The Directors have pleasure in presenting the Annual Report along with
the Audited Accounts for the Financial Year ended March 31, 2016.
Review of Operations
Your Company''s performance during the year as compared with that during
the previous year is summarized below:
(Rs. Crore) Rs. Crore)
Year Ended March 31 Year Ended March 31
Revenue from Operations 1,309.51 1,454.64
Other Income 297.21 233.88
Total Income 1,606.72 1,688.52
Total Expenditure other
than Finance Costs and 1,220.13 1,379.59
Depreciation and Amortisation
Profit before Finance Costs,
Depreciation and 386.59 308.93
Amortisation and Tax
Amortisation Expense 44.37 28.59
Profit before Finance
Costs and Tax 342.22 280.34
Finance Costs (net) 191.98 148.17
Profit before Tax 150.24 132.17
Provision for Current Tax 9.96 4.23
Provision for Deferred Tax (17.02) (20.87)
Net Profit 157.30 148.81
Surplus brought forward 594.98 526.88
Profit after Tax available
for appropriation 752.28 675.69
Your Directors recommend
appropriation as under:
Interim dividend on Equity
Shares 58.80 -
Dividend on Equity Shares - 58.80
Tax on distributed profits 11.97 11.97
Excess Proposed Dividend
provided for in previous (0 01) -
Credit for Dividend Distribution
Tax on Dividend Received (9.75) (7.96)
Depreciation (in transition to
New Companies Act) - 3.02
Transfer to General Reserve - 14.88
Surplus Carried Forward 691.27 594.98
Total Appropriation 752.28 675.69
The Board of Directors of your Company declared an interim dividend of
Rs. 1.75 per equity share of Rs. 1/- each, aggregating Rs. 58.80 crore
INDUSTRY STRUCTURE AND DEVELOPMENTS
The global economy was subdued for most part of 2015 and grew at a
modest 3.1%, which was in line with what the UN and IMF had predicted
last year. According to IMF, emerging market and developing economies-
while still contributing to over 70 percent of global growth- declined
for the fifth consecutive year. The advanced economies on the other
hand showed a modest recovery. In its World Economic Outlook (WEO)
update in January 2016, IMF highlighted three key transitions that
significantly affected the world economy- 1) the rebalancing of
economic activity in China away from manufacturing towards services 2)
lower energy and commodity prices 3) tightening of monetary policy in
the United States in the wake of the economic recovery.
Going forward, the IMF expects the world economy to grow at a slightly
faster rate of 3.4% in 2016 and 3.7% in 2017. This is a downward
revision of 0.2% from the WEO update by IMF in October 2015. Growth in
advanced economies is projected to rise by 0.2% point in 2016 to 2.1%,
and hold steady in 2017. On the other hand, the growth in emerging
economies is projected to increase from 4 percent in 2015 to 4.3% and
4.7% in 2016 and 2017, respectively.
India experienced a slightly better financial year than FY15, with
advance GDP estimates pegging the growth at 7.6%, compared to 7.4% last
year (like for like comparison). Latest available IIP data also shows a
growth of over 2 percent compared to FY15. While some of the reform
measures like deregulation of diesel prices and improving the power
situation across the country have started to show results, delays in
other reforms like the GST bill, have resulted in limiting the
potential growth. In summary, the outlook on the economy remains
bullish, with most global forums expecting India''s GDP growth to remain
in the 7.5% range.
India was hit by two consecutive droughts - a first in the last 25
years. As the El Nino phenomenon intensified during the year, it left
significant distress for Indian farmers. The water levels in reservoirs
of certain parts of the country are at multi-year low. The adverse
conditions severely impacted all the agri input sectors i.e. seeds,
agro-chemicals, farm mechanization. The poor monsoon was accompanied by
a crash in the prices of livestock products - their alternate source of
income. Milk powder prices (skimmed milk powder), broiler prices and
egg prices remained non remunerative for large part of the year which
adversely impacted the animal husbandry sector for the year, further
dampening the rural income.
We look at this year as an exceptional year with respect to what
happened in Indian Agriculture rather than the norm. The focus brought
in by the Govt, of India to promote irrigation and higher spend
allocated to MGNREGA will help reduce the rural distress in coming
years. We do not expect any fundamental changes in the consumption
pattern in India. The consumption of finer food items will keep on
increasing as the population and per capita income rise in the country.
Volatility in commodity prices continued to affect the oleo-chemicals
industry throughout the year. While the lower commodity and energy
prices yielded some benefits, it also resulted in lower demand from the
energy export oriented economies. The economic downturn in China,
Brazil and some of the African economies also affected the export
volumes from India, especially for vegetable oil based alcohols. While
the Indian oleo-chemicals market was strong in FY16, bad monsoons
significantly affected India''s competitiveness in the rape-mustard seed
based oleo-chemicals. Going forward, we continue to expect good growth
Indian market, while being more cautious in our global outlook.
Growth in the real estate sector continued to be lukewarm during FY16.
Residential absorption rates declined from FY15 levels, but with a
marginal decrease in the residential overhang, mainly due to decline in
new launches. The RBI''s consecutive rate cuts came in throughout the
year but failed to revive the sales numbers for FY16, but should aid
demand growth in FY17. Office space absorption levels have seen a rise
in FY16, particularly due to improved business conditions in the
country, as well as an uptake of office space by IT/ITES, banking and
e-commerce companies. Costs of key input materials such as steel and
cement have moved downward throughout FY16, continuing the trend seen
during FY15. The passage of Real Estate Regulatory Bill will impose
restrictions on developers, but being consumer friendly in nature is
expected to boost consumer sentiments. This, along with continuing
urbanization and migration, should drive growth in this sector in the
long term. The Make in India campaign should also positively impact
the commercial transactions space as well. In summary, we continue to
remain bullish on the prospects for the real estate sector in India.
There is a separate section on Management Discussion and Analysis
appended as Annexure A to this Report, which includes the following:
- Discussion on financial performance with respect to operational
- Segment wise performance
- Human Resources and Industrial Relations
- Opportunities and Threats
- Internal Control Systems and their adequacy
- Risks and Concerns
Subsidiary and Associate Companies
Your Company has interests in several industries including animal
feeds, poultry, dairy and agro-products, oil palm plantation, property
development, personal and home care, etc. through its subsidiary and
Improve the productivity of Indian farmers by innovating products and
services that sustainably increase crop and livestock yields.
FY15-16GAVL recorded consolidated revenue of Rs. 4,351 crore against Rs.
3,809 crore, a growth of 14% over FY14-15 sales.
GAVL acquired controlling stake in Cream line Dairy products limited
marking its entry in the fast growing Dairy business
Godrej Agrovet Limited (GAVL)
Godrej Agrovet Ltd., a subsidiary of your company is a diversified Agri
Business with interests in animal feed, agri inputs, and oil palm
business along with Joint Venture with the ACI group in Bangladesh for
the feed business and Tyson Inc. USA for the processed poultry
FY15-16 was an unusually tough year for Indian agriculture. Two back to
back poor monsoons severely impacted the agri sector related businesses
and crash in certain agri commodities prices compounded the rural
distress in FY15-16.
GAVL was also impacted by these adverse operating conditions; however
it leveraged the operating environment to expand inorganically in
FY15-16. The company acquired Astec Life Sciences Ltd. (Astec) to
strengthen its agro chemical play in the country and took controlling
stake in Creamline Dairy Products Limited (Creamline) - A very strong
regional dairy company operating from South India. Both these
acquisitions have been partially consolidated in the FY15-16 reported
sales and earnings.
In FY15-16 GAVL recorded consolidated revenue of Rs. 4,351 crore against
Rs. 3,809 crore, a growth of 14% over FY14-15 sales. The reported Profit
Before Tax for the year was down by 7% to Rs. 255 crore in FY15-16
against Rs. 274 crore in FY14-15 largely due to subdued volumes in the
animal feed vertical and poor crude palm oil prices in FY15-16.
The animal feed business had a tough year, with farm gate prices of
broiler, milk and eggs remaining low during the year. The same
adversely impacted the volume growth. GAVL remains committed to invest
in Research & Developement in the animal feed space to create
differentiated offering to our customers over competition. We also
commissioned two new animal feed capacities in Ajmer, Rajasthan and
Hajipur, Bihar. The sales of the Animal feed vertical was flat at Rs.
2,666 crore in FY15-16 against Rs. 2,689 crore in FY14-15.
The agri input business grew by 13% to Rs.419 crore in FY15-16 against a
sale of Rs. 371 crore in FY14-15. The business was able to sustain its
growth momentum in light of poor monsoon and with acquisition of Astec.
The business is expected to clock a healthy growth rate in future. The
Astec acquisition strengthens the agri Input business'' retail product
portfolio. The acquisition also helps GAVL partially de risk its India
centric agri inputs business, as Astec has a strong export business
spanning across many geographies.
Crude palm oil prices were significantly subdued in FY15-16 as compared
to the prices in FY14-15. Higher production volume helped GAVL offset
the decline in realization in the prices of crude palm oil and palm
kernel oil. The sales of the oil palm business remained flat at Rs. 404
crore in FY15-16 against Rs. 394 crore in FY14-15.
The Joint venture business ACI Bangladesh recorded a strong growth of
35% in sales, in FY15-16 catapulting the business into top 3 animal
feed companies in Bangladesh. Focus on brand building has started
yielding results in processed poultry joint venture with Sales growing
GAVL acquired controlling stake in Creamline marking its entry in the
fast growing Dairy business. The value added products in dairy like
curd, flavored milk, butter milk are growing at a faster pace as
branded food makes inroads in the largely unorganized dairy sector in
Godrej Properties Limited (GPL)
GPL registered its best ever financial year in FY15- 16. GPL achieved
its highest ever revenue, adjusted EBITDA, EBITDA, net profit, cash
flow, booking value, and deliveries in FY15-16. The total revenue for
the year stood at Rs. 2,728 crore, representing a 42% increase over the
corresponding period of the previous year. The adjusted EBITDA grew by
40% to Rs. 714 crore. EBITDA increased by 30% to Rs. 445 crore and net
profit increased by 21 % to Rs.231 crore. The booking value increased by
88% year-on-year to Rs. 5,038 crore despite a decline in the overall
market. As a result, GPL has emerged as the largest publicly listed
developer in India by sales value in FY15-16.
GPL delivered 6 million sq. ft. in FY15-16, which includes 4.2 million
sq. ft. of residential and 1.8 million sq. ft. of commercial space
across seven cities and recorded a growth of 71% over the previous
year. To put this in perspective, it is greater than the area the
company delivered in the first twenty years of its existence and the
highest ever it has delivered in a single year.
GPL achieved three important strategic milestones in FY15-16. GPL sold
435,000 sq. ft. for Rs. 1,479 crore at Godrej BKC in the largest ever
end- user commercial real estate transaction in India. The price of Rs.
34,000 per sq. ft. is 30% above the average price achieved in the
project till date and the highest price achieved for any major
commercial real estate deal in Mumbai. It allows GPL to fast-track its
plans to unlock capital from the commercial portfolio, strengthen the
balance sheet, and redeploy capital into the many high- return new
The second major milestone was the launch of The Trees, which was the
most successful launch in GPL''s history. GPL sold 470 apartments across
two phases registering a booking value of Rs. 1,224 crore. In addition to
the strong financial benefits, it is also a demonstration of GPL''s
ability to create a product that enhances the overall positioning of
Vikhroli. Vikhroli is the Group''s biggest opportunity and by
successfully launching the residential phases at The Trees and moving
into the new headquarters at Godrej One, GPL has ensured that FY15-16
will go down as a key year in Vikhroli''s development.
The third of the three major milestones for the year was the
announcement of the creation of Godrej Fund Management. GPL raised $
275 million under Godrej Residential Investment Program II (GRIP II)
with Dutch pension fund asset manager APG as the lead investor. GPL
will hold a 20% stake in GRIP II. This demonstrates GPL''s ability to
attract long-term institutional capital to power the growth capital
requirements and fits well into GPL''s strategy of increasing the depth
of operations across the country''s real estate markets while
maintaining an asset light strategy. It also opens up a whole new set
of opportunities for the company and continues the track record of
innovation in business development. Each of these three key strategic
highlights has fundamentally strengthened GPL''s long-term prospects.
High quality business development has played a key role in transforming
GPL''s project portfolio and its performance over the past 5 years. GPL
added 4 new projects with saleable area of approximately 7 million sq.
ft. in FY15-16. The year also marked GPL''s entry into the Noida and
Thane markets. The deal pipeline for new projects looks very exciting
as there are a large number of projects across cities where GPL is in
advanced stages of discussion with prospective partners. The
availability of funds through the second residential investment program
and tough market conditions present GPL with a great opportunity to
disproportionately scale its business development. FY16-17 has the
potential to be GPL''s best ever year for business development.
GPL received a total of 49 awards in FY15-16. During the year, GPL was
ranked amongst India''s Top 50 Companies to Work for in a study by the
Great Places to Work Institute in partnership with the Economic Times.
Given its commitment to sustainable practices, GPL has co-founded the
Sustainable Housing Leadership Consortium (SHLC); a voluntary
collaborative effort with leading Indian housing sector companies to
promote sustainable development in India.
GODREJ NATURE''S BASKET
Total 37-store chain of premium gourmet stores strategically located at
high street locations in Mumbai, Delhi/NCR, Pune, Hyderabad and
The sales turnover for NBL in FY15-16 was Rs. 271 crore, delivering a
growth of 30% YOY.
NBL continued to win awards in forums like India Retail Forum, Food &
grocery forum, Asia Retail Congress, Franchise India and CMO Asia
Natures Basket Limited (NBL)
Natures Basket Ltd. continued on its growth path, much above industry
standards. The sales turnover for NBL in FY15-16 was Rs. 271 crore,
delivering a growth of 30% YOY.
With a strategy of consolidating and leveraging right catchments that
was started 2 years ago, stores at Lokhandwala and Churchgate in Mumbai
were expanded to offer wider assortment and range of services to
customers. 2 stores (one each in Bangalore and Pune) were closed and 6
new stores were opened in Mumbai, Bengaluru and Delhi/NCR, taking the
total store count to 37. Improved availability, aggressive introduction
of new products and smart marketing initiatives ensured that growth for
physical stores at 25% continued to be ahead of the industry.
Online sales contributed approx. 4.5% of total sales for the year and
grew over the previous year by a very robust 750%, clearly signifying
the importance of the channel in the future. 15 e-hubs that were
co-located with the physical stores helped us achieve this benchmark.
The brand also launched its updated website and mobile App during the
year as well as made ambient products available to customers across 125
While the in-store consumer experience and brand imagery continued to
be differentiated, our business wide programs drove growth in the
contribution of gifting sales, private label brands as well as ready to
go fresh foods as a % of total sales. Private label sales more than
doubled to nearly 9.7% of total sales while gifting was at 7.4% of
sales and fresh foods contributed nearly 2.5% of total sales. These
programs delivered both sales growth as well as higher margins to the
The loyalty program base continued to grow and was at about 7.5 lac
customers by the end of FY15-16 with nearly 79% of business being
contributed by loyal customers.
Also, the brand continued to win awards in forums like India Retail
Forum, Food & grocery forum, Asia Retail Congress, Franchise India and
CMO Asia awards etc.
GODREJ CONSUMER PRODUCTS
GCPL was ranked number 9 on the ''Great Place to Work - Best Workplaces
in Asia 2016 and ranked among the top 25 ''Aon Hewitt Best Employers in
India - 2016'' survey
Godrej Consumer Products Limited (GCPL)
GCPL, an associate of your Company, has continued to grow ahead of the
overall FMCG sector, as well as the home and personal care categories
that it participates in, despite a challenging macro environment.
On a consolidated basis, GCPL reported a total income of Rs. 8,968 crore
during the FY15-16 compared to Rs. 8,276 crore for FY14-15. The Net
Profit grew by 23% at Rs. 1,119 crore as compared to Rs. 907 crore during
GCPL''s expanding footprint is driven by a focused 3x3 strategy - a
presence in three business categories (personal care, hair care and
home care) in three geographies (Asia, Africa and Latin America) - to
become an emerging markets FMCG leader. Despite challenges across
geographies, its businesses have performed well, with the company''s
salience of international revenues at 47%. GCPL''s focus has been to
accelerate innovation and back new products with strong marketing
investments. In the past year, GCPL made several new launches in the
domestic and international businesses, expected to further enhance the
company''s competitiveness, improve the equity of its brands and drive
increased penetration and consumption. Over 40% of GCPL''s growth now
comes from new products and renovations. It was also the highest ranked
Indian company (at number 24) on Forbes'' list of the ''World''s 100 Most
Innovative Growth Companies 2015'', for the second year in a row.
Today, GCPL is one of the largest household and personal care companies
in India; the leader in hair colour, household insecticides and liquid
detergents, and the number two player in toilet soaps and air care.
Significant marketing investments have driven higher consumption and
penetration across the board. GCPL''s superior global supply chain and
future ready sales organisation leverage the latest technology for
sharper execution and better decision making, thus strengthening market
It was ranked the number 1 FMCG Company to work for in the ''Great Place
to Work - Best Workplaces in India 2015'' list; its twelfth consecutive
year on the list. It was also ranked number 9 on the ''Great Place to
Work - Best Workplaces in Asia 2016'' list and ranked among the top 25
''Aon Hewitt Best Employers in India - 2016'' survey.
Godrej International Limited (GINL), incorporated in the Isle of Man,
is a wholly owned subsidiary of the Company. GINL trades worldwide in
vegetable oils and concentrates on palm, lauric and soya oils.
The year under review saw the emergence of a powerful EL Nino weather
phenomenon and that led to a sharp rise in prices. The Company was able
to catch this big upward move in prices successfully. The EL Nino is
likely to be followed by La Nina which may bring further volatility in
Godrej International Limited, Labuan is incorporated in the financial
centre of Labuan. This Company has remained dormant and is not actively
trading as yet. All trading activities have been successfully centred
into the older and more mature entities incorporated in Isle of Man and
Our international companies have developed a worldwide reputation for
research into commodity pricing and are often invited to make
presentations at prestigious venues and are frequently quoted in the
Ensemble Holding and Finance Limited (EHFL), a wholly owned subsidiary
of your Company, is a Non-Banking Finance Company. The total income of
EHFL for FY15-16 was Rs. 1.03 crore as against that of Rs. 0.97 crore
last year. The Profit before Tax of EHFL remained the same at Rs. 0.95
crore as against last year.
Pursuant to Regulation 16(1)(c) of the SEBI (Listing obligations and
disclosure requirements) Regulations, 2015 (Listing Regulations), your
Company has formulated a policy for determining its ''material
subsidiaries''. The said policy has been uploaded on the Company''s
During the year under review, GIL Vikhroli Real Estate Limited, a
wholly owned subsidiary of the Company, was amalgamated with GPL. In
terms of the Scheme of Amalgamation (''Scheme'') sanctioned by the
Hon''ble Bombay High Court vide order dated February 26, 2016, the
appointed date of the Scheme was August 01, 2015. The effective date of
the scheme was March 15, 2016. Pursuant to the scheme, the Company was
allotted 1,67,45,762 equity shares of GPL.
The loan funds at the end of the year stand at Rs. 2,661 crore as
compared to Rs. 2,022 crore for the previous year. The debt equity ratio
is 1.51 as compared to 1.16 last year. Your Company continues to hold
the top most rating of [ICRA]A1 from ICRA for its commercial paper
program (Rs. 1000 crore) (previous year Rs. 700 crore). ICRA has reaffirmed
an [ICRA]A1 rating for its short term debt instruments/other banking
facilities (Rs. 800 crore) (previous year Rs. 800 crore). This rating of
ICRA represents highest-credit quality carrying lowest-credit risk. ICRA
also reaffirmed [ICRA] AA rating with stable outlook for long-term debt,
Non-convertible Debentures, working capital and other banking facilities
(Rs. 1015 crore) (previous year Rs. 940 crore). This rating represents
high-credit quality carrying low-credit risk. ICRA has also assigned a
rating of MAA with stable outlook for our Public Deposit scheme. The
Public Deposit scheme under the Companies Act, 1956 has been discontinued.
Instruments with this rating are considered to have the high-credit
quality and low credit risk.
The chemicals division of your Company has manufacturing units at
Ambernath, Valia, Wadala and Dombivali.
The Ambernath factory is ISO-9001:2008, ISO 14001:2004, ISO 18001:2007,
ISO 27001: 2005 certified. Over the last year the factory also got
certified for FSSC 22000 and ISO 22716 for Food safety and GMP
respectively. The factory has also achieved considerable energy savings
over the year.
The Valia factory is ISO-9001:2008, ISO 14001:2004, ISO 18001:2007, ISO
27001: 2005 certified. The Factory has also got certification from
FDA, FSSAI and Kosher. We are member of Roundtable on Sustainable Palm
Oil. The Valia factory has successfully got GMP B2 certification for
palmitic acid used as animal feed during this year. The Company has
invested in plants for making specialty products.
The Vegoils Division (Wadala) was operating as contract processor of
edible oils upto August 2015. From September 2015, the unit is
manufacturing and selling edible oils under Godrej Brand. The total
turnover has increased to Rs. 61 crore as against Rs. 6 crore in previous
The Dombivali unit has flexibility of producing multiple value added
products, mainly fatty esters and amide, used in personal and home care
Research and Development (R&D)
In the year under consideration our R&D activities have resulted in the
launch of several new products, each of them being high value
derivatives of fatty acids and fatty alcohols, having specialty
applications in home and personal care products, animal feeds and agri
products. Innovations in existing processes and the endeavor to
develop new processes and technologies will be an ongoing activity. So
too, will be our efforts to manufacture premium quality fatty acids and
fatty alcohols from alternate raw materials. We will also continue to
focus our attention on high value fractionated fatty acids and fatty
alcohols for the polymer, oilfield, lubricant and paper industries.
Parallel to all the above oleo-chemicals projects, R&D continues its
efforts in developing improved and customized specialty surfactants &
bio-surfactants through in house and external consultation routes.
Human Resource Development and Industrial Relations
During the year under review, industrial relations at all plant
locations remained harmonious.
Your Company emphasizes on the safety of people working in its
premises. Structured safety meetings were held and safety programmes
were organized for them throughout the year.
Business Responsibility Report
SEBI, vide its circular SEBI/LAD-NRO/GN/2015-16/27 dated December 22,
2015 had mandated inclusion of Business Responsibility Reports (BRR) as
part of the Annual Reports for top 500 listed entities based on market
capitalisation as on March, 31 of every financial year.
A detailed report on your Company''s sustainability initiatives is
published in the Business Responsibility Report, as ''Annexure B'' and
forms a part of this report. The BRR describes the initiatives taken by
the company from an environmental, social and governance perspective.
Your Company has awarded IT outsourcing contracts to manage Infra and
SAP application support to IBM & Numantra Technologies Ltd. for better
support and savings on annual cost.
Mobile application was developed for Sales & Marketing team to have
online access to product pricing policy thus helping them to get the
online Net Realisation rates for quoting. It is also a two way
communication tool whereby the field sales manager can give their
feedback on competition pricing. It helps them in taking corrective
action and decision making. Also, it carries out pricing trend analysis
for various products.
Employee Stock Grant Scheme 2011 (ESGS) and Employee Stock Option Plan
On May 27, 2015, the Nomination and Compensation Committee approved a
total of 1,68,084 stock grants equivalent to 1,68,084 equity shares of
the Company to eligible employees in terms of the ESGS 2011 Scheme. The
exercise price is Rs.1/- per equity share. As on March 31, 2016 and in
terms of the ESGS Scheme, 2011, a total of 1,09,370 grants were vested,
out of which 1,06,748 were exercised and allotted.
Disclosure in compliance with section 62 of the Companies Act,2013,
Rule 12 of Companies (Share Capital and debentures) Rules, 2014, SEBI
(Share Based Employee Benefits) Regulations, 2014 and The SEBI
(Employee Stock Options Scheme and Employee Stock Purchase Scheme)
Guidelines 1999 is given in Annexure C attached and forms a part of
Your Company is currently not accepting public deposits. The management
of the Company is thankful to all the investors for their continued
trust in the Company. During the year ended March 31, 2016, deposits
aggregating Rs. 32.11 crore. has been repaid on maturity. The Company has
no overdue deposits other than unclaimed deposits.
Your Company''s equity shares are available for dematerialization
through National Securities Depository Limited and Central Depository
Services (India) Limited. As of March 31, 2016, 99.80% of the equity
shares of your Company were held in demat form.
In accordance with the Articles of Association of the Company, the
following directors retire by rotation at the ensuing Annual General
Meeting and being eligible offer themselves for reappointment;
- Mr. J. N. Godrej (DIN 00076250)
- Mr. N. S. Nabar (DIN 06521655)
Your Company had appointed following Non-Executive (Independent)
Directors pursuant to Regulation 17 of the (Listing Regulations) and
they are not liable to retire by rotation as per the Companies Act,
2013 (the Act);
- Mr. S. A. Ahmadullah (DIN 00037137)
- Mr. A. B. Choudhury (DIN 00557547)
- Mr. K. K. Dastur (DIN 00050199)
- Mr. K. M. Elavia (DIN 00003940)
- Mr. A. D. Cooper (DIN 00026134)
- Mr. K. N. Petigara (DIN 00066162)
Your Company has received declarations from all the Independent
Directors of the Company confirming that they meet with the criteria of
independence as prescribed under sub-section (7) of Section 149 of the
Your Company has conducted a formal Board Effectiveness Review as part
of its efforts to evaluate, identify improvements and thus enhance the
effectiveness of the Board, its Committees and Individual Directors.
This was in line with the requirements mentioned in the Act.
The HR team of the Company worked directly with the Chairman and the
Nomination and Compensation Committee of the Board, to design and
execute this process which was adopted by the Board. Each Board Member
completed a confidential online questionnaire, providing vital feedback
on how the Board currently operates and how it might improve its
The survey comprised four sections and compiled feedback and
- Board Processes (including Board composition, strategic orientation
and team dynamics);
- Individual Committees;
- Individual Board Members; and
- the Chairman
The following reports were created, as part of the evaluation:
- Board Feedback Report;
- Individual Board Member Feedback Report; and
- Chairman''s Feedback Report
The overall Board Feedback Report was facilitated by Mr. A. B. Godrej,
Chairman. The Individual Committees and Board Members'' feedback was
shared with the Chairman. Following his evaluation, a Chairman''s
Feedback Report was also compiled.
On the recommendation of the Nomination and Compensation Committee, the
Board had framed a policy for selection and appointment of Directors,
Senior Management and their remuneration. The details of the Board
Appointment Policy are stated below:
Board Appointment Policy - Godrej Industries Limited (the Company)
The Company is committed to equality of opportunity in all aspects of
its business and does not discriminate on the grounds of nationality,
race, colour, religion, caste, gender, gender identity or expression,
sexual orientation, disability, age or marital status.
The Company recognises merit and continuously seeks to enhance the
effectiveness of its Board. The Company believes that for effective
corporate governance, it is important that the Board has the
appropriate balance of skills, experience and diversity of
Board appointments will be made on merit basis and candidates will be
considered against objective criteria with due regard for the benefits
of diversity on the Board. The Board believes that such merit-based
appointments will best enable the Company to serve its stakeholders.
The Board will review this Policy on a regular basis to ensure its
for the financial year ending March 31, 2017. They are required to
submit the report to the Central Government within 180 days from the
end of the accounting year.
The Board has appointed M/s. A. N. Ramani & Co., Company Secretaries,
Practising Company Secretary, to conduct Secretarial Audit for the
financial year 2015-16. The Secretarial Audit Report for the financial
year ended March 31, 2016 is annexed herewith marked as Annexure ''G'' to
this Report. The Secretarial Audit Report does not contain any
qualification, reservation or adverse remark.
The Audit Committee, constituted pursuant to the provisions of the Act,
and the Listing Regulations, has reviewed the Accounts for the year
ended March 31, 2016. The members of the Audit Committee are Mr. K. K.
Dastur, Mr. S. A. Ahmadullah, Mr. K. N. Petigara and Mr. A. B.
Choudhury, all Independent Directors.
Policy to Prevent Sexual Harassment at Work Place
Your Company is committed to creating and maintaining an atmosphere in
which employees can work together without fear of sexual harassment,
exploitation or intimidation. As required under the provisions of
Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013, your Company has constituted an Internal
Complaints Committee. No complaints were received by the committee
during the year under review. Since the number of complaints filed
during the year was NIL, the Committee prepared a NIL complaints
report. This is in compliance with section 22 of the Sexual Harassment
of Women at Workplace (Prevention, Prohibition and Redressal) Act,
Directors'' Responsibility Statement
The Board has laid down Internal Financial Controls within the meaning
of the explanation to section 134 (5) (e) (IFC) of the Act. The Board
believes the Company has sound IFC commensurate with the nature and
size of its business. Business is however dynamic. The Board is seized
of the fact that IFC are not static and are in fact a fluid set of
tools which evolve over time as the business, technology and possibly
even fraud environment changes in response to competition, industry
practices, legislation, regulation and current economic conditions.
There might therefore be gaps in the IFC as Business evolves. The
Company has a process in place to continuously identify such gaps and
implement newer and/or improved controls wherever the effect of such
gaps might have a material effect on the Company''s operations.
Pursuant to the provisions contained in Section 134 of the Act, the
Directors of your Company confirm:
a) that in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures, if any;
b) that such accounting policies have been selected and applied
consistently, and such judgments and estimates have been made that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the
profit or loss of the Company for that period;
c) that proper and sufficient care has been taken for the maintenance
of adequate accounting records in accordance with the provisions of
this Act for safeguarding the assets of the Company, for preventing and
detecting fraud and other irregularities;
d) that the annual accounts have been prepared on a going concern
e) that the proper policies and procedures have been adopted for
ensuring the orderly and efficient conduct of its business, including
adherence to code of conduct and policies, the safeguarding of assets,
the prevention and detection of frauds and errors, the accuracy and
completeness of the accounting records, and the timely preparation of
reliable financial information and that such policies and procedures
are adequate and were operating effectively.
f) that proper systems are in place to ensure compliance of all laws
applicable to the Company and that such systems are adequate and
As required by the existing Regulation 34(3) of the Listing Regulation,
a detailed report on Corporate Governance is included in the Annual
Report. The Auditors have certified the Company''s compliance of the
requirements of Corporate Governance in terms of Regulation 34(3) of
the Listing Regulation and the same is annexed to the Report on
Disclosures and Information under the Companies Act, 2013
Pursuant to section 134 and any other applicable section of the Act,
following disclosures and information is furnished to the shareholders:
(a) Conservation of Energy, Technology absorption and Foreign Exchange
Earnings and Outgo
''Annexure D'' to this Report gives information in respect of
Conservation of Energy, Technology absorption and Foreign Exchange
Earnings and Outgo, required under Section 134(3)(m) of the Act, and
forms a part of the Board''s Report.
(b) Extract of Annual return
The extract of the annual return as provided under sub section (3) of
Section 92 of the Act is given in Form No. MGT 9 as ''Annexure E'',
attached and forms a part of this report.
(c) Board meetings
The Board of Directors of your Company met 6 (six) times during the
year under review. The details of Board meetings and the attendance of
the Directors are provided in the Corporate Governance Report.
(d) Loans, Guarantees & Investments
Details of Loans, Guarantees and Investments covered under the
provisions of Section 186 of the Act, are given in the notes to the
(e) Related Party Transactions
All related party transactions entered into by your Company during the
financial year were on an arm''s length basis and were in the ordinary
course of business. There were no materially significant related party
transactions made by the Company with related parties. Prior omnibus
approval of the Audit Committee was obtained for those transactions
which were of routine nature. Accordingly, the disclosure of Related
Party Transactions as required under Section 134(3) (h) of the Act, in
Form AOC-2 is not applicable. Attention of members is also drawn to the
disclosure of transactions with related parties set out in Note No. 44
of Standalone Financial Statements, forming part of the Annual Report.
None of the Directors has any pecuniary relationships or transactions
vis-a-vis the Company.
The policy on Related Party Transactions is uploaded on the Company''s
(f) Particulars of Employees:
Disclosures with respect to the remuneration of Directors and employees
as required under Section 197 of the Act, and Rule 5(1) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 has been appended as Annexure ''F'' to this Report. The information
required pursuant to Section 197 of the Act read with Rule 5(2)&(3) of
the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 in respect of employees of your Company is available for
inspection by the members at registered office of the Company during
business hours on working days up to the date of the ensuing Annual
General Meeting. If any member is interested in obtaining a copy
thereof, such member may write to the Company Secretary, whereupon a
copy would be sent.
(g) Risk Management
Your Company had formed a Risk Management Committee consisting of the
Managing Director and the Whole time Directors. The Committee
identifies, evaluate business risks and opportunities. This Committee
has formulated and implemented a policy on risk management to ensure
that the company''s reporting system is reliable and that the company
complies with relevant laws and regulations. The Board of Directors of
your Company are of the opinion that, at present, there are no elements
of risks which may threaten the existence of the Company.
Your Company has a vigil mechanism named Whistle Blower Policy to deal
with instance of fraud and mismanagement, if any. The details of the
Whistle Blower Policy are explained in the Corporate Governance Report
and also posted on the website of the Company.
(h) Nomination & Remuneration Policy for Senior Management
The details relating to ratio of the remuneration of each director to
the median remuneration of the employees of the Company for FY15-16 is
given in ''Annexure F'' attached and forms part of this Report.
The policy of your Company on director''s appointment and remuneration
of the directors, key managerial personnel and other employees
including criteria for determining qualifications, positive attributes,
independence of a director, is stated below:
TOTAL REWARDS PHILOSOPHY GODREJ INDUSTRIES LIMITED (the Company)
Our Total Rewards Framework aims at holistically utilising elements
such as fixed and variable compensation, long-term incentives, benefits
and perquisites and non-compensation elements (career development, work
life balance and recognition).
The rewards framework offers you the flexibility to customise different
elements, basis need. It is also integrated with our performance and
talent management processes and designed to ensure sharply
differentiated rewards for our best performers.
The total compensation for a given position is influenced by three
factors: position, performance and potential. As a broad principle, for
our high performers and potential employees, we strive to deliver total
compensation at the 90th percentile of the market.
The total compensation has three components:
1. ''Fixed Compensation'' comprises of basic salary and retirement
benefits, like provident fund and gratuity
2. ''Flexible Compensation'' is a fixed pre-determined component of the
3. ''Variable Compensation (Performance Linked Variable Remuneration)''
rewards one for delivering superior business results and individual
performance. It is designed to provide a significant upside earning
potential without cap for over achieving business results. It has a
''Collective'' component, which is linked to the achievement of specified
business results, measured by Economic Value Added or other related
metrics, relative to the target set for a given financial year and an
''Individual'' component, based on the performance, as measured by the
performance management process.
Long Term Incentives (Employee Stock Grant Scheme)
This scheme aims at driving a culture of ownership and focus on
long-term results. It is applicable to senior managers. Under this
scheme, performance based stock grants are awarded on the basis of
There are no material changes and commitments affecting the financial
position of the Company which have occurred between the end of the
financial year to which the financial statement relates and the date of
There are no qualifications, reservations or adverse remarks in the
Auditors Report and the Secretarial Audit Report for FY15-16.
(j) Share Capital
During the year under review your company allotted 1,06,748 equity
shares of Rs.1 each upon exercise of stock option under Company''s
Employee Stock Grants Scheme and 85 bonus equity shares on ESGS in
compliance with the scheme of amalgamation of Wadala Commodities
Limited with the Company. Consequently, the paid up share capital of
your Company has increased from Rs.33,58,81,974/- divided into
33,58,81,974 equity shares of Rs.1 each to Rs.33,59,88,807 divided into
33,59,88,807 equity shares of Rs.1 each.
(k) Significant Court Order received
During the year under review, the Hon''ble High Court of judicature at
Bombay had, on February 26, 2016, passed an order approving the scheme
of amalgamation of GIL Vikhroli Real Estate Limited with Godrej
The consolidated financial statements of the Company forms a part of
this Annual Report. Accordingly, this Annual Report of your Company
does not contain the financial statements of its subsidiaries. The
Audited Annual Accounts and related information of the Company''s
subsidiaries will be made available upon request. These documents will
also be available for inspection during business hours at the Company''s
registered office in Mumbai, India. The subsidiary companies'' documents
will also be available for inspection at the respective registered
offices of the subsidiary companies during business hours.
Your Directors thank the Union Government, the Governments of
Maharashtra and Gujarat as also all the Government agencies, banks,
financial institutions, shareholders, customers, employees, fixed
deposit holders, vendors and other business associates, who, through
their continued support and co-operation, have helped as partners in
your Company''s progress.
For and on behalf of the Board of Directors
A. B. Godrej
Chairman Mumbai, May 25, 2016.