To the Members
The Directors have the pleasure in presenting the 103rd Annual Report
on the business and operations of Birla Corporation Limited (Company') together
with the Audited Financial Statements of the Company and its Subsidiaries for the
financial year ended 31st March, 2023. The Management Discussion and Analysis also forms a
part of this Report.
FINANCIAL PERFORMANCE
The financial performance of the Company (Standalone and Consolidated)
for the financial year ended 31st March, 2023 and its comparison with the previous year is
summarised below:
|
|
|
|
(Rs in Crore) |
|
STANDALONE |
CONSOLIDATED |
PARTICULARS |
31.03.2023 |
31.03.2022 |
31.03.2023 |
31.03.2022 |
Revenue from Operations (Gross) |
5441.19 |
4790.93 |
8682.27 |
7461.22 |
Total Income |
5543.61 |
4885.32 |
8795.32 |
7560.00 |
Profit before Finance Costs, Tax, |
368.12 |
581.27 |
885.06 |
1208.79 |
Depreciation, Amortization, Minority |
|
|
|
|
Interest and Exceptional items |
|
|
|
|
Finance Costs |
107.00 |
100.53 |
338.72 |
242.66 |
Profit before Tax, Depreciation, Amortization, |
261.12 |
480.74 |
546.34 |
966.13 |
Minority Interest and Exceptional items |
|
|
|
|
Depreciation and Amortization Expense |
187.31 |
176.86 |
509.88 |
396.94 |
Exceptional items |
25.46 |
31.44 |
(6.65) |
31.44 |
Tax Expense (Net) |
2.95 |
69.52 |
2.61 |
139.16 |
|
215.72 |
277.82 |
505.84 |
567.54 |
Profit for the year |
45.40 |
202.92 |
40.50 |
398.59 |
Profit for the year attributable to non controlling interest |
- |
- |
- |
- |
Profit for the year attributable to owner of the Parent |
45.40 |
202.92 |
40.50 |
398.59 |
Re-measurement of the defined benefit plans (net of tax
expenses) |
(0.29) |
5.66 |
(2.84) |
6.25 |
Total Surplus during the year |
45.11 |
208.58 |
37.66 |
404.84 |
Surplus as per the last Financial Statements* |
1079.38 |
947.81 |
1825.51 |
1497.68 |
Appropriations: |
|
|
|
|
Dividend paid on Ordinary Shares |
77.01 |
77.01 |
77.01 |
77.01 |
Net Surplus |
1047.48 |
1079.38 |
1786.16 |
1825.51 |
* After adjustment of re-measurement of the defined benefit plans (net
of tax expenses)
FINANCIAL HIGHLIGHTS AND STATE OF COMPANY'S AFFAIRS
Financial year 2022-2023 was extremely challenging as input costs
particularly fuel increased substantially which continued to impact operations. The
Company's full year consolidated revenue for the financial year 2022-2023 grew 16.34%
over the previous year to Rs 8795.32 crores, despite sluggish demand in most key markets,
thanks largely to a significant spurt in sales in the March quarter which wiped out
cumulative losses till end of December.
However, profitability was seriously impaired by rising input costs and
the cement industry's inability to raise prices. EBIDTA for the financial year
2022-2023 at Rs 885.06 crores was down 26.78% from the previous year and cash profit was
down 43.45% at Rs 546.34 crores. Consolidated Net Profit for the year declined 89.84%
year-on-year to Rs 40.50 crores, compared with Rs 398.59 crores in the previous year.
DIVIDEND
The Directors are pleased to recommend a dividend of Rs 2.50 per share
(i.e. 25%) on 7,70,05,347 Ordinary Shares of the Company for the year ended 31st March,
2023 aggregating to Rs 19.25 crores. The dividend recommended is in accordance with the
Company's Dividend Distribution Policy. The Dividend Distribution Policy of the
Company is uploaded on the Company's website at
https://www.birlacorporation.com/investors/policies/dividend-distribution-policy.pdf.
Dividend is subject to approval of the Members at the ensuing Annual
General Meeting. In view of the changes made under the Income Tax Act, 1961, by the
Finance Act, 2020, dividends paid or distributed by the Company shall be taxable in the
hands of the Shareholders. Accordingly, the Company shall make the payment of Dividend
after deduction of tax at prescribed rates as per the Income Tax Act, 1961 and rules
framed thereunder.
TRANSFER TO RESERVES
The Board of Directors have decided to retain the entire amount of
profit for the financial year 2022-2023 in the Statement of Profit & Loss for the
financial year ended 31st March, 2023.
SHARE CAPITAL
The paid up Equity Share Capital of the Company as on 31st March, 2023
stood at Rs 77.01 crores comprising of 7,70,05,347 Ordinary Shares of Rs 10 each. During
the year the Company has neither issued shares with differential voting rights nor has
granted any stock options or sweat equity. As on 31st March, 2023, none of the Directors
of the Company hold instruments convertible into equity shares of the Company.
DEBENTURES
During the year the Company has partially redeemed Rs 30 Crores out of
the principal amount of Rs 150 Crores of 1500 unlisted, Secured, Redeemable,
Non-Convertible Debentures Series-VIII of Rs 10,00,000/- each on 8th December, 2022 and
accordingly, the face value of the said Non-Convertible Debentures has been reduced from
Rs 10,00,000/- to Rs 8,00,000/- per Debenture.
FINANCIAL STATEMENTS
The Company has prepared its financial statements as per IND AS
requirements for the financial year 2022-2023. The estimates and judgments relating to the
financial statements are made on a prudent basis, so as to reflect, in a true and fair
manner, the form and substance of transactions and reasonably present the Company's
state of affairs, profits and cash flows for the year ended 31st March, 2023.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company are prepared in
accordance with the provisions of the Companies Act, 2013 and SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015 by following applicable IND AS issued by
the Institute of Chartered Accountants of India and forms an integral part of this Report.
MATERIAL CHANGES AND COMMITMENTS
No material changes and commitments which could affect the financial
position of the Company have occurred between the end of the financial year 2022-2023 and
date of this Report.
KEY FINANCIAL RATIOS
The key financial ratios of the Company showing financial performance
for the financial year ended 31st March, 2023, are given herein below:
Sl. Financial Ratios |
2022-2023 |
2021-2022 |
No. |
|
|
1. Debtors Turnover |
23.92 |
22.64 |
2. Inventory Turnover |
7.91 |
7.93 |
3. Interest Coverage Ratio * |
3.20 |
5.47 |
4. Current Ratio |
1.34 |
1.59 |
5. Debt Equity Ratio |
0.23 |
0.25 |
6. Operating Profit Margin (%) ** # |
4.95 % |
10.28 % |
7. Net Profit Margin (%) ## |
0.85% |
4.28% |
8. Return on Net Worth (%) |
1.08% |
4.77% |
* Interest Coverage Ratio was lower for the year ended 31st March, 2023
due to lower EBIDTA as compared to last year.
** Operating Profit Margin was lower for the year ended 31st March,
2023 due to lower profitability.
# Net Profit Margin was lower for the year ended 31st March, 2023 due
to lower profitability.
## Return on Net Worth was lower for the year ended 31st March, 2023
due to lower profitability.
CHANGE IN NATURE OF BUSINESS
There has been no change in the nature of business of the Company
during the financial year 2022-2023.
CEMENT DIVISION
(a) CEMENT INDUSTRY OVERVIEW:
India is the second largest cement producer in the world with installed
capacity of over 600 Million Tons (MT) accounting for around 7% of the global capacity.
Demand for cement is mainly driven by housing sector which is estimated to account for
nearly 65% of the total demand. Infrastructure, Industrial and Commercial Construction are
estimated to account for the remaining share of demand at 20% and 15%, respectively.
During the year 2022-2023, cement demand is estimated to have grown by
9% driven by demand from housing sector, infrastructure projects as well as rural demand.
The year witnessed unprecedented increase in fuel prices driven by geo political events.
While the Industry took price hikes, it was not able to fully offset
the sharp rise in input costs drivers. After peaking in the first quarter of 2022-2023,
the international fuel prices have been correcting, providing relief to the industry
players in the latter half of financial year 2022-2023.
(b) REVIEW OF OPERATIONS AND PERFORMANCE:
After sluggish performance till the end of December 2022, the Company
staged a turnaround in the March quarter with the highest ever quarterly consolidated
sales of 4.44 million tons, up 4.5% over the previous year. This represents a jump of 19%
sequentially, which accompanied by gains in realisation and profitability, points at
improving market conditions.
To optimise cost, the Company is increasingly ramping up consumption of
renewable power and extraction of coal from the Sial Ghogri captive coal mine (Coal mine
of RCCPL Private Limited, material subsidiary of the Company).
For the quarter ended March 2023, renewable power accounted for 25% of
the Company's total power consumption, which is among the best in the industry. For
the full year, renewables accounted for 21% of total power consumption.
In FY 2022-2023, production of coal at Sial Ghogri rose 71% over the
previous year to 3,51,565 tons, which is close to the maximum the Company can extract from
the mine in a year with its current mining plan.
Alongside, the Company is scaling up use of Alternative Fuel and
Resources (AFR), for which investments are being made to equip kilns to use industrial and
municipal waste as fuel.
Production of the Company (Standalone):
The details of production of clinker and cement of the Company are as
follows:-
Particulars |
2022-2023 (Lakh Tons) |
2021-2022 (Lakh Tons) |
Change % |
Clinker production |
56.80 |
53.40 |
6.36 |
Cement production |
91.52 |
83.22 |
9.97 |
Production of RCCPL Private Limited (RCCPL), wholly
owned material subsidiary of the Company:
The details of production of clinker and cement of RCCPL are as
follows:-
Particulars |
2022-2023 (Lakh Tons) |
2021-2022 (Lakh Tons) |
Change % |
Clinker production |
44.00 |
35.03 |
25.61 |
Cement production |
68.60 |
60.02 |
14.30 |
Sales:
During the year the Company has registered an increase of 8.64% in
cement sales on standalone basis and 10.62% on consolidated basis. In absolute terms, the
sale of cement on standalone basis has increased to 90.43 lakh tons from 83.24 lakh tons
in the previous year.
RCCPL has sold 67.97 lakh tons of cement during financial year
2022-2023 compared with 59.88 lakh tons in the previous year.
Power Plant:
The details of power generated at various plants of the Company are as
under:
Particulars |
2022-2023 |
2021-2022 |
Change % |
|
(Lakh Units) |
(Lakh Units) |
|
Thermal Power Plant |
711.40 |
2747.66 |
-74.11 |
WHRS |
1183.73 |
1121.69 |
5.53 |
Solar Power |
113.68 |
100.18 |
13.47 |
Owing to shortage of domestic coal and its significant prices, the cost
of captive power generation had become uneconomical during the year. Accordingly, the
Company decided to source most of its power requirements from the grid and reduce its own
generation.
Cost and Profitability:
The Company's cost of production in FY 2022-2023, excluding
finance cost, went up by almost 15%, largely on account of the jump in fuel costs. The
cost of power and fuel, which accounts for around 30% of total production cost, went up by
46% over the previous year, impacting the Company's profitability. Things had started
to turn around in the March quarter. Sequentially, fuel and power costs came down by 9% in
the March quarter, and going forward, fuel prices is expected to soften further.
The Company's profitability on consolidated basis was also
impacted by the start of commercial operations at Mukutban, unit of RCCPL, which is being
scaled up. Most importantly, despite unfavourable market conditions in Maharashtra, the
unit has turned cash-flow positive at the end of March.
For FY 2022-2023, the Company registered a consolidated EBIDTA of Rs
885.06 crores and a net profit of Rs 40.50 crores, down sharply from the previous year for
reasons cited above.
Marketing Initiatives:
In FY 2022-2023, the Company achieved a sales growth by volume of
10.60% over the previous year. Dispatches from the new production unit of its material
subsidiary at Mukutban started in the first quarter and expanded the Company's reach
into untapped markets of Maharashtra and adjoining areas.
While scaling up sales in all key markets, the Company managed to
maintain the share of premium cement in trade sales by volume at 51% for the full year,
thanks largely to a spurt in sales of premium cement in the fourth quarter. For the full
year, sales of blended cement grew around 10% over the previous year to 14.12 million
tons. Share of high yielding blended cement within total sales was maintained at 90% for
the full year.
Sales of premium cement for the full year stood at 6.15 million tons,
which was the highest ever, up 8% over the previous year. The Company has established a
strong foothold in the super premium category in core markets of Uttar Pradesh through the
super-premium brand Rakshak. The Company commands around 15% share of the super-premium
market.
The Company has been selected to supply construction material to the
prestigious Bullet Train project between Mumbai and Ahmedabad.
The Company has started to sell ready-mix concrete in core markets of
Lucknow to position itself as a complete building materials solution-provider. This, going
forward, is expected to create new business opportunities as well as help retain existing
customers.
The Company regularly engages with its channel partners and
influencers. In FY 2022-2023, the MP Birla Group sponsored Asian Scenario in
Infrastructure Development' under Indian Concrete Institute, Nagpur Chapter, which
was attended by more than 400 engineers and government officials. Additionally, the
Company regularly conducts meetings and training programs for masons, engineers as well as
other engagement activities for independent home builders. In FY 2022-2023, the Company
conducted plant visits for engineers across states to demonstrate its production
capabilities and quality control protocols. These programs help in developing trust and
loyalty towards MP Birla Cement brands and create long term bonding with stakeholders.
The Company started MP Birla Akanksha, a loyalty program for engineers
and architects as well as a dealer app (Humsafar) for ease of channel partners.
In logistics, the Company has taken decisive measures for efficient and
cost-effective movement. Track & Trace through implementation of Integrated Logistics
Management System (ILMS) with help of Control Tower, GPS tracking and Electronic Proof of
Delivery (E-PoD) provides end-to-end visibility and contribute in improvement of truck
turnaround time.
The Company has implemented e-auction at all its plants for
transportation to create a competitive environment among vendors. The enhanced support of
ERP system provides real time data for maximization of efficiency.
In line with increasing focus on the non-trade segment, the Company has
shored up its share of non-trade sales and continues to explore further opportunities in
rural areas, infrastructure and government projects. Projects such as Bharatmala, Pradhan
Mantri Awas Yojana and Urban Infra remain the key drivers in this segment.
Digital Initiatives:
Over the year, the Company has made significant strides in its journey
to drive Digital Transformation. It has successfully leveraged leading-edge technologies
to drive change across various key business functions and workflows. Going forward,
empowered by the vision of 4Vs, put forward by the Management, the Company looks forward
to:
1. Pivoting and Realigning the VISION with which these initiatives were
designed;
2. Bringing renewed focus on ensuring that the envisaged Business VALUE
is achieved;
3. Providing the necessary push required to ramp up the VELOCITY of
organization-wide adoption;
4. Ensuring necessary on-ground VISIBILITY across key processes,
parameters and result areas, for fostering speed and agility in decision-making.
Some of the key digitalisation initiatives and their business
impacts are summarized below:
l Enterprise-Wide:
Implementation of Project Milan - Merger of two disparate SAP
instances of Birla Corporation Limited and RCCPL Private Limited, material subsidiary has
now stabilized and helps centralise, manage overall Operations and get real-time
visibility across all its plants and organisational units in one single location.
l Sales & Marketing:
Completion of Rollout of Customer Relationship Management helps
to provide 360 degree view of the customers at fingertips. Dealer Management App provides
the team and dealers, real-time access to details related to the Product, Orders,
Sales, Invoices, Payments, Credit etc. Loyalty Management App has increased
engagement and business by providing hassle-free management of loyalty incentives. Customer
Onboarding Portal now enables digital on-boarding of Dealers while
Chatbot and WhatsApp Customer Services ensure timely and
personalized support thereby improving customer engagement.
Logistics & Transportation:
E-bidding platform at key units now provide with a dependable
mechanism for efficient price discovery across outbound dispatches resulting in
significant savings.
Successful Rollout of In-Plant automation as part of
Integrated Logistics Management System (ILMS) at selected
Integrated Unit has strengthened belief in the power of convergence. The Company's ILMS
platform is one of the first such implementation in the industry, where disparate
leading-edge technologies like the Internet, Mobile, RFID, IOT, GIS, ERP (SAP),
Control tower, integrate, communicate and empower the business workflows. Base Models
generated and validated in the
Network Optimisation Platform helps the Company in its efforts to
monitor and optimize its distribution network.
l Operations & Maintenance:
Performance KPI Dashboards, Top Management MIS, Maintenance Process
& Quality Control Process improvisations have all helped strengthen Company's
visibility across organisation-wide O&M processes by providing a single, reliable,
centralised view of key operational and financial parameters.
l Mines:
GPS based tracking of Mining Equipment now provides accurate
and auditable trip and actual lead distance measurements for billing and payments. Regular
Drone Surveys at all Mines now provides the Company with the ability to easily
plan and acquire periodic, real-time & accurate geospatial data for creating a
verifiable and reliable Digital Block model of the mines. Centralised Mines Management
System has been recently deployed at one of the mines for digitalizing mining
operations management.
l Finance & Accounts:
Implementation of 194R regulation, Automated Vendor Payment, Automatic
Bank Reconciliation Payment and Collection Bank, Treasury Module-Letter of Credit and Bank
Guarantee, Stock Transfer, Order Invoice clearing and Business Planning and Consolidation
(BPC) modules now help the Company in optimizing and ensuring efficient financial
controls, including Planning, Budgeting and Forecasting. They provide the Company with the
ability to easily adjust plans and forecasts, speed up budget and closing cycles and
ensure compliance with financial reporting standards.
Procurement :
Ariba E-Auction Platform Roll-out now helps the Company streamline
its centralized procurement workflow enabling better price discovery in procurements. Material
Master Management and Vendor Invoice Management (VIM) modules help efficiently digitalise
invoice processing and payments.
Legal & Compliance:
Implementation of a comprehensive Legal Compliance Management
solution across key business locations now helps to provide efficient
monitoring and management of legal and regulatory compliances and enables Centralised
visibility and tracking of compliances.
Digital transformation is an organisational change management
initiative and not just a technology implementation project, one that requires tremendous
amount of commitment and patience, as well as time and energy. The Company remains fully
committed and invested in these digitalisation initiatives going forward, and aspires to
empower and enable the organisation to be future-ready and adequately equipped to handle
the changing contours of business and the socio-environmental landscape.
Mining Operations at Chanderia:
The Mining Operations (through blasting) at the Chanderia plant had
been suspended since August, 2011 owing to the Order of Jodhpur High Court (Rajasthan),
which was challenged by the Company before the Hon'ble Supreme Court. As a partial
relief, the Supreme Court had allowed mining operations beyond two kms from the
Chittorgarh Fort by using heavy earth moving machinery. The Hon'ble Supreme Court had
further directed the Central Building Research Institute (CBRI) to submit a report after
comprehensive study of all relevant aspects and facets relating to full-scale mining
operations and its impact, if any, on the Chittorgarh Fort. The report of CBRI has
concluded that vibrations and air pressures induced by the mine of Birla Cement Works and
adjoining mines are well within safe limits as per national and international standards
and there is no damage to the Fort due to the mining operations. The Company has filed an
Interim Application seeking Interim Relief for blasting at the existing working pit. The
matter is in the final stage of hearing.
(c) OUTLOOK:
Indians economy is widely expected to grow between 6% to 7% during the
financial year 2023-2024.
Budget 2023 has focused on infrastructure capex to drive the economy.
While the overall capital expenditure outlay has increased by 33% to Rs 10 lakh crores,
road sector allocation has been increased by 25% to Rs 2.6 lakh crores and railways by 51%
to Rs 2.4 lakh crores. Further, Pradhan Mantri Awas Yojana (PMAY)-Gramin saw the highest
cost allocation of Rs 54.5 thousand crores since the launch of the scheme. These together
with revival of demand in the real estate sector are expected to aid healthy demand growth
in financial year 2023-2024 which is estimated to grow by 7% to 9% as per a leading
research agency. Fuel prices have continued to correct. By the end of March, 2023 the
international pet coke prices had corrected more than 40% from their peak prices in US
Dollar terms. This together with higher volume is expected to improve the profitability
margin for the industry in financial year 2023-2024.
JUTE DIVISION
(a) JUTE INDUSTRY OVERVIEW:
Jute Industry is mostly concentrated in the eastern part of India,
particularly West Bengal. It plays a vital role in the economy of the state. Jute Industry
supports over 3,00,000 workers and over 4 million farmer families. Jute Industry is
principally dependent on the orders from the government food grains procuring agencies and
over the previous few years, dependence on government orders is increasing and now
accounts for about 70% of installed capacity.
In the long run demand for jute product is expected to increase due to
increased awareness and acceptability of environmentally sustainable products.
With increasing concern and awareness about the adverse effect of
synthetic packaging material to the environment, the demand of jute goods is expected to
revive in the near future. Jute products being environment friendly and biodegradable have
an edge over other packing material. Increase in use of jute shopping bag, floor covering,
jute geotextile products provide opportunity to boost demand of jute goods.
Jute Industry faces daunting task of competing with subsidized
duty-free imports from Bangladesh. Industry is not only losing market share in overseas
markets to Bangladesh, but Bangladesh is also extensively pushing jute goods into India.
Jute manufacturing is a labour-intensive process and requires huge
labour force. Jute industry has traditionally been dependent on migrant labours from
nearby states. Now, migration from other states has virtually dried due to availability of
local jobs. Further, local people are getting alternative employment in physically less
demanding jobs such as embroidery, masonry etc. Difficulty in getting worker for running
the mills is resulting in lower capacity utilization, and causing further increase in cost
of production per unit.
To overcome all these problems of a) loss of traditional market, b)
lower availability of workers, c) subsidized import from Bangladesh, d) ever increasing
raw jute prices, the Company has taken up large scale modernization of mills resulting in
lower requirement of manpower thereby reducing dependence on manpower availability,
reducing cost and diversifying into non-traditional product categories.
(b) PERFORMANCE:
The Company's Jute Division has reported EBIDTA for the year at Rs
3716.98 lakh against corresponding previous year at Rs 4600.74 lakh. Export for the year
has increased by 8.30% from Rs 7436.23 lakh in the previous year to Rs 8053.64 lakh.
Pursuing a new line of business of manufacturing and exporting of jute
shopping bags, the division has reported sale of Rs 2677 lakh in its full year of
operation. It is expected that this new line of business will grow substantially.
Production & Dispatch
PARTICULARS |
2022-2023 |
2021-2022 |
CHANGE % |
Production of |
|
|
|
Jute Goods (MT) |
34908 |
30792 |
13.37 |
Dispatches of |
|
|
|
Jute Goods (MT) |
|
|
|
a) Domestic |
30138 |
26206 |
15.00 |
b) Export |
3916 |
3620 |
8.18 |
Sales
PARTICULARS |
2022-2023 |
2021-2022 |
|
(Rs in Lakh) |
(Rs in Lakh) |
Net Sales |
|
|
a) Domestic |
35189.84 |
32849.40 |
b) Export |
8053.64 |
7436.23 |
FOB Value |
7793.47 |
7012.52 |
(c) COST AND PROFITABILITY:
Input cost is increasing day by day which is affecting competitiveness.
Out of total cost of jute products, raw jute accounts for around 60% and its price
fluctuates from year to year. Further, jute industry is labour intensive with high wages
cost per MT of production.
(d) OUTLOOK:
Due to scant monsoon till now in jute growing area, sowing of jute is
poor till now and if the situation persists the jute crop yield may be affected. This may
result in skyrocketing of raw jute prices.
The increase in cost of manufacturing jute bags has widened the gap
between the prices of jute and synthetic bags. If this trend continues, there is strong
concern that packing of many more commodities will shift to synthetic material. Loss of
traditional market of jute to synthetic fabric is likely to cause a major problem of
insufficient demand for the industry.
Looking to improving its performance, the Jute Division is taking
various measures such as reducing dependence on Government orders, increasing presence in
food-grade jute bags in various countries, developing new value-added products and
designs, including new fabric for shopping bags, curtains, upholstery etc.
The Division is confident that the above efforts coupled with
investments being made currently and in the past will help it to mitigate the structural
risks facing the industry.
VINDHYACHAL STEEL FOUNDRY
Vindhyachal Steel Foundry produces iron & steel castings primarily
for internal consumption. The total production of castings during the year has been 388
tons as against 408 tons in the previous year. The total sale of castings during the year
was 484 tons (including 321 tons inter departmental transfer) as against 510 tons
(including 480 tons inter departmental transfer) in the previous year.
ALLOCATION OF COAL MINE
During the year, the Government of India, Ministry of Coal had approved
allocation of 1 (one) Coal Mine to the Company as under:
Name of Coal Mine |
State |
Geological Reserves (MT) |
Grade |
PRC (MTPA) |
Final Price |
Marki Barka |
Madhya Pradesh |
72.05 |
G8 |
1.00 |
6% of the revenue share |
Once operational, the above Coal Mine is expected to provide fuel
security and cost optimization to the Company.
CAPITAL EXPENDITURE
The details of various Capital Expenditure and Projects of the Company
and its Material Subsidiary during the financial year 2022-2023 are as follows:
Birla Corporation Limited Project Completed: l Installation of new
1 MW Solar Power Plant at Chanderia unit. l Installation of additional 5 MW Solar Power
Plant at Satna unit.
RCCPL Private Limited (Wholly Owned Material Subsidiary Company)
Projects Completed:
Mukutban Greenfield Cement Plant, Maharashtra:
Commissioning of a 3.90 million ton Greenfield Integrated Cement Plant
at Mukutban (Maharashtra) with 40 MW Captive Power Plant and 10.60 MW Waste Heat Recovery
System (WHRS). The unit commenced its cement production on 30th April, 2022. WHRS got
commissioned in March, 2023.
Mukutban integrated unit is now fully functional and ramping up its
production.
Maihar Cement Works, Madhya Pradesh:
Installation of 1000 MT Steel Silo for Water Repellent cement
(Rakshak).
Installation of new packing machine and truck loading machine for more
efficient cement dispatch.
Installation of AFR feeding system.
Commissioning of construction chemical plant.
Kundanganj Cement Works, Uttar Pradesh:
Installation of 2.0 MW captive Solar Power Plant.
ANNUAL RETURN
Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies
Act, 2013 and Rules framed thereunder, the draft Annual Return as on 31st March, 2023 is
available on the Company's website at
https://www.birlacorporation.com/annual-return.html.
COMPOSITION, NUMBER AND DATES OF MEETINGS OF THE BOARD AND COMMITTEES
The details of the composition, number and dates of meetings of the
Board and Committees held during the financial year 2022-2023 are provided in the Report
on Corporate Governance forming part of this Annual Report. The number of meetings
attended by each Director during the financial year 2022-2023 are also provided in the
Report on Corporate Governance. The Independent Directors of the Company held a separate
meeting during the financial year 2022-2023 details of which are also provided in the
Report on Corporate Governance.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act, 2013, the Board of
Directors, to the best of their knowledge and ability, confirm that:
(a) in the preparation of the annual accounts for the year ended 31st
March, 2023, the applicable accounting standards have been followed with proper
explanation relating to material departures, if any;
(b) the accounting policies adopted in the preparation of the annual
accounts have been applied consistently except as otherwise stated in the Notes to
Financial Statements and reasonable and prudent judgments and estimates have been made so
as to give a true and fair view of the state of affairs of the Company at the end of the
financial year 2022-2023 and of the profit for the year ended 31st March, 2023;
(c) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the Companies Act, 2013,
for safeguarding the assets of the Company and for preventing and detecting fraud and
other irregularities;
(d) the annual accounts for the year ended 31st March, 2023, have been
prepared on a going concern basis;
(e) proper internal financial controls were in place and that the
financial controls are adequate and are operating effectively;
(f) proper systems to ensure compliance with the provisions of all
applicable laws were in place and are adequate and operating effectively.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Details of loans, guarantees, investments and acquisition covered under
the provisions of Section 186 of the Companies Act, 2013, are given in the Notes forming
part of the Standalone Financial Statements.
CREDIT RATING
CRISIL has reaffirmed its ratings for Commercial Paper (CP) to the
extent of Rs 300 crores as "A1+".
ICRA has also re-affirmed its rating of "AA" with stable
outlook for Long Term Non-Convertible Debentures of the Company of Rs 250 crores.
Further, CARE has reaffirmed its rating on Long Term Facilities as
"CARE AA" (Outlook Stable) and "CARE A1+" (Outlook Stable) for the
Company's Short Term/Long Term Bank facilities aggregating to Rs 1507.48 crores. The
rating Committee of CARE has reaffirmed as "CARE AA" (Outlook Stable) for the
outstanding Non-Convertible Debentures of Rs 250 crores.
India Ratings and Research has reaffirmed IND AA/Stable ratings for
Non-Convertible Debentures (unlisted) amounting to Rs 150 crores. During the financial
year 2022-2023, Rs 30 crores was repaid towards 20% of Non-Convertible Debentures as per
the repayment schedule.
India Ratings and Research has also reaffirmed IND AA/Stable ratings
for Non-Convertible Debentures issued at floating rate coupon (listed) amounting to Rs 150
crores.
FINANCE
The Company efficiently manages its surplus funds by investing in debt
securities, fixed deposits with banks and companies with high creditworthiness. Funds are
also invested in the debt schemes of mutual funds considering safety, liquidity and
returns. It monitors the borrowings on a continuous basis for opportunities to refinance
or prepay its loans in order to reduce borrowing costs and foreign exchange exposure.
CORPORATE GOVERNANCE
The Board of Directors reaffirm their continued commitment to good
Corporate Governance Practices as set out by the Securities and Exchange Board of India
(SEBI'). The Company has complied with the Corporate Governance Code as
stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015. A separate section on Report on Corporate Governance, along with certificate from
the auditors confirming the compliance of conditions of Corporate Governance, is annexed
and forms part of the Annual Report.
RELATED PARTY TRANSACTIONS
All transactions entered with Related Parties during the financial year
2022-2023 were on an arm's length basis and in the ordinary course of business and
the provisions of Section 188 of the Companies Act, 2013 are not attracted. The
transactions are in compliance with the applicable provisions of the Companies Act, 2013
and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Further,
during the year under review, there were no materially significant related party
transactions which may have a potential conflict with the interest of the Company at
large. Accordingly, the disclosure required under Section 134(3)(h) of the Companies Act,
2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 in Form AOC-2 is not
applicable to the Company.
All Related Party Transactions are placed before the Audit Committee
for review and approval. Prior omnibus approval of the Audit Committee is obtained for the
transactions which are of a foreseen and repetitive nature. The transactions entered into
pursuant to the omnibus approval so granted, along with a statement giving details of all
related party transactions, are placed before the Audit Committee for its review on
quarterly basis.
The Company has adopted Policy on Related Party Transactions as per the
requirements of the SEBI (Listing Obligations and Disclosure Requirements) Regulations
2015, and the same is uploaded on the Company's website and may be accessed at the
link
https://www.birlacorporation.com/investors/policies/policy-on-related-party-transactions-BCL.pdf.
The details of the transactions with related parties pursuant to IND AS
during financial year 2022-2023 are provided in the accompanying financial statements.
Transactions with person or entity belonging to the promoter/ promoter
group which hold(s) 10% or more shareholding in the Company have been disclosed in the
accompanying financial statements.p>
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
Pursuant to the provisions of the Companies Act, 2013 and Rule 8(3) of
Companies (Accounts) Rules, 2014, details relating to Conservation of Energy, Technology
Absorption and Foreign Exchange Earnings and Outgo are given in "Annexure -
A", which is annexed hereto and forms part of the Directors' Report.
RISK MANAGEMENT
The Company's board and management are fully committed to maintain
sound risk management systems to safeguard Company and shareholders' interests. The
board and senior management of the Company set the tone at the top for proactive and
transparent identification and management of risks.
The Board of Directors has formulated a Risk Management Committee
(RMC') to frame, implement and monitor the Risk Management Plan and Policy
(Policy') of the Company and to ensure the adequacy of the risk management
systems. The said Policy is also reviewed by the Audit Committee and approved by the Board
from time to time. Robust mechanisms and systems have been put in place to identify and
manage the inherent risks in business and strategy, and to monitor the Company's
exposure to key risks that could impact the overall strategy and sustainability of the
business. The purpose is to identify risks in time which have the potential effect on the
Company's business or corporate standing or growth and manage them by calibrated
action.
The major risks have been identified by the Company and its mitigation
process/measures have been formulated in the areas such as raw materials and fuel,
quality, market, safety, litigation, logistics, community relations, intellectual
property, project execution, business continuity plan, financial, human resources, fraud,
environment, information technology and statutory compliance.
AWARDS & RECOGNITIONS
The details of various awards and recognitions received by the Company
during the financial year 2022-2023 are as follows:
Satna Unit received the following award/recognition:
"5S-Par Excellence award" for 5S a Continual Journey for
Business Excellence.
Sagmania Limestone Mine of Satna Cement Works has received the
prestigious "5 Star Rating Award in the Cement Sector", for Scientific,
Efficient and Sustainable Mining practices.
CII has awarded "SR EHS Excellence Silver Award 2023" for
best practices in Environment, Health & Safety.
v Chanderia Unit received the following award/recognition:
"Platinum Award" at "Apex India Green Leaf Award 2022
for Overall Sustainable Excellence" in Cement Business by Apex India Foundation.
CII-ITC Sustainability Awards 2022 "Commendation for Significant
Achievement in Corporate Excellence" (Manufacturing Sector) by the Confederation of
Indian Industry.
Greentech International Environment, Health & Safety Award 2023 by
the Greentech Foundation, New Delhi. "Gold Award" under "Apex India CSR
Excellence Award 2021" in Cement Sector by Apex India Foundation.
OCCUPATIONAL HEALTH & SAFETY
The Company recognizes that excellence in Health, Safety and
Environment is an ongoing journey and remains committed to implementing best practices,
complying with the national and international standards.
The Health, Safety & Well-being of the employees, subcontractors
and all related personnel is paramount. The Company believes that it is critical to
protect the health and safety of everyone involved in its operations and to carry out
operations in environmentally sustainable manner.
To strengthen the safety culture, the Company ensures that all hazards
and risks are identified, and control measures implemented to reduce risks to as low as
reasonably practicable, investigate all incidents and implement corrective &
preventive actions. As a part of the continuous effort to build a safe workplace, the
Company has engaged a reputed safety consultancy organization to roll out all
comprehensive Safety Management System with an aim of involving each and every employee of
the Company whether on permanent roll or contract manpower. Structural integrity, design
safety and process safety are well established in the organization.
The Company is giving importance to technological advancement, hence AI
enabled cameras are placed to monitor PPEs & Housekeeping compliances at high rise
structures and QR code based safety inspection of equipment is done. Reporting of
observations, incidents and action tracking are being done through online platform.
Separate capex is earmarked for safety and health related assets every
year and all necessary safety related equipment and disaster management infrastructure is
being put in place.
To get good results in the accident prevention, the Company has
included safety programs like HAZOP study, structured approach and implementation of Risk
assessment & control measures, horizontal deployment of learnings from accidents of
other industry/plant, Emergency planning & preparedness, incident investigation and
analysis of all major and fatal accidents, recommendations/ remedial measures to prevent
similar accidents. Near-miss situation/incident with no injury is accorded serious
consideration for planning of preventive measures.
To inspire and energize the employees to change their behavior for
better performance and safety attitude, the Company provides various training programmes
related to Behavior based safety, Job specific trainings and general awareness safety
trainings. Safety leadership / visible felt leadership workshops are being conducted for
Corporate Heads & Unit Heads.
The Company complies with all statutory provisions as required under
the Factories Act. Competent persons carry out compulsory testing/examination of lifting
tools, pressure vessels, cranes etc. as per statutory requirement. Safety poster, slogans,
Work SOP, Do's & Don'ts are widely displayed inside the Company's
factories-at shop floors, canteen and plant gates to continuously remind everyone about
safe working practices and environment so as to inculcate a culture of safety amongst the
workers. National Safety week, Road Safety Week and Fire Service Day celebrations are
organized every year with a view to create and motivate safety consciousness amongst the
employees and workmen.
CORPORATE SOCIAL RESPONSIBILITY
In compliance with the provisions of the Companies Act, 2013, the
Company has framed its Corporate Social Responsibility (CSR) Policy for the development of
programmes and projects for the benefits of the society and the same has been approved by
the CSR Committee and the Board of Directors of the Company. The CSR Policy of the Company
provides a road map for its CSR activities. The purpose of CSR policy is to devise an
appropriate strategy and focus its CSR initiatives and lay down the broad principles on
the basis of which the Company will fulfil its CSR objectives. As per the said Policy, the
Company continues the strategy of discharging parts of its CSR
responsibilities related to social services through various trusts/societies, in addition
to its own initiatives and donations made to other non-government organisations. The CSR
Policy has been uploaded on the Company's website and may be accessed at the link
http://www.birlacorporation.com/investors/policies/csr-policy.pdf.
CSR activities, projects and programs undertaken by the Company are in
accordance with Section 135 of the Companies Act, 2013 and the rules made thereunder. The
Report on CSR activities and initiatives taken during the year as prescribed under
Companies (Corporate Social Responsibility Policy) Rules, 2014 is given in "Annexure-B"
which is annexed hereto and forms part of the Directors' Report.
The Company is actively associated with various social and
philanthropic activities undertaken on its own as well as by different Trusts and
Societies. As a constructive partner in the communities in which it operates, the Company
has been taking concrete action to realize its social responsibility objective. The
Company has been playing a pro-active role in the socio economic growth and has
contributed to all spheres ranging from health, education, women empowerment, rural
infrastructure development, vocational training etc. In the past several decades, the
Company has supported innumerable social initiatives in India, touching the lives of lakhs
of people positively by supporting environmental and health care projects and social,
cultural and educational programs.
The CSR activities undertaken include:
Health Care activities:
The Company provides active assistance, finance as well as managerial
support, to various hospitals set up by trusts and societies.
The Company has provided financial as well as administrative support in
setting up a hospital in Chittorgarh namely MP Birla Hospital and Research Centre, where
the Company has two cement plants. This is a State-of-the-Art multi-specialty hospital,
which has numerous diagnostic and treatment facilities.
The hospital is also the first hospital of the district with
accreditation from NABH which is a seal of approval for quality care and service for any
hospital. Currently, in the "In-Patient Department" approximately 135 beds are
operational and best medical services are provided to patients at a nominal cost. It is
the only private hospital in Chittorgarh district having 128 slice CT Scan which is
well-recognized diagnostic tool to measure the level of infection.
The healthcare programme aims to contribute in SDGs (Sustainable
Development Goals) to reduce the IMR (Infant Mortality Rate) & MMR (Maternal Mortality
Rate) in community. The Company focuses on strengthening the village's Anganwadi
centers and develop it as a Model. Different extension activities like capacity building
of mothers, staffs, family counselling are organized in centers. The Company also promotes
adolescent health by educating the girls in villages. Kitchen garden and nutritional food
are promoted in villages. Regular health check-up, weight check-up, immunization
programmes are organized in villages. Formation and mobilization of community based
organization, strengthening the village health committee are carried out in these
programmes.
The Company has also provided various health care facilities like free
medical check-up, free medicines and treatments for needy people. It has organized medical
check up camps, free eye camps, specialty health camps and done cataract surgeries of
patients in rural areas.
Educational Initiatives:
The educational programme aims to enhance the quality of education by
strengthening the school infrastructure, organizing capacity building of teachers &
co-curricular activities for students etc. Class room refurbishment, furniture support,
setting up lab & libraries are some of the infrastructure activities which are
undertaken. For the safety and better hygiene of the students, toilets are
renovated/constructed for students. Drinking water facilities are set up in schools. The
Company also promotes technology in pedagogy for better learning among students by
installing smart board in schools. Teachers training programme, parent teachers meeting
and support Teachers Learning Materials (TLM) are organised in schools. Different
co-curricular activities like exhibition, celebration of days, sports & yoga
activities are organised for students in schools. Scholarships are provided to the
meritorious underprivileged children for their higher education. Supplementary learning
centers are running in villages to enhance the quality of education. The Company's
Durgapur unit is running a free primary school for the under privileged students. Under
employee volunteering programme, safety awareness sessions are organized in schools.
Livelihood & Women Empowerment:
The Company aims to enhance and ensure the income of villagers by
organizing different livelihood interventions in villages. Livelihood mainly focused on
farm & non-farm based livelihood activities. In the farm based intervention, the major
initiative is to reduce the input cost of farmers and increase the margin of income. It
promotes different improved agriculture practices like, soil health, selection and
treatment of seeds, application of fertilizers and pesticides, usage of mechanized
farming, promoting organic practices and formation of farmers group in villages. Crop
diversification are organised to enhance the income of the farmers. Horticulture
plantation are promoted in the uncultivated land for additional income of farmers.
Improved Animal husbandry practices, like breed development, vaccination, deworming, green
fodder, construction of mangers are promoted in villages. In Satna, farmers benefitted
from breed development programme. Watershed activities are organised in villages. It helps
in conserve the top soil, ground water recharge and irrigation of more land.
In the non-farm based livelihood programme, Self Help Group (SHG)
development, group based enterprise activities are promoted in
villages. The Company supports the distress families to start their own micro enterprise
by providing start up support, family counselling and market exposure. Regular follow up
are done with these enterprise activities.
Vocational Training Programme:
Skill based training programmes are organised to upgrade the skill of
the unemployed youth and make them employable in villages. Mobilization, training,
counselling and placement are the major activities of vocational training programme. For
girls, bed side patients attendance, beautician, sewing & stitching training are
organized in villages. For boys, mobile repairing, assistant electrician, civil supervisor
courses are provided in villages. The Company is also running coaching classes for the
students to join different government services. Both class room and physical training are
organized for students. Start up support and after training placement are conducted for
students.
Rural Infrastructure development initiatives:
In this initiative, the Company focuses on strengthening the drinking
water facilities, connectivity of villages, drainage system and community infrastructure
in communities. Digging of new bore well, de silting the water bodies, laying water pipe
line, repairing of drain, building of all-weather road and refurbishment of community
infrastructure are organized in the plant's neighborhood villages under this
programme.
The Company promotes non-conventional energy in communities. Solar
panel are installed in villages to light up the street light in villages. Bio gas units
are set up in villages for clean energy. Plantation activities in the barren land field
bund are organised. In Watershed activities, the Company conserve the top soil and
maintain the moisture on it. It also helps in ground water recharge and support the
farmers in more irrigation.
ENVIRONMENTAL SUSTAINABILITY
The Company is well aware of its responsibility towards sustainable
development and environment. Various initiatives are taken for addressing climate change
challenges particularly CO2 reduction and pollution prevention. Extensive
plantation has been done in the factories and mining areas. The Company is focused towards
conservation of water by putting special efforts for rain water harvesting, conservation
of water resources (like using Air Cooled Condenser instead of water cooled in Captive
Power Plants and reusing treated waste water for dust suppression and plantation in
sustainable way.
Emissions from the Stacks are well within regulatory limits, monitored
through online continuous emission monitoring systems. Concerns for environment and
sustainable development are integral to the Company's business decisions. SO & NO
gas
2 X
analyzer in kiln stack has been installed for close monitoring. To
control NOx, SNCR system has been installed in both Satna and Chanderia Plants. Measures
are also taken for conservation of limestone reserves by optimizing (like blending high
grade with low grade limestone) limestone consumption. Water tankers, pumps, rain guns and
water spray system have been provided for pressurized spraying to control dust pollution
around mining areas and connecting roads. Proper utilization of waste water is being done
by using treated water from Water Treatment Plant (WTP) for dust suppression and
plantation. The Company continuously strives for reduction of carbon footprint and Green
House Gases emission by using best energy efficient & environment friendly
technologies to improve power & thermal efficiency of the plants.
For conservation of water, water harvesting is done in mined out areas.
Same water is used for plant and domestic usage. Also roof water harvesting and water
recharge system is installed within the plant to reach the goal of Water Positive.
The Company has Alternative Fuel and Raw Material Feeding System (AFRS)
for higher use of alternative fuel on continuous basis at its clinker manufacturing units,
thus reducing consumption of natural resource like Coal. This move ensures availability of
alternative fuel throughout the year and has resulted in reduction of fuel costs and also
helped in reducing the carbon footprint. Company is extending its AFR facility to consume
any of the available hazardous waste from other industry. Municipal waste whenever made
available is also being co-processed in the Kiln. Company has invested to install set up
for handling and feeding of alternative fuel in various units.
The Waste Heat Recovery System at Satna and Chanderia plants of the
Company uses the hot gases coming out of the pre-heater and clinker cooler to generate
substantial power, thereby reducing Green House Gases (GHG) emissions. Grinding aid is
introduced in all the units to improve consumption of fly ash and slag. Further, to
protect the environment, the Company has consumed substantial quantity of fly ash during
the financial year 2022-2023 at various cement plants. The Company has own slag
granulation unit at Durgapur to consume optimum quantity of slag in ecofriendly manner.
This has resulted in reduction of clinker usage, which in turn reduced GHG emissions at
plants, without compromising on the quality and the strength of cement. Company is
exploring use of Phospho Gypsum/Chemical Gypsum which leads to conservation of mineral
Gypsum and environment.
With a view to promote renewable energy and also to produce energy
through cleaner and greener sources, the Company has installed Solar Power Plants at its
Integrated Cement Plants. Also, it is sourcing solar power for Raebareli Plant in group
captive mode in long term PPA.
Green energy initiative has also been taken in RCCPL Private Limited,
wholly owned material subsidiary of the Company. Waste Heat Recovery System and Solar
Power Plant has been installed in Maihar, Mukutban and Kundanganj Unit in own captive
mode. Additional Solar Power Plant has been installed in group captive mode for Kundanganj
Unit in long term PPA. Maihar Plant is sourcing Fly Ash through BTAP rail wagon which is
most sustainable mode of transportation.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
In accordance with Regulation 34(2)(f) of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, Business Responsibility and Sustainability
Report ("BRSR") covering disclosures on Company's performance on ESG
(Environment, Social and Governance) parameters for FY 2022-2023 forms an integral part of
this Annual Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Retirement by Rotation:
Shri Dilip Ganesh Karnik (DIN: 06419513), Director of the Company,
retires by rotation at the ensuing Annual General Meeting and being eligible offers
himself for reappointment.
Appointment/Change in designation/Cessation:
Shri Brij Behari Tandon (DIN: 00740511) has resigned from the position
of Non-Executive Independent Director of the Company with effect from 11th May, 2022.
Shri Arvind Pathak (DIN: 00585588) ceased to be the Managing Director
& Chief Executive Officer (Key Managerial Personnel) of the Company with effect from
the close of business hours on 31st December, 2022 due to resignation.
Shri Sandip Ghose (DIN: 08526143) was appointed as Additional Director
and simultaneously the Wholetime Director of the Company for the period from 1st December,
2022 to 31st December, 2022. Further, he was elevated as Managing Director & Chief
Executive Officer (Key Managerial Personnel) of the Company for a period of 3 (three)
years with effect from 1st January, 2023.
Approval of the members by way of Ordinary Resolutions had been
obtained on 14th January, 2023 (vide Postal Ballot Notice dated 5th December, 2022) for
appointment of Shri Sandip Ghose (DIN: 08526143) as Wholetime Director of the Company for
the period from 1st December, 2022 to 31st December, 2022 and Managing Director &
Chief Executive Officer (Key Managerial Personnel) of the Company for a period of 3 years
(three) with effect from 1st January, 2023.
In terms of Section 203 of the Companies Act, 2013, the following are
the Key Managerial Personnel (KMP) of the Company as on 31st March, 2023:
1. Shri Sandip Ghose: Managing Director & Chief Executive Officer.
2. Shri Aditya Saraogi: Chief Financial Officer.
3. Shri Manoj Kumar Mehta: Company Secretary & Legal Head.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received declarations from all the Independent
Directors of the Company confirming that they meet the criteria of independence as
prescribed both under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, as amended.
Further, declaration has been received from all the Independent
Directors confirming compliance with Rule 6(3) of the Companies (Appointment and
Qualification of Directors) Rules, 2014, as amended, regarding the requirement relating to
enrollment in the Data Bank maintained with the Indian Institute of Corporate Affairs
(IICA'). In terms of the amended Section 150 of the Companies Act, 2013 read
with Rule 6(4) of the Companies (Appointment & Qualification of Directors) Rules,
2014, the Independent Director(s) of the Company are exempt from the requirement to
undertake the online proficiency self-assessment test conducted by IICA.
COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND
REMUNERATION
In terms of Section 178(3) of the Companies Act, 2013 and Regulation 19
of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board
of Directors of the Company, based on the recommendation of the Nomination and
Remuneration Committee, had formulated a Nomination and Remuneration Policy.
The Nomination and Remuneration Policy of the Company, inter alia,
includes the aims and objectives, principles of remuneration, fixed and variable
components in the remuneration package, guidelines for remuneration to Executive Directors
and Non-Executive Directors, criteria for identification of the Board Members and
appointment of Senior Management.
The criteria for identification of the Board Members, including those
for determining qualification, positive attributes, independence etc. is summarily given
hereunder:
A Director should possess high level of personal and
professional ethics, integrity and values. He/she should be able to balance the legitimate
interest and concerns of all the Company's stakeholders in arriving at decisions,
rather than advancing the interests of a particular constituency.
A Director must be willing to devote sufficient time and energy
in carrying out his/her duties and responsibilities effectively.
He/she must have the aptitude to critically evaluate management's
working as part of a team in an environment of collegiality and trust.
For every appointment of an Independent Director, the Committee
shall evaluate the skills, knowledge, expertise and experience on the Board and on the
basis of such evaluation, prepare a description of the role and capabilities required of
an Independent Director. The person recommended for such role shall meet the description.
In evaluating the suitability of individual Board members, the
Committee takes into account many factors, including general understanding of the
Company's business dynamics, global business, social perspective, educational and
professional background and personal achievements. Factors like eligibility criteria,
independence, term and tenure of a Director should be in accordance with the provisions of
the Act and the Listing Regulations for the time being in force.
The Committee evaluates each individual with the objective of
having a group that best enables the success of the Company's business and achieve
its objectives in a sustainable manner.
The Nomination and Remuneration policy as approved by the Board is
uploaded on the Company's website and may be accessed at the link
https://www.birlacorporation.com/investors/nomination-and-remuneration-policy.pdf
Neither the Managing Director nor the Wholetime Director of the Company
received any remuneration or commission from any of its subsidiaries.
ANNUAL EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS
The Nomination and Remuneration Committee pursuant to the powers
delegated to it by the Board, has carried out an annual evaluation of the performance of
the Board, the Directors individually as well as the evaluation of the functioning of
various Committees based on the criteria for performance evaluation forming part of the
Performance Evaluation Policy of the Company.
For the purpose of proper evaluation, the Directors of the Company have
been divided into 3 (three) categories i.e. Independent Directors; Non-Independent
Chairman and Non-Independent Non-Executive Directors; and Executive Directors.
The criteria for evaluation include factors such as engagement,
strategic planning, vision and direction for growth and development, team spirit and
consensus building, effective leadership, domain knowledge, ensuring best practices in
governance, financial management and operations, contributions towards achieving short
term and long term goals of the Company and roadmap for achieving them, management
qualities, team work abilities, result/achievements, understanding and awareness,
leadership qualities, motivation/commitment/diligence, integrity/ethics/values and
openness/ receptivity.
The Independent Directors of the Company in its separate meeting held
during the year reviewed the performance of Non-Independent Directors and Board as a Whole
and Chairman of the Company taking into account the views of Executive Directors and
Non-Executive Directors.
Further, the performance evaluation of Independent Directors of the
Company was done by the entire Board, excluding the Independent Director being evaluated.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
As on 31st March, 2023, the Company has 7 (Seven) subsidiary companies
namely, RCCPL Private Limited, Lok Cement Limited, Talavadi Cements Limited, Birla Jute
Supply Company Limited, Budge Budge Floorcoverings Limited, Birla Cement (Assam) Limited
and M.P.
Birla Group Services Private Limited and 2 (Two) step down wholly owned
subsidiary companies namely, AAA Resources Private Limited and Utility Infrastructure
& Works Private Limited.
2 (Two) subsidiary companies, namely Thiruvaiyaru Industries Limited
and Birla Corporation Cement Manufacturing PLC, Ethiopia, are under the process of
voluntary winding up. In view of the aforesaid, these subsidiaries have not been
considered in preparing the Consolidated Financial Statements.
During the year the performance of RCCPL Private Limited, wholly owned
material subsidiary of the Company has also impacted due to higher fuel cost and
stabilization of its new plant at Mukutban.
During the year, no Company has become or ceased to be the
Company's Subsidiaries, Joint Venture or Associate Company.
The "Policy on Material' Subsidiary" is available
on the Company's website and may be accessed at the link https://www.
birlacorporation.com/investors/policies/policy-on-material-subsidiary.pdf.
Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5
of the Companies (Accounts) Rules, 2014, a statement containing salient features of the
financial statements of Subsidiaries/ Associate Companies/Joint Ventures in Form AOC-1
forms part of the consolidated financial statement and hence not repeated here for the
sake of brevity. Further, pursuant to the provisions of Section 136 of the Companies Act,
2013, the Annual Financial Statements of each of the Subsidiaries are available on the
Company's website at www.birlacorporation.com.
DEPOSITS
During the year the Company has not accepted any deposits from the
public falling within the ambit of Section 73 of the Companies Act, 2013 and the Rules
framed thereunder.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS,
COURTS AND TRIBUNALS
No significant and material order has been passed by the regulators,
courts, tribunals impacting the going concern status and Company's operations in
future.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has in place adequate internal control systems and
procedures which are commensurate with its size and nature of business. The objective of
these procedures are to ensure efficient use and protection of the Company's
resources, accuracy in financial reporting and due compliance with statutes, corporate
policies and procedures.
Internal Audit is conducted periodically across all locations by
Chartered Accountant/ Audit firms who verify and report on the efficiency and
effectiveness of internal controls. The adequacy of internal control systems are reviewed
by the Audit Committee of
the Board periodically.
INTERNAL FINANCIAL CONTROL SYSTEM
The Company has a robust and comprehensive Internal Financial Control
system commensurate with the size, scale and complexity of its operations. The system
encompasses the major processes to ensure reliability of financial reporting, compliance
with policies, procedures, laws and regulations, safeguarding of assets and economical and
efficient use of resources.
The controls were tested during the year and no reportable material
weaknesses either in their design or operations were observed.
The policies and procedures adopted by the Company ensures orderly and
efficient conduct of its business and adherence to the Company's policies, prevention
and detection of frauds and errors, accuracy in the record-keeping and timely preparation
of reliable financial information.
The Internal Auditors continuously monitor the efficacy of Internal
Financial Control System with the objective of providing to the Audit Committee and the
Board of Directors an independent, objective and reasonable assurance on the adequacy and
effectiveness of the organization's risk management measures with regard to the
Internal Financial Control System.
The Audit Committee has satisfied itself on the adequacy and
effectiveness of the Internal Financial Control System laid down by the management. The
Statutory Auditors in its report have expressed an unmodified opinion on the adequacy and
operating effectiveness of the Internal Financial Control System over financial reporting.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company has adopted a Vigil Mechanism/Whistle Blower Policy for
Directors and employees to report concerns about unethical behaviour, actual or suspected
fraud or violation of the Company's Code of Conduct or ethics policy, if any. The
Policy also provides for the requisite checks, balances and safeguards to ensure no
employee is victimized who avail of the mechanism and also provides for direct access to
the Chairman of the Audit Committee. The Policy also provides mechanism for reporting of
instances of leak or suspected leak of Unpublished Price Sensitive Information in terms of
Regulation 9A of the SEBI (Prohibition of Insider Trading) Regulations, 2015. The Vigil
Mechanism/Whistle Blower Policy has also been uploaded on the website of the Company.
DETAILS RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL
AND EMPLOYEES
Disclosure pertaining to remuneration and other details as required
under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies
(Appointment and Remuneration of
Managerial Personnel) Rules, 2014 is given in "Annexure C"
which is annexed hereto and forms part of the Directors' Report.
In terms of the provisions of Section 197(12) of the Companies Act,
2013 and Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, a statement comprising the names of top 10 (ten) employees in
terms of remuneration drawn and every person employed throughout the year, who were in
receipt of remuneration exceeding the prescribed limit, forms part of the Directors'
Report.
The above Annexure is not being sent along with this Annual Report to
the Members of the Company. Members who are interested in obtaining these particulars may
write to the Company Secretary at the Registered Office/Corporate Office of the Company.
In terms of the provision of Section 136 of the Companies Act, 2013, the aforesaid
Annexure is also available for inspection by Members at the Registered Office/ Corporate
Office of the Company 21 days before and up to the date of the ensuing Annual General
Meeting during the business hours on working days.
COMMISSION TO NON-EXECUTIVE DIRECTORS
The Board of Directors of the Company approved payment of a sum of Rs
10 Lakhs each as commission to all the Non-Executive Directors of the Company for the
financial year 2022-2023. However, Shri Harsh V. Lodha, Non-Executive Chairman of the
Company has decided not to accept any commission and has foregone his right for the
financial year 2022-2023 also, in view of uncertain economic scenario and unprecedented
increase in fuel prices & impact of the same on the profitability of the Company.
HUMAN RESOURCES AND INDUSTRIAL RELATIONS
Employees are the core strength of the Company. The Company continues
to focus on creating the right workplace environment that provides opportunities for
employees to improve their performance. Robust and up to date Human Resource (HR) Policies
are in place for proper evaluation of performances, which is the key to building future
leaders.
HR functions in the organization have witnessed a paradigm shift and
evolved to bring together modern day practices with proper use of technology and
automation. This had a profound impact on the morale and motivation of the employees who
are the prime-movers. The Company has succeeded in fostering a relationship with its
employees which will help transform the organization.
There is a well-calibrated mechanism to reward meritocracy. Learning
and development initiatives for employees are geared to enable all-round performance, both
as individuals and as teams.
There is a continuous effort to improve HR service delivery in order to
better serve the customers with simple well executed processes with proper use of
technology.
Encouraging cordial working relation and maintaining good industrial
relations have been the philosophy and endeavour of the HR Department. Industrial
relations remained harmonious at all the offices and establishments of the Company
throughout the year. Statutory compliances related to labour laws have been followed with
due emphasis.
Suspension of Operation continues at Soorah Jute Mills, Birlapur and
Birla Vinoleum, Birlapur.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE
In order to provide women employees with a safe working environment at
workplace and also in compliance with the provisions of the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed thereunder,
the Company has formulated a Policy on Prevention of Sexual Harassment of Women at the
Workplace. The said Policy has been uploaded on the internal portal of the Company for
information of all employees.
The Company has complied with the provisions relating to constitution
of Internal Complaints Committee under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013. The Internal Complaints Committee
comprises of three employees and one outside member. One of the Senior female employee of
the Company is the Presiding Officer of the said Committee.
No complaint pertaining to sexual harassment of women employees from
any of the Company's locations was received during the financial year ended 31st
March, 2023 and no cases are pending to be disposed during the financial year ended 31st
March, 2023.
AUDITORS & AUDITORS' REPORT
Statutory Auditors:
M/s. V. Sankar Aiyar & Co., Chartered Accountants were reappointed
by the members of the Company at the 102nd Annual General Meeting held on 27th September,
2022, as the Statutory Auditors of the Company for the second term of 5 (Five) consecutive
years to hold office from the conclusion of the 102nd Annual General Meeting till the
conclusion of the 107th Annual General Meeting of the Company to be held in the year 2027.
The Auditors' Report and notes to the financial statements are
self-explanatory and therefore do not call for any further comments/explanation.
Cost Records and Cost Auditors:
The Company is required to maintain cost records as specified by the
Central Government under Section 148(1) of the Companies Act, 2013 read with the Companies
(Cost Records and Audit) Rules, 2014 and accordingly, such accounts and records are made
and maintained by the Company.
The Board of Directors based on the recommendation of the Audit
Committee has appointed M/s. Shome & Banerjee, (Firm Registration No. 000001), Cost
Accountants, as the Cost Auditors of the Company for the financial year 2023-2024 for
auditing the cost records relating to cement, jute goods and steel products manufactured
by the Company.
As required under Section 148(3) of the Companies Act, 2013, the
remuneration payable to the Cost Auditors, as approved by the Board, is required to be
placed before the Members in a general meeting for their ratification and the same forms
part of the Notice of the ensuing Annual General Meeting.
M/s. Shome & Banerjee has confirmed that they are free from any
disqualifications specified under Section 141(3) and proviso to Section 148(3) read with
Section 141(4) and all other applicable provisions of the Companies Act, 2013 and their
appointment meets the requirements of Section 141(3)(g) of the Companies Act, 2013. They
have further confirmed their independent status and arm's length relationship with
the Company.
The Company submits its Cost Audit Report with the Ministry of
Corporate Affairs within the stipulated time period.
Secretarial Auditors:
The Board of Directors on the recommendation of the Audit Committee had
appointed M/s. Mamta Binani & Associates, Company Secretaries, to conduct secretarial
audit of the Company for the financial year 2022-2023. The Secretarial Audit Report for
the financial year ended 31st March, 2023 is given in "Annexure - D" which
is annexed hereto and forms part of Directors' Report. The Report is self-explanatory
and do not call for any comments.
Further, the Board on the recommendation of the Audit Committee has
appointed M/s. Mamta Binani & Associates, Company Secretaries, to conduct secretarial
audit of the Company for the financial year 2023-2024.
Pursuant to the provisions of Regulation 24A of SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, the Secretarial Audit Report
submitted by the Secretarial Auditor of RCCPL Private Limited, a material subsidiary of
the Company in terms of Regulation 16(1)(c) of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 has been given in "Annexure - E"
which is annexed hereto and forms part of Directors' Report.
There are no audit qualifications, adverse remarks or disclaimer in the
respective reports of the Statutory Auditors and Secretarial Auditors for the year under
review.
None of the Auditors of the Company has reported any fraud as specified
under Section 143(12) of the Companies Act, 2013.
APPLICATION UNDER THE INSOLVENCY AND BANKRUPTCY CODE
No application has been made under the Insolvency and Bankruptcy Code,
hence the requirement to disclose the details of application made or any proceeding
pending under the Insolvency and Bankruptcy Code, 2016 during the year along with their
status as at the end of the financial year is not applicable.
DIFFERENCE IN VALUATION
There was no instance of one-time settlement with banks or financial
institutions and hence the differences in valuation as enumerated under Rule 8 (5) (xii)
of Companies (Accounts) Rules, 2014, as amended, do not arise.
COMPLIANCE WITH SECRETARIAL STANDARDS
During the financial year, the Company has complied with applicable
Secretarial Standards issued by the Institute of Company Secretaries of India, i.e. SS-1
and SS-2 relating to 'Meetings of the Board of Directors' and 'General Meetings',
respectively.
CAUTIONARY STATEMENT
Statements in this Report, particularly those which relate to
Management Discussion & Analysis, describing the Company's objectives,
projections, estimates, expectations or predictions may be forward looking
statements' within the meaning of applicable laws or regulations. Actual results
could however differ materially from those expressed or implied. Important factors that
could make a difference to the Company's operations include global and domestic
demand-supply conditions, finished goods prices, raw materials and fuels cost &
availability, transportation costs, changes in Government regulations and tax structure,
economic developments within India and in the countries with which the Company has
business contacts and other factors such as litigation and industrial relations.
APPRECIATION
The Directors would like to express their sincere appreciation for the
assistance and co-operation received by the Company from the Government of India, State
Governments, Financial Institutions, Banks, Dealers, Customers, Vendors and Stakeholders.
Inspired by a vision, driven by values and powered by internal
vitality, the Directors look forward to the future with confidence and stand committed to
creating an even brighter future for all stakeholders.
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For and on behalf of the Board of Directors |
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Harsh V. Lodha |
Sandip Ghose |
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Chairman |
Managing Director & |
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(DIN: 00394094) |
Chief Executive Officer |
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(DIN: 08526143) |
Place: Kolkata |
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Dated, the 9th May, 2023 |
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