fundamental science based digitalisation programme continue to be focusses on improving energy efficiency, asset uptime, quality and productivity.
Our product innovation initiatives took a stride this year by successfully developing and scaling up phosphate-based textile grade FR fibre. These fibre are technical textile grade specialty products, and are now registered as ''Active Chemical Product'' by reputed certifying agencies. Another specialty product Purocel EcoFlush non-woven Fibre(s), was tested by international customers and qualified for regular commercial usage for making of flushable wet wipes. In view of SUPD in Europe we have initiated work on developing 100% cellulose-based fibre solutions for making of disposable products like non-woven wipes. Similarly, cellulosic hydrophobic fibres Purocel, EcoDry have been developed and are being tested to replace plastic based top sheet in hygiene products like sanitary pads. Our textile recycling innovation, Liva Reviva, is gaining recognition and acceptance in the trade. Establishment of a semi-commercial scale facility completed at Vilayat site, which will give us a capacity to upcycle -3 tons/day of textile waste. This will establish your Company as a front-runner in innovations related to chemical recycling of textile waste. Your Company has also initiated work on creating a larger recycling ecosystem to include both chemical and mechanical recycling. We are in the process of putting up a pilot facility for demonstrating novel ways of mechanically upcycling textile waste to new fabrics. We actively collaborate with global innovators and start-ups in the field of sustainability and recycling. LivaEco, offering a rich sustainability quotient, has grown in volume and reach, is now also being offered in specialty segments like Modal and Purocel.
All units have institutionalised quality system driven metrics FPY (First Pass Yield) and Uptime for process/product consistency. These metrics are continuously upgraded based on learnings and customer feedback.
New product development initiatives to increase the value-added product portfolio within Excel fibre have progressed well with projects such as coarse denier Excel for fibrefill and carpet application reaching pilot scale demonstration and initial customer evaluation. The first pilot scale spinning of eco-friendly lyocell fibre containing 20% Nanollose microbial cellulose (Nullarbor-20TM) was accomplished. This demonstrates the potential for making lyocell fibre from agro-waste using existing industrial equipment. Successful pilot scale demonstration of producing lyocell fibre with 31% textile waste recycled pulp marks another important milestone in our commitment to continually raise the bar on sustainability front.
Your Company has been consistently developing new product variants according to consumer''s needs. During the year, your Company has successfully developed Monofilament yarn in CSY by two routes - Mother Yarn (splitting of multi-filaments to single filament) and increasing regeneration length, High DPF (Denier Per Filament) products in SSY and Low dpf in PSY. On new application side, your Company has developed Lycra covered yarn (Spandex covered with PSY), which is stretchable, having usage in garment and denim. Development of space dyed yarn is under progress for usage in fashion fabrics.
Your Company''s Research and Development (''R&D'') efforts stand on the five pillars of - Customers, Innovation, Quality, Sustainability and Profitability. R&D department is putting concerted efforts on Innovation, Process improvement for cost optimisation, product development, application development and introducing new products and innovative solutions to the customers. Your Company''s innovation practices are led by proactive identification of customer needs, and then expanding value-added chlorine derivative products portfolio for meeting explicit and latent needs of the customers.
Your Company''s R&D model involves collaborative working with all major customers for long-term development of innovative products, and continuously looking at new technologies that will help enhance performance of your Company''s offerings. Water Treatment Business being focus, your Company leveraged its R&D Centre - Aditya Birla Application and Product Development Centre (''ABAPDC'') for solving water treatment problems in potable water, some major health problems (removal of fluoride from ground water-jointly with MNIT), working on STP supporting the ''Namami Gange'' project, providing water & waste-water treatment solutions to Oil & Gas, Power, Pulp & Paper and Textile industry.
ABAPDC is also working on improvement of existing processes and enhancements of existing chemicals, in addition to identification, development, and production of new chemicals. ABAPDC has filed 3 patents in the last 12 months. Your Company''s R&D Centre has been approved by the Dept. of Scientific and Industrial Research (DSIR) and is executing collaborative project with many renowned institutes like DST, NEERI, cife, ciba, clri, MNIT, iits, iict, ncl, etc. Your Company received NSF/ANSI and Kosher certifications for its operating Units and certifications from FSSAI for food grade calcium chloride products. R&D Centre published more than 10 research articles/papers and presentations in the area of Water Treatment at various forums like EA Water Magazine, EA Water Virtual Conference, Finest-50 Global Case Studies - Smart Water & Waste World Magazine.
INSULATORS
Your Company''s R&D efforts were focusses on innovation and introduction of new products to meet customer requirements. Developments during the year included the following:
⢠New product development with specifications of narrow strength variations in product to meet export customers'' requirement.
⢠Design optimisation of Composite Long Rod Insulators by controlling Electric Field Magnitude using latest 3D Simulation Software to comply with international standard.
⢠First time development of polymer solid core insulators for optical fiber technology application to cater to special customer needs.
⢠Development of stainless steel cap design for Station Post Insulators to meet customers special application.
TEXTILES
Your Company is involved in driving innovation, servicing new customers with focus on sustainability and customers emerging needs, and constantly improving its processes.
Your Company has launched self-cleaning performance finish range named as ''SmartCare'' with stain repellency properties reducing frequency of washes and increasing durability without compromising natural properties of linen.
Your Company continues to develop blends in both linen and wool with sustainable fibres, such as Silk, Lyocell, Bamboo, etc, that offer organic product certifications with complete traceability from farm to fashion.
In collaboration with Birla Cellulose, your Company developed Cotton blends with sustainable fibres like Liva Eco, Lyocell, Bamboo, etc.
As a response to the consumers'' demand, your Company has developed wool and wool blends for athleisure/active wear using Super wash technology (First in India) and yarn for protective wear applications using merino wool blended with Pyrotex®.
Your Company is also working in collaboration with Aditya Birla Science and Technology Company Private Limited (''ABSTCPL'') and other vendor for exploring feasibility of developing a hemp value chain in India. Your Company is also working with global partners, e.g., CELC, LP Studio, Wool Mark, etc., and other specialty fibre suppliers to explore and develop innovative yarns and fabric.
Thus, the wide span of the R&D activities address the present and future needs of the Textile business.
Your Company''s R&D Centre has also collaborated with the Aditya Birla Science and Technology Company Private Limited (''ABSTCPL) and the academia in the scientific and technical forums. Innovation is the driving force of our product stewardship, benefiting not just our customers but the industry as a whole. R&D Centre has worked with the Industry to develop multiple coagulants for water treatment with unique specifications (e.g, low cost product for CETP, decolourant for coloured effluent, new product for coating and PVC sheets based on long chain chlorinated paraffin for export markets) based on specific end uses, in addition to the development of various water treatment products. Your Company is also developing specialty blends (plastics, water treatment, etc.) and new chemicals for personal care and pharmaceutical applications.
Various enhancements in production process have also been undertaken by the team to enhance its efficacy and quality of deliverables. Your Company observed an improvement in production in HSBP plant, resolution of issues in Phosphoric Acid plant, modified recipes in PAC liquid production for better product and standardisation of shelf life for all products. This has helped your Company to focus on process improvements of basic raw material blends to achieve process accelerations and engineering improvements.
Your Company''s R&D team is leading and driving the Sustainability portfolio through New Product Development in the area of Bio-Based products, waterless, solvent free, green processes and chemistries, as well as innovation in the area of Recyclability & Circularity of Materials. R&D team is working with leading Universities, Institutes and Global experts in building the innovation footprint and speeding up the research to commercialisation of product. Teams are involved in synthesising new molecules and in developing products and applications that drive growth of specialty segment for the business.
R&D team is engaged in development of various bio-based products. Bio-based and high performing molecules are developed via combination of the Company''s formulation expertise and properties in new bio-based chemistries developed by reputed agencies through business collaboration/partnerships. Various reactive bio-based epoxy diluents of desired viscosities, Epoxy Equivalent Weight (''EEW'') and Hydrolyzable chloride (''HyCl'') content, mono, di and multi-functional epoxy building blocks are developed by R&D.
R&D team is involved in application development in epoxy system solutions for composite segment, wind segment, pipes, LPG gas storage tanks, products for electrical and electronic industries, powder coating segment, adhesive product development, water soluble coating solution for can coating applications, developing products for floor coating and construction segments.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF YOUR COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR, TO WHICH THE FINANCIAL STATEMENT RELATES, AND THE DATE OF THE REPORT
No material changes and commitments, which could affect your Company''s financial position, have occurred between the end of the financial year and the date of this Report. There has been no change in the nature of business of your Company.
Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is given in Annexure ''G'' to this Report.
In accordance with the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees drawing remuneration in excess of the limits, set out in the aforesaid rules, forms part of this Report. In line with the provisions of Section 136(1) of the Act, the Report and Accounts, as set out therein, are being sent to all the Members of your Company, excluding the aforesaid information about the employees. Any Member, who is interested in obtaining these particulars about employees, may write to the Company Secretary at [email protected].
EMPLOYEE STOCK OPTION SCHEMES (ESOS)ESOS-2006
During the year, the Stakeholders'' Relationship Committee of the Board of Directors allotted 16,800 equity shares of C2/- each of the Company to Stock Option Grantees, pursuant to the exercise of the Stock Options under ESOS-2006.
During the year, the Stakeholders'' Relationship Committee of the Board of Directors allotted 2,33,782 equity shares of C2/- each of the Company to Stock Option and Restricted Stock Units (''RSUs'') Grantees, pursuant to the exercise of the Stock Options and RSUs, under ESOS-2013.
During the year, the Nomination and Remuneration Committee (''NRC'') of the Board of Directors approved grant of 4,02,606 Stock Options and 1,26,798 Restricted Stock Units (''RSUs'') to the eligible employees, including Managing Director of the Company, under ESOS-2018 and also approved vesting of 4,35,952 Stock Options and 2,18,800 RSUs. NRC also approved 52,847 Stock Options not be vested, due to vesting criteria not being met in accordance with the provisions of ESOS-2018. The ESOS-2018
is being administered through the Grasim Employees'' Welfare Trust (''Trust'').
2,06,437 equity shares were transferred from the Trust account to the employees account on account of exercise of Stock Options and RSUs by the grantees.
The details of Stock Options granted pursuant to ESOS-2006 and the Stock Options and RSUs granted pursuant to ESOS-2013 and ESOS-2018, and the other disclosures in compliance with the provisions of the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, is available on your Company''s website at https://www.grasim. com/Upload/PDF/esos-disclosure-aug22.pdf
A certificate from the Secretarial Auditors, with respect to implementation of your Company''s ESOS, will be available electronically for inspection, without any fee, by the members from the date of circulation of the Notice of the Annual General Meeting up to the date of Annual General Meeting. Members seeking to inspect such documents can send an e-mail at [email protected].
ESOS-2022
The Company intends to reward, attract, motivate and retain employees and directors of the Company, its subsidiary or associate company(ies) for their high level of individual performance, by offering them equity shares by way of an Employee Stock Options Scheme.
Towards this, the Company seeks the approval of the members to adopt the ''Grasim Industries Limited Employee Stock Option and Performance Stock Unit Scheme, 2022'' (hereinafter referred to as ''the Scheme 2022'') in terms of the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (''SEBI SBEB & SE Regulations''). The Company intends to offer not more than 44,14,000 Equity Shares of C2/- each (which represents 0.67% of the paid-up equity share capital as on 31st March 2022) in one or more tranches, in accordance with the Scheme 2022, SEBI SBEB & SE Regulations or other provisions of law as may be prevailing at that time.
The Scheme 2022 shall be implemented through the Grasim Employees'' Welfare Trust (''Trust''), since it is proposed that the equity shares of the Company would be acquired by the Trust from the secondary market. The Company proposes to extend financial assistance to the Trust for this purpose, subject to the overall limits specified under the applicable laws.
The broad framework of the Scheme 2022 is detailed in the Notice of the AGM. Your Directors recommend the resolutions seeking your approval for Scheme 2022 and related matters form part of the Notice of the AGM.
POLICY ON PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company has zero tolerance for sexual harassment at workplace. Your Company has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at Workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (''POSH Act''), and the Rules framed thereunder. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
Your Company has constituted Internal Complaints Committee to redress and resolve any complaints arising under the POSH Act. There were 3 (Three) complaints received during the year, out of which 2 (Two) were outstanding as on 31st March 2022. As on the date of this report, there is no outstanding complaint. The Company is committed to providing a safe and conducive work environment to all its employees and associates.
Your Company''s human resource is the strong foundation for creating many possibilities for its business. The efficient operations of manufacturing units, market development and expansion for various products was the highlight of our people effort.
Continuous people development for developing knowledge and skills coupled with the Talent Management practices will deliver the talent needs of the Organisation. Your Company''s employee engagement score reflects high engagement and pride in being part of the Organisation.
The Group''s Corporate Human Resources plays a critical role in your Company''s talent management process.
Some of the significant accolades earned by your Company during the year include:
⢠Ranked 7th among the India''s Top Companies for Sustainability and CSR by The Economic Times, and Futurescape Responsible Business Rankings 2021.
⢠Gold Shield Award for Integrated Reporting in Manufacturing Sector and Excellence in Financial Reporting - ''ICAI Sustainability Reporting Awards 2020-21''.
⢠Economic Times and Machinist awarded the Promising Plant 2021 Award to Staple Fibre Division, Nagda Unit.
⢠Jaya Shree Textiles, Rishra has been declared the Winner of ''Golden Peacock Environment Management Award'' for the year 2021.
⢠Birla Cellulose won the first edition of the ''National Innovative and Sustainable Supply Chain Awards'' by UN Global Compact Network India.
⢠Grasilene Division awarded ''Platinum Award ''under the category ''Occupational Health and Safety Award -2021'' by Grow Care India, Delhi.
⢠Birla Cellulose Ranked No. 1 in 2021 Hot Button Ranking by the Canada-based environmental not-for-profit Canopy Planet Society.
⢠Birla Cellulosic Kharach received the award for Excellence in Environment Management CII-ITC Sustainability Awards 2021.
⢠Grasilene Division, Harihar has won the Silver Medal in the National Awards for Manufacturing Competitiveness 2021.
⢠Synthetic & Rayon Textiles Export Promotion Council (''SRTEPC'') 2019-20 and 2020-21 award for the second-best overall export performance in synthetic and rayon textiles and Gold for Viscose Staple Fibre.
⢠TERI-IWA-UNDP Water Sustainability Awards 2022 under Category ''Water for All'' to Nagda Unit.
⢠National Awards for Excellence in CSR - 7th Edition 2021, Special Covid Category - Best COVID-19 Solution for Community Care to Nagda Unit.
⢠Manufacturing Today Conference & Awards 2021, Excellence in CSR- Grasim Industries Limited - Vilayat Unit, Bharuch, Gujarat.
⢠Apex India CSR excellence gold award, 2021 for Livelihood creation by ABI - Halol.
UPDATE ON MATERIAL ORDERS PASSED BY THE REGULATORS
⢠Competition Commission of India (''CCI'') had passed an order under Section 4 of the Competition Act, 2002, dated 16th March 2020, imposing a penalty of C301 Crore on your Company in respect of its domestic man-made fibre turnover for the period from 2008-09 to 2011-12. Your Company had filed an appeal against the order before the Hon''ble National Company Law Appellate Tribunal (''NCLAT''), and has obtained a stay by depositing C30 Crore with NCLAT. While the matter is pending before the NCLAT, CCI has passed another order dated 3rd June 2021, and levied a penalty of C3.49 Crore on your Company (@ C 1 lakh per day for a period of 349 days and continuing thereafter) for non-compliance with its order passed on 16th March 2020. Your Company has filed a writ petition with the Hon''ble Delhi High Court, and the Hon''ble Delhi High Court has stayed the operation of the CCI order.
⢠The CCI has passed another order dated 6th August 2021, under Section 4 of the Competition Act, 2002, for the period of 2017-18. However, because of the penalty of C301 Crore has already been imposed on the Company in a previous order; the CCI deemed it appropriate not to impose any further monetary penalty on the Company. The Company filed an appeal before the NCLAT.
⢠The Deputy Commissioner of Income Tax (''Assessing Officer'') has vide order dated 14th March 2019 raised a demand of C5,872 Crore on account of dividend distribution tax (including interest) alleging that the demerger of financial services business is not a qualified demerger and holding that the value of shares allotted by Aditya Birla Capital Limited (''ABCL'') to the shareholders of the Company in consideration of the transfer and vesting of the financial services business into ABCL pursuant to duly approved Scheme of Arrangement, amounted to distribution of dividend by the Company.
Your Company had challenged the said order by filing an appeal before the Commissioner of Income Tax (''CIT'') (Appeal). The CIT (Appeal) upheld the order of the Assessing Officer and reduced the quantum of demand from C5,872 Crore to C3,786 Crore. The Company has filed an appeal against the order of CIT (Appeal) before the Tribunal and has obtained stay on demand by furnishing the requisite security to the Assessing Officer. The appeal is presently pending before the Tribunal.
Further, the Assessing Officer has passed draft assessment order for the AY 2018-19 on 30th September 2021. As a corollary to the earlier order referred above, the Assessing Officer has also made addition of C22,772 Crore towards capital gains in draft assessment order passed by him. The Assessing Officer valued shares issued by ABCL to shareholders of your Company at C24,037 Crore and treated it as sale consideration for transfer of Financial Services Business undertaking.
Your Company has filed objections before Dispute Resolution Panel (''DRP'') against the draft order passed by the Assessing Officer. The DRP has passed an order dated 30th June 2022 and allowed the objection of the Company that the demerger was a tax compliant demerger as all the conditions of Section 2(19AA) of the Act are fulfiled. The Assessing Officer needs to pass the final assessment order and quantify the tax liability for AY 2018-19 by following the directions of the DRP.
Your Company, backed by independent expert''s opinion, believes that the above orders of the Assessing officer are not tenable in law. Accordingly, no provision has been made in the books of account on account of these matters.
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these matters during the year:
1. Issue of equity shares with differential rights as to dividend, voting or otherwise;
2. Issue of shares (including sweat equity shares) to employees of your Company under any Scheme save and except ESOS referred to in this report;
3. The Managing Director of the Company does not receive any remuneration or commission from any of its subsidiaries;
4. There were no revisions in the financial statement(s);
5. There has been no change in the nature of business of your Company;
6. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and your Company''s operations in the future. The update on the status of material orders passed by the Regulators or Court or Tribunals is provided in this Report;
7. There were no proceeding initiated under the Insolvency and Bankruptcy Code, 2016;
8. There was no instance of one time settlement with any Bank or Financial Institution; and
9. There was no failure to implement any Corporate Action. ACKNOWLEDGEMENT
Your Directors express their deep sense of gratitude to the banks, financial institutions, stakeholders, business associates, Central and State Governments for their co-operation and support and look forward to their continued support in future.
Your Directors very warmly thank all our employees for their contribution to your Company''s performance. We applaud them for their superior levels of competence, dedication and commitment to your Company.
For and on behalf of the Board
Kumar Mangalam Birla Chairman
Mumbai, 19th July 2022 (DIN: 00012813)
Mar 31, 2021
Dear Members,
Your Directors are pleased to present the 74th Annual Report in the form of second Integrated Report of your Company along with the Audited Financial Statements (Consolidated and Standalone) for the financial year ended 31st March 2021.
FINANCIAL HIGHLIGHTS
Your Company''s financial performance for the financial year ended 31st March 2021, is summarised below:
|
Financial Results |
(Hin Crore) Consolidated Standalone |
|||
|
2020-21 |
2019-20 Restated# |
2020-21 |
2019-20 Restated## |
|
|
Revenue from Operations |
76,397.81 |
75,140.71 |
12,386.36 |
16,081.87 |
|
Other Income |
1,051.96 |
968.81 |
513.68 |
525.61 |
|
Total Revenue |
77,449.77 |
76,109.52 |
12,900.04 |
16,607.48 |
|
Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) |
15,766.22 |
13,615.29 |
2,078.00 |
2,661.05 |
|
Less: Finance Costs |
1,808.88 |
2,275.69 |
235.95 |
237.88 |
|
Less: Depreciation and Amortisation Expenses |
4,033.40 |
4,004.23 |
828.17 |
813.51 |
|
Profit Before Share in Profit/(Loss) of Equity Accounted Investees, Exceptional Items and Tax |
9,923.94 |
7,335.37 |
1,013.88 |
1,609.66 |
|
Share in Profit/(Loss) of Equity Accounted Investees |
189.22 |
562.22 |
- |
- |
|
Exceptional Items |
(341.73) |
(1,406.05) |
(80.99) |
(318.03) |
|
Profit Before Tax (PBT) from Continuing Operations |
9,771.43 |
6,491.54 |
932.89 |
1,291.63 |
|
Tax Expenses from Continuing Operations |
3,022.19 |
(84.32) |
122.44 |
66.35 |
|
Profit for the Period from Continuing Operations Attributable to: |
6,749.24 |
6,575.86 |
810.45 |
1,225.28 |
|
Shareholders of the Company |
4,128.41 |
4,349.02 |
810.45 |
1,225.28 |
|
Non-Controlling Interest |
2,620.83 |
2,226.84 |
- |
- |
|
Profit Before Tax (PBT) from Discontinued Operations |
162.79 |
221.60 |
145.44 |
72.54 |
|
Exceptional Items |
166.50 |
23.95 |
- |
23.95 |
|
Tax Expenses from Discontinued Operations |
66.10 |
70.40 |
50.89 |
33.77 |
|
Provision of Impairment of Assets classified as Held for Sale |
(25.73) |
(112.43) |
- |
- |
|
Profit for the Period from Discontinued Operations Attributable to: |
237.46 |
62.72 |
94.55 |
62.72 |
|
Shareholders of the Company |
176.41 |
62.72 |
94.55 |
62.72 |
|
Non-Controlling Interest |
61.05 |
- |
- |
- |
|
Other Comprehensive Income for the Year Attributable to: |
4,840.92 |
(5,001.08) |
4,588.91 |
(5,070.01) |
|
Shareholders of the Company |
4,780.54 |
(5,067.05) |
4,588.91 |
(5,070.01) |
|
Non-Controlling Interest |
60.38 |
65.97 |
- |
- |
|
Total Comprehensive Income for the Year Attributable to: |
11,827.62 |
1,637.50 |
5,493.91 |
(3,782.01) |
|
Shareholders of the Company |
9,085.36 |
(655.31) |
5,493.91 |
(3,782.01) |
|
Non-Controlling Interest |
2,742.26 |
2,292.81 |
- |
- |
|
Profit for the Period attributable to Shareholders of the Company |
4,304.82 |
4,411.74 |
905.00 |
1,288.00 |
|
Opening Balance in Retained Earnings |
4,605.56 |
3,940.83 |
4,838.60 |
3,796.06 |
|
Due to Classification of Discontinuing operations to Continuing Operations |
- |
(7.28) |
- |
- |
|
- Gain/(Loss) on Re-measurement of Defined Benefit Plans |
81.96 |
(82.87) |
48.58 |
(57.79) |
|
- Gain on Sale of non-current Investments transferred to retained earnings from equity instruments through OCI |
- |
345.51 |
- |
355.66 |
|
- Stake Dilution in Subsidiary Companies |
(7.97) |
(524.91) |
- |
- |
|
- Ind AS 116 (Leases) transition impact |
- |
(45.31) |
- |
(3.81) |
|
94 Grasim Industries Limited |
||||
|
(H in Crore) |
||||
|
Financial Results |
Consolidated |
Standalone |
||
|
2020-21 |
2019-20 Restated# |
2020-21 |
2019-20 Restated## |
|
|
- Other Adjustments |
- |
7.86 |
- |
- |
|
Amount available for Appropriation |
8,982.68 |
8,045.57 |
5,792.18 |
5,378.12 |
|
Add/Less: Transfer (to)/from Debenture Redemption Reserve |
(11.50) |
72.18 |
- |
(24.51) |
|
Less: Transfer to General Reserve |
(2,581.87) |
(2,865.57) |
- |
( |
|
Less: Transfer to Special Reserve Fund |
(107.14) |
(103.73) |
- |
- |
|
Less: Dividend Paid on Equity Shares (including Corporate Dividend Tax) |
(262.65) |
(542.89) |
(262.65) |
(515.01) |
|
Closing Balance in Retained Earnings |
6,021.21 |
4,605.56 |
5,529.53 |
4,838.60 |
# refer note 4.3 and 4.4 of consolidated financial statements ## refer note 4.4 and 4.5 of standalone financial statements
DIVIDEND
Based on your Company''s performance, the Board of Directors of your Company has recommended dividend of H5 per equity share and a special dividend of H4 per equity share, taking the total dividend to H9 per equity share of face value of H2 each (dividend @450% of the face value), for the financial year ended 31st March 2021. The dividend, if approved by the members, would involve a cash outflow of H592.27 Crore.
In view of the changes made under the Income Tax Act, 1961, by the Finance Act, 2020, dividend paid or distributed by the Company shall be taxable in the hands of the shareholders. Your Company shall, accordingly, make the payment of the dividend after deduction of tax at source.
In terms of the provisions of regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (''Listing Regulations'') as amended from time to time, your Company has formulated a Dividend Distribution Policy. This Policy is given in Annexure ''A'' and is also available on your Company''s website and can be accessed at https://www.grasim.com/investors/policies-and-code-of-conduct
Dividend recommended for the financial year ended 31st March 2021, is in compliance with the Dividend Distribution Policy.
TRANSFER TO RESERVES
The Board of Directors of your Company has decided not to transfer any amount to the General Reserves, for the financial year ended 31st March 2021.
PERFORMANCE REVIEW
On a consolidated basis, the revenue from operations for FY 2020-21, stood at H76,397.81 Crore registering a growth of 1.67 % as compared to the previous year (H75,140.71 Crore in
FY 2019-20). The consolidated EBITDA increased to H15,766.22 Crore for FY 2020-21 which was 15.80 % higher than that of the previous year (H13,615.29 Crore in FY 2019-20).
On a standalone basis, revenue from operations for FY 2020-21 stood at H12,386.36 Crore which was 22.98 % lower than that of the previous year (H16,081.87 Crore in FY 2019-20). The standalone EBITDA is H2,078 Crore for FY 2020-21 which was 21.91 % lower than that of the previous year (H2,661.05 Crore in FY 2019-20).
STRATEGIC INITIATIVES AND SIGNIFICANT DEVELOPMENTS
Divestment of Indo Gulf Fertiliser Business
The Board of Directors of the Company, at its meeting held on 12th November 2020 approved the transfer of the Company''s business of manufacture, trading and sale of urea, customised fertilisers, agri-inputs, crop protection, plant and soil health products and specialty fertilisers (''Fertiliser Business''), as a going concern, on a slump sale basis, to Indorama India Private Limited (''IIPL'') through a Scheme of Arrangement between the Grasim Industries Limited (''the Company'') and IIPL and their respective shareholders and creditors under sections 230-232 of the Companies Act, 2013 (''Scheme'') and other provisions of applicable law, for a lump sum consideration of H2,649 Crore, to be paid by IIPL to the Company, subject to customary closing adjustments as mentioned in the Scheme to be carried out upon effectiveness of the Scheme.
Appointed Date of the Scheme is the Effective Date, or such other date as may be agreed to in writing between the Boards of the Company and IIPL and approved by the Tribunals.
The Scheme is subject to the approval of the shareholders and creditors, and necessary regulatory approvals including approval from Securities and Exchange Board of India (''SEBI''), the
jurisdictional Hon''ble National Company Law Tribunals (''NCLT'') and the Competition Commission of India (''CCI'').
The Scheme has been approved by CCI, Stock Exchanges and SEBI. The Scheme was approved by the shareholders and creditors of the Company at their respective meetings held on 16th April 2021. Hon''ble NCLT Kolkata Bench vide its order dated 26th March 2021 dispensed holding of meetings of shareholders and creditors of IIPL.
Petition for approval of the Scheme has been filed with jurisdictional NCLTs and hearing for the same is pending.
The Scheme, inter-alia, will be beneficial to the Company, as it will help the Company to pursue growth opportunities in its core businesses and unlock value with overall improvement in working capital cycle due to release of blocked funds from long receivable cycle involved in the said business. As the Scheme involves transfer of the fertiliser business through a slump sale, for a lump sum consideration, no shares will be allotted by IIPL to the shareholders of the Company. Therefore, the shareholding of the Company will not be affected by the Scheme.
Entering into Paints as new line of Business
The Board of Directors at its meeting held on 22nd January 2021 approved entering into Paints as new line of business. The shareholders'' approval for alteration to the Object Clause thereby permitting the Company to foray into Paints business was obtained at the Extra Ordinary General Meeting held 22nd February 2021.
Historically, the Indian paints industry has been growing at a healthy rate. The organised segment constitutes approximately 70% by value of the total paints market and has historically grown faster than the unorganised segment and therefore gained market share from the unorganised segment.
The Company''s entry into this consumer-oriented business will further diversify its portfolio, provide scale and growth and will also offer a wide choice to Indian consumers as the Company plans to introduce the latest as well as a wide range of paint products.
The Company''s entry into this high growth sector is expected to help painters/applicators and all traditional and emerging channel partners across India to expand their existing business and grow. The Company''s Board of Directors has approved an initial capital expenditure of approximately H5,000 Crore over the next 3 years.
Entry in the paints sector will add size, scale and diversity to the existing business portfolio of the Company. The Company
Further, the audited financial statements along with related information and other reports of each of the subsidiary companies is also available on the website of your Company and can be accessed at https://www.grasim.com/investors/results-reports-and-presentations.
Your Company does not have any material unlisted subsidiary company. UltraTech Cement Limited and Aditya Birla Capital Limited are the material listed subsidiary companies of your Company. The Audit Committee and the Board reviews the . financial statements, significant transactions and working of all the subsidiary companies, and the minutes of unlisted subsidiary companies are placed before the Board.
Your Company has in accordance with the Listing Regulations adopted the Policy for determining Material Subsidiaries. The said Policy is available on your Company''s website, www.grasim.com and can be accessed at https://www.grasim. com/investors/policies-and-code-of-conduct.
Convening Annual General Meeting through Audio-Visual means
! Considering the present COVID-19 pandemic, the | Ministry of Corporate Affairs (''MCA'') has vide its General Circular No. 20/2020 dated 5th May 2020 read 1 with General Circular No. 14/2020 dated 8th April 2020; General Circular No.17/2020 dated 13th April 2020; and General Circular No. 02/2021 dated 13th January 2021 and Circular No. SEBI/HO/CFD/CMD1/CIR/P/2020/79 dated 12th May 2020 and Circular No. SEBI/HO/CFD/CMD2/CIR/P/2021/11 dated 15th January 2021 issued by the Securities and Exchange Board of India (''SEBI'') (collectively referred to as ''MCA and SEBI Circulars'') permitted convening the Annual General Meeting through Video Conference (VC)/Other Audio-Visual Means (OAVM), without the physical presence of the Members at a common venue. In compliance with the MCA & SEBI Circulars, applicable 1 provisions of the Companies Act, 2013 and Listing Regulations,
; the 74th Annual General Meeting of your Company will be convened and conducted through VC/OAVM.
UltraTech Cement Limited (UltraTech)
During the year, UltraTech Nathdwara Cement Limited (''UNCL'') through its subsidiary, Krishna Holdings Pte. Ltd, ("Krishna"), a company incorporated in Singapore has completed the divestment of its entire equity shareholding of 92.5% in its cement subsidiary and has recorded net gain on divestment of C437.68 Crore.
¦ In terms of the order of the National Company Law Appellate Tribunal (''NCLAT'') dated 14th November, 2018, approving the Resolution Plan submitted by UTCL under the Insolvency and Bankruptcy Code, 2016 for acquisition of Binani Cement Limited, subsequently renamed UNCL, a loan of
Intearated Annual ReDort 2020-21
believes that this sector is likely to be value accretive to its stakeholders.
Aditya Birla Power Composites Limited
Aditya Birla Power Composites Limited (''ABPCL''), is a joint venture between the Company and Maschinenfabrik Reinhausen Gmbh (''MR'')wherein the Company holds 51% of share capital and the balance share capital (49%) is held by MR.
ABPCL is in the process of setting up a state-of-the-art Composite Hollow Core Insulators (''CHCI'') manufacturing plant at Halol, Gujarat, India at a project cost of about H100 Crore for the manufacture and sale of CHCI to serve the power transmission & distribution industry globally. The work of setting up the Plant at Halol is in progress and will be commissioned in FY 2021-22.
Amalgamation of Grasim Premium Fabric Private Limited (''GPFPL'') with your Company
The Scheme of Arrangement between GPFPL and Grasim Industries Limited (''Grasim'') and their respective shareholders and all concerned (''Scheme'') under sections 230 to 232 of the Companies Act, 2013 was approved by the Board of Directors of your Company and GPFPL and necessary application/petitions for approving merger were filed with jurisdictional NCLTs.
Hon''ble NCLT Indore Bench at Ahmedabad approved the Scheme vide its order dated 12th November 2020 as amended vide its order dated 28th January 2021. Your Company has filed the copy of the order with Registrar of Companies (''ROC''), Gwalior. Hon''ble NCLT Mumbai Bench approved the Scheme vide its order dated 23rd March 2021.
On receipt of the certified copy of the order from Hon''ble NCLT Mumbai, same will be filed with the ROC, Pune by GPFPL. The Scheme will be effective on the date of filing of the said order with appointed date being 1st April 2019.
Amalgamation of Sun God Trading and Investment Limited with ABNL Investment Limited
The Board of Directors of ABNL Investment Limited (wholly-owned subsidiary of your Company) and Sun God Trading and Investment Limited (wholly-owned subsidiary of ABNL Investment Limited) had approved the Scheme of Amalgamation between Sun God Trading and Investment Limited and ABNL Investment Limited and their respective shareholders and all concerned (''Scheme'') under section 233 of the Companies Act, 2013.
ABNL Investment Limited has filed copy of the order of Regional Director (North-Western Region), Ahmedabad with Registrar of Companies, Ahmedabad. On receipt of the certified copy of the
order by Sun God Trading and Investment Limited, same will be filed with the Registrar of Companies, Gwalior.
Amalgamation of Aditya Birla Solar Limited (''ABSL'') with Aditya Birla Renewables Limited (''ABReL'')
ABSL and ABReL are wholly-owned subsidiaries of your Company, both engaged in the business of electric power generation using solar energy. The Board of Directors of both companies have approved the Scheme of Arrangement between ABSL and ABReL under sections 230 and 232 of the Companies Act, 2013. A joint application was filed by ABSL and ABReL with the Hon''ble NCLT, Mumbai Bench on 27th March 2020. Hon''ble NCLT Mumbai Bench vide its order dated 17th February 2021 dispensed with the requirement of convening meetings of shareholders and creditors of both ABSL and ABReL. ABSL and ABReL are in the process of filing petition seeking sanction of the merger and the dissolution of ABSL.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, Listing Regulations and IND AS 110 - Consolidated Financial Statements (CFS)/and IND AS 28 - Investment in Associates/and Joint Ventures, the Audited Consolidated Financial Statements forms integral part of this Annual Report.
SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES
During the year under review, there were no changes in the direct subsidiaries, associates and joint venture companies of your Company.
In accordance with the provisions of section 129(3) of the Companies Act, 2013, read with rule 5 of the Companies (Accounts) Rules, 2014, a statement containing the salient features of financial statements of each of the subsidiaries/ associates/joint venture companies of your Company, in the prescribed Form AOC-1, is given in Annexure ''B'' to this Report.
The said Form also highlights the financial performance of each of the subsidiaries/associates/joint venture companies included in the CFS pursuant to rule 8(1) of the Companies (Accounts) Rules, 2014.
In accordance with the provisions of section 136(1) of the Companies Act, 2013, the Annual Report of your Company, containing, inter-alia, the audited standalone and consolidated financial statements, has been placed on the website of your Company and can be accessed at https://www.grasim.com/ investors/results-reports-and-presentations.
account of his advanced age. There was no other material reason for his resignation except as stated.
| The Board placed on record its sincere appreciation for the valuable contribution and services rendered by Mr. Arun Thiagarajan and Mr. O.P. Rungta during their tenure as the Independent Directors of the Company.
There is no pecuniary or business relationship between the Non-Executive Directors and the Company, except for the sitting fees and commission payable to the Non-Executive Directors, in : accordance with the applicable laws and with the approval of the shareholders.
Key Managerial Personnel
Pursuant to the provisions of sections 2(51) and 203 of the Companies Act, 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Mr. Dilip Gaur, Managing Director, Mr. Ashish Adukia, Chief Financial Officer and Mrs. Hutokshi R. Wadia, President and Company Secretary are the Key Managerial Personnel of the Company as on 31st March 2021.
Mr. Sailesh Daga has been appointed as the Company Secretary and Compliance Officer of the Company in place of Mrs. Hutokshi R. Wadia with effect from 1st April 2021. Mrs. Hutokshi R. Wadia ceased to be the Company Secretary and Compliance Officer of the Company with effect from close of business hours on 31st March 2021.
The Board noted the same and placed on record its sincere appreciation for the valuable contribution made by Mrs. Hutokshi R. Wadia during her tenure as the Company Secretary and Compliance Officer of the Company.
MEETINGS OF THE BOARD
The Board of Directors of the Company met 7 (Seven) times during the year to deliberate on various matters. The meetings were held on 13th June 2020, 13th August 2020, 1st October 2020, 12th November 2020, 22nd January 2021, 12th February 2021 and 24th March 2021.
I
¦ Further details are provided in the Corporate Governance Report, which forms an integral part of this Annual Report.
INDEPENDENT DIRECTORS
Definition of ''Independence'' of Directors is derived from regulation 16(1)(b) of the Listing Regulations and section 149(6) of the Companies Act, 2013 and rules framed thereunder. Your Company has received declarations from all the Independent Directors of your Company confirming that they meet the : criteria of independence as prescribed under section 149(6) of the Companies Act, 2013 and regulation 16(1)(b) of the
US$ 230.4 million in 3B Binani Glassfibre SARL, (''3B'') a company registered in Luxembourg, was assigned to UNCL from IDBI Bank Limited. Assignment of the loan was along with securities, which included pledge over all assets and shares of 3B in various forms in favour of UNCL. Since 3B was in continuous default in servicing the loan, UNCL enforced its pledge of 3B shares, consequent to which UNCL became owner of 100% equity of 3B w.e.f 12th March, 2021. 3B''s Board has also been re-constituted. UNCL has taken this step to safeguard and expedite the recovery of its loan from 3B. Till the time UNCL is able to recover its loan, the investment in 3B will be treated as investment held for sale.
Aditya Birla Capital Limited (ABCL)
Aditya Birla Sun Life AMC Limited (''ABSLAMC''), a material subsidiary of ABCL, filed a draft red herring prospectus (''DRHP'') dated 19th April 2021 with the Securities and Exchange Board of India for an initial public offering by way of an offer for sale (''IPO'') of up to 3,88,80,000 equity shares of face value of C5 each constituting up to 13.50% of the paid-up share capital of ABSLAMC, subject to relevant approvals as required and other considerations. The above IPO comprises of an offer for sale of up to 28,50,880 equity shares of face value of C5 each held by ABCL in ABSLAMC.
SHARE CAPITAL
Issued, subscribed and paid-up capital of the Company stood at H1,31,60,89,688 as at 31st March 2021 comprising of 65,80,44,844 equity shares of H2 each fully paid up.
During the year under review, your Company issued and allotted 2,45,906 equity shares of H2 each pursuant to the exercise of Stock Options and Restricted Stock Units in terms of the Employees Stock Option Schemes of your Company.
PURCHASE OF TREASURY SHARES
As on 31st March 2021, Grasim Employees'' Welfare Trust (''Trust'') constituted in terms of the Company''s Employee Stock Option Scheme 2018 (''ESOS-2018'') holds 13,18,344 equity shares of your Company. During the financial year, the Trust did not acquire any equity shares of your Company from the secondary market. As per IND AS, purchase of own equity shares are treated as treasury shares.
DEPOSITS
During the FY 2020-21, your Company has not accepted or renewed any deposits within the meaning of section 73 of the Companies Act, 2013, read with the Companies (Acceptance of Deposits) Rules, 2014, and, as such, no amount of principal or interest was outstanding, as on the date of the Balance Sheet.
ISSUE OF NON-CONVERTIBLE DEBENTURES
During FY 2020-21, your Company has issued 5,000 fully paid-up, Unsecured, Redeemable Non-Convertible Debentures of face value of H10 Lakh each, at par, on private placement basis, as per the details set out hereunder:
|
Date of Issue |
of NonConvertible Debentures |
Issue Size (G in Crore) |
Tenure |
Rate of Interest |
Date of Maturity |
|
17.06.2020 |
5,000 |
500 |
3 years |
5.90% |
16.06.2023 |
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Pursuant to section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014, disclosures relating to loans, advances and investments as on 31st March 2021 are given in the Notes to the Financial Statements. There are no guarantees issued, or securities provided by your Company in terms of section 186 of the Companies Act, 2013, read with the rules issued thereunder.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis for the year under review, as stipulated under regulation 34 of the Listing Regulations, is presented in a separate Section, and forms an integral part of this Report. It, inter-alia, provides details about the Indian economy, business performance review of the Company''s various businesses, risks and concerns and other material developments during FY 2020-21, including impact of COVID-19 on businesses of the Company.
CORPORATE GOVERNANCE
Your Directors re-affirm their continued commitment to the best practices of Corporate Governance. Corporate Governance principles form an integral part of the core values of your Company. Your Company was compliant with the provisions relating to Corporate Governance.
The Corporate Governance Report for the year under review, as stipulated under regulation 34 of the Listing Regulations, is presented in a separate section, and forms an integral part of this Report. A certificate from the Auditors on its compliance is given in Annexure ''C'' to this Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Appointment/Re-appointment of Directors
⢠In accordance with the provisions of section 152 and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Appointment & Qualification of Directors) Rules, 2014, and the Articles of Association of the Company, Mr. Kumar Mangalam Birla (DIN: 00012813) and
Dr. Santrupt Misra (DIN: 00013625), Directors of your Company, are liable to retire by rotation at the ensuing Annual General Meeting and, being eligible, have offered themselves for re-appointment. Brief profiles of Mr. Kumar Mangalam Birla and Dr. Santrupt Misra are provided in the Corporate Governance Report which forms an integral part of this Annual Report.
⢠Mr. Dilip Gaur was appointed as the Managing Director of the Company for a term of 5 years, with effect from 1st April 2016 to hold office up to 31st March 2021. Subject to the approval of the shareholders, and based on the recommendations of the Nomination and Remuneration Committee and taking into account his expertise, business acumen, outstanding leadership, his present performance and business needs, the Board at its meeting held on 12th February 2021 has re-appointed Mr. Dilip Gaur as the Managing Director of the Company for a further period of one year with effect from 1st April 2021.
Resolution seeking re-appointment of Mr. Dilip Gaur, Managing Director, along with his brief profile forms part of the Notice of the Annual General Meeting.
⢠Subject to the approval of the shareholders, and based on the recommendations of the Nomination and Remuneration Committee, the Board at its meeting held on 24th May 2021 appointed Mr. V. Chandrasekaran (DIN: 03126243) and Mr. Adesh Kumar Gupta (DIN: 00020403) as Additional Directors, qualifying as the Independent Directors of the Company, not liable to retire by rotation, for a period of five years commencing with effect from 24th May 2021. In terms of the provisions of the Companies Act, 2013, Mr. V. Chandrasekaran and Mr. Adesh Kumar Gupta will hold office up to the ensuing Annual General Meeting.
Resolutions seeking the appointment of Mr. V. Chandrasekaran and Mr. Adesh Kumar Gupta as Independent Directors along with their brief profile forms part of the Notice of the Annual General Meeting.
Your Directors commend the resolutions pertaining to appointment/re-appointment of aforesaid Directors for your approval.
Cessation of Directors
⢠Mr. Arun Thiagarajan retired as an Independent Director of the Company upon completion of his first term of 5 years on 6th May 2021.
⢠Mr. O.P. Rungta, Independent Director resigned from the Board of Directors of the Company with effect from close of business hours of 24th May 2021 due to health reasons on
Listing Regulations. Your Company''s Board is of the opinion that the Independent Directors possess requisite qualifications, experience, and expertise in leadership, governance, sustainability, strategy planning, technical expertise, financial management, legal expertise, risk management, sales & marketing, human resource development and they hold highest standards of integrity.
FORMAL ANNUAL EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, the Board of Directors has carried out an annual evaluation of its own performance, its Committees, Independent Directors, Non-Executive Directors, Executive Director and the Chairman of the Board.
The Nomination and Remuneration Committee of the Board has laid down the manner in which formal annual evaluation of the performance of the Board, its Committees and Individual Directors has to be made. It includes circulation of evaluation forms separately for evaluation of the Board and its Committees, Independent Directors/Non-Executive Directors/Executive Director and the Chairman of your Company.
The performance of Non-Independent Directors, the Board as a whole, and the Committees of the Board has been evaluated by Independent Directors in a separate meeting. At the same meeting, the Independent Directors also evaluated the performance of the Chairman of your Company, after taking into account the views of Executive Director and Non-Executive Directors. Evaluation as done by the Independent Directors was submitted to the Nomination and Remuneration Committee and subsequently to the Board.
The performance of the Board and its Committees was evaluated by the Nomination and Remuneration Committee after seeking inputs from all the Directors, on the basis of criteria such as the Board/Committee composition and structure, effectiveness of the Board/Committee process, information and functioning, etc.
The performance evaluation of all the Directors of your Company (including Independent Directors, Executive Director and NonExecutive Directors and Chairman), is done at the Nomination and Remuneration Committee meeting and the Board meeting by all the Board members, excluding the Director being evaluated on the basis of criteria, such as contribution at the meetings, strategic perspective or inputs regarding the growth and performance of your Company, among others. Following the meetings of Independent Directors and of Nomination and Remuneration Committee, the Board at its meeting discussed the performance of the Board, as a whole, its Committees and Individual Directors.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo stipulated under section 134(3)(m) of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, is set out in Annexure ''D'' to this Report.
INTEGRATED REPORT
The Company has voluntarily provided Integrated Report. This report is prepared in alignment with the Integrated Reporting Framework laid down by the International Integrated Reporting Council (IIRC) and aims at presenting the value creation approach for our stakeholders.
AUDITORS AND AUDIT REPORTS STATUTORY AUDITORS
Pursuant to the provisions of section 139 of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, as amended from time to time, M/s. B S R & Co. LLP Chartered Accountants (ICAI Firm Registration No. 101248W/W-100022) and M/s. S R B C & CO, LLP, Chartered Accountants (ICAI Firm Registration No. 324982E/E300003) have been appointed as Joint Statutory Auditors of the Company for a period of five consecutive years, to hold office till the conclusion of the 74th Annual General Meeting of the Company, to be held in the calender year 2021 and 75th Annual General Meeting of the Company to be held in the calender year 2022, respectively.
M/s. B S R & Co. LLP are due to retire at the ensuing 74th Annual General Meeting of the Company. M/s. B S R & Co. LLP has confirmed that they are eligible to be re-appointed in accordance with the provisions of the Act and Rules made thereunder. The Board of Directors, upon the recommendation of the Audit Committee, propose re-appointment of M/s. B S R & Co. LLP for a second term of 5 years, to the shareholders for their approval. Resolution seeking your approval forms part of the Notice convening the Annual General Meeting.
Pursuant to the provisions of section 139 of the Companies Act, 2013, as amended with effect from 7th May 2018, the requirement of ratification of the appointment of the statutory auditors, by the Members at every Annual General Meeting during the period of their appointment, has been withdrawn. In view of the above, no resolution is proposed for ratification of appointment of M/s. S R B C & Co. LLP, Chartered Accountants at the Annual General Meeting, and a note in respect of the same has been included in the Notice of the Annual General Meeting. However, they have confirmed that they are eligible to continue to act as Statutory Auditors of your Company.
|
Name of the Cost |
Division of the |
Remuneration |
|
Auditor |
Company |
|
|
M/s. D. C. Dave & Co., |
All Divisions of the |
Not exceeding |
|
Cost Accountants, Mumbai (Registration No. 000611) |
Company, except Viscose Filament Yarn- Century Rayon Division and Indo Gulf Fertilisers Unit |
H15.00 Lakh plus applicable taxes and reimbursement of out-of-pocket expenses |
|
M/s. M. R. Dudani & |
Viscose Filament |
Not exceeding H2.20 Lakh |
|
Co., Cost Accountants, Mumbai (Registration |
Yarn - Century Rayon Division |
plus applicable taxes and reimbursement of |
|
No. FRN-104041) |
out-of-pocket expenses |
|
|
M/s. K G Goyal and Associates, Cost Accountants, Jaipur |
Indo Gulf Fertilisers Unit (IGF Unit) |
Not exceeding H2.00 Lakh plus applicable taxes and reimbursement of |
|
(Registration No. FRN-000024) |
out-of-pocket expenses, to be paid on proportionate basis till divestment of IGF Unit |
The Board expressed satisfaction on the overall functioning of the Board and its Committees. The Board was also satisfied with the contribution of directors, in their respective capacities, which reflected the overall engagement of the individual directors.
The new Director inducted on the Company''s Board attends an orientation programme. The details of the programme for familiarisation of Independent Directors are provided in the Corporate Governance Report, which forms part of this Annual Report and are also available on your Company''s website at https://www.grasim.com/investors/corporate-governance.
DIRECTORS'' RESPONSIBILITY STATEMENT
The audited accounts for the year under review are in conformity with the requirements of the Companies Act, 2013 and the Accounting Standards. The financial statements reflect fairly the form and substance of transactions carried out during the year under review and reasonably present your Company''s financial condition and results of operations.
Pursuant to section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of its knowledge and ability, confirm that:
a) i n the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
b) the accounting policies selected have been applied consistently, and judgements and estimates are made that are reasonable and prudent, so as to give a true and fair view of the state of affairs of your Company as at 31st March 2021 and of the profit of your Company for the year ended on that date;
c) proper and sufficient care has been taken for the maintenance of adequate accounting records, in accordance with the provisions of the Act for safeguarding the assets of your Company, and for preventing and detecting fraud and other irregularities;
d) annual accounts have been prepared on a ''going concern'' basis;
e) the Directors have laid down proper internal financial controls, and that such internal financial controls are adequate and were operating effectively; and
f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws, and that such systems were adequate and operating effectively.
The observations made by the Joint Statutory Auditors on the Financial Statements of the Company, in their Report for the financial year ended 31st March 2021, read with the Explanatory Notes therein, are self-explanatory and, therefore, do not call for any further explanation or comments from the Board under section 134(3)(f) of the Companies Act, 2013. The Auditors'' Report does not contain any qualification, reservation, disclaimer or adverse remark.
COST AUDITORS
The cost accounts and records as required under section 148(1) of the Companies Act, 2013 are duly prepared and maintained by your Company. Pursuant to the provisions of section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, as amended, notifications/circulars issued by the Ministry of Corporate Affairs from time to time, your Board has on the recommendation of the Audit Committee, appointed M/s. D. C. Dave & Co., Cost Accountants, Mumbai, M/s. M. R. Dudani & Co., Cost Accountants, Mumbai and M/s. K G Goyal and Associates, Cost Accountants, Jaipur as the Cost Auditors for FY 2021-22 to conduct cost audit for various divisions and units of the Company as detailed under:
Your Company has received consent from M/s. D. C. Dave & Co., M/s. M. R. Dudani & Co. and M/s. K G Goyal and Associates, Cost Accountants, to act as the Cost Auditors of your Company for FY 2021-22, along with separate certificates confirming each of their eligibility.
As required under the Companies Act, 2013, a resolution seeking ratification of the remuneration payable to the cost auditors has been incorporated in the Notice of the Annual General Meeting for approval by the Members at the ensuing Annual General Meeting.
SECRETARIAL AUDITORS
Pursuant to the provisions of section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed M/s. BNP & Associates, Company Secretaries, Mumbai, to conduct the secretarial audit for FY 2021-22. The Secretarial Audit Report, issued by M/s. BNP & Associates, Company Secretaries for the FY 2020-21, is set out in Annexure ''E'' to this Report.
The Secretarial Audit Report does not contain any qualification, reservation, disclaimer or adverse remark.
The Secretarial Compliance Report for the financial year ended 31st March 2021, in relation to compliance of all applicable SEBI Regulations/circulars/guidelines issued thereunder, pursuant to requirement of regulation 24A of the Listing Regulations, is available on the website of the Company and can be accessed at https://www.grasim.com/investors/board-and-shareholder-meeting.
SECRETARIAL STANDARDS
Your Company is in compliance with the Secretarial Standards specified by the Institute of Company Secretaries of India.
REPORTING OF FRAUDS BY AUDITORS
During the year under review, neither the Statutory Auditors, Cost Auditors and the Secretarial Auditors have reported to the Audit Committee under section 143(12) of the Companies Act, 2013 any instances of fraud committed against your Company by its officers and employees, details of which would need to be mentioned in the Board''s Report.
DISCLOSURES
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
During FY 2020-21, all contracts/arrangements/transactions entered into by your Company with Related Parties were on arm''s length basis and in the ordinary course of business. There are no material transactions with any Related Party as defined under section 188 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014. All Related Party transactions have been approved by the Audit Committee of your Company and are reviewed by it on a quarterly basis. Your Company has implemented Related Party Transactions Policy and Standard Operating Procedures for the purpose of identification and monitoring of such transactions.
The details of contracts and arrangements with Related Parties of your Company for the financial year ended 31st March 2021,
are given in Notes to the Standalone Financial Statements, forming part of this Annual Report.
The Policy on Related Party Transactions, as approved by the Board, is available on your Company''s website and can be accessed at: https://www.grasim.com/investors/policies-and-code-of-conduct.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
Your Company has established a robust Vigil Mechanism for reporting of concerns through the Whistle Blower Policy of your Company, which is in compliance of the provisions of section 177 of the Companies Act, 2013, read with rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, and the Listing Regulations. The Policy provides for framework and process whereby concerns can be raised by its employees against any kind of discrimination, harassment, victimisation or any other unfair practice being adopted against them. Adequate safeguards are provided against victimisation to those who avail of the mechanism, and access to the Chairman of the Audit Committee, in exceptional cases, is provided to them. The details of the Vigil Mechanism are also provided in the Corporate Governance Report, which forms part of this Annual Report and the Whistle Blower Policy has been uploaded on the website of your Company and can be accessed at https://www.grasim.com/ investors/policies-and-code-of-conduct.
CORPORATE SOCIAL RESPONSIBILITY
In terms of the provisions of section 135 of the Companies Act, 2013, read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors of your Company has a Corporate Social Responsibility (''CSR'') Committee, which is chaired by Mrs. Rajashree Birla. The other Members of the Committee are Ms. Anita Ramachandran, Independent Director, Mr. Shailendra K. Jain, Non-Executive Director and Mr. Dilip Gaur, Managing Director. Dr. Pragnya Ram, Group Executive President - CSR, Legacy Documentation & Archives, is a permanent invitee to the Committee. The Corporate Social Responsibility Policy (''CSR Policy''), indicating the activities undertaken by your Company, is available on your Company''s website and can be accessed at: https://www.grasim.com/investors/policies-and-code-of-conduct.
Your Company is a caring corporate citizen and lays significant emphasis on development of the host communities around which it operates. Your Company, with this intent, has identified several projects relating to Social Empowerment and Welfare, Rural Development, Sustainable Livelihood, Health Care and Education, during the year, and initiated various activities in neighboring villages around its plant locations. Your Company undertook several initiatives to help nation fight against COVID
crisis including supply of healthcare equipment''s, medical oxygen and oxygen concentrators, setting up hospital beds, distributing face masks, hand gloves, sanitiser bottles, creating COVID related awareness etc.
During the year, the Company spent H84.66 Crore of which H48.85 Crore was spent towards mandatory CSR obligations of the Company and additionally H35.81 Crore was spent towards voluntary CSR activities (totalling to around 3.76% of the average net profits of last three financial years) on CSR activities.
The initiatives undertaken by your Company on CSR activities, during the FY 2020-21, are set out in Annexure ''F'' to this Report, in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014.
RISK MANAGEMENT
Pursuant to the requirement of Listing Regulations, your Company has constituted Risk Management Committee, which is inter-alia, mandated to review the risk management plan/process of your Company. Risk evaluation and management is an ongoing process within the organisation. The Committee periodically assesses risks in the internal and external environment, and incorporates risk mitigation plans in its strategy, business and operation plans. Your Company has comprehensive risk management framework, which is periodically reviewed by the Committee. The scope of the Committee has been enhanced to include activities pertaining to overseeing sustainability activities, advising Board on sustainability practices etc. and accordingly the Risk Management Committee was renamed as Risk Management and Sustainability Committee (''RMSC'') effective from 24th May 2021.
There are no risks which in the opinion of the Board threaten the existence of the Company. However, some of the risks which may pose challenges are set out in the Management Discussion and Analysis which forms part of this Annual Report.
The Risk Management Policy is available on Company''s website and can be accessed at https://www.grasim.com/investors/ policies-and-code-of-conduct.
BUSINESS RESPONSIBILITY REPORT
As per regulation 34(2)(f) of the Listing Regulations, a separate section on Business Responsibility Report, describing the initiatives taken by your Company from environmental, social and governance perspective, forms an integral part of this Annual Report.
ANNUAL RETURN
In terms of the provisions of Section 92 and Section 134 of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of your Company as on 31st March 2021 is available on Company''s website and can be accessed at https://www.grasim.com/investors/board-and-shareholder-meeting.
INTERNAL CONTROLS
Your Company has in place adequate internal control system (including internal financial control system) commensurate with the size of its operations. Internal control systems comprising of policies and procedures are designed to ensure sound management of your Company''s operations, safe keeping of its assets, optimal utilisation of resources, reliability of its financial information and compliance. Systems and procedures are periodically reviewed to keep pace with the growing size and complexity of your Company''s operations. During the year under review, no material or serious observation has been received from the Joint Statutory Auditors of your Company citing inefficiency or inadequacy of such controls.
REMUNERATION POLICY
The Company''s remuneration policy is directed towards rewarding performance based on review of achievements. The remuneration policy is in consonance with existing industry practice. There has been no change in the policy during the financial year under review.
The Remuneration Policy of your Company, as formulated by the Nomination and Remuneration Committee of the Board of Directors is given in Annexure ''G'' to this Report and is also available on your Company''s website and can be accessed at https://www.grasim.com/investors/policies-and-code-of-conduct.
STATUTORY COMMITTEES OF THE BOARD AUDIT COMMITTEE
The Audit Committee (reconstituted on 24th May 2021) comprises of Mr. N. Mohan Raj (Chairman), Mr. V. Chandrasekaran, Dr. Thomas M. Connelly, Jr. and Mr. Dilip Gaur as its Members. Majority of the members of Audit Committee are Independent Directors with Chairman also being an Independent Director. The CFO of your Company is the permanent invitee at the Audit Committee Meetings.
Further details relating to the Audit Committee are provided in the Corporate Governance Report, which forms an integral part of this Annual Report.
in the subsequent value chain and customer''s hands. It has been successfully developed and scaled up to supply commercial volumes to key customers. Excel fibre using 20% cotton-recycle pulp from a USA based start-up was produced on the Company''s pilot line and is being evaluated for market promotion with international brands. Also, a process for making high tenacity lyocell fibres using bacterial-cellulose pulp by the Australian start-up ''Nanollose'' was developed at lab scale and a joint patent application was filed.
Viscose Filament Yarn (VFY)
Your Company has been consistently developing new product variants according to consumer''s needs. During last year, your Company has successfully developed Antibacterial VFY, Monofilament, low and high denier/filament products etc. On new application side, your Company has created in-house facility to produce Air-textured Yarn from VFY, developed Lycra covered yarn (Spandex covered with PSY) which is stretchable, having usage in garment & Denim and developed Space dyed yarn for usage in fashion fabrics.
On the way to industry 4.0, exploring use of artificial intelligence based technology for defect identification before winding in order to supply defect free yarn to customer. To enhance productivity, Indigenously developed twin tube technology for coarse deniers on Pot spun Yarn Technology. Your Company is increasing its sustainability foot prints by using pulp manufactured with recycled cotton garment waste (5%) as an input raw material.
Chemical Business
Your Company''s R&D department is continuously evolving and taking a more outside-in approach to Innovation, process improvement for cost optimisation, product development, application development to bring in new products & solutions to customers in water management and Plastic derivatives industry segments as key focus. In addition, there are certain segments on horizon where your Company is constantly evaluating the potential growth opportunities like Food, Home care, Disinfection and Hygiene where there is expertise and good synergy with its business.
Your Company''s model of R&D also involves working on long term development with major customers and continuously looking at new technology that will help enhance performance of your Company''s offerings. Water Treatment Business being focus, we have leveraged our R&D Centre - Aditya Birla Water Application Development Centre (ABWADC) - for solving water treatment problems in Potable Water, some major health problems (removal of Fluoride from groundwater- Jointly with MNIT), working on STP supporting the ''Namami Gange'' project, providing water and wastewater treatment solutions to Oil & Gas, Power, Pulp & Paper and Textile industry. ABWADC was awarded its 1st Patent this year in the area of Water treatment.
All the recommendations made by the Audit Committee, during the year, were accepted by the Board of Directors of your Company.
NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee (reconstituted on 24th May 2021) comprises of Ms. Anita Ramachandran (Chairperson), Mr. Kumar Mangalam Birla, Dr. Santrupt Misra and Mr. Cyril Shroff as its members.
Further details relating to the Nomination and Remuneration Committee are provided in the Corporate Governance Report, which forms an integral part of this Annual Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Corporate Social Responsibility Committee comprises of Mrs. Rajashree Birla (Chairperson), Ms. Anita Ramachandran, Mr. Shailendra K. Jain and Mr. Dilip Gaur as its members.
Further details relating to the Corporate Social Responsibility Committee are provided in the Corporate Governance Report, which forms an integral part of this Annual Report.
STAKEHOLDERS'' RELATIONSHIP COMMITTEE
Stakeholders'' Relationship Committee (reconstituted on 24th May 2021) comprises of Ms. Anita Ramachandran (Chairperson), Mr. Shailendra K. Jain and Mr. Dilip Gaur as its members. The Committee looks into matters relating to transfer/ transmission of securities; non-receipt of dividend; non-receipt of annual report etc.
Further details pertaining to Stakeholders'' Relationship Committee are provided in the Corporate Governance Report, which forms an integral part of this Annual Report.
RESEARCH AND DEVELOPMENT (R&D)
The R&D projects portfolio is focused on improving the relative market position of your Company''s businesses in the face of increasingly volatile and competitive business environment. The focus is on developing and commercialising premium differentiated products, improving our competitive cost position, product quality and environmental sustainability. To support these goals, the businesses are managing a pipeline of projects that are addressing near and mid-term needs, as well as the exploration of future opportunities.
Pulp & Fibre Business
The Pulp Technology team is facilitating a comprehensive business quality improvement framework that seeks to enhance customer-centricity and the integration of pulp supply-chain and pulp quality. By employing a "product by process philosophy,"
significant improvement has been achieved in the consistency of pulp quality parameters. This has resulted in narrowing of the product specifications, and an enhanced ability to deliver higher quality pulp-grades more consistently. Furthermore, this has enabled the establishment of a more stringent A category of pulp quality, which caters to very demanding downstream pulp applications. The pulp team is now targeting to further improve its A product quality through process improvement. The Pulp team has also implemented digital transformation projects that seek to bring critical-to-customer information on the pulp supply in real-time to the downstream fiber units. Recently, agile processes and flexible working has enabled the pulp plants to quickly establish high levels of quality and uptime of process units amidst the disruptions caused by the Covid-19 pandemic.
Viscose Staple Fibre (VSF) production facilities have increasingly collaborated on reducing material consumption, increasing productivity, improving product quality, enhancing sustainability and developing specialty products. This is achieved through insightful developments in lab and pilot plant, and careful selection and implementation of the process technologies as well as process additives. One example in fiber making process is the increased efficiency of water utilisation to reduce effluent and improve recovery of chemicals from the effluent. Following demonstration in one line, plan is to implement on multiple lines and plants. Your Company is continuing to fulfill public commitments for reducing the environmental footprint by fully closed-loop recycling of water Nagda. Your Company has designed a zero liquid discharge (ZLD) system, and construction is nearing completion.
Aditya Birla Science and Technology Company Ltd. (ABSTC) has developed an understanding of the effluent streams characteristics as well as of the variations in the effluent treatments employed by different fibre units. This has resulted in the identification of cost saving potential through recovery of chemicals such as zinc, while also providing cleaner effluent. A pilot plant has been constructed at the Kharach plant where process data is being collected to aid the scale-up plan. Similarly, recent years'' understanding of the fundamentals of fiber dryer operation has been leveraged to increase productivity, reduce energy consumption and improve uniformity of fiber drying.
Our digitalisation program has aimed at assisting business decision making through data driven approaches for improvement in energy efficiency, asset uptime, quality, productivity and supply chain efficiency. Process optimisation has resulted in improved CS2 recovery. Pulp Logistics cost optimisation model is developed and is being piloted. As a start, your Company is developing digital-twin solutions at its Vilayat Unit for Chiller MSFE and Fibre Dryer processes, with an objective of improving energy economy, plant capacity and product quality.
At the Pulp and Fibre business R&D, an unwavering focus on enhancing customer experience has driven us towards the timely launch of several key Speciality products. Amidst heightened hygiene concerns owing to Covid-19, your Company quickly established the anti-viral performance of Liva Antimicrobial fibres and facilitated quick commercial manufacturing of these fibres at three fibre plants. Thanks to the nimbleness and commitment of a diverse workforce spanning multiple functions and geographies, the timely supply of Liva Antimicrobial fibres fulfilled a much-needed societal need. Working with external labs and customers, your Company has rapidly scaled-up the in-house developed Purocel EcoFlush nonwoven fibers, which is now accepted by multiple customers for making environmentally friendly, 100% flushable wipes. Through the launch of Liva Reviva, your Company now offer lyocell or viscose fibres made from raw materials partially containing cotton waste. By up-cycling cotton waste otherwise destined for low-end applications, incineration or use in land-fills, Liva Reviva serves the pressing global need of textile circularity and waste reduction. Liva Reviva thus enables its consumers to be stylish while simultaneously being environmentally conscious. Your Company has actively collaborated with multiple startups in this space, with aim of increasing access to reclaimed pulp from used cotton clothing. LivaEco fiber is our offering of a rich bouquet of sustainability features while retaining the fashion quotient of the Liva brand. Every Livaeco⢠garment contains a unique molecular tracer which helps the end buyer to trace the origin and full journey of the garment he/she is buying.
Man-made cellulosic fibres are increasingly being seen as potential alternative to plastics, especially in light of regulations aiming to reduce use of plastics in packaging, and ABSTC is leading such development for its business, and is evaluating the potential of viscose-based solutions for retail and apparel bags.
In order to provide a new thrust towards improving fibre quality across all of its manufacturing units, the Fiber business has constituted a high level Quality Steering Committee comprising of senior leaders from fiber plants, marketing and R&D for seamless collaboration. Going forward, the focus will be to enhance the Customer Experience - by providing the right quality of fibers to each customer with superior technical support and 100% OTIF (On Time In Full) delivery. The aim is to take a quantum leap from ''Customer Satisfaction'' to ''Customer Delight'', by achieving next level of Quality and Consistency to meet changing customer requirement and to bring cultural transformation and outlook towards Quality.
Responding to high demand for NW fibre during the pandemic, technology for TiO2 incorporation for delustering of lyocell fibre (Excel) was quickly developed and commercial runs were conducted for customer evaluation. Your Company has also developed technology for introduction of physical tracer in its Excel fibre, the fibre thus being verifiable of its origin anywhere
Your Company''s R&D Centre is approved by Dept. of Scientific and Industrial Research (DSIR) and is executing collaborative projects with many renowned institutes like MNIT-Jaipur, NCL etc. In addition, the centre also worked with Industry to develop range of plasticisers (phthalate free) for various applications where PVC, PU, metal working fluids and additives in Paints and Coatings are used. This will be a good focus area going forward both in India and International market. New product development effort in area of Disinfection & Hygiene has been initiated to address the current and future needs of the society.
Various enhancements in production process was undertaken by the team that helped improved production in CBGP plant, resolved issues in Super coagulant plant, modified recipes in PAC liquid production for better product and Conversion of spent Aluminium Chloride solution into value added product. This has helped to improve operational efficiencies and quality of product. Your Company is focused on process improvements for basic raw material blends to achieve process accelerations and engineering improvements.
Advanced Material - Epoxy Resins
Your Company''s R&D team is involved in synthesising mono, di, multifunctional epoxy building blocks, Reactive diluents of various viscosities, EEW, HyCl content, various hardeners or curing agents. You Company''s team is engaged in developing process for synthesising building blocks for multifunctional epoxies, application development in powder coating segment for coating electronics parts, Adhesive product development in construction segment, process development for synthesising acrylic based water soluble coating solution for can coating applications, developing products for floor coating and construction segments, epoxy system solutions for composite segment to make low & high pressure pipes, LPG gas storage tanks, and developing products such as Ignition coil, potting system, for electrical and electronic industries.
Agri-business
In line with Honorable PM''s Vision of doubling farmer income by 2022, your Company Agri-Business defined it purpose as ''Farmers Prosperity through Innovative Solutions''. R&D approach is to innovate to deliver products that are customised, functional, with world-class quality and increase productivity. Your Company is continuously providing thrust on Purak segment (non-Urea business) which includes innovative and new variant of product Oorja. Several innovative products are at various stages of inhouse development have performed better in research farm trials. NPK soil and crop specific (CFG) and Water-Soluble Fertiliser introduced are cost effective in production and superior in quality resulting in increase in yield for various crops. The analytical infrastructure built has helped in sourcing and ensuring specific
: quality requirements for seeds, agrochemicals and related raw 1 materials.
Insulators
! Your Company''s Insulator Business has accelerated its R&D efforts with focus on process & working environment 1 improvements. Your Company has worked towards indigenization
¦ and implemented following changes (a) Replacement of imported 1 clay with indigenous clay to reduce import dependence and '' support domestic manufacturing with cost advantage, (b) Inhouse design optimisation of insulators for lower weight and
1 better pollution performance. Your Company has also accelerated J new product development to fulfill customer needs:
: ⢠New product development with specifications of narrow
; strength variations in product to meet export customers'' requirements.
''
⢠Use of latest 3D Simulation Software for Electric Field Magnitude Analysis of Composite Long Rod Insulators.
Textiles
Your Company is involved in driving innovation, servicing new , customers with focus on sustainability and consumer''s emerging . needs, and constantly improving its processes.
j Your Company is the pioneer to launch a new linen range under the name ''Linen Club - Uncrushable'', that offers a wrinkle-resist | performance without compromising on natural linen properties.
1 Your Company has developed blends in both linen and wool with j sustainable fibres such as Silk, Lyocell, Bamboo, etc. that offer Organic product certifications with complete traceability from farm to fashion.
As a response to the consumers'' demand, your Company has developed wool for athleisure/active wear using Super wash technology (1st in India) and yarn for protective wear applications using merino wool blended with Pyrotex®. Your Company has also 1 developed a new effect called ''Delave effect'' in linen yarn dyeing.
i On process improvement front, your Company worked in , collaboration with Aditya Birla Science & Technology Co Pvt Ltd. '' (ABSTC) to improve its by-product (grease) recovery percentage.
Your Company has achieved sustainable improvement in : recovery percentage with a gain of 0.48% against previous year by optimising our processes.
¦ Your Company is also working in collaboration with Aditya Birla '' Science & Technology Co Pvt Ltd. (ABSTC) and other vendor for
exploring feasibility of a developing hemp value chain in India. : Your Company is also working with global partners e.g. CELC,
LP Studio, Wool Mark, etc. and other specialty fibre suppliers to explore and develop innovative yarns and fabric.
Thus, the wide span of the RD&T activities amply addresses the present and future needs of the Textile business.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF YOUR COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THE FINANCIAL STATEMENT RELATES AND THE DATE OF THE REPORT
No material changes and commitments, which could affect your Company''s financial position, have occurred between the end of the financial year and the date of this Report. There has been no change in the nature of business of your Company.
COVID-19
The impact of the second COVID wave started showing up from end of March'' 21 and within few weeks most of the state government-imposed lockdown and various curbs to control the spread of virus.
In the time of crisis, your Company acted as a responsible citizen and caring employer giving utmost priority to the health and welfare of the employees. Your Company undertook several initiatives to provide financial, medical, psychological and emotional support to the employees and their family, battling COVID.
Some key initiatives undertaken by the Company included providing reimbursement of hospitalization expenses beyond insurance coverage, providing ex-gratia payment to the kin of deceased, providing housing and education assistance to the family of deceased employee, providing family medical insurance to the kin of deceased, providing COVID CARE giver''s leave to help employees take care of their family members, providing emotional and psychological support by way of counselling sessions, providing tele-counselling by doctors for COVID treatment, helping employees with hospital beds, providing oxygen cylinders, arranging vaccination camps for employees and their families etc.
As a responsible citizen, your Company undertook several COVID relief measures for society at large which inter-alia included setting up hospital beds, distributing oxygen cylinders, oxygen concentrators, oximeters, sanitisers, hand gloves, arranging vaccination camps etc.
Your Company''s plant operations across various states were impacted due to lockdown related restrictions imposed by government authorities. In Q1 FY 2021-22 the capacity utilisation of viscose, chemicals, insulators and textile plants
is likely to be lower than Q4 FY 2020-21, as the end markets were shut due to lockdown related restrictions imposed by state government. Your Company has taken necessary measures to maintain adequate financial liquidity and to ensure availability of raw materials and needed resources for sustained operations.
PARTICULARS OF EMPLOYEES
Disclosures pertaining to remuneration and other details as required under section 197(12) of the Companies Act, 2013, read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as Annexure ''H'' to this Report.
In accordance with the provisions of section 197(12) of the Companies Act, 2013 read with rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees drawing remuneration in excess of the limits, set out in the aforesaid rules, forms part of this Report. In line with the provisions of section 136(1) of the Companies Act, 2013, the Report and Accounts, as set out therein, are being sent to all the Members of your Company excluding the aforesaid information about the employees. Any Member, who is interested in obtaining these particulars about employees, may write to the Company Secretary at [email protected].
EMPLOYEE STOCK OPTION SCHEMES (ESOS)
ESOS-2006
During the year under review, the Stakeholders'' Relationship Committee of the Board of Directors allotted 6,975 equity shares of H2 each of the Company to Option Grantees, pursuant to the exercise of the Stock Options under ESOS-2006.
ESOS-2013
During the year under review, 18,274 Stock Options, which were due for vesting in the eligible employees, had not vested and lapsed pursuant to the approval of the Nomination and Remuneration Committee and in accordance with the provisions of the ESOS-2013 due to vesting criteria not being met.
Further, the Stakeholders'' Relationship Committee issued and allotted 2,38,931 equity shares of H2 each of the Company to Stock Options and RSU Grantees, pursuant to the exercise of the Stock Options and RSUs, under ESOS-2013.
ESOS-2018
During the year under review, the Nomination and Remuneration Committee of the Board of Directors approved grant of 3,22,925 Stock Options and 13,172 Restricted Stock Units (RSUs) to the eligible employees, including Managing Director of the Company,
under ESOS-2018 and also approved vesting of 3,051 Stock Options to the eligible employees. Further, 2,51,787 Stock Options which were due for vesting to the eligible employees had not vested and lapsed pursuant to the approval of Nomination and Remuneration Committee and in accordance with the provisions of ESOS -2018 due to vesting criteria not being met.
39,031 equity shares were transferred from the ESOS Trust account to the employees account on account of exercise of Options by the grantees.
The details of Employee Stock Options granted pursuant to ESOS-2006 and the Employee Stock Options and RSUs granted pursuant to ESOS-2013 and ESOS-2018, and also the other disclosures in compliance with the provisions of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, are available on your Company''s website and can be accessed at https://www.grasim.com/investors/board-and-shareholder-meeting.
A certificate from the Statutory Auditors, with respect to implementation of your Company''s Employees Stock Option Schemes will be available electronically for inspection without any fee by the members from the date of circulation of the Notice of the Annual General Meeting up to the date of Annual General Meeting. Members seeking to inspect such documents can send an email at [email protected].
POLICY ON PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company has zero tolerance for sexual harassment at workplace. The Company has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (''POSH Act'') and the rules framed thereunder. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
Your Company has constituted Internal Complaints Committee to redress and resolve any complaints arising under the POSH Act. No complaint was received under the POSH Act during the year under review. As on 31st March 2021, there were no outstanding complaints under the aforesaid Act. The Company is committed to providing a safe and conducive work environment to all its employees and associates.
HUMAN RESOURCES
Your Company''s human resource is the strong foundation for creating many possibilities for its business. The efficient operations of manufacturing units, market development and expansion for various products was the highlight of our people effort.
8 Grasim Industries Limited
Continuous people development for developing knowledge and skills coupled with the Talent Management practices will deliver the talent needs of the organisation. Your Company''s employee engagement score reflects high engagement and pride in being part of the organisation.
The Group''s Corporate Human Resources plays a critical role in your Company''s talent management process.
AWARDS AND ACCOLADES
Some of the significant accolades earned by your Company during the year include:
⢠Your Company ranked 9th among the India''s Top Companies for Sustainability and CSR by The Economic times and Futurescape Responsible Business Rankings 2020.
⢠Birla Cellulose, Pulp & Fibre Business was accredited with the ''Golden Peacock Global Award for Sustainability'' for the year 2020.
⢠Your Company won the Investor Relations Award 2020-ESG Disclosures by Investor Relations Society in collaboration with BSE Limited and KPMG India.
⢠Staple Fibre Divison of the Company at Nagda won the World CSR Leadership Award-2020 for best COVID-19 solutions for community care.
⢠Grasilene Division of the Company won the "Energy Efficient Unit Award" at 21st CII National Award for Excellence in Energy Management 2020.
⢠Domestic Chlor Alkali Business at Rehla, won 7th CSR INDIA 2020 Award for "Promotion of Health & Healthcare" by Greentech Foundation.
⢠Company''s Pulp and Fibre business won the ''Special Award for Resiliency'' at IDC Digital Transformation Awards 2020- India.
⢠Insulator Unit at Rishra won Par Excellence Award at NCQC 2020 (National Convention on Quality Concept).
⢠Company''s Fashion Yarn won the Gold Award in India Green Manufacturing Challenge for Excellence in Sustainability by The International Research Institute for Manufacturing Industry, Mumbai.
⢠Company''s Harihar Complex won the "Commendation for Significant Achievement in Environment Management" by CII - ITC Sustainability award - 2020.
UPDATE ON MATERIAL ORDERS PASSED BY THE REGULATORS
⢠Competition Commission of India (''CCI'') had passed an order under section 4 of the Competition Act, 2002 dated 16th March 2020, imposing a penalty of H301.61 Crore on your Company in respect of its domestic man-made fibre
turnover. Your Company had filed an appeal against the order before the Hon''ble National Company Law Appellate Tribunal (''NCLAT'') and has obtained a stay by depositing H30 Crore with NCLAT on 11th November 2020. The matter is being heard by NCLAT.
⢠The Deputy Commissioner of Income Tax (''DCIT'') has vide Order dated 14th March 2019 raised a demand of H5,872.13 Crore on account of dividend distribution tax (including interest) alleging that the demerger of financial services business is not a qualified demerger and holding that the value of shares allotted by Aditya Birla Capital Limited (''ABCL'') to the shareholders of the Company in consideration of the transfer and vesting of the financial services business into ABCL pursuant to duly approved Scheme of Arrangement, amounted to distribution of dividend by the Company.
Your Company had challenged the said order by filing an appeal before the Commissioner of Income Tax (Appeal). The CIT (Appeal) upheld the order and reduced the quantum of demand from H5,872 Crore to H3,786 Crore. The Company has filed an appeal against the order of CIT (Appeal) before the Tribunal on 23rd November 2020 and has obtained stay on demand by furnishing the requisite security to Assessing Officer. The appeal is presently pending before the Tribunal.
Your Company, backed by independent expert''s opinion, believes that the said order is not tenable in law and accordingly no provision has been made in the books of account.
GENERAL
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these matters during the year under review:
1. Issue of equity shares with differential rights as to dividend, voting or otherwise;
2. Issue of shares (including sweat equity shares) to employees of your Company under any Scheme save and except ESOS Schemes referred to in this report;
3. The Managing Director of the Company does not receive any remuneration or commission from any of its subsidiaries;
4. There were no revisions in the financial statement;
5. There has been no change in the nature of business of your Company;
6. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and your Company''s operations in the future. The update on the status of material orders passed by the Regulators or Court or Tribunals in the previous years is provided separately in this Report;
7. There were no proceeding initiated under the Insolvency and Bankruptcy Code, 2016;
8. There was no instance of one time settlement with any Bank or Financial Institution; and
9. There was no failure to implement any Corporate Action. ACKNOWLEDGEMENTS
Your Directors express their deep sense of gratitude to the banks, financial institutions, stakeholders, business associates, Central and State Governments for their co-operation and support and look forward to their continued support in future.
Your Directors very warmly thank all our employees for their contribution to your Company''s performance. We applaud them for their superior levels of competence, dedication and commitment to your Company. We have immense respect for every person who risked their lives and safety to fight this pandemic.
For and on behalf of the Board
Kumar Mangalam Birla Chairman (DIN: 00012813)
Mumbai, 24th May 2021
Mar 31, 2019
To the Members,
The Directors are pleased to present the 72nd Annual Report of your Company along with the Audited Financial Statements for the financial year ended 31st March 2019.
FINANCIAL HIGHLIGHTS
Your Companyâs financial performance for the year ended 31st March 2019, is summarised below:
(Rs. in Crore)
|
Particulars |
Consolidated |
Standalone |
||
|
2018-19 |
2017-18 |
2018-19 |
2017-18 |
|
|
Revenue from Operations |
72,970.64 |
57,033.67 |
20,550.43 |
16,032.05 |
|
Less: Excise Duty |
- |
1,140.16 |
- |
246.24 |
|
Net Revenue from Operations |
72,970.64 |
55,893.51 |
20,550.43 |
15,785.81 |
|
Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) |
12,819.85 |
10,883.37 |
4,639.14 |
3,541.54 |
|
Less: Finance Costs |
1,780.56 |
1,363.98 |
199.05 |
128.13 |
|
Less: Depreciation and Amortisation Expenses |
3,260.45 |
2,724.36 |
760.39 |
627.66 |
|
Profit Before Share in Profit/(Loss) of Equity Accounted Investees, Exceptional Items and Tax |
7,778.84 |
6,795.03 |
3,679.70 |
2,785.75 |
|
Share in Profit/(Loss) of Equity Accounted Investees |
29.06 |
(727.44) |
- |
- |
|
Exceptional Items |
(2,574.52) |
(432.85) |
(2,368.01) |
(272.61) |
|
Profit Before Tax (PBT) |
5,233.38 |
5,634.74 |
1,311.69 |
2,513.14 |
|
Tax Expenses |
2,457.43 |
1,947.12 |
796.39 |
744.48 |
|
Profit for the Period Attributable to: |
2,775.95 |
3,687.62 |
515.30 |
1,768.66 |
|
Shareholders of the Company |
1,771.92 |
2,678.58 |
515.30 |
1,768.66 |
|
Non-Controlling Interest |
1,004.03 |
1,009.04 |
- |
- |
|
Other Comprehensive Income for the Year Attributable to: |
(2,786.46) |
(276.65) |
(2,798.07) |
(221.69) |
|
Shareholders of the Company |
(2,826.72) |
(166.05) |
(2,798.07) |
(221.69) |
|
Non-Controlling Interest |
40.26 |
(110.60) |
- |
- |
|
Total Comprehensive Income for the Year Attributable to: |
(10.51) |
3,410.97 |
(2,282.77) |
1,546.97 |
|
Shareholders of the Company |
(1,054.80) |
2,512.53 |
(2,282.77) |
1,546.97 |
|
Non-Controlling Interest |
1,044.29 |
898.44 |
- |
- |
|
Profit for the Period attributable to Shareholders of the Company |
1,771.92 |
2,678.58 |
515.30 |
1,768.66 |
|
Opening Balance in Retained Earnings |
3,453.58 |
3,299.75 |
3,765.46 |
3,434.87 |
|
Gain/(Loss) on Re-measurements of Defined Benefits Plans |
(7.37) |
15.78 |
(5.49) |
(12.87) |
|
Gain on sale of non-current investment transferred to retained earnings from equity instruments through OCI |
21.39 |
8.19 |
- |
0.02 |
|
Stake Dilution in Subsidiary Companies |
(0.57) |
- |
- |
- |
|
Transaction Cost on cancellation of Shares in UltraTech Nathdwara Cement Limited (UNCL) |
(0.90) |
- |
- |
- |
|
Others (Increase in stake in Aditya Birla Solar Limited, transfer from ESOP reserve on exercise of option and movement in Joint Venture Companies) |
0.09 |
(1.90) |
||
|
Subvention Money Received in subsidiary books |
4.44 |
- |
- |
- |
|
Idea Cellular Limited (now known as Vodafone Idea Limited) not consolidated as an Associate w.e.f. 31st August 2018 |
636.67 |
- |
- |
- |
|
Amount available for Appropriation |
5,879.25 |
6,000.40 |
4,275.27 |
5,190.68 |
|
Less: Transfer to Debenture Redemption Reserve |
(48.71) |
(73.68) |
(23.38) |
(23.75) |
|
Less: Transfer to General Reserve |
(1,084.98) |
(1,963.36) |
- |
(1,000.00) |
|
Less: Dividend Paid on Equity Shares (including Corporate Dividend Tax) |
(491.5) |
(435.07) |
(455.83) |
(401.47) |
|
Less: Transfer to Special Reserve Fund |
(107.47) |
(74.39) |
- |
- |
|
Less: Transfer to Legal Reserve |
- |
(0.32) |
- |
- |
|
Closing Balance in Retained Earnings |
4,146.59 |
3,453.58 |
3,796.06 |
3,765.46 |
DIVIDEND
Based on your Companyâs performance, the Directors are pleased to recommend for your approval, a dividend of Rs. 7 (Rupees Seven Only) per equity share of Rs. 2 each of your Company (dividend @350% of the face value), for the financial year ended 31st March 2019. The dividend, if approved by the members, would involve a cash outflow of Rs. 515.88 Crore (inclusive of Dividend Distribution Tax of Rs. 55.54 Crore).
In terms of the provisions of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended from time to time (âListing Regulationsâ), your Company has formulated a Dividend Distribution Policy. This Policy is given in Annexure âAâ to this Report and is available on your Companyâs website, www.grasim.com.
Dividend declared by your Company for the financial year ended 31st March 2019, is in compliance with the Dividend Distribution Policy.
TRANSFER TO RESERVES
The Board of Directors of your Company has decided not to transfer any amount to the General Reserves, for the financial year ended 31st March 2019.
PERFORMANCE REVIEW
On a consolidated basis, the revenue from operations for FY 2018-19, increased to Rs. 72,970.64 Crore which was 31% higher than that of the previous year (Rs. 55,893.51 Crore in FY 2017-18). The consolidated EBITDA increased to Rs. 12,819.85 Crore for FY 2018-19 which was 18% higher than that of the previous year (Rs. 10,883.37 Crore in FY 2017-18).
On a standalone basis, revenue from operations for FY 2018-19, increased to Rs. 20,550.43 Crore which was 30% higher than that of the previous year (Rs. 15,785.81 Crore in FY 2017-18). The standalone EBITDA increased to Rs. 4,639.14 Crore for FY 2018-19 which was 31% higher than that of the previous year (Rs. 3,541.54 Crore in FY 2017-18).
The Management Discussion and Analysis Section, focuses on your Companyâs strategies for growth and the performance review of the businesses/operations in depth.
STRATEGIC INITIATIVES CHLOR ALKALI BUSINESS
During the year, your Company acquired Chlor-Alkali Business (âCABâ) of K. P R. Industries (India) Limited (âKPRâ) by way of a slump sale. This acquisition is a strategic fit and further strengthens your Companyâs leadership in the chlor-alkali sector. The CAB consists of an under-construction 200 TPD Chlor-Alkali project at Balabhadrapuram, Andhra Pradesh.
The acquisition is in line with your Companyâs strategy to strengthen operations on the east coast of India. Further, the purchase of a partially-completed project, vis-a-vis a greenfield project, will translate into a shorter time-to-market. The acquired Business also has the potential for future expansions. Once operationalised, this plant, along with other ongoing expansion projects, will enhance your Companyâs caustic soda capacity to 1,457 KTPA.
Caustic soda is one of the essential inputs for the manufacture of alumina. Given the expansion plans for the aluminium businesses, it will serve as an excellent sourcing point for leading aluminium players.
It is also used widely in various other industries, viz., viscose staple fibre, water treatment, pharma, chemicals, etc. The business is strategically located in proximity of various aluminium manufacturing plants, which offer significant growth opportunities.
The chlor-alkali division of your Company already operates seven state-of-the-art chlor-alkali plants, pan India. The completion of this chlor-alkali project in Andhra Pradesh enables your Company to serve the fastest growing market of caustic soda in India, and will also catalyse growth of the chlorine downstream sector in Andhra Pradesh.
ACQUISITION OF SOKTAS INDIA PRIVATE LIMITED (NOW KNOWN AS GRASIM PREMIUM FABRIC PRIVATE LIMITED)
During the year, your Company acquired 100% equity of Soktas India Private Limited (âSIPLâ), from its current promoters, SOKTAS TEKSTIL SANAYI VE TICARET ANONIM SIRKETI, world renowned producer and marketer of fabrics at a consideration of Rs. 135 Crore. SIPL is in the business of manufacturing and the distribution of premium cotton fabrics. SIPL became a wholly owned subsidiary on 29th March 2019 and has been renamed as Grasim Premium Fabric Private Limited (GPFPL).
Its state-of-the-art manufacturing facility is located at Kolhapur, Maharashtra and its plant capacity is about 10 million metres per annum of finished fabric. GPFPL sells premium fabrics in India under the âSOKTASâ âGiza Houseâ and âExcellence by SOKTASâ brands. GPFPL is also a preferred supplier to leading Indian and Global menswear brands. The acquisition is in line with your Companyâs Linen business strategy, to strengthen its presence in the premium fabric market. Increasing disposable income, fashion and quality orientation of Indian consumers has resulted in an increase in the demand for premium fabric over the years.
Your Company already has a significant presence in Indiaâs premium linen fabric market, through its leading brand âLinen Clubâ It is Indiaâs top linen fabric manufacturer. This acquisition is a compelling strategic fit with the linen business, and further strengthens our leadership in the premium fabric market in India. The brand Linen Club is well recognised in the evolving Indian fashion industry, which will be further bolstered by the âSOKTASâ âGiza Houseâ and âExcellence by SOKTASâ brands.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the Companies Act, 2013 (Act), read with the Companies (Accounts) Rules, 2014, Listing Regulations and Ind AS 110 - Consolidated Financial Statements/and Ind AS 28 - Investment in Associates/ and Joint Ventures, the Audited Consolidated Financial Statements forms integral part of this Annual Report.
SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES
The following are the changes in the subsidiaries, associates and joint venture companies of the Company:
|
Name of the Company |
Change in Status |
Effective Date |
|
Aditya Birla Renewables Limited |
Became a wholly owned subsidiary |
15th May 2018 |
|
Vodafone Idea Limited (formerly known as Idea Cellular Limited) |
Ceased to be an Associate |
31st August 2018 |
|
Birla Laos Pulp & Plantations Company Limited |
Ceased to be the Joint Venture |
18th September 2018 |
|
Sun God Trading and Investment Limited |
Ceased to be a direct subsidiary |
29th September 2018 |
|
Aditya Birla Chemicals (Belgium) BVBA |
Ceased to be a subsidiary |
21st January 2019 |
|
Shaktiman Mega Food Park Private Limited |
Ceased to be a subsidiary |
22nd February 2019 |
|
Soktas India Private Limited (now known as Grasim Premium Fabric Private Limited) |
Became a subsidiary |
29th March 2019 |
|
Aditya Birla Solar Limited |
Became a wholly owned subsidiary |
31st March 2019 |
In accordance with the provisions of Section 129(3) of the Companies Act, 2013, read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing the salient features of financial statements of each of the subsidiaries/ associates/joint venture companies of the Company, in the prescribed Form AOC-1, is given in Annexure âBâ to this Report.
The said Form also highlights the financial performance of each of the subsidiaries/associates/joint venture companies included in the CFS pursuant to Rule 8(1) of the Companies (Accounts) Rules, 2014.
In accordance with the provisions of Section 136(1) of the Companies Act, 2013, the Annual Report of your Company, containing interaliathe audited standalone and consolidated financial statements, has been placed on the website of your Company, www.grasim.com. Further, the audited financial statements along with related information and other reports of each of the subsidiary companies is also available on the website of your Company, www.grasim.com.
In accordance with Section 136 of the Companies Act, 2013, the financial statements of the subsidiary companies and related information are available for inspection by the Members of the Company at its registered office, during business hours, upto the date of the Annual General Meeting (AGM). Any Member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the Registered Office of your Company.
Your Company does not have any material unlisted subsidiary company. UltraTech Cement Limited and Aditya Birla Capital Limited are the material listed subsidiary companies of your Company. The Audit Committee and the Board reviews the financial statements, significant transactions and working of all the subsidiary companies, and the minutes of unlisted subsidiary companies are placed before the Board.
UltraTech Cement Limited (UltraTech)
a) The National Company Law Appellate Tribunal (NCLAT) by its order dated 14th November 2018, approved the Resolution Plan of UltraTech for acquiring Binani Cement Limited (BCL) under the provisions of the Insolvency and Bankruptcy Code, 2016, as amended. BCL became a wholly-owned subsidiary of UltraTech with effect from 20th November 2018 and it was re-named as UltraTech Nathdwara Cement Limited, with effect from 13th December 2018.
b) The Board of Directors of UltraTech had approved a Scheme of Demerger amongst Century Textiles and Industries Limited (Century) and UltraTech and their respective shareholders and creditors (the Scheme). In terms of the Scheme, Century would demerge its cement business into UltraTech.
The National Company LawTribunal, Mumbai Bench (NCLT) has by its Order dated 3rd July 2019 approved the Scheme and has fixed the Appointed Date as 20th May 2018. The Scheme will be effective upon receipt of the required regulatory approvals for transfer of mining leases.
The Consolidated Financial Statements of the Company for the FY 2018-19 included in this Annual Report, are without giving impact of the Scheme.
Aditya Birla Capital Limited (ABCL)
a) ABCL and Aditya Birla ARC Limited, a subsidiary of the ABCL, entered into a strategic joint venture with Varde Partners (âVardeâ) and created a joint platform to pursue investments in stressed and distressed assets in India. Varde is a global investment adviser focused on credit and value investing strategies.
b) The National Company Law Tribunal, Ahmedabad Bench by its order dated 14th November 2018 approved of the amalgamation of Aditya Birla Money Limited (âABMLâ) and Aditya Birla Commodities Broking Limited (âABCBLâ), with effect from 14th December 2018. ABML is a subsidiary of ABCL and ABCBL is a wholly owned subsidiary of ABML and a step-down subsidiary of ABCL.
Your Company has in accordance with the amendments to the Listing Regulations revised the Policy for determining Material Subsidiaries. The said Policy is available on your Companyâs website, www.grasim.com
SHARE CAPITAL
During the FY 2018-19:
- your Company allotted 2,26,928 equity shares of Rs. 2/- each pursuant to the exercise of Stock Options and Restricted Stock Units in terms of the Employees Stock Option Schemes of your Company.
- your Company has not issued any shares with differential voting rights or any sweat equity shares.
PURCHASE OF TREASURY SHARES
The Grasim Employeesâ Welfare Trust constituted in terms of the Companyâs Employee Stock Option Scheme, 2018 (âESOS 2018â) acquired 13,57,375 equity shares of your Company from the secondary market, to be allotted to the eligible employees under ESOS 2018. As per the Ind AS, purchase of own equity shares are treated as treasury shares.
DEPOSITS
During the year under review, your Company has not accepted or renewed any deposits within the meaning of Section 73 of the Companies Act, 2013, read with the Companies (Acceptance of Deposits) Rules, 2014, and, as such, no amount of principal or interest was outstanding, as on the date of the Balance Sheet.
ISSUE OF NON-CONVERTIBLE DEBENTURES
On 26th March 2019, your Company has issued and allotted 5,000, 7.65%, fully paid-up, Unsecured, Redeemable Non-Convertible Debentures of face value of Rupees Ten Lakh each, having a tenure of 3 years and 20 days, with maturity date being 15th April 2022, at an issue price of Rupees Ten Lakh each, aggregating to Rs. 500 Crore, on private placement basis.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Pursuant to Section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014, disclosures on particulars relating to loans, advances and investments as on 31st March 2019 are given in the Notes to the Financial Statements. There are no guarantees issued, or securities provided by your Company in terms of Section 186 of the Companies Act, 2013, read with the Rules issued thereunder.
ABRIDGED ANNUAL REPORT
In terms of the provisions of Section 136(1) of the Companies Act, 2013, Rule 10 of Companies (Accounts) Rules, 2014, and Regulation 36 of the Listing Regulations, the Board of Directors has decided to circulate the Abridged Annual Report containing salient features of the Balance Sheet and Statement of Profit and Loss, and other documents to the shareholders for the FY 2018-19, under the relevant laws.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 of the Listing Regulations, is presented in a separate section, and forms an integral part of this Report. It, inter alia, provides details about the Indian economy, business performance review of the Companies various businesses and other material developments during the FY 2018-19.
CORPORATE GOVERNANCE
Your Directors re-affirm their continued commitment to the best practices of Corporate Governance. Corporate Governance principles form an integral part of the core values of your Company.
In terms of Regulation 34 of the Listing Regulations, a separate report on Corporate Governance, along with a certificate from the Auditors on its compliance is given in Annexure âCâ to this Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL Directors
- In accordance with the provisions of Section 152 and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Appointment & Qualification of Directors) Rules,2014, and the Articles of Association of the Company, Mr. Kumar Mangalam Birla (DIN: 00012813) and Ms. Usha Sangwan (DIN: 02609263), NonExecutive Directors of your Company, are liable to retire by rotation at the ensuing Annual General Meeting (AGM) and, being eligible, have offered themselves for re-appointment. Resolutions seeking shareholdersâ approval for the re-appointment of Mr. Kumar Mangalam Birla and Ms. Usha Sangwan have been included in the Notice of the ensuing AGM.
- In terms of the Regulation 17(1A) of the Listing Regulations, approval of the shareholders, by way of a special resolution, is required for the continuation of directorship of non-executive directors, who have attained the age of 75 years.
Mr. Arun Thiagarajan (DIN: 00292757), Independent Director, of your Company will attain the age of 75 years, in September 2019. The Nomination and Remuneration Committee had after considering various attributes, including the experience of Mr. Thiagarajan recommended his continuation as Non-Executive Independent Director on the Board of the Company, till the end of his term. Based on the recommendation of the Nomination and Remuneration Committee, the Board has, subject to the approval of the shareholders, consented to the continuation of Directorship of Mr. Arun Thiagarajan till the end of his tenure. Shareholdersâ approval by way of a special resolution for the continuation of Directorship of Mr. Arun Thiagarajan till the end of his tenure has been included in the Notice of the ensuing AGM.
- Mr. Cyril Shroff, Dr. Thomas M. Connelly, Jr., Mr. M. L. Apte and Mr. B. V. Bhargava were appointed as Independent Directors at the AGM of your Company held on 6th September 2014, for a period of 5 consecutive years. Mr. O. P. Rungta was appointed as an Independent Director, at the AGM of your Company held on 19th September 2015, for a term of 5 consecutive years, with effect from 25th September 2014.
Based on the report of performance evaluation and the recommendations of the Nomination and Remuneration Committee, the Board has, subject to the approval of the shareholders approved the re-appointment of the following Independent Directors:
- Mr. Cyril Shroff and Dr. Thomas M. Connelly, Jr., for a further term of 5 years commencing from 23rd August 2019;
- Mr. O. P Rungta for a further term of 5 years commencing from 25th September 2019 Shareholdersâ approval by way of special resolutions for the above Independent Directors have been included in the Notice of the ensuing AGM.
- Mr. M. L. Apte and Mr. B. V. Bhargava whose existing term of office as Independent Directors is up to the conclusion of the ensuing AGM and who are eligible for re-appointment as Independent Directors have expressed their unwillingness to be re-appointed at the ensuing AGM, due to personal reasons. The Board placed on record its deep appreciation for the contribution made by Mr. M. L. Apte and Mr. B. V. Bhargava during their tenure as Independent Directors of the Company.
Subject to the approval of the shareholders, and based on the recommendations of the Nomination and Remuneration Committee, the Board at its meeting held on 12th July 2019 appointed Mr. N. Mohanraj (DIN: 00181969) as an Additional Independent Director of the Company, for a period of 5 years commencing from 12th July 2019.
The resolution seeking the appointment of Mr. N. Mohanraj as an Independent Director has been included in the Notice of the ensuing AGM.
Your Directors commend the Resolutions for your approval for the aforesaid appointment/ re-appointment continuation.
A brief resume of the Directors being appointed forms part of the Notice of the ensuing AGM.
- Pursuant to the Groupâs Policy of rotation of senior leaders, Mr. Sushil Agarwal, Whole-time Director & CFO has relinquished his role as Chief Financial Officer of Grasim Industries Limited and as a member of its Board, with effect from the close of business hours on 30th June 2019. Mr. Agarwal has ceased to be a Director on the Board of the Company, with effect from close of business hours on 30th June 2019.
Mr. Sushil Agarwal was appointed as the Chief Financial Officer of the Company and inducted as a Whole-time Director on the Board of the Company, with effect from 1st July 2015. He was given additional responsibility of Group Chief Financial Officer (Group CFO) on 1st April 2016. Mr. Sushil Agarwal has made significant contributions to your Companyâs growth, notable being the amalgamation of Aditya Birla Chemicals (India) Limited with Grasim Industries Limited, merger of Aditya Birla Nuvo Limited with Grasim Industries Limited and demerger of its financial services business to Aditya Birla Capital Limited and other merger and acquisition transactions.
Mr. Sushil Agarwal is a long-serving member of the Aditya Birla Group and has held variety of roles across the Group. Over 30 years with the Group, he has closely worked with several businesses of the Group including Financial Services, where he was the COO of Birla Global Finance Limited and the CEO of Birla Insurance Advisory. He was conferred the Chairmanâs Award as an Exceptional Achiever in 2000 and an Outstanding Leader Award in the year 2013.
The Board placed on record its deep appreciation for the substantial contribution and services rendered by Mr. Sushil Agarwal during his tenure with your Company as the Whole- time Director & CFO.
Key Managerial Personnel
Pursuant to the provisions of Sections 2(51), and 203 of the Companies Act, 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Key Managerial Personnel of the Company as on 31st March 2019 are Mr. Dilip Gaur, Managing Director, Mr. Sushil Agarwal, Whole-time Director & Chief Financial Officer and Mrs. Hutokshi R. Wadia, President and Company Secretary.
Consequent to Mr. Sushil Agarwal, relinquishing his office as Whole-time Director & CFO, he ceased to be the Key Managerial Personnel of the Company, with effect from the close of business hours on 30th June 2019.
In line with the Groupâs talent movement plans and its strategy of bringing talent into significant roles and based on the recommendations of the Nomination and Remuneration Committee and Audit Committee, the Board of Directors at its meeting held on 24th May 2019, appointed Mr. Ashish Adukia as the Chief Financial Officer of the Company, with effect from 1st July 2019.
Mr. Ashish Adukia joined the Group in August 2014 as President and Head-Group Corporate Finance, Aditya Birla Management Corporation Private Limited. In his last role Mr. Adukia was Senior President and Head-Group Corporate Finance. He has contributed significantly to mergers and acquisitions and capital raising initiatives of the Group, and has been responsible for Business Planning and the Group MIS, amongst other key financial initiatives. He has worked closely with the Chairman and Business Leaders on many strategic and critical projects, maximising value creation from the Corporate Centre to the Groupâs key business issues. His major contributions include systematically providing funding solutions and meeting objectives of cost optimization and long-term impact, providing capital restructuring solutions and numerous major mergers and acquisition transactions within the Group.
Prior to joining the Group, Mr. Adukia was Executive Director - Investment Banking at Morgan Stanley India Co. Ltd. Earlier in his career, he has been with Citigroup and PriceWaterhouse Coopers Private Limited.
MEETINGS OF THE BOARD
The Board of Directors of the Company met 4 times during the year to deliberate on various matters. The meetings were held on 23rd May 2018, 14th August 2018, 14th November 2018 and 7th February 2019. Further details are provided in the Corporate Governance Report, which forms an integral part of this Annual Report.
DECLARATION OF INDEPENDENCE
Definition of âIndependenceâ of Directors is derived from Regulation 16(1)(b) of the Listing Regulations and Section 149(6) of the Companies Act, 2013 and Rules framed thereunder. Your Company has received declarations from all the Independent Directors of your Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and Regulation 16( 1)(b) of the Listing Regulations.
FORMAL ANNUAL EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, the Board of Directors has carried out an annual evaluation of its own performance, its Committees, Independent Directors, Non-Executive Directors, Executive Directors, and the Chairman of the Board.
The Nomination and Remuneration Committee of the Board has laid down the manner in which formal annual evaluation of the performance of the Board, its Committees and Individual Directors has to be made. It includes circulation of evaluation forms separately for evaluation of the Board and its Committees, Independent Directors/Non-Executive Directors/Executive Directors and the Chairman of your Company.
The performance of Non-Independent Directors, the Board as a whole, and the Committees of the Board has been evaluated by Independent Directors in a separate meeting. At the same meeting, the Independent Directors also evaluated the performance of the Chairman of your Company, after taking into account the views of Executive Directors and Non-Executive Directors. Evaluation as done by the Independent Directors was submitted to the Nomination and Remuneration Committee and subsequently to the Board.
The performance of the Board and its Committees was evaluated by the Nomination and Remuneration Committee after seeking inputs from all the Directors, on the basis of criteria such as the Board/Committee composition and structure, effectiveness of the Board/ Committee process, information and functioning, etc.
The performance evaluation of all the Directors of your Company, (including Independent Directors, Executive and Non-Executive Directors and Chairman), is done at the Nomination and Remuneration Committee meeting and the Board meeting by all the Board members, excluding the Director being evaluated on the basis of criteria, such as contribution at the meetings, strategic perspective or inputs regarding the growth and performance of your Company, among others. Following the meetings of Independent Directors and of Nomination and Remuneration Committee, the Board at its meeting discussed the performance of the Board, as a whole, its committees and individual Directors.
The new Directors inducted into the Board attends an orientation programme. The details of the programme for familiarisation of Independent Directors of your Company are provided in the Corporate Governance Report, which forms part of this Annual Report and are also available on your Companyâs website, www.grasim.com.
DIRECTORSâ RESPONSIBILITY STATEMENT
The audited accounts for the year under review are in conformity with the requirements of the Companies Act, 2013 and the Accounting Standards. The financial statements reflect fairly the form and substance of transactions carried out during the year under review and reasonably present your Companyâs financial condition and results of operations.
Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of its knowledge and ability, confirm that:
a) in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
b) the accounting policies selected have been applied consistently, and judgements and estimates are made that are reasonable and prudent, so as to give a true and fair view of the state of affairs of your Company as at 31st March 2019 and of the profit of your Company for the year ended on that date;
c) proper and sufficient care has been taken for the maintenance of adequate accounting records, in accordance with the provisions of the Act for safeguarding the assets of your Company, and for preventing and detecting fraud and other irregularities;
d) Annual Accounts have been prepared on a âgoing concernâ basis;
e) your Company has laid down proper internal financial controls, and that such internal financial controls are adequate and were operating effectively; and
f) your Company has devised proper systems to ensure compliance with the provisions of all applicable laws, and that such systems were adequate and operating effectively.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo stipulated under Section 134(3)(m) of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, is set out in Annexure âDâ to this Report.
AUDITORS AND AUDIT REPORTS STATUTORY AUDITORS
Pursuant to the provisions of Section 139(1) of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, as amended from time to time, B S R & Co. LLP Chartered Accountants (ICAI Firm Registration No. 101248W/W-100022) and S R B C & Co, LLP, Chartered Accountants (ICAI Firm Registration No. 324982E/E300003) have been appointed as Joint Statutory Auditors of the Company for a period of five consecutive years, till the conclusion of the 74th AGM of the Company, to be held in the year 2021 and 75th AGM of the Company to be held in the year 2022, respectively.
Pursuant to the provisions of Section 139(1) of the Companies Act, 2013, as amended with effect from 7th May 2018, ratification of the appointment of the statutory auditors, by the Members at every AGM during the period of their appointment, has been withdrawn from the Section 139(1) of the Companies Act, 2013 with effect from that date. In view of the above, no resolution is proposed for ratification of appointment of the Joint Statutory Auditors at the ensuing AGM, and a note in respect of the same has been included in the Notice of the ensuing AGM.
The Joint Statutory Auditors have confirmed that they are not disqualified to continue as Auditors, and are eligible to hold office as Auditors of the Company. As authorised by the shareholders, the Board, on the recommendation of the Audit Committee, has ratified the appointment of the Joint Statutory Auditors for their respective remaining terms at such remuneration, as may be mutually agreed between the Board of Directors and the Joint Statutory Auditors, from time to time.
The observations made by the Joint Statutory Auditors on the Financial Statements of the Company, in their Report for the financial year ended 31st March 2019, read with the Explanatory Notes therein, are self-explanatory and, therefore, do not call for any further explanation or comments from the Board under Section 134(3)(f) of the Companies Act, 2013. The Auditorsâ Report does not contain any qualification, reservation, disclaimer or adverse remark.
COST AUDITORS
The cost accounts and records as required to be maintained under Section 148(1) of Companies Act, 2013 are duly made and maintained by your Company. Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, as amended, notifications/circulars issued by the Ministry of Corporate Affairs from time to time, your Board has, on the recommendation of the Audit Committee, re-appointed the following Cost Auditors for FY 2019-20:
|
Name of the Cost Auditor |
Division of the Company |
Remuneration |
|
M/s. D. C. Dave & Co., Cost Accountants, Mumbai (Registration No. 000611) |
All Divisions of the Company, except Viscose Filament Yarn-Century Rayon Division |
Not exceeding Rs. 15 Lakh plus applicable taxes and reimbursement of out-of-pocket expenses |
|
M/s. M. R. Dudani & Co., Cost Accountants, Mumbai (Registration No. FRN-100017) |
Viscose Filament Yarn-Century Rayon Division |
Not exceeding Rs. 2.20 Lakh plus applicable taxes and reimbursement of out-of-pocket expenses |
Your Company has received consent from M/s. D. C. Dave & Co. and M/s. M. R. Dudani & Co., Cost Accountants, to act as the Cost Auditors of your Company for the FY 2019-20, along with separate certificates confirming each of their eligibility.
As required under the Companies Act, 2013, a resolution ratifying the remuneration payable to the cost auditors has been placed before the Members for their approval, at the ensuing AGM.
SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has re-appointed M/s. BNP & Associates, Company Secretaries, Mumbai, to conduct the secretarial audit for FY 2019-20. The Secretarial Audit Report, issued by M/s. BNP & Associates, Company Secretaries for the FY 2018-19, is set out in Annexure âEâ to this Report.
The Secretarial Audit Report does not contain any qualification, reservation, disclaimer or adverse remark.
Your Company is in compliance with the Secretarial Standards specified by the Institute of Company Secretaries of India.
REPORTING OF FRAUDS BY AUDITORS
During the year under review, neither the statutory auditors nor the secretarial auditor have reported to the Audit Committee under Section 143(12) of the Companies Act, 2013 any instances of fraud committed against your Company by its officers and employees, details of which would need to be mentioned in the Boardâs Report.
DISCLOSURES
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
During FY 2018-19, all contracts / arrangements / transactions entered into by your Company with Related Parties were on armâs length basis and in the ordinary course of business. There are no material transactions with any Related Party as defined under section 188 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014. All Related Party transactions have been approved by the Audit Committee of your Company. Your Company has implemented Related Party Transactions Policy and Standard Operating Procedures for the purpose of identification and monitoring of such transactions.
The details of contracts and arrangements with Related Parties of your Company for the financial year ended 31st March 2019, are given in Notes to the Standalone Financial Statements, forming part of this Annual Report.
The Policy on Related Party Transactions, as approved by the Board, is available on your Companyâs website, www.grasim.com.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
Your Company has established a robust Vigil Mechanism for reporting of concerns through the Whistle Blower Policy of your Company, which is in compliance of the provisions of Section 177 of the Companies Act, 2013, read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, and the Listing Regulations. The Policy provides for framework and process whereby concerns can be raised by its employees against any kind of discrimination, harassment, victimisation or any other unfair practice being adopted against them. Adequate safeguards are provided against victimisation to those who avail of the mechanism, and access to the Chairman of the Audit Committee, in exceptional cases, is provided to them. The details of the Vigil Mechanism are also provided in the Corporate Governance Report, which forms part of this Annual Report and the Whistle Blower Policy has been uploaded on the website of your Company, www.grasim.com.
CORPORATE SOCIAL RESPONSIBILITY
In terms of the provisions of Section 135 of the Companies Act, 2013, read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors of your Company has a Corporate Social Responsibility (CSR) Committee, which is chaired by Mrs. Rajashree Birla. The other Members of the Committee are Mr. B. V. Bhargava, Independent Director, Mr. Shailendra K. Jain, Non-Executive Director and Mr. Dilip Gaur, Managing Director. Dr. Pragnya Ram, Group Executive President, CSR, is a permanent invitee to the Committee. The Corporate Social Responsibility Policy (CSR Policy), indicating the activities undertaken by your Company, is available on your Companyâs website, www.grasim.com.
Your Company is a caring corporate citizen and lays significant emphasis on development of the host communities around which it operates. Your Company, with this intent, has identified several projects relating to Social Empowerment and Welfare, Infrastructure Developments, Sustainable Livelihood, Health Care and Education, during the year, and initiated various activities in neighbouring villages around its plant locations. The initiatives undertaken by your Company on CSR activities, during the FY 2018-19, are set out in Annexure âFâ to this Report, in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. Your Company has spent a sum of Rs. 47.14 Crore, which is more than 2% of the average net profits of the last three years for the purposes of CSR.
RISK MANAGEMENT
Pursuant to the requirement of Listing Regulations, your Company has constituted Risk Management Committee, which is mandated to review the risk management plan/process of your Company. Risk evaluation and management is an ongoing process within the Organisation. Your Companyâs Risk Management Committee periodically assesses risk in the internal and external environment, and incorporates Risk Mitigation Plans in its strategy, business and operation plans. Your Company has comprehensive risk management framework, which is periodically reviewed by the Risk Management Committee.
BUSINESS RESPONSIBILITY REPORT
As per Regulation 34(2)(f) of the Listing Regulations, a separate section on Business Responsibility Report, describing the initiatives taken by your Company from environmental, social and governance perspective, forms an integral part of this Annual Report.
EXTRACT OF ANNUAL RETURN
The extract of the Annual Return of your Company as on 31st March 2019 in Form MGT-9, in accordance with Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, is given in Annexure âGâ to this Report. The same is also available on your Companyâs website, www.grasim.com
INTERNAL FINANCIAL CONTROLS
Your Company has in place adequate internal financial control system commensurate with the size of its operations. Internal control systems comprising of policies and procedures are designed to ensure sound management of your Companyâs operations, safe keeping of its assets, optimal utilisation of resources, reliability of its financial information and compliance. Systems and procedures are periodically reviewed to keep pace with the growing size and complexity of your Companyâs operations. During the year under review, no material or serious observation has been received from the Auditors of your Company citing inefficiency or inadequacy of such controls.
REMUNERATION POLICY
The Remuneration Policy of your Company, as formulated by the Nomination and Remuneration Committee of the Board of Directors is given in Annexure âHâ to this Report and is also available on your Companyâs website, www.grasim.com.
COMMITTEES OF THE BOARD AUDIT COMMITTEE
The Audit Committee comprises of Mr. Arun Thiagarajan, Mr. B. V. Bhargava, Mr. M. L. Apte and Mr. Dilip Gaur as its Members. The Committee comprises of majority of Independent Directors with Mr. Arun Thiagarajan being the Chairman. The CFO of your Company is the permanent invitee.
Further details relating to the Audit Committee are provided in the Corporate Governance Report, which forms an integral part of this Annual Report.
All the recommendations made by the Audit Committee, during the year, were accepted by the Board of Directors of your Company.
NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee comprises of Mr. M. L. Apte, Mr. Cyril Shroff and Mr. Kumar Mangalam Birla as its members. Further details relating to the Nomination and Remuneration Committee are provided in the Corporate Governance Report, which forms an integral part of this Annual Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Corporate Social Responsibility Committee comprises of Mrs. Rajashree Birla, Mr. B. V. Bhargava, Mr. Shailendra K. Jain and Mr. Dilip Gaur as its members. Further details relating to the Corporate Social Responsibility Committee are provided in the Corporate Governance Report, which forms an integral part of this Annual Report.
STAKEHOLDERSâ RELATIONSHIP COMMITTEE
Stakeholdersâ Relationship Committee looks into matters relating to transfer/transmission of securities; non-receipt of dividends; non-receipt of annual report etc. Further details pertaining to Stakeholders Relationship Committee are provided in the Corporate Governance Report, which forms an integral part of this Annual Report.
RESEARCH AND DEVELOPMENT (R&D)
The R&D investment continues to be focused on enhancing our relative market position in an increasingly competitive environment. Focused programmes are driving innovations in the critical areas of product quality, cost reduction, new product offerings and environmental sustainability. Our portfolio of programmes addresses near-term needs through the implementation of recently developed technologies while filling the pipeline with future opportunities to achieve our long-term goals.
Pulp and Fibre Business
The Pulp R&D and Technology teams have focused their efforts on increasing capacity, improving quality and opening new specialty markets. The Domsjo Plant (a joint venture) is working to increase pulp capacity by addressing the bottleneck in evaporation through improved efficiencies and reduced process flows. Domsjo is also improving pulp quality through stabilising wood chip uniformity, improved bleaching to reduce viscosity variations, and standardised mill operating strategies. These improvements have also supported increasing our pulp specialty products growth with the introduction of new customers in filament yarn and casing applications. In addition, the new pulp quality brand, Ultra, is now fully accepted by a Cellulose Acetate customer.
Across Pulp JV plants, advanced process control systems in the digester and bleaching areas have been developed to enhance consistency, and the system is under stabilisation.
A digitization initiative aimed at seamlessly connecting Pulp plant processes with the consuming Fibre plants is progressing. The first technology platform to allow sharing real-time pulp quality and dispatch data with the Fibre sites has been piloted successfully.
This allows to improve fibre spinning consistency. Full-scale implementation plans are being developed. A new pulp blending methodology has led to improved pulp ratio control and viscose spinning solution consistency. These systems enable further improvements through the development of models for predictive control.
FIBRE RD&T
Production efficiency and improved customer experience are prime focus areas for innovations in Viscose Staple Fibre (VSF) production facilities. One key initiative has been expanding the gradual implementation of technologies, which reduce in-process material consumption amounts. Process developments reducing the usage of energy and water are also reducing costs, while enhancing sustainability. While we are in the process of implementing our public commitments for reducing the environmental footprint, we are doing so by improving emission control technologies to also reduce our overall usage of chemicals and energy.
Our work to improve our customersâ experience includes specific technologies to improve non-woven spunlacing process performance, dope-dyed fibre uniformity leading to higher efficiency yarn spinning and quality, and improved spinning performance for greige fibres. In addition, our increased effort on differentiated products has resulted in several new offerings at different stages of commercialisation. Liva Sno, a fibre with high whiteness, is now produced in regular campaigns for applications like uniforms, melange and patterned fabrics. This provides an environmentally friendly alternative to customersâ existing downstream processes for producing yarns and fabrics with high whiteness. Livaeco, a fibre recently launched with molecular tagging, provides supply-chain traceability for our branded products that incorporate special sustainability attributes. The differentiated products pipeline continues to progress with three additional value-added products from our pilot plant, having gone through customer acceptance tests. These will be scaled-up to commercial production and sales in the coming year. Methodical innovation processes, coupled to business needs, are guiding our selection of new products for development.
Overall fibre quality continues to improve with the objective of bringing fibre lines to global benchmark quality levels by adopting the âProduct by Processâ approach using Six Sigma principles. During FY19, continued upgrades to our production lines has resulted in 78% of capacity now being mechanically capable of producing benchmark quality. We are aggressively addressing a key quality challenge, the growing vortex (MVS) type yarn-spinning demand, which requires especially low fibre imperfection levels. MVS Grade production has been increased from 64% in FY17 to 82% during this year, and our goal is to achieve 90 % in FY 20. As a result of these efforts, customer complaints were reduced from 4.0/10Kt in FY17 to 2.9 in FY19 and were further reduced to 2.1 in FY19. The Quality Initiative focus for the coming year will be improving the process stability and product quality of non-benchmark production lines through innovative solutions requiring little new capital.
Our journey in the Excel® project reached a critical milestone with the commissioning of the new 45 TPD plant based on the environment-friendly solvent spinning technology developed in-house. The new technology offers a higher performance product with improved sustainability as a key growth alternative for our business. The new plant has set the platform for rapid âtake-offâ of our technology in the coming years.
Textile Research and Application Development Centre (TRADC) continues to be a significant contributor to ensure global leadership through development of innovative applications, such as Menâs range, Home Textiles, Warp knit range which were considered as challenges for VSF In collaboration with internal and external customers, TRADC brings contemporary, innovative and cost-effective solutions for the Global Fashion Industry, through continuous improvement in quality by process development, with an eye on sustainability. Recently a brand has selected our dope-dyed fibres for blending with polyester for Sportswear. Similarly, Cotton/Modal denim development is under mini-bulk conversion at premier textile unit. Modal and Excel are finding application in the place of 100% cotton in Sarees and Dhoti.
Enabling Capabilities
A multi-disciplinary team is responsible for the innovation agenda of the Pulp and Fibre business. Starting with early tests of concepts in laboratory, a screening process leads to short-listing. The selected concepts are then taken through iterative processes of developments and testings, and then through scale-up in fibre pilot plants. The fibres are taken through customer processes of yarn, fabric and garment making. In-house, external and customer-facilities are all engaged for effective delivery in minimum time. Successful products are then transferred to plants for commercial implementation, and placed in the market.
Chemical Business
Your Companyâs Chlor-Alkali business has accelerated its R&D efforts as its Aditya Birla Water Application & Product Development Centre. The objective is targeted and focused product and market development and transforming from commodity to specialty chemicals mind-set with focus on innovation and application development. Your Company has focused on customer-oriented R&D and providing solutions and solving problems at customer sites. The R&D team also delivered improvement in existing processes in terms of efficiency and quality. This has benefitted the operating plants, not only on costs but also on setting better safety and environmental standards.
Your Company also filed two patents in the areas of water treatment, on raw material and process improvement. Your Company also partnered with several institutions of repute, viz., Institute of Chemical Technology, Mumbai; Malaviya National Institute of Technology, Jaipur; Central Institute for Brackish Water Aquaculture, Chennai; National Environmental Engineering Research Institute, Nagpur and Vasant Dada Sugar Institute, Pune, on various projects. Two new applications were also established for usage of chlorinated-alkanes. Similarly, research efforts led to usage of one of the ingredients into efficient drip-irrigation system. In line with providing sustainable solutions, your Company undertook a research project with a building materials company to utilise by-product of the chemical process to enhance cementing properties.
Specialty Formulations and New Products: Your Company has been a pioneer in developing several new specialty formulations for water treatment, that are customised and targeted solutions for specific industries such as sugar, paper and pulp, oil refinery, edible oil, textile, dye, aquaculture, etc. We have successfully commercialised these formulations in the areas of refinery wastewater treatment, handling of dispersed dye residue, processing of ceramic ingredients, etc. There is a pipeline of at least 5 more products with initial success and ready for commercialisation soon. Such specialty formulations not only enable us to differentiate vis-a-vis competition, but also help us in getting higher realisation than the base product. Your Company strengthened its water treatment portfolio with successful design and commissioning of a new product in collaboration with the US based consultant.
Focused Market Development: Our sales and marketing team has focused on application and performance selling. This is based on gaining deep understanding of customer processes and product applications and providing customised solutions to customers. The marketing team was able to identify the latent potential of nascent and high growth segments, such as Aquaculture and Public Hygiene. Unique value propositions and new brands were developed for these segments and targeted marketing development activities were executed, e.g., conducting workshops and technical discussions with aquaculture farmers in collaboration with CIFE (Centre for Central Institute of Fisheries Education), conducting trials at places of mega religious congregations, etc.
Processes: We took up initiatives in reduction in input consumption for brine treatment and improvement in the quality of filtered brine through secondary process like ion exchange. Further, other process improvements such as Filtration in brine treatment in stages such as recycling of ion exchange effluent to reduce the acidic effluent & recovery Alkaline effluent was also taken up. Your company also partnered with Aditya Birla Science and Technology Centre for improvements in salt quality with efficiency in brine improvements using refining process.
Health, Safety and Environment monitoring: We developed a Central Manufacturing Cockpit to monitor plant parameters at central level to enhance proves efficiency. We also designed and deployed Suraksha application to enhance safe movement of Chlorine via tonners. These measures are setting new industry standards beyond compliances.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF YOUR COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THE FINANCIAL STATEMENT RELATES AND THE DATE OF THE REPORT
No material changes and commitments, which could affect your Companyâs financial position, have occurred between the end of the financial year and the date of this Report. There has been no change in the nature of business of your Company.
PARTICULARS OF EMPLOYEES
Disclosures pertaining to remuneration and other details as required under section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as Annexure âIâ to this Report.
In accordance with the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees drawing remuneration in excess of the limits, set out in the aforesaid Rules, forms part of this Report. In line with the provisions of Section 136(1) of the Companies Act, 2013, the Report and Accounts, as set out therein, are being sent to all the Members of your Company excluding the aforesaid information about the employees. Any Member, who is interested in obtaining these particulars about employees, may write to your Company Secretary at the Registered Office of your Company.
EMPLOYEE STOCK OPTION SCHEMES (ESOS) ESOS-2006
During the year under review, the Stakeholdersâ Relationship Committee of the Board of Directors allotted 86,835 Equity Shares of Rs. 2/- of your Company to Options Grantees, pursuant to the exercise of the Stock Options under ESOS-2006.
ESOS-2013
During the year under review, the Nomination and Remuneration Committee of the Board of Directors approved vesting of 48,447 Stock Options and 16,665 Restricted Stock Units (RSUs) to the Eligible Employees, subject to the provisions of the ESOS-2013, statutory provisions, as may be applicable from time to time, and the rules and procedures set out by your Company in this regard.
Further, the Stakeholdersâ Relationship Committee of the Board of Directors allotted 1,40,093 equity shares of Rs. 2/- of your Company to the Stock Options and RSUs Grantees, pursuant to the exercise of the Stock Options and RSUs, under ESOS-2013.
ESOS-2018
Pursuant to the approval of the shareholders at the Annual General Meeting held on 14th September 2018, the Board of Directors of your Company and the Nomination and Remuneration Committee, a new scheme viz. âGrasim Industries Limited Employee Stock Option Scheme 2018â (âESOS-2018â) in terms of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (âthe SEBI SBEB Regulationsâ) has been formulated. The ESOS 2018 is being administered by the Nomination and Remuneration Committee through the Grasim Employeesâ Welfare Trust (Trust).
During the year under review, a total of 11,18,480 Stock Options and 2,80,384 RSUs were granted to the eligible employees, including Managing Director and Whole-time Director and CFO of your Company, under the said Scheme.
The details of Employee Stock Options granted pursuant to ESOS-2006 and the Employee Stock Options and RSUs granted pursuant to ESOS-2013 and ESOS-2018, as also the other disclosures in compliance with the provisions of the Securities and Exchange Board of India (Employee Share Based Employee Benefits) Regulations, 2014, are available on your Companyâs website, www.grasim.com
A certificate from the Statutory Auditors, with respect to implementation of your Companyâs Employees Stock Option Schemes will be placed at the ensuing AGM for inspection by the Members, and a copy will also be available for inspection at the Registered Office of your Company.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company has zero tolerance for sexual harassment at workplace. The Company has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH Act) and the rules framed thereunder. Your Company has complied with provisions relating to the constitution of Internal Complaints Committee under the POSH Act. During the year under review, your Company received one complaint of sexual harassment, and the same has been resolved. There were no complaints pending as on 31st March 2019, under the aforesaid Act.
HUMAN RESOURCES
Your Companyâs human resources is the strong foundation for creating many possibilities for its business. During the year under review, your Company added greater employee talent through seamless integration of acquired assets. The efficient operations of manufacturing units, market development and expansion for various products was the highlight of our people effort.
Continuous people development for developing knowledge and skills coupled with theTalent Management practices will deliver the talent needs of the organisation. Your Companyâs employee engagement score reflects high engagement and pride in being part of the organisation.
The Groupâs Corporate Human Resources plays a critical role in your Companyâs talent management process.
AWARDS AND ACCOLADES
Some of the significant accolades earned by your Company during the year include:
- The Dun & Bradstreet Corporate Award 2019 as the Top Company for its stellar performance in the Indian textiles sector.
- Golden Peacock Award for Sustainability-2018 awarded to your Companyâs Harihar Pulp unit
- âExcellence in Operationsâ in Manufacturing and Logistics at the IDC Insights Awards 2018
- Grasim Pulp and Fibre won the award for Next Gen Technologies award at the ETCIO Annual Conclave 2019 presented by The Economic Times, Indiaâs leading business publication.
- 3 Export Awards by SRTEPC (The Synthetic & Rayon Textiles Export Promotion Council): Viscose Staple Fibre (Gold), Exports of fibre/yarn to âFocus SAARCâ countries (Gold), and Second Best Overall Export Performance (Silver)
- Certificate of Appreciation for Sustainable and Impactful CSR projects in Gujarat (Vilayat) from Gujarat CSR Authority (Govt. of Gujarat)-Gujarat State CSR Awards 2019
- Liva won a Gold in the prestigious Abby Awards, Goa Fest 2019 for Innovative use of emerging technology.
GENERAL
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:
1. Issue of equity shares with differential rights as to dividend, voting or otherwise;
2. Issue of shares (including sweat equity shares) to employees of your Company under any Scheme save and except ESOS referred to in this report;
3. There were no revisions in the financial statements;
4. There has been no change in the nature of business of your Company; and
5. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and your Companyâs operations in the future.
ACKNOWLEDGEMENTS
Your Directors express their deep sense of gratitude to the banks, financial institutions, stakeholders, business associates, Central and State Governments for their co-operation and support and look forward to their continued support in future.
We very warmly thank all our employees for their contribution to your Companyâs performance. We applaud them for their superior levels of competence, dedication and commitment to your Company.
For and on behalf of the Board
Kumar Mangalam Birla
Chairman
(DIN: 00012813)
Mumbai, 12th July 2019
Mar 31, 2018
Board''s Report
TO THE MEMBERS OF GRASIM INDUSTRIES LIMITED
The Directors are pleased to present the 71st Annual Report of the Company along with the Audited Financial Statements for the financial year ended 31st March 2018.
FINANCIAL HIGHLIGHTS
(Rs, in Crore)
|
Consolidated |
Standalone |
|||
|
2017-18 |
2016-17 |
2017-18 |
2016-17 |
|
|
Revenue from Operations |
57,338.20 |
40,247.17 |
16,034.71 |
11,252.95 |
|
Earnings Before Interest, Depreciation/Amortization and Tax (EBITDA) |
10,881.09 |
8,332.89 |
3,541.54 |
2,628.70 |
|
Less: Finance Costs |
1,359.13 |
702.40 |
128.13 |
57.62 |
|
Less: Depreciation and Amortization |
2,724.36 |
1,807.59 |
627.66 |
446.14 |
|
Profit Before Share in Profit/(Loss) of Equity Accounted Investees, Exceptional Items and Tax |
6,797.60 |
5,822.90 |
2,785.75 |
2,124.94 |
|
Share in Profit/(Loss) of Equity Accounted Investees |
(727.44) |
129.41 |
- |
- |
|
Exceptional Items |
(432.85) |
- |
(272.61) |
- |
|
Profit Before Tax (PBT) |
5,637.31 |
5,952.31 |
2,513.14 |
2,124.94 |
|
Tax Expenses |
1,947.12 |
1,706.70 |
744.48 |
564.94 |
|
Profit After Tax including Share in Profit/(Loss) of Equity accounted Investees and Profit of Life Insurance Business attributable to Participating Policyholders |
3,690.19 |
4,245.61 |
1,768.66 |
1,560.00 |
|
Less: Profit of Life Insurance Business attributable to Participating Policyholders |
(2.57) |
- |
- |
- |
|
Attributable to: |
3,687.62 |
4,245.61 |
||
|
Shareholders of the Company |
2,678.58 |
3,167.30 |
1,768.66 |
1,560.00 |
|
Non-Controlling Interest |
1,009.04 |
1,078.31 |
- |
- |
|
Other Comprehensive Income for the Year |
(278.48) |
963.44 |
(221.69) |
1,011.53 |
|
Attributable to: |
||||
|
Shareholders of the Company |
(167.88) |
951.48 |
(221.69) |
1,011.53 |
|
Non-Controlling Interest |
(110.60) |
11.96 |
- |
- |
|
Total Comprehensive Income for the Year |
3,409.14 |
5,209.05 |
1,546.97 |
2,571.53 |
|
Attributable to: |
||||
|
Shareholders of the Company |
2,510.70 |
4,118.78 |
1,546.97 |
2,571.53 |
|
Non-Controlling Interest |
898.44 |
1,090.27 |
- |
- |
The financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015, as amended by the Companies (Indian Accounting Standards) (Amendment) Rules, 2016, and the relevant provisions of the Companies Act, 2013 (''the Act''), and guidelines issued by the Securities and Exchange Board of India (''SEBI''). The Company has adopted Ind AS with effect from 1st April 2015, i.e., the date of transition, as applicable for the Company.
DIVIDEND
Based on the Company''s performance, the Directors are pleased to recommend for your approval, a dividend of Rs, 6.20 (Rupees Six and Paise Twenty Only) per equity share of Rs, 2/- each of the Company for the financial year ended 31st March 2018. The dividend, if approved by the members, would involve a cash outflow of Rs, 455.66 Crore (inclusive of Dividend Distribution Tax).
In terms of the provisions of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations (SEBI (LODR)), the Company has formulated a Dividend Distribution Policy. This Policy is given in Annexure ''A'' to this Report and is accessible from the Company''s website, www. grasim.com.
TRANSFER TO RESERVES
The Company proposes to transfer Rs, 1,000 Crore to the General Reserves.
PERFORMANCE REVIEW
On a consolidated basis, the revenue from operations for FY 2017-18, increased to Rs, 57,338 Crore, which was 42.46% higher than that of the previous year (Rs, 40,247 Crore in FY 2016-17). The consolidated EBITDA increased to Rs, 10,881 Crore for FY 2017-18, which was 30.58% higher than that of the previous year (Rs,8,333 Crore in FY 2016-17).The increase in the consolidated revenue and consolidated EBITDA was mainly on account of growth in Viscose, Chemicals, Cement businesses and inclusion of performance of erstwhile Aditya Birla Nuvo Ltd. (ABNL), post-merger of ABNL with the Company, with effect from 1st July 2017, and cement assets acquired by UltraTech Cement Limited, with effect from 29th June
2017. Standalone financials for the current year include the performance of erstwhile ABNL, consequent to the merger with the Company, with effect from 1st July 2017 as stated above. Since the financial statements of the previous year do not include the performance of erstwhile ABNL, and that also of the acquired assets by UltraTech Cement Limited (at consolidated level), the financial performance of the current year is strictly not comparable with that of the previous year.
On a standalone basis, revenue from operations for FY 2017-18, increased to Rs, 16,035 Crore, which was 42.50% higher than that of the previous year (Rs, 11,253 Crore in FY 2016-17). The standalone EBITDA increased to Rs, 3,542 Crore for FY 2017-18, which was 35% higher than that of the previous year (Rs, 2,629 Crore in FY 2016-17).
The Management Discussion and Analysis section, focuses on the Company''s strategies for growth and the performance review of the businesses/operations in depth.
STRATEGIC INITIATIVES Composite Scheme of Arrangement
Vide its Order dated 1st June 2017, the National Company Law Tribunal, Bench at Ahmedabad (NCLT), has sanctioned the Composite Scheme of Arrangement between the
Company and Aditya Birla Nuvo Limited (ABNL) and Aditya Birla Financial Services Limited (now known as Aditya Birla Capital Limited) (ABCL) (Scheme). With effect from 1st July 2017 (the Effective Date 1), ABNL along with its assets, liabilities, contracts, employees, etc., stands amalgamated, in the manner provided in the Scheme.
With effect from 4th July 2017, (the Effective Date 2), the financial services business of the Company stands transferred to and vested in ABCL.
With the amalgamation becoming effective, ABCL and its subsidiaries have become the subsidiary companies of the Company.
The restructuring, in terms of the Scheme, has enabled the Company to extend its presence to the fast growing sectors such as financial services and telecom, and enhance long-term value for the shareholders. This will also enable ABCL to grow faster under the Company''s strong parentage, and is expected to improve its credit profile and reduce its cost of borrowings, thereby enhancing its competitive positioning. The merger has also led to consolidation of similar businesses of the Company and ABNL.
Right to Manage and Operate the Viscose Filament Yarn Business of Century Texiles and Industries Limited ("CTIL")
During the financial year 2017-18, the Company entered into an agreement with CTIL for acquiring the Right to Manage and Operate the Viscose Filament Yarn Business (VFY Business) of CTIL, located at Shahad and Kalyan (Maharashtra), with effect from 1st February 2018. The acquisition has also led to consolidation of similar businesses, create synergy and leverage brand strength in value chain, for VFY business of the Company.
Idea Cellular Limited
Idea Cellular Limited (Idea) is an Associate of the Company, and the share of the Company in Profit of Idea has been consolidated in the Consolidated Financial Statements. Post-merger of Aditya Birla Nuvo Limited with the Company, the holding of the Company in Idea increased to 27.96%, which got revised to 23.13% on issue of additional equity capital by Idea in February 2018.
A scheme of amalgamation of Vodafone India Limited (VIL) and its wholly owned subsidiary Vodafone Mobile Services Limited (VMSL) with Idea is under implementation, under which VIL will get amalgamated with Idea, subject to requisite regulatory and other approvals. On effectiveness of the scheme, the holding of the Company in Idea will be revised to ~11.5%.
Upon the amalgamation becoming effective, the entire business of VIL and VMSL (excluding VIL''s investment in Indus Towers Limited, its international network assets and information technology platforms) will vest with Idea.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the Companies Act, 2013 (Act), read with the Companies (Accounts) Rules, 2014, SEBI (LODR), and Ind AS 110 - Consolidated Financial Statements and Ind AS 28 - Investment in Associates and Joint Ventures - the Audited Consolidated Financial Statements are provided in this Report. The Consolidated Financial Statements have been prepared on the basis of the Audited Financial Statements of the Company, its subsidiaries, joint ventures and associate companies, as approved by their respective Board of Directors.
SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES
With effect from 1st July 2017, the subsidiary/associate companies of the erstwhile Aditya Birla Nuvo Limited have become the subsidiaries/associates of the Company.
In accordance with the provisions of Section 129(3) of the Act, read with Rule 5 of the Companies (Accounts) Rules, 2014, a report on the performance and financial position of each of the subsidiaries, associates and joint venture companies is given in Annexure ''B'' to this Report.
In accordance with the provisions of Section 136(1) of the Act, the Annual Report of the Company, containing inter alia the audited standalone and consolidated financial statements, has been placed on the website of the Company, www.grasim.com. Further, the audited financial statements, along with related information and other reports of each of the subsidiary companies, have also been placed on the website of the Company, www.grasim.com.
In accordance with Section 136 of the Act, the financial statements of the subsidiary companies and related information are available for inspection by the Members at the Registered Office of the Company, during business hours up to the date of the Annual General Meeting (AGM). Any Member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the Registered Office of the Company.
SHARE CAPITAL
During the year 2017-18:
- Aditya Birla Nuvo Limited and Grasim Industries Limited and Aditya Birla Financial Services Limited (now known as Aditya Birla Capital Limited), the
Company allotted 190,462,665 equity share of '' 2/- each fully paid-up of the Company to the shareholders of the erstwhile Aditya Birla Nuvo Limited, as on the record date fixed on 6th July 2017.
- Allotted 71,660 equity shares of '' 2/- each pursuant to the exercise of stock options in terms of the Employees Stock Option Schemes of the Company.
During the year 2017-18, the Company has not issued shares with differential voting rights and sweat equity shares.
DEPOSITS
During the year under review, the Company has not accepted or renewed any deposit within the meaning of Section 73 of the Act, read with the Companies (Acceptance of Deposits) Rules, 2014, and as such, no amount of principal or interest was outstanding, as on the date of the Balance Sheet.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Pursuant to Section 186 of the Act and Schedule V of the SEBI (LODR), disclosures on particulars relating to loans, advances and investments are provided as part of the Financial Statements. There are no guarantees issued or securities provided by the Company in terms of Section 186 of the Act, read with the Rules issued there under.
ABRIDGED ANNUAL REPORT
In terms of the provisions of Section 136(1) of the Act, Rule 10 of the Companies (Accounts) Rules, 2014, and Regulation 36 of SEBI (LODR) Regulations, 2015, the Board of Directors has decided to circulate the Abridged Annual Report containing salient features of the Balance Sheet and Statement of Profit & Loss and other documents to the shareholders for the Financial Year 2017-18 under the relevant laws.
MANAGEMENT''S DISCUSSION AND ANALYSIS REPORT
The Management''s Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 of the SEBI (LODR), forms an integral part of this Report.
CORPORATE GOVERNANCE
Your Directors re-affirm their continued commitment to best practices of Corporate Governance. Corporate Governance principles form an integral part of the core values of the Company.
In terms of Regulation 34 of the SEBI (LODR), a separate report on Corporate Governance, along with a certificate from the Auditors'' on its compliance, forms an integral part of this Report and is given as Annexure ''C'' to this Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL Appointment/Re-appointment of Directors
The Board, on the recommendations of the Nomination and Remuneration Committee of the Board of Directors of the Company, has appointed.
- Ms. Usha Sangwan (DIN: 02609263) as an Additional Director of the Company, with effect from 23rd May 2018. In terms of the provisions of the Act, Ms. Sangwan will hold office up to the date of the Annual General Meeting (AGM);
- Mr. Himanshu Kapania (DIN: 03387441) as an Additional Director of the Company, with effect from 14th August
2018. In terms of the provisions of the Act, Mr. Kapania will hold office up to the date of the AGM;
- Ms. Anita Ramachandran (DIN: 00118188) as an Additional Independent Director of the Company, with effect from 14th August 2018. In terms of the provisions of the Act, Ms. Ramachandran will hold office for a period of five years, i.e., up to 13th August 2023.
The Directors commend the resolutions for the appointment of Ms. Usha Sangwan, Mr. Himanshu Kapania and Ms. Anita Ramachandran as Directors on the Board of the Company, as indicated in the Notice of the AGM.
In accordance with the provisions of the Act and the Articles of Association of the Company, Mr. Shailendra K. Jain (DIN: 00022454) and Mrs. Rajashree Birla (DIN: 00022995), Directors of the Company, retire by rotation at the AGM and, being eligible, have offered themselves for re-appointment. Resolution seeking the re-appointments of Mr. Shailendra K. Jain and Mrs. Rajashree Birla have been included in the Notice of the AGM. Your Directors commend the Resolutions for your approval.
A brief resume of the Directors being appointed and reappointed forms part of the Notice of the AGM.
Continuation of Directorship
In terms of the Regulation 17(1A) of SEBI (LODR) Regulations, 2015, approval of the shareholders by way of a special resolution is required for the appointment/ continuation of directorship of non-executive directors, who have attained the age of 75 years, as on 1st April 2019.
The following Directors of the Company have/will attain the age of 75 years, as on 1st April 2019:
- Mr. M. L. Apte (DIN: 00003656) - Independent Director;
- Mr. B. V. Bhargava (DIN: 00001823) - Independent Director;
- Mr. O. P. Rungta (DIN: 00020559) - Independent Director; and
- Mr. Shailendra K. Jain (DIN: 00022454) â Non Executive Director.
Based on the recommendations of the Nomination and Remuneration Committee, the Board has, subject to the approval of the shareholders, consented to the continuation of Directorship of the aforesaid Directors till the end of each of their respective tenures.
Your Directors commend the Resolutions for your approval.
Cessation
With effect from 23rd May 2018, Mr. N. Mohan Raj (DIN: 00181969) resigned from the Board of Directors of the Company. The Board places on record its deep appreciation and gratitude for the valuable contribution and advice offered by Mr. Mohan Raj during his tenure as Director on the Board of the Company.
Key Managerial Personnel
In terms of the provisions of Sections 2(51), 203 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Mr. Dilip Gaur, Managing Director, Mr. Sushil Agarwal, Wholetime Director & Chief Financial Officer and Mrs. Hutokshi Wadia, President and Company Secretary are the Key Managerial Personnel of the Company.
During the financial year 2017-18, Mr. Dilip Gaur, Managing Director and Mr. Sushil Agarwal, Whole-time Director & Chief Financial Officer of the Company, have not received any commission / remuneration from the Company''s Subsidiary Companies.
MEETINGS OF THE BOARD
The Board of Directors of your Company met 6 times during the year, details of which are given in the Corporate Governance Report forming, part of this Annual Report.
DECLARATION OF INDEPENDENCE
Your Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under the Act, read with Schedules and Rules issued under the SEBI (LODR).
FORMAL ANNUAL EVALUATION
The evaluation framework for assessing the performance of Directors of the Company comprises of contributions at the meetings, strategic perspective or inputs regarding the growth and performance of the Company, among others.
Pursuant to the provisions of the Act and the SEBI (LODR), the Directors have carried out the annual performance evaluation of the Board, Independent Directors, NonExecutive Directors, Executive Directors, Committees and the Chairman of the Board.
The Nomination and Remuneration Committee and the Board have laid down the manner in which formal annual evaluation of the performance of the Board, its Committees and individual Directors has to be made. It includes circulation of evaluation forms separately for evaluation of the Board and its Committees, Independent Directors/Non-Executive Directors/Executive Directors and the Chairman of the Company.
The details of the programme for familiarization of Independent Directors of the Company are available on the Company''s website, viz., www.grasim.com.
DIRECTORS'' RESPONSIBILITY STATEMENT
The audited accounts for the year under review are in conformity with the requirements of the Act and the Accounting Standards. The financial statements reflect fairly the form and substance of transactions carried out during the year under review, and reasonably present the Company''s financial condition and results of operations.
Your Directors confirm that:
a) in the preparation of the Annual Accounts, the applicable accounting standards have been followed, along with proper explanations relating to material departures, if any;
b) the accounting policies selected have been applied consistently, and judgements and estimates are made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2018 and of the profit of the Company for the year ended on that date;
c) proper and sufficient care have been taken for the maintenance of adequate accounting records, in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) Annual Accounts have been prepared on a ''going concern'' basis;
e) the Company has laid down proper internal financial controls, and that such internal financial controls are adequate and were operating effectively; and
f) your Company has devised proper systems to ensure compliance with the provisions of all applicable laws, and that such systems were adequate and operating effectively.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo stipulated under Section 134(3)(m) of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014 is set out in Annexure ''D'' to this Report.
AUDITORS AND AUDIT REPORTS Statutory Auditors
Pursuant to the provisions of Section 139(1) of the Act, read with the Companies (Audit and Auditors) Rules, 2014, as amended from time to time:
- the members, at the 69th AGM held on 23rd September 2016, have approved the appointment of B S R & Co. LLP, Chartered Accountants (ICAI Firm Registration No. 101248W/W-100022), as Joint Statutory Auditors of the Company for a period of five consecutive years, till the conclusion of the 74th AGM of the Company to be held in the year 2021, subject to ratification of their appointment by the members at every AGM till 73rd AGM; and
- the members, at the 70th AGM held on 22nd September 2017, have approved the appointment of S R B C & Co. LLP, Chartered Accountants (ICAI Firm Registration No. 324982E), as Joint Statutory
Auditors of the Company for a period of five consecutive years, till the conclusion of 75th AGM of the Company to be held in the year 2022, subject to ratification of their appointment by the members at every AGM till 74th AGM.
Accordingly, necessary resolutions for ratification of appointment of Auditors are included in the Notice for this AGM. Your Directors commend the Resolutions for your approval.
Consent of the Auditors and certificate u/s 139 of the Act have been obtained from each of the Auditors to the effect that their appointment/ratification, if made, shall be in accordance with the applicable provisions of the Act and the Rules issued there under. As required under the SEBI (LODR), B S R & Co. LLP and S R B C & Co. LLP have confirmed that they hold a valid certificate issued by the Peer Review Board of ICAI.
Pursuant to the provisions of Section 139(1) of the Act, as amended with effect 7th May 2018, ratification of the appointment of the Statutory Auditors, by the Members at every AGM during the period of their appointment, has been omitted with effect from that date. In view thereof read with the provisions of Section 142 of the Act, consent of the members is sought to partially modify the resolutions passed at the aforesaid AGMs and authorize the Board to ratify the appointments and fix their remuneration for each of the Statutory Auditors respective remaining terms. Your Directors commend the Resolutions for your approval.
The observations made by the Statutory Auditors on the Financial Statements of the Company, in their Report for the financial year ended 31st March 2018, read with the explanatory notes therein, are self-explanatory and, therefore, do not call for any further explanation or comments from the Board under Section 134(3)(f) of the Act. The Auditors'' Report does not contain any qualification, reservation, disclaimer or adverse remark.
COST AUDITORS
Pursuant to the provisions of Section 148 of the Act, read with the Companies (Cost Records and Audit) Rules, 2014, as amended, Notifications/Circulars issued by the Ministry of Corporate Affairs from time to time, your Board has, on the recommendation of the Audit Committee, re-appointed M/s. D. C. Dave & Co., Cost Accountants, Mumbai, as the Cost Auditors to conduct the audit of the cost records of all the Units of the Company, except VFY-Century Rayon Unit, for the financial year 2018-19 at a remuneration not exceeding '' 1,500,000/- (Rupees Fifteen Lakh Only), plus applicable taxes and reimbursement of actual out-of-pocket expenses in connection with the audit. On the recommendations of the Audit Committee, your Directors have appointed M/s. M. R. Dudani & Co. as Cost Auditors
to conduct cost audit at VFY-Century Rayon Unit for the financial year 2018-19 at a remuneration of Rs, 2.20 Lakh (Rupees Two Lakh Twenty Thousand only) plus applicable taxes and reimbursement of actual out-of-pocket expenses in connection with the audit.
The Company has received consent from M/s. D. C. Dave
& Co. and M/s. M. R. Dudani & Co., Cost Accountants, to act as the Cost Auditors of the Company for the financial year 2018-19 along with separate certificates confirming each of their independence.
SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has re-appointed M/s. BNP & Associates, Company Secretaries, Mumbai, to conduct the secretarial audit for the financial year 2018-19. The Secretarial Audit Report, issued by M/s. BNP & Associates, Company Secretaries, for the financial year 2017-18, forms part of this Annual Report and is set out in Annexure ''E'' to this Report. The Secretarial Audit Report does not contain any qualification, reservation, disclaimer or adverse remark.
DISCLOSURES
Contracts and Arrangements with Related Parties
During the financial year 2017-18, all contracts/ arrangements/transactions entered into by the Company with Related Parties were on arm''s length basis and in the ordinary course of business. There are no material transactions with any Related Party as defined under Section 188 of the Act, read with the Companies (Meetings of Board and its Powers) Rules, 2014. All Related Party transactions have been approved by the Audit Committee of the Company. Omnibus approvals are taken for transactions, which are repetitive nature. The Company has implemented Related Party transaction manual and Standard Operating Procedures for the purpose of identification and monitoring of such transactions.
The details of contracts and arrangements with Related Parties of the Company for the financial year ended 31st March 2018, are given in Notes to the Standalone Financial Statements, forming part of the Annual Report.
The Policy on Related Party Transactions, as approved by the Board, is available on the Company''s website, www.grasim.com.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company has established a robust Vigil Mechanism for reporting of concerns through the Whistle Blower Policy of the Company, which is in compliance of the provisions of Section 177 of the Act, read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, and SEBI (LODR). The Policy provides for framework and process whereby concerns can be raised by its employees against any kind of discrimination, harassment, victimization or any other unfair practice being adopted against them. Adequate safeguards are provided against victimization to those who avail of the mechanism, and access to the Chairman of the Audit Committee in exceptional cases is provided to them. The details of the Vigil Mechanism are also provided in the Corporate Governance Report and the Whistle Blower Policy has been uploaded on the website of the Company, www.grasim.com.
CORPORATE SOCIAL RESPONSIBILITY
In terms of the provisions of Section 135 of the Act, read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors of the Company has a Corporate Social Responsibility (CSR) Committee, which is chaired by Mrs. Rajashree Birla. The other Members of the Committee are Mr. B. V. Bhargava, Mr. Shailendra K. Jain and Mr. Dilip Gaur. Dr. Pragnya Ram, Group Executive President, Corporate Communication and CSR, is a permanent invitee to the Committee. The Corporate Social Responsibility Policy (CSR Policy), indicating the activities to be undertaken by the Company, is available on the Company''s website, www.grasim.com.
The Company is a caring corporate citizen and lays significant emphasis on development of the host communities around which it operates. The Company, with this intent, has identified several projects relating to Social Empowerment and Welfare, Infrastructure Developments, Sustainable Livelihood, Health Care and Education, during the year, and initiated various activities in neighboring villages around its plant locations. The Annual Report on CSR activities is given in Annexure ''F'' to this Report.
RISK MANAGEMENT
Pursuant to the requirement of SEBI (LODR), the Company has constituted Risk Management Committee, which is mandated to review the risk management plan/ process of the Company. Risk evaluation and management is an ongoing process within the Organization. The Company''s Risk Management Committee periodically assesses risk in the internal and external environment and incorporates Risk Mitigation Plans in its strategy, business and operation plans. The Company has comprehensive risk management policy, which is periodically reviewed by the Risk Management Committee.
BUSINESS RESPONSIBILITY REPORT
As per SEBI (LODR), a separate section of Business Responsibility Report forms part of this Report.
EXTRACT ANNUAL RETURN
In terms of the provisions of Section 92 (3) of the Companies Act, 2013 (the Act) read with the Companies (Management and Administration) Rules, 2014, an extract of the Annual
Return of your Company for the financial year ended 31st March 2018 is given as Annexure ''G'' to this Report.
INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial control system commensurate with the size of its operations. Internal control systems, comprising of policies and procedures, are designed to ensure sound management of the Company''s operations, safe keeping of its assets, optimal utilization of resources, reliability of its financial information and compliance. Systems and procedures are periodically reviewed to keep pace with the growing size and complexity of the Company''s operations. During the year under review, no material or serious observation has been received from the Auditors of the Company citing inefficiency or inadequacy of such controls.
REMUNERATION POLICY
The Remuneration Policy of your Company, as formulated by the Nomination and Remuneration Committee of the Board of Directors, is given in Annexure ''H'' to this Report.
COMMITTEES OF THE BOARD AUDIT COMMITTEE
During the year under review, the Audit Committee was reconstituted and comprises of Mr. ArunThiagarajan, Mr. B.V. Bhargava, Mr. M.L. Apte and Mr. Dilip Gaur. The Committee comprises of majority of Independent Directors with Mr. Arun Thiagarajan being the Chairman. Mr. Sushil Agarwal Whole-Time Director & CFO is the permanent invitee.
Further details relating to the Audit Committee are provided in the Corporate Governance Report forming part of this Annual Report.
All the recommendations made by the Audit Committee, during the year, were accepted by the Board of Directors of the Company.
NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee comprises of Mr. M. L. Apte, Mr. Cyril Shroff and Mr. Kumar Mangalam Birla as its members. Further details relating to the Nomination and Remuneration Committee are provided in the Corporate Governance Report, forming part of this Annual Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Corporate Social Responsibility Committee comprises of Mrs. Rajashree Birla, Mr. B. V. Bhargava, Mr. Shailendra K. Jain and Mr. Dilip Gaur as its members. Further details relating to the Corporate Social Responsibility Committee are provided in the Corporate Governance Report forming part of this Annual Report.
STAKEHOLDERS'' RELATIONSHIP COMMITTEE
The Stakeholders'' Relationship Committee comprises of Mr. B. V. Bhargava, Mr. M. L. Apte, Mr. Cyril Shroff and Mr. Sushil Agarwal as its members. Further details of the Stakeholders'' Relationship Committee are provided in the Corporate Governance Report forming part of this Annual Report.
RESEARCH AND DEVELOPMENT (R&D)
The R&D investment continues to be focused on enhancing our relative market position in an increasingly competitive environment. Focused programmes are driving innovations in the critical areas of product quality, cost reduction, new product offerings and environmental sustainability. Our portfolio of programmes addresses near-term needs through the implementation of recently developed technologies while filling the pipeline with future opportunities to achieve our long-term goals.
Pulp and Fibre Business
Pulp R&D continues to focus on expanding our specialty pulp opportunities at the Domsjo Unit as well as generally improving the quality and consistency of supply to our Viscose Staple Fibre (VSF) manufacturing sites. Tailored products have been developed providing expanded sales into filament yarn production, and new applications in novel new casing products and cellulose acetate end-uses are being adopted. Advances in pulp quality and consistency for the internal VSF customers are leading to significant reductions in contaminate levels like dirt and resins. Model-based predictive controls are leading to reduced viscosity and lignin content variations in the process. Online pulp viscosity measurement and control technologies are being explored to further improve the consistency of this critical parameter. Implementation of new operating conditions, such as those associated with alkali extraction, have enabled the reduced consumption of key raw materials at the Domsjo plant. Ongoing collaborations with external laboratories are focused on developing new sustainable technologies and recycling opportunities. Our digitization initiative continues to seamlessly connect the pulp plant processes to the consuming fibre plants. Access to production data for pulp is being utilized at the fibre plants allowing the optimization of blending leading to viscose consistency improvements. Model-based predictive control systems are being designed to further extract value from this approach.
Fibre-oriented R&D is focused on continuously improving production efficiency and enhancing our customers'' experience. We have expanded implementation of demonstrated technologies, which reduce in-process material consumption and increase line productivities. Work continues to extend the gains through further process innovations. Our marketplace-targeted differentiated offerings agenda has resulted in new insights and innovations for improved products in our non-wovens and dope-dyed fibre segments. The resulting product and process upgrades are being well recognized as providing improved customer performance and value. Our value-added product programme pipeline continues to provide ongoing new opportunities at different stages of development. A recently commercialized example is our branded offering, Liva Sno. This product not only simplifies the downstream processing, but also contributes to processors'' environment-friendly efforts by reducing water consumption and the generation of waste effluent. We are planning the continued launch of new products in our pipeline in the coming years. The fibre-focused quality improvement work over the last five years has been aimed at bringing our production lines to global benchmark quality levels and achieving product leadership. Application of metrics like first pass yield (FPY) and Uptime, and systematic Six-Sigma process projects to improve line performance levels have contributed significantly toward achieving our objectives. The process capability analyses of production lines have been broadly completed, and approximately three quarters of production capacity has been upgraded and certified as achieving benchmark levels. Projects are ongoing to improve our remaining assets. A comprehensive fibre quality gradation system has been developed to more fully specify the product attributes required to fulfill our customers'' expectations for quality and processing performance. This system is being used to guide our improvement projects aimed at ongoing product trade leadership.
Our business development process includes the promotion of our cellulose-based comfort fibres throughout the entire value chain from yarn producers through retail. The Textile Research and Applications Development Centre (TRADC) plays a critical role in this process through the development of unique fabric designs, continual renewal of our fabric resource library, creation of seasonal design collections and launch support for new product offerings. Unique fabric design bases were developed to promote our fibres in textile hubs across India for knitted fabrics in tops, intimate apparel, legwear and sweaters, and woven designs for shirts, suits, jackets and women''s wear. Additionally, more than 150 fabric styles from over 50-base designs were created to showcase our products in home textile applications in India and internationally. TRADC also contributed technical input to the "Sleep
Soft" marketing catalogue showcased in the USA, during Home Textile Week. These efforts are key to new adoptions like our polyester/Modal blend for bed linens currently in commercial production. Earlier this year, the Digital LIVA Fabric Library was launched providing online product information, vendor contacts and detailed input on products and fabrics developed by TRADC over many years. This provides a valuable resource for customers to access when developing their future offerings with our products. Also, by analyzing the inquiries, we can better anticipate market trends and new opportunities to fulfill our customers'' needs. LIVA Season Collections have been developed for the Spring/Summer and Autumn/Winter periods and a dozen story lines were prepared, which describe the values of these innovative concepts. These collections and associated information are a critical part of promoting the LIVA brand with our partners.
Significant strides were made in our in-house technology advancement for the Excel® project. Selective upgrades to one Excel® line at Nagda, based on our new technology, has enabled the achievement of near benchmark product quality and improved realization. Data generation and improved understanding of solvent recovery has led to the prototype demonstration of a new resin chemistry, improving our solvent quality.
Enabling Capabilities
Our R&D facilities are geared to support the innovation needs of the Pulp and Fibre Business. The sequence of development is initiated in laboratory facilities for small scale preparation experiments and analysis equipment. Successful concepts are taken through the scale-up facilities for spinning dope making and fibre spinning, and ultimately through the downstream facilities of yarn, fabric and garment making.
This complete process and product development capability put in place over the years now supports the creation and execution of our process development and new product pipelines, which are creating significant value for the business. Once a technology is proven, the solid process and product data are available to support robust commercialization on large lines in partnership with the Operations and Marketing teams.
Chemical Business
The Company''s Chemical business focus has been to develop various product variants as to meet different customer segments, improving and optimizing key operating processes and practices, enhance equipment reliability and asset integrity, and significantly upgrade the health, safety and environment systems and processes.
- Products: Differentiation in Products by making product variants in flakes, stable bleaching powder, Chlorinated paraffin''s, poly aluminum chloride, hydrochloric acid and food grade phosphoric acid product as to meet the specific customer segments.
- Processes: Process improvements and optimization of Key and critical process operations such removal trace impurities in salt, chlorine and hydrogen streams of the manufacturing cycle.
- Health, Safety and Environment Monitoring, and controlling equipment''s such to minimize process and stack emissions, reduction of solid wastes, and Zero liquid discharge approach with a view to progress towards efficiencies beyond legal compliances.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY, WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THE FINANCIAL STATEMENT RELATES AND THE DATE OF THE REPORT
Except as disclosed elsewhere in this Report, no material changes and commitments, which could affect the Company''s financial position, have occurred between the end of the financial year of the Company and the date of this Report.
PARTICULARS OF EMPLOYEES
In accordance with the provisions of Section 197(12) of the Act, read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees drawing remuneration in excess of the limits, set off in the aforesaid Rules, are to be set out in the Board''s Report, as an annexure thereto. In line with the provisions of Section 136(1) of the Act, the Report and Accounts, as set out therein, are being sent to all Members of the Company, excluding the aforesaid information about the employees. Any Member, who is interested in obtaining these particulars about employees, may write to the Company Secretary at the Registered Office of the Company. The aforesaid addendum is also available for inspection by the members at the Registered Office of the Company 21 days before the AGM and up to the date of the ensuing AGM, during business hours on working days.
Disclosures pertaining to remuneration and other details, as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are given in Annexure ''I'' to this Report.
EMPLOYEE STOCK OPTION SCHEMES (ESOS)
The Company has Employee Stock Option Scheme-2006 (ESOS-2006) and Employee Stock Option Scheme-2013 (ESOS-2013), which provides for grant of Stock Options and/or Restricted Stock Units (RSUs) to the eligible employees of the Company.
The details of Employee Stock Options granted pursuant to ESOS-2006 and the Employee Stock Options and RSUs granted pursuant to ESOS-2013, as also the other disclosures in compliance with the provisions of the Securities and Exchange Board of India (Employee Share Based Employee Benefits) Regulations, 2014, are available on the Company''s website, www.grasim.com.
A certificate from the Statutory Auditors, with respective implementation of the Company''s Employees Stock Option Schemes will be placed at the ensuing AGM for inspection by the Members, and a copy will also be available for inspection at the Registered Office of the Company.
The Company intends to reward, attract, motivate and retain employees and directors of the Company, its holding and subsidiary companies for their high level of individual performance, by offering them equity shares by way of an Employee Stock Options Scheme.
Towards this, the Company has sought approval of the members to approve and adopt the ''Grasim Industries Ltd. Employee Stock Option Scheme 2018'' (hereinafter referred to as the "Scheme 2018"). The Company intends to offer not more than 3,515,528 Equity Shares of '' 2/- each (which represents 0.53% of the paid-up equity capital as on 31st March 2018) in one or more tranches, in accordance with the Scheme 2018, the provisions of the law or regulations issued by the relevant authority, as may be prevailing at that time.
The Scheme 2018 shall be implemented through the ESOS Trust since it is proposed that the equity shares of the Company would be acquired by the ESOS Trust from the secondary market. The Company proposes to extend financial assistance to the ESOS Trust for this purpose, subject to the overall limits specified under the applicable laws.
The broad framework of the Scheme 2018 is detailed in the Notice of the AGM. Your Directors commend the resolutions for approving the grant in terms of the Scheme and the implementation of the Scheme through the Trust.
HUMAN RESOURCES
The Company''s human resources is the strong foundation for creating many possibilities for its business. During the year, the Company added greater employee talent through seamless integration of acquired assets. The efficient operations of manufacturing units and market development and expansion for various products was the highlight of our people effort.
Continuous people development for developing knowledge and skills coupled with the Talent Management practices will deliver the talent needs of the Organization. The Company''s employee engagement score reflects high engagement and pride in being part of the Organization.
The Group''s Corporate Human Resources plays a critical role in the Company''s talent management process.
AWARDS AND ACCOLADES
Some of the significant accolades earned by the Company during the year include:
- Platinum Award in "2nd Annual EKDKN EMINENT Award 2017" under CSR Category in Chemical & Fertilizer Sector (Ek Din Desh Ke Naam)
- Dun & Bradstreet Corporate Award 2018 as the Top Company for its stellar performance in the textiles sector. Grasim was honored for being "Champion of Change" in the transformation of the country.
- Ranked # 205 in the list of "Global 2000 - Growth Champions 2018" by Forbes Magazine, USA
- Award for Best Export Performance in the Category of Viscose Staple Fibre (Gold Trophy). 2018 - SRTEPC
- India Sustainable Leadership Award from World Sustainability, a Not-For-Profit Organization advocating for Sustainable Leadership
- Liva - Most admired fashion innovation of the year by India Fashion Forum
- NCQC (National Convention on Quality Concepts) 2017, Mysuru - "PAR EXCELLENCE" Award - Insulators (Rishra)
- I MC Ramkrishna Bajaj National Quality Award 2017 Performance Excellence in Manufacturing Category -Chemicals
- Golden Peacock Award - 2018 - Business Excellence (Indian Rayon)
GENERAL
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:
1. I ssue of equity shares with differential rights as to dividend, voting or otherwise;
2. Issue of shares (including sweat equity shares) to employees of the Company under any Scheme save and except ESOS referred to in this Report;
3. There were no revisions in the financial statements;
4. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and the Company''s operations in the future;
5. The Company has made and maintained cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013 for the Financial Year 2017-18; and
6. The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. No cases or complaints were filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
ACKNOWLEDGEMENTS
Your Directors express their deep sense of gratitude to the banks, financial institutions, stakeholders, business associates, Central and State Governments for their cooperation and support and look forward to their continued support in future.
We very warmly thank all of our employees for their contribution to the Company''s performance. We applaud them for their superior levels of competence, dedication and commitment to the Company.
For and on behalf of the Board
Kumar Mangalam Birla
Chairman
(DIN: 00012813)
Mumbai, 14th August 2018
Mar 31, 2017
TO THE MEMBERS OF GRASIM INDUSTRIES LIMITED
The Directors are pleased to present the 70th Annual Report of your Company along with the Audited Financial Statements for the financial year ended 31st March 2017.
FINANCIAL HIGHLIGHTS
(Rs. in Crores)
|
Consolidated |
Standalone |
|||
|
2016-17 |
2015-16 |
2016-17 |
2015-16 |
|
|
Revenue from Operations |
40,247.17 |
38,535.01 |
11,252.95 |
9,778.40 |
|
Earnings Before Interest, Depreciation/ Amortisation and Tax (EBITDA) |
8,332.91 |
7,066.05 |
2,628.70 |
1,851.13 |
|
Less: Finance Costs |
702.40 |
718.09 |
57.62 |
147.40 |
|
Less: Depreciation and Amortisation |
1,807.59 |
1,833.79 |
446.14 |
444.89 |
|
Profit Before Share in Profit/(Loss) of Equity Accounted Investees, Exceptional Items and tax |
5,822.92 |
4,514.17 |
2,124.94 |
1,258.84 |
|
Share in Profit/(Loss) of Equity Accounted Investees |
129.40 |
193.02 |
- |
- |
|
Exceptional Items |
- |
(27.85) |
- |
(29.19) |
|
Profit Before Tax (PBT) |
5,952.32 |
4,679.34 |
2,124.94 |
1,229.65 |
|
Tax Expenses |
1,706.71 |
1,224.60 |
564.94 |
259.01 |
|
Profit After Tax including Share in Profit/(Loss) of Equity Accounted Investees |
4,245.61 |
3,454.74 |
1,560.00 |
970.64 |
|
Attributable to: |
||||
|
Shareholders of the Company |
3,167.30 |
2,468.14 |
1,560.00 |
970.64 |
|
Non-Controlling Interest |
1,078.31 |
986.60 |
- |
- |
|
Other Comprehensive Income (Net of Tax) |
963.44 |
221.69 |
1,011.53 |
91.82 |
|
Total Comprehensive Income for the Year |
5,209.05 |
3,676.43 |
2,571.53 |
1,062.46 |
|
Attributable to: |
||||
|
Shareholders of the Company |
4,118.78 |
2,678.12 |
2,571.53 |
1,062.46 |
|
Non-Controlling Interest |
1,090.27 |
998.31 |
- |
- |
|
Retained Earnings: Opening Balance |
2,109.82 |
914.34 |
2,604.32 |
1,938.58 |
|
Transferred from ABCIL as on 1st April, 2015 pursuant to the Scheme of Amalgamation |
- |
362.33 |
- |
362.33 |
|
Profit for the Year |
3,167.30 |
2,468.14 |
1,560.00 |
970.64 |
|
Re-measurement of Defined Benefits Plan |
(18.17) |
(0.11) |
(8.61) |
2.52 |
|
Loss on sale of Non-Current Investments transferred to Retained Earnings from Equity Instrument through Other Comprehensive Income |
(1.02) |
(1.02) |
||
|
Other adjustments related to an Associate |
(52.65) |
(2.72) |
- |
- |
|
Dilution of Stake in a Subsidiary and Associate |
(1.86) |
- |
- |
- |
|
Surplus Available for Appropriation |
5,204.44 |
3,740.96 |
4,155.71 |
3,273.05 |
|
Appropriations: |
||||
|
Reserve Fund |
0.69 |
0.34 |
- |
- |
|
General Reserve |
1,704.56 |
1,405.10 |
500.00 |
500.00 |
|
Dividend Paid (including Corporate Dividend Tax) |
253.20 |
198.77 |
220.84 |
168.73 |
|
Debenture Redemption Reserve |
(53.77) |
26.93 |
- |
- |
|
Legal Reserve |
0.63 |
- |
- |
|
|
Retained Earnings: Closing Balance |
3,299.13 |
2,109.82 |
3,434.87 |
2,604.32 |
The financial statements have been prepared in accordance with Ind AS, notified under the Companies (Indian Accounting Standards) Rules, 2015, as amended by the Companies (Indian Accounting Standards) (Amendment) Rules, 2016, the relevant provisions of the Companies Act, 2013 (âthe Actâ), and guidelines issued by the Securities and Exchange Board of India (âSEBIâ). The date of transition to Ind AS is 1st April 2015.
DIVIDEND
Your Directors have recommended a dividend of Rs.5.50 (Rupees Five and Paise Fifty Only) per equity share of Rs.2 each of the Company for the financial year ended 31st March 2017. The dividend, if approved by the members, would involve a cash outflow of Rs.401.47 Crore (inclusive of Dividend Distribution Tax).
In terms of the provisions of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, your Company has formulated a Dividend Distribution Policy. This Policy is given in Annexure âAâ to this Report and is also accessible at your Companyâs website, www.grasim.com.
TRANSFER TO RESERVES
Your Company proposes to transfer Rs.500 Crore to the General Reserves.
PERFORMANCE REVIEW
Your Company recorded Standalone Revenue of Rs.11,253 Crore, 15% higher from Rs.9,778 Crore in the previous year. Net Profit for the year at Rs.1,560 Crore, increased by 60.71 % from Rs.971 Crore in the previous year.
With improved performance of all the three businesses, EBIDTA grew by 18% to Rs.8,333 Crore from Rs.7,066 Crore in the previous year. Your Companyâs Consolidated Revenue increased to Rs.40,247 Crore from Rs.38,535 Crore in the previous year. Net Profit increased to Rs.3,167 Crore from Rs.2,468 Crore in the previous year.
Globally, the demand for Viscose Staple Fibre (VSF) has been growing at a faster rate as compared to other fibres, and is expected to continue to grow at healthy pace. In India, high value currency replacement programme temporarily impacted down stream players in textile value chain. Thus, the demand for VSF witnessed a slowdown, particularly from power loom sector. However, your Company was able to do higher export sales of VSF to mitigate the slowdown in domestic off take.
Sales volume of the Company increased by 6%, led by higher share of speciality fibre, which increased from 33% in FY 16 to 36% in FY 17. Improved productivity at various plants led to reduction in consumption of power, steam and caustic soda. Higher realisation and improvement in operating efficiencies resulted in surge in EBITDA, which went up by 56% from Rs.923 Crore to Rs.1,439 Crore, negated to some extent by increase in pulp cost. EBITDA margin was 20% in the current financial year as against 15% in the last financial year.
Sustainability is the key focus area for the Company Significant reduction of more than 20% in water consumption was achieved by Quarter 4 compared to average consumption of FY 16.
The Companyâs Liva brand for VSF-based products is making strong foothold in womenâs wear market. Liva Creme, a premium version of brand Liva, was launched during the year, to cater to the niche market. It has established strong market presence with leading customers, and is helping expand market for speciality fibre in India.
The joint venture companies (JVs) engaged in Pulp and Fibre business, reported considerable improvement in financial performance. As against a PAT (Grasimâs share) of Rs.63 Crore in FY 16, these JVs have contributed a PAT of Rs.138 Crore during the current year. Higher pulp realisation and volumes coupled with improvement in consumption norms of various inputs led to rise in operating profit.
Chemical business reported an increase of 11% in sales revenue and EBITDA increased by 13% over the previous year. Capacity utilisation was high at 93%. Sales volume was up by 2%. The impact of higher energy cost was offset by reduction in power consumption and decline in salt and other raw material cost. Steady growth of chlorine derivative products eased the pressure on chlorine offtake to a great extent. The chlorine derivatives business also provides good growth opportunity in the exports market. Business achieved significant progress in the areas of water treatment chemicals, plasticisers and other industrial products.
In Cement business, UltraTech Cement Limited (UltraTech), a subsidiary of your Company, has completed the acquisition of the cement plants of Jaiprakash Associate Ltd. and Jaiprakash Cement Corporation Ltd., located in Madhya Pradesh, Uttar Pradesh, Himachal Pradesh, Uttarakhand and Andhra Pradesh, with a total capacity of 21.20 MTPA at an enterprise value of Rs.16,189 Crore, in June 2017. During the year under review, cement capacity was augmented to 66.25 MTPA, following the commissioning of the grinding unit at Patliputra in Bihar. Cement production improved marginally from 47.56 MTPA in the previous to 47.91 MTPA. Capacity utilisation clocked 72% on a higher capacity base. Domestic sales volume rose marginally from 47.13 MMT to 47.62 MMT vis-a-vis a marginal dip in industry volume for the year.
STRATEGIC INITIATIVES
The Management Discussion and Analysis Section, which forms part of the Annual Report, focuses on your Companyâs strategies for growth and the performance review of the businesses/operations in depth.
COMPOSITE SCHEME OF ARRANGEMENT
Vide its Order dated 1st June 2017, the National Company LawTribunal, Bench at Ahmedabad (NCLT), has sanctioned the Composite Scheme of Arrangement between your Company and Aditya Birla Nuvo Limited (ABNL) and Aditya Birla Financial Services Limited (now known as Aditya Birla Capital Limited) (ABCL) (Scheme). With effect from 1st July 2017 (the Effective Date 1), ABNL along with its assets, liabilities, contracts, employees, etc., stands amalgamated with and be vested in your Company, as a going concern so as to become the assets, liabilities, etc., of your Company, in the manner provided in the Scheme. With effect from 4th July 2017, (the Effective Date 2), the financial services business of your Company stands transferred to and vested in ABCL.
With the amalgamation becoming effective, ABCL and its subsidiaries have become the subsidiary companies of your Company.
The restructuring, in terms of the Scheme, has enabled your Company to extend its presence to the fast growing sectors such as financial services and telecom, and enhance longterm value for the shareholders. This will also enable ABCL to grow faster under your Companyâs strong parentage, and is expected to improve its credit profile and reduce its cost of borrowings, thereby enhancing its competitive positioning. The merger has also led to consolidation of similar businesses of your Company and ABNL.
Your Company and ABCL are in the process of completing the formalities relating to allotment of shares of their respective Companies and listing the same.
CORPORATE ACTIONS PLANS IMPLEMENTED/ INITIATED DURING THE YEAR ENDED 31ST MARCH, 2017
The following developments/actions have taken place during the year ended 31st March 2017:
a. Sub-division of equity shares of your Company from one equity share of the face value of Rs.10/- each fully paid up to five equity shares of the face value of Rs.2/each fully paid-up;
b. Increase in investment limit for registered foreign portfolio investors/foreign institutional investors from 24% to 30% in your Company. (Approval received from Reserve Bank of India on 13th April 2017, for increase in the limit to 49%).
c. The Board of Directors of your Company has adopted Dividend Distribution Policy.
d. The Board of Directors of Idea Cellular Limited (Idea) had at their meeting, held on 20th March 2017, approved the merger of Vodafone India Limited and Vodafone Mobile Services Limited with Idea, subject to receipt of necessary approvals.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the Companies Act, 2013 (Act), read with the Companies (Accounts) Rules, 2014, SEBI (LODR), and Ind AS 110 - Consolidated Financial Statements and Ind AS 28 - Investment in Associates and Joint Ventures, the Audited Consolidated Financial Statements are provided in this Report. The Consolidated Financial Statements have been prepared on the basis of the Audited Financial Statements of the Company, its subsidiaries, joint ventures and associate companies, as approved by their respective Board of Directors.
SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES
a. With effect from 1st April 2016, AV Cell Inc. and AV Nackawic Inc., the joint venture companies of your Company amalgamated and formed a new company, namely, AV Group NB Inc., Canada. Your Company holds 45% of the paid-up equity share capital of AV Group NB Inc., same as it held in each of AV Cell Inc. and AV Nackawic Inc.
b. With effect from 15th July 2016, the paid-up share capital of Aditya Birla Elyaf Sanayi Ve Ticaret Anonim Sirketi, Turkey, stood reduced to TL 5,00,000 from TL 6,00,00,000. The Company received a sum of Rs.56.20 Crore, on account of such reduction. Your Company continues to hold 33.33% of the paid-up share capital of Aditya Birla Elyaf Sanayi Ve Ticaret Anonim Sirketi.
c. On 20th March 2017, your Company executed Agreements, as Promoters of Idea Cellular Limited, in respect of the proposed merger of Vodafone India Limited and Vodafone Mobile Services Limited with Idea Cellular Limited.
With effect from 1st July 2017, the subsidiary companies of the erstwhile Aditya Birla Nuvo Limited have become the subsidiaries of your Company.
In accordance with the provisions of Section 129(3) of the Act, read with Rule 5 of the Companies (Accounts) Rules, 2014, a report on the performance and financial position of each of the subsidiaries, associates and joint venture companies is given in Annexure âBâ to this Report.
In accordance with the provisions of Section 136(1) of the Act, the Annual Report of your Company, containing inter alia the audited standalone and consolidated financial statements, has been placed on the website of the Company, www.grasim.com. Further, the audited financial statements, along with related information and other reports of each of the subsidiary companies, have also been placed on the website of the Company, www. grasim.com.
In accordance with Section 136 of the Act, the financial statements of the subsidiary companies and related information are available for inspection by the Members at the Registered Office of your Company, during business hours upto the date of the Annual General Meeting (AGM). Any Member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the Registered Office of your Company.
SHARE CAPITAL
During the year 2016-17:
- Your Company sub-divided each equity share of the Company of face value of Rs.10/- fully paid-up into 5 (five) Equity Shares of face value of Rs.2/- each fully paid-up as on the record date fixed on 8th October 2016, pursuant to the resolution passed by Members in the Annual General Meeting held on 23rd September 2016.
- Your Company allotted 106,580 equity shares (postsub-division adjustment to the number of equity shares) of Rs.2/- each pursuant to the exercise of stock options.
As on 31st March 2017, the paid-up equity share capital of your Company stood at Rs.93.37 Crore, consisting of 466,862,190 equity shares of Rs.2/- each.
During the year 2016-17, the Company has not issued shares with differential voting rights and sweat equity shares.
DEPOSITS
During the year under review, your Company has not accepted or renewed any deposit within the meaning of Section 73 of the Act, read with the Companies (Acceptance of Deposits) Rules, 2014, and, as such, no amount of principal or interest was outstanding, as on the date of the Balance Sheet.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Pursuant to Section 186 of the Act and Schedule V of SEBI (LODR), disclosures on particulars relating to loans, advances and investments are provided as part of the Financial Statements. There are no guarantees issued or securities provided by your Company in terms of Section 186 of the Act, read with the Rules issued thereunder.
MANAGEMENTâS DISCUSSION AND ANALYSIS REPORT
The Managementâs Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 of SEBI (LODR), forms an integral part of this Report.
CORPORATE GOVERNANCE
Your Directors re-affirm their continued commitment to best practices of Corporate Governance. Corporate Governance principles form an integral part of the core values of your Company.
In terms of Regulation 34 of SEBI (LODR), a separate report on Corporate Governance, along with a certificate from the Auditors on its compliance, forms an integral part of this Report and is given as Annexure âCâ.
BUSINESS RESPONSIBILITY REPORT
As per Regulation 34(2)(f) of SEBI (LODR), a separate section of Business Responsibility Report, describing the initiatives taken by the Company from environmental, social and governance perspective, forms an integral part of this Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
With effect from 1st October 2016, Mr. R. C. Bhargava, an Independent Director (DIN: 00007620) resigned from the Board and Committees of the Board of Directors of the Company. The Board places on record its deep appreciation and gratitude for the valuable contribution and advice offered by Mr. R. C. Bhargava during his tenure as Director on the Board of the Company.
Mr. K. K. Maheshwari, Non-Executive Director (DIN: 00017572), resigned from the Board of Directors of the Company w.e.f. 27th December 2016, due to precommitment. The Board places on record its deep appreciation and gratitude for the substantial contribution and valuable advice offered by Mr. Maheshwari during his tenure as Director on the Board of the Company.
In accordance with the provisions of the Act and the Articles of Association of the Company, Mr. Kumar Mangalam Birla (DIN: 00012813), Director of the Company, retires by rotation at the ensuing Annual General Meeting (AGM) and, being eligible, has offered himself for reappointment. Resolution seeking his appointment has been included in the Notice of the AGM. Your Directors commend the Resolution for your approval.
A brief resume of the Director being re-appointed forms part of the Notice of the ensuing AGM.
In terms of the provisions of Sections 2(51), 203 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Mr. Dilip Gaur, Managing Director, Mr. Sushil Agarwal, Whole-time Director and Chief Financial Officer, and Mrs. Hutokshi Wadia, President and Company Secretary, are the Key Managerial Personnel of your Company.
During the financial year 2016-17, Mr. Dilip Gaur, Managing Director, and Mr. Sushil Agarwal, Whole-time Director and Chief Financial Officer of the Company, have not received any commission/remuneration from your Companyâs holding or subsidiary Companies.
FORMAL ANNUAL EVALUATION
The evaluation framework for assessing the performance of Directors of your Company, inter alia, comprises of contributions at the meetings, strategic perspective or inputs regarding the growth and performance of your Company.
Pursuant to the provisions of the Act and SEBI (LODR) and in terms of the Framework of the Board Performance Evaluation, the Nomination and Remuneration Committee and the Board have carried out an annual performance evaluation of its own performance, the performance of various Committees of the Board, individual Directors and the Chairman. The manner in which the evaluation has been carried out has been set out in the Corporate Governance Report, which forms an integral part of this Annual Report. The details of the programme for familiarisation of the Independent Directors of your Company are available on your Companyâs website, www.grasim.com.
MEETINGS OF THE BOARD
During the year ended 31st March 2017, five Board Meetings were held on 7th May 2016, 11th August 2016, 28th October 2016, 30th January 2017 and 13th February 2017. Further details on the Board Meetings are provided in the Corporate Governance Report, forming part of this Annual Report.
DECLARATION OF INDEPENDENCE
Your Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under the Act, read with Schedules and Rules issued thereunder and the SEBI (LODR).
DIRECTORSâ RESPONSIBILITY STATEMENT
The audited accounts for the year under review are in conformity with the requirements of the Act and the Accounting Standards. In terms of Sections 134(3)(c) and 134(5) of the Act, in relation to the Audited Financial Statements of the Company for the year ended 31st March 2017, the Directors of your Company hereby state that:
a) in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any;
b) the Directors have selected such accounting policies and applied them consistently, and made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at 31st March 2017 and of the profit of your Company for the year ended on that date;
c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company, and for preventing and detecting fraud and other irregularities;
d) Annual Accounts have been prepared on a âgoing concernâ basis;
e) proper internal financial controls, laid down by the Directors, were followed by the Company, and that such internal financial controls are adequate and were operating effectively; and
f) devised proper systems to ensure compliance with the provisions of all applicable laws, and that such systems were adequate and operating effectively.
AUDITORS AND AUDIT REPORTS
Presently, M/s. G. P Kapadia & Co. and BSR & Co. LLP are the Joint Statutory Auditors of the Company. Pursuant to the provisions of the Companies Act, 2013, and the Companies (Audit and Auditors) Rules, 2014, M/s. G. P Kapadia & Co. will be retiring as one of the Joint Statutory Auditors of your Company at the ensuing Annual General Meeting of the Company.
At its meeting held on 19th May 2017, the Board has appointed S R B C & Co., LLP, Chartered Accountants (ICAI Firm Registration No. 324982E), as one of the Joint Statutory Auditors of the Company in place of M/s. G. P Kapadia & Co., Chartered Accountants (Registration No. 104768W), the retiring Joint Statutory Auditors, for a period of five years, i.e., to hold office from the conclusion of this Annual General Meeting till the conclusion of Seventy-fifth Annual General Meeting of the Company, to be held in the year 2022, subject to the approval of the Members, at such remuneration as may be mutually agreed between the Board of Directors of the Company and S R B C & Co, LLP BSR & Co. LLP will continue to hold office till the conclusion of the Seventy-fourth Annual General Meeting of the Company, to be held in the year 2021, subject to the ratification by the Members in each Annual General Meeting.
Consent of the Auditors and certificate u/s 139 of the Act have been obtained from each of the Auditors to the effect that their appointment/ratification, if made, shall be in accordance with the applicable provisions of the Act and the Rules issued thereunder. As required under the SEBI (LODR), BSR & Co. LLP and S R B C & Co, LLP have confirmed that they hold a valid certificate issued by the Peer Review Board of ICAI.
The Board places on record its appreciation for the contribution of M/s. G. P. Kapadia & Co., Chartered Accountants, during their tenure as one of the Joint Statutory Auditors of your Company.
The observations made by the Statutory Auditors on the Financial Statements of the Company, in their Report for the financial year ended 31st March 2017, read with the explanatory notes therein, are self-explanatory and, therefore, do not call for any further explanations or comments from the Board under Section 134(3)(f) of the Act. The Auditorsâ Report does not contain any qualification, reservation or adverse remark.
COST AUDITORS
Pursuant to the provisions of Section 148 of the Act, read with the Companies (Cost Records and Audit) Rules, 2014, as amended, Notifications/Circulars issued by the Ministry of Corporate Affairs from time to time, your Board at its meeting held on 19th May 2017, has, on the recommendation of the Audit Committee, re-appointed M/s. D. C. Dave & Co., Cost Accountants, Mumbai, as the Cost Auditors to conduct the audit of the cost records of the Company for the financial year 2017-18 at a remuneration not exceeding Rs.10,00,000/- (Rupees Ten Lakh Only), plus applicable taxes and reimbursement of actual out-of-pocket expenses in connection with the audit. Your Company has received consent from M/s. D. C. Dave & Co., Cost Accountants, to act as the Cost Auditors of your Company for the financial year 2017-18 along with a certificate confirming their independence.
SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has reappointed M/s. BNP & Associates, Company Secretaries, Mumbai, to conduct the secretarial audit for the financial year 2016-17. The Secretarial Audit Report, issued by M/s. BNP & Associates, Company Secretaries for the financial year 2016-17, forms part of this Report, and is set out in Annexure âDâ to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
DISCLOSURES EXTRACT OF ANNUAL RETURN
In accordance with the provisions of Section 134(3)(a) of the Act, an extract of the Annual Return of the Company for the financial year ended 31st March 2017, is given in Annexure âEâ to this Report.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
During the financial year under review, all contracts/ arrangements/transactions entered into by your Company with Related Parties were on armâs length basis and in the ordinary course of business. There are no material transactions with any Related Party as defined under Section 188 of the Act, read with the Companies (Meetings of Board and its Powers) Rules, 2014. All Related Party transactions have been approved by the Audit Committee of your Company. Omnibus approvals are taken for transactions which are repetitive nature. Your Company has implemented Related Party transaction manual and Standard Operating Procedures for the purpose of identification and monitoring of such transactions.
Since all the contracts/arrangements/transactions with Related Parties, during the year under review, were in the ordinary course of business and at armâs length and were not considered material, disclosure in Form AOC-2 under Section 134(3)(h) of the Act, read with the Companies (Accounts of Companies) Rules, 2014, is not applicable. The details of contracts and arrangements with Related Parties of your Company for the financial year ended 31st March 2017, are given in Note 4.5.4 to the Standalone Financial Statements, forming part of this Annual Report.
The Policy on Related Party Transactions, as approved by the Board, is available on your Companyâs website, www. grasim.com.
RISK MANAGEMENT
You Company recognises that risk is an integral part of business, and is committed to managing the risk in a pro-active and efficient manner. Your Companyâs Risk Management Committee periodically assesses the risks in the internal and external environment, along with the cost of mitigating risk and incorporates Risk Mitigation Plans in its strategy, business and operation plans. Your Company has a comprehensive risk management policy/ framework, which is reviewed by the Risk Management Committee. More details on risk management are covered in the Management Discussion and Analysis forming part of this Annual Report.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
Your Company has established a robust Vigil Mechanism for reporting of concerns through the Whistle Blower Policy of the Company, which is in compliance with the provisions of Section 177 of the Act, read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, and SEBI (LODR). The Policy provides for framework and process, for the employees and directors to voice genuine concerns or grievances about unprofessional conduct without fear of reprisal. Adequate safeguards are provided against victimisation to those who avail of the mechanism, and access to the Chairman of the Audit Committee in exceptional cases is provided to them. The details of the Vigil Mechanism are also provided in the Corporate Governance Report, and the Whistle Blower Policy has been uploaded on the website of the Company, www.grasim.com.
CORPORATE SOCIAL RESPONSIBILITY
In terms of the provisions of Section 135 of the Act, read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors of your Company has a Corporate Social Responsibility (CSR) Committee, which is chaired by Mrs. Rajashree Birla. The other Members of the Committee are Mr. B. V. Bhargava, Mr. Shailendra K. Jain and Mr. Dilip Gaur. Dr. Pragnya Ram, Group Executive President, Corporate Communication and CSR, is a permanent invitee to the Committee. The Corporate Social Responsibility Policy (CSR Policy), indicating the activities to be undertaken by the Company, is available on your Companyâs website, www.grasim.com.
The Company is a caring corporate citizen and lays significant emphasis on development of the host communities around which it operates. The Company, with this intent, has identified several projects relating to Social Empowerment and Welfare, Infrastructure Developments, Sustainable Livelihood, Health Care and Education, during the year, and initiated various activities in neighbouring villages around its plant locations. The work on several initiatives has picked up momentum during the year, resulting in a spend of Rs.18.06 Crore (2.29% of the average net profits of the last 3 years, as defined for the purposes of CSR). The Company has identified promotion and development of handloom, handicrafts, and related projects, the work which was started in earlier years will be intensified in the current year.
The Annual Report on CSR activities is given in Annexure âFâ to this Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
Information relating to the conservation of energy, technology absorption and foreign exchange earnings and outgo, as stipulated under Section 134(3)(m) of the Act, read with the Companies (Accounts) Rules, 2014, is given in Annexure âGâ to this Report.
INTERNAL FINANCIAL CONTROLS
Your Company has in place adequate internal financial control system commensurate with the size of its operations. Internal control systems comprising of policies and procedures are designed to ensure sound management of your Companyâs operations, safe keeping of its assets, optimal utilisation of resources, reliability of its financial information and compliance. Systems and procedures are periodically reviewed to keep pace with the growing size and complexity of your Companyâs operations. During the year under review, no material or serious observation has been received from the Auditors of the Company, citing inefficiency or inadequacy of such controls.
REMUNERATION POLICY
The Remuneration Policy of your Company, as formulated by the Nomination and Remuneration Committee of the Board of Directors, is given in Annexure âHâ to this Report.
COMMITTEES OF THE BOARD AUDIT COMMITTEE
With Mr. R. C. Bhargava ceasing to be a Director on the Board of your Company, the Audit Committee has been re-constituted and now comprises of Mr. Arun Thiagarajan, Mr. B. V. Bhargava, and Mr. M. L. Apte, all Independent Directors, as its members. Mr. Dilip Gaur, Managing Director, and Mr. Sushil Agarwal, Whole-time Director and Chief Financial Officer, are the permanent invitees to the meetings of the Audit Committee.
With effect from 30th January 2017, Mr. Arun Thiagarajan has been appointed as Chairman of Audit Committee in place of Mr. B. V. Bhargava, who continues to be a member of the Audit Committee.
Further details relating to the Audit Committee are provided in the Corporate Governance Report, forming part of this Annual Report.
All the recommendations made by the Audit Committee, during the year, were accepted by the Board of Directors of the Company.
NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee comprises of Mr. M. L. Apte, Mr. Cyril Shroff and Mr. Kumar Mangalam Birla as its members. Further details relating to the Nomination and Remuneration Committee are provided in the Corporate Governance Report, forming part of this Annual Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Corporate Social Responsibility Committee comprises of Mrs. Rajashree Birla, Mr. B. V. Bhargava, Mr. Shailendra K. Jain and Mr. Dilip Gaur as its members. Further details relating to the Corporate Social Responsibility Committee are provided in the Corporate Governance Report, forming part of this Annual Report.
STAKEHOLDERSâ RELATIONSHIP COMMITTEE
The Stakeholdersâ Relationship Committee comprises of Mr. B. V. Bhargava, Mr. M. L. Apte, Mr. Cyril Shroff and Mr. Sushil Agarwal as its members. Further details of the Stakeholdersâ Relationship Committee are provided in the Corporate Governance Report, forming part of this Annual Report.
RESEARCH AND DEVELOPMENT
The portfolio of technology projects continues to aim at addressing competitive market challenges in the areas of product quality, cost reduction and new product offerings. In addition to pursuing step-change technologies during FY 2016-17, your Company is increasingly focused on taking developments from the laboratory through scale-up and plant implementation.
PULP AND FIBRE BUSINESS
The centralised Clonal Production Centre (CPC) produced 75 Lakh clonal plantlets for use in various planting programmes like farm forestry, agroforestry, and social forestry. Emphasis was on distribution of site specific, high yielding and diseases resistant clonal plants, to encourage plantation to support wood supply to pulp plant in future years.
The Pulp R&D capabilities are relatively small, and, until recently, have focused on local Domsjo speciality product developments. They have had significant successes in this area with the commercial demonstration of higher priced, speciality pulp products for high strength filament rayon applications and food casing products. The group has also been expanding their work, in conjunction with the Pulp CTC and local contract R&D resources, co-located at different sites, to improve viscosity control during pulp manufacture. Improved viscosity control is a key to further VSF quality enhancements. The Pulp R&D group has also worked across the network of pulp sites to improve the application uniformity and cost of additives critical to viscose manufacturing performance. Key additional areas of focus for future work include: quality enhancements through continued advances in viscosity control and reductions in pulp contaminant levels, cost reduction through process developments lowering chemical costs, improving wood yields, increasing plant productivity and improvements, leading to more uniform viscose processing, technologies for improved environmental performance.
With an objective of guiding improvement in product quality towards global benchmark quality levels, a Quality Initiative based on Six Sigma techniques starting with monitoring of the First Pass Yield (FPY) was launched in the year 2012-13. While customer experience has improved with implementation of FPY across all lines, a classification criteria based on customer experience is being developed for distinguishing fibre production lines that still need further improvement. This will involve relating process capability of customer and fibre production processes. Further, an Uptime metric has been designed to focus on equipment reliability that determines consistency of material flow, impacting both the fibre properties and the plant effectiveness.
Further, the pulp and fibre plants are being connected seamlessly through digitisation initiative. Such access to the feed pulp quality data will help the fibre plants to accordingly adjust the processes in real-time. While this will help enhance product consistency at fibre plant, knowledge of this will provide as feedback to pulp plant to further enhance customer critical attributes.
For VSF fibre production facilities, raw material and energy consumption reductions are the prime focus areas for improving production costs in existing processes. Commercial implementation of technologies previously developed have allowed us to meet the improvement targets we set last year. Technology advances, in further reducing raw material utilisation, have been demonstrated at the Fibre Research Centre (FRC) facility, thereby laying the groundwork for implementing new targets for next year. Value-added product developments continue to fill and move through our pipeline. New programmes aimed at improving fibre quality and performance are leading to advances for these more environmentally friendly products, which reduce waste effluent and water consumption down the value chain.
The Textile Research and Applications Development Centre (TRADC) continues as an important contributor to the business development process across the fashion seasons. TRADC creates and fabricates new product concepts and styles highlighting the unique values that VSF offers, enabling Marketing to create ongoing excitement for these products. Increased knowledge of these properties has been used to design and position with customers, new offerings for sportswear and home textiles. The launch of Modal Liva Creme, one of these developments, was supported with a technical bulletin, which communicates the quantitative benefits of this concept to customers and down-stream value chain partners, which supports their marketing programmes.
Progress was made toward the in-house technology development initiative for the Excel® project. Optimum pulp characteristics and process parameters for improving the fibre mechanical properties were also identified. In addition, basic data were developed to achieve step-change improvements in the solvent recovery area.
Enabling Capabilities
In Pulp and Fibre Business, significant laboratory, semiworks and commercial scale-up capabilities have been put in-place. A very capable group of research professionals from multiple disciplines have been hired and developed into an effective team able to carry out independent development projects. The business is now beginning to realise significant benefits from this innovation capability through the recent commercialisation of new Pulp and VSF technologies. The continuing development of basic data supporting existing and future Excel production facilities provides the basis for this step-change technology capability. We continue to improve our programme portfolio and its execution in collaboration with the Operations and Marketing teams to better support the business objectives.
CHEMICAL BUSINESS
Your Companyâs Chemical business puts equal focus on performance engines and innovation initiatives. To ensure right balance, dedicated resources are deployed for innovative initiatives whereever required and shared, resources are deployed where it is necessary to have interdependencies.
Performance engines focus on business performance for growth and competitive advantage through rigorous and robust review mechanism for improvements on energy, environment and resource conservation. These include:
i) technology upgradation to 6th generation electrolysers
ii) timely replacement of key spares through predictive and pro-active maintenance practices;
iii) resource conservations and water through the usage of washer and super washed salt a major raw material; and
iv) improving the efficiencies of ethical drives and mechanical drives and utilities, such as water through recycling and steam by installation of CPUs (Condensate polishing units)
Innovation initiatives focus on new product developments based on market intelligence and market feedback, prospectively, and product variants based on specific segments of customers feedback. These include Chlor Alkali as well as valued-added products from Chlorine
i) recovery of product from Liquid wastes of phosphoric acid such as calcium chloride;
ii) elimination of barium carbonate and recovery sodium sulphate from brine stream and developing;
iii) PAC, SBP and Chlorine gas for new applications for handling water and waste water for dye industry, pulp and paper industry, sewage treatment and municipal waste waters; and
iv) product variants of chlorinated paraffins to meet different segments and specific customers based on the specific quality requirements.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR, TO WHICH THE FINANCIAL STATEMENT RELATES, AND THE DATE OF THE REPORT
Except as disclosed elsewhere in this Report, no material changes and commitments, which could affect the Companyâs financial position, have occurred between the end of the financial year of the Company and the date of this Report.
PARTICULARS OF EMPLOYEES
In accordance with the provisions of Section 197(12) of the Act, read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees drawing remuneration in excess of the limits, set off in the aforesaid Rules, are to be set out in the Boardâs Report, as an annexure thereto. In line with the provisions of Section 136(1) of the Act, the Report and Accounts, as set out therein, are being sent to all the Members of your Company, excluding the aforesaid information about the employees. Any Member, who is interested in obtaining these particulars about employees, may write to the Company Secretary at the Registered Office of your Company. The aforesaid addendum is also available for inspection by the members at the Registered Office of the Company 21 days before the AGM and upto the date of the ensuing AGM, during business hours on working days.
Disclosures pertaining to remuneration and other details, as required under Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are given in Annexure âHâ to this Report.
EMPLOYEE STOCK OPTION SCHEMES (ESOS)
Your Company has Employee Stock Option Scheme-2006 (ESOS-2006) and Employee Stock Option Scheme-2013 (ESOS-2013) which provides for grant of Stock Options and/or Restricted Stock Units (RSUs) to eligible employees of the Company.
The Shareholders have approved ESOS-2006 through postal ballot on 20th January 2007, and ESOS-2013 at the 66th Annual General Meeting of the Company held on 17th August 2013.
The details of Employee Stock Options granted pursuant to ESOS-2006 and the Employee Stock Options and RSUs granted pursuant to ESOS-2013, as also the other disclosures in compliance with the provisions of the Securities and Exchange Board of India (Employee Share Based Employee Benefits) Regulations, 2014, are available on the Companyâs website, www.grasim.com.
A certificate from M/s. G. P Kapadia & Co., Chartered Accountants, the Statutory Auditors, on the implementation of your Companyâs Employee Stock Option Schemes will be placed at the ensuing AGM for inspection by the Members, and a copy will also be available for inspection at the Registered Office of the Company.
HUMAN RESOURCES
Your Company believes that its knowledge capital will drive growth and profitability. Your Company enjoys a strong brand image as a preferred and caring employer. The ongoing focus is on attracting, retaining and engaging talent with the objective of creating a robust talent pipeline at all levels. Value-based HR programmes have enabled your Companyâs HR team to be strategic partners for the business. Your Company laid stress to build a women-friendly workplace by introducing various initiatives around development and progression of women employees in the organisation. Your Company has focused on internal talent and nurture them through the culture of continuous learning and development, thereby building capabilities for creating future leaders. Your Company continues to work to strengthen the âWorld of Opportunitiesâ employee positioning initiatives like a hiring freeze at some levels, robust talent review, career development conversations and best-in-class development opportunities, which will help to enhance the employee experience at your Company.
The Groupâs Corporate Human Resources plays a critical role in your Companyâs talent management process.
AWARDS AND ACCOLADES
Some of the significant accolades earned by your Company during the year include:
- Oeko-Tex Certificate for Eco-labelling of Fibre by M/s. British Textiles Technology Group, England;
- Frost & Sullivanâs Sustainability 4.0 Awards, 2016, for excellence in Sustainable Development for Safety Excellence & Challengers Category;
- Accreditation from Energy Management System as per EnMS ISO 50001:2011 Standards by TUV Nord, Germany;
- Manufacturing Today Awards - 2016 under the category of âLarge - Excellence in Technologyâ
- âCertificate of Recognitionâ by Regulators & Policymakers Retreat under the category of âInnovation - 2016-2017â
GENERAL
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:
1. Issue of equity shares with differential rights as to dividend, voting or otherwise;
2. Issue of shares (including sweat equity shares) to employees of the Company under any Scheme save and except ESOS referred to in this report;
3. There were no revisions in the financial statements;
4. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and the Companyâs operations in the future; and
5. No cases or complaints were filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
ACKNOWLEDGEMENTS
Your Directors express their deep sense of gratitude to the banks, financial institutions, stakeholders, business associates, Central and State Governments for their cooperation and support, and look forward to their continued support in future.
We very warmly thank all of our employees for their contribution to your Companyâs performance. We applaud them for their superior levels of competence, dedication and commitment to your Company.
For and on behalf of the Board
Kumar Mangalam Birla
Chairman
(DIN: 00012813)
Mumbai, 8th July 2017
Mar 31, 2015
TO THE MEMBERS OF GRASIM INDUSTRIES LIMITED
The Directors take pleasure in presenting the 68th Annual Report
together with the Audited Financial Statements of your Company for the
financial year ended 31st March 2015.
FINANCIAL HIGHLIGHTS
(Rs. Crore)
Consolidated Standalone
2014-15 2013-14 2014-15 2013-14
Revenue from Operations
(Net) 32,847.34 29,323.34 6,332.58 5,603.50
Profit before Interest,
Depreciation/ Amortization
and Tax (PBIDT) 5,683.42 5,491.02 1,013.04 1,246.12
Less: Finance Costs 667.39 447.32 39.33 41.52
Less: Depreciation and
Amortisation 1,563.22 1,457.48 262.55 219.61
Profit Before Exceptional
Item and Tax 3,452.81 3,586.22 711.16 984.99
Exceptional Item (9.46) - (26.24) -
Profit Before Tax (PBT) 3,443.35 3,586.22 684.92 984.99
Tax Expense 1,015.92 734.79 155.02 89.00
Profit After Tax (PAT) 2,427.43 2,851.43 529.90 895.99
Add: Share in Profit/
(Loss) of Associates 154.23 102.87 - -
Less: Minority Interest 837.86 882.76 - -
Profit for the Year 1,743.80 2,071.54 529.90 895.99
Balance brought forward
from Previous Year 166.46 788.09 1,545.04 1,549.40
Dilution of stake in
Joint Venture/Associate (6.26) - - -
Depreciation charged
to Surplus* (58.71) - (9.25) -
Surplus Available for
Appropriation 1,845.29 2,859.63 2,065.69 2,445.39
Appropriations:
Reserve Fund 0.37 0.57 - -
General Reserve 954.52 2,503.68 200.00 700.00
Debenture Redemption
Reserve 130.29 (56.50) - -
Proposed Dividend 165.50 192.87 165.37 192.87
Corporate Dividend Tax 33.61 49.43 3.37 7.48
Legal Reserve 0.15 - - -
Share of Appropriation
related to Associates 8.10 3.12 - -
Balance carried to Balance
Sheet 552.75 166.46 1,696.95 1,545.04
1,845.29 2,859.63 2,065.69 2,445.39
* Carrying value of the assets whose useful life is already exhausted
as on 1st April 2014, has been recognised in Surplus as per statement
of Profi t & Loss (Net of Deferred Tax) as per Schedule II to the
Companies Act, 2013
DIVIDEND
For the year under review, your Directors have recommended a dividend
of Rs. 18/- per equity share of Rs. 10/- each. The dividend, if
approved by the members, would involve a cash outfl ow of Rs. 168.7
Crore (inclusive of Corporate Dividend Tax).
STRATEGIC INITIATIVES
Your Company''s strategic intent continues to be strengthening of its
leadership position in both the Viscose Staple Fibre (VSF) and Cement
businesses.
In this regard, signifi cant progress has been made on its
expansion/acquisition plans.
As the Management Discussion and Analysis section, which forms part of
the Annual Report, focuses on your Company''s strategies for growth and
the performance review of the businesses/ operations in depth, we are
providing only a brief overview of these matters in this Report.
Growth Plans implemented / initiated during the year ended 31st March
2015
During the year under review, your Company has commissioned the Greenfi
eld VSF Project (120K TPA) at Vilayat in Gujarat, thereby enhancing its
total capacity to 498K TPA. Of the four lines, two lines (43K TPA) are
geared to produce specialty fi bre. This will enable ramping up of VSF
volumes and will also augment your Company''s presence into the
specialty fi bre market.
The Board of Directors of your Company has approved the amalgamation of
Aditya Birla Chemicals (India) Limited (ABCIL) with your Company w.e.f.
1st April 2015, subject to requisite shareholders, court and regulatory
approvals. ABCIL is one of the leading Chlor-Alkali companies in India
with an installed capacity of ~293K TPA of caustic soda. Upon the
effectiveness of the Scheme of Amalgamation, your Company''s total
caustic soda capacity will stand enhanced at 804K TPA. The merger will
allow your Company to strengthen its existing portfolio of VSF,
Chlor-Alkali & allied chemicals and textiles by bringing in
Chlor-Alkali and value added product business of ABCIL.
In Cement Business, your Company''s subsidiary, UltraTech Cement Limited
(UltraTech) completed the acquisition of the Gujarat units (4.8 Mn.
TPA) of Jaypee Cement Corporation Limited (JCCL) in June 2014, at an
enterprise value of Rs. 3,800 Crore, besides the actual net working
capital at closing.
During the year under review, UltraTech commissioned cement capacity of
1.4 Mn. TPA, clinker capacity of 2.0 Mn. TPA and Captive Power Plants /
Waste Heat Recovery System aggregating 72.5 MW.
Further, UltraTech has entered into an agreement with Jaiprakash
Associates Limited (JAL) for acquiring JAL''s Cement business at Bela
and Sidhi in Madhya Pradesh, consisting of Cement capacity of 4.9 Mn.
TPA and Thermal Power Plant of 180 MW. On completion of the ongoing
expansion projects and acquisition of JAL''s business as stated above,
the total capacity of UltraTech will stand expanded from 63.2 Mn. MT to
74.8 Mn. MT per annum.
PERFORMANCE REVIEW
In VSF, the global weakening of competing fi bres (Polyester and
Cotton) and the current overcapacity scenario, especially in China,
exerted pressure on realizations. The impact was partially offset by
lower pulp cost.
In Cement, the prices in the industry were under pressure due to
sluggish demand. Input material and logistic costs continued to rise
during the year. UltraTech reported net revenue for the year at Rs.
24,349 Crore, which was up by 12%, over the previous year. UltraTech''s
PBIDT was up by 10% at Rs. 4,776 Crore, while the increase in fi nance
cost and tax expenses resulted in lower PAT of Rs. 2,098 Crore.
Your Company''s Consolidated revenue rose by 12% from Rs. 29,323 Crore
to Rs. 32,847 Crore. Volumes grew in all the businesses led by
expansions and acquisitions. PBIDT grew by 4% at Rs. 5,683 Crore with
improved performance from Cement and Chemical businesses. Net profi t
for the year was Rs. 1,744 Crore as against Rs. 2,072 Crore in the last
year as a result of higher interest, depreciation and tax expense.
Your Company''s Standalone revenue stood at Rs. 6,333 Crore vis-Ã -vis
Rs. 5,604 Crore in the previous year. Depreciation increased due to
commissioning of VSF plant at Vilayat. Tax expense which was lower at
Rs. 89 Crore in the last year due to tax holiday for newly commissioned
power plant, increased to Rs. 155 Crore during the year. Net profi t
was at Rs. 530 Crore as against Rs. 896 Crore.
SALE OF CONSUMER PRODUCT DIVISION
During the current fi nancial year 2015-16, your Company has sold its
Consumer Products Division (the Division) to Future Consumer Enterprise
Limited on a slump sale basis for a total consideration of Rs. 10.03
Crore, w.e.f. 16th July 2015. The Division was engaged in the
manufacture of Face Care Wipes, Baby Wipes and other products in the
Baby/ House care segments and for the fi nancial year 2014-15 its net
sale was at Rs. 9.52 Crore.
FINANCE
During the year under review, your Company raised Long Term Rupee Loan
of Rs. 36 Crore for fi nancing modernization of its VSF plant at Nagda
in Madhya Pradesh. Term loans aggregating Rs. 152 Crore were repaid
during the year.
Your Company has adequate liquidity and a strong Balance Sheet. CRISIL
Limited (CRISIL) and Credit Analysis & Research Limited (CARE) have
re-affi rmed the ratings of "CRISIL AAA/Stable" and "CARE AAA"
respectively, for your Company''s long term borrowings and "CRISIL A1 "
and "CARE A1 " respectively, for your Company''s short term borrowings.
DEPOSITS
During the year under review, the Company has not accepted or renewed
any amount falling within the purview of provisions of Section 73 of
the Companies Act, 2013 (the Act) read with the Companies (Acceptance
of Deposits) Rules, 2014. Hence, the requirement for furnishing details
of deposits which are not in compliance with Chapter V of the Act is
not applicable.
SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES
During the year under review, Aditya Birla Power Ventures Limited, a
wholly owned subsidiary of the Company, ceased to be a subsidiary of
the Company. No company has become/ ceased to be a joint venture or
associate of the Company during the fi nancial year 2014-15.
In accordance with Section 129(3) of the Act read with the Companies
(Accounts) Rules, 2014, a statement containing salient features of the
fi nancial statements of the subsidiaries, associate and joint venture
companies in Form AOC-1 is given in Annexure ''A'' to this Report. The
audited accounts / fi nancial statements in respect of each of the
Subsidiary Companies are available on the Company''s website,
www.grasim.com. Any Member, who is interested in obtaining a copy of
the Audited Financial Statements of your Company''s subsidiaries, may
write to the Company Secretary at the Registered Offi ce of your
Company.
The Company has framed a Policy for determining material subsidiaries,
which has been uploaded on the Company''s website www.grasim.com.
CONSOLIDATED FINANCIAL STATEMENT
In accordance with the Act, read with the Companies (Accounts) Rules,
2014 and Accounting Standard (AS)-21 on Consolidated Financial
Statements read with AS-23 on Accounting for Investments in Associates
and AS-27 on Financial Reporting of Interest in Joint Ventures, the
Audited Consolidated Financial Statement is provided in the Annual
Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Act, in relation to the Audited
Financial Statements of the Company for the year ended 31st March 2015,
the Directors of your Company hereby state that:
a. in the preparation of the Annual Accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures, if any;
b. the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates 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 fi nancial year and of the profi t of
the Company for that period;
c. the Directors have taken proper and suffi cient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
d. the Directors have prepared the Annual Accounts of the Company on a
''going concern'' basis;
e. the Directors have laid down internal fi nancial controls to be
followed by the Company and that such internal fi nancial controls are
adequate and are operating effectively; and
f. the Directors have devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
MANAGEMENT''S DISCUSSION & ANALYSIS REPORT
Management''s Discussion & Analysis Report for the year under review, as
stipulated under Clause 49 of the Listing Agreement with the Stock
Exchanges in India, is presented in a separate section forming part of
the Annual Report.
CORPORATE GOVERNANCE
Your Directors reaffi rm their continued commitment to good corporate
governance practices. During the year under review, your Company was in
compliance with the provisions of Clause 49 of the Listing Agreement
with the Stock Exchanges relating to Corporate Governance.
The compliance report is provided in the Corporate Governance section
of the Annual Report. The Auditors'' Certifi cate on compliance with the
provisions of Clause 49 of the Listing Agreement is given in Annexure
''B'' to this Report.
BUSINESS RESPONSIBILITY REPORT
As per Clause 55 of the Listing Agreement with the Stock Exchanges, a
separate section of Business Responsibility Report describing the
initiatives taken by the Company from environmental, social and
governance perspective forms part of the Annual Report.
CORPORATE SOCIAL RESPONSIBILITY
In terms of the provisions of Section 135 of the Act read with
Companies (Corporate Social Responsibility Policy) Rules, 2014, the
Board of Directors of your Company has constituted a Corporate Social
Responsibility (CSR) Committee which is chaired by Mrs. Rajashree
Birla. The other Members of the Committee are Mr. B. V. Bhargava, Mr.
Shailendra K. Jain and Mr. K. K. Maheshwari. Dr. Pragnya Ram, Group
Executive President, Corporate Communication & CSR is a permanent
invitee to the Committee. The Committee has formulated and recommended
to the Board a Corporate Social Responsibility Policy (CSR Policy)
indicating the activities to be undertaken by the Company, which has
been approved by the Board and the same is available on your Company''s
website, www.grasim.com.
The Company is a caring corporate citizen and lays signifi cant
emphasis on development of the host communities around which it
operates. The Company, with this intent, has identifi ed several
projects relating to Social Empowerment & Welfare, Infrastructure
Developments, Sustainable Livelihood, Health Care and Education during
the year and initiated various activities in neighboring villages
around its plant locations. The work on several initiatives has picked
up momentum during the year, resulting in a spend of Rs. 16.71 Crore
(1.69% of the average net profi ts of the last 3 years as defi ned for
the purposes of CSR). The Company has identifi ed promotion and
development of handloom, handicrafts, and related projects, the work on
which was started last year and will be intensifi ed in the current
year.
The Annual Report on CSR activities is given in Annexure ''C'' to this
Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year under review, Members approved the appointment of Mr.
Cyril Shroff (DIN: 00018979), Mr. B. V. Bhargava (DIN: 00001823), Dr.
Thomas M. Connelly Jr. (DIN: 03083495), Mr. M. L. Apte (DIN: 00003656)
and Mr. R. C. Bhargava (DIN: 00007620) as Independent Directors of the
Company, for a period of fi ve consecutive years with effect from 6th
September, 2014, whose offi ces are not liable to retire by rotation.
The Company has received declarations from all the Independent
Directors of the Company confi rming that they meet the criteria of
independence as prescribed under the Act and Clause 49 of the Listing
Agreement with the Stock Exchanges.
Mr. D. D. Rathi resigned as a Director of the Company with effect from
25th September 2014 due to preoccupation. Your Board has placed on
record its deep appreciation of the valuable services rendered by Mr.
Rathi during his association with the Company.
Mr. O. P. Rungta (DIN: 00020559) was appointed as an Additional
Director and an Independent Director of the Company for a period of fi
ve consecutive years w.e.f. 25th September, 2014, subject to the
approval of the Members. As per Section 161 of the Act, Mr. Rungta
being an Additional Director, holds offi ce upto the date of the
ensuing Annual General Meeting (AGM) and is eligible to be appointed a
Director of the Company. The Company has received a notice in writing
from Mr. Rungta along with the deposit of requisite amount under
Section 160 of the Act signifying his candidature for the offi ce of
the Director of the Company. The resolution seeking Mr. O. P. Rungta''s
appointment has been included in the Notice of the AGM together with
his brief details. Your Directors commend the Resolutions for your
approval.
In accordance with the provisions of the Act and the Articles of
Association of the Company, Mr. Kumar Mangalam Birla (DIN: 00012813)
and Mr. N. Mohan Raj (DIN: 00181969), Directors of the Company, will
retire by rotation at the Company''s ensuing AGM and being eligible,
have offered themselves for re-appointment. Resolutions seeking their
appointment together with their brief profi le have been included in
the Notice of the AGM. Your Directors commend the Resolutions for your
approval.
The Board has accepted the request of Mr. Adesh Kumar Gupta for an
early retirement with effect from the close of business hours on 30th
June 2015, from the offi ce of the Whole-time Director & Chief
Financial Offi cer, to pursue some of his areas of personal interest
beyond business. Mr. Gupta ceased to be a Whole Time Director & Chief
Financial Offi cer and Director on the Board of the Company with effect
from 30th June 2015. Mr. Gupta had been with the Group for 36 years
and has made an exceptional contribution to various businesses in a
variety of roles and capacities. The Board places on record its deep
appreciation of Mr. Gupta''s contribution to the Group, spanning over
three decades.
Subject to the approval of the shareholders, the Board has on the
recommendation of the Nomination and Remuneration Committee appointed
Mr. Sushil Agarwal (DIN: 00060017) as an Additional Director and Whole
Time Director & Chief Financial Offi cer (CFO) of the Company for a
period of fi ve years, w.e.f. 1st July 2015. As an Additional
Director, Mr. Sushil Agarwal holds offi ce upto the date of the ensuing
AGM and is eligible to be appointed a Director of the Company. The
Company has received a notice from Mr. Sushil Agarwal along with the
requisite deposit signifying his candidature for appointment as the
Director at the ensuing AGM. The resolution seeking Mr. Sushil
Agarwal''s appointment has been included in the Notice of the AGM
together with his brief details. Your Directors commend the Resolution
for your approval.
A brief resume of the Directors being appointed / re-appointed forms
part of the Notice of the ensuing AGM.
Mr. Adesh Kumar Gupta, who was the Whole-time Director & CFO of your
Company up to 30th June 2015, was paid sitting fees of Rs. 2.30 Lakh by
UltraTech for attending its Board meetings and commission of Rs. 1.00
Lakh will be paid by UltraTech, subject to the approval of its
shareholders. Barring this, none of the managerial personnel of the
Company is in receipt of remuneration / commission from the subsidiary
companies of the Company.
Mrs. Hutokshi Wadia was appointed as a Key Managerial Personnel
designated as Sr. Vice President and Company Secretary of the Company
in place of Mr. Ashok Malu, with effect from 1st March 2015.
In terms of the provisions of Section 203 of the Act, Mr. K. K.
Maheshwari, Managing Director, Mr. Sushil Agarwal, Whole-time Director
& CFO and Mrs. Hutokshi Wadia, Sr. Vice President & Company Secretary
are the Key Managerial Personnel of your Company.
FORMAL ANNUAL EVALUATION
Pursuant to the provisions of the Act and Clause 49 of the Listing
Agreement, a Framework of the Board Performance Evaluation has been
formulated. In terms of this Framework, the Nomination and
Remuneration Committee and the Board has carried out an annual
performance evaluation of its own performance, the performance of the
various Committees of the Board, individual Directors and the Chairman.
The manner in which the evaluation has been carried out has been
explained in the Corporate Governance Report
The details of programme for familiarization of the Independent
Directors of your Company are available on your Company''s website,
www.grasim.com.
REMUNERATION POLICY
The Board has, on the recommendation of the Nomination and Remuneration
Committee, formulated the Remuneration policy of your Company which is
given in Annexure ''D'' to this report.
COMMITTEES OF THE BOARD
AUDIT COMMITTEE
The Board has constituted an Audit Committee comprising of Mr. B. V.
Bhargava, Mr. R. C. Bhargava and Mr. M. L. Apte as its members. The
Managing Director and Whole Time Director & CFO are the permanent
invitees to the meetings of the Audit Committee. Further details
relating to the Audit Committee are provided in the Corporate
Governance Report forming part of this Annual Report.
All the recommendations made by the Audit Committee during the year,
were accepted by the Board of Directors of the Company.
NOMINATION AND REMUNERATION
COMMITTEE
The Board has constituted a Nomination and Remuneration Committee
comprising of Mr. M. L. Apte, Mr. Cyril Shroff and Mr. Kumar Mangalam
Birla as its members. Further details relating to the Nomination and
Remuneration Committee are provided in the Corporate Governance Report
forming part of this Annual Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Board has constituted a Corporate Social Responsibility Committee
comprising of Mrs. Rajashree Birla, Mr. B. V. Bhargava, Mr. Shailendra
K. Jain and Mr. K. K. Maheshwari as its members. Further details
relating to the Corporate Social Responsibility Committee are provided
in the Corporate Governance Report forming part of this Annual Report.
STAKEHOLDERS'' RELATIONSHIP COMMITTEE
The Board has constituted a Stakeholders'' Relationship Committee
comprising of Mr. B. V. Bhargava, Mr. M. L. Apte, Mr. Cyril Shroff and
Mr. Sushil Agarwal (w.e.f. 7th August 2015) as its members. Further
details of the Stakeholders'' Relationship Committee are provided in the
Corporate Governance Report forming part of this Annual Report.
RISK MANAGEMENT
The Board has constituted a Risk Management Committee to review the
risk management plan/ process of your Company which was hitherto being
carried out by the Audit Committee. The Risk Management Committee
identifi es potential risks, assesses their potential impact and takes
timely action to mitigate the same. The Company has a comprehensive
risk management policy / framework which is reviewed by the Audit
Committee / Risk Management Committee. More details on risk management
are covered in the Management Discussion and Analysis forming part of
this Annual Report.
RELATED PARTY TRANSACTIONS
During the fi nancial year under review, all contracts/ arrangements /
transactions entered into by your Company with Related Parties were on
arm''s length basis and in the ordinary course of business. The Company
has not entered into contracts / arrangements / transactions with
Related Parties which could be considered material in accordance with
Section 188 of the Act read with the Companies (Meetings of Board and
its Powers) Rules, 2014 and the Policy of the Company on Related Party
Transactions. All Related Party transactions have been approved by the
Audit Committee of your Company.
The Policy on Related Party Transactions as approved by the Board is
available on your Company''s website, www.grasim.com.
Since all the contracts / arrangements / transactions with Related
Parties during the year under review, were in the ordinary course of
business and at arm''s length and were not considered material,
disclosure in Form AOC-2 under Section 134(3)(h) of the Act read with
Companies (Accounts of Companies) Rules, 2014, is not applicable. The
details of contracts and arrangement with Related Parties of your
Company for the fi nancial year ended 31st March, 2015 are given in
Note 4.5 to the Financial Statements of your Company.
INTERNAL FINANCIAL CONTROLS
The Internal Financial Controls designed and implemented by the Company
are commensurate with the size of its operations. During the year under
review, no material or serious observation has been received from the
Auditors of the Company citing ineffi ciency or inadequacy of such
controls.
AUDITORS AND AUDIT REPORTS
STATUTORY AUDITORS
Pursuant to the provisions of Section 139 of the Act and the Companies
(Audit and Auditors) Rules, 2014, Deloitte Haskins & Sells LLP, Mumbai
and M/s G. P. Kapadia & Co., Mumbai, the Joint Statutory Auditors of
the Company, hold offi ce upto the conclusion of the ensuing AGM and
are eligible for re-appointment. The consent of the Auditors and
certifi cate u/s 139 of the Act have been obtained from each of the
Auditors to the effect that their re-appointment, if made, would be in
accordance with the prescribed conditions and that they are eligible to
hold the offi ce of the Auditors of the Company.
The observations made by the Statutory Auditors on the Financial
Statements of the Company, in their Report for the fi nancial year
ended 31st March 2015 read with the explanatory notes therein, are
self-explanatory and therefore, do not call for any further explanation
or comments from the Board under Section 134(3)(f) of the Act. The
Auditors'' Report does not contain any qualifi cation, reservation or
adverse remark.
BRANCH AUDITORS
M/s Vidyarthi & Sons, Branch Auditors for Vikram Woollens Division,
hold offi ce upto the conclusion of the ensuing AGM. M/s Vidyarthi &
Sons have expressed their inability to continue as Branch Auditors and
accordingly, their appointment is not being considered. The Statutory
Auditors of the Company will carry out the audit of the said Division.
COST AUDITORS
Pursuant to the provisions of Section 148 of the Act read with the
Companies (Cost Records and Audit) Rules, 2014, as amended, Notifi
cations/ Circulars issued by the Ministry of Corporate Affairs from
time to time, your Board has appointed M/s. R. Nanabhoy & Co., Cost
Accountants, Mumbai, as the Cost Auditors to conduct the cost audit of
the Company for the fi nancial year 2015-16 at a remuneration as
mentioned in the Notice convening the AGM. Post the merger of ABCIL
with your Company, M/s R. Nanabhoy & Co. will also conduct Cost Audit
of the Units of ABCIL.
SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 read with the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, of
the Act, the Company had appointed M/s BNP & Associates, Company
Secretaries, Mumbai to conduct secretarial audit for the fi nancial
year 2014-15. The Secretarial Audit Report issued by M/s. BNP &
Associates, Company Secretaries for the fi nancial year 2014- 15 forms
part of this Report and is set out in Annexure ''E'' to this Report. The
Secretarial Audit Report does not contain any qualifi cation,
reservation or adverse remark.
RESEARCH AND DEVELOPMENT
While continuing to build our technology capabilities during FY
2014-15, we turned most of our efforts to executing a portfolio of
technology projects aimed at addressing competitive market challenges
in the areas of product quality, cost reduction and new product
offerings.
PULP & FIBRE PLANTS
Program Portfolio
Your Company recently commissioned state-of- the-art clonal sapling
production facility, which is currently operating at full capacity and
will go a long way in supporting your Company''s plan to ensure pulpwood
availability for long term sustainability and meeting the ever growing
demand for high quality saplings from the farming community. It also
aids in making farm forestry an attractive and sustainable land use
option to improve the productivity & profi tability of pulpwood
plantations.
Pulp and Fibre plants are implementing Statistical Process Control
(SPC) and Six Sigma based continuous improvement techniques to improve
product quality. The concept of Uptime has been adopted across several
fi bre sites. It measures the ability of a process to provide name
plate capacity at intended design conditions, and identifi es chronic
mechanical conditions, leading to process disturbances, for root cause
analysis and resolution by maintenance teams. This approach of
combining SPC and Uptime has signifi cantly improved quality and
consistency of our product.
Cost reduction efforts focus on reducing raw material and energy
consumption in the existing processes. Our emphasis is on the
development and commercialization of these advances through technology
networks across the fi bre and pulp sites. Reducing consumption ratios
for raw materials is a key focus area including ways to utilize waste
heat and reduce steam consumption. New fi nishes have been developed to
address foaming and fi bre wetting issues enabling growth in non-woven
markets.
The Excel® lyocell project, developing alternative fi bre process
concepts with superior environmental performance, continues with
in-house technology developments and engagement of external knowledge
network partners. The Technology organization is increasing its
process, product and applications development portfolios to expand its
impact on the quality, cost, differentiated products and new business
development strategies aimed at improved business performance and
growth.
Enabling Capabilities
At your Company''s joint venture, Domsjo''s pulp R&D team is improving
process and pulp performance. Alternative additive technologies
leading to improved viscose uniformity and lower costs are under
development. The Pulp and Fibre Innovation Centre (PFIC) at Taloja and
the Birla Research Institute (BRI) are utilizing bench-scale
capabilities to explore new, high-value product concepts and improved
processes. It has collaborative support from Aditya Birla Science &
Technology Company Pvt. Ltd. (ABSTCPL): corporate R&D with advanced
facilities and skills in areas such as analytical science, materials,
process and design engineering, modelling and control technologies. The
Textile Research and Application Development Centre (TRADC) at Kharach
is engaged in developments in downstream processing of the fi bres into
yarns and fabrics. Working closely with the business development team,
it has enhanced the innovative component of its proactive fabric
collections offered to customers.
The technology talent pool has been increasing with the addition of
skilled R&D professionals with diverse backgrounds, capabilities and
experience. We now have a core team of R&D professionals actively
engaged in important technology programs and initiatives. External
knowledge networks are continuing to be developed to complement
internal capabilities, and are actively contributing to advanced
technologies in the areas of cellulose pulp and novel new fi bres.
In summary, signifi cant milestones have been achieved in the areas of
program portfolio development and execution, infrastructure project
execution, staff development, and the creation of the overall R&D
function operating systems.
CHEMICAL BUSINESS
Your Company''s Chemical business has set up a pilot scale plant based
on Oxygen Depolarization Cathode (ODC) technology with different
generation''s anode and cathode elements. This gives us an idea about
how each generation will have current and voltage requirement. In this
pilot plant, hydrogen generation is there by consuming only 70% of the
power consumption as compared to the conventional Membrane cell
technology. However, pure liquid oxygen is used for reduction of power
consumption. This technology has been established and in second phase,
experiments are being carried to use PSA generated oxygen gas in place
of liquid oxygen to optimize the higher cost of liquid oxygen.
The business has also fi nalized to set up a pilot lab scale
electrolyzer in collaboration with ThyssenKrupp Udhe Chlorine Engineers
GmbH, Germany who are the pioneers in the Chlor- Alkali technology
development and technology suppliers of latest state of the art
Electrolyzer at ABSTCPL. This facility will provide it with an
opportunity to run the electrolyzer at various current densities with
varying electrolyte parameters which will help in understanding and
applications of processes and scaling the experience & knowledge for
optimizing the performance of plants where similar electrolyzers are in
use for bulk manufacturing.
All the chlor-alkali plants of the Company require high quality brine
which is very critical for Optimum performance of Membrane cell plant.
To support this, it is proposed to install a Pilot brine plant at Nagda
to study the suitability of slat from various sources and also various
conditions / parameters that affect the brine quality. The learning and
experiences can be scaled up and incorporated in the plant sites for
continual improvements.
Demonstrating its commitment for uses of solid wastes, you Company
regularly engages with premier institutes such CSMCRI, Bhavnagar,
Gujarat; MINT, Bhopal, Madhya Pradesh and ICT, Mumbai.
The Centre of Excellence for Application and Product Development in the
fi eld of water and waste water treatment is under establishment at
Vilayat. The Centre envisages to have expertise in mainly three key
areas of water i.e. drinking water, municipal water and industrial
waste water treatment. The activities include identifi cation,
development and characterization of new chemicals and support for
resolution of issues at customer end by identifi cation/ development of
suitable product/application for the issue. The Centre will also be
engaged in analyzing various additives to enhance the functionalities
of existing chemicals and improvement in the existing water treatment
chemicals.
DISCLOSURES
VIGIL MECHANISM / WHISTLE BLOWER POLICY
Your Company has established a robust Vigil Mechanism for reporting of
concerns through the Whistle Blower Policy of the Company. Adequate
safeguards are provided against victimization to those who avail of the
mechanism and access to the Chairman of the Audit Committee in
exceptional cases is provided to them. The details of the Vigil
Mechanism are also provided in the Corporate Governance Report and the
Whistle Blower Policy has been uploaded on the website of the Company
www.grasim.com.
MEETINGS OF THE BOARD
During the year ended 31st March, 2015, fi ve Board Meetings were held,
on 2nd May, 2014, 2nd August, 2014, 29th October, 2014, 31st January,
2015 and 11th February, 2015. Further details on the Board Meetings are
provided in the Corporate Governance Report forming part of the Annual
Report.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Details of loans given, investments made, guarantees given and
securities provided and investments covered under the provisions of
Section 186 of the Act are covered in the Notes to the Financial
Statements.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information relating to the conservation of energy, technology
absorption and foreign exchange earnings and outgo, as stipulated under
Section 134(3)(m) of the Act read with the Companies (Accounts) Rules,
2014, is given in Annexure ''F'' to this Report.
EXTRACT OF ANNUAL RETURN
In accordance with the provisions of Section 134(3) (a) of the Act, an
extract of the Annual Return of the Company for the fi nancial year
ended 31st March 2015 is given in Annexure ''G'' to this Report.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF
THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR
TO WHICH THE FINANCIAL STATEMENT RELATES AND THE DATE OF THE REPORT
Except as disclosed elsewhere in this Report, no material changes and
commitments which could affect the Company''s fi nancial position have
occurred between the end of the fi nancial year of the Company and the
date of this Report.
PARTICULARS OF EMPLOYEES
In accordance with the provisions of Section 197(12) of the Act read
with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014, the names and other particulars
of employees are to be set out in the Board''s Report, as an addendum
thereto. However, in line with the provisions of Section 136(1) of the
Act, the Report and Accounts as set out therein, are being sent to all
Members of your Company excluding the aforesaid information about the
employees. Any Member, who is interested in obtaining these particulars
about employees, may write to the Company Secretary at the Registered
Offi ce of your Company. The aforesaid addendum is also available for
inspection by the members at the Registered Offi ce of the Company 21
days before the AGM and upto to the date of the ensuing AGM during
business hours on working days.
Disclosures pertaining to remuneration and other details as required
under Section 197(12) of the Act read with Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 are
given in Annexure ''H'' to this Report.
EMPLOYEE STOCK OPTION SCHEMES (ESOS)
The Company has Employee Stock Option Scheme 2006 (ESOS-2006) and
Employee Stock Option Scheme 2013 (ESOS-2013) which provides for grant
of Stock Options and/or Restricted Stock Units (RSUs) to eligible
employees of the Company.
The Shareholders have approved ESOS-2006 through postal ballot on 20th
January, 2007 and ESOS-2013 at the 66th Annual General Meeting of the
Company held on 17th August, 2013.
The details of Employee Stock Options granted pursuant to ESOS-2006 and
the Employee Stock Options and RSUs granted pursuant to ESOS-2013, as
also the other disclosures in compliance with the provisions of the
Securities and Exchange Board of India (Employee Share based Employee
Benefi ts) Regulations, 2014 are available on the Company''s website,
www.grasim.com.
A certifi cate from the Statutory Auditor on the implementation of your
Company''s Employees Stock Option Schemes will be placed at the ensuing
AGM for inspection by the Members.
HUMAN RESOURCES
Your Company believes that Human Resources will play a signifi cant
role in its future growth. With an unswerving focus on nurturing and
retaining talent, your Company provides avenues for learning and
development through functional, behavioral and leadership training
programs, knowledge exchange conferences, communication channels for
information sharing to name a few.
The Group''s Corporate Human Resources plays a critical role in your
Company''s talent management process.
AWARDS AND ACCOLADES
Some of the signifi cant accolades earned by your Company during the
year include:
- "SAMMAAN PATRA" for remarkable contribution in the category of
Customs-Imports in fi nancial year 2014-15 from the Government of
India, Ministry of Finance, Department of Revenue, Central, Excise and
Service Tax, Gwalior to Staple Fibre Division, Nagda;
- Grasilene Division was awarded the 1st Prize for "Best Fuel Effi
cient Boiler" category for adopting the Best Safe Practices in the year
2014, by the Karnataka State Safety Institute, Department of Factories,
Boilers, Industrial Safety & Health Bengaluru, Government of Karnataka;
- Runner-up - Best Project of the Year (Medium) category awarded at PMI
(Project Management Institute) India Awards 2014 to the Green Field
Epoxy Project, Vilayat.
- Staple Fibre Division, Nagda, was awarded the "Amity CSR Conclave 14"
Award, conducted under the aegis of the Amity Global Business School,
Indore.
GENERAL
Your Directors state that no disclosure or reporting is required in
respect of the following items as there were no transactions on these
items during the year under review:
1. Issue of equity shares with differential rights as to dividend,
voting or otherwise;
2. Issue of shares (including sweat equity shares) to employees of the
Company under any Scheme save and except ESOS referred to in this
report;
3. There were no revisions in the fi nancial statements;
4. No signifi cant or material orders were passed by the Regulators or
Courts or Tribunals which impact the going concern status and Company''s
operations in the future; and
5. No cases or complaints were fi led pursuant to the Sexual
Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013.
ACKNOWLEDGEMENT
Your Directors express their deep sense of gratitude to the banks, fi
nancial institutions, stakeholders, business associates, Central and
State Governments for their co-operation and support and look forward
to their continued support in future.
We very warmly thank all of our employees for their contribution to
your Company''s performance. We applaud them for their superior levels
of competence, dedication and commitment to your Company.
For and on behalf of the Board
Kumar Mangalam Birla
Chairman
(DIN: 00012813)
Mumbai, 7th August 2015
Mar 31, 2014
Dear Shareholders,
The Directors take pleasure in presenting the 67th Annual Report and
Audited Accounts of your Company for the year ended 31st March, 2014.
The Management Discussion and Analysis Section, forming part of the
Annual Report, focuses on your Company''s strategies for growth and the
performance review of the businesses/operations in depth. So, we are
providing only a brief overview of these matters in this Report.
STRATEGIC INITIATIVES
Your Company''s strategic intent continues to be the strengthening of
its leadership position in both the Viscose Staple Fibre (VSF) and
Cement businesses. In this regard, significant progress has been made
on its expansion/acquisition plans.
Expansion Projects
Your Company''s expansion plan to increase VSF capacity from 334K TPA to
498K TPA is nearing completion. The 36,500 TPA Brownfield expansion at
Harihar in Karnataka has been completed. Trial runs for Line 1 have
commenced at the Greenfield project (120K TPA) at Vilayat in Gujarat
from April 2014, to be followed by trial runs of Line 2 shortly. The
other two lines for specialty fibre are expected to be commissioned in
the 2nd quarter of the current year.
The Caustic Soda plant of 182,500 TPA capacity for backward integration
for VSF plant at Vilayat has been commissioned in May 2013. The
capacity utilisation of the new plant is being ramped up in a phased
manner. Consequently, your Company now has the largest capacity of
452,500 TPA in Chlor- alkali segment in India.
As part of its strategy to increase its downstream value added products
portfolio, a 51,500 TPA Epoxy plant at Vilayat in Gujarat, was
commissioned in December 2013.
Acquisition of 4.8 Mn. TPA Cement Capacity in Gujarat
Your Company''s subsidiary, UltraTech Cement Ltd. (UltraTech), entered
into an agreement to acquire, by way of a demerger, the Gujarat Cement
units (4.8 Mn. TPA) comprising of an integrated cement plant at
Sewagram and a grinding unit at Wanakbori of Jaypee Cement Corporation
Limited (JCCL). The transaction has received the requisite regulatory
approvals from the Competition Commission of India, shareholders,
creditors and the Hon''ble High Courts, and the Scheme is now subject to
the approval of Securities and Exchange Board of India.
Capacity Expansion by UltraTech Cement
UltraTech is implementing capacity expansion projects at its plants in
Chhattisgarh, Karnataka and Rajasthan. The Clinkerisation plants of 3.3
Mn. TPA, each at Raipur in Chhattisgarh and Malkhed in Karnataka, have
already been commissioned along with the grinding capacity at Hotgi in
Maharashtra (1.55 Mn. TPA), Malkhed in Karnataka (1.45 Mn. TPA) and
Jharsuguda in Odisha (1.60 Mn. TPA). The balance grinding facility of
~4.5 Mn. TPA of cement is slated to be commissioned in phases, in FY
14-15. Work on Aditya Cement expansion of 2.9 Mn. TPA at Shambhupura in
Rajasthan, is on track and the capacity is expected to go onstream in
FY 15-16.
On completion of all the expansions and the acquisition, UltraTech''s
cement capacity will increase to 70 Mn. TPA.
FINANCIAL PERFORMANCE
In the VSF business, globally the demand was healthy led by growth in
Asian countries, particularly China. Despite the volume growth, the
business environment continues to remain challenging. The demand supply
imbalance and the liquidity crunch in China have impacted VSF prices in
global markets. Your Company''s sales volume increased by 9% with the
enhanced capacity at Harihar plant. The decline in realisations was
much lower compared to global trends, supported by rupee depreciation.
A steep increase in pulp costs, due to the rupee depreciation and the
increase in wood costs, led to a fall in EBIDTA margins.
In the Cement business, the industry witnessed sluggish demand, given
the slowdown in economic growth leading to lower offtake from
infrastructure projects, real estate sector and capex cycle. The
subdued demand and over-capacity resulted in a price squeeze. The year
witnessed continuing pressure on input and logistics costs, because of
the increase in railway freight and a continuous hike in diesel prices.
Your Company''s subsidiary, UltraTech''s volume growth also remained
subdued at 3%. Optimization of fuel mix and other initiatives helped in
maintaining costs almost at the previous year levels. The decline in
average realizations led to a drop in EBIDTA margins. UltraTech
reported a net profit of Rs. 2,206 crore as compared to Rs. 2,678 crore in
the previous year.
Despite the prevailing economic slowdown, Volumes
have risen in all the businesses, viz., VSF, Chemical and Cement,
driven by the commissioning of new capacities. While Revenue rose by 5%
at Rs. 29,324 crore (Rs. 27,909 crore), Net Profit for the year was lower
at Rs. 2,072 crore, vis-Ã -vis Rs. 2,500 crore (before exceptional item) in
the last year.
Consolidated Standalone
2013-14 2012-13 2013-14 2012-13
Revenue from Operations
(Net) 29,324.04 27,909.34 5,603.50 5,255.01
Profit Before Interest,
Depreciation/Amortisation
and Tax (PBIDT) 5,491.02 6,543.12 1,246.12 1,522.75
Less: Finance Costs 447.32 324.14 41.52 39.09
Less: Depreciation
and Amortisation 1,457.48 1,252.06 219.61 159.21
Profit Before Exceptional
Item and Tax 3,586.22 4,966.92 984.99 1,324.45
Add: Exceptional Item - 204.43 - 204.43
Profit Before Tax 3,586.22 5,171.35 984.99 1,528.88
Tax Expense 734.79 1,467.21 89.00 302.89
Profit After Tax 2,851.43 3,704.14 895.99 1,225.99
Add: Share in Profit/
(Loss) of Associates 102.87 73.65 - -
Less: Minority Interest 882.76 1,073.40 - -
Profit for the Year 2,071.54 2,704.39 895.99 1,225.99
Balance brought
forward from Previous Year 788.09 778.77 1,549.40 662.34
Surplus Available for
Appropriation 2,859.63 3,483.16 2,445.39 1,888.33
Appropriations:
- Reserve Fund 0.57 0.77 - -
- General Reserve 2,503.68 2,424.51 700.00 122.60
- Debenture Redemption
Reserve (56.50) 9.36 - -
- Proposed Dividend 192.87 206.52 192.87 206.52
- Corporate Dividend Tax 49.43 51.75 7.48 9.81
- Share of Appropriation
related to Associates 3.12 2.16 - -
- Balance carried to
Balance Sheet 166.46 788.09 1,545.04 1,549.40
2,859.63 3,483.16 2,445.39 1,888.33
DIVIDEND
Your Directors have recommended a dividend of Rs. 21 per equity share.
The dividend, if approved by the members, would involve a cash outflow
of Rs. 200.35 crore (inclusive of Corporate Dividend Tax).
Equity shares as may be allotted upon the exercise
of Options granted under the Employee Stock Option Schemes and out of
the Share Capital Suspense before the Book Closure for payment of
dividend will rank pari passu with the existing shares and shall also
be entitled to receive the aforesaid dividend.
EMPLOYEE STOCK OPTION SCHEMES (ESOS)
Employee Stock Option Scheme 2006 (ESOS- 2006)
During the year:
11,201 Options were granted;
20,370 Options were vested out of the Options granted in the earlier
years; and
50,438 shares were allotted upon exercise of Options by the concerned
option holders.
Employee Stock Option Scheme 2013 (ESOS- 2013)
A new Employee Stock Option Scheme was formulated during the year,
pursuant to the approval accorded by you at the last Annual General
Meeting held on 17th August, 2013. A total of 1,37,384 Options and
32,985 Restricted Stock Units (RSUs) were granted under the said
Scheme.
The details of Employee Stock Options/RSUs granted pursuant to
ESOS-2006 and ESOS-2013, as also the other disclosures in compliance
with Clause 12 of the Securities and Exchange Board of India (Employee
Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,
1999, are set out in Annexure "A" to this Report.
FINANCE
Your Company raised long-term rupee loan of ? 194 crore for financing
its VSF expansion projects. Term loans aggregating ? 106 crore were
repaid during the year.
Your Company has adequate liquidity and a strong Balance Sheet. CRISIL
Limited (CRISIL) and Credit Analysis & Research Limited (CARE) have re-
affirmed the ratings of "CRISIL AAA/Stable" and "CARE AAA"
respectively, for your Company''s long- term borrowings and "CRISIL A1 "
and "CARE A1 ", respectively, for your Company''s short-term borrowings.
AWARDS AND ACCOLADES
Some of the significant accolades earned by your Company during the
year include:
> "Unnatha Suraksha Puraskara" from the National Safety Council,
Karnataka chapter in recognition of Outstanding Safety Performance and
Management Systems in Pulp, Fibre and Paper Products Category
Industries during 2011-12: Harihar Division.
> "Best CSR Activist of the Year-2013" in the category of Large Scale
Industry from the Federation of Madhya Pradesh Chambers of Commerce &
Industry, Bhopal: Staple Fibre Division, Nagda.
> "SAMMAN PATRA" for remarkable contribution in the category of Customs
in FY 2013-14 from the Government of India, Ministry of Finance,
Department of Revenue, Indore: Staple Fibre Division, Nagda.
RESEARCH AND DEVELOPMENT
Significant progress was made during FY 2013-14 in building the
technology capabilities, to address competitive market threats and
begin laying the groundwork for significant profitable growth.
PULP AND FIBRE PLANTS
Programme Portfolio
Your Company''s fibre and pulp sites have implemented a comprehensive
quality improvement approach centred on instituting statistical process
control and Six Sigma continuous improvement techniques. Process
variation has reduced significantly at the lead sites and best
practices are being shared to accelerate improvements across sites. A
robust customer monitoring and feedback process is in place to assess
site and line quality performance versus competition. It identifies
specific areas for further improvement. Focused R&D and Six Sigma
improvement projects are resolving chronic process and fibre finish
issues. These advances are aimed at significantly enhancing our
customers'' satisfaction levels.
Reducing chemical material and energy requirements in the existing
processes are underway. Strengthened technology networks across the
fibre and pulp sites are accelerating the commercialization of these
advances. Programmes exploring alternative fibre process concepts with
superior environmental performance continue with the active engagement
of external knowledge network partners.
In forestry R&D at Harihar and Laos, the high-skill Control Pollination
(CP) technique was perfected to produce genetic material with desired
traits like high volume and basic density, high cellulosic pulp yield
and low energy consumption. A multi-disciplinary approach to create
sustainable and eco-efficient forestry is ongoing. This includes
programmes in genetic tree improvement, development of site
specific silviculture best practices, integrated pest and disease
management and the use of improved genetic material and management of
genetic diversity at each site.
Enabling Capabilities
Your Company''s Joint Venture, Domsjo''s pulp R&D team is improving its
fibre and process performance. The results to-date are being applied
across the pulp production sites to help optimize performance along the
integrated value chain.
The GRASIM Forestry Research Institute (GFRI) at Harihar has been
strengthened and Tissue Culture (TC) protocols have been modified to
match different genotypes, and species to improve efficiency of micro
propagation process to contribute to better planting stocks for local
wood supplies. The Birla Research Institute for Applied Sciences (for
fibres) at Nagda is focused on accelerating improvements in new fibre
production technologies. The Textile Research and Application
Development Centre (TRADC) at Kharach has ushered novel applications
for fibres to quicken growth and improve overall market position. The
R&D expansion project at Aditya Birla Science & Technology Company Ltd.
(ABSTCL), an associate of your Company at Taloja, is in place. It is
contributing to scaling sophisticated laboratory and semi-works
capabilities for fibre research. The construction of the
semi-commercial scale Fibre Research Centre at Kharach is complete and
a project portfolio has been developed which will contribute
significantly to the fibre process and product R&D programmes in 2014
and beyond. These investments, along with significant increases in R&D
resources and the growing analytical and research support available
through the corporate R&D organisation at Taloja, are integral to your
Company''s growth.
The technology talent pool has been bolstered with the recruitment of
talented R&D professionals with diverse backgrounds, capabilities and
experience, along with exposure to the development of the programme
management processes. A core team of R&D professionals is actively
engaged in various technology programmes and initiatives. Importantly,
external knowledge networks to complement internal capabilities are
actively contributing to advanced technologies in the areas of
cellulose pulp and novel new fibres.
We are pursuing systematic programme and intellectual property
management processes and engaging key business stakeholders to ensure
delivery of quantitative results. An organisation structure and
associated personnel management system is in place to enable continued
enhancement of the effectiveness and performance of the R&D function.
In summary, significant milestones have been achieved in the areas of
programme portfolio development and execution, infrastructure project
execution, staff recruiting and development, and the creation of the
overall R&D function operating systems. Our Leadership is actively
engaged in developing the initial contributions from this R&D
capability and looks forward to its increasing impact across the Pulp
and Fibre business in the future.
CHEMICAL BUSINESS
Your Company''s allied Chemical business has set up a pilot scale plant
based on Oxygen Depolarization Cathode (ODC) technology. With this, the
energy consumption is lowered by approx. 30% as compared to
conventional membrane cell technology. It is also planning to set up a
pilot lab scale electrolyzer in collaboration with Uhde at ABSTCL,
Taloja. This facility will provide it with an opportunity to run the
electrolyzer at various current densities with varying electrolyte
parameters which will help in optimizing the plant performance. The
quality of brine is very critical for optimum performance of Membrane
cell plant. It is proposed to install the Pilot brine plant at Nagda to
study the conditions/parameters affecting the brine quality and
incorporate the same learnings in the main plant to enhance its
performance.
HUMAN RESOURCES
Your Company strives to foster a culture of high performance. Ongoing
learning, aligning HR systems in line with global benchmarks, aligning
rewards and recognitions with performance have enabled your Company
sustain its reputation of being a meritocratic organisation.
The Group''s Corporate Human Resources function continues to play an
integral role in your Company''s talent management programme.
CORPORATE GOVERNANCE
Your Directors reaffirm their continued commitment to good corporate
governance practices. Your Company fully adheres to the standards set
out by the Securities and Exchange Board of India for Corporate
Governance practices and has implemented all of its stipulations.
As required by Clause 49 of the Listing Agreement with the Stock
Exchanges, a separate section on Corporate Governance together with a
certificate from your Company''s statutory auditors, forms part of this
Annual Report.
BUSINESS RESPONSIBILITY REPORT
As per Clause 55 of the Listing Agreement with the Stock Exchanges, a
separate section of Business Responsibility Report forms part of this
Annual Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
As stipulated in Section 217(2AA) of the Companies Act, 1956, your
Directors subscribe to the "Directors'' Responsibility Statement" and
confirm that:
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures;
ii) the accounting policies selected have been applied consistently and
judgements, and estimates are made that are reasonable and prudent so
as to give a true and fair view of the state of affairs of your Company
as at the end of the financial year and of the profit of your Company
for that period;
iii) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of this
Act for safeguarding the assets of your Company and for preventing and
detecting fraud and other irregularities; and
iv) the annual accounts have been prepared on a going concern basis.
CONSOLIDATED FINANCIAL STATEMENTS AND RESULTS OF SUBSIDIARY COMPANIES
Consolidated Financial Statements have been prepared by your Company in
accordance with the applicable Accounting Standards (AS-21, AS-23 and
AS-27) issued by the Institute of Chartered Accountants of India and
the provisions of the Listing Agreement with the Stock Exchanges.
Together with the Auditors'' Report, these form part of the Annual
Report.
In terms of the General Circular of the Ministry of Corporate Affairs
(MCA), Government of India, the copy of Balance Sheet, Statement of
Profit and Loss, Directors'' Report, Auditors'' Report, etc., of the
subsidiary companies is not attached with the Annual Report of the
Company. The related information on
the Annual Accounts of the subsidiary companies shall be made available
to the shareholders of the Company and of the subsidiary companies, who
shall seek such information at any point of time. The Annual Accounts
of the subsidiary companies will also be kept for inspection by any
shareholder at the Registered Office of the Company and that of the
subsidiary companies concerned during business hours. The Statement
pursuant to Section 212 of the Companies Act, 1956, containing the
details of the Company''s subsidiaries and the gist of the financial
performance of the subsidiary companies forms part of the Consolidated
Financial Statements of this Annual Report.
PARTICULARS AS PER SECTION 217 OF THE COMPANIES ACT, 1956
Information on Conservation of Energy, Technology Absorption and
Foreign Exchange Earnings and Outgo, stipulated under Section 217(1)(e)
of the Companies Act, 1956, is set out in a separate statement. as
Annexure "B", attached to this Report and forms part of it.
In accordance with the provisions of Section 217(2A) of the Companies
Act, 1956, read with the Companies (Particulars of Employees) Rules,
1975, as amended, the names and other particulars of employees are to
be set out in the annexure to the Directors'' Report. Having regard to
the provisions of Section 219(1)(b)(iv) of the said Act, the Report and
Accounts as set out therein are being sent to all members of the
Company excluding the information about the employees. Any member,
interested in obtaining such particulars, may write to the Company
Secretary at the Registered Office of the Company.
DIRECTORS
Mrs. Rajashree Birla and Mr. D.D. Rathi, the Non- Executive Directors
of your Company, retire from office by rotation in line with the
provisions of the Companies Act, 2013, and, being eligible, have
offered themselves for re-appointment.
INDEPENDENT DIRECTORS
Your Board has recommended re-appointment of Mr. Cyril Shroff as an
Independent Director of your Company, pursuant to the provisions of
Section 149 and applicable Rules and Schedule of the Companies Act,
2013.
Other Independent Directors on your Board, viz. Mr. M.L. Apte, Mr.
B.V. Bhargava, Mr. R.C. Bhargava and Dr. Thomas M Connelly, continue in
office as per the applicable provisions of the Companies Act, 2013.
Your Board has reviewed the declarations made by the said Independent
Directors and is of the view that they meet the criteria of
independence as provided in Section 149 of the Companies Act, 2013, and
the Rules made thereunder, as also those prescribed under the Listing
Agreement.
RE-APPOINTMENT OF MR. ADESH KUMAR GUPTA AS WHOLE-TIME DIRECTOR
The term of appointment of Mr. Adesh Kumar Gupta as a Whole-Time
Director of the Company is expiring on 2nd October, 2014. The Board has
re-appointed him as the Whole-Time Director for a further period of 5
years with effect from 3rd October, 2014. The approval of the members
in the ensuing Annual General Meeting is being sought for his
re-appointment.
Necessary resolutions seeking your approval to the
appointments/re-appointments of the aforesaid Directors, as applicable,
have been included in the Notice convening the ensuing Annual General
Meeting of the Company. A brief resume of the aforesaid Directors,
being appointed/re-appointed, has also been incorporated in the Notice
of the ensuing Annual General Meeting.
AUDITORS
The Board, on the recommendation of the Audit Committee, has proposed
that M/s. G.P. Kapadia & Co., Chartered Accountants, Mumbai, and M/s.
Deloitte Haskins & Sells LLP, Chartered Accountants, Mumbai, be
re-appointed as the Joint Statutory Auditors of the Company, to hold
office from the conclusion of the ensuing Annual General Meeting till
the conclusion of the next Annual General Meeting of the Company. M/s.
G.P. Kapadia & Co., Chartered Accountants, Mumbai, and M/s. Deloitte
Haskins & Sells LLP, Chartered Accountants, Mumbai, have forwarded
their certificates to the Company, stating that their re-appointment,
if made, will be within the limit specified in that behalf in Section
139(1) of the Companies Act, 2013.
The Board, on the recommendation of the Audit Committee, has also
proposed that M/s. Vidyarthi & Sons, Chartered Accountants, Gwalior, be
re- appointed as the Branch Auditors of Vikram Woollens, a Division of
your Company, from the conclusion of the ensuing Annual General Meeting
till the conclusion of the next Annual General Meeting of the Company.
Resolutions seeking your approval on these items have been included in
the Notice of the ensuing Annual General Meeting.
The observations made in the Auditors'' Report are self-explanatory,
and, therefore, do not call for any further comments under Section
217(3) of the Companies Act, 1956.
COST AUDITORS
Your Directors have appointed M/s. R. Nanabhoy & Co., Mumbai, as the
Cost Auditors to conduct the Cost Audit for the year 2014-15.
In accordance with the Cost Audit (Report) Rules, 2011, the Cost Audit
Report of the Company for the financial year ended 31st March, 2013 was
filed in XBRL on 22nd September, 2013 vide SRN No. S22430193 with the
Ministry of Corporate Affairs, New Delhi.
APPRECIATION
Your Directors record their sincere appreciation of the Central and
State Governments, banks, financial institutions, stakeholders and
business associates for their whole-hearted support and co-operation.
Your Directors also place on record their deep appreciation of your
Company''s employees at all levels, for their contribution to its
success.
For and on behalf of the Board
Kumar Mangalam Birla
Mumbai,
2nd May, 2014 Chairman
Mar 31, 2013
Dear Shareholders,
The Directors have pleasure in presenting the 66th Annual Report and
the Audited Accounts of the Company for the year ended 31 st March,
2013.
As the Management Discussion and Analysis Section of the Annual Report
focuses on your Company''s strategies for growth and the performance
review of the businesses/operations of the Company in depth, your Board
is providing only a brief overview in this Report.
STRATEGIC ACQUISITION
Acquisition of Terrace Bay, a Canadian Pulp Mill
In July 2012, in line with your Company''s strategy to secure key
inputs, the assets of Terrace Bay, a closed pulp mill in Ontario,
Canada, was acquired by AV Terrace Bay, Canada, the pulp JV, with
Grasim holding a 40% stake and the remaining 60% held by Thai Rayon
Public Company Ltd., Thailand. The operations at this paper grade pulp
mill were restarted in October 2012, as planned. This acquisition will
help in meeting the increasing pulp requirement for your Company''s VSF
business after the mill is converted into dissolving grade pulp mill.
GROWTH OF THE EXISTING BUSINESSES
Expansion of VSF/Chemical Capacities
At Harihar (Karnataka), the 36,500 TPA VSF brownfield expansion was
commissioned phase- wise. In Phase I, in September 2012, the plant''s
capacity was expanded by 18,250 TPA. In Phase II, in May 2013, the
balance capacity of 18,250 TPA became operational with the
commissioning of the Power Plant.
The 120,000 TPA greenfield VSF project at Vilayat (Gujarat) is nearing
completion and is expected to go on stream in the 2nd Quarter of the FY
2013-14. To improve the technology and efficiency of your Company''s
VSF plant at Nagda, a major revamp in phases, spread over the next
three years is underway.
The Chemical plant (Caustic Soda - 182,500 TPA), also at Vilayat,
commenced commercial production in May 2013. There will be a gradual
ramp up in capacity in the first half of the FY 2013-14.
Work on the Epoxy project (51,500 TPA) at Vilayat is progressing, and
the same is likely to be commissioned by September 2013.
Expansion of Cement Capacity
Your Company''s subsidiary, UltraTech Cement Limited (UltraTech), has
initiated several projects across its locations. Of these, the
following projects have been commissioned -
- Clinkerisation plant of 3.30 Mn. TPA at Rawan, Chhattisgarh
- Grinding unit of 1.55 Mn.TPA at Hotgi, Maharashtra
- Increase in cement grinding capacity by 0.60 Mn. TPA at Gujarat plant
- Bulk terminal at Cochin, Kerala
- Wall-care putty plant at Katni, Madhya Pradesh. With the
commissioning of these projects, the cement capacity of UltraTech has
increased from 51.75 Mn. TPA to 53.90 Mn. TPA. The clinkerisation plant
of 3.30 Mn. TPA in Karnataka is expected to go on stream in Q1 of the
FY 2013-14.
UltraTech is committed to growth and towards this end, its Board has
approved the expansion of capacity at its Aditya Cement Works in
Rajasthan by 2.9 Mn. TPA, including the setting up of two grinding
units. This expansion envisages a capital outlay of around Rs. 2,000
crore to be funded through a mix of internal accruals and borrowings.
The additional facility is expected to be commissioned by March 2015.
With the commissioning of these and other projects in the pipeline,
UltraTech''s cement capacity will stand augmented to 64.45 Mn. TPA by
March 2015.
FINANCIAL PERFORMANCE
Your Company has reported improved performance for the year, achieving
higher Revenue and PBIDT, despite the economic slowdown as reflected in
decline in the Indian GDP growth to ~5%. The Company''s Revenue
increased by 11% at Rs. 27,904 crore (Rs. 25,245 crore). PBIDT was up
from Rs. 6,321 crore to Rs. 6,543 crore, a growth of 4%, led by
improved volumes in the VSF business and cost optimisation. Net Profit
was Rs. 2,704 crore as compared to Rs. 2,647 crore in the FY 2011-12.
Your Company''s subsidiary, UltraTech, reported a net profit of Rs.
2,678 crore vis-a-vis Rs. 2,403 crore, reflecting a growth of 11%. The
pressure on input and logistic cost continued, though there was some
relief on account of the softening in prices of imported coal.
(Rs. in Crore)
Consolidated Standalone
2012-13 2011-12 2012-13 2011-12
Revenue from
Operations (Net) 27,904.32 25,244.89 5,255.01 4,973.56
Profit before Interest,
Depreciation/
Amortisation and
Tax (PBIDT) 6,543.12 6,320.60 1,522.75 1,721.81
Less: Finance Costs 324.14 313.99 39.09 35.82
Less: Depreciation
and Amortisation 1,252.06 1,154.41 159.21 144.20
Profit before
Exceptional Item and Tax 4,966.92 4,852.20 1,324.45 1,541.79
Add: Exceptional Item 204.43 - 204.43 -
Profit Before Tax 5,171.35 4,852.20 1,528.88 1,541.79
Tax Expense 1,467.21 1,320.77 302.89 364.79
Profit After Tax 3,704.14 3,531.43 1,225.99 1,177.00
Add: Share in Profit
/(Loss) of Associates 73.65 63.16 - -
Less: Minority Interest 1,073.40 947.13 - -
Profit for the Year 2,704.39 2,647.46 1,225.99 1,177.00
Balance brought
forward from Previous
Year 778.77 1,520.49 662.34 703.72
Surplus available for
Appropriation 3,483.16 4,167.95 1,888.33 1,880.72
Appropriations:
- Reserve Fund 0.77 0.50 - -
- General Reserve 2,424.51 3,206.23 122.60 1,000.00
- Debenture Redemption
Reserve 9.36 (71.50) - -
- Proposed Dividend 206.52 206.36 206.52 206.36
- Corporate Dividend Tax 51.75 47.59 9.81 12.02
- Share of Appropriation
related to Associates 2.16 - - -
- Balance carried to
Balance Sheet 788.09 778.77 1,549.40 662.34
3,483.16 4,167.95 1,888.33 1,880.72
DIVIDEND
Your Directors have recommended a dividend of Rs. 22.50 per equity
share, same as per last year. The dividend, if approved by the
members, would involve a cash outflow of Rs. 216 crore (inclusive of
Corporate Dividend Tax).
Equity shares that may be allotted upon exercise of Options granted
under the Employee Stock Option Scheme and out of the Share Capital
Suspense, and before the Book Closure for payment of dividend will rank
pari passu with the existing shares and shall also be entitled to
receive the aforesaid dividend.
EMPLOYEE STOCK OPTION SCHEME (ESOS)
During the year:
- 19,334 Options were vested out of the Options granted in the earlier
years; and
- 66,764 Options were exercised and, accordingly, 66,764 shares were
allotted to the concerned option holders.
The details of Employee Stock Options granted pursuant to the Employee
Stock Option Scheme - 2006 (ESOS - 2006), as also the disclosures in
compliance with Clause 12 of the Securities and Exchange Board of India
(Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines, 1999, are set out in the Annexure "A" to this Report. Your
Board has also approved formulation of a new Employee Stock Option
Scheme. Items seeking your approval for introduction and implementation
of the new ESOS Scheme exercisable into not more than 2,30,000 equity
shares of Rs. 10/- each by the permanent employees, including any
managing or whole-time director(s), of your Company and its subsidiary
companies, are included in the Notice convening the AGM together with
the Explanatory Statement.
A certificate from the Statutory Auditor on the implementation of your
Company''s Employee Stock Option Scheme will be placed at the ensuing
Annual General Meeting for inspection by the Members.
FINANCE
Your Company raised long-term rupee loan of Rs. 537 crore for financing
its VSF expansion projects. Term loans aggregating Rs. 73 crore were
repaid during the year.
Your Company has adequate liquidity and a strong balance sheet. CRISIL
Limited has re-affirmed the "CRISIL AAA/Stable" and "CRISIL A1 ''''
rating for your Company''s long-term borrowings and short- term bank
loan facilities, respectively, aggregating to Rs. 2,900 crore. Credit
Analysis & Research Limited (CARE) has also re-affirmed the "CARE
AAA" and "CARE A1 " rating for your Company''s long-term and
short-term borrowings respectively, aggregating to Rs. 3,000 crore.
AWARDS AND ACCOLADES
Some of the significant accolades earned by your Company during the
year include:
- Certificate of Excellence Award for the year 2011-12 from Container
Corporation of India Limited for achieving the largest volume as
importers in terms of Twenty Foot Equivalent Units (TEUs) at Railway
Container Terminal, Vadodara: Birla Cellulosic Division, Kharach
- Gold Award for the year 2012 from Greentech Foundation, New Delhi,
for outstanding achievement in Environment Management in the Chemical
Sector: Chemical Division, Nagda
- Bhamashah Award for the year 2011-12 from Commercial Tax Dept., Govt.
of Madhya Pradesh, for being the third largest tax payer: Caustic Soda
Membrane Cell Division, Nagda
RESEARCH AND DEVELOPMENT
Significant progress was made during the FY 2012-13 in building the
technology capabilities to address competitive market threats and begin
laying the groundwork for significant profitable growth. Key technology
programmes were developed in the areas of fibre and cellulose pulp
quality and towards enhanced product performance, reduced production
costs and improved environmental sustainability. There is progress on
building enabling capabilities in the areas of facilities and
infrastructure, technology organisation staffing and development, and
the engagement of external knowledge networks to complement internal
capabilities. The recruitment of professional staff and leadership is
ongoing and the programme and staff managing processes have been
defined and are being instituted. Some key highlights are outlined to
illustrate the progress being made.
Programme Portfolio
A comprehensive quality improvement approach, centred on instituting
statistical process control and Six Sigma continuous improvement
techniques, has been launched in both fibre and cellulose pulp sites.
Significant reductions in process variation are being accomplished, and
a robust customer monitoring and a feedback process are enabling the
assessment of ongoing quality performance versus competition. Common
metrics are being developed across all sites to track improvement and
to enable the sharing of best operating practices to accelerate
progress. Chronic process and fibre finish issues have been defined,
which require additional technology development. Business and
corporate R&D resources have been engaged to provide this support.
These advances are aimed at significantly enhancing our customers''
satisfaction levels.
A number of programmes, aimed at enhanced fibre product performance,
were launched for producing dyed fibres, higher wet modulus and
tenacity products, and the incorporation of high value attributes into
viscose staple fibres.
Technology developments aimed at reduced costs and improved
environmental sustainability are underway. These aim at increasing
process productivity and reducing chemical material and energy
requirements in the existing processes. Programmes exploring
alternative process concepts with superior environmental performance
are on, including contributions by external knowledge network partners.
Structured Forestry Plantation R&D programmes commenced at Harihar and
Laos. Suitable genetic materials adapted to local edaphic-climatic
conditions were selected, and are being used to establish base
populations for future genetic selection and breeding. A
multi-disciplinary approach to create sustainable and eco-efficient
forestry was started. This included programmes in genetic tree
improvement, development of site specific silviculture best practices,
integrated pest and disease management and the use of improved genetic
material and management of genetic diversity at each site.
Enabling Capabilities
Extensive new capabilities for pulp R&D were added as part of the
Domsjo acquisition, strengthening the existing infrastructure for
developments along the entire value chain. This group has now developed
a portfolio of programmes aimed at enhancing the value of pulp supplies
and improving their use in the fibre facilities. The Wood and Pulp
Research Centre at Harihar has been strengthened, and is contributing
to better tree stocks for local wood supplies. The contribution of
Birla Research Institute for Applied Sciences (for fibres) at Nagda and
the Textile Research and Application Development Centre (TRADC) at
Kharach to new process and product development, and expanded
applications for fibres are commendable. The India-based Centres have
accreditations from the Ministry of Science and Technology, Government
of India. The project to expand fibre R&D at the Aditya Birla Science &
Technology Company Ltd., an Associate of your Company at Taloja, is
nearing completion. It will provide significantly enhanced laboratory
and semi- works capabilities for fibre research. The semi- commercial
scale Fibre Research Centre at Kharach is under construction, and is
expected to contribute significantly to the fibre process and product
R&D programmes in 2013. These investments along with significant
increases in R&D resources and the growing analytical and research
support available through the corporate R&D organisation at Taloja, are
integral to your Company''s growth.
The technology organisation for the business has been strengthened with
the recruitment of R&D professionals with diverse backgrounds,
capabilities and experiences. A core team of 20 R&D professionals are
actively engaged in various technology programmes and initiatives.
External knowledge networks to complement internal capabilities have
been developed, providing access to advanced technologies in the areas
of cellulose pulp and novel new fibres. Many key technology leadership
positions have been filled and work is continuing to staff the
remaining opportunities.
Systematic programme and intellectual property management processes,
engaging all the key business stakeholders, have been developed and are
being implemented across all aspects of R&D. An organisation structure
and associated personnel management system have been developed and are
in the process of being adopted.
All our R&D Centres are being further strengthened with new equipment
and analytical instruments.
In summary, significant progress has been accomplished in the areas of
programme portfolio development, infrastructure project execution,
staff recruiting and development, and the creation of the overall R&D
function operating systems. We look forward to the significant
contributions and this R&D capability will deliver to the Pulp and
Fibre business.
HUMAN RESOURCES
Several innovative people - focused initiatives have been instituted at
the Group level, and these are translated into action at all of the
Group Companies. Our basic objective is to ensure that a robust talent
pipeline and a high-performance culture, centred around accountability
is in place. We feel this is critical to enable us retain our
competitive edge.
CORPORATE GOVERNANCE
Your Directors reaffirm their continued commitment to good corporate
governance practices. Your Company fully adheres to the standards set
out by the Securities and Exchange Board of India for Corporate
Governance practices and has implemented all of its stipulations.
As required by Clause 49 of the Listing Agreement of Stock Exchanges, a
separate section on Corporate Governance, together with a certificate
from your Company''s statutory auditors, forms part of this Annual
Report.
BUSINESS RESPONSIBILITY REPORT
As per Clause 55 of the Listing Agreement with the Stock Exchanges, a
separate section of Business Responsibility Report forms part of this
Annual Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
As stipulated in Section 217(2AA) of the Companies Act, 1956, your
Directors subscribe to the "Directors'' Responsibility Statement" and
confirm that:
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures;
ii) the accounting policies selected have been applied consistently,
and judgements and estimates are made that are reasonable and prudent
so as to give a true and fair view of the state of affairs of your
Company as at the end of the financial year and of the profit or loss
of your Company for that period;
iii) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of this
Act for safeguarding the assets of your Company and for preventing and
detecting fraud, and other irregularities; and
iv) the annual accounts have been prepared on a going concern basis.
CONSOLIDATED FINANCIAL STATEMENTS AND RESULTS OF SUBSIDIARY COMPANIES
Consolidated Financial Statements have been prepared by your Company in
accordance with the applicable Accounting Standards (AS-21, AS-23 and
AS-27) issued by the Institute of Chartered Accountants of India and
the provisions of the listing agreement with the Stock Exchanges.
Together with the Auditors'' Report, these form part of the Annual
Report.
In terms of the General Circular of the Ministry of Corporate Affairs
(MCA), Government of India, the copy of Balance Sheet, Statement of
Profit and Loss, Directors'' Report, Auditors'' Report, etc., of the
subsidiary companies is not attached with the Annual Report of the
Company. The related information on the Annual Accounts of the
subsidiary companies shall be made available to the shareholders of the
Company and of the subsidiary companies, who shall seek such
information at any point of time. The Annual Accounts of the subsidiary
companies will also be kept for inspection by any shareholder at the
Registered Office of the Company and that of the subsidiary companies
concerned. The Statement pursuant to Section 212 of the Companies Act,
1956, containing the details of the Company''s subsidiaries and the gist
of the financial performance of the subsidiary companies forms part of
the Consolidated Financial Statements of this Annual Report.
PARTICULARS AS PER SECTION 217 OF THE COMPANIES ACT, 1956
Information on Conservation of Energy, Technology Absorption and
Foreign Exchange Earnings and Outgo, stipulated under Section 217(1)(e)
of the Companies Act, 1956, is set out in a separate statement,
attached to this Report and forms part of it as Annexure "B".
In accordance with the provisions of Section 217(2A) of the Companies
Act, 1956, read with the Companies (Particulars of Employees) Rules,
1975, as amended, the names and other particulars of employees are to
be set out in the annexure to the Directors'' Report. Having regard to
the provisions of Section 219(1)(b)(iv) of the said Act, the Report and
Accounts as set out therein are being sent to all members of the
Company excluding the information about the employees. Any member,
interested in obtaining such particulars, may write to the Company
Secretary at the Registered Office of the Company.
DIRECTORS
Mr. Shailendra K. Jain, Dr. Thomas M. Connelly, Mr. M.L. Apte and Mr.
R.C. Bhargava, the existing Directors of the Company, retire from
office by rotation and, being eligible, offer themselves for
re-appointment.
A brief resume of the Directors, being re-appointed, has been
incorporated in the notice of the ensuing Annual General Meeting.
AUDITORS
The Board, on the recommendation of the Audit Committee, has proposed
that M/s. G.P. Kapadia & Co., Chartered Accountants, Mumbai, and M/s.
Deloitte Haskins & Sells, Chartered Accountants, Mumbai, be
re-appointed as the Joint Statutory Auditors of the Company, to hold
office from the conclusion of the ensuing Annual General Meeting till
the conclusion of the next Annual General Meeting of the Company. M/s.
G.P. Kapadia & Co., Chartered Accountants, Mumbai, and M/s. Deloitte
Haskins & Sells, Chartered Accountants, Mumbai, have forwarded their
certificates to the Company, stating that their re-appointment, if
made, will be within the limit specified in that behalf in Sub-section
(1B) of Section 224 of the Companies Act, 1956.
The Board, on the recommendation of the Audit Committee, has also
proposed that M/s. Vidyarthi & Sons, Chartered Accountants, Gwalior, be
re-appointed as the Branch Auditors of Vikram Woollens, a Division of
your Company, from the conclusion of the ensuing Annual General Meeting
till the conclusion of the next Annual General Meeting of the Company.
Resolutions seeking your approval on these items are included in the
Notice of the ensuing Annual General Meeting.
The observations made in the Auditors'' Report are self-explanatory,
and, therefore, do not call for any further comments under Section
217(3) of the Companies Act, 1956.
COST AUDITORS
In pursuance of Section 233-B of the Companies Act, 1956, your
Directors have appointed M/s. R. Nanabhoy & Co., Mumbai, as the Cost
Auditors to conduct the Cost Audit for the year 2013-14.
Pursuant to Cost Audit (Report) Rules, 2001, the Cost Audit Report of
the Company for the financial year ended 31st March, 2012, was filed on
30th January, 2013, vide SRN No. S20083218 with the Ministry of
Corporate Affairs, New Delhi.
APPRECIATION
Your Directors record their sincere appreciation of the Central and
State Governments, banks, financial institutions, stakeholders and
business associates for their whole-hearted support and co-operation.
For and on behalf of the Board
Kumar Mangalam Birla
Chairman
Mumbai, 4th May, 2013
Mar 31, 2012
TO THE MEMBER OF GRASIM INDUSTRIES LIMITED,
The Directors have pleasure in presenting the 65th Annual Report and
Audited Accounts of the Company for the year ended 31st March, 2012.
As the Management Discussion and Analysis Section focuses on your
Company's strategies for growth and the performance review of the
businesses/operations of the Company in depth, your Board is providing
only a brief overview.
STRATEGIC ACQUISITION
Acquisition of Domsjo Fabriker AB, a Swedish Pulp Manufacturing Company
During the year under review, your Company acquired a 1/3rd stake in
Aditya Group AB, Sweden, which controls Domsjo Fabriker AB, Sweden
("Domsjo"), a leading manufacturer of specialty pulp used in the
manufacture of Viscose Staple Fibre (VSF). The acquisition will ensure
supply of high quality dissolving grade pulp for your Company's VSF
projects.
GROWTH OF THE EXISTING BUSINESSES Expansion of VSF Capacity
Your Company's VSF greenfield project (120,000 TPA) at Vilayat
(Gujarat) and brownfield expansion (36,500 TPA) at Harihar (Karnataka)
are progressing in line with the schedule. The Caustic Soda project
(182,500 TPA) at Vilayat is also on track. The Vilayat projects are
slated for commissioning by the end of the current financial year,
while the Harihar project will be commissioned in two phases during the
current financial year.
Expansion of Cement Capacity
Your Company's subsidiary, UltraTech Cement Limited (UltraTech), is
setting up additional clinkerisation plants at Chhattisgarh and
Karnataka, grinding units, bulk packaging terminals and ready- mix
concrete plants at various locations. These are expected to be
operational by Q1 FY14. Consequently, UltraTech's cement capacity will
stand enhanced by 10 million TPA at 62 million TPA.
These projects are being funded through a judicious mix of internal
accruals and borrowings.
FINANCIAL PERFORMANCE
Your Company has reported improved performance during the year with its
Consolidated Revenue from Operations (Net) surpassing the Rs 25,000
crore mark at Rs 25,244 crore (up by 17%) and Consolidated Profit for
the year growing by 16% at Rs 2,647 crore.
The performance of your Company's subsidiary, UltraTech, improved on
all 3 parameters, viz., Production, Sales and Profitability. Variable
cost increased, driven by high input and energy costs.
(Rs Crore)
Consolidated Standalone
2011-12 2010-11 2011-12 2010-11
Revenue from Operations
(Net) 25,244.30 21,550.23 4,969.72 4,640.06
Profit before Interest,
Depreciation/
Amortisation and Tax
(PBIDT) 6,320.25 5,394.52 1,721.81 1,816.80
Less: Finance Costs 313.64 406.75 35.82 45.81
Less: Depreciation 1,154.41 1,138.37 144.20 176.29
Profit before Tax 4,852.20 3,849.40 1,541.79 1,594.70
Tax Expense 1,320.77 954.21 364.79 412.99
Profit after Tax 3,531.43 2,895.19 1,177.00 1,181.71
Add: Share in Profit
/(Loss) of Associates 63.16 43.78 - -
Less: Minority Interest 947.13 659.96 - -
Profit for the Year 2,647.46 2,279.01 1,177.00 1,181.71
Amount Transferred
on Change in
Stake in Subsidiaries
/Joint Ventures - (350.01) - -
Balance brought
forward from Previous
Year 1,520.49 3,499.23 703.72 2,219.07
Surplus Available for
Appropriation 4,167.95 5,428.23 1,880.72 3,400.78
Appropriations:
- Reserve Fund 0.50 0.29 - -
- General Reserve 3,206.23 3,618.55 1,000.00 2,500.00
- Debenture Redemption
Reserve (71.50) 65.17 - -
- Proposed Dividend 206.36 183.40 206.36 183.40
- Corporate Dividend Tax 47.59 40.33 12.02 13.66
- Balance carried to
Balance Sheet 778.77 1,520.49 662.34 703.72
4,167.95 5,428.23 1,880.72 3,400.78
DIVIDEND
Your Directors have recommended a dividend of Rs 22.50 per equity share.
The dividend, if approved by the members, would involve a cash outflow
of Rs 218.38 crore (inclusive of Corporate Dividend Tax).
Equity shares that may be allotted upon exercise of Options granted
under the Employee Stock Option Scheme and out of the Share Capital
Suspense, and before the Book Closure for payment of dividend will rank
pari passu with the existing shares and shall also be entitled to
receive the aforesaid dividend.
EMPLOYEE STOCK OPTION SCHEME (ESOS)
During the year:
- 6,037 Employee Stock Options were granted to the eligible employees
of the Company;
- 45,388 Options were vested out of the Options granted in the earlier
years; and
- 10,964 Options were exercised and, accordingly, 10,964 equity shares
were allotted to the concerned option holders.
The details of Employee Stock Options granted pursuant to the Employee
Stock Option Scheme
- 2006 (ESOS - 2006), as also the disclosures in compliance with Clause
12 of the Securities and Exchange Board of India (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, are set
out in the Annexure 'A' to this Report.
FINANCE
Your Company raised a long-term rupee loan of Rs 169 crore for financing
its VSF expansion projects. Term loans aggregating Rs 259 crore were
repaid during the year.
AWARDS AND ACCOLADES
In recognition of the extraordinary contribution made towards setting
corporate governance standards in India, for authoring the first ever
Securities and Exchange Board of India (SEBI) initiated Corporate
Governance Report in India and for benchmarkable Governance standards
in Aditya Birla Group companies, the Asian Centre for Corporate
Governance and Sustainability has conferred the "Transformational
Leader Award" on Mr. Kumar Mangalam Birla.
Some of the significant accolades earned by your Company during the
year include:
- GREENTECH Environment Award 2011 - Gold Award - from Greentech
Foundation: Chemical Division, Nagda (M.P.)
- State Level Safety Award (1st Prize for Fuel Efficient Boiler) from
Karnataka State Safety Institute: Grasilene Division, Harihar
(Karnataka)
- Best Fuel Efficient Boiler Award (1st Prize) from Department of
Factories and Boilers, Government of Karnataka: Grasilene Division,
Harihar
- Unnatha Suraksha Puraskara from National Safety Council, Karnataka,
for Outstanding Safety Performance and Management Systems during
2009-10: Harihar Polyfibers, Harihar
- Best Tax Payer Award (2nd Prize) for 2009- 10 from M.P. State
Government: Staple Fibre Division Nagda
RESEARCH AND DEVELOPMENT
The focus on building the business' technology capabilities moved
forward significantly in 2011. The new leadership team began the
development and execution of a comprehensive technology plan extending
from plantation to fibre. Extensive new capabilities for pulp R&D were
added as part of the Domsjo acquisition strengthening the existing
infrastructure for developments along the value chain including the
Wood and Pulp Research Centre at Harihar, Birla Research Institute for
Applied Sciences (for fibres) at Nagda and the Textile Research and
Application Development Centre (TRADC) at Kharach. These Centres have
accreditations from the Ministry of Science and Technology, Government
of India. Plans for expanding fibre R&D at Aditya Birla Science &
Technology Company Ltd., an Associate of your Company at Taloja, were
also initiated along with the pursuit of the semi-commercial scale
Fibre Research Centre in Kharach. These investments coupled with the
growing analytical and research support available through the Corporate
R&D organisation at Taloja, are critical to your Company's growth.
Important programmes aimed at improving pulp quality, productivity,
environmental management and cost were supported by the Wood and Pulp
Research Centre and the R&D organisation at Domsjo. A global programme
portfolio is being formulated as part of the technology plan.
The thrust on developing a novel next generation cellulosic fibre
continued at the Birla Research Institute for Applied Sciences. The
programme was critically reviewed in the 4th quarter to assess the
current technology barriers, and work streams were initiated to define
leads for resolution of the issues.
A new process variation for viscose production was successfully tested
at bench scale, given its potential for quality and environment
improvement at a competitive cost. A novel process and plant for
treatment of emissions from VSF manufacturing has been successfully
demonstrated on an industrial scale on one of our lines.
Scouting work aimed at creating specialty fibres with innovative
characteristics is ongoing. For example, incorporation of
nano-cellulose in our fibres is being explored as a route to enhanced
tensile properties. Several additional specialty variants of viscose
fibres, based on market feedback of limited test quantities, are in the
first iteration of testing.
Major application development and downstream process innovations
carried out at TRADC include development of Nylon/Excel blended fabrics
for
the Army and its comparison with Nylon/Cotton blended fabrics, process
optimization to make superior quality yarns from spun-dyed black VSF
for knits, and for processing knits made from Excel fibres for which
the patent is pending.
All our R&D Centres are being further strengthened with new equipment
and analytical instruments.
HUMAN RESOURCES
Your Company continues to believe that Human Resources would be a
critical factor for its growth. The key focus of the business remained
retaining and helping talent grow so as to meet the growth aspirations
of the business. The emphasis was on grooming in-house talent enabling
them to take higher responsibilities.
The Senior Management Team spent considerable time in reviewing the
existing talent base and processes used for honing the skills of the
members in the Talent Pool and assessing their preparedness for
shouldering higher responsibilities.
CORPORATE GOVERNANCE
Your Directors reaffirm their continued commitment to good corporate
governance practices. Your Company fully adheres to the standards set
out by the Securities and Exchange Board of India for Corporate
Governance practices, and has implemented all of its stipulations.
As required by Clause 49 of the Listing Agreement of Stock Exchanges, a
separate section on Corporate Governance together with a certificate
from your Company's Statutory Auditors, forms part of this Annual
Report.
DIRECTORS' RESPONSIBILITY STATEMENT
As stipulated in Section 217(2AA) of the Companies Act, 1956, your
Directors subscribe to the "Directors' Responsibility Statement" and
confirm that:
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures;
ii) the accounting policies selected have been applied consistently,
and judgements and estimates are made that are reasonable and prudent
so as to give a true and fair view of the state of affairs of your
Company as at the end of the financial year and of the profit or loss
of your Company for that period;
iii) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of this
Act for safeguarding the assets of your Company and for preventing and
detecting fraud and other irregularities; and
iv) the annual accounts have been prepared on a going concern basis.
CONSOLIDATED FINANCIAL STATEMENTS AND RESULTS OF SUBSIDIARY COMPANIES
The Consolidated Financial Statements have been prepared by your
Company in accordance with the applicable Accounting Standards (AS-21,
AS- 23 and AS-27) issued by the Institute of Chartered Accountants of
India and the provisions of the listing agreement with the Stock
Exchanges. Together with the Auditors' Report, these form part of the
Annual Report.
In terms of the General Circular of the Ministry of Corporate Affairs
(MCA), Government of India, the copy of Balance Sheet, Statement of
Profit and Loss, Directors' Report, Auditors' Report, etc., of the
subsidiary companies is not attached with the Annual Report of the
Company. The related information on the Annual Accounts of the
subsidiary companies shall be made available to the shareholders of the
Company and of the subsidiary companies, who shall seek such
information at any point of time. The Annual Accounts of the subsidiary
companies will also be kept for inspection by any shareholder at the
Registered Office of the Company and that of the subsidiary companies
concerned. The Statement pursuant to Section 212 of the Companies Act,
1956, containing the details of the Company's subsidiaries and the gist
of the financial performance of the subsidiary companies forms part of
the Consolidated Financial Statements of this Annual Report.
PARTICULARS AS PER SECTION 217 OF THE COMPANIES ACT, 1956
Information on Conservation of Energy, Technology Absorption and
Foreign Exchange Earnings and Outgo, stipulated under Section 217(1)(e)
of the Companies Act, 1956, is set out in a separate statement,
attached to this Report (Annexure 'B') and forms part of it.
In accordance with the provisions of Section 217(2A) of the Companies
Act, 1956, read with the Companies (Particulars of Employees) Rules,
1975, as amended, the names and other particulars of employees are to
be set out in the annexure to the Directors' Report. Having regard to
the provisions of Section 219(1 )(b)(iv) of the said Act, the Report
and Accounts as set out therein are being sent to all members of the
Company excluding the information about the employees. Any member,
interested in obtaining such particulars, may write to the Company
Secretary at the Registered Office of the Company.
DIRECTORS
As you are aware, Mr. K.K. Maheshwari, who was the Whole Time Director
of your Company, was appointed as its Managing Director by your Board
on 6th March, 2012. His appointment is proposed for your approval in
the ensuing Annual General Meeting (AGM) of the Company.
Mr. Kumar Mangalam Birla, Mr. B.V. Bhargava and Mr. D.D. Rathi,
Directors of the Company, retire from office by rotation and, being
eligible, have offered themselves for re-appointment at the ensuing
AGM.
Mr. A.K. Dasgupta, the erstwhile Managing Director of Life Insurance
Corporation of India (LIC) and the nominee of LIC on the Company's
Board, has resigned with effect from 21st June, 2012. The Board places
on record its sincere appreciation of the valuable services rendered by
Mr. Dasgupta during his tenure as a Member of the Board.
At the request of LIC, Mr. N. Mohan Raj, Executive Director of LIC, was
appointed as an Additional Director of the Company and accordingly, his
appointment is placed for your approval.
Resolutions seeking your approval on these items are included in the
Notice convening the AGM. The Board recommends the above appointments/
re-appointments. A brief resume of the Directors, being
appointed/re-appointed, has been incorporated in the Notice of the
ensuing AGM.
AUDITORS
The Board, on the recommendation of the Audit Committee, has proposed
that M/s. G.P. Kapadia & Co., Chartered Accountants, Mumbai, and M/s.
Deloitte Haskins & Sells, Chartered Accountants, Mumbai, be
re-appointed as the Joint Statutory Auditors of the Company, to hold
office from the conclusion of the ensuing Annual General Meeting till
the conclusion of the next Annual General Meeting of the Company. M/s.
G.P. Kapadia & Co., Chartered Accountants, Mumbai, and M/s. Deloitte
Haskins & Sells, Chartered Accountants, Mumbai, have forwarded their
certificates to the Company, stating that their re-appointment, if
made, will be within the limit specified in that behalf in Sub-section
(1B) of Section 224 of the Companies Act, 1956.
The Board, on the recommendation of the Audit Committee, has also
proposed that M/s. Vidyarthi & Sons, Chartered Accountants, Gwalior, be
re-appointed as the Branch Auditors of Vikram Woollens, a Division of
your Company, from the conclusion of the ensuing Annual General Meeting
till the conclusion of the next Annual General Meeting of the Company.
Resolutions seeking your approval on these items are included in the
Notice of the ensuing Annual General Meeting.
The observations made in the Auditors' Report are self-explanatory,
and, therefore, do not call for any further comments under Section
217(3) of the Companies Act, 1956.
COST AUDITORS
In pursuance of Section 233-B of the Companies Act, 1956, your
Directors have appointed M/s. R. Nanabhoy & Co., Mumbai, and M/s. R.J.
Goel & Co., Delhi, as the Cost Auditors to conduct the Cost Audit for
the year 2012-13.
The due date for filing the Cost Audit Reports for the financial year
2010-2011 was 30th September, 2011 and the same were filed by the Cost
Auditors on 12th September, 2011 and 17th September, 2011 respectively.
APPRECIATION
Your Directors record their sincere appreciation of the Central and
State Governments, banks, financial institutions, stakeholders and
business associates for their whole-hearted support and co-operation.
For and on behalf of the Board
Kumar Mangalam Birla
Chairman
Date: 21st June, 2012
Mar 31, 2011
Dear Shareholders,
The Directors have pleasure in presenting the 64th Annual Report and
Audited Accounts of the Company for the year ended 31st March, 2011.
As the Management Discussion and Analysis section focuses on your
CompanyÃs strategies for growth, in depth, your Board is providing only
a brief overview in this report.
CONSOLIDATION OF CEMENT BUSINESS
The demerger of the CompanyÃs Cement business into a separate
subsidiary, Samruddhi Cement Limited (SCL), and the subsequent merger
of SCL with UltraTech Cement Limited (UltraTech) (another subsidiary)
were completed. This has paved the way for the shareholders of Grasim
to participate directly in a focussed entity engaged in the Cement
business.
We are confident that this pragmatic step will yield rich dividends in
the long run and lay a strong foundation for the future growth of your
Company.
GROWTH OF THE EXISTING BUSINESSES
Expansion of Viscose Staple Fibre (VSF) Capacity
A total capex of Rs. 2,400 crore has been approved by the Board for the
VSF business. This includes the cost of setting up a 120,000 TPA
greenfield VSF plant at Vilayat (Gujarat) and expansion of its capacity
at Harihar (Karnataka) by 36,500 TPA.
In line with its strategy of resource de-risking critical inputs, your
Company will also establish a Caustic Soda plant at Vilayat with a
capacity of 182,500 tons.
Acquisition of Domsjo Fabriker AB, a Swedish Pulp Manufacturing Company
Your Company has, 1/3rd stake in Aditya Holding AB, Sweden, which
controls Domsjo Fabriker AB, Sweden, a leading manufacturer of
specialty pulp used in the manufacture of VSF.
Expansion of Cement Capacity
A total capex of Rs. 11,000 crore has been approved by the UltraTech
Board. This includes brownfield expansions aggregating to 9.2 million
TPA at Chhattisgarh and Karnataka units which are expected to be
operational from early FY14. In the existing projects, UltraTech is
strengthening logistic support, waste heat recovery, etc., for future
growth.
Acquisition of ETA Star Cement, UAE
In September 2010, UltraTech completed the acquisition of ETA Star
Cement Company LLC with its assets comprising of 2.3 million TPA
clinker facility and grinding units of 2.1 million TPA in UAE, 0.4
million TPA in Bahrain and 0.5 million TPA in Bangladesh. With this
acquisition, UltraTech gained direct access to the markets in the
Middle East and neighbouring regions. Consequent to this acquisition,
UltraTechÃs capacity stands augmented at 52 million TPA.
FINANCIAL PERFORMANCE
Your Company has reported improved results on the back of superior
performance from VSF, a core business of your Company, which moved in
tandem with the other competing fibres.
The performance of your CompanyÃs Cement subsidiary, UltraTech, was
impacted mainly due to the slowdown in the realty sector.
(Rs. in Crore)
Consolidated Stand-alone
2010-11 2009-10 2010-11 2009-10
Continued Total
Business# (As
Reported
Gross Turnover 23,570.54 21,710.54 4,891.40 4,111.79 8,841.79
Gross Profit 4,991.17 5,987.72 1,771.49 1,539.75 2,851.92
Less: Depreciation 1,138.37 994.71 176.29 151.28 351.14
Profit before Tax and
Exceptional Item 3,852.80 4,993.01 1,595.20 1,388.47 2,500.78
Tax Expenses 957.61 1,570.48 413.49 402.27 744.75
Profit after Tax from
Ordinary Activities 2,895.19 3,422.53 1,181.71 986.20 1,756.03
Extraordinary Items
- Profit on Sale of
Sponge Iron Unit -- 336.07 -- 336.07 336.07
- Profit after Tax
after Extraordinary
Activities 2,895.19 3,758.60 2,092.10 1,181.71 1,322.27
Add: Share in Profit
/(Loss) of
Associates 43.78 51.05 -- -- --
Less: Minority Interest 659.96 714.12 -- -- --
Net Profit 2,279.01 3,095.53 1,181.71 1,322.27 2,092.10
Amount Transferred on Change in Stake
in Subsidiaries/Joint
Ventures (350.01) -- -- --
Debenture Redemption
Reserve
Written Back -- 39.83 -- 5.00
Balance brought forward
from
Previous Year 3,499.23 3,406.07 2,219.07 2,180.97
Surplus Available for
Appropriation 5,428.23 6,541.43 3,400.78 4,278.07
Appropriations:
- Reserve Fund 0.29 0.68 -- --
- General Reserve 3,618.55 2,700.00 2,500.00 1,750.00
- Debenture Redemption
Reserve 65.17 12.50 -- --
- Proposed Dividend 183.40 275.05 183.40 275.05
- Corporate Tax on
Dividend 40.33 53.97 13.66 33.95
- Balance carried to
Balance Sheet 1,520.49 3,499.23 703.72 2,219.07
5,428.23 6,541.43 3,400.78 4,278.07
#Results for the year ended 31st March, 2010, for Continued Businesses
(excluding the results of Sponge Iron/Cement businesses sold/demerged
w.e.f. 22nd May, 2009 and 1st October, 2009, respectively) have been
given for better comparison.
At the consolidated level, while there is no change in the Revenue and
Operating Profit of the Company, on account of the demerger/merger of
the Cement Business, the Net Profit after minority share has been
impacted due to the direct participation of the CompanyÃs shareholders
in SCL/UltraTech on demerger/merger of the Cement business of the
Company, as explained above.
DIVIDEND
Your Board has recommended a dividend of Rs. 20 per share, subject to
your approval. The total outflow on account of the dividend (inclusive
of the Corporate Tax on Dividend) would be Rs. 197.06 crore.
EMPLOYEE STOCK OPTION SCHEME (ESOS)
During the year, 71,297 Employee Stock Options were granted to certain
eligible employees of the Company. Out of the Options granted in the
earlier years, 42,909 Options were vested.
During the year, some of the option holders have exercised options
thereby converting 15,207 options into shares of Rs. 10 each and,
accordingly, 15,207 shares were allotted to the concerned option
holders.
The details of Employee Stock Options granted pursuant to the Employee
Stock Option Scheme -2006 (ESOS-2006), as also the disclosures in
compliance with Clause 12 of the Securities and Exchange Board of India
(Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines, 1999, are set out in Annexure ÃAÃ to this Report.
DEBENTURES AND TERM LOANS
Your Company has not raised any long term loans. Term loans
aggregating Rs. 38 crore have been repaid.
AWARDS AND ACCOLADES
Some of the significant accolades earned by your Company during the
year include:
- Greentech Environment Award 2010 - Gold: Harihar Polyfibers,
Harihar.
- Most Innovative Environmental Project Award 2011 by CII Godrej Green
Business Centre: Harihar Polyfibers, Harihar.
RESEARCH AND DEVELOPMENT
Your CompanyÃs unwavering commitment to R&D and to sustainably surpass
ÃQualityà requirements in a holistic manner has been endorsed by
accreditations from the Ministry of Science and Technology, Government
of India, for the newly set up ÃWood and Pulp Research Centreà at
Harihar (Karnataka) and the ÃTextile Research and Application
Development Centreà (TRADC) at Kharach (Gujarat). The ÃBirla Research
Institute for Applied Sciencesà already enjoys this status.
The Pilot Plant facilities at the new state-of-the- art, ÃWood and Pulp
Research Centre,Ã became operational in July 2010. It fosters
continuous improvements in process, product quality and environment
management of the Pulp plants through ongoing projects in areas related
to Wood morphology, pulping and bleaching optimisation and quality
improvement. This centre will help the business in evaluating
suitability of various species of wood for DG pulp and aid customised
process design. The Birla Research Institute for Applied Sciences is
actively engaged in development and patenting of a novel next
generation fibre besides having developed process for Flame Retardant
Viscose Fibres for which patents have been obtained. TRADC has been
facilitating the market seeding of new fibres so developed through
evolving their optimal downstream processing techniques and producing
test quantities of finished products with them. These endeavours have
resulted in the Market launch of a Denim collection based on our
solvent spun fibre ÃExcelà as also a special trousers collection based
on a new colour fast spun dyed fibre. Work is ongoing to develop and
seed specialty products based on functional fibres providing added
value and exclusive convenience to our end-customers. All our R&D
Centres are being further strengthened with new equipment and
analytical instruments.
Towards upgrading our environmental standards, a plant based on a novel
process to reduce emissions has been commissioned at one of our
production lines for confirming the results obtained in pilot trials.
HUMAN RESOURCES
Your Company believes that Human Resources play a very critical role in
its growth. Your Directors are pleased to inform you that the Aditya
Birla Group, of which your Company is a part, has been declared as one
of the Best Employers in India by the Aon à Hewitt survey conducted
recently. The Group ranked second among two hundred other Indian
organisations which took part. The process entailed a rigorous
six-month exercise involving HR systems and processes audit, online
survey with several employees, face to face meetings with Leadership
teams, HR and a cross section of employees.
Going forward, attracting and retaining talent will be a key challenge.
Various initiatives have been launched to provide growth opportunities
to employees and stem attrition. Notable initiatives for the current
year include the rollout of the Employee Value Proposition and the
Career Portal Platform to provide visibility of career opportunity to
the employees.
CORPORATE GOVERNANCE
Your Directors reaffirm their continued commitment to good corporate
governance practices. Your Company fully adheres to the standards set
out by the Securities and Exchange Board of India for Corporate
Governance practices and has implemented all of its stipulations.
As required by Clause 49 of the Listing Agreement of Stock Exchanges, a
separate section on Corporate Governance together with a certificate
from your CompanyÃs statutory Auditors, forms part of this Annual
Report.
DIRECTORSÃ RESPONSIBILITY STATEMENT
As stipulated in Section 217(2AA) of the Companies Act, 1956, your
Directors subscribe to the ÃDirectorsà Responsibility Statementà and
confirm that:
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures;
ii) the accounting policies selected have been applied consistently and
judgements and estimates are made that are reasonable and prudent so as
to give a true and fair view of the state of affairs of your Company as
at the end of the financial year and of the profit or loss of your
Company for that period;
iii) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of this
Act for safeguarding the assets of your
Company and for preventing and detecting fraud and other
irregularities; and
iv) the annual accounts have been prepared on a going concern basis.
CONSOLIDATED FINANCIAL STATEMENTS AND RESULTS OF SUBSIDIARY COMPANIES
The Consolidated Financial Statements have been prepared by your
Company in accordance with the applicable Accounting Standards (AS-21,
AS- 23 and AS-27) issued by the Institute of Chartered Accountants of
India and the provisions of the listing agreement with the Stock
Exchanges. Together with the Auditorsà Report, these form part of the
Annual Report.
In terms of the recent General Circular of the Ministry of Corporate
Affairs (MCA), Government of India, the copy of Balance Sheet, Profit
and Loss Account, Directorsà Report, Auditorsà Report, etc., of the
subsidiary companies are not attached with the Annual Report of the
Company. The related information on the Annual Accounts of the
subsidiary companies shall be made available to the shareholders of the
Company and of the subsidiary companies, who shall seek such
information at any point of time. The Annual Accounts of the subsidiary
companies will also be kept for inspection by any shareholder at the
Registered Office of the Company and that of the subsidiary companies
concerned. The Statement pursuant to Section 212 of the Companies Act,
1956, containing the details of the CompanyÃs subsidiaries and the gist
of the financial performance of the subsidiary companies forms part of
the Consolidated Financial Statements of this Annual Report.
PARTICULARS AS PER SECTION 217 OF THE COMPANIES ACT, 1956
Information on Conservation of Energy, Technology Absorption and
Foreign Exchange Earnings and Outgo, stipulated under Section 217(1)(e)
of the Companies Act, 1956, is set out in a separate statement,
attached to this report (Annexure ÃBÃ) and forms part of it.
In accordance with the provisions of Section 217(2A) read with the
Companies (Particulars of Employees) Rules, 1975, the names and other
particulars of employees are to be set out in the Directorsà Report, as
an addendum thereto. However, in tandem with the provisions of
Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and
Accounts as set out therein are being sent to all members of the
Company excluding the aforesaid information about the employees. Any
member, who is interested in obtaining such particulars about
employees, may write to the Company Secretary at the Registered Office
of the Company.
DIRECTORS
Subject to your approval, the Board of Directors has appointed Mr.
Adesh Gupta as the Manager of the Company, in addition to his present
role as the Whole-time Director and CFO of the Company, w.e.f. 22nd
March, 2011 to 2nd October, 2014.
Mr. M.L. Apte, Mr. R.C. Bhargava, Mrs. Rajashree Birla and Mr. Cyril
Shroff, the existing Directors of the Company, retire from office by
rotation and being eligible, offer themselves for re- appointment.
A brief resume of the Directors being re- appointed, is incorporated in
the Corporate Governance Section, which forms part of this Annual
Report.
It is with great pride that we share with you that the following Awards
have been conferred on your Director, Mrs. Rajashree Birla:
>- the exalted ÃPadma Bhushan Awardà by the Government of India in
recognition of her exemplary contribution in the area of social work;
>- the prestigious ÃGlobal Golden Peacock Life Time Achievement AwardÃ
for Community Development for her Outstanding Contribution towards
Community Development and Social Welfare; and
>- the coveted ÃAIMA Managing India Awardà for the ÃCorporate Citizen
of the YearÃ.
AUDITORS
The Board, on the recommendation of the Audit Committee, has proposed
that M/s. G.P. Kapadia & Co., Chartered Accountants, Mumbai and M/s.
Deloitte Haskins & Sells, Chartered Accountants, Mumbai, be
re-appointed as the Joint Statutory Auditors of the Company, to hold
office from the conclusion of the ensuing Annual General Meeting till
the conclusion of the next Annual General Meeting of the Company. M/s.
G.P. Kapadia &
Co., Chartered Accountants, Mumbai, and M/s. Deloitte Haskins & Sells,
Chartered Accountants, Mumbai, have forwarded their certificates to the
Company, stating that their re-appointment, if made, will be within the
limit specified in that behalf in Sub-section (1B) of Section 224 of
the Companies Act, 1956.
The Board, on the recommendation of the Audit Committee, has also
proposed that M/s. Vidyarthi & Sons, Chartered Accountants, Gwalior, be
re- appointed as the Branch Auditors of Vikram Woollens, a Division of
your Company.
Resolutions seeking your approval on these items are included in the
Notice of the ensuing Annual General Meeting.
The observations made in the Auditorsà Report are self-explanatory,
and, therefore, do not call for any further comments under Section
217(3) of the Companies Act, 1956.
COST AUDITORS
In pursuance of Section 233-B of the Companies Act, 1956, your
Directors have appointed M/s. R. Nanabhoy & Co., Mumbai, and M/s. R.J.
Goel & Co., Delhi, as the Cost Auditors to conduct the Cost Audit of
Pulp and Fibre, Caustic Soda, Sulphuric Acid and Textiles for the year
2011-12. The approval of the Central Government for the appointment
has since been received.
APPRECIATION
Your Directors wish to take this opportunity to express their sincere
appreciation to the Central and State Governments, banks, financial
institutions, stakeholders and business associates for their
whole-hearted support and co-operation.
Your Directors also wish to place on record their deep appreciation of
the contribution of your CompanyÃs employees at all levels which has
been pivotal to your CompanyÃs growth.
For and on behalf of the Board
Kumar Mangalam Birla
Chairman
Mumbai, 28th June, 2011
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