Godrej Industries Directors Report, Godrej Ind Reports by Directors

Godrej Industries

BSE: 500164|NSE: GODREJIND|ISIN: INE233A01035|SECTOR: Personal Care
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Directors Report Year End : Mar '15    « Mar 14
 Dear Members,
 The Directors have pleasure in presenting the Annual Report along with
 the Audited Accounts for the Financial Year ended March 31, 2015.
 Review of Operations
 Your Company''s performance during the year as compared with that during
 the previous year is summarized below.
                                                         (Rs. Crore)
                                            Year Ended    Year Ended
                                            March 31       March 31
 Sales of products and services              1,454.64       1,453.55
 Other Income                                  237.23         144.98
 Total Income                                1,691.87       1,598.53
 Total Expenditure other than                1,383.37       1,354.20
 Finance Costs and
 Depreciation and Amortisation
 Profit before Finance Costs,                  308.50         244.33
 Depreciation and
 Amortisation and Tax
 Depreciation and Amortisation Expenses         28.59          24.61
 Profit before Finance Costs and Tax           279.91         219.72
 Finance Costs (net)                           147.74          94.84
 Profit before Tax                             132.17         124.88
 Provision for Current Tax                       4.23           0.09
 Provision for Deferred Tax                    (20.87)          5.10
 Net Profit                                     148.81        119.69
 Surplus brought forward                        526.88        482.06
 Profit after Tax available for                 675.69        601.75
 Your Directors recommend appropriation as under:
 Dividend on Equity Shares                       58.80         58.70
 Tax on distributed profits                      11.97          9.98
 Proposed Dividend for on additional shares         -           0.01
 issued during the year
 Credit for Dividend Distribution Tax on        (7.96)        (5.79)
 Dividend Received from Subsidiaries
 Depreciation (in transition to New              3.02             -
 Companies Act)
 Transfer to General Reserve                    14.88          11.97
 Surplus Carried Forward                       594.98         526.88
 Total Appropriation                           675.69         601.75
 The Board of Directors of your Company recommends a final dividend of
 Rs. 1.75 per equity share of Re. 1/- each, aggregating Rs. 58.80 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
 * Outlook
 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
 associate companies.
 Godrej Agrovet Limited (GAVL)
 Godrej Agrovet Limited (GAVL), a subsidiary of your company is a
 diversified agribusiness company dedicated to improving the
 productivity of Indian farmers by innovating products and services that
 sustainably increase crop and livestock yields.
 GAVL''s consolidated Total Income grew by 7% from Rs. 3590 crore to
 Rs. 3843 crore during the financial year 2014-15. The Net Profit grew
 by 29% at Rs. 214 crore as compared to Rs. 166 crore during the
 previous financial year 2013-14.
 The Animal Feeds vertical, which is our largest agri vertical,
 continues to do well. Cattle feed, layer feed and shrimp feed delivered
 a strong performance with a growth of 19%, 25% and 23% respectively
 despite adverse environmental conditions in the form of erratic and
 deficient monsoon.
 In line with the focus on building quality manufacturing capacity in
 Animal Feed, GAVL invested in additional capacity at Baramati
 (Maharashtra), Hanuman Junction (AP), Tumkur (Karnataka) and Ikolaha
 (Punjab) during the year under review.
 GAVL also continues to invest in sustained research and development
 efforts. During the year under review, it had launched Nadir Godrej
 Centre for Animal Research & Development (R & D), a state of the art
 R&D facility situated near Nashik, the R&D Centre is one of the first
 private sector investments in the space of improving yield of Livestock
 in India. The Centre is spread across 9 acres of land with separate
 facilities for trials on broiler, layer and cattle.  GAVL also proposes
 to invest in a state of the art manufacturing facility to manufacture
 crop protection chemicals and other products at Dahej, Gujarat.
 GAVL continued its customer relationship building activities and
 organized various events such as healthy calf competitions and Godrej
 Knowledge series lectures to educate its end customers i.e. the
 In the Oil Palm vertical GAVL continues to focus on developing
 additional revenue stream by enhancing the value of Biomass generated
 in the business and on increasing the acreage under oil palm
 plantations. GAVL established a new plant at Kolasib, Mizoram during
 the year under review. It is possibly the highest investment made by
 any private company in the State of Mizoram.
 During the year under review the performance of GAVL''s joint
 ventures, Godrej Tyson Foods Limited (GTFL) and ACI Godrej Agrovet
 Private Limited, Bangladesh (ACI Godrej) was good.
 ACI Godrej registered an excellent growth of 48% in profit before tax
 over previous year on account of favourable input costs and improved
 production efficiencies. GTFL has successfully evolved the business
 model by reducing its dependency on volatile Live Business. Going
 forward GTFL will focus on strengthening its Yummiez and Real Good
 Chicken brands. GTFL has successfully mitigated the risk of flat to low
 live price and increase / enhanced inputs price by remaining
 Godrej Properties Limited (GPL)
 Despite the challenging macroeconomic and real estate sector
 environment, GPL demonstrated strong results. For the full year,
 GPL''s total consolidated income increased by 54% to INR 1,927 crore
 and net profit increased by 20% to INR 191 crore. From a business
 development perspective, GPL added 5 new projects with a saleable area
 of ~8 million square feet during the year. For new projects added to
 the portfolio, the focus has been entirely on residential projects in
 target cities with favourable deal structures.
 Despite a very weak market for residential real estate GPL registered
 its best ever year for residential sales with a growth of 69% in volume
 terms and 58% in value terms as compared to FY14. GPL also had the best
 ever year for project deliveries with 3.5 million sq. ft. of space
 delivered during the year. One critical project delivery was the
 760,000 sq. ft. of commercial space at Godrej One in Vikhroli, which
 will be the new headquarters of the Godrej Group. GPL also opened its
 first international sales office in Dubai to further expand its sales
 Despite very weak market conditions, sales in Gurgaon increased by over
 500%. GPL has emerged as the largest developer in Gurgaon by sales
 volume in 2014. Four years ago GPL had no presence in NCR. In a short
 period of time, it added 5 projects in NCR and has already launched 4
 of these projects with tremendous success. GPL''s cumulative sales in
 Gurgaon now stands at more than 3 million sq. ft.
 Sustainability is one of the key principles underscoring GPL''s design
 led approach and GPL witnessed another year with its multiple projects
 receiving green building certifications.  This included IGBC Platinum
 precertification for Godrej Platinum in Delhi and IGBC Gold
 precertification for Godrej Park, Godrej Anandam and Godrej United.
 GPL received significant external recognition with a total of 59 awards
 being received in FY15. It has been ranked 1st in the real estate
 sector for the fifth consecutive year in the ''Best Companies to Work
 For'' study by the Great Places to Work Institute in partnership with
 the Economic Times. Attracting the best management talent and creating
 an environment that allows this talent to flourish is the most
 important priority for the company.
 Natures Basket Limited (NBL)
 Godrej Nature''s Basket is the retail venture of Godrej Group and is
 today India''s foremost retail destination for fine foods from across
 the world.
 Nature''s Basket continued on its growth path, much above industry
 standards. NBL''s total income grew by 20% year-on-year from Rs. 174
 crore during the financial year 2013-14 to Rs. 209 crore during the
 financial year 2014-15.
 NBL continued to be the most awarded gourmet business brand winning
 several awards in forums like India Retail Forum, Asia Retail Congress
 Awards, CMO Asia Congress many of which have been received for the 3rd
 year in a row.
 The in-store consumer experience and brand imagery was maintained at
 highest levels to ensure that business continues to be seen
 aspirational and connects instantly with discerning consumers. Much of
 the growth and margin can be attributed to the increase in sales in our
 gifting and private label business.
 NBL''s private label brands, L''Exclusif and Healthy Alternatives,
 continued to be growth drivers with sales growing nearly 6 times over
 previous year and the further introduction of 150  distinctive SKUs in
 2014-15 taking the total range to 306 SKUs. NBL has expanded its range
 significantly and it is increasing in popularity. Sales from this
 segment contributed to nearly 6% of its overall sales. Private label
 will continue to be a key driver of growth in sales and margin.
 NBL has revamped its web portal with a best in class user experience
 and strengthened backend ecommerce functionality. With the integration
 of robust technology platform and experts of with our
 existing online business, E-commerce business is poised to growth
 exponentially in 2015-16. The loyalty program base was further
 increased to cross 3 lac customers and contributed 57% of the sales.
 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 a total income of Rs. 8,351
 crore during the financial year 2014-15 compared to Rs. 7,665 crore for
 the previous year 2013-14. The Net Profit grew by 19% at Rs. 907 crore
 as compared to Rs. 760 crore during the financial year 2013-14.
 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, the number two player in toilet soaps and a fast-growing
 new entrant in 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 positions.
 It was ranked the number 1 FMCG Company to work for in the ''Great
 Place to Work - Best Workplaces in India 2014'' list; its eleventh
 consecutive year on the list. It was also ranked number 14 on the
 ''Great Place to Work - Best Workplaces in Asia 2014'' list and
 ranked among the ''Aon Hewitt Best Employers in India - 2015'' survey
 Other Subsidiaries
 Godrej International Limited (GINL) is a wholly owned subsidiary of
 Godrej Industries Ltd. and trades worldwide in vegetable oils. The year
 under review was marked with greater than normal volatility brought
 about by the sharp drop in mineral oil prices, thus affecting the usage
 of veg oils in bio diesel.
 Godrej International Trading & Investments Pte. Limited (GITI) is also
 a wholly owned subsidiary of the Company and is incorporated in
 Singapore. The company continued to trade profitably and maintained its
 presence in key veg oil markets.
 Godrej International Limited (Labuan) has been incorporated in the
 Malaysian Financial Centre of Labuan in February 2015. It is a wholly
 owned subsidiary of the Company and commenced its trading since April
 2015. Being at the heart of the palm oil industry, it is likely to
 encompass the major portion of our trading activity in the near future.
 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 the financial year 2014-15 was Rs. 0.97 crore as against that
 of Rs. 0.99 crore last year. The Net Profit before Tax of EHFL during
 the financial year ended March 31,2015 was Rs. 0.95 crore as against
 that of Rs. 0.97 crore last year.
 Pursuant to clause 49 of the listing agreement, your Company has
 formulated a policy for determining its ''material subsidiaries''.
 The said policy has been uploaded on the Company''s website
 During the year under review, Wadala Commodities Limited (WCL) has
 amalgamated with your Company in terms of the Scheme of Amalgamation
 (the Scheme) sanctioned by the Hon''ble Bombay High Court vide its
 order dated September 5, 2014 and by the Hon''ble High Court of Madhya
 Pradesh, Indore Bench on October 28, 2014. The appointed date of the
 Scheme was April 1, 2014 and the effective date of the Scheme was
 November 21, 2014 i.e. the date on which your Company and WCL filed the
 certified copy of the respective High Court order with the Registrar of
 Companies, Mumbai, Maharashtra and Registrar of Companies, Gwalior,
 Madhya Pradesh. Thereafter, between January and March 2015, your
 Company allotted equity shares to the shareholders of WCL and GIL
 pursuant to the scheme. Your Company has received all the necessary
 regulatory approvals and has also completed requisite filings.
 Financial Position
 The loan funds at the end of the year stand at Rs. 2,022 crore as
 compared to Rs. 1,327 crore for the previous year. The debt equity
 ratio is 1.16 as compared to 0.79 last year. Your Company continues to
 hold the topmost rating of [ICRA]A1  from ICRA for its commercial paper
 program (Rs. 700 crore) (previous year Rs. 600 crore). ICRA has
 reaffirmed an [ICRA]A1  rating for its short term debt
 instruments/other banking facilities (Rs. 800 crore) (previous year Rs.
 900 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. 940 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
 Manufacturing Facilities
 The chemicals division of your Company has manufacturing units at
 Ambernath and Valia.
 The Ambernath factory which commenced manufacturing during the previous
 financial year is now fully operational. The Ambernath factory is
 ISO-9001:2008 and ISO 14001:2004 certified.
 The Valia factory is ISO-9001:2008 and ISO 14001:2004 certified. The
 Valia factory won the FICCI award for Efficiency in Energy Usage in
 Chemical Sector.
 The Vegoils Division (Wadala) continues to operate as a contract
 processor of edible oils and vanaspati. The division recorded a
 turnover of Rs. 6 crore.
 Research and Development (R&D)
 In the year under consideration our R&D activities have resulted in the
 launch of few new products, each of them being high value derivatives
 of fatty alcohols, having specialty applications in personal care
 products and textile auxiliaries. Innovation in existing processes and
 the endeavour to develop new processes and technologies will be an
 ongoing activity. We continue to focus our attention on high value
 fractionated fatty acids and fatty alcohols for the polymer, oilfield,
 lubricant and paper industries. We continue our efforts in developing
 improved and customized specialty surfactants and bio surfactants
 through in house development and external consultation.
 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 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.
 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.
 Information Systems
 Your Company has automated Export Benefit related Processes using SAP
 System. It helped the organization for managing better control on
 application, status of benefits, receipt of benefits and utilization of
 benefits. The system has helped business to have online tracking &
 monitoring of entire process of export benefit utilization and
 available for utilization.
 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 February 11,2015, the Nomination and Compensation Committee approved
 a total of 1,12,747 stock grants equivalent to 1,12,747 equity shares
 of the Company to eligible employees in terms of the ESGS 2011 Scheme.
 The exercise price is Re. 1/- per equity share. As on March 31,2015 and
 in terms of the ESGS Scheme, 2011, a total of 1,58,957 grants were
 vested, exercised and allotted.
 During the current year, The Securities and Exchange Board of
 India(SEBI) has issued the SEBI (Share Based Employee Benefits)
 Regulation, 2014, which requires that the accounting treatment for
 employee share based payments to be based on the Guidance Note on
 Accounting for Employees Share-Based Payments issued by the Institute
 of Chartered Accountants of India.  Accordingly, the Company has not
 included the Financial Statements of the Godrej Industries Limited
 Employees Stock Option Trust (ESOP Trust) in the preparation of the
 Standalone financial statements of the Company for the year ended March
 31,2015, as compared to the previous year where the same were
 consolidated. Consequently, these financial statements do not include
 the assets, liabilities, income and expenditure of the ESOP Trust and
 to that extent, the figures for the previous year are not comparable.
 Disclosure in compliance with Companies (Share Capital and Debentures)
 Rules, 2014 and 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.
 Fixed Deposits
 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 31,2015, deposits
 aggregating to Rs. 18.75 Crore have been repaid on maturity. The
 Company has no overdue deposits other than unclaimed deposits.
 Depository System
 Your Company''s equity shares are available for dematerialization
 through National Securities Depository Limited and Central Depository
 Services (India) Limited. As of March 31,2015, 99.74% 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. A. B. Godrej       (DIN  00065964)
 * Mr. V. M. Crishna      (DIN  00066267)
 Your Company had appointed following Non-Executive (Independent)
 Directors pursuant to clause 49 of the listing agreement and they are
 liable to retire by rotation as per Companies Act, 2013;
 * Mr. S.A.Ahmadullah (DIN 00037137)
 * Mr. A. B. Choudhury    (DIN  00557547)
 * Mr. K. K. Dastur       (DIN  00050199)
 * Mr. K. M. Elavia       (DIN  00003940)
 * Dr. N. D. Forbes       (DIN  00630825)
 * Mr. K. N. Petigara     (DIN  00066162)
 Provisions of Section 149 of the Companies Act, 2013 provides that
 every listed public company is required to have at least one-third of
 the total number of directors as Independent Directors who shall hold
 office for a term of consecutive five years. No Independent Director
 shall be eligible for more than two consecutive terms of five years and
 such Independent Director shall not be liable to retire by rotation.
 Consequent upon applicability of the Companies Act, 2013 w.e.f. April
 1, 2014, all the above Non-Executive Directors were appointed as
 Independent Directors of your Company, not liable to retire by
 rotation, for a period of five consecutive years w.e.f. the date of
 last Annual General Meeting i.e. August 9, 2014.
 Your Company has received declarations from all the Independent
 Directors of the Company confirming that they meet with the criteria of
 independence as prescribed both under sub-section (6) of Section 149 of
 the Companies Act, 2013 and under Clause 49 of the Listing Agreement
 with the Stock Exchanges.
 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 Companies Act,
 2013 and the listing agreement.
 The HR team of the Company worked directly with the Chairman and the
 Nomination and Remuneration 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
 suggestions on:
 * 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. K. M. Elavia,
 an independent director.  The Directors shared their feedback about the
 Board functioning and also identified areas which have scope for
 improvement. 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 & Compensation Committee, the
 Board had framed a policy for selection and appointment of Directors,
 Senior Management and their remuneration. The details of the
 Remuneration 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
 Pursuant to clause 49 of the listing agreement, a familiarisation
 program has been conducted for the independent directors of the
 Company. Under this program a visit to the Ambernath factory was
 arranged for the independent directors of the Company. The details of
 Directors familiarisation program are uploaded on the Company''s
 Key Managerial Personnel
 Mr. P. Ganesh has been appointed as the Chief Financial Officer and
 Company Secretary with effect from April 1, 2015. He shall be the
 compliance officer and shall ensure compliances with effect from April
 1, 2015. Mr. Clement Pinto and Mr. K. R. Rajput, stepped down from
 their positions as Chief Financial Officer and Company Secretary
 respectively, with effect from March 31,2015.
 Statutory Auditors
 Pursuant to section 139 of the Companies Act, 2013, your Company has
 appointed M/s. Kalyaniwalla and Mistry, Chartered Accountants (Firm
 Regn. No. 104607W) as Auditors of the Company to hold office from the
 conclusion of the previous annual general meeting until the conclusion
 of fourth consecutive annual general meeting (AGM), subject to the
 ratification of re-appointment by the members at every AGM.
 You are requested to ratify the re-appointment of Auditors and to
 authorise the Board to fix their remuneration. The auditors M/s.
 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.
 Cost Auditors
 Pursuant to directions from the Department of Company Affairs, M/s. R.
 Nanabhoy & Co., Cost Accountants have been appointed as Cost Auditors
 for the applicable products of the Company for the year 2014-15. They
 are required to submit the report to the Central Government within 180
 days from the end of the accounting year.
 Secretarial Auditors
 The Board has appointed M/s A. N. Ramani & Co., Company Secretaries,
 Practising Company Secretary, to conduct Secretarial Audit for the
 financial year 2014-15. The Secretarial Audit Report for the financial
 year ended March 31, 2015 is annexed herewith marked as Annexure
 ''G'' to this Report. The Secretarial Audit Report does not contain
 any qualification, reservation or adverse remark.
 Audit Committee
 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, 2015. 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 (Act''), 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 Act.
 Directors'' Responsibility Statement
 Pursuant to the provisions contained in Section 134 of the Companies
 Act, 2013, 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
 operating effectively.
 Corporate Governance
 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.
 Disclosures and Information under the Companies Act, 2013
 Pursuant to section 134 and any other applicable section of the
 Companies Act, 2013 (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 Companies
 Act, 2013, and forms a part of the Directors'' Report.
 (b) Annual return
 The extracts 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 Companies Act, 2013 are given in the
 notes to the Financial Statements.
 (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 are no materially significant related party
 transactions made by the Company with Promoters, Directors, Key
 Managerial Personnel or other designated persons which may have a
 potential conflict with the interest of the Company. Prior approval of
 the Audit Committee was obtained for those transactions. Accordingly,
 the disclosure of Related Party Transactions as required under Section
 134(3)(h) of the Companies Act, 2013 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. 45 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
 website http://www.
 (f) Particulars of Employees:
 Disclosures with respect to the remuneration of Directors and employees
 as required under Section 197 of the Companies 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 Companies Act read
 with Rule 5(2) and (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 the
 financial year 2014-15 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:
 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.
 Total Compensation
 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 compensation.
 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
 (i) Financials
 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
 the report.
 There are no qualifications, reservations or adverse remarks in the
 Auditors Report and the Secretarial Audit Report for the financial year
 (j) Share Capital
 During the year under review your company allotted 2,67,757 equity
 shares of Re.1 each pursuant to the scheme of amalgamation of Wadala
 Commodities Limited with Godrej Industries Limited and 1,58,957 equity
 shares of Re.1 each upon exercise of stock option under Company''s
 Employee Stock Grants Scheme. Consequently, the paid up share capital
 of your Company has increased from Rs. 33,54,55,260/- divided into
 33,54,55,260 equity shares of Re.1 each to Rs. 33,58,81,974 divided
 into 33,58,81,974 equity shares of Re.1 each.
 (k) Significant Court Order received
 During the year under review the Hon''ble High Court of judicature at
 Bombay had, on September 5, 2014, passed an order approving the scheme
 of amalgamation of Wadala Commodities Limited with Godrej Industries
 Additional Information
 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 27, 2015.
Source : Dion Global Solutions Limited
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