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Grindwell Norton Ltd.

BSE: 506076 Sector: Engineering
BSE 00:00 | 21 Jan 1930.50 -19.35






NSE 00:00 | 21 Jan 1928.75 -21.20






OPEN 1948.00
52-Week high 2025.45
52-Week low 672.45
P/E 73.94
Mkt Cap.(Rs cr) 21,375
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1948.00
CLOSE 1949.85
52-Week high 2025.45
52-Week low 672.45
P/E 73.94
Mkt Cap.(Rs cr) 21,375
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Grindwell Norton Ltd. (GRINDWELL) - Director Report

Company director report

Dear Members

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




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


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

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


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


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


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

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

Ceramics and Plastics

The severe lockdown at the start of the year adversely impacted the operations andresults of all the businesses in this segment. The revival commenced in June and wassustained over the subsequent quarters. The Silicon Carbide business witnessed a declinein sales and profits. This was partly due to weak demand (domestic and exports) in thefirst half and partly due to supply constraints. The operations of your Company'ssubsidiary in Bhutan were severely impacted by restrictions imposed by the Government tocontrol COVID-19 and as a result there was a substantial decline in production. Duringthe year your Company made a further investment in the equity capital of APGPCL whichentitled it to receive additional electricity. This enabled increased production at theTirupati plant. The Performance Refractory business maintained its sales mainly due to theincreased demand from the end user industry. Despite sales being flat there was asubstantial increase in the operating profit on account of lower raw material costs formuch of the year and the significant increase in plant efficiencies. The PerformancePlastics business had an excellent year with a significant increase in sales (domesticand in particular exports) and operating profit. This was mainly due to the outstandingresults of the Life Sciences segment. As the year progressed demand from passenger carsand the construction sector also improved resulting in higher sales of bearings andcomposites. Overall on a consolidated basis the sales and operating profit of theCeramics & Plastics segment increased by 5.8% and 63.8% respectively.

IT Services and Others

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


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

Company attached the highest priority to ensuring the safety security and well-beingof its employees and took various measures in this regard including facilitatingwork-from-home for all its office staff creating the necessary infrastructure and changesin operations at its plants and supporting employees and their families in dealing withCOVID-19. At the same time your Company also took various steps to support its channelpartners it's base of small vendors and sub-contractors and also vulnerable sections ofsociety.


The Company has one subsidiary in Bhutan Saint-Gobain Ceramic Materials Bhutan PrivateLimited. In terms of sub-regulation (1) (c) of Regulation 16 of Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015("Listing Regulations") it is not a material subsidiary. The operations of yourCompany's subsidiary in Bhutan was severely affected due to restrictions imposed forcontaining the spread of COVID-19.

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

In accordance with Section 129 (3) of the Companies Act 2013 ("Act") andRule 5 of the Companies (Accounts) Rules 2014 and relevant Accounting Standards("AS") the Company has prepared consolidated financialstatements (incorporatingthe financial results of the subsidiary company and Joint Venture) which forms part ofthe Annual Report. A statement in Form AOC-1 containing salient features of the financialstatements of the subsidiary company and Joint Venture are also included in the AnnualReport. In accordance with the provisions of Section 136(1) of the Act the Annual Reportof the Company containing therein the standalone and consolidated financial statementsand audited financial statements of the subsidiary have been placed on the website of the



At the time of writing the second wave of COVID-19 is spreading rapidly throughoutIndia. The severity of the spread may force the government to re-impose stricter virusmanagement controls. Having said this the ground reality is very differentfrom theprevious year and industrial activity is continuing in most parts of the country. Thuswhile the second wave will have an adverse impact in the first quarter demand is expectedto revive as and when this wave subsides. As such while your Company's management willprioritize the safety and well-being of your Company's employees and all its associatesit will also focus on servicing its customers on growth led by new products and newmarkets (especially export markets) and on ensuring the margins are maintained byincreasing prices and improving operating efficiencies to offset the recent escalation incommodity and industrial input prices.

Besides its large cash balance will enable your Company to progress its capitalexpenditure programme aimed at building capacities and capabilities. While the outlook forthe very short term is uncertain your Directors and the Company's management have immenseconfidence in your Company's future.


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


The particulars of loans guarantees andinvestmentshavebeendisclosedinthefinancial .statements


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

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

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

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



The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under

Section 134(3)(m) of the Act and read with Rule 8 of the Companies (Accounts) Rules2014 is set out in the Annexure 1 of this Report.

Your Company is committed to ensure a clean and green pollution-free environment aswell as a safe and healthy workplace at all plant locations and work sites. Your Companystrictly abides by the Saint-Gobain Group's Environment Health and Safety Charter and thepolicies and procedures framed under it. All the plants of your Company are certifiedunder ISO 9001 ISO OHSAS 18001. These certifications and various awards are recognitionof the efforts made and results achieved by your Company in improving the EnvironmentHealth and Safety at all its work sites.


Disclosures pertaining to remuneration and other details as required under Section 197of the Act read with Rule 5 of the Companies

(Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexed asAnnexure 2(A) to this Report.

The Statement containing names of top ten employees in terms of remuneration drawn andthe particulars of employees as required under Section 197(12) of the Act read with Rule5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is provided in Annexure 2(B) forming part of this Report. The Annual Report including theaforementioned information is available on the website of the


The Company has not accepted any public deposits and as such no amount on account ofprincipal or interest on public deposits were outstanding as on the date of the balancesheet.


In accordance with the Act and the Articles of Association of the Company Mr. SreedharNatarajan (Director Identification No. 08320482) Non-Executive retires by rotation andbeing eligible has offered himself for re-appointment. The Board of Directors recommendsthe re-appointment of Mr. Sreedhar Natarajan. A resolution seeking shareholders' approvalfor his re-appointment along with other required details forms part of the Notice.

Mr. Keki Elavia Dr. Archana Hingorani and Mr. Subodh Nadkarni have submitteddeclarations that each of them meets the criteria of independence as provided in Section149 (6) of the Act and Regulation 16(1) and 25 (8) of the Listing Regulations. There hasbeen no change in circumstances affecting their status as Independent Non-ExecutiveDirectors of the Company during the year. They have also completed the registration withthe Independent Directors Databank and requisite disclosures have been received from themin this regard.

The disclosures required pursuant to Regulation 36 of the Listing Regulations Clause1.2.5 of the Secretarial Standard on General Meetings are given in the Notice of AGMforming part of the Annual Report and Schedule V of the Listing Regulations are given inthe Corporate Governance Report forming part of the Annual Report. The attention of theMembers is also invited to the relevant items in the Notice of the AGM.

Pursuant to Section 203 of the Act the Key Managerial Personnel of the Company are:Mr. B. Santhanam Managing Director Mr. Krishna Prasad Executive Alternate Director toMs. Isabelle Hoepfner Non-Executive Director with effect from May 20 2020 Mr. DeepakChindarkar Chief Financial Officer and Mr. K. Visweswaran Company Secretary.

None of the Directors or Key Managerial Personnel has any pecuniary relationships ortransactions with the Company other than salaries commission sitting fees andreimbursement of expenses incurred by them for the purpose of attending meetings of theCompany.


The purpose of the programme is aimed to familiarise the Independent Directors with theCompany the nature of the industry in which the Company operates and the business modelof the Company. The details of the familiarisation programme imparted to the IndependentDirectors are available on the Company's website The Independent

Directors are regularly briefed with respect to the developments that are taking placein the Company and its operations.


The Board meets at regular intervals to review the Company's businesses and to discussstrategy and plans. A tentative annual calendar of meetings is circulated to the Directorsin advance to enable them to plan their schedule and to ensure effective participation.

During the year six board meetings were held and one meeting of Independent Directorswas also held. The maximum interval between the board meetings did not exceed the periodprescribed under the Act and the Listing Regulations.


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

? Audit Committee

? Nomination and Remuneration Committee

? Stakeholders Relationship Committee

? Corporate Social Responsibility Committee

? Risk Management Committee

Details of the Committees their constitution meetings and other details are providedin the Corporate Governance Report.


To the best of their knowledge and belief and according to the information andexplanations obtained your Directors make the following statements in terms of Section134 of the Act:

i. that in the preparation of the annual financial statements for the financial yearended on March 31 2021 the applicable accounting standards have been followed along withproper explanations relating to material departures if any;

ii. that such accounting policies have been selected and applied consistently andjudgments and estimates have been made that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company at the end of the financial yearon March 31 2021 and of the profit of the Company for the year ended on that date;

iii. that proper and sufficient care has been taken for the maintenance of provisionsof the Companies Act 2013 for safeguarding the assets of the Company and for preventingand detecting fraud and other irregularities;

iv. that the annual financial statements have been prepared on a ‘going concern'basis;

v. that proper internal financial controlsare financialcontrols areadequateplace and are operating thatsuchinternal

With reference to the point number (v) the Board believes that the Company has soundInternal Financial Controls ("IFC") commensurate with the nature and size of itsbusiness. However business is dynamic and the IFCs are not static and evolve over timeas the business technology and fraud environment changes in response to competitionindustry practices legislation regulation and current economic conditions. There willtherefore be gaps in the IFC as the business evolves. The Company has a process in placeto continuously identify such gaps and implement newer and/or improved controls whereverthe effect of such gaps would have a material effect on the Company's operations.


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


The Board of Directors on the recommendation of the Nomination and RemunerationCommittee has adopted a framework for performance evaluation of the Board its committeesindividual directors and the chairperson through a survey questionnaire. The surveyquestionnaire broadly covers various aspects of Board functioning the composition ofBoard and its committees culture execution and performance of specific dutiesobligations and governance. The evaluation parameters are based on the execution ofspecificduties quality deliberation at the meeting independence of judgement decisionmaking the contribution of Directors at the meetings and functioning of the Committees.

The performance of the Board its committees individual directors and chairpersonwere reviewed by the Nomination and Remuneration Committee and the Board. The IndependentDirectors evaluated the performance of Non-Independent Directors Chairperson and theBoard as a whole. The Board of Directors evaluated the performance of the IndependentDirectors their fulfillment of independence criteria in terms of the Act and ListingRegulations and independence from the management. The

Director being evaluated did not participate in the evaluation process.


All related party transactions entered during the financial year were in the ordinarycourse of business and on an arm's length

During the year no material related party transactions were entered by your Company.

Prior approval of the Audit Committee is obtained for all related party transactions.The Audit Committee monitors on a quarterly basis the related party transactions enteredvis--vis the related party transactions approved by the Audit Committee.

The policy on related party transactions as approved by the Board is available on thewebsite of the Company There are no transactions that arerequired to be reported in Form AOC-2.

The details of the transactions with related parties pursuant to Ind AS-24 are providedin the accompanying financial statements


It is your Company's belief that its primary goal is to serve the needs of itscustomers and in the process of doing so to generate employment livelihood and incomefor all its stakeholders (suppliers vendors service providers employees lendersshareholders etc.) and at the same time to contribute to the revenues of the Government.Further it is your Company's belief that by pursuing its primary goal and by ensuringthat its business practices meet the highest standards of corporate governance and ethicsit best fulfills its obligations and responsibility to society. Against the backdrop ofthis belief your Company is committed to implementing the agenda set out in its CSRpolicy. The CSR policy and initiatives were undertaken during the year in the formatprescribed under the Companies (Corporate Social Responsibility Policy) Rules 2014 asamended are set out in Annexure 4 to this Report. In accordance with Section 135 of theAct a Corporate Social Responsibility Committee of the Board having an IndependentChair has been constituted to monitor the CSR policy and programs. The amount spent oneligible CSR activity for the financial 2020-21 was around 2.13% of the average profit ofthe Company during the immediately preceding three financial years.


Your Company recognises that managing risk is an integral part of good managementpractice and an essential element of good corporate governance. It aims to have a commonformalized and systematic approach for managing risk and implementing a risk managementprocess across the Company. The intent of the policy is to ensure the effectivecommunication and management of risk across all risk categories. The Company hasidentified elements of risk which may threaten the existence and financialposition of theCompany which are set out in the Management Discussion and Analysis Report.

The Company's Internal Financial Control systems are commensurate with the nature ofits business financial statements and the size and complexity of its operations. Theseare routinely tested and certified by the Statutory as well as Significant auditobservations and follow-up actions thereon are reported to theAudit Committee.


Your Company has adopted and disseminated its Whistle Blower Policy to provide a secureenvironment and encourage employees and others to report unethical unlawful or improperpractices acts or activities including a leak or suspected the leak of Unpublished

Price Sensitive Information and to prohibit any adverse personnel action against thosewho report such practices acts or activities in good faith.

The Whistle Blower Policy is available on the website of the

AUDITORS a. Statutory Auditors

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

Auditors of your Company at the 67th AGM of the Company held on July 262017 till the conclusion of the 72nd AGM of the

Company to be held in the year 2022. The Statutory Auditors have confirmed they are notdisqualified from continuing as Auditors of the Company

b. Cost Auditor

In accordance with Section 148 of the Act and Rules framed thereunder the cost auditrecords are maintained by the Company in respect of the products which are required to beaudited. Your Directors on the recommendation of the Audit Committee appointed M/s. RaoMurthy & Associates Cost Accountants (Firm Registration No. 000065) to conduct theaudit of the cost records maintained by the Company for the financial year ending March31 2022. M/s. Rao Murthy & Associates Cost Accountants have under Section 139(1)of the ActandtheRulesframedthereunderfurnished certificateof their eligibility andconsent for the appointment.

In accordance with the provisions of Section 148(3) of the Act read with Rule 14 of theCompanies (Audit and Auditors) Rules 2014 the remuneration payable to the Cost Auditoras recommended by the Audit Committee and approved by the

Board of Directors have to be ratified by the Members of the Company. Accordingly anappropriate resolution forms part of the Notice convening the AGM. The Board of Directorsseeks your support in approving the proposed remuneration of ` 200000/- (Rupees twolakhs only) plus taxes and out of pocket expenses at actuals payable to the Cost Auditorfor the financialyear ending March 31 2022. M/s. Rao Murthy & Associates CostAccountants have vast experience in the field of cost audit and have conducted the auditof the cost records of the Company for the past several years.

c. Secretarial Auditor

In accordance with Section 204 of the Act and Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 the Company had appointed M/s. Parikh &Associates Company Secretaries to undertake the Secretarial

Audit of the Company for the financialyear ended March 31 2021. The Secretarial AuditReport for the financial year ended March 31 2021 in Form No. MR-3 is set out inAnnexure 6 of this Report.

The Board has also appointed M/s. Parikh & Associates Company Secretaries asSecretarial Auditor to conduct Secretarial Audit of the Company for the financial year2021-22.

Comments on Auditors' Report

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

The Auditors have not reported any incident of fraud to the Audit Committee of theCompany in the year under review.


Pursuant to Section 92(3) read with Section 134(3)(a) of the Act the Annual Return ason March 31 2021 is available on the

Company's website


As per Listing Regulations the Corporate Governance Report with the Auditors'Certificate thereon and the Management Discussion and Analysis Report are attached whichforms part of this Report.

As per Regulation 34 of the Listing Regulations a Business Responsibility Report isattached and is a part of this Annual Report. The Dividend Distribution Policy of theCompany as required under the Listing Regulations was adopted to set out the parametersand the circumstances that will be taken into account by the Board of Directors indetermining the distribution of dividend to its shareholders. The policy is annexed asAnnexure 5 of this Report and is also available on the Company's

Your Company has devised proper systems to ensure compliance with the provisions of allapplicable Secretarial Standards issued by The Institute of Company Secretaries of Indiaand that such systems are adequate and operating effectively.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS orderspassed by the regulators or courts or tribunals impacting the going concernTherehavebeennosignificant status of the Company's operations in the future.


Your Directors take this opportunity to acknowledge with sincere gratitude thesupport of its esteemed customers the strength it derives from its association withCompagnie de Saint-Gobain and its subsidiaries the continued support and co-operationfrom its employees Bankers and the loyalty of the large family of the Company's DealersSuppliers and valued Shareholders.

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