Annual Report 2008–2009 GODREJ INDUSTRIES LIMITED DIRECTORS A.B. Godrej Chairman J.N. Godrej N.B. Godrej Managing Director S.A. Ahmadullah V.M. Crishna K.K. Dastur V.N. Gogate K.N. Petigara F.P. Sarkari N.D. Forbes J.S. Bilimoria A. Maira V.F. Banaji Executive Director & President (Group Corporate Affairs) T.A. Dubash Executive Director & President (Marketing) M. Eipe Executive Director & President (Chemicals) M.P. Pusalkar Executive Director & President (Corporate Projects) COMPANY SECRETARY V. Srinivasan AUDITORS Kalyaniwalla & Mistry, Chartered Accountants Godrej Industries Limited REGISTERED OFFICE : Pirojshanagar, Eastern Express Highway, Vikhroli (East), Mumbai 400 079. Phone : 022-58 800, 258 800, 258 8030 Fax : 0-58 8074, 258 8066 website : http:www.godrejinds.com FACTORIES : Vikhroli Pirojshanagar, Eastern Express Highway, Vikhroli (East), Mumbai 400 079. Phone : 022 - 258 800, 258 800, 258 8030 Fax : 0 - 258 8066/58 8064 Valia Burjorjinagar, (DTA & EOU) Plot No. 3, Village Kanerao, Taluka - Valia, District Bharuch, Gujarat 393 135. Phone : 0643 - 270756 to 270760 Fax : 0643 - 27008 Wadala L.M. Nadkarni Marg, Page Nos. CONTENTS Near M.P. T. Hospital, Chairman's Message ..................................... 03 Wadala (East), Mumbai 400 037. Phone : 0 - 245 486/44 8770 Financial Highlights ..................................... 04 Fax : 0 - 244 604 Notice ..................................................... 05 BRANCHES : Delhi 4th Floor, Delite Theatre Building, Directors’ Report along with Management 4/, Asaf Ali Road, New Delhi 110 00. Discussion and Analysis Report ....................... 3 Phone : 011 - 236 1066 Report on Corporate Governance .................... 6 Fax : 0 - 236 1088 Kolkata Block GN, Sector-V, Shareholders' Information ............................. 33 Salt Lake City, Kolkata 700 09. Auditors’ Report ......................................... 35 Phone : 033 - 2357 3555 Accounts .................................................. 38 Fax : 033 - 2357 3945 Consolidated Accounts ................................. 65 Chennai New No. 15, (Old No. 17-A), nd Street, Jeevarathnam Nagar, Statement Pursuant to Section 212 .................. 86 Adayar, Chennai 600 00. SUBSIDIARIES Phone : 044 - 466 6605 Fax : 044 - 466 6609 Godrej Agrovet Limited ................................ 90 London 84A, Chase Road, Southgate, Golden Feed Products Limited ....................... 07 London N4 - 6HF., UK Godrej Oil Palm Limited ............................... Phone : (00440) - 8886045 Fax : (00440) - 8886944 Cauvery Palm Oil Limited ............................. 9 BANKERS : Central Bank of India Natures Basket Limited ................................ 6 State Bank of India Ensemble Holdings & Finance Limited .............. 3 Bank of India Godrej Properties Limited ............................. 37 HDFC Bank Ltd. Godrej Realty Private Limited ........................ 47 Citibank N.A. Hong Kong and Shanghai Banking Godrej Real Estate Private Limited .................. 5 Corporation Limited Godrej Developers Private Limited .................. 55 Kotak Mahindra Bank Limited Godrej Seaview Properties Private Limited ....... 59 Barclays Bank Plc. Happy Highrises Limited ............................... 6 REGISTRARS : Computech Sharecap Ltd. Godrej International Limited ......................... 66 & TRANSFER AGENT 47, Mahatma Gandhi Road, Opp. Jehangir Art Gallery, Fort, Godrej Waterside Properties Private Limited ...... 69 Mumbai 400 00. Godrej Estate Developers Private Limited ......... 73 Phone : 0 - 2263 5000 - 0- 0 Godrej Hygiene Care Private Limited ............... 76 Fax : 0 - 2263 500 E-Mail : [email protected] Annual Report 2008–2009 CHAIRMAN’S Statement Dear Shareholders, I am pleased to write to you after a volatile year – amidst an economic crisis that has been challenging and testing as rarely seen before. In such times of global economic hardship a diversified business model and a unique operating structure has placed Godrej Industries (GIL) in such position as to not only weather the storm but seek out and take advantage of opportunities that arise in times of such adversity. A business model such as ours is distinct. Through a combination of operating businesses, businesses through subsidiaries and several other joint ventures and investments we enable exposure for our stakeholders to the best facets of the Indian economy. Our operations cover several key areas including chemicals, agriculture, real estate, consumer products and foods. These sectors are central to the sustained progress of India and are a proxy on growth and development. National integration is being driven by the continued media and telephony penetration, improvements in infrastructure and a strong banking sector. GIL is ideally placed to benefit and generate greater prosperity. The chemicals business, our major operating business in GIL has maintained its market leadership position in India despite large scale fluctuations in the prices of raw materials and commodities as well as the rupee-dollar exchange rate. Our other ventures have also performed well this year and are growing consistently in line with our long-term corporate plan. We are excited about the immense value potential across some of our economic interests. Our operations in consumer products and foods are doing well and we are particularly encouraged by our real estate and palm oil businesses which have the capacity and relevant demand to grow several times over in coming years, with the thrust and policy support from the government. The prospects of our businesses are very bright and with decades of industry experience, we have continually demonstrated our ability to add to shareholders’ value from our various initiatives. Going forward our intentions remain unchanged. The international crisis has damaged sentiments rather than fundamentals in India and while short-term indicators may be negative, with a long-term view it is expected that the economy should again resurrect in the current fiscal year. The Indian Government has taken several steps to curb the effects of global recession through several fiscal measures. These include additional spending, cuts in fuel prices, interest rate reductions and the lowering of the duties. The government is focusing on curbing inflation without hindering growth and prices are correcting across several markets. With respect to real estate, reduction in mortgage rates should help stimulate underlying demand. As demand and sentiment improve, GIL is well placed and will continue to build upon strong foundations based around the brand equity and trust earned over several decades. We aim to nurture our businesses and create outstanding operations in all sectors in which we operate. I would like to take this opportunity to thank all our employees for their commitment; our business partners, vendors and other business associates for their support as also the Central and State Governments. Finally, I would like to thank all our stakeholders for their continued encouragement and support. Yours faithfully, Adi Godrej Chairman 3 Godrej Industries Limited GODREJ INDUSTRIES LIMITED – FINANCIAL HIGHLIGHTS (Rs. Lac) 2008-09 2007-08 2006-07 2005-06 2004-05 BALANCE SHEET SOURCES OF FUNDS : Shareholders’ Funds Share Capital 3198 398 99 99 99 Reserves & Surplus 99515 0644 3843 346 3068 Loan Funds Secured Loans 23282 4948 33093 49 075 Unsecured Loans 36814 869 3677 7803 3557 Deferred Tax Liability 3278 369 3980 388 50 166087 5308 98 73667 667 APPLICATION OF FUNDS : Fixed Assets 28871 74 8704 8594 500 Investments 114808 77548 48567 3735 33577 Net Working Capital 22022 4770 937 579 868 Miscellaneous Expenditure 386 068 60 9 6 166087 5308 98 73667 667 INCOME AND PROFIT Total Income 97128 8388 789 8070 8353 Expenditure other than Interest and Depreciation 86747 679 64078 6966 707 Profit before Interest, Depreciation and Tax 10381 676 43 0609 36 Interest (net) 6085 3444 383 837 58 Profit before Depreciation and Tax 4296 339 038 777 9654 Depreciation 2646 547 46 59 48 Profit before Tax and exceptional items 1650 077 7956 553 7506 Exceptional items - expense/(income) (26) (30) (95) (306) — Provision for Current Tax 123 56 6 8 40 Net Profit after Tax 1553 050 7990 8537 705 Provision for Deferred Tax (341) (36) 6 47 (470) Adjustment in respect of prior years - expense/(income) (86) - 8 () Net Profit after taxes and adjustments 1808 0,88 7806 73 7577 Total Income 2008-2009 Total Expenditure 2008-2009 Break-up of Total Income Break-up of Total Expenditure Rs. Lac Rs. Lac Materials 56573 Staff Costs 893 Chemicals 7789 Depreciation 646 Interest 6085 Vegoils 866 Estate 354 Other Operating 88 Finance & Investment 4705 Expenses Others 584 97128 95478 4 Annual Report 2008–2009 NOTICE TO SHAREHOLDERS NOTICE is hereby given that the TWENTY-FIRST ANNUAL GENERAL MEETING of the members of GODREJ INDUSTRIES LIMITED will be held on Wednesday, July 9, 009 at 4.30 P.M. at Y B Chavan Centre, Nariman Point, Mumbai – 400 0, to transact the following business:- ORDINARY BUSINESS: 1. To consider and adopt the Audited Profit & Loss Account and Cash Flow Statement for the year ended March 31, 2009, the Balance Sheet as at that date, the Auditors’ Report thereon, the Directors’ Report along with Management Discussion and Analysis Report and the Statement of Corporate Governance. 2. To declare dividend for the financial year ended March 31, 2009. 3. To appoint a Director in place of Mr. J.N. Godrej, who retires by rotation and being eligible, offers himself for reappointment.