Godrej Consumer Products Ltd Directors Report.

Dear Members,

Your Directors, with great pleasure, present the Annual and Integrated Report for the year ended March 31, 2020.

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 that gives more details on the functioning of the Company.

Rs. (Crore)
Financials: Abridged Profit and Loss Statement

Consolidated

Standalone
March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019
Total revenue from operations 9,910.80 10,314.34 5,474.45 5,679.31
Other income 112.30 108.76 91.26 94.45
Total income 10,023.10 10,423.10 5,565.71 5,773.76
Total expenses, including depreciation and finance costs 8,182.46 8,590.96 4,166.08 4,300.68
Profit/loss before exceptional items, share of profit of equity accounted investees, and tax 1,840.64 1,832.14 1,399.63 1,473.08
Exceptional items (81.05) 252.56 - -
Share of profit of equity accounted investees (net of income tax) 0.81 0.63 - -
Profit/loss before tax 1,760.40 2,085.33 1,399.63 1,473.08
Tax expense 263.82 (256.20) 219.74 (281.90)
Profit/loss after tax 1,496.58 2,341.53 1,179.89 1,754.98
Other comprehensive income 223.20 138.51 (0.97) (0.17)
Total comprehensive income attributable to owners of the Company 1,719.78 2,480.04 1,178.92 1,754.81

2. Appropriation

Your Directors recommend appropriation as given below:

Appropriation

Fiscal Year 2019-20

Fiscal Year 2018-19

Rs. (Crore) Rs. (Crore)
Surplus at the beginning of the year 3,258.64 2,982.46
Less: Transition impact of lease as per IND AS 116 (net of tax) 1.20 -
Restated balance at the beginning of the year 3,257.44 2,982.46
Add: Net profit for the year 1,179.89 1,754.98
Less: Remeasurements of defined benefit plans (net of tax) 0.97 0.17
Available for Appropriation 4,436.36 4,737.27
Less: Interim dividends 817.82 1,226.52
Less: Tax on distributed profits 168.11 252.11
Surplus Carried Forward 3,450.43 3,258.64

3. Dividend

A. Dividend Declared

During the fiscal year 2019-20, the following interim dividends were declared on shares of face value of Rs. 1 each:

Declared at the Board Meeting Dated Dividend Rate Per Share on Shares of Face Value of Rs.1 Each Record Date
May 3, 2019 2 May 13, 2019
August 1, 2019 2 August 9, 2019
November 6, 2019 2 November 15, 2019
January 29, 2020 2 February 6, 2020

4. COVID-19

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 500 listed companies (by market capitalisation) to formulate the same. The Companys Dividend Distribution Policy may also be accessed through the following link [1].

The novel coronavirus outbreak in the last quarter of fiscal year 2020 has significantly affected the consumer goods industry across the globe. We at Godrej Consumer Products Limited (GCPL), have been working on a safety first principle, ensuring that our employees and business partners are safe, and taking all necessary precautions to control the spread of Coronavirus. In view of the lockdown in many of the States/Union Territories across India, operations in many of the Companys locations (manufacturing, warehouses, offices, etc.) had to be scaled down or shut down from the second half of March 2020. The operations at several of the overseas locations were also shut down/scaled down over various periods and are being operated as per the local guidelines complying with the required social distancing and high hygiene standards. While this has adversely impacted the sales performance in various geographies, we continue to closely monitor the situation and take appropriate action, as necessary to scale up operations, in due compliance with the applicable regulations. As per our current assessment, other than the impairment recorded in the financial statements, no significant impact on carrying amounts of inventories, goodwill, intangible assets, trade receivables, investments and other financial assets is expected, and we continue to monitor changes in future economic conditions. The eventual outcome of the impact of the global health pandemic may be different from those estimated as on the date of approval of the financial statements.

From a risk management perspective, we are monitoring and acting against the outbreak in line with our internal crisis management plan, which is overseen by the Risk Committee. More details regarding our response is available in the ‘Risks and Opportunities section and in the message from our Executive Chairperson.

5. 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

At the Board meeting held on January 29, 2019, Mr Sumeet Narang was appointed as an Independent Director with effect from April 1, 2019, for a period of 5 years, and the shareholders approved his appointment through postal ballot held on March 20, 2019. In the opinion of the Board of Directors, he possesses the requisite integrity, expertise, and experience to guide the Companys growth strategy.

Mr Bharat Doshis tenure of 5 years ended on September 25, 2019, and he had expressed his desire to not offer himself for reappointment for another term. The Board places on record its sincere appreciation of the contribution made by Mr Doshi during his tenure on the Board. Ms Ireena Vittal was appointed to act as the Lead Independent Director in place of Mr Bharat Doshi.

After the end of the financial year, Mr Vivek Gambhir tendered his resignation as Managing Director of the Company with effect from the close of business hours of June 30, 2020 for personal reasons. His resignation was accepted by the Board of Directors at their meeting held on June 9, 2020. The Board has requested

Mr Vivek Gambhir to continue as a Whole-time Director up to September 30, 2020. The Board members place on record their sincere appreciation for Mr Gambhirs contributions to the Companys growth during his tenure as the Managing Director.

At the meeting held on June 9, 2020, the Board approved the appointment of Ms Nisaba Godrej as the Managing Director of the Company, subject to approval of the shareholders at the Annual General Meeting (AGM). The Board of Directors also requested her to continue as the Chairperson of the Board till March 31, 2022 and accordingly, designated her as the Chairperson and Managing Director.

In the forthcoming AGM, Mr Pirojsha Godrej and Ms Tanya Dubash will retire by rotation, and being eligible, they will be considered for reappointment.

C. Audit Committee of the Board of Directors

Your Company has an Audit Committee in compliance with Section 177 of the Companies Act, 2013 and Regulation 18 of Listing Regulations. The Committee consists entirely of the Independent Directors, viz., Mr Aman Mehta, Chairman of the Committee, and, Mr Narendra Ambwani, Dr Omkar Goswami, Ms Ireena Vittal, Ms Ndidi Nwuneli, Ms Pippa Armerding, Mr Sumeet Narang, 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.

E. Enrolment of Directors in

Independent Directors Data Bank

The Ministry of Corporate Affairs (MCA) vide its notification dated October 22, 2019, has amended Rule 6 of the Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019, and accordingly, every individual appointed/to be appointed as an Independent Director is required to enrol his/her name for inclusion in the ‘Independent Directors Data Bank to be maintained by the Indian Institute of Corporate Affairs, Manesar. All the Independent Directors of your Company have successfully registered their names for inclusion in the said ‘Independent Directors Data Bank.

F. Familiarisation Programmes

Several familiarisation programmes for the Independent Directors were conducted during the year, covering topics such as the Annual Operating Plan for the fiscal year 2019-20, update on key amendments to the SEBI Listing Regulations, and actionables for the Company arising out of the amendments. Additionally, at all the Board meetings, detailed presentations covering business performance and financial updates were made.

The number of hours of the familiarisation programmes conducted may be accessed through the following link[2].

G. Board Diversity Policy

The Company has in place a Board Diversity Policy, which is attached as Annexure ‘A. The criteria for determining qualification, positive attributes, and independence of Directors are as per the Board Diversity Policy, Listing Regulations, and the Companies Act, 2013.

H. Remuneration Policy

The 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. The information required under

Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not being sent along with this report. Members interested in obtaining these particulars may request the same by sending an email to the Company at investor.relations@godrejcp. com from their registered email ID, quoting their name and Folio No. Mr Adi Godrej, Chairman Emeritus; Ms Nisaba Godrej, Executive Chairperson; and Mr Vivek Gambhir, Managing Director and CEO, receive remuneration from your Company.

J. Performance Evaluation of the Board of Directors, its

Individual Members, and its Committees

We conducted a formal Board effectiveness review, as part of our efforts to evaluate the performance of our Board and identify areas that need improvement in order to enhance the effectiveness of the Board, its Committees, and Individual Directors. This was in line with the requirements of the Companies Act, 2013 and the Listing Regulations. The Corporate HR team of Godrej Industries Limited and Associate Companies worked directly with the Chairperson and the Nomination and Remuneration Committee of the Board to design and execute this process. It was later adopted by the Board.

Each Board Member 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 composition, strategic orientation and team dynamics. Evaluation of each of the Board Committees covered whether they have well- objectives and the correct composition, and whether they achieved their objectives. The criteria for Individual Board Members included skills, experience, level of preparedness, attendance, extent of contribution to Board debates and discussion, and how each Director leveraged their expertise and networks to meaningfully contribute to the Company. The criteria for the 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 so as to give a true and fair view of the state of affairs of the Company at the end of the fiscal year and of the profit of the Company for that period.

c) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) They have prepared the annual accounts on a going concern basis.

e) They have laid down internal financial controls to be followed by the Company, and such internal financial controls are adequate and operating effectively.

f) They have devised a proper system to ensure compliance with the provisions of all applicable laws, and this system is adequate and operating effectively.

6. Transfer to Investor Education and Protection Fund (IEPF)

In accordance with the applicable provisions of the Companies Act, 2013 read with Investor Education and Protection Fund (Accounting, Audit, Transfer, and Refund) Rules, 2016 (IEPF Rules), all unclaimed dividends are required to be transferred by the Company to the IEPF after completion of 7 years. Further, according to IEPF Rules, the shares on which dividend has not been claimed by the shareholders for 7 consecutive years or more shall be transferred to the demat account of the IEPF authority. Accordingly, Rs. 1,07,15,412 of unpaid/unclaimed dividends were transferred during the financial year 2019-20 to IEPF.

The Company has appointed a 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[3]. The Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on March 31, 2019 on the Company website, which can be accessed through the following link[4]. The details of unpaid and unclaimed amounts lying with the Company as March 31, 2020 will be available on the same link within 60 days of the AGM.

7. Finance

A. Loans, Guarantees, and Investments

The details of loans, guarantees, and investments as required by the provisions of Section 186 of the Companies Act, 2013 and the rules made thereunder are set out in the Notes to the Standalone Financial Statements of the Company.

B. Related Party Transactions

In compliance with the Listing Regulations, the Company has a Policy for Transactions with Related Parties (RPT Policy). During the year, the Company has revised its Policy on dealing with Materiality of Related Party Transactions, in accordance with the amendments to the applicable provisions of the Listing Regulations. The RPT Policy is available on the Company website and can be accessed through the following link[5].

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.

8. Subsidiaries, Associates and Joint Venture

During the year, the following companies ceased to be the subsidiaries of your Company: Godrej Household Insecticide Nigeria Limited on account of its dissolution with effect from March 19, 2020 Godrej Consumer Products Malaysia Limited on account of its dissolution with effect from October 7, 2019 Post the completion of financial year 2019-20, the following companies ceased to be the subsidiaries of the Company:

Godrej Hair Care Nigeria Limited on account of its dissolution with effect from April 15, 2020 Godrej Hair Weave Nigeria Limited on account of its dissolution with effect from April 24, 2020 During the year, Godrej Africa Holdings Limited, a wholly owned subsidiary of your Company acquired additional 5 per cent stake in the Darling Group Holding Company, namely Godrej West Africa Holdings Limited, which is a 100 per cent holding Company of Subinite (Pty) Limited and Weave Mozambique LDA. Post this acquisition, the total stake of your Company in Godrej West Africa Holdings Limited increased from 90 per cent to 95 per cent.

Similarly, Godrej Mauritius Africa Holdings Limited, a wholly owned subsidiary of your Company acquired additional 5 per cent stake in the Darling Trading Company Mauritius Limited which is a 100 per cent holding Company of Godrej Consumer Products International FZCO. Post this acquisition, the total stake of your Company in Darling Trading Company Mauritius Limited increased from 90 per cent to 95 per cent.

A. Report on the Performance of Subsidiaries and Associates

The brief details of the cluster-wise performance is given below:

Indonesia

Our Indonesia business posted a strong performance in the fiscal year 2019-20, growing the top line by 8 per cent in constant currency terms, continuing strong momentum from the previous year with a 2-year CAGR of 10 per cent. Our growth this year was led by HIT and Mitu. HIT continued a strong share momentum, backed by at-scale media investments, break-the-clutter communication, and strategic trade spends. We continued the strong momentum on innovation—we had 8 launches this year, all aimed at category development and with strong product differentiation. In household insecticides, we strengthened our foray into other pests by launching Roach Gel, a DIY solution with an impact similar to professional pest services and a mechanical rat trap, a first-to-market non-invasive rat trap. In air care, we launched “Minimatic”, a premium fragrancing solution for smaller spaces at an affordable price and renovated our fragrance portfolio by launching strongly differentiated fragrances. We bolstered our play in the functional air care space by launching Stella Fabric Spray and Disinfectant to create the category for fabric disinfection, increasingly relevant in the post-COVID new normal. Q4 was challenging due to COVID. We responded with unprecedented agility by launching “Saniter”, a hygiene brand from scratch in record 30 days. We also launched a no-ammonia hair colour bleach solution, a first ever to the market, to gain share in the fast-growing fashion colouring space. We backed all our new products with strong media and trade investments and made strong inroads in strengthening our channel fundamentals in both Modern Trade & General Trade.

We also continued our focus on cost savings through direct cost and fixed overhead optimisation to enable strong investments in brand and channel building. Our margins expanded this fiscal, with the bottom line growing well ahead of the top line. We continue to focus sharply on category development with breakthrough innovation, strong brand building, and driving balanced growth across our portfolio.

Africa, Middle East and USA

The fiscal year 2020 continued to be challenging for our Africa,

Middle East, and US business cluster. The overall business top line declined 1 per cent in constant currency terms. We faced adverse currency movement due to which the rupee translation was weaker, making the top line decline by 6 per cent. Most countries faced challenges, given strong macro headwinds, culminating in the COVID blow in Q4. However, South Africa recovered strongly from the previous year, growing at 10 per cent in constant currency terms. Our margins expanded due to trade spend and fixed overhead rationalisation. Despite a challenging year, we focused on strengthening the fundamentals for future. We established a braid portfolio across markets to address key portfolio gaps, which enabled share gain. We also accelerated our fast fashion model that delivered strong innovation rates on non-braids across markets. We strengthened our category leadership by strengthening our back end on technical and consumer understanding. Going forward, our focus would be to continue improving margins, strengthening our portfolio by addressing whitespaces in dry hair, accelerating Wet Hair and FMCG in the post-COVID new normal, and strengthening GTM.

Latin America

Our Argentina business recovered strongly this year despite continued macroeconomic challenges. The business grew 67 per cent in constant currency terms, while the currency devaluation impacted the rupee translation, reducing the top line growth to 13 per cent. Our top line growth was driven by our focus on value growth and price growth ahead of inflation and improved distribution. We turned around the business profitability through strategic cost rationalisation.

Our Chile business, however, faced challenges due to continued competitive intensity and political unrest, resulting in share loss. As a result, our top line declined 1 per cent in constant currency terms with further erosion in margins, driven by increased trade spends to counter competition and working capital requirements.

Looking ahead, we will continue focusing disproportionately on margin improvement and working capital management to strengthen our Latin America businesses.

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[6 ].

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 forms a part of consolidated financial statements (CFS) in compliance with Section 129(3) and other applicable provisions, if any, of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014.

The said form also highlights the financial performance of each of the subsidiaries and joint venture companies included in the CFS of the Company pursuant to Rule 8(1) of the Companies (Accounts) Rules, 2014.

9. Sexual Harassment of Women at

Workplace (Prevention, Prohibition and Redressal) Act, 2013

The 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, in-person and e-learning workshops were conducted to create awareness regarding sexual harassment among employees. No complaint was reported during calendar year 2019, and hence, the

Committee has not filed any complaint report with the concerned authorities, in accordance with Section 22 of the aforementioned Act.

10. Talent Management and Succession

Planning

Your Company has the talent management process in place with an objective of developing a robust talent pipeline for the organisation, which includes the senior leadership team. As part of the talent process, we identify critical positions and assess the succession coverage for them annually. During this process, we also review the supply of talent, identify high-potential employees, and plan talent actions to meet the organisations talent objectives. We continue to deploy leadership development initiatives to build succession for key roles.

11. Extract of AnnualReturn

In compliance with the provisions Section 134(3)(a) of the Companies Act, 2013, the Annual Return of the Company as per Section 92(3) of the Act is available on the Company website, which can be accessed through the following link[7].

12.Risk Management

The Company has a well-defined process in place to ensure appropriate identification and mitigation of risks. The Risk Management Committee of the Company has been entrusted by the Board with the responsibility of identification and mitigation plans for the ‘Risks that Matter.

Elements of risks to the Company are listed in the Management Discussion and Analysis Section of the Annual and Integrated Report.

13.Vigil Mechanism

Your Company has adopted a Whistle Blower Policy as a part of its vigil mechanism. The purpose of the policy is to enable any person (employees, customers, or vendors) to raise concerns regarding unacceptable improper practices and/or any unethical practices in the organisation without the knowledge of the management. All employees shall be protected from any adverse action for reporting any unacceptable or improper practice and/or any unethical practice, fraud, or violation of any law, rule, or regulation. This policy is also applicable to the Directors of the Company.

Mr V Swaminathan, Head Corporate Audit and Assurance, has been appointed as the ‘Whistle Blowing Officer, and his contact details have been mentioned in the policy. Furthermore, employees are free to communicate their complaints directly to the Chairman/Member of the Audit Committee, as stated in the policy. The policy is available on the internal employee portal as well as the Company website and can be accessed through the following link8] [ . The Audit Committee reviews reports made under this policy and implements corrective actions wherever necessary.

14.Annexures

A. Disclosure on Conservation of Energy, Technology Absorption, Foreign Exchange Earnings, and Outgo

Annexure ‘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

Your Company has a well-documented Corporate Social Responsibility (CSR) Policy, which is available on the Company website under the following link9] [ . The CSR Report, along with details of

CSR projects, are provided in

Annexure ‘E to 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 grants vest in one or more tranches as per the decision of the Nomination and Remuneration Committee with a minimum vesting period of 1 year from the grant date. Upon vesting, the eligible employee can exercise the grants and acquire equivalent shares of face value of Rs. 1. The difference between the market price at the time of grant and that on the date of exercise is the gross gain/loss to the employee. The details of the grants allotted under the Godrej Consumer Products Limited Employee Stock Grant Scheme, 2011 and the disclosures in compliance with SEBI (Share Based Employee Benefits) Regulations, 2014 and Section 62 1 (b) read with Rule 12 (9) of the Companies (Share Capital and Debentures) Rules, 2014 are set out in Annexure ‘F. Your Company has not given loan to any person under any scheme for or in connection with the subscription or purchase of shares in the Company or the holding Company. Hence, there are no disclosures on voting rights not directly exercised by the employees.

15.Listing

The shares of your Company are listed at the BSE Limited and National Stock Exchange of India Limited. The applicable annual listing fees have been paid to the stock exchanges before the due dates. Your Company is also listed on the Futures and Options Segment of the National Stock Exchange of India.

16.Business Responsibility Report

Pursuant to Regulation 34 of the Listing Regulations, the Business Responsibility Report highlighting the initiatives taken by the Company in the areas of environment, social, economic, and governance is available on the website of the Company and can be accessed through the following link[10 ].

17.Auditors and Auditors Report

A. Statutory Auditors

In accordance with Section 139 of the Companies Act, 2013 and the Rules made thereunder, M/s. B S R and Co., LLP, Chartered Accountants (Firm Regn. No. 101248W/W- 100022) have been appointed as the statutory auditor to hold office the from the conclusion of the 17th AGM on July 31, 2017 until the conclusion of the 22nd AGM in the year 2022 at a remuneration as may be approved by the Board.

B. Cost Auditors

The Company is maintaining requisite cost records for the applicable products of the Company. Pursuant to directions from the Department of Company Affairs, M/s. P. M. Nanabhoy and Co., Cost Accountants, were appointed as cost auditors for the applicable products of the Company for the fiscal year 2018-19. They are required to submit the report to the Central Government within 180 days from the end of the accounting year.

C. Secretarial Auditors

The Board had appointed M/s. A. N. Ramani and Co., Company Secretaries, Practising Company Secretary, to conduct a secretarial audit for the fiscal year 2019-20. The Secretarial Audit Report for the fiscal year ended March 31, 2020 is attached herewith as Annexure ‘G. The Secretarial Audit Report does not contain any qualification, reservation, or adverse remark.

18.Corporate Governance

Your Company continues to enjoy a Corporate Governance Rating of CGR2+ (pronounced CGR 2 plus) and a Stakeholder Value Creation and Governance Rating of SVG1 (pronounced SVG one). The ‘+ sign indicates a relatively high standing within the category indicated by the rating. The aforementioned ratings are on a scale of 1 to 6, where 1 is the highest rating. The two ratings indicate whether a company is being run on the principles of corporate governance and whether the practices followed by the company lead to value creation for all its shareholders. The CGR2 rating is on a scale of CGR1 to CGR6, where CGR1 denotes the highest rating. The CGR2+ rating implies that according to ICRAs current opinion, the rated company has adopted and follows such practices, conventions, and codes that would provide its financial stakeholders a high level of assurance of the quality of corporate governance. The SVG1 rating is on a scale of SVG1 to SVG6, where SVG1 denotes the highest rating.

The SVG1 rating implies that according to ICRAs current opinion, the company belongs to the highest category of the composite parameters of stakeholder value creation and management as well as corporate governance practices.

Pursuant to the Listing Regulations, the Report on Corporate Governance is included in the Annual and Integrated Report. The Practicing Company Secretarys Certificate certifying the Companys compliance with the requirements of corporate governance, in terms of the Listing Regulations, is attached as Annexure ‘H.

19.Management Discussion and Analysis

Management Discussion and Analysis as stipulated under the Listing Regulations is presented in a separate section forming a part of this Annual and Integrated Report. The details pertaining to internal financial control and their adequacy are also part of the Annual and Integrated Report.

20.Confirmations

• Your Company is in compliance with the Secretarial Standards on Meetings of the Board of Directors (SS-1) and Secretarial Standards on General Meetings (SS-2) issued by the Institute of Company Secretaries of India.

• There have been no material changes and commitments affecting financial the position of the Company that have occurred between March 31, 2020 and the date of this Boards Report.

• There have been no instances of frauds reported by the auditors under Section 143 (12) of the Companies Act, 2013 and the Rules framed thereunder, either to the Company or to the Central Government.

• The Company has not accepted any deposits from public, and as such, no amount on the account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

• During the Financial Year 2019-20, 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 future.

21.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

Mumbai, June 9, 2020

ANNEXURE ‘A

BOARD DIVERSITY POLICY

The Company is committed to equality of opportunity in all aspects of its business and does not discriminate on the grounds of nationality, race, colour, religion, caste, gender, gender identity or expression, sexual orientation, disability, age, or marital status. The Company recognises merit and continuously seeks to enhance the effectiveness of its Board. The Company believes that for an effective corporate governance, the Board should have the appropriate balance of skills, experience, and diversity of perspectives. Board appointments will be made on merit basis, and candidates will be considered on the basis of objective criteria, with due regard for the benefits of diversity on the Board. The Board believes that such merit-based appointments will best enable the Company to serve its stakeholders. The Board will regularly review this policy to ensure its effectiveness.

ANNEXURE ‘B

GCPL TOTAL REWARDS POLICY

GCPLs 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).

Highlights

The rewards framework offers employees the flexibility to customise different elements based on need. The framework is also integrated with GCPLs performance and talent management processes and is designed to ensure sharply differentiated rewards for our best performers.

The total compensation for a given position is influenced by three factors: position, performance, and potential. As a broad principle, for high performers and potential employees, GCPL strives to deliver total compensation at the 90th percentile of the market.

Total Cash Compensation

The employees total cash compensation has the following three components:

1. ‘Fixed Compensation comprising the basic salary and retirement benefits such as the provident fund and gratuity

2. ‘Flexible Compensation comprising a fixed predetermined component of employees compensation. The employees can allocate this amount to different components, as per their grade eligibility, defined at the start of each fiscal year.

3. ‘Variable Compensation (Performance-Linked Variable Remuneration) comprising employee rewards for delivering superior business results and individual performance. It is designed to provide a significant upside earning potential without a cap for overachieving business results. It has a ‘Collective component, linked to the achievement of specified business results, measured by ‘Economic Value Added or other related metrics, relative to the target set for a given fiscal year, and an ‘Individual component, based on an employees performance, as measured by the performance management process.

Long-Term Incentives (Employee Stock Grant Scheme)

This scheme aims at driving a culture of ownership and focus on long-term results. It is applicable to Godrej Leadership Forum members. Under this scheme, performance-based stock grants are awarded. The value of the stock grant is proposed by the management and approved by the Nomination and Remuneration Committee.