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Grasim Industries Ltd.

BSE: 500300 Sector: Industrials
NSE: GRASIM ISIN Code: INE047A01021
BSE 00:00 | 21 Jan 1790.40 -39.45
(-2.16%)
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1840.00

HIGH

1840.00

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1779.60

NSE 00:00 | 21 Jan 1792.10 -38.90
(-2.12%)
OPEN

1829.00

HIGH

1829.00

LOW

1779.00

OPEN 1840.00
PREVIOUS CLOSE 1829.85
VOLUME 63473
52-Week high 1939.00
52-Week low 1000.00
P/E 50.86
Mkt Cap.(Rs cr) 117,862
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1840.00
CLOSE 1829.85
VOLUME 63473
52-Week high 1939.00
52-Week low 1000.00
P/E 50.86
Mkt Cap.(Rs cr) 117,862
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Grasim Industries Ltd. (GRASIM) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the 74th Annual Report in the form ofsecond 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 March2021 is summarised below:

Financial Results

Consolidated

Standalone

2020-21 2019-20 Restated# 2020-21 2019-20 Restated##
Revenue from Operations 76397.81 75140.71 12386.36 16081.87
Other Income 1051.96 968.81 513.68 525.61
Total Revenue 77449.77 76109.52 12900.04 16607.48
Earnings Before Interest Taxes Depreciation and Amortisation (EBITDA) 15766.22 13615.29 2078.00 2661.05
Less: Finance Costs 1808.88 2275.69 235.95 237.88
Less: Depreciation and Amortisation Expenses 4033.40 4004.23 828.17 813.51
Profit Before Share in Profit/(Loss) of Equity Accounted Investees Exceptional Items and Tax 9923.94 7335.37 1013.88 1609.66
Share in Profit/(Loss) of Equity Accounted Investees 189.22 562.22 - -
Exceptional Items (341.73) (1406.05) (80.99) (318.03)
Profit Before Tax (PBT) from Continuing Operations 9771.43 6491.54 932.89 1291.63
Tax Expenses from Continuing Operations 3022.19 (84.32) 122.44 66.35
Profit for the Period from Continuing Operations Attributable to: 6749.24 6575.86 810.45 1225.28
Shareholders of the Company 4128.41 4349.02 810.45 1225.28
Non-Controlling Interest 2620.83 2226.84 - -
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: 4840.92 (5001.08) 4588.91 (5070.01)
Shareholders of the Company 4780.54 (5067.05) 4588.91 (5070.01)
Non-Controlling Interest 60.38 65.97 - -
Total Comprehensive Income for the Year Attributable to: 11827.62 1637.50 5493.91 (3782.01)
Shareholders of the Company 9085.36 (655.31) 5493.91 (3782.01)
Non-Controlling Interest 2742.26 2292.81 - -
Profit for the Period attributable to Shareholders of the Company 4304.82 4411.74 905.00 1288.00
Opening Balance in Retained Earnings 4605.56 3940.83 4838.60 3796.06
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)
- Other Adjustments - 7.86 - -
Amount available for Appropriation 8982.68 8045.57 5792.18 5378.12
Add/Less: Transfer (to)/from Debenture Redemption Reserve (11.50) 72.18 - (24.51)
Less: Transfer to General Reserve (2581.87) (2865.57) - -
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 6021.21 4605.56 5529.53 4838.60

# refer note 4.3 and 4.4 of consolidated financial statements ## refer note 4.4 and 4.5of standalone financial statements

DIVIDEND

Based on your Company's performance the Board of Directors of your Company hasrecommended dividend of H5 per equity share and a special dividend of H4 per equity sharetaking 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 dividendif 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 2020dividend paid or distributed by the Company shall be taxable in the hands of theshareholders. Your Company shall accordingly make the payment of the dividend afterdeduction of tax at source.

In terms of the provisions of regulation 43A of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 ('ListingRegulations') as amended from time to time your Company has formulated a DividendDistribution Policy. This Policy is given in Annexure 'A' and is also available on yourCompany'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 incompliance with the Dividend Distribution Policy.

TRANSFER TO RESERVES

The Board of Directors of your Company has decided not to transfer any amount to theGeneral Reserves for the financial year ended 31st March 2021.

PERFORMANCE REVIEW

On a consolidated basis the revenue from operations for FY 2020-21 stood atH76397.81 Crore registering a growth of 1.67 % as compared to the previous year(H75140.71 Crore in

FY 2019-20). The consolidated EBITDA increased to H15766.22 Crore for FY 2020-21 whichwas 15.80 % higher than that of the previous year (H13615.29 Crore in FY 2019-20).

On a standalone basis revenue from operations for FY 2020-21 stood at H12386.36 Crorewhich was 22.98 % lower than that of the previous year (H16081.87 Crore in FY 2019-20).The standalone EBITDA is H2078 Crore for FY 2020-21 which was 21.91 % lower than that ofthe previous year (H2661.05 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 November2020 approved the transfer of the Company's business of manufacture trading and sale ofurea customised fertilisers agri-inputs crop protection plant and soil health productsand specialty fertilisers ('Fertiliser Business') as a going concern on a slump salebasis to Indorama India Private Limited ('IIPL') through a Scheme of Arrangement betweenthe Grasim Industries Limited ('the Company') and IIPL and their respective shareholdersand creditors under sections 230-232 of the Companies Act 2013 ('Scheme') and otherprovisions of applicable law for a lump sum consideration of H2649 Crore to be paid byIIPL to the Company subject to customary closing adjustments as mentioned in the Schemeto be carried out upon effectiveness of the Scheme.

Appointed Date of the Scheme is the Effective Date or such other date as may be agreedto 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 necessaryregulatory approvals including approval from Securities and Exchange Board of India('SEBI') the

jurisdictional Hon'ble National Company Law Tribunals ('NCLT') and the CompetitionCommission of India ('CCI').

The Scheme has been approved by CCI Stock Exchanges and SEBI. The Scheme was approvedby the shareholders and creditors of the Company at their respective meetings held on 16thApril 2021. Hon'ble NCLT Kolkata Bench vide its order dated 26th March 2021dispensed holding of meetings of shareholders and creditors of IIPL.

Petition for approval of the Scheme has been filed with jurisdictional NCLTs andhearing for the same is pending.

The Scheme inter-alia will be beneficial to the Company as it will help the Companyto pursue growth opportunities in its core businesses and unlock value with overallimprovement in working capital cycle due to release of blocked funds from long receivablecycle involved in the said business. As the Scheme involves transfer of the fertiliserbusiness through a slump sale for a lump sum consideration no shares will be allotted byIIPL to the shareholders of the Company. Therefore the shareholding of the Company willnot 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 approvedentering into Paints as new line of business. The shareholders' approval for alteration tothe Object Clause thereby permitting the Company to foray into Paints business wasobtained at the Extra Ordinary General Meeting held 22nd February 2021.

Historically the Indian paints industry has been growing at a healthy rate. Theorganised segment constitutes approximately 70% by value of the total paints market andhas historically grown faster than the unorganised segment and therefore gained marketshare from the unorganised segment.

The Company's entry into this consumer-oriented business will further diversify itsportfolio provide scale and growth and will also offer a wide choice to Indian consumersas 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 helppainters/applicators and all traditional and emerging channel partners across India toexpand their existing business and grow. The Company's Board of Directors has approved aninitial capital expenditure of approximately H5000 Crore over the next 3 years.

Entry in the paints sector will add size scale and diversity to the existing businessportfolio of the Company. The Company

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 Companyand Maschinenfabrik Reinhausen Gmbh ('MR')wherein the Company holds 51% of share capitaland the balance share capital (49%) is held by MR.

ABPCL is in the process of setting up a state-of-the-art Composite Hollow CoreInsulators ('CHCI') manufacturing plant at Halol Gujarat India at a project cost ofabout 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 inprogress 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') andtheir respective shareholders and all concerned ('Scheme') under sections 230 to 232 ofthe Companies Act 2013 was approved by the Board of Directors of your Company and GPFPLand necessary application/petitions for approving merger were filed with jurisdictionalNCLTs.

Hon'ble NCLT Indore Bench at Ahmedabad approved the Scheme vide its order dated 12thNovember 2020 as amended vide its order dated 28th January 2021. Your Companyhas filed the copy of the order with Registrar of Companies ('ROC') Gwalior. Hon'ble NCLTMumbai 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 befiled with the ROC Pune by GPFPL. The Scheme will be effective on the date of filing ofthe 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 yourCompany) and Sun God Trading and Investment Limited (wholly-owned subsidiary of ABNLInvestment Limited) had approved the Scheme of Amalgamation between Sun God Trading andInvestment Limited and ABNL Investment Limited and their respective shareholders and allconcerned ('Scheme') under section 233 of the Companies Act 2013.

ABNL Investment Limited has filed copy of the order of Regional Director (North-WesternRegion) Ahmedabad with Registrar of Companies Ahmedabad. On receipt of the certifiedcopy of the

order by Sun God Trading and Investment Limited same will be filed with the Registrarof Companies Gwalior.

Amalgamation of Aditya Birla Solar Limited ('ABSL') with Aditya Birla RenewablesLimited ('ABReL')

ABSL and ABReL are wholly-owned subsidiaries of your Company both engaged in thebusiness of electric power generation using solar energy. The Board of Directors of bothcompanies have approved the Scheme of Arrangement between ABSL and ABReL under sections230 and 232 of the Companies Act 2013. A joint application was filed by ABSL and ABReLwith the Hon'ble NCLT Mumbai Bench on 27th March 2020. Hon'ble NCLT MumbaiBench vide its order dated 17th February 2021 dispensed with the requirement ofconvening meetings of shareholders and creditors of both ABSL and ABReL. ABSL and ABReLare in the process of filing petition seeking sanction of the merger and the dissolutionof ABSL.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Companies Act 2013 read with the Companies (Accounts) Rules2014 Listing Regulations and IND AS 110 - Consolidated Financial Statements (CFS)/and INDAS 28 - Investment in Associates/and Joint Ventures the Audited Consolidated FinancialStatements 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 subsidiariesassociates and joint venture companies of your Company.

In accordance with the provisions of section 129(3) of the Companies Act 2013 readwith rule 5 of the Companies (Accounts) Rules 2014 a statement containing the salientfeatures of financial statements of each of the subsidiaries/ associates/joint venturecompanies of your Company in the prescribed Form AOC-1 is given in Annexure 'B' to thisReport.

The said Form also highlights the financial performance of each of thesubsidiaries/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 theAnnual Report of your Company containing inter-alia the audited standalone andconsolidated financial statements has been placed on the website of your Company and canbe accessed at https://www.grasim.com/ investors/results-reports-and-presentations.

Further the audited financial statements along with related information and otherreports of each of the subsidiary companies is also available on the website of yourCompany 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 CementLimited and Aditya Birla Capital Limited are the material listed subsidiary companies ofyour Company. The Audit Committee and the Board reviews the financial statementssignificant transactions and working of all the subsidiary companies and the minutes ofunlisted subsidiary companies are placed before the Board.

Your Company has in accordance with the Listing Regulations adopted the Policy fordetermining Material Subsidiaries. The said Policy is available on your Company's websitewww.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 with GeneralCircular No. 14/2020 dated 8th April 2020; General Circular No.17/2020 dated 13thApril 2020; and General Circular No. 02/2021 dated 13th January 2021 andCircular No. SEBI/HO/CFD/CMD1/CIR/P/2020/79 dated 12th May 2020 and CircularNo. SEBI/HO/CFD/CMD2/CIR/P/2021/11 dated 15th January 2021 issued by theSecurities and Exchange Board of India ('SEBI') (collectively referred to as 'MCA and SEBICirculars') permitted convening the Annual General Meeting through Video Conference(VC)/Other Audio-Visual Means (OAVM) without the physical presence of the Members at acommon venue. In compliance with the MCA & SEBI Circulars applicable provisions ofthe Companies Act 2013 and Listing Regulations the 74th Annual GeneralMeeting 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 subsidiaryKrishna Holdings Pte. Ltd ("Krishna") a company incorporated in Singapore hascompleted the divestment of its entire equity shareholding of 92.5% in its cementsubsidiary 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 14thNovember 2018 approving the Resolution Plan submitted by UTCL under the Insolvency andBankruptcy Code 2016 for acquisition of Binani Cement Limited subsequently renamed UNCLa loan of

US$ 230.4 million in 3B Binani Glassfibre SARL ('3B') a company registered inLuxembourg was assigned to UNCL from IDBI Bank Limited. Assignment of the loan was alongwith securities which included pledge over all assets and shares of 3B in various formsin favour of UNCL. Since 3B was in continuous default in servicing the loan UNCL enforcedits pledge of 3B shares consequent to which UNCL became owner of 100% equity of 3B w.e.f12th March 2021. 3B's Board has also been re-constituted. UNCL has taken thisstep to safeguard and expedite the recovery of its loan from 3B. Till the time UNCL isable to recover its loan the investment in 3B will be treated as investment held forsale.

Aditya Birla Capital Limited (ABCL)

Aditya Birla Sun Life AMC Limited ('ABSLAMC') a material subsidiary of ABCL filed adraft red herring prospectus ('DRHP') dated 19th April 2021 with the Securitiesand Exchange Board of India for an initial public offering by way of an offer for sale('IPO') of up to 38880000 equity shares of face value of C5 each constituting up to13.50% of the paid-up share capital of ABSLAMC subject to relevant approvals as requiredand other considerations. The above IPO comprises of an offer for sale of up to 2850880equity 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 H1316089688 as at 31stMarch 2021 comprising of 658044844 equity shares of H2 each fully paid up.

During the year under review your Company issued and allotted 245906 equity sharesof H2 each pursuant to the exercise of Stock Options and Restricted Stock Units in termsof the Employees Stock Option Schemes of your Company.

PURCHASE OF TREASURY SHARES

As on 31st March 2021 Grasim Employees' Welfare Trust ('Trust') constitutedin terms of the Company's Employee Stock Option Scheme 2018 ('ESOS-2018') holds 1318344equity shares of your Company. During the financial year the Trust did not acquire anyequity shares of your Company from the secondary market. As per IND AS purchase of ownequity shares are treated as treasury shares.

DEPOSITS

During the FY 2020-21 your Company has not accepted or renewed any deposits within themeaning of section 73 of the Companies Act 2013 read with the Companies (Acceptance ofDeposits) Rules 2014 and as such no amount of principal or interest was outstandingas on the date of the Balance Sheet.

ISSUE OF NON-CONVERTIBLE DEBENTURES

During FY 2020-21 your Company has issued 5000 fully paid-up Unsecured RedeemableNon-Convertible Debentures of face value of H10 Lakh each at par on private placementbasis as per the details set out hereunder:

Number

PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS

Pursuant to section 186 of the Companies Act 2013 read with the Companies (Meetings ofBoard and its Powers) Rules 2014 disclosures relating to loans advances and investmentsas on 31st March 2021 are given in the Notes to the Financial Statements. Thereare no guarantees issued or securities provided by your Company in terms of section 186of 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 underregulation 34 of the Listing Regulations is presented in a separate Section and forms anintegral part of this Report. It inter-alia provides details about the Indian economybusiness performance review of the Company's various businesses risks and concerns andother material developments during FY 2020-21 including impact of COVID-19 on businessesof the Company.

CORPORATE GOVERNANCE

Your Directors re-affirm their continued commitment to the best practices of CorporateGovernance. Corporate Governance principles form an integral part of the core values ofyour Company. Your Company was compliant with the provisions relating to CorporateGovernance.

The Corporate Governance Report for the year under review as stipulated underregulation 34 of the Listing Regulations is presented in a separate section and forms anintegral part of this Report. A certificate from the Auditors on its compliance is givenin 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 applicableprovisions if any of the Companies Act 2013 read with Companies (Appointment &Qualification of Directors) Rules 2014 and the Articles of Association of the CompanyMr. Kumar Mangalam Birla (DIN: 00012813) and

Dr. Santrupt Misra (DIN: 00013625) Directors of your Company are liable to retire byrotation at the ensuing Annual General Meeting and being eligible have offeredthemselves for re-appointment. Brief profiles of Mr. Kumar Mangalam Birla and Dr. SantruptMisra are provided in the Corporate Governance Report which forms an integral part of thisAnnual Report.

• Mr. Dilip Gaur was appointed as the Managing Director of the Company for a termof 5 years with effect from 1st April 2016 to hold office up to 31stMarch 2021. Subject to the approval of the shareholders and based on the recommendationsof the Nomination and Remuneration Committee and taking into account his expertisebusiness acumen outstanding leadership his present performance and business needs theBoard at its meeting held on 12th February 2021 has re-appointed Mr. Dilip Gauras the Managing Director of the Company for a further period of one year with effect from1st April 2021.

Resolution seeking re-appointment of Mr. Dilip Gaur Managing Director along with hisbrief profile forms part of the Notice of the Annual General Meeting.

• Subject to the approval of the shareholders and based on the recommendations ofthe Nomination and Remuneration Committee the Board at its meeting held on 24thMay 2021 appointed Mr. V. Chandrasekaran (DIN: 03126243) and Mr. Adesh Kumar Gupta (DIN:00020403) as Additional Directors qualifying as the Independent Directors of the Companynot liable to retire by rotation for a period of five years commencing with effect from24th 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 GeneralMeeting.

Resolutions seeking the appointment of Mr. V. Chandrasekaran and Mr. Adesh Kumar Guptaas Independent Directors along with their brief profile forms part of the Notice of theAnnual General Meeting.

Your Directors commend the resolutions pertaining to appointment/re-appointment ofaforesaid Directors for your approval.

Cessation of Directors

• Mr. Arun Thiagarajan retired as an Independent Director of the Company uponcompletion of his first term of 5 years on 6th May 2021.

• Mr. O.P. Rungta Independent Director resigned from the Board of Directors ofthe Company with effect from close of business hours of 24th May 2021 due tohealth reasons on

r account of his advanced age. There was no other material g reason for his resignationexcept as stated.

 df The Board placed on record its sincere appreciation dffor the valuable contribution and services rendered by d Mr. Arun Thiagarajanand Mr. O.P. Rungta during their tenure as 3l the Independent Directors of theCompany.

 e There is no pecuniary or business relationship between the 6Non-Executive Directors and the Company except for the sitting jl fees and commissionpayable to the Non-Executive Directors in f accordance with the applicable laws and withthe approval of g the shareholders.

 g Key Managerial Personnel

s Pursuant to the provisions of sections 2(51) and 203 of the e Companies Act 2013read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 Mr. Dilip Gaur Managing Director Mr. Ashish Adukia Chief g FinancialOfficer and Mrs. Hutokshi R. Wadia President and ge CompanySecretary are the Key Managerial Personnel of the e Company as on 31stMarch 2021.

Mr. Sailesh Daga has been appointed as the Company d Secretary andCompliance Officer of the Company in place of d Mrs. Hutokshi R. Wadia witheffect from 1st April 2021. n Mrs. Hutokshi R. Wadia ceased to bethe Company Secretary n and Compliance Officer of the Company with effect fromclose a of business hours on 31st March 2021. g

t The Board noted the same and placed on record its s sincereappreciation for the valuable contribution made by n Mrs. Hutokshi R. Wadia during hertenure as the Company Secretary and Compliance Officer of the Company. d

MEETINGS OF THE BOARD

n The Board of Directors of the Company met 7 (Seven) g times during the year todeliberate on various matters. The 3l meetings were held on 13th June 2020 13thAugust 2020 1st October 2020 12th November 2020 22ndJanuary 2021 12th February 2021 and 24th March 2021. o

 r Further details are provided in the Corporate Governance Reportwhich forms an integral part of this Annual Report.

INDEPENDENT DIRECTORS

f Definition of 'Independence' of Directors is derived from n regulation16(1)(b) of the Listing Regulations and section 149(6) of the Companies Act 2013 andrules framed thereunder. Your Company has received declarations from all the Independent eDirectors of your Company confirming that they meet the if criteria of independence asprescribed under section 149(6) n of the Companies Act 2013 and regulation 16(1)(b) ofthe

Listing Regulations. Your Company's Board is of the opinion that the IndependentDirectors possess requisite qualifications experience and expertise in leadershipgovernance sustainability strategy planning technical expertise financial managementlegal expertise risk management sales & marketing human resource development andthey hold highest standards of integrity.

FORMAL ANNUAL EVALUATION

Pursuant to the provisions of the Companies Act 2013 and the Listing Regulations theBoard of Directors has carried out an annual evaluation of its own performance itsCommittees Independent Directors Non-Executive Directors Executive Director and theChairman of the Board.

The Nomination and Remuneration Committee of the Board has laid down the manner inwhich formal annual evaluation of the performance of the Board its Committees andIndividual Directors has to be made. It includes circulation of evaluation formsseparately for evaluation of the Board and its Committees IndependentDirectors/Non-Executive Directors/Executive Director and the Chairman of your Company.

The performance of Non-Independent Directors the Board as a whole and the Committeesof the Board has been evaluated by Independent Directors in a separate meeting. At thesame meeting the Independent Directors also evaluated the performance of the Chairman ofyour Company after taking into account the views of Executive Director and Non-ExecutiveDirectors. Evaluation as done by the Independent Directors was submitted to the Nominationand Remuneration Committee and subsequently to the Board.

The performance of the Board and its Committees was evaluated by the Nomination andRemuneration Committee after seeking inputs from all the Directors on the basis ofcriteria such as the Board/Committee composition and structure effectiveness of theBoard/Committee process information and functioning etc.

The performance evaluation of all the Directors of your Company (including IndependentDirectors Executive Director and NonExecutive Directors and Chairman) is done at theNomination and Remuneration Committee meeting and the Board meeting by all the Boardmembers excluding the Director being evaluated on the basis of criteria such ascontribution at the meetings strategic perspective or inputs regarding the growth andperformance of your Company among others. Following the meetings of Independent Directorsand of Nomination and Remuneration Committee the Board at its meeting discussed theperformance of the Board as a whole its Committees and

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The Board expressed satisfaction on the overall functioning of the Board and itsCommittees. The Board was also satisfied with the contribution of directors in theirrespective capacities which reflected the overall engagement of the individual directors.

The new Director inducted on the Company's Board attends an orientation programme. Thedetails of the programme for familiarisation of Independent Directors are provided in theCorporate Governance Report which forms part of this Annual Report and are also availableon 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 requirementsof the Companies Act 2013 and the Accounting Standards. The financial statements reflectfairly the form and substance of transactions carried out during the year under review andreasonably 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 thebest of its knowledge and ability confirm that:

a) i n the preparation of the Annual Accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures if any;

b) the accounting policies selected have been applied consistently and judgements andestimates are made that are reasonable and prudent so as to give a true and fair view ofthe state of affairs of your Company as at 31st March 2021 and of the profit ofyour Company for the year ended on that date;

c) proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of yourCompany 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 suchinternal financial controls are adequate and were operating effectively; and

f) the Directors have devised proper systems to ensure compliance with the provisionsof 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 ExchangeEarnings and Outgo stipulated under section 134(3)(m) of the Companies Act 2013 readwith 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 inalignment with the Integrated Reporting Framework laid down by the InternationalIntegrated Reporting Council (IIRC) and aims at presenting the value creation approach forour stakeholders.

AUDITORS AND AUDIT REPORTS STATUTORY AUDITORS

Pursuant to the provisions of section 139 of the Companies Act 2013 read with theCompanies (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 BC & CO LLP Chartered Accountants (ICAI Firm Registration No. 324982E/E300003) havebeen appointed as Joint Statutory Auditors of the Company for a period of five consecutiveyears to hold office till the conclusion of the 74th Annual General Meeting ofthe Company to be held in the calender year 2021 and 75th Annual GeneralMeeting 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 AnnualGeneral Meeting of the Company. M/s. B S R & Co. LLP has confirmed that they areeligible to be re-appointed in accordance with the provisions of the Act and Rules madethereunder. The Board of Directors upon the recommendation of the Audit Committeepropose re-appointment of M/s. B S R & Co. LLP for a second term of 5 years to theshareholders for their approval. Resolution seeking your approval forms part of the Noticeconvening the Annual General Meeting.

Pursuant to the provisions of section 139 of the Companies Act 2013 as amended witheffect from 7th May 2018 the requirement of ratification of the appointment ofthe statutory auditors by the Members at every Annual General Meeting during the periodof their appointment has been withdrawn. In view of the above no resolution is proposedfor ratification of appointment of M/s. S R B C & Co. LLP Chartered Accountants atthe Annual General Meeting and a note in respect of the same has been included in theNotice of the Annual General Meeting. However they have confirmed that they are eligibleto continue to act as Statutory Auditors of your Company.

The observations made by the Joint Statutory Auditors on the Financial Statements ofthe Company in their Report for the financial year ended 31st March 2021 readwith the Explanatory Notes therein are self-explanatory and therefore do not call forany further explanation or comments from the Board under section 134(3)(f) of theCompanies Act 2013. The Auditors' Report does not contain any qualification reservationdisclaimer or adverse remark.

COST AUDITORS

The cost accounts and records as required under section 148(1) of the Companies Act2013 are duly prepared and maintained by your Company. Pursuant to the provisions ofsection 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 CorporateAffairs from time to time your Board has on the recommendation of the Audit Committeeappointed 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 Jaipuras the Cost Auditors for FY 2021-22 to conduct cost audit for various divisions and unitsof the Company as detailed under:

Name of the Cost Auditor Division of the Company Remuneration
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 & Co. Cost Accountants Mumbai (Registration No. FRN-104041) Viscose Filament Yarn - Century Rayon Division Not exceeding H2.20 Lakh plus applicable taxes and reimbursement of 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

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 Auditorsof your Company for FY 2021-22 along with separate certificates confirming each of theireligibility.

As required under the Companies Act 2013 a resolution seeking ratification of theremuneration payable to the cost auditors has been incorporated in the Notice of theAnnual 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 theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Boardhas appointed M/s. BNP & Associates Company Secretaries Mumbai to conduct thesecretarial 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 thisReport.

The Secretarial Audit Report does not contain any qualification reservationdisclaimer or adverse remark.

The Secretarial Compliance Report for the financial year ended 31st March2021 in relation to compliance of all applicable SEBI Regulations/circulars/guidelinesissued thereunder pursuant to requirement of regulation 24A of the Listing Regulationsis available on the website of the Company and can be accessed athttps://www.grasim.com/investors/board-and-shareholder- meeting.

SECRETARIAL STANDARDS

Your Company is in compliance with the Secretarial Standards specified by the Instituteof Company Secretaries of India.

REPORTING OF FRAUDS BY AUDITORS

During the year under review neither the Statutory Auditors Cost Auditors and theSecretarial Auditors have reported to the Audit Committee under section 143(12) of theCompanies Act 2013 any instances of fraud committed against your Company by its officersand 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 Companywith 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 ofthe Companies Act 2013 read with the Companies (Meetings of Board and its Powers) Rules2014. All Related Party transactions have been approved by the Audit Committee of yourCompany and are reviewed by it on a quarterly basis. Your Company has implemented RelatedParty Transactions Policy and Standard Operating Procedures for the purpose ofidentification and monitoring of such transactions.

The details of contracts and arrangements with Related Parties of your Company for thefinancial year ended 31st March 2021

are given in Notes to the Standalone Financial Statements forming part of this AnnualReport.

The Policy on Related Party Transactions as approved by the Board is available onyour 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 throughthe Whistle Blower Policy of your Company which is in compliance of the provisions ofsection 177 of the Companies Act 2013 read with rule 7 of the Companies (Meetings ofBoard and its Powers) Rules 2014 and the Listing Regulations. The Policy provides forframework and process whereby concerns can be raised by its employees against any kind ofdiscrimination harassment victimisation or any other unfair practice being adoptedagainst them. Adequate safeguards are provided against victimisation to those who avail ofthe mechanism and access to the Chairman of the Audit Committee in exceptional cases isprovided to them. The details of the Vigil Mechanism are also provided in the CorporateGovernance Report which forms part of this Annual Report and the Whistle Blower Policyhas been uploaded on the website of your Company and can be accessed athttps://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 theCompanies (Corporate Social Responsibility Policy) Rules 2014 the Board of Directors ofyour Company has a Corporate Social Responsibility ('CSR') Committee which is chaired byMrs. Rajashree Birla. The other Members of the Committee are Ms. Anita RamachandranIndependent Director Mr. Shailendra K. Jain Non-Executive Director and Mr. Dilip GaurManaging Director. Dr. Pragnya Ram Group Executive President - CSR Legacy Documentation& Archives is a permanent invitee to the Committee. The Corporate SocialResponsibility Policy ('CSR Policy') indicating the activities undertaken by yourCompany 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 developmentof the host communities around which it operates. Your Company with this intent hasidentified several projects relating to Social Empowerment and Welfare Rural DevelopmentSustainable Livelihood Health Care and Education during the year and initiated variousactivities in neighboring villages around its plant locations. Your Company undertookseveral initiatives to help nation fight against COVID

crisis including supply of healthcare equipment's medical oxygen and oxygenconcentrators setting up hospital beds distributing face masks hand gloves sanitiserbottles creating COVID related awareness etc.

During the year the Company spent H84.66 Crore of which H48.85 Crore was spent towardsmandatory CSR obligations of the Company and additionally H35.81 Crore was spent towardsvoluntary CSR activities (totalling to around 3.76% of the average net profits of lastthree financial years) on CSR activities.

The initiatives undertaken by your Company on CSR activities during the FY 2020-21are 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 RiskManagement Committee which is inter-alia mandated to review the risk managementplan/process of your Company. Risk evaluation and management is an ongoing process withinthe organisation. The Committee periodically assesses risks in the internal and externalenvironment and incorporates risk mitigation plans in its strategy business andoperation plans. Your Company has comprehensive risk management framework which isperiodically reviewed by the Committee. The scope of the Committee has been enhanced toinclude activities pertaining to overseeing sustainability activities advising Board onsustainability practices etc. and accordingly the Risk Management Committee was renamed asRisk Management and Sustainability Committee ('RMSC') effective from 24th May2021.

There are no risks which in the opinion of the Board threaten the existence of theCompany. However some of the risks which may pose challenges are set out in theManagement Discussion and Analysis which forms part of this Annual Report.

The Risk Management Policy is available on Company's website and can be accessed athttps://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 BusinessResponsibility Report describing the initiatives taken by your Company fromenvironmental social and governance perspective forms an integral part of this AnnualReport.

ANNUAL RETURN

In terms of the provisions of Section 92 and Section 134 of the Act read with Rule 12of the Companies (Management and Administration) Rules 2014 the Annual Return of yourCompany as on 31st March 2021 is available on Company's website and can beaccessed at https://www.grasim.com/investors/board-and- shareholder-meeting.

INTERNAL CONTROLS

Your Company has in place adequate internal control system (including internalfinancial control system) commensurate with the size of its operations. Internal controlsystems comprising of policies and procedures are designed to ensure sound management ofyour Company's operations safe keeping of its assets optimal utilisation of resourcesreliability of its financial information and compliance. Systems and procedures areperiodically reviewed to keep pace with the growing size and complexity of your Company'soperations. During the year under review no material or serious observation has beenreceived from the Joint Statutory Auditors of your Company citing inefficiency orinadequacy of such controls.

REMUNERATION POLICY

The Company's remuneration policy is directed towards rewarding performance based onreview of achievements. The remuneration policy is in consonance with existing industrypractice. 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 andRemuneration Committee of the Board of Directors is given in Annexure 'G' to this Reportand is also available on your Company's website and can be accessed athttps://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. DilipGaur as its Members. Majority of the members of Audit Committee are Independent Directorswith Chairman also being an Independent Director. The CFO of your Company is the permanentinvitee at the Audit Committee Meetings.

Further details relating to the Audit Committee are provided in the CorporateGovernance Report which forms an integral part of this Annual Report.

All the recommendations made by the Audit Committee during the year were accepted bythe 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. SantruptMisra and Mr. Cyril Shroff as its members.

Further details relating to the Nomination and Remuneration Committee are provided inthe 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 itsmembers.

Further details relating to the Corporate Social Responsibility Committee are providedin 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. DilipGaur as its members. The Committee looks into matters relating to transfer/ transmissionof securities; non-receipt of dividend; non-receipt of annual report etc.

Further details pertaining to Stakeholders' Relationship Committee are provided in theCorporate 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 ofyour Company's businesses in the face of increasingly volatile and competitive businessenvironment. The focus is on developing and commercialising premium differentiatedproducts improving our competitive cost position product quality and environmentalsustainability. To support these goals the businesses are managing a pipeline of projectsthat are addressing near and mid-term needs as well as the exploration of futureopportunities.

Pulp & Fibre Business

The Pulp Technology team is facilitating a comprehensive business quality improvementframework that seeks to enhance customer-centricity and the integration of pulpsupply-chain and pulp quality. By employing a "product by process philosophy"

significant improvement has been achieved in the consistency of pulp qualityparameters. This has resulted in narrowing of the product specifications and an enhancedability to deliver higher quality pulp-grades more consistently. Furthermore this hasenabled the establishment of a more stringent A+ category of pulp quality which caters tovery demanding downstream pulp applications. The pulp team is now targeting to furtherimprove its A+ product quality through process improvement. The Pulp team has alsoimplemented digital transformation projects that seek to bring critical-to-customerinformation on the pulp supply in real-time to the downstream fiber units. Recently agileprocesses and flexible working has enabled the pulp plants to quickly establish highlevels of quality and uptime of process units amidst the disruptions caused by theCovid-19 pandemic.

Viscose Staple Fibre (VSF) production facilities have increasingly collaborated onreducing material consumption increasing productivity improving product qualityenhancing sustainability and developing specialty products. This is achieved throughinsightful developments in lab and pilot plant and careful selection and implementationof the process technologies as well as process additives. One example in fiber makingprocess is the increased efficiency of water utilisation to reduce effluent and improverecovery of chemicals from the effluent. Following demonstration in one line plan is toimplement on multiple lines and plants. Your Company is continuing to fulfill publiccommitments for reducing the environmental footprint by fully closed-loop recycling ofwater Nagda. Your Company has designed a zero liquid discharge (ZLD) system andconstruction is nearing completion.

Aditya Birla Science and Technology Company Ltd. (ABSTC) has developed an understandingof the effluent streams characteristics as well as of the variations in the effluenttreatments employed by different fibre units. This has resulted in the identification ofcost saving potential through recovery of chemicals such as zinc while also providingcleaner effluent. A pilot plant has been constructed at the Kharach plant where processdata is being collected to aid the scale-up plan. Similarly recent years' understandingof the fundamentals of fiber dryer operation has been leveraged to increase productivityreduce energy consumption and improve uniformity of fiber drying.

Our digitalisation program has aimed at assisting business decision making through datadriven approaches for improvement in energy efficiency asset uptime qualityproductivity and supply chain efficiency. Process optimisation has resulted in improvedCS2 recovery. Pulp Logistics cost optimisation model is developed and is being piloted. Asa start your Company is developing digital-twin solutions at its Vilayat Unit for ChillerMSFE and Fibre Dryer processes with an objective of improving energy economy plantcapacity and product quality.

At the Pulp and Fibre business R&D an unwavering focus on enhancing customerexperience has driven us towards the timely launch of several key Speciality products.Amidst heightened hygiene concerns owing to Covid-19 your Company quickly established theanti-viral performance of Liva Antimicrobial fibres and facilitated quick commercialmanufacturing of these fibres at three fibre plants. Thanks to the nimbleness andcommitment of a diverse workforce spanning multiple functions and geographies the timelysupply of Liva Antimicrobial fibres fulfilled a much-needed societal need. Working withexternal labs and customers your Company has rapidly scaled-up the in-house developedPurocel EcoFlush nonwoven fibers which is now accepted by multiple customers for makingenvironmentally friendly 100% flushable wipes. Through the launch of Liva Reviva yourCompany now offer lyocell or viscose fibres made from raw materials partially containingcotton waste. By up-cycling cotton waste otherwise destined for low-end applicationsincineration or use in land-fills Liva Reviva serves the pressing global need of textilecircularity and waste reduction. Liva Reviva thus enables its consumers to be stylishwhile simultaneously being environmentally conscious. Your Company has activelycollaborated with multiple startups in this space with aim of increasing access toreclaimed pulp from used cotton clothing. LivaEco fiber is our offering of a rich bouquetof sustainability features while retaining the fashion quotient of the Liva brand. EveryLivaeco™ garment contains a unique molecular tracer which helps the end buyer totrace the origin and full journey of the garment he/she is buying.

Man-made cellulosic fibres are increasingly being seen as potential alternative toplastics especially in light of regulations aiming to reduce use of plastics inpackaging and ABSTC is leading such development for its business and is evaluating thepotential of viscose-based solutions for retail and apparel bags.

In order to provide a new thrust towards improving fibre quality across all of itsmanufacturing units the Fiber business has constituted a high level Quality SteeringCommittee comprising of senior leaders from fiber plants marketing and R&D forseamless collaboration. Going forward the focus will be to enhance the CustomerExperience - by providing the right quality of fibers to each customer with superiortechnical support and 100% OTIF (On Time In Full) delivery. The aim is to take a quantumleap from 'Customer Satisfaction' to 'Customer Delight' by achieving next level ofQuality and Consistency to meet changing customer requirement and to bring culturaltransformation and outlook towards Quality.

Responding to high demand for NW fibre during the pandemic technology for TiO2incorporation for delustering of lyocell fibre (Excel) was quickly developed andcommercial runs were conducted for customer evaluation. Your Company has also developedtechnology for introduction of physical tracer in its Excel fibre the fibre thus beingverifiable of its origin anywhere

in the subsequent value chain and customer's hands. It has been successfully developedand 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 andis being evaluated for market promotion with international brands. Also a process formaking high tenacity lyocell fibres using bacterial-cellulose pulp by the Australianstart-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 toconsumer's needs. During last year your Company has successfully developed AntibacterialVFY Monofilament low and high denier/filament products etc. On new application sideyour Company has created in-house facility to produce Air-textured Yarn from VFYdeveloped Lycra covered yarn (Spandex covered with PSY) which is stretchable having usagein 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 technologyfor defect identification before winding in order to supply defect free yarn to customer.To enhance productivity Indigenously developed twin tube technology for coarse deniers onPot spun Yarn Technology. Your Company is increasing its sustainability foot prints byusing 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-inapproach to Innovation process improvement for cost optimisation product developmentapplication development to bring in new products & solutions to customers in watermanagement and Plastic derivatives industry segments as key focus. In addition there arecertain segments on horizon where your Company is constantly evaluating the potentialgrowth opportunities like Food Home care Disinfection and Hygiene where there isexpertise and good synergy with its business.

Your Company's model of R&D also involves working on long term development withmajor customers and continuously looking at new technology that will help enhanceperformance of your Company's offerings. Water Treatment Business being focus we haveleveraged 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 1stPatent this year in the area of Water treatment.

Your Company's R&D Centre is approved by Dept. of Scientific and IndustrialResearch (DSIR) and is executing collaborative projects with many renowned institutes likeMNIT-Jaipur NCL etc. In addition the centre also worked with Industry to develop rangeof plasticisers (phthalate free) for various applications where PVC PU metal workingfluids and additives in Paints and Coatings are used. This will be a good focus area goingforward both in India and International market. New product development effort in area ofDisinfection & Hygiene has been initiated to address the current and future needs ofthe society.

Various enhancements in production process was undertaken by the team that helpedimproved production in CBGP plant resolved issues in Super coagulant plant modifiedrecipes in PAC liquid production for better product and Conversion of spent AluminiumChloride solution into value added product. This has helped to improve operationalefficiencies and quality of product. Your Company is focused on process improvements forbasic 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 epoxybuilding blocks Reactive diluents of various viscosities EEW HyCl content varioushardeners or curing agents. You Company's team is engaged in developing process forsynthesising building blocks for multifunctional epoxies application development inpowder coating segment for coating electronics parts Adhesive product development inconstruction segment process development for synthesising acrylic based water solublecoating solution for can coating applications developing products for floor coating andconstruction segments epoxy system solutions for composite segment to make low & highpressure pipes LPG gas storage tanks and developing products such as Ignition coilpotting system for electrical and electronic industries.

Agri-business

In line with Honorable PM's Vision of doubling farmer income by 2022 your CompanyAgri-Business defined it purpose as 'Farmers Prosperity through Innovative Solutions'.R&D approach is to innovate to deliver products that are customised functional withworld-class quality and increase productivity. Your Company is continuously providingthrust on Purak segment (non-Urea business) which includes innovative and new variant ofproduct Oorja. Several innovative products are at various stages of inhouse developmenthave performed better in research farm trials. NPK soil and crop specific (CFG) andWater-Soluble Fertiliser introduced are cost effective in production and superior inquality resulting in increase in yield for various crops. The analytical infrastructurebuilt has helped in sourcing and ensuring specific

quality requirements for seeds agrochemicals and related raw materials.

Insulators

Your Company's Insulator Business has accelerated its R&D efforts with focus onprocess & working environment improvements. Your Company has worked towardsindigenization and implemented following changes (a) Replacement of imported clay withindigenous clay to reduce import dependence and support domestic manufacturing with costadvantage (b) Inhouse design optimisation of insulators for lower weight and betterpollution performance. Your Company has also accelerated new product development tofulfill customer needs:

• New product development with specifications of narrow strength variations inproduct to meet export customers' requirements.

• Use of latest 3D Simulation Software for Electric Field Magnitude Analysis ofComposite Long Rod Insulators.

Textiles

Your Company is involved in driving innovation servicing new customers with focus onsustainability and consumer's emerging needs and constantly improving its processes.

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 naturallinen properties.

Your Company has developed blends in both linen and wool with sustainable fibres suchas Silk Lyocell Bamboo etc. that offer Organic product certifications with completetraceability from farm to fashion.

As a response to the consumers' demand your Company has developed wool forathleisure/active wear using Super wash technology (1st in India) and yarn forprotective wear applications using merino wool blended with Pyrotex. Your Company hasalso developed a new effect called 'Delave effect' in linen yarn dyeing.

On process improvement front your Company worked in collaboration with Aditya BirlaScience & Technology Co Pvt Ltd. (ABSTC) to improve its by-product (grease) recoverypercentage. Your Company has achieved sustainable improvement in recovery percentage witha 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 developinghemp 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 developinnovative yarns and fabric.

Thus the wide span of the RD&T activities amply addresses the present and futureneeds of the Textile business.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF YOUR COMPANY WHICHHAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THE FINANCIAL STATEMENTRELATES AND THE DATE OF THE REPORT

No material changes and commitments which could affect your Company's financialposition 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 withinfew weeks most of the state government-imposed lockdown and various curbs to control thespread of virus.

In the time of crisis your Company acted as a responsible citizen and caring employergiving utmost priority to the health and welfare of the employees. Your Company undertookseveral initiatives to provide financial medical psychological and emotional support tothe employees and their family battling COVID.

Some key initiatives undertaken by the Company included providing reimbursement ofhospitalization expenses beyond insurance coverage providing ex-gratia payment to the kinof deceased providing housing and education assistance to the family of deceasedemployee providing family medical insurance to the kin of deceased providing COVID CAREgiver's leave to help employees take care of their family members providing emotional andpsychological support by way of counselling sessions providing tele-counselling bydoctors for COVID treatment helping employees with hospital beds providing oxygencylinders arranging vaccination camps for employees and their families etc.

As a responsible citizen your Company undertook several COVID relief measures forsociety at large which inter-alia included setting up hospital beds distributing oxygencylinders oxygen concentrators oximeters sanitisers hand gloves arranging vaccinationcamps etc.

Your Company's plant operations across various states were impacted due to lockdownrelated restrictions imposed by government authorities. In Q1 FY 2021-22 the capacityutilisation 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 lockdownrelated restrictions imposed by state government. Your Company has taken necessarymeasures to maintain adequate financial liquidity and to ensure availability of rawmaterials and needed resources for sustained operations.

PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under section197(12) of the Companies Act 2013 read with rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is annexed herewith as Annexure 'H' tothis Report.

In accordance with the provisions of section 197(12) of the Companies Act 2013 readwith rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 the names and other particulars of employees drawing remunerationin excess of the limits set out in the aforesaid rules forms part of this Report. Inline with the provisions of section 136(1) of the Companies Act 2013 the Report andAccounts as set out therein are being sent to all the Members of your Company excludingthe aforesaid information about the employees. Any Member who is interested in obtainingthese particulars about employees may write to the Company Secretary atgrasim.secretarial@aditvabirla.com.

EMPLOYEE STOCK OPTION SCHEMES (ESOS)

ESOS-2006

During the year under review the Stakeholders' Relationship Committee of the Board ofDirectors allotted 6975 equity shares of H2 each of the Company to Option Granteespursuant to the exercise of the Stock Options under ESOS-2006.

ESOS-2013

During the year under review 18274 Stock Options which were due for vesting in theeligible employees had not vested and lapsed pursuant to the approval of the Nominationand Remuneration Committee and in accordance with the provisions of the ESOS-2013 due tovesting criteria not being met.

Further the Stakeholders' Relationship Committee issued and allotted 238931 equityshares of H2 each of the Company to Stock Options and RSU Grantees pursuant to theexercise of the Stock Options and RSUs under ESOS-2013.

ESOS-2018

During the year under review the Nomination and Remuneration Committee of the Board ofDirectors approved grant of 322925 Stock Options and 13172 Restricted Stock Units(RSUs) to the eligible employees including Managing Director of the Company

under ESOS-2018 and also approved vesting of 3051 Stock Options to the eligibleemployees. Further 251787 Stock Options which were due for vesting to the eligibleemployees had not vested and lapsed pursuant to the approval of Nomination andRemuneration Committee and in accordance with the provisions of ESOS -2018 due to vestingcriteria not being met.

39031 equity shares were transferred from the ESOS Trust account to the employeesaccount on account of exercise of Options by the grantees.

The details of Employee Stock Options granted pursuant to ESOS-2006 and the EmployeeStock Options and RSUs granted pursuant to ESOS-2013 and ESOS-2018 and also the otherdisclosures in compliance with the provisions of the Securities and Exchange Board ofIndia (Share Based Employee Benefits) Regulations 2014 are available on your Company'swebsite 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 yourCompany's Employees Stock Option Schemes will be available electronically for inspectionwithout any fee by the members from the date of circulation of the Notice of the AnnualGeneral Meeting up to the date of Annual General Meeting. Members seeking to inspect suchdocuments can send an email at grasim.secretarial@aditvabirla.com.

POLICY ON PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

Your Company has zero tolerance for sexual harassment at workplace. The Company hasadopted a Policy on Prevention Prohibition and Redressal of Sexual Harassment atworkplace in line with the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 ('POSH Act') and the rules framedthereunder. All employees (permanent contractual temporary trainees) are covered underthis policy.

Your Company has constituted Internal Complaints Committee to redress and resolve anycomplaints arising under the POSH Act. No complaint was received under the POSH Act duringthe year under review. As on 31st March 2021 there were no outstandingcomplaints under the aforesaid Act. The Company is committed to providing a safe andconducive work environment to all its employees and associates.

HUMAN RESOURCES

Your Company's human resource is the strong foundation for creating many possibilitiesfor its business. The efficient operations of manufacturing units market development andexpansion for various products was the highlight of our people

offnrt

: Continuous people development for developing knowledge and

skills coupled with the Talent Management practices will deliver : the talent needsof the organisation. Your Company's employee

I engagement score reflects high engagement and pride in being part of theorganisation.

The Group's Corporate Human Resources plays a critical role in your Company's talentmanagement process.

AWARDS AND ACCOLADES

 ] Some of the significant accolades earned by your Company j duringthe year include:

• Your Company ranked 9th among the India's Top Companies forSustainability and CSR by The Economic times and i Futurescape Responsible BusinessRankings 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

i Disclosures by Investor Relations Society in collaboration with : BSE Limited andKPMG India.

i

• Staple Fibre Divison of the Company at Nagda won the World CSR LeadershipAward-2020 for best COVID-19 solutions for community care.

• Grasilene Division of the Company won the "Energy Efficient UnitAward" at 21st CII National Award for Excellence in Energy Management2020.

: • Domestic Chlor Alkali Business at Rehla won 7th CSR INDIA

2020 Award for "Promotion of Health & Healthcare" by

Greentech Foundation.

 1 • 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 i ManufacturingChallenge for Excellence in Sustainability

by The International Research Institute for Manufacturing Industry Mumbai.

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• 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

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: • Competition Commission of India ('CCI') had passed an

I order under section 4 of the Competition Act 2002 dated 1 16thMarch 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'bleNational Company Law Appellate Tribunal ('NCLAT') and has obtained a stay by depositingH30 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 14thMarch 2019 raised a demand of H5872.13 Crore on account of dividend distribution tax(including interest) alleging that the demerger of financial services business is not aqualified demerger and holding that the value of shares allotted by Aditya Birla CapitalLimited ('ABCL') to the shareholders of the Company in consideration of the transfer andvesting of the financial services business into ABCL pursuant to duly approved Scheme ofArrangement amounted to distribution of dividend by the Company.

Your Company had challenged the said order by filing an appeal before the Commissionerof Income Tax (Appeal). The CIT (Appeal) upheld the order and reduced the quantum ofdemand from H5872 Crore to H3786 Crore. The Company has filed an appeal against theorder of CIT (Appeal) before the Tribunal on 23rd November 2020 and hasobtained stay on demand by furnishing the requisite security to Assessing Officer. Theappeal is presently pending before the Tribunal.

Your Company backed by independent expert's opinion believes that the said order isnot 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 thefollowing items as there were no transactions on these matters during the year underreview:

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 underany Scheme save and except ESOS Schemes referred to in this report;

3. The Managing Director of the Company does not receive any remuneration or commissionfrom 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 orTribunals which impact the going concern status and your Company's operations in thefuture. The update on the status of material orders passed by the Regulators or Court orTribunals 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 financialinstitutions stakeholders business associates Central and State Governments for theirco-operation and support and look forward to their continued support in future.

Your Directors very warmly thank all our employees for their contribution to yourCompany's performance. We applaud them for their superior levels of competence dedicationand commitment to your Company. We have immense respect for every person who risked theirlives and safety to fight this pandemic.

For and on behalf of the Board

Kumar Mangalam Birla Chairman (DIN: 00012813)

Mumbai 24th May 2021

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