Grasim Industries Ltd
Chairman Speech
Dear Shareholders,
For many years, we have been talking about increasing volatility and
unpredictability.
The events of the last 24 months have heralded a new era of uncertainty
where both the amplitude and frequency of shifts have vastly exceeded anything we have
seen in recent decades. The unprecedented pandemic was followed by supply chain whiplash,
and further disruption was brought on by the Russia-Ukraine war.
We are now staring at the spectre of a high-interest rate and
high-inflation regime globally.
Over the years, corporations have tried to find a balance between
efficiency and resilience, with successive decades of growth having swung the pendulum in
the direction of efficiency. The events of the last two years have once again taught us
all the virtues of reserves and resilience.
This era of disruption also presents a unique opportunity for renewal.
The exigencies of this disruption have pushed the boundaries of innovation. A world that
freed thinking from its conventional shackles. And we are clearly staring at a new age,
with new paradigms and new ideas.
GLOBAL ECONOMY: THE STORM BEFORE THE CALM?
The global economy recovered from the pandemic shock in 2022 on the
back of supportive fiscal and monetary policies and mass vaccination programmes. However,
at the end of FY22, the war in Ukraine and the subsequent economic sanctions on Russia
posed several challenges. It disrupted energy markets and supply chains and added to the
already evolving inflationary pressures and concerns over consumer demand. Consequently,
growth forecasts have been slashed. The International Monetary Fund (IMF) now expects the
world economy to grow by 3.6% in CY22, which is 0.8 percentage points lower than its
pre-war projections.
Many economies have experienced a sharp surge in inflation,
particularly in food and fuel prices, taking their inflation rates to multi-decade highs.
Central banks have been forced to respond to surging prices with aggressive rate hikes.
The pace of monetary tightening is turning out to be quite swift as
central bankers attempt to catch up with the rising inflation from their
ultra-accommodative stance during the pandemic.
As the stance of monetary policy shifts, there is greater turbulence in
currency markets. The dollar has strengthened, while emerging economies have witnessed
downward pressure on their currencies. At the same time, energy and commodity markets have
witnessed heightened volatility. Global supply chain disruptions due to pandemic-induced
lockdowns have been replaced by new disruptions caused by the war in Ukraine and the
economic sanctions.
While the global economic backdrop remains challenging, there are
reasons to remain optimistic. First, despite the slowdown, IMF's projection of world GDP
growth in CY22 is still tracking the pre-pandemic average. Second, fiscal support in
developed economies remains above the pre-pandemic trend, although diluted, versus past
years. Third, mega-trends around sustainability, green investments, digitisation, and
disintermediation remain well-entrenched and will support growth and productivity
enhancement in the medium-term.
Thus, while businesses will need to remain on guard regarding financial
market volatility and cost pressures this year, one could expect the medium-term growth
recovery to remain on track.
INDIA: AN ENGINE OF GLOBAL GROWTH
The Indian economy has not remained unscathed by these global
developments. Partly on account of the elevated commodity prices in global markets,
India's inflation has pushed higher than the target of the Reserve Bank of India (RBI). To
control inflationary risks and reduce the pressure on the rupee, the RBI has been selling
reserves and unwinding the extraordinary liquidity support provided by it during the
pandemic.
On the positive side, economic activity in India has witnessed a sharp
recovery to pre-pandemic levels on the back of a rapid and widespread rollout of the
vaccination programme. A strong digital ecosystem, fiscal and monetary policy and various
government schemes helped small and medium enterprises and the worst affected sections of
the population to survive while reviving demand and bringing the economy back on track.
Even as the global headwinds are being felt, India's growth recovery is
progressing well, and most estimates peg economic growth during FY23 around the 7% range.
India, therefore, is poised to be the fastest-growing major economy in the world and an
engine of global growth.
India's exports are exhibiting a strong buoyancy, and economic
sentiment has been supported by a robust pipeline of infrastructure projects as well as
the government's pragmatic policies, such as the production-linked incentives schemes.
Many industries have witnessed fresh project investment announcements. Foreign direct
investment flows have remained strong. The burden of non-performing assets in the banking
sector seems to have peaked out and is easing. Dynamism in India's digital ecosystem,
diversification of global supply chains away from China and the greater emphasis of
investors on sustainable finance offer new opportunities for India.
The above trends lend confidence to a robust economic narrative for
India in the medium-term, which augurs well for the corporate sector as well.
ADITYA BIRLA GROUP: DYNAMISM AND RESILIENCE AT PLAY
The Aditya Birla Group's pace of activity, range of businesses, and
depth of global presence provide a useful compass to navigate this age of disruption.
Against the backdrop of our long history as a group, dynamism leaps out as a common theme.
Over the years, we have witnessed multiple business cycles. Across businesses and markets,
our evolution is a story of continuous renewal and regeneration, as we aggressively
invested in growth and created long-term value for all stakeholders.
This institutional dynamism and resilience helped us navigate an
unprecedented business environment in FY22.
The pandemic inordinately impacted the future of work, workforce, and
workplace. We have moved with the new work ethic by focusing on a holistic employee
experience that puts equal emphasis on growth, engagement, and well-being.
Our employees value and appreciate the One ABG culture, which is
profoundly embedded across the organization. This culture lends the ultimate competitive
edge in a world where business models are easily upended.
It has been a matter of great pride for us that our employee engagement
has continued to be strong despite the stresses of the pandemic. 87% of our employees
stated in a survey that they have a colleague/friend at work to lean on during difficult
times. 96% of our employees experienced considerate behaviour from their managers during
this period.
WE ARE ONLY AS STRONG AS OUR PEOPLE
The Group's continued focus and investment in its People Processes in
good times have helped us build and sustain a robust and agile workforce that is able to
be nimble and responsive at all times. When corporates across the world are facing a
rather unusual phenomenon - The Great Resignation, our employee survey score for Intent to
stay remained strong. It is higher than the global high-performing organizations and
almost similar to pre-covid levels. This strong affinity is a testimony to our relentless
commitment to delivering a world of opportunities with care to our employees.
Internal employee movements of over 5,000 (within the businesses) were
up 18% from the average of the last two fiscals. We also focused on bringing in young
talent, with 73% of new hires being under 35 years of age. Last year, over 9,000 new
employees joined the Group refreshing our competence base.
Building an aspirational workplace for a diverse workforce was
identified as one of the important aspects of our new HR strategy. Enhancing the diversity
of our Group is a journey, and it is getting strengthened with targeted efforts over time.
Our commitment to gender diversity is evident through the appointment of 7 women to senior
leadership roles.
21% of all new hires were women, and we had 102 women engineering
graduates join us at plant locations.
We have always looked for opportunities to showcase the power of our
women leadership. This year, our cement business, UltraTech launched India's first
'all-women' operated Ready-Mix Concrete (RMC) manufacturing plant at Bhugaon, Pune. Our
list of firsts includes Aditya Birla AMC's all-women Mutual Fund branch in Bhilai,
Chhattisgarh and Aditya Birla Fashion and Retail's Madura manufacturing plants in the
south zone, which have 85% women employees.
Our learning strategy evolved continually to adapt in response to the
dynamic external environment. This was achieved by re-designing innovative learning
properties and methodologies focusing on building contemporary and contextual skills. We
shifted gears across digital, blended, and now hybrid learning, making it easier to
navigate the various modes of learning for different sets of learners. We strategically
increased the adoption and penetration of our digital learning platform (Gyanodaya Virtual
Campus) to cover 94% of our employees in the management cadre. Leveraging the power of
internal and external networks, 500+ high-quality digital content modules were created on
various themes and topics across the Aditya Birla Group (ABG).
The spirit of ABG's resilience and dynamism was displayed at an
individual, team, and business level. This has been reflected in the business results for
FY22. This year also saw the launch of new businesses, units, capacity, products, and
brands. This happened seamlessly, presenting a unique human story of innovation and grit,
and bringing alive our Group values of commitment and passion. We have together navigated
an unprecedented period of disruption and emerged stronger and sharper- demonstrating that
care, empathy, and results are mutually compatible. And especially so in periods of
turmoil.
YOUR COMPANY'S PERFORMANCE
Your Company's growth and evolution over 75 years is an instructive
story of entrepreneurship, resilience, dynamism, audacity, and triumph. Grasim exemplified
the pioneer spirit at every stage of its growth. Early generations of the company built
the foundations for an industrial giant in a country that was still in its infancy. Over
the years, we have aggressively invested in growth, accelerated the pace of
value-accretive acquisitions, and continue to bet on the dynamism of this institution as
we expand into new lines of business.
This inherent dynamism was more than visible in your Company's
performance in FY22. FY22 has been a year of growth on the bedrock of a strong ESG
foundation.
On a Consolidated basis, Grasim's Revenue for FY22 stood at ' 95,701
Crore, up 25% YoY, and EBITDA at ' 17,772 Crore, increased 13% YoY.
VISCOSE
The VSF business emerged stronger from the pandemic- induced disruption
on the back of an unrelenting focus on core fundamentals-cost leadership, operational
excellence, VAP Focus and sustainability-driven investments.
The VSF Industry dynamics are driven by events in China, as it is the
largest producer and consumer of VSF. The Chinese VSF industry experienced multiple
headwinds like COVID- related curbs, restriction of energy consumption leading to
production cuts, supply chain issues etc. All these factors impacted the industry
operating rates and created price volatility. Inter-fibre dynamics also influenced the VSF
prices.
The VSF business reported a robust increase of 38% YoY in production
volume to 623 KTPA in FY22. Sales volume also witnessed a 30% YoY increase to 602 KTPA.
The higher production and sales volume was on the back of the commissioning of the 600 TPD
brownfield expansion at Vilayat. This makes it the single largest Integrated VSF plant
globally.
The domestic sales volume surpassed the half million-ton mark in FY22
and accounted for 84% of the total sales volume. The share of value-added products (VAP)
increased 57% YoY, driven by sales of Modal, Dyed and Excel fibre. The overall VAP share
increased to 26% in FY22 from 22% in the previous fiscal. We are committed to improving
the share of VAP products in the overall portfolio.
The Net Revenue for the Viscose business jumped 75% YoY to ' 12,210
Crore and EBITDA stood at ' 1,721 Crore, up 45% YoY in FY22. Strong operational
performance, a cost-focused approach, and a higher share of VAP in the overall portfolio
were the key factors that contributed to a sharp uptick in the financial performance.
The VSF business has taken a target to achieve Net Zero Carbon
emissions across all its operations by 2040. The business also targets to reduce its
greenhouse gas (GHG) emissions intensity to half by 2030.
The VSF Vilayat site became the first Indian site to achieve the EU
Best Available Technology (BAT) compliance. The remaining Indian sites would achieve
compliance by FY25.
The Nagda unit set a new benchmark by commissioning a Zero liquid
Discharge plant (ZLD), a global first in Man Made Cellulose Fibre industry.
PULP JOINT VENTURES
The operational performance of the pulp plants was impacted by
technical factors in the overseas plants. Better pulp prices and exceptional items
supported the financial performance. The pulp JV's are of strategic importance to Grasim's
operations as they cater to a significant portion of our pulp requirement and ensure
consistency in the supply of prime quality pulp.
CHEMICALS
The Chemical business reported watershed performance in FY22, with both
the Chlor-Alkali and Advanced material business clocking solid results.
Global caustic soda prices rallied through the year on the back of a
robust recovery in demand due to the phasing out of covid-related restrictions and other
geopolitical factors.
Indian caustic soda prices also trended global prices, but with a lag.
The Indian demand for caustic soda was driven by pulp & paper, textile, and alumina.
The prices of chlorine, a byproduct of caustic soda, turned negative in H2FY22 on the back
of weak demand from the end-user industry.
Improving the percentage of chlorine integration is a key element of
the strategy. The business is looking to enhance the rate of chlorine integration from 30%
in Q4FY22 to 40% by FY25.
The performance of the Advanced Material (Epoxy) business was robust,
driven by solid demand from the end-user segment (Auto and Wind Power) and substantial
improvement in realisation. Witnessing a strong demand in the Advanced Material business,
your Company has decided to double its capacity.
On the sustainability front, improving the share of renewable energy in
the overall power mix, and setting up Zero Liquid Discharge plants are core to the
strategy.
The Net Revenue for FY22 stood at ' 7,888 Crore, an increase of 72%
YoY, and EBITDA at ' 1,534 Crore was up 160% YoY.
OTHER BUSINESSES
The execution of our strategic foray into paints business is on track.
We have accelerated our pace of investments in the business. This will enable your Company
to create a more significant Pan India presence and harness & expand the distribution
network of our white cement business to serve customers with an unmatched product
offering.
The Textile business witnessed a strong recovery in operational and
financial performance with a rebound in the textile demand during H2FY22.
The performance of the Insulators business for FY22 improved, driven by
demand from overseas markets, higher export realisation, and recovery of old dues.
CAPEX
The total capex spent by the Company towards capacity creation and
modernisation of plants stood at ' 1,958 Crore in FY22 compared to ' 1,508 Crore excluding
the paints business (standalone basis). The total capex spent by the paints business since
inception stood at ' 605 Crore. The Board of your Company has approved a total capex
amount of ' 10,000 Crore for the paints business. This amount will be invested till FY25
with commissioning of plants starting from Q4FY24.
ULTRATECH CEMENT LIMITED (A SUBSIDIARY OF THE COMPANY)
UltraTech recorded net revenues of ' 52,599 Crore and an EBITDA of '
12,022 Crore in FY22.
The Indian cement industry is expected to add -80 million tonnes of
capacity by FY24, the highest during the last ten years, driven by increased spending on
housing and infrastructure. As India's building solutions champion, UltraTech is committed
to meeting the nation's future needs for housing, roads, and other infrastructure.
ADITYA BIRLA CAPITAL LIMITED (A SUBSIDIARY OF THE COMPANY)
Aditya Birla Capital has built a platform with high quality,
significant scale, and a retail franchise over the years. The company has tripled net
profit over the last five years and nearly doubled over the previous two years, despite
several external challenges.
Aditya Birla Capital's revenue grew 15% year-on-year to ' 22,230 Crore.
The consolidated profit after tax (after minority interest) reflected a growth of 51%
year-on-year to ' 1,706 Crore, the highest ever recorded by the Company.
The retailisation strategy has led to the active customer base growing
to a significant -35 million, a 36% year-on-year growth. The scale achieved by the
Company's subsidiaries is evident, with overall AUM across asset management, life
insurance and health insurance businesses growing 10% year- on-year to ' 3,70,608 Crore,
making it one of the largest fund managers in the country. The overall lending book (NBFC
and Housing Finance) grew 11% year on year, to ' 67,189 Crore, making it a lending
portfolio of scale. The gross premium (across Life and Health Insurance) grew 25% year on
year to ' 13,867 Crore, reflecting the scale in the insurance businesses.
ADITYA BIRLA RENEWABLES
The cumulative installed capacity of Aditya Birla Renewables stood at
551 MW in FY22. The share of group captive capacity stood at 209 MW in FY22. This
cumulative installed capacity is expected to rise to 941 MW by FY23.
CONCLUSION
The 'Next 25 years' of the Company's journey would be filled with new
challenges and opportunities. Your company's well place to navigate these challenges given
your company's solid fundamentals and futuristic approach. Climate Change is one such risk
which we are trying to address through ongoing business transformation and technology-led
innovation.
The forces of change engulfing the world are creating a whole new set
of exciting possibilities and unbelievable opportunities. Many that didn't even exist
yesterday. We are uniquely privileged in that we are not passive recipients of changing
circumstances but can actively shape our destiny. And this tomorrow is for us to discover
and build.
Across businesses, we are at the cusp of a transformational growth
cycle. As a business house, we have always made investment decisions based on long-term
fundamental drivers like market opportunity, demography, technology etc. Our strong
leadership position across key businesses has come on the back of bold but calibrated
long-term bets. Given the inherent strengths of your Company we are again at a moment
where we are uniquely positioned to invest for long-term growth and explore new paradigms.
An exciting journey beckons.
Yours sincerely,
Kumar Mangalam Birla
Chairman
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Grasim Industries Ltd
Directors Reports
Dear Members,
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.
FINANCIAL HIGHLIGHTS
The financial performance of the Company for the year ended 31st March
2022 is summarised below:
(Rs in Crore)
| Particulars |
Consolidated |
Standalone |
|
2021-22 |
2020-21 |
2021-22 |
2020-21 |
| Continuing Operations |
|
|
|
|
| Revenue from Operations |
95,701.13 |
76,404.29 |
20,856.84 |
12,386.36 |
| Other Income |
821.34 |
1,045.48 |
895.31 |
513.68 |
| Total Revenue |
96,522.47 |
77,449.77 |
21,752.15 |
12,900.04 |
| Earnings Before Interest, Taxes, Depreciation and
Amortisation (EBITDA) |
17,772.41 |
15,766.22 |
4,111.47 |
2,078.00 |
| Less: Finance Costs |
1,295.70 |
1,808.88 |
247.24 |
235.95 |
| Less: Depreciation and Amortisation Expenses |
4,161.07 |
4,033.40 |
913.96 |
828.17 |
| Profit Before Share in Profit of Equity Accounted
Investees, Exceptional Items and Tax |
12,315.64 |
9,923.94 |
2,950.27 |
1,013.88 |
| Share in Profit of Equity Accounted Investees |
380.33 |
189.22 |
- |
- |
| Exceptional Items |
(69.11) |
(341.73) |
(69.11) |
(80.99) |
| Profit Before Tax (PBT) from Continuing Operations |
12,626.86 |
9,771.43 |
2,881.16 |
932.89 |
| Tax Expenses from continuing operations |
1,936.31 |
3,022.19 |
185.71 |
122.44 |
| Profit for the Period from Continuing Operations
Attributable to: |
10,690.55 |
6,749.24 |
2,695.45 |
810.45 |
| Shareholders of the Company |
7,102.37 |
4,128.41 |
2,695.45 |
810.45 |
| Non-Controlling Interest |
3,588.18 |
2,620.83 |
- |
- |
| Discontinued Operations |
|
|
|
|
| Profit Before Tax (PBT) from Discontinued Operations |
352.52 |
162.79 |
155.98 |
145.44 |
| Exceptional Items |
670.71 |
166.50 |
510.79 |
- |
| Tax Expenses from Discontinued Operations |
(440.07) |
(66.10) |
(310.95) |
(50.89) |
| Provision of Impairment of Assets Classified as Held for Sale |
(67.42) |
(25.73) |
- |
- |
| Profit for the Period from Discontinued Operations
Attributable to: |
515.74 |
237.46 |
355.82 |
94.55 |
| Shareholders of the Company |
447.41 |
176.41 |
355.82 |
94.55 |
| Non-Controlling Interest |
68.33 |
61.05 |
- |
- |
| Other Comprehensive Income for the Year Attributable to: |
3,280.80 |
4,840.92 |
3,219.07 |
4,588.91 |
| Shareholders of the Company |
3,281.85 |
4,780.54 |
3,219.07 |
4,588.91 |
| Non-Controlling Interest |
(1.05) |
60.38 |
- |
- |
| Total Comprehensive Income for the Year Attributable to: |
14,487.09 |
11,827.62 |
6,270.34 |
5,493.91 |
| Shareholders of the Company |
10,831.63 |
9,085.36 |
6,270.34 |
5,493.91 |
| Non-Controlling Interest |
3,655.46 |
2,742.26 |
- |
- |
| Profit for the Period Attributable to Shareholders of the
Company |
7,549.78 |
4,304.82 |
3,051.27 |
905.00 |
| Opening Balance in Retained Earnings |
6,021.21 |
4,605.56 |
5,529.53 |
4,838.60 |
| - Gain/(Loss) on Re-measurement of Defined Benefit Plans |
23.18 |
81.96 |
24.71 |
48.58 |
| - Gain on Sale of Non-Current Investments transferred to
Retained Earnings from equity instruments through OCI |
(1.37) |
- |
- |
- |
| - Stake Dilution in Subsidiary Companies |
(14.82) |
(7.97) |
- |
- |
| 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 |
DIVIDEND
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
TRANSFER TO RESERVES
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.
PERFORMANCE REVIEW
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 DEVELOPMENTS
Divestment 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.
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, 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.
PURCHASE OF TREASURY SHARES
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.
DEPOSITS
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.
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, 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.
Key Managerial Personnel
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.
MEETINGS OF THE BOARD
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.
INDEPENDENT DIRECTORS
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.
FORMAL ANNUAL EVALUATION
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.
INTEGRATED 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.
Cost Auditors
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.
Secretarial Auditors
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.
SECRETARIAL STANDARDS
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.
DISCLOSURES
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 ?blower 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
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.
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 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.
VISCOSE FILAMENT YARN (VFY)
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.
CHEMICAL
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.
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.
ADVANCED MATERIALS (EPOXY)
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.
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.
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.
PARTICULARS OF EMPLOYEES
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
grasim.secretarial@aditvabirla.com.
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.
ESOS-2013
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.
ESOS-2018
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 grasim.secretarial@adityabirla.com.
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.
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.
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:
• 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.
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:
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) |
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