The Directors have pleasure in submitting the Annual Report along with
the Audited Accounts for the year ended March 31, 2012.
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
Sales of products and services 1,438.04 1,112.33
Other Income 125.09 142.21
Total Income 1,563.13 1,254.54
Total Expenditure other than
Interest and Depreciation 1,264.36 1,026.56
Profit before Interest,
Depreciation and Tax 298.77 227.98
Depreciation and Amortisation
Expenses 27.19 28.85
Profit before Interest and Tax 271.58 199.13
Finance Cost (net) 70.53 63.12
Profit before Tax 201.05 136.01
Provision for Current Tax (0.34) (1.36)
Provision for Deferred Tax (0.17) 3.94
Net Profit 201.56 133.43
Adjustments in respect of prior years
Surplus brought forward 366.95 311.46
Profit after Tax available for
appropriation 568.51 444.89
Your Directors recommend
appropriation as under:
Dividend on Equity Shares 55.64 55.58
Tax on distributed profits 9.03 9.02
Transfer to General Reserve 20.16 13.34
Surplus Carried Forward 483.68 366.95
Total Appropriation 568.51 444.89
The Total income increased by ? 308.59 crore from ? 1,254.54 crore to ?
1,563.13 crore, a growth of 25%. The Net Profit for the year was ?
201.56 crore as compared to ? 133.43 crore in the previous year, a
growth of 51%.
The Board of Directors of your Company recommends a final dividend of ?
1.75 per equity share of ? 1/- each, aggregating ? 55.64 crore
(previous year ? 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, Associate and Joint Venture Companies
Your Company has interests in several industries including animal
feeds, poultry and agro-products, oil palm plantation, property
development, personal and home care, beverages and confectionery, etc.
through its subsidiary / associate / joint venture companies.
Godrej Agrovet Limited (GAVL)
GAVL has continued on an aggressive growth path and outperformed
targets on all major parameters during the year under review. GAVL''s
revenue grew by 38% over last year and Profits before Taxation has grown
Based on the Order of the Hon''ble High Court of Judicature at Bombay,
approving The scheme of arrangement between GAVL and Godrej Gokarna Oil
Palm Ltd, Godrej Oil Palm Ltd and Cauvery Palm Oil Ltd (Oil Palm
Companies), Oil palm Companies merged with Godrej Agrovet Limited with
effect from April 1st, 2011.
The Animal Feed business posted an 18% growth in volumes and revenue
grew by 35%, largely due to focus on R&D and Quality. The Profits also
grew by a strong 93% as a result of margin expansion.
The Agricultural Inputs business grew aggressively with sales
increasing by 32% over last year and Profits by 56%, backed by a superb
performance by its products Hitweed and HBR.
The Oil Palm business surpassed all expectations, with processing of
Fresh Fruit Bunches (FFBs) crossing 1.97 lac MT during the year under
review. Sales during the year showed growth of 94% over last year,
buoyed by high Crude Palm Oil (CPO) prices, and Profits increased by
GAVL has incorporated Godrej Seeds & Genetics Limited (GSGL) during the
second quarter of the year under review.
Godrej Properties Limited (GPL)
Godrej Properties Limited (GPL) is the real estate development arm of
the Godrej Group. GPL brings the Group''s philosophy of innovation and
excellence to the real estate industry while aspiring to continue to be
the most trusted name in the industry.
GPL ended the year on a positive note by reporting healthy financial
performance in what has been a challenging year for Indian real estate.
The consolidated total income increased by 47% to Rs. 8,198 million from
Rs. 5,589 million in FY 11. Several factors including high interest rate
regime, rising costs and slow regulatory approvals impacted sales
volumes, profitability and new launches. Given the external
environment, the performance is testimony of the Company''s robust
GPL successfully concluded its fund raising exercise by raising Rs. 4,707
million through the Institutional Placement Program (IPP). By doing so,
GPL became the first Indian Company to take this route after it was
introduced by SEBI earlier this year.
An important development for the year has been the appointment of
Pirojsha Godrej as Managing Director and Chief Executive Officer with
effect from April 1st, 2012. Ever since Pirojsha joined the Company in
2004, he has been closely involved in all the strategic initiatives and
operations at GPL. He also anchored very successful the IPO and IPP of
Godrej Properties. V Srinivasan has been appointed as Executive
Director. His last role was the Chief Financial Officer and Company
Secretary at Godrej Industries.
GPL continued to witness healthy demand momentum for all its projects.
The total booking value this year was ? 15,625 million and the booking
area was 2.4 million square feet.
GPL witnessed the highest number of strategic partnerships in a year in
the history of the Company with the signing of 10 new projects of which
seven are in high growth markets of Mumbai, NCR and Bengaluru. GPL also
entered into a landmark alliance with Godrej & Boyce during the year
for all future development of Godrej & Boyce owned land in Vikhroli,
Mumbai. The year 2011-12 marks GPL''s foray into Mumbai''s redevelopment
space. There is tremendous opportunity for redevelopment in Mumbai
where housing demand is high and there are severe constraints on the
land availability within the city limits. In line with the asset light
model of the company, GPL also executed two private equity deals at
GPL continues to retain its emphasis towards achieving excellence in
responsible and sustainable development by designing and building
properties with high impetus on human and environmental health. Two of
the new projects at Vikhroli, Mumbai, Godrej Platinum, a residential
project and ''Godrej One'', the first commercial building of our flagship
project The Trees'' received Platinum Pre-certification, which is the
highest available rating for green building.
Godrej International Limited (GINL)
GINL is our Subsidiary Company, which trades in vegetable oils. In
fiscal year 2012, GINL turnover increased by 27% to US$ 205.287 million
but profits fell to US$ 1.513 million. Contrary to expectation, palm
oil prices remained strong throughout the year inspite of a big
increase in production. The company continues to expand volumes each
Godrej International Trading & Investments Pte. Limited (GITI)
GITI was established in Singapore as our wholly owned subsidiary.
Singapore being strategically located, the intention is to consolidate
all our vegetable oil trading activities and oil palm investments in
South East Asia in this company which is strategically located in
Singapore. During the year GITI commenced trading successfully with
turnover of US$ 3.904 million and after-tax profits of US$ 176,488.
Natures Basket Limited (NBL)
Our foray into gourmet food retailing, Natures Basket, has been ramping
up very well with a strong expansion in Mumbai and beyond. NBL
currently has 20 stores and plans for 8 new stores in the coming year.
The business is well positioned as ''the'' ultimate retail destination
for gourmet and fine food and provides an excellent rub off on the
The gross turnover of this business for the fiscal year 2012 was ? 82
crore with a growth of 50% over the previous year 2010 - 11. We intend
to focus on growing this business and its profitability over the next
Through its expansion across India, NBL now has operations in major
cities of Mumbai, Pune, Delhi/NCR, Hyderabad and Bengaluru. Its product
portfolio contains globally recognized brands.
NBL continues to register robust year on year growth and boasts of
world best levels in terms of sales per sq. ft. amongst food retailers.
Its strong model, high quality product assortment and in store service
levels has helped it carve a distinctive niche in the food industry and
paved the way for further expansion into newer cities.
NBL was recognized as the retailer of the year at the Asia Retail
Congress in 2012 and also as the Most outstanding Foreign Food retailer
of the year at the Food and Grocery Forum for the second successive
Godrej Hershey Limited (GHL)
Godrej Hershey, our food and beverages business is a Joint Venture
between The Hershey Company (USA) and the Godrej Group, with your
Company holding a 43.4% stake. This JV operates in multiple categories
such as confectionery, beverages, and grocery items.
The Beverages portfolio consists of Jumpin (fruit drinks), Xs (juices
and nectars) and Sofit (soya milk). Sofit is the market leader in the
niche but fast growing soya milk market.
During fscal year 2012, beverages grew 7% over the previous year and
chocolate syrup grew by 23%. Both beverage brands, Jumpin and Soft were
made stronger with a consumer relevant re- stage exercise.
Nutrine Confectionery Company
Nutrine Confectionery Company Limited, a wholly owned subsidiary of GHL
is a major player in the sugar confectionery business in India. Its
product portfolio includes strong brands like Maha Lacto, Maha Coffee
Eclair, Gold Eclair, Nutrine Eclair, Nutrine Lollipop, Aamras and
Honeyfab, and newly launched Choco Roco at price point of ? 2 & ? 5.
NCCL has maintained its position as a leading player in confectionery
market in core states and the new product launches this year have
reinvigorated its portfolio. Éclair category continues to do well
across all variants and will be a big driver for the confectionery
growth. The big thrust has been investment in brand building and the
core brands and innovations have been aggressively supported in mass
The steep increase in inputs costs, primarily sugar, has put severe
pressure on margins and NCCL has undertaken some major cost savings
projects during the year, which have yielded benefits. NCCL continues
to focus and innovate products at higher price points with improved
Godrej Consumer Products
FY 2012 had been an eventful and action packed year for GCPL. This year
GCPL enjoyed healthy sales growth and market share gain in most of its
GCPL continues to focus on growing ahead of the market, driving
consumption & penetration and strengthening its portfolio. GCPL
continues to be the Largest Indian Household and Personal Care Company.
During the year Household Insecticide category delivered robust
performance far ahead of the category growth. GCPL continues to enjoy
market leadership position in the home insecticides and liquid
detergents categories and we are very optimistic of the future growth
opportunities in this category.
GCPL''s domestic businesses performed impressively, led in particular by
strong growth in soaps and household insecticides. Overseas too it has
performed creditably with Indonesia and Africa doing particularly well.
Consolidated Net Sales stood at Rs. 4,866 crore, as against last year''s
Sales of Rs. 3,693 Crore and Consolidated Profit After Tax increased by
41% from Rs. 515 Crore last year to Rs. 727 Crore (after minority interest)
in the current year.
The just concluded fscal has been a year of both consolidation and
growth. Internationally, GCPL has further expanded its footprint by
entering new geographies in Africa and Latin America. During the year
under review, GCPL acquired rights for 51% stake in a pan-African
leading hair care company, Darling Group Holdings. This acquisition
enables GCPL to become a leading player in hair care across sub-Saharan
Africa region with presence in 14 countries across the region. 38% of
revenues in fscal year 2012 came from international operations.
GCPL also expanded its presence in Latin America with the acquisition
of a 60% stake in Cosmetica Nacional, a leading hair colorant and
cosmetics company in Chile. This transaction apart from giving GCPL a
foothold in the continent''s fastest growing economy has also enabled
GCPL to own some highly regarded heritage brands like Pamela Grant
The financial position of your company continues to be sound. The loan
funds at the end of the year stand at Rs. 506.72 crore as compared to Rs.
554.23 crore in the previous year. The debt equity ratio is 0.40 as
compared to 0.49 last year. Your Company continues to hold the topmost
rating of A1 from ICRA for its commercial paper program (Rs. 260 Crore)
(enhanced from Rs. 160 Crore). ICRA has reaffirmed an A1 rating for its
short term debt instruments/other banking facilities (Rs. 750 Crore).
This rating of ICRA represents highest-credit quality carrying
lowest-credit risk. ICRA also reaffirmed LAA rating for long-term
debt, working capital and other banking facilities (Rs. 540 Crore). This
rating represents high-credit quality carrying low-credit risk.
ICRA Online has assigned a rating of the Fundamental Grade ''4 '' and the
valuation Grade ''B'' to the Equity Research rating program of your
company. The Fundamental Grade ''4'' assigned to your company implies
that the company has ''strong fundamentals'' relative to other listed
securities in India, while '' '' indicates relatively stronger position
within the grading category. The Valuation grade ''B'' assigned by ICRA
Online implies that the company is moderately undervalued on a
The chemicals division of your Company has manufacturing units at
Vikhroli and Valia.
Vikhroli: Vikhroli factory continues to be recertified Integrated
Management System (ISO 9001:2008, Environment Management System ISO
14001:2004, Occupational Health & Safety Assessment System OHSAS
18001:2007) conducted by Bureaus Veritas.
Valia: Valia factory, which has been already certified for
ISO-9001:2008 and ISO 14001:2004 standards, has also been certified for
OHSAS18001:2007 by Bureau Veritas and recertified for and ISO
27001:2005 by BSI.
New products C20-90%, C22-98% Fatty Alcohols were successfully Produced
on commercial scale, new spray dryer plant was successfully
commissioned for the production of SLS powder and needles. This Factory
has achieved its full capacity. Strategy to convert sulphonation
facility to produce only SLS and SLES was implemented successfully.
Sulphonation plant has also achieved its rated capacity for SLS/SLES.
The factory has implemented and is maintaining the Current Good
Manufacturing Practice systems for the Surfuctant plant. This facility
is also approved by multinationals for usage of SLS and SLES for oral
and personal care applications.
Vegoils Division (Wadala): This division continues as a contract
processor of edible oils and vanaspati. The division recorded a
turnover of Rs. 2.44 crore as against Rs. 2.86 crore in the previous year.
New manufacturing facilities at Ambernath: Work on new site at
Additional Ambernath has commenced and phase one (Land leveling,
compound wall and underground water tank and fire water tank has been
completed.)Phase two comprising of plant foundations and structures has
begun and is in progress.
Research and Development
Your Company is proud to announce that Godrej Industries Limited
Research Centre has been accorded the designation of a Recognized
In-House R&D Unit by the Department of Scientific and Industrial
Research (DSIR) Wing of the Department of Science and Technology.
Coinciding with the government recognition, our R&D activities have
resulted in the launch of four new products, each of them being high
value derivatives of fatty alcohols, having specialty applications in
personal care products and textile auxiliaries. As this year comes to a
close, we will be on the cusp of developing our first premium grade
derivative of glycerine. Improvement of 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 from economy grade raw materials. We will also continue to
focus our attention on high value fractionated fatty acids for the
polymer, oilfield and lubricant industries. Parallel to all the above
projects, R&D has taken up initiatives to develop and customize
specialty surfactants, focussing on the oral care and personal care
markets, thus delivering customer delight.
Human Resource Development and Industrial Relations
Your Company has always emphasized on quality and its employees are
encouraged to get involved in the continuous process of improving
quality through TQM and quality circles. Two quality circles from the
Vikhroli Factory viz, Shilpakar Quality Circle and Navanirman Quality
Circle were recognized as Par Excellent Quality Circle and Excellent
Quality Circle respectively by the Quality Circle Forum of India in
the 25th National Convention of Quality Circles held in Hyderabad.
Industrial relations at all plant locations remained harmonious. Your
company entered into a 3 year wage agreement for Valia Factory. Regular
structured safety meetings were held with employees and safety
programmes were conducted for them throughout the year.
There is a separate report on sustainability update as Annexure B to
Your Company has strategic alliance with Hewlett Packard (HP) for a
comprehensive IT outsourcing and transformation project. As a result
Application and Infrastructure maintenance services have improved. SAP
system has been upgraded in order to make substantial improvement in
technology as well as business processes. Adequate support is being
provided for ensuring technology availability at the new Ambernath
Employee Stock Option Plan (ESOP) and Employee Stock Grant Scheme
During the financial year 2011-12, 6 option grantees were granted ESOPs
based on their leadership responsibility and potential.
Date and Grant of ESOP No. of ESOPs No. of Employees
July 30, 2011 2,97,250 6
On June 29, 2011 and July 30, 2011, the Compensation Committee approved
a total of 2,25,516 stock grants equivalent to 2,25,516 equity shares
of the Company to eligible employees in terms of the ESGS Scheme. The
exercise price is Rs. 1 per equity share as provided in the Scheme.
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 continues to accept public deposits for 13, 24 and 36
months'' tenor. The Fixed Deposits scheme has received an overwhelming
response and the management of the company is thankful to all the
investors for participating in the scheme and for the trust reposed in
the company. During the year ended March 31, 2012, deposits aggregating
to Rs. 10.10 crore have been mobilised and deposits aggregating to Rs.
15.08 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, 2012, 99.73% of the equity
shares of your Company were held in demat form.
In accordance with Article 127 of the Articles of Association of the
Company, Mr. M. Eipe, Mr. J.S. Bilimoria, Dr. N.D. Forbes and Mr. S.A.
Ahmadullah retire by rotation at the ensuing Annual General Meeting and
offer themselves for reappointment. Mr. F. P. Sarkari ceases to be
Director with effect from June 1, 2012. Mr. F. P. Sarkari has been a
Director of the Company since January 30, 2002, and was also the
Chairman of the Audit Committee of Directors. The Directors place on
record their appreciation of the valuable contribution made by Mr. F.
P. Sarkari during his tenure.
You are requested to appoint Auditors for the current year 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 limits
prescribed under Section 224(1B) of the Companies Act, 1956.
The Audit Committee, which was constituted pursuant to the provisions
of Section 292A of the Companies Act, 1956 and the listing agreement,
has reviewed the Accounts for the year ended March 31, 2012. The
members of the Audit Committee are Mr. F.P. Sarkari, Mr. S.A.
Ahmadullah, Mr. K.N. Petigara and Mr. K.K. Dastur, all Independent
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 Mumbai, India. All these reports / documents are
available on the Company''s website, www.godrejinds.com . The subsidiary
companies'' documents will also be available for inspection at the
respective registered offices of the subsidiary companies during
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 u/s
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.
Details of related party transactions are presented in Note No. 46 to
Annual Accounts of the Annual Report. The Notes to the Accounts
referred to in the Auditors'' Report is self-explanatory. In respect of
the qualifications in the Audit Reports, we state as follows:
Loans and Advances include Rs. 10.33 crore (Previous year Rs. 10.33 crore)
advanced by the Company to certain individuals against pledge by way of
deposit of equity shares of Gharda Chemicals Ltd. The Company has
enforced its security and lodged the shares for transfer in its name,
however, the transfer application has been rejected by Gharda Chemicals
Ltd. and the Company filed an appeal before the Company Law Board
against the rejection. The investee company had in the meanwhile, moved
the Bombay High Court and the Court remanded the matter back to CLB.
The CLB has advised that the parties may approach the Bench after final
disposal of the suit filed by the investee company and the application
made by minority shareholders under section 397/398 before the Hon''ble
High Court. The Company has filed an appeal with the Hon''ble High
Court against the order of the Company Law Board under Section 10 F of
the Companies Act 1956, which is pending for final disposal. The
recoverability of the advance is contingent upon the transfer and/or
disposal of the said shares. It is the opinion of the management that
the underlying value of the said shares is substantially greater than
the amount of the loan. In the meantime, the minority shareholders have
been restrained from transferring shares to a third party.
Non current investments include Rs. 0.12 crore for investment made in
Gharda Chemicals Limites (GCL) which is not in the name of the Company.
The Company had lodged the transfer deed for effecting transfer of
shares in its name with GCL which was refused by them.
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 30, 2012