Godrej Consumer Products Ltd Management Discussions

Our Business Model

Purpose	Values
To bring the goodness of health and beauty to consumers in emerging markets	• Trust; Own It; Be Bold; Be Humble; Create Delight- Show Respect

Strategy

1. Category develop existing portfolio	Double-digit volume growth More spends on brands
2. Funded by radical simplification	More automation SKU rationalisation
3. People and Planet alongside profit	More diversity Less environmental impact

Operating Philosophy

1 Less is more; Much less is much more

2 Consumer first, Business second

3 Think local, Act global

4 Tomorrow before today

5 Better from within, Different from outside

Risk Management

Our risk management approach is comprehensive and deeply embedded within our operational and reporting frameworks across geographies.

Risk governance structure

We have instituted a strong and multi-tiered risk governance structure to proactively identify, assess, and mitigate risks. Oversight begins at the Board level, with risk ownership forming the first line of defence. The second line is led by the Executive Risk Management Committee (ERMC), which provides oversight and strategic direction. Independent assurance is delivered by our internal audit team, constituting the third line of defence, to evaluate the overall effectiveness of the risk management framework.

Board of Directors

The Board of Directors plays a critical role in steering our risk management agenda. They establish the tone at the top, define our risk appetite, and ensure it is aligned with our strategic objectives. Risk appetite outlines the degree of risk we are willing to undertake in pursuit of business growth. The Board closely monitors our risk exposure to ensure alignment with prudent risk-taking and long-term value creation. Their oversight supports sound, informed decision-making at every level.

Board Audit Committee

The Board Audit Committee comprises of all Independent and non-executive directors. They play a key role in shaping the risk management ecosystem.

They formally review and approve the Risk Management Charter and Policy that serves as the cornerstone of our approach. The committee provides structured guidance to the risk owners and the ERMC and ensures that risk management activities are aligned with the organisations strategy. Where required, the Committee sanctions additional resources to mitigate specific risks and prescribes corrective measures in cases where mitigation is inadequate. The Committee also keeps the Board updated with periodic reviews and recommends any recalibration of the risk appetite, if necessary.

First line of defence - Risk Owners

Risk owners are designated for both material and emerging risks. Embedded within operational teams, they serve as the first line of defence by actively assessing, managing, and monitoring risks within their respective domains. They develop and propose mitigation plans, which are reviewed and approved by the ERMC and relevant Board Committees. The concerned team escalates any deviation from the agreed plan to the respective Head of Function and the Managing Director & CEO.

Risk ownership may evolve based on changes in roles and responsibilities across the organisation.

Every six months, risk owners formally report on their respective risk areas during ERMC meetings. These updates evaluate the effectiveness of current mitigation efforts and identify any newly emerging risks that could potentially impact business continuity.

The risk report includes:

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

• Identification of any additional emerging risks

• Mitigation strategy and actions for the new material risks

Second line of defence - Executive Risk Management Committee (ERMC)

The ERMC ensures the deployment of a systematic and consistent risk management process across the organisation. This committee plays a central role in identifying, assessing, and mitigating risks spanning strategic, material, operational, transitional, technological, and environmental domains.

Charged with overseeing the companys risk landscape, the ERMC is responsible for ensuring risks are managed in a manner that strengthens business resilience and continuity. The committee remains firmly committed to maintaining transparency and safeguarding the interests of both the company and its stakeholders.

On the recommendation of the Managing Director & CEO or the Chief Financial Officer, the ERMC may nominate or invite other members or directors to attend specific meetings as deemed necessary.

The Secretary to the ERMC, who is the senior-most individual tasked exclusively with risk management responsibilities, acts as the de facto Chief Risk Officer. The Secretary leads the risk management function at both the operational and performance levels and is accountable for ensuring that ERMC meetings are convened at least twice a year, or more frequently if required.

The Secretary also submits a comprehensive half-yearly risk management report for review by the ERMC. Additionally, on a biannual basis and as per a predefined schedule, risk owners formally present their risk management initiatives and the status of their domains to the ERMC for structured evaluation.

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

Third line of defence - Internal Audit

The internal audit team provides independent assurance on the risk management process. They formulate an annual audit plan based on the risk significance and performs assessment and audits of the internal control system, processes and implementation of risk mitigation strategies that the business has adopted. The internal audit reports provide an objective assessment and even recommendations to strengthen internal controls.

Risk Governance Structure

Risk management approach

Our risk management approach is proactive and closely integrated with our strategic and annual business planning cycles. Each year, a structured risk identification and assessment process is carried out in parallel with the formulation of our annual business operating plan. The annual business operating plan serves as a baseline for recognising and prioritising key risks. Once prioritised, a risk competency scan is conducted to evaluate the effectiveness of current management strategies in addressing both material and emerging risks. This scan also identifies areas where further enhancement of risk mitigation efforts is warranted.

For each material and emerging risk, the combined outcomes of the existing management strategies and identified improvement opportunities are documented in a formal risk management plan. This plan is subsequently presented to the Board Risk Management Committee for thorough evaluation and review of both the prioritised risks and the corresponding mitigation strategies.

Risk management approach

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 efficient risk management strategy across the organisation.

Risks are prioritised basis a risk score that considers likelihood/probability and magnitude. This in turn defines the impact/ overall severity of the risks. We follow a 2x2 matrix framework with each of the 4 quadrants defining the impact of risk.

For FY 2026, entity-level risk assessment results indicated geopolitical risks and commodity price volatility in high impact Quadrant 1; operational and financial risks like logistics costs and forex fluctuations in Quadrant 2; operational risks like supplier service levels dependency and occupational health and safety in Quadrant 3, and evolving regulations and cyber-attacks in Quadrant 4.

We also incorporated the double materiality assessment results in the framework. The identified and analysed risks are managed by relevant functions that are responsible for formulating and implementing risk management strategies, plan of action and its implementation.

Risk Impact Assessment

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 compliance, financial forecasting to reduction of volatile forex exposure.

All our Board of Directors are familiarised on risk management process, risks that matter, and the internal audit reports of risks controls at least twice a year. At the Godrej Learning University, our Godrej Industries Group wide learning management system, we have a dedicated course on Enterprise Risk Management. The course details the fundamental concepts of risk management include planning for risk management, identifying risks, analysing risks, planning risk response and implementation, and monitoring and controlling risks. The course deep dives into recording identified risks into risk registers and analysing with our magnitude and likelihood matrix. It concludes with incorporating risk-based thinking and Failure Mode and Effects Analysis (FMEA). The course is assigned to team members taking up risk goals and moreover it is available to everyone across the company to access and learn ERM. Across all manufacturing facilities, offices and our headquarters, we also conduct workshops on occupational health and safety risks and management throughout the year, covering 100% of our employees and workers.

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. Continuous listening survey is organised across the company seeking suggestions and feedback from all employees. Emerging risks and development of mitigation measures are discussed in departmental monthly review meetings. The line manager records valid risks identified by team members and communicates them to the ERMC 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 appetite

GCPLs risk appetite is set by the Board of Directors. The principles are defined to help the ERMC and the risk owners to take appropriate levels of risks in line with business objectives.

The biggest risks we face are often systemic risks that are inherent to the entire market. The high impact risks that arent systemic need to reach medium or low impact level risk quadrant over time.

We will adhere to all regulations and laws where we operate. All risk owners including but not limited to leaders, managers, employees, finance controllers, compliance officers, among others should adhere to regulations and laws related to their business function and local geography.

Business activities that have a high risk of corruption and/or unethical behaviour should have strong measures of controls and should be regularly analysed and tested. Our relevant preventive measures and trainings will further strengthen the environment for these activities.

Risks and mitigation

Emerging Risks

1. Biodiversity loss

UNEPs Global Resource Outlook 2024 report states that our need for resources will jump by 60% by 2060. Businesses are inextricably linked to nature, drawing upon various resources ranging from timber and agricultural raw materials to water and minerals. As our resource ecosystems are stretched thin, business dependencies on nature will become a huge risk.

Impact of biodiversity loss

Three key commodities we source have a risk of deforestation - rubber, palm fatty acid distillate and paper.

We manufacture a variety of products that uses rubber and palm fatty acid distillate as a raw material and use paper for packaging.

Natural rubber is a key material used to produce a wide variety of goods. Natural rubber tree grows in tropical regions however, its planting practices often involve clearing natural forests, resulting in serious biodiversity loss and net carbon emissions. In India, we source rubber entirely from privately owned plantations which are classified as agro-forestry and therefore do not carry the same risk of deforestation. However, these plantations are subject to the same physical climate risks and are hence considered as an emerging risk.

We use palm fatty acid distillate (PFAD, which is a by-product of palm oil refining). Oil palm development in some key producing markets has been known to often replace tropical forests and other species-rich habitats to meet the growing demand.

Lastly, as we increase our paper- based packaging solutions to reduce reliance on plastic packaging, the most commonly mentioned impacts of the timber industry is forest degradation. Extracting timber or other products changes the tree age structure, composition of tree species and vertical stratification, thereby affecting local temperature, light, moisture, soil and litter conditions.

Mitigation actions

We recognise that biodiversity loss is one of the most critical environmental issues of our time that directly impacts our planets health. Large-scale removal of forests for agriculture commodities

leads to loss of biodiversity, disruption of ecosystems, and increased greenhouse gas emissions. Forests play a vital role in maintaining the ecological balance of our planet. By committing to safeguard forests, we aim to mitigate climate change, conserve biodiversity, and promote well-being for all.

• For rubber, we source only from India where it is an agricultural commodity and not a forest commodity with complete traceability.

• For paper, we are replacing our virgin paper with FSC certified recycled paper for use in soap stiffeners, soap wrappers, corrugated boxes, printed cartons, leaflets, sticker & labels, and other paper-based packaging materials.

• For PFAD, we work closely with our suppliers to ensure highest quality PFAD with lowest environmental impact. We will continue to improve our standard on this. Moreover, to further mitigate this risk, we have actively worked to secure high- quality PFAD from various regions and geographies, thereby reducing our dependency on major palm oil markets.

2. Cyber insecurity

Protecting our computer systems, networks, and electronic data from unauthorised access, theft, or damage due to cyberattacks remains a critical priority. As our reliance on digital technology and online platforms continues to grow, we face an increasing array of cyber threats. The vast amounts of sensitive data we store including customer information and proprietary technology, combined with our extensive use of online platforms for customer engagement, supplier interactions, and supply chain management, make us attractive targets for cybercriminals seeking to steal data, disrupt operations, or extort ransom.

We recognise that cyber threats such as phishing, malware, ransomware, and denial-of-service (DoS) attacks pose significant and evolving risks to our business. These cyberattacks represent a technological business risk with the potential to cause revenue loss, reputational harm, and legal or regulatory consequences.

Global emerging risk for GCPL:

• Indias growing reliance on digital infrastructure like the Unified Payments Interface, Aadhaar, and Open Network for Digital Commerce further increases our vulnerability to cyberattacks. For instance, in March 2024, a cyber threat campaign breached Indias government and energy sectors, highlighting the urgency of robust measures against cyberattacks.

• Africas rapid economic growth has led to increased demand for internet and digital services, but the development of laws and regulations regarding cybersecurity has not kept pace.

• Cyberattacks, such as plans uncovered by an Indian cybersecurity firm involving hacking groups targeting the G20 summit, threaten critical information infrastructure and demand immediate action to strengthen protection measures.

• Indonesias digital transformation has brought opportunities and convenience but also heightened risks of cyberattacks. Close to one billion traffic anomalies associated with potential cyberattacks were recorded in 2022, emphasizing the need for proactive measures to safeguard digital assets.

Impact of cyber insecurity

1. Can disrupt operations, leading to shipment delays, lost sales, and decreased productivity.

2. Can result in financial losses from stolen sensitive data, operational disruptions, and the costs of recovery and repair.

3. GCPL, with an emphasis on customer satisfaction, places great importance on brand reputation to attract and retain customers. Cyber espionage can erode trust and tarnish the brand, affecting customer retention and acquisition.

4. Breaches can also lead to legal liabilities if negligence is proven in protecting customer data or if data protection regulations are violated.

5. Our competitive edge lies in proprietary technology and manufacturing processes. Cyber espionage poses a risk of intellectual property theft, impacting our differentiation from competitors.

Mitigation actions

To proactively identify and address security weaknesses, we conduct regular vulnerability assessments (VA), penetration testing (PT), breach simulations, and red teaming exercises. These structured processes have enabled us to uncover specific vulnerabilities and prioritise remediation. All identified gaps over the past year have been addressed through the deployment of targeted cybersecurity solutions, including:

1. Endpoint Protection: Implemented Data Loss Prevention (DLP) controls for end-user devices, email, web traffic, and cloud storage (e.g., OneDrive) to prevent sensitive data leakage.

2. Network Access Control (NAC): Strengthened compliance with Networking Standards and restricted unauthorised network access through NAC implementation.

3. Log Retention: Deployed a centralised log retention solution to meet regulatory requirements, ensuring availability of database and application logs for the mandated 180-day period under CERT-In guidelines.

4. Data Backup: Rolled out controls and solutions to enable secure backup of end-user data, reducing the risk of data loss or corruption due to system failures.

5. Web Application Security: Initiated rollout of a Web Application Firewall (WAF) to protect against web-based threats such as injection attacks and cross-site scripting. While progress is ongoing, the full deployment is not yet complete, and some areas remain temporarily exposed.

We continue to invest in cybersecurity technologies, reinforce policy compliance, and enhance organisational awareness as part of our commitment to protecting our digital infrastructure and minimising cyber risk exposure.

We have also prioritized the cultivation of a cybersecurity-aware culture among our employees, fostering responsible security behaviour and strengthening our overall resilience. Our systems are ISO 27001 certified. We implement data leak prevention measures with the deployment of a Governance, Risk, and Compliance (GRC) tool which has enhanced GCPLs ability to manage and mitigate risks effectively while ensuring regulatory compliance.

We have taken key actions such as:

• Over 90% of all employees have been provided awareness training on data leak prevention. Employees have also completed the Acceptable Use Policy Signoff and Annual Security eLearning, contributing to ongoing improvement in our security culture maturity model.

• The ISO 27001:2022 certification underwent annual surveillance audits, and we continue to be insured for INR 100 crore for cyber & crime insurance coverage across all Godrej Industries Group companies.

These measures, among others, ensure we are well-prepared to manage cyber espionage effectively while maintaining operational efficiency and productivity.

Our TCFD Report

Climate change presents risks and opportunities for the global economy, affecting businesses in various sectors. Clear information about these climate- related factors is crucial for informed decision-making by investors, markets, and consumers. For consumer goods companies like ours, climate risks and opportunities are influenced by factors such as changing climate patterns, policy shifts toward a low-carbon economy, and evolving consumer perceptions.

The TCFD framework guides organizations in disclosing climate- related financial information, helping them communicate threats and mitigation strategies effectively. These disclosures position companies as market leaders, enhancing stakeholder communication and strengthening business strategies. The framework includes four pillars: Governance, Strategy, Risk Management, and Metrics and Targets, with 11 recommended disclosures that help stakeholders understand how companies address climate-related issues.

We consistently report our climate change strategies through Integrated Annual Reports, CDP, and DJSI disclosures. However, were aligning our disclosures more closely with the TCFD framework in the current reporting cycle. This includes information on climate governance, risk assessment, mitigation strategies, scenario analysis, metrics, and targets. Were also preparing our first standalone TCFD report.

Governance

Our governance structure, is well-defined, encompassing the Board and management to address emerging risks such as climate change. Key stakeholders actively engage and strategize on these risks, ensuring effective governance mechanisms are in place.

Boards Oversight of Climate Risks and Opportunities

The Board takes an active role in overseeing climate-related matters within the organization to ensure strategic alignment with sustainability goals. The Managing Director and CEO play a pivotal role in approving climate strategies and regularly reviewing sustainability performance using key indicators on a quarterly basis. To enhance accountability and performance, an annual mid-year review of Operating Plans is conducted across all organizational levels. Additionally, a dedicated Board-level

Sustainability Committee, led by the Chair of the Board, is tasked with overseeing sustainability performance and providing strategic guidance on climate-related issues, demonstrating a top-down commitment to environmental responsibility.

Managements Integration of Climate Oversight

Climate risks and opportunities are seamlessly integrated into day-to-day operations at the plant level, ensuring that sustainability considerations are embedded into every aspect of our activities. Each facilitys Operations team is actively engaged in meeting annual sustainability targets, thereby contributing to the achievement of long-term climate goals set by the organization. In India, our operations are primarily centralized in Mumbai, with production facilities strategically located in four regional clusters to optimize efficiency and minimize environmental impact. To drive local implementation of climate initiatives, each cluster appoints a dedicated Green Champion who collaborates closely with factory teams to implement measures such as energy efficiency improvements and renewable energy projects.

For example, in India, 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 plant teams that involve members from production, maintenance, and electrical departments. These teams lead implementation of climate-related measures, such as implementation of renewable energy projects. We are leveraging modern technology and use a cloud-based monitoring platform to track and report on sustainability performance on a monthly basis, enabling real-time visibility and informed decision-making to drive continuous improvement in our environmental performance.

Our Sustainability and CSR head, the highest C-suite level management executive, are responsible climate targets of achieving scope 1 & 2 net- zero emissions by 2035. Along with this 15% of our senior managements goal sheets are now dedicated to people & planet goals. Their KPIs include doubling energy efficiency by 2030 in with our EP100 commitment (w.r.t baseline of 2012), increasing renewable energy share and energy and emission intensity year-on-year in line with scope 1 & 2 net-zero by 2035 targets. Each of our manufacturing clusters have plant cluster heads and green champions (sustainability officers) to look after performance of the plants on climate change front along with plant operations.

Governance Structure

In addition to incentives, GCPL provides quarterly awards at the company level and annual awards at the group level to recognize the best performing individuals and teams in sustainability efforts. These awards serve to motivate and reward outstanding contributions towards environmental responsibility. The following members are entitled to these incentives:

Entitled to incentives	Incentivisation details
Head - Good & Green	At the Godrej Group level, green goals are established, and the best-performing companies are acknowledged during the annual awards ceremony. The Head of Good & Green is tasked with overseeing GCPLs performance in meeting its climate change objectives.
Business Unit Manager	Business Unit Managers are incentivised based on their performance against objectives set at the commencement of each financial year. These goals encompass both operational efficiency and climate action initiatives aimed at reducing environmental impact.
Green Champion	Green Champions are recognised and rewarded for their contributions to projects aimed at addressing climate change issues within the organisation. Their efforts play a crucial role in advancing sustainability practices and fostering environmental responsibility.
Process Operation Manager	Operation Managers are acknowledged and incentivised for implementing improvements in the manufacturing process aimed at reducing emission intensity. Their efforts contribute to mitigating the environmental footprint of the companys operations and advancing its climate change goals.

Strategy

We remain committed to integrating climate change into our business strategy. Weve established systems to connect climate change with our strategic goals and integrate related risks and opportunities into our Enterprise Risk Management (ERM) framework.

Climate change scenario analysis involves evaluating potential outcomes to assess associated risks and opportunities. The TCFD framework recommends considering various scenarios, including one aligned with the ambitious targets of the 2015 Paris Agreement (1.5?C future) and a business-as-usual (BAU) scenario, highlighting physical risks like flooding and heat waves. Transitional risks and opportunities arise as organizations move towards a low-carbon economy.

Weve examined two Shared Socioeconomic Pathways (SSPs) provided by the International Panel on Climate Change: SSP-1 aligns with Representative Concentration Pathway (RCP) 2.6, and SSP-5 aligns with RCP- 8.5. Weve chosen the timeframe of 2030 for analysis to align with global development objectives, including the Sustainable Development Goals (SDGs), ensuring relevance to ongoing sustainability efforts.

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-fuelled 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.

To assess physical risks, we modelled water scarcity, temperature, and precipitation variables under SSP-1 and SSP-5. We used tools such as the World Bank Climate Change Knowledge Portal and WRI Aqueduct to collect data from 2020 to 2039. As a result, weve identified prioritized facilities likely to experience severe climate impacts, including Katha, Puducherry, Guwahati, and Karaikal.

Way forward for addressing physical risks

Our TCFD assessment covered all our operations including the new manufacturing sites that are coming up. As defined by the framework, we consolidated a repository of risks through site-level surveys, peer review and stakeholder consultation. Moreover, we identified opportunities in transitioning to a low-carbon economy.

We scored each risk/opportunity using a 4-factor analysis by taking product of Likelihood, Impact, Vulnerability and Speed of Onset. 4-factor risk which involves vulnerability and speed of onset, in addition to likelihood and impact, is more practical for climate change, owing to the nature of adaptability and time dependence of the realized effects. All the risks were then ranked to evaluate prioritised or material climate risks. We examined 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 businesses are particularly vulnerable to climate-related risks, such as supply chain disruptions, increased cost of upstream and downstream operations, and regulatory penalties. Our largest pool of consumers is in tropical countries such as India, Indonesia, and Africa, and all these countries are witnessing significant impacts of climate change such as unpredictable weather and scanty or excessive rainfall. From our assessment, we have determined that the potential ramifications of climate change will be particularly pronounced in our operational location in India at Karaikal, Katha, and Guwahati manufacturing sites and have a plan in the next 3 years to address these risks.

We have already started taking necessary steps to address the potential risks. For example, for water availability, we are working with farming communities in four villages covering an area of 3,300 Ha in implementing integrated watershed management programme.

To begin with climate strategy on mitigation and adaptation, we have considered Katha, Karaikal, Guwahati, and Puducherry for further detailed assessments. The focus will be on identifying cluster/facility-specific hotspots. This will help the company to improve supplier engagement, reduce greenhouse gas (GHG) emissions across the value chain, and consequently, lower operational and reputational risks.

The transition risk scenario analysis involved a thorough sectoral review to evaluate potential risks and opportunities. We utilized the EnROADS Simulator, developed by MIT Sloan and Climate Interactive, to model low-carbon economies aligned with the Well Below 2 Degrees (WB2DS) and 1.5?C futuristic scenarios. Through this analysis, the following risks and opportunities were identified:

These identified risks and opportunities carry financial implications for the consumer goods sector. To assess their impact, we further evaluated the financial implications of prioritised risks. Specific risks with significant financial impacts are summarized on the next page.

Risk Management

Our risk management process begins with a materiality assessment, where material issues are identified through stakeholder engagement and secondary research. We utilize a methodology that involves identifying issues across six capitals, engaging with over 450+ stakeholders, and developing a materiality matrix using specialized tools for issue prioritization. All stakeholder groups play a significant role in influencing our overall performance and operations.

Climate change is one of the material issues identified through this assessment, and it is integrated into our ERM. The Board-level Risk Management Committee and our Risk Management team oversee the risks and mitigation measures related to climate change, along with other key material topics identified. Our risk identification and management processes are aligned with our business strategy. We use analytical techniques such as scenario analysis to identify risks, assess their probability and impact qualitatively and quantitatively, and develop action plans for risk management. These risk mitigation plans are presented to the Board- level Committee for input and are periodically updated. Climate change- related risks are evaluated alongside other business risks and classified into short-term (1-3 years), medium-term (3-5 years), and long-term (5-7 years) categories.

The risk mitigation strategy translates into action plans 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 daily, monthly, quarterly, semi-annually, and annually.

• Site/plant level: The business strategy is cascaded down to the plant level, where action plans are created for each plant. Daily and monthly meetings are conducted to review progress.

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

We actively seek feedback from employees through informal forums, discussions, and annual planning conferences to improve risk management practices. Regular open forums and monthly review meetings are also held to understand climate- related risks and develop mitigation measures.

Metrics and targets

We identify, record, and monitor key performance metrics authentically, which helps to analyse our organisations operational performance and establish goals and targets for continuous enhancement. A robust data management system is maintained to accurately record our performance and inform strategic decision-making.

Aligned with our Groups vision and goals, we have established five sustainability objectives aimed for achievement by FY2025-26. Below is a breakdown of these goals, our approach toward achieving them, and our progress during the reporting period:

Public Policy and Climate Advocacy at GCPL

At GCPL, we understand the vital role businesses play in shaping public policy, particularly concerning climate change. In alignment with our commitment to sustainability and corporate responsibility, we actively engage in corporate climate advocacy and play a constructive role in the global effort to combat climate change and its impacts. We are committed to supporting climate policies in line with the Paris Agreement, limiting the globa temperature increase to 1.5?C.

Our Board of Director, Nadir Godrej, has been a part of the World Economic Forum Annual Meeting held in Davos, Switzerland and the United Nations Climate Change Conference (COP) since 2023. He was also a key part of the Mumbai Climate Week 2026.

He has used these platforms to talk about key ESG and Climate Change issues and providing learning from our programmes. He has been actively involved in various working groups of these internationals forums.

Trade Association Memberships and Policy Advocacy

We believe in the power of strong industry associations and memberships for collective growth and resilience. These partnerships provide us with a platform to share knowledge, foster innovation, and address key industry challenges effectively. Through our Corporate teams, we advocate directly to policymakers and indirectly through trade associations on strategies that promote our transition to a low-carbon economy. We promote:

• Development of solutions to achieve circular economy for plastic packaging

• Transparent reporting on climate impact

• Incentives for decarbonisation

• Development of responsible value chain

• Behaviour changes at consumer-level

• Respect the principles of just transition

For direct advocacy, we regularly provide our industry response to draft discussion papers issued by national governments, or global associations like WBCSD. We also promote safe use of household insecticides in India by demanding to stop on buying or selling of illegal mosquito repellent incense sticks laced with unapproved harmful chemicals.

This can cause health issues such as asthma, bronchitis, reactive airways disease and other respiratory ailments.

For advocacy through trade associations, we represent our views on how industry and governments can best align with the aims of the Paris Agreement and focus on both policymaking and policy outcomes that will help us achieve that.

To ensure that our policy advocacy is conducted with integrity and credibility, we have established robust management structures and processes:

1. Database of Memberships: We maintain a centralised database of all trade association memberships, detailing the purpose of each association, our representatives, membership fees, and the value derived from each membership. This enables us to track the effectiveness of our engagements and ensure alignment with our business strategic goals.

2. Regular Reviews: We conduct regular reviews of our memberships and associations to assess the value derived from each engagement. These reviews help us determine whether our memberships continue to align with our evolving business objectives. We believe we need a rapid transition to a lower carbon energy system. Within our operations and our membership associations we are clear on our stance on climate change and are aligned with the Paris Agreement, Climate Science and Energy Efficiency. We also use this as basis for our periodic review of our trade associations positions and our involvement with them.

3. Functionally led with corporate oversight: The senior leadership of our business functions are responsible for managing trade association memberships within their areas of responsibility.

They ensure that memberships contribute to their functions objectives and manage departmental representation in these associations. For example, our Global R&D team leads our association with CIIs India Plastic Pact that aims to find solutions and innovate to drive the transition towards a circular economy for plastic packaging. The Group Corporate Affairs team is kept in loop of the association and provides oversight for the association and steps in for strategic inputs.

4. Internal Audit Compliance: Our

Internal Audit team rigorously monitors all activities related to association memberships to ensure compliance with legal requirements, ethical standards, and company policies. This ensures that our engagements uphold the highest standards of integrity and transparency.

Through our active participation in trade associations and advocacy efforts, we are committed to drive a positive change and contributing to a sustainable, net-zero future. We welcome policies that incentivize carbon emissions reduction and support initiatives that align with our operational areas, fostering a more sustainable and resilient business ecosystem.

We have made no contributions to any political parties in FY 2025-26.

The following are the list of our industry associations for FY 2025-26:

Name of the trade and industry chambers/ associations	Reach of the trade and industry chambers/ associations	Position	Membership fees (INR)
1. The World Business Council for Sustainable Development	Global	Executive Committee	53,63,000
2. Confederation of Indian Industry	India	Founding member - India Plastics Pact, Chair - CAG on Films and Flexibles	11,80,000
3. United Nations Global Compact Network	Global	Member	13,06,500
4. The Indian Society of Advertisers	India	Executive Council	5,00,000
5. Indian Beauty & Hygiene Association	India	Executive Committee	4,33,333
6. Home Insect Control Association	India	Director	2,00,000
7. EcoVadis	Global	Member	64,106
8. Employers Federation of India	India	Member	40,000
9. Indian Chamber of Commerce	India	Member	35,000
Total			91,21,999

Other Disclosures

A. Key financial ratios

	Standalone	Consolidated
	FY 2025-26	FY 2024-25	FY 2025-26	FY 2024-25
Debtors turnover ratio	15.98	15.98	8.26	8.30
Inventory turnover ratio	13.65	12.92	9.81	10.35
Interest coverage ratio	9.38	8.70	7.45	7.02
Current ratio	0.62	0.97	0.91	1.06
Debt equity ratio	0.36	0.31	0.33	0.32
Operating profit margin (%)	23.87%	24.21%	20.92%	21.58%
Net profit margin (%)	16.16%	15.55%	12.33%	13.31%
Return on net worth (%)	18.70%	15.07%	15.10%	15.06%

Reasons for change in standalone ratios and consolidated ratios

1. Inventory turnover ratio has increased due to increase in average inventory.

2. Current ratio has decreased due to significant Decrease in short term investments, there by Decreasing overall current assets with a corresponding increase in non-current liabilities.

3. Interest Coverage ratio has increased mainly due to increase in finance cost.

4. Net Profit Margin Ratio has Increased due to higher gross margin.

Formulae used for calculation of the ratios

Debt equity ratio (including financial liabilities)	Non-current + current borrowings/total equity
Inventory turnover ratio	Net sales/average of opening and closing Inventories
Interest coverage ratio	(PAT + finance cost + depreciation and amortization expense + (profit)/loss on the sale of fixed assets)/finance cost
Current ratio	Current assets/current liabilities
Debt equity ratio (including financial liabilities)	Non-current + current borrowings/total equity
Operating profit margin (%)	(Profit before Depreciation, Interest, Tax, exceptional items less other income excluding foreign exchange gain )/ Total Sales
Net profit margin (%)	Profit after tax/net sales
Return on net worth (%)	Profit after tax/average equity

B. Internal control systems and their adequacy

Weve set up an internal system to make sure all our assets are protected from unauthorized use or loss, and that our transactions are properly authorized, recorded, and reported. This system includes controls over financial reporting to ensure our financial statements are accurate and to minimize the risk of fraud.

Our Corporate Audit and Assurance department provides clear guidelines and controls to track any significant changes in activities or processes from start to finish.

As part of the audits, they also review the design of key processes from the point of view of adequacy of controls. As part of continuous monitoring, periodic reports are generated to analyse data. 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 their roles require. Our head office in Mumbai, offices across India, and all major factories follow an Information Security Management System and are ISO/IEC 27001:2013 certified.