Godrej Industries Ltd Directors Report.

To the Members,

Your Company’s Directors have pleasure in presenting the Board’s Report along with the Audited Financial Statements for the Financial Year ended March 31, 2021.

Review of Operations / Financial Summary

Your Company’s performance during the Financial Year as compared with that during the previous Financial Year is summarized below:

(Rs. Crore) (Rs. Crore)

Particulars 2020-21 2019-20
Revenue from Operations 1,855.53 1,968.72
Exceptional Items 1.27 (25.62)
Other Income 64.05 60.93
Total Income 1,920.85 2,004.03
Total Expenditure other than Finance Costs and Depreciation and Amortisation 1,718.76 1,675.73
Profit before Finance Costs, Depreciation and Amortisation 202.09 328.30
Depreciation and Amortisation 72.18 68.62
Profit before Finance Costs and Tax 129.91 259.68
Finance Costs (net) 237.51 228.99
Profit before Tax (107.60) 30.69
Provision for Current Tax - (0.07)
Provision for Deferred Tax (0.06) (0.05)
Net Profit / (loss) (107.54) 30.81
Surplus brought forward 545.64 555.48
Profit after Tax available for appropriation 438.10 586.29
Other comprehensive income (net of tax) (0.76) 1.96
Dividend on Equity Shares - 38.69
Tax on Distributed Profit - -
Transfer to General Reserve - -
Surplus Carried Forward 438.86 545.64

Share Capital

The Paid-up Equity Share Capital as on March 31, 2021 was Rs. 33,65,25,098/- (Rupees Thirty Three Crore Sixty Five Lakh Twenty Five Thousand Ninety Eight Only) divided into 33,65,25,098 (Thirty Three Crore Sixty Five Lakh Twenty Five Thousand Ninety Eight) Equity Shares of Face Value of Rs. 1/- (Rupee One Only) each. During the Financial Year under review, your Company has allotted 59,082 (Fifty Nine Thousand Eighty Two) Equity Shares of Face Value of Rs. 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 Rs.1,500 Crore (Rupees One Thousand Five Hundred Crore) [in 2 Tranches of Rs. 750 Crore (Rupees Seven Hundred Fifty Crore) each] during the Financial Year 2020-21, 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/ CIR/P/2018/144 dated November 26, 2018.

Dividend / Dividend Distribution Policy

Your Company has not declared Dividend for the Financial Year 2020-21. 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.godrejindustries.com/listing-compliance.aspx

Industry Structure and Development

The World Economic Outlook (WEO) update, Global growth is projected at 6% in 2021, moderating to 4.4% in 2022. The upward revision reflects additional fiscal support in a few large economies, the anticipated vaccine-powered recovery in the second half of 2021, and continued adaptation of economic activity to subdued mobility. High uncertainty surrounds this outlook, related to the path of the pandemic, the effectiveness of policy support to provide a bridge to vaccine-powered normalization and the evolution of financial conditions.

India is the second-most populous country in the world with an estimated population of 1.38 billion people. India has been one of the fastest growing economies in the past few years. Today, it is the world’s sixth-largest economy in terms of nominal gross domestic product ("GDP") and the third-largest economy on purchasing power parity (PPP) basis.

The Indian economy was already facing turbulence prior to the start of 2020 when the COVID-19 pandemic happened. The pandemic and subsequent containment measures to curb the spread of the virus posed one of the most formidable economic challenges to India and the world.

The stringent nation-wide lockdown imposed in March 2020 resulted in a 24.4% contraction of GDP in the first quarter of the Financial Year 2020. The situation has improved since then, with the measured opening up of the Indian economy. Growth improved to -7.3% in the second quarter and to 0.4% in the third quarter of the Financial Year 2020. Importantly, a sustained resurgence in high frequency indicators such as power demand, GST collection, E-way bills and steel consumption demonstrate that the economy is in a V-shaped recovery. In fact, driven by the normalization of business activities amid a gradual lifting of restrictions, high pent-up demand, policy support and improved consumer sentiments as rollout of vaccines gather traction.

Reserve Bank of India intends to support economic growth by maintaining its accommodative stance. Since the 77-month high of 7.6% recorded in October 2020, retail inflation has also been on a declining trend, falling from 4.6% in December 2020 to 4.1% in January 2021. To aid growth, the RBI is expected to keep the repo rate at the existing historical low of 4%.

The Indian real estate sector was poised to gain momentum in 2020. After three years of disruptions in the form of demonetization, GST, RERA and the NBFC crisis, transparency and efficiency were slowly trickling into the system. Instead, the year 2020 will be remembered for the COVID-19 pandemic that affected virtually every person in the country. The nationwide lockdown that followed threw markets into turmoil, bringing more pain and distress to the realty industry. In the face of this unprecedented crisis, the real estate sector displayed remarkable resilience. Once the process of lifting lockdowns was initiated in the third quarter of 2020, both the residential and office markets started showing promising signs of revival. In the last quarter of 2020, uncertainties surrounding the economy and jobs further reduced, which led to an increase in the pace of revival with the markets tracing a V-shaped recovery path.

COVID-led lockdown in India disrupted demand and supply across sectors. The output in most sectors is expected to contract, however, the agriculture sector is the only sector that is expected to grow in the fiscal year 2020-21. Agricultural activities were categorised under essential goods and services, therefore, the sector was more resilient than other sectors. As per the latest estimates, during the Financial Year, agriculture sector is expected to grow at 3.0% over the previous year and food grain production is expected to increase to 303.3 million tonnes compared to the previous year’s production of 297.5 million tonnes.

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 is increasing in using eco-friendly biodegradable products in FMCG goods like detergents, soaps etc. Fatty Acids, Fatty Alcohol, and Specialty Chemicals used by this segment is growing at 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 pandemic. 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)

At Godrej Agrovet Limited, the management and the employees worked with effective coordination and agility to adjust to the changing and evolving situation. Manufacturing plants were operational in April 2020 after obtaining necessary approvals. GAVL ensured that the manufacturing plants were well-equipped with requisite safety equipment and high level of safety measures were followed at all locations. Focus was on improving profitability in all the business segments, despite the tough environment. Profit before tax (excluding non-recurring and exceptional items) grew by 59.7% year-on-year in Financial Year 2020-21, despite an 8.5% decline in sales.

Animal Feeds:

Favourable commodity prices and realization of R&D initiatives led to segment results increasing by 24.1% in the current Financial Year. However, volumes and segment revenues declined by 13.1% and 16.8%, respectively in 2020-21. The demand for animal feed viz. cattle, broiler, layer, fish and shrimp feed is directly proportional to the demand for the end protein products viz. milk, chicken/eggs, fish and shrimp. In the Financial Year 2020-21 because of the lockdown, the demand for end protein products from the HoReCa segment (Hotels, restaurants and catering), which forms nearly 30%-35% of the overall industry demand, was significantly impacted. As a result, volumes and segment revenues in the animal feed business were impacted.

Crop Protection:

In the current Financial Year, the objective of the standalone crop protection business was to accelerate collections and improve the working capital cycle. During the Financial Year 2020-21, the collections increased to Rs. 629 Crore from Rs. 495 Crore in the previous year, representing a growth of 27%. In terms of performance, standalone segment revenues grew at a marginal rate of 2.4% and segment results at Rs. 153.4 Crore were nearly similar to the previous year. Segment performance could have been higher, but production disruption of the key products in the peak season due to COVID-led lockdown impacted sales and profitability levels to some extent.

Vegetable Palm:

White-fly infestation impacted the palm oil plantation in Southern India in the Financial Year 2020-21. This not only lowered Fresh fruit bunches (FFBs) volumes but also the oil content in the fruit. Therefore, FFBs volumes and oil extraction ratio declined, which adversely affected profitability level in the Financial Year 2020-21. However, the sharp increase in global crude palm oil prices and palm kernel oil prices provided some respite. Crude palm oil prices and palm kernel oil prices increased by 33.4% and 29.1%, respectively. In terms of performance, while the segment revenues increased by 5.4%, the segment results declined by 6.3% year-on-year. Further, GAVL has also worked on increasing area-under plantation and currently has around 75,000 hectares under palm oil cultivation.

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

Astec LifeSciences Limited (Astec) & its Subsidiaries:

GAVL agrochemical subsidiary -Astec LifeSciences Limited (Astec), maintained its strong performance for the Financial Year 2020-21 as profit before tax grew by 45.2%, year-on-year, despite a modest 5.3% growth in total income. Segment-wise, revenue growth is driven by enterprise sales and geographically, domestic business contributed to the growth. GAVL continues to hold 62.3% stake in Astec as on March 31, 2021.

Creamline Dairy Products Limited & its Subsidiary:

In GAVL’s dairy subsidiary, Creamline Dairy Products Limited’s total income declined by 13.4% year-on-year mainly because of lower demand from the HoReCa (Hotels, restaurants and catering) segment. HoReCa segment and out-of-home consumption form nearly one-third of the overall industry demand for milk and milk products. Lower demand from these segments impacted volumes and sales during the year for the industry and our dairy subsidiary. However, profitability improved from the lower levels seen in the fiscal year 2019-20 supported by low procurement prices and fixed costs reduction. The company recorded profit before tax of Rs. 7.3 Crore in the financial year 2020-21 compared to Rs. 3.1 Crore in the previous year. The company re-launched the entire product portfolio under a new ‘Godrej Jersey’ logo. Value-added products formed 27% of revenues in the current year compared to 28% in the previous year.

Godrej Tyson Foods Limited (GTFL):

For the subsidiary Godrej Tyson Foods Limited, it was an excellent year with total income growing by 17.1% year-on-year. Profit before tax also increased to Rs. 22.7 Crore in Financial Year 2020-21 compared to a loss before tax of Rs. 77.2 Crore in the previous year. The performance was supported both by the live bird segment and the Yummiez segment. In the live bird segment, growth was driven by remunerative end product prices on one end and favourable raw material prices on the other end. Lockdown led to an increase in demand for ready-to-eat and easy-to-cook frozen food products, which benefited sales and profitability in the Yummiez segment.

Godrej Maxximilk Private Limited:

GAVL has increased its stake in Godrej Maxximilk Private limited to 74.9% in the financial year 2020-21 from 74.0% stake in the previous year. The subsidiary 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. For 2020-21, the company has reported a loss before tax of Rs. 8.1 Crore compared with a loss before tax of Rs. 7.8 Crore in the previous year.

Joint Venture of GAVL:

ACI Godrej Agrovet Private Limited, Bangladesh:

GAVL’s 50:50 joint venture with Advanced Chemical Industries Limited (ACI), Bangladesh named ACI Godrej Agrovet Private Limited, continued its stellar performance and posted strong growth. Revenues and profit before tax grew by 21.8% and 43.8%, respectively. This was on account of strong volume growth across all segments, i.e. cattle, poultry and aqua feed.

Godrej Properties Limited (GPL)

OVERVIEW OF OPERATIONS:

For the Financial Year under review, GPL’s total income decreased by 57% and stood at Rs. 1,217 Crore. EBITDA decreased by 84% to Rs. 119 Crore and net loss was Rs. 189 Crore, due to certain onetime accounting charges taken in Q4 FY21.

With the new projects signed by GPL, the company has added saleable potential of 6.0 million sq. ft. to the portfolio. One of the key achievements was an acquisition of 18 acres land parcel at Whitefield, Bangalore with a saleable potential of 2.5 million sq. ft. GPL also emerged as highest bidder in the CIDCO e-auctioning process for the two adjacent plots in Sanpada, Navi-Mumbai. Spread over ~1.5 acres, this project will offer ~4 lakh square feet of development potential comprising primarily of premium residential apartments with a small amount of high-street retail at the base.

Despite the pandemic, GPL has achieved the highest ever sales in its history. This was possible due to increased focus on digital sales, attractive payment plans, and the customers trust in our brand. GPL achieved sales volume of 10.8 million square feet and booking value of Rs. 6,725 Crore in FY21, resulting in a growth of 14% Y-o-Y. GPL has recorded a booking value in excess of Rs. 5,000 Crore for the last four consecutive years. GPL achieved sale volumes of more than 1.5 million sq. ft. and sale value of more than Rs. 1,300 Crore in all the four focus markets. GPL launched 11 new projects/ phases in FY21. Most notable of these were Godrej Woods, Sector 43 Noida, with a booking value of Rs. 509 Crore and Godrej Royale Woods, Bengaluru, with a booking value of Rs. 371 Crore. These successful launches were complimented by Rs. 4,550 Crore of sustenance sales in FY21, which is the highest ever reported by GPL.

On the operational front, GPL successfully delivered 6.5 million sq.ft across its projects. GPL has now delivered over 28.2 million sq. ft. of real estate in the last six years. GPL’s delivery record demonstrates that it can operate at a large scale and keep pace with its accelerating sales. GPL has continued its focus on exploring advanced construction technologies, improving Net Promoter Score (NPS) and achieving Design Standardization. Sustainable development is an integral part of the GPL’s vision and GPL received several recognitions for the efforts on environment and safety, including being ranked #1 amongst listed global residential developers in the 2020 Global Real Estate Sustainability Benchmark (GRESB) Assessment report – An industry-driven organization which assesses Environmental, Social and Governance (ESG) performance. GPL also received other awards like Mahatma Award for CSR Excellence, CSR Leadership Award for Best Corporate Social Responsibility Practices from World CSR Congress, Estrade Green Developer of the year Award 2020, Recognition from Enviro Creators Foundation and Ministry of Forest & Tribal Development, Gujarat state for planting over 16,250+ trees at Pulwama Shahid Vann, Gujarat (Umbergaon). The Company’s long term credit rating by ICRA stands is AA (Positive) (Outlook on the long term rating changed to "Positive" from "Stable"), with continued access to cheaper capital, showcasing confidence in the GPL’s operations.

Due to default/delay on the part of the JVPs in fulfilling their contractual obligations, including obtaining approvals and providing funding, GPL has initiated legal action in three projects in MMR – in Byculla, Thane and Bhandup. GPL is confident of its merits in these cases.

FUTURE PROSPECTS AND OUTLOOK OF THE COMPANY:

The outbreak of the COVID-19 pandemic had adversely impacted the sector performance in the first half of FY21. However, in the second half, the company witnessed a turnaround in sentiment towards residential real estate. The recent surge in cases due to the second wave of COVID-19 may impact the demand in the first half of FY22. However, the start of vaccine rollout, low home loan interest rates and increased desire to pursue home ownership may revive the demand.

While the pandemic might have negatively affected the industry at large, the operational momentum of GPL will be sustained by its healthy balance sheet and robust project pipeline. Consolidation in residential real estate sector is expected to continue, leading to increase in market share of branded organized players such as GPL. Given the high pace of urbanization, low interest rates and rising disposable income, GPL remains optimistic about the sectors long-term direction. With a strong brand, pan-India presence, demonstrated track record and excellent sales & marketing capabilities, the company is well poised for a high growth trajectory over the next few years.

Going forward, GPL also believes that the technology will play a vital role in minimizing the impact of C OVID-19 and hence GPL is focusing on strengthening our digital sales capabilities. GPL has also been actively focusing on improving on-site facilities to create a safe working environment for the workforce. These measures will help the company tide over the impact of C OVID-19 and make it more efficient in the long term.

GPL will focus on opportunistic growth avenues in the current environment to create a healthy project pipeline across the growth markets. GPL’ recent Qualified Institutional Placement (QIP) raise of Rs. 3,750 Crore aims at supporting the growth aspirations and providing significant opportunities to rapidly scale in the years ahead. GPL will continue to focus on four key markets - Mumbai, NCR, Bengaluru and Pune. When evaluating new projects, GPL will continue to seek superior long-term growth in shareholder value by maximizing returns through optimal financing and fiscal discipline. GPL will also enhance agility across its processes to further reduce project launch turnaround times. GPL shall continue its pursuit of key strategic priorities – Driving profitability, Improving customer experience, adopting digital technologies.

Godrej Consumer Products Limited (GCPL)

Godrej Consumer Products Limited (GCPL) is a leading emerging markets company. As part of the 124-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.

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 2020-21 began on a depressed note as COVID 19 led to fears of Demand Destruction and commodity prices fell sharply. However, it was soon realised that In-Home Consumption was leading to consumers eating better and using better quality branded products. From mid May 2020, prices began to recover and hit new highs by December 2020. Side by side the weather phenomenon called La Nina swept over South America provoking fears of drought. Fortunately, this 2020 La Nina turned out to be quite mild and soybean production in Brazil and Argentina did not suffer at all. Prices peaked towards the end of December 2020 and fell in the first half of January 2021. However, the excitement of this Financial Year was not finished yet. The new Biden White house in USA led to huge optimism on Green Energy and the encouragement of Bio Diesel as well as Renewable Diesel and corn-based Ethanol. This new factor led to a sharp and strong spike in veg oil prices. High prices continue well into FY 2021-22. Both our companies handled these turning markets admirably and reported very good results.

Ensemble Holdings and Finance Limited (EHFL), a wholly owned subsidiary of your Company, is a Non-Banking Finance Company. The total income of EHFL for FY 2020-21 was Rs. 0.14 Crore as compared to Rs. 0.41 Crore in the previous year. During the year, the National Company Law Tribunal, Mumbai bench vide its Order dated April 22, 2020 has approved the Scheme of Arrangement (Demerger) between Ensemble Holdings and Finance Limited (EHFL) and the Company. Upon coming into effect of the Scheme, the investment undertaking of EHFL stands transferred to and vested in the Company with effect from the Appointed Date, i.e. October 1, 2019.

Financial Position

The Net Debt Position at the end of the Financial Year stands at Rs. 2,963 Crore as compared to Rs. 2,532 Crore in the previous year. The Net debt equity ratio is 1.94 as compared to 1.55 in the previous year.

Your Company continues to hold the topmost rating of [ICRA] A1+ from ICRA for its commercial paper program (Rs. 1,500 Crore) (previous year Rs.1,000 Crore). ICRA has reaffirmed an [ICRA] A1+ rating for its short term debt instruments / other banking facilities (Rs. 800 Crore) (previous year Rs. 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 (Rs. 1,340 Crore) (previous year Rs. 1,340 Crore). In addition to the ICRA’s rating for commercial paper programme, CRISIL has also assigned a rating of "CRISIL A1+" to the commercial paper programme of Rs. 1,500 Crore (previous year Rs. 1,000 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 Rs. 3,000 Crore (previous year Rs. 1,500 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 made by the Company under the aforesaid provisions during the Financial Year 2020-21 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.godrejindustries.com/listing-compliance.aspx.

All Related Party Transactions entered into by your Company during the Financial Year 2020-21 were on an arm’s 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.40 of Standalone Financial Statements, forming part of the Annual Report. None of the Directors had any pecuniary relationships or transactions vis--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 2020-21.

Manufacturing Facilities

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

Ambernath factory is currently certified as per latest ISO standards, i.e., ISO 9001:2015 (QMS), ISO 14001:2015 (EMS) and ISO 45001:2018 (OH&S). This year the factory completed 1st stage of IATF (Automotive certification for tyre industries) and responsible care certification. Ambernath plant has been awarded silver rating on Ecovadis Platform and is also a member of SEDEX with a Zero Score in audit.

The Valia factory is ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018 certified. It has been recently certified with a new ISO standard i.e. ISO 50001:2018 for Energy Management System across India for getting certified as per new 2018 standard guidelines. This year, we have included one of the sophorolipid in the COSMOS certification. The certification helps labelling the product as natural or organic. In new product domain, the unit has started commercial production for Sorbitol Mono Oleate for Industrial application, Coco betaine, Oleth 20 and Polyquaternium for Personal Care segment.

Majority of the finished products at both locations are Kosher certified and some are also REACH registered to meet the EU regulation. The Company is also a member of RSPO (Roundtable for Sustainable Palm Oil), Action of Sustainable Derivative (ASD) and a respondent of Climate Change Discloser and Water Security in CDP.

Vegoils Division (Wadala), is a vegetable oil refining facility in Mumbai for manufacturing edible oils and Vanaspati. We have recently modified our Vanaspati manufacturing process by using inter esterified vegetable oil. This reduces trans-fat content in Vanaspati to <0.5%. Vegoils has a continuous refinery to process 100 TPD vegetable oils like Sunflower oil, Groundnut oil and Vanaspati. Factory is ISO-22000:2018 certified and also possesses Kosher and Halal certificate. This Factory also produces and sells Pharmaceutical Grade Refined Groundnut oil (Arachis oil) and Refined Sunflower Oil to pharmaceuticals companies for their application. This Factory produces and packs variety of edible oils such as Sesame oil, Refined Sunflower oil, Refined Groundnut oil, Refined Rice Bran oil, RBD Palm Olein oil and Vanaspati in various pack sizes.

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 innovations quest in the processes / product ranges and also came up with many new concept advanced ingredients mainly based on the Oleo feedstocks and having applications in Home, Personal care, Animal Nutrition and Agricultural fields. Fatty acids based fuel lubricity blends and Polymer application blends were optimized further and introduced to the petroleum and fuel lubricity customers thus securing newer avenues for our fatty acids portfolio. Similarly, the concentrated Surfactant Blends for the Cleaning and Sanitization applications were standardized and commercialised during the COVID times. 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. Our current emphasis for the new development is "Go Green" and accordingly we are focusing more and more on the totally biodegradable ingredients/ Blends replacing the chemicals ingredients. One of our important developments in this space, was the mild surfactant category termed as "Sulfate Free", which could be the future ready product and the anti-dandruff ingredient which is replacement of the commercially available harsh chemical ingredients.

Human Resource Development and Industrial Relations

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

With an aim at enhancing employees’ experience, the highest priority was given to people-focused measures and policies in areas of health, safety and wellness of employees and their families, especially in the wake of COVID-19. In order to drive employee motivation and performance, a structured culture and engagement framework was put in place with focus on three core pillars of Learning and Development, Communication and Connect, and Recognition.

The total number of persons employed in your Company as on March 31, 2021 were 1,070.

Business Responsibility Report

The Business Responsibility Report highlighting your Company’s 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 Employee Benefits) Regulations, 2014, have been uploaded on the website of the Company at www.gorejindustries.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) Regulations, 2014 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 2020-21. The Certificate, obtained from M/s. BSR & Co. LLP, Statutory Auditors in this regard, shall be kept open for inspection by the Members at / during the ensuing 33rd (Thirty Third) 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 2020-21 are as follows:

Particulars Details
(Rs. Crore)
(i) Deposits accepted during the Year Nil
(ii) Deposits remained unpaid or unclaimed during the Year: Matured Deposits with the Company 0.25
(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 2020-21.

Directors

(a) Re-appointment of Whole Time Directors

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 21, 2021, Ms. Tanya Dubash (DIN: 00026028) has been re-appointment 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) has been 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, subject to approval of the Members at the 33rd (Thirty Third) Annual General Meeting (AGM).

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

The Shareholders of the Company at the 32nd (Thirty Second) Annual General Meeting held on August 13, 2020 approved appointment of Ms. Monaz Noble (DIN: 03086192) as the "Independent Director" on the Board of Directors of your Company for a term of 5 (five) years starting from May 1, 2020 to April 30, 2025.

The tenure of directorship of Mr. Aspy Cooper (DIN: 00026134), who was appointed as the "Independent Director" of the Company for a term of 5 (Five) years, i.e. from October 28, 2015 to October 27, 2020, had come to an end and accordingly, he ceased to be the Independent Director of the Company with effect from close of business hours on October 27, 2020.

Also, upon recommendation of the Nomination and Remuneration Committee and as approved by the Board of Directors on October 22, 2020 and October 23, 2020 respectively, Ms. Shweta Bhatia (DIN: 03164394) was appointed as the "Additional (Non-Executive Independent) Director" on the Board of Directors of your Company for a term of 5 (Five) years starting from October 28, 2020 upto October 27, 2025, which is subject to approval of the Members at the ensuing 33rd (Thirty Third) AGM.

Further, Mr. Keki Elavia (DIN: 00003940), who was appointed as the Independent Director for a second term starting from August 9, 2019 to March 31, 2021 had stepped down from the position of the "Non-Executive Independent Director" of the Company, due to personal reasons, with effect from February 11, 2021. The Board hereby confirms that as per the confirmation received from Mr. Keki Elavia, there were no material reasons for his resignation other than those mentioned in his resignation letter dated February 11, 2021.

Also, upon recommendation of the Nomination and Remuneration Committee and as approved by the Board of Directors on February 27, 2021, Mr. Sandeep Murthy (DIN: 00591165) was appointed as the "Additional (Non-Executive Independent) Director" on the Board of Directors of your Company for a term of 5 (Five) years starting from March 1, 2021 upto February 28, 2026, which is subject to approval of the Members at the ensuing 33rd (Thirty Third) AGM.

Further, Mr. Kavas Petigara (DIN: 00066162), who was appointed as the Independent Director for a second term starting from August 9, 2019 to July 8, 2023 had stepped down from the position of the "Non-Executive Independent Director" of the Company, due to personal reasons, with effect from April 1, 2021. The Board hereby confirms that as per the confirmation received from Mr. Kavas Petigara, there were no material reasons for his resignation other than those mentioned in his resignation letter dated March 31, 2021.

(c) Appointment of Non-Executive Director

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 (Non-Executive) Director" on the Board of Directors of your Company with effect from April 1, 2022, liable to retire by rotation. He will hold office of the Non-Executive Director of the Company with effect from April 1, 2022, subject to regularisation at the next year’s Annual General Meeting of the Shareholders.

(d) Directors liable to retire by rotation

In accordance with the provisions of Section 152(6) of the Companies Act, 2013 and the Company’s Articles of Association, Mr. Jamshyd Godrej (DIN: 00076250) and Mr. Nitin Nabar (DIN: 06521655) Directors of the Company are liable to retire by rotation at the ensuing 33rd (Thirty Third) AGM, and being eligible, have offered themselves for re-appointment.

(e) Resolutions to be passed at the ensuing AGM

Appropriate resolutions for re-appointment of Ms. Tanya Dubash and Mr. Nitin Nabar as the "Whole Time Directors", appointment of Ms. Shweta Bhatia and Mr. Sandeep Murthy as the "Non-Executive Independent Directors" and for re-appointment of Mr. Jamshyd Godrej and Mr. Nitin Nabar as the Directors of the Company liable to retire by rotation, are being moved at the ensuing 33rd (Thirty Third) AGM, which the Board recommends for your approval.

(f) Composition of Board of Directors

As on the date of this Board’s Report, i.e., as on May 21, 2021 your Company’s Board of Directors comprises of the following Directors:

Name of the Director Director Identification Number (DIN) Category
Mr. Adi Godrej 00065964 Chairman and Non-Executive Non-Independent Director
Mr. Jamshyd Godrej 00076250 Non-Executive Non-Independent Director
Mr. Nadir Godrej 00066195 Managing Director
Mr. Vijay Crishna 00066267 Non-Executive Non-Independent Director
Mr. Mathew Eipe 00027780 Non-Executive Independent Director
Ms. Tanya Dubash 00026028 Executive Director & Chief Brand Officer
Mr. Nitin Nabar 06521655 Executive Director & President Chemicals
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

(g) 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 pro_ciency) and they hold the highest standards of integrity that enable 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.

(h) 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 2020-21 (i.e. on May 22, 2020, August 13, 2020, November 11, 2020, February 12, 2021). 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 owing to the lockdown situation across the country due to pandemic.

(i) 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 Chairperson’s 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. Adi Godrej, Chairman with Independent Directors. Feedback from the Committees and Individual Board Members was shared with the Chairman. Following his evaluation, a Chairman’s Feedback Report was compiled.

(j) Nomination and Remuneration Policy

The Company’s Nomination and Remuneration Policy for Directors, Key Managerial Personnel, and other employees can be accessed on the Company’s website at http://www.godrejindustries.com/listing-compliance.aspx. The Company’s 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 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 the talent management process in place with an objective of developing a robust talent pipeline for the organisation which includes the senior leadership team.

As part of 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 organisation’s talent objectives. We continue to deploy leadership development initiatives to build succession for key roles.

Total Rewards Philosophy

The policy of your Company on Director’s 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 you the flexibility to customise different elements, basis need. It is also integrated with our performance and talent management processes and 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 at the 90th 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 Economic Value Added or other related metrics, relative to the target set for a 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.

(k) Familiarisation Programmes

Familiarisation programme for the Independent Directors was conducted during the Financial Year 2020-21. 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 Company’s website, viz. http://www.godrejindustries.com/ listing-compliance.aspx.

Key Managerial Personnel

There have been no changes in the Key Managerial Personnel of the Company during the Financial Year 2020-21.

Details of Directors / Key Managerial Personnel who were appointed or have resigned during the Financial Year 2020-21

Name of the Director Date of appointment / resignation
Mr. Nadir Godrej Re-appointment as "Managing Director" for 3 (three) years with effect from April 1, 2020 to March 31, 2023
Ms. Monaz Noble Appointment as "Independent Director" for a term of 5 (five) years with effect from May 1, 2020 to April 30, 2025
Mr. Aspy Cooper Completion of tenure from directorship as Independent Director of the Company with effect from October 27, 2020.
Ms. Shweta Bhatia Appointment as "Independent Director" for a term of 5 (five) years with effect from October 28, 2020 to October 27, 2025
Mr. Keki Elavia Resigned from directorship with effect from February 11, 2021
Mr. Sandeep Murthy Appointment as "Independent Director" for a term of 5 (five) years with effect from March 1, 2021 to February 28, 2026
Mr. Kavas Petigara Resigned from directorship with effect from April 1, 2021

Auditors and Auditors’ Report Statutory Auditors

M/s. BSR & Co. LLP, Chartered Accountants (Firm Registration Number: 101248W/W-100022) have been 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. Their appointment was subject to ratification by the Members at every subsequent AGM held after the AGM held on August 11, 2017. Pursuant to the amendments made to Section 139 of the Companies Act, 2013 by the Companies (Amendment) Act, 2017, effective from May 7, 2018, the requirement of seeking ratification of the Members for the appointment of the Statutory Auditors was withdrawn from the statute. In view of the same, the Members of the Company at the 30th (Thirtieth) AGM held on August 13, 2018 had approved ratification of appointment of M/s. BSR & Co. LLP as the Statutory Auditors of the Company for the remaining period, i.e., from the conclusion of 30th (Thirtieth) AGM held on August 13, 2018 upto the conclusion of the 34th (Thirty Fourth) AGM. Therefore, the approval of the Members for continuance of their appointment at this AGM is not being sought. The Statutory Auditor’s Report on the Financial Statements for the Financial Year ended on March 31, 2021 does not contain any qualification, reservation, adverse remark or disclaimer.

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 2020-21. 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 21, 2021 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 2021-22 at a remuneration of Rs. 3,50,000/- (Rupees Three Lakh Fifty 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 33rd (Thirty Third) 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 Company’s 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 2020-21.

The Secretarial Audit Report issued by M/s. A. N. Ramami & Co., Secretarial Auditors for the Financial Year ended March 31, 2021 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 2020-21 was as under. The Audit Committee was further re-constituted with effect from April 1, 2021, details are as below:

Name of the Member Designation
Mr. Kavas Petigara Chairman (Independent Director)@
Mr. Aspy Cooper Member (Independent Director)*
Mr. Mathew Eipe Chairman (Independent Director)$
Mr. Nitin Nabar Member (Executive Director)
Ms. Monaz Noble Member (Independent Director)#
Dr. Ganapati Yadav Member (Independent Director)
Mr. Sandeep Murthy Member (Independent Director)

*Ceased to be Independent Director of the Company with effect from close of business hours on October 27, 2020 #Appointed as Member with effect from October 28, 2020 @Resigned from directorship with effect from April 1, 2021 $ Appointed 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 2020-21 (i.e., May 22, 2020, August 13, 2020, November 11, 2020 and February 12, 2021).

(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 2020-21 was as under. The Risk Management Committee was further re-constituted with effect from April 1, 2021 and May 21, 2021, details are as below:

Name of the Member Designation
Mr. Nadir Godrej 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)#

*Appointed with effect from April 1, 2021 # Appointed with effect from May 21, 2021

3 (Three) Meetings of the Risk Management Committee were held during the Financial Year 2020-21 (i.e., June 11, 2020, October 30, 2020 and January 8, 2021).

Your Company had formed a Risk Management Committee consisting of the Managing Director, Whole Time Directors, 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 Company’s 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.

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, a policy on 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 2020, 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 Company’s 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 2020-21, 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, 2021) and of the profit and loss of the Company for that period (i.e. the Financial Year 2020-21);

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, 2021 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 Company’s 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 E‘ 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.godrejindustries.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 2020-21 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 F‘ 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@godrejinds.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, 2021 and the date of this Boards’ Report (i.e. May 21, 2021). However, the Financial Year ended March 31, 2021 was an unprecedented period due to the spread of COVID-19 pandemic across the globe, adversely impacting sales performance of the Company. While the operations have resumed for manufacturing locations in compliance with Government directives since April, 2020, the Company continues to closely monitor the situation and take appropriate action, as considered necessary in due compliance with the applicable regulations. As per the Company’s current assessment, no significant impact on carrying amounts of inventories, goodwill, intangible assets, trade receivables, investments and other financial assets is expected, and we continue to monitor changes in future economic conditions. The eventual outcome of the impact of the global health pandemic may be different from those estimated as on the date of approval of these financial results.

On May 14, 2021, the Company has issued issued 7,500 (Seven Thousand Five Hundred) Unsecured Redeemable Non-Convertible Debentures (NCD) of Face Value Rs. 10,00,000/- (Rupees Ten Lakh) each. The total value of NCD is Rs. 750 Crore (Rupees Seven Hundred Fifty Crore). These NCDs are carrying the interest rate of 6.92% (six point nine two per cent) per annum and are redeemable at the end of 4 (four) years from the date of allotment. The NCDs are listed on the National Stock Exchange of India Limited.

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

Scheme of Arrangement (Demerger) entered into between Ensemble Holdings Finance Limited, Wholly Owned Subsidiary and Godrej Industries Limited ("the Company")

The National Company Law Tribunal, Mumbai bench vide its Order dated April 22, 2020 approved the Scheme of Arrangement (Demerger) between Ensemble Holdings and Finance Limited (EHFL) and the Company. Consequent to the said Order and filing of the certified Orders with the Registrar of Companies, Maharashtra on May 14, 2020, the Scheme had become effective from the Appointed Date i.e. October 1, 2019. Upon coming into effect of the Scheme, the investment undertaking of EHFL stood transferred to and vested in the Company with effect from the Appointed Date. The Company had given effect of the Scheme in its Financial Statements for the Financial Year ended March 31, 2020 as per guidance set out in Ind AS Transition Facilitation Group (ITFG) Clarification Bulletin 14 (Issue 4), being a common control transaction. The Financial Statements for the Financial Year ended March 31, 2019 were restated as per Appendix C of Ind AS 103, Business Combinations, as if the business combination had occurred from the beginning of the preceding period. As EHFL is a 100% subsidiary of the Company, there is no impact of the Scheme on the Consolidated Financial Results.

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 Company’s website viz; www.godrejindustries.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 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 Company’s 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, 2021:
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.
Policy on Prevention of Sexual Harassment at Workplace Your Company has in place, a Policy on Prevention of Sexual Harassment at Workplace, 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 Policy on Criteria for determining Materiality of Events 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. 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 Ven- tures or Associate Com- panies during the Finan- cial Year 2020-21 Pyxis Holdings Limited became the subsidiary of the Company with effect from March 25, 2021.
Details of Significant and Material Orders passed by the Regulators or Courts or Tribunals, impacting the going concern status and the Company’s operations in future During the Financial Year 2020- 21, there were no significant and material orders passed by the regulators or Courts or Tribunals which can adversely impact the going concern status of the Company and its operations in future.

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, Rs. 7,95,241/- (Rupees Seven Lakh Ninety Five Thousand Two Hundred Forty One Only) unpaid / unclaimed dividends were transferred during the Financial Year 2020-21 to the Investor Education and Protection Fund (IEPF).

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.godrejindustries.com. The Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on August 13, 2020 (date of last AGM) on the Company’s website which can be accessed on www.godrejindustries.com and of the Ministry of Corporate Affairs website at www.iepf.gov.in.

Depository System

Your Company’s Equity Shares are available for dematerialization through National Securities Depository Limited and Central Depository Services (India) Limited. As of March 31, 2021, 99.89% of the Equity Shares of your Company were held in demat form.

You Company has issued Non-Convertible Debentures during the Financial Year 2020-21 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 2020-21.

During the Financial Year 2020-21, your Company had issued Non-Convertible Debentures on private placement basis which are listed on the National Stock Exchange of India Limited (NSE). The applicable annual listing fees has 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 this 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 Company’s Subsidiaries will be made available upon request. These documents including the Subsidiary Companies’ documents will be available for inspection on the Company’s website, viz., www.godrejindustries.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 Company’s 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.

For and on behalf of the Board of Directors of Godrej Industries Limited

Adi Godrej

Chairman

(DIN: 00065964)

Mumbai, May 21, 2021