To the Shareholders,
The Directors have pleasure in submitting the Annual Report along with
the Audited Accounts for the year ended March 31, 2014.
Review of Operations
Your Company''s performance during the year as compared with that during
the previous year is summarized below.
Year Ended March 31 Year Ended March 31
Revenue from Operations 1,453.55 1,464.83
Other Income 144.98 108.44
Total Income 1,596.53 1,573.07
Total Expenditure other than
Finance Costs and 1,354.20 1,357.97
Depreciation and Amortisation
Profit before Finance Costs,
Depreciation and 244,33 105.10
Amortisation and Tax
Depreciation and Amortisation
Expenses 24,61 23.12
Profit before Finance Costs and Tax219.72 161.96
Finance Costs (net) 94.34 64.62
Profit before Tax 154.33 97.16
Provision for Current Tax 0.09 1.79
Provision for Deferred Tax 5.10 (1.37)
Net Profit 119.69 96.74
Surplus brought forward 462.06 403.86
Profit after Tax avaiIable for
appnopriation 601.75 500.42
Your Directors recommend appropriation as under:
Dividend on Equity Shares 56.70 58.89
Tax on distributed profits 9.93 9.52
Proposed Dividend for on additional
shares 0.01 2.98
issued during the year
Credit for Dividend Distribution
Tax on Dividend Received (5.79) (1.85)
Transfer to General Reserve 11.97 29.02
Surplus Carried Forward 526.33 432.08
Total Appropriation 601.75 580.42
The Board of Directors of your Company recommends a final dividend of Rs.
1.75 per equity share of Rs. 1/- each, aggregating Rs. 58.70 crore
(previous year Rs. 1.75 per equity share).
Management Discussion and Analysis
There is a separate section on Management Discussion and Analysis
appended as Annexure A to this Report, which includes the following:
- Industry Structure and Developments
- 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 and agro-products, oil palm plantation, property
development, personal and home care, etc. through its subsidiary and
Godrej Agrovet Limited (GAVL)
GAVL continued on its growth path during the year under review. GAVL''s
consolidated total revenue and net profit increased by 16% and 80%
respectively, over last year.
The Animal Feed business recorded a growth of 10% in revenues and 19%
in profitability. The strong performance in sales revenue and
profitability was on account of increased volumes, innovative products
backed by R&D efforts and efficiency in buying. This division of GAVL
undertook Brand Consolidation with few strong brands having national
presence. This division of GAVL arranged Calf competitions during the
fiscal to support Heifer feed sales.
GAVL was the first company to organize such an event which created an
impact at village level.
GAVL''s Vegetable Oil operations registered a growth of 31% in revenues
and 23% in profitability despite adverse impact of new formula for
pricing of Fresh Fruit Bunches (FFB) on account of healthy growth in
arrivals of FFBs, control over fixed costs and high Crude Palm Oil
prices. This division of GAVL has completed the construction of oil
mill in Mizoram and commercial production has started in April 2014.
The Agri inputs division of GAVL reported a growth of 38% in revenues
and 34% in
profitability over the previous year on account of healthy margins in
plant growth promoters and herbicides. During the year, the Company
launched new products, viz.,Impool a herbicide and variants of
Zymegold, a micronutrient, which are innovative products.
GAVL continues to be the holding company of Godrej Seeds & Genetics
Limited (GSGL). GSGL recorded a sales of Rs. 36 crore during the year
under review. GAVL is also the holding company of Godvet Agrochem
Limited (GAL), which was incorporated on January 22, 2014 and entire
paid-up equity share capital of GAL is held by GAVL. Goldmuhor
Agrochem & Feeds Limited and Golden Feed Products Limited have merged
GAVL continues to have joint venture arrangement with ACI Godrej
Agrovet Private Limited, Bangladesh (ACI Godrej) and Godrej Tyson Foods
Limited (GTFL). ACI Godrej achieved a turnaround despite volatile
external environment on account of political uncertainty through
premium pricing and innovative logistics solutions. GTFL also achieved
a complete turnaround and registered a growth of 23% in total income
and 195% in profit before tax over previous year on account of lower
feed costs and control over fixed costs.
Godrej Properties Limited (GPL)
GPL is the real estate development arm of the Godrej Group, with a
pan-India presence. Despite the current uncertainties and challenges
in the real estate environment, GPL has successfully demonstrated
strong value addition to its development portfolio. GPL posted a total
income of Rs. 1254 crore during the financial year ended March 31, 2014.
During the said year, GPL added 8 new projects with a saleable area of
13.42 million sq. ft. to its portfolio. The new projects signed are
located in Mumbai, the National Capital Region, Pune, Bengaluru and
Chennai. The projects added are of substantial size and are in line
with GPL''s long term strategy of focusing on value accretive and risk
efficient models. While real estate supply continues to outpace growth
in demand across most cities in the country, GPL achieved its highest
ever quarterly sales in the fourth quarter of the fiscal year, driven
by successful new launches in Mumbai and Bengaluru. The highlight of
the year was the successful launch of in Mumbai, which registered
bookings of over 200 apartments valued at over Rs. 400 crore on the day
of its launch. Another milestone for GPL was the launch of Godrej
United in Bengaluru. This launch was achieved within 12 months of the
Development Agreement being signed. This project also witnessed strong
uptake in the market, registering bookings worth over Rs. 100 crore over
the span of a few weeks.
Despite the current challenges facing the Indian economy dampening
commercial real estate sales across major cities in the country, GPL
registered over 800,000 sq. ft. of bookings across three commercial
projects in Mumbai and Kolkata.
Delivering on its customer commitments, GPL handed over 624 apartments
across 13 towers in Godrej Garden City, GPL''s first township project.
The Global Indian International School at Godrej Garden City, Ahmedabad
was also inaugurated in the fiscal year. This is the first school that
GPL has built and marks an important milestone for the township.
GPL continues to deliver on its vision of being the most trusted name
in the real estate industry, and has been recognized as such, winning
the ''Developer of the Year'' award at the Indian Realty Awards 2013 and
the ''Ethical Brand for Real Estate'' award by CMO Asia.
GPL also continues its focus to deliver on its commitments on the
sustainability front, aiming for green building certifications for all
ongoing and future projects. Godrej BKC is the first multi-occupant
project in BKC to be awarded the LEED Platinum pre-certification. GPL
also received the ''Sustainability Award'' from the CII for its
contribution to green building mission at the GreenCo Summit 2013.
Natures Basket Limited (NBL)
NBL which operates in the gourmet food retail segment and is a wholly
owned subsidiary of your Company has been increasing its foothold
across cities. NBL is ''the'' retail destination for gourmet and fine
food in India. NBL had extended its footprint from 27 stores in
Financial Year 2012-13 to 33 stores by the end of Financial Year
NBL''s business grew by 36% and achieved a total income of Rs. 174 Crore.
Greater focus on strengthening the gifting portfolio both in terms of
dedicated presence in stores as well as creation of a distinctive and
appealing gifting portfolio ensured that sales through gifting grew at
a very healthy clip of 82% over last year.
NBL introduced 2 distinct brands – l''exclusif and Healthy Alternatives
to introduce its own range of indulgence and health products
respectively. About 150 SKUs introduced so far under these 2 labels
have been well received by consumers and holds out great hope for FY
The business was rewarded across retail platforms with wins at the Coca
Cola Golden Spoon awards, India Retail Forum, Asia Retail Congress and
several others as well.
Godrej Consumer Products Limited (GCPL)
GCPL, an associate of your Company, has continued to grow ahead of the
overall FMCG sector, as well as home and personal care categories that
it participates in, despite a challenging macro environment. On a
consolidated basis, GCPL reported Income from Operations of Rs. 7,583
crore and a Net Profit (after minority interest) of Rs. 760 crore for
Financial Year 2013-14, compared to Rs. 6,400 crore and Rs. 796 crore
respectively, for the previous year.
While GCPL''s salience of international revenues increased to 47%, it
also ensured strong growth momentum in its domestic business with a
healthy 14% growth. GCPL''s focus has been to accelerate nnovation and
back new products with strong marketing investments. In the past year,
GCPL had several new launches in the domestic and international
businesses. These launches, we believe, will further enhance GCPL''s
competitiveness, improve the equity of its brands and drive increased
penetration and consumption.
Today, GCPL is one of the largest household and personal care companies
in India; the leader in hair
colour, household insecticides and liquid detergents, the number two
player in toilet soaps and a fast- growing new entrant in air care.
Over a third of GCPL''s growth now comes from new products and
renovations, having invigorated its product portfolio with 12 launches
and relaunches in India alone, in just over 18 months. 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 positions. It was
ranked the number 1 FMCG Company to work for in the Great Place to Work
survey 2014; its tenth consecutive year on the list.
GCPL''s expanding footprint is driven by a focussed 3x3 strategy - a
presence in three business categories (personal wash, hair care and
home care) in three geographies (Asia, Africa and Latin America) - to
become an emerging markets FMCG leader. GCPL has made good progress in
the next phase of the ntegration of its Darling businesses, thus taking
its presence in Africa to the next stage. It is now strengthening and
building processes and talent infrastructure for sustainable growth.
The UK business continues to outperform, while the Indonesia and Latin
America businesses have also performed well, despite market challenges.
Godrej International Limited (GINL), a wholly owned subsidiary of your
Company, trades in vegetable oils worldwide. GINL continued its strong
operating profit growth with a rise in turnover by 15% to US $ 282
million. Palm oil prices did not fall as expected and were supported by
greater use of palm in the manufacture of bio diesel.
Godrej International Trading & Investments Pte. Limited (GITI), a
wholly owned subsidiary of your Company, incorporated in the Republic
of Singapore, also continued to trade profitably. It has not been
possible to expand its turnover and activity in the past year. The long
term aim remains to consolidate all our vegetable oil trading activity
in this geographic region.
Ensemble Holdings and Finance Limited (EHFL), a wholly owned subsidiary
of your Company, is a Non-Banking Finance Company. The Gross Income of
EHFL for the Financial Year ended March 31, 2014 was Rs. 0.99 crore as
against that of Rs. 3.35 crore last year. The Net Profit of EHFL during
the Financial Year ended March 31, 2014 was Rs. 0.82 crore as against
that of Rs. 0.27 crore last year.
During the year under review, Swadeshi Detergents Limited (SDL) a
wholly owned subsidiary of your Company, had been amalgamated with your
Company in terms of the Scheme of Amalgamation sanctioned by the
Hon''ble Bombay High Court vide its order dated August 16, 2013. The
appointed date of the Scheme was April 1, 2013 and the effective date
of the Scheme was September 6, 2013 i.e. the date on which your Company
and SDL had filed a certified copy of the said High Court order with
the Registrar of Companies, Maharashtra.
During the year under review, the Board of Directors of your Company
had on February 7, 2014 approved the proposal of scheme of amalgamation
of Wadala Commodities Limited (WCL) with your Company. BSE Limited and
National Stock Exchange of India Limited had conveyed their ''No
objection'' for the said scheme of amalgamation. Your Company had
approached the Hon''ble High Court of judicature at Bombay and the High
Court had directed to seek the approval of the equity shareholders for
the scheme of amalgamation. Accordingly, a court convened meeting of
the equity shareholders of your Company has been called on June 13,
2014. Also pursuant to the terms of para 5.16 of Circular Number
CIR/CFD/DIL/5/2013 dated February 4, 2013 issued by Securities and
Exchange Board of India (SEBI) read with para 7 of Circular Number
CIR/CFD/ DIL/8/2013 dated May 21, 2013 issued by SEBI (SEBI Circular)
and Pursuant to Section 110 of the Companies Act, 2013 and applicable
rules thereunder, your Company is seeking the approval of the equity
shareholders for the scheme by way of Postal Ballot. The results of the
said postal ballot will be declared by the Chairman of the Company on
June 3, 2014.
The loan funds at the end of the year stand at Rs. 1,327 crore as
compared to Rs. 926 crore for the previous year. The debt equity ratio is
0.82 as compared to 0.56 last year. Your Company continues to hold the
topmost rating of [ICRA]A1 from ICRA for its commercial paper program
(Rs. 600 crore) (enhanced from Rs. 410 crore). ICRA has reaffirmed an
[ICRA]A1 rating for its short term debt instruments/other banking
facilities (Rs. 900 crore) (enhanced from Rs. 850 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, working capital and
other banking facilities (Rs. 940 crore) (enhanced from Rs. 640 crore).
This rating represents high-credit quality carrying low-credit risk.
ICRA has also assigned a rating of MAA with stable outlook for our
likely Public Deposit scheme (under the Companies Act, 2013) for Rs. 100
crore. 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 and Valia.
The manufacturing operations of your Company at Vikhroli were
discontinued with effect from February 28, 2014. Your Company has set
up a state of the art new manufacturing facility at Ambernath,
Maharashtra and the production has commenced. This factory has the
facility to manufacture Surfactants, Fatty Acids (including specialty
grades) and Refined Glycerin.
The Valia factory is ISO-9001:2008 and ISO 14001:2004 certified. It has
also got OHSAS18001:2007 certificate of Bureau Veritas and ISO
27001:2005 certificate of British Standard Institution. The Valia
factory won the CII Environmental Best Practices Award 2013 for
Innovation for the Effluent Treatment Plant sludge reduction project.
The Vegoils Division (Wadala) continues as a contract processor of
edible oils and vanaspati. The division recorded a turnover of Rs. 6
Research and Development (R&D)
In the year under consideration the R&D activities have resulted in the
launch of two new products, each of them being high value derivatives
of fatty alcohols, having specialty applications in personal care
products and textile auxiliaries. 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.
Your Company will also continue to focus its 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, focusing on the home, oral and
personal care markets, thus delivering customer delight.
Human Resource Development and Industrial Relations
Your Company has been ranked 4th in Manufacturing & Production
industry, and 57th in overall India''s Companies To Work For 2013, in a
survey conducted by Great Place To Work® Institute.
Industrial Relations at all plant locations remained harmonious. Your
Company''s one of the oldest manufacturing unit based at Vikhroli has
been smoothly relocated to Ambernath. The transition has happened
swiftly and the cutting edge technology at Ambernath will soon start
reaping benefits. At Valia manufacturing unit, your Company has
entered into a Long Term Wage settlement with workers'' union.
Your Company emphasises on the safety of people working in its
premises. Structured safety meetings were held and safety programmes
were organized for them throughout the year. These efforts were
recognized by an award for ''Meritorious Performance in Industrial
Safety'' at the Maharashtra Safety Awards won by Vikhroli Factory given
away by ''National Safety Council – Maharashtra Chapter''.
Business Responsibility Report
SEBI, vide its circular CIR/CFD/DIL/8/2012 dated August 13, 2012 had
proposed to mandate inclusion of Business Responsibility Reports as
part of the Annual Reports for listed entities. According to the
proposal, the report should describe measures taken by the listed
companies along with key principles enunciated in the ''National
Voluntary Guidelines on Social, Environmental and Economic
Responsibilities of Business'' framed by the Ministry of Corporate
Affairs. This is intended to be adopted by companies in India to report
their Corporate Social Responsibility (CSR) activities and initiatives.
Your Company had voluntarily published its first Sustainability Report
last year. This year too your Company is publishing the Business
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.
Your Company has initiated implementation of new age Business
Intelligence (BI) software for generation of reports, queries and
executive dashboards. We have completely revamped our existing customer
relationship portal to provide refreshing experience to our customers
by providing online access of order status, dispatch details, financial
history and analytical trend graphs. Customers can also access the
information on the move by our new Mobile application.
Your Company is aggressively looking for new age technology solutions
like Cloud Computing, Mobility Solutions & Business Analytics to
leverage technology for smooth and efficient business operations. We
integrated our new production facility at Ambernath with existing
systems and processes.
Your Company is using technology for various business activities
including HR processes. We will continue to leverage technology and
setup Green Initiatives through use of technology.
Employee Stock Grant Scheme 2011 (ESGS) and Employee Stock Option Plan
On May 28, 2013 and August 10, 2013, the Compensation Committee
approved a total of 1,73,560 stock grants equivalent to 1,73,560 equity
shares of the Company to eligible employees in terms of the ESGS Scheme
2011. The exercise price is Rs. 1/- per equity share. As on March 31,
2014 and in terms of the ESGS Scheme, 2011, a total of 2,89,343 grants
were vested, exercised and allotted.
During the financial year 2013-14, no ESOP''s were granted. In the
current year, in accordance with the opinion issued by the Expert
Advisory Committee (EAC) of the ICAI in 2014 on Consolidation of ESOP
Trust in the standalone financial statements, the Company has included
the financial statements of the ESOP trust for preparation of the
standalone financial statements. Consequently, the assets and
liabilities of the Trust have been included in the financial statements
of the Company and investments in the equity shares of the Company held
by the Trust has been reduced from the share capital and reserves &
Disclosure in compliance with clause 12 of the Securities and Exchange
Board of India (Employees Stock Purchase Scheme) Guidelines, 1999 is
given in Annexure C attached and forms a part of this report.
Your Company stopped 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, 2014, deposits aggregating
to Rs. 15 crore have been mobilised and deposits aggregating to Rs. 37
crore have 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, 2014, 99.78% of the equity
shares of your Company were held in demat form.
Mr. J. N. Godrej and Ms. T. A. Dubash, both Director, retire by
rotation at the Annual General Meeting and being eligible offer
themselves for re-appointment. The Board of Directors recommend their
The Company had appointed Mr. S. A. Ahmadullah, Mr. A. B. Choudhury,
Mr. K. K. Dastur, Mr. K. M. Elavia, Dr. N. D. Forbes and Mr. K. N.
Petigara as Non-Executive Directors, liable to retire by rotation. They
are also the Independent Directors pursuant to the provisions of Clause
49 of the Listing Agreements entered into with Stock Exchanges.
As per section 149 of the Companies Act, 2013 (Act), which came into
effect from April 1, 2014, every listed public company is required to
have at least one-third of the total number of directors as Independent
Directors. These Independent Directors are not liable to retire by
rotation. Accordingly, it is proposed to appoint Mr. S. A. Ahmadullah,
Mr. A. B. Choudhury, Mr. K. K. Dastur, Mr. K. M. Elavia, Dr. N. D.
Forbes and Mr. K. N. Petigara as Independent Directors, in accordance
with the provisions of section 149 of the Act, to hold office as per
their tenure of appointment mentioned in the Notice of the Annual
General Meeting of the Company.
You are requested to appoint Auditors and to authorise the Board to fix
their remuneration. The retiring auditors Kalyaniwalla and Mistry,
Chartered Accountants, are eligible for reappointment. A certificate
from the Auditors has been received to the effect that their
reappointment, if made, would be within the prescribed limits.
The Audit Committee, constituted pursuant to the provisions of the
Companies Act and the listing agreement, has reviewed the Accounts for
the year ended March 31, 2014. 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.
Directors'' Responsibility Statement
Pursuant to the provisions contained in Section 217(2AA) of the
Companies Act, 1956, the Directors of your Company confirm:
a) that in the preparation of the annual accounts, the applicable
accounting standards have been followed and no material departures have
been made from the same;
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
The Directors of your Company further confirm that proper systems are
in place to ensure compliance of all laws applicable to the Company.
As required by the existing clause 49 of the Listing Agreements with
the Stock Exchanges, 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 clause 49 of the Listing Agreement and the same is annexed to
the Report on Corporate Governance.
Annexure D to this Report gives information in respect of Conservation
of Energy, Technology absorption and Foreign Exchange Earnings and
Outgo, required under Section 217(1)(e) of the Companies Act, 1956,
read with the Companies (Disclosure of Particulars in the Report of the
Board of Directors) Rules, 1988 and forms a part of the Directors''
In the context of a globalizing Indian economy, increased number of
subsidiaries and the introduction of accounting standards on
consolidated financial statements, the Ministry of Corporate Affairs
vide its general circular no.2/2011 dated February 8, 2011 has granted
a general exemption from publishing the accounts of subsidiaries
provided certain conditions are fulfilled. In line with the above
circular and as per the Accounting Standard 21 (AS 21) issued by the
Institute of Chartered Accountants of India, 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
India. The subsidiary companies'' documents will also be available for
inspection at the respective registered offices of the subsidiary
companies during business hours.
The Ministry of Corporate Affairs (MCA) has vide its Circular No.8/2014
dated April 4, 2014 has clarified that the financial statements (and
documents required to be attached thereto), auditors report and Board''s
report in respect of financial years that commenced earlier than April
1, 2014 shall be governed by the relevant provisions/schedules/rules of
the Companies Act, 1956.
Information as per Section 217(2A) of the Companies Act, 1956, read
with the Companies (Disclosure of Particulars in the Report of the
Board of Directors) Rules, 1988 forms a part of the Directors'' Report.
As per the provisions of Section 219(1) (b) (iv) of the Companies Act,
1956, the Report and Accounts are being sent to the Shareholders of the
Company, excluding the statement of particulars of employees under
section 217(2A) of the Companies Act, 1956. Any shareholder interested
in obtaining a copy of the same may write to the Company Secretary at
the registered office of the Company.
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
Mumbai, May 28, 2014.