Godrej Industrie Director Discussions


To the Members,

Your Companys Directors have pleasure in presenting the Boards Report along with the Audited Financial Statements for the Financial Year ended March 31,2022.

Review of Operations / Financial Summary

Your Companys performance during the Financial Year as compared with that during the previous Financial Year is summarized below:

(Rs.in Crore) (Rs.in Crore)
Particulars 2021-22 2020-21
Revenue from Operations 3,339.60 1,855.53
Other Income 74.61 64.05
Total Income 3414.21 1919.58
Total Expenditure other than Finance Costs and Depreciation and Amortisation 2,955.69 1,718.76
Profit before Finance Costs, Depreciation and Amortisation 458.52 200.82
Depreciation and Amortisation 74.80 72.18
Profit before Finance Costs, exceptional items and Tax 383.72 128.64
Finance Costs (net) 363.90 237.51
Exceptional Item (64.01) 1.27
Profit before Tax (44.19) (107.60)
Provision for Current Tax - -
Provision for Deferred Tax - (0.06)
Net Profit / (loss) (44.19) (107.54)
Surplus brought forward 444.47 552.01
Profit after Tax available for appropriation 400.28 444.47
Dividend on Equity Shares - -
Tax on Distributed Profit - -
Transfer to General Reserve - -
Surplus Carried Forward 400.28 444.47

Share Capital

The Paid-up Equity Share Capital as on March 31, 2022 was 33,65,84,313/- (Rupees Thirty Three Crore Sixty Five Lakh Eighty Four Thousand Three Hundred Thirteen Only) divided into 33,65,84,313 (Thirty Three Crore Sixty Five Lakh Eighty Four Thousand Three Hundred Thirteen) Equity Shares of Face Value of 1/- (Rupee One Only) each. During the Financial Year under review, your Company has allotted 59,215 (Fifty Nine Thousand Two Hundred Fifteen) Equity Shares of Face Value of 1/- (Rupee One Only) each pursuant to exercise of Options by the employees of the Company under Godrej Industries Limited- Employee Stock Grant Scheme, 2011 (ESGS 2011).

Debentures

Your Company privately placed Non-Convertible Debentures of 1,500 Crore (Rupees One Thousand Five Hundred Crore) [in 2 Tranches of 750 Crore (Rupees Seven Hundred Fifty Crore) each] during the Financial Year 2021-22, which are listed on the Debt Segment of the National Stock Exchange of India Limited. Further, your Company is in compliance with the SEBI Circular having reference number SEBI/HO/DDHS/P/ CIR/2021/613 dated August 10, 2021.

As on March 31, 2022, your Company has outstanding in aggregate, Non-Convertible Debentures of 3,000 Crore (Rupees Three Thousand Crore).

Dividend / Dividend Distribution Policy

Your Company has not declared Dividend for the Financial Year 2021-22. Further, in terms of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the Dividend Distribution Policy of the Company is appended as Annexure A to this Report and the same is also made available on the website of the Company. The same can be accessed on http://www.godreiindustries. com/listing-compliance.aspx

Industry Structure and Development

The World Economic Outlook (WEO) update projects global growth to slow from an estimated 6.1% in 2021 to 3.6% in 2022 and 2023. The war in Ukraine has triggered a costly humanitarian crisis and at the same time the economic damage from the conflict will contribute to a significant slowdown in global growth in 2022 and add to inflation. Fuel and food prices have increased rapidly, hitting vulnerable populations in low-income countries hardest.

The rebound in Indian economic activity that took hold with the ebbing of the Omicron wave is turning out to be increasingly broad-based. Private consumption is regaining traction on the back of recuperating contactintensive services and rising discretionary spending. The forecast of a normal southwest monsoon in 2022 for the fourth successive year has brightened agricultural prospects and this should support rural consumption. There are also signs of an incipient revival taking place in the investment cycle. This is reflected in high- frequency indicators like imports and production of capital goods; rising capacity utilisation supported by conducive financial conditions; and stronger corporate balance sheets. Export growth has remained buoyant while persisting high growth in non-oil non-gold imports reflects a durable revival in domestic demand.

Even as the drivers of domestic economic activity are getting stronger, they face headwinds from global spillovers in the form of protracted and intensifying geopolitical tensions; elevated commodity prices; COVID-19 related lockdowns or restrictions in some major economies; slowing external demand; and tightening global financial conditions on the back of monetary policy normalisation in advanced economies.

Food price indices of the Food and Agriculture Organisation (FAO) and the World Bank touched historical highs in March and remain elevated. Spill-overs from global wheat shortages are impacting domestic prices, even though domestic supply remains comfortable. Prices of edible oils may firm up further due to export restrictions by key producing countries and the loss of sunflower oil output due to the war. Elevated feed costs are translating into escalation in poultry, milk and dairy product prices. International crude oil prices continue to hover above US$ 100 per barrel and this is prompting pass-through to domestic pump prices. The risks of unprecedented input cost pressures translating into yet another round of price increases for processed food, non-food manufactured products and services are now more potent than before.

While the outbreak of the COVID-19 pandemic adversely impacted the Real Estate sectorial performance during FY21 and partly in FY22 as well, high vaccination coverage coupled with low home loan interest rates and an increased desire to pursue home ownership is resulting in revival of its demand. We see marked improvement in the prospects of real estate as volume and pricing is witnessing an uptick across geographies. While commodity price inflation is a short term risk, we believe the improving dynamics of real estate will offset the headwind from rise in commodity prices. A consolidation in the residential real estate sector is expected to continue, leading to an increase in the market share of branded organized players such as a subsidiary of your Company. Given the pace of urbanization, low interest rates and rising per capita disposable incomes, we remain optimistic about the long-term prospects in real estate.

The demand for oleo-chemicals, which is sustainable and bio-based chemicals, is increasing as consumers become more aware about the environmental and cost benefits which oleo-chemicals can provide. Consumer preference in using eco-friendly biodegradable products in FMCG goods like detergents, soaps etc. is increasing. Fatty Acids, Fatty Alcohol, and Specialty Chemicals used by this segment is growing at a healthy rate. Demand for Fatty Acids in oil and gas sector has also increased. Consumer awareness and use of hygiene and cleansing product has increased during the pandemic and post pandemic period. This is helping surfactant and Specialty Chemicals demand. Demand of Glycerine from pharmaceutical sector looks good and its growth is driven by domestic consumption.

Management Discussion and Analysis Report

The Management Discussion and Analysis Report on the operations of the Company, as required under the Listing Regulations, 2015 is appended as Annexure B to this Report.

Subsidiary and Associate Companies

GODREJ AGROVET LIMITED (GAVL)

The Financial Year 2021-22 was a strong financial year for GAVL in terms of top line growth with strengthening profitability. The team delivered a solid performance clocking its highest ever total income of 8385.7 Crore in FY22, growing at 33% year-on-year. Consolidated profit before exceptional items and tax grew by 23.3% year-on-year. Most of GAVLs businesses registered a strong volume growth with the exception of the Standalone Crop Protection segment. Growth in profitability was largely driven by Animal Feeds, Oil Palm Plantations and Astec LifeSciences, while Crop Protection and Food businesses reported a decline in operating margin.

Animal Feed Business:

FY22 was a year of strong comeback post Covid-induced demand disruption for Animal Feed business as volumes and revenues grew by 20.3% and 40.6% respectively as compared to the previous year. The robust double-digit growth in volumes was recorded in all four quarters on the back of new product launches and increasing market penetration. Overall, Animal Feeds segment registered a strong topline performance in FY22.

In terms of profitability, the entire feed industry was reeling under margin pressure in FY22. The industry witnessed unprecedented inflation in input commodities such as soymeal, maize, fishmeal and de-oiled ricebran cake etc. Sharp rise in soymeal prices in first half of the year was contained by government intervention such as approval for soymeal imports, imposing stock holding limits and ban on futures trading. However, prices for all major commodities surged again in Q4 owing to geo-political uncertainties in key agri-commodity producer economies in Eastern Europe. However, despite all these challenges Animal Feed segment results grew by 22.2% year-on-year basis supported by timely price hikes, realisation of R&D initiatives over the years and strategic stocking.

Crop Protection Business:

For domestic Crop Protection industry, FY22 was a very challenging year. Especially for herbicides players, the season was fraught with erratic and uneven monsoon as well as extreme weather events. Unusually dry August followed by heavy rains in September led to lower application opportunities for Crop Protection products in the Kharif season. In the second half of the year, higher emphasis was given on improving channel hygiene resulting in higher sales returns and increased provision for doubtful debts. Consequently, standalone segment revenues declined to 544.9 Crores in FY22 from 581.5 Crores in FY21. Nonetheless, focus on increasing the distribution reach of the in-house products by partnering with other major agrochemical players in the industry continued during the year. GAVL launched an insecticide under the brand name ‘Gracia during the year, extending in-licensing arrangement with Nissan Chemical Corporation, Japan.

Vegetable Oil Business:

FY22 was a remarkable year for Vegetable Oil Palm business with improvement in oil extraction ratio on the back of R&D initiatives and operational efficiencies. This coupled with record-high oil prices and moderate increase in volumes resulted in strong growth in segment revenues and segment results. Segment revenues increased to 1,264.8 Crore in FY22 from 710 Crore in FY21, an increase of 78.1%. At the same time, segment results increased by 187.6% to 240.8 Crore in FY22 from 83.7 Crore in FY21.

Average prices for crude palm oil and palm kernel oil increased by 51% and 90% respectively as compared to the previous year. The sharp rise in palm oil prices could be attributed to several factors such as elevated crude oil prices, rising demand, supply chain disruptions from largest exporters Indonesia and Malaysia and uncertainties surrounding ongoing Russia-Ukraine war.

During the year, Oil Palm business reaped enormous benefits from the R&D initiatives implemented over the past few years. This was further aided by operational efficiencies achieved through changes in plant operations, improved procurement and quality grading processes. On ESG front, Oil Palm business have made satisfactory progress with entire energy requirements being generated inhouse and achieving net zero carbon emissions.

Review of Operations / State of Affairs of the Subsidiaries of GAVL:

Astec LifeSciences Limited (Astec):

GAVLs agrochemical subsidiary, Astec LifeSciences Limited, recorded its best-ever performance till date as total income and profit before tax (excluding non-recurring and exceptional items) grew by 22.1% and 36% year-on-year in FY22, respectively. Geographically, exports were the main driver growing by 44.4% year-on-year while in terms of segment, growth was led by enterprise sales. During the year, Astec commissioned its new herbicide plant and remained on track to complete the state- of-the-art R&D facility by December 2023.

Additionally, Astec has started realising benefits from investment made in backward integration to diversify raw material sourcing and to reduce dependency on international markets. During the year, Astec commercialized two new CMO programs and a new production process for enterprise product. GAVL continues to hold 63.3% stake in Astec as on March 31, 2022.

Creamline Dairy Products Limited:

GAVLs dairy subsidiary, Creamline Dairy Products Limited ("CDPL"), reported 13.8% year-on-year increase in segment income in FY22. The healthy growth in volumes and topline was led by higher market share gains in Curd, milk drinks and Ghee. CDPL maintained its focus on strengthening the market position, increasing the brand awareness and new products development. CDPL launched new variants of Jersey Recharge energy drink, fruit yogurt as well as Paneer and ghee. Overall, CDPL reaped benefits from continued efforts and strategic focus towards increasing salience of VAP category. Share of VAP in total volumes further increased to 29% in FY 2021-22 from 25% in the previous year.

However, CDPLs profitability was impacted due to high inflationary pressure on milk procurement prices as well as fuel and packaging material costs. The sharp rise in input costs could not be transmitted as no price hike was taken by most of the regional players in its key markets in the first nine months of FY22. Although there was some pricing action in Q4 by major players, the increase was marginal and insufficient to absorb entire input cost inflation.

Godrej Tyson Foods Limited (GTFL):

FY22 was a year of mixed performance for GAVLs subsidiary Godrej Tyson Foods Limited ("GTFL"). Favourable demand dynamics in Real Good Chicken (RGC) and live bird categories was offset by highly volatile live bird prices and elevated commodity inflation throughout the year.

Total income grew by 30.1% year-on-year driven by robust volume growth in Real Good Chicken (RGC) and live bird categories. RGC volumes grew by 61%, mainly led by QSR and Institutional sales. However, unprecedented rise in input costs, mainly soya, resulted in decline in profitability for the year. GTFL closed FY22 with segment results of 5.3 Crore as compared to 24.6 Crore in the previous year.

Godrej Maxximilk Private Limited:

During the year, GAVL completed acquisition of balance stake in Godrej Maxximilk Private Limited ("GMPL") and infused additional investments to the tune of 50 Crores. GMPL is engaged in in-vitro production of high- quality cows that aid dairy farmers produce top-quality milk, thereby increasing their yield by a significant proportion. In FY22, GMPL reported a Loss Before Tax of ( 9.77 Crore) as compared with a Loss Before Tax of (8.14 Crore) in the previous year.

Joint Venture of GAVL:

ACI Godrej Agrovet Private Limited, Bangladesh:

Godrej Agrovets 50:50 joint venture with Advanced Chemical Industries Limited (ACI), Bangladesh, named ACI Godrej Agrovet Private Limited, recorded another year of outstanding performance. ACI posted strong growth in revenues by 24.5% year-on-year on account of robust volume growth across all segments, i.e., cattle, poultry and aqua feed.

Overview of operations:

Godrej Properties Limited (GPL) achieved the highest sales in its history in FY22 in spite of the industry just recovering from pandemic. This was driven by innovative efforts across touch points, including an increased focus on digital sales, attractive product propositions and the customer trust. GPL achieved a sales volume of 10.8 million square feet and booking value of 7,861 Crore in FY22, resulting in a growth of 17% Y-o-Y. This was the highest recorded booking value in the history of the Company. This was evenly distributed across its four key geographies, each delivering more than 1.5 million sq. ft. sales and sales value of more than 1,500 Crore in three of its four focus markets. GPL launched 16 new projects/ phases in FY22, including Godrej Woods in Noida which clocked over 1,650 Crore within a year of its launch. This was one of the most successful residential project launches ever for GPL. The new project launches were complemented by 4,826 Crore of sustenance sales in FY22 which, again, was the highest ever for the Company.

GPL added six new projects with saleable potential of around 9.33 million sq. ft. to its portfolio during the year. This includes planned development in Wadala in MMR (1.6 million sq. feet), Sarjapur 5 and Bannerghatta Road in Bangalore (4.9 million sq. feet), Pimpri-Chinchwad in Pune (1.70 million sq. feet), Sonipat and Connaught Place in NCR (1.13 million sq. feet).

On the operational front, GPL successfully delivered 6.4 million sq.ft across projects. With this, GPL has now successfully delivered over 24 million sq. ft. in last five years. The Companys delivery record demonstrates that it can operate at a large scale and keep pace with accelerating sales. Godrej Properties focused on exploring advanced construction technologies, improving Net Promoter Score (NPS) and design standardization.

GPL focuses on excellence, agility, sustainability, employee wellness and Corporate Social Responsibility. GPL has been featured among the top 50 companies listed by the Great Places to Work Institute (in partnership with The Economic Times) on four consecutive occasions. GPL, among the most respected real estate developers in India, has received 114 awards in FY 22, highest ever for the Company.

Some accolades include ‘Indias Top Builder (Gold Award) at the 16th Construction World Architect and Builder Awards 2021, ‘Brand Leadership (Gold Award) by Track2Realty BrandXReport 2020-21, Winner - Residential Project Developer (Non-Metro) at the Economic Times Real Estate Awards - EAST.

The operations of the Company improved significantly on receipt of occupation certificate in Godrej Wood, Godrej Retreat and other projects. For the financial year under review, on consolidated basis, GPLs total income stood at 2,397 Crore, EBITDA was 714 Crore and Net Profit of 352 Crore.

Prospects and outlook:

While outbreak of the COVID-19 pandemic adversely impacted the sectorial performance during FY21 and partly in FY22 as well, high vaccination coverage coupled with low home loan interest rates and an increased desire to pursue home ownership is resulting in revival of demand. GPL saw marked improvement in the prospects of real estate as volume and pricing is witnessing an uptick across geographies. While commodity price inflation is a short term risk, GPL believes the improving dynamics of real estate will offset the headwind from rise in commodity prices.

A consolidation in the residential real estate sector is expected to continue, leading to an increase in the market share of branded organized players such as your Company. Given the pace of urbanization, low interest rates and rising per capita disposable incomes, GPL remains optimistic about the long-term prospects in real estate. Operational momentum of GPL is likely to be sustained by its healthy Balance Sheet and robust project pipeline. GPL is poised for a high growth trajectory with a strong brand, pan- India presence, demonstrated track record and robust marketing capabilities.

GPL will focus on opportunistic growth in the current environment to create a healthy project pipeline. While continuing its focus on the four key markets of Mumbai, National Capital Region, Bengaluru and Pune, the Company is now also looking to enter peripheral markets through plotted developments. When evaluating new projects, GPL will continue to seek superior long-term shareholder value growth by maximizing returns through optimal financing and fiscal discipline. GPL shall seek to drive profitability, improve customer experience and adopt digital technologies. GPL will enhance process agility to reduce project launch turnaround times.

GODREJ CONSUMER PRODUCTS LIMITED (GCPL)

Godrej Consumer Products Limited (GCPL) is a leading emerging markets company. As part of the 125- year young Godrej Group, the Company is fortunate to have a proud legacy built on the strong values of trust, integrity and respect for others. At the same time, it is growing fast and has exciting, ambitious aspirations.

GCPL ranks among the largest household insecticide, air care and hair care players in emerging markets of India, Indonesia and Africa. In household insecticides, it is the leader in India, the second largest player in Indonesia and is expanding its footprint in Africa. GCPL is also the leader in serving the hair care needs of women of African descent, the number one player in hair colour in India and Sub-Saharan Africa, and among the leading players in Latin America. It ranks number two in soaps in India and is the number one player in air fresheners and wet tissues in Indonesia.

GCPL is confident that with its clear strategic focus, differentiated product portfolio, superior execution and top-notch team, it will continue to deliver industry-leading results in the future.

GODREJ CAPITAL LIMITED (GCL)

Godrej Capital Limited (GCL), a subsidiary of your Company, is a Non-Banking Finance Company - Core Investment Company (NBFC-CIC) (exempt from registration). During the year with approval of Reserve Bank of India (RBI), GCL acquired Godrej Housing Finance Limited (GHFL), a Non-Banking Finance Company - Housing Finance Company and Godrej Finance Limited (GFL), a Non-Banking Finance Company. The consolidated Total Income of GCL for FY 2021-22 was 5,486.26 Lakh as compared to 0.30 Lakh in the previous year.

Other Subsidiaries

Godrej International Limited (GINL) is incorporated in the Isle of Man and is a wholly owned subsidiary of the Company.

Godrej International Trading & Investments Pte. Ltd. (GITI) is registered and located in Singapore and trades in palm and soya oil as well as in by products.

Financial Year 2021-22 was dominated by high prices for all vegetable oils.

Palm oil prices reached historic highs on the back of lower production in Malaysia and high Export Taxes levied by Indonesia. Drought in the Canadian Prairies and later in South America also led to lower oilseed crops. The Biden White House poured fuel over the high prices by propagating its Green Agenda centred on bio-fuels and 100% renewable diesel. Side by side there were Supply Chain disruptions resulting in nonavailability of containers and massive delays in transit time. Our companies were able to capitalise on our Supply Chain strengths and score competitive advantage as a result.

Overall our companies enjoyed good profitability and also managed the supply of essential raw materials to our FMCG and our Oleo-Chemicals business in a very satisfactory manner.

Financial Position

The Net Debt Position at the end of the Financial Year stands at 5,246 Crore as compared to 2,963 Crore in the previous year. The Net debt equity ratio is 3.54 as compared to 1.94 in the previous year.

Your Company continues to hold the topmost rating of [ICRA] A1+ from ICRA for its commercial paper program (2,000 Crore) (previous year 1,500 Crore). ICRA has reaffirmed an [ICRA] A1+ rating for its short term debt instruments / other banking facilities (800 Crore) (previous year 800 Crore). This rating of ICRA represents highest-credit quality carrying lowest credit risk. ICRA also reaffirmed [ICRA]AA rating with stable outlook for long-term debt, working capital and other banking facilities ( 1,340 Crore) (previous year 1,340 Crore). In addition to the ICRAs rating for commercial paper programme, CRISIL has also assigned a rating of "CRISIL A1+" to the commercial paper programme of 2,000 Crore (previous year 1,500 Crore). Instruments with these ratings are considered to have very strong degree of safety regarding timely payment of financial obligations. For the Non-Convertible Debentures (NCD) programme of 3,000 Crore (previous year 3,000 Crore) CRISIL has assigned "CRISIL AA" and ICRA has assigned "ICRA AA" with stable outlook.

Report on Performance and Financial Position of Subsidiary Companies:

Report on Performance and Financial Position of each of the Subsidiaries, Associates, Joint Venture companies in Form AOC-1, forms a part of the Consolidated Financial Statements.

Loans, Guarantees & Investments

As required to be reported pursuant to the provisions of Section 186 and Section 134(3)(g) of the Companies Act, 2013, the particulars of loans, guarantees or investments by the Company under the aforesaid provisions during the Financial Year 2021-22 have been provided in the Notes to the Standalone Financial Statements.

Related Party Transactions

In compliance with the Listing Regulations, the Company has a policy on Materiality of Related Party Transactions and dealing with Related Party Transactions (RPT Policy). The RPT Policy can be accessed on the website of the Company, viz. http://www.godreiindustries.com/listing- compliance.aspx.

All Related Party Transactions entered into by your Company during the Financial Year 2021-22 were on an arms length basis and were in the ordinary course of business. There were no materially significant Related Party Transactions entered into by the Company with Promoters, Directors, Key Managerial Personnel or other related parties which may have a potential conflict with the interest of the Company. Requisite prior approval of the Audit Committee of the Board of Directors was obtained for Related Party Transactions. Therefore, disclosure of Related Party Transactions in Form AOC-2 as per the provisions of Section 134(3) (h) and Section 188 of the Companies Act, 2013 read with the Rule 8(2) of the Companies (Accounts) Rules, 2014 is not applicable. Attention of Members is also drawn to the disclosure of transactions with related parties set out in Note No.41 of Standalone Financial Statements, forming part of the Annual Report. None of the Directors had any pecuniary relationships or transactions vis-a-vis the Company. Further, the Company has not entered into any transactions with any person or entity belonging to the promoter/promoter group which hold(s) 10% or more shareholding in the Company during the Financial Year 2021-22.

Manufacturing Facilities

Your Company has manufacturing units at Ambernath, Valia, Wadala and Dombivili.

Both Valia and Ambernath factory are currently certified as per latest ISO standards, i.e., ISO 9001:2015 (QMS), ISO 14001:2015 (EMS) and ISO 45001:2018 (OH&S). Valia is also ISO 50001:2018 (EnMS) certified.

Ambernath completed IATF (Automotive certification for tyre industries) and responsible care certification whereas Valia become first chemical manufacturing company in India to receive Platinum rating in Green Co Audit by CII. Both the units are compliant on SMETA 4.0 Pillar and are certified by BVQI. The units are audited on- Labour Standards, Health and Safety, Environment and Business Ethics. Currently, both units are under reassessment at Ecovadis platform.

Ambernath plant is also certified with ISO 22716:2007 for COSMETIC- GOOD MANUFACTURING PRACTICES (GMP). The site is also certified with FOOD SAFETY SYSTEM CERTIFICATION 22000 for refined glycerine manufacturing.

Majority of our C16-C18 alcohol grades are covered under COSMOS certification. The certification helps labelling the product as natural or organic. Majority of the finished products at both locations are Kosher certified, HALAL certified and some are also REACH registered to meet the EU regulation.

In new product domain, the unit has started commercial production for Coco Betaine, & Glyceryl Mono Oleate. Ginophos CD & Biogod are also in pipeline for commercialisation.

We have completed gate-to-gate life cycle assessments for the surfactant product Alpha Olefin Sulfonate both at Ambernath & Valia.

The Company is also a member of RSPO (Roundtable for Sustainable Palm Oil), Action of Sustainable Derivative (ASD) and a respondent of Climate Change, Water Security and Forest- Palm Oil Discloser in CDP.

This year we have committed for Science Based Target (SBTi) and in first quarter of next financial year, we would be publically publishing our target and roadmap.

The Dombivali unit has flexibility of producing multiple value added products, mainly fatty esters and amide, used in personal and home care products.

Research and Development (R&D)

During the year under consideration, R&D has continued its progress & innovations quest in the processes / product ranges and also came up with many new concept ingredients with applications in Home, Personal care, Oil & Gas industry, Metal Working Fluids thus securing newer avenues and customers for existing as well as new product ranges. Polymeric quaternary compound was a new area for hair & personal care and we successfully introduced our first commercial ingredient in this category.

In the new products category, R&D continues its efforts in developing improved and customized specialty mild surfactants, bio-surfactants and home & personal care ingredients and their blends, mainly through in house process development. Similarly, a patented anti dandruff ingredient based on Biogod was launched, after taking a global patent for it. It could easily replace the existing chemical ingredient ZPTO, which is getting phased out slowly. In many new formulations we are trying to develop, a strategy of keeping 2 ingredients from our NPD portfolio is being followed to keep or prohibiting the competitors away.

We also are working on the sulphate free mild surfactant formulations which are in good demand, Green preservatives, Animal nutrition ingredients based on our Biogod and Glycerides range, and also working on some futuristic technologies for producing Bioplastics.

Human Resource Development and Industrial Relations

During the year under review, industrial relations at all plant locations remained harmonious.

On the Human Resource Development front, many proactive measures were taken to ensure that our employees have a conducive environment to perform at their best. Employees were provided with innovative platforms to learn and grow, by leveraging both digital and classroom modes. At the same time health and wellbeing was given highest priority. Free vaccination drive for COVID was conducted not just for employees but also for their families and support staff. This ensured business continuity and enhanced employee experience. There was special emphasis on leadership connect and communication throughout the year which enabled cross-pollination of ideas and rich feedback and insights on culture. Further employees were duly recognized and appreciated in various forums for their contributions to the organization. Thus all round efforts were made to drive employee motivation and performance which in turn translated into excellent business performance.

The total number of persons employed in your Company as on March 31, 2022 were 1,069.

Business Responsibility Report

The Business Responsibility Report highlighting your Companys sustainability initiatives is appended as Annexure C. This Report describes the initiatives taken by the Company from an environment, social and governance perspective.

Employee Stock Grant Scheme 2011 (ESGS)

The details of the grants allotted under Godrej Industries Limited - Employee Stock Grant Scheme, 2011 (ESGS 2011), as also the disclosures in compliance with the Securities and Exchange Board of India (Share Based Employees Benefits and Sweat Equity) Regulations, 2021, have been uploaded on the website of the Company at www.godreiindustries.com.

The Nomination and Remuneration Committee of the Board of Directors administers and monitors the ESGS 2011. The Board of Directors confirm that the ESGS 2011 has been implemented in accordance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and the resolution passed by the Members. The Board further confirms that there have been no changes in the ESGS 2011 Scheme during the Financial Year 2021-22. The Certificate, obtained from M/s. A.N. Ramani & Co, Practising Company Secretary in this regard, shall be kept open for inspection by the Members at / during the ensuing 34th (Thirty Fourth) Annual General Meeting.

Fixed Deposits

The details of deposits covered under Chapter V of the Companies Act, 2013, i.e., deposits within the meaning of Rule 2(1)(c) of the Companies (Acceptance of Deposits) Rules, 2014 during the Financial Year 2021-22 are as follows:

Sr. No. Particulars Details (Rs.in Crore)
(i) Deposits accepted during the Year Nil
(ii) Deposits remained unpaid or unclaimed during the Year:
Matured Deposits with the Company 0.13
(iii) Whether there has been any default in repayment of deposits or payment of interest thereon during the Year and if so, number of such cases and total amount involved:
a. At the beginning of the Year: Nil
b. Maximum during the Year: NIl
c. At the end of the Year: Nil
(iv) Details of deposits which are not in compliance with the requirements of Schedule V of the Companies Act Nil

Your Company is currently not accepting public deposits and has not accepted any deposits from its Directors during the Financial Year 2021-22.

Directors

(a) Chairman Emeritus and Managing Director

During the year under review, Mr. Adi Godrej, Chairman and Non-Executive Director (DIN: 00065964) retired from directorship and stepped down as the Chairman of the Company with effect from close of business hours on September 30, 2021. The Nomination and Remuneration Committee and the Board of Directors of the Company approved his appointment as the "Chairman Emeritus" of the Company with effect from October 1, 2021. Further, the Nomination and Remuneration Committee and the Board of Directors designated Mr. Nadir Godrej (DIN:00066195) as the "Chairman and Managing Director" of the Company with effect from October 1, 2021.

(b) Re-appointment of Whole Time Directors

During the year under review, Ms. Tanya Dubash (DIN: 00026028) was re-appointed as the "Executive Director and Chief Brand Officer" for a period of 3 (three) years starting from April 1,2022 upto March 31, 2025 and Mr. Nitin Nabar (DIN: 06521655) was re-appointed as the "Executive Director and President (Chemicals)" for a period of 2 (two) years 1 (one) month starting from April 1, 2022 upto April 30, 2024, at the 33rd (Thirty Third) Annual General Meeting (AGM) of the Shareholders of the Company.

Further, upon recommendation of the Nomination and Remuneration Committee of the Board of Directors and as approved by the Board of Directors at their Meetings held on May 26, 2022 and May 27, 2022, respectively, Mr. Nadir Godrej (DIN: 00066195) has been re-appointed as the Managing Director (designated as the "Chairman and Managing Director" of the Company) for a period of 3 (three) years starting from April 1, 2023 to March 31, 2026, subject to approval of the Members at the 34th (Thirty Fourth) Annual General Meeting (AGM).

(c) Appointment / Resignation / Cessation of tenure of Independent Directors

The Shareholders of the Company at the 33rd (Thirty Third) Annual General Meeting held on August 13, 2021 approved appointment of below Independent Directors:

1. Ms. Shweta Bhatia (DIN: 03164394) for a term of 5 (five) years starting from October 28, 2020 upto October 27, 2025;

2. Mr. Sandeep Murthy (DIN: 00591165) for a term of 5 (five) years starting from March 1,2021 upto February 28, 2026; and

3. Mr. Ajaykumar Vaghani (DIN: 00186764) for a term of 5 (five) years starting from June 23, 2021 upto June 22, 2026.

(d) Appointment / Resignation of Non-Executive Directors

During the year under review, Mr. Kavas Petigara (DIN: 00066162) Non-Executive Independent Director and Mr. Vijay Crishna (DIN: 00066267), Non-Executive Non-Independent Director of the Company tendered their resignations from the directorship of the Company with effect from close of business hours on April 1, 2021 and November 8, 2021, respectively.

Further, upon recommendation of the Nomination and Remuneration Committee and as approved by the Board of Directors on May 21, 2021, Mr. Pirojsha Godrej (DIN: 00432983) has been appointed as the "Additional Director (Non-Executive Director)" on the Board of Directors of your Company with effect from April 1, 2022, liable to retire by rotation. Necessary resolution for regularisation of his designation from Additional Director to "Director" is being moved through Postal Ballot for the approval of the Shareholders, the results of which will be declared on or before July 1, 2022.

(e) Director liable to retire by rotation

In accordance with the provisions of Section 152(6) of the Companies Act, 2013 and the Companys Articles of Association, Ms. Tanya Dubash (DIN: 00026028) Director of the Company is liable to retire by rotation at the ensuing 34th (Thirty Fourth) AGM, and being eligible, has offered herself for re-appointment.

(f) Resolutions to be passed at the ensuing AGM

Appropriate resolutions for re-appointment of Mr. Nadir Godrej as the "Chairman and Managing Director" and for re-appointment of Ms. Tanya Dubash as the Director of the Company liable to retire by rotation, are being moved at the ensuing 34th (Thirty Fourth) AGM, which the Board recommends for approval of Shareholders.

(g) Composition of Board of Directors

As on the date of this Boards Report, i.e., as on May 27, 2022 your Companys Board of Directors comprises of the following Directors:

Name of the Director Director Identification Number (DIN) Category
Mr. Nadir Godrej 00066195 Chairman & Managing Director
Mr. Jamshyd Godrej 00076250 Non-Executive Non-Independent Director
Mr. Pirojsha Godrej 00432983 Additional Director (Non-Executive NonIndependent Director)
Ms. Tanya Dubash 00026028 Executive Director & Chief Brand Officer
Mr. Nitin Nabar 06521655 Executive Director & President (Chemicals)
Mr. Mathew Eipe 00027780 Non-Executive Independent Director
Dr. Ganapati Yadav 02235661 Non-Executive Independent Director
Ms. Monaz Noble 03086192 Non-Executive Independent Director
Ms. Shweta Bhatia 03164394 Non-Executive Independent Director
Mr. Sandeep Murthy 00591165 Non-Executive Independent Director
Mr. Ajaykumar Vaghani 00186764 Non-Executive Independent Director

(h) Declaration of Independence from Independent Directors

Your Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and Regulation 16(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. In terms of provisions of Section 134(3)(d) of the Companies Act, 2013, the Board of Directors of your Company have taken note of these declarations of independence received from all the Independent Directors and have undertaken due assessment of the veracity of the same. The Board of Directors is of the opinion that the Independent Directors of your Company possess requisite qualifications, experience, expertise (including proficiency) and they hold the highest standards of integrity that enables them to discharge their duties as the Independent Directors of your Company. Further, in compliance with Rule 6(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014, all Independent Directors of the Company have registered themselves with the Indian Institute of Corporate Affairs.

(i) Board Meetings

The Meetings of the Board of Directors are pre-scheduled and intimated to all the Directors in advance in order to help them plan their schedule. However, in case of special and urgent business needs, approval is taken either by convening Meetings at a shorter notice with consent of the Directors or by passing resolutions through circulation.

4 (Four) Meetings of the Board of Directors were held during the Financial Year 2021-22 (i.e. on May 21, 2021, August 13, 2021, November 13, 2021, February 11, 2022). The maximum gap between two Board Meetings did not exceed 120 (One Hundred and Twenty) days. The details of Board Meetings and the attendance record of the Directors are provided in the Report on Corporate Governance section of the Annual Report. All the Board Meetings during the year were conducted through Video Conferencing.

(j) Performance Evaluation of the Board of Directors, its individual members, and its Committees

In terms with the Policy for Evaluation of the Performance of the Board of Directors of the Company, 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 Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Corporate HR team of Godrej Industries Limited and Associate Companies (GILAC) worked directly with the Chairperson and the Nomination and Remuneration Committee of the Board to design and execute this process. It was later adopted by the Board. Each Board Member completed a confidential online questionnaire, sharing vital feedback on how the Board currently operates and how its effectiveness could be improved. The survey comprised of below sections and compiled feedback and suggestions on:

• Board Processes (including Board composition, strategic orientation and team dynamics);

• Individual Committees;

• Individual Board Members;

• the Chairman and

• Declaration of independence from Independent Directors

The criteria for Board processes included Board composition, strategic orientation and team dynamics. Evaluation of each of the Board Committees covered whether they have well-defined objectives, the correct composition, and whether they achieved their objectives. The criteria for Individual Board Members included skills, experience, level of preparedness, attendance, extent of contribution to Board debates and discussion, and how each Director leveraged their expertise and networks to meaningfully contribute to the Company. The criteria for the Chairpersons evaluation included leadership style and conduct of Board Meetings.

The following reports were created as part of the evaluation:

• Board Feedback Report;

• Individual Board Member Feedback Report;

• Chairmans Feedback Report

Further, the performance evaluation criteria for Independent Directors included a check on their fulfilment of the independence criteria and their independence from the management.

The overall Board Feedback Report was facilitated by Mr. Nadir Godrej, Chairman with Independent Directors. Feedback from the Committees and Individual Board Members was shared separately with the Chairman and the Directors. Following the evaluation, Feedback Reports were compiled.

(k) Nomination and Remuneration Policy:

The Companys Nomination and Remuneration Policy for Directors, Key Managerial Personnel, and other employees can be accessed on the Companys website at http://www.godreiindustries.com/listing- compliance.aspx. 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 Independent Directors receive commission in accordance with the provisions of the Companies Act, 2013.

On the recommendation of the Nomination and Remuneration Committee, the Board had framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The details of the Board Appointment Policy are stated below:

Board Appointment Policy - Godrej Industries Limited (the "Company")

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 effective corporate governance, it is important that the Board has the appropriate balance of skills, experience and diversity of perspectives.

Board appointments will be made on merit basis and candidates will be considered against 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 review this Policy on a regular basis to ensure its effectiveness.

Talent Management and Succession Planning

Your Company has a 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 our Talent Management Process called Total Talent Management, 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 organizations talent objectives. We continue to deploy leadership development initiatives to build succession for key roles.

Total Rewards Philosophy

The policy of your Company on directors appointment and remuneration of the Directors, Key Managerial Personnel and other employees including criteria for determining qualifications, positive attributes, independence of a director, is stated below:

TOTAL REWARDS PHILOSOPHY GODREJ INDUSTRIES LIMITED (the "Company")

Our Total Rewards Framework aims at holistically utilising elements such as fixed and variable compensation, long-term incentives, benefits and perquisites and non-compensation elements (career development, work life balance and recognition).

Highlights

The rewards framework offers flexibility to customise different elements, on the basis of need. It is also integrated with our 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 our high performers and potential employees, we strive to deliver total compensation above 75th percentile of the market.

Total Compensation

The total compensation has three components:

1. ‘Fixed Compensation comprises of basic salary and retirement benefits, like provident fund and gratuity.

2. ‘Flexible Compensation is a fixed pre-determined component of the compensation.

3. ‘Variable Compensation (Performance Linked Variable Remuneration) rewards one for delivering superior business results and individual performance. It is designed to provide a significant upside earning potential without cap for over-achieving business results. It has a ‘Collective component, which is linked to the achievement of specified business results, measured by relevant metrics, relative to the target set for the given financial year and an ‘Individual component, based on the 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 senior managers. Under this scheme, performance based stock grants are awarded on the basis of performance.

(l) Familiarisation Programmes

Familiarisation programme for the Independent Directors was conducted during the Financial Year 202122. Apart from this, business presentations were made by the Management to the Independent Directors. The details of familiarization programmes pursuant to Regulation 25(7) of the Listing Regulations is uploaded on the Companys website, viz. http://www.godreiindustries.com/listing-compliance.aspx.

Key Managerial Personnel

There have been no changes in the Key Managerial Personnel of the Company during the Financial Year 2021-22.

Details of Directors / Key Managerial Personnel who were appointed or have resigned during the Financial Year 2021-22

Name of the Director Date of appointment / resignation
Mr. Adi Godrej Retired from directorship with effect from close of business hours on September 30, 2021 and appointed as the "Chairman Emeritus" of the Company with effect from October 1,2021.
Mr. Nadir Godrej Designated as "Chairman and Managing Director" with effect from October 1,2021
Ms. Tanya Dubash Re-appointed as "Executive Director and Chief Brand Officer" for a period of 3 (three) years with effect from April 1,2022 to March 31,2025
Mr. Nitin Nabar Re-appointed as "Executive Director and President (Chemicals)" for a period of 2 (two) years and 1 (one) month with effect from April 1,2022 to April 30, 2024
Mr. Ajaykumar Vaghani Appointed as "Independent Director" for a term of 5 (five) years with effect from June 23, 2021 upto June 22, 2026
Mr. Vijay Crishna Resigned from directorship with effect from November 8, 2021

Auditors and Auditors Report Statutory Auditors

M/s. BSR & Co. LLP, Chartered Accountants (Firm Registration Number: 101248W/W-100022) were appointed as the Statutory Auditors of the Company at the 29th (Twenty Ninth) Annual General Meeting (AGM) of the Members held on August 11, 2017, pursuant to Sections 139 to 144 of the Companies Act, 2013 and Rules 3 to 6 of the Companies (Audit And Auditors) Rules, 2014, for a term of 5 (Five) years, to hold office from the conclusion of the 29th (Twenty Ninth) AGM, till the conclusion of the 34th (Thirty Fourth) AGM, on a remuneration as may be decided by the Board of Directors. Accordingly, their tenure as Statutory Auditors of the Company shall end upon conclusion of the ensuing 34th (Thirty Fourth) AGM.

The Statutory Auditors Report on the Financial Statements for the Financial Year ended on March 31,2022 does not contain any qualification, reservation, adverse remark or disclaimer.

The Audit Committee and the Board of Directors at their Meetings held on May 27, 2022 have approved appointment of M/s. Kalyaniwalla & Mistry LLP, Chartered Accountants (Firm Registration No: 104607W/ W100166) as the Statutory Auditors of the Company to hold office from the conclusion of the 34th (Thirty Fourth) AGM, till the conclusion of the 39th (Thirty Ninth) AGM, at a remuneration as may be decided by the Board of Directors, subject to approval of the Shareholders of the Company at the ensuing 34th (Thirty Fourth) AGM. Necessary resolution for appointment of the Statutory Auditors is being moved at the ensuing AGM.

Cost Auditors

M/s. R. Nanabhoy & Co., Cost Accountants, Mumbai (Firm Registration No.: 000010) were appointed by the Board of Directors as the Cost Auditors of the Company for all the applicable products pursuant to the provisions of Section 148 of the Companies Act, 2013 and the Companies (Cost Records and Audit) Rules, 2014, for the Financial Year 2021-22. They are required to submit the report within 180 (One Hundred and Eighty) days from the end of the accounting year.

Further, upon recommendation of the Audit Committee, the Board of Directors at their Meetings held on May 27, 2022 have approved re-appointment of M/s. R. Nanabhoy & Co., Cost Accountants, being eligible, as the Cost Auditors of the Company for the Financial Year 2022-23 at a remuneration of 4,03,000/- (Rupees Four Lakh Three Thousand Only) plus applicable taxes and reimbursement of out of pocket expenses, subject to ratification of the said remuneration by the Members at the ensuing 34th (Thirty Fourth) Annual

General Meeting pursuant to Section 148 of the Companies Act, 2013.

The Company has maintained the necessary accounts and records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013 pertaining to Cost Audit.

Secretarial Auditors

Pursuant to provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Companys Board of Directors had appointed M/s. A. N. Ramani & Co., Practicing Company Secretaries (Firm Registration No. P2003MH000900), to conduct Secretarial Audit of the Company for the Financial Year 2021-22.

The Secretarial Audit Report issued by M/s. A. N. Ramami & Co., Secretarial Auditors for the Financial Year ended March 31, 2022 is annexed herewith marked as Annexure D to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Vigil Mechanism / Whistle Blower Policy

Your Company is focused to ensure that integrity and ethics continue to be the bedrock of its corporate operations. It is committed to conducting its business in accordance with the highest standards of professionalism and ethical behavior. Your Company has a vigil mechanism named Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. This initiative was taken to encourage employees to report irregularities in operations, besides complying with the statutory requirements under Companies Act, 2013. All employees of the Company can avail this mechanism. If the whistle blower is not satisfied with the actions taken, necessary steps to escalate the same can be taken. Through the process, the mechanism considers and extends complete protection to the whistle blower and direct access to the Chairman of the Audit Committee, in appropriate or exceptional cases.

Committees of Board of Directors

(a) Audit Committee

Pursuant to the provisions of Section 177(8) of the Companies Act, 2013, Rule 6 of the Companies (Meetings of Board & its Powers) Rules, 2014 and Regulation 18 read with Part C of Schedule II of the Listing Regulations, your Company has constituted an Audit Committee of the Board of Directors.

The composition of the Audit Committee during the Financial Year 2021-22 was as under:

Name of the Member Designation
Mr. Mathew Eipe Chairman (Independent Director)*
Mr. Nitin Nabar Member (Executive Director & President - Chemicals)
Ms. Monaz Noble Member (Independent Director)
Dr. Ganapati Yadav Member (Independent Director)#
Mr. Sandeep Murthy Member (Independent Director)#

 

*iAppointed as Chairman with effect from April 1, 2021 #Appointed as Member with effect from April 1, 2021

The Statutory Auditors, Internal Auditors and Chief Financial Officer attend the Audit Committee Meetings as invitees. The Company Secretary and Compliance Officer acts as Secretary to the Audit Committee. All observations and recommendations made by the Audit Committee to the Board of Directors, were duly noted and accepted by the Board.

4 (Four) Meetings of the Audit Committee were held during the Financial Year 2021-22 (i.e., May 21, 2021, August 13, 2021, November 13, 2021 and February 11, 2022).

(b) Risk Management Committee

Pursuant to the provisions of Regulation 21 of Listing Regulations, your Company has constituted a Risk Management Committee of the Board of Directors.

The composition of the Risk Management Committee during the Financial Year 2021-22 was as under. The Risk Management Committee was further re-constituted with effect from February 11, 2022, details are as below:

Name of the Member Designation
Mr. Nadir Godrej Chairman (Chairman & Managing Director)
Ms. Tanya Dubash Member (Executive Director & Chief Brand Officer)*
Mr. Nitin Nabar Member [Executive Director & President (Chemicals)]
Mr. Mathew Eipe Member (Independent Director)@
Dr. Ganapati Yadav Member (Independent Director)#
Mr. Clement Pinto Member (Chief Financial Officer)#

* Member upto February 11, 2022

@Appointed as Member with effect from April 1, 2021

# Appointed as Member with effect from May 21, 2021

3 (Three) Meetings of the Risk Management Committee were held during the Financial Year 2021-22 (i.e., August 13, 2021, November 13, 2021 and February 11, 2022).

The Risk Management Committee consists of the Managing Director, Whole Time Director, Independent Directors and Chief Financial Officer. The Committee identifies, evaluates business risks and opportunities. This Committee has formulated and implemented a policy on risk management to ensure that the Companys reporting system is reliable and that the Company complies with relevant laws and regulations. The Board of Directors of your Company are of the opinion that, at present, there are no elements of risks which may threaten the existence of the Company.

(c) Corporate Social Responsibility Committee

Pursuant to the provisions of Section 135 of the Companies Act, 2013, your Company has constituted a Corporate Social Responsibility Committee of the Board of Directors.

The composition of the Corporate Social Responsibility Committee during the Financial Year 2021-22 was as under.

Name of the Member Designation
Mr. Nadir Godrej Chairman (Chairman & Managing Director)
Ms. Tanya Dubash Member (Executive Director & Chief Brand Officer)
Mr. Nitin Nabar Member [Executive Director & President (Chemicals)]
Mr. Mathew Eipe Member (Independent Director)@

@Appointed as Member with effect from April 1, 2021

1 (One) Meeting of the Corporate Social Responsibility Committee was held during the Financial Year 202122 (i.e. on February 1 1, 2022).

Areas of CSR Expenditure:

Your Company is committed to the Godrej Groups ‘Good & Green vision of creating a more inclusive and greener India. Your Companys strategic Corporate Social Responsibility (CSR) Projects, undertaken as part of its overall sustainability framework, actively work towards the Godrej Groups Good & Green goals and have helped the Company carve out a reputation for being one of the most committed and responsible companies in the industry.

Your Company has amended the CSR Policy with effect from November 13, 2021. The CSR Policy of your Company is available on the website of the Company viz. www.godreiindustries.com.

Amount of CSR Spending and Annual Report on CSR Activities:

During the Financial Year 2021-22, your Company was not required to spend towards CSR activities in terms of the provisions of Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014. The Annual Report on CSR Activities of your Company for the Financial Year 2021-22, is annexed herewith as "Annexure E".

The Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013

Your Company is committed to creating and maintaining an atmosphere in which employees can work together without fear of sexual harassment, exploitation or intimidation. The Board of Directors of your Company has constituted Internal Complaints Committees (ICCs) at Head Office as well as regional levels pursuant to the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules framed thereunder.

The Company has formulated and circulated to all the employees, Anti Sexual Harassment Policy for prevention of sexual harassment at workplace, which provides for a proper mechanism for redressal of complaints of sexual harassment. Since there were no complaints received by the ICCs during the calendar year 2022, the Committee filed a ‘NIL complaints report with the concerned authority(ies), in compliance with Section 22 of the aforementioned act.

Directors Responsibility Statement

The Board of Directors have laid down Internal Financial Controls within the meaning of the explanation to Section 134(5)(e) ("IFC") of the Companies Act, 2013. The Board believes the Company has sound IFC commensurate with the nature and size of its business. Business is however dynamic. The Board is seized of the fact that IFC are not static and will evolve over time as the business, technology and possibly even fraud environment changes in response to competition, industry practices, legislation, regulation and current economic conditions. There might therefore be gaps in the IFC as Business evolves. Your Company has a process in place to continuously identify such gaps and implement newer and / or improved controls wherever the effect of such gaps might have a material effect on the Companys operations.

Pursuant to the provisions contained in sub-sections (3)(c) and (5) of Section 134 of the Companies Act, 2013, the Directors of your Company, based on the representation received from the Operating Management and after due enquiry confirm the following:

a) In the preparation of the annual accounts for the Financial Year 2021-22, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) The Directors have selected such accounting policies and applied consistently, and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year (i.e. March 31,2022) and of the profit and loss of the Company for that period (i.e. the Financial Year 2021-22);

c) The Directors 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, for preventing and detecting fraud and other irregularities;

d) The Directors have prepared the Annual Accounts for the Financial Year ended March 31, 2022 on a going concern basis;

e) The Directors have laid down Internal Financial Controls to be followed by the Company and such internal financial controls are adequate and operating effectively; and

f) The Directors have devised proper systems to ensure compliance of all laws applicable to the Company and such systems are adequate and operating effectively.

Corporate Governance

As required by the existing Regulation 34(3) read with Schedule V of the Listing Regulations, a detailed report on Corporate Governance is included in the Annual Report.

M/s. A. N. Ramani & Co., Practicing Company Secretaries have certified the Companys compliance of the requirements of Corporate Governance in terms of Regulation 34(3) read with Schedule V of the Listing Regulation and their compliance certificate is annexed to the Report on Corporate Governance.

Conservation of Energy, Technology absorption and Foreign Exchange Earnings and Outgo

The information in respect of matters pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Companies Act, 2013 and Rule 8(3) of the Companies (Accounts) Rules, 2014 is appended as ‘Annexure F to this Report.

Annual Return

In compliance with provisions of Section 134(3)(a) of the Companies Act, 2013, the Annual Return as per Section 92(3) of the Companies Act, 2013 has been hosted on the website of the Company, viz. www.godreiindustries.com.

Managerial Remuneration and Remuneration Particulars of Employees

The remuneration paid to Directors and Key Managerial Personnel and the employees of the Company during the Financial Year 2021-22 was in accordance with the Nomination and Remuneration Policy of the Company.

Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of the Companies Act, 2013 and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been appended as ‘Annexure G to this Report.

The information required pursuant to Section 197 of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of your Company are available to Shareholders for inspection on request. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary, on investor@godreiinds.com, whereupon a copy would be sent.

Material changes and commitments since the Financial Year end

There have been no material changes and commitments affecting the financial position of the Company which have occurred between the March 31, 2022 and the date of this Boards Report (i.e. May 27, 2022).

Fraud Reporting

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.

Corporate Restructuring:

Engaging in financial services business

Your Company had acquired stake in Godrej Capital Limited (formerly known as Pyxis Holdings Limited) during FY 2021-22 and the said company is a subsidiary of the Company. In terms of the approvals received from the Reserve Bank of India for the change in control of Godrej Finance Limited (formerly known as Ensemble Holdings and Finance Limited) and Godrej Housing Finance Limited on June 2, 2021 and July 10, 2021, respectively; on August 23, 2021, Godrej Capital Limited acquired 95% stake of Godrej Housing Finance Limited. Further, Godrej Capital Limited acquired 100% stake of Godrej Finance Limited from your Company. Accordingly, Godrej Finance Limited ceased to be a direct wholly owned subsidiary of your Company and it became a step-down subsidiary of your Company. Thus, Godrej Capital Limited became the immediate holding company for Godrej Housing Finance Limited and Godrej Finance Limited.

Policies of the Company

Listing Regulations have mandated the formulation of certain policies for all listed companies. As per provisions of Listing Regulations, certain Policies are hosted on the Companys website viz; www.godreiindustries.com.

The key policies that have been adopted by the Company pursuant to the provisions of the Companies Act, 2013 and the Rules framed thereunder, the Listing Regulations and other applicable laws are as follows:

Name of the Policy Brief Particulars of the Policy
Risk Management Policy The Company has in place, a Risk Management Policy which is framed by the Board of Directors of the Company. This Policy deals with identifying and assessing risks such as operational, strategic, financial, security, property, regulatory, reputational, cyber security and other risks and the Company has in place an adequate Risk Management infrastructure capable of addressing these risks.
Corporate Social Responsibility Policy The Corporate Social Responsibility (CSR) Committee has formulated and recommended to the Board and the Board has approved a Corporate Social Responsibility Policy (CSR Policy), which outlines the Companys strategy to bring about a positive impact on society through various CSR activities and programmes.
Policy for determining Material Subsidiaries This Policy is used to determine the material subsidiaries and material non-listed Indian subsidiaries of the Company in order to comply with the requirements of Regulation 16(1) (c) and Regulation 24 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Company has the following Material Subsidiaries as on March 31, 2022: 1) Godrej Properties Limited (Listed Subsidiary) 2) Godrej Agrovet Limited (Listed Subsidiary)
Nomination and Remuneration Policy This Policy formulates the criteria for determining qualifications, competencies, positive attributes and independence of a Director (Executive / Non-Executive) and also the criteria for determining the remuneration of the Directors, Key Managerial Personnel and other Senior Management Employees.
Whistle Blower Policy / Vigil Mechanism Your Company has a Vigil Mechanism / Whistle Blower Policy which provides adequate safeguards against victimization of persons who use Whistle Blower mechanism and make provision for direct access to the Chairman of the Audit Committee, in appropriate or exceptional cases.
Anti-Sexual Harassment Policy Your Company has in place an Anti Sexual Harassment Policy, which provides for a proper mechanism for redressal of complaints of sexual harassment and thereby encourages employees to work together without fear of sexual harassment, exploitation or intimidation.
Policy on Materiality of Related Party Transaction and dealing with Related Party Transaction This Policy regulates all transactions between the Company and its Related Parties.
Code of Conduct for the Board of Directors and Senior Management Personnel Your Company has in place, a Code of Conduct for the Board of Directors and Senior Management Personnel which reflects the legal and ethical values to which your Company is strongly committed.
Code of Conduct for Insider Trading This Policy sets up an appropriate mechanism to curb Insider Trading in accordance with Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015.
Policy on Criteria for determining Materiality of Events This Policy applies to disclosures of material events affecting the Company. This Policy warrants disclosure to investors and has been framed in compliance with the requirements of Regulation 30 of the Listing Regulations.
Policy for Maintenance and Preservation of Documents The purpose of this Policy is to specify the type of documents and time period for preservation thereof based on the classification mentioned under Regulation 9 of the Listing Regulations. This Policy covers all business records of the Company, including written, printed and recorded matter and electronic forms of records.
Archival Policy This Policy is framed pursuant to the provisions of the Listing Regulations. As per this Policy, your Company is required to disclose on its website, all such events or information which have been disclosed to the Stock Exchanges where the securities of the Company are listed. Further, such disclosures shall be hosted on the website of the Company for a minimum period of 5 (five) years and thereafter as per Archival Policy of the Company.
Dividend Distribution Policy This Policy is framed by the Board of Directors in terms of the Listing Regulations. The focus of the Company is to have a Policy on distribution of dividend so that the investor may know as to when and how much dividend they may expect.

Disclosures as per the Companies (Accounts) Rules, 2014

Change in nature of business, if any None
Names of Companies which have become or have ceased to be its Subsidiaries, Joint Ventures or Associate Companies during the Financial Year 2021-22 Godrei Finance Limited (formerly known as Ensemble Holdings and Finance Limited) ceased to be a direct wholly owned subsidiary of the Company and became a step-down subsidiary of the Company with Godrej Capital Limited (formerly known as Pyxis Holdings Limited) being the immediate Holding Company for Godrej Finance Limited with effect from August 23, 2022.
Details of Significant and Material Orders passed by the Regulators or Courts or Tribunals, impacting the going concern status and the Companys operations in future During the Financial Year 2021-22, there were no significant and material orders passed by the regulators or Courts or Tribunals which could adversely impact the going concern status of the Company and its operations in future.

Secretarial Standards

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

Transfer to Investor Education and Protection Fund

In terms of the provisions of Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016, Investor Education and Protection Fund (Awareness and Protection of Investors) Rules, 2001, below amounts were transferred during the Financial Year 2021-22 to the Investor Education and Protection Fund (IEPF):

Particulars Amt. in Rs.
Unpaid / Unclaimed Dividend of FY 2013-14 7,35,071
Unpaid / Unclaimed Fractional Amount of Bonus Issue of Shares of FY 2014-15 99,976
Unpaid / Unclaimed Fractional Amount of Swap of Shares of FY 2014-15 2,15,413
Total 10,50,460

The Company has appointed a Nodal Officer under the provisions of IEPF, the details of which are available on the website of the Company. The same can be accessed on www.godreiindustries.com. The Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on August 13, 2021 (date of last AGM) on the Companys website which can be accessed on www.godreiindustries.com and of the Ministry of Corporate Affairs website at www.iepf.gov.in.

Depository System

Your Companys Equity Shares are available for dematerialization through National Securities Depository Limited and Central Depository Services (India) Limited. As of March 31, 2022, 99.90% of the Equity Shares of your Company were held in demat form.

You Company has issued Non-Convertible Debentures in demat mode only.

Listing

The Equity Shares of your Company are listed on the BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE). The applicable annual listing fees have been paid to the Stock Exchanges before the due dates. The Equity Shares of your Company were not suspended from trading on BSE and NSE at any point of time during the Financial Year 2021-22.

Your Companys Non-Convertible Debentures are listed on the National Stock Exchange of India Limited (NSE). The applicable annual listing fees have been paid to the Stock Exchange before the due date.

Additional Information

The additional information required to be given under the Companies Act, 2013 and the Rules framed thereunder, has been laid out in the Notes attached to and forming part of the Accounts. The Notes to the Accounts referred to the Auditors Report are self-explanatory and therefore do not call for any further explanation. The Consolidated Financial Statements of our Company form a part of the Annual Report. Accordingly, this Annual Report of your Company does not contain the Financial Statements of its Subsidiaries. The Audited Annual Accounts and related information of the Companys Subsidiaries will be made available upon request. These documents including the Subsidiary Companies documents will be available for inspection on the Companys website, viz..www.godreiindustries.com.

Acknowledgement

Your Directors thank the Union Government, the Governments of Maharashtra and Gujarat as also all the Government Agencies, Banks, Financial Institutions, Shareholders, Customers, Fixed Deposit Holders, Vendors and other Business Associates, who, through their continued support and co-operation, have helped as partners in your Companys progress. Your Directors also express their warm appreciation to all the employees of the Company for their unstinted commitment and continued contribution to the growth of the Company.