godrej consumer products ltd Management discussions

Our

Business Model

Inputs

Financial Capital

• Equity

• Increased spends on brands

• Investment in assets

Manufactured Capital

• Five manufactuing clusters across 9 countries

• Agile manufacturing through smart automation and Internet of Things (IoT)

• Investments in green manufacturing

Intellectual Capital

• Strong legacy of the Godrej Group and portfolio of brands

• Unique consumer insights through advanced predictive analytics

• Investments in R&D

Human Capital

• Over 13,000 team members across geographies

• Investments in training and development and health and safety

Social and Relationship Capital

• Doubled down efforts to improve distribution

• Global network of suppliers

• Investments in CSR and community initiatives

Natural Capital

• Sourcing and investment in raw materials and resources for our products

• Investments in green supply chain products

• Lifecycle assessments of our products and investments in greener products

Business Process

PURPOSE To bring the goodness of health and beauty to consumers in emerging markets

VALUES • Trust • Own It

• Be Bold • Be Humble

• Create Delight • Show Respect

STRATEGY

Category develop	Double-digit volume growth
existing portfolio	More spends on brands
Funded by radical	More automation
UKORNK ECVKQP	SKU rationalisation
People and planet	More diversity
CNQPIUKFG_RTQ V	Less environmental impact

Outcomes

Leadership positions (market share) across geographies, category penetration, and consumption rate

Exponential growth in our e-commerce business

Enhanced long-term value for all stakeholders, including shareholders, customers, consumers, suppliers, distributors, retailers, and the community

GHG emissions, and water consumption

Risk Management

At GCPL, we have a comprehensive and structured approach to risk management. Across our geographies, we have integrated our approach to risk management into the operating framework and reporting channels of our business. Starting with a Board-level oversight to a dedicated Risk Management Committee and a cross-functional team within the business, we routinely assess risks across the company and all geographies.

Executive Risk Management Committee

The Executive Risk Management

Committee (ERMC) ensures that we follow a structured risk management process. This committee is entrusted with the crucial

mitigation for our company across various domains, including strategic, material, operational, transitional, technological, and environmental.

The ERMC shoulders the comprehensive responsibility of monitoring the companys risk landscape and managing it effectively to ensure a robust and thriving business. This committee remains steadfast in its commitment to uphold transparency and safeguard the interests of the company and its stakeholders.

Based on the recommendations of the Managing Director and CEO or the Chief

or invite additional members/directors, as

The Secretary to the ERMC is the highest-ranking person with a dedicated risk management responsibility at operational and performance levels. The Secretary

the functioning of the risk management process. The Secretary must ensure that the ERMC meetings are held half-yearly or more frequently, if required.

Approach

We take a proactive approach to risk management, wherein an annual risk

is incorporated in line with our strategic business planning and annual business planning initiatives.

The annual business plan is a foundation for identifying and prioritising risks. Following prioritisation, a risk competency scan is conducted to determine existing management strategies that effectively address material and emerging risks to our business. This scanning process helps in pinpointing opportunities for enhancing risk mitigation.

For each material and emerging risk, the combined outcomes of the existing

improvement opportunities are documented in a formal risk management plan. Subsequently, the assessment of prioritised risks and their mitigation strategies is presented to the Board Risk Management Committee for evaluation and review.

The risk assessment function is structurally independent of business and is overseen and coordinated by the Secretary to the ERMC. The risk assessment outcomes fall under the ownership of the respective business function heads. This collaborative approach ensures a comprehensive and the organisation.

Risk management approach

IDENTIFY	PRIORITISE	MITIGATE	MONITOR
Collate a laundry list of risks	Prioritise basis risk score (probability and severity), consider inherent risks	Prepare mitigation plans, assign responsibilities, consider residual risks	Monitor and share periodic updates with the Risk Management Committee
Risk inventory	Material and emerging risks	Mitigation plans and KPIs	Monitoring and adding new risks

Risk review

Risk owners are appointed for material and emerging risks. These risk owners assess, manage, evaluate, and monitor the risks and propose the risk mitigation plan. The implementation of the risk mitigation action plan is agreed upon by the ERMC and Board Committees, and any deviations are discussed with the function heads and Managing Director and CEO.

The risk owners may change over time, depending on their changing roles and responsibilities within the organisation.

On a half-yearly basis, the risk owner formally reports about risk management within their area of operation at the ERMC meetings. This reporting is aimed at assessing how well material risks are being managed and if any additional risk has emerged that can adversely affect business operations. The risk report includes:

• Performance of the function in managing its material risks, considering the mitigation strategies

emerging risks

for the new material risks

The results of this report are coordinated by the Secretary to the ERMC and are made available for review by the ERMC. The Secretary submits a half-yearly report on risk management for review and appraisal of the ERMC. In addition, every 6

I a risk owner would formally present the risk management initiatives and status of their area of operation to the ERMC

The ERMC is responsible for:

• Half-yearly reports to the Audit Committee and Risk Management Committee

• Half-yearly review of the risk mitigation status for material and emerging risks

• Annual assessment of risks in line with business/strategic planning

Risk culture

Employees across all levels and geographies have risks as part of their individual goals and performance review. These risks range from measures to reduce occupational health and safety incidents, adherence to regulations and

V reduction of volatile forex exposure. The risk goal weightage for employees ranges from 30% to 60% and is a part of their half-yearly HR employee performance review. Compliance and quality risk assessments are a part of our new product development (NPD) process, and the goal is aligned with the key performance indicators of R&D team members involved in NPDs.

New managers are inducted on Enterprise Risk Management training, which is organised quarterly. They are trained on

IAmitigation, control, and review. Across all manufacturing facilities, we also conduct workshops on occupational health and safety risks and management throughout the year, encompassing over 100% of our manufacturing plant workforce.

Our employees are encouraged to share feedback for continuous improvement in risk management practices. A formal annual NPS survey is conducted across the company for all functions. Risk management is a part of that survey, and the feedback helps us improve our processes and systems.

An annual InTune survey is also conducted across the company seeking suggestions and feedback from all employees. Moreover, emerging risks and development of mitigation measures are discussed in regularly conducted departmental monthly review meetings. The line manager records

and communicates them to the Risk Management Committee for further action. At the plant level, we have a mobile app to identify occupational health and safety risks. These risks are tracked, reviewed, and mitigated through the app.

Risk category	Risks description		Risk mitigation
Financial	Forex		At GCPL, the forex policy is determined
	currency and/or open exposures and margins.		by a dedicated Forex Committee. This committee monitors all exposures and guides decisions on open exposures and hedging. The committee meets monthly and provides quarterly reports to the Board on forex exposures.
Supply chain	Commodity price volatility		Our primary commitment remains to serve
	Our supply chain faces the challenges of costs and commodity pricing pressures, as palm and crude oil. The recent Russia- on global oil and natural gas trading and transportation, further exacerbating the situation.		the needs of our consumers above all else. In challenging times, we continue to work in their best interest and have passed on only a fraction of the increased input costs to them. Additionally, we have consistently maintained the quality standards of our products, refusing to compromise on quality in the face of rising input costs.
			To further mitigate this risk, we are actively working to secure high-quality palm oil from various regions and geographies, thereby reducing our dependency on major palm oil markets.
Operational	Occupational health and safety Physical risk to the workforce in manufacturing operations and frontline distribution teams; risk of appropriate handling, training, and safely disposing of waste; risks of unrest due to incidents in both the workforce and local communities that they are from.		This is a high-priority area for us. We have a dedicated Human Rights Policy, strong standard operating procedures to ensure the highest adherence to health and safety, and a governance mechanism to ensure any incidents are duly investigated and resolved for the future. We ensure a periodic review of safety procedures, and the Central Safety Committee and committees at plants review monthly data for occupational health and safety.
Risks category		Risks description	Risk mitigation
Economic		*[RGTKP CVKQP_CPF_	We are strategically utilising our
		currency devaluation	manufacturing capabilities and human resources in regions experiencing
		challenges, disproportionately affecting instability of local currencies in regions where we operate results in an increasing number of vulnerable individuals being priced out of access to necessities.	costs. Simultaneously, we are investing in local procurement initiatives to reduce reliance on imports and minimise the impact of global supply chain disruptions. By supporting the local economy, we aim to foster economic stability and contribute to the well-being of the communities we serve.
Financial		Changing consumer preferences The move towards natural and sustainable options with an emphasis on the entire value chain being sustainable.	We have conducted Life Cycle Assessment of more than 50% of our products (with a plan to cover 80% by 2025) to assess where in the value chain can our products be more sustainable on all environmental fronts: energy, water, plastic, and of the reports to make our products demonstrably greener.
			A great example of our green product is our innovative powder-to-liquid Magic handwash. It is the worlds most affordable handwash. It uses half the plastic packaging compared to a regular
			the fuel to be transported. We are also packaging materials and increasing the use of post-consumer recycled plastic to move away from virgin plastic.

Risks category	Risks description	Risk mitigation
Regulatory	Evolving regulations Stringent regulations/ban limiting the use of some ingredients or packaging materials such as plastic. Evolving regulations on carbon pricing, ESG disclosures, and other government- mandated disclosures on ESG issues.	We have the highest levels of statutory compliance and ensure all regulations and laws of the land are adhered to. We have an internal system called Legatrix that helps all manufacturing units monitor adherence to compliance and regulations. It enables management with a one-stop view of the organisations compliances and control mechanism through comprehensive compliance dashboards and provides necessary information at the operating level by creating a comprehensive matrix
		on laws and their management. Further, our Corporate Affairs, Legal, and Audit teams are consistently communicating with key government departments and industry bodies to track new and emerging regulations. They routinely assess and analyse regulations to evaluate how these will impact business and mitigation for the same.

Emerging risks

1. Climate change

Climate change is a critical challenge facing our planet, with its impact already being felt worldwide. Businesses and economies are particularly vulnerable to climate-related risks, such as supply chain disruptions, increased insurance premiums, and regulatory penalties. Our largest pool of consumers are in tropical countries such as India, Indonesia, and Africa, and all of these countries are

change—unpredictable weather and scanty or excessive rainfall.

To address this challenge, a collaborative effort is required from all stakeholders, including businesses, policymakers, and society at large. We need to work together to transition to a low-carbon future by integrating technology, the economy, and society.

Technological advancements in renewable _ capture and storage are essential for reducing our reliance on fossil fuels and mitigating the impacts of climate change. However, technology alone is

that incentivise sustainable practices and reduce carbon footprint are also necessary, such as carbon pricing, renewable energy mandates, and building

Raising awareness and engaging society at large in this transition to a low-carbon future are also critical. This can be achieved by conducting education and outreach programmes, as well as through public-private partnerships that bring together businesses, governments, and civil society organisations to work towards a shared goal. Overall, addressing climate change requires a multifaceted approach that integrates technology, the economy and society. By collaborating, we can build a more sustainable and resilient tomorrow for ourselves and future generations.

Impact of climate change risk

By conducting a thorough scenario analysis using the Task Force on Climate-related Financial Disclosures (TCFD) framework, we have determined that the potential

_ particularly pronounced in our operational locations at Karaikal, Katha, and Guwahati This analysis was conducted by examining key parameters such as temperature, water scarcity, and precipitation, all of which will have a crucial role in shaping the impact of climate change on our business.

Our analysis was conducted within the context of two Shared Socioeconomic Pathways (SSPs), namely SSP-1 and SSP-5. By considering both scenarios, we could fully explore the range of potential climate change-associated outcomes and gain a comprehensive understanding of how our business may be affected.

Mitigation action

We have conducted a risk assessment based on the recommendations of TCFD to identify climate-related risks and develop effective strategies for their long-term mitigation. Furthermore, we have optimised our processes to reduce our carbon footprint and work towards achieving our goal of net zero emissions.

2. Cybersecurity risk

Cybersecurity refers to the protection of computer systems, networks, and electronic data from theft, damage, or unauthorised access. As FMCG companies are becoming increasingly dependent on digital technology and online platforms, they are increasingly being exposed to cyber threats, which has made cybersecurity an emerging risk.

We often store large amounts of sensitive

customer data, and proprietary technology. We also rely on online platforms to connect with customers and suppliers, conduct transactions, and manage their supply chains. This makes us targets for cybercriminals who seek to steal data, disrupt operations, or extort money.

Cyber threats can come in many forms, such as phishing attacks, malware, ransomware, and denial-of-service attacks. These attacks can cause substantial damage to FMCG companies, including loss of revenue, damage to reputation, and legal liabilities.

Impact of cybersecurity risk

1. A cybersecurity breach can disrupt operations, leading to delayed shipments, lost sales, and decreased productivity.

2. A cybersecurity breach can lead to w data, disruption of operations, and the cost of repairing and recovering from the attack.

3. GCPL being customer-centric, places a high weightage on brand reputation to attract and retain customers. A cybersecurity breach can erode customer trust and damage brand reputation.

4. A cybersecurity breach can result in legal liability if the company is found to be negligent in protecting customer data or if it violates data protection regulations.

5. GCPL relies on proprietary technology, manufacturing processes, and recipes to differentiate their products from competitors. A cybersecurity breach can result in the theft of valuable intellectual property.

Mitigation of risks

While developing robust cybersecurity strategies that incorporate risk assessment, threat monitoring, incident response plans, and employee training, we regularly update our cybersecurity systems and infrastructure to keep up with the evolving threat landscape. By taking proactive measures to protect our digital assets, we mitigate the risk of cyberattacks and safeguard

We have implemented a cutting-edge disaster recovery solution that is both robust and fully automated, ensuring that our operations remain resilient even in the face of unforeseen disasters.

We have bolstered our security measures to offer enhanced protection for our endpoints, email and internet security, particularly in the context of a work-from-home scenario. Our teams can control, monitor, and log all

and enforced secure change control and

have trained all our employees in incident-handling and contingency plans.

Further mitigation measures include advanced web security for work-from-home scenarios, perimeter intrusion prevention,

We have crafted a robust Information Security Policy based on risk approach that implements, operates, monitors, reviews, maintains, and improves our information security. It encompasses people, process, and technology.

With these advanced technologies in place,

any challenge and safeguard against potential threats, all while maintaining

Our TCFD Report

Climate change poses severe risks to the global economy, entailing adverse

brings several opportunities that entities, including organisations, can leverage. Markets, investors, and consumers require clear, comprehensive, and high-quality information about these risks and opportunities to make relevant investment decisions. For a consumer goods enterprise like ours, climate-related risks and opportunities majorly stem from drivers such as a change in climate extremes, increasing frequency and severity of climate disasters, global and national policy shift towards a low-carbon economy, emerging technologies, and changes in consumer perception towards carbon and water-intensive products across the lifecycle.

The TCFD framework recommends climate-

enterprises in better communicating the threats emerging from climate change and strategies to mitigate the same. These disclosures provided by organisations position them as market leaders through effective communication to concerned stakeholders and help them in strengthening

_ mitigation and resource allocation. The framework is structured across four pillars, namely governance, strategy, risk management, and metrics and targets. Within these four pillars, there are 11 recommended disclosures. These disclosures help investors or any other stakeholder to understand how companies address climate-related risks and opportunities.

As a company, we have regularly reported on our strategies towards climate change through Integrated Annual Reports, and Carbon Disclosure Project (CDP) and Dow Jones Sustainability Index (DJSI) disclosures, which continue to strengthen the gaps in climate and water-related disclosures as per industry standards. We understand the growing importance of aligning our disclosures to the TCFD framework. In the current reporting cycle, we are disclosing climate change-related information on climate governance; processes to identify, assess, and manage climate change risks and opportunities; strategies to safeguard business performance; climate change scenario analysis as a forward-looking business strategy; and lastly, the metrics and the targets. Details about the aforementioned disclosures are provided in subsequent chapters. Further, we are also in

TCFD report.

Governance

The key stakeholders proactively engage and strategise on these emerging risks. The governance structure is presented in Figure 1.

The TCFD framework recommendations

Governance	Risk management
Report on the organisations governance mechanism around climate-related risks and opportunities	Report how the company manages climate-related risks
Strategy	Metrics and targets
Report potential impacts of climate- related risks and opportunities on planning where its material	Report the metrics and targets used to assess and manage relevant climate-related risks and opportunities where its material

Boards role in addressing climate-related risks and opportunities

We have a strong Board-level oversight of climate-related issues in the organisation. The Managing Director and CEO approves climate-related strategies and reviews the sustainability performance through key performance indicators on a quarterly basis. Further, a mid-year review of Annual Operating Plans is also conducted at all levels. We have a Board-level Sustainability Committee headed by the Chair of the Board to oversee the sustainability performance and provide strategic inputs on various climate change-related matters.

Managements role in addressing climate-related risks and opportunities

We integrate the oversight of climate-related risks and opportunities into our operations at the plant or facility level. The Operations team at each facility works towards achieving annual sustainability targets, which contribute to long-term climate action goals.

In India, our operations are headquartered in Mumbai, with production facilities based in four regional manufacturing clusters: North, South, Central, and North Eastern clusters. Each cluster has a Green Champion to coordinate with the respective factory teams that involve members from production, maintenance, and electrical departments. These teams lead implementation of climate-related measures, such as implementation of i iA}T_ivwV i VT_ _ ?iA>I A_> _ renewable energy projects. We have a cloud-based monitoring platform to capture and monitor sustainability-related data to furnish performance reports on a monthly basis.

In addition to incentives, GCPL provides quarterly awards at the company level and annual awards at the group level, where the best-performing individuals and teams on sustainability are recognised. The following members are entitled to these incentives:

Entitled to incentive	Incentivisation details
Head - Good & Green	Green goals are set at the Godrej Group level and best-performing companies are recognised during
	the annual awards. The Head of Good & Green is responsible for overseeing the performance on GCPLs climate change goals.
Business Unit Manager	Business Unit Managers are rewarded based on their performance against goals established at the
Green Champion	Green Champions are rewarded for projects undertaken to address climate change issues.
Process Operation	Operation Managers are rewarded for improvements in manufacturing process to reduce emission intensity.

Strategy

We have established systems to interlink climate change to the business strategy. Processes exist for identifying risks and opportunities that have substantive w > V > _ ?>VIA_> _v A_ Ii}A>I }_ the same into the Enterprise Risk Management (ERM) framework. In this reporting period, we conducted a scenario analysis to bolster our climate change strategy.

The climate change scenario analysis is a process for examining the likely future to assess risks and opportunities arising from climate change. A scenario is a hypothetical situation that describes a pathway to a particular future outcome. The TCFD framework recommends organisations to consider a set of scenarios, including one aligned with the 2015 Paris Agreement (1.5?C future). Organisations are also recommended to consider a business-as-usual (BAU) scenario where physical risks such as

scarcity dominate. Transitional risks and opportunities for an organisation emerge from shifting to a low-carbon economy. We have considered two SSPs that are provided by the International Panel on Climate Change. Descriptions of the two SSPs are provided below.

We have utilised SSP-1 (which aligns with RCP-2.6) and SSP-5 (which aligns with RCP-8.5) pathways, with a time period of 2030, as most development plans, including the Sustainable Development Goals, are aligned to the target year 2030.

SSP	Narrative
SSP-1 Sustainability: Taking the Green Road (Low challenges to mitigation and adaptation)	This is the Paris Agreement-aligned scenario where the world shifts towards sustainable development, improved global commons management, reduced inequality, and low material growth.
SSP-5 Fossil-fueled development: Taking the Highway (High challenges to mitigation, low challenges to adaptation)	This is the BAU scenario, where investments towards sustainability plateau, economic development staggers, and environmental degradation increases.

The physical risk scenario analysis was conducted by modelling water scarcity, temperature, and precipitation variables for SSP-1 and SSP-5. Recognised tools such as the World Bank Climate Change Knowledge Portal and WRI Aqueduct were used for collecting data for the period of 2020-39.

Through the scenario analysis, we have

_ likely to witness severe physical impacts of climate change. These prioritised locations are in Katha, Puducherry, Guwahati, and Karaikal.

Way forward for addressing physical risks

As a starting point for climate strategy on mitigation and adaptation, Katha, Karaikal, Guwahati, and Puducherry will be considered for further detailed

Tstrengthen supplier engagement, reduce greenhouse gas (GHG) emissions across the value chain, and consequently reduce operational and reputational risks.

The transition risk scenario analysis was conducted through a sectoral review to assess potential risks and opportunities. Further, the EnROADS Simulator (developed by MIT Sloan and Climate Interactive) was used to model low-carbon economies that align with the Well Below 2 Degrees (WB2DS) and 1.5?C futuristic situations. The following risks and opportunities

scenario analysis:

Financial impact of climate-related risks

Increased cooling demand

• Increased cost due to a rise in electricity consumption with an increase in cooling demand in 2030

• Electricity consumption for cooling increases by approximately 1-8% with every 1?C increase in warming above 20?C weather

Financial assessment

• Projected mean temperature (anomaly) calculated across all the facilities through SSP-1 and SSP-5

• Percentage increase in electricity consumption: 0.88-6.24%

• Summer electricity consumption: 1,32,32,579 kW

Workforce health and safety

• Increase in workers wages due to loss in productivity caused by heat wave-induced heat stress

• Financial impact due to loss in

Financial assessment

• Days with a heat index of more than 35?C (anomaly): 146.6 days

• Total number of days lost: 7.76 days

• Assuming 300 days of work.

• Total number of workers: 1195

• Average blended rate of non-managerial

adjusted wage by 2030: 1,005/day

Increased cost of upstream and downstream operations

• Financial impact due to the rise in fuel prices and tax imposition scenario

Financial assessment

• Tax imposed on oil calculated using the EnROADS Simulator: 14.34-20.76 lakh

Water availability

• Facilities in high water-stress areas account for approximately 50% water withdrawal

• Financial impacts emerge from increased procurement of treated water by third-party vendors due to a change in the rainfall pattern and water recharge potential for North and South regions

Financial assessment

• Rainfall Pattern: Baseline: 956 mm, BAU: 992 mm, and 1.5?C: 972 mm

• Water recharged through a large rainwater harvesting system:

Palm oil availability

• Effects on crop production and market price of palm oil

Financial assessment

• Decrease in the demand for palm oil due to a shift towards palm oil alternatives

• As per the RCP 2.6 scenario, the market price of crude palm oil (CPO) is projected to decrease

• Impact on the crop yield of palm oil by 2030: 30% decrease

Risk management extends from materiality assessment wherein material issues are

and secondary research. Our materiality analysis uses the methodology of identifying issues across 6 capitals, followed by engagement with 450+ key stakeholders on

of a materiality matrix by using a specialised tool for issue prioritisation. All stakeholder

our overall performance and operations.

Climate change is one of the material

_ analysis exercise. This material topic is also a part of our ERM. Following the

_ materiality assessment, our Board-level Risk Management Committee and Risk Management team oversee the risks and

and management processes are integrated with the business strategy. We identify risks through analytical techniques such as scenario analysis. Probability and impacts are assessed qualitatively and quantitatively, and action plans are developed for risk management.

The risk mitigation plans are presented to the Board-level Committee for their inputs, which are incorporated into the mitigation plan from time to time. Climate change-related risks are assessed along with other

medium-term (3-5 years), and long-term (5-7 years).

The risk mitigation strategy translates to action plans made at two levels:

• Business level: We develop our sustainability strategy at the business level to manage major risks such as climate change and water-related risks. Progress on risk mitigation is monitored on daily, monthly, quarterly, half-yearly, and an annual basis.

• Site/plant level: The business strategy is cascaded down to the plant level, and an action plan is created for every plant. Daily and monthly meetings are conducted, and the progress is reviewed.

We have established a comprehensive and structured approach to risk management. It involves a Board-level oversight to a dedicated Risk Management Committee and a cross-functional team within the business to routinely assess risks across the company.

Through informal forums, discussions, and annual planning conferences, we regularly seek feedback from employees to improve the risk management practices. For understanding climate-related risks and developing mitigation measures, regular open forums and monthly review meetings are held.

Integrating climate-related risks in GCPLs ERM system

CLIMATE- RELATED RISKS	FINANCIAL IMPACT OF RISKS	PRIORITISATION OF RISKS	INTEGRATION OF RISKS IN
ANALYSIS			GCPLS ERM
GCPLs sustainability team organised a climate change scenario analysis study	In consultation with the Plant and Operations team, GCPL ECNEWNCVGF_VJG_ PCPEKCN_KORCEVU_ of climate-related risks	$CUGF_QP_VJG_ PCPEKCN_ impacts, the GCPL team priortised the climate-related risks	The Risks team incorporated climate-related risk drivers in GCPLs ERM framework that has a Broad-level oversight

Metrics and targets

We identify, record, and monitor key performance metrics authentically, which helps in analysing the organisations operational performance and establishing goals and targets to enhance them further. We maintain a robust data management system to record our performance and take strategic decisions accordingly.

In line with our Groups vision and goals, we

India Targets, which are expected to be achieved by the year 2025-26.

Below is the list of goals, our approach towards achieving them, and our performance in achieving them so far during the reporting period:

Focus area	Goal	Approach	Fiscal year 2022-23 performance
Energy	• consumption by 40% by 2025 • Increase renewable energy	• Improvising processes and • Upgradation of technologies	• consumption by 39% • Increased the renewable
	portfolio to 35% by 2025	• Increasing adoption of renewable energy sources such as solar and biomass	energy portfolio to 31.6%
Emissions	• Reduce GHG emission intensity by 45% by 2025 and carbon neutrality for Scope 1 and 2 emissions	• Enhancing adoption of cleaner fuels such as biomass, and	• Reduced our GHG emission intensity by 48% (Note: This includes Scope 1 and 2
Water	• Reduce water intensity by 40% by 2025 while maintaining water positivity	• Innovative water management systems, technological improvements, and integrated watershed management programme	• Reduced water intensity by 30% and achieved water positivity
Waste	• Maintain zero waste to liquid discharge	• Judicious and innovative use of materials, including reuse and recycling and greater circularity	• Diverted 100% waste from have zero liquid discharge (Note: Waste generated is

Other Disclosures

	Standalone		Consolidated
	FY 22-23	FY 21-22	FY 22-23	FY 21-22
Debtors turnover ratio	22.90	23.24	11.18	11.48
Inventory turnover ratio	10.89	9.13	7.20	6.33
Interest coverage ratio	529.25	199.83	12.02	19.11
Current ratio	3.03	2.62	1.76	1.43
Debt equity ratio	-	-	0.07	0.14
	24.37	24.90	19.07	20.30
	20.10	21.69	12.90	14.65
Return on net worth (%)	17.56	20.82	13.34	16.99

Reasons for change in standalone ratios

• Increase in interest coverage ratio is due to lower borrowings in the current year

Reasons for change in consolidated ratios

• Interest coverage ratio has decreased due to an increase in interest cost of approx 60%, as compared to last year

• Debt equity ratio has decreased due to repayment of long-term debt

• The reduction in return on net worth is on account

VAi>Ai_ _ iI_U AI _ _>VV O I_ v_?A wI_v A_I i_Ti>A_ and foreign currency translation reserve

Formulae used for calculation of the ratios
	Net sales/average of opening and closing trade receivables
Inventory turnover ratio	Net sales/average of opening and closing inventories
Interest coverage ratio
Current ratio	Current assets/current liabilities
Return on networth (%)	Non-current + current borrowings/total equity exchange gain/loss less other income)/total revenue from operations

B. Internal control systems and their adequacy

We have implemented an internal control framework 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. The framework includes Internal Financial Controls over Financial Reporting, which provides reasonable assurance over the integrity

v _ and reduces the possibility of frauds. Our Corporate Audit and Assurance department issues well-documented operating procedures and authorities with adequate built-in controls keep track of any major changes both at the beginning of any activity as well as during the process.

As part of the audits, they also review the design of key processes from the point of view of adequacy of controls. Periodic reports—as part of continuous monitoring—are generated to identify exceptions through data analysis. The internal controls are tested for their design and operating effectiveness across all our locations and functions by the Corporate Audit team; control failures are reviewed by the management from time to time for corrective action.

Controls with respect to authorisation in underlying IT systems are also reviewed periodically to ensure that users have access to only those transactions that

_ factories follow an Information Security Management System and are ISO/IEC

OCaa?\Oa?I_ViAI wi?

Our Strate Pillars

Category develop existing portfolio

Our chosen portfolio

At GCPL, we are deeply driven to create affordable, delightfully designed products. Our consumers are at the heart of everything we do, and serving them is what makes it all worthwhile.

As category leaders, our strategy is to increase innovation-led growth and discover new ways to disrupt our product portfolios. Democratisation and accessibility are important while creating superior quality and delightfully designed products, given our focus on emerging markets.

Our geographic footprint comprises some of the largest and fastest growing emerging economies in the world. However, our top categories in these countries, such as Household Insecticides, Air Care, and Hair Colour, are underdeveloped, with substantial headroom for growth. We view this as a huge opportunity for value creation by applying our winning strategies for category development through our know-how in product, communications, and activations.

Our aim is to achieve consistent, double-digit volume growth by capitalising on our existing market leadership and deepening category penetration, thereby creating long-term value for all our stakeholders.

India & SAARC

• Improved distribution reach, with a focus on enhancing coverage in underpenetrated areas	• Rural substockist network in India grew by 10%	•	In Indonesia, we outsourced the entire distribution for general trade to large-scale distributors to reduce increase direct coverage, and reduce
• Modern trade channel in India delivered a high double-digit growth trajectory	• E-commerce in India grew at 33% with a 2-year CAGR		the cost of operations
		•	Multiple initiatives have been launched to leverage digital technologies and build closer
• Doubled down our efforts on quick commerce	• In India, we have geo-tagged all our general trade urban outlets, enabling optimal utilisation of our resources		connections with different partners

Our strong product portfolio in the Home and Personal Care categories continues to help us bring the goodness of health and beauty to consumers in emerging markets.

However, in terms of market penetration, we are not where we would like to be. Goodknight Liquid Vaporizers market penetration in India is still only 25%, and in Indonesia and Africa, it is between 1% and 2%. We view this as a tremendous opportunity to accelerate growth in our existing categories and to foster long-term economic value creation.

While we continue to innovate and create brilliant products in our emerging categories, we will focus heavily on

_ products and categories, which, as market

potential. This will be driven by doubling down on our marketing and distribution to really accelerate volume growth in these sectors over the next 5 years, in all the markets in which we operate.

Africa & USA

• Strong e-commerce focus in the USA, accounting for ~6% of the total business

• Nigerias van model continues to increase our direct reach

• Top line online revenue grew by 11% YoY to USD 3,60,000, while

• We moved to a self-sustainable model in which the platform was funding

• The advertising cost of sales reduced from 100% to 30%, which

• Repeat customer rate increased to 25% from 19% in

• Direct-to-consumer (D2C) made a 16% contribution to key NPDs across Premium Beauty and Professional Product categories

Our globalisation strategy

Renewed global category structure

a renewed global category structure. This new structure will power our global categories in Household Insecticides,

Coherent global strategy and cross-geography synergies

• Goodknight Liquid Vapouriser, a successful product in India for the last decade, is now being further scaled up in the region, as well as in new markets like Indonesia, Bangladesh, and /

In todays rapidly changing market, we are also adopting a more agile approach. Our company is leveraging new technologies to continuously measure brand performance and tap into consumers sentiment, whenever required. We are tracking consumer preferences on various metrics—from awareness to product feedback to usage behaviour and appeal for various new ideas.

over 50,000 consumers and their perception of our brands. We reached these consumers through various

at their homes or at central locations to gather insights. This survey covered nearly 60% of our brands by revenue.

By incorporating a sustainability lens into our existing surveys, we gained a deeper understanding of the role sustainability plays in shaping consumer preferences.

We engaged our consumers to:

1. Assess attitudes towards sustainability

We asked questions that helped us understand how sustainability factors into our consumers

their perception of our brand.

2. Identify opportunities for innovation

We asked questions to explore consumer values and preferences that could drive brand differentiation and provide us with a competitive advantage.

We recently commissioned a brand perception survey among 21-45 year olds in India. In the survey, 67% of the people found ‘reusability and 32% found ‘less plastic waste to be relevant. This drove a perception of being an eco-friendly product among about two thirds consumers.

Using an agile brand perception-tracking approach, we are working to ensure that our brands remain relevant and resonate with our consumers. We aim to make more informed decisions that foster long-term growth, enhance our reputation, and contribute to a more sustainable future for all.

Democratising our brands

Our purpose has always been to serve the needs of consumers above everything else. We innovate continuously to create versions of our products in different sizes and at multiple price points to cater to as big a net of consumers as possible. Smaller value pack offerings such as HIT No-gas Spray in India and Indonesia, Goodknight Mini Liquid Vaporiser in India, and Godrej Expert Rich Cr?me in India have revolutionised the market and made our products more accessible to a larger section of consumers. This also increases consumer loyalty, when they see a bespoke creation of a beloved

Enhancing go-to-market

As we delve deeper into emerging markets, ensuring that consumers have access to our products on a regular basis is vital to our goal of achieving increased penetration. We are continuously expanding our distribution channels to increase our consumer reach, with a greater focus on unserved or poorly served rural and remote markets.

We are rapidly increasing our presence across multiple platforms—traditional and modern retail channels, e-commerce, and digital marketplaces—to ensure our products are always available to serve our consumers, regardless of where they are located.

Channels of the future

New technologies are transforming the sales and distribution landscape. In India, they are growing more than double than that of traditional channels, with quick

Additionally, e-commerce has seen strong growth across India, Indonesia, and the USA, and modern trade, Cash and Carry, and, more recently, eB2B continue to grow.

In India and Indonesia, it has also refocused attention on the role of traditional kirana or neighbourhood convenience stores. Similarly, in Africa, we have seen the acceleration of proximity shopping to overcome the challenges posed by the pandemic. This has reinforced the importance of last-mile distribution. New models will now be omnichannel, straddling

In Bangladesh, the focus continues to be on building the traditional kirana (modir dukaan) backbone because modern trade and e-commerce are limited to urban centres. In Sri Lanka, we continue to focus on all channels, including traditional, modern trade, and, more recently, the e-commerce channel too.

Partnerships

The interdependencies of our networks have always been crucial for the business. For the system to deliver successfully, we need

addition to continuing our support towards our suppliers, distributors, wholesalers, and modern trade customers globally, we are establishing deeper partnerships with large-scale salons across Africa.

Shopper behaviour

Regarding an assortment mix, the shift in shoppers demand for health and hygiene

_ across markets sharply reversed this year. In India, for example, the spike in both handwash penetration and Household Insecticides consumption observed during the COVID-19 pandemic began tapering off

However, during the year, we have seen a global economic slowdown and high

power. This has impacted volumes across geographies, as consumers have been leaning more towards ‘value buys. We have been meeting this consumer need by making our products more accessible and affordable. We launched access packs of Godrej Expert Rich Cr?me, Goodknight Mini Liquid Vaporizer, and HIT No-gas Spray in India.

In Indonesia, we relaunched an access pack of our hero brand HIT Aerosol. We also launched a low-cost hair colouring solution to cater to consumers shopping through general grade.

Expanding penetration and reach

In India, we continue to focus on deepening our penetration in traditional trade.

_ underpenetrated areas of the country by driving rural reach and penetration through the launch of lower priced stock-keeping units in our key categories, which will result in greater accessibility of our products to rural consumers.

In the past year, we created a blueprint of the ideal rural coverage along with our external partners. Guided by this blueprint, we have grown our rural substockist network by 10%. We have further leveraged external partnerships in rural India and worked closely with an emerging player in the rural eB2B space. The partnership has helped us reach villages with a population of less than 3,000, where we could not reach directly through our

Icomplemented our rural distribution, and the initiative has now been expanded to approximately 15 states in India.

To strengthen our in-market execution, we are now tracking tertiary sales in rural areas, measuring sales from substockists to rural retailers, and using that as a key performance indicator (KPI) for rural sales team members. We launched the tertiary sales tracking system in the past year, which

_ that not only tracks tertiary sales but also uses this data as a crucial KPI for our rural sales ecosystem.

We have experimented with moving the frontline salesforce to third-party payroll, which has resulted in improved productivity and reduced attrition. We have now moved 40% of the business with frontline salesforce to third-party payroll and plan to continue this transition going forward.

Tapping into the emerging opportunity of a growing chemist channel remains a key strategic lever for us. To achieve this goal, we have created a strong network of pharma/over-the-counter drug distributors, and accordingly, created a new revenue stream. This channel helps us expand our reach into the previously untapped chemist outlets.

Our focus in Bangladesh remains on becoming one of the top FMCG companies through category development and strengthening of our go-to-market in the top 175 towns.

In Sri Lanka, our team is driving productivity and expanding reach through a cloud-based distributor management system and salesforce automation. Our focus is to ensure that we reach a good mix of traditional and modern trade stores across the country.

our go-to-market transformation in general trade by outsourcing our direct operations to distributors. This transition

_ complexity and released our Sales teams bandwidth to focus on business development activities. In addition, this has reduced the cost of operations and allowed us to deepen our direct coverage.

Going forward, we aim to continue the momentum on distribution expansion and double down on new outlets while maximising output from our existing distribution base.

We are ramping up our go-to-market efforts across Africa. In Nigeria, where trade is largely unorganised and wholesale-led, we are scaling up our last-mile distribution through van models, subdistributor models, and salon advocacy.

Our experiment of launching a D2C channel aimed at seeding new products, experimenting with untested price points and product bundles, leveraging consumer analytics, and potentially providing distribution in white space regions, with retailers coming onto the platform, has been faring well.

We continued our door-to-door sampling drive to build demand and educate consumers on our recently launched Household Insecticides portfolio, in addition to expanding distribution to modern trade.

_ non-wholesale channel contribution. We aim to continue the momentum in Nigeria and strengthen fundamentals at an accelerated pace in South Africa and Kenya to unlock the full potential over the next few years.

We have expanded the distribution of our Hair Extensions business in the USA. Alongside Walmart, we have now expanded into other retail partnerships such as Target. Hair Extensions is a USD 1 billion market in the USA, and this offers a tremendous

synergies. We are the only end-to-end hair player (Hair Extensions and Hair Care) catering to the African-American community.

Laying the foundations for future growth priorities

Improving

GH EKGPEKGU

_ the value chain and improving sales productivity by leveraging analytics and technology. Reducing sales losses through auto-replenishment and enhancing salesforce effectiveness through technology remain the critical levers of future growth.

Building an omnichannel play

Given the changing shopper trends and environments, we are ramping up capabilities to service the demands of an omnichannel play. Externally, this translates into servicing and solving channel

implementing the right team structure to service this channel with agility.

Exploring new go-to-market formats

In Nigeria, we continue to explore the D2C channel and are seeing strong wins, given the overall shopper preference for online purchasing.

Transforming modern trade

Modern trade is a key driver of growth across geographies, and we intend to ramp this up. Building blocks include account and portfolio prioritisation, category

strong partnerships with customers through joint business planning.

In India, we are investing in category management to build new-age categories such as Air Care and Household Insecticides. To this end, our teams are sharing and learning on category management best practices from our Indonesian and Latin American businesses.

We are also investing in developing modern

marketing capabilities.

Modern trade accounts for nearly 65% of our business in Indonesia. We continued our long-term journey to drive modern trade excellence, with a continued thrust on strategic investments, prioritising winning accounts, which was particularly relevant with shopper shifts post-COVID-19, and focusing on joint business partnerships, which were crucial to winning in an unprecedented macroenvironment.

In Africa, given that modern trade continues to be key, we are leveraging availability, strong in-store presence, and competitive pricing to build on the opportunity, particularly in South Africa. Our entire business in the USA is modern trade-led, with the channel split into retail and beauty stores. We continue to leverage strong channel partnerships and joint business planning to drive distribution and new product listing, compelling in-store presence and competitive pricing.

Building on the salon channel

We are moving beyond traditional retail to build other new-age channels such as a salon. Restructuring of our salon channel in Africa will be a big focus as salon partnership programmes are key to

generating demand in hair fashion as well as hair care. We intend to leverage this channel to drive last-mile distribution.

Training and capability building for frontline teams

Equipping our team members to best serve the changing landscape is critical. We continue to drive multiple capability-building initiatives, which were enhanced over the past year and were moved online

In India, our in-house training academy, the ‘Godrej Sales Academy, was moved completely online to encourage easy access and on-the-go learning. In other geographies too, we have leveraged online training modules for continuous skillset improvement in a tough macroenvironment, while also focusing on team engagement and motivation.

Ramping up e-commerce

In India, we fully integrated e-commerce more closely with our overall sales structure, building synergies on the omnichannel nature of shopper behaviour of our customer base. We embarked on the journey of leveraging e-commerce to expand our more premium categories such as Air Care and Household Insecticides and saw some great results. This encouraged us to explore more of the channels potential to sharply target an audience base with higher spending capacity along with a bigger appetite for experimentation.

E-commerce represents strong opportunities to win in a fast-growing channel, while leveraging its unique reach to bring innovative products and brands to market.

1 are building a strong data backbone to leverage the data-rich environment of i V iAVi_> _A effectiveness across the board. We are investing in expanding capabilities in the e-commerce function by insourcing capabilities such as graphic design, content writing, and search engine optimisation as well as performance marketing. We have a dedicated Shopper Marketing team to distil insights from e-commerce brands and

_ from our visibility and promo spends. To

_ also automating our processes from the order-receiving stage to the billing stage and leveraging data analytics to improve our forecasting methods. Our objective is to improve margins in the e-commerce channel through a better mix and

Through joint business planning, promotion strategies, and online content, we have made substantial upgrades to our capabilities, which are yielding results in terms of on-platform conversion rates and off-takes. We continue to deliver strong performance on e-com-focused product innovations such as Goodknight Mosquito Nets, HIT Anti-mosquito Racquet, and aer Matic.

In Indonesia, our e-commerce business grew by 40% after COVID-19. The focus has now shifted to our main platforms where we are collaborating for joint business partnerships, which have translated into new product launches, catalogues, and programmes. Driving focused digital

helps in creating a seamless consumer experience: from digital awareness to e-commerce purchases. We also began creating special e-commerce-only products to serve large online consumer segments, thereby increasing the basket size across transactions.

In the USA, our efforts to strengthen e-commerce fundamentals paid off with the business growing strongly to become nearly 4% of our overall USA business this year.

E-commerce in Africa has noteworthy headroom for growth, particularly in the fashion and beauty segments. Given limited

Africa (unlike in India, Indonesia, and the USA), we launched our own D2C platform in Nigeria.

This has been more than just a sales channel, with substantial upsides to leverage, like the immediate availability of new products, controlled brand building, consumer data, seeding new products, ability to cross-sell/upsell, experiment with untested product bundles, price assessment, and opportunities for focused consumer research. We have established a new e-commerce team in Latin America and are investing in multiple ways to grow our presence on different digital platforms and marketplaces.

Leveraging brand advocacy

Car Fragrance is a 30% penetrated category in India. Headroom is available to grow the category by building relevance for the format and getting new triers into the category.

Digital as a medium gives one the opportunity to share their message with the target audience, while minimising wastage. For our brand Godrej aer Twist, we leveraged deterministic data signals on digital mediums, with the objective of maximising reach, while directly reaching out to the product users: car owners.

owners through digital channels such as fuel payments and fast tag transactions. The results and learnings have been very encouraging.

Indias rural areas have a bigger and more rapidly expanding digital universe than urban areas. In line with our increased focus on scaling up our reach in rural markets, for brands like Godrej Expert Rich Cr?me and Godrej No.1, we continue to have sustained digital investments on leading video platforms. We have been actively leveraging

designed to target rural markets, at scale, through negation of urban areas.

With consumer journeys becoming increasingly complex and non-linear, activating touchpoints and being present in consumers purchase journey, when they are seeking decision-enabling information on digital mediums, are important.

Quora, being an intent-driven search platform, allows consumers to educate themselves on numerous topics, hence

decisions. Consumers on the platform are at the mid stage of the funnel, and this makes Quora an apt platform for getting new users into the category, especially for a brand like Godrej Expert Rich Cr?me. Through a combination of targeting options and ad formats, we actively answered hair colouring-related queries and addressed top searched queries from consumers looking at covering grey hair.

Our digital penetration in Indonesia reached 77%, which is 10 million (5.2%) more than that in 2022. We partnered with

content that showcased our products. We also chose different personas for different brands that catered to different consumer interests.

TikTok alone has been a big success in building our digital presence in Indonesia. Indonesia is now the second largest region with the most active users, after the USA. We leveraged the platform by using it to create content related to hair colouring for our Hair Colour brand NYU, whose target audience comprises women in their twenties, who also constitute a majority of TikToks users.

In Africa, we moved our Nigeria D2C business to a self-sustained model, while continuing to provide world-class customer experience. This resulted in an impressive 25% repeat customer rate. It has also clocked upwards of 16% saliency in the launch of premium new products across categories.

In Africa, our categories are heavily driven

plan to scale-up our strategy of co-creating

believability and impact, while driving new products and styles. We have partnered

across markets to drive new product awareness and considerations.

We have also leveraged celebrity partnerships to amplify our digital presence. Darling Nigeria partnered with Ayra Starr, an international pop sensation from Nigeria, who is immensely popular among our core target audience of young women across Nigeria and other African markets.

In Argentina, our Hair Styling brand Roby started a campaign to strengthen our consumers self-esteem to embrace whoever they want to be. The brand launched a campaign called ‘You Have All What You Need and built partnerships with

different types of hairstyles to enhance their unique personalities. We partnered

which allowed us to reach a larger audience in an organic manner.

Our Hair Colour brand Issue launched the ‘Its Natural to Choose campaign, which

other points of contact with the target audience and, as a whole, achieving better results than estimated.

As a media best practice, in Latin America, we worked an ODR with Issue. On apps like Meta and TikTok, this tool capitalises

_ develop the credibility of the message with the public through collaboration. Consequently, we have seen double-digit growth in some of our main campaign KPIs. This consumer-centric way of thinking led Villeneuve to achieve a 2.5? growth in the number of Instagram followers, in addition to an improvement in content quality, leading to better delivery on KPIs.

First-party data has become more relevant than ever before. Our Villeneuve brand has been gathering simple but important information on visitors. This tiny step will allow us to enhance consumer experience by providing relevant and personalised messages.

Leveraging technology and analytics

We have integrated different technology solutions across the value chain in India, starting with our sales people on the ground, through our many channel partners. Predictive analytics enables our urban sales people to sell the right assortment in a store. We are moving our distributor billing software and hand-held terminals to cloud-based servers to bring more agility to the sales ecosystem. We have completed cloud transformation for our urban and rural businesses. We are currently exploring the usage of Global Policy and Strategy locations to drive the in-market execution of our Sales team both in urban and rural markets. We also have ready plans to move our distributors to an automated replenishment system by the end of the coming year, thereby minimising sales loss due to stock-outs.

Going forward, we are building a strong analytics platform to forecast sales with higher accuracy levels by considering both external and internal factors. This is a key organisational priority and will enable us to predict demand better and thus improve

Technology continues to play a key role in

Indonesian business. Hand-held terminals guide and track on-ground decision-making, and analytics and dashboards help drive sharper execution. Regional distributors are connected and serviced through an online

A trade spend optimiser tool helps drive return on in-store investments for modern trade. We aim to continue to integrate technology across all execution touchpoints. We have also built stronger visibility in e-commerce analytics on Amazon, which we are translating into action points.

In SAARC, we are leveraging the potential tech partnerships and analytics to help augment our traditional trade expansion through systems such as cloud-based document management systems, micro-targeting, SOQ, and TPM.

Through this, we intend to ensure that our primary aim remains to expand distribution in traditional trade in both Bangladesh

_ penetrated stores. We are also leveraging automation to streamline other functions such as inventory management and claims management.

In Africa, salesforce automation has been expanded to cover most feet-on-street in South Africa and Nigeria. This has helped expand coverage and improve brand visibility across the subcontinent. We now focus on scaling up distribution, extracting ivwV i V iA]_> _LO }_>VV O I>L IT_ across all channels and regions.

We have also leveraged technology in consumer insights, for example, taking consumer insights from the D2C channel in Nigeria to product bundles and price points that can work, and shifting to virtual consumer and stylist interactions to continue having a strong pulse of the on-ground trends and for agile action planning.

Fostering win-win partnerships

To increase digital connect, we scaled up our industry-pioneer android app called ‘Bandhan, which is a one-stop app for all GCPL-related information, communication updates, and training for all our distributors. We have also adopted a comprehensive approach to improve return on investment for our distributors to enhance engagement.

Investment in media and communication

In this age of information overload, it is absolutely critical to ensure that our brand, values, and offerings are communicated frequently, clearly, and through as many different platforms

2022-23, we increased our investments in brand communication across multiple media to facilitate continuous dialogue with our consumers.

With the launch of Goodknights new TVC ‘Neendo Ko Nazar Na Lage, we launched a month-long social media campaign to invite user-generated content from parents who captured adorable papa–baccha sleeping moments. A large number of parents tuned into our endearing lullaby and sent pictures and videos. We collated these

itched with the lullaby in the background and pictures and videos sent in by them, which were published on Goodknights social media channels.

Godrej aer Matic seized Durga Pujo as an opportunity to create a larger 360-degree campaign. In line with the objective of amalgamating digital and the Durga Pujo on-ground activation, the digital leg of the campaign leveraged polygon technology to retarget users who witnessed and experienced the on-ground activation at the pandals. This is one example of how we leveraged technology to create an impactful integrated marketing communication for the brand.

With communities becoming the next big thing on digital platforms, and consumers actively participating in them to seek information and advice, share their experiences, and be a part of conversations around a topic of interest, we leveraged women-centric Facebook communities around beauty and hair for Godrej Expert Rich Cr?me.

The campaign was executed during the wedding season, a time when new consumers are highly likely to enter the category. We enlisted group admins and evangelists to create a buzz around the category in the context of weddings. The activity propelled user-generated

experiences related to hair colouring using Godrej Expert Rich Cr?me. This resulted in a positive movement in the share of voice and engagement metrics for the brand.

Boards Report

Dear Members,

Your Directors, with great pleasure, present the Annual and Integrated Report for the year ended March 31, 2023.

1. Results of Our Operations

The financial performance of your company for the fiscal year under review is given below.

An overview of the performance of the companys subsidiaries in various geographies is given separately in the Boards Report.

The shareholders may also refer to the Management Discussion and Analysis section, which gives more details on the functioning of the company.

	Consolidated		Standalone
Financials: Abridged Profit and Loss Statement	March 31, 2023	March 31, 2022	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

2. Dividend

A. Dividend Declared

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.

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 companys 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 fiscal year, there was no change in the Board composition.

The Board at its meeting held on May 19, 2022, approved the re-appointment of Ms. Nisaba Godrej as Whole-Time 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 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.

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 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.

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. 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

notification As per the 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 Directors Data Bank maintained by IICA.

F. Familiarisation Programmes

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 link^[2].

G. Board Diversity Policy & Independence Statement

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].

H. Remuneration Policy

The companys Remuneration Policy for Directors, Key Managerial Personnel (KMP), and other employees is attached as Annexure ‘B. The companys 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.

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. relations@godrejcp.com 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 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.

[2] https://godrejcp.com/public/uploads/compliance_other_updates/FamiliarisationProgrammeforIDs2022-23.pdf [3] https://godrejcp.com/public/pdfs/codes_policies/people/Board_Independence_Statement_May2023.pdf

Each board member confidential completed 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 Chairpersons 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

• Chairpersons 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 Chairpersons Feedback Report was compiled.

K. 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 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.

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 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 arms length basis, the details of which are given in the Notes to Financial Statements, no other Related Party

Transactions require disclosure in the Boards 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.

6. Acquisition

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.

A. Report on the Performance of Subsidiaries and Associates

The details of the cluster-wise performance are given below:

Indonesia

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.

Africa, the Middle East, and the USA

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 markets—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.

Latin America

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 years 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.

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 and can be accessed through the following link^[7].

C. Financial Performance

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 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 organisations talent objectives. We continue to deploy leadership development initiatives to build succession for key roles.

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.

13. Annexures

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 Boards Report.

B. Corporate Social Responsibility

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.

C. Employee Stock Option Scheme

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 link^[11].

16. Auditors and Auditors Report

A. Statutory Auditors

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 22^nd AGM held on August 03, 2022, until the conclusion of the 27^th AGM in the year 2027 at a remuneration as may be approved by the Board.

B. Cost Auditors

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.

C. Secretarial Auditors

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 ^[12].

17.

 

Corporate Governance

Pursuant to the Listing Regulations, the Report on Corporate Governance is included in the Annual and Integrated Report. The Practising Company Secretarys

Certificate certifying the companys 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.

19. Confirmations

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 Boards 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 companys progress, as partners, through their continued support and co-operation.

For and on behalf of the Board of Directors

Nisaba Godrej

Executive Chairperson