Mar 31, 2023
Your Directors, with great pleasure, present the Annual and Integrated Report for the year ended March 31, 2023.
The financial performance of your company for the fiscal year under review is given below.
An overview of the performance of the company''s
subsidiaries in various geographies is given separately in the Board''s Report.
The shareholders may also refer to the Management Discussion and Analysis section, which gives more details on the functioning of the company.
Financials: Abridged Profit and Loss Statement |
Consolidated March 31, 2023 March 31, 2022 |
'' (Crore) Standalone March 31, 2023 March 31, 2022 |
||
Total revenue from operations |
13,315.97 |
12,276.50 |
7667.17 |
6,951.56 |
Other income |
168.41 |
89.71 |
139.48 |
69.18 |
Total income |
13,484.38 |
12,366.21 |
7806.65 |
7,020.74 |
Total expenses, including depreciation and finance costs |
11,297.54 |
10,201.48 |
5909.46 |
5,316.50 |
Profit/loss before exceptional items, share of profit of equity accounted investees, and tax |
2,186.84 |
2,164.73 |
1897.19 |
1,704.24 |
Exceptional items |
(54.11) |
(9.75) |
(27.59) |
58.21 |
Share of profit of equity accounted investees (net of income tax) |
- |
0.28 |
- |
- |
Profit/loss before tax |
2,132.73 |
2,155.26 |
1869.60 |
1,762.45 |
Tax expense |
430.27 |
371.87 |
355.90 |
283.30 |
Profit/loss after tax |
1,702.86 |
1,783.39 |
1513.70 |
1,479.15 |
Other comprehensive income |
553.05 |
376.56 |
1.03 |
0.82 |
Total comprehensive income attributable to owners of the company |
2,255.51 |
2,159.95 |
1514.73 |
1,479.97 |
The Board at its meeting held on May 19, 2022, approved the re-appointment of Ms. Nisaba Godrej as WholeTime Director designated as "Executive Chairperson" for the period from October 1,
2022 to September 30, 2027. The same was approved by the shareholders at the AGM held on August 3, 2022.
The term of office of Ms.
Ndidi Nwuneli and Ms. Pippa Armerding ended on March 31,2022 and January 30,
2023 respectively. On the basis of recommendation of Nomination and Remuneration Committee, the Board had considered and approved their respective reappointments for a second term of five year, subject to approval of the shareholders. The approval of the shareholders was received by means of postal ballot.
In the forthcoming AGM, Mr. Pirojsha Godrej and Mr. Nadir Godrej will retire by rotation, and being eligible, they will be considered for reappointment.
After the close of the fiscal year, the Board at its meeting held on June 5, 2023, approved the appointment of Ms. Shalini Puchalapalli as an Independent Director with effect from Nov 14, 2023, in place of Mr. Narendra Ambwani who will retire from that date after completing his second term. The appointment of Ms. Shalini Puchalapalli is subject to the
The board did not declare any Interim Dividends during the fiscal year 2022-23 and also has not recommended any final dividend for the fiscal year.
The Board of Directors adopted the Dividend Distribution Policy pursuant to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,
2015 (Listing Regulations), which requires the top 1,000 listed companies (by market capitalisation) to formulate the same. The company''s Dividend Distribution Policy may also be accessed through the following link[1].
Four board meetings were held during the year. The details of the meetings and the attendance record of the directors are given in the Corporate Governance section of the Annual Report.
During the fiscal year, there was no change in the Board composition.
approval of the shareholders at the ensuring annual general meeting. The profile of Ms. Shalini Puchalapalli is annexed in the notice of the annual general meeting forming part of this report.
Your company has an Audit Committee in compliance with Section 177 of the Companies Act, 2013 and Regulation 18 of Listing Regulations. The committee consists of the following Directors, viz., Mr. Sumeet Narang, Chairman of the Committee, and, Mr. Narendra Ambwani, Dr. Omkar Goswami, Ms. Ireena Vittal,
Ms. Ndidi Nwuneli, Ms. Pippa Armerding, and Mr. Pirojsha Godrej, all being members of the committee.
All the Independent Directors have given their declaration confirming that they meet the criteria of independence as prescribed under the provisions of the Companies Act, 2013 and the Listing Regulations, and the same has been noted by the Board of Directors. The Independent Directors also confirmed the compliance with the code of conduct for directors and senior management.
E. Enrolment of Directors in Independent Directors Data Bank
As per the notification of the Ministry of Corporate Affairs dated October 22, 2019, all the Independent Directors of your company have registered their names for inclusion in the ''Independent Director''s Data Bank'' maintained by IICA.
During the year, the Independent Directors were familiarised with the Annual Operating Plan,
Global Categories Structures & Initiatives, Cluster wise performance for the fiscal year 2022-23. Additionally, at all the Board meetings, detailed presentations covering business performance and financial updates were made. The programmes were conducted by the members of the company management. The details of the same are available on the website of the company and can be accessed through the following link121.
The company has in place a Board Diversity Policy which is attached as Annexure ''A''. The criteria for determining qualification, positive attributes, and independence
of Directors are as per the Board Diversity Policy, Listing Regulations, and the Companies Act, 2013.
The Board Independence Statement is available on the company website and can be accessed through the following link''3''.
The company''s Remuneration Policy for Directors, Key Managerial Personnel (KMP), and other employees is attached as Annexure ''B''.
The company''s total rewards framework aims at holistically using elements such as fixed and variable compensation, long-term incentives, benefits and perquisites, and noncompensation elements (career development, work-life balance, and recognition).
The Non-executive Directors receive sitting fees and commission in accordance with the provisions of the Companies Act, 2013.
The remuneration of Directors is in accordance with the Remuneration Policy formulated in accordance with various rules and regulations for the time being in force.
The disclosure on the details of remuneration to Directors and other employees pursuant to Section 197
read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is given under Annexure ''C''. With respect to the information under Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, members may request the same by sending an email to the company at investor. [email protected] from their registered email address, quoting their name and folio number.
J. Performance Evaluation of the Board of Directors, its Individual Members, and its Committees
We conducted a formal Board effectiveness review, as part of our efforts to evaluate the performance of our Board and identify areas that need improvement to enhance the effectiveness of the Board, its Committees, and Individual Directors. This is in line with the requirements of the Companies Act, 2013 and the Listing Regulations.
The Corporate Human Resources team of Godrei Industries Limited and Associate Companies worked directly with the Chairperson and the Nomination and Remuneration Committee of the Board to design and execute this process. It was later adopted by the Board.
Each board member completed a confidential online questionnaire, sharing vital feedback on how the Board currently operates and how its effectiveness could be improved. This survey included four sections on the basis of which feedback and suggestions were compiled:
⢠Board Processes
⢠Individual Committees
⢠Individual Board Members
⢠Chairperson
The criteria for Board processes included Board structure, strategic orientation as well as Board functioning, and team dynamics.
Evaluation of each of the Board Committees covered whether they have well-defined objectives and the correct composition and whether they achieved their objectives. The criteria for Individual Board Members included skills, experience, level of preparedness, attendance, extent of contribution to Board debates and discussions, and how each Director leveraged their expertise and networks to meaningfully contribute to the company. The criteria for the Chairperson''s evaluation included leadership style and conduct of Board meetings. The performance evaluation criteria for Independent Directors included a check
on their fulfilment of the independence criteria and their independence from the management.
The following reports were created as part of the evaluation:
⢠Board Feedback Report
⢠Individual Board Member Feedback Report
⢠Chairperson''s Feedback Report
The overall Board feedback was facilitated by Ms. Ireena Vittal with the Independent Directors. The Directors put forth their views regarding the Board functioning effectively and identified areas that showed scope for improvement. Feedback from the Committees and Individual Board Members was shared with the Chairperson. Following her evaluation, a Chairperson''s Feedback Report was compiled.
Pursuant to the provisions contained in Section 134 (5) of the Companies Act, 2013, your Directors, based on the representation received from the operating management and after due inquiry, confirm the following points:
a) In the preparation of annual accounts, the applicable accounting standards have been
followed and no material departures have been made from the same.
b) They have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of the company at the end of the fiscal year and of the profit of the company for that period.
c) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.
d) They have prepared the annual accounts on a going concern basis.
e) They have laid down internal financial controls to be followed by the company, and such internal financial controls are adequate and operating effectively.
f) They have devised a proper system to ensure compliance with the provisions of all applicable laws, and this system is adequate and operating effectively.
the company as on March 31, 2022, on the company website, which can be accessed through the following link[5]. The details of unpaid and unclaimed amounts lying with the company as on March 31, 2023, will be available on the same link within 60 days of the AGM.
5. Finance
A. Loans, Guarantees, and Investments
The details of loans, guarantees, and investments as required by the provisions of Section 186 of the Companies Act, 2013 and the rules made thereunder are set out in the Notes to the Standalone Financial Statements of the company.
B. Related Party Transactions
In compliance with the Listing Regulations, the company has a Policy for Transactions with Related Parties (RPT Policy).
The RPT Policy is available on the company website and can be accessed through the following link[6].
Apart from the Related Party Transactions in the ordinary course of business and on arm''s length basis, the details of which are given in the Notes to Financial Statements, no other Related Party
4. Transfer to Investor Education and Protection Fund
In accordance with the applicable provisions of the Companies Act, 2013 read with Investor Education and Protection Fund (Accounting, Audit, Transfer, and Refund) Rules, 2016 (IEPF Rules), all unclaimed dividends are required to be transferred by the company to the IEPF after completion of 7 years. Further, according to IEPF Rules, the shares on which dividend has not been claimed by the shareholders for 7 consecutive years or more shall be transferred to the demat account of the IEPF authority. Accordingly, '' 1,30,79,598 unpaid/unclaimed dividends were transferred during the fiscal year 2022-23 to IEPF. No shares were transferred during the current year.
The company has appointed a Nodal Officer and a Deputy Nodal Officer under the provisions of IEPF Regulations, the details of which are available on the company website and can be accessed through the following link[4].
The company has uploaded the details of unpaid and unclaimed amounts lying with
Transactions require disclosure in the Board''s Report for complying with Section 134(3) (h) of the Companies Act, 2013. Therefore, 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.
After the end of the fiscal year 2022-23, the Company entered into an agreement on April 27, 2023 for the acquisition of the business of Raymonds Consumer Care Limited (RCCL) through slump sale basis at a consideration of '' 2825 crore. RCCL is an Indian FMCG player operating primarily in deodorants and sexual wellness categories with two key brands - Park Avenue and Kamasutra. This acquisition allows the Company to complement its business portfolio and growth strategy with under-penetrated categories that offer a long runway of growth. The said acquisition was completed on May 08, 2023.
7. Subsidiaries, Associates, and Joint Venture
During the year, DGH Uganda ceased to be the subsidiary of your company with effect from November 20, 2022.
The dissolution of Indovest Capital initiated in the previous fiscal year is under process.
The details of the cluster-wise performance are given below:
The fiscal year 2022-23 started showing strong signs of recovery in the second half of the year. The large Saniter base waned due to reduced demand as COVID-19 impact receded across the world.
The overall business top line declined by 3%, but ex- Saniter the business grew at 7% in terms of ''. We continued to strengthen the fundamentals for the future, by doubling down on strong distribution expansion in our General Trade business. HIT had muted growth as the category slowdown continued, however, promising growth in Electrics segment as we continue to upgrade consumers from coil to electrics. Air fresheners had a strong growth driven by our strong media investments.
We delivered strong growth in Baby Wipes segment and have clawed back share. We continued to strengthen our in-store execution in modern trade leveraging our strengths in data and analytics.
We also continued focusing on cost savings to fuel our growth investments, field macro environment, and
strengthen profitability. We will continue to focus sharply on category development with breakthrough innovation, strong brand building, and GTM strengthening.
The fiscal year 2022-23 witnessed continued strong growth for our Africa, Middle East, and US business clusters. The overall business top line grew by 12% with the South cluster growing strongly at 11% and US market delivered 7% growth in '' terms despite various macro challenges.
We faced significant cost headwinds across marketsâ input cost increases, adverse forex movement, and the continued tendency of consumers to shift away from value-added products resulting in an adverse portfolio mix. However, our robust cost-optimisation programmes and timely price increases helped minimise the impact on margins,. Overall, despite a challenging year, we focused on strengthening the fundamentals for the future. We witnessed continued momentum on braid premiumisation in South Africa. We also significantly accelerated our GTM efforts in Nigeria, particularly last-mile distribution through the van model. Going forward, our focus would be to strengthen last-mile distribution across markets (including the salon channel) and continue improving margins by driving operational excellence, strengthening
our portfolio, investing in the consumer, and accelerating Wet Hair/FMCG growth. We will maintain laser-sharp focus on strong governance controls and maintain an unrelenting focus on employee/consumer safety.
Our Latin America cluster closed a middling year in a challenging environment.
Net sales (in '') declined by 3%, while EBITDA declined by 57%, in comparison with the past year''s sales and EBITDA, respectively. This was driven by a sharp contrast in performance between Argentina and Chile.
Argentina business closed another year of profitable growth. The team delivered a top-line growth of 90% in local currency (10% in ''), driven by go-to-market improvements, COMEX expansion, and innovation. EBITDA grew by 16% in local currency, achieving an EBITDA margin of 9% in local currency.
Our Chile saw a significant decline led by consumers moving back to salon habit of hair colours. Net sales declined by 23% in local currency (28% in ''). EBITDA declined by 96% in local currency, driven by higher fixed costs and loss of scale benefits.
Looking ahead, we aim to bring Chile back to growth levels by focussing on profitable growth and working capital management.
the constitution of the Internal Committee in compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013, to consider and resolve all sexual harassment complaints reported by women. During the year, awareness regarding sexual harassment among employees was created through emails to employees. There were 5 complaints reported during the calendar year 2022, and accordingly, the committee has filed the complaint report with the concerned authorities in accordance with Section 22 of the aforementioned Act.
9. Talent Management and Succession Planning
Your company has the talent management process in place with the objective of developing a robust talent pipeline for the organisation, which includes the senior leadership team. As part of the talent process, we identify critical positions and assess the succession coverage for them annually. During this process, we also review the supply of talent, identify high-potential employees, and plan talent actions to meet the organisation''s talent objectives. We continue to deploy leadership development initiatives to build succession for key roles.
In compliance with the Listing Regulations, the Board has adopted a policy for determining material subsidiaries. This policy is available on the company website and can be accessed through the following link[7].
A statement containing the salient features of the financial statements of subsidiary/joint venture/associate companies, of the company in the prescribed Form AOC-1, a part of consolidated financial statements (CFSs) in compliance with Section 129(3) and other applicable provisions, if any, of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014.
The said form also highlights the financial performance of each of the subsidiaries and joint venture companies included in the consolidated financial statement of the company pursuant to Rule 8(1) of the Companies (Accounts) Rules, 2014.
8. The Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013
Your company has complied with the provisions relating to
10. Annual Return
In compliance with the provisions Section 134(3)(a) of the Companies Act, 2013, the Annual Return as per Section 93(3) of the Companies Act, 2013, is available on the company website, which can be accessed through the following link[8].
11. Risk Management
The company has a well-defined process in place to ensure appropriate identification and mitigation of risks. The Risk Management Committee of the company has been entrusted by the Board with the responsibility of identification and mitigation plans for the ''Risks that Matter''.
Elements of risks to the company are listed in the Management Discussion and Analysis section of the Annual and Integrated Report.
12. Vigil Mechanism
Your company has adopted a Whistle Blower Policy as a part of its vigil mechanism.
The purpose of the policy is to enable any person (employees, customers, or vendors) to raise concerns regarding unacceptable improper practices and/or any unethical practices in the organisation without the knowledge of the management. All employees shall be protected from any adverse action for reporting
any unacceptable or improper practice and/or any unethical practice, fraud, or violation of any law, rule, or regulation.
This policy is also applicable to the directors of the company.
Mr. V Swaminathan, Head Corporate Audit and Assurance, has been appointed as the Whistle Blowing Officer, and his contact details have been mentioned in the policy. Furthermore, employees are free to communicate their complaints directly to the Chairman/Member of the Audit Committee, as stated in the policy. The policy is available on the internal employee portal, and the company website and can be accessed through the following link[9].
The Audit Committee reviews reports made under this policy and implements corrective actions, wherever necessary.
A. Disclosure on Conservation of Energy, Technology Absorption, Foreign Exchange Earnings, and Outgo
Annexure ''D'' of this report provides information on the conservation of energy, technology absorption, foreign exchange earnings, and outgo required under Section 134(3) (m) of the Companies Act,
2013 read with the Companies (Accounts) Rules, 2014, which forms a part of the Board''s Report.
The corporate social responsibility (CSR) Policy is available on the company website under the following link[10]. The CSR Report, along with details of CSR projects, are provided in Annexure ''E'' of this report.
The company has a stock option scheme named as ''Employee Stock Grant Scheme, 2011''. The number and the resulting value of stock grants to be given to eligible employees are decided by the Nomination and Remuneration Committee, which are based on the closing market price on the date of the grants.
The vesting period, exercise period and the other terms of vesting, if any, are also decided by the Nomination and Remuneration Committee. Upon vesting, the eligible employee can exercise the grants and acquire equivalent shares of the face value of '' 1 per share.
The difference between the market price at the time of grants and that on the date of exercise is the gross gain/loss to the employee. The details of the grants allotted under the Godrej Consumer Products Limited Employee Stock
Grant Scheme, 2011 and the disclosures in compliance with Share Based Employee Benefits (SEBI) Regulations, 2014 and Section 62 (1) (b) read with Rule 12 (9) of the Companies (Share Capital and Debentures) Rules, 2014 are set out in Annexure ''F''.
Your company has not given a loan to any person under any scheme for or in connection with the subscription or purchase of shares in the company or the holding company. Hence, there are no disclosures on voting rights not directly exercised by the employees.
14. Listing
The shares of your company are listed on the BSE Limited and National Stock Exchange of India Limited. The applicable annual listing fees have been paid to the stock exchanges before the due dates. Your company is also listed on the Futures and Options Segment of the National Stock Exchange of India.
15. Business Responsibility & Sustainability Report
Pursuant to Regulation 34 of the Listing Regulations, the Business Responsibility and Sustainability Report highlighting the initiatives taken by the company in the areas of environment, social, economics, and governance is
available on the website of the company and can be accessed through the following link1111.
16. Auditors and Auditors'' Report
During the year, M/s. B S R and Co., LLP, Chartered Accountants (Firm Regn. No. 101248W/W-100022) have been re-appointed as the statutory auditor for a second term of five years to hold the office from the conclusion of the 22nd AGM held on August 03, 2022, until the conclusion of the 27th AGM in the year 2027 at a remuneration as may be approved by the Board.
The company is maintaining requisite cost records for its applicable products.
Pursuant to directions from the Department of Company Affairs, M/s. P. M. Nanabhoy and Co., Cost Accountants, were appointed as cost auditors for the applicable products of the company for the fiscal year 2022-23. They are required to submit the report to the Central Government within 180 days of the end of the accounting year.
The Board had appointed M/s. A. N. Ramani and Co., Company Secretaries, to conduct a secretarial audit for the fiscal year 2022-23. The Secretarial Audit Report for
the fiscal year that ended on March 31,2023, is attached herewith as Annexure ''G''. The Secretarial Audit Report does not contain any qualification, reservation, or adverse remark.
The Company has also undertaken an audit for the fiscal Year 2022-23 for all the applicable compliances as per SEBI Regulations and Circulars/Guidelines issued thereunder. The Annual Secretarial Compliance Report for fiscal year 2022-23 has been submitted to the Stock Exchanges and is available on the website of the Company in the following link |121.
Pursuant to the Listing Regulations, the Report on Corporate Governance is included in the Annual and Integrated Report. The Practising Company Secretary''s Certificate certifying the company''s compliance with the requirements of corporate governance, in terms of the Listing Regulations, is attached as Annexure ''H''.
18. Management Discussion and Analysis
Management Discussion and Analysis as stipulated under the Listing Regulations is presented in a separate section forming a part of this Annual and Integrated Report.
The details pertaining to the internal financial control and its adequacy are also a part of the Annual and Integrated Report.
a. Your company is in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
b. Other than the acquisition of business of Raymond Consumer Care Ltd, which is mentioned
in Note 59 of the standalone financial statements, there have been no material changes and commitments affecting the financial position of the company that have occurred between March 31,2023, and the date of this Board''s Report.
c. There have been no instances of fraud reported by the auditors under Section 143 (12) of the Companies Act, 2013, and the rules framed thereunder, either to
the company or to the Central Government.
d. The company has not accepted any deposits from the public, and as such, no amount on the account of principal or interest on deposits from the public was outstanding as on the date of the balance sheet.
e. During the fiscal year 2022-23, there were no significant and material orders passed by the regulators or courts or tribunals that can adversely impact the going concern status of the company and its operations in the future.
20. Appreciation
Your Directors wish to extend their sincere thanks to the employees of the company, central and state governments, as well as government agencies, banks, customers, shareholders, vendors, and other related organisations that have helped in your company''s progress, as partners, through their continued support and co-operation.
For and on behalf of the Board of Directors
Nisaba Godrej Executive Chairperson
Mumbai, June 5, 2023
ANNEXURE ''A''
BOARD DIVERSITY POLICY
The case for boardroom diversity has never been stronger. In today''s rapidly evolving business environment, we recognise the power of leveraging diverse perspectives, skills, and experiences to stay competitive. At Godrej Consumer Products, we seek board members with diverse backgrounds and viewpoints, who can provide a wide array of insights and ideas. The advantages of a diverse board extend beyond a social factor
to encompass better financial performance, decision-making, innovation, and adaptability to changing market conditions.
The Board Diversity policy aims to create an environment that values and fosters inclusiveness, embraces a broad spectrum of talent, and champions a culture of meritocracy. The policy strives to ensure that its Board reflects diversity in its broadest sense including but not limited to, business experience, geography, age, gender, nationality, ethnicity, and race. By doing so, we aim to contribute to the company''s competitive advantage, stakeholder engagement, and overall business performance.
This policy only applies to the Board of Directors of Godrej Consumer Products. It is crafted in line with Godrej Consumer Products'' Code of Conduct and GCPL Human Right policy, which is committed to inclusion and diversity.
We recognise and embrace the benefits of having a diverse Board and see increasing diversity at Board level as an essential element in maintaining a competitive advantage. Being a global company, we acknowledge to have diversity of thought and nationality to be able to best serve the consumers in regions where we operate. We aspire to maintain a balance with reference to:
⢠Membership of the Board
includes a diverse mixture of skills, professional & industry backgrounds, geographical
experience & expertise, gender, tenure, nationality, ethnicity, race, and diversity of thought.
⢠Board will include and make good use of the differences in the competency of skills, capabilities, knowledge, industry experience, background, race, gender, nationality and other qualities of the individual members as a whole.
⢠Board will have diversity in thought and nationality to best represent the consumers served in emerging markets globally.
⢠Board will have a range of views, thoughts, insights, perspectives, and opinions to improve its decision-making and benefit the company''s stakeholders.
Our commitment and target is to have at least one woman director on the Board as per the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. However, our aspiration is to ensure that no more than 50% of any one gender is represented on the Board. We recognise that Board composition may result in temporary periods when we are not able to achieve this balance.
The Nomination and Renumeration Committee is responsible for ensuring that the Board has the right balance of skills, experience, and knowledge and, in accordance with its terms of reference, shall:
long-term commitment. In addition to monetary rewards, benefits and perquisites are provided to enhance employee satisfaction and well-being. Furthermore, the framework also emphasizes noncompensation elements such as career development opportunities, work-life balance initiatives, and recognition programs, ensuring a well-rounded approach to employee rewards. By adopting this Total Rewards Framework, GCPL aims to provide a comprehensive package that supports employee growth, motivation, and overall satisfaction.
Highlights
The rewards framework implemented at GCPL provides employees with the flexibility to personalize various elements based on their specific needs. This framework is seamlessly integrated with GCPL''s performance and talent management processes, ensuring that rewards are closely aligned with individual performance and contributions. A key focus of the framework is to deliver sharply differentiated rewards for our high-performing talent, recognizing their exceptional achievements and potential. Additionally, when determining total compensation, GCPL considers three significant factors: Position, Performance, and Potential. Specifically, for employee: with high potential, GCPL aims to provide total compensation that exceeds the 75th percentile of the market, reflecting our commitment to attract and retain top talent. Through this approach, GCPL aims to create a culture of excellence and ensure that our employees are rewarded appropriately for their contributions and growth.
⢠Periodically review Board composition, succession planning, talent development and the broader aspects of diversity.
⢠Identify/evaluate candidates for appointment to the Board on merit against the Board Diversity policy objective and have diverse skills, experience, background, and expertise of current members of the Board.
⢠Report in the Corporate Governance section of the Annual Report on the implementation of the Board Diversity Policy and other regulatory and statutory requirements.
The Nomination and Renumeration Committee will review the policy periodically keeping in view the statutory requirement and need of the organisation and recommend the same to the Board for their approval.
At GCPL (Godrej Consumer Products Limited), the Total Rewards Framework is designed to encompass a comprehensive approach to employee compensation and well-being. It incorporates various elements to create a comprehensive rewards package that considers both financial and non-financial aspects. The framework encompasses fixed and variable compensation, including salary and incentives, as well as long-term incentives to promote employee engagement and
The total cash compensation includes all forms of direct monetary compensation that an employee receives, such as base salary, bonuses, incentives, and allowances, excluding non-cash benefits or perks. It has following two components:
comprising both "Fixed Compensation" and "Flexible Compensation." The Fixed Compensation encompasses basic salary, House Rent Allowance (HRA), and retirement benefits, including the provident fund and gratuity. On the other hand, the Flexible Compensation is a predetermined portion of the overall compensation that employees can allocate to different components based on their grade eligibility. At the beginning of each fiscal year, employees have the flexibility to distribute this amount among various options according to their individual needs and preferences.
(b) Variable Compensation (Performance-Linked Variable Remuneration):
comprising employee rewards for delivering superior business results and individual performance. It is designed to provide a significant upside earning potential for overachieving business results. It has a ''Collective'' component, linked to the achievement of specified business results, relative to the target set for a given fiscal year, and
an ''Individual'' component, based on an employee''s performance, as measured by the performance management process.
It also includes Employee Stock Grant Scheme. This scheme is applicable to GLF (Godrej Leadership Forum) members, under this scheme stock options are granted annually at face value to vest over multi-years. The value of the stock grant is proposed by the management and approved by the Nomination and Remuneration Committee. This component comprises of 15 to 20% of the CTC of our leadership team.
LTI (Long Term Incentives) at Godrej strive to drive a culture of ownership and focus on long term result, it also has element of retention.
This plan is applicable to the top leadership of GCPL. In 2022, we introduced a long-term incentive plan that is linked to sustained business success over a four-year plan period based on metrics of market capitalisation and profit after taxes. The payout under this plan is calculated at the end of the four-year period based on the business performance achieved during that time. To ensure the continuity of business success, half of the payout is deferred and paid out in the fifth year. This approach incentivises the top leadership to focus on the longterm growth and profitability of the company, driving sustainable value for all our stakeholders.
Our compensation philosophy is strategically designed to align a sizeable portion of our CEO''s compensation with the attainment of business performance objectives and the best interests of our shareholders. This approach cultivates a culture of responsibility and fosters long-term value creation for all stakeholders.
Our compensation philosophy seeks to achieve a harmonious equilibrium by rewarding the CEO for their exceptional leadership and accomplishments while also ensuring that their interests are closely aligned with our enduring business goals. It has following three components:
(a) Fixed Compensation: Fixed compensation encompasses base pay, allowances, perks, and benefits. It includes a fixed salary, guaranteed payouts, and annual increments linked to the business performance. This component ensures
that our CEO receives a competitive and stable remuneration package that reflects their skills, experience, and performance.
Variable pay is directly tied to a combination of the company''s overall business performance and the CEO''s individual performance. The performance measures are calculated based on three predefined financial and relative financial
metrics - Underlying Volume Growth, Reduction in Inventory & Account Receivables, and EBITDA & Working Media Growth. These financial and Operating metrics are set internally by the Management Committee and the Board of Directors.
This includes Stock Option Grants to incorporate external market performance measures, we grant our CEO stock options at face value. These options vest equally over a three-year period aligning the CEO''s interests with the longterm success of the company. The stock options represent approximately 50% of their total compensation which demonstrates a substantial commitment to the company''s success and strengthens the alignment between the CEO''s performance and shareholder value.
(c) Long Term Incentives (2021):
A significant portion of the CEO compensation is tied to a long-term outlook and performance of the business which entails performance linked stock grant vesting and a component of cash payout on the achievement of a CAGR on market capitalization over a six-year timeframe. The threshold for the plan is an achievement of target revenue CAGR growth, PAT CAGR growth and relative performance to BSE FMCG index.
ANNEXURE ''C''
INFORMATION PURSUANT TO SECTION 197 (12) OF THE COMPANIES ACT, 2013 READ WITH RULE 5 (1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014
The ratio of the remuneration of each Director to the median remuneration of the employees of the company for the fiscal year
2022-23; the percentage increase/ decrease in the remuneration of each Director, Chief Financial Officer, and Company Secretary during
the fiscal year 2022-23; and the comparison of remuneration of each KMP against the performance of the company are as follows:
Whole-Time Directors, Chief Financial Officer, and Company Secretary Sr. Name of the KMP Designation No. |
Percent Increase/ (Decrease) In Remuneration in the Fiscal Year 2022-23 |
Ratio of Median Remuneration of Each Director to the Median Remuneration Paid/Payable to all Employees for the Fiscal Year 2022-23 |
||
1 |
Nisaba Godrej |
Executive Chairperson |
38.84 |
146.26 |
2 |
Sudhir Sitapati |
Managing Director & CEO |
Please see note below |
311.63 |
3 |
Sameer Shah |
Chief Financial Officer |
Please see note below |
Not Applicable |
4 |
Rahul Botadara |
Company Secretary & Compliance Officer |
Please see note below |
Not Applicable |
Note: Mr. Sudhir Sitapati has been appointed as the Managing Director & CEO w.e.f. October 18, 2021, Mr. Sameer Shah has been appointed as Chief Financial Officer and Mr. Rahul
Botadara has been appointed as Company Secretary & Compliance Officer w.e.f. September 1, 2021. Since they have been appointed to their new roles in the mid of the fiscal year 2021-22, the remuneration is not comparable and hence percentage change in remuneration is not provided in the table.
Sr. No. |
Name of Director |
Percent Increase/(Decrease) in Remuneration in the Fiscal Year 2022-23 |
Ratio of Remuneration of Each Director to the Median Remuneration Paid/Payable to all Employees for the Fiscal Year 2022-23 |
1 |
Jamshyd Godrej |
(4.35) |
4.75 |
2 |
Nadir Godrej |
- |
5.40 |
3 |
Tanya Dubash |
8.70 |
5.40 |
4 |
Pirojsha Godrej |
- |
5.40 |
5 |
Narendra Ambwani |
- |
8.86 |
6 |
Pippa Armerding |
2.50 |
8.64 |
7 |
Omkar Goswami |
- |
8.64 |
8 |
Ndidi Nwuneli |
- |
8.64 |
9 |
Ireena Vittal |
- |
8.64 |
10 |
Sumeet Narang* |
- |
- |
*Mr. Sumeet Narang has |
voluntarily waived the remuneration receivable from the company. |
Note:
(i) The median remuneration of all the employees of the company for the fiscal year 2022-23:
'' 4.63 lakhs
(ii) The percentage decrease in the median remuneration of employees in the fiscal year 2022-23: 12.31%
(iii) The number of permanent employees on the payrolls of the company as on March 31, 2023: 2510
(iv) The average percentile increases already made in the salaries of the employees, other than the Managerial Personnel, in the last fiscal year and its comparison with the percentile increase in the managerial remuneration and justification thereof:
Total managerial remuneration comprises the remuneration of the Whole-Time Directors and commission paid to Non-Executive Directors.
The Whole-Time Directors'' remuneration is as per the resolution approved by the shareholders and will not exceed 10% of the company''s net profits as permitted by the Companies Act, 2013. The Non-Executive Directors are also eligible for a sitting fee of 1 lakh per Board meeting attended and 20,000 per committee meeting attended. The shareholders at the AGM
held on July 30, 2018, has authorised the payment of commissions on profits to the Non-Executive Directors at the rate not exceeding 1% of net profits of the company with authority to the Board to determine the manner and proportion in which the amount be distributed among the Non-Executive Directors. The Board has authorised a base commission of '' 20 lakhs per annum to each Non-Executive Director. All the Independent Directors are paid an additional commission linked to their attendance at various committee meetings and Independent Directors'' meetings. There is no change in the base amount of the commission on profits or sitting fees payable to Non-Executive Directors for attending meetings of the Board/Committee thereof.
The percent change in remuneration represents a change in the pay-out based on actual attendance at meetings of the Board or Committee thereof for each of the NonExecutive Directors, compared with that in the previous year.
The average change in the salary of employees other than the Managerial Personnel is a decrease of 14%. This is largely due to lesser performance linked variable remuneration payout to all employees in FY 2022-23 as compared
to previous year. In case of salaries of Key Managerial persons, the figures are not strictly comparable as there were changes in KMP in the mid of FY 2021-22 and the remuneration reflected for FY 2022-23 is for the full year.
(v) The remuneration is as per the Remuneration Policy of the company.
ANNEXURE ''D''
INFORMATION PURSUANT TO SECTION 134 (3) (M) OF THE COMPANIES ACT, 2013 READ WITH THE COMPANIES (ACCOUNTS) RULES, 2014, WITH RESPECT TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS, AND OUTGO
A. Conservation of Energy
Steps taken or impact of initiatives for conservation of energy, and steps taken by the company to use alternate sources of energy.
I. North East Cluster
The total expense on energy savings initiatives is '' 83 lacs. A few major energy/water conservation initiatives are as follows:
⢠Use of DM water in place of Distilled water for Developer batch making in creme manufacturing at New Guwahati, New
Conso and Lokhra II units. Annual Energy Saving 11765 kwh Annual HSD saving - 96 KL
⢠Replacing Pakona with Ezee 40 gm multitrack machine at Lokhra II, Annual Energy Saving 145981 kwh
⢠RC-1 , RC-2 and RC-3 motor capacity reduced from 3HP to 1.5 HP at Meghalaya Coil.
Annual Energy Savings -70054 KWH
⢠Replacement of Pulver 25 hp motor with 15 hp motor at Kalapahar Coil. Annual Energy Savings -13356 KWH
⢠Slider for material transfer from 1st floor to ground Floor at New Conso. Annual Energy Savings - 33600 KWH
⢠Creme Colorant process optimization at New Conso. Annual Energy Savings-11321 KWH Annual Water Savings -225 KL
⢠One rod heater(3.0KW) reduced in twist filling hopper at Kalapahar AER. Annual Energy Savings -7488 KWH
⢠Upgraded Latest version of economizer installation in boiler to reduce diesel consumption at Lokhra Ii. Annual Energy Savings -23063 KWH
⢠Outfeed conveyor of Flow wrap & Pakona interlock with Machine in AER Pocket at Sikkim. Annual Energy Savings -5670 KWH
⢠GCPL India Meghalaya Coil unit selected
as winner for the prestigious ''The Machinist Super Shop floor Awards 2022" in the category "Excellence in Environment, Health and Safety -SME".
The Machinist Super Shop floor Awards are organized by Worldwide Media (WWM), a fully owned subsidiary of The Times of India Group (BCCL).
⢠Our GCPL Factories have bagged Gold for New Conso, and Silver for Meghalaya Coil,
New Guwahati, AER and Sikkim in 4th ICC National Occupational Health
& Safety Award 2022 by Indian Chamber of Commerce
⢠Meghalaya Coil has received 4th Level Award: PRASHANSA PATRA and AER unit has received "Certificate of Appreciation" in NSCI Safety Award 2022 at Panjim, Goa.
⢠In 36th National Convention on Quality Concepts (NCQC-2022), 15 awards have been
received by our 7 teams including 2 par excellence award in Lean QC and 5 par excellence award in QCC.
II. North Cluster
Energy Conservation
The total capital investment on energy savings initiatives is ''132.76 lakh, and savings in energy consumption is 12.08 lakh KWH per annum, which is equivalent to '' 72 lakh per annum. Some of energy conservation initiatives are as follows:
⢠Power saving due to
elimination of 4 banding machine by merging output of 2 wrapping machine.
⢠Power saving by interlocking of roller conveyors and metal detectors.
⢠Energy saving by replacing UB cutter pneumatic cylinder with servo motor.
⢠Modification done in wrapping heater assembly.
⢠Power saving due to FG & mezzanine floor no. of light reduction.
⢠Power saving through speed synchronization by interlocking of MPC & eliminate idle running of TRM.
⢠Cooling tower motor rating reduction by replacement of fan.
⢠VFD installed in hot well motor pump.
⢠Replaced normal vacuum pump with VSD vacuum pump.
⢠Installation of VFD on chiller.
⢠Streetlights replaced with solar lights.
⢠Motion control sensor to be fixed in the office cabins.
⢠Replaced the old servo 3HP motor with 1HP servo motor of wrapping machine.
⢠Replacement of all old motor with energy efficient motors.
⢠625KVA DG replaced with 325KVA DG set. Interchange with another unit.
⢠Admin office CFL lights convert to LED.
⢠Intermediate conveyor replaced with SS stand; base of stand made by acrylic sheet & installed LED light for monitoring quality defects. Per day 12.1 KWH & annual 363 KWH.
⢠Utilization of solar power system-65-70% to be load in solar system.
⢠Electricity power to be saved through utilization of 1500 KG bulk Mfg facilities in Liu 850KG for lime variant.
⢠Motion sensor-based lighting to on/-(lights-45watt, light qty-50) 20% lighting electricity to be saved.
⢠Electricity saving with the help of FBD system in Liu of tray dryer.
⢠Solar light tubes.
⢠Maintain the unit PF in electricity bill.
⢠CD reduction 50KVA.
⢠Energy saving by remove the idle run of flow wrap conveyor.
⢠Replacement of air-cooled
brine chiller for individual line 2 & 3.
⢠Replacement of ordinary
vacuum pump with VSD vacuum pump.
⢠Replacement of ordinary
motor with energy efficient motor.
⢠Installation of solar tube lights to eliminate electrical light.
⢠Energy saving on BDH blower by timer implementation.
⢠Energy saving by fixing timer for hot water pump.
⢠Energy saving by removing 2 RC fans at wet stage each drier.
The total capital investment on
water conservation initiatives is
'' 8.2 lakh, and savings in water
consumption is 750 KL per
annum. The water conservation initiatives are as follows:
⢠RO waste water start to use for gardening purpose.
⢠Reuse of RO rejected water.
⢠Replacement of wate cooled air compressor with VSD air cooled compressor in Katha & Kathua.
Awards Won
⢠Platinum & Super Star Award in CII National Technology Competition under Manufacturing Category.
⢠4 Gold Awards in CII Poka-yoke National Kaizen Competition.
⢠5 Sliver Award Winner in Poka-yoke & Renovation Category at 41st CII National Kaizen Competition.
⢠02 Star Challenger Award Winner in Restorative Kaizen at CII Challengers trophy 2022-23
⢠2 Par Excellence,
9 Excellence & 2 Distinguish awards in NCQC.
III. South Cluster
Energy Conservation
The total CAPEX utilized for energy conservation measures in fiscal year was ''144 lakhs and the Energy conservation initiatives are as follows:
⢠Reduction in energy consumption by the installation of energy efficiency motors, VFDs, BLDC fans, Electric Screwdriver, Roof top Solar panels have all resulted in Discom Power savings of 2,71,240 Kwh/ year covering all units.
⢠To reduce Carbon Footprint, use of Bio waste fuels, instead of Furnace oil, in our Hot air generators in our Pondicherry Coil Factory, to the extent of 3,835 MT.
⢠New Roof top Solar panel is installed in Coil 9 and Coil 6 unit with the capacity of 115 and 315 kWp. Roof top Solar panel installed in CONSO unit of capacity 99.6kWp has Generated the power of 1.31 lakhs of units which has saved 138 trees and carbon reduction by 105 MT.
The total CAPEX utilized for Water conservation in fiscal year is ''20 lakhs and the water conservation initiatives are as follows:
⢠Use of STP treated water for toilet flushing and gardening purposes.
⢠Water management using level sensors in water storage tanks.
⢠Rainwater harvesting system of 1lakh liter capacity in CONSO unit.
⢠Installation of sensor-based water taps in all the washrooms and Canteen areas.
⢠CII-EHS: MMN unit has got the Silver award and CONSO unit has got the Bronze Award in CII EHS Excellence Award 2022.
⢠National Safety Councils Safety Awards: CONSO unit has got the "Certificate of Appreciation" towards NSCI Safety Award 2022.
⢠CII - Best practices of Work at Height Award has got by Coil 6 unit.
⢠QCFI - EHS: MMN unit has got the Gold Award.
⢠CONSO and MMN Unit has won Excellence award and Par Excellence award respectively in 8th National 5S Conclave at Goa.
⢠MMN Unit won Platinum award in QCFI Chennai Chapter 5S Competition.
⢠Integrated Management Systems (IMS): South Units have successfully completed 3rd IMS surveillance audits without any NCs
(ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018).
⢠Marai Malai Nagar (MMN) Unit has successfully
completed QCFI-JUSE 5S Re-Certification audit and obtain the certificate at National Convention at Aurangabad.
⢠Safety theme based monthly celebrations organized in all units for the past 8 years.
⢠Safety infrastructures provided in the units are Fire detection system,
Fire Hydrant Ring main line, Fire snipper system, Machine Guarding, Visitor safety animated Video, Roof lifeline, Skylight sheet mesh protection and Electrical safety etc.
⢠"World Environment Day" was celebrated based
on the theme "Living sustainably in Harmony with nature", and tree saplings were planted in all units.
⢠The 34th National Road Safety was celebrated across the South Cluster based on the theme of "Sadak Suraksha - Jeevan Raksha".
⢠The 52nd National Safety Week was celebrated across the South Cluster based on the theme of "Our Aim Zero Harm".
⢠21 Mock Drills are conducted across the South Cluster units to validate Emergency preparedness.
⢠Women''s Day across the South Cluster where various competitions were conducted for contract workers and prizes were distributed to the Winners.
⢠We donated 15 Nos ECG Machines to government hospitals which posed
a challenge in treating cardiac ailments as request from Health secretary of Puducherry on 25th November 2022.
⢠We donated a 60KVA DG Set to Madagadipet Commune Panchayat on 23rd September 2022 for the uninterrupted Power supply for the Drinking water pumps which cater to 28 nos Overhead Drinking water Tanks in Madagadipet Village.
⢠On account of "WORLD HEALTH DAY", we organized exercise event across all the south cluster units, wherein BC and WC employees were participated and did the exercise.
⢠In order to create the awareness on health diet, we organized "EAT NATURALLY EVENT" across all the units. Contract workers displayed the various healthy natural diet.
⢠International yoga day was organized in all the units to impart the goodness of yoga and maintain good health.
⢠75th Independence day celebration done in a grand manner across all the units. Various competitions conducted to all category of employees and prizes distributed to the winners.
⢠As a part of health awareness creation, we conducted Eye screening program in Conso unit, wherein 127 employees participated and benefited in the camp.
⢠For COVID-19 Control, we organized Covid Booster Camp across all the units.
⢠We donated 2 computers and 1 printer to Govt primary school-Nallur as a part of CSR initiatives in developing Children''s education.
⢠As a part of sustaining employee''s health,
We organized cardio exercise across all the south cluster units during "WORLD HEART DAY" event.
⢠Prepared Common Health awareness calendar across all the units and awareness program given as per the calendar.
⢠Children''s day celebration done in all the units at nearby Schools.
⢠As a part of 5s, we did community cleaning at nearby villages.
⢠Christmas day celebration done for the first time
in all the units of south cluster and CONSO unit selected as the runner up across all GCPL Units.
⢠As a part of GGVW, we organized Make Science fun event in the nearby schools wherein 395 school students benefited.
⢠Dengue awareness session given in Govt School.
⢠As a part of building safe work environment, we conducted POSH awareness session in all the units of South Cluster. 80 officers, 92 Blue collar and 1050 Contract Labors covered in this program.
⢠We renovated 5 Panchayats Public Toilet to improve the sanitation and Hygiene, lead to 500 Villagers benefit.
⢠We donated Science Life Labs to 30 Government Schools in Karaikkal and Pondicherry to enhance the Students Knowledge.
The total capex utilized for energy conservation/ Renewable energy measures is '' 1140 lac. The energy conservation measures undertaken are as follows:
Under the Renewable & GHG head, following initiatives were implemented:
⢠Installed 1700 Kwp shed solar panels which reduced load on electricity board and reduced GHG emissions which has resulted in saving of 25 lac unit per annum.
⢠Maximized usage of Briquette by 4% with respect to fiscal year to reduce gas consumption and fossil fuel usage.
Under Specific Energy Consumption head, the following initiatives were implemented:
⢠Commissioned energy efficient vacuum pump in place of water ring pump which resulted in saving of power consumption by 2 lac units / annum.
⢠Evaporative type condenser installation in water chilling unit resulted in saving of 1.2 lac units per annum.
⢠Installed higher surface area heat exchanger
in FADP 3 resulting in improved productivity and 3% reduction in steam consumption (Saving of '' 25 LPA ).
⢠Energy Saving in FSP 2 by improvement in Heat Balance by Heat Exchanger design change resulting in 4% reduction in specific fuel consumption (Saving of '' 12 LPA).
⢠Energy Saving in FADP 2 by improvement
in Heat Balance by design change - 2.5% reduction in specific Fuel Consumption.
⢠Feed and energy improvement in MVC resulted in saving of '' 20 lac/annum.
⢠Reduction in steam & power consumption in new CSP plant resulted in saving of '' 138 lacs / annum.
⢠Installed energy efficient LED lights in offices in place of CFL resulted
in reduction of power consumption by 6000 units /annum.
⢠Installed High flow rate impeller with Motor in process pumps resulted in reduction of power consumption by 1 lac unit/annum.
Consumption Reduction head:
following initiatives were taken
⢠Installed rain water harvesting in new soap plant which has resulted in harvesting of approx. 15 lac litres of water / annum.
In addition, Malanpur team improved productivity of soap noodle & feed rates of chemical plants which contributed in reduction of specific energy consumption.
⢠Increase in noodle output from 456 MT/day to 565 MT/day (including new CSP) resulting into energy efficient plant operations.
⢠Increase in FADP feed rates from 482 to 496 MT/day.
⢠Increase in FSP feed rates from 492 to 502 MT/day.
following projects were
completed:
⢠Installed 128 numbers of AI based CCTV camera''s in boundary of factory to monitor activity which can detect human trespassing and send alerts.
⢠Installed an integrated high speed soap line
5 & CSP plant which has SCADA system for monitoring of various process parameters which helps in taking timely decision to improve the productivity & reduce down time of plant.
⢠Installed Radar based Level transmitter along with SCADA for prevention of overflow of oil in storage tanks.
⢠Online monitoring of soap noodle bag counting in SM2 SCADA for all 3 Bag filling system.
⢠Installed online OPE measurement in line 2 helped in taking timely decisions to improve efficiency and reduce downtime.
B. Technology Absorption
The Research and Development function of your organisation played a key role in ensuring the successful launches of the following products during the fiscal year 2022-23:
1. Jumbo Fast Card
2. HIT one push aerosol in Indonesia
3. Roll on
4. AER Power Pocket Range
5. Godrej Professional new
shades
6. MG Hair styling Gel
7. Godrej Professional Keracare
8. Stella Mist Diffuser
9. HIT Goodknight LV
10. NYU Creme variants
The current year, like previous years, also saw a sharp focus on consumer-centric and relevant design led innovation. The company put lot of focus on Innovation in new technologies, which gives value for money to the consumer.
I. R&D Product Categories Initiated by the company
1. Home Care, which includes household insecticides, air fresheners, and fabric care etc.
⢠GCPL Malanpur received 10 Par Excellence awards, 1 Excellence award and
4 Quiz Awards in the 36th National Convention on Quality Concepts 2022, held at Aurangabad, Maharashtra from 27th to 30th December 2022.
⢠GCPL Malanpur bagged a total of 17 awards in case study presentation on various topics in
the Indian National Suggestions Schemes'' Association (INSAAN) held at New Delhi in various categories like Poem/Poster/Slogan Competition.
⢠GCPL Malanpur received 1 Quality Circle award,
10 LQC awards and 2 5S awards in the Gwalior Chapter of Quality Circle (GCCQC) 2022 held at Gwalior on 3rd September 2022.
⢠GCPL Malanpur received 6 par excellence awards in the 8th National conclave on 5S held
at Agnel Institute of Technology & Design,
Goa held on 25th June 2022.
⢠GCPL Malanpur received certificate of appreciation from NSCI (National Safety Council of India).
2. Personal Care, which includes soaps & toiletries and hygiene range etc.
3. Hair care and hair colours
4. Wet hair and dry hair.
R&D has played pivotal role in developing new technologies in AER, Hair Colours, Personal Wash and HI areas. Strong R&D led initiatives with innovative projects have led to successful launches of several new products in the marketplace in the current fiscal year. The company has launched range of health & hygiene products under different brands and has shown strong agility in development & technology commercialisation. R&D is continuously protecting its Innovations through Design and Product patents. The company has filed several patents both in India and abroad. R&D has played a pivotal role in improving cost optimization across product categories by contributing through both product and process related innovations and improvements.
We believe that the three key pillars of consumer centricity, new product Innovation & Development and training-led skill up-gradation will continue to propel your Company ahead of competition in its strategy of innovation led value creation.
Future Plan of Action:
R&D shall continue to play a key role in the advancement and successful execution of newer innovations in the marketplace, for both domestic and international business.
Our R&D team shall constantly endeavor to deliver superior innovative products thereby delighting, both domestic and international customers by:
1. Ensuring successful
commercial launches within
Hair Care, Household Insecticides, Room Freshner and personal care categories for the coming year.
2. Engaging in providing support on global innovation strategies for various product categories within our international businesses and extending support on relevant product development for international markets.
3. Focusing on newer consumer relevant product experiences within all categories such as Household Insecticides, Hair Care, AER, Fabric Care and Health & Hygiene.
4. Maintaining a strong focus on R&D training needs and people development.
5. Partnering collaborations with external stake holders and leading Institutions.
6. Sustainability in the core of Packaging and product.
C. Expenditure on R&D |
'' Crore |
|
Fiscal Year 2022-23 |
Fiscal Year 2021-22 |
|
Capital |
0.97 |
0.08 |
Recurring |
21.20 |
20.57 |
Total |
22.17 |
20.66 |
Total R&D expenditure as a percentage of total sales turnover |
0.29% |
0.30% |
D. Foreign Exchange Earnings and Outgo |
||
'' Crore |
||
Fiscal Year |
Fiscal Year |
|
2022-23 |
2021-22 |
|
I. Foreign exchange used |
618.92 |
737.10 |
II. Foreign exchange earned |
292.18 |
264.49 |
A brief outline of the Company''s CSR Policy, including an overview of projects or programmes proposed to be undertaken, with a URL to the CSR Policy and initiatives
GCPL is committed to the Godrej Group''s ''Good & Green'' vision of creating a more inclusive and
greener world. The GCPL CSR policy focuses on addressing the critical social, environmental, and economic needs of the marginalised and less privileged sections of society. We adopt an approach that integrates the solutions to these problems into the strategy of the Company to benefit communities at large and deliver social and environmental impact. The Company has framed a CSR Policy in compliance with the provisions of the Companies Act,
2013. The policy as well as projects and programmes under the CSR Policy are available on the Company website and can be accessed through the following link1131.
An overview of the projects or programmes undertaken during the fiscal year 2022-23 is given below. We have aligned our programmes to national priorities and missions, and they are categorised as follows.
Godrej believes in people, planet, profit - meaning our focus is to improve and support people and communities, work towards sustainable environment and be a responsible company. As a part of our people focus, we work very closely with the communities around our operations. We understand that the need of every community may be different based on a lot of factors; the focus is to drive interventions that are need based and through the participation of the people. Through our various community projects focused on access to WASH, education, health, justice and entitlements, we have been able to unlock INR 1 cr of direct cash benefit and INR 50 cr worth of insurance coverage by unlocking govt. schemes and benefits.
Responding to the situation of depleting sanitation condition in schools, we constructed 4 toilets in a primary school in Meghalaya, and repaired one public toilet in Pondicherry, thus providing better and hygiene and sanitation to 250 students and over 1,000 people respectively.
Access to water is a major challenge in many locations. For communities to access drinking water - we constructed a borewell in Kathua, an under-ground water tank in Bari Brahma, renovated existing drinking
water facility in Meghalaya, provided a gen-set and trolly to draw ground water in Karaikal which will provide water to 6,000 people. Further, in Malanpur we installed Roof Rainwater Harvesting Systems in all community buildings in 4 villages, aiming at saving 1,565 KL of water per year going forward.
Promoting STEM education, STEM labs were set up in 30 schools across Pondicherry and Karaikal, catering to over 3,800 students from low-income backgrounds. A computer lab and a classroom were set up in Kathua while classrooms were renovated in a primary school in Bari Brahma. In addition, 150 destitute children were supported in Mumbai by supporting their access to a safe and enabling living environment and quality education.
We support health infrastructure around our operations to ensure quality and timely access to health services for the people. We donated 5 OT tables and 1 anaesthesia station in Guwahati Medical College &Hospital.
The hospital caters to over 500 patients daily.
In Mumbai, we provide food kits to 200 TB patients and their families on a monthly basis, in partnership with Brihanmumbai Municipal Corporation under the TB Mukt Bharat Abhiyan.
National and state government have introduced various welfare schemes to support the most vulnerable population and often, the target beneficiaries are unaware of the schemes or the process to access it. We at GCPL are working with our non-profit partners to provide awareness about and access to these schemes to communities around our factories. In Jammu, Baddi, and Malanpur, we helped unlock over INR 1 cr of direct cash benefit and INR 50 cr worth of insurance coverage by unlocking govt. schemes and benefits (Jammu, Baddi, Malanpur) for close to 8,000 people and their families.
While we have a robust justice system in India; however, accessing those especially by the most vulnerable and illiterate population can be a strenuous task - which may lead to further trauma for people already suffering from social challenges. To enable access to justice, a social justice centre was set up in the District Court in Bhind, especially for women - which has resulted in 15% increase in women accessing the same.
The flood situation in Assam in June - July 2022 was very bad with over 55 lakh people across 32 out of 35 districts in the state affected. The worst affected districts were Barpeta, Cachar, Dima Hasao, Kamrup, and Karimganj. The
death toll figures crossed 100 people with extensive damage to property, farm animals, and agricultural land. Though partnerships with the district administration of Kamrup, and civil society implementation, we supported over 5,800 families affected by Assam floods were supported through flood relief food packets, support to revive livelihoods in the form of seeds and animal feed.
At Godrej, we collaborate with non-profit organisations and social enterprises to design and run several skilling programmes for youth from low-income sections of society. We aim to improve the earning potential of our trainees by building their skills and by empowering them. Apart from core domain skills, our programmes also focus on life skills training, entrepreneurship development, and postplacement support.
As of March 2023, we have trained over 4,47,000 young people in skills that will enhance their earning potential. Our projects are:
⢠Salon-iâour beauty and hair care training
⢠Beauty-preneur (BP), Home-preneur (HP) and Barber-preneur platform for nano and micro entrepreneurs in beauty industry
In Salon-I, we trained 2,900 young girls this year. Of this over 60% of the trainees were either placed in jobs or
opted for self-employment by setting up a small beauty parluor at home. The trainees who are placed have received an average starting salary of INR 4,500 per month. 80% of these trainees are first time job seekers and also first generation of females participating in workforce.
In addition, we ran a pilot on providing conversational English learning platform to 500 trainees. Over 40% of them have shown improvement in learning and basic English conversational levels. This was introduced to boost their confidence in interacting with clients and improving their scope of placement at high end beauty-parlours.
As an extension of Salon-i, we support women micro entrepreneurs in the beauty and wellness sector in various parts of the country to grow their businesses. The Beautypreneur project aims to handhold nano entrepreneurs to help them stabilise and expand their enterprises. Since the fiscal year 2016-17, we have supported over 8,660 women entrepreneurs and in FY23 we welcomed 3,369 new entrepreneurs to the cohort.
In addition, we have expanded our work with barbers and have trained and supported over 240 young men to on advanced hair styling skills and enterprise development.
In FY23, we also introduced short workshops wherein our trainers would teach specific topics and services to the participants. This
was introduced to provide women interested in skilling and upskilling themselves on certain areas in beauty and wellness - who may not be able to commit to a long-term training programme. Through these workshops, we reached over 7,163 women plus alumnis.
Project EMBED (Elimination of Vector-Borne Endemic Diseases) started in 2015 in Madhya Pradesh in partnership with the Ministry of Health & Family Welfare''s National Centre for Vector Borne Diseases Control (erstwhile NVBDCP) focusing on malaria elimination in line with the Government of India''s mission. Over the past 8 years, we extended our initiative to Madhya Pradesh, Uttar Pradesh and Chhattisgarh, and in FY 21, we extended our focus on dengue and chikungunya prevention in urban areas.
We collaborate with NGOs and state governments to run intensive behaviour change programmes in regions with a high annual parasite index, where the case burden is the highest. We work in each location for 3 years, spreading awareness among households and people at the bottom of the pyramid and vulnerable and marginalised groups.
Our urban dengue and chikungunya project in five cities focuses on increasing the awareness of urban poor communities regarding the spread of mosquito-borne diseases and educating them regarding how to keep their families and communities safe. The project runs in Bhopal and Gwalior in Madhya Pradesh and Lucknow and Kanpur in Uttar Pradesh. It aims to reduce dengue and chikungunya cases and associated mortality. Our third project under EMBED focused on providing technical support to the Government of India and Government of Uttar Pradesh to help develop an integrated vector management protocol and support the roll out of the same in endemic states. In FY23, we organised 1 national dengue conclave with NVBDCP in Delhi and 1 state dengue conclave in Lucknow, Uttar Pradesh.
In FY23, in addition to above we piloted a Civic action model of equipping community citizens - women and youth to take leadership in their communities for prevention of dengue. We ran awareness sessions for these select volunteers and equipped them with information on detection of larvae and working collaboratively with municipal corporation for prevention of dengue. We ran the pilot in Mumbai (Maharashtra), Ahmedabad (Gujarat), Delhi, Lucknow, and Kanpur (Uttar Pradesh).
- In our rural malaria
project, we have met the target of zero malaria cases in 4 out of 9 districts (Mirzapur & Sonbhadra in UP and Sheopur and Shivpuri in MP). Further, we have seen a 44% reduction in SPR and treatment completion rate is up by 18%.
- Increase in fever testing up by 332% and there has been 36% reduction in Dengue cases in intervention geographies. This has to a large
part been due to our successful integration with communities and cross linkages between different municipal departments.
- Finally, we partnered with the National Centre for Vector Borne Diseases Control (NCVBDC) to organise a ''Technical Symposium on Dengue'' in New Delhi on 22 & 23 March 2023, under the Chairmanship of Union Secretary, Ministry of Health & Family Welfare. The main objective of this Symposium was
to develop a strategic plan and roadmap for Dengue control in India along with inputs from endemic states. A draft plan has been created and will be finalised and implemented by August 2023. This framework will become the foundation for GoI and all endemic states to manage and control Dengue, Chikungunya and Zika type diseases.
Through the successful implementation of all three projects, by the fiscal year 2025-26, we aim to protect 30 million people against vector-borne diseases.
As a global FMCG player and responsible corporate citizen, GCPL is committed to reducing waste across all its plants, processes, products, and supply chain. To this end we have been sending zero waste to landfills from our manufacturing units for the last 4 fiscal years. Beyond addressing the waste from our manufacturing processes, GCPL recognises its responsibility to work with communities to manage waste. We do this not just by collecting back 100% of the plastic waste we generate every year as per Indian EPR laws, but we go beyond and work with civic agencies, social enterprises, and citizens'' groups to ensure that we work in partnership to increase reuse of material and recycle as much as possible.
To this end we are invested in helping communities around our offices and plant locations identify and mitigate their waste related issues through a variety of interventions by using circular economy principles.
Since the fiscal year 202021, we have partnered with the Puducherry Municipal Corporation to implement a community waste management project reaching out to over 200,000 people. We are digitally tracking the waste management process and raising awareness on door-to-door collection and source segregation. We have
diverted over 541 MT of waste from landfills through clean-up drives and have set up a sanitation park which now processes 4TPD of waste. We provided 385 waste workers access to medical camps. Further, the implementation team has proposed a detailed project plan to the Govt. of Puducherry with an action plan for sustainable waste management solutions for the state. This DPR has become the basis for the new tenders being released by the government.
In September 2022, we initiated an end to end waste management project in the newly formed Malanpur Nagar Parishad, where one of GCPL''s oldest and biggest factories is based. The 3 year project will operate in all 15 wards of the Nagar Parishad with the aim of sending zero waste to landfill and breaking even on the operational cost of solid waste management by year 3. In FY23, the project has diverted 383 MT of waste from landfills.
GCPL has initiated an integrated decentralised solid waste management system in
Palashbari Municipal Board in Kamrup district of Assam in October 2022. Kamrup district currently houses several GCPL manufacturing units. The project will cover all 10 wards of the municipality as well as surrounding commercial zones that are open to partnering, in order to reach optimal capacity and break even from an operational cost perspective. In FY23, the project has diverted 125 MT of waste from landfills.
Baddi in Solan district of Himachal Pradesh houses two GCPL factories. Kasauli is one of the well known tourist destinations in Solan district and initiated a municipal waste management project to tackle the growing garbage issue in the region which mars the natural beauty of the geography. In FY23, we undertook a detailed baseline assessment in Kasauli cantonment area and 5 surrounding Panchayats (local population from 2011 census is~8,000 35,000 tourists annually). Apart from the baseline, we also conducted several cleaning drives around garbage blackspots, set up waste themed art installations to create interest in citizens and tourists, and worked with school children to build awareness about the issue. Through this project, we have been able to divert 325 kg of waste via cleaning drives. The full scale implementation will begin in FY24.
The state of Goa is one of the largest tourist hubs in the country and therefore needs to continually focus on waste management to ensure its natural beauty does not get negatively impacted. In FY23, GCPL in partnership with Goa State Pollution Control Board and Goa Waste Management Corporation, initiated a three year waste management project with Bicholim and Sattari Municipal Councils. The project is being implemented by Mineral Foundation of Goa (MFG) in partnership with Sampurna Earth. This project will cater to ~2.9 lakh people in the region. In FY23, the project has diverted 678 MT of waste from landfill.
Mar 31, 2022
Your Directors, with great pleasure, present the Annual and Integrated Report for the year ended March 31, 2022.
The financial performance of your company for the fiscal year under review is given below.
An overview of the performance of the company''s
subsidiaries in various geographies is given separately in the Board''s Report.
The shareholders may also refer to the Management Discussion and Analysis section, which gives more details on the functioning of the company.
Financials: Abridged Profit and Loss Statement |
Consolidated March 31, 2022 March 31, 2021 |
'' (Crore) Standalone March 31, 2022 March 31, 2021 |
||
Total revenue from operations |
12,276.50 |
11,028.62 |
6,951.56 |
6,254.33 |
Other income |
89.71 |
67.07 |
69.18 |
64.74 |
Total income |
12,366.21 |
11,095.69 |
7,020.74 |
6,319.07 |
Total expenses, including depreciation and finance costs |
10,201.48 |
8,970.85 |
5,316.50 |
4,709.77 |
Profit/loss before exceptional items, share of profit of equity accounted investees, and tax |
2,164.73 |
2,124.84 |
1,704.24 |
1,609.30 |
Exceptional items |
(9.75) |
(44.47) |
(58.21) |
(15.38) |
Share of profit of equity accounted investees (net of income tax) |
0.28 |
(0.01) |
- |
- |
Profit/loss before tax |
2,155.26 |
2,080.36 |
1,762.45 |
1,593.92 |
Tax expense |
371.87 |
359.54 |
283.30 |
369.58 |
Profit/loss after tax |
1,783.39 |
1,720.82 |
1,479.15 |
1,224.34 |
Other comprehensive income |
376.56 |
(163.63) |
0.82 |
1.11 |
Total comprehensive income attributable to owners of the company |
2,159.95 |
1,557.19 |
1,479.97 |
1,225.45 |
2. Dividend
A. Dividend Declared
The board did not declare any Interim Dividends during the
fiscal year 2021-22 and also has not recommended any final dividend for the fiscal year.
B. Dividend Distribution Policy
The Board of Directors adopted the Dividend Distribution Policy pursuant to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), which requires the top 1,000 listed companies (by market capitalisation) to formulate the same. The company''s Dividend Distribution Policy may also be accessed through the following link [1].
3. Board of Directors
A. Number of Meetings
Four board meetings were held during the year. The details of the meetings and the attendance record of the directors are given in the Corporate Governance section of the Annual Report.
B. Changes in the Board of Directors
During the financial year, the Board at its meeting held
on May 11,2021, appointed Mr. Sudhir Sitapati as the Managing Director & CEO of the Company with effect from October 18, 2021, and the shareholder''s approval for the same was received at the Annual General meeting held on August 4, 2021. At the same meeting, the Board also approved the continuation of Ms. Nisaba Godrej as Wholetime Director of the Company for the reminder of her term i.e. till September 30, 2022.
Ms. Nisaba Godrej continues to be the Executive Chairperson of the Company as per the prevailing regulations. Since the term of Ms. Nisaba Godrej as Whole time Director is ending on September 30,
2022, the notice of the Annual General Meeting contains a resolution for her reappointment for a further period of five years with effect from October 1, 2022, for the approval of shareholders.
Mr. Adi Godrej stepped down from the Board of Directors of the Company with effect from September 30, 2021. He continues to be the Chairman Emeritus of the Company.
The Board of Directors places on record their sincere appreciation for his vision and guidance that has helped shape and transform our company.
Mr. Aman Mehta''s second term as Independent Director ended on August 31,2021. The Board
of Directors places on record their sincere appreciation of the contribution made by Mr. Mehta during his tenure on the Board.
In the forthcoming AGM, Mr. Jamshyd Godrej and Ms. Tanya Dubash will retire by rotation, and being eligible, they will be considered for reappointment as per the provisions of Companies Act, 2013, Listing Regulations and Articles of Association of the Company.
Your Company has an Audit Committee in compliance with Section 177 of the Companies Act, 2013 and Regulation 18 of Listing Regulations. The tenure of Mr. Aman Mehta completed on August 31,
2021, and subsequently Mr. Sumeet Narang has been appointed as the Chairman of the Committee with effect from September 1,2021. The Committee now consists of following Directors, viz., Mr. Sumeet Narang, Chairman of the Committee, and, Mr. Narendra Ambwani, Dr. Omkar Goswami, Ms. Ireena Vittal,
Ms. Ndidi Nwuneli,
Ms. Pippa Armerding,
Mr. Pirojsha Godrej, all being members of the Committee.
All the Independent Directors have given their declaration confirming that they meet the criteria of independence as prescribed under the provisions of the Companies Act, 2013 and the Listing Regulations, and the same has been noted by the Board of Directors. The Independent Directors also confirmed the compliance with the code of conduct for directors and senior management.
During the year, the Independent Directors were familiarised with the Annual Operating Plan for the fiscal year 2021-22. Additionally, at all the Board meetings, detailed presentations covering business performance and financial updates were made. The programmes were conducted by the members of the company management. The details of the same are available on the website of the company and can be accessed through the following link[2].
The company has in place a Board Diversity Policy, which is attached as Annexure ''A''. The criteria for determining qualification, positive attributes, and independence
of Directors are as per the Board Diversity Policy, Listing Regulations, and the Companies Act, 2013.
The company''s Remuneration Policy for Directors, Key Managerial Personnel (KMP), and other employees is attached as Annexure ''B''.
The company''s total rewards framework aims at holistically using elements such as fixed and variable compensation, long-term incentives, benefits and perquisites, and noncompensation elements (career development, work-life balance, and recognition).
The Non-executive Directors receive sitting fees and commission in accordance with the provisions of the Companies Act, 2013.
The remuneration of Directors is in accordance with the Remuneration Policy formulated in accordance with various rules and regulations for the time being in force.
The disclosure on the details of remuneration to Directors and other employees pursuant to Section 197 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is given under Annexure ''C''. With respect to the information under Rule 5(2) and Rule 5(3) of
the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, members may request the same by sending an email to the company at investor. [email protected] from their registered email address, quoting their name and folio number.
I. Performance Evaluation of the Board of Directors, its Individual Members, and its Committees
We conducted a formal Board effectiveness review, as part of our efforts to evaluate the performance of our Board and identify areas that need improvement to enhance the effectiveness of the Board, its Committees, and Individual Directors. This was in line with the requirements of the Companies Act, 2013 and the Listing Regulations.
The Corporate Human Resources team of Godrej Industries Limited and Associate Companies worked directly with the Chairperson and the Nomination and Remuneration Committee of the Board to design and execute this process. It was later adopted by the Board.
Each board member completed a confidential online questionnaire, sharing vital feedback on how the Board currently operates and how its effectiveness could
be improved. This survey included four sections on the basis of which feedback and suggestions were compiled:
⢠Board Processes
⢠Individual Committees
⢠Individual Board Members
⢠Chairperson
The criteria for Board processes included Board composition, strategic orientation, and team dynamics. Evaluation of each of the Board Committees covered whether they have well-defined objectives and the correct composition and whether they achieved their objectives. The criteria for Individual Board Members included skills, experience, level of preparedness, attendance, extent of contribution to Board debates and discussions, and how each Director leveraged their expertise and networks to meaningfully contribute to the company. The criteria for the Chairperson''s evaluation included leadership style and conduct of Board meetings.
The performance evaluation criteria for Independent Directors included a check on their fulfilment of the independence criteria and their independence from the management.
The following reports were created as part of the evaluation:
⢠Board Feedback Report
⢠Individual Board Member Feedback Report
⢠Chairperson''s Feedback Report
The overall board feedback was facilitated by Ms. Ireena Vittal with the Independent Directors. The Directors put forth their views regarding the Board functioning effectively and identified areas that showed scope for improvement. Feedback from the Committees and Individual Board Members was shared with the Chairperson. Following her evaluation, a Chairperson''s Feedback Report was compiled.
Pursuant to the provisions contained in Section 134 (5) of the Companies Act, 2013, your Directors, based on the representation received from the Operating Management and after due inquiry, confirm the following points:
a) In the preparation of annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same.
b) They have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent
to give a true and fair view of the state of affairs of the company at the end of the fiscal year and ofthe profit ofthe company for that period.
c) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.
d) They have prepared the annual accounts on a going concern basis.
e) They have laid down internal financial controls to be followed by the company, and such internal financial controls are adequate and operating effectively.
f) They have devised a proper system to ensure compliance with the provisions of all applicable laws, and this system is adequate and operating effectively.
4. Transfer to Investor Education and Protection Fund
In accordance with the applicable provisions of the Companies Act, 2013 read with Investor Education and Protection Fund (Accounting,
5. Finance
A. Loans, Guarantees, and Investments
The details of loans, guarantees, and investments as required by the provisions of Section 186 of the Companies Act, 2013 and the rules made thereunder are set out in the Notes to the Standalone Financial Statements of the company.
B. Related Party Transactions
In compliance with the Listing Regulations, the company has a Policy for Transactions with Related Parties (RPT Policy).
The RPT Policy is available on the company website and can be accessed through the following link[5].
Apart from the Related Party Transactions in the ordinary course of business and on arm''s length basis, the details of which are given in the Notes to Financial Statements, no other Related Party Transactions require disclosure in the Board''s Report for complying with Section 134(3) (h) of the Companies Act, 2013. Therefore, 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.
Audit, Transfer, and Refund) Rules, 2016 (IEPF Rules), all unclaimed dividends are required to be transferred by the company to the IEPF after completion of 7 years. Further, according to IEPF Rules, the shares on which dividend has not been claimed by the shareholders for 7 consecutive years or more shall be transferred to the demat account of the IEPF authority. Accordingly, '' 1,25,06,051 unpaid/unclaimed dividends were transferred during the financial year 2021-22 to IEPF. No shares were required to be transferred during the current year.
The company has appointed a Nodal Officer and Deputy Nodal Officers under the provisions of IEPF Regulations, the details of which are available on the company website and can be accessed through the following link[3].
The company has uploaded the details of unpaid and unclaimed amounts lying with the company as on March 31, 2021, on the company website, which can be accessed through the following link[4]. The details of unpaid and unclaimed amounts lying with the company as on March 31, 2022, will be available on the same link within 60 days of the AGM.
6. Subsidiaries,Associates, and Joint Venture
During the year, the following companies ceased to be the subsidiaries of your company:
⢠Style Industries Uganda Limited on account of its voluntary dissolution with effect from August 3, 2021.
⢠Indovest Capital on account of its voluntary dissolution with effect from December 27, 2021.
During the year, Bhabani Blunt Hair Dressing Private Limited has ceased to be an associate of your company with effect from February 14, 2022.
Furthermore, Godrej Consumer Care Limited was incorporated as a wholly owned subsidiary of your company on January 4, 2022.
The details of the cluster-wise performance are given below:
The fiscal year 2022 was a challenging one for Indonesia, with the Covid-19 pandemic challenging the business environment through the year. The overall business top line declined at 4 percent in INR
terms (5 percent decline in constant currency), but flat over a 2 year period. Despite a challenging year with tough macros in Indonesia, we focused on strengthening the fundamentals for the future. Saniter continued to make strong forays with Saniter Aerosol becoming the product of choice during the Covid waves. HIT had muted growth as the category slowdown continued. Air Fresheners showed strong growth with the Home care segment showing a strong recovery.
We faced strong headwinds in our Baby wipes segment, with significantly heightened competitive intensity from new / smaller players, however, have started to clawback share. We also significantly accelerated our Go-To-Market efforts with strong distribution expansion in General Trade, continued to strengthen our in-store execution in Modern Trade and also doubled down into ecommerce.
We also continued our focus on cost savings to fuel our growth investments, field macro environment & also strengthen profitability. We will continue to focus sharply on category development with breakthrough innovation, strong brand building and strengthening GTM.
The fiscal year 2022 witnessed continued strong growth for
our Africa, Middle East, and US business duster. The overall business top line grew by 22 per cent in constant currency terms. West and South clusters grew strongly at a break-out pace of 36 and 17 per cent in constant currencyterms. US market also delivered 8 per cent growth in constant currency terms, though over a small base, despite various macro challenges. We faced significant cost headwinds across markets - input cost increases, adverse forex movement, & continued tendency of consumers to shift away from value-added products resulting in adverse portfolio mix. However, our robust cost optimization programs and timely price increases helped in maintaining EBITDA margins in line with previous year. Overall, despite a challenging year, we focused on strengthening the fundamentals for future. We witnessed continued momentum on braid premiumization in South Africa. We grew strongly in the newly launched HI category in Nigeria and strengthened our US ethnic hair fashion portfolio by expanding our partnership to Target in addition to Walmart. We also significantly accelerated our GTM efforts in Nigeria, particularly last mile distribution through van model. Going forward, our focus would be to strengthen last mile distribution across markets (including the salon channel), continue improving margins by driving operational excellence, strengthening our portfolio, investing in the consumer, & accelerating Wet
Hair / FMCG growth. We will maintain laser sharp focus on strong governance controls and maintain an unrelenting focus on employee / consumer safety.
Our Latin America cluster closed a strong year in a challenging environment. Net Sales (INR) grew 15 percent while EBITDA grew at 33 percent versus last year.
Argentina business closed another year of profitable growth. In a context of COVID restrictions and lockdowns, the team delivered a Top Line growth of 45 percent in constant currency (21 percent in INR), driven by Go-To-Market Improvements, COMEX expansion and Innovation. EBITDA grew 50 percent in constant currency (24 percent in INR) achieving an EBITDA margin of 15 percent in constant currency. Profit improvements were also driven by a healthy NWC reduction.
Our Chile business grew Net Sales at 5 percent CC (4 percent in INR) driven by a strong performance of Hair Color, Hair Removal and Traditional Channel. EBITDA grew by 50 percent in CC (49 percent in INR) driven by efficiencies and better absorption of fixed costs.
Looking ahead, we will continue focusing on profitable growth and working capital management to strengthen our Latin America businesses.
In compliance with the Listing Regulations, the Board has adopted a policy for determining material subsidiaries. This policy is available on the company website and can be accessed through the following link[6].
A statement containing the salient features of the financial statements of subsidiary/joint venture/associate companies, of the company in the prescribed Form AOC-1, a part of consolidated financial statements (CFSs) in compliance with Section 129(3) and other applicable provisions, if any, of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014.
The said form also highlights the financial performance of each of the subsidiaries and joint venture companies included in the CFS of the company pursuant to Rule 8(1) of the Companies (Accounts) Rules, 2014.
7. Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013
Your company has complied with the provisions relating to
the constitution of the Internal Committee in compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013, to consider and resolve all sexual harassment complaints reported by women. During the year, awareness regarding sexual harassment among employees was created through emails to employees. There were two complaints reported during the calendar year 2021, and accordingly, the committee has filed the complaint report with the concerned authorities in accordance with Section 22 of the aforementioned Act.
8. Talent Management and Succession Planning
Your company has the talent management process in place with the objective of developing a robust talent pipeline for the organisation, which includes the senior leadership team. As part of the talent process, we identify critical positions and assess the succession coverage for them annually. During this process, we also review the supply of talent, identify high-potential employees, and plan talent actions to meet the organisation''s talent objectives. We continue to deploy leadership development initiatives to build succession for key roles.
9. Annual Return
In compliance with the provisions Section 134(3)(a) of the Companies Act, 2013, the Annual Return as per Section 93(3) of the Companies Act, 2013, is available on the company website, which can be accessed through the following link[7].
10. Risk Management
The company has a well-defined process in place to ensure appropriate identification and mitigation of risks. The Risk Management Committee of the company has been entrusted by the Board with the responsibility of identification and mitigation plans for the ''Risks that Matter''.
Elements of risks to the company are listed in the Management Discussion and Analysis section of the Annual and Integrated Report.
11. Vigil Mechanism
Your company has adopted a Whistle Blower Policy as a part of its vigil mechanism.
The purpose of the policy is to enable any person (employees, customers, or vendors) to raise concerns regarding unacceptable improper practices and/or any unethical practices in the organisation without the knowledge of the management. All employees shall be protected from any adverse action for reporting
any unacceptable or improper practice and/or any unethical practice, fraud, or violation of any law, rule, or regulation.
This policy is also applicable to the directors of the company.
Mr. V Swaminathan, Head Corporate Audit and Assurance, has been appointed as the Whistle Blowing Officer, and his contact details have been mentioned in the policy. Furthermore, employees are free to communicate their complaints directly to the Chairman/Member of the Audit Committee, as stated in the policy. The policy is available on the internal employee portal, and the company website and can be accessed through the following link[8].
The Audit Committee reviews reports made under this policy and implements corrective actions, wherever necessary.
A. Disclosure on Conservation of Energy, Technology Absorption, Foreign Exchange Earnings, and Outgo
Annexure ''D'' of this report provides information on the conservation of energy, technology absorption, foreign exchange earnings, and outgo required under Section 134(3) (m) of the Companies Act,
2013 read with the Companies (Accounts) Rules, 2014, which forms a part of the Board''s Report.
The corporate social responsibility (CSR) Policy is available on the company website under the following link[9]. The CSR Report, along with details of CSR projects, are provided in Annexure ''E'' of this report.
The company has a stock option scheme named as ''Employee Stock Grant Scheme, 2011''. The number and the resulting value of stock grants to be given to eligible employees are decided by the Nomination and Remuneration Committee, which are based on the closing market price on the date of the grants.
The grants vest in one or more tranches as per the decision of the Nomination and Remuneration Committee with a minimum vesting period of 1 year from the grant date. Upon vesting, the eligible employee can exercise the grants and acquire equivalent shares of the face value of 1. The difference between the market price at the time of grants and that on the date of exercise is the gross gain/loss to the employee. The details of the grants allotted under the Godrej Consumer Products Limited Employee Stock Grant Scheme, 2011 and the
disclosures in compliance with Share Based Employee Benefits (SEBI) Regulations, 2014 and Section 62 1 (b) read with Rule 12 (9) of the Companies (Share Capital and Debentures) Rules, 2014 are set out in Annexure ''F''. Your company has not given a loan to any person under any scheme for or in connection with the subscription or purchase of shares in the company or the holding company. Hence, there are no disclosures on voting rights not directly exercised by the employees.
The shares of your company are listed on the BSE Limited and National Stock Exchange of India Limited. The applicable annual listing fees have been paid to the stock exchanges before the due dates. Your company is also listed on the Futures and Options Segment of the National Stock Exchange of India.
14. Business Responsibility Report
Pursuant to Regulation 34 of the Listing Regulations, the Business Responsibility Report highlighting the initiatives taken by the company in the areas of environment, social, economics, and governance is available on the website of the company and can be accessed through the following link[10].
15. Auditors and Auditors'' Report
In accordance with Section 139 of the Companies Act, 2013 and the rules made thereunder, M/s. B S R and Co. LLP, Chartered Accountants (Firm Regn. No. 101248W/W-100022) have been appointed as the statutory auditor to hold the office from the conclusion of the 17th AGM on July 31,2017, until the conclusion of the 22nd AGM in the year 2022 at a remuneration as may be approved by the Board. As the first 5-year term of the statutory auditors will be completed at this AGM, and the company has received an eligibility letter for their appointment for the second term of 5 years, a resolution for their reappointment for the second term has been included in the Notice of AGM for the approval of shareholders.
The company is maintaining requisite cost records for its applicable products.
Pursuant to directions from the Department of Company Affairs, M/s. P. M. Nanabhoy and Co., Cost Accountants, were appointed as cost auditors for the applicable products of the company for the fiscal year 2021-22. They are required to submit the report to the Central Government within 180 days of the end of the accounting year.
The Board had appointed M/s. A. N. Ramani and Co.
Company Secretaries, to conduct a secretarial audit for the fiscal year 2021-22. The Secretarial Audit Report for the fiscal year that ended on March 31,2022, is attached herewith as Annexure ''G''. The Secretarial Audit Report does not contain any qualification, reservation, or adverse remark.
Pursuant to the Listing Regulations, the Report on Corporate Governance is included in the Annual and Integrated Report. The Practising Company Secretary''s Certificate certifying the company''s compliance with the requirements of corporate governance, in terms of the Listing Regulations, is attached as Annexure ''H''.
17. Management Discussion and Analysis
Management Discussion and Analysis as stipulated under the Listing Regulations is presented in a separate section forming a part of this Annual and Integrated Report. The details pertaining to the internal financial control and its adequacy are also a part of the Annual and Integrated Report.
a. Your company is in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
b. There have been no material changes and commitments affecting the financial position of the company that have occurred between March 31, 2022, and the date of this Board''s Report.
c. There have been no instances of fraud reported by the auditors under Section 143 (12) of the Companies Act, 2013, and the rules framed thereunder, either to
the company or to the Central Government.
d. The company has not accepted any deposits from the public, and as such, no amount on the account of principal or interest on deposits from the public was outstanding as on the date of the balance sheet.
e. During the financial year 2021-22, there were no significant and material orders passed by the regulators or courts
or tribunals that can adversely impact the going concern status of the company and its operations in the future.
Your Directors wish to extend their sincere thanks to the employees of the company, central and state governments, as well as government agencies, banks, customers, shareholders, vendors, and other related organisations that
have helped in your company''s progress, as partners, through their continued support and co-operation.
Mumbai, May 19, 2022
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 an effective corporate governance, the Board should have the appropriate balance of skills, experience, and diversity of perspectives. Board appointments will be made on a merit basis, and candidates will be considered on the basis of 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 regularly review this policy to ensure its effectiveness.
GCPL''s Total Rewards Framework aims at holistically using elements such as fixed and variable compensation, long-term incentives, benefits and perquisites, and noncompensation elements (career development, work-life balance, and recognition).
The rewards framework offers employees the flexibility to customise different elements based on need. The framework is also integrated with GCPL''s performance and talent management processes and is 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 high performers and potential employees, GCPL strives to deliver the total compensation at the 75th percentile of the market.
The employees'' total cash compensation has the following three components:
1. ''Fixed Compensation''
comprising the basic salary, HRA, and retirement benefits, such as the provident fund and gratuity.
2. ''Flexible Compensation'' comprising a fixed predetermined component of employees'' compensation. The employees can allocate this amount to different components, as per their grade eligibility, defined at the start of each fiscal year.
3. ''Variable Compensation (Performance-Linked Variable Remuneration)'' comprising employee rewards for delivering superior business results and individual performance. It is designed to provide a significant upside earning potential for overachieving business results. It has a ''Collective'' component, linked to the achievement
of specified business results, relative to the target set for a given fiscal year, and an ''Individual'' component, based on an employee''s performance, as measured by the performance management process.
This scheme aims at driving a culture of ownership and focusing on long-term results. It is applicable to Godrej Leadership Forum members. Under this scheme, performance-based stock grants are awarded.
The value of the stock grant is proposed by the management and approved by the Nomination and Remuneration Committee.
227
Mar 31, 2021
Your Directors, with great pleasure, present the Annual and Integrated Report for the year ended March 31, 2021.
The financial performance of your Company for the fiscal year under review is given below.
performance of the Company''s subsidiaries in various geographies is given separately in the Board''s Report.
The shareholders may also refer to the Management Discussion and Analysis section that gives more details on the functioning of the Company.
Financials: Abridged Profit and Loss Statement |
Consolidated March 31, 2021 March 31, 2020 |
'' (Crore) Standalone March 31, 2021 March 31, 2020 |
||
Total revenue from operations |
11028.62 |
9,910.80 |
6,254.33 |
5,474.45 |
Other income |
67.07 |
112.30 |
64.74 |
91.26 |
Total income |
11095.69 |
10,023.10 |
6319.07 |
5,565.71 |
Total expenses, including depreciation and finance costs |
8,970.85 |
8,182.46 |
4,709.77 |
4,166.08 |
Profit/loss before exceptional items, share of profit of equity accounted investees, and tax |
2124.84 |
1,840.64 |
1,609.30 |
1,399.63 |
Exceptional items |
(44.87) |
(81.05) |
(15.38) |
- |
Share of profit of equity accounted investees (net of income tax) |
(0.01) |
0.81 |
- |
- |
Profit/loss before tax |
2080.36 |
1,760.40 |
1,593.92 |
1,399.63 |
Tax expense |
359.54 |
263.82 |
369.58 |
219.74 |
Profit/loss after tax |
1720.82 |
1,496.58 |
1,224.34 |
1,179.89 |
Other comprehensive income |
(163.63) |
223.20 |
1.11 |
(0.97) |
Total comprehensive income attributable to owners of the Company |
1557.19 |
1,719.78 |
1225.45 |
1,178.92 |
The surplus available for appropriation is as given below: |
||
Fiscal Year |
Fiscal Year |
|
Appropriation |
2020-21 |
2019-20 |
'' (Crore) |
'' (Crore) |
|
Surplus at the beginning of the year |
3450.43 |
3,258.64 |
Less: Transition impact of lease as per IND AS 116 (net of tax) |
0 |
1.20 |
Restated balance at the beginning of the year |
3450.43 |
3,257.44 |
Add: Net profit forthe year |
1224.34 |
1,179.89 |
Add: Remeasurements of defined benefit plans (net of tax) |
1.11 |
(0.97) |
Available for Appropriation |
4675.88 |
4,436.36 |
Less: Interim dividends |
0 |
817.82 |
Less: Tax on distributed profits |
0 |
168.11 |
Surplus Carried Forward |
4675.88 |
3,450.43 |
The Company''s Dividend Distribution Policy may also be accessed through the following link [1].
4. COVID-19
The Materiality study was carried out in fiscal year 201920. The COVID-19 pandemic had not spread at that point and so it does not appear as a material aspect. In FY20-21, however, the COVID-19 pandemic has had a multi-fold impact on the business and this impact and our mitigation strategies are discussed in detail in our Chairperson''s message and our seven Strategic Pillars.
5. Board of Directors
A. Number of Meetings
Five Board meetings were held during the year. The details of the meetings and
The Board did not declare any Interim Dividends during Fiscal Year 202021, and also has not recommended anyfinal dividend for the fiscal year.
The Board of Directors adopted the Dividend Distribution Policy pursuant to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), which requires the top 1000 listed companies (by market capitalisation) to formulate the same.
the attendance record of the Directors are given in the Corporate Governance section of the Annual Report.
During the financial year,
Mr. Vivek Gambhir tendered his resignation as Managing Director of the Company with effect from the close of business hours of June 30,
2020 for personal reasons.
His resignation was accepted by the Board of Directors at their meeting held on June 9, 2020. The Board requested Mr Vivek Gambhir to continue as a Whole-time Director up to September 30, 2020. The Board members place on record their sincere appreciation for Mr Gambhir''s contributions to the Company''s growth during his tenure as the Managing Director & CEO. Consequent to the resignation
of Mr. Gambhir, the Board, at the same meeting approved the appointment of Ms Nisaba Godrej as the Managing Director of the Company.
The Board of Directors also requested her to continue as the Chairperson of the Board till March 31,2022, and accordingly, designated her as the Chairperson and Managing Director. The shareholders approved her appointment at the Annual General Meeting (AGM) of the Company held on August 4, 2020.
At the Board meeting held on May 11,2021, the Board approved the appointment of Mr. Sudhir Sitapati as the Managing Director & CEO of the Company with effect from October 18, 2021, subject to shareholder''s approval.
The terms and conditions of appointment and the other details required pursuant to Listing Regulations and Secretarial Standards is available in Notice of the Annual General Meeting.
At the same meeting, the Board also approved the continuation of Ms. Nisaba Godrej as Whole-time Director of the Company, designated as Executive Chairperson for the period from October 18, 2021 till March 31, 2022 and thereafter carry the designation as Executive Director for her remaining term till September 30, 2022.
Mr. Aman Mehta''s second term is ending on August 31,2021.The Board of Directors place on record their sincere appreciation of the contribution made by Mr. Mehta during his tenure on the Board.
In the forthcoming AGM, Mr. Nadir Godrej will retire by rotation, and being eligible, he will be considered for reappointment.
Your Company has an Audit Committee in compliance with Section 177 of the Companies Act, 2013 and Regulation 18 of Listing Regulations. During the year, Mr. Pirojsha Godrej has been appointed as the member of the Committee with effect from October 1, 2020. The Committee consists of following Directors, viz.,
Mr Aman Mehta, Chairman of the Committee, and, Mr Narendra Ambwani, Dr Omkar Goswami, Ms Ireena Vittal,
Ms Ndidi Nwuneli, Ms Pippa Armerding, Mr Sumeet Narang, Mr. Pirojsha Godrej, all being members of the Committee.
All the Independent Directors i have given their declaration
confirming that they meet the criteria of independence as
prescribed under the provisions of the Companies Act, 2013 and the Listing Regulations, and the same has been noted by the Board of Directors. The Independent Directors also confirmed the compliance with code of conduct for directors and senior management.
E. Enrolment of Directors in Independent Directors Data Bank
As per the notification of Ministry of Corporate Affairs (MCA) dated October 22,
2019, all the Independent Directors of your Company have registered their names for inclusion in the ''Independent Director''s Data Bank'' maintained by IICA.
During the year the Independent Directors were familiarised with the Annual Operating Plan for the fiscal year 2020-21. Additionally, at all the Board meetings, detailed presentations covering business performance and financial updates were made. The programmes were conducted by the members of Company management.
The details of the same are available on the website of the Company and can be accessed through the following link[2].
G. Board Diversity Policy
The Company has in place a Board Diversity Policy, which is attached as Annexure ''A''. The criteria for determining qualification, positive attributes, and independence of Directors are as per the Board Diversity Policy, Listing Regulations, and the Companies Act, 2013.
H. Remuneration Policy
The Company''s Remuneration Policy for Directors, Key Managerial Personnel (KMP), and other employees is attached as Annexure ''B''.
The Company''s total rewards framework aims at holistically using elements such as fixed and variable compensation, long-term incentives, benefits and perquisites, and noncompensation elements (career development, work-life balance, and recognition).
The Non-Executive Directors receive sitting fees and commission in accordance with the provisions of the Companies Act, 2013.
I. Remuneration to Directors
The remuneration of Directors is in accordance with the Remuneration Policy formulated in accordance with various rules and regulations for the time being in force.
The disclosure on the details of remuneration to Directors and other employees pursuant to Section 197 read with Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 is given under Annexure ''C''. With respect to the information under Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, members may request the same by sending an email to the Company at investor. [email protected] from their registered email ID, quoting their name and Folio No.
MrAdi Godrej, Chairman Emeritus and Ms Nisaba Godrej, Chairperson & Managing Director, voluntarily waived off their remuneration for the year 2020-21 due to the lockdown imposed by the Government of India and the likely impact of the same on the Company''s performance.
Mr Vivek Gambhir, who resigned during the year, received remuneration for the period till he acted as a director in the Company.
J. Performance Evaluation of the Board of Directors, its Individual Members, and its Committees
We conducted a formal Board effectiveness review, as part of our efforts to evaluate the performance of our Board and identify areas that need improvement in order to enhance the effectiveness of the Board, its Committees, and Individual Directors. This was in line with the requirements of the Companies Act, 2013 and the Listing Regulations.
The Corporate HR team of Godrej Industries Limited and Associate Companies worked directly with the Chairperson and the Nomination and Remuneration Committee of the Board to design and execute this process. It was later adopted by the Board.
Each Board Member completed a confidential online questionnaire, sharing vital feedback on how the Board currently operates and how its effectiveness could be improved. This survey included four sections on the basis of which feedback and suggestions were compiled:
⢠Board Processes
⢠Individual Committees
⢠Individual Board Members
⢠Chairperson
The criteria for Board processes included Board composition, strategic orientation and team dynamics. Evaluation of each of the Board Committees covered whether they have well-defined objectives and the correct composition, and whether they achieved their objectives. The criteria for Individual Board Members included skills, experience, level of preparedness, attendance, extent of contribution to Board debates and discussion, and how each Director leveraged their expertise and networks to meaningfully contribute to the Company. The criteria for the Chairperson''s evaluation included leadership style and
ensure compliance with the provisions of all applicable laws, and this system is adequate and operating effectively.
6. Transfer to Investor Education and Protection Fund (IEPF)
In accordance with the applicable provisions of the Companies Act, 2013 read with Investor Education and Protection Fund (Accounting, Audit, Transfer, and Refund) Rules, 2016 (IEPF Rules), all unclaimed dividends are required to be transferred by the Company to the IEPF after completion of 7 years. Further, according to IEPF Rules, the shares on which dividend has not been claimed by the shareholders for 7 consecutive years or more shall be transferred to the demat account of the IEPF authority. Accordingly, '' 1,16,91,295 of unpaid/unclaimed dividends were transferred during the financial year 2020-21 to IEPF. No shares were required to be transferred during the current year.
The Company has appointed a Nodal Officer and Deputy Nodal Officer under the provisions of IEPF Regulations, the details of which are available on the Company website and can be accessed [3I
conduct of Board meetings.
The performance evaluation criteria for Independent Directors included a check on their fulfilment of the independence criteria and their independence from the management.
The following reports were created as part of the evaluation:
⢠Board Feedback Report
⢠Individual Board Member Feedback Report
⢠Chairperson''s Feedback Report
The overall Board Feedback was facilitated by Ms Ireena Vittal with the Independent Directors. The Directors put forth their views regarding the Board functioning effectively and identified areas that showed scope for improvement. Feedback from the Committees and Individual Board Members was shared with the Chairperson. Following her evaluation, a Chairperson''s Feedback Report was compiled.
Pursuant to the provisions contained in Section 134 (5) of the Companies Act, 2013, your Directors, based on the representation received from the Operating Management, and after due inquiry, confirm the following points:
a) In the preparation of annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same.
b) They have selected such accounting policies and applied them consistently and madejudgements and estimates 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 fiscal year and of the profit of the Company for that period.
c) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
d) They have prepared the annual accounts on a going concern basis.
e) They have laid down internal financial controls to be followed by the Company, and such internal financial controls are adequate and operating effectively.
f) They have devised a proper system to
The Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on March 31, 2020 on the Company website, which can be accessed through the following link[4]. The details of unpaid and unclaimed amounts lying with the Company as March 31, 2021 will be available on the same link within 60 days of the AGM.
The details of loans, guarantees, and investments as required by the provisions of Section 186 of the Companies Act, 2013 and the rules made thereunder are set out in the Notes to the Standalone Financial Statements of the Company.
In compliance with the Listing Regulations, the Company has a Policy for Transactions with Related Parties (RPT Policy). The RPT Policy is available on the Company website and can be accessed through the following link[5].
Apart from the Related Party Transactions in the ordinary course of business and on arm''s length basis, the details of which are given in the Notes to Financial Statements, no
other related party transactions require disclosure in the Board''s Report for complying with Section 134(3)(h) of the Companies Act, 2013. Therefore, 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.
8. Subsidiaries, Associates and Joint Venture
During the year, the following companies ceased to be the subsidiaries of your Company:
⢠Godrej Hair Care Nigeria Limited on account of its voluntary dissolution with effect from April 15, 2020.
⢠Godrej Hair Weave Nigeria Limited on account of its voluntary dissolution with effect from April 24, 2020.
⢠Godrej International Trading Company on account of its voluntary dissolution with effect from January 20, 2021.
⢠SON South Africa (Pty) Limited on account of its voluntary dissolution with effect from November 11, 2020.
During the year, the Company acquired balance 25% stake in Canon Chemicals, Kenya on May 15, 2020.
The brief details of the cluster-wise performance is given below:
The fiscal year 2021 was a challenging one for Indonesia, with the Covid-19 pandemic challenging the business environment through the year. The overall business top line grew at 4 percent in INR terms (2 percent constant currency), but at 8 per cent over a 2 year period. Despite a challenging year, we focused on strengthening the fundamentals for the future.
We made a strong foray into the Hygiene segment with growing global relevance, with our new brand Saniter launched within a month, with a portfolio across personal and home hygiene. HIT continued to deliver strong growth with innovations in burning format and launches in Aerosol segment. We bolstered category relevance for Air Fresheners in the new normal, with the launch of Stella Fresh & Protect with a functional / germ-kill proposition. We faced strong headwinds in our Baby wipes segment, with significantly heightened
competitive intensity from new / smaller players, but we have focused on rejuvenating our portfolio to clawback share in the coming year. We also significantly accelerated our Go-To-Market efforts with strong distribution expansion in General Trade, continued to strengthen our in-store execution in Modern Trade and also doubled down into ecommerce which grew at break out pace for us.
We also continued our focus on cost savings to fuel our growth investments, field macro environment & also strengthen profitability. Our margins expanded this fiscal, with the bottom line growing well ahead of the top line. We will continue to focus sharply on category development with breakthrough innovation, strong brand building and strengthening GTM.
The fiscal year 2021 witnessed strong revival in growth for our Africa, Middle East, and US business cluster. The overall business top line grew by 9 per cent in constant currency terms. While all countries faced a challenging macro environment due to COVID-19, West and South clusters bounced back from the crisis strongly and grew at break-out pace at 38 and 21 per cent in constant currency terms. US market also witnessed green shoots in latter part of the year as it recovered
from macro shocks in the first half. We faced significant cost headwinds across markets -input cost increases, adverse forex movement, factory shut downs & consumers shifting away from value-added products resulting in adverse portfolio mix. However, our robust cost optimisation programs helped minimise impact on margins, with our EBITDA margins diluting only by ~0.5%. Overall, despite a challenging year, we focused on strengthening the fundamentals for future. We have established a braid portfolio across markets to address key portfolio gaps, and have seen early momentum on braid premiumization in South Africa. We entered the ~0.5 Billion Dollar & fast growing human-hair-feel weave category across different markets, and managed to gain strong early momentum in Nigeria. We have entered the HI category in Nigeria and had strong early momentum. We also strengthened our US portfolio, by entering the >1 Billion Dollar ethnic hair fashion category , through an exclusive partnership with Walmart. We also significantly accelerated our GTM efforts in Nigeria particularly last mile distribution. Going forward, our focus would be to strengthen GTM across markets, continue improving margins by driving operational excellence, strengthening our portfolio by addressing whitespaces in hair fashion & accelerating Wet Hair /FMCG in the post-COVID
new normal. We will also ensure strong governance controls and maintain an unrelenting focus on employee / consumer safety.
Our Latin America cluster closed a strong year in a challenging environment. Net Sales (INR) grew 17 per cent while EBITDA grew at 126 per cent versus last year.
Argentina business closed another year of profitable growth. In a context of COVID restrictions and lockdowns, the team delivered a Top Line growth of 60 per cent in constant currency (17 per cent in INR), driven by Distribution, COMEX expansion and Innovation. EBITDA grew 166% percent in constant currency (89 per cent in INR) achieving an EBITDA margin of 14%, the highest ever for the market. Profit improvements led to a healthy NWC reduction.
Our Chile business grew Net Sales at 22 percent (CC and INR) driven by a strong performance of Hair Color,
Hair Removal and Traditional Channel. EBITDA grew by 255 per cent (in INR) driven by efficiencies and better absorption of fixed costs.
Looking ahead, we will continue focusing on profitable growth and working capital management to strengthen our Latin America businesses.
In compliance with the Listing Regulations, the Board has adopted a policy for determining material subsidiaries. This policy is available on the Company website and can be accessed through the following link[6].
A statement containing the salient features of the financial statements of subsidiary/ joint venture /associate companies, of the Company in the prescribed Form AOC-1 a part of consolidated financial statements (CFS) in compliance with Section 129(3) and other applicable provisions, if any, of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014.
The said form also highlights the financial performance of each of the subsidiaries and joint venture companies included in the CFS of the Company pursuant to Rule 8(1) of the Companies (Accounts) Rules, 2014.
9. Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
Your Company has complied with the provisions relating to
the constitution of the Internal Committee in compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 to consider and resolve all sexual harassment complaints reported by women. During the year, e-learning modules were made available to create awareness regarding sexual harassment among employees. No complaint was reported during calendar year 2020, and hence, the Committee has not filed any complaint report with the concerned authorities, in accordance with Section 22 of the aforementioned Act.
10. Talent Management and Succession Planning
Your Company has the talent management process in place with an objective of developing a robust talent pipeline for the organisation, which includes the senior leadership team. As part of the talent process, we identify critical positions and assess the succession coverage for them annually. During this process, we also review the supply of talent, identify high-potential employees, and plan talent actions to meet the organisation''s talent objectives. We continue to deploy leadership development initiatives to build succession
11. Annual Return
In compliance with the provisions Section 134(3)(a) of the Companies Act, 2013, the Annual Return as per Section 93(3) of the Companies Act, 2013 is available on the Company website, which can be accessed through the following link[7].
12. Risk Management
The Company has a well-defined process in place to ensure appropriate identification and mitigation of risks. The Risk management Committee of the Company has been entrusted by the Board with the responsibility of identification and mitigation plans for the ''Risks that Matter''.
Elements of risks to the Company are listed in the Management Discussion and Analysis Section of the Annual and Integrated Report.
13. Vigil Mechanism
Your Company has adopted a Whistle Blower Policy as a part of its vigil mechanism.
The purpose of the policy is to enable any person (employees, customers, or vendors) to raise concerns regarding unacceptable improper practices and/or any unethical practices in the organisation
without the knowledge of the management. All employees shall be protected from any adverse action for reporting any unacceptable or improper practice and/or any unethical practice, fraud, or violation of any law, rule, or regulation.
This policy is also applicable to the Directors of the Company.
Mr V Swaminathan, Head Corporate Audit and Assurance, has been appointed as the ''Whistle Blowing Officer'', and his contact details have been mentioned in the policy. Furthermore, employees are free to communicate their complaints directly to the Chairman/Member of the Audit Committee, as stated in the policy. The policy is available on the internal employee portal as well as the Company website and can be accessed through the following link[8].
The Audit Committee reviews reports made under this policy and implements corrective actions wherever necessary.
A. Disclosure on Conservation of Energy, Technology Absorption, Foreign Exchange Earnings, and Outgo
Annexure ''D'' of this Report provides information on the conservation of energy, technology absorption, foreign exchange earnings, and outgo required under Section 134(3) (m) of the Companies Act,
2013 read with the Companies (Accounts) Rules, 2014, which forms a part of the Board''s Report.
During the year, there was an amendment in CSR Regulations, which required amendments in the CSR Policy of the Company. The revised Policy is available on the Company website under the following link[9]. The CSR Report, along with details of CSR projects, are provided in Annexure ''E'' to this report.
The Company has a stock option scheme named as ''Employee Stock Grant Scheme, 2011''. The number and the resulting value of stock grants to be given to eligible employees are decided by the Nomination and Remuneration Committee, which are based on the closing market price on the date of the grants.
The grants vest in one or more tranches as per the decision of the Nomination and Remuneration Committee with a minimum vesting period of 1 year from the grant date. Upon vesting, the eligible employee can exercise the grants and acquire equivalent shares of face value of '' 1.
The difference between the market price at the time of
grant and that on the date of exercise is the gross gain/loss to the employee. The details of the grants allotted under the Godrej Consumer Products Limited Employee Stock Grant Scheme, 2011 and the disclosures in compliance with SEBI (Share Based Employee Benefits) Regulations, 2014 and Section 62 1 (b) read with Rule 12 (9) of the Companies (Share Capital and Debentures) Rules, 2014 are set out in Annexure ''F''. Your Company has not given loan to any person under any scheme for or in connection with the subscription or purchase of shares in the Company or the holding Company. Hence, there are no disclosures on voting rights not directly exercised by the employees.
The shares of your Company are listed at the BSE Limited and National Stock Exchange of India Limited. The applicable annual listing fees have been paid to the stock exchanges before the due dates. Your Company is also listed on the Futures and Options Segment of the National Stock Exchange of India.
16. Business Responsibility Report
Pursuant to Regulation 34 of the Listing Regulations, the Business Responsibility Report
highlighting the initiatives taken by the Company in the areas of environment, social, economic, and governance is available on the website of the Company and can be accessed through the following link[10].
17. Auditors and Auditors'' Report
In accordance with Section 139 of the Companies Act,
2013 and the Rules made thereunder, M/s. BSR and Co., LLP, Chartered Accountants (Firm Regn. No. 101248W/W-100022) have been appointed as the statutory auditor to hold the office from the conclusion of the 17th AGM on July 31,
2017 until the conclusion of the 22nd AGM in the year 2022 at a remuneration as may be approved by the Board.
The Company is maintaining requisite cost records for the applicable products of the Company. Pursuant to directions from the Department of CompanyAffairs, M/s. P.
M. Nanabhoy and Co., Cost Accountants, were appointed as cost auditors for the applicable products of the Company for the fiscal year 2020-21. They are required to submit the report to the Central Government within 180 days from the end of the accounting year.
The Board had appointed M/s. A. N. Ramani and Co., Company Secretaries, Practising Company Secretary, to conduct a secretarial audit for the fiscal year 2020-21. The Secretarial Audit Report for the fiscal year ended March 31, 2021 is attached herewith as Annexure ''G''. The Secretarial Audit Report does not contain any qualification, reservation, or adverse remark.
Pursuant to the Listing Regulations, the Report on Corporate Governance is included in the Annual and Integrated Report. The Practicing Company Secretary''s Certificate certifying the Company''s compliance with the requirements of corporate governance, in terms of the Listing Regulations, is attached as Annexure ''H''.
19. Management Discussion and Analysis
Management Discussion and Analysis as stipulated under the Listing Regulations is presented in a separate section forming a part of this Annual and Integrated Report. The details pertaining to internal financial control and their adequacy are also part of the Annual and Integrated Report.
⢠Your Company is in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
⢠There have been no material changes and commitments affecting the financial position of the Company that have occurred between March 31, 2021 and the date of this Board''s Report.
⢠There have been no instances of frauds reported by the auditors under Section 143 (12) of the Companies Act, 2013 and the Rules framed thereunder, either to the Company or to the Central Government.
⢠The Company has not accepted any deposits from public, and as such, no amount on the account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.
⢠During the Financial Year 2020-21, there were no significant and material orders passed by the regulators or Courts
or Tribunals that can adversely impact the going concern status of the Company and its
nnorotiAnc in ri i i Iro
Your Directors wish to extend their sincere thanks to the employees of the Company, central and state governments, as well as government agencies, banks, customers, shareholders, vendors, and other related organisations that have helped in your Company''s progress, as partners, through their continued support and co-operation.
Mar 31, 2019
Dear Members,
The Directors, with great pleasure, present the Annual and Integrated Report for the year ended March 31, 2019.
1. RESULTS OF OUR OPERATIONS
Fiscal year 2018-19 was a mixed bag. While the India business continued to deliver strong profits and increased profit margins to industry leading levels, it was a challenging year for top-line growth. Our soaps, hair colour and air freshener categories performed relatively well. However, our largest category, household insecticides, was significantly impacted by a surge in illegal and unsafe mosquito incense sticks and an unfavourable season. We are taking numerous corrective actions to recover our performance over the next year.
This has been an active year on innovations, with multiple new products launched across categories. Godrej protekt Mr. Magic hand wash is the first ever powder-to-liquid hand wash, designed to be more environmentally sustainable, while also democratising the low penetration hand wash category. We extended our Cinthol portfolio to foray into the growing male grooming category, with a range of multi-benefit products for the face, body, hair and beard. Through Godrej Nupur Natural Henna Based Hair Colour, we are extending our strong henna play to the herbal-based powder hair colour segment. In Goodknight, we introduced Power Chip, an electric solution infused with unique gel technology, a higher efficacy liquid vapouriser and 100 per cent natural mosquito repellent incense sticks.
On a consolidated basis, we reported a comparable sales growth of 7 per cent (excluding the UK business which was divested during the year) and a comparable PAT growth of 40 per cent (excluding the UK business).
An overview on the performance of the Companyâs subsidiaries in various geographies is given separately in the Boardâs Report.
The Shareholders may also refer to the Management Discussion & Analysis Section which gives more details on the functioning of the Company.
The financial performance of your Company for the fiscal year under review is summarised as follows:
Rs. (Crore)
Financials Abridged Profit and Loss Statement |
Consolidated |
Standalone |
|||||
March 31, 2019 |
March 31, 2018 |
March 31, 2019 |
March 31, 2018 |
||||
Total Revenue From Operations |
10,314.34 |
9,936.99 |
5,679.31 |
5,354.74 |
|||
Other Income |
108.76 |
107.55 |
94.45 |
73.89 |
|||
Total Income |
10,423.10 10,044.54 |
|
5,773.76 |
5,428.63 |
|||
Total Expenses including Depreciation and Finance Costs |
8,590.96 |
8,186.30 |
4,300.68 |
4,139.62 |
|||
Profit/(Loss) Before Exceptional Items, Share of Profit of Equity Accounted Investees, and Tax |
1,832.14 |
1,858.24 |
1,473.08 |
1,289.01 |
|||
Exceptional Items |
252.56 |
179.56 |
- |
- |
|||
Share of Profit of Equity Accounted Investees (Net of Income Tax) |
0.63 |
1.08 |
- |
- |
|||
Profit/(Loss) Before Tax |
2,085.33 |
2,038.88 |
1,473.08 |
1,289.01 |
|||
Tax Expense/(Income) |
(256.2) |
404.70 |
(281.90) |
289.14 |
|||
Profit/(Loss) After Tax |
2,341.53 |
1,634.18 |
1,754.98 |
999.87 |
|||
Other Comprehensive Income |
138.51 |
36.95 |
(0.17) |
(1.97) |
|||
Total Comprehensive Income for the Period attributable to Owners |
2,480.04 |
1,671.13 |
1,754.81 |
997.90 |
|||
2. APPROPRIATION
Your Directors recommend appropriation as under:
Appropriation |
Fiscal Year 2018-19 Rs.(Crore) |
Fiscal Year 2017-18 Rs.(Crore) |
Surplus at the Beginning of the Year |
2,982.46 |
2,722.50 |
Less: Remeasurements of Defined Benefit Plans |
0.17 |
1.97 |
Add: Net Profit for the Year |
1,754.98 |
999.87 |
Available for Appropriation |
4,737.27 |
3,720.40 |
Less: Interim Dividends |
1,226.52 |
613.12 |
Less: Tax on Distributed Profits |
252.11 |
124.82 |
Surplus Carried Forward |
3,258.64 |
2,982.46 |
3. CHANGE IN CAPITAL STRUCTURE
During the year, the Company has increased its authorised share capital from Rs.70 crore to Rs.104 crore. The shareholders vide their resolution dated September 5, 2018, had approved the issue of Bonus shares in the ratio of 1:2, that is, one bonus equity share of Rs.1 each for every two fully paid-up equity shares held. Accordingly, the Company has issued and allotted 34,07,22,032 equity shares after which the post issue paid up capital of the Company increased from Rs.68.13 crore to Rs.102.22 crore.
4. DIVIDEND
A. Dividend Declared
During the fiscal year 2018-19, the following interim dividends were declared on shares of face value of Rs.1 each.
Declared at the Board Meeting Dated |
Dividend Rate Per Share on Shares of Face Value of Rs.1 Each |
Record Date |
May 8, 2018 |
7.00* |
May 16, 2018 |
July 30, 2018 |
2.00* |
August 7, 2018 |
November 2, 2018 |
4.00 |
November 14, 2018 |
January 29, 2019 |
2.00 |
February 6, 2019 |
*Note: The dividend declared on May 8, 2018 and July 30, 2018 are on the pre-bonus paid-up capital, and all the subsequent dividends are on the post-bonus paid-up capital. Subsequent to the close of fiscal year 2018-19, the Board has declared an interim dividend of Rs.2 per equity share. The record date for the same is May 13, 2019. This dividend will be accounted in fiscal year 2019-20.
B. Dividend Distribution Policy
The Board of Directors adopted the Dividend Distribution Policy pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Regulations), which requires the top 500 listed companies (by market capitalisation) to formulate the same. The Companyâs Dividend Distribution Policy may also be accessed through the following link[1].
5. BOARD OF DIRECTORS
A. Number of Meetings and Appointment of Directors
Four Board meetings were held during the year. The details of the meetings and the attendance record of the Directors are in the Corporate Governance section of the Annual Report.
B. Appointment/Reappointment/ Retirement of Directors
Mr. Sumeet Narang was appointed as an Additional Independent Director at the Board meeting held on January 29, 2019, with effect from April 1, 2019. Sumeet has experience of making investments in businesses in emerging categories in India and working closely with management teams in scaling business. Sumeetâs appointment will enable GCPL to leverage his significant expertise and perspective to guide GPCLâs growth strategy.
Mr. Bharat Doshiâs tenure of 5 years is ending on September 25, 2019, and he has expressed his desire to not offer himself for reappointment for another term. The Board of Directors places on record its sincere appreciation of the contribution made by Mr. Doshi during his tenure on the Board.
The first term of 5 years of Mr. Narendra Ambwani is ending on July 27, 2019. The first term of 5 years of Mr. Aman Mehta, Dr. Omkar Goswami and Ms. Ireena Vittal is ending on September 25, 2019. Based on their successful performance evaluations, the Nomination and Remuneration Committee has recommended their reappointment for a second term as follows:
Mr. Narendra Ambwani - Term from July 28, 2019 to November 14, 2023
Mr. Aman Mehta - Term from September 26, 2019 to August 31,2021
Ms. Ireena Vittal and Dr. Omkar Goswami - Term of 5 years from September 26, 2019 to September 25, 2024
The special resolutions for the above reappointments are included in the notice of the Annual General Meeting (AGM).
In the forthcoming AGM,
Mr. Nadir Godrej and Mr. Jamshyd Godrej will retire by rotation and being eligible will be considered for re-appointment.
C. Audit Committee of the Board of Directors
Your Company has an Audit Committee in compliance with Section 177 of the Companies Act, 2013 and Regulation 18 of Listing Regulations. The Committee consists entirely of the Independent Directors Mr. Bharat Doshi, Mr. Narendra Ambwani, Dr. Omkar Goswami, Mr. Aman Mehta, Ms. Ireena Vittal, Ms. Ndidi Nwuneli and Ms. Pippa Armerding as members. Mr. Sumeet Narang has also been appointed as a member of the Audit Committee with effect from April 1, 2019, consequent to his appointment on the Board as an Independent Director. Mr Bharat Doshi has stepped down as the Chairman of the Committee from April 1, 2019 and Mr Aman Mehta has been appointed as the Chairman of the Committee with effect from the same date.
D. Declaration from Independent Directors
All the Independent Directors have given their declaration confirming that they meet the criteria of independence as prescribed under the provisions of the Companies Act, 2013 and the Listing Regulations, and the same has been noted by the Board of Directors.
E. Familiarisation Programmes
Several familiarisation programmes for the Independent Directors were conducted during the year, covering topics like Annual Operating Plan for fiscal year 2018-19, update on key amendment to the SEBI Listing Regulations and actionables for the Company arising out of the amendments and in-depth presentation on household insecticides business by the business head. Additionally, at all the Board meetings, detailed presentations covering business performance and financial updates were made. The number of hours of the familiarisation programmes conducted may be accessed through the following link[2].
F. Board Diversity Policy
The Company has in place a Board Diversity Policy, which is attached as Annexure âAâ.
The criteria for determining qualification, positive attributes and independence of Directors are as per the Board Diversity Policy, Listing Regulations and the Companies Act, 2013.
G. Remuneration Policy
The Companyâs Remuneration Policy for Directors, key managerial personnel (KMP) and other employees is attached as Annexure âBâ.
The Companyâs total rewards framework aims at holistically using elements such as fixed and variable compensation, long-term incentives, benefits and perquisites, and noncompensation elements (career development, work-life balance and recognition). The Non-Executive Directors receive sitting fees and commission in accordance with the provisions of the Companies Act, 2013.
H. Remuneration to Directors
The remuneration of Directors is in accordance with the remuneration policy formulated in accordance with various rules and regulations for the time being in force. The disclosure on the details of remuneration to Directors and other employees pursuant to Section 197 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given under Annexure âCâ. The information required under Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not being sent along with this report. However, this annexure is available on the Company website. Members who are interested in obtaining these particulars may write to the Company Secretary at the Registered Office of the Company. The aforesaid annexure is also available for inspection at the Registered Office of the Company during working hours, up to the date of the AGM. Mr. Adi Godrej, Chairman Emeritus; Ms. Nisaba Godrej, Executive Chairperson; and Mr. Vivek Gambhir, Managing Director and CEO, receive remuneration from your Company.
I. Performance Evaluation of the Board of Directors, its Individual Members and its Committees
We conducted a formal Board effectiveness review, as part of our efforts to evaluate the performance of our Board and identify areas that need improvement in order to enhance the effectiveness of the Board, its Committees, and Individual Directors. This was in line with the requirements of the Companies Act, 2013 and the Listing Regulations. The Corporate HR team of Godrej Industries Limited and Associate Companies worked directly with the Chairperson and the Nomination and Remuneration Committee of the Board to design and execute this process. It was later adopted by the Board.
Each Board Member completed a confidential online questionnaire, sharing vital feedback on how the Board currently operates and how its effectiveness could be improved. This survey included four sections on the basis of which feedback and suggestions were compiled:
- Board processes
- Individual Committees
- Individual Board Members
- Chairperson
The criteria for Board processes included Board composition, strategic orientation and team dynamics. Evaluation of each of the Board Committees covered whether they have well-defined objectives and the correct composition, and whether they achieved their objectives. The criteria for Individual Board Members included skills, experience, level of preparedness, attendance, extent of contribution to Board debates and discussion, and how each Director leveraged their expertise and networks to meaningfully contribute to the Company. The criteria for the Chairpersonâs evaluation included leadership style and conduct of Board meetings.
The performance evaluation criteria for Independent Directors included a check on their fulfilment of the independence criteria and their independence from the management.
The following reports were created as part of the evaluation:
- Board Feedback Report
- Individual Board Member Feedback Report
- Chairpersonâs Feedback Report
The overall Board Feedback was facilitated by Mr. Bharat Doshi with the Independent Directors. The Directors were not only vocal regarding the Board functioning effectively but also identified areas that showed scope for improvement. Feedback from the Committees and Individual Board Members was shared with the Chairperson. Following her evaluation, a Chairpersonâs Feedback Report was compiled.
J. Directorsâ Responsibility Statement
Pursuant to the provisions contained in Section 134(5) of the Companies Act, 2013, your Directors, based on the representation received from the Operating Management, and after due inquiry, confirm the following:
a) 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) They have selected such accounting policies and applied them consistently and made judgements and estimates 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 fiscal year and of the profit of the Company for that period
c) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities
d) They have prepared the annual accounts on a going concern basis
e) They have laid down internal financial controls to be followed by the Company, and such internal financial controls are adequate and operating effectively
f) They have devised a proper system to ensure compliance with the provisions of all applicable laws, and this system is adequate and operating effectively
6. Transfer to IEPF
In accordance with the applicable provisions of Companies Act, 2013 read with Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016 (âIEPF Rulesâ), all unclaimed dividends are required to be transferred by the Company to the IEPF, after completion of 7 years. Further, according to IEPF Rules, the shares on which dividend has not been claimed by the shareholders for seven consecutive years or more shall be transferred to the demat account of the IEPF authority. Accordingly, Rs.86,83,307 of unpaid/ unclaimed dividends and 9,22,131 shares (including 8,35,029 bonus shares declared in September 2018) were transferred during the financial year 2018-19 to the Investor Education and Protection Fund.
The Company has appointed a Nodal Officer under the provisions of IEPF Regulations, the details of which are available on the website of the Company, which can be accessed through the following link[3].
The Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on July 30, 2018 (date of last AGM) on the Companyâs website, which can be accessed through the following link[4] and of the Ministry of Corporate Affairs website at www.iepf.gov.in.
7. Finance
A. Loans, Guarantees and Investments
The details of loans, guarantees and investments as required by the provisions of Section 186 of the Companies Act, 2013, and the rules made thereunder are set out in the Notes to the Standalone Financial Statements of the Company.
B. Related Party Transactions
In compliance with the Listing Regulations, the Company has a policy for transactions with Related Parties (RPT Policy). During the year, the Company has revised its Policy on dealing with Materiality of Related Party Transactions, in accordance with the amendments to the applicable provisions of the Listing Regulations. The RPT Policy is available on the Company website, which can be accessed through the following link[5].
Apart from the Related Party Transactions in the ordinary course of business and on armâs length basis, the details of which are given in the notes to financial statements, no other related party transactions require disclosure in the Boardâs Report, for compliance with Section 134(3)(h) of the Companies Act, 2013. Therefore, 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.
8. Subsidiaries, Associates and Joint Venture
During the year, the following company became a subsidiary of your Company:
- Godrej CP Malaysia BHD
During the year, the following companies have ceased to be the subsidiaries of your Company:
- Argencos SA on account of its merger with Laboratoria Cuenca
- Godrej Consumer Products UK Ltd. on account of divestment of stake in that Company
During the year, the following company has ceased to be the Joint Venture of your Company:
- Godrej Easy IP Holding Ltd.
A. Report on the Performance of Subsidiaries and Associates
The business details of the key subsidiaries are provided in the Management Discussion & Analysis section of this Annual Report. While the Review of Operations section mentions the details regarding the performance of your Companyâs India business, we provide brief details on the performance of other clusters below:
Indonesia
Our Indonesia business posted a strong turnaround in fiscal year 2019, growing by 11 per cent in constant currency terms, recovering from the 6 per cent top-line decline in the previous fiscal. Our growth was led by HIT, with strong share revival backed by at-scale media investments, break-the-clutter communication and strategic trade spends. This fiscal was also a milestone year for us in terms of innovation, with the highest ever new product launches in a year. We had four strong launches this year, all aimed at category development and with strong product differentiation. In household insecticides, we launched Long Lasting Paper (LLP) under the expert platform that we launched in the previous fiscal. LLP is a superior overnight solution, longer lasting as well as more effective than coil; it targets upgrading coil users and gained a share of the coil market, a segment we earlier did not compete in. We also forayed into other pests, by launching HIT Roach Aerosol, as part of our strategy to address market whitespaces. In air care, we launched the parfumist platform, a range of premium air fragrancing solutions. Under this platform, we launched a new Matic during the festive Lebaran season, aimed at driving upgrades in-home, and Twist, a car dashboard solution, aiming to drive car air freshener penetration. HIT Expert Aerosol, launched in the previous fiscal, continued to do well and build strong equity for the overall HIT Aerosol portfolio. We backed all our new products with strong media and trade investments.
We also focused on cost savings through direct cost and fixed overhead optimisations to enable strong investments in brand and channel building. Our margins expanded this fiscal, with bottom line growing well ahead of top line. We continue to focus sharply on category development with breakthrough innovation, strong brand building and driving balanced growth across our portfolio.
Africa, Middle East and USA
Fiscal year 2019 was a challenging year for our Africa, Middle East and US business cluster. The overall business grew by 5 per cent in constant currency terms. On top line, while most countries performed moderately well, we faced slowdown in South Africa due to macro-economic challenges. We faced favourable currency movement due to which the Rupee translation was better at 12 per cent. We faced bottom-line challenges due to inventory aging issues given the nature of fashion in the dry hair market. Despite a challenging year, we focused on strengthening the fundamentals for future.
We turned around the Kenya business, driven by an enhanced operating model. Brand building through the Darling re-launched drove strong top-line growth in Nigeria. The US business, Strength of Nature, grew strongly despite soft macro factors, driven by our entry into the naturals space. We also established strong beach heads in Tanzania and Zambia. Going forward, our focus would be to strengthen margins, strategically drive âFast Fashionâ to avoid inventory issues and drive faster ramp-up of wet hair.
Latin America
Our Argentina business was mired in unprecedented macroeconomic challenges this year, with the highest ever currency devaluation in recent years driven by hyper-inflation and the economy shrinking. The business performed well on top line, with 34 per cent growth in constant currency terms, driven by our gaining volume share while also increasing prices well ahead of inflation. However, due to the currency devaluation, this did not translate in Rupee terms. We also faced bottom-line pressures this year, with working capital requirements increasing.
Our Chile business too faced strong macro headwinds with heightened competitive intensity and the category in some of our key-channels de-growing. As a result, our top-line declined by 13 per cent in constant currency terms with muted performance on bottom line as well, driven by increased trade spends to counter competition and working capital requirements.
Looking ahead, we will focus disproportionately on margin improvement and working capital management to turn our Latin America businesses around.
United Kingdom
We divested our UK business in Q2, this fiscal, in line with our overall GCPL-wide strategy of focusing on our core categoriesâhome insecticides, personal care, hair care and air care.
B. Policy on Material Subsidiaries
In compliance with the Listing Regulations, the Board has adopted a policy for determining material subsidiaries. This policy is available on the Company website, which can be accessed through the following link[6].
C. Financial Performance
A statement containing the salient features of financial statements of subsidiaries/joint venture companies of the Company in the prescribed Form AOC-1 forms a part of consolidated financial statements (CFSs) in compliance with Section 129 (3) and other applicable provisions, if any, of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014.
The said form also highlights the financial performance of each of the subsidiaries and joint venture companies included in the CFS of the Company pursuant to Rule 8(1) of the Companies (Accounts) Rules, 2014.
9. SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has complied with the provisions relating to the constitution of the Internal Committee in compliance with Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 to consider and resolve all sexual harassment complaints reported by women. During the year, in-person and e-learning workshops were conducted to create awareness regarding sexual harassment among employees. There was one complaint during the calendar year 2018, and hence, the Committee filed one complaint report with the concerned authorities, in compliance with Section 22 of the aforementioned act.
10. TALENT MANAGEMENT AND SUCCESSION PLANNING
Your Company has the talent management process in place with an objective of developing a robust talent pipeline for the organisation which includes the senior leadership team. As part of the talent process, we identify critical positions and assess the succession coverage for them annually. During this process, we also review the supply of talent, identify high potential employees and plan talent actions to meet the organisationâs talent objectives.
We continue to deploy leadership development initiatives to build succession for key roles.
11. ANNUAL RETURN
In compliance with the provisions Section 134(3)(a) of the Companies Act, 2013, the Annual Return of the Company as per Section 92(3) of the Act is available on the Company website, which can be accessed through the following link[7].
12. RISK MANAGEMENT
The Company has a well-defined process in place to ensure appropriate identification and mitigation of risks. The Risk Management Committee of the Company has been entrusted by the Board with the responsibility of identification and mitigation plans for the âRisks that Matterâ.
Elements of risks to the Company are listed in the Management Discussion and Analysis Section of the Annual and Integrated Report.
13. VIGIL MECHANISM
Your Company has adopted a Whistle Blower Policy as a part of its vigil mechanism. The purpose of the policy is to enable any person (employees, customers or vendors) to raise concerns regarding unacceptable improper practices and/or any unethical practices in the organisation without the knowledge of the management. All employees shall be protected from any adverse action for reporting any unacceptable or improper practice and/or any unethical practice, fraud or violation of any law, rule or regulation. This policy is also applicable to the Directors of the Company.
Mr. V Swaminathan, Head-Corporate Audit and Assurance, has been appointed as the âWhistle Blowing Officerâ, and his contact details have been mentioned in the policy. Furthermore, employees are also free to communicate their complaints directly to the Chairman/ Member of the Audit Committee, as stated in the policy. The policy is available on the internal employee portal as well as the Companyâs website and can be accessed through the following link[8]. The Audit Committee reviews reports made under this policy and implements corrective actions, wherever necessary.
14. ANNEXURES
A. Disclosure on Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo Annexure âDâ of this Report provides information on the conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, which forms a part of the Boardâs Report.
B. Corporate Social Responsibility
Your Company has a well-documented Corporate Social Responsibility (CSR) Policy, and the same is available on the website of the Company under the following link[9]. The CSR Report along with details of CSR projects are provided in Annexure âEâ to this Report.
C. Employee Stock Option Scheme
The Company has a stock option scheme named as âEmployee Stock Grant Scheme, 2011â. The number and the resulting value of stock grants to be given to eligible employees is decided by the Nomination and Remuneration Committee, which is based on the closing market price on the date of the grants. The grants vest in one or more tranches as per the decision of the Nomination and Remuneration Committee with a minimum vesting period of 1 year from the grant date. Upon vesting, the eligible employee can exercise the grants and acquire equivalent shares of face value Rs.1. The difference between the market price at the time of grant and the market price on the date of exercise is the gross gain/loss to the employee. The details of the grants allotted under Godrej Consumer Products Limited Employee Stock Grant Scheme, 2011, as also the disclosures in compliance with SEBI (Share Based Employee Benefits) Regulations, 2014, and Section 62 1(b) read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014 are set out in Annexure âFâ.
Your Company has not given loan to any person under any scheme for or in connection with the subscription or purchase of shares in the Company or the holding Company. Hence, there are no disclosures on voting rights not directly exercised by the employees with respect to the shares to which the scheme relates.
15. LISTING
The shares of your Company are listed at the BSE Limited and the National Stock Exchange of India Limited. The applicable annual listing fees have been paid to the Stock Exchanges before the due dates. Your Company is also listed on the Futures & Options Segment of the National Stock Exchange of India.
16. BUSINESS RESPONSIBILITY REPORT
Pursuant to Regulation 34 of the Listing Regulations, the Business Responsibility Report highlighting the initiatives taken by the Company in the areas of environment, social, economic and governance is available on the website of the Company, which can be accessed through the following link[10].
17.AUDITORS AND AUDITORSâ REPORT
A. Statutory Auditors
In accordance with Section 139 of the Companies Act, 2013 and the Rules made thereunder, M/s. B S R and Co., LLP, Chartered Accountants (Firm Regn. No. 101248W/W-100022) has been appointed as the statutory auditor to hold office from the conclusion of the 17th AGM on July 31, 2017 until the conclusion of the 22nd AGM in the year 2022, at a remuneration as may be approved by the Board.
B. Cost Auditors
The Company is maintaining requisite cost records for the applicable products of the Company. Pursuant to directions from the Department of Company Affairs, M/s. P. M. Nanabhoy and Co., Cost Accountants, were appointed as cost auditors for the applicable products of the Company for the fiscal year 2018-19. They are required to submit the report to the Central Government within 180 days from the end of the accounting year.
C. Secretarial Auditors
The Board had appointed M/s. A. N. Ramani and Co., Company Secretaries, Practising Company Secretary, to conduct a secretarial audit for the fiscal year 2018-19. The Secretarial Audit Report for the fiscal year ended March 31, 2019 is attached herewith as Annexure âGâ. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
18. CORPORATE GOVERNANCE
Your Company continues to enjoy a Corporate Governance Rating of CGR2 (pronounced CGR 2 plus) and a Stakeholder Value Creation and Governance Rating of SVG1 (pronounced SVG one). The â â sign indicates a relatively high standing within the category indicated by the rating. The aforementioned ratings are on a scale of 1 to 6, where 1 is the highest rating.
The two ratings indicate whether a company is being run on the principles of corporate governance and whether the practices followed by the company lead to value creation for all its shareholders. The CGR2 rating is on a scale of CGR1 to CGR6, where CGR1 denotes the highest rating. The CGR2 rating implies that according to ICRAâs current opinion, the rated company has adopted and follows such practices, conventions and codes that would provide its financial stakeholders a high level of assurance of the quality of corporate governance.
The SVG1 rating is on a scale of SVG1 to SVG6, where SVG1 denotes the highest rating. The SVG1 rating implies that according to ICRAâs current opinion, the company belongs to the highest category of the composite parameters of stakeholder value creation and management as well as corporate governance practices.
Pursuant to the Listing Regulations, the Report on Corporate Governance is included in the Annual and Integrated Report. The Practicing Company Secretaryâs Certificate certifying the Companyâs compliance with the requirements of corporate governance, in terms of the Listing Regulations, is attached as Annexure âHâ.
19.MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis as stipulated under the Listing Regulations is presented in a separate section forming a part of this Annual and Integrated Report.
20. CONFIRMATIONS
- Your Company is in compliance with the Secretarial Standards on Meetings of the Board of Directors (SS-1) and Secretarial Standards on General Meetings (SS-2) issued by the Institute of Company Secretaries of India (ICSI).
- There have been no material changes and commitments affecting the financial position of the Company which have occurred between the March 31, 2019 and the date of this Boardâs Report (i.e. May 3, 2019).
- There have been no instances of frauds reported by the auditors under Section 143(12) of the Companies Act, 2013 and the Rules framed thereunder, either to the Company or to the Central Government.
- During the Financial Year 2018-19, there were no significant and material orders passed by the regulators or Courts or Tribunals which can adversely impact the going concern status of the Company and its operations in future.
21. APPRECIATION
Your Directors wish to extend their sincere thanks to the employees of the Company, central and state governments as well as the government agencies, banks, customers, shareholders, vendors and other related organisations that have helped in your Companyâs progress, as partners, through their continued support and co-operation.
For and on behalf of the Board of Directors
Nisaba Godrej
Executive Chairperson
Mumbai, May 03, 2019
Mar 31, 2018
DIRECTORSâ REPORT
Dear Members,
The Directors, with great pleasure, present the Annual Report for the year ended March 31, 2018.
1. Review of Operations
Your Company has delivered another year of competitive and profitable growth. Our focused approach and strong execution have enabled us to deliver an ahead-of-market performance over the past few years. During the fiscal year 2017-18, we reported a sales growth of 3 per cent (on a consolidated basis) and an EBITDA growth of 10 per cent.
In India, we continued to deliver a superior performance, with a sales growth of 10 per cent (adjusted for GST), gaining shares across most key brands. We forayed into the professional hair care with the launch of Godrej Professional. In Goodknight, we introduced Power Chip, an electric solution infused with unique gel technology, and a higher efficacy liquid vaporizer.
We were among Indiaâs âGreat Place to Work - Top 25 Best Workplaces in Manufacturing: 2018â. We also ranked number 20 on the âGreat Place to Work - Best Workplaces in Asia 2018â list and were among the Aon Hewitt Best Employers in India.
The financial performance of your Company for the fiscal year under review is summarized as follows: _
_Rs, (Crore)
Financials Abridged Profit and Loss Statement |
Consolidated |
Standalone |
||
March 31, 2018 March 31, 2017 |
March 31, 2018 March 31, 2017 |
|||
Total Revenue From Operations |
9936.99 |
9608.80 |
5354.74 |
5088.99 |
Other Income |
107.55 |
75.30 |
73.89 |
63.60 |
Total Income |
10044.54 |
9684.10 |
5428.63 |
5152.59 |
Total Expenses including Depreciation and Finance Costs |
8186.30 |
7997.87 |
4139.62 |
4045.42 |
Profit/(Loss) Before Exceptional Items, Share of Profit of |
1858.24 |
1686.23 |
1289.01 |
1107.17 |
Equity Accounted Investees, and Tax |
||||
Exceptional Items |
179.56 |
0.08 |
- |
- |
Share of Profit of Equity Accounted Investees (Net of |
1.08 |
0.82 |
- |
- |
Income Tax) |
||||
Profit/(Loss) Before Tax |
2038.88 |
1687.13 |
1289.01 |
1107.17 |
Tax Expense |
404.70 |
379.16 |
289.14 |
259.45 |
Profit/(Loss) After Tax |
1634.18 |
1307.97 |
999.87 |
847.72 |
Other Comprehensive Income |
36.95 |
(83.41) |
(1.97) |
(5.94) |
Total Comprehensive Income for the Period |
1671.13 |
1224.56 |
997.90 |
841.78 |
Net Profit/(Loss) attributable to |
||||
a) Owners of the Company |
1634.18 |
1304.08 |
999.87 |
847.72 |
b) Non-Controlling Interests |
- |
3.89 |
- |
- |
Total Comprehensive Income Attributable to |
||||
a) Owners of the Company |
1671.13 |
1220.67 |
997.90 |
841.78 |
b) Non-Controlling Interests |
- |
3.89 |
- |
- |
2. Appropriation
Your Directors recommend appropriation as under:
Appropriation |
Fiscal Year 2017-18 Rs, (Crore) |
Fiscal Year 2016-17 Rs, (Crore) |
Surplus at the Beginning of the Year |
2722.50 |
2115.62 |
Less: Remeasurements of Defined Benefit Plans |
1.97 |
5.19 |
Add: Net Profit for the Year |
999.87 |
847.72 |
Available for Appropriation |
3720.40 |
2958.15 |
Less: Interim Dividends |
613.12 |
195.78 |
Less: Tax on Distributed Profits |
124.82 |
39.87 |
Surplus Carried Forward |
2982.46 |
2722.50 |
3. Issue of bonus shares
During the year, pursuant to the Board approval received on May 09, 2017, the Company had issued and allotted bonus shares in the ratio of 1:1; that is, one bonus equity share of Rs, 1/- each for every one fully paid-up equity share held.
4. Dividend
A. Dividend declared
During the fiscal year 2017-18, the following interim dividends were declared on shares of face value of Rs, 1/- each. The details of the dividends are as follows:
Declared at the Board Meeting Dated |
Dividend rate per share on shares of face value of Rs, 1/- each |
Record Date |
May 09, 2017 |
12.00 1 |
May 17, 2017 |
July 31, 2017 |
1.00 |
August 8, 2017 |
November 01, 2017 |
1.00 |
November 9, 2017 |
January 30, 2018 |
1.00 |
February 7, 2018 |
Distribution Policy may also be accessed through the following link2
5. Board of Directors
A. Number of meetings and appointment of directors
Four board meetings were held during the year. The details of the meetings and the attendance record of the directors are in the Corporate
Governance section of the Annual Report. All the Independent Directors have given their declaration of independence, as required under Section 149(6) of the Companies Act, 2013 and the same has been noted by the Board of Directors. Ms. Pippa Armerding was appointed as an Additional Independent Director at the Board Meeting held on January 30, 2018, with effect
from January 30, 2018. As per the provisions of Section 160 of the Companies Act, 2013, your Company has received a notice from a member specifying their intention to propose the appointment of Ms. Pippa Armerding as an Independent Director for a period of 5 years with effect from January 30, 2018.
B. Familiarization programmes
Several familiarization programmes for the Independent Directors were conducted during the year including updates on Overview of Annual Operating Plan (AOP) for FY 2017-18, update on regulatory amendment to layers of subsidiaries which can be maintained as per the Companies Act, 2013, update on USA & Bangladesh Business, update on regulatory changes by Statutory Auditors etc. Apart from this, there were quarterly business presentations by Mr. Vivek Gambhir, Managing Director & CEO, and Mr. V Srinivasan, Chief Financial Officer & Company Secretary. Additional details of the familiarization programmes may also be accessed through the following link3.
C. Audit Committee of the Board of Directors
Your Company has an Audit Committee in compliance with Section 177 of the Companies Act, 2013 and Listing Regulations. The Committee consists entirely of the Independent Directors: Mr. Bharat Doshi as Chairman of the Committee and Mr. Narendra Ambwani, Dr. Omkar Goswami, Mr. Aman Mehta,
Ms. Ireena Vittal, and Ms.
Ndidi Nwuneli as members.
Ms. Pippa Armerding was also appointed as a member of the Audit Committee with effect from January 30, 2018, consequent to her appointment on the Board as the Additional Independent Director.
D. Directors liable to retire by rotation
In the forthcoming AGM, Ms. Tanya Dubash and Mr. Vivek Gambhir will retire by rotation and will be considered for reappointment because of their eligibility.
E. Board Diversity Policy
The Company has in place a Board Diversity Policy, which is attached as Annexure âAâ. The criteria for determining qualification, positive attributes, and independence of directors are as per the Board Diversity Policy, Listing Regulations, and the Companies Act, 2013.
F. Remuneration Policy
The Companyâs Remuneration Policy for Directors, Key Managerial Personnel, and other employees is attached as Annexure âBâ. The Companyâs total rewards framework aims at holistically using elements such as fixed and variable compensation, long-term incentives, benefits and perquisites, and no compensation elements (career development, work-life balance, and recognition).
The Non-Executive Directors receive sitting fees and commission in accordance with the provisions of the Companies Act, 2013.
G. Remuneration to Directors
The disclosure on the details of remuneration to directors and other employees pursuant to Section 197 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given under Annexure âCâ.
The information required under Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is not being sent along with this Report. However, this annexure is available on the Company website. Members who are interested in obtaining these particulars may write to the Company Secretary at the Registered Office of the Company. The aforesaid annexure is also available for inspection at the Registered Office of the Company during working hours, up to the date of the AGM. Mr. Adi Godrej, Chairman Emeritus; Ms.
Nisaba Godrej, Executive Chairperson; and Mr. Vivek Gambhir, Managing Director & CEO receive remuneration from your Company.
H. Performance evaluation of the Board of Directors, its individual members, and its Committees:
We conducted a formal Board Effectiveness Review, as part of our efforts to evaluate the performance of our Board and identify areas that need improvement, in order to enhance the effectiveness of the Board, its Committees, and Individual Directors. This was in line with the requirements of the Companies Act, 2013 and the Listing Regulations. The Corporate HR team of Godrej Industries Limited and Associate Companies (GILAC) worked directly with the Chairperson and the Nomination & Remuneration Committee of the Board to design and execute this process. It was later adopted by the Board.
Each Board Member completed a confidential online questionnaire, sharing vital feedback on how the Board currently operates and how its effectiveness could be improved. This survey included four sections on the basis of which feedback and suggestions were compiled:
- Board processes
- Individual Committees
- Individual Board Members
- Chairperson
The criteria for Board processes included Board composition, strategic orientation, and team dynamics. Evaluation of each of the Board Committees covered whether they have well-defined objectives, the correct composition, and whether they achieved their objectives. The criteria for Individual Board Members included skills, experience, level of preparedness, attendance, extent of contribution to Board debates and discussion, and how each Director leveraged their expertise and networks to meaningfully contribute to the Company. The criteria for the Chairpersonâs evaluation included leadership style and conduct of Board meetings. The following reports were created as part of the evaluation:
- Board Feedback Report
- Individual Board Member
- Feedback Report
- Chairpersonâs Feedback Report
The overall Board Feedback Report was facilitated by Mr. Bharat Doshi with Independent Directors. The Directors were not only vocal regarding the Board functioning effectively but also identified areas that showed scope for improvement. Feedback from the Committees and Individual Board Members was shared with the Chairperson. Following her evaluation, a Chairpersonâs Feedback Report was compiled.
I. Directorsâ Responsibility Statement
Pursuant to the provisions contained in Section 134(5) of the Companies Act, 2013, your Directors, based on the representation received from the Operating Management, and after due inquiry, confirm the following:
a) 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) They have selected such accounting policies and applied them consistently and made judgments and estimates 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 fiscal year and of the profit of the Company for that period.
c) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
d) They have prepared the annual accounts on a going concern basis.
e) They have laid down internal financial controls to be followed by the Company, and such internal financial controls are adequate and operating effectively.
f) They have devised a proper system to ensure compliance with the provisions of all applicable laws, and this system is adequate and operating effectively.
6. Transfer to IEPF
In terms of the provisions of Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016, Investor Education and Protection Fund (Awareness and Protection of Investors) Rules, 2001, Rs, 7,738,044 of unpaid / unclaimed dividends and 1,671,258 shares were transferred during the financial year 2017-18 to the Investor Education and Protection Fund.
The Company has appointed a Nodal Officer under the provisions of IEPF, the details of which are available on the website of the Company which can be accessed through the following link4.
The Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on July 31, 2017 (date of last AGM) on the Companyâs website which can be accessed through the following link5 and of the Ministry of Corporate Affairs website at www.iepf.gov.in
7. Finance
A. Particulars of loans, guarantees, and investments
The details of loans, guarantees, and investments as required by the provisions of Section 186 of the Companies Act, 2013 and the rules made there under are set out in the Notes to the Standalone Financial Statements of the Company.
B. Related Party Transactions and Policy
In compliance with the Listing Regulations, the Company has a policy for transactions with Related Parties (RPT Policy). The RPT Policy is available on the Company website which can be accessed through the following link6.
Apart from the Related Party Transactions in the ordinary course of business and at armâs length basis, the details of which are given in the notes to financial statements, no other Related Party Transactions require disclosure in the Directorsâ Report, for compliance with Section 134(3)(h) of the Companies Act, 2013. Therefore, a Nil Report is attached as Annexure âDâ in the format prescribed (i.e. Form AOC-2).
8. Subsidiaries, Associates and Joint Venture
During the year, the following companies became subsidiaries of your company:
- Godrej Peru Limited
- Godrej Consumer Products Malaysia Limited.
During the year, the following companies have ceased to be the subsidiaries of your Company:
- Plasticos Nacional (on account of its merger with Cosmetica Nacional)
- Godrej Consumer Products Mauritius Ltd (on account of its merger with Godrej Consumer Products Limited)
- Godrej Consumer Products US Holding Ltd (on account of its merger with Godrej Consumer Products Limited)
A. Report on the performance of the subsidiaries and associates: The business details of the key subsidiaries are provided in the Management Discussion & Analysis section of this Annual Report. While the Review of Operations section mentions the details regarding the performance of your Companyâs India Business, we provide brief details on the performance of other clusters below:
Indonesia
Fiscal year 2018 was a challenging year for our Indonesia business. Unprecedented competitive intensity in Household Insecticide resulted in a significant share loss on HIT by the end of Q1, with simultaneously peaking trade spends. Muted FMCG growth further challenged us, culminating in 11% top line decline, in constant currency terms, at the end of Q1. However, we focused on strengthening our fundamentals against this market construct: trade spend optimization & cost control, innovation priorities, and talent & capabilities. We have seen signs of recovery with fiscal year 18 closing at 6% top line decline, in constant currency terms, despite continued market challenges through the year and inventory reduction with key modern retail channel partners in Q4. HIT exit shares are back to earlier high levels of 50% , and the recently launched premium range of HIT Expert is receiving encouraging traction. We continue to sharply focus on category development with breakthrough innovation and driving business efficiencies.
Africa, Middle East, and USA
Our Africa, Middle East, and USA business grew by 14% in constant currency terms driven by a strong performance in South Africa and Rest-of-Africa market. While the year saw some economic and political challenges across countries, our business has weathered the environment to post healthy growth. We continued to expand our presence with the launch of our Wet Hair product portfolio through local manufacturing operations in Nigeria and Kenya, launch of a Natural Hair Care range for black hair in the USA, and set up a state of the art hair extensions plant in Mozambique during the year. We have maintained sharp focus on building a strong innovation pipeline and continue engaging in
deep consumer connect and research. We are committed to talent development and building local talent pools for our operations in Africa.
Latin America and UK
Our Latin America business grew by 17 per cent in constant currency terms, backed by healthy growth in Argentina despite an inflationary economy. Our core brands-Roby (styling spray) and Millefiori (depilatories)â maintained market leading volume share. Our UK business grew at 15% in constant currency terms, with our key brands Inecto and Pro: Voke growing at >30%. We continue to focus on growing distribution and driving profitability.
B. Policy on Material Subsidiaries
In compliance with the Listing Regulations, the Board has adopted a policy for determining material subsidiaries. This policy is available on the Company website which can be accessed through the following link[6].
9. The Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013
In compliance with Section 4(3) of the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013, your Company reconstituted
its âInternal Complaints Committeeâ (Committee), during the year. During the year, e-learning workshops were conducted to create awareness regarding sexual harassment among employees. Because there were no complaints during the calendar year 2017, the Committee filed a NIL complaints report with the concerned authorities, in compliance with Section 22 of the aforementioned act.
10. Policies and Annexure
A. Extract of Annual Return
Annexure âEâ of this Report provides the Extract of Annual Return to be filed by the company under the Companies Act, 2013.
B. Disclosure on Conservation of Energy, Technology Absorption, Foreign Exchange Earnings, and Outgo
Annexure âFâ of this Report provides information on the conservation of energy, technology absorption, and foreign exchange earnings and outgo, required under Section 134 (3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, which forms a part of the Directorsâ Report.
C Risk Management
Elements of risks to the Company are listed in the Management Discussion & Analysis section of the Annual Report under the heading âEnterprise Business Risk
Managementâ.
D. Corporate Social Responsibility
Your Company has a well-documented Corporate Social Responsibility (CSR) Policy, Details of CSR projects are provided in Annexure âGâ in the prescribed format.
E. Vigil Mechanism
Your Company has adopted a Whistle Blower Policy as a part of its vigil mechanism.
The purpose of the policy is to enable employees to raise concerns regarding unacceptable improper practices and/ or any unethical practices in the organization without the knowledge of the management. All employees shall be protected from any adverse action for reporting any unacceptable or improper practice and/or any unethical practice, fraud, or violation of any law, rule, or regulation.
This Policy is also applicable to the Directors of the Company,
Mr. V Swaminathan, Head-Corporate Audit & Assurance, has been appointed as the âWhistle Blowing Officerâ, and his contact details have been mentioned in the Policy, Furthermore, employees are also free to communicate their complaints directly to the Chairman/Member of the Audit Committee, as stated in the Policy. The Policy is available on the internal employee portal. On a quarterly basis, the Audit Committee reviews reports made under this policy and implements corrective actions, wherever necessary,
F. Employee Stock Grant Scheme
The details of the grants allotted under Godrej Consumer Products Limited Employee Stock Grant Scheme, 2011, as also the disclosures in compliance with SEBI (Share Based Employee Benefits) Regulations, 2014, and Section 62 1(b) read with Rule 12(9) of the Companies (Share Capital & Debentures) Rules, 2014, are set out in Annexure âHâ. Your Company has not given loan to any person under any scheme for or in connection with the subscription or purchase of shares in the Company or the holding Company. Hence, there are no disclosures on voting rights not directly exercised by the employees with respect to the shares to which the scheme relates.
11. Unclaimed shares
In compliance with the Listing Regulations, your Company has transferred the unclaimed shares into a demat account, namely the âUnclaimed-Suspense Accountâ. As and when an allottee approaches the Company, after proper verification, the shares are rematerialized, and physical certificates are delivered to the allottee.
Unclaimed Shares Table
Particulars |
No. of Shareholders |
No. of Shares |
Aggregate number of shareholders and the outstanding shares lying in the Unclaimed-Suspense Account at the beginning of the year |
5,549 |
834,945 |
Number of shareholders and aggregate shares transferred to Unclaimed- Suspense Account during the year on account of Bonus issue by the Company |
8,29,931 |
|
Number of shareholders who approached the issuer for transfer of shares from the Unclaimed-Suspense Account during the year and aggregate shares transferred |
99 |
41,678 |
Number of shareholders to whom shares were transferred from the Unclaimed-Suspense Account during the year and the aggregate shares transferred |
99 |
41,678 |
Number of shareholders to whose shares were transferred from the Unclaimed-Suspense Account to the IEPF Account during the year and the aggregate shares transferred |
3,950 |
10,10,406 |
Aggregate number of shareholders and the outstanding shares lying in the Unclaimed-Suspense Account at the end of the year |
1,500 |
6,12,792 |
12. Listing
The shares of your Company are listed at the BSE Limited and the National Stock Exchange of India Limited. The applicable annual listing fees have been paid to the Stock Exchanges before the due dates. Your Company is also listed on the Futures & Options Segment of the National Stock Exchange of India.
13. Business Responsibility Report
Pursuant to Regulation 34 of the Listing Regulations, the Business Responsibility Report highlighting the initiatives taken by the Company in the areas of environment, social, economical and governance, is available on the website of the Company which can be accessed through the following link[7].
14. Auditors and Auditorsâ Report
A. Statutory Auditors
In accordance with Section 139 of the Companies Act, 2013 and the rules made there under, M/s. B S R & Co., LLP, Chartered Accountants (Firm Regn. No. 101248W/W-100022) has been appointed as the statutory auditor to hold office from the conclusion of the 17th AGM on July 31, 2017 until the conclusion of the 22nd AGM in the year 2022, at a remuneration as may be approved by the Board.
B. Cost Auditors
Pursuant to directions from the Department of Company Affairs, M/s. P. M. Nanabhoy & Co., Cost Accountants, were appointed as cost auditors for the applicable products of the Company for the fiscal year 2017-18. They are required to submit the report to the Central Government within 180 days from the end of the accounting year.
C. Secretarial Auditors
The Board had appointed M/s. A. N. Ramani & Co.,
Company Secretaries,
Practicing Company Secretary, to conduct a secretarial audit for the fiscal year 2017-18. The Secretarial Audit Report for the fiscal year ended March 31, 2018, is attached herewith as Annexure âIâ. The Secretarial Audit Report does not contain any qualification, reservation, or adverse remark.
15. Corporate Governance
Your Company continues to enjoy a Corporate Governance Rating of CGR2 (pronounced CGR 2 plus) and a Stakeholder Value Creation and Governance Rating of SVG1 (pronounced SVG one). The '' â sign indicates a relatively high standing within the category indicated by the rating. The aforementioned ratings are on a scale of 1 to 6, where 1 is the highest rating. The two ratings indicate whether a company is being run on the principles of Corporate Governance and whether the practices followed by the company lead to value creation for all its shareholders.
The CGR2 rating is on a scale of CGR1 to CGR6, where CGR1 denotes the highest rating.
The CGR2 rating implies that according to ICRAâs current opinion, the rated company has adopted and follows such practices, conventions, and codes that would provide its financial stakeholders a high level of assurance of the quality of corporate governance.
The SVG1 rating is on a scale of SVG1 to SVG6, where SVG1 denotes the highest rating.
The SVG1 rating implies that according to ICRAâs current opinion, the company belongs to the highest category of the composite parameters of stakeholder value creation and management as well as corporate governance practices.
Pursuant to the Listing Regulations, the Management Discussion & Analysis Report and the Report on Corporate Governance are included in the Annual Report. The Practicing Company Secretaryâs Certificate certifying the Companyâs compliance with the requirements of Corporate Governance, in terms of the Listing Regulations, is attached as Annexure âJâ.
16. Acknowledgement
Your Directors wish to extend their sincere thanks to the Central and State Governments as well as the Government agencies, banks, customers, shareholders, vendors, and other related organizations that have helped in your Companyâs progress, as partners, through their continued support and co-operation.
For and on behalf of the Board of Directors
sd/-
Nisaba Godrej
Executive Chairperson
Mumbai, May 08, 2018
Mar 31, 2017
Dear Members,
The Directors, with pleasure, present the Annual Report for the year ended March 31, 2017.
1. Review of Operations
Your Company has delivered another year of competitive and profitable growth. Our focused approach and strong execution has enabled us to deliver an ahead-of-market performance over the past few years. During the fiscal year 2016-17, we consistently outperformed across quarters, with a reported sales growth of 10 per cent (on a consolidated basis for the fiscal year) and an EBITDA growth of 17 per cent.
In India, while demonetisation resulted in some near-term disruptions, we continued to deliver a superior performance, with a sales growth of 4 per cent, and gaining share across most key brands. We also sustained momentum on new product development, with 5 key launches: aer pocket, BBLUNT Salon Secret, Cinthol Deostick, Good knight personal repellents, and HIT Gel Stick. aer pocket has been a huge success, and our Good knight personal repellents range is receiving an encouraging response from trade and consumers, particularly with innovative media campaigns. Cinthol Deostick, both for men and women, has been well received by consumers. We continue to support this launch with innovative consumer engagement initiatives and impactful communication.
We were ranked the number 1 FMCG Company to work for in the âGreat Place to Work - Best Workplaces in India 2016â list, for the thirteenth year in a row,
We also ranked number 12 on the âGreat Place to Work - Best Workplaces in Asia 2017â list and among the best employers in India, in the âAon Hewitt Best Employers in India - 2017â survey.
Pursuant to the notification issued by the Ministry of Corporate Affairs dated February 16, 2015, your Company has adopted Indian Accounting Standards (âInd ASâ) notified under the Companies (Indian Accounting Standards) Rules with effect from April 1, 2016. Financial Statements for the year ended and as at March 31, 2016 have been restated to conform to Ind AS.
The financial performance of your Company for the fiscal year under review is summarised as follows:
Financials |
Rs. (Crore) |
||||||
Abridged Profit and Loss Statement |
Consolidated |
Standalone |
|||||
March 31, 2017 |
March 31, 2016 |
March 31, 2017 |
March 31, 2016 |
||||
Total Revenue from Operations |
9608.80 |
8753.06 |
5088.99 |
4883.40 |
|||
Other Income |
75.30 |
83.90 |
63.60 |
61.37 |
|||
Total Income |
9684.10 |
8836.96 |
5152.59 |
4944.77 |
|||
Total Expenses including Depreciation and Finance Costs |
7997.87 |
7336.88 |
4045.11 |
3996.55 |
|||
Profit/ (Loss) before Exceptional items, Share of Profit of |
1686.23 |
1500.08 |
1107.48 |
948.22 |
|||
Equity Accounted lnvestees and Tax |
|||||||
Exceptional Items |
0.08 |
-333.51 |
0.00 |
0.00 |
|||
Share of Profit of Equity Accounted lnvestees (net of |
0.82 |
0.10 |
0.00 |
0.00 |
|||
income tax) |
|||||||
Profit/ (Loss) before Tax |
1687.13 |
1166.67 |
1107.48 |
948.22 |
|||
Tax Expense |
379.16 |
336.05 |
259.45 |
225.55 |
|||
Profit/ (Loss) after Tax |
1307.97 |
830.62 |
848.03 |
722.67 |
|||
Other Comprehensive Income |
-83.41 |
-70.93 |
-5.94 |
-1.61 |
|||
Total Comprehensive Income for the period |
1224.56 |
759.69 |
842.09 |
721.06 |
|||
Net Profit/ (Loss) attributable to: |
|||||||
a) Owners of the company |
1304.08 |
827.61 |
848.03 |
722.67 |
|||
b) Non-Controlling interests |
3.89 |
3.01 |
0 |
0 |
|||
Total Comprehensive Income Attributable to: |
|||||||
a) Owners of the company |
1220.67 |
756.68 |
842.09 |
721.06 |
|||
b) Non-Controlling interests |
3.89 |
3.01 |
0 |
0 |
|||
2. Appropriation
Your Directors recommend appropriation as detailed as follows:
Appropriation |
FY 2016-17 |
FY 2015-16 |
Rs. (Crore) |
Rs. (Crore) |
|
Surplus at the beginning of the year |
2139.63 |
1619.57 |
Less: Remeasurements of defined benefit plans |
5.19 |
1.61 |
Add: Net Profit for the year |
848.03 |
722.67 |
Add: Transfer from Debenture Redemption Reserve |
- |
24.39 |
Available for Appropriation |
2982.47 |
2365.02 |
Less: Interim Dividends |
195.78 |
187.27 |
Less: Tax on Distributed Profits |
39.87 |
38.12 |
Surplus Carried Forward |
2746.82 |
2139.63 |
3. Changes in the holding structure of the Company
During the fiscal year 2016-17, your Companyâs holding company Godrej & Boyce Manufacturing Company Limited, transferred 27.451 per cent of its equity stake to another promoter group company, Godrej Seeds & Genetics Limited, as an inter-se transfer among qualifying persons. Consequently, your Company does not have any holding company as on March 31, 2017. However, the overall promoter shareholding has not changed, and it continues to stand at 63.27 per cent as at the year end, subsequent to this transaction.
4. Issue of bonus shares
The Board at its meeting held on May 9, 2017, approved the issue of bonus shares in the ratio of 1:1, i.e. one bonus equity share of Rs.1/each for every one fully paid-up equity share held. Furthermore, the Board approved the increase in authorised share capital, necessary to accommodate the issue of bonus shares and consequent Alteration of the Memorandum of Association and Article of Association of the Company. These approvals are subject to the shareholdersâ approval and hence, have been set out as agenda items in the Notice of the Annual General Meeting (AGM), along with relevant explanatory statements.
5. Dividend
A. Dividend declared
For the fiscal year 2016-17, the following four interim dividends were declared on shares of a face value of Rs.1/- each. The details of the dividends are as follows:
Dividend Type |
Declared at Board Meeting Dated |
Dividend rate per share on shares of face value Rs.1 each |
Record Date |
1st Interim for fiscal year 2016-17 |
July 29, 2016 |
Rs.1.00 |
August 8, 2016 |
2nd Interim for fiscal year 2016-17 |
November 7, 2016 |
Rs.1.00 |
November 16, 2016 |
3rd Interim for fiscal year 2016-17 |
January 30, 2017 |
Rs.1.00 |
February 7, 2017 |
4th Interim for fiscal year 2016-17 |
May 9, 2017 |
Rs.12.00 |
May 17, 2017 |
TOTAL |
Rs.15.00 |
Your directors recommend that the aforesaid interim dividends aggregating to Rs.15.00/- per equity share, be declared as the final dividend for the year ended March 31, 2017.
Since your Company has adopted IND AS, accounting of dividends will be done based on the payment of dividend and hence, the 4th Interim Dividend of the fiscal year 2015-16 has been accounted for in the fiscal year 2016-17. Similarly, the 4th Interim Dividend of the fiscal year 2016-17, will be accounted in the fiscal year 2017-18.
B. Dividend Distribution Policy
The Board of Directors adopted the Dividend Distribution Policy pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Regulations) which requires the top 500 listed companies (by market capitalisation) to formulate the same.
The Companyâs Dividend Distribution Policy may also be accessed through the following link[1]
6. Board of Directors
A. Number of meetings, declarations, appointment of directors:
Four board meetings were held during the year. The details of the meetings and the attendance record of the directors are in the Corporate Governance section of the Annual Report.
All the Independent Directors have given their declaration of independence as required under Section 149(6) of the Companies Act, 2013. This has been noted by the Board of Directors.
Mr. Pirojsha Godrej and Ms. Ndidi Nwuneli were appointed as Additional Non-Executive Director and Additional & Independent Director, respectively, at the Board Meeting held on January 30, 2017, with effect from April 1, 2017. As per the provisions of Section 160 of the Companies Act, 2013, your Company has received a notice from a member specifying their intention to propose the appointment of Mr. Pirojsha Godrej and Ms. Ndidi Nwuneli as Directors in the forthcoming AGM. Furthermore, a specific resolution is included in the Notice of the AGM for the appointment of Ms. Ndidi Nwuneli as an Independent Director for a period of 5 years with effect from April 1, 2017.
Furthermore, the Board its meeting held on May 9, 2017, approved the changes in the leadership positions of the Company. Ms. Nisaba Godrej, who was an Executive Director, will now be the Executive Chairperson, and Mr. Adi Godrej will assume the position of Chairman Emeritus with effect from May 10, 2017. In addition, Mr. Vivek Gambhir Managing Director & CEO, will now be designated as the Managing Director and CEO.
B. Familiarisation programmes:
Several familiarisation programmes for the Independent Directors were conducted during the year including updates on its long term business strategies, Latin America operations, risk management, digital transformation strategies, R&D priorities, changes in tax regulations, impact of and strategy to counter demonetisation, brand strategies for select product categories, etc. Apart from this there were quarterly business presentations by Mr. Vivek Gambhir, Managing Director & CEO and Mr. V Srinivasan, Chief Financial Officer & Company Secretary.
Further details of the familiarisation programmes may also be accessed through the following link[2]
C. Audit Committee of the Board of Directors:
Your Company has an Audit Committee in compliance with Section 177 of the Companies Act, 2013 and Listing Regulations. The Committee consists entirely of the Independent Directors: Mr. Bharat Doshi as Chairman of the Committee and Mr. Narendra Ambwani, Dr. Omkar Goswami, Mr. Aman Mehta, Mr. D Shivakumar, and Ms. Ireena Vittal as members.
Ms. Ndidi Nwuneli was also appointed as a member of the Audit Committee with effect from April 1, 2017, consequent to her appointment on the Board as the Additional & Independent Director.
D. Directors liable to retire by rotation:
In the forthcoming AGM, Mr. Jamshyd Godrej and Mr. Nadir Godrej will retire by rotation and will be considered for re-appointment because of their eligibility.
E. Board Diversity Policy:
The Company has in place a Board Diversity Policy, which is attached as Annexure âAâ. The criteria for determining qualification, positive attributes, and independence of directors are as per the Board Diversity Policy Listing Regulations, and the Companies Act, 2013.
F. Remuneration Policy:
The Companyâs Remuneration Policy for Directors, Key Managerial Personnel, and other employees is attached as Annexure âBâ. The Companyâs total rewards framework aims at holistically using 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 Non-Executive Directors receive sitting fees and commission in accordance with the provisions of the Companies Act, 2013.
G. Remuneration to Directors:
The disclosure on the details of remuneration to directors and other employees pursuant to Section 197 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given under Annexure âCâ.
The information required under Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not being sent along with this Report. However, this annexure is available on the Company website. Members who are interested in obtaining these particulars may write to the Company Secretary at the Registered Office of the Company. The aforesaid annexure is also available for inspection at the Registered Office of the Company during working hours, up to the date of the AGM.
Mr. Adi Godrej, Chairman; Ms. Nisaba Godrej, Executive Director; and Mr. Vivek Gambhir, Managing Director & CEO receive remuneration from your Company. Godrej & Boyce Manufacturing Company Limited was the holding company of your Company till March 30, 2017. Mr. Adi Godrej receives commission from Godrej & Boyce Manufacturing Company Limited.
H. Performance evaluation of the Board of Directors, its individual members, and its Committees
A formal Board Effectiveness Review was conducted as part of our efforts to evaluate the performance of the Board and identify areas that need improvement, and thus, enhance the effectiveness of the Board, its Committees, and Individual Directors. This was in line with the requirements of the Companies Act, 2013 and the Listing Regulations.
The Corporate HR team of Godrej Industries Limited and Associate Companies (GILAC) worked directly with the Chairman and the Nomination & 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 its effectiveness could be improved.
The survey comprised four sections and compiled feedback and suggestions on the following criteria:
- Board Processes (including Board composition, strategic orientation, and team dynamics)
- Individual Committees
- Individual Board Members
- Chairman
The criteria for Board processes included Board composition, strategic orientation, and team dynamics. The criteria for evaluation of the Board Committees covered whether the Committee has well defined objectives, whether it has the correct composition, and whether it achieves its objectives. The criteria for evaluation of all the individual Directors included skills, experience, and level of preparedness of the Directors, attendance and extent of contribution to Board debates and discussion, and how the Director leverages his/her expertise and networks to meaningfully contribute to the Company. The criteria for the Chairmanâs evaluation included leadership style and conduct of Board meetings.
The following reports were created as part of the evaluation:
- Board Feedback Report
- Individual Board Member Feedback Report
- Chairmanâs Feedback Report
The overall Board Feedback Report was facilitated by Mr. Bharat Doshi with the Independent Directors.
The Directors were vocal about the Board functioning effectively, but they also identified areas that show scope for improvement. The Board Committees and Board Membersâ feedback was shared with the Chairman. Following his evaluation, a Chairmanâs Feedback Report was also compiled.
I. Directorsâ Responsibility Statement
Pursuant to the provisions contained in Section 134(5) of the Companies Act, 2013, your Directors, based on the representation received from the Operating Management, and after due inquiry, confirm the following:
a) 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) They have selected such accounting policies and applied them consistently and made judgments and estimates 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 of the Company for that period;
c) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) They have prepared the annual accounts on a going concern basis;
e) They have laid down internal financial controls to be followed by the Company, and such internal financial controls are adequate and operating effectively;
f) They have devised a proper system to ensure compliance with the provisions of all applicable laws, and this system is adequate and operating effectively,
7. Finance
A. Particulars of loans, guarantees, and investments
The details of loans, guarantees, and investments as required by the provisions of Section 186 of the Companies Act, 2013 and the rules made thereunder are set out in the Notes to the Standalone Financial Statements of the Company.
B. Related Party Transactions and Policy
In compliance with the Listing Regulations, the Company has a policy for transactions with Related Parties (RPT Policy). The RPT Policy is available on the Company website viz. www.godrejcp.com, under the Investors tab, on the âCodes and Policiesâ page.
The RPT Policy may also be accessed through the following link[3]
Apart from the Related Party Transactions in the ordinary course of business and at armâs length transactions, the details of which are given in the notes to the financial statements, no other Related Party Transactions require disclosure in the Directorsâ Report, for compliance with Section 134(3)(h) of the Companies Act, 2013. Therefore, a Nil Report is attached as Annexure âDâ in the format prescribed (i.e. Form AOC-2).
8. Subsidiaries and Associates
A. Report of acquisitions completed during the year
During the year, the following acquisitions were completed by your Company:
Canon Chemicals Limited, a Kenya-based home and personal care company, manufactures and distributes products in the personal and home care categories.
This acquisition helps your Company in further strengthening its presence in the sub-Saharan African market. This acquisition is in line with your Companyâs global 3 by 3 strategy of targeting strong regional assets in the emerging world.
Strength of Nature (SON), a leading hair care company, to accelerate growth in Africa. SON is a US-based company with a strong global presence. It has a compelling portfolio of leading hair care brands with affordable and innovative products and has been serving women of African descent across 50 countries. The acquisition enables your Company to turbo-charge, creating a strong platform for Wet Hair Care products in Africa and to forge a stronger presence in the global Wet Hair Care category USD 1.8 billion. SON complements your Companyâs portfolio in Africa, building on its leadership position in Dry Hair Care and hair colour products in the region. This investment catapults your Company, making it one of the largest global players, serving the hair care needs of women of African descent. It will, over time, provide a platform to further build and drive global leadership.
During the year, your Company, through its subsidiary, increased its stake in Hair Credentials Zambia, a company formed to start the hair extension business in Zambia, from 51 per cent to 100 per cent. Furthermore, your Company, through its subsidiary, increased its equity stake from 51 per cent to 100 per cent in Charm Industries Limited, Kenya, and increased its stake to 100% in Weave Senegal Limited, a newly formed company to start the hair and skin care business in Senegal.
B. Names of companies which have become or ceased to be subsidiaries, joint ventures, or associates during the year:
During the year, the following companies became subsidiaries of your Company:
- Strength of Nature LLC (USA)
- Canon Chemicals Ltd.
- Weave Senegal Ltd.
- Strength of Nature South Africa Proprietary Limited
- Old Pro International Inc (USA)
- DGH Uganda
- Style Industries Uganda Limited
- Godrej Consumer Products International FZCO, (Dubai, UAE)
- Godrej International Trading Company (Sharjah, UAE)
DGH Angola ceased to be a subsidiary of your Company during the year,
C. Report on the performance of the subsidiaries and associates:
Business details of the key subsidiaries are given in the Management Discussion & Analysis section of the Annual Report.
While the Review of Operations section mentions details about the performance of your Companyâs India Business, we provide brief details on the performance of other clusters below:
Indonesia
Our Indonesia business delivered a mixed sales growth. While the Household Insecticides portfolio declined due to a poor season, the rest of the portfolio grew strongly. The overall portfolio sales were the same as the previous year in constant currency terms.
During the last quarter of the year, we cross-pollinated the aer pocket bathroom air freshener to Indonesia, and launched Stella pocket. In July 2016, we cross-pollinated hair colours in Indonesia with the launch of NYU creme hair colour in a sachet format.
Africa
Last year, we saw muted economic growth in certain key countries, such as South Africa and Nigeria. We bucked the trend and grew the business strongly with a constant currency sales growth of 22 per cent. We also acquired the Strength of Nature business this year and are focusing on leveraging this acquisition to turbocharge our wet hair care portfolio growth in Africa.
Latin America and UK
Despite a challenging macroeconomic environment, our Latin America business grew by 19 per cent in constant currency terms.
We continued to focus on innovation and effective communication campaigns to drive growth. Our UK business remained flat on a constant currency basis in a challenging operating environment.
A report on the performance and financial position of each of the subsidiary, associate, and joint venture companies has been provided after the Consolidated Financial Statement section of the Annual Report in Form AOC-1.
Pursuant to the provisions of Section 136 of the Companies Act, 2013, your Company has placed the financial statements of its subsidiaries on the Company website www. godrejcp.com.
D. Policy on Material Subsidiaries:
In compliance with the Listing Regulations, the Board has adopted a policy for determining material subsidiaries. This policy is available on the Company website www.godrejcp.com. under the Investors tab, on the âCodes and Policiesâ page.
The policy may also be accessed through the following link[4]
9. The Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013
In compliance with Section 4(3) of the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013, your Company reconstituted its âInternal Complaints Committeeâ (Committee), during the year, During the year, e-learning workshops were conducted to create awareness about sexual harassment among employees.
Because there were no complaints during the year, the Committee filed a NIL complaints report with the concerned authorities, in compliance with Section 22 of the above-mentioned Act.
10. Policies and Annexures
A. Extract of Annual Return
Annexure âEâ to this Report provides the Extract of Annual Return to be filed by the company under the Companies Act, 2013.
B. Disclosure on Conservation of Energy, Technology Absorption, Foreign Exchange Earnings, and Outgo
Annexure âFâ to this Report provides information on the conservation of energy technology absorption, and foreign exchange earnings and outgo, required under Section 134 (3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, which forms a part of the Directorsâ Report.
C. Risk Management
Elements of risks to the Company are listed in the Management Discussion & Analysis section of the Annual Report under the heading Enterprise Business Risk Managementâ.
D. Corporate Social Responsibility
Your Company has a well-documented Corporate Social Responsibility (CSR) Policy, Details of CSR projects are provided in Annexure âGâ in the prescribed format.
E. Vigil Mechanism
Your Company has adopted a Whistle Blower Policy as a part of its Vigil Mechanism.
The purpose of the policy is to enable employees to raise concerns about unacceptable improper practices and/ or any unethical practices in the organisation without the knowledge of the management. All employees shall be protected from any adverse action for reporting any unacceptable or improper practice and/or any unethical practice, fraud or violation of any law, rule, or regulation.
This Policy is also be applicable to the Directors of the Company,
Mr. V Swaminathan, Head-Corporate Audit & Assurance has been appointed as the âWhistle Blowing Officer'' and his contact details have been mentioned in the Policy, Furthermore, employees are also free to communicate their complaints directly to the Chairman/Member of the Audit Committee, as stated in the Policy. The Policy is available on the internal employee portal.
On a quarterly basis, the Audit Committee reviews reports made under this policy and implements corrective actions, wherever necessary,
F. Employee Stock Grant Scheme
The details of the grants allotted under Godrej Consumer Products Limited Employee Stock Grant Scheme, 2011 as also the disclosures in compliance with SEBI (Share Based Employee Benefits) Regulations, 2014, and Section 62 1(b) read with Rule 12(9) of the Companies (Share Capital & Debentures) Rules, 2014 are set out in Annexure âHâ.
Your Company has not given loan to any person under any scheme for or in connection with the subscription or purchase of shares in the Company or the holding Company. Hence, there are no disclosures on voting rights not directly exercised by the employees with respect to the shares to which the scheme relates.
11. Unclaimed shares
In compliance with the Listing Regulations, your Company has transferred the unclaimed shares into a demat account, namely the âUnclaimed-Suspense Accountâ. As and when an allottee approaches the Company, after proper verification, the shares are rematerialised and physical certificates are delivered to the allottee.
Particulars |
No. of Shareholders |
No. of Shares |
Aggregate number of shareholders and the outstanding shares lying in the |
5,658 |
858,185 |
Unclaimed-Suspense Account at the beginning of the year |
||
Number of shareholders and aggregate shares transferred to Unclaimed- |
- |
- |
Suspense Account during the year |
||
Number of shareholders who approached the issuer for transfer of shares |
109 |
23,240 |
from the Unclaimed-Suspense Account during the year and aggregate shares |
||
transferred |
||
Number of shareholders to whom shares were transferred from the Unclaimed- |
109 |
23,240 |
Suspense Account during the year and the aggregate shares transferred |
||
Aggregate number of shareholders and the outstanding shares lying in the |
5,549 |
834,945 |
Unclaimed-Suspense Account at the end of the year |
12. Listing
The shares of your Company are listed at the BSE Limited and the National Stock Exchange of India Limited.
The applicable annual listing fees have been paid to the Stock Exchanges before the due dates.
Your Company is also listed on the Futures & Options Segment of the National Stock Exchange of India.
13. Auditors and Auditorsâ Report
A. Statutory Auditors
In accordance with Section 139 of the Companies Act, 2013 and the rules made thereunder, M/s Kalyaniwalla & Mistry LLP, Chartered Accountants (Firm Regn. No. 104607W), Mumbai, were appointed as Statutory Auditors to hold office from the conclusion of the 14th AGM till the conclusion of the 17th AGM (i.e. the forthcoming AGM of the Company). M/s Kalyaniwalla & Mistry LLP Chartered Accountants have been the Statutory Auditors of the Company since incorporation in the year 2000.
Hence, pursuant to the provisions of the Companies Act, 2013, the Company is required to appoint new Statutory Auditors.
The Audit Committee at its Meeting held on November 7, 2016, unanimously approved to recommend to the Board, the appointment of B S R & Co, LLP, Chartered Accountants (Firm Regn. No. 101248W/W-100022) as the new statutory auditors to hold office from the conclusion of the 17th AGM on July 31, 2017 (i.e. the forthcoming AGM), until the conclusion of the 22nd AGM in the year 2022, at a remuneration as may be approved by the Board. B S R & Co. LLP has access to the international knowledge and methodology of KPMG International. The Board, at its meeting held on May 9, 2017, approved the recommendation of the Audit Committee.
Accordingly, this item has been included in the Notice of the AGM for the approval of the shareholders.
The Board places on record, its appreciation of the contribution of M/s Kalyaniwalla & Mistry LLP Chartered Accountants, during their tenure as the Statutory Auditors of the Company.
The notes to the Accounts referred to in the Auditorsâ Report are self-explanatory and therefore, do not warrant any further explanation.
B. Cost Auditors
Pursuant to directions from the Department of Company Affairs, M/s. P. M. Nanabhoy & Co., Cost Accountants, were appointed as cost auditors for the applicable products of the Company for the fiscal year 2016-17. They are required to submit the report to the Central Government within 180 days from the end of the accounting year.
C. Secretarial Auditors
The Board had appointed A. N. Ramani & Co., Company Secretaries, Practising Company Secretary, to conduct a secretarial audit for the fiscal year 2016-17. The Secretarial Audit Report for the fiscal year ended March 31, 2017, is attached herewith as Annexure âIâ. The Secretarial Audit Report does not contain any qualification, reservation, or adverse remark.
14. Corporate Governance
Your Company continues to enjoy a Corporate Governance Rating of CGR2 (pronounced CGR 2 plus) and a Stakeholder Value Creation and Governance Rating of SVG1 (pronounced SVG one). The '' â sign indicates a relatively high standing within the category indicated by the rating. The aforementioned ratings are on a scale of 1 to 6, where 1 is the highest rating. The two ratings indicate whether a company is being run on the principles of Corporate Governance and whether the practices followed by the Company lead to value creation for all its shareholders.
The CGR2 rating is on a scale of CGR1 to CGR6, where CGR1 denotes the highest rating. The CGR2 rating implies that in ICRAâs current opinion, the rated company has adopted and follows such practices, conventions, and codes as would provide its financial stakeholders a high level of assurance of the quality of corporate governance.
The SVG1 rating is on a scale of SVG1 to SVG6, where SVG1 denotes the highest rating. The SVG1 rating implies that in ICRAâs current opinion, the company belongs to the highest category of the composite parameters of stakeholder value creation and management as well as corporate governance practices.
Pursuant to the Listing Regulations, the Management Discussion & Analysis Report and the Report on Corporate Governance are included in the Annual Report. The Auditorsâ Certificate certifying the Companyâs compliance with the requirements of Corporate Governance, in terms of the Listing Regulations, is attached as Annexure âJâ.
15. Acknowledgement
Your Directors wish to extend their sincere thanks to the Central and State Governments as well as the Government agencies, banks, customers, shareholders, vendors, and other related organisations that have helped in your Companyâs progress, as partners, through their continued support and co-operation.
For and on behalf of the Board of Directors
sd/-
Adi Godrej Chairman
Mumbai, May 9, 2017
Mar 31, 2015
Dear Members,
The Directors have pleasure in presenting their Report along with the
Audited Accounts for the year ended on March 31,2015.
1. REVIEW OF OPERATIONS
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.
Godrej Consumer Products Limited's ("GCPL") 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 its 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, your Company 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.
Your Company 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.
Your Company's financial performance for the year under review is
summarised below:
Figures in Rs. (Crore)
financia is consolidated standalone
abridged profit and loss fy fy fy fy
statement 2014-15 2013-14 2014-15 2013-14
Net Sales 8242.20 7582.57 4369.25 4024.74
Other Operating Income 34.16 19.84 60.55 55.10
Total Income from Operations 8276.36 7602.41 4429.80 4079.84
Total Expenses other than 6907.80 6418.88 3590.13 3326.87
Depreciation &Finance Cost
Profit from Operations 1368.56 1183.53 839.67 752.97
Finance Cost, Exceptional
Items & Depreciation
Depreciation 90.78 81.85 41.67 35.52
Profit from Operations
before Other Income,
Finance Cost & Exceptional 1277.78 1101.68 798.00 717.45
Items
Foreign Exchange Gain/Loss) (3.25) (26.78) 2.27 (5.94)
Other Income 91.51 62.71 55.24 40.00
Profit before Finance Costs 1366.04 1137.61 855.51 751.51
& Exceptional Items
Finance Cost 100.15 107.37 36.92 38.52
Profit after Finance 1265.89 1030.24 818.59 712.99
Costs but before
Exceptional Items
Exceptional Items (17.17) (0.57) 8.60 0.00
Profit Before Tax 1248.72 1029.67 827.19 712.99
Tax Expense 272.29 210.37 172.74 148.15
Net Profit after Tax before 976.43 819.30 654.45 564.84
Minority Interest
Share of Profit in Associate 0.04 (0.05) - -
Company
Minority Interest (69.35) (59.52) - -
Net Profit for the period 907.12 759.73 654.45 564.84
2. APPROPRIATION
Your Directors recommend appropriation as under:
GCPL standalone FY2014-15 FY2013-14
rs(crore) RS(crore)
Surplus as at the end of previous year 1270.33 1010.09
Add: Net Profit for the year 654.45 564.84
Available for appropriation 1924.78 1574.93
Add: Transfer to Debenture Redemption 20.39 (23.53)
Reserve
Less: Interim Dividend 187.24 178.70
Less: Tax on distributed profits 36.73 30.37
Less: Transfer to General Reserve - 56.50
Less: Adjustment on amalgamation of - 15.50
Godrej Hygiene Products Limited
Less: Depreciation Adjustment pursuant to 0.83 -
implementation of Schedule II of the
Companies Act, 2013
Total Appropriation 204.41 304.60
Surplus Carried Forward 1720.37 1270.33
3. DIVIDEND
For the year 2014-15, four interim dividends were paid on shares of
face value Rs. 1/- each, the details of which are mentioned below:
DIvidend Type Declared at dividend rate Record
Board meeting per share on date
dated shares
1st Interim for FY 2014-15 July 28, 2014 Rs. 1.00 August 4,
2014
2nd Interim for FY 2014-15 November 1,2014 Rs. 1.00 November
12, 2014
3rd Interim for FY 2014-15 February 5, 2015 Rs. 1.00 February
13, 2015
4th Interim for FY 2014-15 April 28, 2015 Rs. 2.50 May 6, 2015
TOTAL Rs. 5.50
Your Directors recommend that the aforesaid interim dividends
aggregating to Rs. 5.50/- per equity share be declared as final
dividend for the year ended on March 31,2015.
4. BOARD OF DIRECTORS
Six Board meetings were held during the year. Details of the meetings
and the attendance record of the directors are in the Corporate
Governance section of the Annual Report.
At the last Annual General Meeting ("AGM") held on July 28, 2014, Mr.
Narendra Ambwani who was earlier appointed as an Independent Director
under the provisions of the Listing Agreement retired by rotation and
was appointed as an Independent Director for a period of five years
till July 27, 2019, in compliance with Clause 49 of the Listing
Agreement and the Companies Act, 2013.
The shareholders through a resolution passed by Postal Ballot on
September 23, 2014 appointed Prof. Bala Balachandran, Mr. Bharat Doshi,
Dr. Omkar Goswami,Mr. Aman Mehta, Mr. D Shivakumar and Ms. Ireena
Vittal as Independent Directors for a period of five years from
September 26, 2014 till September 25, 2019 in compliance with Clause
49 of the Listing Agreement and the Companies Act, 2013.
Prof. Bala Balachandran and Mr. A Mahendran resigned from the Board
with effect from close of business hours on March 31,2015. The Board of
Directors placed on record its appreciation of their individual
contributions during their tenure.
All the Independent Directors have given their declaration of
independence as required under Section 149(6) of the Companies Act,
2013 and this has been recorded by the Board of Directors.
A familiarisation programme for the Independent Directors was conducted
to familiarise them with the company, their roles, rights,
responsibilities in the company, nature of the industry in which the
company operates, business model of the company, etc.
The same may also be accessed through the following link:
http://www.godrejcp.com/Resources/pdf/Familiarisation-
Programme-for-Independent-Directors.pdf
In the forthcoming Annual General Meeting, Mr. Nadir Godrej will retire
by rotation and being eligible is considered for re-appointment.
Your Company has an Audit Committee in compliance with the Listing
Agreement and the provisions of the Companies Act, 2013. The Committee
consists entirely of the Independent Directors. The composition of the
Committee is given in the Corporate Governance section of the Annual
Report.
5. CHANGES IN KEY MANAGERIAL PERSONNEL
Mr. P Ganesh, Executive Vice President (Finance & Commercial) & Company
Secretary resigned with effect from close of business hours on March
31,2015. As a part of talent rotation within the Group, Mr. P Ganesh
has moved to another Group Company from April 1,2015. Mr. V Srinivasan
has been appointed as the Chief Financial Officer and Company Secretary
of the Company with effect from April 1,2015.
6. REMUNERATION POLICY
The Company's Remuneration Policy for Directors, Key Managerial
Personnel and other employees is annexed as Annexure 'A' to the
Directors' Report. The Company's 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 non-executive directors receive sitting fees and commission in
accordance with the provisions of the Companies Act, 2013.
The Company also has a Board Diversity Policy in place and is annexed
as Annexure 'B'. The criteria for determining qualification, positive
attributes and independence of directors is as per the Board Diversity
Policy, Listing Agreement and Companies Act, 2013.
7. REMUNERATION TO DIRECTORS
The disclosure on the details of remuneration to directors and other
employees pursuant to Section 197 read with Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 is
annexed as Annexure 'C'. Details of employee remuneration as required
under provisions of Section 197 of the Companies Act, 2013 and Rule
5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 are available at the Registered Office of the
Company during working hours before 21 days of the Annual General
Meeting and shall be made available to any shareholder on request. Such
details are also available on your Company's website in the Annual
Report section of the Investor's page.
Mr. Adi Godrej, Chairman; Ms. Nisaba Godrej, Executive Director,
Innovation and Mr. Vivek Gambhir, Managing Director receive remuneration
from your Company. Mr. Adi Godrej receives commission from your
Company's holding company viz. Godrej & Boyce Manufacturing Company
Limited.
8. PERFORMANCE EVALUATION OF THE BOARD OF DIRECTORS, ITS INDIVIDUAL
MEMBERS AND ITS COMMITTEES
We recently conducted a formal Board Effectiveness Review as part of
our 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 Corporate HR team of Godrej Industries Limited and Associate
Companies (GILAC) 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 could improve its effectiveness.
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
* Chairman
The following reports were created, as part of the evaluation:
* Board Feedback Report
* Individual Board Member Feedback Report
* Chairman's Feedback Report
The overall Board Feedback Report was facilitated by Mr. Bharat Doshi
with the Independent Directors. The Directors were vocal about the Board
functioning effectively, but also identified areas that show 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.
9. FINANCE
A. Non-Convertible Debentures
The Unsecured Redeemable Zero Coupon Non-Convertible Debentures issued
in October 2012 on private placement basis, aggregating to Rs. 250
crore for a tenor of two years, having a credit rating of [ICRA] AA
(Stable), have been redeemed during the year as per the terms of the
issue.
Your Company issued 2,500 Unsecured Redeemable Zero Coupon
Non-Convertible Debentures on October 16, 2014 on private placement
basis, aggregating to Rs. 250 crore for a tenor of 1 year and 63 days
(428 days). The said Debentures have been given a credit rating of
"ICRA AA (Stable)" by ICRA.
B. Particulars of Loans, Guarantees and Investment
Following are the particulars of Loans, Guarantees and Investments made
by the Company during the year:-
sr company name Amount Amount
no USD(MIO) Rs(crore)
INVESTMENTS:
1 Godrej Consumer Products 7.85 47.68
Mauritius Limited
2 Godrej Global Middle East (1. 25) (5.74)
FZE *
3 Godrej Consumer Products 1.50 8.98
Holding (Mauritius) Limited
4 Godrej Household Products 1.50 8.95
(Bangladesh) Pvt. Limited
5 Godrej Consumer Products (0.50) (2.28)
Mauritius Limited **
6 Godrej Mauritius Africa 1.00 6.22
Holdings Limited
7 Godrej East Africa Holdings 3.60 22.12
Limited
Total 13.70 85.94
Note: * Investments transferred to another wholly owned subsidiary.
** Investment in preference capital.
All investments except the investment mentioned in Sr. No 5 above are
in equity capital.
No Loans or Corporate Guarantees were given during the year.
10. RELATED PARTY TRANSACTIONS
In compliance with Clause 49 of the Listing Agreement, the Board has
adopted a policy for transactions with Related Parties ("RPT Policy").
The RPT policy is available on the Company website, viz.
www.godreicp.com. on the Investors page, under the section titled
"Compliance".
This may also be accessed through the following link:
http://www.godrejcp.com/Resources/pdf/Related-Party-
Transactions-Policy.pdf
Apart from the Related Party Transactions in the ordinary course of
business and at arm's length basis, details of which are given in the
notes to the financial statements, there were no other Related Party
Transactions requiring disclosure in the Directors' Report, for
compliance with Section 134(3)(h) of the Companies Act, 2013.
Therefore, a Nil Report is annexed as Annexure 'D' in the format
prescribed i.e. Form AOC-2.
11. ACQUISITIONS & MERGERS
Your Company entered into the following agreements during the year for
various acquisitions:
* With the Darling Group on October 1,2014to acquire 100% stake in its
hair extensions business in Ghana through its wholly-owned subsidiary,
Weave Business Holdings Mauritius Private Limited.
* With Frika Pty Limited, South Africa on January 6, 2015, for the
acquisition of 100% equity stake in its hair extensions business
in South Africa.
* With the Darling Group on February 24, 2015, for increasing the
Company's shareholding in Darling Group's South Africa and Mozambique
businesses to 90% in line with the intent of gradually scaling up its
ownership of the Darling business.
Certain Subsidiaries of your Company have merged with another
subsidiary, the details of which are given in the para on Subsidiaries
and Associates below.
12. SUBSIDIARIES & ASSOCIATES
During the year, the following companies became subsidiaries of your
Company:
DGH Phase 3 Mauritius
Weave Ghana Limited
Godrej Easy IP Holding Limited
Darling Trading Company Limited
Godrej Africa Holdings Limited
Godrej Indonesia IP Holdings Limited
Godrej Megasari Holdings Limited
Frika Weave Pty Limited
Pursuant to a scheme of amalgamation sanctioned by the Supreme Court of
Mauritius, Godrej Kinky Holdings Limited, a wholly owned subsidiary of
your Company has merged with Godrej Consumer Investment Holding
Limited, another wholly owned subsidiary. The merger is effective from
April 1,2014.
Pursuant to another scheme of amalgamation sanctioned by the Supreme
Court of Mauritius, the wholly owned subsidiaries named below merged
into Godrej Mauritius Africa Holdings Ltd, another wholly owned
subsidiary.
Godrej Consumer Investment Holding Limited
Godrej Weave Holdings Limited
DGH Mauritius Private Limited
Weave Business Holding Mauritius Private Limited
DGH Phase 3 Mauritius
The merger is effective from March 31,2015.
Inecto Manufacturing Limited, U.K and Issue Group Uruguay
S.A were dissolved during the year.
The details of business of the key subsidiaries are given in the
Management Discussion & Analysis section of the Directors' Report. The
performance and financial position of each subsidiary and associate
company is given in form AOC 1 which forms part of Consolidated
Financial Statements.
The Consolidated Financial Statements of the Company and its
subsidiaries, prepared in accordance with Accounting Standard 21 issued
by the Institute of Chartered Accountants of India, also forms part of
the Annual Report and Accounts of your Company.
Pursuant to the provisions of Section 136 of the Companies Act, 2013,
the Company has placed the financial statements of its subsidiaries on
the Company's website www.godrejcp.com.
In compliance with the Listing Agreement, the Board has adopted a
policy for determining material subsidiaries. This policy is available
on the Company's website www.godrejcp.com, in the Investors page, under
the section titled "Compliance".
This may also be accessed at the following link:
http://www.godrejcp.com/Resources/pdf/Policv-on-Material-
Subsidiaries.pdf
13. DISCLOSURE ON CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION,
FOREIGN EXCHANGE EARNINGS AND OUTGO
Annexure 'E' to this Report provides information on Conservation of
Energy, Technology Absorption and Foreign Exchange Earnings and Outgo,
required under Section 134 (3)(m) of the Companies Act, 2013 read with
the Companies (Accounts) Rules, 2014 which forms a part of the
Directors' Report.
14. RISK MANAGEMENT POLICY
The Board has constituted a Risk Management Committee. Elements of
risks to the Company are given in the Management Discussion & Analysis
section of this Report under the heading "Risks & Concerns".
15. CORPORATE SOCIAL RESPONSIBILITY
Your Company has a policy for meeting its Corporate Social
Responsibility ("CSR"). Details of CSR projects are provided in
Annexure 'F' in the prescribed format.
16. VIGIL MECHANISM
Your Company has adopted a Vigil Mechanism Policy.
The purpose of the policy is to enable employees to raise concerns
about unacceptable improper practices and/or any unethical practices
being carried out in the organisation without the knowledge of
management. All employees shall be protected from any adverse action
for reporting any unacceptable/improper practice and/or any unethical
practice, fraud or violation of any law, rule or regulation. This
Whistle Blower policy will also be applicable to the Directors of the
Company.
The Audit Committee reviews on a quarterly basis, reports made under
this policy and implements corrective actions, wherever necessary.
17. THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION AND REDRESSAL) ACT, 2013
In Compliance with Section 4 of the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013 your
Company constituted an "Internal Complaints Committee" ("Committee").
Twenty- six workshops were conducted to create awareness about sexual
harassment among employees.
Since the number of complaints hied during the year was NIL the
Committee prepared a NIL complaints report. This is in compliance with
Section 22 of the Act.
18. AUDIT COMMITTEE
Your Company has an Audit Committee in compliance with Section 177 of
the Companies Act, 2013 and the Listing Agreement. The Audit Committee
consists of the following Independent Directors: Mr. Bharat Doshi as
Chairman of the Committee and Mr. Narendra Ambwani, Prof. Bala
Balachandran, Dr. Omkar Goswami, Mr. Aman Mehta, Mr.D Shivakumar and
Ms. Ireena Vittal as members. Prof. Bala Balachandran has ceased to be
a member of the Committee with effect from the close of business hours
on March 31, 2015 since he has resigned from the Board.
19. EMPLOYEE STOCK GRANT SCHEME
The shareholders have on March 18, 2011, approved the Employee Stock
Grant Scheme (GCPL ESGS 2011).The scheme envisages the issue of up to
2,500,000 fully paid equity shares at a nominal value of Rs. 1/- each
in the Company to certain eligible employees of the Company and/ or its
subsidiaries. In terms of the GCPL ESGS 2011, 174,121 grants are
outstanding and not vested as at March 31,2015.
The eligible employees shall be entitled to exercise the options vested
in them, within one month from the date of vesting or such dates as may
be determined by the Nomination and Remuneration Committee. The equity
shares vested in the eligible employees shall be allotted on payment of
the exercise price of Rs. 1/- per share.
The details of the grants allotted under GCPL ESGS 2011, as also the
disclosures in compliance with Section 62 1(b) read with Rule 12(9) of
the Companies (Share Capital & Debentures) Rules, 2014 are set out in
Annexure 'G' to this report.
Under the scheme of amalgamation between your Company and Godrej
Household Products Limited (GHPL), the Employee Stock Option Scheme of
the erstwhile unlisted GHPL has become part of your Company. The equity
shares of 'Godrej Industries Limited' are the underlying equity shares
for the stock option scheme. As at April 1,2014, 10,40,000 options
convertible into 10,40,000 equity shares of Godrej Industries Limited
(GIL) were outstanding. As at March 31,2015, 35,000 options convertible
into 35,000 equity shares of GIL were outstanding.
The Company has not given any loan to any person under any scheme for
the purpose of or in connection with the subscription or purchase of
shares in the Company or the Holding Company. Hence there are no
disclosures on voting rights not directly exercised by the employees in
respect of shares to which the scheme relates.
20. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions contained in Section 134(5) of the Companies
Act, 2013, your Directors, based on the representation received from
the Operating Management, and after due enquiry, confirm that:
a) 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) they have selected such accounting policies and applied them
consistently and made judgments and estimates 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 of the
Company for that period;
c) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of this
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
d) they have prepared the annual accounts on a going concern basis;
e) they have laid down internal financial controls to be followed by
the Company and such internal financial controls are adequate and
operating effectively;
f) the Directors have devised a proper system to ensure compliance with
the provisions of all applicable laws and this system is adequate and
operating effectively.
21. UNCLAIMED SHARES
In compliance with Clause 5A of the Listing Agreement with the Stock
Exchanges, your Company has transferred the unclaimed shares into a
demat account, viz. "Unclaimed- Suspense Account". As and when an
allottee approaches the Company, after proper verification, either
credit the shares lying in the Unclaimed Suspense Account to the demat
account of the allottee to the extent of the allottee's entitlement, or
deliver the physical certificates after re- materialising them,
depending on what has been opted for by the allottee.
Particulars no.of no.of shares
shareholders
Aggregate number of 5,808 882,849
shareholders and the
outstanding shares lying in
the Unclaimed Suspense
Account at the beginning of
the year;
Number of shareholders - -
and aggregate shares
transferred to Unclaimed
Suspense Account during
the year;
Number of shareholders 52 9,112
who approached the issuer
for transfer of shares from
the Unclaimed Suspense
Account during the year
and aggregate shares
transferred;
Number of shareholders 52 9,112
to whom shares were
transferred from the
Unclaimed Suspense
Account during the year
and the aggregate shares
transferred;
Aggregate number of 5,756 873,737
shareholders and the
outstanding shares lying in
the Unclaimed Suspense
Account at the end of the
year.
22. LISTING
The shares of your Company are listed at The BSE Limited and The
National Stock Exchange of India Limited.
2500 Non-Convertible Debentures of face value Rs. 10 lakh each
aggregating Rs. 250 crore issued in October, 2014 on private placement
basis, are listed in the whole sale debt segment on The National Stock
Exchange of India Limited.
The applicable annual listing fees have been paid to the Stock
Exchanges before the due date.
23. EXTRACT OF ANNUAL RETURN
Annexure 'H' to this Report provides the Extract of Annual Return to be
filed by the Company under the Companies Act, 2013.
24. AUDITORS AND AUDITORS' REPORT
A. Statutory Auditors
In accordance with Section 139 of the Companies Act, 2013 and rules
made thereunder, M/s. Kalyaniwalla & Mistry, Chartered Accountants,
Mumbai, have been appointed as statutory auditors to hold office from
the conclusion of the 14th Annual General Meeting till the conclusion
of the 17th Annual General Meeting which will be held in 2017 (subject
to ratification of re-appointment by the members at every AGM held
after the AGM in which the appointment was made) of the Company, on a
remuneration as may be agreed upon by the Board of Directors and the
Auditors.
The notes to the Accounts referred to in the Auditors' Report are
self-explanatory and therefore do not call for any further explanation.
B. Cost Auditors
Pursuant to directions from the Department of Company Affairs, M/s. P.
M. 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.
C. Secretarial Auditors
The Board has appointed 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 'I' to
this Report. The Secretarial Audit Report does not contain any
qualification, reservation or adverse remark.
25. CORPORATE GOVERNANCE
The Company continues to enjoy a Corporate Governance Rating of CGR2
(pronounced as CGR 2 plus) and a Stakeholder Value Creation and
Governance Rating of SVG1 (pronounced as SVG one). The ' ' sign
indicates relatively higher standing within the category indicated by
the rating. The above ratings are on a rating scale of 1 to 6, where 1
is the highest rating. The two ratings evaluate whether a Company is
being run on the principles of Corporate Governance and whether the
practices followed by the Company lead to value creation for all its
shareholders.
The CGR2 rating is on a rating scale of CGR1 to CGR6, where CGR1
denotes the highest rating. The CGR2 rating implies that in ICRA's
current opinion, the rated Company has adopted and follows such
practices, conventions and codes as would provide its financial
stakeholders a high level of assurance on the quality of corporate
governance.
The SVG1 rating is on a rating scale of SVG1 to SVG6, where SVG1
denotes the highest rating. The SVG1 rating implies that in ICRA's
current opinion, the Company belongs to the highest category on the
composite parameters of stakeholder value creation and management as
also corporate governance practices.
Pursuant to Clause 49 of the Listing Agreement, the Management
Discussion & Analysis Report and the Report on Corporate Governance are
included in the Annual Report. The Auditors' Certificate certifying the
Company's compliance with the requirements of Corporate Governance in
terms of Clause 49 of the Listing Agreement, is attached as Annexure
'J' and forms a part of this Annual Report.
27. INTERNAL CONTROL AND ADEQUACY
We have a proper system of Internal Controls to ensure that all assets
are safeguarded and protected against loss from unauthorised use or
disposition and that transactions are authorised, recorded and reported
correctly.
Our Corporate Audit & Assurance Department which is ISO 9001: 2008
certified, issues well documented operating procedures and authorities,
with adequate built-in controls at the beginning of any activity and
during the continuation of the process, if there is a major change.
The internal control is supplemented by an extensive programme of
internal, external audits and periodic review by the management. This
system is designed to adequately ensure that financial and other
records are reliable for preparing financial information and other data
and for maintaining accountability of assets.
The GCPL Head Office and all major factories and offices across India
operate on an Information Security Management System which is ISO/IEC
27001 certified.
28. RISKS AND CONCERNS
With our presence in three continents i.e. Asia, Africa and Latin
America, we are exposed to risks which can adversely impact our
operating performance, cash flows, financial performance, management
performance and overall sustainability. We have an active risk
management strategy in place and a Risk Committee, whose role is to
identify potential risks, create mitigation strategies and monitor the
occurrence of risk.
The risks that may affect us include, but are not limited to:
* Economic conditions.
* Inflationary pressures and other factors affecting demand for our
products.
* Increasing costs of raw material, transport and storage.
* Supplier and distributor relationships and retention of distribution
channels.
* Competitive market conditions and new entrants to the market.
* Labour shortages and attrition of key staff.
* Exchange rate fluctuation and arbitrage risk.
* Integration risks for acquired companies.
* Compliance and regulatory pressures including changes to tax laws.
* Seasonal fluctuations.
* Political risks associated with unrest and instability in countries
where we have a presence or operation
98 | Annual Report 2014-15
29. OPPORTUNITIES AND THREATS
Close to 40% of our growth now comes from new products and renovations.
We believe that there are tremendous long-term growth opportunities in
emerging markets. These geographies are home to 80% of the world's
population. Estimates suggest that these markets will contribute to
close to 36% of the forecasted increase in the world's population over
the next five years. Close to half of the total global consumption is
also slated to come from here. We believe that there are significant
opportunities for growth in our core geographies and categories.
On the domestic front, the fundamentals of the FMCG sector remain
strong and there is still significant growth potential, given the low
penetration and consumption rates for many FMCG categories in the
country.
In terms of threats, the key threats are compliance and regulatory
pressures including changes to tax law, seasonal fluctuations and
unrest and instability in countries where we have a presence or
operation.
OUTLOOK
We expect to see a gradual recovery in the macroeconomic environment
and for the Indian economy to consequently, gather pace in fiscal year
2016. While macroeconomic factors remain challenging in some of our
international markets, we believe that we are well placed to continue
our strong sales and profitability growth momentum. Overall, our focus
will be on sustaining and extending leadership in our core categories.
We are investing for the longer term and accelerating the pace of new
product launches, to capitalise on the uptick in consumer sentiment and
demand. We are confident that with our clear strategic focus,
differentiated product portfolio, superior execution and top-notch
team, we will continue to deliver industry-leading results in the
future.
30. ACKNOWLEDGEMENT
Your Directors wish to extend their sincere thanks to the Central and
State Governments as also all the Government agencies, banks,
customers, shareholders, vendors and other related organisations 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
Adi Godrej
Chairman
Mumbai, April 28, 2015
Mar 31, 2013
The Directors have pleasure in presenting their Report along with the
Audited Accounts for the year ended on March 31, 2013.
1. FINANCIAL HIGHLIGHTS AND REVIEW OF OPERATIONS
The Company''s financial performance for the year under review has been
encouraging and is summarised below:
Figures in Rs. Crore
Consolidated Standalone
FY 2012-13 FY 2011-12 FY 2012-13 FY 2011-12
Net Sales 6390.79 4850.94 3520.93 2933.53
Other Operating Income 16.65 15.22 60.09 46.55
Total Income from
Operations 6407.44 4866.16 3581.02 2980.08
Total Expenses other
than Depreciation &
Finance Cost 5392.28 3990.26 2938.94 2410.64
Profit from Operations
before depreciation,
Other 1015.16 875.90 642.08 569.44
Income, Finance Cost
& Exceptional Items
Depreciation 77.00 64.44 32.27 25.83
Profit from Operations
before Other Income,
Finance 938.16 811.46 609.81 543.61
Cost & Exceptional
Items
Foreign Exchange
Gain / (Loss) (32.78) (20.50) (12.01) (15.16)
Other Income 67.78 52.00 50.65 63.05
Profit before Finance
Costs and Exceptional
Items 973.16 842.96 648.45 591.50
Finance Cost 77.45 65.84 15.49 13.39
Profit after Finance
Costs but before
Exceptional Items 895.71 777.12 632.96 578.11
Exceptional Items 128.90 200.17 0.00 180.95
Profit Before Tax 1024.61 977.29 632.96 759.06
Tax Expense 179.18 226.05 122.02 154.67
Net Profit after Tax
before Minority Interest 845.43 751.24 510.94 604.39
Minority Interest (49.33) (24.52) - -
Net Profit for the period 796.10 726.72 510.94 604.39
2. APROPRIATION
Your Directors recommend appropriation as under:
Rs. Crore
GCPL Standalone FY 2012-13 FY 2011-12
Surplus as at end of previous year 769.82 407.91
Add : Net Profit for the year 510.94 604.39
Available for appropriation 1280.76 1012.30
Less: Transfer to DRR 21.25 -
Less : Interim Dividend 170.16 156.63
Less : Tax on distributed profits 28.13 25.41
Less :Transfer to General Reserve 51.13 60.44
Total Appropriation 270.67 242.48
Surplus Carried Forward 1010.09 769.82
3. DIVIDEND
For the year 2012-13, three interim dividends were paid on shares of
face value Rs. 1/- each - as follows: Rs. 1/- per equity share on
August 4, 2012, Rs. 1/- per equity share on November 3, 2012 and Rs.
1/- per equity share on January 31, 2013.
In addition to the above, the Board of Directors has also declared a
fourth interim dividend on April 30, 2013 at the rate of Rs. 2/- per
equity share on shares of nominal value Rs. 1/- each. The record date
for the same has been fixed as May 9, 2013.
Your Directors recommend that the aforesaid interim dividends
aggregating to Rs. 5.00 per equity share on shares of face value Rs.
1/- each be declared as final dividend for the year ended on March 31,
2013.
4. NON-CONVERTIBLE DEBENTURES
In April 2012, your Company made an issue of Unsecured Redeemable 9.80%
p.a. coupon Non- Convertible Debentures aggregating Rs. 50 crore for a
tenor of 18 months, on a private placement basis and the same is
outstanding as at the year end. The said Debentures have a credit
rating of [ICRA] AA (Stable)
In October 2012, your Company has made a fresh issue of a Unsecured
Redeemable Zero Coupon Non-Convertible Debentures on a private
placement basis aggregating to Rs. 250 crore for a tenor of two years
and the same is outstanding as at the year end. The said Debentures
have a credit rating of [ICRA] AA (Stable)
The unsecured Non-Convertible Debentures of Rs. 225 crore issued
November 2011 on a private placement basis was redeemed by your Company
in November 2012 by exercising the call option at the end of one year
as per the terms of the issue.
5. subsidiaries
Your Company''s focus is on emerging markets. Our 3x3 strategy
concentrates on three categories namely home care, personal wash, hair
care in three continents which comprise Asia, Africa and South America.
In the past few years we acquired subsidiaries in the three continents
in line with our ''3 x 3'' strategy.
During the year your Company completed the acquisition of 51% stake in
Darling group operations in Kenya and 60% stake in Cosmetica Nacional
in Chile. During the year Godrej Nigeria Holdings Ltd merged with
Godrej Consumer Products Mauritius Ltd (both wholly owned subsidiaries
of GCPL) with effect from April 1, 2012.
In January 2013, your Company divested its non core food business in
Indonesia together with the associated brands at a value of about uSD
35 million. This business was operated by an Indonesian subsidiary of
the Company viz PT Simba Indosnack Makmur. Consequently PT Simba
Indosnack Makmurhas ceased to be a subsidiary of your Company
The details of business of the subsidiaries are given in Management
Discussion and Analysis section of the Directors'' Report. In line with
the General Circular No. 2 /2011 dated February 8, 2011 issued by the
Ministry of Corporate affairs, the Board of Directors of your Company
has passed a resolution for giving its consent for not attaching the
financial statements of subsidiaries of the Company to the Balance
sheet of the Company for the year ended March 31, 2013.
The Consolidated Financial Statements of the Company and its
subsidiaries, prepared in accordance with Accounting Standard 21 issued
by the Institute of Chartered Accountants of India, also forms part of
the Annual Report and accounts of your Company. A one page financial
summary for all the subsidiaries giving the required information is
disclosed in the consolidated balance sheet.
As directed by the aforesaid circular the accounts of the subsidiary
companies and the related detailed information will be made available
to any shareholder seeking such information at any point of time. The
accounts of the subsidiary companies are also available for inspection
by any shareholder at the registered office of the Company or at the
registered offices of the subsidiary companies.
6. DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the provisions contained in section 217 (2AA) of the
Companies Act, 1956, your Directors, based on the representation
received from the Operating Management, and after due enquiry, 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 they have selected such accounting policies and applied them
consistently and made judgements and estimates 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 of the
Company for that period;
c) that they have taken proper and sufficient care 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 they have prepared the annual accounts on a going concern
basis.
7. EMPLOYEE STOCK OPTION PLAN
The shareholders of the Company vide special resolution passed on March
14, 2007 approved the setting up of Godrej Consumer Products Ltd.
Employee Stock Option Plan (GCPL ESOP). Pursuant to the approvals
received in the above meeting and in the meeting dated April 24, 2008,
the Company can grant 4,500,000 stock options convertible into
4,500,000 equity shares of the nominal value Rs. 1/- each to the
eligible employees/directors of the Company and of the Company''s
subsidiaries.
The GCPL ESOP is administered by a trust set up for this purpose viz.
Godrej Consumer Products Ltd. Employee Stock Option Trust.
As on March 31, 2013, 74,050 options convertible into 74,050 shares of
nominal value of Rs. 1/- each are outstanding in respect of options
granted under the GCPL ESOP to employees of the Company.
The details of the Options allotted under GCPL ESOP, as also the
disclosures in compliance with Clause 12 of the Securities and Exchange
Board of India (Employee Stock Option Scheme and Employee Stock
Purchase Scheme) Guidelines, 1999 are set out in Annexure A to this
report.
Since the exercise price of GCPL options is the last closing price on
the stock exchange plus interest till the date of exercise, there is no
compensation cost in Financial Year 2012-13 based on the intrinsic
value of the options.
Under the Scheme of Amalgamation between your Company and Godrej
Household Products Limited (GHPL), the Employee Stock Option Scheme of
the erstwhile unlisted GHPL has become part of your Company. The equity
shares of ''Godrej Industries Limited'' are the underlying equity
shares for the stock option scheme. As at March 31, 2013, 1,120,000
options convertible into 1,120,000 equity shares of Godrej Industries
Ltd are outstanding.
8. EMPLOYEE STOCK PURCHASE PLAN
The Board of Directors at its meeting held on January 22, 2011 had
approved an Employee Stock Purchase Plan (GCPL ESPL) under the
provisions of Section 77 of the Companies Act, 1956. The GCPL ESPL is
administered by the GCPL ESOP Trust. Employees in the cadre of Vice
Presidents and above, are eligible to be covered under the plan.
under the GCPL ESPL, the Company has provided loan to the GCPL ESOP
Trust at an interest rate which is not less than the bank rate, to
enable the GCPL ESOP trust to acquire upto 1,000,000 shares of the
Company from the secondary market.
under the GCPL ESPL,1,000,000 shares have been granted, which have
vested on March 30, 2012. The grants shall be compulsorily exercised by
acquiring the shares from the GCPL ESOP trust within the exercise
period as per the scheme. The exercise price shall be the market price
on the day prior to the date of grant plus interest at a rate not less
than the bank rate till the date of exercise.
9. EMPLOYEE STOCK GRANT SCHEME
The shareholders have on March 18, 2011, approved a new Employee Stock
Grant Scheme (ESGS 2011). The scheme envisages the issue of up to
2,500,000 fully paid equity shares at a nominal value of Rs. 1 each in
the Company to certain eligible employees of the Company and / or its
subsidiaries. In terms of the ESGS 2011, 126,193 grants are outstanding
and not vested as at March 31, 2013.
The eligible employees shall be entitled to exercise the options vested
in them, within one month from the date of vesting or such dates as may
be determined by the HR & Compensation Committee. The equity shares
vested in the eligible employees shall be allotted on payment of the
exercise price of Rs. 1.
The details of the grants allotted under GCPL ESGS, as also the
disclosures in compliance with Clause 12 of the Securities and Exchange
Board of India
(Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines, 1999 are set out in Annexure A to this report
10. UNCLAIMED SHARES
With respect to the unclaimed shares in the Company, in compliance with
clause 5A of the listing agreement with the stock exchanges, your
Company had sent three reminders to the addresses given in the
application form asking for the correct particulars.In respect of the
folios for which no response was received, the said shares were
transferred to a newly opened demat account during the year viz.
"Unclaimed-Suspense Account". As and when an allottee approaches
the Company, the Company shall, after proper verification, either
credit the shares lying in the unclaimed Suspense Account to the demat
account of the allottee to the extent of the allottee''s entitlement, or
deliver the physical certificates after re-materialising the same,
depending on what has been opted for by the allottee.
11. DIRECTORS
In accordance with Article 130 and 131 of the Articles of Association
of your Company, Mr. Nadir Godrej, Mr. Bharat Doshi and Dr. Omkar
Goswami retire by rotation and being eligible, offer themselves for re-
appointment.
The Board has at its meeting held on April 30, 2013 appointed Ms.
Nisaba Godrej as a whole- time Director designated as Executive
Director, Innovation for a period of three years with effect from July
1, 2013 to June 30, 2016. The appointment is subject to the approval of
the shareholders
The Board of Directors at its meeting held on April 30, 2013 also made
the following appointments
- Mr. Vivek Gambhir as an Additional Director with effect from April
30, 2013 and as the Managing Director for a period of three years with
effect from July 1, 2013 to June 30, 2016.
- Ms. Ireena Vittal as an Additional Director with effect from April
30, 2013.
- Mr. A Mahendran as a Non Executive Additional Director with effect
from July 1, 2013.
The Additional Directors appointed as above will hold office upto the
date of the Annual General Meeting pursuant to Section 260 of the
Companies Act, 1956. Pursuant to Section 257 of the Companies Act,
1956, the Company has received a notice from a member signifying his
intention to propose the candidatures of Mr. Vivek Gambhir, Ms. Ireena
Vittal and Mr A Mahendran as Directors in the ensuing Annual General
Meeting Accordingly the proposals for the aforesaid
appointments/reappointments of Directors are included in the notice of
the Annual General Meeting.
12. LISTING
The shares of your Company are listed at The BSE Limited and The
National Stock Exchange of India Ltd.
2500 Non-Convertible Debentures of face value Rs. 10 each aggregating
Rs. 250 crore issued in October 2011 on private placement basis is
listed in the whole sale debt segment in The National Stock Exchange of
India Ltd
500 unsecured Redeemable 9.80% p.a. coupon Non-Convertible Debentures
aggregating Rs. 50 crore issued in April 2012 on private placement
basis is listed whole sale debt segment in The National Stock Exchange
of India Ltd
The applicable annual listing fees have been paid to the stock
exchanges before the due date.
13. AUDITORS
The Auditors, Kalyaniwalla & Mistry, Chartered Accountants, Mumbai,
retire and offer themselves for reappointment.
Pursuant to directions from the Department of Company Affairs, M/s. P.
M. Nanabhoy & Co., Cost Accountants have been appointed as Cost
Auditors for the applicable products of the Company for the year
2012-13. They are required to submit the report to the Central
Government within 180 days from the end of the accounting year. M/s. P.
M. Nanabhoy & Co., Cost Accountants have also been appointed as Cost
Auditors for the year 2013-14 for the applicable products of the
Company
14. ADDITIONAL INFORMATION
Annexure B to this Report gives the 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'' Report.
Information as per Section 217(2A) of the Companies Act,1956 read with
the Companies (Particular of Employees) Rules, 1975 forms part of this
Report. As per 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 the employee
under Section 217(2A) of the Companies Act,1956. Any shareholder
interested in obtaining a copy of the statement may write to the
Company Secretary at the Registered Office of the Company.
The notes to the Accounts referred to in the Auditors'' Report are
self-explanatory and therefore do not call for any further explanation.
15. CORPORATE GOVERNANCE
The Company continues to enjoy a Corporate Governance Rating of CGR2
(pronounced as CGR2 plus) and a Stakeholder Value Creation and
Governance Rating of SVG1 (pronounced as SVG 1). The sign indicates
relatively higher standing within the category indicated by the rating.
The above ratings are on a rating scale of 1 to 6, where 1 is the
highest rating. The two ratings evaluate whether a Company is being run
on the principles of Corporate Governance and whether the practices
followed by the Company lead to value creation for all its
shareholders.
The CGR2 rating is on a rating scale of CGR1 to CGR6 where CGR1 denotes
the highest rating. The CGR2 rating implies that in ICRA''s current
opinion, the rated Company has adopted and follows such
practices,conventions and codes as would provide its financial
stakeholders a high level of assurance on the quality of corporate
governance.
The SVG1 rating is on a rating scale of SVG1 to SVG6 where SVG1 denotes
the highest rating. The SVG1 rating implies that in ICRA''s current
opinion, the Company belongs to the highest category on the composite
parameters of stakeholder value creation and management as also
corporate governance practices
Pursuant to Clause 49 of the Listing Agreements, the Management
Discussion and Analysis Report and the Report on Corporate Governance
are included in the Annual Report. The Auditors Certificate certifying
the Company''s compliance with the requirements of Corporate Governance
in terms of Clause 49 of the Listing Agreement,is attached as Annexure
C and forms a part of this Annual Report.
16. ACKNOWLEDGEMENT
Your Directors wish to place their sincere thanks to the Central and
State Governments as also all the Government agencies, banks,
customers, shareholders, vendors and other related organisations 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
Adi Godrej
Chairman
Mumbai, April 30, 2013
Mar 31, 2012
The Directors have pleasure in presenting their Report along with the
Audited Accounts for the year ended March 31, 2012.
1. Financial Highlights and Review of Operations
Your Company's financial performance for the year under review has been
encouraging and is summarised below:
(Rs. Crore)
Consolidated Standalone
Sr
N0. PARTICULARS Year ended Year ended Year ended Year ended
31-Mar-12 31-Mar-11 31-Mar-12 31-Mar-11
1. Income from Operations
Net Sales (Net of
Excise Duty) 4,850.94 3,676.31 2,933.53 2,425.37
Other Operating Income 15.22 17.29 46.55 43.53
Other Income 52.00 46.96 63.05 37.14
Total Revenue 4,918.16 3,740.56 3,043.13 2,506.04
2. Total Expenses other
than depreciation &
Finance Cost 3,990.26 3,040.50 2,410.64 1,972.53
3. Profit before
Depreciation, Finance
Cost & 927.90 700.06 632.49 533.51
Exceptional Items
4. Depreciation 64.44 49.92 25.83 21.98
5. Profit before Finance
Cost, Exceptional
Items and Tax 863.46 650.14 606.66 511.53
6. Foreign Exchange Gain
/ (Loss) (20.50) 5.28 (15.16) (1.18)
7. Finance Cost 65.84 43.64 13.39 5.70
8. Profit after Finance
Costs but before
Exceptional Items 777.12 611.78 578.11 504.65
9. Exceptional Items 200.17 41.14 180.95 40.31
10. Profit Before Tax 977.29 652.92 759.06 544.96
11. Tax Expense 226.05 138.21 154.67 110.00
12. Net Profit after Tax
before Minority
Interest 751.24 514.71 604.39 434.96
13. Minority Interest (24.52) 0.00 0.00 0.00
14. Net Profit for the
period 726.72 514.71 604.39 434.96
15. EPS (Basic &
Diluted) 22.34 16.11 18.58 13.62
2. Appropriation
Your Directors recommend appropriation as under:
(Rs. Crore)
Year ended Year ended
GCPL Standalone 31-Mar-12 31-Mar-11
Surplus as at end of previous year 407.91 174.20
Add : Net Profit for the year 604.39 434.96
Add : Addition on Amalgamation - 60.44
Available for appropriation 1,012.30 669.60
Less : Interim Dividend 156.63 163.20
Less : Tax on distributed profits 25.41 33.39
Less : Transfer to General Reserve 60.44 65.10
Total Appropriation 242.48 261.69
Surplus Carried Forward 769.82 407.91
3. Dividend
For the year 2011-12, three interim dividends were paid on shares of
face value Rs. 1/- each - as follows: Rs. 1/- per equity share on July 23,
2011, Rs. 1/- per equity share on October 23, 2011 and Rs. 1/- per equity
share on January 21, 2012.
In addition to the above, the Board of Directors has also declared a
fourth interim dividend on April 30, 2012 at the rate of Rs. 1.75 per
equity share on shares of nominal value Rs. 1/- each. The record date for
the same has been fixed as May 10, 2012.
Your Directors recommend that the aforesaid interim dividends
aggregating to Rs. 4.75 per equity share on shares of face value Rs. 1/-
each be declared as final dividend for the year ended on March 31,
2012.
4. Preferential Allotment of Equity Shares
During the year your Company issued 16,707,317 equity shares of face
value Rs. 1/- each at a premium of Rs. 409 per equity share to Baytree
Investments (Mauritius) Pte. Ltd. on a preferential basis. The pricing
was higher than the floor price calculated as per the SEBI ICDR
regulations. The issue proceeds aggregating Rs. 685 crore is proposed to
be used for general corporate purpose including retirement of debts.
5. Issue of Non-Convertible Debentures
In November 2011, your Company has made a fresh issue of unsecured
redeemable non- convertible debentures on a private placement basis,
aggregating to Rs. 225 crore for a tenor of three years and the same is
outstanding as at the year end. The said debentures have a credit
rating of ICRA AA.
Subsequent to the close of the financial year, your Company made a
fresh issue of unsecured redeemable non-convertible debentures on a
private placement basis, aggregating to Rs. 50 crore for a tenor of 18
months. The said debentures have a credit rating of ICRA AA.
During the year your Company redeemed debentures aggregating to Rs. 200
crore on their respective redemption dates.
6. Acquisitions
Your Company acquired a 51% stake in the Darling Group's business in
South Africa, Nigeria & Mozambique, which represents about 45% of the
Group's business. The acquisition of the balance stake will be
completed in phases spread over the next 3 to 5 years.
Kinky will leverage Darling's efficient production facilities to
considerably lower their costs while hair extensions including
artificial hair, wigs adn braids manufactured by Darling have a
readymade consumer interface through the Kinky outlets.
During the year, your Company also entered into an agreement for
acquisition of 60% stake in Cosmetica Nacional, a leading hair
colourant and cosmetics company based in Chile and with important
presence in Panama and Costa Rica as well. The Company also has a
strong presence in the colour cosmetics segment - "Pamela Grant" is the
second largest brand in the colour cosmetics market. Cosmetica Nacional
also has popular heritage brands including "Illicit" and "U2". The
Company exports to 7 countries in Latin America
- this acquisition will enable your Company to strengthen its foothold
in the LatAm region. The acquisition has been completed in April 2012.
7. Termination of Licenses
The Kiwi Manufacturing and Distribution license for the use of Kiwi
Shoe Care and Kiwi Kleen Brands in India and Sri Lanka, granted to the
erstwhile Godrej Household Products Ltd. by Sara Lee Corporation, USA,
has been terminated with effect from April 3, 2011. Your Company
received Rs. 156 crore and its wholly owned subsidiary Godrej Household
Products Lanka (Private) Ltd. received Rs. 19 crore as a one-time exit
compensation.
The license for the use of Brylcreem brand in India and Sri Lanka
granted to the erstwhile Godrej Household Products Ltd. by Sara Lee
Corporation, USA has been terminated with effect from March 31, 2012.
This is consequent to the sale of global rights of the Brylcreem brand
by Sara Lee Corporation to Unilever. As a result of the termination,
your Company received Rs. 24.76 crore and its wholly owned subsidiary
Godrej Household Products Lanka (Private) Ltd. received Rs. 0.24 crore.
8. Subsidiaries
Your Company's focus is on emerging markets. The 3x3 strategy
concentrates on three categories namely personal wash, hair care and
home care in three geographies which comprise Asia, Africa and Latin
America. In the past few years we acquired subsidiaries in the three
continents in line with our '3 x 3' strategy.
The details of business of the subsidiaries are given in Management
Discussion and Analysis section of the Directors' Report, under the
heading 'International Businesses'. In line with the General Circular
No. 2 /2011 dated February 8, 2011 issued by the Ministry of Corporate
Affairs, the Board of Directors of your Company has passed a resolution
for giving its consent for not attaching the financial statements of
subsidiaries of the Company to the Balance Sheet of the Company for the
year ended March 31, 2012.
The Consolidated Financial Statements of the Company and its
subsidiaries, prepared in accordance with Accounting Standard 21 issued
by the Institute of Chartered Accountants of India, also forms part of
the Annual Report and accounts of your Company. A one page financial
summary for all the subsidiaries giving the required information is
disclosed in the consolidated Balance Sheet.
As directed by the aforesaid circular the accounts of the subsidiary
companies and the related detailed information will be made available
to any shareholder seeking such information. The accounts of the
subsidiary companies are also available for inspection by any
shareholder at the registered office of the Company or at the
registered offices of the subsidiary companies.
9. Directors
In accordance with Articles 130 and 131 of the Articles of Association
of your Company, Prof. Bala Balachandran, Mr. Aman Mehta and Mr. D.
Shivakumar retire by rotation and being eligible, offer themselves for
re-appointment.
Accordingly, the proposals for their re- appointments are included in
the notice of the Annual General Meeting.
11. Employee Stock Option Plan
The shareholders of the Company vide special resolution passed on March
14, 2007 approved the setting up of Godrej Consumer Products Ltd.
Employee Stock Option Plan (GCPL ESOP). Pursuant to the approvals
received in the above meeting and in the meeting dated April 24, 2008,
the Company can grant 4,500,000 stock options convertible into
4,500,000 equity shares of the nominal value Rs. 1/- each to the eligible
employees/directors of the Company and of the Company's subsidiaries.
The GCPL ESOP is administered by a trust set up for this purpose viz.
Godrej Consumer Products Ltd. Employee Stock Option Trust.
As on March 31, 2012, 419,925 options convertible into 419,925 shares
of nominal value of Rs. 1/- each are outstanding in respect of options
granted under the GCPL ESOP to employees of the Company.
No fresh options have been granted during the year.
The details of the Options allotted under GCPL ESOP, as also the
disclosures in compliance with Clause 12 of the Securities and Exchange
Board of India (Employee Stock Option Scheme and Employee Stock
Purchase Scheme) Guidelines, 1999 are set out in Annexure A to this
report.
Since the exercise price of GCPL options is the last closing price on
the stock exchange, there is no compensation cost in Financial Year
2011- 12 based on the intrinsic value of the options. Under the Scheme
of Amalgamation between your Company and Godrej Household Products
Limited (GHPL), the Employee Stock Option Scheme of the erstwhile
unlisted GHPL has now become part of your Company. The equity shares of
'Godrej Industries Limited' are the underlying equity shares for the
stock option scheme. As at March 31, 2012, 1,462,000 options
convertible into 1,462,000 equity shares of Godrej Industries Ltd. are
outstanding.
12. Employee Stock Purchase Plan
The Board of Directors at its meeting held on January 22, 2011 had
approved an Employee Stock Purchase Plan (GCPL ESPL) under the
provisions of Section 77 of the Companies Act, 1956. The GCPL ESPL is
administered by the GCPL ESOP Trust. Employees in the cadre of
Vice Presidents and above, are eligible to be covered under the plan.
Under the GCPL ESPL, the Company provides loan to the GCPL ESOP Trust
at an interest rate which is not less than the bank rate, to enable the
GCPL ESOP Trust to acquire upto 1,000,000 shares of the Company from
the secondary market.
Under the GCPL ESPL 1,000,000 shares have been granted, which have
vested on March 30,
2012. Within the exercise period of two years, the shares shall be
compulsorily exercised by acquiring them from the GCPL ESOP trust. The
exercise price shall be the market price on the day prior to the date
of grant plus interest at a rate not less than the bank rate till the
date of exercise.
13. Employee Stock Grant Scheme
The shareholders have on March 18, 2011, approved a new Employee Stock
Grant Scheme (ESGS 2011). The scheme envisages the issue of up to
2,500,000 fully paid equity shares at a nominal value of Rs. 1 each in
the Company to certain eligible employees of the Company and/ or its
subsidiaries. In terms of the scheme, 94,966 grants are outstanding and
not vested as at March 31, 2012.
The eligible employees shall be entitled to exercise the options vested
in them, within one month from the date of vesting or such dates as may
be determined by the HR & Compensation Committee. The exercise price
shall be Rs. 1/- per equity share. The equity shares vested in the
eligible employees shall be allotted on payment of the exercise price.
The details of the grants allotted under GCPL ESGS, as also the
disclosures in compliance with Clause 12 of the Securities and Exchange
Board of India (Employee Stock Option Scheme and Employee Stock
Purchase Scheme) Guidelines, 1999 are set out in Annexure A to this
report.
14. Directors' Responsibility Statement
Pursuant to the provisions contained in Section 217 (2AA) of the
Companies Act, 1956, your Directors, based on the representation
received from the Operating Management, and after due enquiry, 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 they have selected such accounting policies and applied them
consistently and made judgements and estimates 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 of the
Company for that period;
c) that they have taken proper and sufficient care 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 they have prepared the annual accounts on a going concern
basis.
15. Listing
The shares of your Company are listed at the BSE Limited and the
National Stock Exchange of India Ltd.
2,250 unsecured redeemable non-nonvertible debentures of face value Rs.
10 lac each aggregating to Rs. 225 crore issued in November 2011 on
private placement basis are listed in the whole sale debt segment of
the National Stock Exchange of India Ltd.
500 unsecured redeemable non-convertible debentures of face value Rs. 10
lac each aggregating to Rs. 50 crore issued in April 2012 on private
placement basis are listed in the whole sale debt segment in of the
National Stock Exchange of India Ltd.
The applicable annual listing fees have been paid to the stock
exchanges before the due date.
16. Auditors
The Auditors, Kalyaniwalla & Mistry, Chartered Accountants, Mumbai,
retire and offer themselves for re-appointment.
Pursuant to directions from the Department of Company Affairs, M/s. P.
M. Nanabhoy & Co., Cost Accountants have been appointed as Cost
Auditors for the applicable products of the Company for the year
2011-12. They are required to submit the report to the Central
Government within 180 days from the end of the accounting year. M/s. P.
M. Nanabhoy & Co., Cost Accountants have also been appointed as Cost
Auditors for the year 2012-13 for the applicable products of the
Company.
17. Additional Information
Annexure B to this Report gives the 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' Report.
Information as per Section 217(2A) of the Companies Act, 1956 read with
the Companies (Particular of Employees) Rules, 1975 forms part of this
Report. As per 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 the employee
under Section 217(2A) of the Companies Act, 1956. Any shareholder
interested in obtaining a copy of the statement may write to the
Company Secretary at the Registered Office of the Company.
The notes to the Accounts referred to in the Auditors' Report are
self-explanatory and therefore do not call for any further explanation.
18. Corporate Governance
The Company continues to enjoy a Corporate Governance Rating of CGR2
(pronounced as CGR2 plus) and a Stakeholder Value Creation and
Governance Rating of SVG1 (pronounced as SVG 1). The sign indicates
relatively higher standing within the category indicated by the rating.
The above ratings are on a rating scale of 1 to 6, where 1 is the
highest rating. The two ratings evaluate whether a Company is being run
on the principles of Corporate Governance and whether the practices
followed by the Company lead to value creation for all its
shareholders.
The CGR2 rating is on a rating scale of CGR1 to CGR6 where CGR1 denotes
the highest rating. The CGR2 rating implies that in ICRA's current
opinion, the rated Company has adopted and follows such
practices,conventions and codes as would provide its financial
stakeholders a high level of assurance on the quality of corporate
governance.
The SVG1 rating is on a rating scale of SVG1 to SVG6 where SVG1 denotes
the highest rating. The SVG1 rating implies that in ICRA's current
opinion, the Company belongs to the highest category on the composite
parameters of stakeholder value creation and management as also
corporate governance practices.
Pursuant to Clause 49 of the Listing Agreements, the Management
Discussion and Analysis Report and the Report on Corporate Governance
are included in the Annual Report. The Auditors' Certificate certifying
the Company's compliance with the requirements of Corporate Governance
in terms of Clause 49 of the Listing Agreement,is attached as Annexure
C and forms a part of this Annual Report.
19. Acknowledgement
Your Directors wish to place their sincere thanks to the Union
Government and the various State Governments as also to all the
Government agencies, banks, customers, shareholders, vendors and other
related organisations 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
Adi Godrej
Chairman
Mumbai, April 30, 2012
Mar 31, 2011
The Directors have pleasure in presenting their Report along with the
Audited Accounts for the year ended on March 31, 2011.
Financial Highlights
Your Companys financial performance for the year under review has been
encouraging and is summarised below:
Standalone FY 2010-11 FY 2009-10
Rs. Crore Rs. Crore
Sales (net of excise duty) 2395.2 1267.9
Other Income 80.6 49.6
Total Income 2475.8 1317.5
Total Expenditure other than 1940.4 1000.9
Interest and Depreciation
Proft before Interest, 535.4 316.6
Depreciation, Tax and
exceptional items_^
Depreciation 22.0 13.8
Prof t before Interest and 513.4 302.8
Tax and exceptional items
Interest and Financial 8.8 3.7
Charges
Proft before Tax & 504.6 299.1
exceptional items
Tax expenses 102.0 51.0
Proft after Tax before 402.6 248.1
exceptional items
Exceptional Items (Net of Tax) 32.3 -
Net Proft after tax 434.9 248.1
Surplus brought forward 174.2 98.1
Amount available for 609.1 346.2
appropriation
Appropriation
Your Directors recommend appropriation as under:
FY 2010-11 FY 2009-10
Rs. Crore Rs. Crore
Interim Dividend 163.2 125.9
Tax on distributed Profits 33.4 21.4
Transfer to General Reserve 65.1 24.8
Surplus Carried Forward 347.4 174.1
Total Appropriation 609.1 346.2
Dividend
For the year 2010-11, three interim dividends were paid on shares of
face value Rs. 1/- each à as follows: Rs. 1/- per share on July 24, 2010, Rs.
1/- per share on October 30, 2010 and Rs. 1/- per share on January 22, 2011.
In addition to the above, the Board of Directors has also declared a
fourth interim dividend on May 2, 2011 at the rate of Rs. 1.50 per share
on equity shares of nominal value Rs. 1/- each. The record date for the
same has been fxed as May 10, 2011.
The total dividend payout for the year ended March 31,
2011 stands at Rs. 4.50 per share (450 % on shares of the face value of Rs.
1/- each). The erstwhile Godrej Household Products Ltd. had declared an
interim dividend of Rs. 13.50 per share in May 2010. The interim dividend
amount of Rs. 163.2 crore includes dividend of Rs. 17.5 crore paid by
erstwhile Godrej Household Products Limited to its JV shareholder in
May 2010.
Your Directors recommend that the aforesaid interim dividends
aggregating to Rs. 4.50 per share on shares of face value Rs. 1/- each and
the interim dividend of Rs. 13.50 per share paid by the erstwhile Godrej
Household Products Ltd. on its shares of face value Rs. 4/- each, be
declared as fnal dividend for the year ended on March 31, 2011.
Issue of Shares to Qualifed Institutional Buyers
During the year your Company issued 15,400,100 equity shares of face
value Rs. 1/- each at a premium of Rs. 344 per equity share to Qualifed
Institutional Buyers (QIBs). The pricing was equal to the foor price
of Rs. 345 calculated in accordance with SEBI guidelines. The issue
proceeds aggregating to Rs. 531.30 crore has been utilized to retire debt
and for general corporate purpose.
Issue of Non-Convertible Debentures
During the year your Company had issued a series of unsecured non
convertible debentures on a private
placement basis upto a maximum outstanding amount of Rs. 760 crore. The
said debentures had a credit rating of "A1+" (pronounced as A one plus)
by ICRA. As at March 31, 2011, non-convertible debentures aggregating
to Rs. 200 crore are outstanding. Out of these, Debentures amounting to Rs.
45 crore is redeemable in December 2011 and the balance Rs. 155 crore is
redeemable in January 2012.
Mergers and Acquisitions
During the year under review, your Company has consolidated its
presence in the domestic market by acquiring the remaining 51% stake in
Godrej Sara Lee from the erstwhile JV partner Sara Lee Corp. After the
acquisition, GSLL was renamed Godrej Household Products Limited (GHPL).
Subsequently GHPL was legally merged into Godrej Consumer Products Ltd.
(GCPL) pursuant to a scheme of arrangement sanctioned by the High Court
of Judicature at Bombay. The appointed date for the merger is April 1,
2010 and the effective date is March 31, 2011.
The merger consolidates your Companys position in the Indian FMCG
space, giving GCPL the largest home grown home and personal care
portfolio in India and making GCPL the second largest household
insecticides market in Asia excluding Japan. As far as the synergies
for the integration of both companies are concerned, GCPLs focus is on
value synergy improvement rather than preplanned cost synergies.
Because of the distribution reach of the Companies, GCPL can now
capitalize on GHPLs reach throughout urban and rural India, giving
your Company signifcant opportunities.
Towards the second half of FY11 your Company, acquired two brands,
Genteel and Swastik, owned by Essence Consumer Care Products Pvt.
Limited (ECCPL) and Naturesse Consumer Care Products Pvt. Limited
(NCCPL) respectively. The acquisition extends our leadership presence
specifcally in the liquid detergents category and reaffrms its position
as a domestic leader in the Personal Wash category. The Board of
Directors of your Company, ECCPL and NCCPL have approved the merger of
ECCPL and NCCPL with GCPL subject to the approval of Honble High Court
of Judicature at Bombay. The appointed date for the merger is December
3, 2010.
In the International front, your Company acquired PT. Megasari Makmur
in Indonesia. Megasari is in the manufacturing and distribution of
Household Insecticides, Wet Tissues and Air Freshners.
Your Company also acquired two businesses in Latin America viz., Issue
Group and Argencos. Both companies are focused on hair colours and the
acquisitions have complemented each other.
During the financial year, your Company also concluded the acquisition
of Tura from Tura Group in Nigeria. Tura is a household name in Nigeria
and leading personal care company.
Review of Operations
During the year under review your Company earned Proft After Tax (PAT)
of Rs. 434.9 crore.
Net Sales have increased by 89% from Rs. 1267.8 crore in 2009-10 to Rs.
2395.2 crore in 2010-11. Current year Sales includes sales of Godrej
Household Products Limited which was merged with your Company with
appointed date being April 1, 2010.
A detailed analysis of your Companys performance is contained in the
Management Discussion and Analysis Report.
The Company has commenced commercial production of Personal care
products at its factory at Plot No. 52, Brahmaputra Industrial Park,
Dol Gobinda Mandir Road, Village Sila, Guwahati on March 23, 2011.
The license for the Kiwi Shoe Care and Kiwi Kleen Brands in India and
Sri Lanka by the ersthwhile Godrej Household Products Ltd. with Sara
Lee Corporation has been terminated with effect from April 3, 2011 for
which
the Company has received a consideration of Rs. 158.80 crore and its
wholly owned subsidiary Godrej Household Products Lanka (Private) Ltd.
has received Rs. 18.20 crore as a one time exit compensation in the
financial year 2011-12.
Subsidiaries
Your Company has enhanced its global presence through its various
subsidiaries.
The details of business of the subsidiaries are given in Management
Discussion and Analysis section which forms part of this Annual Report,
under the heading ÃInternational Businesses.
In line with the General Circular No. 2 /2011 dated February 8, 2011
issued by the Ministry of Corporate affairs, the Board of Directors of
your Company has passed a resolution for giving its consent for not
attaching the financial statements of subsidiaries of the Company to the
Balance sheet of the Company for the year ended March 31, 2011.
The Consolidated Financial Statements of the Company and its
subsidiaries, prepared in accordance with Accounting Standard 21 issued
by the Institute of Chartered Accountants of India, also forms part of
the Annual Report and accounts of your Company. A one page financial
summary for all the subsidiaries giving the required information is
disclosed in the consolidated balance sheet.
As directed by the aforesaid circular the accounts of the subsidiary
companies and the related detailed information will be made available
to any shareholder seeking such information at any point of time. The
accounts of the subsidiary companies are also available for inspection
by any shareholder at the registered offce of the Company or at the
registered offces of the subsidiary companies.
Employee Stock Option Plan
The shareholders of the Company vide special resolution passed on March
14, 2007 approved the setting up of Godrej Consumer Products Ltd.
Employee Stock Option Plan (GCPL ESOP). Pursuant to the approvals
received in the above meeting and in the meeting dated April 24, 2008,
the Company can grant 4,500,000 stock options convertible into
4,500,000 equity shares of the nominal value Rs. 1/- each to the eligible
employees/directors of the Company and of the Companys subsidiaries.
The GCPL ESOP is administered by a trust set up for this purpose viz.
Godrej Consumer Products Ltd. Employee Stock Option Trust.
As on March 31, 2011, 1,903,500 options convertible into 1,903,500
shares of nominal value of Rs. 1/- each
The details of the Options allotted under GCPL ESOP, as also the
disclosures in compliance with Clause 12 of the Securities and Exchange
Board of India (Employee Stock Option Scheme and Employee Stock
Purchase Scheme) Guidelines, 1999 are set out in Annexure A to this
report.
Since the exercise price of GCPL options is the last closing price on
the stock exchange, there is no compensation cost in Financial Year
2010-11 based on the intrinsic value of the options.
Under the Scheme of Amalgamation between your Company and Godrej
Household Products Limited(GHPL), the Employee Stock Option Scheme of
the erstwhile unlisted GHPL has now become part of your Company. The
equity shares of ÃGodrej Industries Limited are the underlying equity
shares for the stock option scheme. As at March 31, 2011, 21,29,000
options convertible into 21,29,000 equity shares of Godrej Industries
Ltd are outstanding.
Employee Stock Purchase Plan
The Board of Directors at its meeting held on January 22, 2011 had
approved an Employee Stock Purchase Plan (GCPL ESPL) under the
provisions of Section 77 of the Companies Act, 1956. The GCPL ESPL is
administered by the GCPL ESOP Trust. Employees in the cadre of Vice
Presidents and above, are eligible to be covered under the plan.
Under the GCPL ESPL, the Company provides loan to the GCPL ESOP Trust
at an interest rate which is not less than the bank rate, to enable the
GCPL ESOP trust
to acquire upto 1,000,000 shares of the Company from the secondary
market.
Under the GCPL ESPL, 980,000 shares have been granted till March 31,
2011 and the balance 20,000 shares have been granted after the close of
the financial year.
The shares so granted are held by the trust for the benefit of the
employee. The shares shall vest with the employee on March 30, 2012.
Thereafter within the exercise period of two years, the employee shall
compulsorily exercise the shares by acquiring the shares from the GCPL
ESOP trust. The exercise price shall be the market price on the day
prior to the date of grant plus interest at a rate not less than the
bank rate till the date of exercise.
Employee Stock Grant Scheme
The shareholders have on March 18, 2011, approved a new Employee Stock
Grant Scheme( ESGS 2011). The Scheme envisages the issue of up to
25,00,000 fully paid equity shares at a nominal value of Rs. 1 each in
the Company to certain eligible employees of the Company and / or its
subsidiaries. In terms of the ESGS 2011, the HR & Compensation
Committee has approved the granting of 1,09,632 Stock Grants to
eligible employees of the Company with effect from June 1, 2011. In
terms of the above scheme, one stock grant represents one equity share
of the Company.
The equity shares shall vest in the employees on the dates as given
hereunder.
No. of grants Vesting date
36,544 May 31, 2012
36,544 May 31, 2013
36,544 May 31, 2014
Total Grant: 1,09,632
The eligible employees shall be entitled to exercise the options vested
in them, within one month from the date of vesting or such dates as may
be determined by the HR & Compensation Committee. The exercise price
shall be Rs. 1/- per equity share. The equity shares vested in the
eligible employees shall be allotted on payment of the exercise price.
Since the options have been allotted after the financial year to which
this report relates, the details of the options allotted under ESGS
2011, as also the disclosures in compliance with clause 12 of the
Securities and Exchange Board of India (Employee Stock Option Scheme
and Employee Stock Purchase Scheme) Guidelines, 1999 are not applicable
for the financial year 2010-11.
Directors
Ms. Rama Bijapurkar resigned from the Board of your Company with effect
from close of business hours on October 30, 2010. The Board places on
record her extra-ordinary service to the Board and Company over a
period of nine years.
In accordance with Article 130 and 131 of the Articles of Association
of your Company, Dr. Omkar Goswami and Mr. Jamshyd Godrej retire by
rotation and being eligible, offer themselves for re-appointment.
Ms Tanya Dubash, Ms Nisaba Godrej and Mr Narendra Ambwani were
appointed additional directors with effect from May 2, 2011 and will
hold offce upto the date of the Annual General Meeting pursuant to
Section 260 of the Companies Act, 1956. Pursuant to Section 257 of the
Companies Act, 1956, the Company has received a notice from a member
signifying his intention to propose the candidature of Ms Tanya Dubash,
Ms Nisaba Godrej and Mr. Narendra Ambwani as directors in the ensuing
Annual General Meeting. Accordingly resolutions for all the aforesaid
reappointments/appointments are included in the notice of the Annual
General Meeting.
Listing
The shares of your Company are listed at The Bombay Stock Exchange
Limited and The National Stock Exchange of India Ltd. The annual
listing fee has been paid to each of the above exchanges before the due
date.
Auditors
The Auditors, Kalyaniwalla & Mistry, Chartered Accountants, Mumbai,
retire and offer themselves for re- appointment.
Pursuant to directions from the Department of Company Affairs, M/s. P.
M. Nanabhoy & Co., Cost Accountants have been appointed as Cost
Auditors for the year 2010-11. They are required to submit the report
to the Central Government within 180 days from the end of the
accounting year.
Directors Responsibility Statement
Pursuant to the provisions contained in section 217 (2AA) of the
Companies Act, 1956, your Directors, based on the representation
received from the Operating Management, and after due enquiry, confrm:
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 they have selected such accounting policies and applied them
consistently and made judgements
and estimates 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 proft of the Company for that period;
c) that they have taken proper and suffcient care 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 they have prepared the annual accounts on a going concern
basis.
Additional Information
Annexure B to this Report gives the 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 Report.
Information as per Section 217(2A) of the Companies Act,1956 read with
the Companies ( Particular of Employees) Rules, 1975 forms part of this
Report. As per 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 the employee
under Section 217(2A) of the Companies Act,1956. Any shareholder
interested in obtaining a copy of the statement may write to the
Company Secretary at the Registered Offce of the Company.
The notes to the Accounts referred to in the Auditors Report are
self-explanatory and therefore do not call for any further explanation.
Group for Interse Transfer of Shares
As required under Clause 3(1)(e) of the Securities and Exchange Board
of India(Substantial Acquisition of Shares and Takeovers) Regulations,
1997 persons constituting "Group" (within the meaning as defned in the
Monopolies and Restrictive Trade Practices Act, 1969) for the purpose
of availing exemption from applicability of the provisions of
Regulation 10 to 12 of the aforesaid Regulations, are given in the
Annexure C attached herewith and forms part of this Annual Report.
Corporate Governance
The Company continues to enjoy a Corporate Governance Rating of CGR2+
(pronounced as CGR2 plus) and a Stakeholder Value Creation and
Governance Rating of SVG1 (pronounced as SVG 1). The + sign
indicates relatively higher standing within the category indicated by
the rating. The above ratings are on a rating scale of 1 to 6, where 1
is the highest rating.
The two ratings evaluate whether a Company is being run on the
principles of Corporate Governance and whether the practices followed
by the Company lead to value creation for all its shareholders.
The CGR2 rating is on a rating scale of CGR1 to CGR6 where CGR1 denotes
the highest rating. The CGR2+ rating implies that in ICRAs current
opinion, the rated Company has adopted and follows such practices,
conventions and codes as would provide its financial stakeholders a high
level of assurance on the quality of corporate governance.
The SVG1 rating is on a rating scale of SVG1 to SVG6 where SVG1 denotes
the highest rating. The SVG1 rating implies that in ICRAs current
opinion, the Company belongs to the highest category on the composite
parameters of stakeholder value creation and management as also
corporate governance practices
Pursuant to Clause 49 of the Listing Agreements, the Management
Discussion and Analysis Report and the Report on Corporate Governance
are included in the Annual Report. The Auditors Certifcate certifying
the Companys compliance with the requirements of Corporate Governance
in terms of Clause 49 of the Listing Agreement, is attached as Annexure
D and forms part of this Annual Report.
Acknowledgement
Your Directors wish to place their sincere thanks to the Union
Government and the Governments of Maharashtra, Madhya Pradesh, Tamil
Nadu, Pondicherry, Jammu & Kashmir, Himachal Pradesh, Assam, Meghalaya
and Sikkim, as also to all the Government agencies, banks, customers,
shareholders, vendors and other related organisations who, through
their continued support and co-operation, have helped, as partners, in
your Companys progress.
For and on behalf of the Board of Directors
Adi Godrej
Chairman
Mumbai, May 2, 2011
Mar 31, 2010
The Directors have pleasure in presenting their Report along with the
Audited Accounts for the year ended on March 31, 2010.
Operating Results
Your Companys financial performance for the year under review has been
encouraging and is summarised below:
This year Previous
Year
Rs. Crore Rs. Crore
Sales (net of excise duty) 1267.9 1084.3
Other operating income - 3.7
Other Income 50.6 44.0
Total Income 1318.5 1132.0
Total Expenditure other than
Interest 1001.9 922.9
and Depreciation
Profit before Interest,
Depreciation 316.6 209.1
and Tax
Depreciation 13.7 14.4
Profit before Interest and Tax 302.9 194.7
Interest and Financial Charges
(net) 3.7 8.8
Profit before Tax 299.2 185.9
Provision for tax:
Current tax 48.9 21.1
Deferred tax 2.2 3.2
Fringe Benefit Tax - 0.7
Profit after tax 248.1 160.9
Tax adjustments in respect of - 0.6
previous years
Profit after tax and tax 248.1 161.5
adjustments for previous years
Surplus brought forward 98.1 73.2
Amount available for appropriation 346.2 234.7
Appropriation
Your Directors recommend appropriation as under:
This Year Previous Year
Rs. Crore Rs. Crore
Interim Dividend 125.9 83.7
Proposed Final Dividend - 19.3
Tax on distributed profits 21.4 17.5
Transfer to General Reserve 24.8 16.2
Surplus Carried Forward 174.1 98.0
Total Appropriation 346.2 234.7
Dividend
For the year 2009-10, three interim dividends were paid on shares of
face value Re.1 each - Re.1 per share on August 17, 2009, Re.1 per
share on November 24, 2009 and Re.1 per share on February 15, 2010.
In addition to the above, the Board of Directors has also declared a
fourth interim dividend on April 26, 2010 at the rate of Rs. 1.25 per
share on equity shares of nominal value Re.1 each. The record date for
the same has been fixed as May 4, 2010.
The total dividend payout for the year ended March 31, 2010 stands at
Rs.4.25 per share (425% on shares of the face value of Re.1/- each).
Your Directors recommend that the aforesaid interim dividends
aggregating to Rs.4.25 per share on shares of face value Re.1 each be
declared as final dividend for the year ended on March 31, 2010.
Review of Operations
During the year under review your Company earned Profit After Tax (PAT)
of Rs.248.1 crore.
The comparison of the current years Sales with the previous year is
given in table 1 below.
Sales of Godrej brands have increased by 19 percent from Rs.1040.9
crore in 2008-09 to Rs.1239.4 crore in 2009-10.
A detailed analysis of your Companys performance is contained in the
Management Discussion and Analysis Report.
Table 1: Comparison of Current year sales with the previous year
(Rs. Crore)
Particulars of
Sale Year Year % Increase ended
ended /(decrease)
31-Mar-10 31-Mar-09
Soaps 828.4 705.6 17%
Hair Colour 274.5 230.4 19%
Toiletries 83.2 62.0 34%
Liquid Detergents 53.3 42.9 24%
Godrej Brands 1239.4 1040.9 19%
Contract Manufacturing - 8.2 -
By-products 28.5 35.2 (19%)
Total 1267.9 1084.3 17%
Acquisitions
49% stake in Godrej Sara Lee Ltd.
The Honorable High Court of Judicature at Bombay has vide order dated
October 8, 2009, sanctioned the Scheme of amalgamation of Godrej
ConsumerBiz Ltd. (GCBL) and Godrej Hygiene Care Ltd. (GHCL) with
Godrej Consumer Products Ltd. (GCPL). The appointed date of the Scheme
was June 1, 2009 and the effective date, was October 15, 2009 (being
the date on which the certified copy of the court order was filed with
the Registrar of Companies, Mumbai).
GCBL and GHCL held 29% and 20% respectively in Godrej Sara Lee Ltd.
(GSLL), which is a 49:51 unlisted joint venture company between the
Godrej Group and Saralee Corporation, USA.
Pursuant to the amalgamation, the assets and liabilities of GCBL and
GHCL have been transferred to GCPL with effect from the appointed date
and therefore GCPL holds 49% stake in the equity of GSLL.
In terms of the Scheme, Godrej & Boyce Mfg. Co. Ltd., (G&B) and Godrej
Industries Ltd. (GIL), the shareholders of GCBL and GHCL respectively,
were to be issued and allotted 10 shares in GCPL for every 11 shares
held by them in GCBL and GHCL respectively. Accordingly, GCPL has
issued and allotted 3,02,96,727 equity shares of face value Re.1 each
to G&B and 2,09,39,409 equity shares of face value Re.1 each to GIL.
The new shares aggregating to 5,12,36,136 rank pari passu with the
existing equity shares.
Consequent to the above allotment of shares, the issued and paid-up
equity share capital of GCPL stands increased to 30,81,90,044 equity
shares of face value of Re.1 each aggregating Rs.30,81,90,044.
Performance of GSLL in FY 2009-10
Godrej Sara Lee Ltd. has recorded a growth of 20% in gross sales and
31% in Profit after Tax over the previous year. Good knight Active plus
initiative was a great success and recorded a good sales growth. Other
new initiatives in household insecticides category viz., GoodKnight
Naturals and GK Advanced Coils were able to get a good consumer
response. The Company witnessed a strong market share increase in
Electrics and Aerosol formats in household insecticide category during
the year.
Bangladesh witnessed doubling of sales on the back of the new
distribution model. The Company maintained its focus of growing South
East Asian markets including Bangladesh, Sri Lanka and Nepal.
Tura, Nigeria
In March 2010, your Company entered into an agreement to acquire Tura
from the Tura Group, Nigeria. Tura, a household name in many African
markets, is a market-leading personal care brand with a range of
products that distributes a range of products including soaps,
moisturising lotions and skin-toning creams. Its medicated bar soap is
amongst the top three in its category in Nigeria. The acquisition will
serve as a strong platform for introducing your Companys portfolio
into Nigeria and other Western African countries.
Megasari, Indonesia
After the close of the financial year, your Company has entered in to
an agreement to acquire PT. Megasari Makmur Group and its distribution
company in Indonesia. Megasari Group manufactures and distributes a
wide range of household products including household insecticides, wet
tissues and air fresheners. Megasari Groups products are market
leaders in Indonesia in most of the categories that the company
participates in. Megasari Group provides your Company a strong platform
to establish a significant foothold in Indonesia, which is among the
largest consumer markets in Asia. Given Megasari Groups leading
position in household product categories in Indonesia and the Godrej
Groups strong presence in this category in India, we believe this
acquisition will provide significant synergies and create value for
shareholders.
Subsidiaries
Keyline Brands Limited, UK posted a turnover of GBP 29.0 million and a
profit after tax of GBP 2.8 million (as per local GAAP).
Rapidol Pty. Limited, South Africa posted a turnover of ZAR 113.2
million and a profit after tax of ZAR 20.6 million.
Godrej Global Mideast FZE posted a turnover of AED 13.6 million and a
profit after tax of AED 0.7 million.
Kinky Group Pty. Ltd. posted a turnover of ZAR 117.6 million and a
profit after tax of ZAR 14.9 million (as per local GAAP).
Your Company had made an application to the Central Government pursuant
to Section 212 of the Companies Act, 1956 for seeking exemption from
attaching with its accounts the individual accounts of each of the
subsidiaries. The application was made in respect of the following 10
subsidiaries as on the date of the application viz., Godrej Netherlands
B.V, Godrej Consumer Products (UK) Limited, Keyline Brands Limited,
Inecto Manufacturing Limited, Rapidol Pty. Limited, Godrej Global
Mideast FZE, Godrej Consumer Products (Mauritius) Limited, Godrej Kinky
Holdings Limited, Kinky Group Pty. Ltd. and Godrej Hygiene Products
Limited.
Accordingly the Central Government gave its approval and exempted your
Company from attaching to its accounts, the individual accounts of each
of the above subsidiaries.
The accounts of the subsidiary companies and the related detailed
information will be made available to any shareholder seeking such
information at any point of time. The accounts of the subsidiary
companies are uploaded in the website of the Company viz.,
www.godrejcp.com and are also available for inspection by any
shareholder at the registered office of the Company or at the
registered offices of the subsidiary companies.
In respect of the following companies which were incorporated as
subsidiaries of your Company during the last quarter of the current
financial year, your Company did not prefer an application to the
Central Government pursuant to Section 212 of the Companies Act, 1956.
Name of the Place of Date of incorporation
Company incorporation as subsidiary
Godrej Nigeria Mauritius February 24, 2010
Holdings Limited
Godrej Consumer Mauritius February 23, 2010
Products Holding
(Mauritius) Ltd.
Godrej Nigeria Nigeria March 26, 2010
Limited
Godrej Consumer Netherlands March 24, 2010
Products Dutch
Cooperatief U.A.
(Netherlands)
Godrej Consumer Netherlands March 31, 2010
Holdings
(Netherlands) B.V
Godrej Consumer Netherlands March 31, 2010
Products
(Netherlands) B.V
Out of the above six subsidiaries, the following companies viz., Godrej
Nigeria Limited, Godrej Consumer Products Dutch Cooperatief U.A.
(Netherlands), Godrej Consumer Holdings (Netherlands) B.V and Godrej
Consumer Products (Netherlands) B.V are yet to issue their capital and
they did not carry out any operations during the year under review.
Hence, the financial statements of these subsidiaries were not required
to be prepared and annexed to your Companys Annual Report. The
accounts of the balance two subsidiaries viz., Godrej Nigeria Holdings
Limited and Godrej Consumer Products Holding (Mauritius) Ltd. forms
part of the Annual Report and the accounts of Godrej Consumer Products
Ltd.
The Consolidated Financial Statements of the Company and its
subsidiaries, prepared in accordance with Accounting Standard 21 issued
by the Institute of Chartered Accountants of India, also forms part of
the Annual Report and accounts of your Company.
In accordance with the conditions stipulated by the Ministry of
Corporate Affairs, while granting exemption from attaching the
individual accounts of some of the subsidiaries, a one page financial
summary for those subsidiaries is disclosed in the consolidated balance
sheet.
Employee Stock Option Plan
The shareholders of the Company vide special resolution passed on March
14, 2007 approved the setting up of Godrej Consumer Products Ltd.
Employee Stock Option Plan (GCPL ESOP). Pursuant to the approvals
received in the above meeting and in the meeting dated April 24, 2008,
the Company can grant 45,00,000 stock options convertible into
45,00,000 equity shares of the nominal value Re.1 each to the eligible
employees/directors of the Company and of the Companys subsidiaries.
The GCPL ESOP is administered by a trust set up for this purpose viz.,
Godrej Consumer Products Ltd. Employee Stock Option Trust.
As on March 31, 2010, 28,34,000 options convertible into 28,34,000
shares of nominal value of Re.1 each are outstanding in respect of
options granted to employees of the Company.
Date of Grant Unvested Options outstanding
02-04-07 5,50,000
12-07-07 1,10,000
11-12-07 25,000
25-03-08 5,55,000
05-05-08 50,000
06-06-08 4,50,000
23-06-08 2,40,000
05-01-09 60,000
18-06-09 3,04,000
30-06-09 3,40,000
13-08-09 1,00,000
03-09-09 34,000
15-12-09 16,000
Total 28,34,000
The details of the Options allotted under GCPL ESOP, as also the
disclosures in compliance with Clause 12 of the Securities and Exchange
Board of India (Employee Stock Option Scheme and Employee Stock
Purchase Scheme) Guidelines, 1999 are set out in Annexure A to this
report.
Since the exercise price of GCPL options is the last closing price on
the stock exchange, there is no compensation cost in Financial Year
2009-10 based on the intrinsic value of the options.
Ratings
The Company continues to enjoy a Corporate Governance Rating of CGR2+.
(pronounced as CGR2 plus) and a Stakeholder Value Creation and
Governance Rating of SVG1 (pronounced as SVG 1). The + sign indicates
relatively higher standing within the category indicated by the rating.
The above ratings are on a rating scale of 1 to 6, where 1 is the
highest rating.
The two ratings evaluate whether a Company is being run on the
principles of Corporate Governance and whether the practices followed
by the Company lead to value creation for all its shareholders.
The CGR2 rating is on a rating scale of CGR1 to CGR6 where CGR1 denotes
the highest rating. The CGR2+ rating implies that in ICRAs current
opinion, the rated Company has adopted and follows such practices,
conventions and codes as would provide its financial stakeholders a
high level of assurance on the quality of corporate governance.
The SVG1 rating is on a rating scale of SVG1 to SVG6 where SVG1 denotes
the highest rating. The SVG1 rating implies that in ICRAs current
opinion, the Company belongs to the highest category on the composite
parameters of stakeholder value creation and management as also
corporate governance practices.
Directors
Mr. Hoshedar Press is retiring from your Company with effect from close
of business hours on April 30, 2010 after a long and illustrious career
with the Godrej Group. The Board places on record his valuable
contributions made at all levels during his career with the group.
In accordance with Article 130 and 131 of the Articles of Association
of your Company, Ms Rama Bijapurkar, Mr. Bharat Doshi and Mr.Nadir
Godrej retire by rotation and being eligible, offer themselves for
reappointment.
Listing
The shares of your Company are listed at The Bombay Stock Exchange
Limited and The National Stock Exchange of India Ltd. The annual
listing fee has been paid to each of the above exchanges before the due
date.
Auditors
The auditors, Kalyaniwalla&Mistry, Chartered Accountants, Mumbai,
retire and offer themselves for re-appointment.
Pursuant to directions from the Department of Company Affairs, P. M.
Nanabhoy & Co. Cost Accountants have been appointed as Cost Auditors
for the year 2009-10. They are required to submit the report to the
Central Government within 180 days from the end of the accounting year.
Directors Responsibility Statement
Pursuant to the provisions contained in Section 217 (2AA) of the
Companies Act, 1956, your Directors, based on the representation
received from the Operating Management, and after due enquiry, 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 they have selected such accounting policies and applied them
consistently and made judgements and estimates 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 of the
Company for that period;
c) that they have taken proper and sufficient care 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 they have prepared the annual accounts on a going concern
basis.
Additional Information
Annexure B to this Report gives the 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 Report.
Information as per Section 217(2A) of the Companies Act, 1956 read with
the Companies (Particular of Employees) Rules, 1975 forms part of this
Report. As per 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 the employee
under Section 217(2A) of the Companies Act, 1956. Any shareholder
interested in obtaining a copy of the statement may write to the
Company Secretary at the Registered Office of the Company.
The notes to the Accounts referred to in the Auditors Report are
self-explanatory and therefore do not call for any further explanation.
Group for Interse Transfer of Shares
As required under Clause 3(1)(e) of the Securities and Exchange Board
of India (Substantial Acquisition of Shares and Takeovers) Regulations,
1997 persons constituting "Group" (within the meaning as defined in the
Monopolies and Restrictive Trade Practices Act, 1969) for the purpose
of availing exemption from applicability of the provisions of
Regulation 10 to 12 of the aforesaid Regulations, are given in the
Annexure C attached herewith and forms part of this Annual Report.
Corporate Governance
Pursuant to Clause 49 of the Listing Agreements, the Management
Discussion and Analysis Report and the Report on Corporate Governance
are included in the Annual Report. The Auditors Certificate certifying
the Companys compliance with the requirements of Corporate Governance
in terms of Clause 49 of the Listing Agreement, is attached as Annexure
D and forms part of this Annual Report.
Acknowledgement
Your Directors wish to place their sincere thanks to the Union
Government and the Governments of Maharashtra, Madhya Pradesh, Assam,
Himachal Pradesh and Sikkim, as also to all the Government agencies,
banks, customers, shareholders, vendors and other related organisations
who, through their continued support and co-operation, have helped, as
partners, in your Companys progress.
For and on behalf of the Board of Directors
Adi Godrej
Chairman
Mumbai, April 26, 2010