NOTE 1 : General Information
The Company was incorporated under the Companies Act, 1956 on March 7,
1988 under the name of Gujarat-Godrej Innovative Chemicals Limited. The
business and undertaking of the erstwhile Godrej Soaps Limited was
transferred to the Company under a Scheme of Amalgamation with effect
from April 1, 1994 and the Company''s name was changed to Godrej Soaps
Limited. Subsequently, under a Scheme of Arrangement the Consumer
Products division of the Company was demerged with effect from April 1,
2001 into a separate company, Godrej Consumer Products Limited (GCPL)
and the Vegetable Oils and Processed Foods Manufacturing business of
Godrej Foods Limited was transferred to the Company with effect from
June 30, 2001. The Foods division (except Wadala factory) was then sold
to Godrej Hershey Limited, on March 31, 2006. The Company''s name was
changed to Godrej Industries Limited on April 2, 2001.
The Company is engaged in the businesses of manufacture and marketing
of oleo-chemicals, their precursors and derivatives, bulk edible oils,
estate management and investment activities.
NOTE 2 : Contingent Liabilities
Amount INR Crore
Current Year Previous Year
a) Claims against the Company not
acknowledged as debts:
(i) Excise duty demands relating to
disputed classifcation, post manufacturing 9.47 11.97
expenses, assessable values, etc. which the
Company has contested and is in appeal at
(ii) Customs Duty demands relating to
lower charge, differential duty, 2.06 1.67
(iii) Sales Tax demands relating to
purchase tax on Branch Transfer / Non 20.42 18.72
availability of C Forms, etc at various levels.
(iv) Octroi demand relating to classifcation
issue on import of Palm Stearine 14.05 13.12
and interest thereon.
(v) Stamp duties claimed on certain properties
which are under appeal by the 1.82 1.82
(vi) Income tax demands against which the
company has preferred appeals 20.69 18.00
(vii) Industrial relations matters
under appeal 2.08 1.91
(viii) Others 1.31 1.31
b) Guarantees :
(i) Guarantees issued by banks, excluding guarantees issued in respect
of 13.45 13.01 matters reported in
(a) above (ii) Guarantees given by the Company in respect of
credit/guarantee limits - 7.81 sanctioned by banks to subsidiary and
c) Other Money for which the Company is Contingently Liable.
(i) Letter of credit issued by bank on behalf of the Company 4.52 0.55
NOTE 3 : Employee Stock benefit Plans 1 Employee Stock Option Plans
a) In December 2005, the Company had instituted an Employee Stock
Option Plan (GIL ESOP) as approved by the Board of Directors and the
Shareholders, for the allotment of 15,00,000 options, increased to
90,00,000 options on split of shares convertible into 90,00,000 equity
shares of Rs. 1 each to eligible employees of participating companies.
In July 2009, the Company had instituted an Employee Stock Option Plan
II (GIL ESOP II) as approved by the Board of Directors and the
Shareholders, for the allotment of 90,00,000 options convertible into
90,00,000 shares of Rs. 1 each to eligible employees of participating
NOTE 4 : Employee Stock benefit Plans (Contd.)
The repayment of the loans granted to the ESOP Trust and the interest
payable by the Trust on the said loans is dependent on the exercise of
the options by the employees during the exercise period and / or the
market price of the underlying equity shares of the unexercised options
at the end of the exercise period. The fall in value of the underlying
equity shares is on account of market volatility and the loss, if any,
can be determined only at the end of the exercise period. In view of
the aforesaid, provision for diminution of Rs. 11.79 crore (previous year
Rs. 25.47 crore) is not considered necessary in the financial statements.
2 Employee Stock Grant Scheme
a) During the year the Company set up the Employees Stock Grant Scheme
2011 (ESGS) pursuant to the approval by the Shareholders at their
Meeting held on January 17, 2011.
b) The ESGS Scheme is effective from April 1, 2011, (the Effective
Date) and shall continue to be in force until (i) its termination by
the Board or (ii) the date on which all of the shares to be vested
under Employee Stock Grant Scheme 2011 have been vested in the Eligible
Employees and all restrictions on such Stock Grants awarded under the
terms of ESGS Scheme, if any, have lapsed, whichever is earlier.
c) The Scheme applies to the Eligible Employees who are in whole time
employment of the Company or its Subsidiary Company. The entitlement of
each employee would be decided by the Compensation Committee of the
Company based on the employee''s performance, level, grade, etc.
d) The total number of Stock Grants to be awarded under the ESGS Scheme
are restricted to 25,00,000 (Twenty Five Lac) fully paid up equity
shares of the Company. Not more than 5,00,000 (Five Lac) fully paid up
equity shares or 1% of the issued equity share capital at the time of
awarding the Stock Grant, whichever is lower, can be awarded to any one
employee in any one year.
e) The Stock Grants shall vest in the Eligible Employees pursuant to
the ESGS Scheme in the proportion of 1/3rd at the end of each year from
the date on which the Stock Grants are awarded for a period of three
consecutive years subject to the condition that the Eligible Employee
continues to be in employment of the Company or the Subsidiary company
as the case may be.
f) The Eligible Employee shall exercise her / his right to acquire the
shares vested in her / him all at one time within 1 month from the date
on which the shares vested in her / him or such other period as may be
determined by the Compensation Committee.
g) The Exercise Price of the shares has been fxed at Rs. 1 per share. The
intrinsic value, being the difference between market price and exercise
price is treated as Employee Compensation Expenses and charged to the
Statement of Profit and Loss. The value of the options is treated as a
part of employee compensation in the financial statements and is
amortised over the vesting period.
NOTE 5 : Employee benefits
a) Defned Contribution Plan Provident Fund:
The contributions to the Provident Fund and Family Pension Fund are
made to a Government administered Provident Fund and there are no
further obligations beyond making such contribution.
b) Defned benefit Plan Gratuity:
The Company participates in the Employees'' Group Gratuity-cum-Life
Assurance Scheme of ICICI Prudential, HDFC Standard Life Insurance Co.
Ltd. and SBI Life Insurance, a funded defned benefit plan for qualifying
employees. Gratuity is payable to all eligible employees on death or on
separation / termination in terms of the provisions of the Payment of
Gratuity (Amendment) Act, 1997, or as per the Company''s scheme
whichever is more benefcial to the employees.
The liability for the Defned benefit Plan is provided on the basis of a
valuation, using the Projected Unit Credit Method, as at the Balance
Sheet date, carried out by an independent actuary.
The Company manages the Provident Fund plan through a Provident Fund
Trust for its employees which is permitted under The Employees''
Provident Fund and Miscellaneous Provisions Act, 1952. The plan
envisages contribution by the employer and employees and guarantees
interest at the rate notifed by the Provident Fund authority. The
contribution by employer and employee, together with interest, are
payable at the time of separation from service or retirement, whichever
The Company has Pension plan for eligible employees. The liability for
the Defned benefit Plan is provided on the basis of a valuation, using
the Projected Unit Credit Method, as at the Balance Sheet date, carried
out by an independent actuary.
c) Basis Used to Determine Expected Rate of Return on Assets:
The expected return on plan assets of 8.50% has been considered based
on the current investment pattern in Government securities.
d) Amounts Recognised as Expense: i) Defned Contribution Plan
Employer''s Contribution to Provident Fund amounting to Rs. 0.96 crore
(previous year Rs. 0.84 crore) has been included in Note 28 under
Contribution to Provident Fund and Other Funds.
ii) Defned benefit Plan
Gratuity cost amounting to Rs. 2.51 crore (previous year Rs. 1.30 crore)
has been included in Note 28 under
Contribution to Provident and Other Funds.
Employer''s Contribution to Provident Fund amounting to Rs. 3.26 crore
(previous year Rs. 4.25 crore) has been
included in Note 28 under Contribution to Provident Fund and Other
Pension cost amounting to Rs. 0.23 crore (previous year Rs. 0.07 crore) has
been included in Note 28 under
Contribution to Provident and Other Funds.
NOTE 6 : Related Party Information a) Names of Related Parties and
Description of Relationship
Parties where Control exists
Godrej & Boyce Mfg. Co. Ltd., the holding company
Godrej Agrovet Ltd.
Golden Feeds Products Ltd.
Godrej Seeds & Genetics Ltd.
Godrej Properties Ltd.
Godrej Waterside Properties P. Ltd.
Godrej Estate Developers P. Ltd.
Godrej Developers P. Ltd.
Godrej Real Estate P. Ltd.
Godrej Sea View Properties P. Ltd.
Godrej Nandhi Hills Project P. Ltd.
Godrej Buildcon P. Ltd.
Godrej Buildwell P. Ltd.
Godrej Realty P. Ltd.
Godrej Premium Builders P. Ltd.
Godrej Garden City Properties P. Ltd.
Happy Highrises Ltd.
Godrej Project Development P. Ltd.
Godrej Landmark Developers P. Ltd.
Godrej Property Developers LLP
Godrej Buildcorp LLP
Mosiac Landmark LLP
Natures Basket Ltd.
Ensemble Holdings & Finance Ltd.
Godrej International Ltd.
Godrej International Trading & Investments Pte Ltd.
Wadala Commodities Ltd. Godrej (Malaysia) Sdn Bhd G & B Enterprises
(Mauritius) P. Ltd. Godrej (Singapore) Pte Ltd. Godrej Infotech Ltd.
Veromatic International BV Veromatic Services BV Water Wonder Benelux
Other related parties with whom the Company had transactions during the
Associate / Joint Venture Companies
Godrej Consumer Products Ltd. Godrej Hershey Ltd. Nutrine
Confectionery Co. Ltd. Swadeshi Detergents Ltd. Godrej VIkhroli
Key management Personnel
Mr. A.B. Godrej Chairman
Mr. N.B. Godrej Managing Director
Ms. T.A. Dubash Executive Director
& President (Marketing) Mr. M. Eipe Executive Director
& President (Chemicals)
Relatives Key management Personnel
Ms. P.A. Godrej Wife of Mr. A.B. Godrej
Ms. N.A. Godrej Daughter of Mr. A.B. Godrej
Mr. P.A. Godrej Son of Mr. A.B. Godrej
Ms. R.N. Godrej Wife of Mr. N.B. Godrej
Mst. B.N. Godrej Son of Mr. N.B. Godrej
Mst. S.N. Godrej Son of Mr. N.B. Godrej
Mst. H.N. Godrej Son of Mr. N.B. Godrej
Enterprises over which Key management personnel exercise signifcant
Godrej Consumer Products Ltd. Rapidol (Pty) Ltd. Laboratorio Cuenca
S.A. Godrej Global Mideast FZE Godrej Investments P. Ltd. Bahar
Agrochem & Feeds P. Ltd. Vora Soaps Ltd. Godrej Tyson Foods Ltd.
NOTE : 7
The adoption of the Revised Schedule VI does not impact recognition and
measurement principles followed for preparation of Financial Statements
and has no signifcant impact on the presentations and disclosure made
in the Financial Statements.
All Assets and Liabilities have been classifed as current or non
current as per the Company''s normal operating cycles and other criteria
set out in the Revised Schedule VI to the Companies Act, 1956, which is
applicable from the current reporting period ended March 31, 2012.
NOTE : 8
Figures for the previous year have been regrouped / restated wherever
necessary to conform to current year''s presentation.