INNOVATING FOR A
BRIGHTER FUTURE. www.godrejinds.com G O D R E J
I N D U S T R I E S
L T D.
File : GIL Annual Report10 Pg 9-26 / Size: Close Size: 20.3cm(w)x26cm(h)
GODREJ INDUSTRIES LIMITED
Annual Report 2009–2010
GODREJ INDUSTRIES LIMITED DIRECTORS A.B. Godrej
Chairman
J.N. Godrej N.B. Godrej
Managing Director
S.A. Ahmadullah J.S. Bilimoria A.B. Choudhury V.M. Crishna K.K. Dastur N.D. Forbes V.N. Gogate K.N. Petigara F.P. Sarkari T.A. Dubash
Executive Director & President (Marketing)
M. Eipe
Executive Director & President (Chemicals)
COMPANY SECRETARY V. Srinivasan
AUDITORS Kalyaniwalla & Mistry, Chartered Accountants
1
REGISTERED OFFICE
FACTORIES
:
:
Vikhroli
Valia (DTA & EOU)
CONTENTS
Wadala
Page Nos.
Chairman’s Statement .............................. 03 Financial Highlights .................................. 04 Notice ................................................. 05 Directors’ Report along with Management
BRANCHES
:
Delhi
Report on Corporate Governance ................. 24 Kolkata
Auditors’ Report...................................... 33 Standalone Accounts ................................ 36 Consolidated Accounts .............................. 66
London
Statement Pursuant to Section 212............... 88 SUBSIDIARIES Godrej Agrovet Limited ............................. 92
BANKERS
:
Central Bank of India State Bank of India Bank of India HDFC Bank Ltd. Citibank N.A. Hong Kong and Shanghai Banking Corp. Ltd. DBS Bank Ltd. IDBI Bank Ltd.
REGISTRARS & TRANSFER AGEN T
:
Computech Sharecap Ltd. 147, Mahatma Gandhi Road, Opp. Jehangir Art Gallery, Fort, Mumbai 400 001. Phone : 022 - 2263 5000 to 2263 5002 Fax : 022 - 2263 5001 e-Mail : helpdesk@computechsharecap.com
Golden Feed Products Limited ................... 108 Godrej Oil Palm Limited ........................... 112 Cauvery Palm Oil Limited ......................... 119 Natures Basket Limited ............................ 126 Ensemble Holdings & Finance Limited .......... 133 Godrej Properties Limited ......................... 139 Godrej Realty Private Limited .................... 152 Godrej Real Estate Private Limited .............. 156 Godrej Developers Private Limited .............. 160 Godrej Seaview Properties Private Limited .... 164 Happy Highrises Limited ........................... 168 Godrej Waterside Properties Limited............ 172 Godrej Estate Developers Private Limited ..... 176 Godrej International Limited ..................... 180
2
Pirojshanagar, Eastern Express Highway, Vikhroli (East), Mumbai 400 079. Phone : 022-2518 8010, 2518 8020, 2518 8030 Fax : 022-2518 8066, 2518 8064 Burjorjinagar, Plot No. 3, Village Kanearo, Taluka - Valia, District Bharuch, Gujarat 393 135. Phone : 02643 - 270756 to 270760 Fax : 02643 - 270018 L.M. Nadkarni Marg, Near M.P.T. Hospital, Wadala (East), Mumbai 400 037. Phone : 022 - 2415 4816, 2414 8770 Fax : 022 - 2414 6204 4th Floor, Delite Theatre Building, 4/1, Asaf Ali Road, New Delhi 110 002. Phone : 011 - 2326 1066 Fax : 011 - 2326 1088 Block GN, Sector - V, Salt Lake City, Kolkata 700 091. Phone : 033 - 2357 3555 Fax : 033 - 2357 3945 284A, Chase Road, Southgate, London N14 - 6HF., UK Phone : (004420) - 88860145 Fax : (004420) - 88869424
Discussion and Analysis Report .................... 11 Shareholders’ Information .......................... 31
Pirojshanagar, Eastern Express Highway, Vikhroli (East), Mumbai 400 079. Phone : 022-2518 8010, 2518 8020, 2518 8030 Fax : 022-2518 8074, 2518 8066 website : www.godrejinds.com
Annual Report 2009–2010
CHAIRMAN’S STATEMENT Dear Shareholders, D It is my pleasure to write to you following a positive year that began in recovery from the g global economic crisis and turned into a good year for Godrej Industries. During the economic d downturn, we focused on various initiatives to improve our operational efficiencies and de-risk o our portfolio. These initiatives have enabled us to reinvent our processes and reinvigorate o our business and we expect to reap benefits in this current growth cycle. O Our diversified business model is unique with interests in the form of operating businesses, ssubsidiaries, joint ventures and investments. This variety allows our shareholders to partake in growth in our entire range of businesses, including oleo-chemicals, agriculture, real estate, cconsumer products, and foods. These sectors are essential parts of the Indian economy, and with growth in the Indian economy now in full swing, these are very exciting times at Godrej. We have always laid strong emphasis on green and environmentally friendly business practices, which in turn have lead to strong advantages and dividends. We have maintained our position as market leaders in the Indian oleo-chemicals and surfactants space. Our chemical business had healthy profit margins this year due to consistently strong demand and normalized raw material prices. In addition, we have significantly improved efficiencies and reduced costs in the division, which will yield results in the years to come. Results from the agri and palm oil business have been especially encouraging and we anticipate these businesses to be among the most impressive growth drivers going forward. There has been considerable growth in the consumer and healthcare business due to high consumer demand for our products across the country. The Godrej brand reaches over 470 million consumers daily and our business always strives to exceed our customers’ changing expectations. Our property development business was successfully listed on the stock exchanges this year and we have projects under construction in several cities across India. There is tremendous demand for residential housing, and affordable housing is an area of particular interest. We expect a housing boom in the next decade, supported by robust economic progress and readily available mortgages. We will harness this potential by continuing to cater to this need and anticipate very aggressive growth for our property development business. The downturn challenged us at Godrej, but we viewed it as an opportunity to evaluate our operations to energize ourselves and our businesses. We focused on initiatives that would enable us to be a company of the future. We have worked on redefining the Godrej brand to strengthen brand unity across our broad range of businesses. We reinforced our commitment to innovation, adding technology while improving efficiency to processes that uphold our high quality standards while sustaining product affordability. Godrej has over a century of industry experience and is one of the most trusted business houses in India. Our management practices and code of conduct have ensured good governance across our businesses. In line with our corporate values, we renewed our responsibility to create social capital by implementing initiatives to improve and create social awareness on issues like disability rights, healthcare, education, environmental issues, and social welfare. Our high standards are present throughout the group’s various businesses and ensure our dedication to our shareholders, business partners, and employees. We hope to continually improve our businesses and envision an even brighter future for Godrej. I appreciate our employees for their outstanding contribution, our business partners, vendors, business associates as well as the Central and State Governments for their support. I would also like to thank our shareholders for their sustained encouragement and support. Yours faithfully, Adi Godrej Chairman 3
FINANCIAL HIGHLIGHTS (Rs. Lac) 2009-10
2008-09
2007-08
2006-07
2005-06
2004-05
BALANCE SHEET SOURCES OF FUNDS : Shareholders’ Funds 3,176.25
3,197.59
3,197.59
2,918.52
2,919.00
2,919.00
Reserves & Surplus
Share Capital
99,093.36
99,514.61
102,644.47
38,142.56
34,217.00
30,618.00
Secured Loans
20,418.89
23,282.16
24,948.07
33,092.48
24,910.00
22,075.00
Unsecured Loans
34,342.14
36,814.31
18,618.92
13,677.13
7,803.00
3,557.00
3,198.20
3,278.20
3,619.20
3,980.00
3,818.00
2,502.00
160,228.84
166,086.87
153,028.25
91,810.69
73,667.00
61,671.00
Fixed Assets
29,828.78
28,870.84
27,142.37
28,704.33
28,594.00
25,100.00
Investments
114,761.99
114,808.02
77,548.43
48,566.78
37,135.00
33,577.00
15,638.07
22,022.14
47,269.56
12,937.47
5,719.00
2,868.00
-
385.87
1,067.89
1,602.11
2,219.00
126.00
160,228.84
166,086.87
153,028.25
91,810.69
73,667.00
61,671.00
99,169.73
97,148.32
83,881.74
78,291.22
80,270.00
82,353.00
Deferred Tax Liability APPLICATION OF FUNDS :
Net Working Capital Miscellaneous Expenditure INCOME AND PROFIT Total Income Expenditure other than Interest and Depreciation
82,306.87
86,745.94
67,119.44
64,077.98
69,661.00
70,117.00
Profit before Interest, Depreciation and Tax
16,862.86
10,402.38
16,762.30
14,213.24
10,609.00
12,236.00
Interest (net)
6,024.79
6,106.12
3,443.74
3,830.78
2,837.00
2,582.00
10,838.07
4,296.26
13,318.56
10,382.46
7,772.00
9,654.00
Depreciation
2,838.80
2,646.19
2,547.00
2,426.36
2,259.00
2,148.00
Profit before Tax and exceptional items
7,999.27
1,650.07
10,771.56
7,956.10
5,513.00
7,506.00
-
26.00
310.28
94.75
3,510.80
-
Profit before Depreciation and Tax
Exceptional items - (expense)/income Provision for Current Tax Net Profit after Tax Provision for Deferred Tax
(13.47)
123.27
561.87
82.77
545.16
401.00
8,012.74
1,552.80
10,519.97
7,968.08
8,478.64
7,105.00
(80.00)
(341.00)
(361.00)
162.00
1,316.00
(470.00)
Adjustment in respect of prior years - (expense)/income Net Profit after taxes and adjustments
-
(86.11)
-
-
50.08
2.00
8,092.74
1,807.69
10,880.97
7,806.08
7,112.56
7,577.00
Total Expenditure 2009-2010
Total Income 2009-2010 Break-up of Total Income Rs. Lac
Chemicals Estate
78,123.55 2,775.39
Finance & Investment 17,081.77
Others
1,189.02 99,169.73
Break-up of Total Expenditure Rs. Lac Materials
51,680.87
Staff Costs
10,582.61
Depreciation
2,838.80
Interest
6,024.79
Other Operating Expenses
20,043.39 91,170.46
4
Annual Report 2009–2010
NOTICE TO SHAREHOLDERS NOTICE is hereby given that the TWENTY-SECOND ANNUAL GENERAL MEETING of the members of GODREJ INDUSTRIES LIMITED will be held on Tuesday, July 27, 2010 at 4.30 P.M. at Y B Chavan Centre, Nariman Point, Mumbai – 400 021, 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, 2010, 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, 2010. 3. To appoint a Director in place of Mr. F.P. Sarkari, who retires by rotation and being eligible, offers himself for reappointment. 4. To appoint a Director in place of Mr. S.A. Ahmadullah, who retires by rotation and being eligible, offers himself for reappointment. 5. To appoint a Director in place of Mr. A.B. Godrej, who retires by rotation and being eligible, offers himself for reappointment. 6. To appoint a Director in place of Mr. K.K. Dastur, who retires by rotation and being elgible, offers himself for reappointment. 7. To appoint Auditors to hold office from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting, and to authorize the Board of Directors of the Company to fix their remuneration. M/s. Kalyaniwalla & Mistry, Chartered Accountants, the retiring Auditors are eligible for reappointment. SPECIAL BUSINESS: To consider and if thought fit, to pass with or without modification(s), the following resolutions :8. Approval for not filling up the vacancy caused by the retirement of Mr. V.N. Gogate as an Ordinary Resolution : RESOLVED THAT pursuant to Section 256 and all other applicable provisions, if any, of the Companies Act, 1956, the vacancy caused by the retirement of Mr. V.N. Gogate who retires by rotation at this Annual General Meeting and who does not seek reappointment be not filled up. 9. Appointment of Mr. A.B. Choudhury as a Director, liable to retire by rotation as an Ordinary Resolution : RESOLVED THAT Mr. A.B. Choudhury, who was appointed by the Board of Directors as an Additional Director with effect from August 5, 2009 and who holds office upto the date of this Annual General Meeting in terms of Section 260 of the Companies Act, 1956 (“the Act”) and is eligible for appointment as Director in terms of Section 258 of the Act, and in respect of whom the Company has received notice under Section 257 of the Act, proposing his candidature for the office of Director of the Company, be and is hereby appointed as a Director of the Company, liable to retire by rotation. 10. Reappointment of and remuneration payable to Mr. N.B. Godrej, Managing Director as a Special Resolution : RESOLVED THAT pursuant to the provisions of Sections 198, 269, 309, 310, Schedule XIII and other applicable provisions, if any, of the Companies Act, 1956, approval of the Company be and is hereby accorded for the reappointment of and terms of remuneration payable to including the remuneration to be paid in the event of loss or inadequacy of profit in any financial year during the tenure of appointment of Mr. N.B. Godrej as Managing Director of the Company, for a period of three years from April 1, 2011 to March 31, 2014 on the terms and conditions as contained in the Agreement to be entered into between the Company and Mr. N.B. Godrej, a draft of which is placed before the meeting and for the purpose of identification,initialled by the Chairman with liberty to the directors/compensation committee to alter and vary the terms and conditions of the said appointment in such manner as may be agreed to between the directors and Mr. N.B. Godrej. 11. Approval to invest in CBay Infotech Ventures Pvt. Ltd. under Section 372A of the Companies Act, 1956 as a Special Resolution: RESOLVED THAT pursuant to Section 372A and all other applicable provisions, if any, of the Companies Act, 1956 (including any statutory modification or re-enactment thereof for the time being in force and as may be enacted from time to time) (hereinafter referred to as ‘the Act’), and/or subject to any other approvals, as may be required, the Company be and is hereby authorised to further invest in securities of CBay Infotech Ventures Pvt. Ltd. (CIVPL) by subscription/ purchase from other shareholders or otherwise in addition to the limits already sanctioned, upto a sum of Rs.2 crore (Rupees Two Crore Only), notwithstanding that the aggregate of the loans and investments so far made in or to be made in and the guarantees so far given or to be given to all bodies corporate, exceed the limits laid down by the Act. RESOLVED FURTHER THAT the Management Committee of the Board of Directors, Mr. A.B. Godrej, Chairman, Mr. N.B. Godrej, Managing Director, Ms. T.A. Dubash, Executive Director & President (Marketing), Mr. M. Eipe, Executive Director & President (Chemicals), Mr. V. Srinivasan, Executive Vice-President (Finance & Estate) & Company Secretary, and Mr. C.G. Pinto, Associate Vice-President (Finance), be and are hereby severally authorised to take from time to time all decisions and steps necessary or 5
expedient or proper in respect of the above investment including the timing, the amount and other terms and conditions of such transactions and also to take all other decisions including varying any of them through recall, renewal, transfer, sale, disinvestment or otherwise, either in part or in full, as it may, in its absolute discretion, deem appropriate, subject to the limits specified above. RESOLVED FURTHER THAT this resolution be valid for a period from the date of approval of the shareholders to March 31, 2014 and that during this period, the limits indicated hereinabove in case of divestment, renewal, transfer or sale of investment as the case may be, be restored to the original sanctioned limit of Rs. 2 crore. By Order of the Board of Directors V. SRINIVASAN Executive Vice-President (Finance & Estate) & Company Secretary Mumbai, May 26, 2010 Registered Office : Pirojshanagar, Eastern Express Highway, Vikhroli (East), Mumbai 400 079. NOTES: 1. The relative Explanatory Statement in respect of business under Item No. 8 to 11 as set out in the Notice is annexed hereto. 2. A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY TO ATTEND AND ON POLL, TO VOTE INSTEAD OF HIMSELF. SUCH A PROXY NEED NOT BE A MEMBER OF THE COMPANY. PROXIES IN ORDER TO BE EFFECTIVE MUST BE RECEIVED BY THE COMPANY NOT LESS THAN 48 HOURS BEFORE THE MEETING. A PROXY SO APPOINTED SHALL NOT HAVE ANY RIGHT TO SPEAK AT THE MEETING. 3. The Register of Members and Share Transfer Books of the Company will be closed from July 20, 2010 to July 27, 2010 (both days inclusive) for ascertaining the names of the shareholders to whom the dividend which, if declared at the Annual General Meeting, is payable. In respect of shares held in electronic form, the dividend will be payable on the basis of beneficial ownership as per details furnished by National Securities Depository Ltd. and Central Depository Services (India) Ltd., for this purpose. 4. Those Members who have so far not encashed their dividend warrants for the below mentioned financial years, may claim or approach the Company for the payment thereof as the same will be transferred to the ‘Investor Education and Protection Fund’ of the Central Government, pursuant to Section 205C of the Companies Act, 1956 on the respective dates mentioned there against. Please note that as per Section 205C of the Companies Act, 1956, no claim shall lie against the Company or the aforesaid Fund in respect of individual amounts which remain unclaimed or unpaid for a period of seven years from the date the dividend became due for payment and no payment shall be made in respect of such claims. Dividend for the Financial Year ended 31.03.2003
Due date for transfer 25.08.2010
31.03.2004
26.07.2011
31.03.2005
26.07.2012
31.03.2006
24.07.2013
31.03.2007
27.07.2014
31.03.2008
29.07.2015
31.03.2009
29.07.2016
5. Members are requested to bring their copy of the Annual Report to the Annual General Meeting. 6. Members are requested to send in their queries at least a week in advance to the Company Secretary at the Registered Office of the Company to facilitate clarifications during the meeting. EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956. Item No. 8 In accordance with Article 127 of the Articles of Association of the Company, Mr. V.N. Gogate retires by rotation at the ensuing Annual General Meeting. In view of his advanced age, Mr. V.N. Gogate, has not offered himself for reappointment. The Board proposes that the vacancy caused by his retirement shall not be filled up. Mr. V.N. Gogate has been on the Board of the Company since 1995 and the Board records its appreciation for the contribution made by him during his tenure with the Company.
6
Annual Report 2009–2010
The Board recommends passing of this resolution. None of the Directors of the Company except Mr. V.N. Gogate, are interested in the resolution. Item No.9 The Board of Directors had on August 4, 2009, appointed Mr. A.B. Choudhury as an Additional Director with effect from August 5, 2009, to hold office till the date of the next Annual General Meeting of the Company. It is proposed to appoint him as Director, liable to retire by rotation. Brief profile of Mr. A.B. Choudhury, in terms of the Listing Agreement, is provided elsewhere in the Notice. The Board recommends passing of this resolution. None of the Directors of the Company except Mr. A.B. Choudhury, are interested in the resolution. Item No.10 Reappointment of and remuneration payable to Mr. N.B. Godrej, Managing Director The tenure of Mr. N.B. Godrej as Managing Director of the Company will expire on March 31, 2011. It is proposed to reappoint Mr. N.B. Godrej for a further period of three years from April 1, 2011 to March 31, 2014. Mr. N.B. Godrej shall perform his duties subject to the superintendence, control and direction of the Board of Directors of the Company. In consideration of the performance of his duties, Mr. N.B. Godrej shall be entitled to receive remuneration as stated hereinbelow :1. Fixed Compensation: Fixed Compensation shall include Basic Salary and the Company’s Contribution to Provident Fund and Gratuity Fund. The Basic Salary shall be in the range of Rs. 7,00,000/- p.m. to Rs. 13,00,000/-p.m. (presently Rs. 5,00,000/- p.m. to Rs. 9,00,000/p.m.). The Basic Salary approved by the Compensation Committee to Managing Director for the year 2010-11 is Rs. 77,22,000 p.a. The Annual Basic Salary and increments will be decided by the Compensation Committee/Board of Directors depending on the performance of the Managing Director, the profitability of the Company and other relevant factors. 2. Performance Linked Variable Remuneration (PLVR): Performance Linked Variable Remuneration according to the Scheme of the Company for each of the financial years as may be decided by the Compensation Committee/Board of Directors of the Company based on Economic Value Added (EVA) in the business and other relevant factors and having regard to the performance of the Managing Director for each year. 3. Flexible Compensation: In addition to the Fixed Compensation and PLVR, the Managing Director shall be entitled to the following allowances, perquisites, benefits, facilities and amenities as per rules of the Company and subject to the relevant provisions of the Companies Act, 1956 (collectively called “perquisites and allowances”). These perquisites and allowances may be granted to the Managing Director in the manner as the Board may decide as per the Rules of the Company. •
Housing (i.e. unfurnished residential accommodation OR House Rent Allowance at 85% of Basic Salary);
•
Furnishing at residence;
•
Supplementary Allowance;
•
Leave Travel Assistance;
•
Payment/reimbursement of domiciliary medical expenses for self and family;
•
Payment/reimbursement of Food Vouchers, fuel reimbursement;
•
Company cars with driver for official use, provision of telephone(s) at residence, payment/reimbursement of expenses there of;
•
Housing Loan, Contingency Loan as per rules of the Company. These loans shall be subject to Central Government approval, if any;
•
Earned/privilege leave, on full pay and allowance, not exceeding 30 days in a financial year. Encashment/accumulation of leave will be permissible in accordance with the Rules specified by the Company. Casual/Sick leave as per the rules of the Company;
•
Such other perquisites and allowances as per the policy/rules of the Company in force and/or as may be approved by the Board from time to time.
The maximum cost to the Company per annum for the aggregate of the allowances listed above for the Managing Director shall be Rs. 60,00,000/- p.a. (Presently Rs. 26,40,000/-) plus car (including driver salary, fuel, maintenance and other incidental expenses) plus housing (i.e. furnished residential accommodation cost of which shall be at actuals OR House Rent Allowance at 85% of the basic salary). In addition to the above, the Managing Director shall be eligible to encashment of leave, club facilities, group insurance cover, group hospitalisation cover and/or any other allowances, perquisites and facilities as per the rules of the Company.
7
Explanation: i)
For the Leave Travel Assistance and reimbursement of medical and hospitalisation expenses, ‘family’ means the spouse, dependent children and dependent parents.
ii) Perquisites shall be evaluated at actual cost or if the cost is not ascertainable the same shall be valued as per Income Tax Rules. 4. Overall Remuneration: The aggregate of salary and perquisites as specified above or paid additionally in accordance with the rules of the Company in any financial year, which the Board in its absolute discretion pay to the Managing Director from time to time, shall not exceed the limits prescribed from time to time under Sections 198, 309 and other applicable provisions of the Companies Act, 1956 read with Schedule XIII to the said Act as may for the time being, be in force, unless approved by the Central Government. 5. Loans: (a) Granting of loans according to Company’s Scheme subject to Central Government’s approval, if applicable. (b) Continuation of Loans, if already availed. Notes : I.
Unless otherwise stipulated, for the purpose of the above, the perquisites shall be evaluated as per Income Tax Rules wherever actual cost cannot be determined.
II. Notwithstanding the foregoing, where in any Financial Year during the currency of the tenure of the Managing Director, the Company has no profits or its profits are inadequate, the remuneration by way of salary, commission and perquisites shall not exceed, the maximum limits prescribed in Schedule XIII to the Companies Act, 1956, except with the approval of the Central Government. III. The limits specified above are the maximum limits and the Compensation Committee / Board may in its absolute discretion pay to the Managing Director lower remuneration and revise the same from time to time within the maximum limits stipulated above. IV. In the event of any re-enactment or re-codification of the Companies Act, 1956 or the Income Tax Act, 1961 or amendments thereto, the foregoing shall continue to remain in force and the reference to various provisions of the Companies Act, 1956 or the Income Tax Act, 1961 shall be deemed to be substituted by the corresponding provisions of the new Act or the amendments thereto or the Rules and notifications issued thereunder. V.
If at any time the Managing Director ceases to be in the employment of the Company for any cause whatsoever, he shall cease to be the Managing Director of the Company.
VI. The Managing Director is appointed by virtue of his employment in the Company and his appointment is subject to the provisions of Section 283(1) of the Companies Act, 1956. The appointment is terminable by giving three months’ notice in writing on either side. Mr. N.B. Godrej, may be deemed to be interested in the resolution at item no.10. Mr. A.B. Godrej, being relative of Mr. N.B. Godrej, may be deemed to be interested in the resolution. None of the other Diretors are interested in the resolution. Item No.11 Particulars of the Company where investment is proposed: Name & Regd. Office of the Company
Investment as on date in Rs. Crore and % of existing holding
CBay Infotech 1.00 Ventures Pvt. Ltd. (8%) Godrej Industries Complex, Gate No. 4, Pirojshanagar, Eastern Express Highway, Vikhroli (East), Mumbai – 400 079.
8
Amount of proposed investment
Principal business of the Company
Purpose of investment
Source of funds
Nature of Concern/ interest of Directors
Development of IT Park, IT and ITES, Software Development, BPO activities
A good investment opportunity
Internal sources/ borrowings
None of the Directors are interested in the resolution.
(Rs. Crore) 2.00
Annual Report 2009–2010
Brief Resume of Directors seeking appointment/reappointment at this Annual General Meeting (in pursuance of Clause 49 of the Listing Agreement) Name of the Director Age Nationality Date of appointment on the Board Shareholding in the company Qualification(s)
Mr. F.P. Sarkari
Mr. A.B. Godrej
Mr. K.K. Dastur
Mr. A.B. Choudhury Mr. N.B. Godrej
78 Indian 30-01-2002
Mr. S.A. Ahmadullah 70 Indian 03-01-1995
68 Indian 07-03-1988
68 Indian 01-04-2001
67 Indian 05-08-2009
58 Indian 07-03-1988
20,000
6,000
Nil
3,606
Nil
12,20,572
F.C.A.
B.A. (Cantab.)
B.S., M.S. from Massachusetts Institute of Technology, U.S.A.
B.Com., A.C.A.
Masters in B.S.from Economics and MMS Massachusetts from JBIMS Institute of Technology, U.S.A. M.S. in Chem. Engg., Stanford University. MBA, Harvard Business School. Expertise in specific Finance Marketing Engineering and Finance and Marketing, General Engineering and functional area and General Management Accounts Management and Management Management Real Estate Godrej Infotech Ltd. Wadala Godrej Consumer Directorships held in Godrej & Boyce Mfg. Globe Theatres Godrej Agrovet Ltd. Commodities Ltd. Products Ltd. other companies Co. Ltd. Private Ltd. Oil Field Godrej Tyson Foods Godrej Agrovet Ltd. Ltd. Godrej Hershey Ltd. Instrumentation Tropicana Enterprise Nadir Company (India) Ltd. Pvt. Ltd. Private Ltd. Swadeshi Detergents Godrej Oil Palm Ltd. Godrej Sara Lee Ltd. Cartini India Ltd. Ltd. Motorsports Godrej & Boyce Mfg. Association of India Swadeshi Detergents Wadala Godrej Properties Co Ltd. Commodities Ltd. Ltd. Ltd. Godrej Properties Netel (India) Ltd. Vora Soaps Ltd. Ltd. Vora Soaps Ltd. Transwarranty Godrej Properties Godrej Consumer Godrej Waterside Finance Ltd. Ltd. Properties Pvt. Ltd. Products Ltd. Godrej Hygiene Mahindra & Products Ltd. Mahindra Ltd. Nutrine Godrej Sara Lee Confectionery Ltd. Company Ltd. KarROX Godrej & Boyce Mfg. Technologies Ltd. Co. Ltd. Godrej Gold Coin Godrej Agrovet Ltd. Aquafeed Ltd. Godrej Investments The Indian Hotels Pvt. Ltd. Co.Ltd. Godrej Consumer Tata Teleservices Products (UK) Ltd. (Mah.) Ltd. Keyline Brands Ltd. Cauvery Palm Oil Ltd. Rapidol (Pty) Ltd. Godrej International Godrej International Ltd. Ltd. Godrej Global Mid Godrej Global Mid East FZE, East FZE ACI Godrej Godrej Consumer Agrovet Pvt. Ltd., Products Mauritius Bangladesh. Ltd. Keyline Brands Ltd. Godrej Kinky Rapidol (Pty) Ltd. Products Holdings Poultry Processors Ltd. Association of India Godrej Consumer (Chairman). Products Holding (Mauritius) Ltd. Godrej Nigeria Holdings Ltd. Indian School of Business, Member of the Executive Board
9
Name of the Director Chairmanships/ Memberships of committees in other companies
Mr. F.P. Sarkari Godrej & Boyce Mfg. Co. Ltd.: Chairman of Audit Committee Chairman of Remuneration Committee
Mr. S.A. Ahmadullah Nil
Mr. A.B. Godrej
Mr. K.K. Dastur
Mr. A.B. Choudhury Mr. N.B. Godrej
Godrej Consumer Products Ltd.: Member of Shareholders Committee Godrej Sara Lee Ltd.: Chairman of Audit Committee Godrej Hershey Ltd.: Chairman of Audit Committee Godrej Properties Ltd.: Chairman of Investors’ Grievance Cum Share Transfer Committee
Wadala Commodities Ltd.: Chairman of Audit Committee Chairman of Remuneration Committee Oil Field Instrumentation (India) Ltd.: Chairman of Audit Committee Netel (India) Ltd.: Chairman of Audit Committee Transwarranty Finance Ltd.: Member of Audit Committee
Wadala Commodities Ltd.: Member of Shareholder’s Committee Member of Audit Committee Godrej Properties Ltd.: Member of Audit Committee Member of Investors Grievance Committee
Godrej Consumer Products Ltd.: Chairman of Shareholders Committee Godrej Sara Lee Ltd.: Member of Audit Committee Mahindra & Mahindra Ltd.: Member of Audit Committee
By Order of the Board of Directors V. SRINIVASAN Executive Vice-President (Finance & Estate) & Company Secretary Mumbai, May 26, 2010 Registered Office : Pirojshanagar, Eastern Express Highway, Vikhroli (East), Mumbai 400 079.
10
Annual Report 2009–2010
DIRECTORS’ REPORT
MANAGEMENT DISCUSSION AND ANALYSIS
To the Shareholders, Your Directors have pleasure in submitting the Annual Report along with the Audited Accounts for the year ended March 31, 2010. REVIEW OF OPERATIONS Your Company’s performance during the year as compared with that during the previous year is summarized below. Rs. Crore
Sales of products and services Other Income Total Income Total Expenditure other than Interest and Depreciation Profit before Interest, Depreciation and Tax Depreciation Profit before Interest and Tax Interest and Financial Charges (net) Profit before Tax Provision for Current Tax Profit after Current Tax Provision for Deferred Tax Profit after Current and Deferred Taxation Profit on sale of undertaking (extraordinary item, net of tax) Net Profit Adjustments in respect of prior years Surplus brought forward (after adjusting excess provision for dividend & tax on distributed profit) Profit after Tax available for appropriation Appropriation Your Directors recommend appropriation as under: Dividend on Equity Shares Tax on distributed profits Transfer to General Reserve Surplus Carried Forward Total Appropriation
Year ended March 31, 2010 2009 816.37 817.45 175.33 154.03 991.70 971.48 823.07
867.46
168.63 28.39 140.24 60.25 79.99 (0.14) 80.13 (0.80) 80.93
104.02 26.46 77.56 61.06 16.50 1.23 15.27 (3.41) 18.68
– 80.93 –
0.26 18.94 (0.86)
294.18
324.37
375.11
342.45
47.65 7.91 8.09 311.46 375.11
39.97 6.79 1.81 293.88 342.45
The total income increased by Rs. 20.22 crore from Rs. 971.48 crore to Rs. 991.70 crore. The Net Profit for the year was Rs. 80.93 crore as compared to Rs.18.94 crore in the previous year. DIVIDEND The Board of Directors of your Company recommends a final dividend of Rs. 1.50 per equity share of Re. 1/- each, aggregating Rs. 47.65 crore (previous year Rs. 1.25 per equity share).
There is a separate section on Management Discussion and Analysis appended as Annexure A to this Report, which includes the following: • Industry Structure and Developments • Discussion on financial performance with respect to operational performance • Segmentwise performance • Human Resources and Industrial Relations • Opportunities and Threats • Internal Control Systems and their adequacy • Risks and Concerns • Outlook SUBSIDIARY, ASSOCIATE AND JOINT VENTURE COMPANIES Your Company has interests in several industries including animal feeds, poultry and agro-products, oil palm plantation, property development, personal and home care, beverages and confectionery, etc. through its subsidiary / associate / joint venture companies. Godrej Agrovet Limited (GAVL): The turnover of GAVL increased from Rs. 1,283.46 crore to Rs. 1,391.60 crore, an 8% increase over the previous year. The Profit after tax but before extra ordinary income increased from Rs. 13.32 crore to Rs. 21.71 crore. The year under review saw the core businesses of Animal Feeds and Agri Inputs returning an extremely good performance, both in revenue and profit. The Animal Feed business recorded a growth of 16% in revenue and 31% in profit. The profitability grew due to expansion of contribution margins and control over fixed overheads. The expansion of contribution margins was possible due to efficient sourcing, improved formulation and successful R & D efforts. The Agricultural Inputs business grew by 19% in revenue and 22% in profitability. This success is even more impressive in the light of a failed monsoon and drought conditions that followed. The sales growth was fuelled by innovative products from in-house R & D in addition to growth in the more commoditised pesticides and Organic Manure Mixture. GAVL enjoyed significantly lower borrowing costs on account of efficient treasury management. GAVL also successfully implemented SAP in its Animal Feed business and the implementation has started yielding significant business benefits. During the year, GAVL transferred its entire shareholding in Natures Basket Limited (NBL) to your Company. GAVL continues to be the holding Company of Godrej Oil Palm Limited (GOPL), Cauvery Palm Oil Limited (CPOL) and Golden Feed Products Limited (GFPL). Godrej Properties Limited (GPL): During the year 2009–10, GPL entered the capital market with an Initial Public Offer (IPO) of 9,429,750 equity shares of Rs. 10/- each, through 100% Book Building Process wherein 7,732,405 equity shares were allotted to the subscribers, at a premium of Rs. 480/- per share and 1,697,345 equity shares were allotted to certain Anchor Investors at a premium of Rs. 520/- per share. The issue was subscribed about 3.6 times. GPL shares were listed on the Bombay Stock Exchange Limited and National Stock Exchange of India Limited on January 5, 2010. 11
GPL posted a total revenue of Rs. 313.43 crore for the year ended March 31, 2010 from Rs. 255.52 crore for the year ended March 31, 2009, thereby a growth of 23% over last year. The net profit grew by 62% at Rs. 124.19 crore for the year ended March 31, 2010 from Rs. 76.62 crore for the year ended March 31, 2009. During the year, GPL successfully completed several projects, most notably the 1st Phase of Godrej Waterside - commercial project in Kolkata, Godrej Woodsman Estate - a residential project in Bangalore and Godrej Coliseum in Mumbai. At the end of 2009-10, the completed developed area of GPL stood at 7.55 mn sq. ft. compared to 3.63 mn sq. ft. in 2008-09. During the year GPL successfully launched mid-income residential projects in Ahmedabad and Kolkata and it commenced operations in Chandigarh, Chennai and Mangalore. GPL launched a state-of-the art township project, Godrej Garden City in Ahmedabad in March 2010. It is one amongst 16 founding projects of the Climate Positive Development Program, a Clinton Climate Initiative (CCI) program that will support the development of large-scale urban projects that demonstrate cities can grow in ways that are “Climate Positive.” Climate Positive real estate developments will strive to reduce the amount of on-site CO2 emissions to below zero. The project received an overwhelming response, the first phase has been entirely booked within 10 days of its launch. Godrej International Limited (GINL): GINL trades worldwide in vegetable oils. GINL’s turnover increased by about 4% to US$ 120.27 million from US$ 115.50 million whilst profits increased by about 11% to US$ 1.53 million from US$ 1.38 million. The company improved its turnover and profits despite difficult markets and lower unit value of vegetable oils. As the world economy recovers, the company should continue to do well. Godrej Hershey Limited (GHL): Your Company holds a 43.4% stake in GHL. During the year under review, beverages grew 8% over the previous year and chocolate syrup grew 82% over the previous year. The gross margin was under pressure due to unprecedented rise in commodity prices particularly, sugar, glucose and dairy products. There were some major cost saving projects undertaken that yielded benefits during this year. Nutrine Confectionery Company Limited (NCCL): NCCL, a 100% subsidiary of GHL, is a major player in confectionery business in India. Its product portfolio includes strong brands such as MahaLacto, Nutrine Eclairs, Koko Naka, Honey Fab, Aam Ras, Aasay, SuperStar and Gulkand. Nutrine Lollipop was re-launched with an innovative packaging that provided the much needed momentum to the brand thereby doubling its sales. Nutrine Froot Shoot was re-launched with a modern and contemporary packaging to appeal more to the kids and upgrade the brand to justify Rs. 2/- price point. Nutrine Chatkeeli Imli was launched in Q4 which marked the move of GHL into spicy / tangy segment of fruit candies. This market contributes to about 30% of fruit confectionary and is growing at a very healthy rate. For the first time, a customer relationship program was held for Maha Lacto in which over 2,000 channel partners were invited in a ‘Meet & Greet’ Dhoni event. This was held in Chennai and turned out to be a huge hit with the wholesalers and distributors who participated in the same. Apart from this, a consumer promotion was launched in which kids were invited to meet their idol – M.S. Dhoni. This promotion 12
saw an overwhelming response in key states leading to a jump in sales post the event. Godrej Consumer Products Limited (GCPL): GCPL is one of the leading companies in the FMCG sector with a presence in the Personal and Household Care business. During the year under review the company has endeavored to build on its strong foundation and to create an even stronger future. The year has seen the introduction of many new products combined with several other growth initiatives which included a focused expansion into the rural and interior regions. GCPL’s new product introductions span all the company’s categories comprising soaps, hair colourants, toiletries and a new range of hand hygiene products. All these launches have been after a rigorous amount of research and interaction with the target consumer. In the soaps business GCPL introduced two new variants of Godrej No. 1 namely ‘Lime and Aloe Vera’ and ‘Moisturising soap’ with nourishment of Milk Cream & Almonds. With this the Godrej No. 1 portfolio now comprises nine variants. Godrej No. 1 is one of the three chosen power brands of GCPL and is today valued at over Rs. 500 crore. During the year, Godrej No. 1 maintained its leadership position in the States of Uttaranchal, Punjab, Himachal, and Gujarat and has emerged as the leader in Uttar Pradesh as well. In the hair colourants business, GCPL re-launched its ‘Godrej Expert Hair colour’ brand during the year. This is GCPL’s power brand. Godrej Expert Colour is now available in liquid form as well as powder form. In Renew brand, GCPL launched Godrej Renew’s Ravishing Reds Collection with two new shades, Wine Red and Plum Crazy. Both these new launches have been very well liked. GCPL’s international operations too performed encouragingly especially on the back of the ‘One Africa’ program which enabled it to derive numerous synergies across the continent and thereby strengthen GCPL’s presence. Keyline brands’ key offerings, namely the ‘Cuticura’ Hand Hygiene range, ‘Bio-oil’, P20 performed strongly. In South Africa ‘Inecto’ Powder Hair Colours have been relaunched. ‘Cuticura’ Hand Hygiene range, Godrej Expert Hair Colour and Godrej Nupur Mehendi were launched in the GCC and the Middle East in the current year. GCPL acquired 49% stake in Godrej Sara Lee Limited (GSLL), an unlisted joint venture between the Godrej Group and Sara Lee Corporation USA earlier during the year. Subsequently in, May 2010 it entered into an agreement to acquire the remaining 51% stake. GSLL has a range of products that are complementary to GCPL’s existing offerings and there is significant potential to derive synergies from the combined operations. GCPL has also been able to acquire strong, local, personal and household care brand in key emerging markets. It has acquired Megasari, a leading FMCG player in household care sector in Indonesia and has agreed to acquire Tura, a leading personal care player in Nigeria. Financial Performance of GCPL On a consolidated basis, GCPL registered a net income of Rs. 2,088.50 crore as compared to Rs. 1,433.13 crore in the previous year and GCPL’s profit after tax increased by 96% from Rs. 173.26 crore in the previous year to Rs. 339.59 crore in the current year. GCPL has paid a total dividend at the rate of Rs. 4.25 per equity share of face value Re. 1. Godrej Hygiene Care Limited (GHCL) The Board of Directors of your Company, at its meeting held in May 2009, approved a scheme for the merger of GHCL a 100% subsidiary of your Company, into Godrej Consumer Products Limited (GCPL).
Annual Report 2009–2010
The scheme has been approved by the Hon’able High Court, Bombay in October 2009. The Appointed date of the merger is June 1, 2009 and the assets and liabilities of GHCL stands transferred to and vested in GCPL from that date. Pursuant to the said scheme of arrangement, 51,07,125 equity shares held by GHCL in Godrej Sara Lee Limited, stood transferred to and vested in GCPL and your Company received 209,39,409 equity shares of GCPL in lieu thereof as per the terms of the Scheme of Arrangement. 25% of these shares are locked in till November 2012. FINANCIAL POSITION The financial position of your company continues to be sound. The loan funds at the end of the year stand at Rs. 547.61 crore as compared to Rs. 600.96 crore at the end of the previous year. The debt equity ratio is 0.52 as compared to 0.57 last year. Your Company continues to hold the topmost rating of A1+ from ICRA for its commercial paper program (Rs. 140 crore) (enhanced from Rs. 100 crore). ICRA has also assigned an A1+ rating for its short term debt instruments/other banking facilities (Rs. 595 crore) (enhanced from Rs. 570 crore). This rating of ICRA represents highest-credit quality carrying lowest-credit risk. ICRA also assigned LAA rating for long-term debt, working capital and other banking facilities (Rs. 370 crore) (enhanced from Rs. 330 crore). This rating represents high-credit quality carrying lowcredit risk. MANUFACTURING FACILITIES The Chemicals Division of your Company has manufacturing facilities at Vikhroli and Valia. Effective January 1, 2010, leadership across both the factories has been integrated with one head for manufacturing and engineering services. Vikhroli: Vikhroli factory has successfully implemented OHSAS 18001: 2007 standards last year. Post implementation of OHSAS 18001: 2007, surveillance audit of the Integrated Management System (Quality Management Systems-ISO 9001:2000, Environment Management Systems-ISO 14001:2004 and Occupational Health & Safety Assessment SeriesOHSAS 18001:2007), was conducted by Bureau Veritas. The factory has been re-certified for the Integrated Management System in which ISO 9001:2000 has been upgraded to ISO 9001:2008 standards during last year. Valia: Valia factory has successfully recertified for ISO-14001:2004 & ISO-9001:2008 upgradation after surveillance audit conducted by Bureau Veritas to check the effectiveness and improvements under the system and on environment and quality front. The factory is recommended for continuation of both certificates. This factory has successfully implemented cost effective separation of C8, C10, C12 and C14 alcohols. Vegoils Division: This Division continues as a contract processor of edible oils and vanaspati. The division recorded a turnover of Rs. 2.44 crore as against Rs. 2.45 crore in the previous year. RESEARCH AND DEVELOPMENT Activities have been initiated to develop new process/modify existing processes for the manufacturing of premium quality fatty acids from economy grade raw materials for high value
fractionated fatty acids for the polymer, oilfield and lubricant industries. Parallel to these activities, the R&D department has taken up initiatives to develop customers for specialty surfactants and glycerin for oral care and personal care products to meet their specific needs. INFORMATION SYSTEMS Your Company had entered into a strategic alliance with Hewlett Packard (HP) for a comprehensive IT outsourcing and transformation project. The transition to HP services has been smooth and without any disruption to business operations. The customer relationship management package (eCRM) has been re-launched on the robust SAP platform. The domestic portal, named Rishta has been rolled out to 150 plus customers. The international eCRM was launched in February 2010 and already has 50 plus key customers. EMPLOYEE STOCK OPTION PLAN (ESOP): During the financial year 2009-10, 20 employees of the Company were granted ESOPs based on their leadership responsibility and potential: Date of Grant of ESOP August 10, 2009
No. of ESOP 8,60,000
No. of employees 20
Disclosure in compliance with clause 12 of the Securities and Exchange Board of India (Employees Stock Purchase Scheme) Guidelines, 1999 is given in Annexure B attached and forms a part of this report. GROUP FOR INTERSE TRANSFER OF SHARES As required under Clause 3(1) (e) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, persons constituting Group (within the meaning as defined in the Monopolies and Restrictive Trade Practices Act, 1969) for the purpose of availing exemption from applicability of the provisions of Regulation 10 to 12 of the aforesaid SEBI Regulations are given in Annexure C attached herewith and forms a part of this Report. HUMAN RESOURCE DEVELOPMENT AND INDUSTRIAL RELATIONS Your Company encourages a culture that develops and empowers people, promotes team building, nurtures new ideas and uses information technology to support HR processes and initiatives. These efforts were recently recognized when the Company received an award for “Excellence in HR through Technology” at the World HRD Congress held in Mumbai on February 13, 2010. Your Company has always emphasized on quality and its employees are encouraged to get involved in the never-ending process of improving quality through Total Quality Management and quality circles. Two quality circles from the Vikhroli Factory of the Company were recognized as “Excellent Quality Circles” by the Quality Circle Forum of India in the 23rd National Convention on Quality Circles held in Bangalore from 19–21 December 2009. Industrial relations at all plant locations remained harmonious. Regular structured safety meetings were held with employees and safety programmes were conducted for them throughout the year. Inclusiveness It has been the endeavour of your Company to provide opportunities to socially and economically underprivileged persons, particularly those belonging to Scheduled Castes / Scheduled Tribes and physically challenged individuals. Your Company supports 13
underprivileged children for education through scholarships and mid-day meal programs at the school level. Your Company gave permanent employment to five physically challenged persons. CORPORATE SOCIAL RESPONSIBILITY Your Company as part of the Godrej group aims to build a brighter, more sustainable India. During the year your Company undertook various activities as a part of its Corporate Social Responsibility. Your Company instituted the Indian chapter of ‘Table For Two’ initiative at the World Economic Forum’s India Summit in December last year. This initiative was targeted at addressing hunger and malnutrition in the developing world by combining our organization’s tradition of serving society and your individual involvement. Your Company continues to support Heroes AIDS Project (HAP). HAP is a national HIV/AIDS initiative launched in July 2004 to work with media organizations and societal leaders in India. It seeks to develop coordinated campaigns to address the spread of HIV/AIDS and reduce stigma and discrimination by influencing public perception and policy through two platforms, advocacy and communications. Under the Teach for India initiative, your Company has sponsored one Company employee for a period of 2 years under Teach for India Fellowship program which is run by Teach for India, an organization established in 2008 to bridge the educational divide and increase the participation of highly skilled leaders in the education sector of India. Under this program, the sponsored employee is committed to teach for two years in low-income urban and rural public schools. During the year, your Company donated fly catcher machines through Lions Club to various hospitals, orphanages, old age homes, home for blind, BMC run schools etc. Your Company distributed scholarships to Scheduled Caste (SC) / Scheduled Tribes (ST) primary school children covering three schools and also distributed note books to SC/ST primary school children in village Kanerao. ENVIRONMENT AND SOCIAL CONCERN Your Company continues its efforts for the betterment of the environment and conservation of scarce natural resources. Your Company planted 4,500 trees in the Company’s premises at Valia and environmental training sessions were conducted by Company’s personnel at ITI Valia and Anchor Institute, DDIT, Ahmedabad and Ankleshwar. Your Company continued “Rain water harvesting” initiatives undertaken at its factory and in the staff quarters at Vikhroli. So far 18,500 m3 of water has been collected at Vikhroli factory and staff quarters for the Year 2009-10. This process has resulted in saving water and consequently, the costs, thereof. To prevent pollution to environment, efforts are made to convert waste from the factories into an environment friendly product and then dispose off the same safely. Your Company continued its arrangement with Trans Thane Creek Waste Management Association for the treatment of solid waste being generated at the Company’s factory at Vikhroli. More areas of wasteland have been converted into garden using water from ETP. As part of your Company’s continued commitment to conserve natural resources, and also to ward off the ever increasing water shortage, the Company has successfully commissioned a Reverse Osmosis plant to upgrade ETP treated water to boiler feed water resulting into effective recycling of ETP treated water. 14
Vikhroli factory continues to convert the bio degradable waste into bio compost with the help of an NGO. The Vikhroli factory focused on waste elimination and also continued energy conservation measures. The Valia factory has improved / modified in Generation / Transfer/ Treatment / Monitoring and disposal pattern of waste water and treated water. Achieved significant reduction of main waste water pollutant parameter i.e. COD Value at inlet of ETP compared to last year and streamlined/optimized the operation and treatment capability of ETP. FIXED DEPOSITS Your Company continues to accept public deposits for 13, 24 and 36 months’ tenure. The Fixed Deposits scheme has received an overwhelming response and the management of the company is thankful to all the investors for participating in the scheme and for the trust reposed in the company. During the year ended March 31, 2010, deposits aggregating to Rs. 76.38 crore have been mobilised and deposits aggregating to Rs. 0.60 crore have been repaid on maturity. The Company has no overdue deposits other than unclaimed deposits. DEPOSITORY SYSTEM Your Company’s equity shares are available for dematerialisation through National Securities Depository Limited and Central Depository Services (India) Limited. As of March 31, 2010, 99.68 % of the equity shares of your Company were held in demat form. BUYBACK Pursuant to the resolution passed by the Board of Directors of the Company and in accordance with the provisions of the Companies Act, 1956 and the Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998, the Company made a Public Announcement to Buyback 57,00,000 equity shares (“Maximum Offer Shares”) of Re. 1 each, from the existing owners of equity shares other than Persons in Control, at a price not exceeding Rs. 275 (Rupees Two Hundred and Seventy Five Only) per equity share (the “Maximum Offer Price”) payable in cash, for an aggregate amount not exceeding Rs. 99 crore (“Maximum Offer Size”). During the year your Company bought back and extinguished 21,33,710 equity shares of face value Re. 1 each. The total amount invested in the Buyback is Rs. 28,86,58,132/- representing 29.16% of the Maximum Offer Size. The change in the paid up capital of the Company consequent to the Buyback is given hereunder :Particulars No. of shares Equity share capital before Buyback (i.e. on May 319,758,602 24, 2009) Less: Equity Shares bought back and extinguished 2,133,710 (from May 25, 2009 to July 28, 2009 ) Equity share capital after Buyback (i.e. on July 317,624,892 29, 2009) DEVELOPMENT OF PROPERTY AT VIKHROLI During the year your Company has entered into a Memorandum of Understanding (MoU) with Godrej & Boyce Mfg. Co. Ltd. and Godrej Properties Ltd. for development of the property at Vikhroli. The binding MoU provides for setting up of suitable Special Purpose Vehicle(s) to execute joint development of the property as also the commercial terms for such development including the sharing of costs and revenues/profit between your Company and GPL, who
Annual Report 2009–2010
would be developing the said property. The MoU is subject to all the parties obtaining appropriate corporate and statutory permissions/ consents to execute the definitive agreements inter-se and the Company obtaining appropriate shareholders’ approval. DIRECTORS In accordance with Article 127 of the Articles of Association of the Company, Mr. F.P. Sarkari, Mr. S.A. Ahmadullah, Mr. A.B. Godrej, Mr. K.K. Dastur retire by rotation at the ensuing Annual General Meeting and offer themselves for reappointment. Mr. V.N. Gogate, also retires by rotation at this Annual General Meeting. However in view of his advanced age, Mr. V.N. Gogate has not offered himself for reappointment. Mr. V.N. Gogate has been on the Board of the Company since 1995 and the Board records its appreciation for the contribution made by him during his tenure with the Company. AUDITORS You are requested to appoint Auditors for the current year and to authorise the Board to fix their remuneration. The retiring auditors, Kalyaniwalla and Mistry, Chartered Accountants, are eligible for reappointment. A certificate from the Auditors has been received to the effect that their reappointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956. AUDIT COMMITTEE The Audit Committee, which was constituted pursuant to the provisions of Section 292A of the Companies Act, 1956 and the listing agreement, has reviewed the Accounts for the year ended March 31, 2010. The members of the Audit Committee are Mr. F.P. Sarkari (Chairman), Mr. V.N. Gogate, Mr. S.A. Ahmadullah and Mr. K.N. Petigara, all Independent Directors. The Board of Directors of the Company at its meeting held on May 26, 2010 has appointed Mr. K.K. Dastur as an Audit Committee member with immediate effect. DIRECTORS’ RESPONSIBILITY STATEMENT Pursuant to the provisions contained in Section 217(2AA) of the Companies Act, 1956, the Directors of your Company confirm: a) that in the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same; b) that such accounting policies have been selected and applied consistently, and such judgments and estimates have been made 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 and of the profit or loss of the Company for that period;
the Company’s compliance of the requirements of Corporate Governance in terms of clause 49 of the Listing Agreement and the same is annexed to the Report on Corporate Governance. ADDITIONAL INFORMATION Annexure D to this Report gives information in respect of Conservation of Energy, Technology absorption and Foreign Exchange Earnings and Outgo, required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 and forms a part of the Directors’ Report. Information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 forms a part of the Directors’ Report. As per the provisions of Section 219(1) (b) (iv) of the Companies Act, 1956, the Report and Accounts are being sent to the Shareholders of the Company, excluding the statement of particulars of employees u/s 217(2A) of the Companies Act, 1956. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary at the registered office of the Company. The Notes to the Accounts referred to in the Auditors’ Report is self-explanatory. However in respect of the qualifications in the Audit Report, we state as follows: Loans and Advances include Rs. 10.33 crore (Previous year Rs. 10.33 crore) advanced by the Company to certain individuals against pledge by way of deposit of equity shares of Gharda Chemicals Ltd. The Company has enforced its security and lodged the shares for transfer in its name, however, the transfer application has been rejected by Gharda Chemicals Ltd. and the Company filed an appeal before the Company Law Board against the rejection. The investee company had in the meanwhile, moved the Bombay High Court and the Court remanded the matter back to CLB. The CLB has advised that the parties may approach the Bench after final disposal of the suit filed by the investee company and the application made by minority shareholders under section 397/398 before the Hon’ble High Court. The Company has filed an appeal with the Hon’ble High Court against the order of the Company Law Board under Section 10 F of the Companies Act 1956, which has been admitted. The recoverability of the advance is contingent upon the transfer and/or disposal of the said shares. It is the opinion of the management that the underlying value of the said shares is substantially greater than the amount of the loan. ACKNOWLEDGEMENT
that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company, for preventing and detecting fraud and other irregularities;
Your Directors thank the Union Government, the Governments of Maharashtra and Gujarat as also all the Government agencies, banks, financial institutions, shareholders, customers, employees, 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.
d) that the annual accounts have been prepared on a going concern basis.
For and on behalf of the Board of Directors
c)
CORPORATE GOVERNANCE As required by the existing clause 49 of the Listing Agreements with the Stock Exchanges, a detailed report on Corporate Governance is included in the Annual Report. The Auditors have certified
A.B. Godrej Chairman Mumbai, June 4, 2010 15
ANNEXURE “A” FORMING PART OF THE DIRECTORS’ REPORT MANAGEMENT DISCUSSIONS AND ANALYSIS Business Structure GIL
Own business Chemicals, Estate Management, Finance & Investment
Godrej Agrovet 75.2%
Godrej Feed Products 100%
Shareholding %
Godrej Consumer Products 23.5%
Godrej Hershey 43.4%
Godrej Properties 69.4%
Godrej Sara Lee Ltd. Keyline, Rapidol, Godrej Hygiene, GGME
Nutrine Confectionery 100%
Various SPVs
Godrej Oil Palm 80%
Cauvery Oil Palm 90%
JVs Godrej Tyson Foods ACI Godrej Agrovet Godrej IJM Palm Oil Godrej Goldcoin Aquafeed
INDUSTRY STRUCTURE AND DEVELOPMENTS The global meltdown experienced last year, with India being no exception, has given way to a strong recovery shown this year particularly by the Indian economy. The GDP growth rate is expected to remain relatively strong in 2009-10 at around 7.2% as per the advance estimate by Central Statistical Organisation (CSO). The manufacturing sector contribution in this is high at 9%. The per capita income is up by 5.4% as per advance estimate by CSO. With the Index of Industrial Production showing growth of 10.1% and within that, manufacturing sector growing at 10.5% compared to same period of last year, the outlook for the coming year looks promising. However, rising food inflation is an area of concern. Overall, the Indian economy has shown signs of growth in almost all the sectors. With the resurgence of positive sentiments, the Indian economy is expected to maintain and expand its growth rate in the coming year. FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE The highlights of overall performance are as follows: Rs. Crore Particulars Sales Total Income
16
2009-10 816.37 991.70
2008-09 817.45 971.48
Other Investments
Particulars Profit Before Taxation Profit After Current Taxation Profit After Current & Deferred Taxation Earnings per Equity Share (Rs.)
2009-10 79.99 80.13 80.93 2.54
2008-09 16.50 15.27 18.68 0.56
17.00 8.07 8.16 8.61 7.67 2.54
10.71 1.70 1.86 4.70 1.71 0.56
0.52 2.33
0.57 1.27
Profitability ratios are as follows: PBDIT/Total Income PBT/Total Income PAT/Total Income Return on Capital Employed Return on Net Worth Basic EPS (Rs.) The Financial risk ratios are as follows: Debt/Equity Interest coverage Segment Performance 1. Segment Revenue Chemicals Estate Finance & Investments Others Total
2009-10
Rs. Crore 2008-09
781.24 27.75 170.82 11.89 991.70
778.19 31.54 147.26 14.49 971.48
Annual Report 2009–2010
Segment Performance 2. Segment Results (PBIT) Chemicals Estate Finance & Investments Others Total Less: Interest (Net) Less: Unallocated expenses (Net) Profit Before Tax 3. Segment Capital Employed Chemicals Estate Finance & Investments Others Unallocated Total
2009-10
Rs. Crore 2008-09
52.38 18.19 158.28 (5.39) 223.46 (60.25) (83.22) 79.99
(18.32) 21.78 147.26 (4.80) 145.92 (61.06) (68.36) 16.50
266.00 61.12 1,276.63 22.95 (604.00) 1,022.70
250.11 42.36 1,343.08 25.51 (633.94) 1,027.12
CHEMICALS DIVISION The Chemicals division operates in the oleo-chemical and surfactant industries. The division has a blend of domestic and international operations and continued its leadership position in the Indian market. The division achieved export turnover of Rs. 300 crore in this fiscal, accounting for about 37% of its turnover. The recovery of the global economy leading to a robust increase in demand helped the growth in this division. The product categorywise review follows: Fatty Acids Fatty Acids portfolio, comprising stearic acid, oleic acid, as well as specialty fatty acids, accounted for about 40% of the turnover of the division. Continuous cost reduction and market development initiatives have helped grow this category by about 9% in value terms and 8% in volume terms. The division plans to enhance the sales of its specialty fatty acids in the domestic as well as export markets. Fatty Alcohol Fatty Alcohols accounted for 34% of the sales revenue of the Chemicals division. Revenue decreased by 11% largely due to the fall in commodity prices leading to a reduction in unit selling price though volume increased by 3%. Through effective customer relationship management and supply chain initiatives, the division could maintain and grow its share with major global corporations. The growth in sales of fatty alcohols in Europe was aided by ‘Just in Time’ (JIT) supplies with improved logistics management. Your Company has reached over 62 countries in the world through its exports. With customer focused manufacturing and marketing strategies, it is expected that revenues from this segment will improve in the coming year. Surfactants Surfactants contributed 18% to the turnover of the division. As a forward integration and de-risking strategy, the division is strongly focusing on fatty alcohol based surfactants such as Sodium Lauryl Ethoxy Sulphate (SLES) and Sodium Lauryl Sulphate (SLS) in addition to Alpha Olefin Sulphonate (AOS), particularly in improving the presence in the international market. Your company has started exporting SLES and SLS to various countries. Sales grew by 41% in value terms as compared to last year. This portfolio is expected to grow steadily in the future.
Glycerin Glycerin accounted for 4% of the turnover of this division. Revenues decreased by 36% in view of the low price of Glycerin. This is largely a by-product and additional sales are mostly opportunistic, depending on market conditions. Other initiatives Your Company continued its strong focus on cost reduction and operational efficiency improvement initiatives, which included reduction in the net working capital employed and reduction in the variable costs of production. Your Company also successfully added specialty and value added products in its portfolio which are expected to improve the margins for the division going forward. Your Company has developed a customer relationship management website (eCRM) that enables customers to track their orders and transactions as also receive updates through personalized web pages 24x7. This initiative has been accorded recognition from Businessweek magazine and your Company was adjudged as amongst the top 25 unsung innovators. Your Company had made an application to Maharashtra Industrial Development Corporation (MIDC) for allotment of 20 acres of industrial land in their industrial area at Ambernath to enable expansion/relocation of some of the plants of the Chemicals division and/or for the purpose of diversification of business. MIDC has favourably considered the Company’s application and an Offer Letter has been issued based on which the Company has signed the agreement to lease. Outlook The outlook for the coming year 2010-11 is mixed at this point in time. International prices and demand are showing signs of improvement and if the recovery trend continues, the chemicals business is well poised to take advantage. If new capacities for oleo-chemicals that were announced earlier go on stream, there could be an oversupply situation in the market affecting the prices. However, most of the new plants are set up to produce mid chain alcohols. Your Company has a competitive advantage due to its unique strategy of offering higher chain alcohols. Focus on increasing sales of integrated specialty derivative products of fatty alcohol will improve profitability as well as de-risk the business from the adverse movements in the fatty alcohol market. Your Company is actively expanding its presence in the international market for its specialty derivative products by getting R&D approvals from multinational corporations. Your Company is also focusing on specialty fatty acids and their co-products, which will improve its leadership position in terms of market share as also profitability. ESTATE MANAGEMENT The Ghatkopar - Vikhroli – Kanjur - Powai belt, of Mumbai suburb is continuing to witness major development activity. The area around the registered office of your Company at Vikhroli is developing at a brisk pace. The ongoing projects of widening of the Eastern Express Highway, additional flyovers on the southern end, metro terminal in the vicinity and other infrastructure projects will be a catalyst for attracting mixed use developmental activity and is expected to make this suburb, a desired location in the coming years. Reputed corporates continue to lease spaces in your Company for their business operations. The green environment, excellent infrastructure and close proximity to CBD, airport, New Mumbai and the extended suburbs are major positives, in making Vikhroli a preferred location. Your Company has entered into a Memorandum of Understanding (MoU) with Godrej & Boyce Manufacturing Co. Ltd. and Godrej 17
Properties Ltd. for development of property at Vikhroli. In view of the proposed development, some areas given on leave and licence basis would not be renewed for further periods. The revenue could also be affected due to the reduction in average rentals as areas given on higher rentals come up for renewal. The total income from this business for the year was Rs. 27.75 crore as compared to Rs. 31.54 crore in the previous year. FINANCE AND INVESTMENTS During the year, your Company continued to earn return from its investments in the form of dividend of Rs. 42.80 crore (previous year Rs. 50.21 crore) and realised capital appreciation of Rs. 104.38 crore (previous year Rs. 56.27 crore). During the year, Godrej Hygiene Care Limited (GHCL) (formerly known as Godrej Hygiene Care Private Limited), 100% subsidiary of your Company, was merged with Godrej Consumer Products Limited (GCPL) under a scheme of arrangement filed with Hon’ble High Court, Bombay w.e.f. June 1, 2009 and all assets and liabilities of GHCL stand transferred to and vested in GCPL. Your Company received 209,39,409 equity shares of GCPL in lieu thereof as per the scheme of arrangement. Out of the equity shares received, 25% equity shares are locked in till November 2012. During the year, our subsidiary Godrej Properties Limited successfully completed its IPO and listed on BSE and NSE. Your Company acquired 100% stake in Natures Basket Limited during the year. Your Company sold its entire stake in Compass BPO Limited. As earlier reported, your Company had sold its subsidiary company Godrej Hi Care Ltd. The per capita income is up by 5.4% as per advance estimate by CSO. (GHCL) in March, 2009 last year. As per the Share Purchase Agreement entered into with the purchaser, the sellers of GHCL were entitled to additional consideration on achievement of stipulated financial parameters based on which your Company received additional consideration during the year which is reflected in the accounts. HUMAN RESOURCES, INDUSTRIAL RELATIONS Industrial Relations at all locations were cordial. The total number of persons employed in your Company as on March 31, 2010 was 1,264. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY Your Company has a proper and adequate system of Internal Controls, to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposal and that transactions are authorized, recorded and reported correctly. Your Company’s Corporate Audit and Assurance Department which is ISO 9001 certified, issues well documented operating procedures and authorities with adequate built-in controls at the beginning of any activity and revised procedures if there is any major change. The internal control is supplemented by an extensive programme of internal, external audits and periodic review by the management. The system is designed to adequately ensure that financial and other records are reliable for preparing financial information and other data and for maintaining accountability of assets. Corporate Audit & Assurance Department, during the year, facilitated a review of your Company’s risk management programme. The risks and mitigation measures were reviewed by your Company’s Risk Committee and corrective measures initiated. During the year the Corporate Audit & Assurance Department carried out various reviews and provided assurance on compliances to laid down policies, process and internal controls. INFORMATION SECURITY Your Company accords great importance to the security of its information assets. To ensure that this gets desired focus and attention, a Chief Information Security Officer, who is attached to the Corporate Audit and Assurance Department, is entrusted with the task of ensuring that your Company has the requisite security posture. 18
Your Company has in place, all the procedures and practices that are in line with the ISO Security Standards. Your Company is now ISO 27001 certified. OPPORTUNITIES AND THREATS The improvement in the global economic and liquidity situation coupled with more stable commodity prices, the stimulus package by the Indian Government and various Governments globally, provides an opportunity for growth for the Chemicals division. At the same time, if new capacity additions announced earlier go on stream, there could be an over supply situation in the market which can put pressure on margins. Specialty products are expected to improve margin and strengthen your Company’s position in the oleo-chemicals space. The Estate management business can continue to do well, by optimizing the available space usage in the campus and leveraging the benefits of the location such as assured power supply, better connectivity and infrastructural benefits. The over supply situation for commercial space in the Real Estate market continues to put pressure on the rentals and the margins. In the coming months the rentals will continue to be under pressure till the demands for commercial space picks-up and the sentiments turn buoyant with the improvement in the economic situation. RISKS AND CONCERNS Your Company has put a risk management framework in place post a comprehensive review of its risk management process. The review involved understanding the existing risk management initiatives, zero-based identification and assessment of risks in the various businesses as also the relative control measures and arriving at the desired counter measures keeping in mind the risk appetite of the organization. The Risk Committee has periodically reviewed the risks in the various businesses and recommended appropriate risk mitigating actions. The Commodity based businesses are likely to be affected by vagaries of the weather, demand for edible oil, oilseed production, etc. The increase in bio-diesel manufacturing capacity is expected to impact vegetable oil prices. The business is exposed to commodity price risks relating to raw materials which account for the largest portion of the costs of both the Chemicals and Vegoils businesses. The Chemicals business growth will also depend on the growth of end user industries like polymer, detergent, cosmetic and personal care. As a significant employer and chemicals producer, to ensure occupational safety, employment standards, production safety, and environmental protection, your Company maintains strict safety, health, environmental protection and quality control programs to monitor and control these operational risks. Macro economic factors including economic and political developments, natural calamities which affect the industrial sector generally would also affect the businesses of your Company. Legislative changes resulting in a change in the taxes, duties and levies, whether local or central, also impact business performance and relative competitiveness of the businesses. CAUTIONARY STATEMENT Some of the statements in this management discussion and analysis describing the Company’s objectives, projections, estimates and expectations may be ‘forward looking statements’ within the meaning of applicable laws and regulations. Actual results might differ substantially or materially from those expressed or implied. Important developments that could affect the Company’s operations include a downtrend in industry, significant changes in political and economic environment in India and abroad, tax laws, import duties, litigation and labour relations.
Annual Report 2009–2010
ANNEXURE “B” FORMING PART OF THE DIRECTORS’ REPORT As per the Securities & Exchange Board of India (Employee Stock Option Scheme & Employee Stock Purchase Scheme) Guidelines, 1999 following information is disclosed in respect of Godrej Industries Limited Employee Stock Option Plans I and II: Sr. Heading No. a Options granted during the year b The pricing formula
c d e
f g h i j
k
l
m
Particulars
ESOP II : 8,60,000 ESOP I : Market Price plus Interest at such a rate not being less than the Bank Rate then prevailing compoundable on an annual basis for the period commencing from the date of Grant of the Option and ending on the date of intimating Exercise of the Option to the Company. ESOP II : Grant Price* plus Interest at such a rate as may be decided from time to time compoundable on an annual basis for the period commencing from the date of Granting of the Options and ending on the date of intimating Exercise of the Option to the Company. * Grant Price means higher of market price or average cost of shares purchased by the Trust for that specific grant, including any unallotted shares lying with the Trust if utilized for that specific grant, plus interest on the loan taken to purchase the said shares at such rate as may be decided from time to time and compoundable on annual basis till the date of grant. Options vested during the year ESOP I : 18,00,000 Options exercised during the year ESOP I : 21,00,000 The total number of shares arising as a result of exercise of Nil. option As shares purchased from secondary market, there is no further issue of shares as a result of exercise of options. Options lapsed/revoked during the year ESOP I : 1,19,250 Variation of terms of options Annexure 2 Money realized by exercise of options ESOP I : Rs.19,28,61,756/Total number of options in force ESOP I : 55,80,700 equity shares of nominal value of Re.1/- each. ESOP II: 8,60,000 equity shares of nominal value of Re.1/- each. Employee-wise details of options granted to: Annexure 1 i) senior managerial personnel; ii) any other employee who receives a grant in any one year of option amounting to 5% or more of option granted during Annexure 1 that year. iii) identified employees who were granted option, during any one year, equal to or exceeding 1% of the issued capital NIL (excluding outstanding warrants and conversions) of the Company at the time of grant; Diluted Earnings Per Share (EPS) pursuant to issue of shares on There is no fresh issue of shares hence, not applicable. exercise of option calculated in accordance with Accounting Standard (AS) 20 ‘Earnings Per Share’. Where the company has calculated the employee compensation The company has calculated the employee compensation cost cost using the intrinsic value of the stock options, the difference using the intrinsic value of stock options. Had the fair value method between the employee compensation cost so computed and the been used, in respect of stock options granted the employee employee compensation cost that shall have been recognized if compensation cost for the Company would have been higher by it had used the fair value of the options, shall be disclosed. The Rs. 11.02 crore, Profit after tax lower by Rs. 11.02 crore and impact of this difference on profits and on EPS of the Company basic EPS would have been lower by Rs. 0.35. shall also be disclosed. Weighted average exercise prices and weighted average fair Weighted average exercise price of the options granted during values of options shall be disclosed separately for options whose the year is Rs. 179.86 plus interest. exercise price either equals or exceeds or is less than the market Weighted average fair value of the option granted during the price of the stock. year is Rs. 84.77. 19
n A description of the method and significant assumptions used during the year to estimate the fair values of options, including the following weighted average information: i) risk-free interest rate, ii) expected life, iii) expected volatility, iv) expected dividends, and v)
The fair value of the options granted has been calculated using Black – Scholes Options pricing formula and the significant assumptions made in this regard are as follows: 6.68% 4 years 70% 0.69% Rs. 1.25 per share the price of the underlying share in market at the time of Weighted average market price at the time of grant of option option grant Rs. 153.05 per option.
Annexure 1 : Senior Managerial Personnel Name Options granted Vivek Gambhir 6,00,000 Rajiv Bakshi 50,000 Praful Bhat 50,000 Options granted to all the above employees are in excess of 5% of the total options granted during the year. Annexure 2 : Amendment to ESOP terms for employees who were granted ESOP’s on April 5, 2007 and April 11, 2007: (a) Clause no.5.4: Existing Clause: The Employee Stock Options granted under GIL ESOP shall vest as follows: The Options shall vest in the eligible employees within such period as may be prescribed by the Compensation Committee, which period shall be not less than one year and may extend upto three years from the date of grant of Options. Vesting may occur in tranches, subject to the terms and conditions of vesting, as may be stipulated by the Compensation Committee. Amended Clause: The Employee Stock Options granted under GIL ESOP shall vest as follows: The Options shall vest in the eligible employees within such period as may be prescribed by the Compensation Committee,
20
which period shall be not less than one year and may extend upto five years from the date of grant of Options. Vesting may occur in tranches, subject to the terms and conditions of Vesting, as may be stipulated by the Compensation Committee. In the event that, during the 4th and 5th year of the vesting period, the average of the closing market price of the shares of the Company on the Bombay Stock Exchange and National Stock Exchange on each day exceeds the Exercise Price by not less than Rs. 50/- for a consecutive period of thirty days, the Options shall be deemed to have vested on the day immediately following the thirtieth day, as determined by the Compensation Committee. (b) First paragraph of Clause No.5.5 Existing Clause: From the date of Vesting of the Options, the Option Grantee shall be entitled to Exercise the Options within such period as may be prescribed by the Compensation Committee which period shall not exceed a period of two years from the date of the respective Vesting of the Options. Amended Clause: From the date of Vesting of the Options, the Option Grantee shall be entitled to Exercise the Options within such period as may be prescribed by the Compensation Committee which period shall not exceed a period of three years from the date of the respective Vesting of the Options.
Annual Report 2009–2010
ANNEXURE “C” FORMING PART OF THE DIRECTORS’ REPORT The following is the list of persons constituting Group (within the meaning as defined in the Monopolies and Restrictive Trade Practices Act, 1969) for the purpose of availing exemption from applicability of the provisions of regulation 10 to 12 of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulation, 1997 (“the said Regulations”), provided Clause 3(1)(e) of the said Regulations: 1. Godrej & Boyce Mfg. Co. Ltd.
40. ACI Godrej Agrovet Pvt. Ltd.
2. Cartini India Ltd.
41. Godrej Hersheys Ltd.
3. Godrej Investments Pvt. Ltd.
42. Nutrine Confectionery Co. Ltd.
4. Godrej Efacec Automation & Robotics Ltd.
43. Godrej SaraLee Ltd.
5. Godrej Holdings Pvt. Ltd.
44. Tahir Properties Ltd.
6. Godrej (Malaysia) Sdn. Bhd.
45. Godrej Consumer Products Ltd.
7. Godrej (Singapore) Pte. Ltd.
46. Rapidol (Pty) Ltd.
8. J T Dragon Pte. Ltd.
47. Godrej Netherlands BV
9. Mercury Mfg. Co. Ltd.
48. Godrej Global Mid East FZE
10. Veromatic International BV
49. Godrej Consumer Products Mauritius Ltd.
11. Water Wonder Benelux BV 12. Geomeric Ltd.
50. Godrej Hygiene Products Ltd. (formerly known as SCA Hygiene)
13. Godrej & Khimji (Middle East) LLC
51. Godrej Consumer Products Holdings Mauritius Ltd.
14. Godrej Infotech Ltd.
52. Godrej Consumer Products Dutch Cooperatief U.A. (Netherlands)
15. Veromatic Services B.V. 16. Godrej International Ltd. 17. Ensemble Holdings & Finance Ltd. 18. Swadeshi Detergents Ltd. 19. Vora Soaps Ltd. 20. Godrej Properties Ltd. 21. Godrej Realty Pvt. Ltd. 22. Godrej Waterside Properties Pvt. Ltd. 23. Godrej Real Estate Pvt. Ltd. 24. Godrej Developers Pvt. Ltd. 25. Godrej Sea View Properties Pvt. Ltd. 26. Godrej Estate Developers Pvt. Ltd. 27. Happy Highrises Ltd. 28. Godrej Agrovet Ltd. 29. Golden Feed Products Ltd. 30. Godrej Oil Palm Ltd. 31. Cauvery Palm Oil Ltd. 32. Godrej Tyson Foods Limited 33. Bahar Agrochem & Feeds Pvt. Ltd. 34. Natures Basket Ltd. 35. Aadhaar Retailing Ltd. 36. Godrej IJM Palm Oil Ltd. 37. Godrej Gold Coin Aquafeed Ltd. 38. Polychem Hygiene Laboratories Pvt. Ltd. 39. Creamline Dairy Products Ltd.
53. ABG Venture LLP 54. NBG Enterprise LLP 55. JNG Enterprise LLP 56. SVC Enterprise LLP 57. RKN Enterprise LLP 58. Godrej & Boyce Enterprise LLP 59. Mr. Adi B. Godrej 60. Mrs. Parmeshwar A. Godrej 61. Mrs. Tanya A. Dubash 62. Mr. Pirojsha A. Godrej 63. Ms. Nisaba A. Godrej 64. Mr. Nadir B. Godrej 65. Mrs. Rati N. Godrej 66. Master Burjis N. Godrej 67. Master Sorab N. Godrej 68. Master Hormuzd N. Godrej 69. Mr. Jamshyd N. Godrej 70. Mrs. Phiroza J. Godrej 71. Mr. Navroze J. Godrej 72. Ms. Raika J. Godrej 73. Mrs. Smita V. Crishna 74. Mr. Vijay M. Crishna 75. Ms. Freyan Crishna 76. Ms. Nyrika Crishna 77. Mr. Rishad K. Naoroji 21
ANNEXURE “D” FORMING PART OF THE DIRECTORS’ REPORT
III. Details of energy consumption The details of energy consumption are given below. These details cover the operations of your Company’s factories at Vikhroli, Valia and Wadala.
INFORMATION PURSUANT TO SECTION 217(1)(e) OF THE COMPANIES ACT, 1956, READ WITH THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS) RULES, 1988 IN RESPECT OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
(A) Power and Fuel consumption Electricity Previous Year
313.27 20.55 6.56
290.55 19.35 6.66
Own generated through D.G. Sets Units (KWH in lac) Cost (Rs. in crore) Rate per unit (Rs.)
0.54 0.08 15.42
1.00 0.16 15.73
iii) Own generated through Steam Turbine Generator Co-generation Units (KWH in lac) Cost (Rs. in crore) Rate per Unit (Rs.)
202.90 16.22 7.99
218.54 13.25 6.07
2,309.93 3.85 16.67
7,242.70 16.00 22.09
270.49 38.98 14.41
223.14 29.80 13.35
i)
A. Conservation of Energy I.
This Year
(A) Energy Conservation measures undertaken: Vikhroli 1. Heat Exchanger for flaker installed to reduce the power consumption & improve the quality of stearic acid. Annual savings of Rs. 0.01 crore accrued.
ii)
2. Continued working in consultation with CII for the Mission for Sustainable Growth. 3. Dedicated lines for fatty acid transfer to eliminate steam wastage resulting in savings in fuel worth Rs. 0.15 crore per annum. 4. Installation of VFDs in splitting and Flaking sections resulting in power savings worth Rs. 0.02 crore per annum. Valia 1. Power saving in AOS cooling tower by process improvement resulting into saving of Rs. 0.21 crore per annum.
Fuel Oil (LSHS, FO and LDO) Total Quantity (KL) Total Amount (Rs. in crore) Rate per Unit (Rs. per litre)
2. Saving in power due to stopping of chiller & utilizing of VAM in flaker worth Rs. 0.25 crore per annum. 3. Reduction in NG consumption in various sections by improvement of process resulting in savings of Rs. 0.52 crore per annum.
Natural Gas Total Quantity (SM3 lac) Total Amount (Rs. in crore) Rate per Unit (Rs. per SM3)
4. Installation of VFD’s in AOS & EOU plant resulting in power savings worth Rs. 0.08 crore per annum. 5. Installation of lighting transformer in DTA plant resulting in power savings worth Rs. 0.02 crore per annum. (B) Proposed Energy Conservation Measures:
Pitches Total Quantity (MT) Total Cost (Rs. in crore) Rate per unit (Rs. per MT)
1. Change of Vacuum system of fractionation plant to save fuel cost. 2. To improve steam distribution network at Valia factory to eliminate steam wastages.
II. Impact of measures on reduction of energy consumption and consequent impact on the cost of production of goods Saving in energy costs during the period under consideration.
Particulars
Natural Gas Electricity Furnace Oil ( SM3/MT ) (Kwh/MT) (Litre/MT) Pitches 2009-10 2008-09 2009-10 2008-09 2009-10 2008-09 2009-10 2008-09
Fatty Acid
79.28
56.95
77.07
76.01
18.82
24.69
-
15.86
Fatty Alcohol
96.49
89.57
429.96
424.64
3.24
7.61
-
-
A.O.S. Glycerin Oils & Vanaspati
22
683.05 957.05 0.88 1.51 12,870.00 15,812.00
(B) Consumption per unit of production
3. Replacement of feed pumps running in series by higher capacity pump with savings in power consumption. 4. Installation of powerless wind ventilators in all godowns of Valia & thereby saving power consumed by the exhaust fans.
Purchased Units (KWH in lac) Total Amount (Rs. in crore) Rate per Unit (Rs.)
22.12
16.39
142.89
146.22
1.26
4.38
-
1.38
343.74
247.43
606.30
614.59
58.17
109.08
-
49.46
-
-
144.09
174.72
-
60.00
54.28
85.86
Annual Report 2009–2010
B. Technology Absorption, Adaptation and Innovation I.
IV. Expenditure on R&D :
Specific areas in which R&D carried out by the Company : During the year under review, Research & Development efforts in the following areas strengthened the Company’s operation through technology absorption, adaptation and innovation. •
Oils and Fatty Acids
•
Fatty Alcohol
•
Surfactants
•
Glycerin
•
Customer Centric Formulations for Personal Care Product Applications
II. Benefits derived as a result of the above R&D. : •
Premium quality fatty acids from economy grade raw materials.
•
Understanding the impact of raw material quality and manufacturing process on the quality of the finished goods.
•
Manufacture of high value pure cut fatty acids, specifically for the polymer, oil field and lubricant industries.
•
Qualification of specialty surfactants for oral care and personal care products.
•
Value added derivatives of glycerin so as to enter certain niche markets.
•
Value added formulations of fatty acids so as to enter niche markets.
Rs. crore This Year
(a) (b) (c) (d)
Capital Recurring Total Total R&D expenditure as a percentage of total sales turnover C. Foreign Exchange earnings and outgo
Nil 3.27 3.27 0.40%
Previous Year Nil 1.73 1.73 0.21%
The Chemicals Division’s exports were Rs. 339.26 crore in the current year (including deemed exports of Rs. 39.62 crore) as compared to Rs. 367.74 crore in the previous year (including deemed exports Rs. 45.91 crore). The Company continues to export refined glycerin, fatty alcohol and other chemicals to over 62 countries including U.S.A., U.A.E., Japan, South Africa, Germany, U.K., France, Malaysia, China, Australia, Mexico, Singapore and Sri Lanka. Rs. crore This Year Foreign exchange used Foreign exchange earned
242.10 299.70
Previous Year 257.41 323.90
III. Future Plan of Actions : •
Specialty chemicals from Glycerin, so as to enter niche markets in the field of Pharmaceuticals, Personal Care and Industrial Lubricants.
•
Specialty chemicals used in personal care formulations – foam boosters, conditioning agents, co-surfactants, viscosifying and pearlizing agents.
23
REPORT ON CORPORATE GOVERNANCE Clause 49 of the listing agreement with the Indian Stock Exchanges stipulates the norms and disclosure standards that have to be followed on the Corporate Governance front by listed Indian companies. 1. THE COMPANY’S PHILOSOPHY The Company is a part of the Godrej Group which has established a reputation for honesty and integrity. The Company’s philosophy of corporate governance is to achieve business excellence by enhancing the long-term welfare of all its stakeholders. The Company believes that corporate governance is about creating outperforming organisations, i.e. organizations that consistently succeed in the marketplace against competition and thereby enhance the value of all its stakeholders. THE GOVERNANCE STRUCTURE 2. BOARD OF DIRECTORS a) Board Structure The Board of Directors of the Company comprises sixteen Directors, which includes one Managing Director and four Whole-time Executive Directors. The remaining eleven
are Non-Executive Directors, with eight of them being Independent Directors. On April 30, 2010 two Wholetime Executive Directors retired from the services of the Company and hence ceased to be Directors. No Director is related to any other Director on the Board in terms of the definition of “relative” given under the Companies Act, 1956, except (1) Mr. A.B. Godrej and Mr. N.B. Godrej, who are brothers, (2) Ms. T.A. Dubash who is the daughter of Mr. A.B. Godrej and (3) M r. J. N. Godrej and Mr. V. M. Crishna, who are brothers-in-law. The details are given in Table 1 and 2 respectively: b) Board meetings held and Directors’ attendance record The Board meets atleast once in a quarter to consider among other businesses, quarterly performance of the Company and financial results. To enable the Board to discharge its responsibilities effectively and take informed decisions, necessary information is made available to the Board. During the year four Board meetings were held on May 27, 2009, July 29, 2009, October 31, 2009 and January 25, 2010. The details are given in Table 1:
Table 1: Details about the Company’s Board of Directors & meetings attended by the Directors during the year Name of Director
Category
A.B. Godrej
Chairman – Non-Executive Non-Executive Managing Director Non-Executive – Independent Non-Executive - Independent Non-Executive Non-Executive - Independent Non-Executive - Independent Non-Executive – Independent Non-Executive Independent Non-Executive - Independent Non-Executive - Independent Non-Executive - Independent Whole-time Whole-time Whole-time Whole-time
J.N. Godrej N.B. Godrej S.A. Ahmadullah Jimmy Bilimoria V.M. Crishna K.K. Dastur N.D. Forbes V.N. Gogate A. Maira* A.B. Choudhury* K.N. Petigara F.P. Sarkari
Board meetings held during the year
V.F. Banaji T.A. Dubash M. Eipe M.P. Pusalkar Note: (i) $ Alternate directorships and directorships in (ii) Figures in ( ) denote listed companies.
24
Board meetings attended during the year
Whether Directorships attended held in public last AGM companies incorporated in India as at year- end $
Number of Chairmanship/ Membership in other Board Committees as at the year-end Chairmanship
Membership
4 4 4
4 3 4
Yes Yes Yes
11(3) 9(5) 14(5)
4 1 1
1 3 2
4
4
Yes
1(1)
-
1
4 4
3 4
Yes Yes
8(5) 4(1)
4 -
4 -
4
4
Yes
7(3)
3
1
4
3
Yes
3(3)
-
-
4
4
Yes
1(1)
-
1
1
1
NA
NA
NA
NA
2
2
NA
6(3)
-
4
4
4
Yes
5(1)
1
2
4 4 4 4 4
4 4 3 4 3
Yes Yes Yes Yes Yes
1(1) 2(2) 6(1) 3(1) 2(2)
2 1
1 2 1 2
private companies, foreign companies and associations are excluded.
Annual Report 2009–2010
(iii) *Mr. A. Maira resigned with effect from July 24, 2009 and Mr. A.B. Choudhury was appointed with effect from August 5, 2009 in his place.
Significant development in the human resources and industrial relations front,
(iv) Board Meetings held during the year represent the number of meetings held during the tenure of that director.
Sale of material nature of investments, subsidiaries, assets, which is not in the normal course of business,
None of the Directors is a member of more than 10 Board-level committees, or a Chairman of more than five such committees, as required under Clause 49 of the listing agreement.
Quarterly details of foreign exchange exposure and the steps taken by management to limit the risks of adverse exchange rate movement,
c)
Information supplied to the Board Among others, this includes: Annual operating plans and budgets, capital budgets, and any updates thereon, Quarterly results of the Company, Minutes of meetings of audit committee and other committees, Information on recruitment and remuneration of senior officers just below the Board level, Materially important show cause, demand, prosecution and penalty notices, Fatal or serious accidents or dangerous occurrences, Any materially significant effluent or pollution problems, Any materially relevant default in financial obligations to and by the Company or substantial non-payment for goods sold by the Company, Any issue which involves possible public or product liability claims of a substantial nature, Details of any joint venture or collaboration agreement, Transactions that involve substantial payment towards goodwill, brand equity or intellectual property, Significant labour problems and their proposed solutions,
Non-compliance of any regulatory, statutory nature or listing requirements as well as shareholder services such as non-payment of dividend and delays in share transfer. The Board of the Company is presented with all information under the above heads, whenever applicable. These are submitted either as part of the agenda papers well in advance of the Board meeting or are tabled in the course of the Board meeting. d) Directors with materially significant related party transactions, pecuniary or business relationship with the Company Except for drawing remuneration, none of the Directors have any other materially significant related party transactions, pecuniary or business relationship with the Company. Attention of Members is drawn to the disclosures of transactions with related parties set out in Notes to Accounts – Schedule 22, Note No.20, forming part of the Annual Report. e) Remuneration of Directors: sitting fees, salary, perquisites and commissions and Number of Shares held by Non-Executive Directors The details of remuneration package of Directors and their relationships with each other are given in Table 2. The number of shares held and dividend paid are given in Table 3.
Table 2: Remuneration in Rupees paid or payable to Directors for the year ended March 31, 2010 Amt. in Rs. Name of Director Relationship with Directors A. B. Godrej
Brother of N.B. Godrej Father of T.A. Dubash J. N. Godrej Brother-in-law of V. M. Crishna N. B. Godrej Brother of A.B. Godrej S. A. Ahmadullah None J.S. Bilimoria None V. M. Crishna Brother-in-law of J. N. Godrej K. K. Dastur None N.D. Forbes None V. N. Gogate None A. Maira None A.B. Choudhury None K. N. Petigara None F. P. Sarkari None V. F. Banaji None T. A. Dubash Daughter of A.B. Godrej M. Eipe None M. P. Pusalkar None
Sitting Commission Salary fees on profits 1,60,000 Nil Nil Nil 1,20,000 60,000 80,000 80,000 60,000 1,20,000 20,000 40,000 1,20,000 1,00,000 Nil Nil Nil Nil
Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil
Perquisites
Provident Fund
Total
Nil
Nil
Nil
1,60,000
Nil 1,31,33,314 Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil 1,39,10,873 1,12,17,514 1,16,46,514 1,44,25,226
Nil 1,01,74,378 Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil 64,31,173 76,69,659 54,14,434 51,23,157
Nil 8,25,840 Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil 7,93,800 5,95,944 6,47,424 4,29,696
Nil 2,41,33,532 1,20,000 60,000 80,000 80,000 60,000 1,20,000 20,000 40,000 1,20,000 1,00,000 2,11,35,846 1,94,83,117 1,77,08,372 1,99,78,079
25
Table 4: Attendance record of audit committee members
Notes: 1. Salary to Mr. N.B. Godrej, Mr. V.F. Banaji, Ms. T.A. Dubash, Mr. M. Eipe and Mr. M.P. Pusalkar includes a performance linked variable remuneration of Rs.62,51,314/- Rs.72,95,873/-, Rs. 62,51,314/-, Rs.62,51,314/- and Rs.1,08,44,426/respectively for the year ended March 31, 2010 payable in 2010-11. 2. The service contracts of the Whole-time Directors are for a period of three years with a notice period of three months. Table 3: Number of shares held by Non-Executive Directors and dividend paid Name of Non-Executive Director A.B. Godrej A.B. Godrej * J.N. Godrej * F.P. Sarkari F.P. Sarkari * S.A. Ahmadullah S.A. Ahmadullah * V.N. Gogate V.N. Gogate * V.M. Crishna J.S. Bilimoria N.D. Forbes A.B. Choudhury K.N. Petigara K.K. Dastur K.K. Dastur * K.K. Dastur **
Shares held as on March 31, 2010 Nil 11,21,226 32,21,472 20,000 62,000 6,000 11,700 1,878 270 Nil Nil 5,000 Nil Nil 3,606 25,400 9,570
Dividend paid during the year (Rupees) Nil Nil Nil 25,000.00 Nil 7,500.00 Nil 2,347.50 Nil Nil Nil Nil Nil Nil 4,507.50 Nil Nil
Name of Director Mr. F.P. Sarkari Mr. S.A. Ahmadullah Mr. V.N. Gogate Mr. K.N. Petigara Notes:
No. of meetings held 4 4 4 4
Meetings attended 4 4 4 4
Committee Meetings held during the year represents the no. of meetings held during the tenure of that director. The Audit Committee of the Company performs the following functions: Overview of the Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible. Recommending the appointment/removal of external auditor, fixation of audit fees and approval for payment for any other services. Reviewing with management the annual financial statements before submission to the board for approval with particular reference to: Matters that needs to be included in the Director’s Responsibility Statement to be included in the Board’s Report in terms of Clause (2AA) of the Section 217 of the Companies Act, 1956. Change if any in accounting policies and practices and reasons for the same. Major accounting entries involving estimates based on exercise of judgement by the management. Significant adjustments made in the financial statements arising out of audit findings.
* Shares held as second holder ** Shares held as third holder
Compliance with listing and other requirements relating to financial statements.
Committees of the Board
Disclosure of any related party transactions.
3. AUDIT COMMITTEE The Company’s Audit Committee comprises of four Independent and Non-Executive Directors. They are Mr. F.P. Sarkari (Chairman), Mr. S.A. Ahmadullah, Mr. V.N. Gogate and Mr. K.N. Petigara. Effective May 26, 2010, Mr. K. K. Dastur (Independent Director) was appointed as a member of the committee. Mr. F.P. Sarkari is the Chairman of the Committee, a Chartered Accountant and is knowledgeable in finance, accounts and company law. All the members of the committee are eminent professionals and draw upon their experience and expertise across a wide spectrum of functional areas such as finance and corporate strategy. Minutes of each of the audit committee meetings are placed before the Board Meeting. Mr. V. Srinivasan, Executive Vice-President (Finance & Estate) & Company Secretary acts as a secretary to the audit committee. The Audit Committee met four times during the year i.e. on May 27, 2009, July 29, 2009, October 31, 2009 and January 25, 2010. Table 4 gives the attendance record.
26
Any qualification in the draft audit report. Reviewing with the management, the quarterly financial statement before submission to the Board for approval. Reviewing with the management, performance of the statutory and internal auditors, and adequacy of the internal control system. Reviewing the adequacy of internal audit function, if any, including the structure of Internal Audit Department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit. Discussion with internal auditors any significant findings and follow up thereon. Reviewing the findings of any internal investigation by the internal auditors into matters where there is suspected fraud or irregularity or failure of internal control systems of a material nature and reporting the matter to the Board. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussions to ascertain any area of concern.
Annual Report 2009–2010
Looking into the reasons for substantial defaults in payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividend) and creditors. Reviewing the functioning of Whistle Blower mechanism. 4. COMPENSATION COMMITTEE Setting up of a Compensation Committee for determining a company’s policy on remuneration packages for Executive Directors constitutes a non-mandatory provision of Clause 49. The Company set up its Remuneration Committee on February 22, 2002 to review the human resources policies and practices of the Company and in particular, policies regarding remuneration of Whole-Time Directors. The Committee discusses human resources policies such as compensation and performance of management. The Remuneration Committee was renamed as Compensation Committee by the Board of Directors at its meeting held on October 24, 2005. The Compensation Committee consists of the following directors: Mr. S.A. Ahmadullah (Chairman and Independent Director); Mr. N.B. Godrej (Managing Director); Mr. V.N. Gogate (Independent Director) and Mr. K.N. Petigara (Independent Director). Effective May 26, 2010, Mr. A.B. Choudhary (Independent Director) was appointed as a memeber of the committee. During the year ended March 31, 2010, the committee met on May 27, 2009, July 29, 2009, August 10, 2009 and January 25, 2010. The attendance details are given in Table 5.
Number of complaints regarding shares for the year ended March 31, 2010 Complaints outstanding as on April 1, 2009 Complaints received during the year ended March 31, 2010 Complaints resolved during the year ended March 31, 2010 Complaints outstanding as on March 31, 2010
a) Management discussion and analysis This annual report has a detailed chapter on management discussion and analysis. b) Disclosures by management to the Board All details relating to financial and commercial transactions where Directors may have a potential interest are provided to the Board, and the interested Directors neither participate in the discussion, nor do they vote on such matters. 7. DISCLOSURES a) Materially significant related party transaction that may have potential conflict of interests of Company at large During the year 2009-10, there were no materially significant related party transactions, i.e. transactions of the Company of material nature, with its promoters, the Directors or the management, their subsidiaries or relatives, etc. that may have potential conflict with the interests of the Company at large. Attention of Members is drawn to the disclosures of transactions with related parties set out in Notes to Accounts – Schedule 22, Note No. 20, forming part of the Annual Report. b) Whistle Blower Policy With a view to establish a mechanism for protecting the employees reporting unethical behaviour, fraud, violation of Company’s Code of Conduct, the Board of Directors has adopted a Whistle Blower Policy. During the year 200910, no personnel has been denied access to the Audit Committee.
The Company has adopted EVA as a tool for driving performance, and has linked improvements in EVA to Performance Linked Variable Remuneration (PLVR) of Managing Director, WholeTime Directors, Managers and Officers of the Company. 5. SHAREHOLDERS COMMITTEE Among other functions, this committee looks into redressal of shareholder complaints regarding transfer of shares, non-receipt of Balance Sheet and non-receipt of declared dividends, as required in Clause 49 of the Listing Agreement. The Committee consists of the following members: Mr. A.B. Godrej (Chairman), Mr. V.F. Banaji, Ms. T.A. Dubash, Mr. M. Eipe and Mr. M.P. Pusalkar. On April 30, 2010 Mr. V. F. Banaji and Mr. M. P. Pusalkar retired from the services of the Company and hence ceased to be Directors of the Company. During the year, 11 meetings of the Committee were held. Mr. V. Srinivasan, Executive Vice-President (Finance & Estate) & Company Secretary acts as the secretary to the Committee. Name and designation of Compliance Officer:
Nil
6. MANAGEMENT
Name of Director
Mr. V. Srinivasan, Executive Vice-President (Finance & Estate) & Company Secretary acts as the secretary to the Committee.
20
There are no pending share transfers as on March 31, 2010.
Table 5: Attendance record of Compensation Committee members No. of meetings Meetings attended held Mr. S.A. Ahmadullah 4 4 Mr. V.N. Gogate 4 4 Mr. K.N. Petigara 4 4 Mr. N.B. Godrej 4 4
Nil 20
c)
Policy to Prevent Sexual Harassment at the work place The Company is committed to creating and maintaining an atmosphere in which employees can work together, without fear of sexual harassment, exploitation or intimidation. Every employee is made aware that the Company is strongly opposed to sexual harassment and that such behaviour is prohibited both by law and by the Godrej group. To redress complaints of sexual harassment, a Complaint Committee has been formed which is headed by Ms. T.A. Dubash, Executive Director & President (Marketing). Members of the Committee include, among others, a representative from an NGO familiar with the issue of sexual harassment.
Mr. V. Srinivasan, Executive Vice-President (Finance & Estate) & Company Secretary. 27
d) Details of compliance with mandatory requirement Particulars
I.
II.
III. IV.
V. VI. VII.
Board of Directors (A) Composition of Board (B) Non-Executive Directors’ compensation & disclosures (C) Other provisions as to Board and Committees (D) Code of Conduct Audit Committee (A) Qualified & Independent Audit Committee (B) Meeting of Audit Committee (C) Powers of Audit Committee (D) Role of Audit Committee (E) Review of Information by Audit Committee Subsidiary Companies Disclosures (A) Basis of related party transactions (B) Board disclosures (C) Proceeds from public issues, rights issues, preferential issues etc. (D) Remuneration of Directors (E) Management (F) Shareholders CEO/CFO Certification Report on Corporate Governance Compliance
Clause of Compliance Listing Status Agreement Yes / No 49 I Yes 49 (IA) Yes 49 (IB)
Yes
49 (IC) 49 (ID) 49 (II)
Yes Yes
49 (IIA) 49 (IIB) 49 (IIC) 49 (IID)
Yes Yes Yes Yes
49 (IIE) 49 (III) 49 (IV)
Yes Yes
49 (IV A) 49 (IV B) 49 (IV C)
Yes Yes Not applicable at present Yes Yes Yes Yes Yes Yes
49 (IV D) 49 (IV E) 49 (IV F) 49 (IV G) 49 (V) 49 (VI) 49 (VII)
}
b) Details of Special Resolutions Passed in previous three Annual General Meetings. Date of Number AGM of Special Resolution passed July 27, 2007
1
1)
July 29, 2008
6
1) To further invest in securities of and/ or place intercorporate deposits with and/or make loans or any other form of debt to and/or investment in Godrej Properties Ltd., upto a sum of Rs. 25 crore, u/s 372A of the Companies Act, 1956. 2) To further invest in securities of and/ or place intercorporate deposits with and/or make loans or any other form of debt to and/or investment in Godrej Agrovet Ltd., upto a sum of Rs. 20 crore, u/s 372A of the Companies Act, 1956. 3) To further invest in securities of and/ or place intercorporate deposits with and/or make loans or any other form of debt to and/or investment in Ensemble Holdings & Finance Ltd., upto a sum of Rs. 10 crore, u/s 372A of the Companies Act, 1956. 4) To further invest in securities of and/ or place intercorporate deposits with and/or make loans or any other form of debt to and/or investment in Boston Analytics Inc., upto a sum of Rs. 15 crore, u/s 372A of the Companies Act, 1956. 5) Revision in the terms of remuneration payable to Ms. Nisaba A. Godrej. 6) Amendment to Articles of Association of the Company.
July, 29 2009
5
1) Reappointment and remuneration of Ms. T.A. Dubash as a Whole-time Director of the Company. 2) Reappointment and remuneration of Mr. V.F. Banaji as a Whole-time Director of the Company. 3) Reappointment and remuneration of Mr. M. Eipe as a Whole-time Director of the Company. 4) Reappointment and remuneration of Mr. M. P. Pusalkar as a Whole-time Director of the Company. 5) To approve New Employees Stock Option Scheme and to authorize persons in this regard.
e) Details of Non-compliance There has not been any non-compliance by the Company and no penalties or strictures were imposed on the Company by the Stock Exchanges or SEBI or any statutory authority, on any matter related to capital markets. f)
Declaration by Chairman & Managing Director The declaration by the Managing Director stating that all the Board Members and senior management personnel have affirmed their compliance with the said code of conduct for the year ended March 31, 2010, is annexed to the Corporate Governance Report.
8. GENERAL BODY MEETINGS a) Details of last three AGMs Year 2006-07
2007-08 2008-09
28
Venue Y. B. Chavan Centre, Nariman Point, Mumbai 400 021. - do - do -
Date July 27, 2007
Time 4.30 P.M.
July 29, 2008 July 29, 2009
4.30 P.M. 4.30 P.M.
Details of Special Resolution Passed
Reappointment and remuneration payable to Mr. N.B. Godrej as Managing Director of the Company.
Annual Report 2009–2010
c)
Postal Ballot
all shareholders along with postage prepaid envelopes. Mr. Bharat Shemlani, Chartered Accountant, had been appointed as scrutinizer for the postal ballots, who submitted his reports to the Chairman, Mr. A.B. Godrej. The details of the postal ballots are given below :-
During the year, pursuant to the provisions of Section 192A of the Companies Act, 1956 read with the Companies (Passing of the Resolution by Postal Ballot) Rules 2001, certain resolutions were passed by shareholders by postal ballot. The Notice of postal ballot were mailed to Sr. No.
1.
Date of Nature of Item announcement resolution of results September 23,2009
Special
Special
2.
March 26, 2010 Special
No. of votes in favour
No. of votes against
No. of invalid votes
1550
% 99.96
% 0.01
% 0.03
1550
99.80
0.01
0.19
2206
99.38
0.30
0.32
To invest in securities of and/or place intercorporate deposits with and/or make loans or any other form of debt to and/or investment in and/or give guarantees in connection with loan(s) given by any other person to Godrej Hershey Limited. To place intercorporate deposits with and/or make loans or any other form of debt to Tricom India Limited. Modification of the Godrej Industries Limited Employees Stock Option Plan
d) Procedure adopted for Postal Ballot (i)
Total no. of votes polled
Gogate, also retires by rotation at this Annual General Meeting. However in view of his advanced age, Mr. V.N. Gogate has not offered himself for reappointment and the Board proposes that the vacancy caused by his retirement shall not be filled up.
The Board at its meeting approves the items to be passed through postal ballot and authorizes one of the functional Directors and the Company Secretary to be responsible for the entire process of postal ballot.
(ii) A professional such as a Chartered Accountant/ Company Secretary, who is not in employment of the Company, is appointed as the Scrutinizer for the poll process.
Information about the Directors who are being appointed/ reappointed is given as an annexure to the Notice of the AGM. b) Communication to shareholders All vital information relating to the Company and its performance, including quarterly results, official press releases are posted on the web site of the Company. The Company’s web-site address is www.godrejinds.com. The quarterly and annual results of the Company’s performance are published in leading English dailies like Economic Times, Business Standard, Business Line, etc. The Company has also posted information relating to its financial results and shareholdings pattern on electronic data information filing and retrieval system (EDIFAR) at www.sebiedifar.nic.in. Effective fron April 1, 2010, the EDIFAR system was discontinued and now the information is uploaded at www.corfiling.co.in.
(iii) Notice of postal ballot along with the ballot papers are sent to the shareholders along with a selfaddressed envelope addressed to the Scrutinizer. (iv) An advertisement is published in a National news paper about the dispatch of ballot papers and notice of postal ballot. (v) The duly completed postal ballot papers are received by the Scrutinizer. (vi) Scrutinizer gives his report to the Chairman. (vii) The Chairman announces the results of the postal ballot in a meeting convened for the same. (viii) Results are intimated to the Stock Exchange and are put up on the Notice Board of the Company as well as on the Company’s Website. SHAREHOLDERS AND MEANS OF COMMUNICATION a) Disclosures regarding appointment or reappointment of Directors According to the Articles of Association of the Company, at every Annual General meeting of the Company one-third of the Directors are liable to retire by rotation. Mr. F.P. Sarkari, Mr. S.A. Ahmadullah, Mr. A.B. Godrej, Mr. K.K. Dastur shall retire at this Annual General Meeting of the Company and being eligible offer themselves for reappointment. Mr. V.N.
c)
Investor grievances As mentioned before, the Company has constituted a Shareholders Committee to look into and redress Shareholders and investor complaints. Mr. V. Srinivasan, Executive VicePresident (Finance & Estate) & Company Secretary is the compliance officer.
d) Share transfer The Company has outsourced its share transfer function to M/s. Computech Sharecap Ltd., which is registered with the SEBI as a Category 1 Registrar and Transfer Agent. e) Details of non-compliance There has been no instance of the Company not complying with any matter related to capital markets. 29
Declaration by Managing Director I, N.B. Godrej, Managing Director of Godrej Industries Limited (GIL), hereby confirm pursuant to clause 49(1)(D) of the listing agreement that: The Board of Directors of GIL has laid down a code of conduct for all Board members and senior management of the Company. The said code of conduct has also been posted on the Company’s website viz. www.godrejinds.com. All the Board members and senior management personnel have affirmed their compliance with the said code of conduct for the year ended March 31, 2010. N.B. Godrej Managing Director
Mumbai, May 26, 2010
Auditors’ Certificate on Corporate Governance To the Members of Godrej Industries Limited We have examined the compliance of conditions of Corporate Governance by Godrej Industries Limited for the year ended on March 31, 2010, as stipulated in Clause 49 of the Listing Agreement of the said Company with the stock exchanges. The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to a review of procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance stipulated in Clause 49 of the above mentioned Listing Agreement. We state that such compliance is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company.
Mumbai, May 26, 2010
30
For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants V.R. Mehta Partner Membership No. 32083 Firm Registration No. 104607W
Annual Report 2009–2010
Shareholders’ Information i)
Table 2: Monthly high and low prices and trading volumes of equity shares of the Company at NSE for the year ended March 31, 2010
Annual General Meeting Date Time Venue
: July 27, 2010 : 4.30 p.m. : Y.B. Chavan Centre, Gen. Jagannathrao Bhonsle Marg, Nariman Point, Mumbai- 400 021.
Volume Date High (Rs.) Low (Rs.) (No. of Shares) April 2009 86.50 52.50 1,85,98,529 May 2009 139.90 75.10 3,07,36,903 June 2009 154.00 118.25 1,23,06,921 July 2009 158.80 112.00 1,16,30,542 August 2009 189.40 138.45 1,66,41,474 September 2009 213.30 171.25 2,63,58,688 October 2009 217.60 175.60 1,91,87,884 November 2009 212.20 162.50 98,77,792 December 2009 219.00 171.50 1,46,84,999 January 2010 193.30 141.00 93,89,024 February 2010 164.00 135.00 83,01,926 March 2010 166.50 139.40 68,74,674 Note: High and low are in Rupees per traded share. Volume is the total monthly volume of trade (in numbers) in equity shares of the Company on the NSE.
ii) Financial Calendar Financial year: April 1 to March 31 For the year ended March 31, 2010, results were announced on: • • • •
July 29, 2009 October 31, 2009 January 25, 2010 May 26, 2010
: First quarter : Half year : Third quarter : Annual
iii) Record Date/Book Closure A dividend of Rs. 1.50/- per equity share of Re. 1/- each has been recommended by the Board of Directors of the Company. For payment of dividend, the book closure is from July 20, 2010 to July 27, 2010 (both days inclusive). iv) Listing information The Company’s equity shares are listed on The Bombay Stock Exchange Ltd. and The National Stock Exchange of India Ltd.
Chart A – The Company’s share performance compared to the BSE Sensex for FY 2009-2010
Tables 1 and 2 respectively give the monthly high and low prices and volumes of equity shares of the Company at BSE and the NSE for the year ended March 31, 2010. Chart A compares the Company’s share price at the BSE versus the Sensex.
BSE Sensex
v) Stock Data
GIL Share Price (Rs.)
Name of the Stock Exchange Stock code The Bombay Stock Exchange Ltd. (BSE) 500164 National Stock Exchange of India Ltd. (NSE) GODREJIND The ISIN Number of the Company on both NSDL and CDSL is INE233A01035.
Table 1: Monthly high and low prices and trading volumes of equity shares of the Company at BSE for the year ended March 31, 2010 Volume Date High (Rs.) Low (Rs.) (No. of Shares) April 2009 86.55 52.30 1,52,37,302 May 2009 139.75 75.30 2,04,97,428 June 2009 155.95 120.10 90,52,324 July 2009 158.45 112.00 84,05,526 August 2009 189.55 138.60 1,19,45,092 September 2009 213.70 174.00 1,67,92,934 October 2009 217.85 175.50 1,16,42,200 November 2009 212.20 162.00 59,25,713 December 2009 218.95 171.50 83,91,771 January 2010 193.40 139.50 52,78,904 February 2010 163.85 136.60 41,85,306 March 2010 166.50 140.00 31,37,601 Note: High and low are in Rupees per traded share. Volume is the total monthly volume of trade (in numbers) in equity shares of the Company on the BSE.
Mar
BSE Sensex
GIL Share Price
vi) Distribution of shareholding: Tables 3 and 4 give the distribution pattern of shareholding of the Company by size and ownership respectively as on March 31, 2010. Table 3: Distribution of shareholding by size as on March 31, 2010 Number of Number of Shareshares shareholders holders % 1 - 500 56,302 86.94% 501 – 1,000 4,540 7.01% 1,001 – 2,000 1,977 3.05% 2,001 – 3,000 645 1.00% 3,001 – 4,000 262 0.40%
Number of Shareshares held holding % 67,33,123 2.12% 35,57,110 1.12% 29,87,570 0.94% 16,82,675 0.53% 9,41,923 0.30%
31
Number of Number of Share- Number of Shareshares shareholders holders % shares held holding % 4,001 – 5,000 214 0.33% 9,98,210 0.31% 5,001 – 10,000 391 0.60% 28,58,707 0.90% 10,001 & above 428 0.66% 29,78,65,574 93.78% Total 64,759 100.00% 31,76,24,892 100.00% Table 4: Distribution of shareholding by ownership as on March 31, 2010 Category (as being reported to Shares held Stock Exchanges) (nos.) Promoter’s holding Promoters 25,12,34,174 Persons deemed to act in concert with promoters – Institutional investors Mutual funds & UTI 71,242 Banks, financial institutions & 1,31,28,996 insurance companies Foreign institutional investors 68,44,623 Others Private corporate bodies 1,17,31,995 Indian public 3,32,96,779 NRI / OCBs 13,17,083 Total 31,76,24,892
32
% of holding
79.10 – 0.02 4.13 2.15
vii) Shares held in physical and dematerialised form As on March 31, 2010, 99.68 percent of the Company’s shares were held in dematerialised form and the remaining 0.32 percent in physical form. The break up is listed below: Number of Shareholders Number of Shareholding Category shareholders % shares held % Physical 2,685 4.15% 10,11,687 0.32% Electronic 62,074 95.85% 31,66,13,205 99.68% Total 64,759 100.00% 31,76,24,892 100.00% viii) Outstanding GDRs/ADRs/Warrants/Convertible instruments and their impact on equity The Company does not have any outstanding GDRs / ADRs / warrants / convertible instruments. ix) Share Transfer Share transfers and related operations for the Company are conducted by Computech Sharecap Limited, which is registered with the SEBI as a Category 1 Registrar. Share transfer is normally effected within the maximum period of 30 days from the date of receipt, if all the required documentation is submitted. x) Investor correspondence should be addressed to:
3.69 10.48 0.41 100.00
Computech Sharecap Limited 147, M.G. Road, Opp. Jehangir Art Gallery, Mumbai 400 001. Tel: 022-22635000 / 22635001 Email: helpdesk@computechsharecap.com Fax: 022-22635001
Annual Report 2009–2010
REPORT OF THE AUDITORS' TO THE MEMBERS OF GODREJ INDUSTRIES LIMITED 1. We have audited the attached Balance Sheet of Godrej Industries Limited as at March 31, 2010 and also the Profit and Loss Account and Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with the Auditing Standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditor's Report) Order, 2003, issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. 4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that: a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit. b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of such books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us. The Branch Auditor’s Report has been forwarded to us and has been appropriately dealt with. c)
The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account and with the audited returns from the branches.
d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. e) Without qualifying our opinion, we draw attention to Note 11 (b) of Schedule 22 – Notes to Accounts, regarding a loan of Rs. 8,113 lac (previous year Rs. 7,359 lac) to a Trust for purchase of the company’s shares from the market equivalent to options granted under an Employee Stock Option Plan. As at March 31, 2010, the market value of the shares held by the ESOP Trust is lower than the cost of acquisition of the shares by Rs. 3,456 lac (previous year Rs. 5,331 lac). The repayment of the loans granted to the ESOP Trust is dependent on the exercise of options
by the employees and the market price of the underlying equity shares of the unexercised options at the end of the exercise period. In the opinion of the management, the fall in the value of the underlying equity shares is on account of market volatility and the loss, if any, can be determined only at the end of the exercise period, in view of which provision for the diminution is not considered necessary in the financial statements. f)
Reference is invited to note 9 (a) of Schedule 22 - Notes to Accounts, regarding the recoverability of advances given to certain individuals amounting to Rs. 1,033 lac being contingent upon the transfer and/or disposal of the shares pledged against the loan. The said shares were lodged for transfer which application was rejected and the Company has preferred an appeal to the Company Law Board. The investee company had in the mean while moved the High Court but the matter was referred back to the Company Law Board, where the matter is awaiting hearing. The impact thereof on the profit for the year and the reserves as at March 31, 2010 could not be ascertained.
g)
In our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to paragraph (f) above, and read with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: i)
in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2010;
ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date; and iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date. 5. On the basis of the written representations received from the directors of the Company as on March 31, 2010 and taken on record by the Board of Directors, we report that none of the directors of the Company is disqualified as on March 31, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.
For and on behalf of Kalyaniwalla & Mistry Chartered Accountants Registration No. 104607W Viraf R. Mehta Partner M. No: 32083 Mumbai, May 26, 2010
33
Godrej Industries Limited ANNEXURE TO THE AUDITORS' REPORT Referred to in Paragraph (3) of our report of even date on the accounts of Godrej Industries Limited for the year ended 31st March, 2010. 1) (a) The Company is generally maintaining proper records showing full particulars, including quantitative details and situation of fixed assets, except in case of certain continuous process plants where item-wise values are not available and in case of furniture, fittings and equipment at Vikhroli where the records maintained show quantitative details with their situation and values based on valuation by an approved valuer. (b) The Company has a program for physical verification of fixed assets at periodic intervals. In our opinion, the period of verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies between the book records and the physical inventory were reported for the assets verified during the year. (c) In our opinion the fixed assets disposed off by the Company during the year were not substantial and therefore do not affect the going concern assumption. 2) (a) The management has conducted physical verification of inventory at reasonable intervals. (b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. (c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between physical inventories and book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account. 3) (a) The Company had granted unsecured loans to three companies listed in the register maintained under section 301 of the Companies Act, 1956, of which two loans of Rs. 474 lakh were outstanding at the year end. The maximum amount of loans granted to the said companies during the year was Rs. 1,040 lakh. (b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of loans given are prima facie not prejudicial to the interest of the Company. (c) The loans outstanding at the year end are at call and have not been recalled during the year. The companies are generally regular in payment of interest. (d) There are no overdue amounts exceeding Rs. one lakh. (e) The Company has taken unsecured loans from three companies listed in the register maintained under section 301 of the Companies Act, 1956, of which one loan of Rs. 100 lakh was outstanding at the year end. The maximum amount of loans taken from the said companies during the year was Rs. 480 lakh. (f) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of loans taken are prima facie not prejudicial to the interest of the Company. 34
(g) The loans outstanding at the year end are at call and have not been recalled during the year. The company is generally regular in payment of interest. (h) There are no overdue amounts exceeding Rs. one lakh. 4) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records and the information and explanations given to us, we have not come across any continuing failure to correct major weakness in the internal control system. 5) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act have generally been entered in the register required to be maintained under that section. (b) In our opinion and according to the information and explanations given to us, having regard to the explanation that many of the items are of a special nature and their prices cannot be compared with alternative quotations, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time. 6) In our opinion and according to the information and explanations given to us, the Company has complied with the directives issued by the Reserve Bank of India and the provisions of section 58A and 58AA or any other relevant provisions of the Act and the rules framed there under in respect of the deposits accepted from the public. 7) The Company has an internal audit system, which in our opinion, is commensurate with the size of the Company and the nature of its business. 8) In our opinion and to the best of our knowledge and according to the information given to us, the Central Government has not prescribed maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 for any of the products of the Company. 9) (a) According to the records examined by us, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, cess and other statutory dues applicable to it with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2010 for a period of more than six months from the date of becoming payable. (b) According to the information and explanations given to us and the records examined by us, there are no dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs
Annual Report 2009–2010
Duty, Excise Duty or cess which have not been deposited on account of any dispute, other than those stated hereunder: Name of statute Central Excise
Custom Duty
Sales Tax
Others Stamp Duty Municipal Taxes Entry Tax
Rs in Lac. 3.60 28.23 74.03 695.04 391.15 39.43 112.08 25.44 109.11 26.16
Period to which amount relates 2002-03,2006-07 1996-97, 2005-06,2009-10 1982-83,1998-99,1999-02,1993-94 1978-79,1976-85,1995-96 1993-97 1978-83,1991-92,2003-04 1987-93 1978-79,2003-04 1978-93 1996-97,1997-98,2001-02,2002-06
Forum where dispute is pending Assistant Commissioner Commissioner CESTAT High Court The Supreme Court Assistant Commissioner Commissioner CESTAT High Court Sales Tax Officer
40.13 1996-00,2001-02,2003-05,2006-07
Assistant Commissioner
76.97 2000-03,2004-05,2006-07 63.10 1990-92,1994-96,1997-98,2003-05 9.88 2003-04
Commissioner Tribunal High Court
182.23 1,188.78 4.26 23.56 1.03
2000 1984-2002 1997-99 1997-2003 2000-01
10) The Company has no accumulated losses as at the end of the financial year and it has not incurred any cash losses in the current and immediately preceding financial years. 11) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders as at the balance sheet date. 12) The Company has maintained adequate documents and records in respect of loans and advances granted on the basis of security by way of pledge of shares and other securities, except for the shares referred to in note 9(b) of Schedule 22 which have not been transferred in the name of the Company. 13) In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi / mutual benefit fund / societies. 14) In our opinion, the Company has maintained proper records of the transactions and contracts in respect of investments purchased and sold during the year and timely entries have been made therein. The investments made by the Company are held in its own name except for the shares referred to in note (d) of Schedule 6. 15) According to the information and explanations given to us and the records examined by us, it is our opinion that the terms and conditions of the guarantees given by the Company for loans taken by others from banks or financial institutions are not prejudicial to the interest of the Company.
Controlling Revenue Authority The Bombay High Court Dy. Commissioner Tribunal The Supreme Court 16) According to the information and explanations given to us and the records examined by us, on an overall basis, the term loans have been applied for the purpose for which the loans were obtained. 17) On the basis on an overall examination of the balance sheet and cash flows of the Company and the information and explanations given to us, we report that the Company has not utilized the funds raised on short-term basis for long term investment. 18) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956. 19) The Company did not issue any debentures during the year. 20) The Company has not raised any money through a public issue during the year. 21) Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on or any fraud by the Company has been noticed or reported during the year. For and on behalf of Kalyaniwalla and Mistry Chartered Accountants Registration No. 104607W Viraf R. Mehta Partner M. No. 32083 Mumbai, May 26, 2010
35
Godrej Industries Limited BALANCE SHEET AS AT MARCH 31, 2010 Schedule SOURCES OF FUNDS 1. Shareholders’ Funds (a) Share capital (b) Reserves & surplus
1 2
2. Loan Funds (a) Secured loans (b) Unsecured loans
3 4
3. Deferred Tax Liability TOTAL APPLICATION OF FUNDS 4. Fixed Assets (a) Gross block (b) Less: Depreciation / Impairment (c) Net block (d) Capital work-in-progress
Rs. lac
This Year Rs. lac
Previous Year Rs. lac
102,269.61
3,197.59 99,514.61 102,712.20
54,761.03 3,198.20 160,228.84
23,282.16 36,814.31 60,096.47 3,278.20 166,086.87
29,828.78 114,761.99
57,854.70 31,467.99 26,386.71 2,484.13 28,870.84 114,808.02
3,176.25 99,093.36
20,418.89 34,342.14
5 61,512.98 33,881.80 27,631.18 2,197.60
5. Investments 6. Current Assets, Loans and Advances (a) Inventories (b) Sundry debtors (c) Cash and bank balances (d) Loans and advances
6
Less : Current Liabilities and Provisions (a) Liabilities (b) Provisions Net Current Assets 7. Miscellaneous Expenditure (To the extent not written off or adjusted) TOTAL Significant Accounting Policies Notes to Accounts
7 8 9 10
13,476.87 11,086.55 1,508.61 17,535.41 43,607.44
9,355.62 16,099.98 2,851.17 14,794.20 43,100.97
11 12
21,035.53 6,933.84 27,969.37 15,638.07 —
14,045.42 7,033.41 21,078.83 22,022.14 385.87
160,228.84
166,086.87
13
21 22
The Schedules referred to above form an integral part of the Balance Sheet. As per our Report attached
Signatures to Balance Sheet and Schedules 1 to 13, 21 and 22
For and on behalf of Kalyaniwalla & Mistry Chartered Accountants
A.B. Godrej Chairman
N.B. Godrej Managing Director
V. R. Mehta Partner
M. Eipe Executive Director & President (Chemicals)
V. Srinivasan Executive Vice President (Finance & Estate) & Company Secretary
Mumbai, May 26, 2010 36
Annual Report 2009–2010
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010 Schedule Rs. lac INCOME Turnover (gross) (refer note 15) Less: Excise duty Turnover (net) Other Income
14
EXPENDITURE Materials consumed and purchase of goods Expenses Inventory change Interest and financial charges (net) Depreciation (Net of transfer from Revaluation Reserve Rs. 99.50 lac, Previous year Rs. 133.69 lac) Profit before Taxation and Extraordinary Items Provision for Taxation - Current Tax - MAT credit - Deferred Tax - Fringe benefit Tax - Adjustment for tax of previous years (net)
15 16 17 18
Profit after Taxation and before Extraordinary Items Extraordinary Items (Net of Tax) Profit after Extraordinary Items Prior Period adjustments (net) Net Profit Surplus brought forward Add : Excess provision of proposed dividend Add : Excess provision of tax on distributed profit
19 20
This Year Rs. lac
Previous Year Rs. lac
85,629.45 3,992.70 81,636.75 17,532.98 99,169.73
87,468.82 5,723.44 81,745.38 15,402.94 97,148.32
53,416.89 30,626.00 (1,736.02) 6,024.79 2,838.80
54,317.99 30,173.54 2,254.41 6,106.12 2,646.19
91,170.46 7,999.27
95,498.25 1,650.07
877.00 (877.00) (80.00) (13.47) (93.47) 8,092.74 8,092.74 8,092.74
29,418.26 37,511.00
(341.00) 58.00 65.27 (217.73) 1,867.80 26.00 1,893.80 (86.11) 1,807.69 32,437.14 32,437.14 34,244.83
4,764.37 791.30 809.28 31,146.05 37,511.00 2.54 2.54
3,996.99 679.29 180.77 29,387.78 34,244.83 0.56 0.57
29,387.78 26.05 4.43
Amount Available For Appropriation Appropriations Proposed Dividend - Final Tax on distributed profits Transfer to General Reserve Surplus carried forward TOTAL Basic & Diluted Earnings per share before Extraordinary Items Basic & Diluted Earnings per share after Extraordinary Items (refer note 19) Significant Accounting Policies Notes to Accounts
21 22
The Schedules referred to above form an integral part of the Profit & Loss Account. As per our Report attached
Signatures to Profit and Loss Account and Schedules 14 to 22
For and on behalf of Kalyaniwalla & Mistry Chartered Accountants
A.B. Godrej Chairman
N.B. Godrej Managing Director
V. R. Mehta Partner
M. Eipe Executive Director & President (Chemicals)
V. Srinivasan Executive Vice President (Finance & Estate) & Company Secretary
Mumbai, May 26, 2010 37
Godrej Industries Limited CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010 This year Previous year Rs. lac Rs. lac A. Cash Flow from operating activities : Profit before tax Adjustments for : Depreciation Unrealised Foreign exchange Profit on sale of investments Profit on sale of fixed assets Dividend income Interest income Interest expense Deferred expenditure written off Provision/(write back) for diminution in value of investments Provision/(Write back) for doubtful debts & sundry balances (net) Others Operating Profit/(Loss) before working capital changes Adjustments for : Inventories Trade and other receivables Trade payables Cash generated from operations Direct taxes paid Direct taxes refund / received Net Cash from operating activities B. Cash Flow from investing activities : Purchase of fixed assets Proceeds from sale of fixed assets Purchase of investments Proceeds from sale of investments Intercorporate deposits / Loans (net) Interest received Dividend received Net Cash used in investing activities before extraordinary item Proceeds from sale of Medical Diagnostics Division Net Cash from/(used in) investing activities after extraordinary item C. Cash Flow from financing activities : Proceeds from borrowings Repayments of borrowings Equity share capital bought back Bank overdrafts (net) Interest paid Dividend paid Tax on distributed profits Net Cash (used in)/from financing activities Net decrease in cash and cash equivalents Cash and cash equivalents (Opening Balance) Cash and cash equivalents (Closing Balance) Notes : 1. Cash and Cash equivalents Cash on hand and balances with banks Effect of exchange rate changes Cash and cash equivalents 2. Cash and cash equivalents include Deposits with Bank as security against guarantees issued amounting to Rs. 18.50 lac (Previous year Rs.18.50 lac). 3. To finance working capital requirements, the Company’s Bankers have sanctioned a total fundbased limit of Rs. 7,500 lac. Of this, limits utilised as on March 31, 2010 is Rs. 3,918.89 lac. 4. The figures of previous year have been regrouped wherever necessary. As per our Report attached
For and on behalf of Kalyaniwalla & Mistry Chartered Accountants V. R. Mehta Partner Mumbai, May 26, 2010 38
7,999.27
1,650.07
2,838.80 (182.56) (10,538.71) (9.44) (4,280.11) (1,274.66) 6,042.10 385.87 1,253.52 (25.56) 2,208.52
2,646.19 494.16 (5,939.18) (99.01) (5,021.39) (1,747.39) 5,850.65 682.02 (1,686.04) 480.63 (86.11) (2,775.40)
(4,121.25) 4,516.48 6,320.95 8,924.70 (1,227.00) 12.56 7,710.26
10,415.57 9,501.27 (10,714.37) 6,427.07 (2,384.91) 407.86 4,450.02
(4,020.67) 49.67 (82,577.71) 91,908.92 (922.17) 1,193.14 4,280.11 9,911.29 9,911.29
(4,635.73) 135.37 (173,103.49) 135,094.16 (562.95) 1,265.99 5,021.39 (36,785.26) 26.00 (36,759.26)
82,500.00 (84,620.90) (2,886.58) (3,193.27) (6,115.79) (3,972.71) (674.86) (18,964.11) (1,342.56) 2,851.17 1,508.61
122,617.69 (103,825.30) (2,644.43) (5,724.49) (4,012.62) (679.29) 5,731.56 (26,577.68) 29,428.85 2,851.17
1,504.39 4.22 1,508.61
2,845.86 5.31 2,851.17
Signatures to Cash Flow Statement
A.B. Godrej Chairman
N.B. Godrej Managing Director
M. Eipe Executive Director & President (Chemicals)
V. Srinivasan Executive Vice President (Finance & Estate) & Company Secretary
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010 This Year Rs. lac
Previous Year Rs. lac
8,000.00 10,000.00 18,000.00
8,000.00 10,000.00 18,000.00
3,176.25 3,176.25
3,197.59 3,197.59
SCHEDULE 1 : SHARE CAPITAL Authorised: 800,000,000 100,000,000
Equity shares of Re. 1 each Unclassified Shares of Rs.10 each
Issued, Subscribed and Paid Up: 317,624,892 Of the above, (i) 187,202,388 (ii) 155,547,816 (iii)
95,705,718
(Previous Year 319,758,602) Equity shares of Re.1 each fully paid
(Previous Year 187,202,388) shares are held by Godrej & Boyce Mfg. Co. Limited, the holding company. (Previous Year 155,547,816) shares are allotted for consideration other than cash pursuant to schemes of amalgamation/arrangement. (Previous Year 95,705,718) shares are allotted as fully paid bonus shares by way of capitalisation of Securities Premium Account.
SCHEDULE 2: RESERVES AND SURPLUS Securities Premium Account As per last balance sheet Less : Premium paid to buyback of shares Capital Investment Subsidy Reserve As per last balance sheet Capital Redemption Reserve As per last balance sheet Add : Transfer from General Reserve on buyback of shares
Rs. lac 58,515.68 (2,865.24)
3,125.00 21.34
Revaluation Reserve As per last balance sheet Less : Depreciation on revalued component and deduction due to sale/discard of fixed assets
1,409.93
General Reserve As per last balance sheet Less: Transfer to Capital Redemption Reserve Add :Transferred from profit & loss account
7,051.21 (21.34) 809.28
Profit & Loss Account SCHEDULE 3: SECURED LOANS Term loans from banks Bank overdrafts, packing credits, etc. Commercial paper Other loans Particulars of securities (refer note 5) SCHEDULE 4: UNSECURED LOANS Short term loans From Banks From others Other loans from banks Commercial paper Fixed Deposits Intercorporate borrowing Amount repayable within one year
(123.55)
This Year Rs. lac
Previous Year Rs. lac
55,650.44
58,515.68 58,515.68
25.00
25.00
3,146.34
3,125.00 3,125.00 1,671.21
1,286.38
(261.28) 1,409.93
7,839.15 31,146.05
6,870.44 180.77 7,051.21 29,387.79
99,093.36
99,514.61
10,000.00 1,418.89 2,500.00 6,500.00 20,418.89
12,170.00 4,612.16 6,500.00 23,282.16
18,500.00 — — 6,000.00 9,742.14 100.00 34,342.14
21,000.00 2,500.00 8,000.00 3,000.00 2,164.31 150.00 36,814.31
25,610.31
26,650.00 39
Godrej Industries Limited SCHEDULE 5 : FIXED ASSETS Rs. Lac ASSETS
Tangible Assets Land - Freehold - Leasehold Buildings Plant & Machinery Research Centre Furniture & Fixtures Office & Other Equipments Vehicles / Vessels Intangible Assets Trademarks Software Assets acquired under finance lease Vehicles TOTAL - This Year - Previous Year Capital Work-in-Progress TOTAL 1. 2. 3. 4. 5.
GROSS BLOCK DEPRECIATION / IMPAIRMENT NET BLOCK As on Additions Deductions/ As on Upto Deductions/ For the Upto As on As on 01.04.2009 Adjustments 31.03.2010 31.03.2009 Adjustments Year 31.03.2010 31.03.2010 31.03.2009 113.90 147.97 6,659.12 44,142.40 127.06 1,194.56 1,137.34
— — 3,074.02 870.10 — 136.75 100.87
— — 2.83 460.18 — 62.13 34.01
113.90 147.97 9,730.31 44,552.32 127.06 1,269.18 1,204.20
— 25.86 2,477.52 25,824.88 57.46 701.71 598.42
— — 0.07 427.14 — 44.66 15.93
— 1.54 209.62 2,225.62 3.68 78.25 55.01
— 27.40 2,687.07 27,623.36 61.14 735.30 637.50
113.90 120.57 7,043.24 16,928.96 65.92 533.88 566.70
113.90 122.11 4,181.60 18,317.52 69.60 492.85 538.92
2,597.88
14.55
17.91
2,594.52
396.60
16.71
199.99
579.88
2,014.64
2,201.28
463.00 964.84
— 68.00
— —
463.00 1,032.84
378.12 805.57
— —
46.30 64.65
424.42 870.22
38.58 162.62
84.88 159.27
306.63 — 57,854.70 4,264.29 55,822.44 2,693.68
28.95 606.01 661.42
277.68 61,512.98 57,854.70
201.85 31,467.99 29,173.75
19.98 53.64 524.49 2,938.30 485.64 2,779.88
235.51 33,881.80 31,467.99
42.17 104.78 27,631.18 26,386.71 2,197.60 29,828.78
2,484.13 28,870.84
Buildings, Plant & Machinery and Research Centre at Vikhroli Factory were revalued on 30th June, 1992 on the basis of a Valuation Report submitted by professional valuers. Depreciation for the year includes Rs.99.50 Lac (Previous Year Rs.133.69 lac) being depreciation on revalued component of the fixed assets. Gross block deductions includes Rs. 82.63 lac (Previous Year Rs.313.25 lac) being the revalued component of assets sold/discarded during the year. Accumulated depreciation includes impairment loss of Rs. 510.36 lac (Previous year Rs 510.36 lac) on certain plant & machinery. Capital work-in-progress is net of impairment loss of Rs.204.10 lac (Previous Year Rs. 204.10 lac) provided on an infructuous asset under construction.
SCHEDULE 6 : INVESTMENTS PARTICULARS OF INVESTMENTS : Investee Company / Institutions LONG TERM INVESTMENTS : At Cost A. TRADE INVESTMENTS Equity Shares : Fully Paid Bharuch Eco-Aqua Infrastructure Ltd. Preference Shares : Partly paid Wadala Commodities Ltd. (8% Redeemable Cumulative Preference Shares, 2012) B. OTHER INVESTMENTS : Fully Paid unless stated otherwise Equity Shares : Quoted : Godrej Consumer Products Ltd. Unquoted : Avesthagen Limited Compass BPO Ltd. CBay Infotech Ventures Pvt. Ltd. Gharda Chemicals Ltd. Godrej Hershey Ltd. HyCa Technologies Pvt. Ltd. Swadeshi Detergents Ltd. Tahir Properties Ltd. (Partly paid) Common Stock/Membership Units : Quoted CBay Systems Holdings Ltd., BVI Unquoted : CBay Systems Ltd., USA Boston Analytics Inc. Verseon Corporation - Class A Preferred Shares
40
Face value (Rs.)
Qty. as on 01.04.09
Number Acquired Sold/adjusted during the during the year year
Qty. as on 31.03.10
10
440,000
-
-
440,000
10
5,000,000
-
-
5,000,000
1
55,369,989
21,074,631
4,000,000 72,444,620
10 £0.25 10 100 10 10 10 100
195,577 13,692 32,258 114 32,587,046 12,222 209,370 25
6,626 1,805 -
15,497
-
202,203 32,258 114 32,587,046 12,222 209,370 25
$0.10
8,182,148
-
-
$0.01 $1 $1.90
4,091,073 1,055,629 2,631,578
-
-
-
Notes
Amount As on As on 31.03.10 31.03.09 Rs. lac Rs. lac
44.00
44.00
(a)
450.00
450.00
(b)
51,372.93
49,223.86
1,242.83 100.00 11.57 17,740.44 125.00 191.33 0.01
1,142.83 124.55 100.00 11.57 17,740.44 125.00 191.33 0.01
8,182,148
3,809.30
3,809.30
4,091,073 1,055,629 2,631,578
253.52 688.09 1,142.34
253.52 688.09 1,142.34
(c) (d)
(a)
Annual Report 2009–2010
Investee Company / Institutions
Face value (Rs.)
Preference Shares : Unquoted : Tahir Properties Ltd. (Class - A) (partly paid) 100 Optionally convertible Loan notes/Debentures : Unquoted : Compass BPO Ltd. (10%) £1000 Verseon Corporation (13%) $1,000,000 Boston Analytics Inc. (15%) $750,000 Boston Analytics Inc. (20%) $1,550,000 Boston Analytics Inc. (12%) $950,000 Tricom India Limited (8%) 10 Non-convertible Debentures : Godrej Oil Plantations Limited 10 Shares in Co-operative Society : Fully Paid Unquoted : The Saraswat Co-op Bank Ltd. 10 Investment in the capital of Partnership Firm : View Group LP C. INVESTMENT IN SUBSIDIARY COMPANIES Equity Shares : Quoted : Godrej Properties Ltd. (listed on 5.1.2010) 10 Unquoted : Ensemble Holdings & Finance Ltd. 10 Godrej Agrovet Ltd. 10 Godrej Gokarna Oil Palm Limited 10 Godrej International Ltd. £1 Godrej Hygiene Care Pvt. Ltd. (received 22,03,190 1 bonus shares & thereafter sub divided into 10 shares of Re 1 each) Natures Basket Limited 10
Qty. as on 01.04.09
Number Acquired Sold/adjusted during the during the year year
Qty. as on 31.03.10
Notes
Amount As on As on 31.03.10 31.03.09 Rs. lac Rs. lac
25
-
-
25
(a)
0.02
0.02
97 13,135,050
-
97 13,135,050
-
(c) (e) (f) (f) (g)
397.60 299.68 673.03 469.21 -
83.19 397.60 299.68 673.03 469.21 1,313.51
175,737
-
175,737
-
-
17.57
1,000
-
-
1,000
0.10
0.10
-
-
-
-
0.01
0.01
48,495,209
-
- 48,495,209
18,528.60
18,528.60
3,774,160 9,112,956 2,584 2,355,000 500,000
22,533,350
3,774,160 9,112,956 2,584 2,355,000 -
1,318.94 16,317.91 41.86 1,651.61 -
1,318.94 16,317.91 41.86 1,651.61 4.00
501.25 117,371.18 (2,609.19) 114,761.99
116,163.68 (1,355.67) 114,808.02
73,710.83 41,051.16 114,761.99
53,033.16 61,774.86 114,808.02
443,052.00
75,725.27
23,033,350
7,050,000
Less : Provision for diminution in value of Investments Aggregate book value of Investments Quoted Unquoted Market Value of Quoted Investments
7,050,000
(b)
NOTES: (a) Uncalled Liability on partly paid shares
-
Tahir Properties Ltd. - Equity - Rs. 80 per share.
-
Tahir Properties Ltd. - Preference - Rs. 30 per share.
-
Wadala Commodities Limited - Preference - Re. 1 per share.
(b) 97,50,000 shares of Godrej Consumer Products Limited have been pledged as security against loan from J.P. Morgan Securities India Pvt. Ltd. and 52,34,852 received under the scheme of arrangement are locked in till November 24, 2012. (c) 1,805 equity shares received on conversion of loan notes. (d) The said shares have been refused for registration by the investee company. (e) Optionally Convertible Notes are convertible as under :
-
(f)
The optionally convertible Promissory notes (15%) of Boston Analytics Inc. in respect of which the company did not exercise the conversion option and Boston Analytics Inc. promissory notes (20%) were due for redemption on June 30, 2009 and August 21, 2009 respectively. The said promissory notes have not been redeemed as of the Balance Sheet date.
Verseon Corporation - After December 1, 2008 until the due date but not later than Sepember 15, 2012.
(g) 12% promissory notes repayable on or before March 31, 2011 along with interest on maturity.
41
Godrej Industries Limited This Year Rs. lac
Previous Year Rs. lac
SCHEDULE 7: INVENTORIES (at lower of cost and net realisable value) Stores and spares
1,192.44
1,333.39
Raw materials
5,030.25
2,504.07
Work-in-progress
4,237.76
2,676.28
Finished goods
3,016.42
2,841.88
13,476.87
9,355.62
102.21
144.63
SCHEDULE 8: SUNDRY DEBTORS (Unsecured) Debts outstanding over six months Considered doubtful Other debts Considered good Less: Provision for doubtful debts
11,086.55
16,099.98
11,188.76
16,244.61
102.21
144.63
11,086.55
16,099.98
15.55
14.35
1,459.56
215.32
SCHEDULE 9: CASH AND BANK BALANCES Cash and cheques on hand Balances with scheduled banks - on current account - on deposit account (refer note 8)
33.50
2,621.50
1,508.61
2,851.17
Loans and Advances (refer note 9 a)
2,482.64
2,307.33
Loan to GIL ESOP Trust
7,301.80
7,358.70
Rs. 585.67 lac, previous year Rs.549.58 lac)
1,964.60
1,932.72
Intercorporate deposits
1,387.51
35.00
540.62
619.19
SCHEDULE 10: LOANS AND ADVANCES (Unsecured and considered good unless otherwise stated)
(net of provision for doubtful advances Rs. 329.14 lac, previous year Rs.313 lac) Advances recoverable in cash or in kind or for value to be received (net of provision for doubtful advances
Deposits and balances with - Customs & excise authorities - Others Advance payment of taxes
776.56
687.48
3,081.68
1,853.78
17,535.41
14,794.20
(Net of Provision for tax Rs. 1670.91 lac, previous year Rs.761.90 lac)
42
Annual Report 2009–2010
This Year Rs. lac
Previous Year Rs. lac
85.28
47.17
18,399.08
10,906.31
307.22
577.76
1,521.81
1,280.79
SCHEDULE 11 : CURRENT LIABILITIES Sundry creditors (refer note 10) - Outstanding dues of micro enterprises and small enterprises - others Advances from customers Sundry deposits Investor Education & Protection Fund * - Unclaimed dividend
16.97
18.74
- Unclaimed Matured Deposits
9.46
9.21
- Unclaimed interest on Matured Deposits
4.87
-
Other liabilities
423.42
864.32
Interest accrued but not due on loans
267.42
341.12
21,035.53
14,045.42
4,764.37
3,996.99
* There is no amount due and outstanding to be credited to the Investor Education and Protection Fund. SCHEDULE 12 : PROVISIONS Proposed dividend Provision for tax on distributed profits Provision for retirement benefits
791.30
679.29
1,378.16
2,357.13
6,933.84
7,033.41
SCHEDULE 13: MISCELLANEOUS EXPENDITURE (To the extent not written off or adjusted) Deferred revenue expenditure Voluntary retirement compensation Balance at the beginning of the year Less : Amortised during the year
385.87
1,067.89
(385.87)
(682.02)
-
385.87
76.27
159.46
SCHEDULE 14: OTHER INCOME Interest (Gross) : - Debentures - Income tax refund
-
41.98
1,181.08
1,537.60
- from subsidiary companies
1,384.58
2,132.25
- from long term investments
2,895.53
2,889.14
9.44
99.01
10,437.56
5,626.55
101.15
312.63
-
1,686.04
747.97
9.24
- Deposits (Tax deducted at source Rs. 121.11 lac, previous year Rs. 584 lac) Dividend
Profit on sale of fixed assets (Net) Profit on sale of long term investments (refer notes 6 and 16) Profit on sale of current investments Provision for diminution in investment written back (refer note 16) Bad debt recovered Miscellaneous income
699.40
909.04
17,532.98
15,402.94
43
Godrej Industries Limited This Year Rs. lac
Previous Year Rs. lac
2,504.07
10,380.37
55,556.98
45,917.74
58,061.05
56,298.11
SCHEDULE 15 : MATERIALS CONSUMED AND PURCHASE OF GOODS Raw materials consumed : Stocks at the commencement of the year Add : Purchases (net) Less : Stocks as at the close of the year
5,030.25
2,504.07
Raw Materials consumed during the year
53,030.80
53,794.04
Purchase of goods for resale
386.09
523.95
53,416.89
54,317.99
SCHEDULE 16: EXPENSES Salaries, wages and allowances
9,273.84
7,033.16
Contribution to provident fund and other funds
731.23
662.42
Employee welfare expenses
577.54
597.28
Stores and spares consumed
797.21
1,203.58
Power and fuel
6,561.57
6,820.18
Processing charges
648.50
292.12
Rent
440.44
418.17
Rates and taxes
535.08
534.75
Repairs and maintenance -
Machinery
853.70
703.34
-
Buildings
706.15
646.46
-
Other assets
27.48
159.30
Insurance
140.66
128.40
2,557.85
3,146.21
Commission
388.44
351.38
Discount
378.66
286.08
1,264.97
1,095.29
627.36
821.54
Freight
Advertisement and publicity Selling and distribution expenses Provision for doubtful debts and advances Provision for depletion in value of investments Excise duty
(25.56)
480.63
1,253.52
-
194.79
429.64
5.22
2,160.50
2,904.85
2,828.84
(Including Rs. 38.91 lac, previous year Rs. 329.09 lac on inventory change ) Foreign exchange loss Miscellaneous expenses Less: Expenses recovered under cost sharing agreement for use of common facilities
44
(217.50)
(625.73)
30,626.00
30,173.54
Annual Report 2009–2010
Rs. lac
This Year Rs. lac
Previous Year Rs. lac
SCHEDULE 17 : INVENTORY CHANGE Stocks at the commencement of the year -
Finished goods
2,841.88
3,447.66
-
Work-in-progress
2,676.28
4,324.91 5,518.16
7,772.57
Less: Stocks at the close of the year : -
Finished goods
(3,016.42)
(2,841.88)
-
Work-in-progress
(4,237.76)
(2,676.28)
(Increase)/Decrease in Inventory
(7,254.18)
(5,518.16)
(1,736.02)
2,254.41
SCHEDULE 18 : INTEREST AND FINANCIAL CHARGES (Net) Interest paid -
on fixed loans
-
on bank overdrafts
-
other interest
4,367.92
4,627.93
25.14
36.12
667.83
375.40 5,060.89
5,039.45
Less: Interest received -
on Customer balances, etc.
-
others
Net Interest Other financial charges Foreign exchange loss
17.31
5.68
-
2.67 17.31
8.35
5,043.58
5,031.10
981.21
811.20
-
263.82
6,024.79
6,106.12
-
26.00
-
26.00
-
(86.11)
-
(86.11)
SCHEDULE 19 : EXTRAORDINARY ITEMS Profit on sale of Medical Diagnostics business
SCHEDULE 20 : PRIOR PERIOD ADJUSTMENTS Short provision for expenses
45
Godrej Industries Limited SCHEDULE 21: SIGNIFICANT ACCOUNTING POLICIES 1.
2.
3.
4.
5.
6.
7.
46
Accounting Convention The financial statements are prepared Under the historical cost convention, on the accrual basis of accounting, in accordance with the generally accepted accounting principles in India, the Accounting Standards presecribed in the Companies (Accounting Standard) Rules, 2006 and the relevant provisions of the Companies Act, 1956. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported balances of assets and liabilities as of the date of the financial statements and reported amounts of income and expenses during the period. Management believes that the estimates used in the preparation of financial statements are prudent and reasonable. Actual results could differ from the estimates. Fixed Assets Fixed Assets are stated at cost or as revalued as the case may be, less accumulated depreciation. Cost includes expenses related to acquisition and any directly attributable cost of bringing the assets to it’s intended working condition. Fixed Assets acquired under finance lease are capitalised at the lower of their face value and present value of the minimum lease payments. Intangible Assets Intangible assets are stated at cost of acquisition less accumulated amortisation. The cost of acquisition of trade marks is amortised equally over a period of ten years. Computer software is amortised over a period of six years on the straight line method. Impairment of Assets The Company reviews the carrying amounts of tangible and intangible assets for any possible impairment at each balance sheet date. An impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount. Impairment loss, if any, is recognised in the period in which impairment takes place. Borrowing Costs Borrowing costs that are directly attributable to the acquisition / construction of the qualifying asset are capitalised as a part of the cost of such asset, upto the date of acquisition / completion of construction. Investments Investments are classified into long-term and current investments. Long term investments are carried at cost. Provision for diminution, if any, in the value of each long term investment is made to recognise a decline, other than of a temporary nature. The fair value of a long term investment is ascertained with reference to its market value, the investee’s assets and results and the expected cash flows from the investment. Current investments are stated at lower of cost and fair value.
8. Inventories Inventories are valued at lower of cost and net realisable value. Cost is computed on weighted average basis and is net of modvat. Finished goods and work in progress include cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Provision is made for the cost of obsolescence and other anticipated losses, wherever considered necessary. 9. Provisions and Contingent Liabilities Provisions are recognised in the accounts in respect of present probable obligations, the amount of which can be reliably estimated. Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company. 10. Foreign Exchange Transactions (i) Transactions in foreign currency are recorded at exchange rates prevailing on the day of the transaction. Monetary assets and liabilities denominated in foreign currency, remaining unsettled at the period end are translated at closing rates. The difference in translation of monetary assets and liabilities and realised gains and losses on foreign currency transactions are recognised in the Profit and Loss Account. (ii) Forward exchange contracts other than those entered into to hedge foreign currency risk of firm commitments or highly probable forecast transactions are translated at period end exchange rates. Premium or discount on such forward exchange contracts is amortised as income or expense over the life of the contract. (iii) Realised gain or losses on cancellation of forward exchange contracts are recognised in the Profit and Loss Account of the period in which they are cancelled. (iv) Exchange differences in respect of other unexpired foreign currency derivative contracts, which have been entered into to hedge foreign currency risks are marked to market and losses, if any, are recognised in the Profit and Loss Account. 11. Revenue Recognition Sales are recognised when goods are supplied and are recorded net of returns, trade discounts, rebates, sales taxes and excise duties. Income from processing operations is recognised on completion of production / dispatch of the goods, as per the terms of contract. Export incentives receivable under the Duty Entitlement Pass Book Scheme and Duty Drawback Scheme are accounted on accrual basis. Dividend income is recognised when the right to receive the same is established. Interest income is recognised on a time proportion basis. Income on assets given on operating lease is recognised on a straight line basis over the lease term.
Annual Report 2009–2010
SCHEDULE 21: SIGNIFICANT ACCOUNTING POLICIES 12. Research and Development Expenditure Revenue expenditure on Research & Development is charged to the Profit and Loss Account of the year in which it is incurred. Capital expenditure incurred during the year on Research & Development is included under additions to fixed assets. 13. Depreciation Leasehold land is amortised equally over the lease period. Leasehold improvements are amortised over five years. Depreciation is provided on the straight line method at the rates specified in Schedule XIV to the Companies Act, 1956, except for computer hardware which is depreciated over its estimated useful life of 4 years. Depreciation on assets acquired during the year is provided for the full accounting year and no depreciation is charged on the assets sold/discarded during the year, except in case of major additions and deductions exceeding rupees one crore in which case, proportionate depreciation is provided. Depreciation on the revalued component is provided on the straight line method based on the balance useful life of the assets as certified by the valuers. Such depreciation is withdrawn from Revaluation Reserve and credited to Profit and Loss Account. 14. Employee Benefits Liability is provided for the retirement benefits of provident fund, gratuity, leave encashment and pension benefit in respect of all eligible employees of the company. (i) Defined Contribution Plan Employee benefits in the form of Provident Fund and family pension are considered as defined contribution plans and the contributions are charged to the Profit and Loss of the year when the contributions to the respective funds are due. (ii) Defined Benefit Plan Retirement benefits in the form of Gratuity and Pension plan for eligible employees considered as defined benefit obligations and are provided for on the basis of an actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet. (iii) Other long-term benefits Long-term compensated absences and Long Service awards are provided for on the basis of an actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet. Actuarial gain/losses comprising of experience adjustments and the effects of changes in acturial assumptions are immediately recognized in the Profit and Loss Account. 15. Incentive Plans The Company has a scheme of Performance Linked Variable Remuneration (PLVR) which rewards its employees based on Economic Value Addition (EVA). The PLVR amount is related to actual improvement made in EVA over the previous year when compared with expected improvements.
16. Hedging The company uses forward exchange contracts to hedge it’s foreign exchange exposures and commodity futures contracts to hedge the exposure to oil price risks. Gains or losses on settled contracts is recognized in the profit and loss account. Futures contracts not settled as on the Balance Sheet date are marked to market and losses, if any, are recognized in the profit and loss account, whereas, the unrealized profit is ignored. Gains or losses on the commodity futures contracts is recorded in the profit & loss account under cost of materials consumed. 17. Deferred Revenue Expenditure The compensation payable under the Voluntary Retirement Schemes, the benefit of which is expected to accrue in future is deferred over its payback period. The compensation is generally amortised over three to five years depending on the pay back period, however, the pay back period is restricted to March 31, 2010. 18. Taxes on Income Tax expense comprises both current and deferred tax. Current tax is the amount of tax payable on the assessable income for the year determined in accordance with the provisions of the Income Tax Act, 1961. Deferred tax is recognized on timing differences, being the differences between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets on unabsorbed tax losses and tax depreciation are recognized only when there is virtual certainty of their realisation and on other items when there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. The tax effect is calculated on the accumulated timing differences at the year end based on the tax rate and laws enacted or substantially enacted on the balance sheet date. 19. Segment Reporting The Accounting Policies adopted for segment reporting are in line with the Accounting Policies of the Company. Segment assets include all operating assets used by the business segments and consist principally of fixed assets, debtors and inventories. Segment liabilities include the operating liabilities that result from the operating activities of the business. Segment assets and liabilities that cannot be allocated between the segments are shown as part of unallocated corporate assets and liabilities respectively. Income / Expenses relating to the enterprise as a whole and not allocable on a reasonable basis to business segments are reflected as unallocated corporate income / expenses.
47
Godrej Industries Limited SCHEDULE 22: NOTES TO ACCOUNTS 1.
This Year Previous Year Rs. Lac Rs. Lac
Background The Company was incorporated under the Companies Act, 1956 on March 7, 1988 under the name of Gujarat-Godrej Innovative Chemicals Limited. The business and undertaking of the erstwhile Godrej Soaps Limited was transferred to the Company under a scheme of amalgamation with effect from April 1, 1994 and the Company’s name was changed to Godrej Soaps Ltd. Subsequently, under a scheme of arrangement the Consumer Products division of the Company was demerged with effect from April 1, 2001 into a separate company, Godrej Consumer Products Limited (GCPL) and the vegetable oils and processed foods manufacturing business of Godrej Foods Ltd. was transferred to the Company with effect from June 30, 2001. The Foods division (except Wadala factory) was then sold to Godrej Hershey Ltd., on March 31, 2006 The Company’s name was changed to Godrej Industries Limited on April 2, 2001. The Company is engaged in the businesses of manufacture and marketing of oleo-chemicals, their precursors and derivatives, bulk edible oils, estate management and investment activities.
2. Contingent Liabilities
(vii) Industrial relations matters under appeal 199.70 (viii) Others 130.76 b) Guarantees issued by banks, excluding guarantees issued in respect of matters reported in (a) above 733.04 c) Guarantees given by the Company in respect of credit/ guarantee limits sanctioned by banks to subsidiary and other companies. 1,431.21 d) Letter of credit issued by bank on behalf of the company 617.74 e) Uncalled liability on partly paid shares/debentures 50.03 f) Additional consideration payable for acquisition of certain shares on the occurrence of certain contingent events 3. Capital Commitments
48
666.65
2,225.00 84.26 50.03
104.13
This Year Previous Year Rs. Lac Rs. Lac
This Year Previous Year Rs. Lac Rs. Lac
a) Claims against the Company not acknowledged as debts: (i) Excise duty demands relating to disputed classification, post manufacturing expenses, assessable values, etc. which the Company has contested and is in appeal at various levels. 1,192.05 (ii) Customs Duty demands relating to lower charge, differential duty, classification, etc. 286.08 (iii) Sales Tax demands relating to purchase tax on Branch Transfer / Non availability of C Forms, etc at various levels. 216.24 (iv) Octroi demand relating to classification issue on import of Palm Stearine and interest thereon. 1,217.63 (v) Stamp duties claimed on certain properties which are under appeal by the Company 182.23 (vi) Income Tax demands against which the company has preferred appeals 1,498.03
204.71 224.43
Estimated value of contracts remaining to be executed on capital account, to the extent not provided
86.35
1,694.43
4. Share Capital
1,198.23
856.94
1,697.68
Post receipt of SEBI exemption under regulation 3(1)(l) of the Takeover Code, the Company issued a Public Announcement on 29th April, 2009 and on 20th May, 2009 for Buyback upto 57,00,000 of its shares from the open market at a price not exceeding Rs. 275/- per share for an aggregate consideration not exceeding Rs. 99 crore. Under the Buyback programme, the Company has bought back and extinguished 21,33,710 shares at a consideration of Rs. 2,887 lac. The premium paid on Buyback of shares amounting to Rs 2,865.24 lac has been adjusted from the Securities Premium Account. The Buyback programme has been completed. The resultant excess provision of proposed divided and tax on distributed profit due to Buyback of shares is added in surplus brought forward of profit & loss account 5. Loans
1,124.04
182.23
a)
b) c)
1,220.36
Term loans from banks are secured by first charge by way of equitable mortgage of the immovable properties including land, building and plant & machinery at Valia factory. Working capital facilities sanctioned by banks are secured by hypothecation of stocks and book debts. Other loans are secured by pledge of 97,50,000 shares of Godrej Consumer Products Limited so as to result in a collateral cover of three times the loan facility.
Annual Report 2009–2010
SCHEDULE 22: NOTES TO ACCOUNTS d)
(Contd.)
The Company had during the year raised Rs. 37500 lac (Previous year Rs.15000 lac) against the issue of commercial paper. The amount outstanding there against as on March 31, 2010 is Rs. 8500 lac.
6. Investments a)
b)
c)
The Company had sold its entire holding in Godrej Hicare Limited, a subsidiary company, in March 2009. The profit thereon based on the minimum consideration received was recognised in the accounts for the year ended on 31st March 2009. During the year, the company has received an additional consideration of Rs 2759 lac (net) on Godrej HiCare achieving certain financial performance parameters which consideration has been recognised as exceptional income in this year. The Board of Directors at its meeting held on May 27, 2009, approved a scheme for the merger of Godrej Hygiene Care Limited (GHCL), a 100% subsidiary of Godrej Industries Limited, into Godrej Consumer Products Limited (GCPL). The scheme has been approved by the Hon’ble High Court, Bombay on 8th October, 2009. The Appointed date of the merger being June 1, 2009, the assets and liabilities of GHCL stand transferred to and vested in GCPL from that date. Pursuant to the said scheme of arrangement, 51,07,125 (20%) equity shares held by GHCL in Godrej Sara Lee Limited , a 49:51 unlisted joint venture Company between the Godrej Group and Saralee Corporation, USA stand transferred to and vested in GCPL and the Company has received 209,39,409 equity shares of GCPL in lieu thereof as per the terms of the Scheme of Arrangement. 25% of these shares are locked in till 24th November, 2012. The Company has acquired and sold the following investments during the year:
Mutual Funds Liquid - Growth schemes
This Year
No. of Unts Birla Cash Plus Liquid Prudential ICICI Liquid KMMF Liquid LIC MF Liquid Fund UTI Liquid fund SBI Magnum Liquid Templeton Mutual Fund Standard Chartered Liquidity Manager Fund ING Vysya Liquid Deutsche Insta Cash Plus Fund HDFC Liquid Fund
88,296,420 141,505,480 18,592,371 545,617 55,087,628
Previous Year
Rs Lac
No. of Unts
12,715.00
Rs Lac
96,361,450
13,080.00
25,742.00 160,464,990 3,455.00 12,196,981 - 69,580,260 7,710.00 1,223,373 11,000.00 158,554,280
19,870.00 2,000.00 10,425.00 16,875.00 23,695.00
-
-
476,664
6,155.00
-
-
385,209 32,822,955
4,485.00 4,230.00
500.00
76,356,419
8,140.00
15,869.00 113,755,533
19,190.00
4,364,601 87,569,997
7. Sundry Debtors This Year Previous Year Rs. Lac Rs. Lac Sundry Debtors include the following amounts due from companies under the same management: Godrej Consumer Products Ltd. Godrej Agrovet Ltd. Godrej Hershey Ltd. Godrej Properties Ltd. Godrej Saralee Ltd. Godrej SCA Hygiene Ltd. Godrej & Boyce Mfg. Co. Ltd. Godrej International Ltd. Godrej Hygiene Care Pvt. Ltd. (Formerly known as Build Tough Properties Pvt. Ltd.) Natures Basket Ltd. Godrej Oil Palm Ltd.
-
123.27
5.18 1.59
18.71 49.32 21.33 25.60 0.02 5.44 1.59
17.67 4.57
4,741.61 -
8. Cash and Bank Balances This Year Previous Year Rs. Lac Rs. Lac Balances with Scheduled Banks in Deposit Accounts include: deposits held by bank as security against guarantees issued.
18.50
18.50
9. Loans and Advances a) Loans and Advances include Rs. 1,033 lac (Previous year Rs. 1,033 lac) advanced by the Company to certain individuals against pledge by way of deposit of equity shares of Gharda Chemicals Ltd. The Company has enforced its security and lodged the shares for transfer in its name, however, the transfer application has been rejected by Gharda Chemicals Ltd. and the Company filed an appeal before the Company Law Board against the rejection. The investee company had in the meanwhile, moved the Bombay High court and the Court remanded the matter back to CLB. The CLB has advised that the parties may approach the Bench after final disposal of the suit filed by the investee company and the application made by minority shareholders under Section 397/398 before the Hon’ble High Court. The company has filed an appeal with the Hon’ble High Court against the order of the Company Law Board under Section 10 F of the Companies Act to the High Court, which has been admitted.” Interest on the aforesaid loan amounting to Rs. 315 lac was accrued upto March 31, 2000 and has been fully provided for, no interest is being accrued thereafter. The recoverability of the advance is contingent upon the transfer and/ or disposal of the said shares. It is the 49
Godrej Industries Limited SCHEDULE 22: NOTES TO ACCOUNTS
(Contd.)
opinion of the management that the underlying value of the said shares is substantially greater than the amount of the loan. b) Loans and Advances include a loan of Rs 1382.43 lac to an individual secured by pledge of 38,97,454 shares of Godrej Hershey Ltd. c) Maximum Balance during the year This Year I.
Loans & Advances to subsidiary companies Godrej Properties Ltd. Natures Basket Ltd. II. Loans and Advances to associate companies Swadeshi Detergents Ltd. III. Loans and Advances where there is no repayment schedule or repayment is beyond seven years D. Kavasmanek and Others (refer (a) above). IV. Investments by the loanee in the shares of parent company and subsidiary company GIL ESOP Trust
Previous Year
Rs. Lac
Rs. Lac
Rs. Lac
550.00 455.00
455.00
-
35.00
19.00
35.00
This Year No. of Wt. Options average exercise price ( * ) Options outstanding at the beginning of the year Options granted during the year : 2 May, 2008 26 May, 2008 3 June, 2008 Options exercised during the year : Options forfeited / expired during the year : Options outstanding at the year end
ESOP II
1,033.00 1,033.00 1,033.00
8,728.27 7,301.80 7,358.70
10. Disclosure of sundry creditors under current liabilities is based on the information available with the company regarding the status of the suppliers as defined under the “Micro, Small and Medium Enterprises Development Act, 2006”. Amount overdue as on 31st March 2010 to Micro, Small and Medium Enterprises on account of principal amount together with interest, aggregate to Rs. Nil (Previous year – Rs. Nil). 11. Employee Stock Option Plans a) In December 2005, the Company had instituted an Employee Stock Option Plan (GIL ESOP) as approved by the Board of Directors and the Shareholders, for the allotment of 15,00,000 options, increased to 90,00,000 options on split of shares convertible into 90,00,000 equity shares of Re.1 each to eligible employees of participating companies. The scheme is administered by an independent ESOP Trust created with ILFS Trust Co. Ltd. which purchases from the market shares equivalent to the number of options granted by the Compensation Committee. The particulars of the scheme and movements during the year are as under:
50
ESOP I
Options outstanding at the beginning of the year Options granted during the year : 10 August, 2009 Options exercised during the year : Options forfeited / expired during the year : Options outstanding at the year end
Previous Year No. of Wt. Options average exercise price ( * )
7,799,950
190.43
7,309,500
177.10
-
-
340,000 835,450 150,000
284.60 276.70 254.45
2,100,000
91.84
-
-
119,250
284.45
835,000
209.87
5,580,700
228.06
7,799,950
190.43
This Year No. of Wt. Options average exercise price ( * ) -
Previous Year No. of Wt. Options average exercise price ( * ) -
860,000 -
179.86 -
-
-
-
-
-
-
860,000
179.86
-
-
( * ) The Wt. average exercise price stated above is the price on the grant date and will be increased by the interest cost at the prevailing rates upto the exercise of the option. The weighted average balance life of options outstanding as on 31st March 2010 is 4.08 years. The options granted shall vest after three to five years from the date of grant of option, provided the employee continues to be in employment and the option is exercisable within two years after vesting. Modification of the ESOP scheme : The vesting period for options granted on 05/04/07 and on 11/04/07 was increased to a maximum of 5 years and the exercise period to 3 years from vesting. The employee share based payment plans have been accounted based on the intrinsic value method and no compensation expense has been recognized since the market price of the underlying share at the grant date is the same / less than the exercise price of the option, the intrinsic value therefore being Nil.
Annual Report 2009–2010
SCHEDULE 22: NOTES TO ACCOUNTS
(Contd.)
The fair value of the share options has been determined using the Black-Scholes Option Pricing Model. Had the fair value method of accounting been used, the net profit and earnings per share would have been as per the pro forma amounts indicated below. This Year Rs. Lac
Previous Year Rs. Lac 8,092.74 1,807.69
Net Profit (as reported) Less : Stock based compensation expense determined under fair value based method (Pro Forma) 1,102.33 Net Profit (Pro Forma) 6,990.41 Amt. Rs. Basic & Diluted Earnings per share before Extraordinary Items (as reported) 2.55 Basic & Diluted Earnings per share before Extraordinary Items (Pro Forma) 2.20 Basic & Diluted Earnings per share after Extraordinary Items (as reported) 2.55 Basic & Diluted Earnings per share after Extraordinary Items (Pro Forma) 2.20
1,072.14 735.55 Amt. Rs.
Period Lease payment recognised in the profit & loss account Future lease payments - Within one year - Later than one year and not later than five years
0.23
The repayment of the loans granted to the ESOP trust is dependent on the exercise of the options by the employees and the market price of the underlying shares of the unexercised options at the end of the exercise period. The fall in value of the underlying equity shares is on account of market volatility and the loss, if any, can be determined only at the end of the exercise period. In view of the aforesaid, provision for diminution of Rs. 3,456.05 lac (previous year Rs. 5,331.24 lac) is not considered necessary in the financial statements. 12. Lease Leases granted by the Company (a) Operating Lease: The company has entered into leave and licence agreements in respect of its commercial and residential premises. The non-cancelable portion of the leases range between 3 months to 36 months and are renewable by mutual consent on mutually acceptable terms. Leave and licence arrangements being similar in substance to operating leases. The company has also granted lease for freehold land. The particulars of the operating lease arrangements are as under:
2,625.72 4,719.23
2,791.35 2,745.00
(b) Operating Lease: The Company’s significant leasing arrangements are in respect of operating lease for land, office premises, residential premises, machinery and storage tanks. The agreegate lease rentals paid by the Company are charged to profit & loss account.
0.25 0.57
This Year Previous Year Rs. Lac Rs. Lac 2,625.40 2,949.71
Lease taken by the Company
0.58
b) The independent ESOP trust has purchased shares of the Company from the market against the options granted. The purchases are financed by loans from the Company amounting to Rs. 8,113.31 lac (previous year Rs. 7,358.70 lac). As on 31 March 2010, the market value of the shares purchased by the Trust is lower than the acquisition cost of the shares by Rs. 3,456.05 lac (previous year Rs. 5,331.24 lac).
Gross carrying amount of premises Accumulated depreciation Depreciation for the period
The aggregate future minimum lease payments are as under :
Period Lease payment recognised in the profit & loss account Future lease commitments - Within one year - Later than one year and not later than five years
This Year Previous Year Rs. Lac Rs. Lac 440.44 418.17
399.87 323.41
412.53 336.07
(c) Finance Leases: The company has acquired vehicles under Finance Lease. Liability for minimum lease payment is secured by hypothecation of the vehicles acquired under the lease. The minimum lease payments outstanding as on March 31, 2010, in respect of vehicles acquired under lease are as under: Period
Total Un-matured minimum Interest lease payments outstanding as on March 31, 2010 Rs. Lac Rs. Lac Within one year 48.54 8.47 Later than one year 14.43 2.07 and not later than five years 62.97 10.54
Present value of minimum lease payments
Rs. Lac 45.71 11.73
57.44
This Year Previous Year Rs. Lac Rs. Lac 1,913.45 1,785.95 870.14 50.89
763.43 50.87 51
Godrej Industries Limited SCHEDULE 22: NOTES TO ACCOUNTS
(Contd.)
13. Deferred Tax Major components of deferred tax arising on account of timing differences as at the year end are: This Year Previous Year Rs Lac Rs Lac Assets Provision for retirement benefits 225.00 521.00 Provision for doubtful debts / 338.00 355.00 advances VRS Expenses 215.00 298.00 Others 327.00 30.00 1,105.00 1,204.00 Liabilities Depreciation 4,303.20 4,482.20 Net Deferred Tax Liability 3,198.20 3,278.20 14. Hedging Contracts The Company uses forward exchange contracts to hedge its foreign exchange exposure relating to the underlying transactions and firm commitments. The use of the foreign exchange forward contracts reduces the risk on cost to the company. The Company also uses commodity futures contracts to hedge it’s exposure to vegetable oil price risk. The Company does not use foreign exchange forward contracts or commodity future contracts for trading or speculation purposes. i)
52
Derivative instruments outstanding: a) Commodity futures contracts Details This Year Previous Year Purchase Sale Purchase Sale Futures contracts 1 6 outstanding Number of units 1,040 4,500 under above contracts in MT. b) Forward Exchange contracts Details This Year Previous Year Purchase Sale Purchase Sale Total number 31 9 24 6 of contracts outstanding Foreign currency value - US Dollar (million) 9.47 1.85 10.04 2.42 - Euro (million) 2.00 0.50
ii) Un-hedged foreign currency exposures Details This Year Previous Year Purchase Sale Purchase Sale Uncovered Foreign exchange exposure as at the year end - US Dollar (million) 13.78 8.42 2.08 3.56 - Euro (million) 0.04 0.04 0.17 - GBP (million) 0.03 15. Turnover This Year Previous Year Rs Lac Rs Lac Turnover includes i) Processing charges ii) Export Incentives iii) Licence fees and service charges
607.58 180.20 2,803.19
1,048.51 963.18 3,140.68
3,590.97
5,152.37
16. Exceptional Items
i) ii)
Profit on sale of long term investments Write back / (Provision) for diminution in investment
This Year Previous Year Rs Lac Rs Lac 10,437.56 5,626.55 -
1,686.04
17. Profit & Loss Account a)
b)
Exchange differences recognised in the Profit & Loss Account for the year is a loss of Rs. 5.22 lac (Previous year loss of Rs. 2424.32 lac). The exchange difference in respect of forward exchange contracts to be recognised in subsequent accounting periods is Rs. 26.38 lac (Previous year Rs. 21.31 lac). Research & Development Expenditure of revenue nature charged to the Profit & Loss Account amounts to Rs. 327.31 lac (Previous year Rs.173.30 lac).
Annual Report 2009–2010
SCHEDULE 22: NOTES TO ACCOUNTS
(Contd.)
18. Earning Per Share This Year Previous Year Calculation of weighted average number of equity shares Number of shares at the beginning of the year Nos. 319,758,602 319,758,602 Number of equity shares outstanding at the end of the year Nos. 317,624,892 319,758,602 Weighted average number of equity shares outstanding during the year Nos. 318,247,978 319,758,602 b) Net profit after tax excluding extraordinary items Rs. lac 8,092.74 1,781.69 c) Net profit after tax available for equity shareholders Rs. lac 8,092.74 1,807.69 (including extraordinary items) d) Basic and diluted earnings per share of Re 1 each Rupees 2.54 0.56 excluding extraordinary Items e) Basic and diluted earnings per share of Re 1 each Rupees 2.54 0.57 including extraordinary Items Note: There is no impact on basic as well as diluted earnings per share on account of the ESOP, as the scheme does not envisage any fresh issue of share capital. a)
19. Segment Information Information about primary business segments. Rs. lac
Revenue External Sales Inter segment sale Total Income Results Segment result before interest and tax Unallocated expenses Interest Expense (net) Profit before tax Taxes Profit after taxes and before extraordinary items Add: Extraordinary Items (Net of taxes) Add/(Less): Prior Period Items Net Profit Segment Assets Unallocated Assets Total Assets Segment Liabilities Unallocated Liabilities Total Liabilities Total Cost incurred during the year to acquire segment assets Segment depreciation Unallocated depreciation Total Depreciation
Chemicals Estate Finance & Investments Others This Year Previous This Year Previous This Year Previous This Year Previous Year Year Year Year
Total This Year Previous Year
78123.55 78123.55
77818.57 77818.57
2775.39 2775.39
3154.26 3154.26
17081.77 17081.77
14726.08 14726.08
1189.02 1189.02
1449.41 1449.41
99169.73
97148.32
99169.73
97148.32
5238.25
(1832.02)
1819.47
2177.91
15828.25
14726.08
(539.48)
(480.10)
22346.49
14591.87
(8322.43) (6024.79) 7999.27 93.47 8092.74
(6835.68) (6106.12) 1650.07 217.73 1867.80
-
26.00
-
(86.11)
8092.74 3157.69 185083.32 3114.89 188198.21 606.82 22413.69 63514.91 85928.60 7.77 3992.43
1807.69 182508.39 4657.31 187165.70 16402.55 68050.95 84453.50 4682.13
44848.58
38806.09
7943.25
5571.54 129455.39
18248.42
13795.00
1831.58
1335.98
902.36
1261.72
3057.49
2083.57
2034.48
108.97
Information about Secondary Business Segments Revenue by Geographical markets India Outside India Total Carrying Amount of Segment Assets India Outside India Total
134973.07
2836.10
1792.64
664.75
541.05
1688.52
17.91
1,724.12
14.67
64.92
155.50
59.98
237.14
213.72
2585.18 253.62 2838.80
2373.10 273.09 2646.19
69199.69 29970.04 99169.73
64737.13 32390.47 97127.60
188198.21 188198.21
187165.70 187165.70
53
Godrej Industries Limited SCHEDULE 22: NOTES TO ACCOUNTS
(Contd.)
Notes:
1. The Company has disclosed Business Segment as the primary segment. Segments have been identified taking into account the nature of the products, the different risks and returns, the organisational structure and the internal reporting system. 2. Chemicals segment includes Oleo Chemicals such as Fatty Alcohols, Fatty Acids, Alfa Olefin Sulphonates and Refined Glycerin. Estate segment comprises the business of giving premises on leave and license basis. Finance & Investments segment comprises of investment in subsidiaries, associate companies & other investments. Others includes business of refined vegetable oils and vanaspati and energy generation through windmills. 3. The geographical segments are as follows - Sales in India represent sales to customers located in India - Sales outside India represent sales to customers located outside India. 20. Related Party Disclosures a) Names of related parties and description of relationship Parties where control exists Godrej & Boyce Mfg. Co. Ltd., the holding company Subsidiary companies Godrej Agrovet Ltd. Golden Feeds Products Ltd. Cauvery Palm Oil Ltd. Godrej Oil Palm Ltd. Godrej Properties Ltd. Godrej Developers P. Ltd. Godrej Real Estate P. Ltd. Godrej Realty P. Ltd. Godrej Sea View Properties P. Ltd. Godrej Waterside Properties P. Ltd. Happy Highrises Ltd. Godrej Estate Developers P. Ltd. Natures Basket Ltd. Ensemble Holdings & Finance Ltd. Godrej International Ltd. Godrej Hygiene Care Pvt. Ltd. ( up to 31.05.2009) Fellow Subsidiaries: Wadala Commodities Ltd. Godrej (Malaysia) Sdn Bhd Godrej (Singapore) Pte Ltd. Godrej Infotech Ltd. Veromatic International BV Veromatic Services BV Water Wonder Benelux BV Godrej ConsumerBiz Ltd. (up to 01.06.2009) Other related parties with whom the Company had transactions during the year Associate / Joint Venture Companies Godrej Consumer Products Ltd. (also fellow subsidiary) Godrej Hershey Ltd. Swadeshi Detergents Ltd. Compass BPO Ltd. (up to 08.03.2010) Godrej Sara Lee Ltd. (up to 31.05.2009)
54
Key Management Personnel Mr. A.B. Godrej Mr. N.B. Godrej Ms. T.A. Dubash Mr. M. Eipe Mr. V. Banaji Mr. M.P. Pusalkar
Chairman Managing Director Executive Director & President (Marketing) Executive Director & President (Chemicals) Executive Director & President (Group Corporate Affairs) Executive Director & President (Corporate Projects)
Relatives of Key Management Personnel Ms. P.A. Godrej Wife of Mr. A.B. Godrej Ms. N.A. Godrej Daughter of Mr. A.B. Godrej Mr. P.A. Godrej Son of Mr. A.B. Godrej Ms. R.N. Godrej Wife of Mr. N.B. Godrej Mst. B.N. Godrej Son of Mr. N.B. Godrej Mst. S.N. Godrej Son of Mr. N.B. Godrej Mst. H.N. Godrej Son of Mr. N.B. Godrej Enterprises over which key management personnel exercise significant influence Godrej Netherlands BV Rapidol (Pty) Ltd. Godrej Global Mideast FZE Godrej Hygiene Products Ltd. Godrej Consumer Products Mauritius Ltd. Godrej Consumer Products Holding (Mauritius) Ltd. Godrej Holdings Pvt. Ltd. Godrej Investments Pvt. Ltd. Bahar Agrochem & Feeds Pvt. Ltd. Vora Soaps Ltd. Tahir Properties Ltd. Godrej Tyson Foods Ltd.
Annual Report 2009–2010
SCHEDULE 22: NOTES TO ACCOUNTS (Contd.) b) Transaction with Related Parties Nature of Transaction
Sale of Goods Previous Year Sale of Fixed Assets Previous Year Purchase of goods Previous Year Purchase of Fixed Assets Previous Year Processing charges received Previous Year Commission / Royalty received Previous Year Licence fees / Service charges / Storage Income Previous Year Other Income Previous Year Recovery of establishment & Other Expenses Previous Year Rent, Establishment & other exps paid Previous Year Interest received Previous Year Interest paid Previous Year Dividend income Previous Year Dividend paid Previous Year Remuneration Previous Year Purchase of Investments Previous Year Sale of Investments Previous Year Intercorporate Deposits -Accepted Previous Year Intercorporate Deposits Repaid during the year Previous Year Intercorporate Deposits -Advanced Previous Year Intercorporate Deposits Repayment received during the year Previous Year Shares in Associate Compnay acquired under a scheme of arrangement Previous Year Directors Fees Previous Year Balance Outstanding as on March 31, 2010 Receivables Previous Year Payables Previous Year Guarantees Outstanding Previous Year
(Rs. lac)
Holding Company
Subsidiary Companies
0.73 23.29 45.48 207.10 -
5.64 4.94 17.87 4.78 883.30 1,441.40 -
-
Fellow Associate/ Key Relative Subsidiaries Joint Venture Management of Key Companies Personnel Management Personnel
-
935.93 1,277.97 753.97 761.99 157.55 198.38
-
100.00 -
Enterprises over which Key Mangement Personnel exercise significant influence 13.54 5.29 0.06 -
123.59 105.14
-
182.99 178.89
-
-
-
306.58 284.03
0.27 0.39 0.12 1.11
203.12 165.66 22.63 28.85
7.69 -
426.66 707.30 18.09 41.71
-
-
9.45 0.02
630.05 890.49 40.84 71.69
30.90
175.86 154.75
0.78 0.89
756.33 1,192.16
-
-
3.40
932.97 1,382.11
294.49 304.36 2,340.03 2,340.03 4,291.80
49.51 73.93 61.43 17.22 12.51 6.54 1,303.51 2,132.25 5,244.97 4.00 17.57 4,729.78
7.40 19.11 8.00 8.00 -
243.07 168.62 2.24 6.12 2,895.51 2,889.12 35,129.26 -
70.93 68.62 1,024.39 792.16 -
64.68 82.31 249.23 729.47 87.07 55.74 -
0.49 0.84 3.50 -
659.64 649.17 63.67 20.72 26.63 14.54 4,199.02 5,021.37 2,660.19 3,138.11 1,111.46 847.90 5,244.97 35,133.26 17.57 9,021.58
-
525.00 265.78
-
405.00 17.44
-
-
-
930.00 283.22
-
575.00 231.15
-
405.00 22.30
-
-
-
980.00 253.45
-
1,005.00 1,300.00
-
-
-
-
-
1,005.00 1,300.00
-
550.00 1,300.00
-
16.00 -
-
-
-
566.00 1,300.00
-
-
-
4,747.72 -
1.60 2.1 0
-
-
4,747.72 1.60 2.10
20.52 22.91 -
18.34 4,764.21 243.76 163.01 500.00 -
3.11 0.13 0.27 6.84 -
4.72 177.16 108.15 155.01 1,431.21 2,225.00
-
-
12.61 9.65 0.09 (0.12) -
38.78 4,971.67 375.18 324.74 1,931.21 2,225.00
-
Total
955.11 1,283.26 4.94 772.57 790.12 928.78 1,748.49 157.55 198.38
55
Godrej Industries Limited SCHEDULE 22: NOTES TO ACCOUNTS (Contd.) c)
The Significant Related Party transactions are as under:
Nature of Transaction Sale of goods - Godrej Consumer Products Ltd. - Rapidol PTY Ltd. - Godrej Properties Ltd. - Godrej Saralee Ltd. Sale of fixed assets - Godrej Properties Ltd. Purchase of Fixed Assets - Godrej Properties Ltd. - Godrej & Boyce Mfg. Co. Ltd.
This Year Previous Year Nature of Transaction Rs. Lac Rs. Lac Interest received 927.98 1,188.61 - Godrej Properties Ltd. 11.95 - - Natures Basket Ltd. 3.83 - - Swadeshi Detergents Ltd. 89.36 - Godrej Agrovet Ltd.
-
883.30 45.48
538.07 215.16 17.87 0.73 -
531.11 225.02 44.36 100.00 46.87 5.86
Commission / Royalty received - Godrej Hershey Ltd. - Godrej Properties Ltd. - Godrej Consumer Products Ltd. - Natures Basket Ltd. - Godrej Global Solutions Ltd.
180.04 122.34 2.95 1.25 -
173.43 102.63 5.46 2.51
56
Previous Year Rs. Lac
35.71 25.72 2.24 -
3.50 17.22
12.51 8.00 6.12
6.54 8.00 -
157.55
198.38
Inter Corporate Deposits - Accepted - Ensemble Holdings & Finance Ltd. - Godrej Consumer Products Ltd.
525.00 405.00
250.00 -
Inter Corporate Deposits - Repaid - Ensemble Holdings & Finance Ltd. - Godrej Consumer Products Ltd.
575.00 405.00
200.00 -
Inter Corporate Deposits - Advanced - Godrej Properties Ltd. - Natures Basket Ltd. - Godrej Agrovet Ltd.
550.00 455.00 -
1,300.00
Inter Corporate Deposits - Repayment Received - Godrej Properties Ltd.
550.00
-
16.00
-
-
1,300.00
Dividend income - Godrej Consumer Products Ltd. - Godrej Properties Ltd. - Godrej Agrovet Ltd. - Godrej Saralee Ltd. - Ensemble Holdings & Finance Ltd.
2,895.51 1,212.38 91.13 -
1,854.93 1,961.86 91.13 1,034.19 79.26
Dividend paid - Godrej & Boyce Mfg. Co. Ltd.
2,340.03
2,340.03
Interest paid 4.94 - Ensemble Holdings & Finance Ltd. - Wadala Commodities Ltd. - Godrej Consumer Products Ltd. 1,398.48 186.03 Processing Charges received - Godrej Hershey Ltd.
Purchase of goods - Godrej Consumer Products Ltd. - Godrej Hershey Ltd. - Godrej Oil Palm Ltd. - Godrej & Boyce Mfg. Co. Ltd. - Heroes Aids Project - Godrej Hi Care Ltd. - Godrej Saralee Ltd.
Licence fees / Service charges / Storage income - Godrej Consumer Products Ltd. - Compass BPO Ltd. - Godrej Agrovet Ltd. - Godrej Properties Ltd. - Godrej Hershey Ltd. - Godrej Saralee Ltd. - Natures Basket Ltd. - Godrej Oil Palm Ltd. - Godrej Hicare Ltd. - Godrej SCA Hygiene Ltd. - Godrej Global Solutions Ltd.
This Year Rs. Lac
- Swadeshi Detergents Ltd. 182.26 154.79 103.24 73.52 49.88 39.73 22.21 4.15 -
211.72 172.69 101.31 33.09 84.75 238.14 7.69 25.88 9.45 5.37
- Godrej Agrovet Ltd.
Annual Report 2009–2010
SCHEDULE 22: NOTES TO ACCOUNTS (Contd.) Nature of Transaction
This Year Previous Year Nature of Transaction Rs. Lac Rs. Lac
This Year Rs. Lac
Previous Year Rs. Lac
Remuneration to Key Management Personnel
Other Income - Godrej Agrovet Ltd.
20.07
22.32 - Mr. N. B. Godrej
241.34
219.84
- Godrej Consumer Products Ltd.
11.14
17.65 - Mr. V. F. Banaji
211.36
151.58
- Godrej Hershey Ltd.
5.66
10.98 - Mr. M. P. Pusalkar
199.78
131.84
- Godrej Properties Ltd.
1.37
3.64 - Ms. T. A. Dubash
194.83
137.82
177.08
135.02
-
16.06
87.07
53.57
-
2.17
17.57
-
- Natures Basket Ltd.
1.18
- - Mr. M. Eipe
- Godrej Saralee Ltd.
1.29
13.08 - Mr. C. K. Vaidya
- Godrej Hicare Ltd.
-
2.89
- Godrej & Boyce Mfg. Co. Ltd.
-
1.11 Remuneration to Relatives of Key Management Personnel - Ms. Nisaba A. Godrej
Recovery of Establishment & other expenses
- Mr. Pirojsha Godrej
- Godrej Consumer Products Ltd.
686.49
- Godrej Agrovet Ltd.
121.14
- Godrej Hershey Ltd.
63.22
- Godrej Properties Ltd.
54.50
41.04 - Godrej & Boyce Mfg. Co. Ltd.
-
4,291.80
6.24
100.00 - Godrej Hygiene Care Pvt. Ltd.
-
4,729.78
- Godrej Saralee Ltd.
983.25 96.31 Sale of Investments 108.88 - Godrej Oil Palm Ltd.
- Godrej Hicare Ltd.
-
16.52
- Godrej & Boyce Mfg. Co. Ltd.
-
30.90 Purchase of Investments
- Godrej SCA Hygiene Ltd.
-
3.42 - Godrej Agrovet Ltd.
- Godrej Global Solutions Ltd.
-
0.89 - Godrej Hygiene Care Pvt. Ltd.
Rent, Establishment & other exps paid
501.25
-
4,743.72
4.00
- Godrej Consumer Products Ltd.
-
31,689.26
- Godrej Hershey Ltd.
-
3,440.00
4,747.72
-
- Godrej & Boyce Mfg. Co. Ltd.
294.49
304.36
- Godrej Consumer Products Ltd.
232.14
136.39 Shares in Associate company acquired under a scheme of arrangement
- Ms. R.N. Godrej
64.68
82.31 - Godrej Consumer Products Ltd.
- Godrej Properties Ltd.
42.63
18.24
7.26
-
- Godrej Hershey Ltd. - Wadala Commodities Ltd.
5.77
6.38
- Godrej Agrovet Ltd.
3.92
29.31
- Natures Basket Ltd.
2.96
2.88
- Godrej Infotech Ltd.
1.63
9.85
- Godrej Saralee Ltd.
-
32.20
- Godrej Hicare Ltd.
-
26.38
57
Godrej Industries Limited SCHEDULE 22 : NOTES TO ACCOUNTS (Contd.) Rs.’lac 21. Computation of Profits under Section 349 of the Companies Act, 1956 Profit for the year after tax as per Profit & Loss Account Add: Depreciation as per accounts Managerial Remuneration Directors’ Fees Profit / (loss) on sale of assets under Section 349 Provision for doubtful debts / advances Provision for depletion in value of investments Provision for Tax (including tax on extraordinary items)
This Year Rs.’lac
8,092.74
18,127.13 (4,830.73) 1,024.39
1,807.69 2,646.19 827.26 10.35 27.49 480.63 217.73 4,209.65 6,017.34 2,619.81 99.01 5,626.55 26.00 1,686.04 10,057.41 (4,040.07) 827.26
902.65 32.93 88.81 1,024.39
686.97 30.27 110.02 827.26
32.09 5.00 9.70 10.47 4.80 1.28 63.34
30.02 4.80 11.30 9.40 5.45 1.12 62.09
2,838.80 1,024.39 9.60 9.44 (25.53) 1,253.49 93.47 5,203.66 13,296.40
Less:
Depreciation under Section 350 of the Companies Act, 1956 Profit / (loss) on sale of assets as per books Profit on sale of investments Profit on sale of M.D. division Provision for diminution in investment written back Brought forward loss u/s 349 of the Companies Act 1956 Net Profit for the purpose of Directors’ Remuneration Managerial remuneration payable Managerial remuneration paid / payable as per approval of Central Govt. 22. Managerial Remuneration Salaries and allowances Contribution to Provident Fund Estimated Monetary value of perquisites TOTAL The above does not include contribution to Gratuity Fund as separate figures are not available. 23. Auditors’ Remuneration Audit fees (including Rs. 1.09 lac to branch auditors, Previous Year Rs.1.13 lac) Tax audit fees Certification and other services Tax Consultation and representation Consultation and management services Out of pocket expenses TOTAL
58
Previous Year Rs.’lac
2,812.80 9.44 10,437.56 4,867.33
Annual Report 2009–2010
SCHEDULE 22 : NOTES TO ACCOUNTS (Contd.) 24. Turnover (Net) Item
Unit
Fatty Acids Glycerin Alpha Olefin and its precursors Synthetic Detergent Medical Diagnostic Products Others TOTAL
MT MT MT MT
This Year Quantity Value Rs.’lac 58888 31624.03 9120 3192.27 49598 28942.92 19089 13439.79 0.00 4437.74 81636.75
Previous Year Quantity Value Rs.’lac 51352 27554.26 8904 4832.14 47959 32247.82 15137 10988.08 160.29 5841.13 81623.72
MARCH 31, 2009 Quantity Value Rs.’lac 1054 555.60 140 55.44 2822 1,876.34 519 352.84 1.66 2841.88
MARCH 31, 2008 Quantity Value Rs.’lac 1437 667.62 282 197.69 3627 2171.95 1185 408.36 2.04 3447.66
25. Inventories - Finished Goods Item
Unit
Fatty Acids Glycerin Alpha Olefin and its precursors Synthetic Detergent Others TOTAL
MT MT MT MT
MARCH 31, 2010 Quantity Value Rs.’lac 1653 855.86 250 91.04 2920 1,737.81 445 327.41 4.30 3016.42
26. Raw Materials Consumed Unit
Oils & Fats Chemicals and Catalysts Packing Materials, etc.
MT MT
This Year Quantity Value Rs.’lac 127646 39731.74 22540 9512.07 3786.99
Previous Year Quantity Value Rs.’lac 103421 39893.90 22412 10208.01 3692.13
53030.80
53794.04
TOTAL Raw materials consumption includes consumption for production of captively consumed items. 27. Purchase of Goods Unit
This Year Quantity Value Rs.’lac
Previous Year Quantity Value Rs.’lac
Refined oil, Soaps, Toileteries, etc.
262.82
361.72
Others
123.27
162.23
TOTAL
386.09
523.95
59
Godrej Industries Limited SCHEDULE 22 : NOTES TO ACCOUNTS (Contd.) 28. Licensed, Installed and Utilised Capacity Item
Unit
Licensed Capacity
Installed Capacity This Year 73300 8280 65000 38700 29250 19200000 -
Previous Year 73300 8280 65000 38700 29250 19200000 -
Actual Production This Year 59488 9230 49696 6354 23126 -
Previous Year 50969 8663 47154 9189 22738 -
Fatty Acids MT } Glycerin MT } Alpha Olefin and its precursors MT } Refined Oils & Vanaspati MT } Synthetic Detergents MT } Hydrogen (Captive consumption) NM 3 } Oxygen (By-Product) NM 3 } NOTES : 1. The Licensed Capacities are not applicable in view of the exemption from licensing granted under Notification SO 477 ( E ) dated 25th July 1991, issued under the Industries ( Development & Regulation Act,1951). 2. Installed capacity excludes the installed capacity for manufacture of intermediates which are intended to be used for internal consumption to manufacture A.O. and its precursors and derivatives. 3. Production of Synthetic Detergent includes 4111 MT (Previous year 7871 MT) produced under process contracts for third parties. 4. Production of Refined Oils & Vanaspati is under process contract. This Year Rs.’lac
This Year Previous Year Rs.’lac Rs.’lac 29. Value of Imports on CIF Basis (includes only Imports directly made) Raw materials Goods for resale Stores & spares Capital goods 30. Expenditure in Foreign Currency Interest Travelling expenditure Other expenditure Expenses for Foreign Branch: - Salaries and allowance - Rent - Others
60
23,095.75 183.62 1.69 23,281.06
22,264.53 156.93 247.65 1,251.24 23,920.35
83.05 675.70
33.53 62.21 1,553.56
135.81 21.05 13.79 929.40
136.26 23.05 12.14 1,820.75
Previous Year Rs.’lac
31. Value of Consumption of Raw Materials & Spares % Raw Materials Imported (including duty content) Indigenous Spares Imported (including duty content) Indigenous
25,897.78
49
27,133.02 51 53,030.80 100 232.89
29
564.32 71 797.21 100
32. Dividends Remitted in Foreign Currency (subject to deduction of tax, as applicable) Final Dividend for Financial Year 2008-09 to 89 shareholders on 0.97 77548 shares TOTAL 0.97 33. Earnings in Foreign Exchange Export of goods 29,964.26 (F.O.B. : this year Rs. 28065.74 lac previous year Rs.30616.20 lac) Others 5.78 29,970.04
% 33,844.55
63
19,949.49 37 53,794.04 100 370.54
31
833.04 69 1,203.58 100
0.07 0.07
32,183.63
206.84 32,390.47
Annual Report 2009–2010
SCHEDULE 22 : NOTES TO ACCOUNTS (Contd.) 34. Employee Benefits
The amounts recognised in the Company’s financial statements as at the year end are as under: Gratuity This Year Previous Year Rs.’lac Rs.’lac a)
b)
c)
d)
Pension This Year Previous Year Rs.’lac Rs.’lac
Change in Present Value of Obligation Present value of the obligation at the beginning of the year Current Service Cost Interest Cost Contribution by Plan Participants Actuarial (Gain) / Loss on Obligation Foreign Currency exchange rate changes Benefits Paid Past Service Cost Amalgamations Curtailments Settlements
2,435.53 106.44 183.46 12.67 (2.22) -
2,214.96 102.70 177.20 (57.45) (1.88) -
106.64 (50.89) (12.00) -
73.28 45.67 (12.31) -
Present value of the obligation at the end of the year
2,735.88
2,435.53
43.75
106.64
Change in Plan Assets Fair value of Plan Assets at the beginning of the year Expected return on Plan Assets Actuarial (Gain)/Loss on Plan Assets Foreign Currency exchange rate changes Contributions by the Employer Contributions by Plan Participants Benefits Paid Amalgamations Settlements
1,536.33 115.22 (46.40) 900.00 -
1,458.81 116.70 39.18 -
-
-
Fair value of Plan Assets at the end of the year
2,597.95
1,536.33
-
-
Amounts Recognised in the Balance Sheet: Present value of Obligation at the end of the year Unrecognised Past Service Cost Fair value of Plan Assets at the end of the year Net Obligation at the end of the year
2,735.88 2,597.95 137.93
2,435.53 1,536.33 899.20
-
-
Amounts Recognised in the statement of Profit and Loss: Current Service Cost Interest cost on Obligation Expected return on Plan Assets Expected return on Reimbursement Right recognised as an asset Net Actuarial (Gain) / Loss recognised in the year Past Service Cost Effect of Curtailment or Settlement Net Cost Included in Personnel Expenses
106.44 183.46 (115.22) (33.71) 140.97
102.70 177.20 (116.70) (18.28) 144.92
-
-
161.61
77.53
-
-
8.00% P.A. 8.00% P.A. 5.00% P.A. L.I.C 1994-96 ULTIMATE
7.5% P.A. 7.5% P.A. 4.5% P.A. L.I.C 1994-96 ULTIMATE
8.00% P.A. 5.00% P.A. L.I.C 1994-96 ULTIMATE
7.5% P.A. 4.5% P.A. L.I.C 1994-96 ULTIMATE
e)
Actual return on Plan Assets
f)
Estimated contribution to be made in next financial year
g)
Actuarial Assumptions i) Discount Rate ii) Expected Rate of Return on Plan Assets iii) Salary Escalation Rate iv) Employee Turnover v) Mortality
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
61
Godrej Industries Limited SCHEDULE 22 : NOTES TO ACCOUNTS (Contd.) 35.
Interest in Joint Ventures: The Company’s interests, as a venturer, in jointly controlled entities are: Name
Countries of Incorporation
Principal activities
Household Insectisides
Percentage of Ownership interest as at 31st March, 2010 -
Percentage of Ownership interest as at 31st March, 2009 -
Godrej SaraLee Ltd. (upto 28 March 2009) Godrej Hersheys Ltd
India India
Beverages & Foods
43.00%
43.00%
The Company’s interests in Joint Venture are reported as Long Term Investments (Schedule “6”) and stated at cost less provision, if any, for permanent diminution in value of such investments. The Company’s share of each of the assets, liabilities, income and expenses, etc. related to its interests in these joint ventures are:
I.
II.
III.
IV.
V.
62
This year Rs. ‘lac
Previous year Rs. ‘lac
3,565.13 -
3,522.56 17,740.44
1,765.15 633.39 564.59 2,856.06
2,278.14 1,142.08 664.78 2,304.36
3,669.19 4,031.25
5,772.32 462.25
2,492.71 248.54 -
2,443.69 287.24 -
INCOME 1. Turnover (net of excise) 2. Other Income
15,404.32 774.86
32,772.45 329.42
EXPENSES 1. Material consumed and purchase of goods 2. Expenses 3. Inventory change 4. Depreciation 5. Interest 6. Provision for Taxation
10,195.30 6,943.21 246.82 331.96 591.25 -
18,702.96 11,792.39 (102.89) 419.87 556.48 376.01
1,828.36 263.16
683.70 13.33
ASSETS 1. Fixed Assets 2. Investments 3. Current Assets, Loans and Advances a) Inventories b) Sundry Debtors c) Cash and Bank Balances d) Other Current Assets e) Loans and Advances LIABILITIES 1. Loan Funds a) Secured Loans b) Unsecured Loans 2. Current Liabilities and Provisions a) Liabilities b) Provisions 3. Deferred Tax- Net
OTHER MATTERS 1. Contingent Liabilities 2. Capital Commitments
Annual Report 2009–2010
SCHEDULE 22 : NOTES TO ACCOUNTS (Contd.) 36. Figures for the previous year have been regrouped wherever necessary. 37. Additional Information as Required Under Part IV Of Schedule VI To The Companies Act, 1956 1.
2.
3.
4.
Registration Details Registration No. State Code Balance Sheet Date
: : :
97781 11 31/3/2010
Capital raised during the year (Amount in Rs. lac) Public Issue Rights Issue Bonus Issue Private Placement
: : : :
Nil Nil Nil Nil
Position of mobilisation and deployment of funds (Amount in Rs. lac) Total Liabilities Total Assets
: :
160,228.84 160,228.84
Sources of Funds Paid-up Capital Reserves & Surplus Secured Loans Unsecured Loans Defered Tax Liability
: : : : :
3,176.25 99,093.36 20,418.89 34,342.14 3,198.20
Application of Funds Net Fixed Assets Investments Net Current Assets Misc. Expenditure Accumulated Losses
: : : : :
29,828.78 144,761.99 15,638.07 – -
: : : : : :
99,169.73 91,170.46 7,999.27 8,092.74 2.54 150.00
: : : :
38.23 * Fatty Acids/Fatty Alcohols 15.16 * Vanaspati/Refined Oils
Performance of Company (Amount in Rs. lac) Turnover (Total Income) Total Expenditure Profit/(Loss) before tax (Including extra ordinary income) Profit/(Loss) after tax Earning per Share in Rs. (on an annualised basis) Dividend rate % Generic Names of three principal products/services of Company Item Code No. Product description Item Code No. Product description
(*represents Heading No. of the Harmonized Commodity Description and Coding System)
63
Godrej Industries Limited REPORT OF THE AUDITORS TO THE BOARD OF DIRECTORS OF THE GODREJ INDUSTRIES LIMITED ON CONSOLIDATED FINANCIAL STATEMENTS 1. We have audited the attached Consolidated Balance Sheet
the Group’s share of associates’ profit upto March
of Godrej Industries Limited and its subsidiaries as at March
31, 2010 of Rs. 1,325.14 lakhs and the share of profit
31, 2010, and also the Consolidated Profit and Loss Account
for the year of Rs. 387.62 lakhs has been included in
and Consolidated Cash Flow Statement for the year then
the consolidated financial statements on the basis of
ended, both annexed thereto. These consolidated financial
unaudited management accounts.
statements are the responsibility of Godrej Industries Limited’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
4. We report that the consolidated financial statements have been prepared by the management of Godrej Industries Limited in accordance with the requirements of Accounting Standard
2. We conducted our audit in accordance with the auditing
(AS) 21 - Consolidated Financial Statements, Accounting
standards generally accepted in India. Those standards require
Standard (AS) 23 – Accounting for Investments in Associates in
that we plan and perform the audit to obtain reasonable
Consolidated Financial Statements and Accounting Standard
assurance whether the financial statements are free of
(AS) 27 – Financial Reporting of Interests in Joint Ventures
material misstatements. An audit includes, examining on a
issued by the Institute of Chartered Accountants of India.
test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing
5. Without qualifying our opinion, we draw attention to Note 15
the accounting principles used and significant estimates made
(b) of Schedule 23 – Notes to Accounts, regarding a loan of
by management, as well as evaluating the overall financial
Rs.17,330 lakh to a Trust for purchase of the Godrej Industries
statement presentation. We believe that our audit provides
Ltd. shares from the market equivalent to options granted
a reasonable basis for our opinion.
under an Employee Stock Option Plan. As at March 31, 2010, the market value of the shares held by the ESOP Trust is lower
3. (a) We did not audit the financial statements of certain subsidiaries and joint ventures, whose financial statements reflect the group’s share of total assets of Rs. 13,241.63 lakhs as at March 31, 2010, and the group’s share of total revenues of Rs. 80,780.27 lakhs and net cash inflows amounting to Rs. 91.99 lakhs for the year ended on that date as considered in the consolidated financial statements. These financial statements have been audited by other auditors whose reports have been furnished to us and our opinion, insofar as it relates to the amounts included in respect of the subsidiaries and joint ventures is based solely on the report of the other auditors. (b) As stated in Note 2 of Schedule 23, the financial statements of a Jointly controlled entity, whose financial statements reflect the Group’s share of total revenue of Rs. 1,958.75 lakhs and net cash inflows amounting to Rs. 284.00 lakhs for the year ended on that date are not audited as of the date of this report and have been included in the consolidated financial statements on the basis of unaudited management accounts. (c) As stated in Note 2 of Schedule 23, the financial statements of certain associates whose financial statements reflect 64
than the cost of acquisition of the shares by Rs. 7,871 lakh. The repayment of the loans granted to the ESOP Trust is dependent on the exercise of options by the employees and the market price of the underlying equity shares of the unexercised options at the end of the exercise period. In the opinion of the management, the fall in the value of the underlying equity shares is on account of market volatility and the loss, if any, can be determined only at the end of the exercise period, in view of which provision for the diminution is not considered necessary in the financial statements. 6. Reference is invited to note 14 (a) of Schedule 23 - Notes to Accounts, regarding the recoverability of advances given to certain individuals amounting to Rs. 1033 lac being contingent upon the transfer and/or disposal of the shares pledged against the loan. The said shares were lodged for transfer which application was rejected and the Company has preferred an appeal to the Company Law Board. The investee company had in the mean while moved the High Court but the matter was referred back to the Company Law Board, where the matter is awaiting hearing. The impact thereof on the profit for the year and the reserves as at March 31, 2010 could not be ascertained.
Annual Report 2009–2010
7. Based on our audit and on consideration of the reports of
c)
in case of the Consolidated Cash Flow Statement, of
other auditors on separate financial statements and the
the consolidated cash flows for the year ended on that
management’s certification of the unaudited financial
date.
statements, in our opinion, the consolidated financial statements, subject to the observations in paragraphs 3 and
For and on behalf of
6 above, give a true and fair view in conformity with the
Kalyaniwalla & Mistry
accounting principles generally accepted in India:
Chartered Accountants a) in case of the Consolidated Balance Sheet, of the
Registration No. 104607W
consolidated state of affairs of the Godrej Industries Viraf R. Mehta
Limited Group as March 31, 2010;
Partner b) in case of the Consolidated Profit and Loss Account, of the
Membership No: 32083
consolidated results of operations for the year ended on that date; and
Mumbai, May 26, 2010
65
Godrej Industries Limited — Consolidated Account CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2010
Schedule SOURCES OF FUNDS 1. Shareholders’ Funds (a) Share capital (b) Reserves & surplus
1 2
2. Minority Interest 3. Loan Funds (a) Secured loans (b) Unsecured loans
3 4
4. Deferred Tax Liability TOTAL APPLICATION OF FUNDS 5. Fixed Assets (a) Gross block (b) Less: Depreciation / Impairment (c) Net block (d) Capital work-in-progress
Rs. lac
This Year Rs. lac
Previous Year Rs. lac
176,559.05 31,546.64
3,197.59 137,590.92 140,788.51 11,831.77
148,119.08 5,078.50 361,303.27
80,264.90 77,081.89 157,346.79 5,016.16 314,983.23
51,524.37 48,096.18
86,908.24 41,811.79 45,096.45 2,454.54 47,550.99 52,346.04
92,747.15
65,266.38
3,176.26 173,382.79
71,494.68 76,624.40
5 92,508.15 44,841.35 47,666.80 3,857.57
6. Goodwill (on consolidation) 7. Investments 8. Current Assets, Loans and Advances (a) Inventories (b) Sundry debtors (c) Cash and bank balances (d) Other Current Assets (e) Loans and advances
6 7 8 9 10
Less : Current Liabilities and Provisions (a) Liabilities (b) Provisions
11 12
Net Current Assets 9. Miscellaneous Expenditure (To the extent not written off or adjusted) TOTAL Significant Accounting Policies Notes to Accounts
13
103,581.11 42,305.82 14,788.78 23.34 84,498.52 245,197.57
74,335.73 87,519.93 12,520.42 21.94 77,718.56 252,116.58
67,949.70 8,312.30 76,262.00 168,935.57 -
94,525.35 8,287.59 102,812.94 149,303.64 516.18
361,303.27
314,983.23
22 23
The Schedules referred to above form an integral part of the Balance Sheet. As per our Report attached
Signatures to Balance Sheet and Shedules 1 to 13, 22 and 23
For and on behalf of Kalyaniwalla & Mistry Chartered Accountants
A.B. Godrej Chairman
N.B. Godrej Managing Director
V. R. Mehta Partner
M. Eipe Executive Director & President (Chemicals)
V. Srinivasan Executive Vice President (Finance & Estate) & Company Secretary
Mumbai, May 26, 2010 66
Annual Report 2009–2010
CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010 Schedule INCOME Turnover (gross) Less: Excise duty Turnover (net) Other Income
Rs. lac
14
EXPENDITURE Materials consumed and purchase of goods Cost of sales - Property Development Expenses Inventory change Interest and financial charges (net) Depreciation (Net of transfer from Revaluation Reserve Rs. 99.50 lac previous year Rs. 133.69 lac)
15 16 17 18 19
Profit Before Tax & Extraordinary Items Profit from continuing operations before tax Income tax - current tax - MAT credit entitlement - deferred tax - Adjustment for tax of previous years (net) Profit from continuing operations after tax Profit from discontinuing operations before tax Income tax - current tax - deferred tax Profit from discontinuing operations after tax Profit for the year after taxation before extraordinary items Extraordinary Items (net of tax) Profit for the year after extraordinary items Prior Period adjustments (net)
This Year Rs. lac
Previous Year Rs. lac
345,802.11 4,384.96 341,417.15 36,705.14 378,122.29
343,467.80 7,298.81 336,168.99 25,175.62 361,344.61
249,771.66 20,004.58 68,740.66 (1,671.29) 14,961.81 5,017.27
240,819.35 12,123.89 72,048.13 3,583.96 14,959.54 4,702.77
356,824.69 21,297.60
348,237.64 13,106.97 12,976.80
21,297.60 (5,252.58) 877.04 (95.69) (5.47) 16,820.90 -
21
Share of profit in Associates Profit before Minority Interest Share of Minority Interest Profit after Minority Interest Surplus brought forward Excess provision of proposed dividend Excess provision of tax on distributed profit Adjustment of opening profit of subsidiaries/Jointlly controlled entities on acquisition/deletion Adjustment of goodwill pursuant to scheme of arrangement in a jointly controlled entity Amount available For Appropriation APPROPRIATIONS: Proposed Dividend on Equity Shares Tax on distributed profits Transfer to Special Reserve under Section 45IC of RBI Act, 1934 Transfer to General Reserve Surplus carried forward TOTAL Basic & Diluted Earnings per share before extra ordinary items Basic & Diluted Earnings per share after extra ordinary items (refer note 21) Significant Accounting Policies Notes to Accounts
39,478.43 59,803.15
(34.59) (7.53) 88.05 7,769.85 2,122.32 9,892.17 (85.02) 9,807.15 3,622.24 13,429.39 (2,282.39) 11,147.00 36,308.59 316.99 36,625.58 (52.85) 47,719.73
4,764.37 1,327.89 64.04 2,278.37 51,368.48 59,803.15
3,996.99 1,135.14 27.97 1,305.48 41,254.15 47,719.73
6.39 6.39
2.82 3.49
16,820.90 16,820.90 16,820.90 8,102.60 24,923.50 (4,598.78) 20,324.72
20
(5,158.47) 29.88 (166.41) 7,681.80 130.17
41,254.15 26.05 4.43 (1,806.20)
22 23
The Schedules referred to above form an integral part of the Profit and Loss Account. As per our Report attached Signatures to Profit and Loss account and Shedules 14 to 23 For and on behalf of Kalyaniwalla & Mistry Chartered Accountants
A.B. Godrej Chairman
N.B. Godrej Managing Director
V. R. Mehta Partner
M. Eipe Executive Director & President (Chemicals)
V. Srinivasan Executive Vice President (Finance & Estate) & Company Secretary
Mumbai, May 26, 2010
67
Godrej Industries Limited — Consolidated Account CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010 A.
B.
C.
Cash Flow from operating activities : Profit before tax Adjustments for : Depreciation Unrealised Foreign exchange Profit on sale of investments (Loss)/Profit on sale of fixed assets Dividend income Interest income Interest expense Deferred expenditure written off Provision/(write-back) of provision in diminution on value of investments Provision/(write-back) of provision for doubtful debts/advances (net) Others Operating profit before working capital changes Adjustments for : Inventories Trade and other receivables Trade payables Cash used in operations Direct taxes paid Direct taxes refund received Voluntary retirement compensation paid Net Cash used in operating activities Cash Flow from investing activities : Purchase of fixed assets Proceeds from sale of fixed assets Purchase of investments Proceeds from sale of investments Intercorporate deposits/Loans (net) Interest received Dividend received Net Cash from/(used in) investing activities before extraordinary items Proceeds from transfer of business/demerger Proceeds from sale of Medical Diagnostics Division Net Cash from/(used in) investing activities after extraordinary items Cash Flow from financing activities : Equity shares capital bought back Proceeds from issue of share capital to minority Proceeds from borrowings Repayments of borrowings Bank overdrafts (net) Interest paid Dividend paid Tax on distributed profits Net Cash from financing activities
This year Rs. lac
Previous year Rs. lac
21,297.60
13,106.97
5,017.27 (360.72) (24,652.84) 133.30 (326.04) (9,874.59) 14,288.85 1,002.03 1,022.42 (58.01) 7,489.27
4,702.77 504.23 (13,490.71) (80.64) (563.35) (7,994.24) 14,108.75 744.50 (1,688.19) 1,127.83 811.76 11,289.68
(30,594.47) 37,819.53 (20,286.20) (5,571.87) (5,494.70) 12.56 (486.33) (11,540.34)
(10,587.80) (22,241.61) (7,278.80) (28,818.53) (8,965.26) 408.44 (37,375.35)
(9,460.17) 177.25 (112,664.01) 117,453.21 (362.54) 9,809.00 326.04 5,278.78 5,278.78
(7,522.79) 448.86 (171,623.51) 140,269.02 (1,177.63) 7,224.42 561.36 (31,820.27) 8,894.05 26.00 (22,900.22)
(2,886.58) 42,816.71 107,062.65 (106,939.77) (9,748.96) (15,351.63) (4,283.53) (1,100.18) 9,568.71
1,371.13 151,045.60 (105,546.62) 8,870.35 (14,773.73) (3,248.47) (1,186.79) 36,531.47
Net increase/(decrease) in cash and cash equivalents
3,307.15
(23,744.10)
Cash and cash equivalents (Opening Balance) Add: cash and cash equivalents taken over pursuant to Business Acquisition Le ss : cash and cash equivalents on Demerger/Transfer/Dilution
12,520.42 (1,038.79)
36,491.60 23.92 (251.00)
Cash and cash equivalents (Closing Balance)
14,788.78
12,520.42
14,630.24 158.54 14,788.78
12,515.11 5.31 12,520.42
(including share in jointly controlled entities - Rs. 1,163.24 lac) Notes : 1. Cash and Cash equivalents. Cash on hand and balances with banks Effect of exchange rate changes Cash and cash equivalents 2. Cash and cash equivalents include Deposit with Bank as security amounting to Rs. 25.00 lac (previous year Rs. 18.50 lac) and Rs. 344.23 lac (previous year Rs. 340.15 lac) received from flat buyers and held in trust. 3. The above cashflow statement includes share of cashflows from jointly controlled entities as under: a. Net cash used in operating activities b. Net cash used in investing activities c. Net cash from financing activities 4. During the year, Godrej Hygiene Care Ltd., a 100% subsidiary of Godrej Industries Ltd. (GIL) was merged with Godrej Consumer Products Ltd. (GCPL) as approved by Hon'ble High Court, Bombay on 8th October, 2009. GIL received 2,09,39,409 equity shares of GCPL under the scheme of arrangement. The said transation has no impact on the cash flows of the Company.
(738.82) (1,054.08) 2,128.58
5. The figures of previous year have been regrouped wherever necessary.
As per our Report attached
Signatures to Cash Flow Statement
For and on behalf of Kalyaniwalla & Mistry Chartered Accountants
A.B. Godrej Chairman
N.B. Godrej Managing Director
V. R. Mehta Partner
M. Eipe Executive Director & President (Chemicals)
V. Srinivasan Executive Vice President (Finance & Estate) & Company Secretary
Mumbai, May 26, 2010
68
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010
SCHEDULE 1 : SHARE CAPITAL Authorised: 800,000,000 Equity shares of Re. 1 each 100,000,000 Unclassified Shares of Rs.10 each Issued, Subscribed and Paid Up: 317,624,892 (previous year 319,758,602) Equity shares of Re.1 each fully paid
This Year Rs. lac
Previous Year Rs. lac
8,000.00 10,000.00 18,000.00
8,000.00 10,000.00 18,000.00
3,176.26 3,176.26
3,197.59 3,197.59
Of the above, (i) 187,202,388 (ii) 155,547,816 (iii) 95,705,718
(Previous year 187,202,388) shares are held by Godrej & Boyce Mfg. Co. Limited, the holding company (Previous year 155,547,816) shares are allotted for consideration other than cash pursuant to schemes of amalgamation/arrangement. (Previous year 95,705,718) shares are allotted as fully paid bonus shares by way of capitalisation of Securities premium account.
SCHEDULE 2 : RESERVES AND SURPLUS
Securities Premium Account
As at 1.4.2009
Additions
Deductions
Adjustment on aquisition/deletion
As at 31.03.2010
80,200.24 81,804.71
31,935.05 -
6,933.24 1,604.47
-
105,202.05 80,200.24
71.04 52.27
18.77
-
-
71.04 71.04
1,409.93 1,671.21
-
123.55 261.28
-
1,286.38 1,409.93
194.95 166.98
64.02 27.97
-
-
258.97 194.95
3,125.00 3,301.34
21.34 -
176.34
-
3,146.34 3,125.00
3.87 -
3.87
-
-
3.87 3.87
10,875.12 10,316.14
1,697.98 1,305.48
21.34 746.50
(537.63) -
12,014.13 10,875.12
456.62 (176.79)
(432.44) 764.93
131.52
7.35 -
31.52 456.62
41,254.15 36,308.58 137,590.92 133,444.44
20,355.20 11,147.00 53,641.15 13,268.02
8,434.67 6,518.42 15,512.80 9,438.53
(1,806.20) 316.99 (2,336.48) 316.99
51,368.48 41,254.15 173,382.79 137,590.92
Capital Investment Subsidy Reserve Revaluation Reserve Special Reserve u/s. 451C of RBI Act, 1934 Capital Redemption Reserve Capital Reserve General Reserve Foreign Exchange Fluctuation Reserve Profit & Loss Account Total - This Year Total - Previous Year
SCHEDULE 3 : SECURED LOANS Term loans from banks 1% Secured Redeemable Optionally Convertible Debentures Bank overdrafts, packing credits, etc . Commercial Paper Other Loans Share in jointly controlled entities
36,931.40 2,156.00 17,474.81 2,500.00 6,500.00 5,932.47 71,494.68
39,144.71 2,156.00 25,338.37 6,500.00 7,125.82 80,264.90
The Secured Redeemable Optionally Convertible Debentures issued by a Subsidiary company are redeemable at the end of 7 years from the date of allotment i.e. in 2013-14. 69
Godrej Industries Limited — Consolidated Account SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS (contd.)
SCHEDULE 4 : UNSECURED LOANS Fixed deposits Intercorporate deposits Commercial Paper Short term loans - from Banks - from Others Other loans from banks Sales tax deferment facility Share in jointly controlled entities
This Year Rs. lac
Previous Year Rs. lac
17,231.57 750.72 6,000.00
2,164.31 300.00 3,000.00
47,656.57 466.74 4,518.80 76,6 24.40
60,150.28 2,500.00 8,000.00 466.74 500.56 77,081.89
SCHEDULE 5 : FIXED ASSETS
Rs. Lac
ASSETS As on 01.04.2009 Tangible Assets Land - Freehold - Leasehold Buildings Plant & Machinery Research Centre Furniture & Fixtures Office & Other Equipments Vehicles / vessels Trees Development Cost Intangible Assets Trademarks Technical Know-how Software ASSETS ACQUIRED UNDER FINANCE LEASE Vehicles Share in jointly controlled entities TOTAL - This Year - Previous Year Capital Work in-Progress TOTAL
GROSS BLOCK Deductions/ As on Additions Adjustments 31.03.2010
988.96 170.84 9,473.96 52,398.27 164.13 1,768.40 1,856.38 3,266.00 117.03
395.94 188.89 3,294.84 3,145.01 0.20 231.16 344.74 138.13 -
1,180.47 200.00 1,057.23
737.22
306.63 13,959.94 86,908.24 91,262.05
912.52 9,388.65 6,035.11
0.54 1,384.36 (0.54) 360.27 14.93 12,753.87 737.58 54,805.70 18.21 146.12 134.44 1,865.12 123.43 2,077.69 169.13 3,235.00 117.03 0.38
DEPRECIATION / IMPAIRMENT NET BLOCK Upto Deductions/ For the Upto As on As on 01.04.2009 Adjustments Year 31.03.2010 31.03.2010 31.03.2009 4.13 27.43 3,474.91 29,036.31 80.43 943.94 819.22 637.12 39.95
1,180.47 200.00 1,794.07
449.85 199.98 829.55
28.95 277.68 2,561.69 12,310.77 3,788.74 92,508.15 10,388.92 86,908.24
201.85 5,067.14 41,811.81 41,543.06
4.13 (4.13) 3.87 (28.73) 430.24 706.51 2,990.95 11.61 4.93 83.77 123.08 54.14 112.38 108.85 278.17 19.96
35.43 3,933.88 31,320.75 73.75 983.25 877.46 806.44 59.91
1,384.36 324.84 8,819.99 23,484.95 72.37 881.87 1,200.23 2,428.56 57.12
984.83 143.41 5,999.05 23,361.96 83.70 824.46 1,037.16 2,628.88 77.08
82.17 158.26
532.02 199.99 987.66
648.45 0.01 806.41
730.62 0.02 227.68
19.98 53.64 1,130.57 858.73 2,086.84 5,116.38 4,567.73 4,836.46
235.51 4,795.30 44,841.35 41,811.79
42.17 7,515.47 47,666.80
104.78 8,892.80 45,096.43
3,857.57 51,524.37
2,454.54 47,550.97
(0.01) 0.15
1. Buildings, Plant & Machinery and Research Centre at Vikhroli Factory were revalued on 30th June, 1992 on the basis of a Valuation Report submitted by professional valuers. 2. Depreciation for the year includes Rs. 99.50 lac (Previous Year Rs. 133.69 lac) being depreciation on revalued component of the fixed assets. 3. Accumulated depreciation includes impairment loss of Rs. 540.26 lac on plant & machinery in an earlier year. 4. Capital work-in-progress is net of impairment loss of Rs. 204.10 lac provided in an earlier year on an infructuous asset under construction.
70
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS (contd.) SCHEDULE 6 : INVESTMENTS Investee Company / Institutions LONG TERM INVESTMENTS : At Cost A. TRADE INVESTMENTS Equity Shares : Fully Paid Bharuch Eco-Aqua Infrastructure Ltd. Preference Shares : Partly paid Wadala Commodities Ltd. (8% Redeemable Cumulative Preference Shares, 2012) B. OTHER INVESTMENTS : Fully paid unless stated otherwise Equity Shares Quoted : Godrej Consumer Products Ltd. Amrutanjan Healthcare Limited Mafatlal Industries Limited Others Unquoted : Associate Companies Swadeshi Detergents Ltd. Creamline Diary Products Ltd. Polychem Hygine Laboratories Pvt. Ltd. Personalitree Academy Ltd. Compass BPO Ltd. Other Companies Avesthagen Limited Cbay Infotech Ventures Pvt. Ltd. Gharda Chemicals Ltd. Tahir Properties Ltd. (Partly paid) KaROX Technologies Ltd. HyCa Technologies Pvt. Ltd. Aadhar Retailing Ltd. Common Stock/Membership Units : Unquoted : CBay Systems Ltd., USA Boston Analytics Inc. Verseon Corporation - Class A Preferred Shares Newmarket Limited Quoted: CBaySystems Holdings Ltd., BVI Preference Shares : Unquoted : Tahir Properties Ltd. (Class - A) (partly paid) Government Securities Unquoted : National Saving Certificate Optionally convertible Loan notes / debentures : Unquoted : Compass BPO Ltd. (10%) Verseon Corporation (13%) Boston Analytics Inc. (15%) Boston Analytics Inc. (20%) Boston Analytics Inc. (12%) Tricom India Limited (8%) Shares in Co-operative Society : Fully Paid Unquoted : The Saraswat Co-op Bank Ltd. Sachin Industrial Co-op Society Amitabh Bachhan Corporation Ltd. Investment in the capital of Partnership Firm : View Group LP CURRENT INVESTMENTS Units of Mutual Fund : Unquoted: SBI Mutual Fund - Cash option National Savings certificate Kotak Floater - LT - Daily Dividend Reinvest JPMorgan India Treasury Fund - Super IP - Daily Dividend Reinvest Reliance Money Manager Fund - IP - Daily Dividend Reinvest ICICI Prudential Flexible Income Plan - Premium - Daily Dividend Reinvest LIC MF Savings Plus Fund - Daily Dividend Reinvest HDFC Cash Mgmt. Fund - Treasury Advantage - WP - Dly Dividend Reinvest IDFC Money Manager - Treasury Plan - Plan C - Daily Dividend Reinvest FORTIS Money Plus Fund - IP - Daily Dividend Reinvest Less : Provision for diminution in value of Investments Aggregate book value of Investments Quoted Unquoted
Face value (Rs)
Qty. as on 01.04.09
Number Acquired during Sold/adjusted the year during the year
Amount (Rs. lac) Qty. as on Notes As on 31.03.10 As on 31.03.10 31.03.09
10
440,000
-
-
440,000
10
5,000,000
-
-
5,000,000
44.00
44.00
(a)
450.00
450.00
1 10 10
55,369,989 15,423 -
21,074,631
4,000,000 72,444,620 (b) 15,423 7,716 114,334
58,040.80 87.35 7.58
51,163.47 54.11 7.68
10 10 10 10 £0.25
209,370 2,671,993 455,000 389,269 13,692
1,805
15,497
(c)
1,689.46 306.99 -
1,504.98 242.21 132.24
10 10 100 100 10 10 10
195,577 32,258 114 25 250,000 12,222 1,900,000
6,626 2,565,000
-
202,203 32,258 114 (d) 25 (a) 250,000 12,222 4,465,000
1,080.43 100.00 11.57 0.01 100.50 125.00 2,099.50
980.43 100.00 11.57 0.01 100.50 125.00 121.21
$0.01 $1 $1.90 £1.00
4,091,073 1,067,754 2,631,578 100
-
-
4,091,073 1,067,754 2,631,578 100
253.52 688.09 1,142.34 922.70
253.52 688.09 1,142.34 1,042.30
$0.10
9,604,540
-
-
9,604,540
4,258.30
4,316.50
100
25
-
-
25
0.02
0.02
-
-
-
-
-
-
0.25
£1000 $1,000,000 $750,000 $1,550,000 $950,000 10
97 13,135,050
-
97 13,135,050
-
397.60 299.68 673.03 469.21 -
83.19 397.60 299.68 673.03 469.21 1,313.51
10 500 10
2,000 3 25,000
2,500 -
-
4,500 3 25,000
0.45 0.02 0.03
0.13 0.02 -
-
-
-
-
-
0.01
0.01
477.73 0.25 3,533.03 1,948.56 1,931.11 3,532.79 3,535.16 3,532.84 2,523.42 243.52 94,506.60 (1,759.45) 92,747.15
65,716.81 (450.43) 65,266.38
61,945.03 30,802.12 92,747.15 194,388.98
55,034.56 10,231.82 65,266.38 73,559.03
122,050
209,370 2,671,993 455,000 389,269 -
(a)
(c) (e) (f) (f) (g)
Market Value of Quoted Investments NOTES: (a) Uncalled Liability on partly paid shares Tahir Properties Ltd. - Equity - Rs. 80 per share. Tahir Properties Ltd. - Preference - Rs. 30 per share. Wadala Commodities Limited - Preference - Re. 1 per share. (b) 97,50,000 shares of Godrej Consumer Products Limited have been pledged as security against loan from J.P. Morgan Securities India Pvt. Ltd. and 52,34,852 received under the scheme of arrangement are locked in till November 24, 2012. (c) 1,805 equity shares received on conversion of loan notes (d) The said shares have been refused for registration by the investee company. (e) Optionally Convertible Notes are convertible as under : - Verseon Corporation - After December 1, 2008 until the due date but not later than Sepember 15, 2012. (f) The optionally convertible promissory notes (15%) of Boston Analytics Inc. in respect of which the company did not exercise the conversion option and Boston Analytics Inc. promissory notes (20%) were due for redemption on June 30, 2009 and August 21, 2009 respectively. The said promissory notes have not been redeemed as of the Balance Sheet date. (g) 12% promissory notes repayable on or before March 31, 2011 along with interest on maturity.
71
Godrej Industries Limited — Consolidated Account SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS (contd.) This Year Previous Year Rs. lac Rs. lac SCHEDULE 7: INVENTORIES (at lower of cost and net realisable value) Stores and spares Raw materials Construction work-in-progress Work-in-progress Stock under cultivation Finished Goods Stock-in-trade Poultry stock Share in jointly controlled entities SCHEDULE 8: SUNDRY DEBTORS (Unsecured) Debts outstanding over six months Considered good Considered doubtful Other debts Considered good (Includes unbilled revenue of Rs. 7,502.36 lac, previous year Rs. 2,197.48 lac) Less: Provision for doubtful debts Share in jointly controlled entities SCHEDULE 9: CASH AND BANK BALANCES Cash and cheques on hand Balances with scheduled banks - on current accounts - on deposit accounts (refer note 11) Share in jointly controlled entities SCHEDULE 10: LOANS AND ADVANCES (Unsecured and considered good unless otherwise stated) Loans and Advances (refer note 14 a) Loan to ESOP Trusts (net of provision for doubtful loans Rs. 329.14 lac, previous year Rs. 313 lac) Advances recoverable in cash or in kind or for value to be received (net of provision for doubtful advances of Rs. 875.53 lac previous year Rs. 1214.10 lac) Mobilisation Advances (secured against bank/corporate guarantee) Intercorporate deposits Deposits and balances with - Customs & excise authorities - Others Due on Management Projects (refer note 14 b) Advance payment of taxes (Net of provision for tax) Share in jointly controlled entities
72
1,657.41 13,725.24 72,461.01 4,240.06 778.53 5,862.88 48.17 1,703.98 3,103.83 103,581.11
1,469.59 10,191.17 47,550.14 2,680.98 445.09 5,412.59 36.28 2,055.76 4,494.13 74,335.73
2,506.44 500.11 3,006.55
1,878.50 744.33 2,622.83
38,593.42
82,962.61
41,599.97 (500.11) 41,099.86 1,205.96 42,305.82
85,585.44 (789.00) 84,796.44 2,723.49 87,519.93
756.40
1,019.74
6,356.39 6,315.99 1,360.00 14,788.78
4,623.28 5,242.80 1,634.60 12,520.42
2,482.64 18,524.85
5,135.76 15,375.82
10,881.44
12,757.21
3,417.43
4,254.77
2,839.63
1,973.75
562.26 32,643.85 6,777.18 3,692.25
635.28 21,650.90 8,704.80 2,437.37
2,676.99 84,498.52
4,792.90 77,718.56
This Year Previous Year Rs. lac Rs. lac SCHEDULE 11 : CURRENT LIABILITIES Acceptances Sundry creditors Advances from customers Sundry deposits Investor Education & Protection Fund - Unclaimed Dividend - Unpaid Matured Deposits - Interest accrued on above Other liabilities Interest accrued but not due on loans Share in jointly controlled entities SCHEDULE 12 : PROVISIONS Proposed dividend Provision for tax on distributed profits Provision for retirement benefits Share in jointly controlled entities SCHEDULE 13: MISCELLANEOUS EXPENDITURE (To the extent not written off or adjusted) Deferred revenue expenditure - Voluntary retirement compensation Share in jointly controlled entities SCHEDULE 14: OTHER INCOME Interest : - Debentures - Income tax refund - Deposits - From projects, landlords & others Dividend Profit on sale of fixed assets (Net) Profit on sale of long term investments (refer note 19) Profit on sale of current investments Provision for depletion in value of investment written back Bad debt recovered Miscellaneous income Share in jointly controlled entities
12,359.30 38,189.03 3,694.02 2,463.87
2,131.81 30,321.59 44,598.35 2,070.00
16.97 11.29 4.87 7,009.70 613.34 3,587.31 67,949.70
18.74 16.82 7,727.20 667.64 6,973.20 94,525.35
4,764.37 1,327.89 1,917.87 302.17 8,312.30
3,996.99 956.60 2,788.80 545.20 8,287.59
-
386.75 129.43 516.18
14.84 2,765.71 7,073.41 326.04 24,549.96
159.46 41.98 2,702.32 4,921.11 563.35 80.64 13,168.66
102.88
322.05
747.97 1,082.69 41.64 36,705.14
1,688.19 9.24 1,173.12 345.50 25,175.62
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS (contd.) This Year Previous Year Rs. lac Rs. lac
This Year Previous Year Rs. lac Rs. lac SCHEDULE 15 : MATERIALS CONSUMED AND PURCHASE OF GOODS Raw materials consumed : Stocks at the commencement of the year Add : Purchases (net) Less : Stocks as at the close of the year Raw Materials consumed during the year Purchase of goods for resale Share in jointly controlled entities SCHEDULE 16 : COST OF SALES-PROPERTY DEVELOPMENT Stocks at the commencement of the year Add : Construction Expenditure during the year Less : Stocks as at the close of the year SCHEDULE 17: EXPENSES Salaries, wages and allowances Contribution to provident fund and other funds Employee welfare expenses Stores and spares consumed Power and fuel Processing charges Rent Rates and taxes Repairs and maintenance - Machinery - Buildings - Other assets Insurance Freight Commission Discount Advertisement and publicity Selling and distribution expenses Bad debts written off Provision for doubtful debts and advances Provision for depletion in the value of long term investments Loss on Sale of Fixed Assets Excise duty on inventory change Foreign Exchange loss / (gain) Miscellaneous expenses Share in jointly controlled entities
10,191.17 232,232.28 242,423.45 13,725.24 228,698.21 10,026.27 11,047.18 249,771.66
15,422.68 207,103.36 222,526.04 10,191.17 212,334.87 9,781.52 18,702.96 240,819.35
47,586.42 44,927.34
28,479.19 31,231.12
92,513.76 72,509.18 20,004.58
59,710.31 47,586.42 12,123.89
15,844.26 1,121.04 983.41 1,321.29 8,522.70 5,229.55 1,190.35 664.71
12,483.81 990.99 983.86 1,717.51 8,757.36 4,920.46 1,106.45 632.61
1,035.57 735.50 301.54 237.84 3,601.47 6,789.95 400.54 1,349.32 627.36 404.40 (462.41) 1,022.42
992.03 683.43 218.80 203.65 4,363.60 5,636.75 286.24 1,816.18 821.39 285.39 1,127.83 -
133.30 194.79 4.91 6,264.14 11,222.71 68,740.66
429.64 2,155.55 7,214.61 14,219.99 72,048.13
SCHEDULE 18 : INVENTORY CHANGE Stocks at the commencement of the year Finished goods Work-in-progress Stock under cultivation Poultry stock Share in jointly controlled entities Less: Stock adjustment for subsidiaries deleted Less: Stocks at the close of the year : Finished goods Work-in-progress Stock under cultivation Poultry stock Share in jointly controlled entities (Increase)/Decrease in Inventory SCHEDULE 19 : INTEREST AND FINANCIAL CHARGES (Net) Interest paid - on debentures and fixed loans - on bank overdrafts - on Intercorporate deposits - other interest Less: Interest received - on loans & deposits - on Customer balances, etc. - others Net Interest Other financial charges Foreign exchange loss Share in jointly controlled entities SCHEDULE 20 : EXTRAORDINARY ITEMS Profit on Sale of business SCHEDULE 21 : PRIOR PERIOD ADJUSTMENTS Short provision for expenses
5,412.59 2,680.98 445.09 2,055.76 2,137.63 12,732.05 -
5,955.89 6,242.45 534.57 1,917.53 2,034.73 16,685.17 369.16
5,862.88 4,240.06 778.53 1,703.98 1,817.89 14,403.34 (1,671.29)
5,412.59 2,680.98 445.09 2,055.76 2,137.63 12,732.05 3,583.96
5,725.24 5,314.90 482.76 1,342.24 12,865.14
7,004.19 4,174.71 223.55 1,416.99 12,819.44
17.31 3.32 20.63 12,844.51 1,423.71 693.59 14,961.81
26.95 5.68 136.74 169.37 12,650.07 1,289.31 263.82 756.34 14,959.54
-
2,122.32 2,122.32
-
(85.02) (85.02)
73
Godrej Industries Limited — Consolidated Account SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS (contd.) SCHEDULE 22: SIGNIFICANT ACCOUNTING POLICIES:a) Accounting Convention The financial statements are prepared under the historical cost convention, on the accrual basis of accounting, in accordance with the generally accepted accounting principles in India and the Accounting Standards prescribed in the Companies (Accounting Standard) Rules, 2006 and the relevant provisions of the Companies Act, 1956.
progress/Management Project Receivables at weighted average of the borrowing cost/rates as per agreement respectively. g)
Investments are classified into long-term and current investments. Long term investments are carried at cost. Provision for diminution, if any, in the value of each long term investment is made to recognise a decline, other than of a temporary nature. The fair value of a long term investment is ascertained with reference to its market value, the investee's assets and results and the expected cash flows from the investment.
b) Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported balances of assets and liabilities as of the date of the financial statements and reported amounts of income and expenses during the period. Management believes that the estimates used in the preparation of financial statements are prudent and reasonable. Actual results could differ from the estimates. c)
Current investments are carried at lower of cost and fair value. h) Inventories Inventories are valued at lower of cost and net realisable value. Cost is computed on weighted average basis and is net of modvat. Finished goods and work in progress include cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Provision is made for the cost of obsolescence and other anticipated losses, wherever considered necessary.
Fixed Assets Fixed Assets are stated at cost or as revalued as the case may be, less accumulated depreciation. Cost includes expenses related to acquisition and any directly attributable cost of bringing the assets to its intended working condition. Fixed Assets acquired under finance lease are capitalised at the lower of their face value and present value of the minimum lease payments.
Construction work-in-progress includes cost of land, premium for development rights, construction costs, allocated interest and expenses incidental to the projects undertaken by the Group. i)
The group has evaluated the useful lives of the Intangible Assets – Goodwill, Trademarks, Non-compete fees, Acquisition value of contracts, etc based on the nature of business, growth rates and estimated discounted cash flows. The intangible assets are amortised over the estimated useful lives as follows. Estimated useful lives
Goodwill
8 - 20 years
Trade marks
8 - 15 years
Technical Know-how
10 years
Non-compete fees
7 - 8 years
Computer software
4 - 6 years
e) Impairment of Assets
f)
Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. j)
Foreign Exchange Transactions i)
Transactions in foreign currency are recorded at exchange rates prevailing on the day of the transaction. Monetary assets and liabilities denominated in foreign currency, remaining unsettled at the period end are translated at closing rates. The difference in translation of monetary assets and liabilities and realised gains and losses on foreign currency transactions are recognised in the Profit and Loss Account.
The group reviews the carrying amounts of tangible and intangible assets for any possible impairment at each balance sheet date. An impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount. Impairment loss, if any, is recognised in the period in which impairment takes place.
ii) Forward exchange contracts other than those entered into to hedge foreign currency risk of firm commitments or highly probable forecast transactions are translated at period end exchange rates. Premium or discount on such forward exchange contracts is amortised as income or expense over the life of the contract.
Borrowing Costs
iii) Realised gain or losses on cancellation of forward exchange contracts are recognised in the Profit and Loss Account of the period in which they are cancelled.
Borrowing costs that are directly attributable to the acquisition/ construction of the qualifying asset are capitalised as a part of the cost of such asset, upto the date of acquisition/completion of construction. Borrowing costs incurred for the development of long term projects are included under Construction work in 74
Provisions and Contingent Liabilities Provisions are recognised in the accounts in respect of present probable obligations, the amount of which can be reliably estimated.
d) Intangible Assets
Particulars
Investments
iv) Exchange differences in respect of other unexpired foreign currency derivative contracts, which have been entered
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS (contd.) into to hedge foreign currency risks are marked to market and losses, if any, are recognised in the Profit and Loss Account.
withdrawn from Revaluation Reserve and credited to Profit and Loss Account. n) Employee Benefits
k) Revenue Recognition
Liability is provided for the retirement benefits of provident fund, gratuity, leave encashment and pension benefit in respect of all eligible employees of the Group. i) Defined Contribution Plan Employee benefits in the form of Provident Fund and family pension are considered as defined contribution plans and the contributions are charged to the Profit and Loss of the year when the contributions to the respective funds are due. ii) Defined Benefit Plan Retirement benefits in the form of Gratuity and Pension plan for eligible employees considered as defined benefit obligations and are provided for on the basis of an actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet. iii) Other Long-term Benefits Long-term compensated absences and Long Service awards are provided for on the basis of an actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet. Actuarial gain/losses comprising of experience adjustments and the effects of changes in acturial assumptions are immediately recognized in the Profit and Loss Account.
Sales are recognised where goods are supplied and are recorded net of returns, trade discounts, rebates, sales taxes and excise duty. Income from processing operations is recognised on completion of production / dispatch of the goods, as per the terms of contract. Export incentives receivable under the Duty Entitlement Pass Book Scheme and the Duty Drawback Scheme are accounted on accrual basis. Revenue from construction activity is recognized on “Percentage of Completion Method� of accounting. As per this method, revenue is recognised in proportion to the actual cost incurred for the work completed as against the total estimated cost of project under execution with the Company. Determination of revenues under the percentage of completion method necessarily involves making estimates, some of which are of a technical nature, concerning, where relevant, the percentages of completion, costs to completion, the expected revenues from the project/activity and the foreseeable losses to completion. Such estimates have been relied upon by the auditors. Dividend income is recognised when the right to receive the same is established. Interest income is recognised on a time proportion basis. Income on assets given on operating lease is recognised on a straight line basis over the lease term. l)
Research and Development Expenditure Revenue expenditure on Research & Development is charged to the Profit and Loss Account of the year in which it is incurred. Capital expenditure incurred during the year on Research & Development is included under additions to fixed assets.
o) Incentive Plans The Group has a scheme of Performance Linked Variable Remuneration (PLVR) which rewards its employees based on Economic Value Addition (EVA). The PLVR amount is related to actual improvement made in EVA over the previous year when compared with expected improvements. p) Hedging The group uses forward exchange contracts to hedge its foreign exchange exposures and commodity futures contracts to hedge the exposure to oil price risks. Gains or losses on settled contracts is recognized in the profit and loss account. Futures contracts not settled as on the Balance Sheet date are marked to market and losses, if any, are recognized in the profit and loss account, whereas, the unrealized profit is ignored. Gains or losses on the Commodity futures contracts is recorded in the profit & loss account under cost of materials consumed.
m) Depreciation Leasehold land is amortised equally over the lease period. Leasehold improvements are amortised over five years. Depreciation is provided on the straight line method at the rates specified in Schedule XIV to the Companies Act, 1956, except in some subsidiary companies, where depreciation has been provided on the written down value method. The impact of the differing method of depreciation has not been ascertained but is not likely to be material. Computer hardware is depreciated over its estimated useful life of 4 years. Depreciation on assets acquired during the year is provided for the full accounting year and no depreciation is charged on the assets sold/discarded during the year, except in case of major additions and deductions exceeding rupees one crore in which case, proportionate depreciation is provided. Depreciation on the revalued component is provided on the straight line method based on the balance useful life of the assets as certified by the valuers. Such depreciation is
q) Deferred Revenue Expenditure The compensation payable under the Voluntary Retirement Schemes, the benefit of which is expected to accrue in future is deferred over its payback period. The compensation is generally amortised over three to five years depending on the pay back period, however the pay back period is restricted to March 31, 2010. r)
Taxes on Income Tax expense comprises both current and deferred tax. Current tax is the amount of tax payable on the assessable income for the year determined in accordance with the provisions of the Income Tax Act, 1961. 75
Godrej Industries Limited — Consolidated Account SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS (contd.) Deferred tax is recognized on timing differences, being the differences between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets on unabsorbed tax losses and tax depreciation are recognized only when there is virtual certainty of their realisation and on other items when there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. The tax effect is calculated on the accumulated timing differences at the year end and based on the tax rate and laws enacted or substantially enacted on the balance sheet date. s)
Segment Reporting The Accounting Policies adopted for segment reporting are in line with the Accounting Policies of the Company. Segment assets include all operating assets used by the business segments and consist principally of fixed assets, debtors and inventories. Segment liabilities include the operating liabilities that result from the operating activities of the business. Segment assets and liabilities that cannot be allocated between the segments are shown as part of unallocated corporate assets and liabilities respectively. Income / Expenses relating to the enterprise as a whole and not allocable on a reasonable basis to business segments are reflected as unallocated corporate income / expenses.
Investments in Associates are dealt with in accordance with Accounting Standard (AS) 23 ‘Accounting for Investments in Associates in Consolidated Financial Statements’. Effect has been given to the carrying amount of investments in associates using the ‘Equity method’. The Company’s share of the post acquisition profits or losses is included in the carrying cost of investments. 2. The financial statements of the subsidiaries, joint ventures and associates used in the consolidation are drawn upto the same reporting date as of the Company i.e. year ended March 31, 2010. The accounts of Creamline Dairy Products Ltd., Polychem Hygiene Laboratories Pvt. Ltd., & Al Rahba International Trading Ltd., associate companies, have not been audited for the year ended March 31, 2010 as of the Balance Sheet date and have been consolidated on the basis of the accounts as certified by their respective management. 3. Information on subsidiaries, joint ventures and associates: (a) The subsidiary companies considered in the consolidated financial statements are: Sr. Name of the Company No.
SCHEDULE 23: NOTES TO ACCOUNTS:1. Principles of Consolidation: The consolidated financial statements relate to Godrej Industries Limited, the holding company, its majority owned subsidiaries, Joint ventures and Associates (collectively referred to as Group). The consolidation of accounts of the Company with its subsidiaries has been prepared in accordance with Accounting Standard (AS) 21 ‘Consolidated Financial Statements’. The financial statements of the parent and its subsidiaries are combined on a line by line basis and intra group balances, intra group transactions and unrealized profits or losses are fully eliminated. In the consolidated financial statements, ‘Goodwill’ represents the excess of the cost to the Company of its investment in the subsidiaries and/or joint ventures over its share of equity, at the respective dates on which the investments are made. Alternatively, where the share of equity as on the date of investment is in excess of cost of investment, it is recognised as ‘Capital Reserve’ in the consolidated financial statements. Minority interest in the net assets of consolidated subsidiaries consists of the amount of equity attributable to the minority shareholders at the respective dates on which investments are made by the Company in the subsidiary companies and further movements in their share in the equity, subsequent to the dates of investment as stated above. Investments in Joint Ventures are dealt with in accordance with Accounting Standard (AS) 27 ‘Financial Reporting of Interests in Joint Ventures’. The Company’s interest in jointly controlled entities are reported using proportionate consolidation, whereby the Company’s share of jointly controlled assets and liabilities and the share of income and expenses of the jointly controlled entities are reported as separate line items. 76
1 2
3
4
5
6 7
Godrej Agrovet Ltd. Golden Feed Products Ltd. (100% subsidiary of Godrej Agrovet Ltd.) Godrej Oil Palm Limited (formerly known as Godrej Aquafeed Limited) (80% subsidiary of Godrej Agrovet Ltd.) Cauvery Palm Oil Limited (51% subsidiary of Godrej Agrovet Ltd. upto 19-05-09) (90% subsidiary of Godrej Agrovet Ltd. from 20-05-09) Natures Basket Ltd. 100% subsidiary of (Godrej Agrovet Ltd. upto 30-06-09) (100% subsidiary of Godrej Industries Ltd. from 01-07-09) Godrej Properties Ltd. Godrej Realty Pvt. Ltd. (51% subsidiary of Godrej Properties Ltd.)
Country of Percentage of Holding Incorporation This Year Previous Year India 75.26% 75.26% India 75.26% 75.26%
India
60.21%
60.21%
India
67.73%
38.38%
India
75.26%
75.26%
India
100.00%
0.00%
India India
70.42% 35.91%
81.40% 41.51%
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS (contd.) Sr. Name of the Company No.
8
9
10
11
12
13
14
15 16
Godrej Waterside Properties Pvt. Ltd. (51% subsidiary of Godrej Properties Ltd.) Godrej Developers Pvt Ltd. (51% subsidiary of Godrej Properties Ltd.) Godrej Real Estate Private Limited (100% subsidiary of Godrej Properties Ltd.) Godrej Seaview Properties Private Limited (77.73% subsidiary of Godrej Properties Ltd.) Happy Highrises Limited (51% subsidiary of Godrej Properties Ltd.) Godrej Estate Developers Pvt. Ltd. (51% subsidiary of Godrej Properties Ltd.) Godrej Hygiene Care Pvt. Ltd. (up to 31-05-09) Ensemble Holdings & Finance Ltd. Godrej International Ltd., UK
Country of Percentage of Holding Incorporation This Year Previous Year India 35.91% 41.51%
(b) Interests in Joint Ventures: Sr. Name of the Company Country of No. Incorporation
1 India
35.91%
41.51% 2
India
70.42%
81.40%
India
54.74%
81.40%
India
35.91%
81.40%
India
35.91%
81.40%
5
India
100%
100%
6
India
100%
100%
UK
100%
100%
3
4
7
8 9
Godrej Sara Lee Ltd. (Shares held by 100% subsidiary Godrej Hygiene Care Pvt. Ltd.) (up to 31-05-09) Godrej Sara Lee Bangladesh Pvt. Ltd. (100% subsidiary of Godrej Sara Lee Ltd.) (up to 31-05-09) Godrej Sara Lee Lanka Pvt. Ltd. (100% subsidiary of Godrej Sara Lee Ltd.) (up to 31-05-09) ACI Godrej Agrovet Pvt. Ltd. (joint venture partner of Godrej Agrovet Ltd.) Godrej Gold Coin Acqafeed Ltd. (joint venture partner of Godrej Agrovet Ltd.) Godrej IJM Palm Oil Ltd. (formerly Godrej Gokarna Oil Palm Ltd.) (joint venture partner of Godrej Agrovet Ltd.) Godrej Tyson Foods Ltd. (joint venture partner of Godrej Agrovet Ltd.) Godrej Hershey Limited Nutrine Confectionery Ltd. (100% subsidiary of Godrej Hershey Limited)
India
Percentage of Holding This Year Previous Year 20.00% 20.00%
Bangladesh
20.00%
20.00%
Sri Lanka
20.00%
20.00%
Bangladesh
37.63%
37.63%
India
36.88%
36.88%
India
36.29%
36.29%
India
36.88%
36.88%
India
43.00%
43.00%
India
43.00%
43.00%
77
Godrej Industries Limited — Consolidated Account SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS (contd.) (c) Investment in Associates: Sr. Name of the Company Country of Percentage of Holding No. Incorporation This Year Previous Year 1 Swadeshi Detergents India 41.08% 41.08% Ltd. 2 Godrej Consumer India 23.51% 21.55% Products Limited 3 Personalitree Academy India 26.00% 26.00% Ltd. (associate of Ensemble Holdings & Finance Ltd.) 4 Creamline Dairy India 19.57% 19.57% Products Ltd. (associate of Godrej Agrovet Ltd.) 5 Al Rahba International U.A.E. 33.87% 25.08% Trading LLC (associate of Godrej Agrovet Ltd.) 6 Polychem Hygiene India 19.57% 19.57% Laboratories Pvt. Ltd. (associate of Godrej Agrovet Ltd.) 7 Compass Connections UK 20.71% 20.71% Limited (up to 08-03-10)
Sr. Name of the Company
No.
5
6
7
1
2
3
4
78
Swadeshi Detergents Ltd.
Cost of Acquisition
191.32 191.32
Goodwill included in cost of acquisition
91.46 91.46
Godrej Consumer Products Limited 51,372.93 35,540.15 49,223.86 37,845.36 Personalitree Academy Ltd. 110.28 42.84 110.28 42.84 Creamline Dairy Products Ltd. 1,038.00 398.41 1,038.00 398.41
Share in Provision Carrying profits / for cost of (loss) of diminution Investments associates in the post value of acquisition investments (130.27) (135.81) 6,667.87 1,939.61
61.05 55.51
– –
– 58,040.80 – 51,163.47
7. (42.04) (42.04)
68.24 68.24
– –
651.46 466.98
– –
1,689.46 1,504.98
Compass Connection Ltd. (up to 08-03-10) Total this year Total previous year
8.10 8.10
(246.37) 69.55
(8.10) (8.10)
–
– –
162.75 162.75
88.99 88.99
144.24 79.46
–
306.99 242.21
– – 124.54 80.56 52,883.38 35,915.48 50,858.85 38,617.17
– 73.87 7,283.16 2,373.97
Share in Provision Carrying profits / for cost of (loss) of diminution Investments associates in the post value of acquisition investments
Sr. Description No. (a) Claims against the Company not acknowledged as debts: 1) Excise duty demands relating to disputed classification, post manufacturing expenses, assessable values, etc. which the Company has contested and is in appeal at various levels 2) Customs Duty demands relating to less charge, differential duty, classification, etc 3) Sales Tax demand relating to purchase tax on Branch Transfer / Non availability of C Forms, etc at various levels 4) Octroi demand relating to classification issue on import of Palm Stearine and interest thereon 5) Stamp duties claimed on certain properties which are under appeal by the Company 6) Income Tax demands against which the company has preferred appeals 7) Industrial relations matters under appeal 8) Others (b) Guarantees issued by banks, excluding guarantees issued in respect of matters reported in (a) above (c) Guarantees given by the Company in respect of credit/guarantee limits sanctioned by banks to subsidiary and other companies (d) Letters of credit issued by bank on behalf of the company (e) Uncalled liability on partly paid shares/debentures (f) Additional consideration against acquisition of shares (g) Case/Claim filed by Processors for claiming various expenses (h) Share in Jointly Controlled Entities
5. The break-up of Investment in Associates is as under: Sr. Name of the Company
Polychem Hygiene Lab Pvt. Ltd.
Goodwill included in cost of acquisition
– – 66.17 132.24 129.29 60,037.25 189.92 53,042.90
6. Contingent Liabilities
4. The accounting policies of certain subsidiaries, joint ventures & associates especially regarding the method of depreciation, amortization of technical know-how and accounting for retirement benefits are not in consonance with the group accounting policies. No effect has been given in the consolidated financial statements on account of such differing accounting policies, where the impact is not expected to be material.
No.
Al Rahba International Trading LLC
Cost of Acquisition
This Year Previous Year Rs. Lac Rs. Lac
2,388.53
2,029.35
286.08
856.94
557.75
2,054.42
1,217.63
1,124.04
330.73
330.73
1,561.02
2,297.56
219.59 238.07 733.04
234.60 289.67 666.65
6,932.97
4,313.66
617.74
84.26
50.03
41.70 50.11
41.70
104.13
1,828.36
1,106.70
Capital Commitments Sr. Description No. 1 Estimated value of contracts remaining to be executed on capital account, to the extent not provided 2 Share in Jointly Controlled Entities
This Year Previous Year Rs. Lac Rs. Lac 755.09 1,938.14 378.82
138.74
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS (contd.) 8. Share capital Post receipt of SEBI exemption under regulation 3(1)(l) of the Takeover Code, the Company issued a Public Announcement on 29th April, 2009 and on 20th May, 2009 for Buyback upto 57,00,000 of its shares from the open market at a price not exceeding Rs. 275/- per share for an aggregate consideration not exceeding Rs. 99 crore. Under the Buyback programme, the Company has bought back and extinguished 21,33,710 shares at a consideration of Rs. 2,887 lac. The premium paid on Buyback of shares amounting to Rs 2,865.24 lac has been adjusted from the Securities Premium Account. The Buyback programme has been completed. The resultant excess provision of proposed divided and Tax on distributed profit due to Buyback of shares is added in surplus brought forward of profit & loss account. 9. Loans a)
Term loans from banks are secured by first charge by way of equitable mortgage of the immovable properties including land, building and plant & machinery at Valia factory. b) Working capital facilities sanctioned by banks are secured by hypothecation of stocks and book debts. c) Other loans are secured by pledge of 97,50,000 shares of Godrej Consumer Products Limited so as to result in a collateral cover of three times the loan facility. d) The Company had during the year raised Rs. 37,500 lac (Previous year Rs.15,000 lac) against the issue of commercial paper. The amount outstanding there against as on March 31, 2010 is Rs. 8,500 lac. e) The Secured Redeemable Optionally Convertible Debentures are secured to the extent of specific immovable assets of the Group disclosed under the head “Fixed Assets”.
10. Investments a) The Company had sold its entire holding in Godrej Hicare Limited, a subsidiary company, in March 2009. The profit thereon based on the minimum consideration received was recognised in the accounts for the year ended on 31st March 2009. During the year, the company has received an additional consideration of Rs. 2,759 lac (net) on Godrej HiCare achieving certain financial performance parameters which consideration has been recognised as exceptional income in this year. b) The Board of Directors at its meeting held on May 27, 2009, approved a scheme for the merger of Godrej Hygiene Care Limited (GHCL), a 100% subsidiary of Godrej Industries Limited, into Godrej Consumer Products Limited (GCPL). The scheme has been approved by the Hon’able High Court, Bombay on 8th October, 2009 . The Appointed date of the merger being June 1st, 2009, the assets and liabilities of GHCL stand transferred to and vested in GCPL from that date. Pursuant to the said scheme of arrangement, 51,07,125 (20%) equity shares held by GHCL in Godrej Sara Lee Limited, a 49:51 unlisted joint venture Company between the Godrej Group and Saralee Corporation, USA stand transferred to and vested in GCPL
and the Company has received 209,39,409 equity shares of GCPL in lieu thereof as per the terms of the Scheme of Arrangement. 25% of these shares are locked in till 24th November, 2012. 11. Cash & Bank Balances Balances with scheduled banks on deposit accounts include Rs.344.23 lac (Previous year Rs.340.15 lac) received from flat buyers and held in trust on their behalf in a corpus fund and Rs. 6.50 lac deposit pledged with government authorities 12. Deferred Tax Major components of Deferred Tax arising on account of timing differences as at March 31, 2010 are: Description Assets Provision for retirement benefits Provision for doubtful debts/advances VRS Expenses Others
This Year Previous Year 228.64
521.00
547.55 215.00 581.31 1,572.50
784.71 298.00 (213.42) 1,390.29
Liabilities Depreciation 6,648.53 Share in Jointly Controlled Entities 2.47 6,651.00 Net Deferred Tax Liability 5,078.50
6,385.94 20.51 6,406.45 5,016.16
Loans & Advances: 13. The Group has been entering into Development Agreements with landlords. Development Manager Fees amounting to Rs. 60,230,839/- (Previous Year Rs. 60,230,839/-) accrued as per terms of the Agreement are receivable by the Group based upon progress milestones specified in the respective Agreements and have been disclosed as Development Manager Fees accrued but not due in Schedule 10. 14. a) Loans and Advances include Rs. 1,033 lac (Previous year Rs. 1,033 lac) advanced by the Company to certain individuals against pledge by way of deposit of equity shares of Gharda Chemicals Ltd. The Company has enforced its security and lodged the shares for transfer in its name, however, the transfer application has been rejected by Gharda Chemicals Ltd. and the Company filed an appeal before the Company Law Board against the rejection. The investee Company had in the meanwhile, moved the Bombay High Court and the Court remanded the matter back to CLB. The CLB has advised that the parties may approach the Bench after final disposal of the suit filed by the investee company and the application made by minority shareholders under Section 397/398 before the Hon’ble High Court. The Company has filed an appeal with the Hon’ble High Court against the order of the Company Law Board under Section 10 F of the Companies Act to the High Court, which has been admitted. Interest on the aforesaid loan amounting to Rs. 315 lac was accrued upto March 31, 2000 and has been fully 79
Godrej Industries Limited — Consolidated Account SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS (contd.) provided for, no interest is being accrued thereafter. The recoverability of the advance is contingent upon the transfer and/or disposal of the said shares. It is the opinion of the management that the underlying value of the said shares is substantially greater than the amount of the loan. 14. b) Due on Management Projects include a sum of Rs. 21,564,700/- (Previous Year Rs. 21,479,389/-) on account of a project, where the matter is sub-judice with arbitrators. 15. Employee Stock Option Plans a) In December 2005, the group had instituted an Employee Stock Option Plan (GIL ESOP) as approved by the Board of Directors and the Shareholders, for the allotment of 15,00,000 options, increased to 90,00,000 options on split of shares convertible into 90,00,000 equity shares of Re.1 each to eligible employees of participating companies.
This Year No. of Wt. average Options exercise price ( * ) Options outstanding at the beginning of the year Options granted during the year: 10th August, 2009 Options exercised during the year : Options forfeited / expired during the year : Options outstanding at the year end
In July 2009, the Company had instituted an Employee Stock Option Plan II (GIL ESOP II) as approved by the Board of Directors and the Shareholders, for the allotment of 90,00,000 convertible into 90,00,000 shares of the nominal value of Re.1 each to eligible employees of participating companies.
GPL ESOP
In F.Y. 2007-08, Godrej Properties Limited (GPL) instituted an Employee Stock Option Plan (GPL ESOP) approved by the Board of Directors, Shareholders and the Remuneration Committee which provides for the allotment of 442,700 options convertible into 442,700 Equity Shares of Rs. 10/- each to eligible employee of Godrej Properties Limited and its subsidiary companies (the participating companies).
Options outstanding at the beginning of the year Options granted during the year: Options exercised during the year : Options forfeited / expired during the year : Options outstanding at the year end
The schemes are administered by an independent ESOP Trust created with ILFS Trust Co. Ltd. which purchases from the market, shares equivalent to the number of options granted by the Compensation Committee. The particulars of the scheme and movements during the year are as under: ESOP I This Year No. of Wt. average Options exercise price ( * ) Options outstanding at the beginning of the year Options granted during the year : 2nd May, 2008 26th May, 2008 3rd June, 2008 Options exercised during the year Options forfeited / expired during the year : Options outstanding at the year end
80
ESOP II :
Previous Year No. of Wt. Options average exercise price ( * )
Previous Year No. of Wt. Options average exercise price ( * )
-
-
-
-
860,000
179.86
-
-
-
-
-
-
-
-
-
-
860,000
179.86
-
-
This Year No. of Wt. average Options exercise price ( * )
Previous Year No. of Wt. Options average exercise price ( * )
442,700
620.00
442,700
620.00
-
-
-
-
-
-
-
-
39,000
620.00
-
-
403,700
620.00
442,700
620.00
(*) The Wt. average exercise price stated above is the price on the grant date and will be increased by the interest cost at the prevailing rates upto the exercise of the option. The weighted average balance life of options outstanding as on 31st March, 2010 is 3.82 years. The weighted average balance life of options outstanding as on 31st March, 2010 for ESOP I is 3.74 years and for ESOP II is 4.30 years. The options granted shall vest after three years from the date of grant of option, provided the employee continues to be in employment and the option is exercisable within two years after vesting.
7,799,950
190.43
7,309,500
177.10
-
-
340,000 835,450 150,000
284.60 276.70 254.45
1. The vesting period for options granted on 05/04/07 and on 11/04/07 was increased to a maximum of 5 years and the exercise period to 3 years from vesting.
2,100,000
91.84
-
-
2. The exercise period of unvested options of retiring employees increased from 6 months to 2 years.
119,250
284.45
835,000
209.87
5,580,700
235.48
7,799,950
190.43
Modification of the ESOP scheme :
3. The options granted to the employees of participating company shall continue in case of restructuring including sale of shares of participating Company.
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS (contd.) mutual consent on mutually acceptable terms. Leave and licence arrangements being similar in substance to operating leases. The company has also granted lease for freehold land. The particulars of the operating lease arrangements are as under:
The employee share based payment plans have been accounted based on the intrinsic value method and no compensation expense has been recognized since the market price of the underlying share at the grant date is the same / less than the exercise price of the option, the intrinsic value therefore being Nil. The fair value of the share options has been determined using the Black-Scholes Option Pricing Model. Had the fair value method of accounting been used, the net profit and earnings per share would have been as per the pro forma amounts indicated below. This Year Previous Year Rs. Lac Rs. Lac Net Profit (as reported) Less : Stock based compensation expense determined under fair value based method (Pro Forma) Net Profit (Pro Forma) Basic & Diluted Earnings per share before Extraordinary Items (as reported) Basic & Diluted Earnings per share before Extraordinary Items (Pro Forma) Basic & Diluted Earnings per share after Extraordinary Items (as reported) Basic & Diluted Earnings per share after Extraordinary Items (Pro Forma)
20,317.34
11,147.00
2,665.86 17,651.48 Amt. Rs.
2,645.00 8,502.00 Amt. Rs.
6.39
2.82
This Year Rs Lac 1,913.45 870.14 50.89
Gross carrying amount of premises Accumulated depreciation Depreciation for the period
Previous Year Rs Lac 1,785.95 763.43 50.87
The aggregate future minimum lease payments are as under : Period Lease payment recognised in the profit & loss account Future lease payments - Within one year - Later than one year and not later than five years
This Year Rs Lac 3,157.87
Previous Year Rs Lac 3,433.55
3,484.95 6,622.90
3,347.89 3,632.33
Lease taken by the group b) Operating Lease:
5.56
2.68
6.39
3.49
5.56
2. 66
b) The independent ESOP trust has purchased shares of GIL from the market against the options granted. The purchases are financed by loans from the group companies amounting to Rs 17330.08 lac (previous year Rs 17304.07 lac). As on 31 March 2010, the market value of the shares purchased by the Trust is lower than the acquisition cost of the shares by Rs 7871.22 lac (previous year Rs 12306.77 lac) The repayment of the loans granted to the ESOP trust is dependent on the exercise of the options by the employees and the market price of the underlying shares of the unexercised options at the end of the exercise period. The fall in value of the underlying equity shares is on account of market volatility and the loss, if any, can be determined only at the end of the exercise period. In view of the aforesaid, provision for diminution of Rs 7871.22 lac (previous year Rs 12306.77 lac) is not considered necessary in the financial statements. 16 Leases:
The Company’s significant leasing arrangements are in respect of operating lease for land, office premises, residential premises, machinery and storage tanks. The agreegate lease rentals paid by the Company are charged to profit & loss account Period Lease payment recognised in the profit & loss account Future lease commitments - Within one year - Later than one year and not later than five years c)
The company has entered into leave and licence agreements in respect of its commercial and residential premises. The non-cancelable portion of the leases range between 3 months to 36 months and are renewable by
Previous Year Rs Lac 418.17
399.87 323.41
412.53 336.07
Finance Leases: The company has acquired vehicles under Finance Lease. Liability for minimum lease payment is secured by hypothecation of the vehicles acquired under the lease. The minimum lease payments outstanding as on March 31, 2010, in respect of vehicles acquired under lease are as under:
Period
Leases granted by the group a) Operating Lease:
This Year Rs Lac 440.44
Within one year Later than one year and not later than five years
Total minimum lease payments outstanding as on March 31, Un-matured 2010 Interest Rs Lac Rs Lac 48.54 8.47 14.43 62.97
2.07 10.54
Present value of minimum lease payments Rs Lac 45.71 11.73 57.44 81
Godrej Industries Limited — Consolidated Account SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS (contd.) 17. Hedging Contracts
19. Exceptional Items
The group uses forward exchange contracts to hedge its foreign exchange exposure relating to the underlying transactions and firm commitments. The use of the foreign exchange forward contracts reduces the risk on cost to the company. The group also uses commodity futures contracts to hedge it’s exposure to vegetable oil price risk. The group does not use foreign exchange forward contracts or commodity future contracts for trading or speculation purposes. i)
Derivative instruments outstanding: a)
Commodity futures contracts Details
Futures contracts outstanding Number of units under above contracts in MT. b)
This Year Previous Year Purchase Sale Purchase Sale 1
-
6
-
1,040
-
4,500
-
Forward Exchange contracts Details
Total number of contracts outstanding Foreign currency value - US Dollar (million) - Euro (million)
This Year Previous Year Purchase Sale Purchase Sale 31
9
24
6
9.47 -
1.85 2.00
10.04 -
2.42 0.50
ii) Un-hedged foreign currency exposures Details Uncovered Foreign exchange exposure as at the year end - US Dollar (million) - Euro (million) - GBP (million)
This Year Purchase Sale
13.78 0.04 -
Previous Year Purchase Sale
8.42 0.03
2.08 0.04 -
3.56 0.17 -
18. Turnover This Year Rs Lac i) ii) iii) iv) v) vi) vii)
82
Turnover includes Processing charges Export Incentives Licence fees and service charges Project / Development Management Fees Claims Other income from customers Share in jointly controlled entities
Previous Year Rs Lac
539.83 180.20 2,494.50
948.01 963.18 6,679.45
2,230.18
1,352.69
717.84 145.52
45.10 84.87
12,604.92
13,949.39
18,912.99
24,022.69
This Year Rs Lac Included under Other Income i) Profit on sale of long term investments ii) Write back / (Provision) for diminution in investment
Previous Year Rs Lac
10,564.43
8,969.63
-
1,688.19
20. Profit & Loss Account a) Exchange differences recognised in the Profit & Loss Account for the year is a loss of Rs. 4.91 lac (Previous year loss of Rs. 2,419.37 lac). The exchange difference in respect of forward exchange contracts to be recognised in subsequent accounting periods is Rs. 26.38 lac (Previous year Rs. 21.31 lac). b) Research & Development Expenditure of revenue nature charged to the Profit & Loss Account amounts to Rs. 327.31 lac (Previous year Rs. 173.30 lac). 21. Earnings Per Share: a. Calculation of weighted average number of equity shares: Number of shares at the beginning of the year Number of equity shares outstanding at the end of the year Weighted average number of equity shares outstanding during the year b. Net profit after tax excluding extraordinary items c. Net profit after tax available for equity shareholders including extraordinary items d. Basic and diluted earnings per share of Re. 1 each excluding extraordinary Items e. Basic and diluted earnings per share of Re. 1 each including extraordinary Items
This Year
Previous Year
Nos.
319,758,602
319,758,602
Nos.
317,624,892
319,758,602
Nos.
318,247,978
319,758,602
Rs. 'lac
20,324.72
9,024.68
Rs. 'lac
20,324.72
11,147.00
Rupees
6.39
2.82
Rupees
6.39
3.49
Note: There is no impact on basic as well as diluted earnings per share on account of the ESOP, as the scheme does not envisage any fresh issue of share capital.
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS (contd.) 22. Related Party Disclosures a) Names of related parties and description of relationship Parties where control exists Godrej & Boyce Mfg. Co. Ltd., the holding company Fellow Subsidiaries: Wadala Commodities Ltd. Godrej (Malaysia) Sdn Bhd Godrej (Singapore) Pte Ltd. Godrej Infotech Ltd. Veromatic International BV Veromatic Services BV Water Wonder Benelux BV Godrej ConsumerBiz Ltd. (up to 01.06.2009) Other related parties with whom the Company had transactions during the year Associate / Joint Venture Companies Godrej Consumer Products Ltd. (also a fellow subsidiary) Godrej Hershey Ltd. Swadeshi Detergents Ltd. Compass BPO Ltd. ( up to 08.03.2010) HDFC Venture Trustee Co. Ltd. Red Fort India Real Estate HDFC PMS Milestone Real Estate Fund Enterprises over which key management personnel exercise significant influence Godrej Netherlands BV Rapidol (Pty) Ltd. Godrej Global Mideast FZE Godrej Hygiene Products Ltd. Godrej Consumer Products Mauritius Ltd. Godrej Consumer Products Holding (Mauritius) Ltd. Godrej Holdings P. Ltd. Godrej Investments Pvt. Ltd. Cartini India Ltd. Bahar Agrochem & Feeds Pvt. Ltd. Vora Soaps Ltd. Tahir Properties Ltd. Godrej Tyson Foods Ltd.
Key Management Personnel Mr. A.B. Godrej Chairman Mr. N.B. Godrej Managing Director Ms. T.A. Dubash Executive Director & President (Marketing) Mr. M. Eipe Executive Director & President (Chemicals) Mr. V. Banaji Executive Director & President (Group Corporate Affairs) Mr. M.P. Pusalkar Executive Director & President (Corporate Projects) Mr. B.S. Yadav Managing Director (Godrej Agrovet Ltd.) Mr. M.S. Korde Managing Director (Godrej Properties Ltd.) Mr. Pirojsha Godrej Executive Director (Godrej Properties Ltd.) Mr. H.K. Press Vice-Chairman (Godrej Consumer Products Ltd.) Mr. Dalip Sehgal Managing Director (Godrej Consumer Products Ltd.) Mr. Vivek Mathur Managing Director (Godrej Hershey Ltd.) Mr. C.H. Gopal Deputy General Manager (Godrej Hershey Ltd.) Relatives of Key Management Personnel Ms. P.A. Godrej Wife of Mr. A.B. Godrej Ms. N.A. Godrej Daughter of Mr. A.B. Godrej Mr. P.A. Godrej Son of Mr. A.B. Godrej Ms. R.N. Godrej Wife of Mr. N.B. Godrej Mst. B.N. Godrej Son of Mr. N.B. Godrej Mst. S.N. Godrej Son of Mr. N.B. Godrej Mst. H.N. Godrej Son of Mr. N.B. Godrej
83
Godrej Industries Limited — Consolidated Account SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS (contd.) b) Transactions with Related Parties Nature of Transaction
Sale of Goods Previous Year Advance given Previous Year Loan given Previous Year Loan repaid Previous Year Purchase of goods Previous Year Purchase of Fixed Assets Previous Year Processing charges received Previous Year Commission / Royalty received Previous Year Licence fees / Service Charges / Storage Income Previous Year Other Income Previous Year Recovery of establishment & Other Expenses Previous Year Rent, Establishment & other exps. paid Previous Year Interest received Previous Year Interest paid Previous Year Dividend income Previous Year Dividend paid Previous Year Remuneration Previous Year Purchase of Investments Previous Year Sale of Investments Previous Year Intercorporate Deposits -Accepted Previous Year Intercorporate Deposits Repaid during the year Previous Year Intercorporate Deposits -Advanced Previous Year Intercorporate Deposits Repayment received during the year Previous Year Issue of equity shares Previous Year Directors Fees Previous Year Balance Outstanding as on March 31, 2010 Receivables Previous Year Payables Previous Year Debentures Outstanding Previous Year Guarantees Outstanding Previous Year
84
Rs. Lac
Holding Company
Fellow Subsidiaries
Associate/ Joint Venture Companies
Key Management Personnel
19.88 29.09 140.13 88.22 76.84 141.57 233.17 242.00 -
-
945.78 1,327.34 687.92 1,087.79 4.16 89.81 198.38 105.57 178.89
0.27 0.39 0.12 1.11
7.69 -
30.90
Total
20.16 173.00 23.99 -
Relative of Key Management Personnel 40.00 100.00 -
Enterprises over which Key Mangement Personnel exercise significant influence 13.53 49.28 1,218.72 1.99 -
979.19 1,405.71 140.13 148.38 173.00 23.99 1,983.48 1,231.35 233.17 346.16 89.81 198.38 105.57 178.89
397.27 15.40 -
-
-
-
397.54 8.08 15.52 1.11
2.13 0.89
772.04 1,991.57
2.40 -
-
2.39 -
778.96 2,023.36
1,656.58 1,604.75 7,334.07 2,340.03 4,291.80
52.57 21.73 8.00 8.00 -
267.96 174.51 2.24 2.26 27.68 167.75 2,895.51 1,854.93 39,331.56 20,357.72 4,202.30
2.17 147.26 135.17 92.40 1,830.76 1,258.80 -
193.76 117.33 264.03 729.47 87.07 55.74 -
0.49 0.84 3.50 31.92 71.33 -
2,171.36 1,921.33 2.24 153.02 35.68 175.75 2,895.51 1,854.93 7,765.19 3,233.23 1,917.83 1,314.54 39,331.56 20,357.72 8,494.10
-
-
405.00 17.44
-
-
-
405.00 17.44
-
-
405.00 22.30
-
-
-
405.00 22.30
-
-
175.00
-
-
-
175.00
302.97 -
-
16.00 175.00 -
2.23 4.17
-
-
16.00 175.00 302.97 2.23 4.17
29.93 212.64 90.06 -
3.11 0.13 0.27 6.84 -
4.72 187.14 450.29 319.23 2,156.00 2,156.00 1,431.21 2,225.00
-
-
12.61 9.65 32.55 0.12 -
20.44 226.85 695.75 416.25 2,156.00 2,156.00 1,431.21 2,225.00
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS (contd.) c) The significant Related Party transactions are as under: Nature of Transaction
This Year Rs. Lac
Previous Year Nature of Transaction Rs. Lac
Sale of goods - Godrej Consumer Products Ltd. - Godrej & Boyce Mfg. Co. Ltd. - Rapidol PTY Ltd. - Godrej Hershey Ltd. - Godrej Saralee Ltd. - Godrej Global Mideast FZE
927.98 19.88 11.95 11.44 6.36 -
Purchase of Fixed Assets - Godrej & Boyce Mfg. Co. Ltd.
233.17
Interest received 1,204.21 - Swadeshi Detergents Ltd. 29.09 - Mr. A. Mahendran - Godrej Hershey Ltd. 15.87 107.26 Interest paid 43.99 - HDFC Venture Trustee Co. Ltd. - Wadala Commodities Ltd - Godrej Consumer Products Ltd. 186.03 - Red Fort India Real Estate
1,218.72 538.07 149.26 76.84 0.59 -
Inter Corporate Deposits - Accepted - Godrej Consumer Products Ltd. 531.11 225.02 Inter Corporate Deposits - Repaid 197.53 - Godrej Consumer Products Ltd. 18.50 317.32 Inter Corporate Deposits - Advanced 100.00 - Godrej Hershey Ltd.
Purchase of goods - Bahar Agrochem & Feeds Pvt. Ltd. - Godrej Consumer Products Ltd. - Godrej Hershey Ltd. - Godrej & Boyce Mfg. Co. Ltd. - Godrej Saralee Ltd. - Godrej Hygiene Products Ltd. - Heroes Aids Project Processing Charges received - Godrej Hershey Ltd.
89.81
198.38
Inter Corporate Deposits - Repayment Received - Swadeshi Detergents Ltd. - Godrej Hershey Ltd.
Commission received - Godrej Hershey Ltd. - Godrej Consumer Products Ltd.
102.62 2.95
173.43 Dividend income 5.46 - Godrej Consumer Products Ltd.
Licence fee / Storage income - Godrej Consumer Products Ltd. - Compass BPO Ltd. - Godrej Saralee Ltd. - Godrej Hershey Ltd.
182.26 154.79 31.78 28.43
211.72 172.69 238.14 84.75
Other Income - Godrej Consumer Products Ltd. - Godrej Hershey Ltd. - Godrej Saralee Ltd.
11.14 3.23 1.03
Recovery of Establishment & other expenses - Godrej Consumer Products Ltd. - Godrej Hershey Ltd. - Godrej Saralee Ltd. - Godrej Hygiene Products Ltd. - Compass BPO Ltd. - Godrej & Boyce Mfg. Co. Ltd.
716.41 50.26 4.99 2.28 0.38 -
Rent, Establishment & other exps. paid - Godrej & Boyce Mfg. Co. Ltd. - Godrej Consumer Products Ltd. - Ms. P.A. Godrej - Ms. R.N. Godrej - Godrej Infotech Ltd. - Wadala Commodities Ltd. - Godrej Hershey Ltd. - Godrej Saralee Ltd. - Ms. M. Mahendran
1,656.58 260.90 129.07 64.68 46.80 5.77 4.14 2.93 -
Advance given - Godrej & Boyce Mfg. Co. Ltd. - Ms. M. Mahendran
140.13 -
Loan given - Mr. A. Mahendran
-
Loan repaid - Mr. A. Mahendran - Mr. Ravi Venkateswar
-
Issue of equity shares - Godrej & Boyce Mfg. Co. Ltd.
302.97
Dividend paid - Godrej & Boyce Mfg. Co. Ltd. - Mr. Pirojsha Godrej - Mr. N. B. Godrej - Ms. T. A. Dubash - Ms. Nisaba A. Godrej - Bahar Agrochem & Feeds Pvt. Ltd.
17.65 10.98 Remuneration to Key Management Personnel 13.08 - Mr. A. B. Godrej - Mr. H. K. Press - Mr. Dalip Sehgal 983.25 - Mr. N. B. Godrej 108.87 - Mr. V. F. Banaji 107.06 - Mr. M. P. Pusalkar 30.46 - Ms. T. A. Dubash - Mr. Mathew Eipe 32.40 - Mr. M.S. Korde - Mr. Vivek Mathur - Mr. B.S. Yadav 1,604.75 - Mr. Pirojsha Godrej 136.65 - Mr. C.H. Gopal 27.82 - Mr. A. Mahendran 82.31 - Mr. Ravi Venkateswar 12.47 - Mr. C. K. Vaidya 6.38 0.56 Remuneration to Relatives of Key Management 37.25 Personnel 7.20 - Ms. Nisaba A. Godrej - Mr. Pirojsha Godrej 88.23 Sale of Investments 40.00 - Milestone Real Estate Fund - HDFC PMS - Godrej & Boyce Mfg. Co. Ltd. 193.15 - Red Fort India Real Estate 23.17 0.81
Purchase of Investments - Godrej Consumer Products Ltd. - Godrej Hershey Ltd.
Shares in Associate Compnay acquired under a scheme of arrangement - Godrej Consumer Products Ltd.
This Year Rs. Lac
Previous Year Rs. Lac
2.24 -
3.50 147.26 2.26
21.56 8.00 6.12 -
8.00 167.75
405.00
-
405.00
-
-
175.00
16.00 -
175.00
2,895.51
1,854.93
7,334.07 65.47 64.38 53.36 53.36 31.14
2,340.03 23.78 71.33 -
132.79 117.59 105.22 241.34 211.36 199.78 194.83 177.08 149.46 78.66 130.49 84.74 7.41 -
58.55 34.76 1.35 219.84 151.58 131.84 137.82 135.02 145.89 91.75 34.63 68.64 31.07 16.06
87.07 -
53.57 2.17
8,610.00 7,000.00 -
4,291.80 4,202.30
-
31,689.26 3,440.00
4,747.72
-
85
86 Chemicals
Animal Feed
359.88
49.94
179.75
927.16
28.38
0.00
222.27
310.09
3275.18
6238.98
331.96
423.55
2711.15
9034.76
3171.31 (1561.80)
This Year
6233.85
245.96
474.72
2730.93
155.50
17.91
1792.64
59.98
1,917.97
664.75
1299.35
2521.63
6902.16
9769.19 135345.32 140208.92 32446.88
10527.95
This Year
9411.72
Total
Previous Year 432449.01 412944.23 5116.29 4851.94 437565.30 417796.17
This Year
This Year Previowus Year 283339.85 270259.70 94782.44 91084.91 378122.29 361344.61
4248.24 454.53 4702.77
179.63 6650.67
1138.86 4728.40 288.87 5017.27
(9877.48) (14959.54) 13106.97 (5337.12) 2122.32 (85.02) 9807.15 3622.24 13429.39 (2282.39) 11147.00 399357.02 18439.15 417796.17 98136.66 178871.00 277007.66 6471.04
(13787.90) (14961.81) 21297.60 (4476.70) 0.00 0.00 16820.90 8102.60 24923.50 (4598.78) 20324.72 31808.16 417564.06 20001.24 437565.30 10984.34 70706.35 190299.90 261006.25 1414.97 8272.86
993.78
37943.99
6076.84 50047.31
361344.61 7529.00 368873.61 (7529.00) 361344.61
Previous Year
(Rs. lac) Total
51755.68 378122.29 35.19 5663.72 51790.87 383786.01 (35.19) (5663.72) 51755.68 378122.29
Previous Year
Others
12685.36 10528.25 49449.70 4396.28 4177.11 798.07 17081.64 14705.36 50247.77 (4396.28) (4177.11) (798.07) 12685.36 10528.25 49449.70
(300.16) 11431.97
17727.17 96.76 17823.93 (96.76) 17727.17
Finance & Investments This Previous Year Year
Notes: 1. The Company has disclosed Business Segment as the primary segment. Segments have been identified taking into account the nature of the products, the. different risks and returns, the organisational structure and the internal reporting system. 2. Chemicals segment includes the business of production and sale of Oleochemicals and surfactants such as Fatty Acids, Fatty Alcohols, refined glycerine, Alfa Olefin Sulphonates, Sodium Lauryl Sulphate and Sodium Lauryl Ether Sulphate. 3. Animal Feed segment includes the business of production and sale of compound feeds for cattle, poultry, shrimp and fish. 4. Veg oils segment includes the business of processing and bulk trading of refined vegetable oils & vanaspati and international vegetable oil trading. 5. Estate & property development segment includes the business of development and sale of real estate and leasing and leave and licensing of properties. 6. Household Insecticides segment includes the business of production and sale of household insecticides & commercial pest management services. 7. Beverages and Foods segment includes the business of processing, production and sale of fruit pulp, tomato puree, fruit juices, nectors and drinks, other beverages and confectionary products and sale of refined vegetable oils, vanaspati and tea. 8. Finance & Investments includes investments in subsidiaries, associates companies and other investments 9. Others includes Integrated Poultry, Agri Inputs and tissue culture, Oil Palm Plantations, energy generation through windmills. 10. The geographical segments are as follows - Sales in India represent sales to customers located in India. - Sales outside India represent sales to customers located outside India.
India Outside India Total
3184.60
0.00
1360.64 18682.70 7.77
0.00
3638.26 173369.69 148857.11 54632.79
165.47
17349.22
(44.52) 24592.46
19490.78 16063.87 1.47 92.52 19492.25 16156.39 (1.47) (92.52) 19490.78 16063.87
Household Beverages & Foods Insecticides This Previous This Previous Year Year Year Year
32022.48 1958.74 546.79 0.15 32569.27 1958.89 (546.79) (0.15) 32022.48 1958.74
Estate & Property Development This Previous Year Year
53827.63 48012.35 100.50 308.95 53928.13 48321.30 (100.50) (308.95) 53827.63 48012.35
Previous Year
Veg Oils
This Previous This Previous This Year Year Year Year Year (A) Revenue External Sales 78130.02 77800.70 114179.55 98191.92 57642.70 Intersegment Sales 17.87 - 2,553.31 67.75 Total Sales 78130.02 77818.57 114179.55 100745.23 57710.45 Less: Intersegment Sales (17.87) - (2,553.31) (67.75) Total Revenue 78130.02 77800.70 114179.55 98191.92 57642.70 (B) Results Segment result before interest, 5238.25 (1849.89) 3879.49 3013.24 67.62 exceptional items and tax Unallocated expenses Interest Expense (net) Profit before tax Taxes Add : Extra Ordinary items (Net of Tax) Add: Prior Period items Profit after taxes Share of profit in associates Profit before Minority Interest Share of Minority Interest Net Profit after Minority Interest Segment Assets 44848.58 40612.67 19582.88 18223.73 2935.95 Unallocated Assets Total Assets Segment Liabilities 18248.42 13795.00 21821.48 10693.03 547.80 Unallocated Liabilities Total Liabilities Cost incurred during 902.36 964.52 1208.14 453.84 14.67 the year to acquire segment assets Cost incurred on unallocated assets Total Cost incurred during the year to acquire segment assets Segment Depreciation 2083.57 2094.46 396.40 402.10 73.36 Unallocated Depreciation Total Depreciation Information about Secondary Business Segments Revenue by Geographical markets India Outside India Total Carrying Amount of Segment assets
Information about primary business segments
23. Segment Information
SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS (contd.)
Godrej Industries Limited — Consolidated Account
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS (contd.) 24. Employee Benefits The amounts recognised in the Company’s financial statements as at the year end are as under: Gratuity Leave Encashment This Year Previous Year This Year Previous Year Rs. lac Rs. lac Rs. lac Rs. lac a) Change in Present Value of Obligation Present value of the obligation at the beginning of the year 3,108.98 2,897.14 126.67 110.51 Current Service Cost 173.00 172.53 14.20 18.33 Interest Cost 233.20 228.81 8.75 7.83 Contribution by Plan Participants Actuarial (Gain) / Loss on Obligation 100.08 (43.51) (11.03) 19.29 Foreign Currency exchange rate changes Effect of Liability Transfer in 2.39 8.42 Benefits Paid (175.73) (154.41) (21.41) (29.29) Past Service Cost Amalgamations Curtailments Settlements 8.60 0.86 Plan Amendments (2.40) 3,450.52 3,108.98 115.64 126.67 Present value of the obligation at the end of the year b) Change in Plan Assets Fair value of Plan Assets at the beginning of the year Expected return on Plan Assets Actuarial (Gain) / Loss on Plan Assets Foreign Currency exchange rate changes Contributions by the Employer Contributions by Plan Participants Benefits Paid Amalgamations Settlements
Pension This Year Previous Year Rs. lac Rs. lac 106.64 (50.89) (12.00) 43.75
73.28 45.67 (12.31) 106.64
1,872.84 143.01 (66.31) 1,035.75 (139.62) -
1,806.12 144.69 48.68 83.76 (113.05) -
-
-
-
-
Fair value of Plan Assets at the end of the year
2,978.29
1,872.84
-
-
-
-
c) Amounts Recognised in the Balance Sheet: Present value of Obligation at the end of the year Unrecognised Past Service Cost Fair value of Plan Assets at the end of the year Net Obligation at the end of the year
3,369.53 2,985.39 384.14
3,029.24 1,882.86 1,146.38
-
-
-
-
173.43 233.20 (143.01) -
172.37 228.76 (144.69) -
14.20 8.75 -
18.33 7.83 -
-
-
31.28 8.60 303.50
0.87 257.31
(11.03) 0.86 12.78
19.29 45.45
-
-
209.32
96.01
-
-
-
-
7.55%-8.00% 7.55%-8.00% 7.55%-8.00% 7.55%-8.00% 5%-6% 5%-6%
8.00% 4.00%
7.55% 4.00%
8.00% 5.00% -
7.5% 4.5%
d) Amounts Recognised in the statement of Profit and Loss: Current Service Cost Interest cost on Obligation Expected return on Plan Assets Expected return on Reimbursement Right recognised as an asset Net Actuarial (Gain) / Loss recognised in the year Past Service Cost Effect of Curtailment or Settlement Net Cost Included in Personnel Expenses e) Actual return on Plan Assets f) Estimated contribution to be made in next financial year g) Actuarial Assumptions i) Discount Rate (p.a.) ii) Expected Rate of Return on Plan Assets (p.a.) iii) Salary Escalation Rate (p.a.) iv) Employee Turnover (p.a.)
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
87
Godrej Industries Limited — Consolidated Account Statement regarding Subsidiary Companies pursuant to Section 212 of the Companies Act, 1956 1. Name of the Subsidiary Company
2. The company's interest in the subsidiaries as on March 31, 2010 a. Number of Equity Shares Total Number of Shares b. Face Value c. Extent of Holding 3. Net aggregate profit/(Loss) of the subsidiary company so far it concerns the members of the Company A.
B.
For the financial year ended on March 31, 2010 i. Not dealt with in the books of Account of the Company ii. Dealt with in the books of Account of the Company For the subsidiary company's previous financial years since it became a subsidiary i. Not dealt with in the books of Account of the Company ii. Dealt with in the books of Account of the Company
Godrej Agrovet Limited
Godrej Properties Limited
Ensemble Holdings & Finance Limited
Godrej International Limited
Natures Basket Limited
9,112,956 12,118,752 10 75.20%
48,495,209 69,850,009 10 69.43%
3,774,160 3,774,160 10 100.00%
2,355,000 2,355,000 £1 100.00%
Rs. lac
Rs. lac
Rs. lac
Rs. lac
Rs. lac
2,452.13
8,647.93
320.12
725.85
(624.07)
—
—
—
—
—
3,195.70
10,209.77
(347.58)
26,510.57
—
3,294.33
7,606.35
560.80
11,348.28
—
Godrej Oil Palm Ltd.
7,050,000 (See note 7,050,000 1 below) 10 100.00%
Notes: The Financial Year of the subsidiary companies has ended on March 31, 2010 1. 56,400 Equity Shares of Rs.10 each in Godrej Oil Palm Ltd. (formerly Godrej Oil Plantations Ltd.) (representing 80% of the share capital) are held by Godrej Agrovet Ltd. 2. 50,000 Equity Shares of Rs.10 each in Golden Feed Products Ltd. (representing 100% of the share capital) are held by Godrej Agrovet Ltd. 3. 34,20,000 Equity Shares of Rs.10 each in Cauvery Palm Oil Ltd. (representing 90% of the share capital) are held by Godrej Agrovet Ltd. 4. 25,500 Equity Shares of Rs.10 each in Godrej Estate Developers Pvt. Ltd. (representing 51% of the share capital) are held by Godrej Properties Ltd. 5. 34,031 Equity Shares of Rs.10 each in Godrej Developers Pvt. Ltd. (representing 51% of the share capital) are held by Godrej Properties Ltd. 6. 49,999 Equity Shares of Rs.10 each in Godrej Real Estate Pvt. Ltd. (representing 99.99% of the share capital) are held by Godrej Properties Ltd. 7. 5,10,000 Equity Shares of Rs.10 each in Godrej Realty Pvt. Ltd. (representing 51% of the share capital) are held by Godrej Properties Ltd.
88
Annual Report 2009–2010
Golden Feed Products Limited
Cauvery Palm Oil Limited
Godrej Estate Developers Pvt. Ltd.
Godrej Developers Pvt. Ltd.
Godrej Real Estate Pvt. Ltd.
Godrej Realty Pvt. Ltd.
Godrej Seaview Properties Ltd.
Godrej Waterside Properties Pvt. Ltd.
Happy Highrises Ltd.
(See note 2 below)
(See note 3 below)
(See note 4 below)
(See note 5 below)
(See note 6 below)
(See note 7 below)
(See note 8 below)
(See note 9 below)
(See note 10 below)
8. 3,88,636 Equity Shares of Rs.10 each in Godrej Sea View Properties Pvt. Ltd. (representing 77.73% of the share capital) are held by Godrej Properties Ltd. 9. 5,10,000 Equity Shares of Rs.10 each in Godrej Waterside Properties Pvt. Ltd. (representing 51% of the share capital) are held by Godrej Properties Ltd. 10. 103,592 Equity Shares of Rs.10 each in Happy Highrises Ltd. (representing 51% of the share capital) are held by Godrej Properties Ltd. 11. 691,155 Equity Shares of Rs.10 each in Godrej Properties Ltd. are held by Ensemble Holdings & Finance Ltd. 12. 8,100 Equity Shares of Rs.10 each in Godrej Agrovet Ltd. are held by Ensemble Holdings & Finance Ltd.
Mumbai, May 26, 2010
A.B. Godrej Chairman
N.B. Godrej Managing Director
M. Eipe Executive Director & President (Chemicals)
V. Srinivasan Executive Vice President (Finance & Estate) & Company Secretary
89
NOTES
Annual Report 2009–2010
Godrej Industries Limited
ACCOUNTS OF SUBSIDIARY COMPANIES 2009-2010
91
Godrej Agrovet Limited DIRECTORS’ REPORT FOR THE FINANCIAL YEAR ENDED ON MARCH 31, 2010 To The Shareholders Your Directors have pleasure in submitting their Report along with the audited Accounts for the financial year ended on March 31, 2010. Financial Results Your Company’s performance during the year as compared with that during the previous year is summarised below: -
Total Income Profit Before Taxation (PBT) Less : Provision for Taxation Add : Extraordinary Income/(Expense)(Net) Profit After Taxation (PAT) Balance Brought Forward from Previous Year Total Appropriations: Final Dividend Tax on Dividend General Reserve Balance Carried Forward to Balance Sheet Total
THIS YEAR PREVIOUS YEAR Rs. lac Rs. lac 141306.37 132068.88 2493.22 2684.46 322.54 1352.81 — 4505.67 2170.68 5837.72 11535.09 5987.82 13705.77 11825.14 242.37 41.20 217.07 13205.13 13705.77
121.18 20.60 148.28 11535.09 11825.14
Review of Operations The year under review saw the core businesses of Animal Feeds and Agricultural Inputs returning an extremely good performance, both in revenue and profitability. This represents the fulfillment of the strategy kicked off in FY2008 to refocus Godrej Agrovet on its core competency of selling high-quality, yield-improving inputs to Indian farmers. Since then we have divested, partially or fully, our non-core businesses in areas such as rural retail (Aadhaar), poultry integration/processing (Godrej Tyson Foods), and gourmet food retail (Natures Basket). Going forward, we remain steadfastly committed to improving the productivity of Indian farmers by innovating products and services that sustainably increase crop and livestock yields. The business-wise performance is reviewed hereunder: ANIMAL FEEDS: The Animal Feed business recorded a good growth of 16% in revenue and 31% in profitability. Despite almost-flat sales volumes, profitability grew due to expansion of contribution margins and control over fixed overheads. Cattle Feed volumes rose modestly year-on-year, arresting the persistent trend of falling sales volumes in that category. We attribute this success to our decision to divide the Animal Feed sales force into seperate teams for Cattle, Poultry and Aqua, which came into effect in September 2009. Poultry Feed had a more difficult year, suffering de-growth in some regions. This was mostly due to market conditions, where industry growth stalled from lower placement of chicks. The situation is expected to be corrected in the coming year, and with more beaks to feed, sales volumes are projected to rise again. Expansion of contribution margins was possible due to efficient sourcing, improved formulation, and successful R&D efforts. The Central Buying Organization (CBO) was successful in forecasting the soya meal market, as well as in their positions in imported amino acids and fish meal. Aggressive efforts to stock raw materials for Cattle Feed also paid off. The Animal Nutrition Innovation Center (ANIC) also supported margin expansion through breakthroughs in feed formulation, performance, and quality. Additionally, ANIC made substantial progress in advancing their pipeline of innovative cattle nutrition products towards commercialization. Over time, it is expected that ANIC will help transform Godrej Agrovet into the most innovative feed company in South Asia. AGRICULTURAL INPUTS: The Agricultural Inputs business grew by 19% in revenue and 22% in profitability. This success is even more impressive in light of the failed monsoon, and the drought conditions which followed. Sales growth was fueled by innovative products from in-house R&D (HBR, Hitweed and Zymegold) in addition to growth in more commoditized pesticides and OMM. Contribution margins remained relatively steady at the product level. Working capital requirements for the business increased due to rising trade receivables and the interest cost on the same impacted profitability. Going forward, greater efforts will be made to grow the business aggressively while keeping working capital requirements in check. Agricultural Inputs R&D continued their focus on the development of innovative agrochemicals this year. Key projects include the development of crop-specific selective herbicides, synthesis of intermediates, and innovation of a next generation PGR for cereals. FINANCE AND INFORMATION SYSTEMS: Your Company managed treasury operations very efficiently. Excellent treasury management resulted in your Company procuring funds at a significantly lower pricing. Your Company continues to enjoy the apex rating of A1+ from ICRA for its Commercial Paper Programme of Rs. 15 crore and for its short-term borrowing program of Rs. 230 crore. Your Company also continues to enjoy the rating LA+ for its long-term borrowing program of Rs. 27 crore. Your Company, successfully implemented SAP, a world renowned, ERP solution in the Animal Feed business of your Company. Your Company is also in the process of implementing SAP in the rest of the businesses and the corporate office. Implementation of SAP in your Company has already started to yield significant business benefits. OTHER INITIATIVES: Your Company continues to accord great importance to the security of its information assets. During the year under review, your Company was accredited with ISO 27001 for Information Security Management System in all its Regional Offices in addition to the accreditation for Information Security Management System in its Corporate Office. DIVIDEND Your Directors have recommended a Final dividend for 2009-10 amounting to Rs. 2 per share of face value of Rs. 10/- each, i.e. 20%. FIXED DEPOSITS Your Company has not accepted any public deposits during the financial year under review. SUBSIDIARY COMPANIES Your Company continues to be the Holding Company of Golden Feed Products Ltd. (GFPL), Cauvery Palm Oil Limited (CPOL) and Godrej Oil Palm Limited (GOPL). During the year under review, your Company sold 100% of the shares in Natures Basket Limited (NBL). Consequent to this sale, the aforesaid Company ceases to be the subsidiary of your Company. The audited Balance Sheets of GFPL, CPOL and GOPL as at March 31, 2010 together with their audited Profit & Loss Accounts, Directors’ Reports and Auditors’ Reports are attached to the Balance Sheet
92
and Profit & Loss Account of your Company. JOINT VENTURES Your Company continues to have Joint Venture arrangement in ACI Godrej Agrovet Private Limited (Bangladesh), Godrej Gold Coin Aquafeed Limited, Godrej IJM Palm Oil Limited and Godrej Tyson Foods Limited. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The information in respect of these matters, required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 and forming part of this Report, is annexed hereto (Annexure - A). DIRECTORS During the year under review, there have been no changes in the Directors of the Company. Mr. B. S. Yadav, formerly the ‘Executive Director & President’ has been redesignated as “Managing Director” w.e.f. May 20, 2009. Mr. A. B. Godrej, Ms. Nisaba A. Godrej and Mr. Amit B. Choudhury retire by rotation at the ensuing Annual General Meeting of the Company in accordance with Section 256 of the Companies Act, 1956 and Article 124 of the Articles of Association of the Company and being eligible offer themselves for re-appointment. AUDITORS You are requested to appoint Auditors for the current year and authorize the Board to fix their remuneration. The retiring Auditors M/s. Kalyaniwalla & Mistry, Chartered Accountants, Mumbai are eligible for re-appointment. A certificate from the Auditors has been received to the effect that their re-appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act,1956. ADDITIONAL INFORMATION The additional information required to be given under the Companies Act, 1956, has been laid out in the Schedules 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 . AUDIT COMMITTEE Pursuant to the provisions of Section 292 A of the Companies Act, 1956, your Company has constituted the Audit Committee of the Board of Directors. The following Directors are the Members of the Audit Committee: (1) Mr. K. N. Petigara – Chairman (2) Dr. S. L. Anaokar – Member (3) Mr. B. S. Yadav – Member The Audit Committee, pursuant to the terms of reference specified by the Board from time to time has made recommendations to the Board in respect of internal control systems, half-yearly & annual financial statements, standard accounting principles, Risk Management policies, etc. The Board of Directors has since accepted the recommendations of the Audit Committee. REMUNERATION COMMITTEE Pursuant to the provisions of Schedule XIII to the Companies Act, 1956, your Company has constituted Remuneration Committee of the Board of Directors to approve the payment of remuneration to the Managerial Personnel. The following Directors are the Members of the Remuneration Committee :(1) Mr. K. N. Petigara – Chairman (2) Dr. S. L. Anaokar – Member (3) Mr. Amit Choudhury – Member MANAGING COMMITTEE Your Company has constituted the Managing Committee of Board of Directors consisting of the following Directors pursuant to Article 144 of the Articles of Association of the Company :(1) Mr. N. B. Godrej (Chairman) (2) Mr. A. B. Godrej (Member) (3) Mr. B. S. Yadav (Member) (4) Dr. S. L. Anaokar (Member) (5) Ms. Nisaba A. Godrej (Member) RESPONSIBILITY STATEMENT Pursuant to the provisions contained in Section 217(2AA) of the Companies Act, 1956, the Directors of your Company confirm :a) that in the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same; b)
that they have selected such accounting policies and applied them 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 and of the profit or loss of the Company for that period;
c)
that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company for preventing and detecting fraud and other irregularities;
d)
that they have prepared the annual accounts on a going concern basis.
HUMAN RESOURCES Your Company continues to take various initiatives for the development of its human resources and has maintained healthy and harmonious industrial relations. The Board would like to place on record its sincere appreciation for the unstinted support it continues to receive from all associates. PARTICULARS OF EMPLOYEES Information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 forms a part of the Directors’ Report. As per the provisions of Section 219(1) (b) (iv) of the Companies Act, 1956, the Report and Accounts are being sent to the Shareholders of the Company, excluding the statement of particulars of employees u/s 217(2A) of the Companies Act, 1956. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary at the registered office of the Company. For and on behalf of the Board of Directors Mumbai, May 17, 2010.
N. B. GODREJ Chairman
Annual Report 2009–2010 4.
ANNEXURE 'A'
ANNEXURE FORMING PART OF THE DIRECTORS’ REPORT INFORMATION PURSUANT TO SECTION 217(1)(e) OF THE COMPANIES ACT, 1956, READ WITH THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS) RULES, 1988 IN RESPECT OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO : A) Conservation of Energy Your Company continues its policy of implementing/promoting various energy conservation measures as the same is an effective means of saving cost and also a corporate social responsibility. Various systems installed to conserve energy are regularly reviewed. Some of the measures adopted by the Company during the year under review for conservation of energy were as follows :1) Use of DG set as an alternative source of energy 2) Use of CNG, a clean fuel without adulteration, in genset, boiler, lab and canteen as an alternate to HSD 3) Change in office weekly off to power staggering day 4) Maintenance of power factor level at 0.98 5) Installation of wood fire boiler in place of diesel fire boiler 6) Plant-wise installation of sub energy meter to know product-wise actual energy consumption 7) Installation of appropriate meters in accordance with the equipment load requirement The adoption of above energy conservation measures has resulted in the following benefits to the Company :a) Direct reduction in fuel & steam cost b) Low combustion on account of clean fuels c) Decline in process & storage losses d) Enhancement in the life of plant & machinery B) Technology Absorption, Adaptation and Innovation I. Your Company continuously carried out during the year under review, in-house research in quality systems and standards. Some key initiatives undertaken in this regard include the following :1. Continuous R&D activities in the areas of – (i) development of selective herbicides for different crops; (ii) reduction of TDC of existing products through improvements in chemical processes, purifications, raw material substitutions, synthesis of intermediates and making and testing of improved formulations 2. Development of a package of herbicide application practices for total control of weeds in cotton 3. University trials on a new PGR for improving cereal yields under progress
Nimin, a urea use efficiency enhancer being evaluated at the University of Mauritius Patents granted to the Company on:- (a) the use of a mycoherbicide in combination with Hitweed, the cotton herbicide for control of weeds; and (b) on the technology of online urea coating with Nimin 6. Patent applications published on:- (a) a neem based composition for coating nitrogenous fertilizers; and (b) a novel process for synthesis of rice herbicide 7. Development of two neem based customized products for a US customer and the same being registered with US EPA 8. Bountee, HBR based PGR product registered as ‘Zaidee’ by a Kenyan distributor 9. CIB registration obtained for export of both Technical Material and Formulation of a rice herbicide 10. New customer-centric initiative taken for developing an alternative to very toxic Hydrogen Cyanamide product used in grape growing 11. A project sponsored with the National Research Centre for Citrus for enhancing sweetness in oranges. The Company’s expenditure on R&D is given below :Expenditure on R & D THIS YEAR PREVIOUS YEAR Rs. lac Rs. lac. 5.
II.
(a) (b) (c) (d)
C.
Capital — — Recurring 212.22 129.99 Total 212.22 129.99 Total R & D expenditure as 0.15% 0.10 % a percentage of total turnover Foreign Exchange earnings and outgo I. Your Company’s efforts to export agricultural inputs (Vipul–liquid, Achook, Nimin) to US, Kenya and other promising markets continued during the year. THIS YEAR PREVIOUS YEAR Rs. lac Rs. lac II. Foreign exchange used 3155.58 3398.69 III. Foreign exchange earned 73.20 151.73
Mumbai, May 17, 2010.
For and on behalf of the Board of Directors N. B. GODREJ Chairman
REPORT OF THE AUDITORS TO THE MEMBERS OF GODREJ AGROVET LIMITED 1.
We have audited the attached Balance Sheet of Godrej Agrovet Limited, as at 31st March 2010 and also the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
2.
We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
3.
As required by the Companies (Auditor’s Report) Order, 2003, issued by the Central Government in terms of Section 227 (4A) of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.
4.
Further to our comments in the Annexure referred to in paragraph (3) above, we report that: a)
We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit.
b)
As referred to in Note 6 of Schedule 15, Notes to accounts, investments in a joint venture and an associate aggregating to Rs. 90,852 thousands, exceeds the book value of the shares of those companies. The Company has also advanced Rs. 80,618 thousands to those companies. However, in view of the benefits of future profitability of these companies being non-quantifiable at this stage, we are unable to determine the quantum of the possible diminution in the value of these investments / advances.
c)
Without qualifying our opinion, we draw attention to Note 27 of Schedule 15, Notes to accounts, regarding a loan of Rs. 676,212 thousand to an ESOP Trust for purchase of the holding company’s shares from the market equivalent to options granted under an Employee Stock Option Plan. As at March 31, 2010, the market value of the shares held by the ESOP Trust is lower than the cost of acquisition of the shares by Rs. 325,404 thousand. The repayment of this loan granted to the ESOP trust is dependent on the exercise of the options by the employees and the market price of the underlying shares of the unexercised options at the end of the exercise period. The fall in value of the underlying equity shares is on account of current market volatility and the loss, if any,
5.
can be determined only at the end of the exercise period, in view of which provision for the diminution is not considered necessary in the financial statements. d) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of these books. e) The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account. f) In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. g) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements read with the notes thereon, subject to (b) above, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010; and ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date. iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date. On the basis of the written representations received from the Directors as on 31st March, 2010, and taken on record by the Board of Directors, we report that, none of the Directors is disqualified as on 31st March, 2010 from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956. For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants Firm Registration No. : 104607W ERMIN K. IRANI Partner Membership No. 35646
Mumbai, May 17, 2010
93
Godrej Agrovet Limited Annexure to the Auditors’ Report
Education and Protection Fund, Employees’ State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, cess and other statutory dues applicable to it with the appropriate authorities. According to the information and explanations given to us, there are no undisputed dues payable in respect of above as at 31st March 2010 for a period of more than six months from the date they became payable.
Referred to in paragraph (3) of our report of even date. 1)
2)
3)
(a)
The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b)
As explained to us, the Company has a program for physical verification of fixed assets at periodic intervals. In our opinion, the period of verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies have been reported on such verification.
5)
In our opinion, the disposal of fixed assets during the year does not affect the going concern assumption.
Name of Statute
Nature of the Dues
(a)
The Management has conducted physical verification of inventory at reasonable intervals.
Excise Duty Act
(b)
In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.
Excise duty & interest from April 2006 to March 2010 on account of Classification matter.
119,648 Commissioner of Central Excise
(c)
The Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.
Sales Tax Act
Sales tax & interest thereon from FY 199394 to 1995-96.
34,151 Commissioner, Appellate Tribunal and High Court
(a)
The Company has granted unsecured loans amounting to Rs. 186,130 thousands to seven companies covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount outstanding during the year was Rs. 234,054 thousands and the year end balance of loan granted to such parties was Rs. 138,864 thousands.
Income Tax Act
Demand raised for AY 2007-08
2,929 Commissioner of Income Tax (Appeals)
The Company has not charged interest on unsecured loans / advances amounting to Rs. 12,216 thousands given to one company which is prima facie prejudicial to the interest of the Company. The rate of interest of other unsecured loans and the other terms and conditions of the all the loans are not prima facie prejudicial to the interests of the Company.
Amount Forum where dispute is (Rs.’000) pending
10)
The Company does not have accumulated losses at the end of the financial year and it has not incurred any cash losses in the current and immediately preceding financial year.
11)
According to the information and explanations given to us and based on the documents and records produced to us, the Company has not defaulted in repayment of dues to banks. The Company does not have dues to financial institutions or debenture holders.
12)
According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.
(c)
As informed to us the receipt of principal and interest, to the extent due, has been regular.
13)
(d)
As informed to us, there are no overdue amounts exceeding rupees one lakh and hence the question of commenting on reasonable steps taken for recovery of principal and interest does not arise.
In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/ mutual benefit fund/ societies.
14)
(e)
The Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 during the year. The maximum amount involved during the year was Rs. 11,700 thousands and year-end balance of loan taken from such party was Rs. Nil.
In our opinion and according to the information and explanations given to us, the Company does not deal in shares, securities, debentures and other investments.
15)
According to the information and explanations given to us, the Company has given a corporate guarantee for loans taken by its subsidiary/associate from banks. The terms and conditions are not prima facie prejudicial to the interest of the Company.
(f)
The rate of interest and the other terms and conditions of the unsecured loan taken is not prima facie prejudicial to the interest of the Company.
16)
According to the information and explanations given to us, term loans were applied for the purpose for which the loans were obtained.
(g)
The payment of principal amounts and interest was also regular.
17)
In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchases of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed a continuing failure to correct major weakness in internal controls.
According to the information and explanations given to us and on an overall examination of the Balance Sheet and Cash Flows of the Company, we report that the Company has not utilized funds raised on short-term basis for long term investment.
18)
The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.
19)
The Company did not have outstanding debentures during the year.
(a)
20)
The Company has not raised any money through a public issue during the year.
21)
During the course of our examination of the book of account and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given and representations made by the Management, no major fraud on or by the Company, has been noticed or reported during the year.
(b)
6)
According to the information and explanations given to us, there are no dues outstanding of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty or cess on account of any dispute, other than the following:
(c)
(b)
4)
(b)
Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the particulars of contracts and arrangements referred to in section 301 of the Companies Act, 1956 have been entered into the register required to be maintained under that section. The transactions made in pursuance of such contracts or arrangements, were made at prices which are reasonable having regard to prevailing market prices at the relevant time, except for certain transactions for which, there are no similar services rendered to other parties or have been entered into on an reciprocal basis and hence the prices are not comparable.
In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public and hence the provisions of section 58A, 58AA or any other provision of the Companies Act, 1956, read with the rules framed thereunder are not applicable.
For and on behalf of KALYANIWALLA & MISTRY CHARTERED ACCOUNTANTS
7)
In our opinion and according to the information and explanations given to us, the internal audit system is commensurate with the size of the Company and nature of its business.
Firm Registration No.: 104607W
8)
According to the information and explanation given to us, the maintenance of cost records has not been prescribed by the Central Government, under section 209(1)(d) of the Companies Act, 1956, for any of the Company’s products.
E. K. IRANI PARTNER Membership No. 35646
9)
(a)
94
According to the information and explanations given to us and on the basis of our examination of the books of account, during the year, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor
Place: Mumbai Dated: May 17, 2010.
Annual Report 2009–2010
BALANCE SHEET AS AT MARCH 31, 2010
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010 THIS YEAR
Schedule
Rs.’000
PREVIOUS YEAR
Rs.’000
Rs.’000
SOURCES OF FUNDS SHAREHOLDERS’ FUNDS Share Capital
1
121,188
121,188
Reserves & Surplus
2
2,751,104
2,562,393 2,872,292
2,683,580
LOAN FUNDS Secured Loans
3
580,675
290,294
Unsecured Loans
4
400,263
2,036,165 980,938
DEFERRED TAX LIABILITY TOTAL
2,326,459
102,004
124,050
3,955,234
5,134,089
APPLICATION OF FUNDS FIXED ASSETS
5 1,200,117
1,094,958
Less: Depreciation
Gross Block
445,810
423,515
Net Block
754,307
671,443
76,054
Capital work-in-progress/ Advances INVESTMENTS
6
CURRENT ASSETS, LOANS AND ADVANCES
7
Inventories Sundry Debtors Cash and Bank Balances Other Current Assets Loans and Advances
41,523 830,361
712,966
1,949,717
1,663,714
1,334,991
1,198,601
935,349
868,572
92,384
311,922
55
60
1,490,590
1,890,640
3,853,369
4,269,796
2,619,376
1,471,616
LESS : CURRENT LIABILITIES AND PROVISIONS Liabilities
8
Provisions
9
58,837
40,770
2,678,213
1,512,386
NET CURRENT ASSETS TOTAL NOTES TO ACCOUNTS
1,175,156
2,757,409
3,955,234
5,134,089
15
Schedule INCOME From Operations Other Income
Rs.’000
10 11
EXPENDITURE Materials Expenses Interest and Financial Charges Depreciation
THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000 Rs.’000 14,077,595 53,042
12 13 14
13,881,315 249,322
10,512,600 2,093,989 259,668 72,185 12,938,442 268,446
11,418,404 2,248,445 151,082 63,384
PROFIT BEFORE TAX AND EXTRAORDINARY INCOME Profit on Continuing Operations Provision for Tax Current Tax Fringe Benefit Tax Deferred Tax
14,130,637
12,935,470 271,418 13,206,888
250,623
310,155
54,300 — (22,046)
115,603 9,112 10,280 134,995 175,160 —
32,254 218,369 Profit/(Loss) on Discontinuing Operations for Live Bird Business Provision for Tax Current Tax
(1,301)
—
— (19,800)
(1,301) Profit/(Loss) on Discontinuing Operations for Processed Chicken Provision for Tax Current Tax Fringe Benefit Tax
—
Profit/(Loss) on Discontinuing Operations for Retail Business Provision for Tax Fringe Benefit Tax
—
— —
— 195 (19,995) (21,910)
—
PROFIT BEFORE EXTRAORDINARY INCOME/EXPENSE Extraordinary Income (on transfer of) Part of Processed Chicken Business Provision for Current Tax
— — 217,068 — — —
Extraordinary Income (on transfer of) of Retail Business Provision for Current Tax
— —
Extraordinary Expenditure for Employee Benefits Extraordinary Expenditure on stamp charges Extraordinary Expenditure for Advisory Services for Business Transfer
— — —
—
PROFIT AFTER TAX AND EXTRAORDINARY INCOME Surplus Brought Forward AMOUNT AVAILABLE FOR APPROPRIATION APPROPRIATION: Dividend Proposed Dividend Tax on Dividend Transfer to General Reserve Surplus carried forward TOTAL Earnings per share before extraordinary items (Basic/Diluted) in Rs. (Refer Note 28) Earnings per share after extraordinary items (Basic/Diluted) in Rs. (Refer Note 28) NOTES TO ACCOUNTS 15
91 (22,001) 133,165 476,654 476,654 7,376 7,376 (17,568) (1,795) (14,099)
— 217,068 1,153,509 1,370,577
(33,462) 583,732 598,782 1,182,514
24,236 4,120 21,707 1,320,514 1,370,577
12,118 2,060 14,828 1,153,509 1,182,514
17.91
10.99
17.91
48.17
The Schedules referred to above form an integral part of the Balance Sheet. Signatures to Balance Sheet and As per our Report attached Schedules 1 to 9 and 15 For and on behalf of For and on behalf of the Board KALYANIWALLA & MISTRY CHARTERED ACCOUNTANTS
The Schedules referred to above form an integral part of the Profit and Loss Account. Signatures to Profit & Loss Account and As per our Report attached Schedules 10 to 15 For and on behalf of For and on behalf of the Board KALYANIWALLA & MISTRY CHARTERED ACCOUNTANTS
ERMIN K. IRANI Partner Membership no. 35646 Mumbai, May 17, 2010
ERMIN K. IRANI Partner Membership no. 35646 Mumbai, May 17, 2010
V. V. CHAUBAL Company Secretary
N. B. GODREJ Chairman
B. S. YADAV Managing Director
V. V. CHAUBAL Company Secretary
N. B. GODREJ Chairman
B. S. YADAV Managing Director
95
Godrej Agrovet Limited SCHEDULES ATTACHED TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED ON MARCH 31, 2010 PREVIOUS YEAR THIS YEAR Rs.’000 Rs.’000 Rs.’000 SCHEDULE 1 : SHARE CAPITAL AUTHORISED 150,00,000 Equity Shares of Rs. 10 each ISSUED, SUBSCRIBED AND PAID UP 1,21,18,752 Equity Shares of Rs. 10/- each fully paid Of the above shares (a) 91,12,956 Equity Shares of Rs. 10/- each fully paid up are held by Godrej Industries Limited the Holding Company. (b) 52,47,600 Equity Shares of Rs. 10/- each have been issued as fully paid bonus shares by capitalising Securities Premium Account SCHEDULE 2 : RESERVES & SURPLUS SECURITIES PREMIUM ACCOUNT As per last Balance Sheet Less : Trade Marks adjusted as per court order CAPITAL INVESTMENT SUBSIDY As per last Balance Sheet Add : Received during the year
SCHEDULE 3 : SECURED LOANS 150,000
150,000
121,188
121,188
From Banks Term Loans
280,000
200,200
300,675
90,094
580,675
290,294
400,000
2,036,165
263
—
400,263
2,036,165
(amount due within a year Rs. 280,000 thousand, Previous year Rs. 133,200 thousand) Cash Credit/Working Capital Demand Loans (Refer Note 4) TOTAL SCHEDULE 4 : UNSECURED LOANS
1,269,782 — 1,269,782
1,392,125 122,343 1,269,782
8,102
5,602 2,500 8,102
152,707 1,320,514 2,751,104
116,172 14,828 131,000 1,153,509 2,562,393
8,102 —
GENERAL RESERVE As per last Balance Sheet Add : Transferred from Profit & Loss Account
PREVIOUS YEAR THIS YEAR Rs.’000 Rs.’000 Rs.’000
131,000 21,707
PROFIT AND LOSS ACCOUNT TOTAL
From Banks Term Loans (Amount due within a year Rs. Nil, Previous year Rs. 2,036,165 thousand) Interest Accrued and due TOTAL
SCHEDULE 5 : FIXED ASSETS
ASSETS Tangible Assets Freehold Land Leasehold Land Buildings Plant & Machinery Furniture & Fixtures Leasehold Improvements Office & Other Equipments Vehicles Research Centre Intangible Assets SAP Software Technical Know-How Fees TOTAL Previous Year
As at 1.4.2009 83,498 2,287 175,122 676,887 36,875 3,863 39,454 53,265 3,707 — 20,000 1,094,958 1,876,695
GROSS BLOCK Additions Deletions
39,594 18,889 5,287 60,663 594 5,683 5,121 20 — 27,232 — 163,083 79,734
— — 958 27,119 6,999 252 8,375 12,400 1,821 — — 57,924 861,471
As at 31.3.10
Upto 1.4.2009
123,092 21,176 179,451 710,431 30,470 3,611 36,762 45,986 1,906
— 570 66,080 281,875 16,054 2,133 14,767 19,739 2,298
27,232 20,000 1,200,117 1,094,958
— 19,999 423,515 619,743
Upto 31.3.10
(Rs.’000) NET BLOCK As at As at 31.3.10 31.3.2009
— 439 24,236 3,772 252 3,709 7,520 1,161
— 803 71,616 304,213 13,876 2,335 13,458 17,144 1,262
123,092 20,373 107,835 406,218 16,594 1,276 23,304 28,842 644
83,498 1,717 109,042 395,012 20,821 1,730 24,687 33,526 1,409
41,089 268,413
1,104 19,999 445,810 423,515
26,128 1 754,307
— 1 671,443
76,054 830,361
41,523 712,966
DEPRECIATION For the Year Deductions/ Adjustments
233 5,975 46,574 1,594 454 2,400 4,925 125 1,104 63,384 72,185
Capital Work-In-Progress/Advances THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000 Rs.’000 SCHEDULE 6 : INVESTMENTS TRADE UNQUOTED IN SUBSIDIARY COMPANIES (a) Golden Feed Products Limited 50,000 Equity Shares of Rs.10/- each (b) Godrej Oil Palm Ltd. 56,400 Equity Shares of Rs. 10/- each (c) Natures Basket Ltd. Nil (Previous year 705,000) Equity Shares of Rs. 10 each(Sold during the year) (d) Cauvery Palm Oil Ltd. 34,20,000 (Previous year 19,38,000) Equity shares of Rs. 10/- each, (Acquired 14,82,000 shares during the year)
500
500
398,395
398,395
—
70,500
311,510
142,830 612,225
710,405 IN OTHER COMPANIES (a) ACI Godrej Agrovet Private Limited 13,50,000 (Previous year 12,00,000) Equity share of Tk. 100/- each (Acquired 1,50,000 shares during the year) (b) Al Rahba International Trading Limited Liability Company '45 Equity share of AED. 1500/- each
96
90,042
79,954
810
810
THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000 Rs.’000 SCHEDULE 6 : INVESTMENTS (Contd.) (c) Creamline Dairy Products Limited 26,71,993 Equity shares of Rs. 10/- each (d) Polchem Hygiene Laboratories Private Limited 4,55,000 Equity shares of Rs. 10/- each (e) Godrej Gold Coin Aquafeed Limited 53,80,916 Equity shares of Rs. 10/- each (f) Godrej IJM Palm Oil Limited 62,867 Equity shares of Rs. 10/- each (g) Aadhaar Retailing Limited 44,65,000 (Previous year 19,00,000) Equity shares of Rs. 10/- each (Acquired 25,65,000 shares during the year) (h) Godrej Tyson Foods Limited 85,880 (Previous year 80,409) Equity shares of Rs. 10/- each (Acquired 5,471 shares during the year) IN CO-OPERATIVE SOCIETY Sachin Industrial Co-operative Society Limited 3 Shares of Rs. 500/- each
103,800
103,800
16,275
16,275
198,729
198,729
63,542
63,542
209,950
81,700
555,521
506,035 1,238,669
1,050,845
2 1,949,076
2 1,663,072
Annual Report 2009–2010
SCHEDULES ATTACHED TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED ON MARCH 31, 2010 THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000 Rs.’000 SCHEDULE 6 : INVESTMENTS (Contd.) NON TRADE QUOTED IN COMPANIES (a) Castrol India Limited 1,207 Equity Shares of Rs. 10/- each (b) Colgate Palmolive (India) Limited 840 Equity Shares of Re. 1/- each AGGREGATE COST OF QUOTED INVESTMENTS
316
316
326
326 642 1,663,714
642 1,949,717
TOTAL SCHEDULE 7 : CURRENT ASSETS, LOANS & ADVANCES (A) INVENTORIES : Raw Materials including in Transit & Packing material Finished Products Poultry stock Stock under cultivation Stores and Spares SUNDRY DEBTORS : (Unsecured and considered good unless otherwise stated) Debts outstanding for a period exceeding six months Considered Good Considered Doubtful Other Debts TOTAL Less: Provision for doubtful debts
849,783 254,101 170,398 16,989 43,720
(C)
(D) (E)
OTHER CURRENT ASSETS : LOANS AND ADVANCES : (Unsecured and considered good unless otherwise stated) Loans and Advances recoverable in cash or in kind or for value to be received (Refer Note - 8(b)) Considered Good Considered Doubtful Less: Provision for doubtful advances (Of the above Rs. 156,684 (Previous year Rs. 470,000) thousand is receivable on account of sale of business/investments) Share application money pending allotment Inter Corporate Deposits Other Deposits i) Government Authorities ii) Others Advance payment of Taxes (Net of provision for taxation Rs. 361,945 thousand; Previous year Rs. 302,042 thousand) TOTAL
748,521 226,965 205,576 7,192 10,347 1,198,601
THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000 1,235,930 —
—
213,181 — 11,700
57
—
1,177,742
TOTAL
1,177,799 111,962 93,685 2,619,376
1,062,442 1,074,142 107,820 76,473 1,471,616
TOTAL
24,236 4,120 10,826 19,655 58,837
12,118 2,060 6,444 20,148 40,770
SCHEDULE 9 : PROVISIONS Proposed Dividend Tax on Dividend Gratuity Leave Encashment
SCHEDULE 10 : INCOME FROM OPERATIONS Sales 218,078 35,597 253,675 717,271 970,946 35,597 935,349
[Debts amounting to Rs. 12,263 thousand (Previous year Rs. 12,263/- thousand) are secured by equitable mortgage/ hypothecation of assets/ deposit of title deeds, Rs. 78,231/- thousand (Previous year Rs. 60,575/-thousand) against Security Deposits, Rs. 189,362/- thousand (previous year Rs. 117,310/-) against Bank Guarantees] CASH AND BANK BALANCES : Cash and Cheques on hand Balances with Scheduled Banks i) In Current Accounts ii) In Fixed Deposit Accounts [(Rs. 40 thousand (Previous year Rs. 40 thousand) pledged with government authorities)]
SCHEDULE 8 : LIABILITIES Acceptances Investor Education and Protection Fund Inter Corporate Deposits Sundry Creditors Dues to Micro, Small and Medium enterprises (Refer Note - 9) Others Advances from Customers Sundry Deposits
1,334,991 (B)
Rs.’000
204,216 59,970 264,186 664,356 928,542 59,970 868,572
13,916,059
12,834,626
-
Less : Excise Duty recovered on Sales Net Sales Claims and Compensations
13,916,059
12,834,626
1,784
610
Financial Operations Dividend on Investments (Gross)
7,226
6,964
Interest (Gross) (Tax at Source Rs. 22,245 thousand; 152,526
Previous year Rs. 19,533 thousand) TOTAL
93,270 159,752
100,234
14,077,595
12,935,470
-
235,376
SCHEDULE 11 : OTHER INCOME Profit on sale of Investments Miscellaneous Income 65,783
33,350
20,475
236,586
TOTAL
92,384 55
a)
Add : Purchases during the year
41,986 311,922 60
1,456,629 66,452 1,523,081 66,452 1,456,629
Less : Sales during the year
b)
PURCHASE FOR RESALE
c)
INVENTORY CHANGE
93,190 201,600
397 57,700
419 64,366
71,343
74,436 1,890,640 4,269,796
748,521
666,955
10,915,477
10,117,700
11,663,998
10,784,655
58,578
187,507
11,605,420
10,597,148
849,783
748,521 10,755,637
9,848,627
664,522
706,766
Opening Stock Finished Goods Stock under cultivation Poultry Stock Less : Transferred on sale/demerger of business
25,060 122,100
271,418
RAW MATERIALS CONSUMED
Less : Closing Stocks
1,213,990 27,109 1,241,099 27,109 1,213,990
36,042
53,042
SCHEDULE 12 : MATERIALS Opening stock
6,126
53,042
226,965
224,847
7,192
10,983
205,576
191,753
439,733
427,583
-
30,643
439,733
396,940
254,101
226,965
Less : Closing Stock Finished Goods Stock under cultivation Poultry Stock
16,989
7,192
170,398
205,576
441,488 1,490,590 3,853,369
439,733 (1,755)
(42,793)
11,418,404
10,512,600
97
Godrej Agrovet Limited SCHEDULES ATTACHED TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED ON MARCH 31, 2010 Rs.'000
THIS YEAR PREVIOUS YEAR Rs.'000 Rs.'000
SCHEDULE 13 : EXPENSES 1.
Salaries, Wages, Bonus, Gratuity and Allowances
478,404
378,758
2.
Contribution to Provident Fund and Other Funds and Administration Charges
27,002
20,078
3.
Employee Welfare Expenses
4.
Processing charges
5.
Consumable Stores
6.
Power and Fuel
7.
38,317
35,355
441,761
446,636
41,331
36,843
165,748
164,528
Rent
42,272
39,533
8.
Rates and Taxes
12,118
7,275
9.
Repairs & Maintenance Building Plant & Machinery Other assets
2,755
3,633
13,985
22,646
5,562
3,570 22,302
10.
Insurance
11.
Postage, telephony and stationery
5,701
27,727
29,667
12.
Auditor's Remuneration
4,956
4,440
Legal & Professional Fees
18,496
28,552
14.
Freight, Coolie and Cartage
95,563
102,263
15.
Discount, Commission and Selling Expenses
635,678
524,249
16.
Advertisement and Publicity
4,893
11,710
17.
Travelling Expenses
81,948
74,825
18.
Bad Debts/Advances written off
39,212
24,072
19.
(Write Back)/Provision for Doubtful Debts and Advances
(43,412)
67,286
20.
Loss on Sale of Investments
20,500
—
21.
Loss on Sale of Fixed Assets/Write off
14,077
1,747
22.
Research Expenses
5,976
1,065
23.
General Expenses
80,603
75,531
2,264,045
2,109,964
24.
Less: Shared Expenses recovered
(15,600)
(15,975)
2,248,445
2,093,989
SCHEDULE 14 : INTEREST AND FINANCIAL CHARGES (a)
i)
Banks
ii)
Inter Corporate Deposits
130,340
236,909
—
9,582
a)
The financial statements are prepared under the historical cost convention and on the 'going concern basis', with revenues recognised and expenses accounted on their accrual in accordance with the generally accepted accounting principles, and in compliance with the applicable Accounting Standards and other requirements of the Companies Act, 1956.
b)
Fixed assets have been stated at cost and include incidental and/or installation development expenses incurred in putting the asset to use and interest on borrowing incurred during construction period. Pre-operative expenses for major projects are also capitalized, where appropriate.
c)
Carrying amount of cash generating units/assets are reviewed at balance sheet date to determine whether there is any indication of impairment. If such indication exists, the recoverable amount is estimated as the net selling price or value in use, whichever is higher. Impairment loss, if any, is recognized whenever carrying amount exceeds the recoverable amount.
d)
Depreciation/Amortisation has been provided for as under:
e)
i)
Banks
ii)
Others
Other Financial Charges TOTAL
(a)
The Company has grouped additions and disposals in appropriate time periods of a month/quarter for the purpose of charging pro rata depreciation in respect of additions and disposals of its assets keeping in view the materiality of the items involved.
(b)
1)
Depreciation is provided on the straight line method at the rates specified in schedule XIV to the Companies Act, 1956, except for computer hardware which is depreciated over its estimated useful life of four years.
2)
Amortizations
597
3,915
5,157
3,131 14,988
6,131 259,668
Asset type Leasehold Land Leasehold improvements and equipments
(iii) (iv) (v) (vi) (vii) (viii)
Trees Development cost Nursery/Greenhouse building Poultry Equipments/Signage Technical Know-how of a capital nature Computer software Moulds
Period Primary lease period Primary lease period or 16 years whichever is less 15 years 10 years 3 years 6 years 6.17 years 2 years
Grants/Subsidies : (i)
Investment Subsidy under the Central/State investment incentive scheme is credited to Capital Investment Subsidy Reserve and treated as part of the shareholders' funds.
(ii)
Grants/Subsidies related to specific fixed assets are shown as a deduction from the gross value of the asset concerned in arriving at its book value.
(iii)
Grants/Subsidies related to revenue are presented as a credit to the profit and loss statement or are deducted in reporting the related expense.
Long-term investments are carried at cost. Provision for diminution, if any, in the value of each long-term investment is made to recognise a decline, other than of a temporary nature. Current investments are stated at lower of cost and net realizable value.
g)
Raw materials/Stores & Spares and Poultry Stock are valued at weighted average cost. Finished goods and work-in-progress are valued at lower of cost and net realizable value. These costs include cost of conversion and other costs incurred in bringing the inventories to their present location and condition.
h)
Employee Benefits: i)
Short-term employee benefits (payable wholly within twelve months of rendering the service): Short-term benefits such as salaries, wages, short-term compensation absences, etc., are determined on an undiscounted basis and recognized in the period in which the employee renders the related service.
7,046
151,082
(i) (ii)
f)
246,491
Interest paid on other loans
5,754 (c)
SIGNIFICANT ACCOUNTING POLICIES:
Interest paid on fixed loans
130,340 (b)
1
29,849
8,571
13.
TOTAL
SCHEDULE 15 : NOTES TO ACCOUNTS
ii)
Post-employment benefits: Defined Contribution Plans: The Company's contributions paid/payable to provident Fund, Employees State Insurance Scheme, Employees Pension Schemes, 1995 and other funds, are determined under the relevant approved schemes and/or statutes and are recognized as expense in the Profit and Loss Account during the period in which the employee renders the related service. There are no further obligations other than the contributions payable to the approved trusts/appropriate authorities. However, the rules of Company's Provident Fund Scheme, 1952, for the reason that the return on investment is less or for any other reason, then the deficiency shall be made good by the Company. The Company's PF does not have any existing Deficit or Interest shortfall. In view of the track record of the Company's PF Trust - its assets, return on investments and acumulated reserves - the Company does not anticipate any deficiency in the foreseeable future. In any case making reasonable actuarial assumptions for determining and measuring any probable future obligations arising due to interest shortfall, would pose a formidable challenge. Defined Benefit Plans: The Company's gratuity and leave encashment/longterm compensated absences schemes are defined benefit plans. The Company's liability for the defined benefit schemes is actuarially determined based on the projected unit credit method. The Company's net obligations in respect of such plans is calculated by estimating the amount of future benefit that the employees
98
Annual Report 2009–2010
SCHEDULES ATTACHED TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED ON MARCH 31, 2010 have earned in return for their services and the current and prior periods that benefit is discounted to determine its present value and the fair value of the plan asset is deducted. Actuarial gains and losses are recognized immediately in the Profit and Loss Account. Terminal Benefits: All terminal benefits including voluntary retirement compensation are fully written off to the Profit and Loss Account. i)
2
Miscellaneous expenditure: i)
Non-Compete fee is amortised over a period of five years or the period of the agreement (wherever applicable).
ii)
Front-end fee paid on loans raised from financial institutions is amortized over the period of the loan.
j)
Revenue is recognized when goods are despatched to external customers. Sales are inclusive of realized exchange fluctuations on export receivables but net of returns, sales tax, rebates, etc.
k)
Revenue expenditure on Research and Development is charged to Profit and Loss Account of the year in which it is incurred. Capital Expenditure incurred during the year on Research and Development is shown as an addition to Fixed Assets under the head "Research Centre".
l)
Interest and commitment charges incurred in connection with borrowing of funds, which are directly attributable to the acquisition, construction or production of an asset that necessarily takes substantial period of time to get ready for its intended use, upto the time the said asset is put to use are capitalized, as a part of the cost of that asset. Other borrowing costs are recognized as an expense in the period in which they are incurred.
m)
Transactions in foreign currency are recorded at the exchange rates prevailing on the date of the transaction. Assets and liabilities related to foreign currency transactions, remaining unsettled at the year end, are translated at the year end exchange rates. Forward exchange contracts, remaining unsettled at the year end, backed by underlying assets or liabilities are also translated at year end exchange rates.The premium payable on foreign exchange contracts is amortized over the period of the contract. Exchange gains/losses are recognized in the Profit and Loss Account.
n)
Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets, subject to consideration of prudence, are recognized and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. The tax effect is calculated on the accumulated timing difference at the year end, based on the tax rates and laws enacted or substantially enacted on the balance sheet date.
o)
The basic earnings per share is computed using the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the period, except where the results would be anti-dilutive.
p)
Provisions are recognized in the accounts in respect of present probable obligations, the amount of which can be reliably estimated. Contingent liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company.
CONTINGENT LIABILITY: In respect of: (a) Income Tax Matters Demand raised by the Deputy Commissioner of Income Tax after the completion of scrutiny assessment for the A.Y. 2007-2008. (b) Sales Tax Matters The Company has filed Appeal with the Sales Tax tribunal in Tamilnadu for F.Y. 1993-94 to 1995-96, for classifying branch transfer as sales. [Against the above the Company has paid advance of Rs. 800 thousand (Previous year Rs. 800 thousand)] The Company has filed an appeal in Bombay High Court against an order of the Director of Marketing, Pune in connection with Agricultural Produce Market Committee (APMC) in respect of poultry business. (Against the above the Company has paid advance of Rs. 14,300 thousand (Previous year Rs. 14,300 thousand) (c) Excise Matter The Company has preferred an appeal with the Excise Dept in the matter of classification of Agri Products and presently the case is pending with the Commissioner of Central Excise. Guarantee issued to Banks on behalf of the Joint (d) venture/Associates companies. (e) Guarantees issued by the Banks and counter guaranteed by the company (other than those mentioned in (d) above) have been secured by deposit with bank. (f) Case/Claim filed by Processors for claiming various expenses
THIS YEAR Rs.'000
PREVIOUS YEAR Rs.'000
2,929
5,922
34,151
35,674
119,648
83,112
448,706
125,839
55,187
61,927
4,170
4,170
3 4
5
6
CAPITAL COMMITMENTS: The estimated value of contracts remaining to be executed on Capital Account to the extent not provided for. SECURED LOANS:
THIS YEAR Rs.'000
PREVIOUS YEAR Rs.'000
29,030
17,357
a)
Term Loans from Banks are secured by an equitable mortgage of specified immovable properties and hypothecation of specified movable assets of the Company.
b)
Cash Credit and other facilities from banks are secured by hypothecation of stocks and book debts of the Company (both present and future).
c)
During the year, the Company had raised Rs. 600,000 thousand (Previous year Rs. Nil) as Commercial Papers. Outstanding balance as at year end of such Commercial Papers is Rs. Nil (Previous year Rs. Nil).
FIXED ASSETS: a)
Legal formalities relating to the transfer of title of immovable assets situated at Chennai (acquired as a part of the takeover of Agrovet business from Godrej Industries Limited) and Hyderabad (as part of the merger of Godrej Plant Biotech Limited) are being complied with. Stamp duty payable thereon is not presently determinable.
b)
Pursuant to provisions of Section 78 of the Companies Act , 1956 and Article 8 of the Articles of Association of the Company and based on the confirmation of the Honourable High Court of Judicature at Bombay, an amount of Rs. 114,448 thousand standing in the Securities Premium Account of the Company has been utilized for adjustment of amount standing in Trade Marks as of March 31, 2009.
INVESTMENTS IN JOINT VENTURES/ASSOCIATES: The Company has equity investment of Rs. 90,042 thousand (Previous year Rs. 79,954 thousand) in ACI Godrej Agrovet Private Limited and Rs. 810 thousand (Previous year Rs. 810 thousand) in Al Rahaba International Trading LLC. The Company’s investments in Joint Ventures/Associates are carried at costs, which are higher than their respective book values. The diminution in the value of these investments is considered to be of a temporary nature, in view of the Company’s long-term financial involvement in, and the future profitability projected by the two companies. No provision for diminution in the value of investments is therefore considered necessary in the accounts. Similarly, no provision for Debtors/Loans and advance of Rs. 5,073 thousand (Previous year Rs. 4,558 thousands) in ACI Godrej Agrovet Private Limited has been made.In view of dilution of Godrej Agrovet Limited's stake in Al Rahba, from 70% to 33% in the previous years, and it no longer being GAVL's subsidiary it was considered necessary to provide for Debtors/Loans to the tune of Rs 19,700 thousand. The same has been reprovided in the current year out of the total of Rs. 65,370 thousand (Previous year Rs. 37,605 thousand).
7
INFORMATION IN RESPECT OF JOINT VENTURES (JOINTLY CONTROLLED ENTITY): Name Country of Incorporation Percentage Holding THIS YEAR PREVIOUS YEAR Rs. in '000 Rs. in '000 (a) ACI Godrej Agrovet Private Limited Bangladesh 50% 50% ACI Godrej Agrovet Private Limited has its operations in the fields of Animal Feed, Poultry businesses etc. Interest in Assets, Liabilities, Income and Expense with respect of jointly controlled entity Assets 119,015 193,407 Liablities 119,015 193,407 Income 768,555 466,613 Expense 747,342 450,434 (b) Godrej Tyson Foods Limited India 49% 49% The company is in the Poultry Business Interest in Assets, Liablities, Income and Expense with respect of jointly controlled entity Assets 575,082 579,594 Liabilities 575,082 579,594 Income 909,862 772,601 Expense 950,988 852,483 (c) Godrej Gold Coin Aquafeed Limited India 49% 49% The Company is in the Aqua feed business. Interest in Assets, Liablities, Income and Expense with respect of jointly controlled entity Assets 292,076 289,712 Liabilities 292,076 289,712 Income 117,553 79,811 Expense 145,094 115,547 (d) Godrej IJM Palm Oil Limited India 48.22% 48.22% The Company is in the Oil Palm business. Interest in Assets, Liabilities, Income and Expense with respect of jointly controlled entity Assets 67,265 74,296 Liabilities 67,265 74,296 Income 11,490 17,371 Expense 16,751 20,722
99
Godrej Agrovet Limited SCHEDULES ATTACHED TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED ON MARCH 31, 2010 THIS YEAR PREVIOUS YEAR Rs. in '000 Rs. in '000 8
CURRENT ASSETS, LOANS AND ADVANCES: (a) Sundry Debtors include due from Companies under the same management Godrej Industries Limited (i) (ii) Godrej International Limited (iii) Godrej Consumer Products Limited (iv) Polchem Hygiene Laboratories (v) Godrej Properties Limited Loans and Advances include due from (b) Companies under the same management (i) Golden Feed Products Limited Maximum balance during the year (ii) Krithika Agro Farm Chemicals and Engineering Industries Private Limited Maximum balance during the year (iii) Al Rahaba International Trading Limited Liability Company Maximum balance during the year (iv) ACI Godrej Agrovet Limited Maximum balance during the year (v) Godrej Gold Coin Aquafeed Limited Maximum balance during the year (vi) Aadhaar Retailing Limited Maximum balance during the year (vii) Cauvery Palm Oil Limited Maximum balance during the year (viii) Godrej Oil Plantations Limited Maximum balance during the year (ix) Godrej Tyson Foods Limited Maximum balance during the year (x) Natures Basket Limited Maximum balance during the year (xi) Godrej IJM Palm Oil Limited Maximum balance during the year
Unit 13
70 378 64
317 70 5 15
11,906 11,906 -
9,376 9,376 4,197
4,197 65,370
4,197 37,605
65,370 5,073 5,073 95,751 95,751 156,684 156,684 6,700 6,700 13,195 15,698 18,742 63,051 917 12,676
37,605 4,558 4,558 90,672 90,672 535,681 535,681 3,311 3,311 13,195 13,967 15,698 15,698 63,051 63,051 -
PURCHASES FOR RESALE: Animal Feeds Agri Inputs Plant Growth Promoter Spray Granules Synthetic pesticides Retail Segment Others
14
RAW MATERIALS CONSUMED: Cakes & Brans Extractions Others
10
CURRENT LIABILITIES: Disclosure of sundry creditors under current liabilities is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro,Small & Medium Enterprises Development Act, 2006". Accordingly the amount overdue as on March 31, 2010 on account of principal amount together with interest, aggregate to Rs 70 thousand ( Previous year - Rs Nil.). The amount payable to Simple Package is Rs. 70 thousand.
11
12
100
SALES TURNOVER: Animal Feeds Agro Inputs Integrated Poultry Business Retail Segment Parent Chicks Others
MT
THIS YEAR Quantity Value Rs. '000
PREVIOUS YEAR Quantity
Value Rs. '000
727,790 11,110,947 726,724 9,739,745 - 1,284,274 1,066,690 - 1,363,809 1,733,834 0 43,462 46,221 110,808 250,894 13,916,059 12,834,625 TOTAL Note: Sales Turnover includes sale of items processed by third parties, and items purchased by the Company for resale. FINISHED GOODS INVENTORIES: Animal Feeds MT 8,046 117,344 7,613 107,439 Agri Inputs Synthetic pesticides KL 353 76,427 278 32,607 Natural pesticides MT 5 653 94 19,114 Others 59,677 67,805 254,101 226,965 TOTAL
5,151
63,292
KL MT KL
535 6,390 2,536 -
51,993 97,193 418,483 96,376 664,522
406 6,041 1,535 -
43,902 98,598 231,550 332,716 706,766
221,422 268,286
1,721,242 4,437,535 4,596,860
248,483 400,129
2,027,835 4,404,741 3,416,051
MT MT
10,755,637
The total of future minimum lease payments under cancellable operating leases for each of the following periods: THIS YEAR PREVIOUS YEAR Rs. '000 Rs. '000
i. ii.
Not later than one year Later than one year and not later than five years Later than five years Lease payments recognised in the statement of Profit & Loss for the period : Minimum lease payments
4,550 10,658
8,604 16,273
10,112
6,006
466
3,252
LICENSED & INSTALLED CAPACITY AND ACTUAL PRODUCTION: a) Animal Feeds
b) Tissue Culture Plants c) Agri Inputs (i) Plant Growth Promoter Liquids (ii) Plant Growth Regulator Granules
17
9,848,627
a.
Item
DEFERRED TAX: The tax effects of significant temporary differences that resulted in deferred tax assets and liabilities are : THIS YEAR PREVIOUS YEAR Rs.'000 Rs.'000 Depreciation on Fixed Assets (130,769) (137,722) Provision for Doubtful Debts 20,943 42,971 Others 7,822 (29,299) (102,004) (124,050) Deferred Tax Liability Unit
477
DISCLOSURE IN RESPECT OF LEASES: The Company’s leasing arrangements are in respect of operating leases for premises occupied by the Company. These leasing arrangements are cancellable, and are renewable on a periodic basis by mutual consent on mutually acceptable terms.
b.
16
Value Rs. '000
39
TOTAL 15
PREVIOUS YEAR Quantity
MT
TOTAL
iii. 9
THIS YEAR Quantity Value Rs. '000
For the year Capacity Per Annum Ended Registered Installed 31.3.2010 Not Applicable 350,000 MT 31.3.2009 Not Applicable 359,974 MT Million Plants 31.3.2010 4.25 5 31.3.2009 4.25 5 31.3.2010 31.3.2009 31.3.2010 31.3.2009
500 KL 500 KL 5000 MT 5000 MT
500 KL 500 KL 5000 MT 5000 MT
Actual Third Party Production Production 233,991 MT 494193 MT 383,496 MT 442283 MT Million Plants 3 3 500 KL 467 KL 4063 MT 3384 MT
95 KL -
(a) COMPUTATION OF PROFIT FOR THE PURPOSE OF MANAGERIAL REMUNERATION: THIS YEAR PREVIOUS YEAR Rs.'000 Rs.'000 Profit after tax as per Profit and Loss Account 217,068 583,732 Add : Depreciation as per accounts 63,384 72,185 Add : Extraordinary expenses 0 33,462 Managerial Remuneration, including Directors sitting fees 13,048 9,250 Provision for Doubtful Debts/Advances (43,412) 67,286 Provision for Tax (including Deferred tax) 32,254 56,723 (Loss)/Profit on sale of Fixed Assets (net) 14,077 1,747 20,500 (Loss)/Profit on sale of Investments 99,851 240,653 Less : Depreciation as per Section 350 of the Companies Act, 1956 63,384 72,185 Less : Profit on transfer of business 484,029 Less : Profit on sale of Investments 235,376 63,384 791,591 Net Profit / (Loss) for the purpose of Directors' remuneration 5% thereof MAXIMUM REMUNERATION PERMISSIBLE UNDER THE ACT (Computed on the basis of inadequacy of profits as per Schedule XIII- Part II)
253,535 12,677 12,677
32,794 1,640 4,200
Annual Report 2009–2010
SCHEDULES ATTACHED TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED ON MARCH 31, 2010 THIS YEAR PREVIOUS YEAR Rs '000 Rs '000
THIS YEAR PREVIOUS YEAR Rs.'000 Rs.'000 (b) MANAGERIAL REMUNERATION a) Salaries b) Contribution to Provident Fund c) Estimated monetary value of perquisites d)
12,320 527 110 12,957 91 13,048
Directors' Sitting Fees
8,760 412 3 9,175 75 9,250
18
COMMON EXPENSES SHARED BY THE COMPANIES : Expenses (Schedule 13) include Rs. 25,180 thousand (Previous year Rs. 21,344 thousand) charged by Godrej Industries Limited, the Holding Company.
19
AUDITORS' REMUNERATION: Audit fees Audit under Other Statutes Tax representation before Authorities Management Consultancy Certification Reimbursement of Expenses TOTAL
20
21
22
23
24
VALUE OF IMPORTS ON CIF BASIS: (INCLUDES DIRECT IMPORTS ONLY) Raw Materials Spares Capital Goods EXPENDITURE IN FOREIGN CURRENCY: Travelling Expenses Others EARNINGS IN FOREIGN EXCHANGE: F.O.B value of goods exported Others
2,698 852 896 55 278 177 4,956
2,565 806 713 88 15 112 4,300
295,178 18,832 314,010
326,518 4,804 940 332,262
742 806 1,548
5,928 1,679 7,607
7,320 7,320
15,173 15,173
VALUE OF CONSUMPTION OF RAW MATERIALS, SPARES & TOOLS: (INCLUDING CAPITALIZED ITEMS ) THIS YEAR Rs.'000 % RAW MATERIALS : Imported items (including duty content) 300,442 3% Indigenous 10,455,195 97% 10,755,637 100 TOTAL SPARES & TOOLS : Imported items 2,283 0 Indigenous 941 100 TOTAL 41,331 100 EMPLOYEE BENEFITS: I. Defined Contribution Plans:
THIS YEAR Rs '000
Change in plan assets Fair value of plan assets as at 1st April 2009 Expected return on plan assets Contributions Benefits paid Actuarial gain/(loss) on plan assets Fair value of plan assets as at 31st March 2010 Amount recognised in the Balance Sheet Present value of obligation, as at 1st April 2009 Fair value of plan assets as at 31st March 2010 Net obligation as at 31st March 2010 Net gratuity cost for the year ended 31st March 2010 Current Service Cost Interest Cost Expected return on plan assets Net Actuarial (gain)/loss to be recognised Net gratuity cost Assumptions used in accounting for the gratuity plan
Contribution to Defined Contribution Plan, recognised as expense for the year are as under: Employers' Contribution to Provident Fund 19,503 9,827 II. Defined Benefit Plans: Contribution to Gratuity Fund The Company makes annual contributions to the Employees' Group Gratuity-cum-Life Assurance Scheme of ICICI Prudential Ltd, a funded defined benefit plan for qualifying employees. Gratuity is payable to all eligible employees on superannuation, death or on separation/termination in terms of the provisions of the Payment of Gratuity Act or as per the Company's policy whichever is beneficial to the employees. The following table sets out the funded status of the gratuity plan and the amounts recognised in the Company's financial statements as at 31 March 2010 THIS YEAR PREVIOUS YEAR Rs '000 Rs '000 Change in present value of obligation Present value of obligation as at 1st April 2009 34,203 37,167 Interest Cost 2,736 2,973 Service Cost 2,475 3,704 Benefits Paid (9,824) (8,424) Actuarial (gain)/loss on obligation 10,815 (1,218) 40,405 34,203 Present value of obligation, as at 31st March 2010
40,405 29,324 11,081
34,203 27,759 6,444
2,475 2,736 (2,221) 8,097 11,087
3,704 2,973 (2,283) 422 4,816
The expected return on plan assets is determined considering several applicable factors mainly the composition of the plan assets held, assessed risks of asset management, historical results of the return on plan assets. 25
Research & Development Expenditure of revenue nature charged to the Profit and Loss Account amounts to Rs.21,222 thousand (previous year Rs.12,999 thousand).
26
The amount of exchange difference included in the Profit and Loss Account, under the related heads of expenses /(income), is Rs. 11328 thousand (Previous year expense Rs.366 thousand). The amount of exchange difference in respect of forward exchange contracts to be recognised in the profit and loss account of subsequent accounting periods Rs. 450 thousand (Previous Year Rs. Nil thousand).
27
The Company has provided loan to Godrej Industries Limited Employee Stock Option Scheme (GIL ESOP), which is administered by an independent ESOP Trust which purchases shares of GIL from the market equivalent to the number of stock options granted from time to time to eligible employees. The repayment of the loans granted to the ESOP trust is dependent on the exercise of the options by the employees and the market price of the underlying shares of the unexercised options at the end of the exercise period. The fall in value of the underlying equity shares is on account of current market volatility and the loss, if any, can be determined only at the end of the exercise period. In view of the aforesaid, provision for diminution of Rs. 325,404 thousand is not considered necessary in the financial statements.
129,865 1% 9,718,762 99% 9,848,627 100
PREVIOUS YEAR Rs '000
28,539 2,283 7,000 (8,424) (1,639) 27,760
% % Discount Rate 8 8 Salary escalation rate 5 4 Expected rate of return on plan assets 8 8 The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
PREVIOUS YEAR Rs.'000 %
– – 36,843 100 36,843 100
27,760 2,220 6,450 (9,824) 2,718 29,324
28
EARNINGS PER SHARE: Profit / (Loss) after tax before extraordinary income Profit/ (Loss) after tax and extraordinary income Weighted average number of equity shares outstanding EPS before extraordinary items Basic earnings per share (Rs.) Diluted earnings per share(Rs.) EPS after extraordinary items Basic earnings per share (Rs.) Diluted earnings per share(Rs.) Nominal value of shares (Rs.)
THIS YEAR PREVIOUS YEAR Rs.'000 Rs.'000 217,068 133,165 217,068 583,732 12,118,752 12,118,752 17.91 17.91
10.99 10.99
17.91 17.91 10.00
48.17 48.17 10.00
101
Godrej Agrovet Limited SCHEDULES ATTACHED TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED ON MARCH 31, 2010 29. SEGMENT INFORMATION (i)
Information about Primary business Segments Animal Feeds
Agri
(A) 11,462,048 (158,553)
(B) 1,292,906 -
For the year ended 31st March 2010 Integrated Other Unallocated Poultry Business Business (C) (D) (E) 1,410,030 67,222 (157,594) -
11,303,495
1,292,906
1,252,437
67,222
393,671
191,791
26,137
7,715
Revenue Total Sales Less : Inter-segment External Sales Result Segment Result Unallocated expenditure net of unallocated income Interest expenses Interest Income Dividend Income and Profit on sale of Investments Profit before taxation and exceptional items Provision for taxation Profit after taxation and before exceptional items Profit after taxation and exceptional items Other Information Segment assets Segment liabilities Capital expenditure Depreciation
393,671
191,791
26,137
Rs.'000 Total (A+B+C+D+E+F) 14,232,206 (316,147)
-
13,916,059
(378,661)
611,180 (370,528)
(151,082) 152,526 7,226
(151,082) 152,526 7,226
7,715
(369,991)
249,322 32,254 217,068
393,671
191,791
26,137
7,715
32,254 (402,245)
393,671
191,791
26,137
7,715
(402,245)
217,068
1,813,979 2,048,229 120,611 35,043
718,509 89,198 1,579 1,957
406,672 61,148 6,173 8,399
223,743 13,990 14,295
3,470,543 1,534,413 34,721 3,689
6,633,448 3,746,977 163,084 63,384
(ii) Information about Secondary business Segments THIS YEAR Rs.'000 Revenue by geographical India Outside Total segment India Total Sales 14,223,574 8,632 14,232,206 Less : Inter-segment (316,147) (316,147) External Sales 13,907,428 8,632 13,916,059
30
RELATED PARTY DISCLOSURES: Related party disclosures as required by AS - 18, "Related Party Disclosures", are given below 1.
Relationships : (i)
(ii)
(iii)
(v)
300,245
300,245 300,245
300,245 1,650,011 963,693 42,638 27,334
2.
Nature of Transactions
Subsidiary Companies:
2
Sale of Business / Investments
Golden Feed Products Ltd. Cauvery Palm Oil Ltd. Godrej Oil Palm Ltd. Natures Basket Ltd. (upto June 30, 2009)
3
Investment in share capital
4
Advances given during the year
5
Intercorporate deposits placed during the year
6
Intercorporate deposits taken during the year
7
Loan Given
8
Sale of materials / finished goods
9
Sundry deposits placed
Joint Ventures:
10 Purchase of materials / finished goods
ACI Godrej Agrovet Private Ltd. Godrej Tyson Foods Ltd. Godrej Gold Coin Aquafeed Ltd. Godrej IJM Palm Oil Ltd.
11 Expenses charged to other companies
Associates:
14 Interest expense on intercorporate deposits taken
Other related parties where persons mentioned in (viii) below exercise significant influence: Krithika Agro Farm Chemicals and Engineering Industries Private Ltd.
(vii) Key management personnel: Mr. B.S.Yadav Dr. S.L. Anaokar (viii) Individuals exercising control or significant influence (and their relatives): Mr. A.B. Godrej Mr. N.B. Godrej
7,044
156,870 (21,910)
7,044
156,870 (21,910)
7,044
156,870 (21,910) 599,008 72,036 1,353 2,215
6,317 3,567
Rs.'000 Total (A+B+C+D+E+F) 13,089,956 (255,331) 12,834,626
5,747 (255,492)
447,996 (255,492)
(259,668) 93,270 242,340
(259,668) 93,270 242,340
5,747
(179,551)
268,446
5,747
135,281 (314,832)
135,281 133,165
450,567 450,567 7,044
5,747
135,736
450,567 450,567 583,732
479,197 69,177 11,180 13,508
235,457 11,545 282 14,544
3,682,803 2,846,450 17,963 11,016
6,646,476 3,962,901 79,734 72,185
Rs.'000 Total
Outside India 16,260 16,260 -
13,089,956 (255,331) 12,834,626 6,646,476
-
79,734
The following transactions were carried out with the related parties in the ordinary course of business : (i) Details relating to parties referred to in items 1(i), (ii), (iii), (iv),(v) and (vi) above
Purchase / Transfer of fixed assets
Fellow Subsidaries:
156,870 (21,910)
(ii) Information about Secondary business Segments PREVIOUS YEAR Revenue by geographical India segment Total Sales 13,073,696 Less : Inter-segment (255,331) External Sales 12,818,365 Carrying amount of segment 6,646,476 assets Additions to fixed assets 79,734
1
Avesthagen Ltd.
12 Expenses charged by other companies 13 Interest income on loan given
15 Interest income on intercorporate deposits placed
Holding Subsidiaries Fellow Joint Companies Subsidiaries Ventures (i)
843 633
18 Dividend paid 19 Outstanding Loans Receivable 20 Outstanding receivables, net of (payables) 21 Guarantees issued in favour of
(ii)
(iii)
(iv)
70,000 168,681 500
50,000
86,600
580,000
252
Associates (v)
464,832 73,943 93,462 27,764
Rs.'000 Other related Parties (vi)
30,100 19,825
230,000
53,932
40,000
45,500
6,811 3,154 369 318 1,856 22,692 21,627
1,722
16 Intercorporate deposits written off 17 Dividend Income
125,000 1,241,709 1,264,135
24,222 4,875 8,636 55,418 55,892 8,135 (636)
1,008 7,617 282 8,243 7,373
3,140
2,016
5,022
3,888
9,113 9,113 (541)
15,906
19,255
(1,360)
115,245
343
22 Gurantees Outstanding
10,865 12,086 92,577 21,504 18,854 (3,056) 9,252 1,955
12,916 38,959 19,829 53,547 25 17,599
121,872 124,656 11 26
232
2,057
71,575 169,607 146,498 19,200 19,200 125,843 129,039
7,226 6,680
-
4,355
(3,246)
49,796
33,213
(ii) Details relating to persons referred to in items 1 (vii) & (viii) above
1 2 3
102
(A) 9,995,075 -255331 9,739,745
For the year ended 31st March 2009 Agri Nature's Integrated Other Unallocated Basket Poultry Business Retail Business (B) (C) (D) (E) (F) 1,082,950 43,462 1,733,834 234,635 1,082,950 43,462 1,733,834 234,635 -
Godrej Industries Ltd. (GIL) holds 75.19% (Previous year 75.19%)in the Company. GIL is the subsidiary of Godrej & Boyce Mfg. Co. Ltd., the ultimate Holding Company.
Creamline Dairy Products Ltd. Polchem Hygiene Laboratories Private Ltd. Al Rahaba International Trading LLC (vi)
Total Sales Less : Inter-segment External Sales Result Segment Result Unallocated expenditure net of unallocated income Interest expenses Interest Income Dividend Income and Profit on sale of Investments Profit before taxation and exceptional items Provision for taxation Profit after taxation and before exceptional items Exceptional Items Exceptional item (net of Tax) Prior years adjustments Profit after taxation and exceptional items Other Information Segment assets Segment liabilities Capital expenditure Depreciation
Holding Companies:
Godrej Consumer Products Ltd. Godrej Infotech Ltd. Natures Basket Ltd. (from July 1, 2009) Godrej International Ltd. Godrej Properties Ltd. Ensemble Holdings & Finance Ltd. (iv)
Animal Feeds
Revenue
Remuneration Dividend Paid Director's Sitting Fees
THIS YEAR PREVIOUS YEAR 12,957 9,175 586 586 15 20
Annual Report 2009–2010
SCHEDULES ATTACHED TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED ON MARCH 31, 2010 3.
Significant Related Party Transactions Nature of Transactions 1 2
Issue of share capital (incl. Premium) Sale of Investments
Holding Companies (i) Godrej Industries Ltd. Godrej Industries Ltd.
Amount Subsidiaries (ii)
Amount Fellow Subsidiaries (iii) Natures Basket Ltd.
Natures Basket Ltd. -
Investment in Share Capital
Cauvery Palm Oil Ltd.
Amount Joint Ventures (iv)
Amount Associate Companies (v)
Amount Other related Parties (vi)
50,000
70,000 168,681
Amount
Bahar Agrochem & Feeds Private Ltd. 30,100 Godrej Tyson Foods Ltd.
49,485
Bahar Agrochem & Feeds Private Ltd.
40,832
Natures Basket Ltd. 500
ACI Godrej Agrovet Pvt. Ltd.
19,825
24,458 34,990
Godrej Gold Coin Aquafeed Ltd. Loan Given
Al Rahba International Trading LLC Godrej Gold Coin Aquafeed Ltd.
Sale of Business
Godrej Tyson Foods Ltd.
17,640 27,764
125,000
1
Purchase/Transfer of fixed assets
Godrej & Boyce Mfg. Co. Ltd.
843
Godrej IJM Palm Oil Ltd.
464,832 27
633
2
Intercorporate deposits taken during the year
2
Intercorporate deposits placed during the year
Godrej Industries Ltd.
Godrej Tyson Foods Ltd. Godrej Tyson Foods Ltd.
Ensemble Holdings & Finance Ltd. 230,000
226
45,500 Cauvery Palm Oil Ltd.
Godrej Hershey Ltd. 25,500
Natures Basket Ltd.
— Godrej Tyson Foods Ltd. 200,000
Aadhar Retailing Ltd. 53,932
40,000
Godrej Hi Care Ltd. 61,600
30,000 Godrej Properties Ltd. 350,000
2
Sale of materials/finished goods/debtors
Godrej Industries Ltd.
Godrej Oil Palm Ltd. Golden Feed Products Ltd.
Godrej Gold Coin Aqua Feed Ltd. 24,222 —
Godrej IJM Palm Oil Ltd. Godrej Tyson Foods Ltd.
ACI Godrej Agrovet Pvt. Ltd. 3
Sundry Deposits Placed
Godrej & Boyce Mfg. Co. Ltd. Godrej Industries Ltd.
230 Aadhaar Retailing Ltd. 6,856 150 Creamline Dairy Products Ltd. 1,240,831 Polchem Hygiene Laboratories Pvt. Ltd. 1,257,279 498
36,454 7,984 2,505 4,933
—
3 2,100 6,808 1,054
4
Interest Income on Intercorporate Deposits
Godrej Oil Palm Ltd.
2,709 Godrej Hershey Ltd.
Cauvery Palm Oil Ltd.
431 Godrej Hi Care Ltd. 2,555 Godrej Properties Ltd. 2,467 Natures Basket Ltd. 4,462 Godrej Consumer Products Ltd.
Natures Basket Ltd.
5
Purchase of materials/ finished goods
Godrej & Boyce Mfg. Co. Ltd.
Godrej Oil Palm Limited
369
8,378
— Godrej Tyson Foods Ltd. 2,082
Aadhaar Retailing Ltd. 2,057
842
964 2,016 Godrej Gold Coin Aquafeed Limited
898
334 Polchem Hygiene Laboratories Pvt. Ltd. 42
19,829 Bahar Agrochem & Feeds Pvt. Ltd.
121,872
52,723
124,656
103
Godrej Agrovet Limited SCHEDULES ATTACHED TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED ON MARCH 31, 2010 3.
Significant Related Party Transactions (Contd.)
Nature of Transactions
Holding Companies (i)
Amount Subsidiaries (ii) Cauvery Palm Oil Ltd. Golden Feed Products Ltd.
6
Expenses charged to other companies
Golden Feed Products Ltd.
Godrej Oil Palm Ltd.
Cauvery Palm Oil Ltd.
Amount Fellow Subsidiaries (iii) Godrej Hershey Ltd. 258 413
— Godrej Hershey Ltd 107 52,459 Godrej Consumer Products Ltd. 52,475 2,959
Amount Joint Ventures (iv) Godrej Tyson Foods Ltd. 15
318
— Godrej Gold Coin Aquafeed Ltd. 28 2,992 Godrej IJM Palm Oil Ltd.
16 Godrej Tyson Foods Ltd. Godrej Hi Care Ltd.
1,856
Godrej Properties Ltd.
7
Expenses charged by other companies
Godrej Industries Ltd.
18,372 Godrej Oil Palm Ltd. 21,344
Godrej & Boyce Mfg. Co. Ltd.
4,319
Godrej Sara Lee Ltd. Natures Basket Ltd. 8,135 Godrej Consumer Products Ltd. (636) Natures Basket Ltd. Godrej Hi Care Ltd.
283
8
Interest income on loan given
—
9
Interest expense on intercorporate deposits taken
Godrej Industries Ltd.
10
Dividend paid
Godrej Industries Ltd.
8
Dividend Income
Godrej Infotech Ltd.
Amount Other related Parties (vi)
Amount
823
Godrej IJM Palm Oil Ltd.
3,311 Godrej Industries Ltd.
Amount Associate Companies (v) 10,531 Aadhaar Retailing Ltd. 7,776
— ACI Godrej Agrovet Pvt. Ltd. 229 AL Rahba International Trading LLC 49
4,268 11,080 Aadhaar Retailing Ltd. 6,371 8,265 Creamline Dairy Products Ltd.
Bahar Agrochem & Feeds Pvt. Ltd.
11
17,599 25 Kritika Agro Farm Chemical & Engineering Industries Pvt. Ltd.
13,267 72,686 1,283
26
1,606 545 230
31
8 — 4,576 2,826 Godrej Gold Coin Aquafeed Ltd. 643 900 Godrej IJM Palm Oil Ltd. — 94 4,517 Godrej Tyson Foods Ltd. 6,730 Godrej Gold Coin Aquafeed Ltd.
16,369 Aadhaar Retailing Ltd. 924 177
232
(3,980) 2,309
9,252 1,955
Ensemble Holdings & Finance Ltd. 1,722 9,113
Ensemble Holdings & Finance Ltd.
9,113 Creamline Dairy Products Ltd. Polchem Hygiene Laboratories Pvt. Ltd. Outstanding Loans Receivable
11 9
Godrej Gold Coin Aquafeed Ltd. Godrej Tyson Foods Ltd.
Outstanding intercorporate — deposits receivable Outstanding receivables, net Godrej Industries of (payables) Ltd.
(323) Golden Feed Products Ltd. (1,360) Godrej Oil PalmLtd.
Godrej & Boyce Mfg. Co. Ltd.
104
(219)
11,906 Godrej Hi Care Ltd.
- Godrej Gold Coin Aquafeed Ltd.
9,376 (769)
14,008 Godrej Properties Ltd.
Godrej IJM Palm Oil Ltd.
64
6,680 6,680 546
72,100 (525)
95,891 Creamline Dairy Products Ltd. 81,869 949
(13,132) Aadhaar Retailing Ltd.
4,068 Bahar Agrochem & Feeds Pvt. Ltd. 1,738 Kritika Agro Farm Chemical & Engineering Industries Pvt. Ltd.
(3,246)
29,017
4,197
Annual Report 2009–2010
SCHEDULES ATTACHED TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED ON MARCH 31, 2010 3.
Significant Related Party Transactions (contd.) : Nature of Transactions
Holding Companies (i)
Amount Subsidiaries (ii) (1) Cauvery Palm Oil Ltd.
Amount Fellow Subsidiaries (iii) 4,769
Amount Joint Ventures (iv) 15
28,811
Natures Basket Ltd.
Godrej Tyson Foods Ltd.
— Godrej Sara Lee Ltd 63,051
Godrej Hershey Ltd.
Guraantees Issued
Guarantees outstanding
— 5 ACI Godrej Agrovet Pvt. Ltd.
Godrej Consumer Products Ltd.
Godrej International Ltd. Natures Basket Ltd.
Amount Associate Companies (v)
378 AL Rahba International Trading LLC 16 —
2,324 Polchem Hygiene Laboratories Pvt. Ltd. 35,597
Amount Other related Parties (vi) 51,754
Amount
287
(3,695)
5,073 4,558 65,370 37,605
65 70 18,742 ACI Godrej Agrovet Pvt. Ltd. Godrej IJM Palm Oil Ltd. ACI Godrej Agrovet Ltd. AL Rahba International
19,200 19,200 3 3 66,257 66,257 59,582 59,582
105
Godrej Agrovet Limited SCHEDULES ATTACHED TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED ON MARCH 31, 2010 31.
Figures of the previous year have been regrouped & re-classified wherever necessary to conform to the current year's classification.
32.
INFORMATION REQUIRED TO BE FURNISHED UNDER PART IV OF SCHEDULE VI OF THE COMPANIES ACT, 1956: i)
ii)
Registration Details Registration No. State Code Balance Sheet Date Capital raised during the year Public Issue Rights Issue Bonus Issue Private Placement
iii)
v)
106
(Rupees ’000) Nil Nil Nil Nil
Position of mobilisation and deployment of funds Total Liabilities Total Assets Sources of Funds Paid-up Capital Reserves & Surplus Secured Loans Unsecured Loans Application of Funds Net Fixed Assets Investments Net Current Assets Misc. Expenditure Accumulated Losses
iv)
16655 11 31/3/2010
(Rupees ’000) 6,633,447 6,633,447 121,188 2,751,104 580,675 400,263 830,361 1,949,717 1,175,156 Nil
Performance of Company Turnover Total Expenditure Profit before tax before extraordinary income Profit before tax after extraordinary income Profit after tax Earning Per Share before extraordinary Earning Per Share after extraordinary Dividend rate
(Rupees ’000) 14,130,637 13,881,315 249,322 249,322 217,068 17.91 17.91 20.00%
Generic Names of three principal products/services of Company Item Code No. Product Description
23099010 Animal Feeds
STATEMENT REGARDING SUBSIDIARY COMPANY PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956.
1. Name of the Subsidiary
Golden Feed Products Limited
Cauvery Palm Oil Limited
Godrej Oil Palm Limited
2. Date on which it became a Subsidiary
July 14, 2003
March 1, 2008
August 18, 2006
3. Financial Year ending
March 31, 2010 March 31, 2010 March 31, 2010
4. The Company's interest in the Subsidiary as on 31.3.2010
a) Number of fully paid Equity Shares held
50,000
34,20,000
56,400
b) Face Value
Rs. 10
Rs. 10
Rs. 10
100%
90%
80%
(Rs.’000)
(Rs.’000)
(Rs.’000)
i) Not dealt with in the Books of Account of the Company
-
-
-
ii) Dealt with in the Books of Account of the Company
-
-
-
i) Not dealt with in the Books of Account of the Company
-
-
-
ii) Dealt with in the Books of Account of the Company
-
-
-
c) Extent of holding 5. Net aggregate Profit/(Loss) of the Subsidiary Company so far as it concerns the members of the Company :A) For the Financial Year ended on March 31, 2010 :
B) For the subsidiary company's previous Financial Years since it became a Subsidiary
For and on behalf of the Board
V. V. CHAUBAL Company Secretary Mumbai, May 17, 2010
N. B. GODREJ Chairman
B. S. YADAV Managing Director
Annual Report 2009–2010
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010
Rs. (’000) Rs. (’000)
THIS YEAR
PREVIOUS YEAR
Rs. (’000)
Rs. (’000)
Rs. (’000) Rs. (’000) C.
A.
Net Profit Before Taxes(after extraordinary income)
249,322
Repayment of Borrowings
718,733
Adjustment for: Depreciation
63,384
72,185
Loss on sale of fixed assets
14,077
1,747
Extraordinary Income: Profit on transfer of business
(484,029)
-
(6,131) (258,200)
580,675
-
Proceeds from Unsecured Borrowings
400,263
372,093
Interest Paid
(151,082)
(253,538)
Dividend Paid
(12,118)
(12,118)
(2,060)
(484,029)
450
(152)
Dividend income
(7,226)
(6,964)
Finance charges
—
6,131
Interest income
(152,526)
(93,270)
Interest expenses
151,082
253,538
Provision for Doubtful Debts and Advances
(43,412)
67,286
Loss on sales on investments
20,500
(235,376)
Bad Debts Written off
39,212
—
Operating Profit Before Working Capital Changes
85,542
(418,905)
334,864
299,828
Adjustments for: Inventories Creditors and Other Payables
(136,389)
(97,382)
257,978
(120,038)
1,128,742
Cash Generated from Operations Direct Taxes paid (net of refund received) Net Cash Flow from Operating Activities B.
Acquisition of fixed assets Proceeds from sale of fixed assets Intercorporate Deposits Given Purchase of Investments Proceeds from sale of investments in subsidiaries Proceeds from sale of investments in ARL Interest Received Dividend Received Net Cash used in Investing Activities before extraordinary item
(219,539)
12,757
Cash and Cash equivalents (Opening balance)
311,922
299,165
Cash and Cash equivalents (Closing balance)
92,384
311,922
Net increase in Cash and Cash equivalents
NOTES: 1
The Cash Flow Statement has been prepared under the “Indirect Method” as set out in the Accounting Standard (AS) 3 on “Cash Flow Statements”, and presents cash flows by operating, investing and financing activities.
2
Figures in brackets are outflows/deductions.
3
Proceeds from transfer of business/demerger is for a total consideration of Rs. Nil (Previous year Rs. 1,410,610 thousands) for the three business. Out of the total consideration Rs. Nil (Previous year Rs. 374,424 thousands) has been received in cash and the balance by way of allotment of equity shares in demerged/transfer of business companies.
4
Figures for the previous year have been regrouped/restated wherever necessary to conform to this year’s classification.
(463,541)
1,250,331
(680,962)
1,585,194
(381,134)
(31,845)
(134,800)
For and on behalf of
1,553,349
(515,934)
KALYANIWALLA & MISTRY
For and on behalf of the Board
CHARTERED ACCOUNTANTS
Cash Flow from Investing Activities : Capital subsidy received
(2,060) (159,952)
Net Cash used in Financing Activities
(1,510,781) —
Debtors and Other Receivables
Rs. (’000)
(2,326,460)
Profit on Demerger Exchange difference
Rs. (’000)
Proceeds from Secured Borrowings
Dividend Tax Paid —
PREVIOUS YEAR
Cash Flow from Financing Activities : other financial charges
Cash Flow from Operating Activities :
THIS YEAR
—
2,500
(197,614)
(95,850)
2,759
6,408
79,500
(85,900)
(356,503)
(138,721)
ERMIN K. IRANI
V. V. CHAUBAL
N. B. GODREJ
B. S. YADAV
Partner
Company Secretary
Chairman
Managing Director
Membership no. 35646 Mumbai, May 17, 2010
50,000 —
30,100
152,526
73,737
7,226
6,964 (262,107)
(200,762)
—
889,405
(262,107)
688,643
Proceeds from Extraordinary Items; Proceeds from transfer of business/ demerger (Note 3) Net Cash used in Investing Activities after extraordinary item
107
Golden Feed Products Limited DIRECTORS’ REPORT FOR THE FINANCIAL YEAR ENDED ON MARCH 31, 2010 To The Shareholders
STATUTORY INFORMATION
Your Directors have pleasure in submitting their Report along with the audited Accounts for the financial year ended on March 31, 2010.
A)
FINANCIAL RESULTS
The information in respect of these matters, required under Section 217 (1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 and forming part of the Directors’ Report is given in the Annexure “A” to this report.
Your Company’s performance during the year as compared with that during the previous year is summarized below: (Rs. Lac) This Year
Previous Year
-
-
1.61
(2.22)
-
-
1.61
(2.22)
Balance Brought Forward from previous year
(160.90)
(158.68)
Balance Carried Forward to Balance Sheet
(159.29)
(160.90)
Total Income Loss before Taxation Add: Provision for Taxation Loss after Taxation
Conservation of Energy, Technology absorption and Foreign Exchange earnings and outgo
B)
Particulars of Employees None of the employees is covered under the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) (Amendment) Rules, 2002.
C)
Directors’ Responsibility Statement Pursuant to the provisions contained in Section 217(2AA) of the Companies Act, 1956, the Directors of your Company confirm:
REVIEW OF OPERATIONS
a)
that in the preparation of the annual accounts, the applicable Accounting Standards have been followed and no material departures have been made from the same;
b)
that they have selected such Accounting Policies and applied them 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 and of the profit or loss of the Company for that period;
c)
that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company for preventing and detecting fraud and other irregularities;
d)
that they have prepared the annual accounts on a going concern basis.
In the current year, your Company initiated trading activities. DIVIDEND Your Directors do not recommend any dividend for the year 2009-10. FIXED DEPOSITS Your Company has not accepted any public deposits during the financial year under review. HOLDING COMPANY Your Company continues to be a subsidiary of Godrej Agrovet Limited as defined under Section 4(1)(b) of the Companies Act, 1956.
HUMAN RESOURCES There are no employees in the Company.
SUBSIDIARY COMPANIES
For and on behalf of the Board
The Company has no subsidiary companies during the year under review.
B. S. Yadav Director
DIRECTORS The Board of Directors of the Company presently comprises of the following Directors: 1.
Mr. B. S. Yadav
2.
Dr. P. N. Narkhede
3.
Dr. S. L. Anaokar
During the year under review (i.e., from April 1, 2009 upto March 31, 2010), there have been no changes in the directorship of the Company. Dr. S. S. Sindhu has resigned from directorship of the Company w.e.f. May 14, 2010. Dr. P. N. Narkhede retires by rotation at the ensuing Annual General Meeting of the Company in accordance with Section 256 of the Companies Act, 1956 and Article 15 of the Articles of Association of the Company and being eligible offers himself for reappointment. AUDITORS You are requested to appoint Auditors for the current year and fix their remuneration. The retiring Auditors M/s. Kalyaniwalla & Mistry, Chartered Accountants, Mumbai, are eligible for re-appointment and a certificate as required u/s 224 (1 B) of the Companies Act, 1956, has been received from them. QUALIFICATIONS BY AUDITORS The auditors of the Company have qualified in the Auditors' Report that the accumulated losses as at March 31, 2010 exceed its paid up capital, resulting in the erosion of its net worth. Your Company still remains a “Going Concern” as the finance will continue to be available to the Company for its working capital requirements from its holding company Godrej Agrovet Limited.
P. N. Narkhede Director
Mumbai, May 14, 2010
ANNEXURE ‘A’ ANNEXURE FORMING PART OF THE DIRECTORS’ REPORT INFORMATION PURSUANT TO SECTION 217(1)(e) OF THE COMPANIES ACT, 1956, READ WITH THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS) RULES, 1988 IN RESPECT OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO : A.
Conservation of Energy The Company has not established any manufacturing facility this year.
B.
Technology absorption, adaptation and innovation Not Applicable since the Company does not have any manufacturing facility at present.
C.
Foreign Exchange earnings and outgo Your Company had no foreign exchange earning as well as outgo.
ADDITIONAL INFORMATION
For and on behalf of the Board
The additional information required to be given under the Companies Act, 1956, has been laid out in the Schedules attached to and forming part of the Accounts. The Notes to the Accounts referred to in the Auditors’ Report are self-explanatory and therefore do not call for any further explanation.
B. S. Yadav Director
108
Mumbai, May 14, 2010
P. N. Narkhede Director
Annual Report 2009–2010
REPORT OF THE AUDITORS TO THE MEMBERS OF GOLDEN FEED PRODUCTS LIMITED 1.
2.
3.
4.
We have audited the attached Balance Sheet of Golden Feed Products Limited, as at 31st March 2010 and also the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditor’s Report) Order, 2003, issued by the Central Government in terms of Section 227 (4A) of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order. Further to our comments in the Annexure referred to in paragraph (3) above, we report that: a)
The accumulated losses of the Company as at March 31, 2010 exceed its paid up capital resulting in the erosion of its net worth. The accounts for the year have been prepared on the ‘Going Concern’ basis on the understanding that finance will continue to be available to the Company for working capital requirements.
b)
We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit.
c)
In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of these books.
d)
The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account.
e)
5.
In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements read with the notes thereon, subject to (a) above, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010; and ii) in the case of the Profit and Loss Account, of the loss for the year ended on that date. iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date. On the basis of the written representations received from the Directors as on 31st March, 2010, and taken on record by the Board of Directors, we report that, none of the Directors is disqualified as on 31st March, 2010 from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.
For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants Firm Registration No.: 104607W ERMIN K. IRANI Partner Membership No. 35646
Mumbai, May 14, 2010
ANNEXURE TO THE AUDITORS’ REPORT Referred to in paragraph (3) of our report of even date. 1)
The Company does not have any Fixed Assets and hence maintenance of records, physical verification and disposal of fixed assets does not arise.
2)
The Company does not have any inventories.
3)
(a)
The Company has not granted any loans, secured or unsecured to companies, firms or parties covered in the register maintained under section 301 of the Companies Act, 1956.
(b)
Consequently, the question of commenting whether the rates of interest and other terms and conditions are not prejudicial to the interest of the Company does not arise.
(c)
The Company has taken unsecured loans of Rs. 2,840 thousand from a Company covered in the register maintained under section 301 of the Act. The maximum amount involved during the year was Rs. 12,216 thousand and year-end balance of loan taken from such party was Rs. 12,216 thousand.
(d)
The Loan as aforesaid is interest free and the other terms and conditions are not prejudicial to the interest of the company.
(e)
There is no schedule of repayment and hence the question of regular repayment does not arise.
4)
5)
In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchases of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed a continuing failure to correct major weakness in internal controls. (a)
Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the particulars of contracts and arrangements referred to in section 301 of the Companies Act, 1956 have been entered into the register required to be maintained under that section.
(b)
The transactions made in pursuance of such contracts or arrangements, were made at prices which are reasonable having regard to the prevailing market prices at the relevant time, where comparable market price exists.
6)
In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public and hence the provisions of section 58A, 58AA or any other provision of the Companies Act, 1956, read with the rules framed thereunder are not applicable.
7)
In our opinion and according to the information and explanations given to us, the internal audit system is commensurate with the size of the Company and nature of its business.
8)
According to the information and explanation given to us, the maintenance of cost records has not been prescribed by the Central Government, under section 209(1)(d) of the Companies Act, 1956, for any of the Company’s products.
9)
(a)
According to the information and explanations given to us and on the basis of our examination of the books of account, during the year, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, cess and other
statutory dues applicable to it with the appropriate authorities. According to the information and explanations given to us, there are no undisputed dues payable in respect of above as at 31st March 2010 for a period of more than six months from the date they became payable. (b)
According to the information and explanations given to us, there are no dues outstanding of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty or cess on account of any dispute.
10)
The accumulated losses of the Company at the end of the 31st March 2010 are more than 50% of its net worth. The Company has incurred cash loss during the financial year and also in the immediately preceding financial year.
11)
According to the information and explanations given to us and based on the documents and records produced to us, the Company does not have dues to banks, financial institutions or debenture holders.
12)
According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.
13)
In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/ mutual benefit fund/ societies.
14)
The Company does not deal in shares, securities, debentures and other investments.
15)
According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.
16)
The Company has not taken any term loans during the year.
17)
According to the information and explanations given to us and on an overall examination of the Balance Sheet and Cash Flows of the Company, we report that the Company has not utilized funds raised on short-term basis for long term investment.
18)
The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.
19)
The Company did not have outstanding debentures during the year.
20)
The Company has not raised any money through a public issue during the year.
21)
Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.
For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants Firm Registration No.: 104607W
Mumbai, May 14, 2010
ERMIN K. IRANI Partner Membership No. 35646
109
Golden Feed Products Limited PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010
BALANCE SHEET AS AT MARCH 31, 2010 Schedule SOURCES OF FUNDS SHAREHOLDERS’ FUNDS Share Capital Reserves and Surplus LOAN FUNDS Secured loans Unsecured loans from Holding Company TOTAL APPLICATION OF FUNDS FIXED ASSETS INVESTMENTS CURRENT ASSETS, LOANS AND ADVANCES Inventories Sundry Debtors Cash and Bank Balances Other Current Assets Loans and Advances LESS :CURRENT LIABILITIES AND PROVISIONS Liabilities Provisions NET CURRENT ASSETS PROFIT & LOSS ACCOUNT TOTAL NOTES TO ACCOUNTS
Rs.’000
1
This Year Previous Year Rs.’000 Rs.’000
500 500
500 500
-
-
11,906 12,406
9,376 9,876
25
25
This Year Previous Year Rs. ’000 Rs. ’000
Schedule INCOME Sales Credit Balances Written Back
413 413
2
3
413 413
6 43 18 67
3,961 3,961
6,305 6,305 (6,239) 16,090 9,876
(3,548) 15,929 12,406
EXPENDITURE Purchase for Resale Auditors’ Remuneration Legal and Professional Charges Dr Balances in Current Assets/Loans and advances written off Provision for Doubtful Debts & Advances Bank Charges Sundry Expenses PROFIT/(LOSS) BEFORE TAXATION Provision for Taxation PROFIT/(LOSS) AFTER TAXATION (Deficit) Brought Forward DEFICIT CARRIED OVER TO BALANCE SHEET Earnings per share (Basic/Diluted ) in Rs. (Refer Note 4) NOTES TO ACCOUNTS
4,417 4,417
405 55 2
55 -
61 (310) 39 252 161 161 (16,090) (15,929)
4,467 54 63 4,639 (222) (222) (15,868) (16,090)
3.22
(4.45)
4
4
The Schedules referred to above form an integral part of the Balance Sheet As per our Report of even date attached Signatures to Balance Sheet and Schedules 1 to 4 For and on behalf of For and on behalf of the Board KALYANIWALLA & MISTRY Chartered Accountants
The Schedules referred to above form an integral part of the Profit and Loss Account As per our Report of even date attached Signatures to Profit and Loss Account Schedule 4 For and on behalf of For and on behalf of the Board KALYANIWALLA & MISTRY Chartered Accountants
ERMIN K. IRANI Partner Membership No. 35646 Mumbai, May 14, 2010
ERMIN K. IRANI Partner Membership No. 35646 Mumbai, May 14, 2010
B. S. YADAV Director
P. N. NARKHEDE Director
B. S. YADAV Director
P. N. NARKHEDE Director
SCHEDULES TO THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010 This Year Rs.’000
This Year Previous Year Rs.’000 Rs.’000
SCHEDULE 1 : SHARE CAPITAL
SCHEDULE 4 : NOTES TO ACCOUNTS 1.
SIGNIFICANT ACCOUNTING POLICIES a)
The financial statements have been prepared on historical cost convention and on the 'going concern basis', with revenues recognised and expenses accounted on their accrual in accordance with the generally accepted accounting principles, and in compliance with the applicable Accounting Standards and other requirements of the Companies Act, 1956.
b)
Fixed assets have been stated at cost and include incidental and/or installation/ development expenses incurred in putting the asset to use and interest on borrowing incurred during construction period. Pre-operative expenses for major projects are also capitalised, where appropriate.
c)
Carrying amount of cash generating units/assets are reviewed at balance sheet date to determine whether there is any indication of impairment. If such indication exists, the recoverable amount is estimated as the net selling price or value in use, whichever is higher. Impairment loss, if any, is recognised whenever carrying amount exceeds the recoverable amount.
d)
Depreciation/Amortisation has been provided for as under :
AUTHORISED 100,000 Equity Shares of Rs. 10 each
1,000
1,000
500
500
ISSUED, SUBSCRIBED AND PAID UP 50,000 Equity Shares of Rs.10 each fully paid All the above shares are held by Godrej Agrovet Ltd. (Holding Company) & its nominees SCHEDULE 2 : SUNDRY DEBTORS Debts outstanding for a period exceeding six months Considered Good
-
4,467
4,157
-
4,157
4,467
413
-
TOTAL
4,570
4,467
Less: Provisions for doubtful debts
4,157
Considered Doubtful Other Debts
(a)
The Company has grouped additions and disposals in appropriate time periods of a month/quarter for the purpose of charging pro rata depreciation in respect of additions and disposals of its assets keeping in view the materiality of the items involved.
(b)
1)
Depreciation is provided on the straight line method at the rates specified in Schedule IV to the Companies Act, 1956, except for computer hardware which is depreciated over its estimated useful life of four years.
2)
Amortisations
4,467 413
-
-
-
1,450
1,045
SCHEDULE 3 : CURRENT LIABILITIES AND PROVISIONS A)
CURRENT LIABILITIES Investor Education and Protection Fund Sundry Creditors Bank Overdraft as per books Other Liabilities Advance from Customers TOTAL
3
-
2,427
2,437
81
2,823
3,961
6,305
(i) (ii) (iii) (iv)
(v)
110
Asset type
Period
Leasehold Land Leasehold improvements and equipments Signages Technical Knowhow, technical knowhow fees of a capital nature Computer software
Primary lease period Primary lease period or 16 years whichever is less 3 years
10 years 6.17 years
Annual Report 2009–2010
SCHEDULES TO THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010 e)
Raw materials are valued at weighted average cost.
5.
Finished goods and work-in-progress are valued at lower of cost and net realisable value. These costs include cost of conversion and other costs incurred in bringing the inventories to their present location and condition. f)
Retirement benefits to employees comprise payments under defined contribution plans like provident fund and family pension. Payments under defined contribution plans are charged to the profit and loss account. The liability in respect of defined benefit schemes like gratuity and leave encashment benefit on retirement is provided on the actual basis.
g)
Revenue is recognised when goods are despatched to external customers.
h)
Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets, subject to consideration of prudence, are recognised and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such Deferred tax liability is recognised, if material. Deferred tax assets can be realised. The tax effect is calculated on the accumulated timing difference at the year-end, based on the tax rates and laws enacted on the balance sheet date.
i)
j) 2.
The basic earnings per share is computed using the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the period, except where the results would be anti-dilutive.
AUDITORS’ REMUNERATION
Reimbursement of Expenses TOTAL
This Year Previous Year Rs.
Rs.
55,150
55,150
-
-
55,150
55,150
Nature of Transactions 1. Loan taken 2. 3.
Loan repaid Expenses charged to other companies
4.
Sale of Material/Finished Goods
5.
Outstanding payables, net of (receivables)
* All transactions are with Godrej Agrovet Limited. 4.
EARNINGS PER SHARE
Profit after tax and prior period expenses Weighted average number of equity shares outstanding Basic earnings per share Diluted earnings per share Nominal value of shares
This Year Previous Year Rs. Rs. 161 (222) 50,000 50,000 3.22 (4.45) 3 (4.45) 10.00 10.00
Application of Funds Net Fixed Assets Investments Net Current Assets Misc. Expenditure Accumulated Losses Performance of Company
25 (3,548) 15,929 (Rupees ’000) 413 252 161
Turnover Total Expenditure Profit before tax Profit after tax Earning Per Share in Rs. Dividend rate
161 3.22 -
Generic names of three principal products/services of Company Item Code No. 23099010 Product Description Animal Feeds
B. S. YADAV Director
P. N. NARKHEDE Director
Mumbai, May 14, 2010
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010 Rs. ’000 A.
This Year Previous Year Rs. ’000 Rs. ’000
Cash Flow from Operating Activities : Net Profit Before Taxes (after extraordinary income)
RELATED PARTY DISCLOSURES Related party disclosures as required by AS - 18, “Related Party Disclosures”, are given below: 1. Relationships : (i) Holding Companies: Godrej Agrovet Limited (GAVL) holds 100% in the Company. GAVL is the subsidiary of Godrej Industries Limited (GIL). GIL is the subsidiary of Godrej & Boyce Mfg. Co. Limited, the ultimate holding company. (ii) Fellow subsidiaries: Cauvery Palm Oil Ltd. Godrej Oil Palm Ltd. (formerly Godrej Oil Plantations Ltd.) 2. The following transactions were carried out with the related parties in the ordinary course of business : (Rs. in Thousands) Holding Company* 2,530 521 (2,530) 107 413 11,906 9,376
Part IV of Schedule VI of the Companies
For and on behalf of the Board
Provisions are recognised in the accounts in respect of present probable obligations, the amount of which can be reliably estimated.
Audit fees
3.
Information required to be furnished under Act, 1956 i) Registration Details Registration No. 140599 State Code 11 Balance Sheet Date 31/3/2010 ii) Capital raised during the year (Rupees ’000) Public Issue Nil iv) Rights Issue Nil Bonus Issue Nil Private Placement Nil iii) Position of mobilisation and deployment of funds (Rupees ’000) Total Liabilities 16,367 Total Assets 16,367 Sources of Funds Paid-up Capital 500 v) Reserves & Surplus Secured Loans Unsecured Loans 11,906
161
(222)
Adjustment for: Provision for Doubtful Debts written (back)/off
(310)
4,467
61
Advances written off
(250)
4,467
(89)
4,245
Operating Profit Before Working Capital Changes Adjustments for: Debtors and Other Receivables Creditors and Other Payables Cash Generated from Operations
(103)
15,191
(2,347)
(4,391) (2,450)
10,800
(2,539)
15,045
Direct Taxes paid (net of refund received)
-
-
Net Cash Flow from Operating Activities
(2,539)
15,045
-
-
Proceeds from Unsecured Borrowings
2,530
(15,084)
Net Cash used in Financing Activities
2,530
(15,084)
(9)
(39)
6
45
(3)
6
B.
Cash Flow from Investing Activities:
C.
Cash Flow from Financing Activities:
Net increase in Cash and Cash Equivalents Cash and Cash equivalents (Opening Balance) Cash and Cash equivalents (Closing Balance) NOTES: 1.
The Cash Flow Statement has been prepared under the “Indirect Method” as set out in the Accounting Standard (AS) 3 on “Cash Flow Statements”, and presents cash flows by operating, investing and financing activities.
2.
Figures in brackets are outflows/deductions.
3.
Figures for the previous year have been regrouped/restated wherever necessary to conform to this year’s classification.
As per our Report of even date attached For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants
For and on behalf of the Board
ERMIN K. IRANI Partner Membership No. 35646 Mumbai, May 14, 2010
B. S. YADAV Director
P. N. NARKHEDE Director
111
Godrej Oil Palm Limited DIRECTORS’ REPORT FOR THE FINANCIAL YEAR ENDED ON MARCH 31, 2010 TO THE SHAREHOLDERS Your Directors have pleasure in submitting their Report along with the audited Accounts for the financial year ended on March 31, 2010.
Mr. R. R. Govindan and Mr. S. Varadaraj retire by rotation at the ensuing Annual General Meeting of the Company in accordance with Section 256 of the Companies Act, 1956 and Article 124 of Articles of Association of the Company and being eligible offer themselves for reappointment.
FINANCIAL RESULTS
AUDITORS
Your Company’s performance during the year as compared with that during the previous year is summarised below: -
You are requested to appoint Auditors for the current year and fix their remuneration. The retiring Auditors M/s. Kalyaniwalla & Mistry, Chartered Accountants, Mumbai are eligible for reappointment and a certificate as required u/s 224 (1 B) of the Companies Act, 1956, has been received from them.
THIS YEAR (Rs. lac)
PREVIOUS YEAR (Rs. lac)
Total Income
6465.82
7431.68
Profit Before Taxation (PBT)
1068.20
975.35
ADDITIONAL INFORMATION
Less : Provision for Taxation
387.91
385.29
Profit After Taxation (PAT)
680.29
590.05
The additional information required to be given under the Companies Act, 1956, has been laid out in the Schedules attached to and forming part of the Accounts. The Notes to the Accounts referred to in the Auditors’ Report are self-explanatory and therefore do not call for any further explanation.
1426.96
868.36
STATUTORY INFORMATION
Balance brought forward from previous year Total
2107.25
1426.96
Balance Carried Forward to Balance Sheet
2107.25
1426.96
A)
The information in respect of these matters, required under Section 217 (1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 and forming part of the Directors’ Report is given in the Annexure “A” to this report.
OPERATIONAL HIGHLIGHTS Your Company operated under highly adverse conditions during the year which witnessed a severe drought resulting in a major drop in the FFB yield per hectare. The drop in targets approved by the Government constrained area coverage and sales from the nursery. CPO prices were substantially below the average levels of 2008-09. Improvement in operational efficiencies and additional arrivals from newly emerging areas helped the Company face the adversity and post improved results for the year. During the year, the Company successfully completed a capital expenditure programme including augmentation of capacity from 20 TPH to 30 TPH, installation of a COGEN plant and an EFB press station. The setting up of a COGEN plant not only ensured self sufficiency in power but also savings in power cost. It is proposed to further augment the capacity to 40 TPH during 2010-11 and also increase the capacity of the Palm Kernel Oil Mill.
Conservation of Energy, Technology absorption and Foreign Exchange earnings and outgo
B)
Particulars of Employees None of the employees is covered under the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) (Amendment) Rules, 2002.
C)
Directors’ Responsibility Statement Pursuant to the provisions contained in Section 217(2AA) of the Companies Act, 1956, the Directors of your Company confirm:-
DIVIDEND The Directors do not recommend any dividend for the year 2009-10.
a)
that in the preparation of the annual accounts, the applicable Accounting Standards have been followed and no material departures have been made from the same;
b)
that they have selected such Accounting Policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;
c)
that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company for preventing and detecting fraud and other irregularities;
d)
that they have prepared the annual accounts on a going concern basis.
FIXED DEPOSITS The Company has not accepted any public deposits during the financial year under review. HOLDING COMPANY The Company is a subsidiary of Godrej Agrovet Limited as defined under Section 4(1)(b) of the Companies Act, 1956. SUBSIDIARY COMPANIES The Company has no subsidiary companies during the year under review.
HUMAN RESOURCES
DIRECTORS:
Your Company continues to focus on development of Human Resources. The industrial relations are cordial and the Board would like to place on record its sincere appreciation for the unstinted support from all the employees.
The following are the current Directors of the Company:1. 2. 3. 4. 5.
Mr. Mr. Mr. Mr. Mr.
N. B. Godrej (Chairman) B. S. Yadav (Director) R. R. Govindan (Director) S. Varadaraj (Director) Velayuthan Tan (Director)
For and on behalf of the Board of Directors
Mumbai, May 17, 2010
ANNEXURE ‘A’ ANNEXURE FORMING PART OF THE DIRECTORS’ REPORT INFORMATION PURSUANT TO SECTION 217(1)(e) OF THE COMPANIES ACT, 1956, READ WITH THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS) RULES, 1988 IN RESPECT OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO: A]
c) d) B]
Conservation of Energy
I.
The Company constantly endeavours for technological upgradation in order to have improved quality at a lower cost and a Leaf and Soil Analysis Laboratory is being set up for the same.
II.
The Company’s expenditure on R&D is given below:
(a) (b) (c) (d)
The measures adopted by the Company during the year under review for conservation of energy include the following:Provision of limit switches for tanks for automatic switching on & off the motors Switching off unwanted motive load when not in use Installation of energy saving blowers to reduce the load Installation of additional capacitors at MCCs Replacement of 40W tubes with slim energy efficient tube-36W Installation of Gensets of capacity of 160 KVA and 500 KVA Installation of Co-Generation Plant (a captive power generation plant) of Capacity of 1.6 MW per hour at Pothepally Factory.
Substantial saving in terms of cost of energy Increase in the life of equipment
Technology absorption, adaptation and innovation
The Company continues its policy of implementation of various measures for energy conservation recognizing the same as a necessary means of saving cost and a social responsibility. A regular review of various systems installed to conserve energy is undertaken.
1) 2) 3) 4) 5) 6) 7)
C]
Capital Recurring Total Total R & D expenditure as a percentage of total turnover
112
Reduction of load on cables Improvement in power factor level
THIS YEAR Rs. lac
PREVIOUS YEAR Rs. lac
6 1 7 0.1%
Nil Nil Nil Nil
THIS YEAR Rs. lac
PREVIOUS YEAR Rs. lac
Nil Nil
0.66 Nil
Foreign Exchange earnings and outgo
I. II.
Foreign exchange used Foreign exchange earned
The adoption of above energy conservation measures has resulted in accrual of the following benefits to the Company:a) b)
N. B. Godrej Chairman
For and on behalf of the Board of Directors
Mumbai, May 17, 2010
N. B. Godrej Chairman
Annual Report 2009–2010
REPORT OF THE AUDITORS TO THE MEMBERS OF GODREJ OIL PALM LIMITED 1.
2.
We have audited the attached Balance Sheet of Godrej Oil Palm Limited, as at March 31, 2010 and also the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
c)
In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of these books.
d)
The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account.
We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
e)
In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.
f)
In our opinion and to the best of our information and according to the explanations given to us, the said financial statements read with the notes thereon, subject to (b) above give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
3.
As required by the Companies (Auditor’s Report) Order, 2003, issued by the Central Government in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.
4.
Further to our comments in the Annexure referred to in paragraph (3) above we report that: a)
We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit.
b)
As stated in Note 4 of Schedule 10, notes to accounts, the Company has amortised Licenses/Rights, an intangible asset for oil palm plantation business over a period of 20 years which exceeds the maximum limit of 10 years as prescribed by Accounting Standard 26 “Intangible Assets” issued by the Institute of Chartered Accountants of India. The Company is of the view that the oil palm plantation business operates on a command area basis with the government allotting to various companies clearly demarcated area for the development of the oil palm plantation. With this responsibility for the development of the oil plantation comes the exclusive rights for the procurement of Fresh Fruit Bunches produced in the allotted area. Oil Palm Plantation has relatively long productive life of 30 years. Since the allotment right is expected to yield benefits over a long period, the amount paid towards the same is amortised over a 20-year period.
5.
i)
in the case of the Balance Sheet, the state of affairs of the Company as at March 31, 2010; and
ii)
in the case of the Profit and Loss Account, of the profit for the period ended on that date.
iii)
in the case of the Cash Flow Statement, the cash flows of the Company for the period ended on that date.
On the basis of the written representations received from the Directors as on March 31, 2010, and taken on record by the Board of Directors, we report that, none of the Directors is disqualified as on March 31, 2010 from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956. For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants
Mumbai, May 17, 2010
ERMIN K. IRANI Partner Membership No. 35646
ANNEXURE TO THE AUDITORS' REPORT Referred to in paragraph (3) of our report of even date. 1)
2)
3)
4)
5)
6)
7) 8)
(a)
The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) As explained to us, the Company has a program for physical verification of fixed assets at periodic intervals. In our opinion, the periodic verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies have been reported on such verification. (c) In our opinion, the disposal of fixed assets during the year does not affect the going concern assumption. (a) The Management has conducted physical verification of inventory at reasonable intervals. (b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. (c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification. (a) The Company has granted unsecured loans amounting to Rs. 65,500 thousands to two companies covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 65,500 thousands and the year end balance of loan granted to such parties was Rs. 65,500 thousands. (b) The rate of interest and the other terms and conditions of the loan is not prima facie prejudicial to the interests of the Company. (c) As informed to us the receipt of principal and interest, to the extent due, has been regular. (d) As informed to us, there are no overdue amounts exceeding rupees one lakh and hence the question of commenting on reasonable steps taken for recovery of principal and interest does not arise. (e) The Company has taken unsecured loans of Rs. 10,500 thousands from a company covered in the register maintained under Section 301 of the Act. The maximum amount involved during the year was Rs. 25,540 thousands and year-end balance of loan taken from such party is Rs. Nil. (f) The rate of interest and the other terms and conditions of the unsecured loan taken is not prima facie prejudicial to the interest of the Company. (g) The payment of principal amounts and interest was also regular. In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchases of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed a continuing failure to correct major weakness in internal controls. (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the particulars of contracts and arrangements referred to in Section 301 of the Companies Act, 1956 have been entered into the register required to be maintained under that section. (b) The transactions made in pursuance of such contracts or arrangements, were made at prices which are reasonable having regard to prevailing market prices at the relevant time. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public hence the provisions of section 58A and 58AA or any other provisions of the Companies Act, 1956, are not applicable. In our opinion and according to the information and explanations given to us, the internal audit system is commensurate with the size of the Company and the nature of its business. We have broadly reviewed the books of accounts maintained by the Company pursuant to the order made by the Central Government for maintenance of cost records prescribed
9)
10)
11)
12)
13)
14) 15) 16) 17)
18) 19)
20) 21)
under Section 209 (1) (d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete. (a) According to the information and explanations given to us and on the basis of our examination of books of accounts, during the period, the Company has no statutory dues including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income Tax, Sales Tax, Value Added Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues incurred during the period covered. According to the information and explanations given to us, there are no undisputed dues, payable in respect of above as at March 31, 2010 for a period of more than six months from the date they became payable. (b) According to the information and explanations given to us, there are no dues outstanding of Sales Tax, Income Tax, Wealth Tax, Excise Duty, Cess on account of any dispute. As the Company has been registered for a period less than five years the question of commenting on its accumulated losses being less than fifty percent of its net worth does not arise. The Company has not incurred cash loss during the financial year or in the immediately preceding financial year. According to the information and explanations given to us and based on the documents and records produced to us, there are no dues to banks, financial institutions or debenture holders. According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/ mutual benefit fund/ societies. The Company does not deal in shares, securities, debentures and other investments. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions. According to the information and explanations provided to us, there are no term loans, hence the question of its application for the purposes for which they were obtained is not applicable. According to the information and explanations given to us and an overall examination of the Balance Sheet and Cash Flows of the Company, we report that the Company has not raised funds on short term or long term basis. The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956. During the year, the Company has not issued any debentures. However, in respect of private placement of Debentures in an earlier year, we have been informed that the security was not created, but these debentures have since been redeemed. The Company has not raised any money through a public issue during the year. Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year. For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants Firm Registration Number : 104607W
Mumbai, May 17, 2010
ERMIN K. IRANI Partner Membership No. 35646
113
Godrej Oil Palm Limited BALANCE SHEET AS AT MARCH 31, 2010 Schedule SOURCES OF FUNDS SHAREHOLDERS’ FUNDS Share Capital Reserves & Surplus
1 2
LOAN FUNDS Unsecured Loans DEFERRED TAX LIABILITY TOTAL APPLICATION OF FUNDS FIXED ASSETS Gross Block Less: Depreciation Net Block Capital work-in-progress/ Advances
THIS YEAR Rs.’000
PREVIOUS YEAR Rs.’000 Rs.’000
705 708,014
3
708,719
705 639,985 640,690
46,674 91,779 847,172
49,376 52,988 743,054
4 679,950 97,352 582,598
497,842 56,882 440,960
6,778
29,625 470,585
589,376 CURRENT ASSETS, LOANS AND ADVANCES Inventories Sundry Debtors Cash and Bank Balances Other Current Assets Loans and Advances
5
LESS : CURRENT LIABILITIES AND PROVISIONS Liabilities Provisions
6
NET CURRENT ASSETS TOTAL NOTES TO ACCOUNTS
68,378 108,614 20,796 139 87,663 285,590
50,425 131,690 84,392 60 32,160 298,727
25,649 2,145 27,794
18,753 7,505 26,258 272,469 743,054
257,796 847,172 11
The Schedules referred to above form an integral part of the Balance Sheet. As per our Report of even date attached For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants
Signatures to Balance Sheet and Schedules 1 to 6 and 11
ERMIN K. IRANI Partner Membership No. 35646 Mumbai, May 17, 2010
N. B. GODREJ Chairman
For and on behalf of the Board
R. R. GOVINDAN Director
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010 Schedule INCOME Sales Other income
8 9 10
PREVIOUS YEAR Rs.’000
646,582
742,805 364 743,168
539,762 106,820
539,492 75,950 250 29,941 645,633 97,535
38,791 68,029 68,029 142,696 210,725
16,281 714 21,534 38,529 59,005 3,145 55,860 86,836 142,696
964.95
792.34
408,392 89,245 1,560 40,565
PROFIT BEFORE TAXATION Provision for Taxation Current Tax including MAT credit entitlement Fringe Benefit Tax MAT Credit entitlement Deferred Tax PROFIT AFTER TAXATION Prior years adjustments Profit after Tax and prior period item Surplus Brought Forward Surplus carried to Balance Sheet Earnings per share (Basic/Diluted) in Rs. (Refer Note 20) NOTES TO ACCOUNTS
Rs.’000
638,769 7,813
7
EXPENDITURE Materials Expenses Interest Depreciation
THIS YEAR Rs.’000
18,200 (18,200) 38,791
11
The Schedules referred to above form an integral part of the Profit & Loss Account As per our Report of even date attached For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants
Signatures to Profit and Loss Account & Schedules 7 to 11
ERMIN K. IRANI Partner Membership No. 35646 Mumbai, May 17, 2010
N. B. GODREJ Chairman
For and on behalf of the Board
R. R. GOVINDAN Director
SCHEDULES ATTACHED TO AND FORMING PART OF THE ACCOUNTS FOR THE PERIOD ENDED MARCH 31, 2010 THIS YEAR Rs.’000 SCHEDULE 1 : SHARE CAPITAL AUTHORISED 1,00,00,000 Equity Shares of Rs. 10 each ISSUED, SUBSCRIBED AND PAID UP 70,500 Equity Shares of Rs. 10 each fully paid. Of the above : a) 56,400 equity shares are held by Godrej Agrovet Ltd. the holding Company. b) 20,500 equity shares have been issued pursuant to the scheme of demerger without payment being received in cash. SCHEDULE 2 : RESERVES & SURPLUS Securities Premium Account Profit and Loss Account TOTAL SCHEDULE 4: FIXED ASSETS ASSETS As on 01.04.09 Tangible Assets Freehold Land Buildings Plant & Machinery Furniture & Fixtures Office & Other Equipments Vehicles Tree Development Cost Computer Intangible Assets Grant of Licenses Total Previous Year Capital Work-In-Progress/Advance
114
Rs.’000
PREVIOUS YEAR Rs.’000
THIS YEAR Rs.’000
Rs.’000
PREVIOUS YEAR Rs.’000
SCHEDULE 3 : UNSECURED LOANS 100,000
100,000
705
705
497,289 210,725 708,014
GROSS BLOCK Additions Deductions
2,980 39,382 87,748 422 812 2,271 11,703 679
22,471 159,231 117 323 259
181 14 60 38
351,845 497,842 476,549
182,401 21,307
293 14
2,50,000, 10% Redeemable non-convertible Debentures of Rs. 10 each (amount due within a year Rs. 2,500 thousand, previous year Rs. 2,500 thousand)
-
Add: Interest accured and due
-
2,500 -
202
-
2,702
Sales Tax Deferment facility (Refer Note 3)
46,674
46,674
TOTAL
46,674
49,376
497,289 142,696 639,985
DEPRECIATION For the Year On Deductions
Upto 31.03.10
(Rs.’000) NET BLOCK As on As on 31.03.10 31.03.09
As on 31.03.10
As on 01.04.09
2,980 61,853 246,798 525 1,075 2,271 11,703 900 351,845 679,950 497,842
2,550 14,677 122 98 73 3,994 183
1,939 18,408 67 57 297 1,997 207
55 7 17 15
4,489 33,030 182 138 370 5,991 375
2,980 57,364 213,768 343 937 1,901 5,712 525
2,980 36,832 73,070 301 713 2,198 7,709 496
35,184 56,881 26,943
17,593 40,565 29,941
94 3
52,777 97,352 56,882
299,068 582,598 6,778 589,376
316,661 440,960 29,625 470,585
Annual Report 2009–2010
SCHEDULES ATTACHED TO AND FORMING PART OF THE ACCOUNTS FOR THE PERIOD ENDED MARCH 31,2010 THIS YEAR Rs.’000
PREVIOUS YEAR Rs.’000
SCHEDULE 5 : CURRENT ASSETS, LOANS & ADVANCES (A)
Interest Income (Gross) (Tax at Sources Rs.740 thousands previous year Rs. 1 thousand) 217
547
Finished Products
5,177
3,242
Stores and Spares
2,120
2,127
Stock under Cultivation
60,864 68,378
(B)
Sundry Balances written back Sundry income TOTAL
44,509
SCHEDULE 8 : MATERIALS
50,425
a)
SUNDRY DEBTORS (Unsecured and considered good unless otherwise stated) Debts outstanding for a period exceeding six months Considered Good Considered Doubtful Other Debts (less than six months) TOTAL Less: Provision for doubtful debts
Add : Purchases during the year
30,542
Less : Closing Stocks
40,476
36
-
30,578
40,476
78,072
91,214
108,650
131,690
36
-
b)
PURCHASE FOR RESALE
c)
INVENTORY CHANGE Finished Goods Stock under Cultivation
131,690
i)
In Current Accounts In Fixed Deposit Accounts
168
181
11,128
4,211
9,500
80,000 20,796
(D)
Finished Goods Stock under Cultivation
84,392
139
60
LOANS AND ADVANCES : (Unsecured and considered good) Advances recoverable in cash or in kind or for value to be received
303
47
54
280
7
7,813
364
547
1,224
392,087
498,826
392,634
500,050
217
547 392,417
499,503
34,265
43,233
3,242
4,576
44,509
39,931
47,751
44,507
5,177
3,242
60,864
44,509
66,041 TOTAL
OTHER CURRENT ASSETS : Interest Accrued
(E)
7,486
Less : Closing Stock
Balances with Scheduled Banks ii)
Rs.’000
Opening Stock
CASH AND BANK BALANCES : Cash and Cheques on hand
PREVIOUS YEAR Rs.’000
RAW MATERIALS CONSUMED Opening stock
108,614 (C)
Rs.’000 SCHEDULE 7 : OTHER INCOME
INVENTORIES : Raw Materials
THIS YEAR
Rs.’000
SCHEDULE 9 : EXPENSES 1.
Salaries, Wages, Bonus,Gratuity and Allowances
2.
Contribution to Provident Fund and
3.
Employee Welfare Expenses
4.
Processing Charges
47,751 (18,290)
(3,244)
408,392
539,492
27,423
20,365
1,269
852
`
Other Funds and Administration Charges
4,251
29,374
Inter Corporate Deposits
67,915
-
Advance Income Tax Paid (net of Provision Rs. 51,883 thousand Previous year Rs. Nil)
5.
Consumable Stores
4,460
4,659
12,570
-
6.
Power and Fuel
9,742
8,701
7.
Rent
944
824
1,004
8.
Rates and Taxes
391
2,249
1,782
9.
Repairs & Maintenance
Deposits i)
Government Authorities
1,506
ii)
Others
1,421
TOTAL
87,663
32,160
285,590
298,727
Building Plant & Machinery Other Assets
SCHEDULE 6 : LIABILITIES & PROVISIONS LIABILITIES Sundry Creditors Dues to Micro, Small & Medium Enteriprises (refer Note 6) Others
-
-
24,898
Investors Education and Protection Fund
211 2,080
12
76 4,394
2,367 235
Insurance
522 844
786
12.
Auditor’s Remuneration
217
210
2,232
2,267
17,263
13.
Legal & Professional Fees
24,898
17,263
14.
Bank Charges
-
-
15.
Freight, Coolie and Cartage
481
853
16.
Advertisement and Publicity
637
17.
Travelling Expenses
25,649
18,753
PROVISIONS
18.
Provision for Doubtful Debts and Advances/(Writeback)
For Taxes (net of advance tax paid Rs. Nil previous year Rs. 45,960 thousand)
19.
Loss on sale of Fixed Assets/Write off
TOTAL
180 4,202
Postage, Telephony and Stationery
270
For Leave Encashment
5,459
10.
Advances from Customers
For Gratuity
339
8,397
11.
Sundry Deposits TOTAL
458
223
560
3,336
2,201
142
154
1,820
1,138
36
(131)
174
8
3,320
3,675
-
5,923
20.
Discounts, Commission & Brokerage
1,542
1,167
21.
General Expenses
18,901
19,031
603
415
TOTAL
89,245
75,950
63
250
2,145
7,505
27,794
26,258
SCHEDULE 10 : INTEREST 1.
On Debenture
2.
On Inter Corporate Deposit
1,497
-
1,560
250
115
Godrej Oil Palm Limited SCHEDULE ATTACHED TO AND FORMING PART OF THE ACCOUNTS FOR THE PERIOD ENDED MARCH 31, 2010 SCHEDULE 11: NOTES TO ACCOUNTS 1.
116
SIGNIFICANT ACCOUNTING POLICIES: a) The financial statements are prepared under the historical cost convention and on the ‘going concern basis’, with revenues recognised and expenses accounted on their accrual in accordance with the generally accepted accounting principles, and in compliance with the applicable Accounting Standards and other requirements of the Companies Act, 1956. b) Fixed assets have been stated at cost and include incidental and/or installation/ development expenses incurred in putting the asset to use and interest on borrowing incurred during construction period. c) Carrying amount of cash generating units/assets are reviewed at balance sheet date to determine whether there is any indication of impairment. If such indication exists, the recoverable amount is estimated as the net selling price or value in use, whichever is higher. Impairment loss, if any, is recognised whenever carrying amount exceeds the recoverable amount. d) Depreciation/Amortization has been provided for as under : (a) The Company has grouped additions and disposals in appropriate time periods of a month/quarter for the purpose of charging pro rata depreciation in respect of additions and disposals of its assets keeping in view the materiality of the items involved. (b) 1) Depreciation on asset purchased/acquired other than acquired under the scheme of demerger are provided on the straight line method at the rates specified in Schedule XIV to the Companies Act, 1956, except for computer hardware which is depreciated over its estimated useful life of four years. 2) Assets acquired under the scheme of demerger are depreciated on straight line basis over the remaining useful life of the asset. 3) Amortizations Asset type Period (i) Leasehold Land Primary lease period (ii) Trees Development cost 15 years (iii) Grant of Licenses/Rights 20 years e) Inventories: Raw materials and stock under cultivation are valued at weighted average cost. Finished goods are valued at lower of cost and net realisable value. These costs include cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Stores and spares are valued at cost using the First-In-First-Out method. f) Employee Benefits: i) Short-term employee benefits (payable wholly within twelve months of rendering the service): Short-term benefits such as salaries, wages, short-term compensation absences, etc., are determined on an undiscounted basis and recognised in the period in which the employee renders the related service. ii) Post-employment benefits: Defined Contribution Plans: The Company’s contributions paid/payable to Provident Fund, Employees State Insurance Scheme, Employees Pension Schemes, 1995 and other funds, are determined under the relevant approved schemes and/or statutes and are recognised as expense in the Profit and Loss Account during the period in which the employee renders the related service. There are no further obligations other than the contributions payable to the approved trusts/appropriate authorities. However, the rules of Company’s Provident Fund Scheme, 1952, for the reason that the return on investment is less or for any other reason, then the deficiency shall be made good by the Company. The Company’s PF does not have any existing Deficit or Interest shortfall. In view of the track record of the Company’s PF Trust - its assets, return on investments and accumulated reserves - the Company does not anticipate any deficiency in the foreseeable future. In any case making reasonable actuarial assumptions for determining and measuring any probable future obligations arising due to interest shortfall, would pose a formidable challenge. Defined Benefit Plans: The Company’s gratuity and leave encashment/longterm compensated absences schemes are defined benefit plans. The Company’s liability for the defined benefit schemes is actuarially determined based on the projected unit credit method. The Company’s net obligations in respect of such plans is calculated by estimating the amount of future benefit that the employees have earned in return for their services in the current and prior periods that benefit is discounted to determine its present value and the fair value of the plan asset is deducted. Actuarial gains and losses are recognised immediately in the Profit and Loss Account. Terminal Benefits: All terminal benefits including voluntary retirement compensation are fully written off to the Profit and Loss Account. g) Revenue is recognised when goods are dispatched to external customers. Sales are inclusive of realised exchange fluctuations on export receivables but net of returns, sales tax, rebates, etc. h) Transactions in foreign currency are recorded at the exchange rates prevailing on the date of the transaction. Assets and liabilities related to foreign currency transactions, remaining unsettled at the year end, are translated at the year end exchange rates. Forward exchange contracts, remaining unsettled at the year end, backed by underlying assets or liabilities are also translated at year end exchange rates. The premium payable on foreign exchange contracts is amortised over the period of the contract. Exchange gains/losses are recognised in the Profit and Loss Account. i) Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets, subject to consideration of prudence, are recognised and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. The tax effect is
calculated on the accumulated timing difference at the year-end, based on the tax rates and laws enacted or substantially enacted on the balance sheet date. The basic earnings per share is computed using the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the period, except where the results would be anti-dilutive. k) Provisions are recognised in the accounts in respect of present probable obligations, the amount of which can be reliably estimated. Contingent liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. CAPITAL COMMITMENTS: j)
2.
THIS YEAR Rs.’000
3.
4.
5.
The estimated value of contracts remaining to be executed on Capital Account to the extent not provided for 35,522 786 UNSECURED LOANS: Sales Tax Deferment availed under the scheme floated by the Directorate of Industries, Government of Andhra Pradesh is classified under Unsecured Loans. AMORTIZING GRANT OF LICENSES/RIGHTS OVER 20 YEARS: The oil palm plantation business operates on a command area basis with the government allotting to various companies clearly demarcated area for the development of oil palm plantation. With this responsibility for development for oil palm plantations, comes the exclusive rights for the procurement of Fresh Fruit Bunches produced in the allotted area. Oil Palm Plantation has a relatively long productive life of 30 years. Since the allotment right is expected to yield benefits over a long period, the amount paid towards the same is amortized over a 20 year period. CURRENT ASSETS, LOANS & ADVANCES: (a) Loans & Advances and other Current Assets include dues from Companies under the same Management
(i) (ii) 6.
7.
PREVIOUS YEAR Rs.’000
THIS YEAR PREVIOUS YEAR Rs. ‘000 Rs. ‘000 449 4,957 27,872 27,872 -
Godrej Agrovet Limited Maximum Balance during the year Cauvery Palm Oil Limited Maximum Balance during the year
CURRENT LIABILITIES: Under the Micro, Small & Medium Enterprises Development Act, 2006, which came into force from October 2, 2006, certain disclosures are required to be made relating to Micro, Small & Medium Enterprises. The Company is still in the process of compiling relevant information from its suppliers about their coverage under the Act. Since the relevant information is not readily available, no disclosures have been made in the accounts. SALES TURNOVER:
Crude Palm Oil Palm Kernel Oil Palm Kernel Cake Seedlings Agri Inputs Others TOTAL
Unit
THIS YEAR Quantity
MT MT MT Nos
14,519 1,536 2,670 556,740
Value Rs. ’000 486,691 53,393 14,219 44,023 33,360 7,083 638,769
PREVIOUS YEAR Quantity Value Rs. ’000 13,051 508,655 1,832 91,023 3,217 14,605 1,009,078 73,783 47,847 6,892 742,805
8.
Note: Sales Turnover includes sale of items purchased by the Company for resale. FINISHED GOODS INVENTORIES:
9.
Crude Palm Oil MT Palm Kernel Oil MT Palm Kernel Cake MT Agri Inputs TOTAL PURCHASES FOR RESALE:
10.
Agri Inputs TOTAL RAW MATERIALS CONSUMED: Fresh Fruit Bunches Palm Nuts Palm Kernel Palm Sprouts Others TOTAL
11.
MT MT MT Nos
30.72 3.05 4.70
823 99 28 4,227 5,177
70.66 6.07 57.54
34,265 34,265 78,873.81 9,144.98 556,740
344,800 4,947 42,573 97 392,417
1,544 176 247 1,275 3,242 43,233 43,233
73,833.02 9,300.17 399.91 1,009,078
429,740 11,441 8,868 45,524 3,931 499,504
LICENSED & INSTALLED CAPACITY AND ACTUAL PRODUCTION: Item
For the year ended
Capacity Per Annum Actual Third Party Registered Installed Production Processing MT MT MT MT a) Crude Palm Oil 31.3.2010 Not Applicable 18,000 14,349 130 31.3.2009 Not Applicable 11,880 13,102 b) Palm Kernel Oil 31.3.2010 Not Applicable 2,160 1,533 31.3.2009 Not Applicable 2,160 1,819 Installed capacity is calculatd at 18% Oil Extraction Rate of the input capacity of the FFB Crushed in case of Crude Palm Oil and Palm Kernel Nut crushed in case of Palm Kernel Oil.
Annual Report 2009–2010
SCHEDULE ATTACHED TO AND FORMING PART OF THE ACCOUNTS FOR THE PERIOD ENDED MARCH 31, 2010 SCHEDULE 11: NOTES TO ACCOUNTS (Contd.) 12.
(a)
COMPUTATION OF PROFIT FOR THE PURPOSE OF MANAGERIAL REMUNERATION:
THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000
THIS YEAR Rs.’000 68,029 40,565 4,025 38,791 174 151,584
Profit after Tax as per Profit & Loss Account Add : Depreciation as per Accounts Add : Managerial Remuneration Add : Provision for Taxation (Including Deferred Tax) Add : Loss on sales of Fixed Assets/Write off Less : Depreciation as per Section 350 of the Companies Act, 1956
Amount recognised in the Balance Sheet Present value of obligation, as at March 31, 2010 Fair value of plan assets as at March 31, 2009 Net obligation as at March 31, 2010 Net gratuity cost for the year ended March 31, 2010 Current Service Cost Interest Cost Expected return on plan assets Net Actuarial (gain)/loss to be recognised Net gratuity cost Assumptions used in accounting for the gratuity plan
40,565 40,565
Net profit/(Loss) for the purpose of Director's Remuneration 5% thereof MAXIMUM REMUNERATION PERMISSIBLE UNDER THE ACT (b) MANAGERIAL REMUNERATION a) Salaries b) Contribution to Providend Fund c) Estimated monetary value of Perquisites
13.
15.
3,811 186 28 4,025
Note : Previous year Managerial Remunerations are Rs. Nil. DISCLOSURE IN RESPECT OF LEASES: The Company’s leasing arrangements are in respect of operating leases for premises occupied by the Company. These leasing arrangements are cancellable, and are renewable on a periodic basis by mutual consent on mutually acceptable terms. a. The total of future minimum lease payments under non-cancelable operating leases for each of the following periods :
Not later than one year Later than one year and not later than five years iii. Later than five years b. Lease payments recognised in the statement of Profit & Loss for the period : AUDITORS’ REMUNERATION:
Audit fees Audit under Other Statutes Taxation Services TOTAL EXPENDITURE IN FOREIGN CURRENCY:
18.
-
458
509
66 66
THIS YEAR Rs.’000
%
-
-
PREVIOUS YEAR Rs.’000 -
% -
392,417 392,417
100 100
499,504 499,504
100 100
4,460 4,460
100 100
4,659 4,659
100 100
Schedule 9, item No. 21 - General Expenses includes, share of corporate overhead charged by Group Company for Rs.12,000 thousand (previous year Rs. 9,600 thousand) EMPLOYEE BENEFITS: I. Defined Contribution Plans: Contribution to Defined Contribution Plan, recognised as expense for the year are as under:
II.
THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000 1,269 852
Employers’ Contribution to Provident Fund Defined Benefit Plans: a. Contribution to Gratuity Fund The Company makes provision for Gratuity in the books of accounts for qualifying employees. Gratuity is payable to all eligible employees on superannuation, death or on separation/termination in terms of the provisions of the Payment of Gratuity Act or as per the Company's policy whichever is beneficial to the employees. The following table sets out the funded status of the gratuity plan and the amounts recognised in the Company's financial statements as at March 31, 2010: THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000 Change in present value of obligation Present value of obligation as at April 1, 2009 Interest Cost Service Cost Benefits Paid Actuarial (gain)/loss on obligation Present value of obligation, as at March 31, 2010
1,167 65 148 (80) 242 1,542
1,028 139 1,167
1,542
1,167
148 65 242 455
139 139
% % Discount Rate 8 8 Salary escalation rate 5 4 The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. DEFERRED TAX : Major components of deferred tax arising on account of timing differences as on March 31, 2010 are:
Asset Provision for Doubtful Debts Others Liabilities Depreciation on Fixed Assets
20.
21. -
VALUE OF CONSUMPTION OF RAW MATERIALS, SPARES & TOOLS:
RAW MATERIALS : Imported items (including duty content) Indigenous TOTAL SPARES & TOOLS : Imported items Indigenous TOTAL 17.
-
1,167
THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000
THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000 165 138 50 44 28 215 210
Travelling Expenses TOTAL 16.
19.
THIS YEAR PREVIOUS YEAR Rs. ’000 Rs. ’000 458 509
i. ii.
14.
111,019 5,551 5,551
1,542
Net Deferred Tax Liability EARNINGS PER SHARE:
12 6,188 6,200
538 538
(97,979) (97,979) 91,779
(53,526) (53,526) 52,988
THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000 Profit after tax and prior period expenses 68,029 55,860 Weighted average number of equity shares outstanding 70,500 70,500 Basic earnings per share (Rs.) 964.95 792.34 Diluted earnings per share (Rs.) 964.95 792.34 Nominal value of shares (Rs.) 10 10 SEGMENT INFORMATION FOR THE YEAR ENDED MARCH 31, 2010 (i) Information about Primary Business Segments Revenue
Total Sales Less : Inter-segment External Sales Result Segment Result Unallocated expenditure net of unallocated income Interest expenses Interest Income Dividend Income and Profit on sale of Investments Profit before taxation and exceptional items Provision for taxation Profit after taxation and before exceptional items Exceptional Items Prior years adjustments Profit after taxation and exceptional items Other Information Segment assets Segment liabilities Capital expenditure Depreciation Non-cash expenses other than depreciation Revenue
Total Sales Less : Inter-segment External Sales Result Segment Result Unallocated expenditure net of unallocated income Interest expenses Interest Income Dividend Income and Profit on sale of Investments Profit before taxation and exceptional items Provision for taxation Profit after taxation and before exceptional items Exceptional Items Prior years adjustments Profit after taxation and exceptional items Other Information Segment assets Segment liabilities Capital expenditure Depreciation Impairment Loss Non-cash expenses other than depreciation
Current Year Rs.’000 Oil Agri Unallocated Total Palm Inputs Plantations (A) (B) (C) (A)+(B)+(C) 605,409 33,360 638,769 605,409 33,360 98,367
967
98,367
967
98,367
967
638,769 99,334 7,486
7,486
7,486 38,791 (31,305)
106,820 38,791 68,029 68,029
737,629 74,428 159,554 40,565
4,968 40
132,368 91,779
874,966 166,247 159,554 40,565
Last Year Oil Agri Unallocated Total Palm Inputs Plantations (A) (B) (C) (A)+(B)+(C) 694,958 47,847 742,805 694,958 47,847 105,457
1,928
105,457
1,928
105,457
1,928
9,600 250 9,850 38,529 3,145
768,038 128,622 21,307 29,941
1,274
742,805 107,385 9,600 250 97,535 38,529 59,006 3,145 55,861 769,312 128,622 21,307 29,941
117
Godrej Oil Palm Limited SCHEDULE ATTACHED TO AND FORMING PART OF THE ACCOUNTS FOR THE PERIOD ENDED MARCH 31, 2010 SCHEDULE 11: NOTES TO ACCOUNTS (Contd.) (ii)
22.
Information about Secondary business Segments The Company operates only within India and hence the information related to Secondary Business Segment is not furnished. (iii) Notes (i) The Company is organised into two main business segments,Namely (a) Oil Palm Plantation business (b) Agri-business - comprising of plant growth promoters, pesticides etc. Segments have been identified and reported taking into account, the nature of products and services, the differing risks and returns, the organisation structure, and the internal financing reporting systems. (ii) The Segment revenue in each of the above business segments consists of sales (net of returns, sales tax, rebates etc.) (iii) Segment Revenue, Results, Assets and liabilities include the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis RELATED PARTY DISCLOSURES: Related party disclosures as required by AS - 18, “Related Party Disclosures”, are given below : 1. Relationships : (i) Holding Companies: Godrej Agrovet Limited (GAVL) holds 80% in the Company. GAVL is the subsidiary of Godrej Industries Limited (GIL) & GIL is the subsidiary of Godrej & Boyce Mfg Co Ltd, the ultimate Holding Company. (ii) Fellow Subsidiaries: Golden Feed Products Limited Cauvery Palm Oil Limited. (iii) Other related parties where persons mentioned (iv) below exercise significant influence: Godrej IJM Palm Oil Limited Godrej Gold Coin Aquafeed Limited Godrej Tyson Foods Ltd. Nature Basket Limited. (iv) Key management persons Mr. B. S. Yadav Mr. R. R. Govindan 2. The following transactions were carried out with the related parties in the ordinary course of business :
Rs.’000 Holding Other Related Nature of Transactions Companies Parties (i) (iii) I Expenses charged by other companies 3,926 447 (52,475) (875) II Expenses charged to other companies 2,683 III Sale of materials/finished goods 6,249 405 (8,378) IV Purchase of Material 1,680 (24,222) (2,044) V Inter Corporate Deposit placed 65,500 VI Fixed Assets Purchased 825 VII Advance paid for Fixed Assets 68 VIII Debenture redumption with interest repayment 1,931 IX Recoveries from other Group Companies 2,415 63 (636) (846) X Recoveries by other Group Companies 35,771 206 XI Outstanding Payables 103 (14,008) XII Outstanding receivables 837 27,872 XIII Inter Corporate Deposit taken 10,500 XIV Inter Corporate Deposit repaid 25,540 Transactions with Fellow Subsidiaries and key management persons are Rs. Nil 3.
1
(i) Godrej Agrovet Ltd.
3
Godrej Industries Ltd. Expenses Charged to other Companies Sale of materials/finished goods Godrej Agrovet Ltd.
4
Purchase of Material
2
5
Inter Corporate Deposit placed
6
Fixed Assets Purchased
7
Advance paid for Fixed Assets
8
Debenture redumption with interest repayment Recoveries from other Group Companies
9
118
Expenses Charged by other Companies
Holding Companies
Godrej Industries Ltd. Godrej Agrovet Ltd.
Godrej Agrovet Ltd. Godrej & Boyce Mfg. Co.Ltd. Godrej & Boyce Mfg. Co.Ltd. Godrej Industries Ltd.
23. 24.
(52,475) 512
Amount 447 -
Cauveri Palm Oil Ltd. 4,462 Godrej IJM Oil Palm Ltd. (8,378) 1,787 Cauvery Palm Oil Ltd. - Godrej IJM Oil Palm Ltd. (24,222) Cauvery Palm Oil Ltd. Cauvery Palm Oil Ltd. Nature Basket Limited 230 595
2683 322 83 1,296 (2,044) 384 25,500 40,000
68 1,931 2,415 Godrej IJM Oil Palm Ltd. (636)
63 (846)
11
Outstanding Payables
12
Outstanding receivables
Godrej Agrovet Ltd.
35,771 Godrej IJM Oil Palm Ltd. - Godrej IJM Oil Palm Ltd. (14,008) 769 Cauvery Palm Oil Ltd. 68
Godrej Agrovet Ltd.
206 (875) 103 27,872
Figures of the previous year have been regrouped and re-classified wherever necessary to conform to the current year’s classification. Information required to be furnished under Part IV of Schedule VI of the Companies Act, 1956. i)
ii)
iii)
Registration Details Registration No. U15122MH2006TLC163857 State Code 11 Balance Sheet Date 31/3/2010 Capital raised during the year (Rupees ’000) Public Issue Nil iv) Rights Issue Nil Bonus Issue Nil Private Placement Nil Position of mobilisation and deployment of funds (Rupees ’000) Total Liabilities 874,966 Total Assets 874,966 Sources of Funds Paid-up Capital 705 v) Reserves & Surplus 708,014 Secured Loans Unsecured Loans
46,674
Application of Funds Net Fixed Assets Investments Net Current Assets Misc. Expenditure Accumulated Losses Performance of Company Turnover Total Expenditure Profit before tax Profit after tax Earning Per Share in Rs. Dividend rate
589,376 257,796 Nil (Rupees ’000) 646,582 539,762 106,820 68,029 964.95 -
Generic Names of three principal products services of Company Item Code No. 151110 and 151321 Product Description Crude Palm Oil and Palm Kernel Oil
For and on behalf of Board N. B. GODREJ R. R. GOVINDAN Chairman Director Mumbai, May 17, 2010
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010 A.
Cash Flow from Operating Activities: Profit before Tax and Operational Items Adjustments for: Depreciation Loss on sale of Fixed Assets/Write off Interest Income Interest paid Provision for Doubtful Debts and Advance Sundry Balances written back Prior Period Adjustment Operating Profit before Working Capital Changes Adjustments for: Inventories Debtors increase/decrease Other receivable increase/decrease Loans and advances increase/decrease Creditors and Other payables
Other Related Parties Amount 3,414 Cauvery Palm Oil Ltd.
Recoveries by other Group Companies
Godrej Agrovet Ltd. Godrej & Boyce Mfg. Co. Ltd. 13 Inter Corporate Deposit taken Godrej Agrovet Ltd. 10,500 14 Inter Corporate Deposit repaid Godrej Agrovet Ltd. 25,540 Transactions with Fellow Subsidiaries and key management persons are Rs. Nil.
B.
Significant Related Party Transactions : Nature of Transactions
10
C.
THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000 Rs.’000 106,820 40,565 174 (7,486) 1,560 36 (47) -
(17,953) 23,040 (79) 24,982 7,303
Cash Generated from Operations Direct taxes Paid Net Cash Generated from Operating Activities Cash from Investing Activities: Acquisition of Fixed Assets (159,554) Proceeds from sales of Fixed Assets 25 Interest Income 7,486 Net Cash used in Investing Activities Cash from Financing Activities: Debenture (2,500) Interest on Debenture (63) Inter Corporate Deposits (67,915) Interest paid (1,497) Net Cash used in Financing Activities Net Increase/(Decrease) in Cash and Cash Equivalents Cash and Cash equivalents at beginning of period Cash and Cash equivalents at end of period
As per our Report of even date attached For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants ERMIN K. IRANI Partner Membership No. 35646 Mumbai, May 17, 2010
97,535 29,941 8 (303) 250 -
34,802 141,622
(3,145) 26,751 124,286
37,293 178,915 (18,493) 160,422
(3,185) (39,308) (330) 79,098 4,413 40,688 164,974 (45,960) 119,014
(152,043)
(36,651) 3 303 (36,344) 202
(71,975)
(250) (48)
(63,596)
82,622
84,392 20,796
1,769 84,392
For and on behalf of Board
N. B. GODREJ Chairman
R. R. GOVINDAN Director
Cauvery Palm Oil Limited
Annual Report 2009–2010
DIRECTORS’ REPORT FOR THE FINANCIAL YEAR ENDED ON MARCH 31, 2010 To The Shareholders Your Directors have pleasure in submitting their Report along with the audited Accounts for the financial year ended on March 31, 2010. FINANCIAL RESULTS Your Company’s performance during the year as compared with that during the previous year is summarized below:Rs. in Lac Total Income Profit Before Taxation (PBT) Less : Provision for Taxation Profit After Taxation (PAT) Adjustment to Capital Reserve for previous year depreciation Balance brought forward from previous year Total Balance Carried Forward to Balance Sheet
This Year 219.02 (329.19) 0.00 (329.19) 0.00 (252.56) (581.75) (581.75)
Previous Year 385.85 (190.52) (2.83) (193.36) 41.80 (101.00) (252.56) (252.56)
Dr. V. Krishnamurthy and Mr. Jayakar Krishnamurthy retire by rotation at the ensuing Annual General Meeting of the Company in accordance with Section 256 of Companies Act, 1956 and provisions of Articles of Association of the Company and being eligible offer themselves for reappointment. AUDITORS You are requested to appoint Auditors for the current year and fix their remuneration. The retiring Auditors M/s. Kalyaniwalla & Mistry, Chartered Accountants, Mumbai are eligible for reappointment and a certificate as required u/s 224 (1-B) of the Companies Act, 1956, has been received from them. ADDITIONAL INFORMATION The additional information required to be given under the Companies Act, 1956, has been laid out in the Schedules attached to and forming part of the Accounts. The Notes to the Accounts referred to in the Auditors’ Report are self-explanatory and therefore do not call for any further explanation. STATUTORY INFORMATION A)
OPERATIONAL HIGHLIGHTS
The information in respect of these matters, required under Section 217 (1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 and forming part of the Directors’ Report is given in the Annexure “A” to this report.
Your Company operated under highly adverse conditions during the year which witnessed a severe drought leading to a major drop in the FFB yield per hectare. The area coverage was extremely constrained due to fall in the prices of fresh fruit bunches coupled with highly attractive economics of competing crops such as sugar. FINANCIAL POSITION
B)
The Accumulated los of your company exceeds 50% of its networth. Your Directors propose to infuse further share capital into the Company to strengthen its financial position. The accounts have been prepared on a goind concern basis on the assumption that requisite funds will be available to Your Company. Your Company operates in the Oil Palm Plantation business, which is a long gestation business. Your Company is strongly placed in view of allotment of potentially high yielding area in the Cauvery delta. Your Company has made a major area expansion of Oil Plam Plantation during 2006-07 to 2009-10, the benefit of which is goint to be flown in the coming years.
Conservation of Energy, Technology absorption and Foreign Exchange earnings and outgo
Particulars of Employees None of the employees is covered under the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) (Amendment) Rules, 2002.
C)
Directors’ Responsibility Statement Pursuant to the provisions contained in Section 217(2AA) of the Companies Act, 1956, the Directors of your Company confirm:-
Shares issued out of Revaluation Reserve have been capitalized by issue of Bonus Shares during 2001-02, which, presently your company is not in a position to rectify.
a)
that in the preparation of the annual accounts, the applicable Accounting Standards have been followed and no material departures have been made from the same;
b)
that they have selected such Accounting Policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;
c)
that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company for preventing and detecting fraud and other irregularities;
d)
that they have prepared the annual accounts on a going concern basis.
DIVIDEND The Directors do not recommend any dividend for the year 2009-10. FIXED DEPOSITS The Company has not accepted any public deposits during the financial year under review. HOLDING COMPANY The Company is a subsidiary of Godrej Agrovet Limited as defined under Section 4(1)(b) of the Companies Act, 1956. SUBSIDIARY COMPANIES
HUMAN RESOURCES
The Company has no subsidiary companies during the year under review.
Your Company continues to focus on development of Human Resources. The industrial relations are cordial and the Board would like to place on record its sincere appreciation for the unstinted support from all the employees.
DIRECTORS The following are the present Directors of the Company: 1. Dr. V. Krishnamurthy
(Chairman)
2. Mr. Jayakar Krishnamurthy
(Director)
3. Mr. N. B. Godrej
(Director)
4. Mr. B. S. Yadav
(Director)
5. Mr. R. R. Govindan
(Director)
For and on behalf of the Board of Directors V. Krishnamurthy Mumbai, May 17, 2010
Chairman
ANNEXURE 'A' ANNEXURE FORMING PART OF THE DIRECTORS’ REPORT INFORMATION PURSUANT TO SECTION 217(1)(e) OF THE COMPANIES ACT, 1956, READ WITH THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS) RULES, 1988 IN RESPECT OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO: A] Conservation of Energy Your Company continues its policy of implementing various energy conservation measures considering the same as an effective means of saving cost and also a corporate social responsibility. The systems installed to conserve energy are regularly reviewed. Some measures adopted by the Company during the year under review for conservation of energy were as follows:1) HT connection proposed to be obtained. 2) Installation of 250 KVA transformer. 3) Use of DG set for running of the factory. The adoption of above energy conservation measures will result in the following benefits to the Company:a) Considerable saving on energy cost. b) Increase in the life of plant & machinery.
B]
C]
Technology Absorption, Adaptation and Innovation I. Your Company continues its endeavours for technological upgradation. II. The Company’s expenditure on R&D is given below:-
(a) Capital (b) Recurring (c) Total (d) Total R & D expenditure as a percentage of total turnover Foreign Exchange earnings and outgo
I. Foreign exchange used II. Foreign exchange earned
Mumbai, May 17, 2010
This Year Rs. in Lac Nil Nil Nil Nil
Previous Year Rs. in Lac Nil Nil Nil Nil
This Year Previous Year Rs. in Lac Rs. in Lac Nil Nil Nil Nil For and on behalf of the Board of Directors V. Krishnamurthy Chairman
119
Cauvery Palm Oil Limited AUDITORS’ REPORT To The Members of Cauvery Palm Oil Limited 1. We have audited the attached Balance Sheet of Cauvery Palm Oil Limited, as at 31st March 2010 and also the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditor’s Report) Order, 2003, issued by the Central Government in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order. 4. Further to our comments in the Annexure referred to in paragraph (3) above we report that: a) The accounts have been prepared on a going concern basis on the assumption that funds will be available for working capital as the net worth of the Company has been eroded. b) Shares issued out of Revaluation Reserve have been capitalised by issue of Bonus Shares. c) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit. d) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of these books.
e)
5.
The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account. f) In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. g) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements subject to b) & c) above and read with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2010; and ii) in the case of the Profit and Loss Account, of the loss for the period ended on that date. iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the period ended on that date. On the basis of the written representations received from the Directors as on March 31, 2010, and taken on record by the Board of Directors, we report that, none of the Directors is disqualified as on March 31, 2010 from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956. For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants Firm Registration No: 104607W ERMIN K. IRANI Partner Membership No. 35646
Mumbai, May 17, 2010
ANNEXURE TO THE AUDITORS’ REPORT Referred to in paragraph (3) of our report of even date 1)
2)
3)
4)
5)
6)
7) 8)
120
(a)
The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) As explained to us, the Company has a program for physical verification of fixed assets at periodic intervals. In our opinion, the periodic verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies have been reported on such verification. (c) In our opinion, the disposal of fixed assets during the year does not affect the going concern assumption. (a) The Management has conducted physical verification of inventory at reasonable intervals. (b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. (c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification. (a) The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. (b) Consequently, the question of commenting on the rates of interest and conditions of the loans granted being prejudicial to the interests of the Company, receipt of regular principal and the interest and reasonable steps for recovery of principal and interest does not arise. (c) The Company has taken unsecured loans of Rs. 25,500 thousand from a company covered in the register maintained under Section 301 of the Act. The maximum amount involved during the year was Rs. 25,500 thousand and year-end balance of loan taken from such party was Rs. 25,500 thousand. (d) The rate of interest and the other terms and conditions of the unsecured loan taken is not prima facie prejudicial to the interest of the Company. (e) As informed to us the payment of principal and interest, to the extent due, has been regular. In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchases of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed a continuing failure to correct major weakness in internal controls. (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the particulars of contracts and arrangements referred to in Section 301 of the Companies Act, 1956, have been entered into the register required to be maintained under that section. (b) The transactions made in pursuance of such contracts or arrangements, were made at prices which are reasonable having regard to prevailing market prices at the relevant time. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public hence the provisions of Section 58A and 58AA or any other provisions of the Companies Act, 1956, are not applicable. In our opinion and according to the information and explanations given to us, the internal audit system is commensurate with the size of the Company and the nature of its business. According to the information and explanation given to us, the maintenance of cost records has not been prescribed by the Central Government, under Section 209(1)(d) of the Companies Act, 1956, for any of the Company’s products.
9)
10)
11)
12)
13)
14) 15) 16)
17)
18) 19) 20) 21)
(a)
According to the information and explanations given to us and on the basis of our examination of books of accounts, during the period, the Company has no statutory dues including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income Tax, Sales Tax, Value Added Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues incurred during the period covered. According to the information and explanations given to us, there are no undisputed dues, payable in respect of above as at March 31, 2010 for a period of more than six months from the date they became payable. (b) According to the information and explanations given to us, there are no dues outstanding of Sales Tax, Income Tax, Wealth Tax, Excise Duty, Cess on account of any dispute. The accumulated losses of the Company at the end of the financial year exceed fifty percent of its net worth. The Company has incurred cash losses in the current financial year and also in the immediately preceding financial year. According to the information and explanations given to us and based on the documents and records produced to us, there are no dues to banks, financial institutions or debenture holders. According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/mutual benefit fund/societies. The Company does not deal in shares, securities, debentures and other investments. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions. According to the information and explanations provided to us, there are no term loans, hence the question of its application for the purposes for which they were obtained is not applicable. According to the information and explanations given to us and an overall examination of the Balance Sheet and Cash Flows of the Company, we report that the Company has not raised funds on short-term or long-term basis. The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956. The Company did not issue any debentures during the year. The Company has not raised any money through a public issue during the year. Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year. For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants Firm Registration No: 104607W ERMIN K. IRANI Partner Membership No. 35646
Mumbai, May 17, 2010
Annual Report 2009–2010
BALANCE SHEET AS AT MARCH 31, 2010 This Year Previous Year Rs. Rs.
Schedule SOURCES OF FUNDS Shareholders’ Funds Share Capital Reserves & Surplus Loan Funds Secured Loans Unsecured Loans
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010 Schedule
APPLICATION OF FUNDS Fixed Assets Gross Block Less : Depreciation Net Block Project Development Cost Current Assets, Loans & Advances Inventories Sundry Debtors Cash and Bank Balances Loans & Advances
1 2
38,000,000 25,730,017
38,000,000 26,775,013
3 4
59,409,919 28,302,594 151,442,530
35,568,732 27,033,896 127,377,641
48,869,150 12,177,091 36,692,059 13,800,000
49,640,849 10,632,189 39,008,660 14,950,000
19,818,322 14,523,850 303,694 717,995 35,363,861
21,257,643 14,578,807 982,743 835,598 37,654,791
10,377,242 950,582 11,327,824 24,036,037 18,739,082
5,929,276 2,615,940 8,545,216 29,109,575 19,053,394
58,175,352 151,442,530
25,256,012 127,377,641
5 6 7
Less: Current Liabilities & Provisions Current Liabilities Provisions
8
Net Current Assets Miscellaneous Expenditure (to the extent not written off or adjusted) Profit & Loss Account TOTAL Notes to Accounts & Significant Accounting Policies
9
15
The Schedules referred to above form an integral part of the Balance Sheet As per our Report of even date attached For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants
Signatures to Balance Sheet and Schedules 1 to 9 and 15
ERMIN K. IRANI Partner Membership No. 35646 Mumbai, May 17, 2010
V. Krishnamurthy Chairman
For and on behalf of the Board
Nilesh N. Pingale Company Secretary
R. R. Govindan Director
Income Sales - Palm Oil Mill Revenue from Nursery Operations Other Income
This Year Rs.
Previous Year Rs.
13,348,807 8,268,540 284,197 21,901,544
15,067,287 23,454,055 64,243 38,585,585
8,951,082 15,748,526 18,467,199 9,063,453
10,511,104 14,419,336 24,026,248 5,841,271
10
Expenditure Materials Payroll Cost Expenses Interest & Finance Charges Depreciation Less: Adjustment of Capital Reserve for Current Year Project Development Cost Written Off Misc Expenditure Written Off
11 12 13 14
(Loss) before tax Provision for Taxation - Current - Deferred (Note 13 of Schedule 15) - Fringe Benefit Tax (Loss) after Tax Adjustment of Capital Reserve for Previous Years to Depreciation Deficit brought forward from previous year Deficit carried to Balance Sheet Earnings Per Share (Basic/Diluted) in Rs. (Refer Note 8 Schedule 15) Notes to Accounts & Significant Accounting Policies
2,171,308
2,415,124
1,044,996
1,126,312 1,045,001 1,150,000 314,312 54,820,884 (32,919,340) – – – (32,919,340)
1,370,123 1,150,000 320,371 57,638,453 (19,052,868) 283,000 (19,335,868)
(25,256,012) (58,175,352)
4,180,004 (10,100,148) (25,256,012)
(8.66)
(5.09)
15
The Schedules referred to above form an integral part of the Profit and Loss Account As per our Report of even date attached For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants
Signatures to Profit and Loss and Schedules 10 to 15
ERMIN K. IRANI Partner Membership No. 35646 Mumbai, May 17, 2010
V. Krishnamurthy Chairman
Nilesh N. Pingale Company Secretary
For and on behalf of the Board
R. R. Govindan Director
SCHEDULES TO ACCOUNTS SCHEDULE 1: SHARE CAPITAL Authorised 50,00,000 Equity Shares of Rs. 10/- each TOTAL Issued, Subscribed and Paid up 38,00,000 Equity Shares of Rs.10/- each fully paid. - Of the above 34,20,000 shares is held by Godrej Agrovet Limited, the Holding Company. - Includes 23,00,000 Equity Shares of Rs. 10/- each Issued as Fully paid Bonus Shares by capitalising the Revaluation Reserve TOTAL SCHEDULE 2: RESERVES & SURPLUS Capital Reserve As per last Balance Sheet 16,775,013 Less : Adjustment to Depreciation for Previous Year Less : Adjustment to Depreciation for Current Year 1,044,996
This Year Rs.
Previous Year Rs.
50,000,000 50,000,000
50,000,000 50,000,000
From Bank
38,000,000
38,000,000
Repayable within One Year: Rs.33,58,596 (Previous Year: Rs.18,14,594)
Previous Year Rs.
39,176,936
19,970,687
- Overdraft (Refer Note 5 of Schedule 15)
20,232,983
15,598,045
TOTAL
59,409,919
35,568,732
25,500,000
25,500,000
2,802,594
1,533,896
28,302,594
27,033,896
SCHEDULE 3: SECURED LOANS - Term Loan (including Interest Accrued and Due Rs.24,15,243)
SCHEDULE 4: UNSECURED LOANS 38,000,000
38,000,000
Inter Corporate Deposit Interest accrued and due on Inter Corporate Deposits
22,000,018 4,180,004 1,045,001 15,730,017 10,000,000 25,730,017
Share Premium Account TOTAL
This Year Rs.
TOTAL 16,775,013 10,000,000 26,775,013
SCHEDULE 5: FIXED ASSETS
Rs.
Particulars
Lands - Freehold Lands - Leasehold Buildings Plant & Machinery Office Equipment Furniture & Fixtures Computers Vehicles TOTAL PREVIOUS YEAR
As at 01.04.2009 396,544 54,000 14,475,707 30,477,564 330,222 107,835 447,015 3,351,962 49,640,849 48,080,249
Gross Block Additions Deletions 29,255 911 1,395 37,533 69,094 1,622,462
16,445 824,348 840,793 61,862
As at 31.03.2010 396,544 54,000 14,475,707 30,506,819 331,133 109,230 468,103 2,527,614 48,869,150 49,640,849
Upto 01.04.2009 1,760,662 6,876,481 291,146 70,676 320,999 1,312,225 10,632,189 8,237,977
Depreciation Additions Deletions 351,797 1,452,797 3,668 5,362 51,150 306,534 2,171,308 2,415,124
14,885 611,521 626,406 20,912
Upto 31.03.2010 2,112,459 8,329,278 294,814 76,038 357,264 1,007,238 12,177,091 10,632,189
Net Block As at As at 31.03.2010 31.03.2009 396,544 396,544 54,000 54,000 12,363,248 12,715,045 22,177,541 23,601,083 36,319 39,076 33,192 37,159 110,839 126,016 1,520,376 2,039,737 36,692,059 39,008,660 39,008,660 -
121
Cauvery Palm Oil Limited SCHEDULES TO ACCOUNTS SCHEDULE 6: PROJECT DEVELOPMENT COST As per last Balance Sheet Less : Written Off for the year TOTAL SCHEDULE 7: CURRENT ASSETS, LOANS & ADVANCES INVENTORIES (At Cost) Stock of Stores & Spares Stock of Crude Palm Oil Stock of Seedlings SUNDRY DEBTORS (Unsecured, considered good) Debts outstanding for more than six months Other Debts CASH & BANK BALANCES Cash on hand Balance with Scheduled Banks in Current Accounts Fixed Deposit with Bank LOANS & ADVANCES (Unsecured and considered good) Advances recoverable in cash or in kind or for value to be received Interest Receivable Deposits TOTAL SCHEDULE 8: CURRENT LIABILITIES & PROVISIONS CURRENT LIABILITIES Sundry Creditors - Total outstanding dues of Micro Enterprises and Small Enterprises - Others - Investor Education & Protection Fund Advance from Customers Other Liabilities PROVISIONS - For Bonus - For Super Annuation - For Leave Encashment - For Fringe Benefit Tax TOTAL SCHEDULE 9: MISCELLANEOUS EXPENDITURE (To the extent not written off or adjusted) Preliminary Expenses As per the Last Balance Sheet Less : Written off during the year TOTAL (A) Pre-Operative Expenses - Nursery Operations Less : Written off during the year TOTAL (B) Pre-Project Activities - Cuddalore & Villupuram Districts Incurred during the year TOTAL (C) TOTAL (A+B+C) SCHEDULE 10: INCOME Sales - Palm Oil Mill Sale of Crude Palm Oil Sale of Oil Palm Nuts Revenue from Nursery Operations Sprouts Revenue Seedlings Revenue Other Income Interest Received on Deposits Gain on Fluctuation of Foreign Exchange Profit on sale of Fixed Assets Miscellaneous Income SCHEDULE 11: MATERIALS Raw Materials Consumed Opening Stock Add: Purchases during the year Less: Closing Stock Inventory Change Opening Stock of Finished Goods Less: Closing Stock of Finished Goods
122
This Year Rs.
Previous Year Rs.
14,950,000 1,150,000 13,800,000
16,100,000 1,150,000 14,950,000
657,197 230,480 18,930,645 19,818,322
1,146,019 469,937 19,641,687 21,257,643
8,803,530 5,720,320 14,523,850
4,123,100 10,455,707 14,578,807
5,976 175,170 122,548 303,694
37,562 238,736 706,445 982,743
652,837 65,158 717,995
725,220 13,117 97,261 835,598
624,066 19,377 9,733,799 10,377,242
2,366,667 168,025 3,394,584 5,929,276
327,347 623,235 950,582
607,711 1,147,582 845,647 15,000 2,615,940
314,312 314,312 18,739,082 18,739,082 18,739,082
6,067 6,067 628,616 314,304 314,312 18,739,082 18,739,082 19,053,394
12,274,765 1,074,042 13,348,807
13,204,369 1,862,918 15,067,287
8,268,540 8,268,540
9,420,000 14,034,055 23,454,055
21,504 66,082 196,611 284,197
14,293 49,950 64,243
8,711,625 8,711,625
10,744,828 10,744,828
469,937 230,480 239,457 8,951,082
236,213 469,937 (233,724) 10,511,104
SCHEDULE 12: PAYROLL COST Salaries, Wages, Bonus Contribution to Provident and other Funds Staff Welfare Expenses SCHEDULE 13: EXPENSES Advertisement and Sales Promotion Auditors' Remuneration Carriage and Freight Insurance Legal and Professional Charges Miscellaneous Expenses Nursery Daily Expenses Postage, Telephone and Stationery Power, Light and Fuel Loss on Sale of Assets Bad Debts Written Off Rates and Taxes Rent Repairs and Maintenance - Building - Machinery - Others Travelling and Motor Car Expenses SCHEDULE 14: INTEREST & FINANCE CHARGES On Fixed Loans - Banks - Others On Other Loans - Banks - Bank Charges
This Year Rs.
Previous Year Rs.
14,582,810 886,575 279,141 15,748,526
13,195,851 967,378 256,107 14,419,336
251,339 354,972 240,637 237,270 1,349,144 876,852 6,616,850 454,415 659,964 1,166,730 102,320 1,138,816
382,142 245,000 1,686,112 305,653 1,634,435 755,619 9,891,028 736,744 917,290 40,950 127,871 964,870
13,600 427,591 52,360 4,524,339 18,467,199
49,495 510,293 28,408 5,750,338 24,026,248
4,316,240 3,113,993
705,775 2,539,603
1,399,805 233,415 9,063,453
2,297,210 298,683 5,841,271
SCHEDULE 15 : NOTES TO ACCOUNTS 1. Significant Accounting Policies a. Cost Convention The financial statements have been prepared and presented under the historical cost convention, on the accrual basis of accounting and comply with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956 (‘the Act’), to the extent applicable. b. Revenue Recognition All receivables and expenditures are accounted on accrual basis except where stated otherwise. c. Sales Sales are exclusive of Sales Tax/VAT. d. Valuation of Stock of Seedlings The Valuation of stock of seedlings is at actual cost. The Valuation of Stores, Tools and Spares, Crude Palm Oil and Nuts are valued at cost or net realisable value whichever is lower. e. Fixed Assets Fixed Assets are stated at cost, which include all direct expenses incurred to bring the assets to the working condition for its intended use. f. Depreciation The Depreciation on Fixed Assets is calculated on Straight Line Method at rates specified in the Schedule XIV of the Companies Act, 1956. Depreciation is charged on a pro-rata basis for assets purchased/sold during the year. Individual assets costing Rs. 5,000/- or less are depreciated in full in the year of purchase. Depreciation on assets purchased against grant in aid is adjusted against capital reserve. g. Employee Benefits a) Short-term employee benefits: All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries, wages, performance incentives, etc. are recognised at actual amounts due in the period in which the employee renders the related service. b) Post-employment benefits: (i) Defined Contribution Plans: Payments made to defined contribution plans such as Provident Fund are charged as an expense as they fall due. (ii) Defined Benefit Plans: Gratuity: The Company accounts its liability for future gratuity benefits based on actuarial valuation as at the Balance Sheet date, determined using the Projected Unit Credit method. Gratuity benefit is funded with Life Insurance Corporation of India. Actuarial gains and losses are recognised immediately in the Profit & Loss Account. Leave Encashment: Liability for Leave encashment payable at the time of retirement/resignation determined as on the Balance Sheet date, based on actuarial valuation using the Projected Unit Credit Method, is provided for. Actuarial gains and losses in respect of such benefits are charged to the Profit and Loss Account. Other Benefits: All other benefits are either paid or provision is created in the Accounts.
Annual Report 2009–2010 h.
2.
3. 4.
5.
6.
7. 8.
9.
Government Grants Grants in terms of Capital/Investment Subsidy are treated as Capital Reserve. i. Foreign Exchange Fluctuations Transactions in foreign currency are recorded at the exchange rates prevailing on the date of the transaction. Assets and liabilities related to foreign currency transactions, remaining unsettled at the year-end, are stated at year-end rates. Exchange gains/ losses are recognised in the Profit and Loss Account. j. Borrowing Cost The Company had availed Term Loan from a Bank and the funds were utilised for the purchase of Assets in the regular course of the business of the Company. The Company also availed Working Capital facility from the said Bank. The interest cost on these loans is included in the finance charges. The interest cost of this Term Loan and the Working Capital facility is apportioned between Nursery Operations and Palm Oil Mill in the ratio of 60 : 40, which is the ratio of Income of these activities. k. Income Tax Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred Tax assets, subject to consideration of prudence, are recognised and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. The tax effect is calculated on the accumulated timing difference at the year-end, based on the tax rates and laws enacted or substantially enacted on the balance sheet date. l. Earnings Per Share The basic earnings per share are computed using the weighted average number of common share outstanding during the period. Diluted earning per share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the period, expcept where the results would be anti-dilutive. m. Intangible Assets The Company did not acquire any Intangible Asset during the year. n. Miscellaneous Expenditure i. The Miscellaneous Expenditure is amortised over a period of 5 years commencing from the year 2004-05, as allowed under Section 35D of the Income-Tax Act. ii. Pre-operative Expenses of Rs. 15,71,543/- representing the net of expenditure over the income upto 31.03.2005, after considering stock of seedlings as on that date for the Nursery Operations, is being written off in 5 years commencing from the financial year 2005-2006. iii. Pre Project Expenses are written off in the year the expenses are incurred. o. Project Development Cost The Company writes off the balance Project Development Cost of Rs. 230 Lacs (after netting of the Revaluation Reserve of Rs. 630 Lacs) over a period of twenty years. From the financial year 2008-09 Company has changed the accounting policy for treatment of project development cost, as per the new policy the expenses incurred towards the project development cost will be charged off in the same year. Contingent Liabilities. The Company has given a Bank Guarantee of Rs. 10 Lacs (Previous Year: Rs.10 Lacs) to Government of Tamil Nadu, through the Commissioner of Agriculture. The common expenses of Nursery Operations and Palm Oil Mill are apportioned in the appropriate working ratios. The Company commenced Area Development Activity in Cuddalore and Villupuram Districts during 2006-2007 based on the Allotment Letter issued by Government of Tamil Nadu. The expenses capitalised upto March 2008 totalling to Rs. 187.39 Lacs shall be written off in the subsequent years. The Term Loan and Bank Overdraft Facility from City Union Bank is secured by Equitable Mortgage of Palm Oil Mill Land, Buildings and Hypothecation of Plant and Machinery and other equipments, present and future, situated at the Palm Oil Mill and stock of oil palm seedlings at Company’s Nurseries and the said loans are further guaranteed by a comfort letter from Godrej Agrovet Limited. The Company has been granted Financial Assistance in the form of Grant-in-aid by the Government of India of Rs. 240 Lacs for establishment of demonstration unit of oil palm processing mill of 2.5 Tonnes per hour capacity at a total cost of Rs. 400 Lacs. Against this Financial Assistance, during the financial years 2002-03 and 2003-04, the Company received a total financial assistance of Rs. 2,20,00,018/-. This amount is credited to the ‘Capital Reserve’ and shown under the Head ‘Reserves and Surplus’. Leasehold Land is not amortised over the period of the Lease. Earnings Per Share: This Year Previous Year Profit/(loss) after tax and prior period items (Rs.) (32,919,338) (19,335,868) Weighted average number of equity shares outstanding 3,800,000 3,800,000 Basic & Diluted earnings per share (8.66) (5.09) Nominal value of shares – Rs. 10.00 10.00 The Company has no financial leases. Operating leases are in the nature of lease of Nursery Lands with no restrictions and renewable at mutual consent. The Company’s leasing arrangements are in respect of operating leases for premises occupied by the Company. These leasing arrangements are cancellable, and are renewable on a periodic basis by mutual consent on mutually accepted terms. The aggregate lease rental payable by the Company and charged to Profit and Loss Account (Schedule 13) is as follows: Particulars Lease rental paid during the year Future Lease Obligations Due within one year of balance sheet date Due after one year and within five years of balance sheet date Due after five years of balance sheet date
This Year Rs. 1,138,816
Previous Year Rs. 938,720
1,100,438 1,829,982 -
1,088,475 2,428,348 -
10. As per the information available with the Company, there is no overdue outstanding payable to Small Scale Industrial Units as at March 31, 2010. 11. Under the Micro, Small and Medium Enterprises Development Act, 2006, which came into force on October 2, 2006, the Company is required to make certain disclosures relating to Micro, Small and Medium Enterprises. The Company is in the process to compiling and assimilating the relevant information from its suppliers about their coverage under the Act. Since the relevant information is not readily available, no disclosures have been made in the Accounts. 12. Disclosure Under AS – 15 : I. Defined Contribution Plans: Contribution to Defined Contribution Plan, recognised as expense for the year are as under: This Year Rs. Employers’ Contribution to Provident Fund 886,575 II. Defined Benefit Plan: a. Contribution to Gratuity Fund The Company makes provision for gratuity in the books of accounts for qualifying employees. Gratuity is payable to all eligible employees on superannuation, death or on separation/termination in terms of the provisions of the Payment of Gratuity Act. Reconciliation of the projected benefit obligations This Year Rs. Change in projected benefit obligation Obligations at period beginning Service Cost Interest Cost Benefits Paid Actuarial (Gain)/Loss Obligations at period end
807,305 187,535 64,584 (371,202) (29,356) 658,866 This Year Rs.
Reconciliation of present value of obligation and fair value of plan assets Fair Value of plan assets at the end of the year Present Value of defined benefit obligation at the end of the year Liability recognised at the balance sheet
710,341 658,866 51,475 This Year Rs.
Gratuity cost for the period Service cost Interest cost Expected return on plan assets Actuarial (Gain)/Loss Net Gratuity Cost
187,535 64,584 (80,300) (26,851) 144,968
Assumptions Discount Rate Salary Escalation Rate
8% 5%
13. Deferred Tax This Year In Rs. A.
Deferred Tax Liabilities arising from: Differences between carrying amount of fixed Assets in financial statements & the Income Tax Return
5,102,587 5,102,587
B.
Deferred Tax Assets arising from: Provision for Gratuity Provision for Bonus Provision for Leave Encashment Unabsorbed depreciation allowance carried forward as per Income Tax Act, 1961
– 97,355 77,685 4,927,547
5,102,587 The deferred tax asset as at March 31, 2010 computed on unabsorbed depreciation amounts to Rs. 8,603,305 (Previous Year Rs. 8,647,054). However, the same is restricted to the amount of deferred tax liability on timing differences amounting to Rs. 4,927,547. The difference amounting to Rs. 3,675,758 has not been recognised in the absence of virtual certainty of future taxable income in accordance with Accounting Standards Interpretation (ASI) 9, on “Virtual certainty supported by convincing evidence”, issued by the Institute of Chartered Accountants of India. The tax impact for the above purpose has been arrived by applying tax rate of 30.99% being prevailing tax rate for Indian Companies under Income Tax Act, 1961. 14. The additional information pursuant to the provisions of paragraphs 3 and 4 of Part II of Schedule VI of Companies Act, 1956. A. Description of Capacities, Production, Turnover, etc. Sl. No. Palm Oil Mill a. b. c. d. e. f.
Licensed Capacity (Fresh Fruit Bunches) Installed Capacity (Fresh Fruit Bunches of Oil Palm) Opening Stock Production (Crude Palm Oil) Sales Closing Stock
This Year (in MT) 12500 12500 14.337 364.624 370.236 8.725
Previous Year (in MT) 12500 12500 7.660 365.510 358.833 14.337
123
Cauvery Palm Oil Limited B.
Turnover
Sl. No. Particulars a. Crude Palm Oil b. C.
MT Rs. MT Rs.
Oil Palm Nuts
Fresh Fruit Bunches of Oil Palm (FFBs) C.I.F. Value of Imports
This Year MT 2079.570
Previous Year MT 1987.573
This Year Rs NIL
Previous Year Rs 3,427,481
2.
Oil Palm Sprouts Value of Raw Material Consumed
Sl. No. Particulars
This Year Previous Year Rs. Rs. a. Imports 0% NIL NIL b. Indigenous 100% 8,951,082 10,511,104 15. Information as required under Part IV, Schedule VI of the Companies Act, 1956 is given in the Annexure. 16. The previous year figures have been regrouped and reclassified wherever necessary. 17. Segment Information for Tthe Year ended March 31, 2010 (i) Information about Primary business Segments Rs.'000 This Year Revenue
Total Sales Less : Inter-segment External Sales Result Segment Result Unallocated expenditure net of unallocated income Interest expenses Interest Income Dividend Income and Profit on sale of Investments Profit before taxation and exceptional items Provision for taxation Profit after taxation and before exceptional items Exceptional Items Prior years adjustments Profit after taxation and exceptional items Other Information Segment assets Segment liabilities Capital expenditure Depreciation Non-cash expenses other than depreciation
Previous year
Area Oil Palm Expansion Plantations & Nursery Unallocated (A) (B) 13,349 8,269 263 13,349
8,269
(3,211)
(20,929)
Area Expansion & Nursery Unallocated (B) 23,454 50
Total (A)+(B) 21,881
Oil Palm Plantations (A) 15,067
21,881
15,067
23,454
50
38,571
263 (23,877)
(1,884)
(11,391)
50
(13,225)
5,841 14
5,841 14
(5,777)
(19,052)
(5,777)
(283) (19,335)
263
9,063 21
(iii) Other related parties where persons mentioned (v) below exercise significant influence : Godrej IJM Palm Oil Limited Godrej Gold Coin Aquafeed Limited Godrej Tyson Foods Ltd. (iv) Key management person Mr. B. S. Yadav Mr. R. R. Govindan The following transactions were carried out with the related parties in the ordinary course of business : Rs. '000 Nature of Transactions
Sl. No. Particulars a. E.
Previous Year 358.833 13,204,369 251.558 1,862,918
Break-up of Raw Material Consumed
Sl. No. Particulars a. D.
This Year 370.236 12,274,765 247.635 1,074,042
9,063 21
Total (A)+(B) 38,571
1
Expenses Charged by other Companies
2
Expenses Charged to other Companies
3
Purchase of materials/finished goods
4
Sale of materials/finished goods
5
Inter Corporate Deposit Accepted
6
Inter Corporate Deposit Repaid
7
Recoveries made by other Companies
8
Fixed Assets Purchased
9
Fixed Assets Sold
10 Outstanding Payables 11 Outstanding Receivable 3.
Significant Related Party Transactions : Nature of Transactions
Holding Amount Fellow Amount Companies Subsidiaries (i)
(3,211) (3,211)
(3,211) 162,770 162,770 5 10,036
(20,929) (20,929)
(8,779) (32,919)
(1,884)
(8,779) (32,919)
(283) (2,167)
(20,929)
(8,779) (32,919)
(2,167)
64 2,141
162,770 162,770 69 12,177
135,923 135,923 1,623 8,360
(11,391) (11,391)
(11,391)
2,272
(5,777)
1
Expenses Charged by Godrej other Companies Agrovet Ltd.
2
Expenses Charged to other Companies
3
purchase of materials/finished goods
4
Sale of materials/ finished goods
Godrej Agrovet Ltd.
5
Inter Corporate Deposit Accepted
Godrej Agrovet Ltd.
6
Inter Corporate Deposit Repaid
Godrej Agrovet Ltd.
7
Recoveries made by other Companies
Godrej Agrovet Ltd.
8
Fixed Assets Purchased
Godrej Agrovet Ltd.
9
Fixed Assets Sold
Godrej Agrovet Ltd.
(19,335) 135,923 135,923 1,623 10,632 -
Information about Secondary business Segments The Company operates only within India and hence the information related to Secondary Business Segment is not furnished. (iii) Notes (i) The Company is organized into two business segments, namely (a) Oil Palm Plantation business (b) Agri-business - comprising of plant growth promoters, pesticides etc. Segments have been identified and reported taking into account, the nature of products and services, the differing risks and returns, the organisation structure, and the internal financing reporting systems. (ii) The Segment revenue in each of the above business segments consists of sales (net of returns, sales tax, rebates etc.) (iii) The Segment revenue in the geographical segments considered for disclosure are as follows : (a) Revenue within India includes sales to customers located within India (b) Revenue outside India includes sales to customers located outside India (iv) Segment Revenue, Results, Assets and liabilities include the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis. 18. RELATED PARTY DISCLOSURES: Related party disclosures as required by AS - 18, "Related Party Disclosures", are given below: 1. Relationships : (i) Holding Companies : Godrej Agrovet Limited (GAVL) holds 90% in the Company. GAVL is the subsidiary of Godrej Industries Limited (GIL) & GIL is the subsidiary of Godrej & Boyce Mfg. Co. Ltd., the ultimate Holding Company. (ii) Fellow Subsidiaries : Golden Feed Products Limited Godrej Oil Palm Limited
Godrej Agrovet Ltd.
(ii) 431 Godrej Oil Palm Ltd. 3,311 29 Godrej Oil Palm Ltd. Godrej Oil Palm Ltd.
(ii)
124
Holding Fellow Other Related Companies Subsidiaries Parties (i) (ii) (iii) 431 2,683 3,311 29 1,208 52 83 1,691 384 258 25,500 28,055 25,500 2,970 2 32 211 4,769 27,872 3,311 50
10 Outstanding Payables Godrej Agrovet Ltd.
1,691 Godrej Oil Palm Ltd. 258 - Godrej Oil Palm Ltd. 28,055 25,500
2,683 1,208 Godrej IJM Palm Oil Ltd. 83
52 -
384 25,500 -
2,970
Godrej IJM Palm Oil Ltd.
32
2 -
211 4,769 Godrej Oil Palm Ltd. 3,311
11 Outstanding Receivable
Other Amount Related Parties (iii)
27,872 Godrej IJM Palm Oil Ltd.
50 -
Annual Report 2009–2010 19. Additional information as required under part iv of schedule vi of the companies act, 1956 Balance Sheet Abstract and Company's General Business Profile: I.
II.
III.
IV.
V.
Registration Details: Registration No. State Code Balance Sheet Date Capital Raised during the year: Public Issue Rights Issue Bonus Issue Private Placement Position of Mobilisation and Deployment of Funds: Total Liabilities Total Assets Source of Funds: Paid up Capital Reserves & Surplus Secured Loans Unsecured Loans Application of Funds: Net Fixed Assets Investments Net Current Assets Misc. Expenditure Accumulated Losses Performance of Company: Turnover Total Expenditure Profit/(Loss) Before Tax Profit/(Loss) After Tax Earnings Per Share (Rs.) Dividend Rate Generic names of three Principal Products/Services of Company (as per monetary terms) Item Code No. (ITC Code) Product Description
36551 18 Rs. -
Mumbai, May 17, 2010
V. Krishnamurthy Chairman
A.
162,770,354 162,770,354
50,492,059 24,036,037 18,739,082 58,175,352
B.
C. 21,901,544 54,820,884 (32,919,340) (32,919,340) (8.66) -
Crude Palm Oil Oil Palm Nuts
R. R. Govindan Director
Cash Flow from Operating Activities: Profit before Tax and Operational Items Adjustment for: Depreciation Loss/(Profit) on sale of Fixed Assets Interest Expense Project Development Cost/Miscellaneous Expenditure written off Operating Profit before Working Capital Changes Adjustments for: Inventories Debtors and Other receivables Creditors and Other payables
38,000,000 25,730,017 59,409,919 28,302,594
For and on behalf of the Board Nilesh N. Pingale Company Secretary
CASH FLOW STATEMENT FOR THE PERIOD ENDED MARCH 31, 2010
Cash Generated from Operations Direct taxes Paid Net Cash Generated from Operating Activities Cash from Investing Activities: Acquisition of Fixed Assets Proceeds from sales of Fixed Assets Net Cash used in Investing Activities Cash from Financing Activities: ICD received from GAVL ICD Repaid to Sujo Lands and Properties ICD Repaid to Godrej Agrovet Limited (Decrease)/ Increase in Cash Credit/ Loan from Banks (net) Interest Paid Net Cash used in Financing Activities Net Increase/(Decrease) in Cash and Cash Equivalents Cash and Cash equivalents (Opening Balance) Cash and Cash equivalents (Closing Balance)
This Year Rs.
Previous Year Rs.
(32,919,340)
(19,052,868)
1,126,312 (66,082) 9,063,453
1,370,123 40,950 5,841,271
1,464,312 11,587,995 (21,331,345)
1,470,371 8,722,715 (10,330,153)
4,394,490 (16,936,856) (16,936,856)
(7,301,621) (7,519,819) 4,951,576 (9,869,864) (20,200,017) (283,000) (20,483,017)
211,375
(1,622,462) (1,622,462)
1,439,321 172,560 2,782,608
(69,094) 280,469 -
27,500,000 (2,500,000) (7,000,000)
25,109,885 (9,063,453) 16,046,432
10,714,750 (5,841,271) 22,873,479
(679,049) 982,743 303,694
768,000 214,743 982,743
For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants
For and on behalf of the Board
Nilesh N. Pingale ERMIN K. IRANI Company Secretary Partner Membership No. 35646 Mumbai, May 17, 2010
V. Krishnamurthy Chairman
R. R. Govindan Director
125
Natures Basket Limited DIRECTORS’ REPORT FOR THE PERIOD ENDED MARCH 31, 2010 DIRECTORS’ RESPONSIBILITY STATEMENT:
To, The Members Your Directors hereby present the Second Annual Report on the business and operations of the Company together with the Statements of Audited Accounts of the Company for the year ended March 31, 2010.
As required under the provisions of Section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm: i)
that in the preparation of the Annual Accounts for the year ended March 31, 2010, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
ii)
that the Directors had selected such accounting policies and applied consistently and made judgements and estimates that were 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 ended March 31, 2010 and the loss of the Company for the year under review;
iii)
that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv)
that the Annual Accounts for the year ended March 31, 2010, have been prepared on a ‘going concern’ basis.
FINANCIAL RESULTS AND PERFORMANCE: (Rs in Lac) Particulars Total Income
THIS YEAR PREVIOUS YEAR 3391.23
1553.00
Loss before taxation
852.64
702.14
Loss after taxation
825.39
699.64
Balance brought forward from previous year Balance carried forward to Balance sheet DIVIDEND:
699.64
0.00
1525.03
699.64
In view of the losses incurred, your Directors have not recommended any Dividend for the year 2009-2010. REVIEW OF OPERATIONS AND FUTURE OUTLOOK: During the year under review business responded very well to several operational improvement initiatives. The Overall growth level of approx 70% in a difficult business year established that the business proposition amongst core target consumers is well accepted. In store, layouts were altered to make it more consumer friendly and to enable consumers to spend more time browsing through products. Several initiatives on greater customer interaction and service orientation helped the business extract greater revenues through increase in average bill values by at least Rs 125 per store per transaction from the same customer. Inventories were controlled and stock rotation was improved by nearly 50%. Control of inventory also enabled the business to limit its losses through expiry, damages and wastage of food products to significantly reduced levels as compared to the previous financial year. Renegotiation with suppliers helped the business improve its operating margins substantially. Several initiatives were undertaken on the cost front to limit or minimize the fixed expenses including renegotiation of rentals, measures to control electricity costs as well as actions to control the cost of consumables inside the stores. This was also the first year in which the business expanded from Mumbai into another city - Delhi. The initial response to the stores and to our service levels in Delhi has been very positive. The future outlook for the business appears bright with most Mumbai stores poised to break even (at store level). Also the business is set to expand its foot print further into atleast one more metro city besides planning expansion within Mumbai and Delhi. FIXED DEPOSIT: Your Company has not accepted any deposit from public as contemplated under Section 58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposit) Rules, 1975, during the year under review.
AUDITORS: You are requested to appoint Auditors for the current year and fix their remuneration. The retiring Auditors M/s. Kalyaniwalla & Mistry, Chartered Accountants, Mumbai are eligible for reappointment. ADDITIONAL INFORMATION: The additional information required to be given under the Companies Act, 1956, has been laid out in the Schedules attached to and forming part of the Accounts. The Notes to the Accounts referred to in the Auditors’ Report are self-explanatory and therefore do not call for any further explanation. STATUTORY INFORMATION: A)
Conservation of Energy, Technology absorption and Foreign Exchange earnings and outgo: The information in respect of these matters, required under Section 217 (1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 and forming part of the Directors’ Report is given in the Annexure “A” to this report.
B)
Particulars of Employees: Mr. Mohit Khattar is the only employee covered under the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) (Amendment) Rules, 2002.
ACKNOWLEDGEMENT: Your Board of Directors takes this opportunity to express its gratitude for the assistance and co-operation received, especially in such tough times and difficult circumstances faced by the Company, from bankers, Government authorities, customers and vendors all of whom have contributed to the Company’s working. Your Company also places on record its appreciation for the dedicated services of all its employees.
HOLDING COMPANY:
FOR AND ON BEHALF OF THE BOARD
Your Company is subsidiary of Godrej Industries Limited as defined under Section 4(1) (b) of the Companies Act, 1956. SUBSIDIARIES: The Company has no subsidiary companies during the year under review.
MOHIT KHATTAR Managing Director
Mumbai, May 21,2010
A. MAHENDRAN Director
DIRECTORS:
ANNEXURE 'A'
The following are the current Directors of the Company:
ANNEXURE FORMING PART OF THE DIRECTORS’ REPORT:
Mr. Mohit Khattar Ms. Tanya Dubash Mr. A. Mahendran Mr. Mohit Khattar who was appointed as Additional Director of the Company in the Board Meeting dated August 25, 2009 to hold office upto the date of Annual General Meeting has been confirmed as Director in the Annual General Meeting held on September 22, 2009. Mr. Mohit Khattar has been appointed as Managing Director of the Company for the period of three years w.e.f. August 25, 2009 who is not liable to retire by rotation. Ms. Tanya Dubash and Mr. A. Mahendran who were appointed as Additional Director to hold office upto last Annual General Meeting have been confirmed as Directors of the Company in the Annual General Meeting of the Company held on September 22, 2009. Ms. Tanya Dubash retires by rotation at the ensuing Annual General Meeting of the Company in accordance with Section 256 of the Companies Act, 1956 and Article 124 of the Articles of the Association of the Company and being eligible offers herself for reappointment.
126
INFORMATION PURSUANT TO SECTION 217(1) (e) OF THE COMPANIES ACT, 1956, READ WITH THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS) RULES, 1988 IN RESPECT OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO: A.
Conservation of Energy, Technology absorption, adaptation and innovation
B.
Foreign Exchange earnings and outgo:
These provisions are Not Applicable the Company during the year under review. Foreign Exchange earnings :
NIL
Foreign Exchange outgo
NIL
:
FOR AND ON BEHALF OF THE BOARD
Mumbai, May 21,2010
MOHIT KHATTAR Managing Director
A. MAHENDRAN Director
Annual Report 2009–2010
REPORT OF THE AUDITORS TO THE MEMBERS OF NATURES BASKET LIMITED 1.
We have audited the attached Balance Sheet of Natures Basket Limited, as at March 31, 2010 and also the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
2.
We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
3.
As required by the Companies (Auditor’s Report) Order, 2003, issued by the Central Government in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.
4.
Further to our comments in the Annexure referred to in paragraph (3) above we report that:
e)
In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.
f)
In our opinion and to the best of our information and according to the explanations given to us, the said financial statements read with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: i) ii) iii)
5.
in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2010; and in the case of the Profit and Loss Account, of the loss for the year ended on that date. in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.
a)
We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit.
On the basis of the written representations received from the Directors as on 31st March, 2010, and taken on record by the Board of Directors, we report that, none of the Directors is disqualified as on March 31, 2010 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.
b)
As referred to in Note 6 of Schedule 11, Notes to Accounts, the managerial remuneration paid to the Managing Director is in excess of the limits laid down under Section 198 read with Schedule XIII of the Companies Act, 1956 by Rs.1,016 thousands. The amount is pending approval from the Central Government.
For and on behalf of KALYANIWALLA AND MISTRY Chartered Accountants Firm Registration No. 104607W
c)
In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of these books.
d)
The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account.
ERMIN K IRANI Partner Membership No. 35646 Mumbai, May 21, 2010
Annexure to the Auditors' Report Referred to in paragraph (3) of our report of even date.
7)
1)
8)
2)
3)
4)
5)
6)
(a)
The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets purchased after April 01, 2009. In respect of fixed assets acquired / purchased prior to April 01, 2009, the register is not complete in respect of particulars such as quantitative details and situation of fixed assets. (b) As explained to us, the Company has a program for physical verification of fixed assets at periodic intervals. In our opinion, the period of verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies have been reported on such verification. (c) In our opinion the disposal of fixed assets during the year does not affect the going concern assumption. (a) The Management has conducted physical verification of inventory at reasonable intervals. (b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. (c) The Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account. (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, clauses (iii)(b) to (iii)(d) of paragraph 4 of the Order are not applicable to the Company for the current year. (b) Consequently, the question of commenting on the rates of interest and other terms and conditions of the loans granted being prejudicial to the interests of the Company, receipt of regular principal and the interest and reasonable steps taken for recovery of principal and interest does not arise. (c) The Company has taken unsecured loans from two companies covered in the register maintained under Section 301 of the Act. The balance outstanding is Rs. 60,568 thousand and the maximum balance during the year is Rs.108,578 thousand. The Company has not taken any loans, secured or unsecured, from firms or other parties covered in the register maintained under Section 301. (d) In our opinion, the rate of interest and the other terms and conditions of the aforesaid unsecured loans taken by the Company, are not prima facie prejudicial to the interest of the Company. (e) As per the information and explanations given to us, there are no fixed terms of repayment of the principal and hence the question of the regular payment of the principal amount does not arise. The repayment of interest on the aforesaid loans was regular. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weaknesses have been noticed in internal controls. (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the particulars of contracts and arrangements referred to in Section 301 of the Companies Act, 1956, have been entered into the register required to be maintained under that section. (b) The transactions made in pursuance of such contracts or arrangements, were made at prices which are reasonable having regard to prevailing market prices at the relevant time, where comparable market prices exist. In our opinion, and according to the information and explanations given to us, the Company has not accepted any deposits from the public hence the provisions of Sections 58A and 58AA or any other provisions of the Companies Act, 1956, read with the rules framed thereunder are not applicable.
9)
10)
11) 12) 13) 14) 15) 16) 17) 18) 19) 20) 21)
In our opinion and according to the information and explanations given to us, the internal audit system is commensurate with the size of the Company and the nature of its business. According to the information and explanations given to us, the maintenance of cost records has not been prescribed by the Central Government, under Section 209(1)(d) of the Companies Act, 1956, for any of the Company’s products. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income Tax, Sales Tax, Value Added Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues as applicable, with the appropriate authorities. According to the information and explanations given to us, there are no undisputed dues, payable in respect of above as at March 31, 2010 for a period of more than six months from the date they became payable. (b) According to the information and explanations given to us, there are no dues outstanding of Sales Tax, Income Tax, Wealth Tax, Excise Duty, cess on account of any dispute. As the Company has been registered for a period of less than five years the question of commenting on its accumulated losses being less than fifty percent of its net worth and whether the Company has incurred cash losses in the current financial year and in the immediately preceding financial year does not arise. According to the information and explanations given to us and based on the documents and records produced to us, there are no dues to banks, financial institutions or debenture holders. According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/ mutual benefit fund/ societies. The Company does not deal in shares, securities, debentures and other investments. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions. According to the information and explanations given to us, the term loan was applied for the purpose for which the loan was obtained. According to the information and explanations given to us, and on an overall examination of the Balance Sheet and Cash Flows of the Company, we report that the Company has not utilized funds raised on short term basis for long term investment. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956. The Company did not have outstanding debentures during the year. The Company has not raised any money through a public issue during the year. During the course of our examination of the book of account and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given and representations made by the management, we report that no major fraud on or by the Company, has been noticed or reported during the year. For and on behalf of KALYANIWALLA AND MISTRY Chartered Accountants Firm Registration No. 104607W ERMIN K. IRANI Partner Membership No. 35646
Mumbai, May 21, 2010
127
Natures Basket Limited BALANCE SHEET AS AT MARCH 31, 2010 Schedule
Rs. ‘000
1
70,500 -
SOURCES OF FUNDS SHAREHOLDERS’ FUNDS Share Capital Reserves & Surplus LOAN FUNDS Secured Loans Unsecured Loan
2 3
As at 31.03.2009 Rs. ‘000
70,500
70,500 70,500
153,335
63,008 63,008
42,763 110,572
223,835
TOTAL APPLICATION OF FUNDS FIXED ASSETS Gross Block Less: Depreciation Net Block INVESTMENT DEFERRED TAX ASSET CURRENT ASSETS, LOANS AND ADVANCES Inventories Sundry Debtors Cash and Bank Balances Loans and Advances Other Current Asset
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010
Schedule
107,282 41,853
Sales
65,429 25 3,268
5
For the Period Ended 31.03.2009 Rs. ‘000
333,853
154,515
5,270
Other Income
785 339,123
155,300
EXPENDITURE Purchase of Traded Goods
274,093
133,724
-
16,484
Acquisition of Traded goods on Business Transfer
133,508
74,775 26,299 48,476 431
Rs. ‘000
For the Year Ended 31.03.2010 Rs. ‘000
INCOME
4
Inventory Change
8
(5,697)
(19,672)
Expenses
9
127,327
80,768
Interest & Financial Charges
10
13,101
3,586
15,564
10,624
Depreciation/Amortisation (LOSS) BEFORE TAX
424,388
225,514
(85,265)
(70,214)
Less: Provision For Tax
6
Current Tax 25,936 4,548 5,046 29,299 9 64,838
LESS: CURRENT LIABILITIES & PROVISIONS Liabilities Provisions NET CURRENT ASSETS PROFIT & LOSS ACCOUNT TOTAL NOTES TO ACCOUNTS
As at 31.03.2010 Rs. ‘000
19,672 2,781 661 14,759 37,873
7 61,128 1,101 62,229 2,609 152,504 223,835
22,585 650 23,235 14,638 69,964 133,508
Deferred Tax
-
-
(2,837)
(431)
-
181
Fringe Benefit Tax
112
Fringe Benefit Tax of previous year
(2,725)
(250)
(LOSS) AFTER TAX
(82,540)
(69,964)
(Deficit) Brought Forward
(69,964)
-
(DEFICIT) CARRIED TO BALANCE SHEET
(152,504)
(69,964)
Earnings Per Share (Basic/Diluted) in Rs. (Refer Note 9)
(11.71)
(13.23)
NOTES TO ACCOUNTS
11
11
The Schedules referred to above form an integral part of the Balance Sheet. As per our Report attached.
Signatures to the Balance Sheet and Schedules 1 to 7 and 11
The Schedules referred to above form an integral part of the Profit & Loss Account. As per our Report attached.
Signatures to the Profit & Loss Account and Schedules 8 to 11
For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants
For and on behalf of the Board
For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants
For and on behalf of the Board
ERMIN K. IRANI Partner Membership No. 35646
MOHIT KHATTAR Managing Director
A. MAHENDRAN Director
ERMIN K. IRANI Partner Membership No. 35646
Mumbai, May 21, 2010
MOHIT KHATTAR Managing Director
A. MAHENDRAN Director
Mumbai, May 21, 2010
SCHEDULES ATTACHED AND FORMING PART OF THE ACCOUNTS FOR THE PERIOD ENDED MARCH 31, 2010 Rs. ‘000 SCHEDULE 1: SHARE CAPITAL AUTHORISED 100,000,000 Equity Shares of Rs.10/- each ISSUED, SUBSCRIBED AND PAID UP 7,050,000 Equity Shares of Rs.10/- each fully paid All the above shares are held by Godrej Industries Limited, the Holding Company and its nominees (Previous year all the above shares were held by Godrej Agrovet Limited, the then Holding Company and its nominees) SCHEDULE 2: SECURED LOANS Term Loan (Secured by hypothecation of tangible fixed assets of the Company, present and future (except motor cars) and Inventory and Debtors.) (Amount due within a year Rs.Nil) Interest accrued and due on Term Loan SCHEDULE 3: UNSECURED LOANS Intercorporate Deposits (Amount due within a year Rs.110,568 thousand, Previous Year Rs.61,100 thousand) Interest accrued and due
128
As at 31.03.2010 Rs. ‘000
As at 31.03.2009 Rs. ‘000
1,000,000
1,000,000
70,500
70,500
SCHEDULE 4: FIXED ASSETS ASSETS
DeducAs At Upto Accum tions 31.12.09 01.04.09 Depn On Assets Taken Over
For the period
NET BLOCK
Assets Taken Over
Additions
On Upto As At As At Deduc- 31.03.10 31.03.10 31.03.09 tions
Computers
7,376
-
2,475
-
9,851
3,893
-
1,885
-
5,778
4,073
3,483
Furniture & Fixtures
5,792
-
1,878
-
7,670
1,307
-
585
-
1,892
5,778
4,486
6,200
-
2,358
-
8,558
687
-
629
-
1,316
7,242
5,513
11,799
-
7,217
47
18,969
1,164
-
650
5
1,809
17,160
10,634
Tangible Assets
Air Conditioners/ Water Coolers
-
DEPRECIATION
As At 01.04.09
Equipments
42,400
Rs. ‘000
GROSS BLOCK
Motor Cars Leasehold Improvements
435
-
-
11
424
143
-
41
5
180
244
291
35,797
-
18,637
-
54,434
18,551
-
11,036
-
29,587
24,847
17,246
-
7,376
553
-
738
-
1,291
6,085
6,823
58 107,282
26,299
-
15,564
10
41,853
65,429
48,476
-
15,675
10,624
-
26,299
48,476
-
Intangible Assets
363 42,763
-
110,568
61,100
4 110,572
1,908 63,008
Goodwill Total Previous Year
7,376
-
-
74,775
-
32,565
-
62,607
12,169
-
74,775
Annual Report 2009–2010
SCHEDULES ATTACHED AND FORMING PART OF THE ACCOUNTS FOR THE PERIOD ENDED MARCH 31, 2010 SCHEDULE 5: INVESTMENTS
Rs. ‘000 LONG TERM - TRADE EQUITY SHARES AT COST 2500 Equity Shares of Rs.10/- each fully paid in The Saraswat Co-operative Bank Limited (Purchased during the year) SCHEDULE 6: CURRENT ASSETS, LOANS AND ADVANCES (A) INVENTORIES Traded Goods Packing Materials
As at 31.03.2010 Rs. ‘000
As at 31.03.2009 Rs. ‘000
25
-
25
-
25,368 568 25,936
(B)
SUNDRY DEBTORS (Unsecured and considered good unless otherwise stated) Debts outstanding for a period exceeding six months Other Debts
-
-
4,548
2,781 2,781
4,548 (C)
CASH AND BANK BALANCES Cash in Hand Balances with Scheduled Banks (a) In Current Accounts (b) In Fixed Deposit Accounts (Rs.650 thousand (Previous Year Rs.Nil) pledged with Government Authorities)
(D) OTHER CURRENT ASSET Interest Accrued (E) LOANS AND ADVANCES (Unsecured and considered good unless otherwise stated) Advances recoverable in cash or in kind or for value to be received Advances to Creditors Deposits (a) Government Authorities (b) Others Advance Payment of Taxes (Net of provision for taxation Rs.292 thousand, Previous Year Rs.181 thousand)
1,544
423
2,852 650
238 -
5,046
661
9
-
6,598
975
744
-
261 21,696
186 13,569
-
29 29,299 64,838
SCHEDULE 7: CURRENT LIABILITIES AND PROVISIONS (A) CURRENT LIABILITIES Investor Education and Protection Fund Sundry Creditors (a) Dues to Micro, Small and Medium enterprises (Refer Note 2) (b) Others Other Liabilities (B)
PROVISIONS Gratuity Leave Encashment
19,672 19,672
14,759 37,873
-
-
-
-
44,314 -
44,314 16,814 61,128
16,345 16,345 6,240 22,585
1,101 62,229
413 237 650 23,235
581 520
Rs. ‘000 SCHEDULE 8: INVENTORY CHANGE Opening Stock of Traded Goods Traded Goods Less : Closing Stock Traded Goods SCHEDULE 9: EXPENSES Salaries, Wages, Gratuity & Allowances Contribution to Provident Fund and other Funds and Administration Charges Employee Welfare Expenses Labour Charges Consumption of Packing Material Rent Rates & Taxes Repairs & Maintenance - Others Insurance Postage, Telephone and Stationery Computer Expenses Electricity Charges Licence Fees Auditors’ Remuneration Legal & Professional Fees Freight, Coolie and Cartage Discount and Selling Expenses Advertisement and Publicity Travelling Expenses Loss on Sale of Fixed Assets General Expenses SCHEDULE 10: INTEREST AND FINANCIAL CHARGES (a) Interest paid on fixed loans Term Loan Inter Corporate Deposits (b)
Other Financial Charges
For the Year For the Period Ended Ended 31.03.2010 to 31.03.2009 Rs. ‘000 Rs. ‘000
19,671
-
25,368 (5,697)
19,672 (19,672)
34,656
17,498
1,635 1,886 11,350 3,437 30,930 233
670 1,075 8,650 21,032 378
880 153 2,209 3,065 14,783 582 513 2,441 5,222 3,341 3,148 1,954 29 4,880 127,327
1,662 78 977 2,639 9,413 114 469 1,750 7,078 613 3,156 620 2,896 80,768
10,645 2,456
2,467 2,467 1,119
13,101
3,586
1,076 9,569
SCHEDULE 11 : NOTES TO ACCOUNTS 1. Significant Accounting Policies a) The financial statements have been prepared on historical cost convention. The Company follows mercantile system of accounting and recognises income and expenditure on accrual basis b) Fixed assets have been stated at cost and include incidental and/or installation/ development expenses incurred in putting the asset to use and interest on borrowing incurred during construction period. Pre-operative expenses for major projects are also capitalised, where appropriate. c) Carrying amount of cash generating units/assets are reviewed at balance sheet date to determine whether there is any indication of impairment. If such indication exists, the recoverable amount is estimated as the net selling price or value in use, whichever is higher. Impairment loss, if any, is recognized whenever carrying amount exceeds the recoverable amount. d) Depreciation /Amortisation has been provided for as under : (a) The Company charges depreciation in respect of additions from the date of addition and upto the date of disposals in respect of disposals. (b) i) Depreciation is provided on the straight line method at the rates specified in schedule XIV to the Companies Act, 1956, except for Computers, which are depreciated over its estimated useful life of four years. ii) Amortisations (i) Leasehold improvements and equipments-Primary lease period (ii) Goodwill is amortised over a period of 10 years e) Trading inventories are valued at lower of cost and net realisable value. These costs include costs incurred in bringing the inventories to their present location and condition. f) Retirement benefits to employees comprise payments under defined contribution plans like provident fund and family pension. Payments under defined contribution plans are charged to the profit and loss account. The liability in respect of defined benefit schemes like gratuity and leave encashment benefit on retirement is provided on the basis of actuarial valuation at the end of each year.
129
Natures Basket Limited SCHEDULES ATTACHED AND FORMING PART OF THE ACCOUNTS FOR THE PERIOD ENDED MARCH 31, 2010 g)
2.
3.
Revenue is recognised when goods are despatched to external customers. Sales are net of returns, sales tax rebates, etc. h) Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets, subject to consideration of prudence, are recognised and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. The tax effect is calculated on the accumulated timing difference at the year-end, based on the tax rates and laws enacted or substantially enacted on the balance sheet date. i) The basic earnings per share is computed using the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the period, except where the results would be anti-dilutive. j) Provisions are recognized in the accounts in respect of present probable obligations, the amount of which can be reliably estimated. Contingent liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. Current Liabilities Disclosure of sundry creditors under current liabilities is based on the information available with the Company regarding the status of the suppliers as defined under the “ Micro,Small & Medium Enterprises Development Act 2006”. Deferred Tax The Deferred Tax Asset as at March 31, 2010 computed on unabsorbed depreciation amounts to Rs.26,188 thousands (Previous Year - Rs. 23,434 thousands). The above amount has not been recognised in the absence of virtual certainity of future taxable income in accordance with Accounting Standard Interpretation (ASI) 9, on “virtual certainity supported by convincing evidence”, issued by the Insitute of Chartered Accountants of India.
7.
Auditors Remuneration
8.
Audit fees Audit under Other Statutes TOTAL Employee Benefits
9.
I. Defined Contribution Plans: Contribution to Defined Contribution Plan, recognised as expense for the period are as under: Employers’ Contribution to Provident Fund 1,429 670 II. Defined Benefit Plans: Contribution to Gratuity Fund The Company makes provision for Grauity in the books of accounts for qualifying employees. Gratuity is payable to all eligible employees on superannuation, death or on separation/ termination in terms of the provisions of the Payment of Gratuity Act or as per the Company’s policy whichever is beneficial to the employees. The following table sets out the funded status of the gratuity plan and the amounts recognised in the Company’s financial statements as at March 31, 2010: Change in present value of obligation Present value of obligation as at April 1, 2009 413 Interest Cost 33 Service Cost 210 Benefits Paid Actuarial (gain)/loss on obligation (75) 581 413 Present value of obligation, as at March 31, 2010 Change in plan assets Fair value of plan assets as at April 1, 2009 Expected Return on plan assets Contributions 413 Benefits Paid Actuarial gain/(loss) on plan assets 2 415 Fair Value of plan assets, as at March 31, 2010 Amount recognised in the Balance Sheet Present value of obligation, as at March 31, 2010 581 Fair value of plan assets as at March 31, 2010 415 413 Net obligation as at March 31, 2010 166 413 Net gratuity cost for the year ended March 31, 2010 Current Service Cost 210 Interest Cost 33 Expected return on plan assets Net Actuarial (gain)/loss to be recognised 77 413 Net gratuity cost 319 413 Assumptions used in accounting for the gratuity plan % Discount Rate 8 8 Salary escalation rate 4 4 Expected rate of return on plan assets 8 The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. The expected return on plan assets is determined considering several applicable factors mainly the composition of the plan assets held, assessed risks of asset management, historical results of the return on plan assets. Earnings Per Share
THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000
4.
5.
The tax effects of significant temporary differences that resulted in deferred tax assets and liabilities are : Depreciation on Fixed Assets 2,904 210 Provision for Gratuity 192 140 Provision for Leave Encashment 172 81 Deferred Tax Asset 3,268 431 Quantitative Details for Sales/Inventories & Purchases Since the Company operates in the gourmet food retailing business, it deals with heterogenous range of products. In view of the same quantitative details have not been disclosed. Disclosure in respect of leases The Company’s leasing arrangements are in respect of operating leases for premises occupied by the Company. These leasing arrangements are cancellable, and are renewable on a periodic basis by mutual consent on mutually acceptable terms. a. The total of future minimum lease payments under cancelable operating leases for each of the following periods : i. ii.
6.
Not later than one year 44,521 Later than one year and not later than five 108,606 years iii. Later than five years b. Lease payments recognised in the statement of Profit & Loss for the period : 30,930 Managerial Remuneration a) Computation of Profit for the purpose of Managerial Remuneration (Loss) After Tax as per Profit & Loss Account Add: Depreciation as per Accounts Managerial Remuneration Provision for Tax (including Deferred Tax) Loss on Sale of Fixed Assets
b)
Less: Depreciation as per Section 350 of the Companies Act, 1956 Net (Loss) for the purpose of Director’s Remuneration 5% thereof Maximum Remuneration permissible under Schedule XIII Part II Section II 1(B) of the Companies Act, 1956 (computed on the basis of inadequacy of profits) Managerial Remuneration i. Salaries ii. Contribution to Provident Fund
25,550 44,278 21,032
(82,540) 15,564 2,766 2,725 29 (61,455) 15,564
(69,964) 10,624 250 (59,090) 10,624
(77,019)
(69,714)
1,750
-
2,753 13 2,766
-
Note: a) All the above items have been included under respective heads under “Expenses” in Schedule 9. b) Performance linked variable remuneration is on the basis of provision made in the books of accounts. Provision for Gratuity has not been considered in the above computation. c) The remuneration paid to the Managing Director is in excess of the remuneration prescribed under Section 198 read with Schedule XIII to the Companies Act, 1956 by Rs.1,016 thousands (previous year Rs.Nil). The Company has made an application for the necessary approval from the Central Government for the remuneration in excess of the prescribed limits.
130
THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000 403 358 110 110 513 469
THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000 (82,540) (69,964) (82,540) (69,964) 7,050 5,288 (11.71) (13.23)
10.
Profit after tax and before extraordinary items (Rs.’000) Profit after tax and after extraordinary items (Rs.’000) Weighted average number of equity shares outstanding Basic and Diluted earnings per share before extraordinary items(Rs.) Basic and Diluted earnings per share after extraordinary (11.71) (13.23) items(Rs.) Nominal value of shares (Rs.) 10 10 Related Party Transactions Related party disclosures as required by AS - 18, “Related Party Disclosures”, are given below’’ 1. Relationships : (i) Holding Company Godrej Industries Ltd. the Holding Company (From 25.08.2009) Godrej Agrovet Limited, the Holding Company (Upto 24.08.2009) Godrej & Boyce Mfg Co. Ltd., the ultimate Holding Company (ii) Fellow Subsidaries Godrej Agrovet Ltd. (From 25.08.2009) Ensemble Holdings & Finance Ltd. (From 25.08.2009) Godrej Properties Ltd. (From 25.08.2009) Godrej International Ltd. (From 25.08.2009) Golden Feed Products Ltd. (Upto 24.08.2009) Cauvery Palm Oil Ltd. (Upto 24.08.2009) Godrej Oil Palm Ltd. (Upto 24.08.2009) (iii) Key management personnel Mr. Mohit Khattar (From 25.08.2009) (iv) Individuals exercising control or significant influence (and their relatives) Mrs. T. Dubash Mr. A. Mahendran
Annual Report 2009–2010
SCHEDULES ATTACHED AND FORMING PART OF THE ACCOUNTS FOR THE PERIOD ENDED MARCH 31, 2010 2.
The following transactions were carried out with the related parties in the ordinary course of business : (i) Details relating to parties referred to in items 1(i), to (iv) above
Holding Fellow Company Subsidiaries (i) (ii) 70,500 72,556 20,753 41,764
1
Nature of Transactions Issue of share capital (incl. Premium)
2
Business acquired during the year
3
Intercorporate deposits taken during the year
4
Intercorporate deposits repaid during the year Interest expense on intercorporate deposits taken
5 6
Outstanding Intercorporate deposits
7
Intercorporate deposits placed during the year Recovery of Intercorporate deposit placed
8 9
Interest income on intercorporate deposit placed
10
Expenses charged by other companies
11
Outstanding receivables, net of (payables)
12
Interest Accrued and due on Intercorporate deposits
13
Sale of Traded Goods
14
Remuneration
61,100 50,000
-
2,922
2,277
1,908 45,500 63,051
-
Rs.’000 Other Related Parties (iii) & (iv)
Nature of Transactions 11
Outstanding receivables, net of (payables)
Holding Company (i) Godrej Industries Ltd. Godrej Agrovet Ltd.
Amount
Fellow Subsidiaries (ii)
Amount
Other Related Parties (iii)
Rs.’000 Amount
(28) (43)
12
Interest Accrued and due on Intercorporate deposits
Godrej Industries Ltd.
Godrej Agrovet Ltd.
4
1,908
13 14
Sale of Traded Goods Remuneration
Mrs. T. Dubash Mr. Mohit Khattar
448 2,766
11.
The previous year’s figures are for a period of nine months and hence are not strictly comparable with those of the current year. Previous period amounts have been reclassified wherever necessary to confirm with current year’s classification.
-
12.
10,000 10,000 31 1,724 619 (28) (43) 4 1,908
3.
Significant Related Party Transactions : Nature of Transactions
1
Issue of share capital (incl. Premium)
Holding Company (i) Godrej Agrovet Ltd.
2
Business acquired during the year
Godrej Agrovet Ltd.
3
Intercorporate deposits taken during the year
Godrej Industries Ltd. Godrej Agrovet Ltd.
4
Intercorporate deposits repaid during the year
Godrej Industries Ltd.
5
Interest expense on intercorporate deposits taken
Godrej Industries Ltd.
Godrej Agrovet Ltd. 6
448 2,766 -
Outstanding Intercorporate deposits
Godrej Industries Ltd. Godrej Agrovet Ltd.
Amount
Fellow Subsidiaries (ii)
Amount
Other Related Parties (iii)
Rs.’000 Amount
70,500 72,556 20,500 Godrej Agrovet Ltd. 253 Godrej Oil Palm Ltd. 61,100 50,000
40,000
1,928 Godrej Agrovet Ltd.
758
994 Godrej Oil Palm Ltd. 1,908 45,500
1,764
-
1,519 -
63,051
7
Intercorporate deposits placed during the year
Godrej Properties Ltd.
8
Recovery of Intercorporate deposit placed
Godrej Properties Ltd.
9
Interest income on intercorporate deposit placed
Godrej Properties Ltd.
10
Expenses charged by other companies
10,000
10,000
31
Godrej Industries Ltd. Godrej Agrovet Ltd.
1,724 619
131
Natures Basket Limited CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010
ADDITIONAL INFORMATION AS REQUIRED UNDER PART IV TO THE COMPANIES ACT, 1956 BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE I
Registration Details Registration No.
U15310MH2008PLC182816
State Code.
11
Balance Sheet Date. II
31.03.2010
Capital Raised during the period
(Amounts in Rs. ‘000)
Public Issue
NIL
Rights Issue
NIL
Bonus Issue
NIL
Private Placement III
Rs. ‘000 A.
NIL
Position of mobilisation and deployment of funds
(Amounts in Rs. ‘000)
Total Liabilities
286,064
Total Assets
286,064
Operating Profit Before Working Capital Changes Adjustments for: Inventories Debtors and Other Receivables Creditors and Other Payables
Sources of Funds Paid-up Capital
70,500
Reserves and Surplus
-
Secured Loans
42,763
Unsecured Loans
110,572 B.
Application of Funds Net Fixed Assets
65,429
Investments
25
Net Current Assets
2,609
Misc Expenditure
-
Accumulated Losses IV
152,504 C.
Performance of Company Turnover
333,853
Total Expenditure
424,388
(Loss) / Profit before tax
(85,265)
(Loss) / Profit after tax
(82,540)
Earnings per share Rs.
(11.71)
(on an annualised basis) Dividend rate % V
-
Generic Names of principal products/services of the Company Item code no
651
Product description
Retail Trade in Vegetables and Fruits together 659 Retail trade in food and food articles, beverages, tobacco and intoxicants not elsewhere classified.
( * represents Heading no of the Harmonised Commodity Description and coding system) For and on behalf of the Board MOHIT KHATTAR Managing Director Mumbai, May 21, 2010
132
A. MAHENDRAN Director
Cash Flow from Operating Activities : (Loss)/Profit Before Taxes Adjustments for: Depreciation Loss On Sale Of Assets Interest expenses Interest income
Cash Generated from Operations Direct Taxes Paid Net Cash Flow from Operating Activities Cash Flow from Investing Activities : Acquisition of Fixed Assets Proceeds from Sale of Fixed Assets Purchase of Investments Intercorporate Deposit Placed Recovery of Intercorporate Deposit Placed Interest Received Net Cash used in Investing Activities Cash Flow from Financing Activites : Proceeds from issue of capital Proceeds from Borrowings Repayment of Borrowings Interest Paid Net Cash used in Financing Activities Net increase in Cash and Cash equivalents Cash and Cash equivalents (Opening Balance) Add: Cash Balance Taken over from Godrej Agrovet Limited Cash and Cash equivalents (Closing Balance)
For the Year For the Period Ended Ended 31.03.2010 31.03.2009 Rs. ‘000 Rs. ‘000 (85,265)
(70,214)
26,197 (59,068)
10,624 2,467 13,091 (57,123)
16,393 (42,675) 83 (42,758)
(5,744) (3,922) 10,769 1,102 (56,021) 210 (56,231)
(32,540)
(12,169) (12,169)
79,683 4,385 661
70,500 384 (2,467) 68,417 17 -
5,046
644 661
15,564 29 10,645 (41)
(6,264) (16,337) 38,994
(32,565) 19 (25) (10,000) 10,000 31
141,868 (50,000) (12,185)
NOTES: 1. The Cash Flow Statement has been prepared under the “Indirect Method” as set out in the Accounting Standard (AS) 3 on “Cash Flow Statements”, and presents cash flows by operating, investing and financing activities. 2. Figures in brackets are outflows/deductions. For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants
For and on behalf of the Board
ERMIN K. IRANI Partner Membership no. 35646
MOHIT KHATTAR Managing Director
Mumbai, May 21, 2010
A. MAHENDRAN Director
Ensemble Holdings & Finance Limited
Annual Report 2009–2010
DIRECTORS’ REPORT FOR THE YEAR ENDED MARCH 31, 2010 TO THE SHAREHOLDERS, Your Directors submit their Report along with the audited Accounts for the year ended March 31, 2010. REVIEW OF OPERATIONS Your Company’s performance during the year as compared with that of the previous year is summarised below:-
Gross Revenue earned Total Expenditure Profit / (Loss) for the year before Tax Provision for Taxation Profit / (Loss) after Tax Adjustment in respect of prior years Profit available for appropriation Proposed Dividend Interim Dividend Dividend Distribution Tax Transfer to Special Reserve Fund u/s 45IC of RBI Act, 1934 Transfer to General Reserve Balance available for set off against b/f deficit in P&L A/c Loss brought forward Loss carried forward
THIS YEAR (Rs.’000)
PREVIOUS YEAR (Rs.’000)
33,240 166 33,074 1,300 31,774 244 32,018 18,871 31,34 64,04 32,02 4,07 (78,663) (78,255)
15,710 167 15,543 1,416 14,127 (13) 14,114 79,26 13,47 28,23 14,11 6,07 (79,270) (78,663)
DIVIDEND The Board of Directors of your Company recommends a final dividend of Rs. 5/- per equity share (Previous year Rs. 2.10 per share) of Rs. 10/- each aggregating to Rs. 188.71 lac. COMPLIANCE WITH GUIDELINES ISSUED BY THE RESERVE BANK OF INDIA Your Company has been granted a Certificate of Registration by Reserve Bank of India to carry on the business as Non-Banking Financial Institution. Your Company has not accepted any public deposits during the year under review, nor does it propose to accept the same. As such, pursuant to Non-Banking Financial Companies (Reserve Bank) Directions, 1998, issued by Reserve Bank of India vide notification No.DFC.114/DG (SPT) dated January 2, 1998, your Company is not required to obtain rating from a rating agency in this regard. Hence, rating for Fixed Deposit obtained from CRISIL in 1996-97 has not been renewed. In view of the above, there are no overdue or unclaimed deposits. DIRECTORS Ms. T.A. Dubash retires by rotation at the ensuing Annual General Meeting and being eligible offer herself for reappointment
During the year under review, Mr. H. K. Press resigned from the Board of the Company w.e.f. May 1, 2010. Mr. B. S. Yadav has been appointed as an Additional Director w.e.f. May 1, 2010. He is being appointed as Diretor, liable to retire by rotation at the forthcoming Annual General Meeting. Mr. Yadav is a Bachelor of Science (Agricultural Sciences) and has done his PGDBM from IIM, Ahmedabad. He has 19 years of experience. Presently he is the Managing Director of Godrej Agrovet Limited. AUDITORS You are requested to appoint Auditors for the current year and to authorise the Board of Directors to fix their remuneration. The retiring auditors, M/s Kalyaniwalla Mistry And Associates, Chartered Accountants are eligible for reappointment. DIRECTORS’ RESPONSIBILITY STATEMENT Pursuant to the provisions contained in Section 217 (2AA) of the Companies Act, 1956, the Directors of your Company confirm: a) that in the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same; b) that they have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that year; c) that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguard of the assets of the Company and for preventing and detecting fraud and other irregularities; d) that they have prepared the annual accounts on a going concern basis. ADDITIONAL INFORMATION The additional information required to be given under the Companies Act, 1956, has been laid out in the Accounts to the extent applicable. The notes to the Accounts referred to in the Auditors’ Report are selfexplanatory and therefore do not call for any further explanation. The information in respect of Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo, required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 has not been given, since such requirement is not applicable to the Company. During the year under review, the Company did not have any employee attracting the provisions of Section 217(2A) of Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 requiring disclosure in the Report. For and on behalf of the Board of Directors M. EIPE Director Mumbai, May 26, 2010
REPORT OF THE AUDITORS
d.
To The Members of ENSEMBLE HOLDINGS & FINANCE LIMITED 1.
2.
3.
4.
We have audited the attached Balance Sheet of Ensemble Holdings and Finance Limited as at March 31, 2010 and also the Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditor’s Report) Order, 2003, as amended by the Companies (Auditors’ Report) (Amendment) Order 2004, issued by the Central Government in terms of Section 227 (4A) of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order. Further to our comments in the Annexure referred to above, we report that: a. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit; b. In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of such books; c. The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of account;
ANNEXURE TO THE AUDITORS’ REPORT Referred to in Paragraph 3 of our report of even date on the accounts of Ensemble Holdings & Finance Limited for
the year ended March 31, 2010: 1. a) The Company had granted unsecured loans to a company listed in the register maintained under section 301 of the Companies Act, 1956. The maximum amount of loan granted to the said company during the year was Rs. 2,25,00,000. No amount is outstanding at the year end. b) In our opinion and according to information and explanations given to us, the rate of interest and other terms and conditions of unsecured loan given by the Company, are prima facie not prejudicial to the interest of the Company. c) All parties have repaid the principal amounts as stipulated and have been regular in the payment of interest. d) The Company had not taken unsecured loans from a Company covered in the register maintained under section 301 of the Companies Act, 1956. 2. a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that all transactions that need to be entered into the register in pursuance of Section 301 of the Companies Act, 1956, have been so entered. b) These transactions have been made at reasonable prices having regard to the prevailing market prices at the relevant time. 3. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956, and the rules framed thereunder. 4. The Company has an internal audit system, which in our opinion, is commensurate with the size and nature of its business. 5. a) According to the records examined by us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Income Tax and other statutory dues as applicable to it. According to the information and explanation given to us, no undisputed amounts payable in respect of statutory dues were outstanding, at the year end for a period of more than six months from the date they became payable. b) According to the information and explanation given to us there are no dues of sales tax, income tax, wealth tax, service tax, excise duty or cess, which have not been deposited on account of any dispute. 6. The accumulated losses of the Company as at end of the financial year are more than fifty percent of its net worth. The company has not incurred cash losses during the current financial year and in the immediate preceding financial year.
5.
In our opinion, the Profit and Loss Account and Balance Sheet dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956; e. In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: (i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2010, (ii) in the case of the Profit and Loss Account, of the Profit of the Company for the year ended on that date (iii) in the case of Cash Flow Statement, of the cash flow for the year ended on that date. On the basis of the written representations received from the Directors as on March 31, 2010, and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2010, from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.
For and on behalf of KALYANIWALLA MISTRY & ASSOCIATES Chartered Accountants V. M. PADWAL Partner Membership No. 49639 Firm Regn. No. 121157W Mumbai, May 26, 2010 7.
According to the information and explanations given to us and the records examined by us, we observed that the company has not borrowed any money from financial institutions or banks or debenture holders. According to the information and explanations given to us the Company has not granted loans and advances on the basis of security by way of pledge of shares and other securities. 9. In our opinion and according to the information and explanation given to us, the nature of the activities of the Company does not attract any special statute applicable to chit fund and nidhi/ mutual benefit fund/ societies. 10. In our opinion, the Company has maintained proper records of the transactions and contracts of the investments dealt in by the Company and timely entries have been made therein. The investments made by the Company are held in its own name. 11. According to the information and explanations given to us and the records examined by us, the Company has not given any guarantees for loans taken by others from banks or financial institutions. 12. According to the information and explanations given to us and the records examined by us we observed that the Company has not taken any term loan. 13. On the basis of an overall examination of the balance sheet and cash flows of the Company and the information and explanation given to us, we report that the company has not utilized any funds raised on short-term basis for long-term investments. 14. The Company has not made any preferential allotment of shares to parties or companies covered under Section 301 of the Companies Act, 1956. 15. The Company did not issue any debentures during the financial year. 16. The Company has not raised any money through a public issue during the year. 17. Based upon the audit procedures performed and the information and explanation given by the management, we report that no fraud on or by the Company has been noticed or reported during the year. 18. In our opinion, clauses (i), (ii), (iii) (d), (iii) (f), iii(g), (iv) and (viii) of paragraph 4 of the Companies (Auditor’s Report) Order, 2003 are not applicable. For and on behalf of KALYANIWALLA MISTRY & ASSOCIATES Chartered Accountants V. M. PADWAL Partner Membership No. 49639 Firm Regn. No. 121157W Mumbai, May 26, 2010 8.
133
Ensemble Holdings & Finance Limited BALANCE SHEET AS AT MARCH 31, 2010 Schedule
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010 AS AT 31.03.10 Rupees
AS AT 31.03.09 Rupees
SOURCE OF FUNDS 1
SHAREHOLDERS’ FUNDS (a)
Share Capital
1
37,741,600
37,741,600
(b)
Reserves & Surplus
2
123,585,245
113,979,815
161,326,845
151,721,415
8
EXPENDITURE Expenses
APPLICATION OF FUNDS 1
INVESTMENTS
2
CURRENT ASSETS, LOANS AND ADVANCES
3
73,951,817
Cash & Bank Balances
4
168,114
(b)
Other Current Assets
5
386,137
1,104,004
(c)
Loans and Advances
6
30,711,660
48,765,882
31,265,911
51,710,061
Provisions
NET CURRENT ASSETS PROFIT AND LOSS ACCOUNT TOTAL NOTES TO ACCOUNTS
1,840,175
7
Current Liabilities
9
17,366,029
(a)
LESS: CURRENT LIABILITIES AND PROVISIONS
3
Schedule INCOME Interest Income Dividend Profit on sale of investments (Net) Profit on sale of Mutual Funds Sundry Income Reversal of Prov. for depletion in Investment
140,943
159,112
22,005,004
1,346,980
22,145,947
1,506,092
9,119,964
50,203,969
78,255,064
78,662,729
161,326,845
146,232,727
PROFIT/(LOSS) BEFORE TAX Provision for Taxation PROFIT/(LOSS) AFTER TAX Adjustments for prior years PROFIT AVAILABLE FOR APPROPRIATION APPROPRIATION Dividend Proposed Dividend Interim Dividend Dividend Distribution Tax Transfer to Special Reserve Fund u/s 45IC of RBI Act, 1934 Transfer to General Reserves Balance available for set off against b/f deficit in P&L A/c Loss brought forward Loss Carried Forward Earnings Per Share NOTES TO ACCOUNTS
YEAR ENDED 31.03.10 Rupees
YEAR ENDED 31.03.09 Rupees
5,503,538 1,811,748 2,567,195 173,359 74,141 23,110,000 33,239,981
5,533,647 3,045,473 5,973,980 942,121 215,293 15,710,514
166,242 166,242 33,073,739 1,300,000 31,773,739 244,360 32,018,099
167,252 167,252 15,543,262 1,416,000 14,127,262 (12,917) 14,114,345
18,870,800 3,134,204 6,403,620 3,201,810 31,610,434
– 7,925,736 1,346,980 2,822,869 1,411,434 13,507,019
407,665 (78,662,729) (78,255,064)
607,326 (79,270,055) (78,662,729)
8.48
3.74
10 (5) 10
10
The Schedules referred to above form an integral part of the Balance Sheet
The Schedules referred to above form an integral part of the Profit and Loss Account
As per our Report of even date attached
Signatures to Balance Sheet and Schedules 1 to 7 and 10 For and on behalf of the Board
As per our Report of even date attached
M. EIPE Director
V.M. PADWAL Partner Mumbai, May 26, 2010
For and on behalf of KALYANIWALLA MISTRY & ASSOCIATES Chartered Accountants V.M. PADWAL Partner Mumbai, May 26, 2010
M.G. SUBRAMANIAM Company Secretary
B.S. YADAV Director
For and on behalf of KALYANIWALLA MISTRY & ASSOCIATES Chartered Accountants M.G. SUBRAMANIAM Company Secretary
Signatures to Profit & Loss Account and Schedules 8 to 10 For and on behalf of the Board
M. EIPE Director
B.S. YADAV Director
SCHEDULES ANNEXED TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010 AS AT 31.03.10
AS AT 31.03.09
SCHEDULE 1 : SHARE CAPITAL
50,000,000
50,000,000
ISSUED, SUBSCRIBED AND PAID UP 3,774,160 Equity Shares of Rs.10/- each fully paid up. (100% shares are held by Godrej Industries Ltd., the Holding Company)
AS AT 31.03.09 Rupees
84,945,040
84,945,040
25,897,137
19,493,517
SCHEDULE 2 : RESERVES & SURPLUS
AUTHORISED 5,000,000 Equity Shares of Rs.10/- each
AS AT 31.03.10 Rupees SHARE PREMIUM As per last Balance Sheet Special Reserves u/s 45IC of RBI Act, 1934
37,741,600
37,741,600
Opening Balance Add : Transferred from Profit & Loss A/c
37,741,600
19,493,517 6,403,620
37,741,600
-
General Reserve
134
Opening Balance
9,541,258
Add : Transferred from Profit & Loss A/c
3,201,810 12,743,068
9,541,258
123,585,245
113,979,815
Annual Report 2009–2010
SCHEDULES ANNEXED TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010 SCHEDULE 3 : INVESTMENTS Investee Company/Institution Long Term Investments (At Cost) Equity shares - Quoted Companies under Same Management: Godrej Properties Ltd. Other Companies: Agro Tech Foods Ltd. Colgate Palmolive India Ltd. Dabur India Ltd. Henkel India Ltd. Hindustan Unilever Ltd. Gillette India Ltd. Marico Industries Ltd. Nirma Ltd. Procter & Gamble Hygiene & Health Care Ltd. Venkys India Ltd. Amrutanjan Health Care Ltd. Mafatlal Industries Ltd. Unquoted Companies under the Same Management : Godrej Agrovet Ltd. Godrej Gokarna Oil Palm Limited Other Companies : karROX Technologies Ltd. Personalitree Academy Ltd. Unquoted : Non-Convertible Debentures Companies under the Same Management : Godrej Oil Plantations Limited Current Investments Mutual Funds - Unquoted SBI Mutual Fund - Cash option
Quantity as on 01.04.09
Quantity Acquired during the year
Sold during the year
Quantity as on 31.03.10
10
691,155
-
-
691,155
5,488,688
5,488,688
10 10 1 10 1 10 1 5 10 10 10 10
1 1 3 1 751 1 40 2 1 1 15,423 –
122,050
15,423 7,716
1 1 3 1 751 1 40 2 1 1 114,334
53 151 59 31 90,589 400 271 255 490 37 – 8,734,664
53 151 59 31 90,589 400 271 255 490 37 5,410,332 -
10 10
8,100 2
-
-
8,100 2
1,809,717 3,240
1,808,707 3,240
10 10
250,000 389,269
-
-
250,000 389,269
10,050,000 11,027,991
10,050,000 11,027,991
10
160
-
160
-
-
1,600
47,773,359 84,979,995 11,028,178 73,951,817
28,394,207 11,028,178 17,366,029
14,315,688 59,636,129 73,951,817
5,502,668 17,352,049 22,854,717
370,078,667
5,458,501
Fac Value
Less : Provision for diminution in value of Investments Aggregate Book Value of Investments : Quoted Investments Unquoted Investments Market Value of quoted investments
SCHEDULE 4 : CASH AND BANK BALANCES Cash on hand Balances with Scheduled Banks in Current Accounts SCHEDULE 5 : OTHER CURRENT ASSETS Outstanding Income SCHEDULE 6 : LOANS AND ADVANCES (Unsecured, considered good, unless stated otherwise) ESOP Loans Share Application Money (considered doubtful) Intercorporate Deposits (considered good) Intercorporate Deposits (considered doubtful) Less : Provision for Doubtful Loans and Advances Advance Payment of Taxes SCHEDULE 7: CURRENT LIABILITIES & PROVISIONS Current Liabilities Sundry Creditors Provisions : Proposed Dividend Tax on Distributed Profits SCHEDULE 8 : INTEREST INCOME (Gross) On Loans (TDS Rs. 292,440/-, previous year Rs. 554,712/-) On Intercorporate Deposits (TDS Rs. 668,134/-, previous year Rs. 688,933/-) On Fixed Deposits with Bank (TDS Rs. Nil, previous year Rs. Nil) On Investment (Non-convertible Debentures) SCHEDULE 9 : EXPENSES Salary Profession Tax Auditors’ Remuneration Professional Charges Miscellaneous Expenses
AS AT 31.03.10 Rupees
AS AT 31.03.09 Rupees
1,561
1,301
166,553 168,114
1,838,874 1,840,175
386,137 386,137
1,104,004 1,104,004
– 300,000 29,000,000 29,300,000 (300,000) 29,000,000 1,711,660 30,711,660
24,691,000 300,000 24,000,000 23,110,000 47,410,000 (23,410,000) 24,000,000 74,882 48,765,882
140,943
159,112
18,870,800 3,134,204 22,145,947
– 1,346,980 1,506,092
1,290,555
2,447,977
4,212,823 160 5,503,538
3,040,300 45,370 – 5,533,647
60,000 2,500 25,120 60,665 17,957 166,242
60,000 2,500 49,635 44,944 10,173 167,252
Amount As on As on 31/03/10 Rupees 31.03.09 (Rupees)
SCHEDULE 10 : NOTES TO ACCOUNTS 1. Significant Accounting Policies a. Accounting Convention: The financial statements are prepared under the historical cost convention, on accrual basis in accordance with the generally accepted accounting principles in India, the Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the Companics Act, 1956. b. Income recognition: (i) Dividend income is recognised when the right to receive the same is established. (ii) Interest income is recognised on time proportion basis. (iii) Profit/loss on sale of investments is accounted on the trade dates. c. Investments: Long term investments are carried at cost. Provision for diminution, if any, in the value of each long-term investment is made to recognise decline, other than that of a temporary nature. The fair value of a long Term investment is ascertained with reference to its market value, the investee's assets and results and the expected cash flows from the investments. d. Taxes on Income: Current Tax is the amount of tax payable on the taxable income for the year determined in accordance with the provisions of the Income Tax Act, 1961. Deferred tax is recognised on timing differences, being the differences between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets subject to the consideration of prudence are recognised and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. The tax effect is calculated on the accumulated timing differences at the year end based on the tax rate and laws enacted or substantially enacted on the Balance Sheet date. 2. Investments: i) The Company has acquired and sold the following investments during the year:
LIC Mutual Fund SBI Mutual Fund Fem Care Pharma Mafatlal Industries Godrej Global Solutions Ltd. (Pref. shares)
This Year No.of Purchase units/ Cost shares (Rs.) 1,958,697 38,826,641 7,716 589,472 -
Previous Year No.of Purchase units/ Cost shares (Rs.) 2,996,333 44,600,000 128,507 2,500,000 15,242 4,189,265 18,000 180,000
135
Ensemble Holdings & Finance Limited SCHEDULE 10: NOTES TO ACCOUNTS (Contd.)
9.
THIS YEAR PREVIOUS YEAR Rupees Rupees 3.
Amount due from a Company under the same management Godrej Hicare Ltd. Godrej Industries Ltd.
4.
-
23,110,000 5,000,000 28,110,000
33,090 16,545 49,635
33,090 16,545 49,635
32,018,099 3,774,160 8.48
4,110,101 3,774,160 3.74
Auditors’ Remuneration: (includes service tax wherever applicable) Audit Fees Tax Audit Fees
5.
Earnings per share a. Net Profit/(Loss) after Tax available for shareholders b. Weighted Average Number of Equity Shares c. Basic and Diluted Earnings per Share of Rs.10 each
6.
Related Party Disclosures: a) Related Parties with whom transactions have taken place during the year, with the name and description of relationship. Parties where control exists Godrej Industries Limited, the holding company Godrej & Boyce Mfg. Co. Ltd., the ultimate holding company Related Parties with whom transactions have taken place during the year Holding Company Fellow Subsidiaries Godrej Industries Limited Godrej Properties Limited Godrej Agrovet Limited Individual exercising significant influence over the enterprise Ms. T. A. Dubash Mr. H. K. Press Mr. M. Eipe b)
Transactions with Related Parties (Rs. in Lac)
Sr. No.
i)
ii)
iii)
iv)
v)
vi)
Nature of Transaction
Holding Subsidiary Fellow Associate/ Key Relatives Company Company Subsidiary Joint Management of Key Venture Personnel Mangement Personnel
Total
Dividend Received
-
-
17.36
-
-
-
17.36
Previous year
-
-
28.57
-
-
-
28.57
ICD Placed
525.00
-
-
-
-
-
525.00
Previous year
250.00
-
-
-
-
-
250.00
ICD Refunded
575.00
-
-
-
-
-
575.00
Previous year
200.00
-
-
-
-
-
200.00
Interest Received on ICD
12.51
-
-
-
-
-
12.51
Previous year
6.54
-
-
-
-
-
6.54
Dividend Paid
-
-
-
-
-
-
-
Previous year
79.26
-
-
-
-
-
79.26
Remuneration
-
-
-
-
0.60
-
0.60
Previous year
-
-
-
-
0.60
-
0.60
c)
The significant Related Party Transactions are as under (Rs. in Lac)
Nature of Transaction Placement of ICD Godrej Industries Limited Refund of ICD Godrej Industries Limited 7. 8.
Amount Nature of Transaction
Amount
Interest recd on ICD placed 525.00 Godrej Industries Limited
12.51
Remunertion 575.00 Mr. H. K. Press
0.60
Additional information required under Schedule VI, Part IV of the Companies Act, 1956 to the extent not applicable has not been given. Previous year’s figures have been regrouped/reclassified wherever necessary.
ADDITIONAL INFORMATION AS REQUIRED UNDER PART IV OF SCHEDULE VI TO THE COMPANIES ACT, 1956 BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE 1. Registration details Registration No : 11-65457 State Code : 11 Balance Sheet Date : 31.03.2010 2. Capital raised during the year (Amount in Rs. Thousands) Public Issue : Rights Issue : Bonus Issue : Private Placement : 3. Position of mobilisation and deployment of funds (Amount in Rs. Thousands) Total Liabilities : 161,327 Total Assets : 161,327 Sources of funds: Paid up Capital : 37,742 Reserves & Surplus : 123,585 Secured Loans : Unsecured Loans : Application of funds: Net Fixed Assets : Investments : 73,952 Net Current Assets : 9,120 Miscellaneous Expenditure : Accumulated Losses : 78,255 4. Performance of Company (Amount in Rs. Thousands) Turnover (Total Income) : 33,240 Total Expenditure : 166 Profit before tax : 33,074 Profit after tax : 31,774 Earnings per share in Rs. : 8.48 Dividend rate (%) : 50% 5. Generic names of three principal : The Company is a Loan products/services of the Company and Investment Company
As per our Report attached For and on behalf of KALYANIWALLA MISTRY & ASSOCIATES Chartered Accountants
Signatures to Balance sheet Statement For and on behalf of Board
V.M. PADWAL Partner Mumbai, May 26, 2010
M. EIPE Director
M.G. SUBRAMANIAM Company Secretary
B.S. YADAV Director
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010 Cash flow from Operating Activities Profit before tax Adjustments for : Dividend Income Profit on sale of long term investments Profit on sale of Mutual Funds Reversal of Provision for Dimunition in value of Investments/Loan Interest Income Operating Profit before working capital changes Adjustments for : Accrued Interest Trade Payables Cash generated from operations Direct Taxes paid Direct Taxes refund received Net Cash from operating activities
YEAR ENDED 31.03.10 Rupees
YEAR ENDED 31.03.09 Rupees
33,073,739
15,543,262
(1,811,748) (2,567,195) (173,359) (23,110,000) (1,250,959) 4,160,478
(5,973,980) (942,121) (215,293) (653,589) 7,758,279
717,867 (18,169) 4,860,176 (2,936,778) 1,923,398
826,985 1,345,470 9,930,734 (1,387,216) 57,988 8,601,506
Proceeds from sale of investments Dividend Income New investments made Interest Income Interest Income Loans
47,812,960 1,811,748 (95,925,146) 1,250,959 42,801,000
67,482,850 (57,280,607) 653,589 (28,424,363)
Net cash generated / (used) from investing activities
(2,248,479)
(17,568,531)
(1,346,980) (1,346,980) (1,672,061) 1,840,175 168,114
(7,925,736) (1,346,980) (9,272,716) (18,239,741) 20,079,916 1,840,175
Cash flow from Investing Activities
Cash flow from Financing Activities Dividend Paid Tax on Distributed Profits Net cash generated / (used) from financing activities Net increase / (decrease) in cash and cash equivalents Cash in and cash equivalents (opening balance) Cash in and cash equivalents (closing balance) Notes: Since the Company is a loan and investment company, changes in deposits given are considered as working capital changes.
As per our Report attached For and on behalf of KALYANIWALLA MISTRY & ASSOCIATES Chartered Accountants V.M. PADWAL Partner Mumbai, May 26, 2010
136
M.G. SUBRAMANIAM Company Secretary
inter-corporate loans and
Signatures to Cash Flow Statement For and on behalf of Board
M. EIPE Director
B.S. YADAV Director
Annual Report 2009–2010 Schedule to Balance Sheet of a Non-Banking Financial Company (as required in terms of Paragraph 9BB of Non-Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 1998 (Rs. in lakhs)
(1)
(2)
Particulars LIABILITIES SIDE : Loans and advances availed by the NBFCs inclusive of interest accrued thereon but not paid: (a) Debentures : Secured : Unsecured (other than falling within the meaning of public deposits*) (b) Deferred Credits (c) Term Loans (d) Inter-corporate loans and borrowing (e) Commercial Paper (f) Public Deposits* (g) Other Loans (specify nature) * Please see Note 1 below Break-up of (1)(f) above (Outstanding public deposits inclusive of interest accrued thereon but not paid): (a) In the form of Unsecured debentures (b) In the form of partly secured debentures i.e. debentures where there is a shortfall in the value of security (c) Other public deposits
Amount outstanding NIL NIL NIL NIL NIL NIL NIL NIL NIL
Amount overdue NIL NIL NIL NIL NIL NIL NIL NIL NIL
NIL NIL NIL
NIL NIL NIL
* Please see Note 1 below ASSETS SIDE : Amount outstanding (3)
(4)
(5)
Break-up of Loans and Advances including bills receivables [other than those included in (4) below] : (a) Secured (b) Unsecured i) Loans /Advances ii) Inter Corporate Deposits iii) Advance Payment of Taxes Break up of Leased Assets and stock on hire and hypothecation loans counting towards EL/HP activities (i) Lease assets including lease rentals under sundry debtors : (a) Financial lease (b) Operating lease (ii) Stock on hire including hire charges under sundry debtors: (a) Assets on hire (b) Repossessed Assets (iii) Hypothecation loans counting towards EL/HP activities (a) Loans where assets have been repossessed (b) Loans other than (a) above Break-up of Investments : Current Investments : 1. Quoted : (i) Shares : (a) Equity (b) Preference (ii) Debentures and Bonds (iii) Units of mutual funds (iv) Government Securities (v) Others (please specify) 2. Unquoted : (i) Shares : (a) Equity (b) Preference (ii) Debentures and Bonds (iii) Units of mutual funds (iv) Government Securities (v) Others (Please specify) Long Term investments : 1. Quoted : (i) Share : (a) Equity (b) Preference (ii) Debentures and Bonds (iii) Units of mutual funds (iv) Government Securities (v) Others (Please specify) 2. Unquoted : (i) Shares : (a) Equity (b) Preference (ii) Debentures and Bonds (iii) Units of mutual funds (iv) Government Securities (v) Others (Please specify)
NIL NIL 290.00 17.12
NIL NIL NIL NIL NIL NIL
NIL NIL NIL NIL NIL NIL NIL NIL NIL 477.73 NIL NIL
143.16 NIL NIL NIL NIL NIL 228.91 NIL NIL NIL NIL NIL
137
Ensemble Holdings & Finance Limited (6)
Borrower group-wise classification of all leased assets, stock-on-hire and loans and advances : Please see Note 2 below Amount net of provisions
Category Secured 1.
Related Parties ** (a) Subsidiaries (b) Companies in the same group : Loans (c)
2.
(7)
Other related parties Inter Corporate Deposits -
Other than related parties a) Advance Tax Payment b) Inter Corporate Deposits Total
Unsecured
Total
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL NIL NIL
17.12 290.00
17.12 290.00
307.12
307.12
Investor group-wise classification of all investments (current and long term) in shares and securities (both quoted and unquoted): Please see note 3 below Market Value / Break up for fair value or NAV
Category 1.
2.
Related Parties ** (a) Subsidiaries (b) Companies in the same group : Quoted Unquoted (c) Other related parties Other than related parties Quoted : Unquoted : Total
Book Value (Net of Provisions)
NIL
NIL
3546.32 18.13 NIL
54.89 18.13 NIL
154.47 787.63 4506.55
88.27 578.23 739.52
** As per Accounting Standard of ICAI (Please see Note 3) # Start up Company hence fair value considered at face value. (8) (i)
(ii)
(iii)
Other information Particulars Gross Non-Performing Assets
Amount
(a) Related parties
NIL
(b) Other than related parties
NIL
Net Non-Performing Assets (a) Related parties
NIL
(b) Other than related parties
NIL
Assets acquired in satisfaction of debt
NIL
Notes: 1. As defined in Paragraph 2(1)(xii) of the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998. 2.
Provisioning norms shall be applicable as prescribed in the Non-Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 1998.
3.
All Accounting Standards and Guidance Notes issued by ICAI are applicable including for valuation of investments and other assets as also assets acquired in satisfaction of debt. However, market value in respect of quoted investments and break up/fair value/NAV in respect of unquoted investments should be disclosed irrespective of whether they are classified as long term or current in column (5) above.
138
Godrej Properties Limited
Annual Report 2009–2010
DIRECTORS’ REPORT FOR THE FINANCIAL YEAR ENDED ON MARCH 31, 2010 7.
TO THE SHAREHOLDERS Your Directors have pleasure in submitting their 25th Annual Report along with the Audited Accounts for the year ended March 31, 2010. 1.
Your Company’s equity shares are available for dematerialization through National Securities Depository Limited and Central Depository Services (India) Limited. 16.09% of the equity shares of your Company were held in demat form as on March 31, 2010.
OPERATING RESULTS: Your Company’s performance during the year as compared to the previous period is summarised below: 2009 – 2010 (Rs. In Lacs) 15,874.60
10,603.42
Provision for Taxation
(3,669.83)
(3,124.00)
Provision for Fringe Benefit Tax Provision for deferred tax Profit after taxation Add: Surplus brought forward Prior year tax adjustments AMOUNT AVAILABLE FOR APPROPRIATION
8.
-
(16.50)
(20.65)
10.61
12,184.12
7,473.53
7,510.69
2,655.39
(21.37)
(101.01)
19,673.44
10,027.91
CORPORATE GOVERNANCE: As required by the existing Clause 49 of the Listing Agreements with the Stock Exchanges, a detailed report on Corporate Governance together with Management Discussion and Analysis Report are included in the Annual Report. The Auditors have certified the Company’s compliance of the requirements of Corporate Governance in terms of Clause 49 of the Listing Agreement and the same is annexed to the Report on Corporate Governance.
2008-2009 (Rs. in Lacs)
Profit before Taxation
DEPOSITORY SYSTEM:
9.
AWARDS & RECOGNITIONS: Your directors take pleasure in informing you that the Company was acknowledged with the following Awards during the year:“Best Business Practices Award by Accommodation” times. “CNBC AWAAZ CRISIL CREDAI Real Estate Awards 09” for the best residential project in the western India for Planet Godrej. Ranked 1st in the Construction and Real Estate Category in India’s Best Companies to Work for 2009 awarded by The Great Place to Work® Institute, India, in partnership with The Economic Times.
Appropriations:
Ranked one of India’s Top 10 Builders by the Construction World Architect and Builder Awards, 2009.
Your Directors recommend appropriations as under: Proposed Dividend Dividend Distribution Tax Transfer to General Reserve
2.
2,794.00
1,510.51
464.05
256.71
1,220.00
750.00
Surplus carried forward
15195.39
7,510.69
TOTAL APPROPRIATIONS
19,673.44
10,027.91
INITIAL PUBLIC OFFER:
10.
MODIFICATION OF EMPLOYEES STOCK OPTION SCHEME: The Shareholders had vide special resolution passed by the Postal Ballot on March 10, 2010 approved the amendments to the Employees Stock Option Plan (ESOP) of the Company inter alia to increase the limit of shares from 442,700 upto 1,500,000, which may be purchased by GPL ESOP Trust for granting options to the employees. The disclosure relating to ESOP is given in Annexure A.
11.
SUBSIDIARY COMPANIES: A.
During the year 2009-2010 your Company has entered the capital market with the Initial Public Offer (IPO) of 9,429,750 equity shares of Rs.10/- each, through 100% Book Building Process wherein 7,732,405 equity shares were allotted to the Shareholders at a premium of Rs.480/- per share and 1,697,345 equity shares were allotted to certain Anchor Investors at a premium of Rs.520/- per share.
The audited Balance Sheet as at March 31, 2010 and Profit & Loss account ended on that date together with the Reports of Directors and Auditors thereon of our Subsidiaries along with Statement as required under Section 212 of the Companies Act, 1956, forms part of the Annual Report . B.
Your Company’s shares were listed on the Bombay Stock Exchange Limited and National Stock Exchange of India Limited on January 5, 2010.
DIVIDEND: Your Directors recommend for approval of the members at the ensuing Annual General Meeting payment of dividend of 40% (Rs. 4.00 per share) for the year ended March 31, 2010.
4.
During the year, the company successfully completed several projects, most notably the 1st Phase of Godrej Waterside - commercial project in Kolkata, Godrej Woodsman Estate - a residential project in Bangalore and Godrej Coliseum in Mumbai. At the end of 2009-10, the completed developed area for the company stands at 7.55 mn sq.ft compared to 3.63 mn sq.ft in 2008-09.
Happy Highrises Limited by transferring 49% of equity share capital to IL&FS Trust Company Ltd. A/C Milestone Real Estate Fund for a consideration of Rs.8,610 Lakhs.
2)
Godrej Estate Developers Private Limited (“GEDPL”) by transferring 49% of the equity share capital to HDFC PMS (under HDFC Asset Management Company Limited Portfolio Management Services Real Estate Portfolio-I, through its Portfolio Manager HDFC Asset Management Company Limited), for a consideration of Rs. 4,500 Lakhs.
3)
Godrej Sea View Properties Private Limited (GSVPPL) by transferring 49% (22.27% before March 31, 2010) of the equity share capital to HDFC PMS (under HDFC Asset Management Company Limited Portfolio Management Services Real Estate Portfolio-I, through its Portfolio Manager HDFC Asset Management Company Limited), for a consideration of Rs.5,500 Lakhs in two tranches.
Now the Company holds 51% of the paid up capital of the above mentioned subsidiaries.
The highlight of the year has been successful launch of mid-income residential projects in Ahmedabad and Kolkata. The company commenced operations in Chandigarh, Chennai and Mangalore.
C.
HDFC PMS, a real estate private equity fund, invested 49% each in subsidiaries, Godrej Estate Developers Private Limited and Godrej Sea View Properties Private Limited, for development of a commercial project, Godrej Eternia in Chandigarh and a residential project, Godrej Palm Grove in Chennai respectively. In Godrej Sea View Properties Private Limited, 22.27% of the equity share capital out of 49% was transferred before March 31, 2010. Also, Milestone Real Estate Fund invested 49% in Happy Highrises Limited, a subsidiary for development of Godrej Prakriti, a mix-use project in Kolkata. Continuing with the commitment towards customer delight, your company had set up a dedicated team for Customer Centricity initiatives led by Chief Customer Officer. FUTURE PROSPECTS AND OUTLOOK OF THE COMPANY: Your Company has a well diversified portfolio spread across established Tier-1 and emerging Tier-II and III locations. The strategy of partnering with leading firms like L&T for construction services and P.G. Patki for architectural services is likely to be a key driver in scaling up the projects across regions. The strategy of Joint Venture for sourcing land continues to help in minimizing capital requirement during the initial stages of project development. FIXED DEPOSITS: Your Company has accepted Fixed Deposits for 12, 24 and 36 Months tenure. During the year ended March 31, 2010 deposits aggregating to Rs.7489.43 Lacs have been mobilized.
Material Non Listed Indian Subsidiary Pursuant to Clause 49 of the Listing Agreement, if the turnover or net worth (i.e. paid-up capital and free reserves) of any unlisted Indian Subsidiary Company exceeds 20% of the consolidated turnover or net worth respectively, of the Listed Holding Company and its subsidiaries in the immediately preceding Accounting year; that subsidiary is termed as Material Non Listed Indian Subsidiary. Accordingly, Godrej Waterside Properties Private Limited (GWPPL) has become the Material Non Listed Indian subsidiary of Godrej Properties Limited. As per Clause 49 of the Listing Agreement the Company has appointed Mr. Amit B. Choudhury, Independent Director on the Board of GWPPL.
Your company signed MOU for development of project at Pune, where due diligence is currently underway. Your Company also signed an MOU with Godrej Industries Limited and Godrej and Boyce Mfg. Company Limited for undertaking the development of a 35 acre project at Vikhroli, Mumbai.
6.
1)
REVIEW OF OPERATIONS: Your Company posted a total income of Rs. 35,701.18 lacs during the year ended March 31, 2010.
5.
Transfer of Stake The Company has diluted its stake in the following Subsidiaries:-
Your Directors take this opportunity to thank all the investor for their overwhelming response and the confidence reposed by them. 3.
Subsidiaries Accounts
12.
OBJECTS OF THE INITIAL PUBLIC OFFERING Certain deviations/amendments to the objects of the initial public offering as disclosed on page 43 of the Prospectus of the Company dated December 16, 2009 (the “Prospectus”) have taken place details of which are set forth below: 1.
Schedule of deployment The schedule of deployment of net proceeds as disclosed on page 43 of the Prospectus has undergone change due to the following reasons: a)
Acquisition of land development rights for our Forthcoming Projects In relation to the property located at Ahmedabad, the Company was required to utilise an amount of Rs. 132.00 crores in fiscal year 2010. The Company has already utilised an amount of Rs. 25 crores in fiscal year 2010 out of the sum of Rs. 132.00 crores. The Company had entered into an agreement to grant development rights dated April 15, 2008 for the said project and thereafter the Company has entered into development agreements for part of the area. It is proposed to enter into a development agreement for the
139
Godrej Properties Limited DIRECTORS’ REPORT FOR THE FINANCIAL YEAR ENDED ON MARCH 31, 2010 Rs. 15.00 crores was to be utilised in fiscal year 2012. However, there has been delay in implementation of the project at Chandigarh as construction was delayed due to certain approvals not being received in a timely manner and now the activities have been accelerated to complete the project on time. Accordingly, the Company now proposes to utilise an amount of Rs. 60.00 crores in fiscal year 2011 and Rs. 15.00 crores in fiscal year 2012 towards construction of the project.
remaining area by March 2011. Accordingly, the Company shall utilise the balance amount of Rs. 107 Crores in fiscal year 2011 as compared to utilizing this amount in fiscal year 2010 as stated in the Prospectus. In relation to the property located at Kalyan, the Company was required to pay an amount of Rs. 20.00 crores in fiscal year 2010. However, due to the aggregation of the entire 160 acres of land at Kalyan not being completed till date, the Company shall pay the amount of Rs. 20.00 crores in fiscal year 2011 when the aggregation of land is completed.
Further the Company has now assigned the development rights of this project to its subsidiary, Godrej Estate Developers Private Limited (“GEDPL”) and has transferred 49% of the equity share capital of GEDPL to HDFC PMS (under HDFC Asset Management Company Limited Portfolio Management Services Real Estate Portfolio-I, through its Portfolio Manager HDFC Asset Management Company Limited), for a consideration of Rs. 45 Crores. It is now proposed to invest a sum of Rs. 60.00 crores in fiscal year 2011 and Rs. 15.00 crores in fiscal year 2012 in this project through the subsidiary, GEDPL.
In relation to the property located at Pune, the Company was required to pay an amount of Rs. 51.00 crores in fiscal year 2010. However, the owners of the property at Pune did not receive a certificate of conversion of land to non-agricultural use in fiscal year 2010. Accordingly, the Company shall pay the amount of Rs. 51.00 crores in fiscal year 2011. b)
Construction of our Forthcoming project In relation to construction of the project located at Chandigarh, the Company was required to utilise an amount of Rs. 75.00 crores from the Net Proceeds. An amount of Rs. 20.00 crores was proposed to be utilised in fiscal year 2010, Rs. 40.00 crores was to be utilised in fiscal year 2011 and
S. No.
Expenditure Items
Total Estimated Cost
Amount deployed till November 15, 2009
Balance Payable as on November 15, 2009
In light of the abovementioned changes to the Objects of the Issue it is proposed to amend the utilisation of the Net Proceeds of the IPO as under: (Rs. in Crores) Proposed to be funded by internal accruals
Amount upto which will be financed from Net Proceeds
Estimated schedule of deployment of Net Proceeds for FY 2010
FY 2011
FY 2012
1.
Acquisition of land development rights for our Forthcoming Projects
444.82
152.50
292.32
Nil
203.00
25.00*
178.00**
-
2.
Construction of our Forthcoming project
100.84
22.82
78.02
Nil
75.00
-#
60.00#3
15.00
3.
Repayment of loans Total
* ** # #3
172.00
Nil
172.00
Nil
150.17
150.17
-
-
717.66
175.32
542.34
Nil
428.17
175.17
238.00
15.00
The Prospectus stated that an amount of Rs. 203.00 crores was proposed to be utilised in fiscal year 2010. Now amended to state that Rs. 25.00 crores was utilised in fiscal year 2010. The Prospectus stated that no amount was proposed to be utilised in fiscal year 2011. Now amended to state that Rs. 178.00 crores is proposed to be utilised in fiscal year 2011. The Prospectus stated that an amount of Rs. 20.00 crores was proposed to be utilised in fiscal year 2010, Now amended to state that no amount was utilised in fiscal year 2010 The Prospectus stated that an amount of Rs. 40.00 crores was proposed to be utilised in fiscal year 2011, Now amended to state that the amount of Rs. 60..00 crores is proposed to be utilised in fiscal year 2011.
13.
DIRECTORS: In accordance with the Articles of Association of the Company and the provisions of the Companies Act, 1956, Mr. Adi B Godrej, Mr. Jamshyd N Godrej, Mr.Pranay Vakil and Dr. Pritam Singh, retire by rotation and being eligible, offer themselves for reappointment.
(i) (ii)
The Board of Directors in their meeting held on May 17, 2010, has appointed Mr.K.T. Jithendran and Mr. Amitava Mukherjee as Additional Directors of the Company. They will hold office up to the ensuing Annual General Meeting of the Company. Mr. K. T.Jithendran, was appointed as an Executive Director subject to the approval of the shareholders and Mr. Amitava Mukherjee was appointed as an Independent Director. 14.
b)
c)
Audit Committee: The Audit Committee which was constituted pursuant to the provisions of Section 292A of the Companies Act, 1956 and the Listing Agreement has reviewed the Accounts for the year ended March 31, 2010. The members of the Audit Committee are Mr. Keki B. Dadiseth - Chairman, Mrs. Lalita D. Gupte, Mr. Amit B. Choudhury, Mr. Pranay D. Vakil, Dr. Pritam Singh and Mr. S. Narayan, all Independent Directors. The Scope of the Audit Committee has been revised at the meeting of the Board of Directors held on October 24, 2009 to include review and monitoring of the issue proceeds of the public or rights issue. Investor Grievance cum Share Transfer Committee: The Board of Directors in their meeting held on October 24, 2009 re-constituted the Investor Grievance Cum Share Transfer Committee by appointing Mr. Amit B. Choudhury as a member of the Committee. Management Committee: The Board of Directors in their meeting held on January 22, 2010 has formed the Management Committee for administrative convenience and for handling day to day affairs of the Company. The Committee comprises of Mr. Adi B. Godrej, Chairman, Mr. Milind S. Korde, Managing Director and Mr. Pirojsha A. Godrej, Executive Director.
ADDITIONAL INFORMATION: (a)
(b)
140
The Company has not earned any Foreign Exchange during the year. 17.
In accordance with the provisions of Section 217 (2A) of the Companies Act, 1956 and the rules framed there under, the names and other particulars of employees are required to be set out in the annexure to the Director’s Report. In terms of the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Directors Report and Accounts are being sent to all the members of the Company excluding the statement of particulars of the employee under Section 217 (2A) of the Companies Act, 1956. Any member interested in obtaining a copy of the annexure may write to the Company Secretary at the Registered Office of the Company. Information in respect of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, required under Section 217(1)(e) of the Companies
GROUP FOR INTERSE TRANSFER OF SHARES: As required under Clause 3(1) (e) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, persons constituting Group (within the meaning as defined in the Monopolies and Restrictive Trade Practices Act, 1969) for the purpose of availing exemption from applicability of the provisions of Regulation 10 to 12 of the aforesaid SEBI Regulations are given in Annexure B attached herewith and forms a part of this Report.
COMMITTEES OF DIRECTORS: a)
16.
During 2009-10, expenditure in foreign currencies amounted to Rs. 667.52 Lakhs/(Previous Year Rs. 482.52 Lakhs) on account of travelling and expenses incurred for business promotion.
APPOINTMENT OF AUDITORS: M/s. Kalyaniwalla & Mistry, Chartered Accountants retire at the ensuing Annual General Meeting and are eligible for re-appointment for which they have given their consent.
15.
(iii)
Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is provided hereunder: Conservation of Energy: Expenses on account of Energy are negligible. Technology Absorption: It is an on going process. Foreign Exchange Earnings & Outgo:
18.
DIRECTORS’ RESPONSIBILITY STATEMENT: Pursuant to Section 217(2A) of the Companies Act, 1956, Your Directors based on the representation received from the Operation Management, and after due enquiry confirms : (i) that in the preparation of the annual accounts, the applicable accounting standards have been followed; (ii) that the Directors have selected such accounting policies and applied them 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 ended March 31, 2010 and of the profit of the Company for that year; (iii) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (iv) that the Directors have prepared the annual accounts on a going concern basis.
19.
ACKNOWLEDGEMENT: Your Directors wish to place on record, sincere thanks to the Government, Government agencies, Banks, Financial Institutions, Joint Venture Partners, Customers, Shareholders, Fixed Deposit Holders, Vendors, and other related organizations who through their continued support and co-operation, have helped, as partners, in your Company’s progress. For and on behalf of the Board of Directors Adi. B. Godrej Chairman
Mumbai, Date: June 4, 2010
Annual Report 2009–2010
ANNEXURE A Disclosure Relating To Employees Stock Option Plan Particulars
Details
Options granted
442,700
Exercise price of options
Rs. 620 per share plus interest at a compounding rate of 10 % per annum or at such other rate as may be defined by the Remuneration Committee and intimated to the option grantees. In addition to it, such other amount as intimated by the Remuneration Committee from time to time viz. amount of stamp duty and trusteeship fees will be recoverable from the employees.
Total options vested
Nil
Options exercised
Nil
Total number of Equity Shares that would arise as a result of full exercise of options already granted
442,700
Options forfeited/ lapsed/ cancelled
39,000
Variations in terms of options
Nil
Money realised by exercise of options
Nil
Options outstanding (in force)
403,700
Vesting schedule
Options shall vest in the eligible employees under the ESOP within such period as may be prescribed by the Remuneration Committee, which period shall not be less than one year and may extend upto three years from the date of grant of options. The Remuneration Committee of the Company at its meeting held on December 24, 2007 has decided that the above mentioned options would be vested in the employees on December 27, 2010. Further there is a change in the vesting schedule for the grants made on or after March 10, 2010, the said vesting schedule is provided herein after.
Person wise details of options granted to i)
Directors and key management employees
ii)
Any other employee who received a grant in any one year of options amounting to 5% or more of the options granted during the year
Please see Note 1 below Nil
iii)
Identified employees who are granted options, during any one year equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant
Nil
Diluted Earnings Per Share (EPS) pursuant to issue of shares on exercise of option calculated in accordance with Accounting Standard (AS) 20 ‘Earnings Per Share’.
There is no fresh issue of shares on exercise of option therefore the same is not applicable.
Difference between employee compensation cost using the intrinsic value method and the employee compensation cost that shall have been recognised if the Company has used fair value of options and impact of this difference on profits and EPS of the Company
Nil
Weighted average exercise prices and weighted average fair values of options whose exercise price either equals or exceeds or is less than the market price of the stock
Weighted average exercise price is Rs. 620 per share plus interest
Description of the method and significant assumptions used during the year to estimate the fair values of options, including weighted-average information, namely, risk-free interest rate, expected life, expected volatility, expected dividends and the price of the underlying share in market at the time of grant of the option
N.A.
Lock-in
Three years from the date of grant i.e., December 28, 2007
Impact on profits of the last three years and on the EPS of the last three years if the issuer had followed the accounting policies specified in clause 13 of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 in respect of options granted in the last three years
Nil
Details regarding options granted to our Directors and our Key Management Personnel are set forth below: Name
Position
Number of options granted under ESOP
Mr. Milind S. Korde
Managing Director
60,000
Mr. K. T. Jithendran
Executive Director
30,000
Mr. Nishikant Shimpi
Executive Vice President (Bangalore region)
20,000
Mr. K. P. Sudheer
Vice President (Mumbai region)
20,000
Mr. Nitin Wagle
Vice President (Operations)
10,000
Mr. Shodhan A. Kembhavi
Vice President (Legal) and Company Secretary
10,000
Mr. Rajendra Khetawat
Vice President (Finance and Accounts)
10,000
Mr. Santosh Tamhane
Vice President (Projects)
10,000
Ms. Krishnakoli S. Kumar
Vice President (Marketing and Sales)
10,000
Ms. Aylona D’Souza
Vice President (Human Resources and Administration)
7,000
Amendments to the Employee Stock Option Scheme: The Shareholders had vide special resolution passed by Postal Ballot on March 10, 2010 approved the following amendments to the Godrej Properties Limited Employees Stock Option Plan (GPL ESOP). The following amendments would be effective for the grants made on or after March 10, 2010. 1. Grant additional options to the extent of 50% to the employees who have been granted options in December 2007. 2. Grant options to new employees and additional options to the old employees on account of promotions. 3. Allot options in 3 tranches for new employees (who have joined after December 2007) first on the date of joining, second on completion of one year and third on completion of two years. 4. Curtail the vesting period proportionately for employees who have joined or who have been promoted between December 2007 to December 2009, and for additional allotments to existing employees. 5. Change the definition of exercise price from: ‘‘The Market Price plus Interest at such a rate not being less than the Bank Rate then prevailing compoundable on an annual basis for the period commencing from the date of Granting of the Option and ending on the date of intimating Exercise of the Option to the Company" to “Grant price plus interest at such rate as may be decided from time to time compoundable on an annual basis, for the period commencing from the date of granting of the options and ending on the date of intimating exercise of the option to the Company plus all other expenses as may be incurred by the Company to give effect to the GPL ESOP ” where “Grant Price” means higher of market price or average cost of shares purchased by the Trust for that specific grant, including any unalloted shares lying with the Trust if utilized for that specific grant, plus interest on the loan taken to purchase the said shares at such rate as may be decided from time to time and compoundable on annual basis till the date of grant.” 6. The GPL ESOP Trust shall purchase not more than 4,30,000 equity shares at any one point of time. 7. The maximum equity shares that can be purchased by GPL ESOP Trust for grant of options under the scheme will be 15,00,000 equity shares including 4,42,700 equity shares already purchased by the trust.
141
Godrej Properties Limited ANNEXURE B “Group” for interse transfer of shares under clause 3(1) (e) of the Securities & Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. 1) 2) 3) 4) 5) 6) 7) 8) 9) 10) 11) 12) 13) 14) 15) 16) 17) 18) 19) 20) 21) 22) 23) 24) 25) 26) 27) 28) 29) 30) 31) 32)
142
Godrej Industries Limited Godrej & Boyce Manufacturing Co. Ltd. Ensemble holdings & Finance Ltd. Godrej Investments Private Ltd. Godrej Efacec Automation & Robotics Ltd. Veromatic International BV Water Wonder Benelux BV Wadala Commodities Ltd. Swadeshi Detergents Ltd. Natures’s Basket Ltd. Godrej Hershey Ltd. Godrej Consumer Products Ltd. Godrej Agrovet Ltd. Golden Feed Products Ltd. Godrej Oil Palm Ltd. Cauvery Palm Oil Ltd. Godrej Infotech Ltd. Geometric Ltd. Mercury Mfg. Co. Ltd. Godrej (Malaysia) Sdn. Bhd. Godrej (Singapore) Pte. Ltd. Godrej International Ltd. Veromatic Services BV Boston Analytics Inc., USA CBay Systems Limited, USA HyCa Technologies Pvt. Ltd. Bahar Agrochem & Feeds Pvt. Ltd. Vora Soaps Ltd. Godrej Sara Lee Ltd. Godrej Consumer Products (UK) Ltd. Keyline Brands Ltd. Rapidol (Pty) Ltd.
33) 34) 35) 36) 37) 38) 39) 40) 41) 42) 43) 44) 45) 46) 47) 48) 49) 50) 51) 52) 53) 54) 55) 56) 57) 58) 59) 60) 61) 62) 63) 64) 65)
Godrej Global Mid East FZE Godrej Consumer Products Mauritius Ltd. Godrej Kinky Holding Ltd. Kinky Group Pty. Ltd. Godrej Hygiene Products Ltd. Cartini India Ltd. Godrej Holdings Pvt. Ltd. Godrej (Vietnam) Co.Ltd. ABG Venture LLP NBG Enterprise LLP JNG Enterprise LLP SVC Enterprise LLP RKN Enterprise LLP Godrej & Boyce Enterprise LLP Mr. Adi B. Godrej Mr. Jamshyd N. Godrej Mr. Nadir B. Godrej Mr. Pirojsha A. Godrej Mr. Rishad K. Naoroji Ms. Freyan V. Crishna Mr. Navroze J. Godrej Ms. Nyrika V. Crishna Ms. Raika J. Godrej Ms. Tanya Arvind Dubash Ms. Nisaba A. Godrej Master Burjis Nadir Godrej Mst. Hormuzd N. Godrej Mrs. Rati Nadir Godrej Mr. Sohrab Nadir Godrej Ms. Parmeshwar A. Godrej Mrs. Smita V. Crishna Mrs. Pheroza Godrej Mr. V. M. Crishna
Annual Report 2009–2010
REPORT OF THE AUDITORS TO THE MEMBERS OF GODREJ PROPERTIES LIMITED 1.
2.
3. 4.
5.
We have audited the attached Balance Sheet of GODREJ PROPERTIES LIMITED, as at 31st March, 2010, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We have conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditor’s Report) Order, 2003, issued by the Central Government in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order. Further to our comments in the Annexure referred to in paragraph (3) above, we report that: a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit. b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of such books. c) The Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account. d) In our opinion, the Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. e) Without qualifying our opinion, we draw attention to the fact that as referred to in Note 1(f) of Schedule 19-Notes to Accounts, in respect of projects under long term contracts undertaken and/or financed by the Company, we have relied upon the management’s estimates of the percentage of completion, costs to completion and on the projections of revenues expected from projects owing to the technical nature of such estimates, on the basis of which profits/losses have been accounted, interest income accrued and realizability of the construction work in progress and project advances determined. a) Without qualifying our opinion, we draw attention to the fact that as referred to in Note 9a of Schedule 19-Notes to Accounts, regarding a loan of Rs.3751.19 lakh to the GPL ESOP Trust for purchase of the Company’s shares from Godrej Industries Ltd. equivalent to options granted under an Employee Stock Option Plan. As at 31st March, 2010, the market value of the shares held by the GPL ESOP Trust is lower than the cost of acquisition of the shares by Rs.1177.50 lakh. The repayment of the loans granted to the GPL ESOP Trust is dependant on the exercise of the options by the employees and the market price of the underlying equity shares of the unexercised options at the end of the exercise period. In the opinion of the management, the fall in value of the underlying equity shares is on account of current
market volatility and the loss, if any, can be determined only at the end of the exercise period, in view of which provision for the diminution is not considered necessary in the financial statements. Without qualifying our opinion, we draw attention to the fact that as referred to in Note 9b of Schedule 19-Notes to Accounts, regarding a loan of Rs.709.74 lakh to GIL ESOP Trust for purchase of the Holding Company’s shares from the market equivalent to options granted under an Employee Stock Option Plan. As at 31st March, 2010, the market value of the shares held by the GIL ESOP Trust is lower than the cost of acquisition of the shares by Rs.290.16 lakh. The repayment of the loans granted to the GIL ESOP Trust is dependant on the exercise of the options by the employees and the market price of the underlying equity shares of the unexercised options at the end of the exercise period. In the opinion of the management, the fall in value of the underlying equity shares is on account of current market volatility and the loss, if any , can be determined only at the end of the exercise period, in view of which provision for the diminution is not considered necessary in the financial statements. 6. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010; ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date and iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date. 7. On the basis of the written representations received from the directors as on 31st March, 2010, and taken on record by the Board of Directors, we report that, none of the directors is disqualified as on 31st March, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956. For and on behalf of KALYANIWALLA & MISTRY CHARTERED ACCOUNTANTS b)
Firm Registration No. 104607W ERMIN K. IRANI PARTNER Membership No. 35646 Place: Mumbai Dated: May 17, 2010
ANNEXURE TO THE AUDITORS REPORT Referred to in paragraph (3) of our report of even date. 1)
2)
3)
4)
5)
6)
7) 8) 9)
(a)
The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) As explained to us, the Company has a program for physical verification of fixed assets at periodic intervals. In our opinion, the period of verification is reasonable having regard to the size of the Company and the nature of its assets. (c) In our opinion, the disposal of fixed assets during the year does not affect the going concern assumption. (a) The Management has conducted physical verification of inventory at reasonable intervals. (b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. (c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification. (a) The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. (b) Consequently, the question of commenting on the rates of interest, terms and conditions of the loans granted being prejudicial to the interests of the Company, receipt of regular principal and interest and reasonable steps for recovery of the same does not arise. (c) The Company has taken unsecured loans amounting to of Rs. 650 lakh from two companies covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 550 lakh and year-end balance of loans taken from such parties is Rs. Nil. (d) The rate of interest and the other terms and conditions of the unsecured loans taken were not prima facie prejudicial to the interest of the Company. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchase of inventory, fixed assets and for the sale of goods. There are no sales of service. During the course of our audit, we have not observed a continuing failure to correct major weaknesses in internal controls. (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the particulars of contracts and arrangements referred to in Section 301 of the Companies Act, 1956 have been entered into the register required to be maintained under that section. (b) The transactions made in pursuance of such contracts or arrangements, were made at prices which are reasonable having regard to prevailing market prices at the relevant time, where comparable market price exist. In our opinion and according to the information and explanations given to us, the Company has complied with directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA of the Companies Act, 1956, and the rules framed there under, in respect of the deposit accepted from the public. The Company has an internal audit system which in our opinion is commensurate with the size of the Company and nature of its business. In our opinion and according to the information and explanation given to us the Central Government has not prescribed maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956, in respect of the activities carried on by the Company. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, during the year, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income Tax, Value Added Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues applicable to it with the appropriate authorities. According to the
(b)
10) 11) 12) 13) 14)
15) 16) 17) 18) 19) 20) 21)
information and explanations given to us, there are no undisputed dues, payable in respect of above as at 31st March, 2010 for a period of more than six months from the date they became payable. According to the information and explanations given to us, there are no dues outstanding of Income Tax, Sales Tax, Value Added Tax, Service Tax, Customs Duty, Wealth Tax, Excise Duty or Cess on account of any dispute other than the following:
Sr. No. Name of the Statute Amount Forum where dispute is pending 1 Income Tax Act, 1961 3,369,812/- Commissioner of Income Tax (Appeals) The Company does not have accumulated losses at the end of the financial year and has not incurred any cash losses in the current and immediately preceding financial years. According to the information and explanations given to us and based on the documents and records produced to us, the Company has not defaulted in repayment of dues to banks. The Company does not have dues to financial institutions or outstanding debentures. According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/ mutual benefit fund/ societies. In our opinion and according to the information and explanations given to us, the Company has maintained proper records of the transactions and contracts in respect of investments purchased and sold during the year and timely entries have been made therein .The investments made by the Company are held in its own name. In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks and other financial institutions. According to the information and explanations given to us and based on the documents and records examined by us, on an overall basis, the term loan has been applied for the purpose for which the loan were obtained. According to the information and explanations given to us and on an overall examination of the Balance Sheet and Cash Flows of the Company, we report that the Company has not utilized funds raised on short-term basis for long-term investment. The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956. The Company did not issue any debentures during the year. We have verified the end use of money raised by public issue as disclosed in Note 2 of Schedule 19. Pending utilization of the funds raised through public issue, a sum of Rs. 25,559.01 lakh has been temporarily invested in Mutual Funds and Bank Deposits. Based on the audit procedures performed and information and explanations given by the Management, we report that no fraud on or by the Company has been noticed or reported during the year.
For and on behalf of KALYANIWALLA & MISTRY CHARTERED ACCOUNTANTS Firm Registration No. 104607W ERMIN K. IRANI PARTNER Membership No. 35646 Place: Mumbai Dated: May 17, 2010
143
Godrej Properties Limited BALANCE SHEET AS AT 31ST MARCH, 2010 Schedule
As at 31.03.2010
As at 31.03.2009
Rupees
Rupees
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010 Schedule
SOURCES OF FUNDS SHAREHOLDERS' FUNDS Share Capital
1
698,500,090
604,202,590
Reserves & Surplus
2
7,455,718,586
2,377,875,458
LOAN FUNDS Secured Loans
3
1,284,680,753
2,566,929,456
Unsecured Loans
4
3,264,337,035
1,903,589,895
12,703,236,464
7,452,597,399
165,480,100
Less: Depreciation
INVESTMENTS
6
DEFERRED TAX ASSET
Sales
1,123,900,693
1,259,401,567
13
1,019,813,958
685,207,029
Other Income
14
1,426,460,639
421,112,992
3,570,175,290
2,365,721,588
TOTAL INCOME EXPENDITURE 15
1,038,528,297
644,528,613
16
106,851,547
37,508,060
75,040,934
Administration Expenses
17
141,490,427
99,708,180
18
671,317,930
512,956,238
37,313,275 37,727,659
Depreciation
-
32,536,657
105,060,119
70,264,316
2,477,723,964
557,189,373
2,794,500
4,859,000
Profit for the year
24,528,123
10,677,865
1,982,716,324
1,305,378,956
1,587,458,966
1,060,342,632
(366,983,000)
(312,400,000)
-
(1,650,000)
Provision for Taxation for Current Tax for Fringe Benefit Tax
CURRENT ASSETS, LOANS & ADVANCES Inventories
7
1,435,939,077
525,039,067
Sundry Debtors
8
1,377,092,002
1,140,203,131
for Deferred Tax Profit After Tax
Cash & Bank Balances
9
723,493,415
147,337,283
Loans & Advances
10
8,214,075,359
5,886,785,733
Surplus brought forward
11,750,599,853
7,699,365,214
Amount Available for Appropriation
LESS: CURRENT LIABILITIES & PROVISIONS
Less : Prior years tax adjustments
11
1,268,608,022
682,915,473
Proposed Dividend
Provisions
12
364,333,950
196,165,031
Dividend Distribution Tax
1,632,941,972
879,080,504
Transfer to General Reserve
10,117,657,881
6,820,284,710
Surplus carried forward to Balance Sheet
12,703,236,464
7,452,597,399
Earnings per share Basic/ Diluted in Rs. (Refer Note 10)
NET CURRENT ASSETS NOTES TO ACCOUNTS & ACCOUNTING POLICIES
19
The Schedules referred to above form an integral part of the Balance Sheet
NOTES TO ACCOUNTS & ACCOUNTING POLICIES Signatures to the Balance Sheet and Schedules 1 to 12 and 19
Adi. B. GODREJ Chairman
ERMIN K. IRANI Partner
(2,064,500)
1,061,000
1,218,411,466
747,353,632
(2,137,248)
(10,101,372)
751,069,518
265,538,964
1,967,343,736
1,002,791,224
279,400,036
151,050,648
Less :
Current Liabilities
As per our Report of even date. For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants
Rupees
Operating Income
105,060,119
Capital Work-In-Progress / Advances
31.03.2009
Rupees INCOME
Interest & Finance Charges
60,419,981
Net Block
31.03.2010
Employee Remumeration & Benefits
5
Gross Block
For the year ended
Cost of sales
APPLICATION OF FUNDS FIXED ASSETS
For the year ended
SHODHAN A. KEMBHAVI Company Secretary
Mumbai, Dated : May 17, 2010
75,000,000
1,519,538,846
751,069,518
19.31
12.20
Signatures to the Profit and Loss Account and Schedules 13 and 19
Adi. B. GODREJ Chairman
ERMIN K. IRANI Partner
25,671,058
122,000,000
19
The Schedules referred to above form an integral part of the Profit and Loss Account As per our Report of even date. For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants
MILIND S. KORDE Managing Director
46,404,854
MILIND S. KORDE Managing Director
SHODHAN A. KEMBHAVI Company Secretary
Mumbai, Dated : May 17, 2010
SCHEDULES FORMING PART OF THE ACCOUNTS As at 31.03.2010 Rupees
As at 31.03.2009 Rupees
As at 31.03.2010 Rupees
As at 31.03.2009 Rupees
Share Premium As per last Balance Sheet
1,475,805,940
1,475,805,940
Add : Received during the year
4,594,173,800
-
SCHEDULE 1
SCHEDULE 2
SHARE CAPITAL
RESERVES & SURPLUS
AUTHORISED 100,000,000 Equity Shares of Rs. 10/- each
1,000,000,000
1,000,000,000
1,000,000,000
1,000,000,000
698,500,090
604,202,590
ISSUED, SUBSCRIBED & PAID UP 69,850,009 Equity Shares of Rs. 10/- each fully paid up. (Of the above 48,495,209 (previous year 48,495,209) shares are held
406,800,000
-
5,663,179,740
1,475,805,940
General Reserve - As per last Balance Sheet
151,000,000
76,000,000
Add : Transfer from Profit & Loss Account
122,000,000
75,000,000
273,000,000
151,000,000
Less : Utilised for Initial Public Issue expenses
by Godrej Industries Ltd., the Holding Company) Of the above 54,239,845 (previous year 54,239,845) shares issued as
Profit and Loss Account
Bonus shares by capitalising Share Premium, General Reserve & Profit & Loss Account 698,500,090
144
604,202,590
1,519,538,846
751,069,518
7,455,718,586
2,377,875,458
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE ACCOUNTS As at 31.03.2010 Rupees SECURED LOANS
UNSECURED LOANS
Cash Credit / Working Capital Demand Loan
1,284,680,753
1,966,929,456
(Secured by equitable mortgage of immovable property
Fixed Deposits Banks
of the Company's Project at Juhu, Mumbai) 2)
As at 31.03.2009 Rupees
SCHEDULE 4
SCHEDULE 3 1)
As at 31.03.2010 Rupees
As at 31.03.2009 Rupees
748,943,000
-
2,515,394,035
1,883,589,895
-
20,000,000
3,264,337,035
1,903,589,895
2,440,193,000
1,903,589,895
Companies
Short Term Loan from Banks (Secured by way of equitable mortgage of its interest,
-
600,000,000 Of the above,
in the immovable property of the project undertaken by the Company at Chandigarh
Repayable within a year (other than cash credit accounts) 1,284,680,753
2,566,929,456
-
600,000,000
Of the above, Repayable within a year (Other than cash credit accounts) SCHEDULE 5 : FIXED ASSETS ASSETS
Tangible Assets Building Leasehold Improvement Office Equipment Site Equipments Furniture & Fixtures Computer Motor Vehicle Intangible Assets Licenses & Software Total Previous Year Capital Work-in-progress
As at 1st April, 2009
GROSS BLOCK Additions Deductions
As at As at 31st March, 1st April, 2009 2010 Rs. Rs.
Rs.
Rs.
Rs.
12,844,708 10,799,115 2,072,120 13,237,691 20,871,953 6,654,645
17,031,600 15,981,411 7,158,788 3,816,383 3,486,202 6,526,978
461,606 217,574 424,622 1,888,069
17,031,600 28,826,119 17,496,297 2,072,120 16,836,500 23,933,533 11,293,554
8,560,702 75,040,934 54,138,926
39,429,675 93,431,037 22,141,833
2,991,871 1,239,825
47,990,377 165,480,100 75,040,934
DEPRECIATION For the Year Deductions Rs.
Rs.
8,667,024 3,369,810 1,593,219 6,375,541 12,672,051 2,421,065
6,809,838 1,754,256 66,615 1,693,702 4,036,212 2,117,664
88,171 132,554 125,607 1,075,088
15,476,862 5,035,895 1,659,834 7,936,689 16,582,656 3,463,641
17,031,600 13,349,257 12,460,402 412,286 8,899,811 7,350,877 7,829,913
4,177,684 7,429,305 478,901 6,862,150 8,199,902 4,233,580
2,214,568 37,313,278 27,357,996
8,049,836 24,528,123 10,677,865
1,421,420 722,584
10,264,404 60,419,981 37,313,278
37,725,973 105,060,119 37,727,657 105,060,119
6,346,134 37,727,657
TOTAL As at 31.03.2010 Rupees SCHEDULE 6 : INVESTMENTS At Cost Long Term Quoted Investments 100 Equity Shares of Rs.10/- each of Alacrity Housing Limited 100 Equity Shares of Rs.10/- each of Alsa Construction & Housing Limited (Written off during the year) 100 Equity Shares of Rs.10/- each of Ansal Buildwell Limited 100 Equity Shares of Rs.10/- each of Ansal Housing & Construction Limited 600 Equity Shares of Rs.5/- each of Ansal Properties & Infrastructure Limited 100 Equity Shares of Rs.10/- each of Lok Housing & Construction Limited 100 Equity Shares of Rs.10/- each of Global Infrastructure & Technologies Limited (Formerly Known as Mantri Housing & Construction Limited) 100 Equity Shares of Rs.10/- each of Premier Energy & Infrastructure Limited (Formerly Known as Premier Hsg & Industrial Ent Limited) 100 Equity Shares of Rs.10/- each of D.S. Kulkarni Developers 13,000 Equity Shares of Rs.2/- each of Unitech Limited SCHEDULE 6 : INVESTMENTS (Contd.) 72 Equity Shares of Rs.10/- each of The Great Eastern Shipping Company Limited 18 Equity Shares of Rs.10/- each of The Great Offshore Limited
As at 31.03.2009 Rupees
742
742
-
616
1,066
1,066
1,366
1,366
3,081
3,081
1,241
1,241
1,641
1,641
1,516
1,516
891
891
6,366
6,366
2,485
2,485
621
621
NET BLOCK As at As at 31st March 31st April, 2009 2010 Rs. Rs.
As at 31st March 2010 Rs.
1,000 Equity Shares of Re.1/- each of Radhe Developers Limited (900 Shares are received on Split of Face Value Per Share from Rs. 10/- to Re. 1/-) 23,700 Equity Shares of Rs.10/- each of United Textiles Limited Less : Provision for Dimunition in Value Unquoted Investments 1,000 Equity Shares of Rs.10/- each of Saraswat Co-operative Bank Limited 25,000 Equity Shares of Rs.10/- each of Amitabh Bachchan Corporation Limited Investments In Subsidiary Companies 510,000 Equity Shares of Rs.10/- each of Godrej Realty Pvt. Ltd. 1% Secured Redeemable optionally Convertible Debentures Godrej Realty Pvt. Ltd. 510,000 Equity Shares of Rs.10/- each of Godrej Waterside Properties Pvt. Ltd. 1% Secured Redeemable optionally Convertible Debentures of Godrej Waterside Properties Pvt. Ltd. 388,636 (Previous Year 50,000 Equity Shares of Rs. 10 Each) Equity Shares of Re.1/- each of Godrej Seaview Properties Pvt. Ltd. 50,000 Equity Shares of Rs.10/- each of Godrej Real Estate Pvt. Ltd. 34,032 (Previous Year 50,000) Equity Shares of Rs.10/- each of Godrej Developers Pvt. Ltd. 103,592 (Previous Year 203,120) Equity Shares of Rs. 10/- each of Happy Highrises Limited 25,500 (Previous Year 50,000) Equity Shares of Rs.10/- each of
32,536,657 70,264,314
As at 31.03.2010 Rupees 266
As at 31.03.2009 Rupees 266
2,370
2,370
23,652 7,564 16,088
24,268 7,765 16,503
10,000
10,000
2,500
2,500
5,100,000 76,500,000
5,100,000 76,500,000
5,100,000
5,100,000
147,900,000
147,900,000
388,636
500,000
500,000
500,000
340,320
340,320
163,568,489
320,720,050
145
Godrej Properties Limited SCHEDULES FORMING PART OF THE ACCOUNTS
SCHEDULE 6 : INVESTMENTS (Contd.) Godrej Estate Developers Pvt. Ltd. Total Long Term Investments Current Investments (In Debt Mutual Funds) - Refer Note 2 35050618.61 Units Kotak Floater - LT - Daily Dividend Reinvest 19468215.87 Units JPMorgan India Treasury Fund - Super IP - Daily Dividend Reinvest (Purchased 3,52,85,408.57 Units and Sold 1,58,17,192.70 Units) 192892.196 Units Reliance Money Manager Fund - IP - Dly Dividend Reinvest (Purchased 3,52,702.278 Units and Sold 1,59,810.082 Units) 3341176.86 Units ICICI Prudential Flexible Income Plan - Premium - Daily Dividend Reinvest 35351542.24 Units LIC MF Savings Plus Fund - Dly Dividend Reinvest 35217481.74 Units HDFC Cash Mgmt Fund - Treasury Advantage - WP - Dly Div Reinvest 25230374.17 Units IDFC Money Manager - Treasury Plan - Plan C - Dly Dividend Reinvest 2434480.63 Units FORTIS Money Plus Fund - IP - Daily Dividend Reinvest Total Current Investments Total Investments 1. Cost of Quoted Investments 2. Market Value of Quoted Investments SCHEDULE 7 : INVENTORIES Stock in trade (Refer Note 4) Construction Work in progress
As at 31.03.2010 Rupees
As at 31.03.2009 Rupees
255,000 399,681,033
500,000 557,189,373
194,855,426
-
-
353,279,335
-
353,515,422
-
353,284,168
-
252,341,587
-
24,352,353 2,078,042,931 2,477,723,964
557,189,373
23,652 1,142,410
24,268 611,739
4,816,919 1,431,122,158 1,435,939,077
3,628,193 521,410,874 525,039,067
SCHEDULE 11 : CURRENT LIABILITIES Sundry Creditors (Refer Note 11) Investor Education and Protection Fund Advances received against sale of flats Deposits Unclaimed Fixed Deposits Other liabilities Due to Management Projects SCHEDULE 12 : PROVISIONS For Taxation (Net of Advance Tax & Tax of deducted at source of Rs. 1,351,335,693/-, Previous Year Rs. 994,065,196/-) Proposed Dividend Tax on Dividend Gratuity Leave Encashment
146
Project Management fees
66,444,003 42,959,442 37,933,838 147,337,283
60,230,839
60,230,839
75,236,194 2,775,846,940 8,214,075,359
67,412,273 2,015,295,359 5,886,785,733
485,786,105 220,256,051 250,590 183,000 433,284,414 128,847,862 1,268,608,022
103,978,759 5,707,812 250,590 761,000 529,652,976 42,564,336 682,915,473
18,907,926
7,093,175
31,676
Lease Rent
14,400
14,400
Licence Fees
12,000
12,000
Interest Income - Customers - Others Tax Deducted at source
151,050,648 25,671,058 6,450,060 5,900,090 196,165,031
2,250
82,879
659,090,950
425,219,562
48,909,476
59,110,844
1,019,813,958
685,207,029
61,459,829
94,282,458
24,417,754
7,469
SCHEDULE 14 : OTHER INCOME Profit on sale of Fixed Assets (Net) Profit on sale of Long Term Investments Miscellaneous Income
5,932
-
1,398,581,955
419,903,138
3,454,998
1,202,385
1,426,460,639
421,112,992
525,039,070
115,552,452
SCHEDULE 15 : COST OF SALES Own Projects Opening Stock: Add : Expenditure/ Transfers from Advances during the period Stock-In-Trade Acquired during the year
317,741,314
-
Development Rights
115,882,000
100,000,000
Construction, Material & Labour
974,292,348
474,430,413
Architect Fees
75,974,660
52,628,095
Advertisement Expenses
41,859,043
7,481,511
377,376,685
270,052,154
305,833,636
149,423,052
2,208,959,686
1,054,015,225
Less : Project transferred to Subsidiary Company
(259,531,382)
-
Less : Closing Stock:
(1,435,939,077)
(525,039,070)
1,038,528,297
644,528,613
1,038,528,297
644,528,613
Salaries, Bonus, Gratuity & Allowances
98,665,676
30,994,798
Contribution to Provident & other funds
8,185,871
6,489,379
SCHEDULE 16 : EMPLOYEE REMUNERATION & BENEFITS
-
23,883
106,851,547
37,508,060
SCHEDULE 17 : ADMINISTRATION EXPENSES Cost of Project Management Consultancy Charges Service Charges Loss on sale of Fixed Assets (Net) Power & Fuel
187,177
1,321,416
7,094,890
7,861,766
135,478
98,139
-
17,548
4,445,260
3,516,734
28,094,016
10,971,849
Insurance
234,543
263,030
Rates & Taxes
119,371
21,284
Repairs & Maintenance
19,472,695
235,645
Other Operating Expenses
81,706,582
75,400,769
Rent
Dimunition in value of investments written back
415
-
141,490,427
99,708,180
526,978,921
406,638,640
SCHEDULE 18 : INTEREST AND FINANCE CHARGES Interest Paid - Banks - Inter Corporate Deposits - Projects and landlords
279,400,036 46,404,854 7,625,984 11,995,150 364,333,950
3,900,000 8,486,786
Other Employee Benefits 2,501,432,277 89,091,768 282,842,884 870,480,333
188,348,882
70,000,000 14,552,183
Interest 834,666,553 305,536,578 1,140,203,131
227,228,811 3,888
Overheads
Due over Six months 822,054,523 Others (includes unbilled revenue of Rs. 348,931,645/555,037,479 1,377,092,002 Previous year Rs. 13,349,711/-) SCHEDULE 9 : CASH & BANK BALANCES Cash & Cheques-in-Hand 6,381,985 Balance with Scheduled Banks - on Current Accounts 178,010,937 539,100,493 - on Fixed Deposit Accounts (Refer Note 2 & 5) 723,493,415 SCHEDULE 10 : LOANS & ADVANCES (UNSECURED, CONSIDERED GOOD) Advances recoverable in cash or in kind or for value to be received (Refer Note 6(a), 6(b)) 4,178,949,152 Loan to GIL ESOP Trust 70,974,033 Loan to GPL ESOP Trust 375,119,478 Due on Management Projects (Refer Note 6(c)) 677,718,723 Interest Accrued Deposits
Compensation Received from Project
Dividends
SCHEDULE 8 : SUNDRY DEBTORS (UNSECURED, CONSIDERED GOOD)
Development Manager Fees Accrued but not due (Refer Note 7 (b)
Income From Development Projects
- Projects and landlords 193,111,414
For the period ended 31.03.2009 Rupees
SCHEDULE 13 : OPERATING INCOME (GROSS)
Other Income from Customers 353,303,226
For the period ended 31.03.2010 Rupees
- Others Total Interest Paid Add : Brokerage & other Financial charges Total Interest/ Finance Charges Paid
8,234,384
1,566,422
76,841,766
64,905,596
32,952,168
2,142,981
645,007,239
475,253,639
26,310,691
37,702,599
671,317,930
512,956,238
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE ACCOUNTS
The fair value of the plan assets is reduced from the gross obligation under the defined benefit plan, to recognize the obligation on net basis.
SCHEDULE 19 : NOTES TO ACCOUNTS & ACCOUNTING POLICIES 1) Accounting Policies: a)
Past service cost is recognized as expense on a straight-line basis over the average period until the benefits become vested.
General
(iii)
The financial statements are prepared under the historical cost convention in accordance with Generally Accepted Accounting Principles in India, the Accounting Standards issued by The Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956. b)
Other long-term employee benefits viz., leave encashment is recognized as an expense in the profit and loss account as and when they accrue. The Company determines the liability using the Projected Unit Credit Method, with actuarial valuations carried out as at the balance sheet date. Actuarial gains and losses in respect of such benefits are charged to the profit and loss account.
Fixed Assets Fixed assets are stated at cost of acquisition or construction less accumulated depreciation. Cost includes all incidental expenses related to acquisition and installation, other pre-operation expenses and interest in case of construction.
i)
Other borrowing costs are recognized as an expense in the period in which they are incurred.
Depreciation/Amortization j)
Depreciation has been provided on Written Down Value basis, at the rates specified in Schedule XIV of the Companies Act, 1956. Leasehold improvements are amortized over a period of lease or five years whichever is less.
k)
Intangible Assets are amortized over a period of six years.
Current tax is measured at the amount expected to be paid to the tax authorities, using the applicable tax rates and tax laws.
Long-term investments are carried at cost. Provision for diminution, if any, in the value of each long-term investment is made to recognize a decline, other than of a temporary nature.
Deferred tax is recognized on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets, subject to consideration of prudence, are recognized and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. The tax effect is calculated on the accumulated timing difference at the year-end based on the tax rates and laws enacted or substantially enacted on the balance sheet date.
Current investments are carried individually at lower of cost and fair value and the resultant decline, if any, is charged to revenue. Inventories Inventories are valued as under: Completed Flats
l)
- At lower of Cost or Market value
Revenue Recognition The Company is following the “Percentage of Completion Method� of accounting. As per this method, revenue in Profit & Loss Account at the end of the accounting year is recognized in proportion to the actual cost incurred as against the total estimated cost of projects under execution with the Company.
m)
n)
Dividend income is recognized when the right to receive the same is established. g)
h)
Provisions and Contingent Liabilities Provisions are recognized in the accounts in respect of present probable obligations, the amount of which can be reliably estimated. Contingent liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company.
Revenue on bulk deals on sale of its properties is recognized on execution of documents.
Interest income is accounted on an accrual basis at contracted rates.
Allocation of Expenses Corporate Employee Remuneration and Administration expenses are allocated to various projects on a reasonable basis as estimated by the management.
Determination of revenues under the percentage of completion method necessarily involves making estimates by the Company, some of which are of a technical nature, concerning, where relevant, the percentages of completion, costs to completion, the expected revenues from the project / activity and the foreseeable losses to completion. Such estimates have been relied upon by the auditors.
Income from operation of commercial complexes is recognized over the tenure of the lease/service agreement.
Foreign Currency Transactions Transactions in foreign currency are recorded at the exchange rates prevailing on the date of the transaction. Assets and liabilities related to foreign currency transactions, remaining unsettled at the year end, are translated at the year end exchange rates. Forward exchange contracts, remaining unsettled at the year end, backed by underlying assets or liabilities are also translated at year end exchange rates.The premium payable on foreign exchange contracts is amortised over the period of the contract. Exchange gains / losses are recognised in the Profit and Loss Account.
Construction Work-in-Progress - At cost Construction Work-in-Progress includes cost of land, premium for development rights, construction costs, allocated interest and expenses incidental to the projects undertaken by the Company. f)
Provision For Taxation Tax expense comprises both current and deferred tax.
Investments Investments are classified into long term and current investments.
e)
Earnings Per Share The basic earnings per share is computed using the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the period, except where the results would be anti-dilutive.
Assets acquired on lease are depreciated over the period of the lease.
d)
Borrowing Cost Interest and finance charges incurred in connection with borrowing of funds, which are incurred for the development of long term projects are transferred to Construction Work in Progress / Due on Management Project, as a part of the cost of the projects at weighted average of the borrowing cost / rates as per Agreements respectively.
Carrying amount of cash generating units / assets are reviewed at balance sheet date to determine whether there is any indication of impairment. If such indication exists, the recoverable amount is estimated as the net selling price or value in use, whichever is higher. Impairment loss, if any, is recognized whenever carrying amount exceeds the recoverable amount. c)
Other long-term employee benefits:
2)
The Initial Public Offer (IPO) proceeds have been utilized as per objects of the issue as stated in the prospectus as under: Particulars Amount Received from IPO
Development Manager Fees
Utilization of Funds upto March 31, 2010
The Company has been entering into Development & Project Management agreements with landlords. Accounting for income from such projects is done on accrual basis on percentage of completion or as per the terms of the agreement.
Funding to part finance the acquisition of land developments rights and construction costs
Employee Benefits a)
Short-term employee benefits: All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits. Benefits such as salaries, wages, performance incentives, etc. are recognized at actual amounts due in the period in which the employee renders the related service.
b)
Post-employment benefits: (i)
Defined Contribution Plans:
Repayment of Loans Issue Expenses
(Rs. in Lacs) 46,884.71 2,500.00 15,017.00 3,808.70
Balance unutilised Amount temporarily invested in Mutual Funds Fixed Deposit / Bank Balance TOTAL
20,559.01 5,000.00 46,884.71
As on 31st March 2010, unutilized funds have been temporarily invested in mutual funds schemes and fixed deposit / balance with banks as mentioned in the prospectus of the Company.
Payments made to defined contribution plans such as Provident Fund are charged as an expense as they fall due. (ii)
Defined Benefit Plans: The cost of providing benefits i.e. gratuity is determined using the Projected Unit Credit Method, with actuarial valuations carried out as at the balance sheet date. Actuarial gains and losses are recognized immediately in the Profit & Loss Account.
147
Godrej Properties Limited SCHEDULES FORMING PART OF THE ACCOUNTS 3)
b)
Contingent Liabilities: Matters
As at 3 1st March 2010 (Rs.) 7,850/-
a)
As at 31st March 2009 (Rs.) 7,850/-
8)
4)
Inventories
Particulars
Current Year (Rs.)
Previous Year (Rs.)
1,400
1,400
5,250
5,250
5)
70 Equity shares of Rs. 100/- each, Rs. 20/- paid up b) 75 Redeemable Preference Class A shares of Rs.100/- each, Rs.70/- paid Cash & Bank Balances:
Later than 1 year and not later than 5 years b)
Maximum Debit Balance during the year
Balance as on March 31, 2010
Balance as on March 31, 2009
3,249,136
3,249,136
1,649,136
Godrej Industries Ltd. b)
Maximum Debit Balance during the year
Balance as on March 31, 2010
Balance as on March 31, 2009
16,032,697
16,032,697
15,344,207
Godrej Waterside Properties Private Limited
768,962,487
556,396,071
203,194,595
Godrej Sea View Properties Private Limited
141,219,295
141,085,481
22,379
Godrej Real Estate Private Limited
983,867,205
983,867,205
845,998,414
Godrej Developers Private Limited
768,328,450
501,260,304
392,825,438
1,227,097,105
1,227,097,105
885,915,640
590,977,587
590,596,924
18,000
Godrej Realty Private Limited
Happy Highrises Limited Godrej Estate Developers Private Limited c) 7)
23,191,357 30,558,198 7,061,962
No. of Options Current Previous Year Year 412,700 442,700 9,000
30,000
403,700
412,700
Weighted Average Exercise Price 620.00 (plus interest) 620.00 (plus interest)
The employee share based payment plans have been accounted based on the intrinsic value method and no compensation expense has been recognized since, the price of the underlying equity shares on the grant date is same /less than exercise price of the option, the intrinsic value of option, therefore being determined as nil. The Company has provided loan of Rs. 375,119,478/- (Previous Year Rs. 282,842,884/-) to GPL ESOP, which is administered by an independent ESOP Trust which has purchased shares of GPL from Godrej Industries Limited equivalent to the number of stock options granted from time to time to eligible employees. The repayment of the loans granted by the Company to ESOP Trust is dependent on the exercise of the options by the employees and the market price of the underlying shares of the unexercised options at the end of the exercise period. The fall in value of the underlying equity shares is on account of market volatility and the loss, if any, can be determined only at the end of the exercise period. In view of the aforesaid, provision for diminution of Rs. 117,750,174/- (Previous Year N.A. as equity shares were not listed) is not considered necessary in the financial statements. The Company has provided loan of Rs. 70,974,033/- (Previous Year Rs. 89,091,768/-) to Godrej Industries Limited Employee Stock Option Scheme (GIL ESOP), which is administered by an independent ESOP Trust which purchases shares of GIL from the market equivalent to the number of stock options granted from time to time to eligible employees. The repayment of the loans granted by the Company to ESOP trust is dependent on the exercise of the options by the employees and the market price of the underlying shares of the unexercised options at the end of the exercise period.
Due on Management Projects include a sum of Rs. 21,564,700/- (Previous Year Rs. 21,479,389/-) on account of a project, where the matter is sub-judice with arbitrators. Construction Work in Progress and Due on Management projects represents materials at site and unbilled cost on the projects based on projections and estimates by the Company of the expected revenues and costs to completion. In the opinion of the management, the net realizable value of the construction work in progress will not be lower than the costs so included.
28,603,511 33,332,065 6,047,901
The Option granted shall vest after three years from the date of grant of option, provided the employee continues to be in employment and the option is exercisable within two years after vesting.
Inventories, Current Assets, Loans and Advances: a)
148
Options Outstanding at the beginning of the year Options granted Options exercised Less : Forfeited / Expired / Lapsed / Idle / Available for re-issue Options Outstanding at the year end
Loan & Advance to Subsidiary Companies:
Particulars
Previous Year Rs.
During the financial year ended 31st March, 2008, the Company instituted an employee Stock Option Plan (GPL ESOP) approved by the Board of Directors, shareholders and the Remuneration Committee, which provided allotment of 442,700 options convertible into 442,700 Equity Shares of Rs. 10/- each to eligible employees of Godrej Properties Limited and its Subsidiary Companies (the Participating Companies) with effect from 28th December, 2007.
Particulars
Amounts due from companies under the same management:
Particulars
26,400 105,600
The Scheme is administered by an Independent ESOP Trust which has purchased shares from Godrej Industries Limited (The holding Company), equivalent to the number of options granted to the eligible employees of the Participating Companies.
Loans and Advances: a)
26,400 105,600
Current Year Rs.
Future minimum lease payments under noncancelable operating leases Not later than 1 year Later than 1 year and not later than 5 years Later than 5 years Employee Stock Option Plan : a)
Previous Year Rs.
The Company’s significant leasing arrangements are in respect of operating leases for Commercial/Residential premises. Lease expenditure for operating leases is recognized on a straight-line basis over the period of lease. The particulars of the premises taken on operating leases are as under: Particulars
Balances with scheduled banks on deposit accounts include Rs.34,422,705/- (Previous year Rs. 34,014,876/-) received from flat buyers and held in trust on their behalf in a corpus fund. 6)
Current Year Rs.
Future minimum lease receipts under noncancelable operating leases Not later than 1 year
Tahir Properties Limited a)
The Company’s significant leasing arrangements are in respect of operating leases for Residential premises. Lease income from operating leases is recognized on a straightline basis over the period of lease. The particulars of the premises given under operating leases are as under: Particulars
9)
Stock - in - Trade includes shares in the following Companies - at cost or market value (whichever is lower):
Leases a)
Uncalled amount of Rs. 80/- & Rs. 30/- on 70 & 75 partly paid shares respectively of Tahir Properties Limited b) Claims against the company not acknowledged 798,647/6,523,647/as debts represents cases filed by parties in the Consumer forum and High Court and disputed by the Company as advised by our advocates. In the opinion of the management the claims are not sustainable c) Claims against the Company under the Labour 1,989,240/2,989,240/Laws for disputed cases d) Guarantees given by Bank, counter guaranteed 30,500,000/20,100,000/by the Company e) Claims against the Company under Bombay 14,850,000/14,850,000/Stamp Act, 1958 f) Other Claims against the Company not 9,925,000/NIL acknowledged as debts g) Claims against the Company under Income 3,369,812/- 101,798,275/Tax Act, Appeal preferred to Commissioner of Income Tax (Appeals) Capital Commitment outstanding for the year ended March 31, 2010 (Net of Advance) is amounting to Rs. NIL (Previous Year Rs. 6,227,909/-)
The company has been entering into Development Agreements with landlords. Development Manager Fees amounting to Rs. 60,230,839/- (Previous Year Rs. 60,230,839/- ) accrued as per terms of the Agreement are receivable by the Company based upon progress milestones specified in the respective Agreements and have been disclosed as Development Manager Fees accrued but not due in Schedule 10.
b)
The fall in value of the underlying equity shares is on account of market volatility and the loss, if any, can be determined only at the end of the exercise period. In view of the aforesaid, provision for diminution of Rs. 29,016,289/- (Previous Year Rs. 63,591,019/-) is not considered necessary in the financial statements.
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE ACCOUNTS 10)
Particulars Profit after tax and prior years tax adjustments as per Profit & Loss Account Weighted average No. of equity shares outstanding Basic earnings per share
Current Year Rs. 1,216,274,218
Previous Year Rs. 737,252,260
62,977,917
60,420,259
Rs. 19.31
Rs. 12.20
Rs.10 /-
Rs. 10 /-
Nominal value of shares 11)
17)
Segment Information: As the company has only one business segment, disclosure under Accounting Standard 17 on “Segment Reporting” issued by the Institute of Chartered Accountants of India is not applicable.
18)
Related Party Disclosures:
Earnings Per Share
Dues to Micro, Small and Medium Industries
1. (i)
(ii)
Disclosure of sundry creditors under current liabilities is based on the information available with the Company regarding the status of the suppliers as defined under the “Micro, Small & Medium Enterprises Development Act 2006”. There is no amount overdue as on 31st March, 2010 to Micro, Small & Medium Enterprises on account of principal amount together with interest and also during the previous year. 12)
The amount of exchange difference included in the Profit and Loss Account, under the related heads of expenses is Rs. (25,624/-). (Previous Year Rs. 13,971,672/-).
13)
Expenditure in Foreign Currency Particulars Travelling Expenses Other Expenditure Total
14)
(iii) Current Year Rs. 1,788,397 64,963,887 66,752,284
Previous Year Rs. 1,663,605 46,588,039 48,251,644
Deferred Tax The tax effect of significant temporary differences that resulted in deferred tax assets are: Particulars Depreciation on Fixed Assets
15)
Current Year Rs.
Previous Year Rs.
(3,523,000)
661,000
Others
6,317,500
4,198,000
Deferred Tax Asset
2,794,500
4,859,000
Computation of Net Profit under Section 349 of the Companies Act, 1956 Particulars
Current Year Rs.
Previous Year Rs.
1,587,458,966
1,060,342,632
Managerial Remuneration
39,754,731
29,267,596
Depreciation
24,528,123
10,677,865
Profit before Tax as per Profit and Loss Account Add :-
Loss on sale of Fixed Asset
-
17,548
24,528,123
10,677,865
5,932
-
1,627,207,765
1,089,627,776
178,992,854
119,859,055
Less :Depreciation Profit on sale of Fixed Asset Net Profit for the purpose of Directors Remuneration (a) 11% (Previous Year 11%) of Net Profit as computed above Managerial Remuneration:Particulars A B C D E F
Salaries Contribution to Provident Fund Estimated Monetary Value of Perquisites Performance Linked Variable Remuneration Director Sitting Fees to Non-Executive Director Commission to Non-Executive Director Total
Current Year Rs. 20,196,168 1,048,608 1,474,955 11,030,000 1,005,000 5,000,000 39,754,731
Previous Year Rs. 15,609,280 823,552 1,123,358 6,139,346 772,060 4,800,000 29,267,596
Notes:
16)
(iv)
(v)
2.
(i)
Godrej & Boyce Mfg. Co. Ltd. (i)
Godrej Industries Ltd. (ii)
Subsidiaries
1.
3.
Investment in equity/ preference share capital Sale of Investments (Preference Shares) Purchase of fixed assets
4.
Advances given
5. 6.
Advance received against sale of flats Loans & Advances repaid
7.
Deposit given
8.
Deposit repaid
9.
16,358,085 2,977,879 8,822,568 -
Inter-Corporate Deposit taken Inter-Corporate Deposit repaid Interest (Paid)/Received on Inter-Corporate Deposit Construction & other expenses incurred on behalf of other companies Expenses charged by 94,505,898 other companies (net) 107,880,517 Dividend paid 1,725,000 Outstanding receivables, (14,470,248) net of (payables) (9,005,774) Deposits receivable -
555,627 86,284,840 135,484,520 1,600,000 625,000 350,000 55,000,000 55,000,000 (3,571,233) 2,286,799 1,108,550
500,000 214,944,318 2,042,546,970 1,697,797,318 1,092,756,863 1,876,301,328 735,552,192 406,168,736
Other Related Parties In Godrej Group (iv) 10,000,000 350,000,000 10,000,000 350,000,000 (39,041) (964,383) 228,393 -
26,706,213 5,323,036 121,238,023 196,185,842 (7,838,443) 24,136 3,225,000 1,625,000
9,604,511 7,178,648 4,016,335,787 2,347,580,672 -
10,864 353,686 4,919,625 8,112,751 -
2.
10.
Amounts paid to Auditors:
12.
Audit Fees Audit under other Statutes Certification under other Statutes Other Certifications Consultancy Charges Reimbursement of Expenses
Previous Year Rs. 2,525,870 904,460 3,418,553 108,995 495,788 2,121
Details relating to parties referred to in items 1 (i), (ii) and (iii) above
Description
11.
Current Year Rs. 1,963,340 1,036,820 1,384,265 118,703 4,412 8,553
The following transactions were carried out with the related parties in the ordinary course of business.
Sr. No.
In case of the Managing Director and Executive Director, Performance Linked Variable Remuneration of Rs. 11,030,000/- (Previous Year Rs. 6,139,346/-) is on the basis of provision made in the accounts.
Particulars
Related party disclosures as required by AS - 18, “Related Party Disclosures”, are given below: Relationships: Shareholders (Holding Company) Godrej Industries Limited (GIL) holds 69.43% (Previous Year 80.26%) shares in the Company. GIL is the subsidiary of Godrej & Boyce Mfg. Co. Limited, the Ultimate Holding Company. Subsidiaries : Godrej Realty Private Limited (51%) Godrej Waterside Properties Private Limited (51%) Godrej Real Estate Private Limited (100%) Godrej Developers Private Limited (51%) Godrej Sea View Properties Private Limited (77.73%) (100% upto 30th March, 2010) Happy Highrises Limited (51%) (100% upto 13th September, 2009) Godrej Estate Developers Private Limited (51%) (100% upto 19th March, 2010) Other Related Parties in Godrej Group, where common control exists : Vora Soaps Limited Bahar Agrochem & Feeds Private Limited Ensemble Holdings & Finance Limited Godrej Appliances Limited Godrej Agrovet Limited Godrej Consumer Products Limited Godrej Saralee Limited Godrej SCA Hygiene Limited Godrej Hershey Limited Godrej Infotech Limited Lawkim Limited Natures Basket Limited Key Management Personnel : Mr. Milind Surendra Korde Mr. Pirojsha A. Godrej Individuals exercising Significant Influence : Mr. A. B. Godrej Mr. N. B. Godrej
13. 14. 15. 16.
(iii)
149
Godrej Properties Limited SCHEDULES FORMING PART OF THE ACCOUNTS
19)
(i)
Figures in italics are for previous year. (ii) Details relating to persons referred to in items 1 (iv) & (v) above
3.
Sr. No.
Key Management Personnel
1. 2. 3. 4.
Remuneration Reimbursement of Travel Expenses Dividend Paid Individuals exercising significant Influence : Dividend paid – Mr. N.B. Godrej
Defined Contribution Plans: Contribution to Defined Contribution Plan, recognized as expense for the year are as under:
Current Year Rs.
Previous Year Rs.
33,749,731 240,000 1,466,868
23,695,536 217,200 2,477,724
4,325,625
7,133,210
Particulars
Investment in equity share capital
Subsidiaries & Other Related Parties in the Godrej Group Godrej Estate Developers Pvt. Ltd.
Sale of Investments (Preference Shares)
Godrej Developers Private Limited
Purchase of fixed assets
Godrej & Boyce Mfg. Co. Limited Godrej Industries Limited
Advances given
Godrej Waterside Properties Private Limited Godrej Developers Private Limited
Advances repaid
Godrej Estate Developers Private Limited Godrej Waterside Properties Private Limited Godrej Developers Private Limited
Advance received against sale of flats Inter-Corporate Deposits taken during the year
Godrej Industries Limited Godrej Agrovet Ltd. Godrej Industries Limited Natures basket Limited
Inter-Corporate Deposits repaid during the year
Godrej Agrovet Ltd. Godrej Industries Limited Natures basket Limited
Deposit given
Godrej Industries Limited
Deposit repaid
Godrej Industries Limited
Construction & other expenses incurred on behalf of other companies
Happy Highrises Ltd. Godrej Waterside Properties Private Ltd. Godrej Real Estate Private Limited Godrej Developers Private Limited
Amount Rs. 500,000 214,944,318 16,358,085 2,977,879 555,627 763,850,000 1,186,033,000 501,687,500 333,644,318 329,645,356 500,752,038 1,674,651,328 453,900,000 88,250,000 86,284,840 135,484,520 350,000,000 55,000,000 10,000,000 350,000,000 55,000,000 10,000,000 1,600,000 625,000 350,000 181,214,018 114,240,742
(ii)
Interest (Paid)/Received on InterCorporate Deposits given
Outstanding receivables, net of (payables)
Dividend paid
Godrej Industries Limited
Deposit receivable
Godrej Industries Limited
121,238,023 196,185,842 3,225,000 1,625,000
8,144,688
6,444,909
41,183
44,470
Defined Benefit Plans: a.
Contribution to Gratuity Fund Gratuity is payable to all eligible employees on death or on separation/ termination in terms of the provisions of the Payment of Gratuity Act or as per the Company’s policy whichever is beneficial to the employees. The following table sets out the funded status of the gratuity plan and the amounts recognized in the Company’s financial statements:
Particulars
Current Year (Rs.)
Previous Year (Rs.)
6,450,060 499,880 1,231,678 (1,224,663) 238,552 430,477 7,625,984
4,211,619 336,929 727,433 (392,197) 841,500 724,776 6,450,060
(430,477) (430,477)
(724,776) (724,776)
1,231,678 499,880 430,477 2,162,035
727,433 336,929 724,776 1,789,138
(In %) 7.75 4.75
(In %) 7.75 4.75
Change in present value of obligation Present value of obligation as at beginning of the year Interest Cost Service Cost Benefits Paid Effect of Liability Transfer in Actuarial (gain)/loss on obligation Present value of obligation, as at end of the year Amount recognized in the Balance Sheet Present value of obligation, as at end of the year Fair value of plan assets as at end of the year Net obligation as at end of the year Net gratuity cost for the year ended Current Service Cost Interest Cost Expected return on plan assets Net Actuarial (gain)/loss to be recognized Net gratuity cost Assumptions used in accounting for the gratuity plan Discount Rate Salary escalation rate
The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. 20)
Information in respect of Joint Ventures Jointly Controlled Operations
Godrej Estate Developers Pvt. Ltd.
Expenses charged by other companies (net)
Previous Year (Rs.)
Employers’ Contribution to Provident Fund
77,778,258 136,308,667 118,101,621 108,151,756 61,571,202 47,353,570
264,496,384 18,000 Godrej & Boyce Mfg. Co. Limited 94,505,898 107,880,517 Godrej Industries Limited 26,706,213 5,323,036 Godrej Industries Limited (3,571,233) Godrej Agrovet Ltd. (964,384) Godrej Real Estate Private Limited 983,867,205 845,998,414 1,227,097,105 Happy Highrises Limited 885,915,639 501,260,304 Godrej Developers Private Limited 397,087,438 Godrej Waterside Properties Private Ltd. 556,396,071 203,194,595 Godrej Estate Developers Private 590,596,924 Limited 18,000
Current Year (Rs.)
Employers’ Contribution to ESIC
Significant Related Party Transactions
Nature of Transactions
150
Employee Benefits
-
Development of the following Residential/ Commercial Projects:
Coliseum, Mumbai
-
Profit sharing
Woodsman Estate, Bengaluru
-
Revenue Sharing
Gold County, Bengaluru
-
Profit Sharing
Planet Godrej, Mumbai
-
Profit Sharing Profit Sharing
Glenelg, Mumbai
-
Edenwoods, Mumbai
-
Revenue / Profit Sharing
Shivajinagar, Pune
-
Profit Sharing
Bhugaon, Pune Avalon Project
-
Area Sharing/Revenue Sharing
Sanjay Khan, Bengaluru
-
Revenue Sharing
Grenville Park, Mumbai
-
Profit Sharing
Godrej Garden City, Ahmedabad
-
Area Sharing
K. Syama Raju, Bengaluru
-
Area Sharing
Vikhroli
-
Profit Sharing
Kochi
-
Revenue Sharing
Umbarde, Kalyan
-
Revenue Sharing
21)
Previous year's figures have been regrouped/rearranged wherever necessary to confirm to current year’s classification.
22)
Additional information as required under Part IV of Schedule VI of the Companies Act, 1956 to the extent not applicable has not been given.
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE ACCOUNTS 23)
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010
Statement Pursuant to Part IV of Schedule VI of the Companies Act, 1956 Balance Sheet Abstract for the Year Ended March 31, 2010 And Company’s General Business Profile
a)
b)
c)
d)
e)
Registration Details Registration No. State Code Balance Sheet Date
U74120MH1985PLC035308 11 March 31, 2010
Capital raised during the year (Amount in Rs. Thousands) Public Issue (Including Premium) Rights Issue Bonus Issue Private Placement
Profit for the Year before Taxation
2
3
The Company’s interest in the subsidiaries as on 31st March, 2010 a. Number of Equity Shares Total Number of Shares b. Face Value (Rs.) c. Extent of Holding Net aggregate profit/ (loss) of the subsidiary company so far it concerns the members of the Company A. For the financial year ended on 31st March, 2010 i. Not dealt with in the books of Accounts of the Company ii. Dealt with in the books of account of the Company B. For the subsidiary company’s previous financial years since it became a subsidiary i. Not dealt with in the books of Accounts of the Company ii. Dealt with in the books of account of the Company
Godrej Godrej Godrej Developers Estate Real Estate Private Developers Private Limited Private Limited Limited
512,956,238
(5,932)
17,548
(201)
-
Interest Income
25,500
66,730 10 51.00%
50,000 10 51.00%
50,000
(24,417,754)
(7,469) (419,903,138)
Operating Profit before working capital changes
152,288,807
679,670,391
Change in Inventory
(910,900,009)
(409,486,615)
Change in Sundry Debtors
(236,888,871)
(400,673,167)
Change in Loans & Advances Change in Current Liabilities / Provisions Taxes Paid (Net) Net Cash Flow from Operating activities
50,000 1,000,000 10 10 100.00% 51.00%
(2,319,465,704)
(941,598,612)
588,980,038
(394,976,650)
(2,725,985,739)
(1,467,064,653)
(357,305,497)
(422,073,561)
(3,083,291,236)
(1,889,138,213)
(60,894,380)
(52,537,298)
Cash Flow from Investing Activities Purchase of Fixed Assets Sale of Fixed Assets Sale of Investments
1,576,383
499,693
(2,978,561,060)
(500,000)
2,456,616,320
420,162,818
Interest Received
700,178,755
450,878,689
Dividend Received
24,417,754
7,469
143,333,772
818,511,371
Net Cash Flow from Investing Activities Cash Flow from Financing Activities
Godrej Godrej Godrej Realty Sea View Waterside Private Properties Properties Limited Private Private Limited Limited
388,636
(484,413,285)
(1,398,590,265)
Purchase of Investments
510,000
-
(708,002,676)
Profit on Sale of Long Term & Current Investment
Happy Highrises Limited
Proceeds from Issue of Equity Share Capital (Net of Issue Expenses)
4,285,654,795
-
Change in Cash Credit
(682,248,703)
981,174,047
(Repayment)/ Proceeds from Term Loan
(600,000,000)
600,000,000
Proceeds from Unsecured Borrowings
631,804,140
372,843,185
(Repayment)/ Proceeds from Inter Company Deposit
(20,000,000)
20,000,000
(Repayment)/ Acceptance of Fixed Deposits
748,943,000
(19,098,000)
Interest Paid
(671,317,930)
(512,956,239)
Payment of Dividend
(151,050,648)
(246,124,143)
(25,671,058)
(41,828,800)
3,516,113,596
1,154,010,050
Net Increase in Cash & Cash Equivalent
576,156,132
83,383,208
Cash & Cash Equivalent -Opening Balance
147,337,283
63,954,075
Cash & Cash Equivalent -Closing Balance
723,493,415
147,337,283
Tax on Distributed Profits 34,032
616
Adjustment for:
105,060 2,477,724 10,117,658 Nil 2,795 Nil
N.A
Name of the Subsidiary Company
10,677,865
671,317,930
Investment Written Off
STATEMENT REGARDING SUBSIDIARY COMPANY PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956 1
24,528,123
Interest Paid Provision for Dimunition in value of Investment written back
698,500 7,455,719 1,284,681 3,264,337
Generic Name of three principal products/services of Company
1,060,342,632
Depreciation (Profit) /Loss on sale of Fixed Asset (Net)
14,336,178 14,336,178
3,570,175 1,982,716 1,587,459 1,218,411 19.31 40%
1,587,458,966
Adjustment for:
Dividend Received
Performance of Company (Amount in Rs. thousands) Turnover Total Expenditure (Net of other income) Profit before tax Profit after tax Earning per Share in Rs. (on an annualized basis) Dividend rate %
Previous year Rupees
Cash Flow from Operating Activities
4,688,471 Nil Nil Nil
Position of mobilisation and deployment of funds (Amount in Rs. Thousands) Total Liabilities Total Assets Sources of Funds Paid-up Capital Reserves & Surplus Secured Loans Unsecured Loans Application of Funds Net Fixed Assets Investments Net Current Assets Misc. Expenditure Deferred Tax Asset Accumulated Losses
Current year Rupees
510,000
103,592
500,000 1,000,000 1 10 77.73% 51.00%
203,120 10 51.00%
Net Cash Flow from Financing Activities
Notes :-
(35,678)
(29,397)
-
-
(388,913) 2,824,096
(25,239) 2,005,492 10,659,915
1.
The cash flow statement has been prepared under the 'Indirect Method' as set out in the Accounting Standard (AS) 3 on 'Cash Flow Statement', and presents cash flows by operating, investing and financing activities.
2.
Figures for the previous year have been regrouped / restated wherever necessary to conform to this year's classification.
For and on behalf of -
-
-
-
-
KALYANIWALLA & MISTRY Chartered Accountants ERMIN K. IRANI Partner Mumbai, Dated : May 17, 2010
(56,438)
(45,095)
(75,917)
343,981
-
-
-
-
(145,288) 5,412,437 -
-
Adi. B. GODREJ Chairman
MILIND S. KORDE Managing Director
SHODHAN A. KEMBHAVI Company Secretary
(13,606) -
151
Godrej Realty Private Limited BOARD OF DIRECTORS’ REPORT FOR THE YEAR ENDED MARCH 31, 2010 TO THE SHAREHOLDERS Your Directors have pleasure in submitting their Report along with the Audited Accounts for the year ended March 31, 2010. 1. FINANCIAL HIGHLIGHTS: The accounting results for the period ended March 31, 2010 reveal that there is surplus at the end of the period. During the year the Company has created Debenture Redemption Reserve as required under Section 117(C) of the Companies Act, 1956. 2. REVIEW OF OPERATIONS: The Company has conceptualized and finalized the design for the First Phase of the Project and is awaiting further approvals for the same. 3. DIVIDEND : There is no Dividend declared for the year ended March 31, 2010. 4. DIRECTORS : In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Mr. Naresh Nadkarni, retires by rotation and being eligible, offers himself for re-appointment. 5. APPOINTMENT OF AUDITORS: M/s. Kalyaniwalla & Mistry, Chartered Accountants retire at the ensuing Annual General Meeting and are eligible for re-appointment for which they have given their consent. 6. DIRECTORS’ RESPONSIBILITY STATEMENT: Your Director’s confirm: (i) that in the preparation of the annual accounts, the applicable accounting standards have been followed; (ii) that the Directors have selected such accounting policies and applied them 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 ended March 31, 2010 and of the profit of the Company for that year; (iii) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (iv) that the Directors have prepared the annual accounts on a going concern basis.
7.
8.
ADDITIONAL INFORMATION: (a) Since the company has no employees, the particulars of the employees to be disclosed u/s 217 (2A) of the Companies Act, 1956 read with Companies (particulars of employees) Rules, 1975, are not given. (b) Information in respect of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, required under section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is provided hereunder: (i) Conservation of Energy : Expenses on account of Energy are negligible. (ii) Technology Absorption: It is an on going process. (iii) Foreign Exchange Earning & Outgo: The Company has not earned any Foreign Exchange nor incurred any Foreign Exchange Expenditure during the year. ACKNOWLEDGEMENT: Your Directors take this opportunity to thank all the associates for their co-operation. For and on behalf of the board of directors
Place : Mumbai
Milind S. Korde
NARESH NADKARNI
Director
Director
Dated : May 14, 2010
REPORT OF THE AUDITORS TO THE MEMBERS OF GODREJ REALTY PRIVATE LIMITED 1.
2.
3. 4.
We have audited the attached Balance Sheet of GODREJ REALTY PRIVATE LIMITED, as at 31st March, 2010, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We have conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditor’s Report) Order, 2003, issued by the Central Government in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order. Further to our comments in the Annexure referred to in paragraph (3) above, we report that: a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit. b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of such books. c) The Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account. d) In our opinion, the Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956. e) Without qualifying our opinion, we draw attention to the fact that as referred to in Note 1(e) of Schedule 12-Notes to Accounts, in respect of projects under long term contracts undertaken and/or financed by the Company, we have relied upon the management’s estimates of the percentage of completion, costs to completion and on the projections of revenues expected from projects owing to the technical
nature of such estimates, on the basis of which profits/losses have been accounted, interest income accrued and realizability of the construction work in progress and project advances determined. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010; ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date and iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date. 5. On the basis of the written representations received from the directors as on 31st March, 2010, and taken on record by the Board of Directors, we report that, none of the directors is disqualified as on 31st March, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956. For and on behalf of KALYANIWALLA AND MISTRY Chartered Accountants Firm Registration No. 104607W ERMIN K. IRANI Partner Membership No. 35646 Place : Mumbai, Dated : May 14, 2010 f)
ANNEXURE TO THE AUDITORS' REPORT Referred to in paragraph (3) of our report of even date. 1) (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets. (b) As explained to us, the Company has a program for physical verification of fixed assets at periodic intervals. In our opinion, the period of verification is reasonable having regard to the size of the Company. (c) There is no disposal of fixed assets during the year. 2) (a) The management has conducted physical verification of inventory at reasonable intervals. (b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. (c) The company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification. 3) (a) The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. (b) Consequently, the question of commenting on the rates of interest, terms and conditions of the loans granted being prejudicial to the interests of the Company, receipt of regular principal and interest and reasonable steps for recovery of the same does not arise. (c) The Company has not taken any loan, secured or unsecured from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. (d) Consequently, the question of commenting on the rates of interest and others terms and conditions of the loans taken being prejudicial to the interests of the Company, payment of regular principal and the interest does not arise. 4) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchases of inventory, fixed assets and for the sale of goods. There are no sales of service. During the course of our audit, we have not observed a continuing failure to correct major weaknesses in internal controls. 5) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the particulars of contracts and arrangements referred to in Section 301 of the Companies Act, 1956 have been entered into the register required to be maintained under that section. (b) The transactions made in pursuance of such contracts or arrangements, were made at prices which are reasonable having regard to prevailing market prices at the relevant time, where comparable market price exist. 6) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public hence the provisions of Section 58A and 58AA or any other provisions of the Companies Act, 1956, are not applicable. 7) The Company has an internal audit system, which in our opinion is commensurate with the size of the Company and nature of its business. 8) In our opinion and according to the information and explanations given to us, The Central Government has not been prescribed maintenance of cost records under section 209(1) (d) of the Companies Act, 1956, in respect of the activities carried on by the Company. 9) (a) According to the information and explanations given to us and on the basis of our examination of books of accounts, during the year, the Company has been generally regular in depositing undisputed statutory
152
dues including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income Tax, Value Added Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess and other statutory dues incurred during the year. According to the information and explanations given to us, there are no undisputed dues, payable in respect of above as at 31st March 2010 for a period of more than six months from the date they became payable. (b) According to the information and explanations given to us, there are no dues outstanding of Sales Tax, Value Added Tax, Income Tax, Wealth Tax, Excise Duty, cess on account of any dispute. 10) The Company does not have accumulated losses at the end of the financial year and has not incurred any cash losses in the current and immediately preceding financial year. 11) According to the information and explanations given to us and based on documents and records produced to us, the Company has not defaulted in repayment of dues to banks and debenture holders. There are no dues to financial institutions. 12) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. 13) In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/ mutual benefit fund/ societies. 14) In our opinion and according to the information and explanations given to us, the Company does not deal in shares, securities, debentures and other investments. 15) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions. 16) Based on our examination and according to the information and explanations given to us, there were no term taken during the year. 17) According to the information and explanations given to us and an overall examination of the Balance Sheet and Cash Flows of the Company, we report that the Company has not utilized funds raised on short-term basis for long-term investments. 18) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956. 19) The Company did not issue any debentures during the year. 20) The Company has not raised any money through a public issue during the year. 21) Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year. For and on behalf of KALYANIWALLA AND MISTRY Chartered Accountants Firm Registration No. 104607W ERMIN K. IRANI Partner Membership No. 35646 Mumbai, May 14, 2010
Annual Report 2009–2010
BALANCE SHEET AS AT 31ST MARCH, 2010 Schedule
SOURCES OF FUNDS Shareholders’ Funds Share Capital Reserves & Surplus Loan Funds Secured Loans Deferred Tax Liability APPLICATION OF FUNDS Fixed Assets Gross Block Less : Depreciation Net Block Investments Current Assets, Loans & Advances Inventory Cash & Bank Balances Loans & Advances Less : Current Liabilities & Provisions Current Liabilities
1 2 3
4
5 6 7
8
Net Current Assets Notes To Accounts & Accounting Policies
The Schedules referred to above form an integral part of the Balance sheet
As at 31.03.2010 Rupees
As at 31.03.2009 Rupees
10,000,000 6,211,915
10,000,000 674,472
150,000,000 1,000 166,212,915
150,000,000 1,000 160,675,472
247,525 22,421 225,104 -
247,525 20,468 227,057 -
90,702,935 105,396,053 3,925,054 200,024,042
84,163,008 101,915,567 9,490,264 195,568,839
34,036,231 34,036,231 165,987,811 166,212,915
35,120,424 35,120,424 160,448,415 160,675,472
12
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010 For the Schedule For the
Interest Income
28,785,599
EXPENDITURE Cost of Sales
9
-
-
Administration Expenses
10
-
23,451
Interest & Finance Charges
11
1,500,150
24,727,520
Depreciation Profit/ (Loss) for the Year
1,953
7,917
8,152,462
4,026,711
(2,614,000)
(1,248,000)
Provision for Taxation For Current Tax For Deferred Tax Profit/ (Loss) After Tax Prior Year Tax Adjustment
-
(4,000)
5,538,462
2,774,711
(1,019)
-
-
(2,100,239)
Amount available for appropriation
5,537,443
674,472
Transfer to Debenture Redemmption Reserve
5,537,443
674,472
Deficit Brought Forward
Balance Carried Forward Earning per share Basic in Rs. (Refer Note 5) Earning per share Diluted in Rs. (Refer Note 5)
The Schedules referred to above form an integral part of the Profit and Loss Account As per our Report of even date.
For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants
For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants MILIND S. KORDE NARESH NADKARNI Directors
9,654,565
(Tax deducted at Source Rs.9,70,762/- [Previous Year Rs. 6,507,756/-])
As per our Report of even date.
ERMIN K. IRANI Partner Mumbai, Dated: May 14, 2010
Year ended 31.03.2009 Rupees
INCOME
Notes to Accounts & Accounting Policies
Signatures to Balance sheet and Schedules 1 to 8 and 12
Year ended 31.03.2010 Rupees
-
-
5.54
2.77
0.41
0.65
12 Signatures to Profit and Loss Account and Schedules 9 to 12
ERMIN K. IRANI Partner Mumbai, Dated: May 14, 2010
MILIND S. KORDE NARESH NADKARNI Directors
SCHEDULES FORMING PART OF THE ACCOUNTS As at 31.03.2010 Rupees
As at 31.03.2009 Rupees
SCHEDULE 1 : SHARE CAPITAL
Construction Work in Progress 10,000,000
10,000,000
10,000,000
10,000,000
SCHEDULE 6 : CASH & BANK BALANCE
10,000,000
10,000,000
Balance with Scheduled Bank - on Current Account
Cash in Hand
Issued & Subscribed & Paid Up 1,000,000 Equity Shares of Rs.10/- each, fully paid-up (Out of the above 510,000 equity shares are held by Godrej Properties Limited, the Holding Company and its nominee)
- on Fixed Deposit Account 10,000,000
10,000,000
Transferred from Profit & Loss Account
674,472
-
5,537,443
674,472
Less : Utilised during the year
-
-
Balance at the end of the year
6,211,915
674,472
PROFIT & LOSS ACCOUNT Balance at the end of the year
-
-
6,211,915
674,472
84,163,008
90,702,935
84,163,008
667
667
105,395,386
410,413
-
101,504,487
105,396,053
101,915,567
SCHEDULE 7 : LOANS & ADVANCES Advances recoverable in cash or kind or for value to be received Others Advance Tax and Tax Deducted at Source
412
3,922,385
3,924,642
5,567,879
3,925,054
9,490,264
(Net of provision for Tax of Rs. 38,62,000/- previous year Rs. 15,82,610/- ) SCHEDULE 8 : CURRENT LIABILITIES
SCHEDULE 3 : SECURED LOANS 1% Secured Redeemable optionally Convertible Debentures
90,702,935
(Unsecured & considered good unless otherwise stated)
SCHEDULE 2 : RESERVES & SURPLUS DEBENTURE REDEMPRION RESERVE Balance as per last Balance Sheet
As at 31.03.2009 Rupees
SCHEDULE 5 : INVENTORY
Authorised 1,000,000 Equity shares of Rs.10/- each
As at 31.03.2010 Rupees
150,000,000
150,000,000
150,000,000
150,000,000
(Refer Note 2) SCHEDULE 4 : FIXED ASSET
Sundry Creditors ( Refer Note 3)
888,634
809,480
Other Liabilities
369,923
2,883,271
32,777,674
31,427,673
34,036,231
35,120,424
Interest Accrued but not due
Particulars
Gross Block Depreciation Net Block As at Additions Deductions Upto For the Deductions As at Upto As at As at 1st April 31st March 1st April Year 31st March 31st March 31st March 2010 2009 2009 2010 2010 2009 Rs. Rs Rs Rs Rs Rs Rs Rs Rs Rs Land (Refer Note 2) 222,175 222,175 222,175 222,175 Computers 25,350 25,350 20,468 20,468 4,882 4,882 Motor Vehicle Total 247,525 247,525 20,468 20,468 227,057 227,057 Previous Year 347,608 100,083 247,525 63,850 7,917 51,299 20,468 227,057
153
Godrej Realty Private Limited SCHEDULES FORMING PART OF THE ACCOUNTS For the year ended 31.03.2010 Rupees SCHEDULE 9 : COST OF SALES Opening Stock: 84,163,009 Add : Expenditure/ Transfers from Advances during the period Construction Material & Labour 150,724 Architect Fees 5,027,474 Overheads 1,361,728 Interest 90,702,935 Less : Transferred to Interest & Finance Charges Less : Closing Stock: 90,702,935 Cost of Sales SCHEDULE 10 : ADMINISTRATION EXPENSES Loss on sale of Fixed Assets SCHEDULE 11 : INTEREST AND FINANCE CHARGES (NET) Interest Paid 1,500,000 Others Total Interest paid 1,500,000 Add : Trfd from Cost of Sales 150 Add : Brokerage & Other Financial Charges GROSS INTEREST 1,500,150 Less : Transferred to Cost of Sales 1,500,150 NET INTEREST
For the year ended 31.03.2009 Rupees 88,563,479 7,809,660 756,159 4,527,861 101,657,159 17,494,151 84,163,008 23,451 23,451
11,761,030 11,761,030 17,494,151 200 29,255,381 4,527,861 24,727,520
SCHEDULE 12 : NOTES TO ACCOUNTS AND ACCOUNTING POLICIES 1) Accounting Policies a) General The financial statements are prepared under the historical cost convention in accordance with Generally Accepted Accounting Principles in India, the Accounting Standards issued by The Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956. b) Fixed Assets Fixed assets are stated at cost of acquisition or construction less accumulated depreciation. Cost includes all incidental expenses related to acquisition and installation, other pre-operation expenses and interest in case of construction. Carrying amount of cash generating units / assets are reviewed at balance sheet date to determine whether there is any indication of impairment. If such indication exists, the recoverable amount is estimated as the net selling price or value in use, whichever is higher. Impairment loss, if any, is recognized whenever carrying amount exceeds the recoverable amount. c) Depreciation / Amortization Depreciation has been provided on Written Down Value basis, at the rates specified in Schedule XIV of the Companies Act, 1956. d) Inventories Inventories are valued as under : a) Completed Flats - At lower of Cost or Market value b) Construction Work-in-Progress - At cost Construction Work in Progress includes cost of land, premium for development rights, construction costs, allocated interest and expenses incidental to the projects undertaken by the Company. e) Revenue Recognition The Company is following the “Percentage of Completion Method” of accounting. As per this method, revenue in Profit & Loss Account at the end of the accounting year is recognized in proportion to the actual cost incurred as against the total estimated cost of projects under execution with the Company. Determination of revenues under the percentage of completion method necessarily involves making estimates by the Company, some of which are of a technical nature, concerning, where relevant, the percentages of completion, costs to completion, the expected revenues from the project/activity and the foreseeable losses to completion. Such estimates have been relied upon by the auditors. Interest income is accounted on an accrual basis at contracted rates. f) Borrowing Cost Interest and finance charges incurred in connection with borrowing of funds, which are incurred for the development of long term projects are transferred to Construction Work in Progress / Due on Management Project, as a part of the cost of the projects at weighted average of the borrowing cost / rates as per Agreements respectively. Other borrowing costs are recognized as an expense in the period in which they are incurred. g) Earnings Per Share The basic earnings per share is computed using the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the period, except where the results would be anti-dilutive. h) Provision for Taxation Tax expense comprises both current and deferred tax. Current tax is measured at the amount expected to be paid to the tax authorities, using the applicable tax rates and tax laws. Deferred tax is recognized on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets, subject to consideration of prudence, are recognized and carried forward only to the extent
154
2)
3)
4)
that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. The tax effect is calculated on the accumulated timing difference at the year-end based on the tax rates and loss exacted on substantially exacted on the balance sheet date. i) Foreign Currency Transactions Transactions in foreign currency are recorded at the exchange rates prevailing on the date of the transaction. Assets and liabilities related to foreign currency transactions, remaining unsettled at the year end, are transalated at the year end exchange rates. Forward exchange contracts, remaining unsetteled at the year end, backed by underlying assets or liabilities are also translated at year end exchange rates.The premium payable on foreign exchange contracts is amortised over the period of the contract. Exchange gains / losses are recognised in the Profit and Loss Account. j) Provisions and Contingent Liabilities Provisions are recognized in the accounts in respect of present probable obligations, the amount of which can be reliably estimated. Contingent liabilities are disclosed in respect of possible obligations that arise from the past events but their existence is confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. As on the balance sheet date there is no contingent liability. Secured Loans The 1% secured optionally convertible debentures are redeemable at the end of the 7 years from the deed date of allotment and are secured to the extent of specific immovable assets of the Company disclosed under the head “Fixed Assets”. The Company has created a Debenture Redemption Reserve as required under Section 117 ( C ) of the Companies Act, 1956 to the extent of Profit available for distribution. Micro, Small and Medium Enterprises Development Act, 2006: Disclosure of sundry creditors under current liabilities is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small & Medium Enterprises Development Act 2006". There is no amount overdue as on 31st March, 2010 to Micro, Small and Medium Enterprises on account of principal amount together with interest and also during the previous year. Deferred Tax The Tax effect of significant temporary differences that resulted in deferred tax liabilities are : Particulars Liabilities -Depreciation on Fixed Assets Deferred Tax Liabilities
5)
7)
8)
(1,000) (1,000)
(1,000) (1,000)
Earnings per share Particulars Profit for the year as per Profit & Loss Account Weighted average no. of Equity Shares outstanding Weighted average no. of Potential Equity Shares outstanding Basic Earnings Per Share (Rs.) Diluted Earnings Per Share (Rs.) Nominal value of shares
6)
Current Year(Rs.) Previous Year (Rs.)
Current Year(Rs.) Previous Year (Rs.) 55,37,443 2,774,711 1,000,000 1,000,000 16,000,000 16,000,000 5.54 2.77 0.41 0.65 10 10
Amounts paid to Auditors: Particulars Current Year(Rs.) Previous Year (Rs.) Audit Fees 159,935 159,935 Audit & Other Statutes 55,150 55,150 Certification 1,124 Consultancy charges 67,293 33,708 Total 282,378 249,917 Segment Information As the company has only one business segment, disclosure under Accounting Standard 17 on “ Segment Reporting” issued by the Institute of Chartered Accountants of India is not applicable. AS 18 – Related Party Disclosure 1. Relationships: (i) Shareholders (`the Godrej Group Shareholding) in the Company Godrej Properties Limited (GPL) holds 51% in the Company. GPL is the Subsidiary of Godrej Industries Limited (GIL). GIL is subsidiary of Godrej & Boyce Manufacturing Company Limited (G&B), the ultimate holding company. (ii) Investing party in respect of which the reporting enterprise is an associate. – HDFC Venture Trustee Company Limited 2. The following transactions were carried out with the related parties in the ordinary course of the business: Sr. No
G&B
1 Expenses Charged to other Companies
9,604,511 4,612,506 150 94,852 Debenture Interest 765,000 5,952,329 Loans / Advances taken - 105,400,000 - 112,400,000 Advances repaid - 105,400,000 - 112,400,000 Outstanding receivables, net of (payables) (703) (16,032,697) (703) (15,344,207) Debentures Outstanding - 76,500,000 76,500,000
2 Expenses Charged by other Companies 3 4 5 6 7
GPL
HDFC Venture Trustee Company Limited 735,000 5,718,904 (16,744,977) (16,083,477) 73,500,000 73,500,000
(Figures in italics are for previous year)
9) 10)
Previous year figures have been rearranged / regrouped wherever necessary to confirm to current year’s classification. Additional Information as required under Part IV of Schedule VI of the Companies Act, 1956 to the extent not applicable has not been given.
Annual Report 2009–2010
ADDITIONAL INFORMATION AS REQUIRED UNDER PART IV OF THE SCHEDULE VI TO THE COMPANIES ACT, 1956
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2010
Balance Sheet Abstract for the year ended 31st March, 2010 and Company’s General Business Profile
Particulars
1
2
Registration Details Registration No. State Code Balance Sheet Date
U70100MH2005PTC154268 11 31st March, 2010
Capital raised during the year (Amount in Rs. thousands) Public Issue Rights Issue Bonus Issue Private Placement - Capital - Premium
3
Position of mobilisation and deployment of funds (Amount in Rs. thousands) Total Liabilities Total Assets Sources of Funds Paid-up capital Reserves & Surplus Secured Loans Unsecured Loans Deferred Tax Liability Application of Funds Net Fixed Assets Investments Net Current Assets Misc. Expenditure Accumulated Losses
4
200,249 200,249 10,000 6,212 150,000 1 225 165,988 -
Performance of Company (Amount in Rs. thousands) Total Expenditure Profit / (Loss) before Tax Profit / (Loss) after Tax Earning per Share (Basic) in Rs. Earning per Share (Diluted) in Rs. Dividend Rate %
5
Nil Nil Nil Nil Nil
1,502 8,152 5,537 5.54 0.41 -
Generic Names of three principal products / services of Company
N.A.
Current Year Rupees
Previous Year Rupees
8,152,462
4,026,711
1,953 1,500,000 (9,654,565) (150)
7,917 29,255,181 23,451 (28,785,599) 4,527,661
(6,539,927) 3,921,973 (2,584,192) (5,202,296) (971,783) (6,174,079)
4,400,471 84,061,521 (32,401,802) 60,587,851 (6,507,199) 54,080,652
9,654,565 9,654,565
25,333 28,785,599 28,810,932
-
-
3,480,486
82,891,584
Cash & Cash Equivalent -Opening Balance
101,915,567
19,023,983
Cash & Cash Equivalent -Closing Balance
105,396,053
101,915,567
Cash Flow from Operating Activities Profit / (Loss) for the Year Adjustment for: Depreciation Interest Paid (Profit) /Loss on sale of Fixed Asset (Net) Interest Income Operating Profit / (Loss) before working capital changes Adjustment for: Change in Inventory Change in Loans & Advances Change in Current Liabilities / Provisions Taxes Paid (Net) Net Cash Flow from Operating activities Cash Flow from Investing Activities Sale of Fixed Assets Interest Received Net Cash Flow from Investing Activities Cash Flow from Financing Activities Net Increase/ (Decrease) in Cash & Cash Equivalent
Notes : has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard (AS) 3 on ‘Cash Flow Statement’, and presents cash flows by operating, investing and financing activities. 2. Figures for the previous year have been regrouped/restated wherever necessary to conform to this year’s classification. For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants
1.
The cash flow statement
ERMIN K. IRANI Partner Mumbai, Dated: May 14, 2010
MILIND S. KORDE NARESH NADKARNI Directors
155
Godrej Real Estate Private Limited BOARD OF DIRECTORS’ REPORT FOR THE YEAR ENDED 31ST MARCH, 2010 TO THE SHAREHOLDERS Your Directors have pleasure in submitting their Report together with the Audited Accounts for the year ended March 31, 2010. 1. FINANCIAL HIGHLIGHTS : The accounting results for the period ended March 31, 2010 reveal that there is a deficit at the end of the period. 2. REVIEW OF OPERATIONS : During the year the Company has made an application to the authorities for conversion of land use from IT to mixed use and is awaiting approval. 3. DIVIDEND : As there are no profits, the Directors regret that no dividend can be recommended. 4. DIRECTORS : In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Mr. Milind S Korde, retires by rotation and being eligible, offers himself for re-appointment. 5. APPOINTMENT OF AUDITORS: M/s. Kalyaniwalla & Mistry, Chartered Accountants retire at the ensuing Annual General Meeting and are eligible for re-appointment for which they have given their consent. 6. DIRECTORS’ RESPONSIBILITY STATEMENT: Your Director’s confirm: (i) that in the preparation of the annual accounts, the applicable accounting standards have been followed; (ii) that the Directors have selected such accounting policies and applied them 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 ended 31st March, 2010 and of the loss of the Company for that year; (iii) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for
safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (iv) that the Directors have prepared the annual accounts on a going concern basis. 7. ADDITIONAL INFORMATION: (a) Since the company has no employees, the particulars of the employees to be disclosed u/s 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, are not given. (b) Information in respect of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is provided hereunder: (i) Conservation of Energy : Expenses on account of Energy are negligible. (ii) Technology Absorption : It is an on going process. (iii) Foreign Exchange Earning & Outgo : The Company has not earned any Foreign Exchange nor incurred any Foreign Exchange Expenditure during the year. 8. ACKNOWLEDGEMENT: Your Directors take this opportunity to thank all the associates for their co-operation. FOR AND ON BEHALF OF THE BOARD Milind S. Korde K.T. Jithendran Director Mumbai, Dated : May 14, 2010
REPORT OF THE AUDITORS TO THE MEMBERS OF GODREJ REAL ESTATE PRIVATE LIMITED 1.
We have audited the attached Balance Sheet of GODREJ REAL ESTATE PRIVATE LIMITED, as at 31st March 2010, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We have conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditor’s Report) Order, 2003, issued by the Central Government in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order. Further to our comments in the Annexure referred to in paragraph (3) above, we report that: a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit. b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of such books. c) The Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account. d) In our opinion, the Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956. e) Without qualifying our opinion, we draw attention to the fact that as referred to in Note 1(e) of Schedule 9-Notes to Accounts, in respect of projects under long term contracts undertaken and/or financed by the Company, we have relied upon the management’s estimates of the percentage of completion, costs
2.
3. 4.
Annexure to the Auditors’ Report
to completion and on the projections of revenues expected from projects owing to the technical nature of such estimates, on the basis of which profits/losses have been accounted, interest income accrued and realizability of the construction work in progress and project advances determined. f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010; ii) in the case of the Profit and Loss Account, of the loss of the Company for the year ended on that date and iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date. 5. On the basis of the written representations received from the directors as on 31st March, 2010, and taken on record by the Board of Directors, we report that, none of the directors is disqualified as on 31st March, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956. For and on behalf of KALYANIWALLA & MISTRY CHARTERED ACCOUNTANTS Firm Registration No. 104607W ERMIN K. IRANI PARTNER Membership No. 35646 Place: Mumbai Dated: May 14, 2010 9.
(a)
According to the information and explanations given to us and on the basis of our examination of books of accounts, during the year, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income Tax, Value Added Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess and other statutory dues incurred during the year. According to the information and explanations given to us, there are no undisputed dues, payable in respect of above as at 31st March 2010 for a period of more than six months from the date they became payable.
(b)
According to the information and explanations given to us, there are no dues outstanding of Sales Tax, Value Added Tax, Income Tax, Wealth Tax, Excise Duty, cess on account of any dispute.
Referred to in paragraph (3) of our report of even date. 1.
2.
3.
(a) (b)
As explained to us, the Company has a program for physical verification of fixed assets at periodic intervals. In our opinion, the period of verification is reasonable having regard to the size of the Company.
(c)
There is no disposal of fixed assets during the year.
(a)
The management has conducted physical verification of inventory at reasonable intervals.
(b)
In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.
(c)
The company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.
(a)
The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.
12.
(b)
Consequently, the question of commenting on the rates of interest and conditions of the loans granted being prejudicial to the interests of the Company, receipt of regular principal and the interest and reasonable steps for recovery of principal and interest does not arise.
13.
(c)
The Company has not taken any loan, secured or unsecured from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956.
(d)
Consequently, the question of commenting on the rates of interest and others terms and conditions of the loans taken being prejudicial to the interests of the Company, payment of regular principal and the interest does not arise.
14. 15.
4.
5.
The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets.
In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchases of inventory, fixed assets and for the sale of goods. There are no sales of service. During the course of our audit, we have not observed a continuing failure to correct major weaknesses in internal controls. (a)
(b)
Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the particulars of contracts and arrangements referred to in Section 301 of the Companies Act, 1956 have been entered into the register required to be maintained under that section. The transactions made in pursuance of such contracts or arrangements, were made at prices which are reasonable having regard to prevailing market prices at the relevant time, where comparable market price exist.
6.
In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public hence the provisions of Section 58A and 58AA or any other provisions of the Companies Act, 1956, are not applicable.
7.
In our opinion and according to the information and explanations given to us, the internal audit system is commensurate with the size of the Company and nature of its business.
8.
The maintenance of cost records has not been prescribed by the Central Government under section 209(1)(d) of the Companies Act, 1956, in respect of the activities carried on by the Company.
156
10. 11.
16. 17.
18. 19. 20. 21.
The Company’s accumulated losses at the end of the financial year are more than fifty percent of its net worth. The Company has not incurred any Cash losses during the current and immediately preceding financial year. According to the information and explanations given to us and based on documents and records produced to us, the Company has not defaulted in repayment of dues to debenture holders. There are no dues to banks and financial institutions. According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/ mutual benefit fund/ societies. The Company does not deal in shares, securities, debentures and other investments. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions. Based on our examination and according to the information and explanations given to us, there were no term loans taken during the year. According to the information and explanations given to us and an overall examination of the Balance Sheet and Cash Flows of the Company, we report that the Company has not utilized funds raised on short-term basis for long-term investments. The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956. The company did not issue any debentures during the year. The Company has not raised any money through a public issue during the year. Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.
For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants Firm Registration No. 104607W ERMIN K. IRANI Partner Membership No. 35646 Place: Mumbai Dated : May 14, 2010
Annual Report 2009–2010
BALANCE SHEET AS AT 31ST MARCH, 2010 Schedule
SOURCES OF FUNDS Shareholders’ Funds Share Capital Loan Funds
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010 As at 31.03.2010 Rupees
As at 31.03.2009 Rupees
500,000 500,000
500,000 500,000
1
APPLICATION OF FUNDS Fixed Assets Gross Block Less : Depreciation Net Block INVESTMENTS
2 2,272,694 446,373 1,826,321 -
99,990 46,302 53,688 -
13,000
-
DEFERRED TAX ASSETS
Schedule
3 4 5
985,846,618 68,345 7,303,998 993,218,961
857,517,086 218,014 8,830,043 866,565,143
LESS : CURRENT LIABILITIES & PROVISIONS Current Liabilities
6
995,034,164 995,034,164
866,207,642 866,207,642
(1,815,203)
357,501
11,052 464,830 500,000
12,894 75,917 500,000
NET CURRENT ASSETS MISCELLANEOUS EXPENDITURE (to the extent not written off or adjusted) Preliminary Expenditure PROFIT & LOSS ACCOUNT NOTES TO ACCOUNTS & ACCOUNTING POLICIES The Schedules referred to above form an integral part of the Balance Sheet. As per our Report of even date. For and on behalf of KALYANIWALLA & MISTRY CHARTERED ACCOUNTANTS
-
-
EXPENDITURE Cost of sales
7
-
Interest & Finance Charges
8
-
-
400,071
32,518
Depreciation Preliminary Expenses written off Deficit for the Year Deferred Tax (Loss) / Profit for the Year Deficit Carried Forward to Balance Sheet Earning per share Basic/Diluted in Rs. (Refer Note 4) NOTES TO ACCOUNTS & ACCOUNTING POLICIES
1,842
1,842
(401,913)
(34,360)
13,000
-
(388,913)
(34,360)
(75,917)
(41,557)
(464,830)
(75,917)
(7.78)
(0.69)
9
9 The Schedules referred to above form an integral part of the Profit & Loss Account. As per our Report of even date. For and on behalf of KALYANIWALLA & MISTRY CHARTERED ACCOUNTANTS
Signatures to the Balance Sheet and Schedules 1 to 6 and 9
ERMIN K. IRANI Partner
For the Year Ended 31.03.2009 Rupees
INCOME
Deficit Brought Forward
CURRENT ASSETS, LOANS & ADVANCES Inventory Cash & Bank Balances Loans and advances
For the Year Ended 31.03.2010 Rupees
ERMIN K. IRANI Partner
MILIND S. KORDE K.T. JITHENDRAN Directors
Signatures to the Profit & Loss Account and Schedules 7 to 9
MILIND S. KORDE K.T. JITHENDRAN Directors
Mumbai, Dated : May 14, 2010
Mumbai, Dated : May 14, 2010
SCHEDULES FORMING PART OF THE ACCOUNTS As at 31.03.2010 Rupees SCHEDULE 1 SHARE CAPITAL AUTHORISED 50,000 Equity shares of Rs. 10/- each ISSUED, SUBSCRIBED & PAID UP 50,000 Equity shares of Rs. 10/- each, fully paid up (All the above Shares are held by Godrej Properties Limited, the Holding company and its nominee)
As at 31.03.2009 Rupees
500,000 500,000
500,000 500,000
500,000
500,000
500,000
500,000
SCHEDULE 2: FIXED ASSETS Particulars
Office Equipment Furniture & Fixtures Computer TOTAL Previous Year
As at 1st April 2009 Rs. 7,990
Gross Block Additions Deductions
Rs. 565,017
1,455,099 92,000 152,588 99,990 2,172,704 99,990 -
Rs. -
As at 31st March 2010 Rs. 573,007
1,455,099 244,588 2,272,694 99,990
Depreciation Upto For the Upto 1st April Year 31st 2009 March 2010 Rs. Rs. Rs. 1,509 67,233 68,742 263,159 44,793 69,679 46,302 400,071 13,784 32,518
Net Block As at As at 31st 31st March March 2009 2010 Rs. Rs. 504,265 6,481
263,159 1,191,940 114,472 130,116 446,373 1,826,321 46,302 53,688
47,207 53,688
SCHEDULE 3 INVENTORY Construction Work in Progress SCHEDULE 4 CASH & BANK BALANCE Cash & Cheques In hand Balances with Scheduled Bank - On Current Accounts SCHEDULE 5 LOANS & ADVANCES (Unsecured Considered good unless otherwise stated) Advances recoverable in cash or kind or for value to be received SCHEDULE 6 CURRENT LIABILITIES Sundry Creditors (Refer Note No 3) Investor Education & Protection Fund Other Liabilities
As at 31.03.2010 Rupees
As at 31.03.2009 Rupees
985,846,618 985,846,618
857,517,086 857,517,086
5,224 63,121 68,345
131 217,883 218,014
7,303,998
8,830,043
7,303,998
8,830,043
1,410,886 993,623,278 995,034,164
557,318 865,650,324 866,207,642
–
157
Godrej Real Estate Private Limited SCHEDULES FORMING PART OF THE ACCOUNTS
Opening Stock Add : Expenditure/Transfers from Advances/Taken over during the year Construction Architect Fees Advertisement Expenses Overheads Interest Less : Closing Stock: Cost of Sales SCHEDULE 8 INTEREST AND FINANCIAL CHARGES Interest Paid Other loans Total Interest Paid Add: Brokerage & other Financial Charges Total Interest/Finance Charges Paid Less: Transferred to Cost of Sales NET INTEREST
For the year ended 31.03.2010 Rupees 857,517,086
For the year ended 31.03.2009 Rupees 728,176,550
2,060,605 3,441,360 138,096 32,111,180 90,578,291 985,846,618 985,846,618 -
6,321,935 41,396,718 81,621,882 857,517,086 857,517,086 -
90,578,291 90,578,291 90,578,291 90,578,291 -
81,621,882 81,621,882 81,621,882 81,621,882 -
SCHEDULE 9 1) Accounting Policies a) General The financial statements are prepared under the historical cost convention in accordance with Generally Accepted Accounting Principles in India, the Accounting Standards issued by The Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956. b) Fixed Assets Fixed assets are stated at cost of acquisition or construction less accumulated depreciation. Cost includes all incidental expenses related to acquisition and installation, other pre-operation expenses and interest in case of construction. Carrying amount of cash generating units / assets are reviewed at balance sheet date to determine whether there is any indication of impairment. If such indication exists, the recoverable amount is estimated as the net selling price or value in use, whichever is higher. Impairment loss, if any, is recognized whenever carrying amount exceeds the recoverable amount. c) Depreciation / Amortization Depreciation has been provided on Written Down Value basis, at the rates specified in Schedule XIV of the Companies Act, 1956. d) Inventories Inventories are valued as under : Completed Flats - At lower of Cost or Market value Construction Work-in-Progress - At Cost Construction Work in Progress includes cost of land, premium for development rights, construction costs, allocated interest and expenses incidental to the projects undertaken by the Company. e) Revenue Recognition The Company is following the “Percentage of Completion Method” of accounting. As per this method, revenue in Profit & Loss Account at the end of the accounting year is recognized in proportion to the actual cost incurred as against the total estimated cost of projects under execution with the Company. Determination of revenues under the percentage of completion method necessarily involves making estimates by the Company, some of which are of a technical nature, concerning, where relevant, the percentages of completion, costs to completion, the expected revenues from the project/activity and the foreseeable losses to completion. Such estimates have been relied upon by the auditors. f) Borrowing Cost Interest and Finance charges incurred in connection with borrowing of funds, which are incurred for the development of long term projects are transferred to Construction Work in Progress as a part of the cost of the projects at weighted average of the borrowing cost. g) Earnings Per Share The basic earnings per share is computed using the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the period, except where the results would be anti-dilutive. h) Foreign Currency Transactions Transactions in foreign currency are recorded at the exchange rates prevailing on the date of the transaction. Assets and liabilities related to foreign currency transactions, remaining unsettled at the year end, are transalated at the year end exchange
158
2)
rates. Forward exchange contracts, remaining unsetteled at the year end, backed by underlying assets or liabilities are also translated at year end exchange rates.The premium payable on foreign exchange contracts is amortised over the period of the contract. Exchange gains / losses are recognised in the Profit and Loss Account. i) Provision for taxation Tax expense comprises both current and deferred tax. Current tax is measured at the amount expected to be paid to the tax authorities, using the applicable tax rates and tax laws. Deferred tax is recognized on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets, subject to consideration of prudence, are recognized and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. The tax effect is calculated on the accumulated timing difference at the year-end based on the tax rates and laws enacted or substantially enacted on the balance sheet date. j) Provisions And Contingent Liabilities Provisions are recognized in the accounts in respect of present probable obligations, the amount of which can be reliably estimated. Contingent liabilities are disclosed in respect of possible obligations that arise from the past events but their existence is confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. There is no contingent liability as on the balance sheet date. k) Miscellaneous Expenditure Miscellaneous expenditure is amortized over a period of 10 years. Leases The Company’s significant leasing arrangements are in respect of operating leases for commercial premises. Lease expenditure from operating leases is recognized on a straightline basis over the period of lease. The particulars of the premises taken under operating leases are as under: Particulars
Current Year
Previous Year
Rs.
Rs.
Future minimum lease Payment under non-cancelable operating leases Not later than 1 year
1,384,320
1,384,320
Later than 1 year and not later than 5 years
3,918,395
5,299,117
3)
Micro, Small and Medium Enterprises Development Act, 2006:
4)
Disclosure of sundry creditors under current liabilities is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small & Medium Enterprises Development Act 2006". There is no amount overdue as on 31st March, 2010 to Micro, Small and Medium Enterprises on account of principal amount together with interest and also during the previous year. Earnings per share Particulars Profit / (Loss) as per Profit & Loss Account (Rs.) Weighted average no. of equity shares outstanding Basic / Diluted earnings per share (Rs.) Nominal value of shares (Rs.)
5)
Assets - Depreciation on Fixed Assets Deferred Tax Assets Particulars
Consultancy Charges Total
8)
(34,360)
50,000
50,000
(7.78)
(0.69)
10 /-
10 /-
Current Year (Rs.)
Previous Year (Rs.)
13,000 13,000
-
Current Year (Rs.) 159,935
Previous Year (Rs.) 159,935
Amounts paid to Auditors
Audit Fees
7)
Previous Year
(388,913)
Deferred Tax The Tax effect of significant temporary differences that resulted in the deferred tax assets are: Particulars
6)
Current Year
40,388
33,708
200,323
1,93,643
Segment Information As the company has only one business segment, disclosure under Accounting Standard 17 on “Segment Reporting” issued by the Institute of Chartered Accountants of India is not applicable. AS 18 – Related Party Disclosure Related party disclosures as required by AS-18, “Related Party Disclosures’, are given below: 1. Relationships: Shareholders: Godrej Properties Limited (GPL) holds 100% of the Share Capital of the Company. GPL is the Subsidiary of Godrej Industries Limited (GIL). GIL is subsidiary of Godrej & Boyce Manufacturing Company Limited (G&B), the ultimate holding company.
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE ACCOUNTS 2.
The following transactions were carried out with the related parties in the ordinary course of the business: Sr. No
9) 10) 11)
Particulars
GPL
1.
Expenses charged by other companies
2.
Purchase of Fixed Assets
3.
Advances received
4.
Advances repaid
5.
Outstanding payables
118,101,621 108,151,756 29,625,000 34,450,000 800,000 10,00,000 983,867,205 845,998,414
G&B 14,86,527 -
Figures in italics are for previous year Previous year figures have been rearranged / regrouped wherever necessary to confirm to current year’s classification. Additional Information as required under Part IV of Schedule VI of the Companies Act, 1956 to the extent not applicable has not been given. Additional Information as required under Part IV of the Schedule VI to the Companies Act, 1956
Balance Sheet Abstract for the Year ended 31st March, 2010 And Company’s General Business Profile 1
2
3
Registration Details Registration No. : U45200MH2007PTC168818 State Code : 11 Balance Sheet Date : 31st March, 2010 Capital raised during the year (Amount in Rs. thousands) Public Issue : Nil Rights Issue : Nil Bonus Issue : Nil Private Placement - Capital : Nil - Premium : Nil Position of mobilisation and deployment of funds (Amount in Rs. thousands) Total Liabilities : 995,534 Total Assets : 995,534 Sources of Funds Paid-up capital Reserves & Surplus Secured Loans Unsecured Loans Application of Funds Net Fixed Assets Investments Deferred Tax Assets Net Current Assets Misc. Expenditure Accumulated Losses
4
5
: : : :
500 -
: : : : : :
1,826 13 (1,815) 11 465
Performance of Company (Amount in Rs. thousands) Turnover : Total Expenditure : Profit/(Loss) before Tax : Profit/(Loss) after Tax : Earning per Share in Rs. : Dividend Rate % : Generic Names of three principal products/services of Company :
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010 Current Year Rupees
Previous Year Rupees
(401,913)
(34,360)
Cash Flow from Operating Activities Loss for the Year Adjustment for: Depreciation
400,071
32,518
Interest Paid
90,578,291
81,621,882
Preliminary expenses
1,842
1,842
90,578,291
81,621,882
(128,329,532)
(129,340,535)
1,526,045
(7,152,543)
Change in Current Liabilities / Provisions
38,248,231
54,960,253
Net Cash Flow from Operating activities
2,023,035
89,057
Purchase of Fixed Assets
(2,172,704)
-
Net Cash Flow from Investing Activities
(2,172,704)
-
Operating Loss before working capital changes Adjustment for: Change in Inventory Change in Loans & Advances
Cash Flow from Investing Activities
Cash Flow from Financing Activities Net Increase/ (Decrease) in Cash & Cash Equivalent
-
-
(149,669)
89,057
Cash & Cash Equivalent -Opening Balance
218,014
128,957
Cash & Cash Equivalent -Closing Balance
68,345
218,014
Notes : 1.
The cash flow statement has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard (AS) 3 on ‘Cash Flow Statement’, and presents cash flows by operating, investing and financing activities.
2.
Figures for the previous year have been regrouped/ restated wherever necessary to conform to this year’s classification.
For and on behalf of KALYANIWALLA & MISTRY CHARTERED ACCOUNTANTS ERMIN K. IRANI Partner
MILIND S. KORDE K.T. JITHENDRAN Directors
Mumbai, Dated : May 14, 2010
(402) (402) (389) (7.78) N.A.
159
Godrej Developers Private Limited DIRECTORS’ REPORT FOR THE PERIOD ENDED ON MARCH 31, 2010 TO THE SHAREHOLDERS Your Directors have pleasure in submitting their Report together with the Audited Accounts for the year ended March 31, 2010. 1. FINANCIAL HIGHLIGHTS: The accounting results for the year ended March 31, 2010 reveal that there is a deficit at the end of the year. 2. REVIEW OF OPERATIONS: During the year the Company has completed piling work for Phase - I. Structural work up to 12th level have also been completed for Phase-I. Contracting for MEP service & Elevators are in process. Shifting of existing Simoco office to the new building has been initiated. 3. DIVIDEND: As there are no profits, Directors regret their inability to recommend any dividend for the year under consideration. 4. DIRECTORS: In accordance with the provisions of the Articles of Association, Mr. Milind Korde and Mr. K. T. Jithendran, retire by rotation and being eligible, offers themselves for re-appointment. Mr. G.B. Singh resigned as Director from the Board of Directors with effect from March 15, 2010. The Board wishes to place on record its appreciation for the valuable guidance extended by him during his association with the Company. During the year Mr.Y. Kalyan Chakrabarti has been appointed as an Additional Director on March 15, 2010, who will hold office till the conclusion of the ensuing Annual General Meeting of the Company. It is proposed to appoint him as a Director liable to retire by rotation in this Annual General Meeting. 5. APPOINTMENT OF AUDITORS: M/s. Kalyaniwalla & Mistry, Chartered Accountants retire at the ensuing Annual General Meeting and are eligible for re-appointment for which they have given their consent. 6. DIRECTORS’ RESPONSIBILITY STATEMENT: Your Directors confirm: (i) that in the preparation of the annual accounts, the applicable accounting standards have been followed; (ii) that the Directors have selected such accounting policies and applied them consistently and made
7.
8.
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 ended March 31, 2010 and of the loss of the Company for that year; (iii) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (iv) that the Directors have prepared the annual accounts on a going concern basis. ADDITIONAL INFORMATION: (a) Since the company has no employees, the particulars of the employees to be disclosed u/s 217 (2A) of the Companies Act, 1956 read with Companies (particulars of employees) Rules, 1975, are not given. (b) Information in respect of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, required under section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is provided hereunder: (i) Conservation of Energy: Expenses on account of Energy are negligible. (ii) Technology Absorption: It is an on going process. (iii) Foreign Exchange Earning & Outgo: The Company has not earned any Foreign Exchange nor incurred any Foreign Exchange Expenditure during the year. ACKNOWLEDGEMENT: Your Directors take this opportunity to thank all the associates for their co-operation. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS MILIND S. KORDE Chairman
Mumbai, Dated: May 05, 2010
REPORT OF THE AUDITORS TO THE MEMBERS OF GODREJ DEVELOPERS PRIVATE LIMITED 1.
2.
3. 4.
We have audited the attached Balance Sheet of GODREJ DEVELOPERS PRIVATE LIMITED, as at 31st March 2010, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We have conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditor’s Report) Order, 2003, issued by the Central Government in terms of subsection (4A) of section 227 of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order. Further to our comments in the Annexure referred to in paragraph (3) above, we report that: a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit. b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of such books. c) The Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account. d) In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. e) Without qualifying our opinion, we draw attention to the fact that as referred to in Note 1(e) of Schedule 11-Notes to Accounts, in respect of projects under long term contracts undertaken and/or financed by the Company, we have relied upon the management’s estimates of the percentage of completion, costs to completion and on the projections of revenues expected from projects owing to the technical nature
of such estimates, on the basis of which profits/losses have been accounted, interest income accrued and realizability of the construction work in progress and project advances determined. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010; ii) in the case of the Profit and Loss Account, of the loss of the Company for the year ended on that date and iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date. On the basis of the written representations received from the directors as on 31st March, 2010, and taken on record by the Board of Directors, we report that, none of the directors is disqualified as on 31st March, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956. f)
5.
For and on behalf of KALYANIWALLA & MISTRY CHARTERED ACCOUNTANTS Firm Registration No. 104607W ERMIN K. IRANI partner Membership No. 35646 Place: Mumbai Dated: May 05, 2010
Annexure to the Auditors' Report Referred to in paragraph (3) of our report of even date. 1) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) As explained to us, the Company has a program for physical verification of fixed assets at periodical intervals. In our opinion, the period of verification is reasonable having regard to the size of the Company. (c) There is no disposal of fixed assets during the year. 2) (a) The management has conducted physical verification of inventory at reasonable intervals. (b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. (c) The company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification. 3) (a) The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. (b) Consequently, the question of commenting on the rates of interest, terms and conditions of the loans granted being prejudicial to the interests of the Company, receipt of regular principal and interest and reasonable steps for recovery of the same does not arise. (c) The Company has not taken any loan, secured or unsecured from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956 (d) Consequently, the question of commenting on the rates of interest and others terms and conditions of the loans taken being prejudicial to the interests of the Company, payment of regular principal and the interest does not arise. 4) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchases of inventory, fixed assets and for the sale of goods. There are no sales of service. During the course of our audit, we have not observed a continuing failure to correct major weaknesses in internal controls. 5) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the particulars of contracts and arrangements referred to in Section 301 of the Companies Act, 1956 have been entered into the register required to be maintained under that section. (b) In our opinion and according to the information and explanations given to us ,the transactions made in pursuance of such contracts or arrangements, were made at prices which are reasonable having regard to prevailing market prices at the relevant time, where comparable market price exist. 6) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public hence the provisions of Section 58A and 58AA or any other provisions of the Companies Act, 1956, are not applicable. 7) The Company has an internal audit system, which in our opinion is commensurate with the size of the Company and nature of its business. 8) In our opinion and according to the information and explanations given to us, The Central Government has not been prescribed maintenance of cost records under section 209(1) (d) of the Companies Act, 1956, in respect of the activities carried on by the Company. 9) (a) According to the information and explanations given to us and on the basis of our examination of books of accounts, during the year, the Company has been generally regular in depositing undisputed statutory
160
dues including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income Tax, Value Added Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess and other statutory dues incurred during the year. According to the information and explanations given to us, there are no undisputed dues, payable in respect of above as at 31st March 2010 for a period of more than six months from the date they became payable. (b) According to the information and explanations given to us, there are no dues outstanding of Sales Tax, Value Added Tax, Income Tax, Wealth Tax, Excise Duty, cess on account of any dispute. 10) The Company’s accumulated losses at the end of the financial year are less than fifty percent of its networth. Further, the company has not incurred any cash losses in the current and immediately preceding financial years. 11) According to the information and explanations given to us and based on documents and records produced to us, the Company has not defaulted in repayment of dues to bank and financial institutions. The Company does not have any outstanding debentures. 12) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. 13) In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/mutual benefit fund/ societies. 14) In our opinion and according to the information and explanations given to us, the Company does not deal in shares, securities, debentures and other investments. 15) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions. 16) According to the information and explanations given to us and based on the documents and records examined by us, on an overall basis, the term loan has been applied for the purpose for which the loan was obtained. 17) According to the information and explanations given to us and an overall examination of the Balance Sheet and Cash Flows of the Company, we report that the Company has not utilized funds raised on short term basis for long term investments. 18) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956. 19) The Company did not issue any debentures during the year. 20) The Company has not raised any money through a public issue during the year. 21) Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year. For and on behalf of KALYANIWALLA & MISTRY CHARTERED ACCOUNTANTS Firm Registration No. 104607W ERMIN K. IRANI Partner Membership No. 35646 Place : Mumbai Dated : May 05, 2010
Annual Report 2009—2010
BALANCE SHEET AS AT MARCH 31, 2010 Schedule SOURCES OF FUNDS Shareholders’ Funds Share Capital Reserves & Surplus Loan Funds Deferred Tax Liability
1 2 3
APPLICATION OF FUNDS Fixed Assets Gross Block Less : Depreciation Net Block INVESTMENTS Current Assets, Loans & Advances Inventory Cash & Bank Balances Loans & Advances
4
5 6 7
Less : Current Liabilities & Provisions Current Liabilities
8
Net Current Assets Miscellaneous Expenditure (to the extent not written off or adjusted) Preliminary Expenditure Profit & Loss Account Notes To Accounts & Accounting Policies
As at 31.03.2010 Rupees
As at 31.03.2009 Rupees
667,300 453,900,000 13,000 454,580,300
667,300 667,300
173,585 98,521 75,064 -
139,464 43,406 96,058 -
808,334,259 5,585,346 197,458,358 1,011,377,963
313,882,169 102,229 100,272,825 414,257,223
557,026,757 557,026,757 454,351,206
413,771,896 413,771,896 485,327
11,052 142,978 454,580,300
12,894 73,021 667,300
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010 Schedule
INCOME
For the year ended 31.03.2010 Rupees
For the year ended 31.03.2009 Rupees
-
-
EXPENDITURE Cost of Sales
9
-
Interest & Finance Charges
10
-
-
55,115
43,406
Depreciation Preliminary Expenses written off Deficit for the year Provision for Deferred Tax Deficit After Tax Deficit Brought Forward Deficit Carried Forward to Balance Sheet Earning per share Basic/Diluted in Rs. (Refer Note 6) NOTES TO ACCOUNTS & ACCOUNTING POLICIES
1,842
1,842
(56,957)
(45,248)
(13,000)
-
(69,957)
(45,248)
(73,021)
(27,773)
(142,978)
(73,021)
(1.05)
(0.72)
11
11
The Schedules referred to above form an integral part of the Balance Sheet.
Signatures to the Balance Sheet and Schedules 1 to 8 and 11
The Schedules referred to above form an integral part of the Profit & Loss Account.
As per our Report of even date.
As per our Report of even date.
For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants
For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants
ERMIN K. IRANI Partner
MILIND S. KORDE K T JITHENDRAN Directors
ERMIN K. IRANI Partner
Mumbai, Dated: May 05, 2010
Signatures to Profit & Loss Account and Schedules 9 to 11
MILIND S. KORDE K T JITHENDRAN Directors
Mumbai, Dated: May 05, 2010
SCHEDULES FORMING PART OF THE ACCOUNTS As at 31.03.2010 Rupees SCHEDULE 1: SHARE CAPITAL Authorised 90,000 Equity shares of Rs. 10/- each 10,000 10% Non Convertible Cumulative Redeemable Preference Shares of Rs. 10/- each
900,000 100,000
900,000 100,000
1,000,000
1,000,000
667,300
667,300
667,300
667,300
-
214,844,318 (214,844,318)
-
-
453,900,000
-
453,900,000
-
Issued, Subscribed & Paid Up 66,730 Equity shares of Rs. 10/- each, fully paid-up (Out of which 34,032 Equity Shares are held by Godrej Properties Limited, the Holding company and its nominee) SCHEDULE 2: RESERVE & SURPLUS Received During the Year Less : Utilised for Redemption of Preference Shares during the year SCHEDULE 3: SECURED LOANS Term Loan from State Bank of India (Secured against Company’s share of undivided interest in the project Godrej Genesis at Kolkata)
As at 31.03.2009 Rupees SCHEDULE 5: INVENTORY Construction work-in-progress SCHEDULE 6: CASH & BANK BALANCE Cash & Cheques in hand Balances with Scheduled Bank - on Current Accounts SCHEDULE 7: LOANS & ADVANCES (Unsecured & considered good unless otherwise stated) Advances recoverable in cash or kind or for value to be received - Secured (Secured against Bank / Corporate Guarantee) - Others SCHEDULE 8: CURRENT LIABILITIES Sundry Creditors (Refer Note 4) Investors Education & Protection Fund Other Liabilities
As at 31.03.2010 Rupees
As at 31.03.2009 Rupees
808,334,259 808,334,259
313,882,169 313,882,169
54,119 5,531,227 5,585,346
10,622 91,607 102,229
97,062,129 100,396,229 197,458,358
100,272,825 100,272,825
42,034,294 514,992,463 557,026,757
13,435,028 400,336,868 413,771,896
SCHEDULE 4 : FIXED ASSETS Particulars
Gross Block
Depreciation
As at Additions Deductions 1st April 2009 Rs. Rs. Rs. Office Equipment
As at 31st March 2010
Net Block
For the Year
Rs.
As at 1st April 2009 Rs.
5,063
-
546
546
4,517
-
168,522 43,406
54,569
97,975
70,547
96,058
Rs.
As at As at 31st 31st March March 2010 2010 Rs. Rs.
As at 31st March 2009 Rs.
-
5,063
-
Computer
139,464
29,058
-
Total
139,464
34,121
-
173,585 43,406
55,115
98,521
75,064
96,058
-
139,464
-
139,464
43,406
43,406
96,058
–
Previous Year
-
161
Godrej Developers Private Limited SCHEDULE 9: COST OF SALES Opening Stock: Add : Expenditure/Transfers from Advances/Taken over during the year Construction, Material & Labour Architect Fees Overheads Interest
313,882,169
141,768,467
379,990,860 6,563,741 39,387,620 68,509,869 808,334,259 808,334,259 -
42,400,487 10,112,400 108,714,649 10,886,166 313,882,169 313,882,169 -
SCHEDULE 10: INTEREST AND FINANCIAL CHARGES Interest Paid - Banks - Others Total Interest Paid
16,651,505 51,858,364 68,509,869
38 10,886,128 10,886,166
Less: Transferred to Cost of Sales NET INTEREST
68,509,869 -
10,886,166 -
Less : Closing Stock: Cost of Sales
SCHEDULE 11 : NOTES TO ACCOUNTS AND ACCOUNTING POLICIES 1) Accounting Policies a) General The accounts are prepared under the Historical Cost Convention, using the accrual method of accounting, the accounting standard issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956. b) Fixed Assets Fixed assets are stated at cost of acquisition or construction less accumulated depreciation. Cost includes all incidental expenses related to acquisition and installation, other pre-operation expenses and interest in case of construction. Carrying amount of cash generating units / assets are reviewed at balance sheet date to determine whether there is any indication of impairment. If such indication exists, the recoverable amount is estimated as the net selling price or value in use, whichever is higher. Impairment loss, if any, is recognized whenever carrying amount exceeds the recoverable amount. c) Depreciation / Amortization Depreciation has been provided on Written Down Value basis, at the rates specified in Schedule XIV of the Companies Act, 1956. d) Inventories Inventories are valued as under: a) Completed Flats - At lower of Cost or Market value b) Construction Work-in-Progress - At Cost Construction Work in Progress includes cost of land, premium for development rights, construction costs, allocated interest and expenses incidental to the projects undertaken by the Company. e) Revenue Recognition The Company is following the “Percentage of Completion Method” of accounting. As per this method, revenue in Profit & Loss Account at the end of the accounting year is recognized in proportion to the actual cost incurred as against the total estimated cost of projects under execution with the Company. Determination of revenues under the percentage of completion method necessarily involves making estimates by the Company, some of which are of a technical nature, concerning, where relevant, the percentages of completion, costs to completion, the expected revenues from the project/activity and the foreseeable losses to completion. Such estimates have been relied upon by the auditors. Interest income is accounted on an accrual basis at contracted rates. f) Borrowing Cost Interest and Finance charges incurred in connection with borrowing of funds, which are incurred for the development of long term projects, are transferred to Construction Work-in-Progress as a part of the cost of the projects at weighted average of the borrowing cost. Other borrowing costs are recognized as an expense in the period in which they are incurred. g) Earnings Per Share The basic earnings per share is computed using the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the period, except where the results would be anti-dilutive. h) Provision For Taxation Tax expense comprises both current and deferred tax. Current tax is measured at the amount expected to be paid to the tax authorities, using the applicable tax rates and tax laws. Deferred tax is recognized on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets, subject to consideration of prudence, are recognized and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. The tax effect is calculated on the accumulated timing difference at the year-end based on the tax rates and laws enacted or substantially enacted on the balance sheet date. i) Foreign Currency Transactions Transactions in foreign currency are recorded at the exchange rates prevailing on the date of the transaction. Assets and liabilities related to foreign currency transactions, remaining unsettled at the year end, are transalated at the year end exchange
162
2)
3)
rates. Forward exchange contracts, remaining unsetteled at the year end, backed by underlying assets or liabilities are also translated at year end exchange rates.The premium payable on foreign exchange contracts is amortised over the period of the contract. Exchange gains / losses are recognised in the Profit and Loss Account. j) Provisions and Contingent Liabilities Provisions are recognized in the accounts in respect of present probable obligations, the amount of which can be reliably estimated. Contingent liabilities are disclosed in respect of possible obligations that arise from the past events but their existence is confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. There is no contingent liability as on the balance sheet date. k) Miscellaneous Expenditure Miscellaneous expenditure is amortized over a period of 10 years. 10,000 10% Non Convertible Cumulative Redeemable Preference shares of Rs.10/- each issued on 24th March 2008 are redeemed on 31st March 2009 @ premium of Rs. 21,484.43/Per Share as per the provision of Companies Act ,1956. Preference dividend Particulars Arrears of Cumulative Preference Dividend
4)
5)
Current Year (Rs.) 10,163
Due to Micro, Small and Medium Enterprises Disclosure of sundry creditors under current liabilities is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small & Medium Enterprises Development Act 2006". There is no amount overdue as on 31st March, 2010 to Micro, Small and Medium Enterprises on account of principal amount together with interest and also during the previous year. Deferred Tax The Tax effect of significant temporary differences that resulted in the deferred tax liabilities are : Particulars Liabilities - Depreciation on Fixed Assets Deferred Tax Liabilities
6)
Audit Fees Certification Consultancy Charges Total
9)
Previous Year (Rs.)
13,000 13,000
-
Current Year (69,957) 66,730 (1.05) 10 /-
Previous Year (45,248) 62,513 (0.72) 10 /-
Current Year (Rs.) 159,935 33,092 40,388 233,415
Previous Year (Rs.) 159,935 11,236 171,171
Amounts paid to Auditors Particulars
8)
Current Year (Rs.)
Earnings Per Share Particulars Loss for the year as per Profit & Loss Account(Rs.) Weighted average no. of equity shares outstanding Basic Earnings Per Share (Rs.) Nominal value of shares (Rs.)
7)
Previous Year (Rs.) 10,163
Segment Information As the company has only one business segment, disclosure under Accounting Standard 17 on “Segment Reporting” issued by the Institute of Chartered Accountants of India is not applicable. Related Party Disclosure Related party disclosures as required by AS-18, “Related Party Disclosures”, are given below: 1. Relationships: Shareholders: Godrej Properties Limited (GPL) holds 51% of the Share Capital of the Company. Red Fort India Real Estate Babur (RFIREB) holds 49% of the Share Capital of the Company. 2. The following transactions were carried out with the related party in the ordinary course of the business: Sr. No Particulars 1
Issue of Equity/Preference Shares
2
Redemption of Preference Shares
3
Expenses Charged by other companies
4
Expenses Charged to other companies
5
Advances received
6
Advances paid
7
Outstanding payables
Figures in italics are for previous year
GPL
RFIREB
214,944,318 61,571,202 47,353,570 2,566,142 501,687,500 333,644,318 453,900,000 88,250,000 501,260,304 397,087,438
215,011,618 -
Annual Report 2009—2010 10) Previous year figures have been regrouped / rearranged where ever necessary to confirm to current year’s classification. 11) Additional Information as required under Part IV of Schedule VI of the Companies Act, 1956 to the extent not applicable has not been given. 12) Additional information as required under Part IV of the Schedule VI to the Companies Act, 1956 Balance Sheet abstract for the Year ended 31st March, 2010 And Company’s General Business Profile 1. Registration Details Registration No. : U45200MH2007PTC168783 State Code : 11 Balance Sheet Date : 31st March, 2010 2. Capital raised during the year (Amount in Rs. thousands) Public Issue : Nil Rights Issue : Nil Bonus Issue : Nil Private Placement - Capital : Nil - Premium : Nil 3. Position of mobilisation and deployment of funds (Amount in Rs. thousands) Total Liabilities : 1,011,607 Total Assets : 1,011,607 Sources of Funds Paid-up capital : 667 Reserves & Surplus : Secured Loans : 453,900 Unsecured Loans : Deferred Tax Liability : 13 Application of Funds Net Fixed Assets : 75 Investments : Net Current Assets : 454,351 Misc. Expenditure : 11 Accumulated Losses : 143 4. Performance of Company (Amount in Rs. thousands) Turnover : Total Expenditure : (57) Profit / (Loss) before Tax : (57) Profit / (Loss) after Tax : (70) Earning per Share in Rs. : (1.05) Dividend Rate % : 5. Generic Names of three principal products / services of Company : N.A.
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010 Current Year Rupees
Previous Year Rupees
(56,957)
(45,248)
Cash Flow from Operating Activities Loss For the period Adjustment for: Depreciation
55,115
43,406
Interest Paid
68,509,869
10,886,166
Preliminary Expenses Operating Profit before working capital changes
1,842
1,842
68,509,869
10,886,166
(494,452,090)
(172,113,702)
Adjustment for: Change in Inventory Change in Loans & Advances Change in Current Liabilities/Provisions Net Cash Flow from Operating activities
(97,185,533)
155,185
86,481,320
161,040,793
(436,646,434)
(31,558)
(34,121)
(139,464)
(34,121)
(139,464)
-
215,011,618
Cash Flow from Investing Activities Purchase of Fixed Assets Cash Flow from Financing Activities Proceeds from Issue of Equity Share Capital including Share Premium Amount Increase in Secured Loan Redemption of Preference Shares
453,900,000
-
-
(214,944,318)
Interest Paid
(11,736,328)
(38)
Net Cash Flow from Financing Activities
442,163,672
67,262
5,483,117
(103,760)
102,229
205,989
5,585,346
102,229
Net Increase/ (Decrease) in Cash & Cash Equivalent Cash & Cash Equivalent -Opening Balance Cash & Cash Equivalent -Closing Balance Notes : 1.
2.
The cash flow statement has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard (AS) 3 on ‘Cash Flow Statement’, and presents cash flows by operating, investing and financing activities. Figures for the previous year have been regrouped/ restated wherever necessary to conform to this year’s classification.
For and on behalf of KALYANIWALLA & MISTRY CHARTERED ACCOUNTANTS ERMIN K. IRANI Partner
MILIND S. KORDE K. T. JITHENDRAN Director
Mumbai, Dated: May 05, 2010
163
Godrej Sea View Properties Private Limited DIRECTORS’ REPORT FOR THE PERIOD ENDED MARCH 31, 2010 TO THE SHAREHOLDERS Your Directors have pleasure in submitting their Report together with the Audited Accounts for the year ended March 31, 2010. 1. FINANCIAL HIGHLIGHTS: The accounting results for the period ended March 31, 2010 reveal that there is a deficit at the end of the period. 2. REVIEW OF OPERATIONS: The Company has executed an assignment agreement with Godrej Properties Limited for undertaking development of their project called ‘Godrej Palm Grove’ at Chennai. Further HDFC PMS (under HDFC Asset Management Company Limited Portfolio Management Services Real Estate Portfolio-I, through its Portfolio Manager HDFC Asset Management Company Limited) has purchased a 49% equity in the Company. Post transfer of shares to HDFC PMS, Godrej Properties Limited now holds 51% stake in the Company. The Company is developing a residential project and has conceptualized and finalized the design for the First Phase of the Project. 3. DIVIDEND: As there are no profits, the Directors regret that no dividend can be recommended. 4. SUBDIVISION OF SHARES: During the year your Company has sub-divided the equity share capital from Rs.10/- each to Re.1/- each, consequently the total number of equity shares of the Company has increased from 50,000 to 5,00,000. 5. DIRECTORS: During the year Mr. Vipul Roongta was appointed as a nominee Director of HDFC Asset Management Company Limited w.e.f March 31, 2010. In accordance with the provisions of the Articles of Association, Mr. Milind S. Korde retires by rotation and being eligible, offers himself for re-appointment. 6. APPOINTMENT OF AUDITORS: M/s. Kalyaniwalla & Mistry, Chartered Accountants retire at the ensuing Annual General Meeting and are eligible for re-appointment for which they have given their consent. 7. DIRECTORS’ RESPONSIBILITY STATEMENT: Your Director’s confirm: (i) that in the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same;
(ii)
8.
9.
that the Directors have selected such accounting policies and applied them 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 ended 31st March, 2010 and of the loss of the Company for that year; (iii) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (iv) that the Directors have prepared the annual accounts on a going concern basis. ADDITIONAL INFORMATION: a. Since the company has no employees, the particulars of the employees to be disclosed u/s 217 (2A) of the Companies Act, 1956 read with Companies (particulars of employees) Rules, 1975, are not given. b. Information in respect of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is provided hereunder: i. Conservation of Energy : Expenses on account of Energy are negligible. ii.
Technology Absorption : It is an on going process.
iii.
Foreign Exchange Earning & Outgo : The Company has not earned any Foreign Exchange nor incurred any Foreign Exchange Expenditure during the year.
ACKNOWLEDGEMENT: Your Directors take this opportunity to thank all the associates for their co-operation. For and on Behalf of the Board of Directors MILIND S. KORDE
Directors
K.T. JITHENDRAN
Mumbai, Dated: May 14, 2010
REPORT OF THE AUDITORS TO THE MEMBERS OF GODREJ SEA VIEW PROPERTIES PRIVATE LIMITED 1.
2.
3. 4.
We have audited the attached Balance Sheet of GODREJ SEA VIEW PROPERTIES PRIVATE LIMITED, as at 31st March, 2010, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditor’s Report) Order, 2003, issued by the Central Government in terms of subsection (4A) of Section 227 of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order. Further to our comments in the Annexure referred to in paragraph (3) above, we report that: a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit. b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of such books. c) The Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account. d) In our opinion, the Balance Sheet and the Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956. e) Without qualifying our opinion, we draw attention to the fact that as referred to in Note 1(e) of Schedule 11-Notes to Accounts, in respect of projects under long term contracts undertaken and/or financed by the Company, we have relied upon the management’s estimates of the percentage of completion, costs
5.
to completion and on the projections of revenues expected from projects owing to the technical nature of such estimates, on the basis of which profits/losses have been accounted, interest income accrued and realizability of the construction work-in-progress and project advances determined. f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010; ii) in the case of the Profit and Loss Account, of the loss of the Company for the year ended on that date and, iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date. On the basis of the written representations received from the directors as on 31st March, 2010, and taken on record by the Board of Directors, we report that, none of the directors is disqualified as on 31st March, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.
For and on behalf of KALYANIWALLA & MISTRY CHARTERED ACCOUNTANTS Firm Registration No.: 104607W ERMIN K. IRANI Partner Membership No. 35646 Place : Mumbai, Date : May 14, 2010
Annexure to the Auditors' Report Referred to in paragraph (3) of our report of even date. 1)
(a)
The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. As explained to us, the Company has a program for physical verification of fixed assets at periodical intervals. In our opinion, the period of verification is reasonable having regard to the size of the Company. (c) There is no disposal of fixed assets during the year. (a) The management has conducted physical verification of inventory at reasonable intervals. (b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. (c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification. (a) The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. (b) Consequently, the question of commenting on the rates of interest, terms and conditions of the loans granted being prejudicial to the interests of the Company, receipt of regular principal and interest and reasonable steps for recovery of the same does not arise. (c) The Company has not taken any loan, secured or unsecured from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. (d) Consequently, the question of commenting on the rates of interest and others terms and conditions of the loans taken being prejudicial to the interests of the Company, payment of regular principal and the interest does not arise. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchases of inventory, fixed assets and for the sale of goods. There are no sales of service. During the course of our audit, we have not observed a continuing failure to correct major weaknesses in internal controls. (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the particulars of contracts and arrangements referred to in Section 301 of the Companies Act, 1956 have been entered into the register required to be maintained under that section. (b) The transactions made in pursuance of such contracts or arrangements, were made at prices which are reasonable having regard to prevailing market prices at the relevant time, where comparable market price exist. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public hence the provisions of Section 58A and 58AA or any other provisions of the Companies Act, 1956, are not applicable. The Company has an internal audit system, which in our opinion is commensurate with the size of the Company and nature of its business. In our opinion and according to the information and explanations given to us, The Central Government has not been prescribed maintenance of cost records under section 209(1) (d) of the Companies Act, 1956, in respect of the activities carried on by the Company. (a) According to the information and explanations given to us and on the basis of our examination of books of accounts, during the year, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, (b)
2)
3)
4)
5)
6) 7) 8) 9)
164
10) 11) 12) 13) 14) 15) 16) 17) 18) 19) 20) 21)
Income Tax, Value Added Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess and other statutory dues incurred during the year. According to the information and explanations given to us, there are no undisputed dues, payable in respect of above as at 31st March, 2010 for a period of more than six months from the date they became payable. (b) According to the information and explanations given to us, there are no dues outstanding of Sales Tax, Value Added Tax, Income Tax, Wealth Tax, Excise Duty, cess on account of any dispute. The Company’s accumulated losses at the end of the financial yearare less than fifty percent of its networth. In Current year the Company has not incurred cash losses, however, it has incurred cash losses in the immediately preceding financial year According to the information and explanations given to us and based on documents and records produced to us, the Company has not defaulted in repayment of dues to bank. The Company does not have any outstanding debentures or dues to financial institutions. According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/mutual benefit fund/ societies. In our opinion and according to the information and explanations given to us, the Company does not deal in shares, securities, debentures and other investments. In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions. Based on our examination and according to the information and explanations given to us, there were no term loans taken during the year. According to the information and explanations given to us and an overall examination of the Balance Sheet and cash flows of the Company, we report that the Company has not utilized funds raised on short term basis for long term investments. The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956. The Company did not issue any debentures during the year. The Company has not raised any money through a public issue during the year. Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.
For and on behalf of KALYANIWALLA & MISTRY CHARTERED ACCOUNTANTS Firm Registration No.: 104607W ERMIN K. IRANI Partner Membership No. 35646 Place : Mumbai, Date : May 14, 2010
Annual Report 2009–2010
BALANCE SHEET AS AT MARCH 31, 2010 Schedule
SOURCES OF FUNDS SHAREHOLDERS' FUNDS Share Capital LOAN FUNDS DEFERRED TAX LIABILITY
APPLICATION OF FUNDS FIXED ASSETS Gross Block Less : Depreciation Net Block Capital Work-In-Progress / Advances INVESTMENTS CURRENT ASSETS, LOANS & ADVANCES Inventory Cash & Bank Balances Loans & Advances LESS : CURRENT LIABILITIES & PROVISIONS Current Liabilities Provisions
1
As at 31.03.2010 Rupees
As at 31.03.2009 Rupees
500,000 — 31,000
500,000 — —
531,000
500,000
2 587,902 7,967 579,935 2,182,485 2,762,420 —
— — — — — —
36,331,024 19,926,791 82,945,430
— 392,781 —
139,203,245
392,781
141,616,260 — 141,616,260
50,963 — 50,963
(2,413,015)
341,818
11,052
12,894
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010 Schedule
For the year ended 31.03.2010 Rupees
For the year ended 31.03.2009 Rupees
15,554
—
INCOME Interest Income EXPENDITURE Cost of Sales
8
—
—
Administration Expenses
9
—
77,186
Interest & Finance Charges
10
—
—
Depreciation
7,967
—
Preliminary Expenses written off
1,842
1,842
5,745
(79,028)
(1,000)
—
Profit / (Defecit) for the Year Provision for Taxation For Current Tax
3 4 5
6 7
NET CURRENT ASSETS
For MAT Credit Entitlement For Deferred Tax Deficit After Tax
1,000
—
(31,000)
—
(25,255)
(79,028)
Deficit Brought Forward
(145,288)
(66,260)
Deficit carried to the Balance sheet
(170,543)
(145,288)
(0.05)
(0.16)
Earning per share - Basic in Rs. (Refer Note 3) NOTES TO ACCOUNTS & ACCOUNTING POLICIES
11
MISCELLANEOUS EXPENDITURE (to the extent not written off or adjusted) Preliminary Expenditure PROFIT AND LOSS ACCOUNT Notes To Accounts & Accounting Policies The Schedules referred to above form an integral part of the Balance Sheet.
170,543
145,288
531,000
500,000
11 Signatures to the Balance Sheet and Schedules 1 to 7 and 11
The Schedules referred to above form an integral part of the Profit & Loss Account.
As per our Report of even date.
As per our Report of even date.
For and on behalf of KALYANIWALLA & MISTRY CHARTERED ACCOUNTANTS
For and on behalf of KALYANIWALLA & MISTRY CHARTERED ACCOUNTANTS
ERMIN K. IRANI Partner
MILIND S. KORDE K.T. JITHENDRAN Directors
Mumbai, Dated: May 14, 2010
ERMIN K. IRANI Partner
Signatures to Profit & Loss Account and Schedules 8 to 11
MILIND S. KORDE K.T. JITHENDRAN Directors
Mumbai, Dated: May 14, 2010
SCHEDULES FORMING PART OF THE ACCOUNTS
SCHEDULE 1 : SHARE CAPITAL Authorised 500,000 Equity shares of Re. 1/- each (Previous Year 50,000 Equity shares of Rs. 10/- each)
Issued, Subscribed and Paid-up 500,000 Equity shares of Re. 1/- each, fully paid-up (Of the above 388,636 (Previous year 50,000 Equity shares of Rs. 10/- each) Shares are held by Godrej Properties Limited, the Holding company and its nominee)
As at 31.03.2010 Rupees
As at 31.03.2009 Rupees
500,000
500,000
500,000
500,000
500,000
500,000
SCHEDULE 2 : FIXED ASSETS Particulars
Gross Block
Rs.
500,000
500,000
Depreciation
As at 1st Additions Deductions April, 2009 Office Equipment
—
As at 31st March, 2010
Upto 1st For the Year April, 2009
Net Block Upto 31st March, 2010
As at As at 31st 31st March, March, 2010 2009
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
135,000
—
135,000
—
848
848
134,152
—
Furniture & Fixtures
—
152,061
—
152,061
—
528
528
151,533
—
Computer
—
300,841
—
300,841
—
6,591
6,591
294,250
—
TOTAL
—
587,902
— 587,902
—
7,967
7,967
579,935
Previous Year
—
—
—
—
—
—
—
—
Capital Work-inProgress
—
—
—
—
—
—
—
TOTAL
2,182,485 2,762,420
— — —
165
Godrej Sea View Properties Private Limited
SCHEDULE 3 INVENTORY Construction Work-in-Progress
SCHEDULE 4 CASH & BANK BALANCE Cash & Cheques-in-Hand Balance with Scheduled Bank - on Current Account - on Fixed Deposit Accounts
As at 31.03.2010 Rupees
As at 31.03.2009 Rupees
36,331,024 36,331,024
— —
1,960 674,831 19,250,000 19,926,791
— 392,781 392,781
2,929,876
—
15,554 80,000,000 82,945,430
— — —
1,009 141,615,251 141,616,260
23,388 27,575 50,963
— —
— —
— 27,403,964 10,000 8,677,327 239,733 36,331,024 36,331,024 —
— — — — — — — —
— — —
27,575 49,611 77,186
239,733 239,733 239,733 —
— — — —
SCHEDULE 5 LOANS & ADVANCES (Unsecured & considered good unless otherwise stated) Advances recoverable in cash or kind or for value to be received Interest accrued Deposits
SCHEDULE 6 CURRENT LIABILITIES Sundry Creditors (Refer Note 2) Other Liabilities
SCHEDULE 7 PROVISIONS Provision for Income Tax (Net of MAT Credit entitlement of Rs. 1,000/-) SCHEDULE 8 COST OF SALES Opening Stock Add : Stock-In-Trade Acquired during the year Construction, Material & Labour Over heads Interest Less : Closing Stock Cost of Sales SCHEDULE 9 ADMINISTRATION EXPENSES Audit fees Other Expenses
SCHEDULE 10 INTEREST AND FINANCE CHARGES (NET) INTEREST PAID Interest Paid - Others TOTAL INTEREST PAID Less: Transferred to Cost of Sales NET INTEREST
SCHEDULE 11 NOTES TO ACCOUNTS AND ACCOUNTING POLICIES 1) Accounting Policies a. General The financial statements are prepared under the historical cost convention in accordance with Generally Accepted Accounting Principles in India, the Accounting Standards issued by The Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956. b. Fixed Assets Fixed assets are stated at cost of acquisition or construction less accumulated depreciation. Cost includes all incidental expenses related to acquisition and installation, other pre-operation expenses and interest in case of construction.
2)
3)
4)
Carrying amount of cash generating units / assets are reviewed at balance sheet date to determine whether there is any indication of impairment. If such indication exists, the recoverable amount is estimated as the net selling price or value in use, whichever is higher. Impairment loss, if any, is recognized whenever carrying amount exceeds the recoverable amount. c. Depreciation / Amortization Depreciation has been provided on Written Down Value basis, at the rates specified in Schedule XIV of the Companies Act, 1956. d. Inventories Inventories are valued as under : Completed Flats - At lower of Cost or Market value Construction Work-in-Progress - At Cost Construction Work in Progress includes cost of land, premium for development rights, construction costs, allocated interest and expenses incidental to the projects undertaken by the Company. e. Revenue Recognition The Company is following the “Percentage of Completion Method” of accounting. As per this method, revenue in Profit & Loss Account at the end of the accounting year is recognized in proportion to the actual cost incurred as against the total estimated cost of projects under execution with the Company. Determination of revenues under the percentage of completion method necessarily involves making estimates by the Company, some of which are of a technical nature, concerning, where relevant, the percentages of completion, costs to completion, the expected revenues from the project/activity and the foreseeable losses to completion. Such estimates have been relied upon by the auditors. f. Borrowing Cost Interest and Finance charges incurred in connection with borrowing of funds, which are incurred for the development of long term projects are transferred to Construction Work in Progress as a part of the cost of the projects at weighted average of the borrowing cost. g. Earnings Per Share The basic earnings per share is computed using the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the period, except where the results would be anti-dilutive. h. Provision for Taxation Tax expense comprises both current and deferred tax. Current tax is measured at the amount expected to be paid to the tax authorities, using the applicable tax rates and tax laws. Deferred tax is recognized on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets, subject to consideration of prudence, are recognized and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. The tax effect is calculated on the accumulated timing difference at the year-end based on the tax rates and laws enacted or substantially enacted on the balance sheet date. i. Foreign Currency Transactions Transactions in foreign currency are recorded at the exchange rates prevailing on the date of the transaction. Assets and liabilities related to foreign currency transactions, remaining unsettled at the year end, are transalated at the year end exchange rates. Forward exchange contracts, remaining unsettled at the year end, backed by underlying assets or liabilities are also translated at year end exchange rates.The premium payable on foreign exchange contracts is amortised over the period of the contract. Exchange gains / losses are recognised in the Profit and Loss Account. j. Provisions And Contingent Liabilities Provisions are recognized in the accounts in respect of present probable obligations, the amount of which can be reliably estimated. Contingent liabilities are disclosed in respect of possible obligations that arise from the past events but their existence is confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. There is no contingent liability as on the balance sheet date. k. Miscellaneous Expenditure Miscellaneous expenditure is amortized over a period of 10 years. Contingent Liabilities Capital Commitment outstanding for the year ended 2009-10 (Net of Advance) is amounting to Rs. 2,322,203/- (Previous Year Rs. NIL). Due to Micro, Small and Medium Enterprises Disclosure of sundry creditors under current liabilities is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small & Medium Enterprises Development Act 2006". There is no amount overdue as on 31st March, 2010 to Micro, Small and Medium Enterprises on account of principal amount together with interest and also during the previous year. Earnings per Share Particulars Loss for the Year as per Profit & Loss Account Weighted average no. of equity shares outstanding Basic / Diluted earnings per share (Rs.) Nominal value of shares (Rs.)
Current Year (Rs.) (25,255) 500,000 (0.05)
Previous Year (Rs.) (79,028) 500,000 (0.16)*
1/-
1/-
* Earning per share of previous year has been recomputed based on the no of shares outstanding after split of shares during the year.
166
Annual Report 2009–2010 5)
Deferred Tax The Tax effect of significant temporary differences that resulted in the deferred tax liabilities are : Particulars
6)
Current Year Previous Year (Rs.) (Rs.)
Liabilities - Depreciation on Fixed Assets
31,000
-
Deferred Tax Liabilities
31,000
-
9.
Additional information as required under Part IV of the Schedule VI to the Companies Act, 1956 Balance Sheet Abstract for the period ended 31st March, 2010 and Company’s General Business Profile. 1.
2.
Lease The Company’s significant leasing arrangements are in respect of operating leases for Commercial premises. Lease expenditure for operating leases is recognized on a straightline basis over the period of lease. The particulars of the premises taken under operating leases are as under : Particulars
Current Year (Rs.)
Previous Year (Rs.)
3.
Future minimum lease payments under non-cancelable operating leases
7)
- Not later than 1 year - Later than 1 year and not later than 5 years
2,241,396 9,709,390
NIL NIL
- Later than 5 years
2,030,206
NIL
Amounts paid to Auditors:
Audit Fees Consultancy Charges Total
Current Year (Rs.) 159,935
Previous Year (Rs.) 27,575
40,388
33,708
200,323
61,283
8)
Segment Information As the company has only one business segment, disclosure under Accounting Standard 17 on “Segment Reporting” issued by the Institute of Chartered Accountants of India is not applicable.
9)
Related Party Disclosure Related party disclosures as required by AS-18, “Related Party Disclosures”, are given below: 1. Relationships: (i) Shareholders: (the Godrej Group Shareholding) in the Company Godrej Properties Limited (GPL) holds 77.73% in the Company. GPL is the subsidiary of Godrej Industries Limited (GIL). GIL is subsidiary of Godrej & Boyce Manufacturing Company Limited (G&B), the ultimate holding company (ii) Investing party in respect of which the reporting enterprise is an associate. – HDFC PMS. 2. The following transactions were carried out with the related party in the ordinary course of the business: Sr. No.
Particulars
1
Reimbursement of Expenses
2.
Advance Received/(Given)
3.
Purchase of Fixed Assets
4.
Outstanding payables/(Receivable)
GPL
G&B
29,170,686 1,149 109,839,114 – 2,454,873 –
– – (304,284) -
141,085,481 22,379
(304,284) -
Figures in italics are for previous year. 10) Previous year figures have been regrouped / rearranged whereever necessary to confirm to current year’s classification. 11) Additional Information as required under Part IV of Schedule VI of the Companies Act, 1956 to the extent not applicable has not been given.
4.
5.
Registration Details Registration No. State Code Balance Sheet Date
: : :
U45200MH2007PTC168730 11 31st March, 2010
Capital raised during the year (Amount in Rs. thousands) Public Issue : Nil Rights Issue : Nil Bonus Issue : Nil Private Placement - Capital : Nil - Premium : Nil Position of mobilisation and deployment of funds (Amount in Rs. thousands) Total Liabilities : 142,147 Total Assets : 142,147 Sources of Funds Paid-up capital : 500 Reserves and Surplus : — Secured Loans : — Unsecured Loans : — Deferred Tax Liability : 31 Application of Funds Net Fixed Assets : 2,762 Investments : — Deferred Tax Assets : — Net Current Assets : (2,413) Miscellaneous Expenditure : 11 Accumulated Losses : 171 Performance of Company (Amount in Rs. thousands) Turnover : — Total Expenditure : 10 Profit/(Loss) before Tax : 6 Profit/(Loss) after Tax : (25) Earning per Share in Rs. : (0.05) Dividend Rate % : — Generic Names of three principal products/services of Company : N.A.
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010 Cash Flow from Operating Activities Profit/(Loss) for the Year Adjustment for: Depreciation Interest Paid Preliminary Expenses Ineterst Received Operating Profit before working capital changes Adjustment for: Change in Inventory Change in Loans & Advances Changes in Current Liabilities & Provisions Net Cash Flow from Operating Activities Purchase of Fixed Assets Net Cash Flow from Investing Activities Net Cash Flow from Financing Activities Net Increase/ (Decrease) in Cash & Cash Equivalent Cash & Cash Equivalent -Opening Balance Cash & Cash Equivalent -Closing Balance Notes : 1. The cash flow statement has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard (AS) 3 on ‘Cash Flow Statement’, and presents cash flows by operating, investing and financing activities. 2. Figures for the previous year have been regrouped/ restated wherever necessary to conform to this year’s classification.
Current Year Rupees
Previous Year Rupees
5,745
(79,028)
7,967 239,733 1,842 (15,554) 239,733
– – 1,842 – (77,186)
(36,331,024) (82,929,876) 141,325,564 22,304,397 (2,770,387) (2,770,387) – 19,534,010 392,781 19,926,791
– – 1,643 (75,543) – – (75,543) 468,324 392,781
As per our Report of even date. For and on behalf of KALYANIWALLA & MISTRY CHARTERED ACCOUNTANTS ERMIN K. IRANI Partner
MILIND S. KORDE K.T. JITHENDRAN Directors
Mumbai, Dated: May 14, 2010
167
Happy Highrises Limited DIRECTORS’ REPORT FOR THE YEAR ENDED MARCH 31, 2010 TO THE SHAREHOLDERS
(ii)
that the Directors have selected such accounting policies and applied them 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 ended March 31, 2010 and of the profit of the Company for that year;
(iii)
that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv)
that the Directors have prepared the annual accounts on a going concern basis.
Your Directors have pleasure in submitting their Report alongwith the Audited Accounts for the year ended March 31, 2010. 1.
FINANCIAL HIGHLIGHTS: The accounting results for the year ended March 31, 2010 reveal that there is profit at the end of the period.
2.
REVIEW OF OPERATIONS: The project will have a total developable area of 3.2 million sq.ft in two phases, Phase 1 will have a total developable area of 0.54 million sq ft and Phase 2 would have a total developable area of 2.66 million sq.ft.
8.
(a)
The Company has obtained approvals for Phase 1 and it is expected to receive approval for Phase 2 by end of September 2010. Phase 1 was launched by the Company in October 2009, wherein the Company had sold 214117 sq.ft. out of total of 514046 sq.ft. 3.
ADDITIONAL INFORMATION:
(b)
DIVIDEND: There is no Dividend declared for the year ended March 31, 2010.
4.
CHANGE IN SHAREHOLDING PATTERN:
Information in respect of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is provided hereunder: (i)
Conservation of Energy :
Post transfer of shares to Milestone India Real Estate Fund Godrej Properties Limited now holds 51% stake in the Company.
(ii)
Technology Absorption:
DIRECTORS:
(iii)
During the year Godrej Properties Limited, the holding Company has diluted its 49% stake in the Company to IL&FS Trust Company Limited A/C Milestone India Real Estate Fund.
5.
Since the company has no employees, the particulars of the employees to be disclosed u/s 217 (2A) of the Companies Act, 1956 read with Companies (particulars of employees) Rules, 1975, are not given.
Expenses on account of Energy are negligible. It is an on going process.
During the year Mr. Paritosh Kakkad and Mr. Ashish Joshi were appointed as nominee Directors of Milestone India Real Estate Fund w.e.f September 14, 2009. In accordance with the Provisions of the Companies Act, 1956 and the Articles of Association of the Company Mr. K.T.Jithendran retire by rotation and offers himself for reappointment. 6.
Foreign Exchange Earning & Outgo: The Company has not earned any Foreign Exchange nor incurred any Foreign Exchange Expenditure during the year.
9.
ACKNOWLEDGEMENT: Your Directors take this opportunity to thank all the associates for their co-operation.
APPOINTMENT OF AUDITORS: M/s. Kalyaniwalla & Mistry, Chartered Accountants retire at the ensuing Annual General Meeting and are eligible for re-appointment for which they have given their consent.
7.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS MILIND S. KORDE
DIRECTORS’ RESPONSIBILITY STATEMENT: Your Director’s confirm: (i)
that in the preparation of the annual accounts, the applicable accounting standards have been followed;
K.T. JITHENDRAN DIRECTORS
Place : Mumbai Dated : May 14, 2010
REPORT OF THE AUDITORS TO THE MEMBERS OF HAPPY HIGHRISES LIMITED 1.
2.
3.
4.
168
We have audited the attached Balance Sheet of HAPPY HIGHRISES LIMITED, as at 31st March, 2010, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We have conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditor’s Report) Order, 2003, issued by the Central Government in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order. Further to our comments in the Annexure referred to in paragraph (3) above, we report that: a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit. b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of such books. c) The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account. d) In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.
e)
5.
In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010; ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date and iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date. On the basis of the written representations received from the directors as on 31st March, 2010, and taken on record by the Board of Directors, we report that, none of the directors is disqualified as on 31st March, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.
For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants Firm Registration No.: 104607W ERMIN K. IRANI Partner Membership No. 35646 Place: Mumbai Dated : May 14, 2010
Annual Report 2009–2010
ANNEXURE TO THE AUDITORS’ REPORT Referred to in paragraph (3) of our report of even date. 1) (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets. (b) As explained to us, the Company has a program for physical verification of fixed assets at periodicals intervals. In our opinion, the period of verification is reasonable having regard to the size of the Company. (c) There is no disposal of fixed assets during the year. 2) (a) The management has conducted physical verification of inventory at reasonable intervals. (b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. (c) The company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification. 3) (a) The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956 (b) Consequently, the question of commenting on the rates of interest, terms and conditions of the loans granted being prejudicial to the interests of the Company, receipt of regular principal and interest and reasonable steps for recovery of the same does not arise. (c) The Company has not taken any loan, secured or unsecured from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956 (d) Consequently, the question of commenting on the rates of interest and other terms and conditions of the loans taken being prejudicial to the interests of the Company, payment of regular principal and the interest does not arise. 4) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchases of inventory, fixed assets and for the sale of goods. There are no sales of service. During the course of our audit, we have not observed a continuing failure to correct major weaknesses in internal controls. 5) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the particulars of contracts and arrangements referred to in Section 301 of the Companies Act, 1956 have been entered into the register required to be maintained under that section. (b) The transactions made in pursuance of such contracts or arrangements, were made at prices which are reasonable having regard to prevailing marketing prices at the relevant time, where comparable market price exist. 6) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public hence the provisions of section 58A and 58AA or any other provisions of the Companies Act, 1956, are not applicable. 7) The Company has an internal audit system, which in our opinion is commensurate with the size of the Company and nature of its business. 8) In our opinion and according to the information and explanations given to us, The Central Government has not been prescribed maintenance of cost records under section 209(1) (d) of the Companies Act, 1956, in respect of the activities carried on by the Company. 9) (a) According to the information and explanations given to us and on the basis of our
BALANCE SHEET AS AT 31ST MARCH, 2010 Schedule SOURCES OF FUNDS SHAREHOLDERS’ FUNDS Share Capital Reserve & Surplus LOAN FUNDS DEFERRED TAX LIABILITY
1 2
As at 31.03.2010 Rupees
As at 31.03.2009 Rupees
2,031,200 14,472,024 12,000 16,515,224
2,031,200 2,031,200
APPLICATION OF FUNDS FIXED ASSETS Gross Block Less : Depreciation Net Block INVESTMENTS CURRENT ASSETS, LOANS & ADVANCES Inventory Debtors Cash & Bank Balances Loans & Advances
3
2,618,114 392,900 2,225,214 -
137,360 33,445 103,915 -
4 5 6 7
LESS : CURRENT LIABILITIES & PROVISIONS Current Liabilities Provisions
1,256,666,886 67,616,112 14,481,093 19,898,842 1,358,662,933
907,618,712 87,980 1,155,172 908,861,864
8 9
1,336,263,427 8,121,578 1,344,385,005 14,277,928
907,020,485 907,020,485 1,841,379
12,082 16,515,224
13,808 72,098 2,031,200
NET CURRENT ASSETS MISCELLANEOUS EXPENDITURE (to the extent not written off or adjusted) Preliminary Expenditure PROFIT & LOSS ACCOUNT NOTES TO ACCOUNTS & ACCOUNTING POLICIES
12
The Schedules referred to above form an integral part of the Balance Sheet. Signatures to the Balance Sheet and As per our Report of even date. Schedules 1 to 9 and 12 For and on behalf of KALYANIWALLA & MISTRY CHARTERED ACCOUNTANTS ERMIN K. IRANI MILIND S. KORDE K.T. JITHENDRAN Partner DIRECTORS Mumbai, Dated : May 14, 2010
10) 11) 12) 13) 14) 15) 16) 17) 18) 19) 20) 21)
examination of books of accounts, during the year, the Company has no statutory dues including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income Tax, Value Added Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess and other statutory dues incurred during the year. According to the information and explanations given to us, there are no undisputed dues, payable in respect of above as at 31st March 2010 for a period of more than six months from the date they became payable. (b) According to the information and explanations given to us, there are no dues outstanding of Sales Tax, Value Added Tax, Income Tax, Wealth Tax, Excise Duty, cess on account of any dispute. The Company does not have accumulated losses at the end of the financial year and has not incurred any cash losses in the current and immediately preceding financial year. According to the information and explanations given to us and based on documents and records produced to us, the Company has not defaulted in repayment of dues to bank. The Company does not have any outstanding debentures or dues to financial institutions. According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/ mutual benefit fund/ societies. In our opinion and according to the information and explanations given to us, the Company does not deal in shares, securities, debentures and other investments. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions. Based on our examination and according to the information and explanations given to us, there were no term loans taken during the year. According to the information and explanations given to us and an overall examination of the Balance Sheet and cash flows of the Company, we report that the Company has not utilized funds raised on short-term basis for long-term investments. The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956. The Company did not issue any debentures during the year. The Company has not raised any money through a public issue during the year. Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.
For and on behalf of KALYANIWALLA & MISTRY CHARTERED ACCOUNTANTS Firm Registration No.: 104607W ERMIN K. IRANI Partner Membership No. 35646 Place: Mumbai Dated: May 14, 2010
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010 Schedule
INCOME Sales EXPENDITURE Cost of Sales Interest & Finance Charges Depreciation Preliminary Expenses written off Profit / (Defecit) for the Year Provision for Tax for Current Tax for Deferred Tax Profit / (Defecit) after tax Deficit Brought Forward Profit Carried Forward to Balance Sheet Earning per share Basic/Diluted in Rs. (Refer Note 3) NOTES TO ACCOUNTS & ACCOUNTING POLICIES
10 11
For the Year ended 31.03.2010 Rupees
For the Year ended 31.03.2009 Rupees
121,057,106
-
97,971,803 359,455 1,726 22,724,122
30,245 1,726 (31,971)
(8,168,000) (12,000) 14,544,122 (72,098) 14,472,024 71.60
(31,971) (40,127) (72,098) (0.16)
12
The Schedules referred to above form an integral part of the Profit & Loss Account. Signatures to Profit & Loss Account and As per our Report of even date. Schedules 10 to 12 For and on behalf of KALYANIWALLA & MISTRY CHARTERED ACCOUNTANTS ERMIN K. IRANI MILIND S. KORDE K.T. JITHENDRAN Partner DIRECTORS Mumbai, Dated : May 14, 2010
169
Happy Highrises Limited SCHEDULES FORMING PART OF THE ACCOUNTS
SCHEDULE 1: SHARE CAPITAL AUTHORISED 250,000 Equity shares of Rs. 10/- each ISSUED, SUBSCRIBED & PAID UP 203,120 Equity shares of Rs. 10/- each, fully paid-up (Of the above 1,03,592 (previous year 2,03,120) shares are held by Godrej Properties Limited, the Holding Company and its nominee) SCHEDULE 2 RESERVES & SURPLUS PROFIT AND LOSS ACCOUNT
As at 31.03.10 Rupees
As at 31.03.00 Rupees
2,500,000 2,500,000
2,500,000 2,500,000
2,031,200
2,031,200
2,031,200
2,031,200
14,472,024 14,472,024
– –
SCHEDULE 3: FIXED ASSETS Particulars As at 1st April, 2009 Rs. Furniture & Fixtures Office Equipments Computers
Gross Block Additions Deductions
Rs.
Rs.
- 1,369,693
Depreciation As at Upto For the Upto 31st 1st April, Year 31st March, 2009 March, 2010 2010 Rs. Rs. Rs. Rs.
Net Block As at As at 31st 31st March, March, 2010 2009 Rs. Rs.
-
1,369,693
-
156,032
3,200
386,246
-
389,446
3,200
38,151
156,032 1,213,661 41,351
348,095
-
134,160
724,815
-
858,975
30,245
165,272
195,517
663,458
103,915
137,360 2,480,754
-
2,618,114
33,445
359,455
392,900 2,225,214
103,915
-
137,360
3,200
30,245
Total Previous Year
3,200
134,160
33,445
103,915
-
As at 31.03.2010 Rupees
As at 31.03.2009 Rupees
1,256,666,886
907,618,712
1,256,666,886
907,618,712
Others
67,616,112
-
(Includes unbilled revenue of Rs. 57,999,721/- (Previous year Rs. NIL))
67,616,112
-
54,110
14,085
SCHEDULE 4 INVENTORY Construction work in progress SCHEDULE 5 SUNDRY DEBTORS (UNSECURED, CONSIDERED GOOD)
SCHEDULE 6 CASH & BANK BALANCE Cash & Cheques-in-Hand Balances with Scheduled Bank
14,426,983
73,895
14,481,093
87,980
SCHEDULE 7 LOANS & ADVANCES (Unsecured & considered good unless otherwise stated) - Secured (Secured against Bank Guarantee) Advances recoverable in cash or kind or for value to be received Advance Tax and Tax Deducted at Source
16,212,613
-
3,686,229
1,108,750
-
46,422
19,898,842
1,155,172
90,373,592
1,087,650
-
-
SCHEDULE 8 CURRENT LIABILITIES Sundry Creditors (Refer Note 2) Investor Education & Protection Fund Advances received against Sale Other liabilities
1,278,797
-
1,244,611,038
905,932,835
1,336,263,427
907,020,485
8,121,578
-
8,121,578
-
SCHEDULE 9 PROVISIONS Provision for Income Tax (Net of Advance Tax & Tax of deducted at source of Rs. 46,422/-, Previous Year Rs. 46,422/-)
170
SCHEDULE 10 COST OF SALES Opening Stock Add : Expenditure during the period Construction, Material & Labour Architect Fees Advertisment Expenses Overheads Interest Less : Closing Stock Cost of Sales SCHEDULE 11 INTEREST AND FINANCIAL CHARGES Interest Paid Interest Paid - Others Total Interest Paid Add: Brokerage & other Financial Charges Total Interest/Finance Charges Paid Less: Transferred to Cost of Sales NET INTEREST
For the Year ended 31.03.2010 Rupees
For the Year ended 31.03.2009 Rupees
907,618,712
774,188,736
123,579,224 1,416,852 32,826,545 182,866,518 106,330,838 1,354,638,689 1,256,666,886 97,971,803
5,662,615 545,093 39,873,381 87,348,887 907,618,712 907,618,712 -
106,325,525 106,325,525 5,313 106,330,838 106,330,838 -
87,345,656 87,345,656 3,231 87,348,887 87,348,887 -
SCHEDULE 12 : NOTES TO ACCOUNT AND ACCOUNTING POLICIES 1) Accounting Policies a) General The financial statements are prepared under the historical cost convention in accordance with Generally Accepted Accounting Principles in India, the Accounting Standards issued by The Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956. b) Miscellaneous Expenditure Miscellaneous expenditure is amortized over a period of 10 years. c) Fixed Assets Fixed assets are stated at cost of acquisition or construction less accumulated depreciation. Cost includes all incidental expenses related to acquisition and installation, other preoperation expenses and interest in case of construction. Carrying amount of cash generating units / assets are reviewed at balance sheet date to determine whether there is any indication of impairment. If such indication exists, the recoverable amount is estimated as the net selling price or value in use, whichever is higher. Impairment loss, if any, is recognized whenever carrying amount exceeds the recoverable amount. d) Depreciation / Amortization Depreciation has been provided on Written Down Value basis, at the rates specified in Schedule XIV of the Companies Act, 1956. e) Inventories Inventories are valued as under: a) Completed Flats - At lower of Cost or Market value b) Construction Work-in-Progress - At cost Construction Work in Progress includes cost of land, premium for development rights, construction costs, allocated interest and expenses incidental to the projects undertaken by the Company. f) Revenue Recognition The Company is following the “Percentage of Completion Method” of accounting. As per this method, revenue in Profit & Loss Account at the end of the accounting year is recognized in proportion to the actual cost incurred as against the total estimated cost of projects under execution with the Company. Determination of revenues under the percentage of completion method necessarily involves making estimates by the Company, some of which are of a technical nature, concerning, where relevant, the percentages of completion, costs to completion, the expected revenues from the project/activity and the foreseeable losses to completion. Such estimates have been relied upon by the auditors. Interest income is accounted on an accrual basis at contracted rates. g) Borrowing Cost Interest and finance charges incurred in connection with borrowing of funds, which are incurred for the development of long term projects, are transferred to Construction Work in Progress / Due on Management Project, as a part of the cost of the projects at weighted average of the borrowing cost / rates as per Agreements respectively. Other borrowing costs are recognized as an expense in the period in which they are incurred. h) Earnings Per Share The basic earnings per share is computed using the weighted average number of common shares outstanding during the period. Diluted earnings per share are computed using the weighted average number of common and dilutive common equivalent shares outstanding during the period, except where the results would be anti-dilutive. i) Provision For Taxation Tax expense comprises both current and deferred tax. Current tax is measured at the amount expected to be paid to the tax authorities, using the applicable tax rates and tax laws. Deferred tax is recognized on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in
Annual Report 2009–2010 SCHEDULES FORMING PART OF THE ACCOUNTS
j)
k)
2.
3.
one or more subsequent periods. Deferred tax assets, subject to consideration of prudence, are recognized and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. The tax effect is calculated on the accumulated timing difference at the year-end based on the tax rates and laws enacted or substantially enacted on the balance sheet date. Foreign Currency Transactions Transactions in foreign currency are recorded at the exchange rates prevailing on the date of the transaction. Assets and liabilities related to foreign currency transactions, remaining unsettled at the year end, are transalated at the year end exchange rates. Forward exchange contracts, remaining unsetteled at the year end, backed by underlying assets or liabilities are also translated at year end exchange rates.The premium payable on foreign exchange contracts is amortised over the period of the contract. Exchange gains / losses are recognised in the Profit and Loss Account. Provisions And Contigent Liabilities Provisions are recognized in the accounts in respect of present probable obligations, the amount of which can be reliably estimated. Contingent liabilities are disclosed in respect of possible obligations that arise from the past events but their existence is confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. Micro, Small and Medium Enterprises Development Act, 2006: Disclosure of sundry creditors under current liabilities is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small & Medium Enterprises Development Act 2006". There is no amount overdue as on 31st March, 2010 to Micro, Small and Medium Enterprises on account of principal amount together with interest and also during the previous year. Earnings per share Profit / (Loss) for the period as per Profit & Loss Account (Rs.) Weighted average no. of equity shares outstanding Earnings Per Share (Basic /Diluted) (Rs.)
4.
6.
7.
2.
Liabilities - Depreciation on Fixed Assets Deferred Tax Liabilities Amounts paid to Auditors
1.
9.
203,120 71.60
203,120 (0.16)
Current Year
Previous Year
(Rs.)
(Rs.)
12,000 12,000
-
Current Year (Rs.) 1,59,935 55,150 40,388 255,473
Previous Year (Rs.) 1,59,935 159,935
Audit Fees Audit Under Other Statutes Consultancy Charges Total Segment Information As the company has only one business segment, disclosure under Accounting Standard 17 on “Segment Reporting” issued by the Institute of Chartered Accountants of India is not applicable. Related Party Disclosure Related party disclosures as required by AS-18, “Related Party Disclosures”, are given below: (i) Relationships: Shareholders (the Godrej Group Shareholding) in the Company Godrej Properties Limited (GPL) hold 51% in the Company. GPL is the Subsidiary of Godrej Industries Limited (GIL). GIL is a subsidiary of Godrej & Boyce Manufacturing Company Limited (G&B), the ultimate holding Company. (ii) Investing party in respect of which the reporting enterprise is an associate. - Milestone Real Estate Fund. The following transactions were carried out with the related party in the ordinary course of the business: Sr. No Particulars
8.
Previous Year (31,971)
Nominal value of shares (Rs.) 10/10/Deferred Tax The Tax effect of significant temporary differences that resulted in deferred tax liabilities are : Particulars
5.
Current Year 14,544,122
2.
Expenses incurred by other company towards Construction work in progress and Revenue expenditure Advances Received
3.
Advances Repaid
4.
Outstanding payables
5.
Purchase of Fixed Assets
GPL Amount Rs. 181,214,018 114,240,742
G&B Rs. -
202,500,000 31,270,000
-
31,900,000 -
-
1,227,097,105 885,915,639 -
81,702 -
Figures in italics are for previous year Previous year figures have been rearranged / regrouped wherever necessary to confirm to current year’s classification. Additional Information as required under Part IV of Schedule VI of the Companies Act, 1956 to the extent not applicable has not been given.
10.
1
2
3
4
5
Additional information as required under Part IV of the Schedule VI to the Companies Act, 1956 Balance Sheet Abstract for the Year ended 31st March, 2010 And Company’s General Business Profile Registration Details : Registration No. : U51909MH1993PLC180464 State Code : 11 Balance Sheet Date : 31st March, 2010 Capital raised during the year (Amount in Rs. thousands) Public Issue : Nil Rights Issue : Nil Bonus Issue : Nil Private Placement - Capital : Nil - Premium : Nil Position of mobilisation and deployment of funds (Amount : in Rs. thousands) Total Liabilities : 1,360,900 Total Assets : 1,360,900 Sources of Funds : Paid-up capital : 2,031 Reserves & Surplus : 14,472 Secured Loans : Unsecured Loans : Deferred Tax Liability : 12 Application of Funds : Net Fixed Assets : 2,225 Investments : Net Current Assets : 14,278 Misc. Expenditure : 12 Accumulated Losses : – Performance of Company (Amount in Rs. thousands) : Turnover : 121,057 Total Expenditure : 98,333 Profit/(Loss) before Tax : 22,724 Profit/(Loss) after Tax : 14,544 Earning per Share in Rs. : 71.60 Dividend Rate % : Generic Names of three principal products/services of Company : N.A.
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010 Current Year Rupees
Previous Year Rupees
22,724,122
(31,971)
Cash Flow from Operating Activities Profit / (Loss) before taxation Adjustment for: Depreciation
359,455
30,245
Interest Paid
106,330,838
87,348,887
Preliminary Expenses Operating Profit /(Loss) before working capital changes
1,726
1,726
129,416,141
87,348,887
(349,048,174)
(133,429,976)
Adjustment for: Change in Inventory Increase in Sundry Debtors
(67,616,112)
-
Change in Loans & Advances
(18,790,092)
(705,278)
Change in Current Liabilities / Provisions
322,912,104
45,012,567
Net Cash Flow from Operating Activities
16,873,867
(1,773,800)
Purchase of Fixed Assets
(2,480,754)
(134,160)
Net Cash Flow from Investing Activities
(2,480,754)
(134,160)
Cash Flow from Investing Activities
Cash Flow from Financing Activities Net Increase/ (Decrease) in Cash & Cash Equivalent Cash & Cash Equivalent -Opening Balance Cash & Cash Equivalent -Closing Balance
-
-
14,393,113
(1,907,960)
87,980
1,995,940
14,481,093
87,980
Notes : 1.
The cash flow statement has been prepared under the 'Indirect Method' as set out in the Accounting Standard (AS) 3 on 'Cash Flow Statement', and presents cash flows by operating, investing and financing activities.
2.
Figures for the previous year have been regrouped/ restated wherever necessary to conform to this year's classification.
For and on behalf of KALYANIWALLA & MISTRY CHARTERED ACCOUNTANTS ERMIN K. IRANI Partner Place : Mumbai Dated : May 14, 2010
MILIND S. KORDE K.T. JITHENDRAN DIRECTORS
171
Godrej Waterside Properties Private Limited BOARD OF DIRECTORS' REPORT FOR THE YEAR ENDED 31ST MARCH, 2010 TO THE SHAREHOLDERS Your Directors have pleasure in submitting their Report along with the Audited Accounts for the year ended March 31, 2010. 1. FINANCIAL HIGHLIGHTS: The accounting results for the year ended March 31, 2010 reveal that there is a surplus at the end of the year. During the year the Company has created Debenture Redemption Reserve as required under Section 117(C) of the Companies Act, 1956. 2. REVIEW OF OPERATIONS : The project has a total Developable area of 2.16 million sq.ft spanning two towers with parking facility for approximately 1400 car parks. The Project comprises of two towers, Tower 1 having a developable area of 0.72 million sq.ft. and Tower 2 having a developable area of 1 .44 million sq.ft. Tower I is fully complete and the Company has sold 3,31,772 sq.ft. Tower II is under construction. 3. DIVIDEND: There is no Dividend declared for the year ended March 31, 2010. 4. DIRECTORS: During the year Mr. Amit B. Choudhury has been appointed as an Additional Director w.e.f February 1, 2010 who will hold office till the conclusion of the ensuing Annual General Meeting of the Company. In accordance with the provisions of the Articles of Association, Mr. Pirojsha A Godrej and Mr. K. T. Jithendran retire by rotation and being eligible, offer themselves for re-appointment. 5. MATERIAL SUBSIDIARY: During the year your Company has become the Material Non Listed Indian Subsidiary of Godrej Properties Limited as per Clause 49 of listing agreement. 6. APPOINTMENT OF AUDITORS: M/s. Kalyaniwalla & Mistry, Chartered Accountants retire at the ensuing Annual General Meeting and are eligible for re-appointment for which they have given their consent. 7. DIRECTORS’ RESPONSIBILITY STATEMENT: Your Director’s Confirm: (i) that in the preparation of the annual accounts, the applicable accounting standards have been followed; (ii) that the Directors have selected such accounting policies and applied them consistently
8.
9.
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 ended March 31, 2010 and of the profit of the Company for that year; (iii) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (iv) that the Directors have prepared the annual accounts on a going concern basis. ADDITIONAL INFORMATION: (a) Since the Company has no employees, the particulars of the employees to be disclosed u/s 217 (2A) of the Companies Act, 1956 read with Companies (particulars of employees) Rules, 1975, are not given. (b) Information in respect of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is provided hereunder: i) Conservation of Energy : Expenses on account of Energy are negligible. ii) Technology Absorption: It is an on going process. iii) Foreign Exchange Earning & Outgo: The Company has not earned any Foreign Exchange nor incurred any Foreign Exchange Expenditure during the year. ACKNOWLEDGEMENT: Your Directors take this opportunity to thank all the associates for their co-operation. For And On Behalf Of The Board Of Directors MILIND S. KORDE NARESH NADKARNI Directors
Mumbai, Dated : May 14, 2010
REPORT OF THE AUDITORS TO THE MEMBERS OF GODREJ WATERSIDE PROPERTIES PRIVATE LIMITED 1.
2.
3.
4.
172
We have audited the attached Balance Sheet of GODREJ WATERSIDE PROPERTIES PRIVATE LIMITED, as at 31st March 2010, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We have conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditor’s Report) Order, 2003, issued by the Central Government in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order. Further to our comments in the Annexure referred to in paragraph (3) above, we report that: a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit. b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of such books. c) The Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account. d) In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956. e) Without qualifying our opinion, we draw attention to the fact that as referred to in Note 1(e) of Schedule 14-Notes to Accounts, in respect of projects under long term contracts undertaken and/or financed by the Company, we have relied upon the management’s
5.
estimates of the percentage of completion, costs to completion and on the projections of revenues expected from projects owing to the technical nature of such estimates, on the basis of which profits/losses have been accounted, interest income accrued and realizability of the construction work in progress and project advances determined. f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010; ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date and iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date. On the basis of the written representations received from the directors as on 31st March, 2010, and taken on record by the Board of Directors, we report that, none of the directors is disqualified as on 31st March, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.
For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants Firm Registration No.: 104607W ERMIN K. IRANI Partner Membership No. 35646 Place: Mumbai Dated: May 14, 2010
Annual Report 2009–2010
ANNEXURE TO THE AUDITORS’ REPORT
Referred to in paragraph (3) of our report of even date. 1. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) As explained to us, the Company has a program for physical verification of fixed assets at periodical intervals. In our opinion, the period of verification is reasonable having regard to the size of the Company. (c) There is no disposal of fixed assets during the year. 2. (a) The management has conducted physical verification of inventory at reasonable intervals. (b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. (c) The company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification. 3. (a) The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. (b) Consequently, the question of commenting on the rates of interest, terms and conditions of the loans granted being prejudicial to the interests of the Company, receipt of regular principal and interest and reasonable steps for recovery of the same does not arise. (c) The Company has not taken any loan, secured or unsecured from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. (d) Consequently, the question of commenting on the rates of interest and others terms and conditions of the loans taken being prejudicial to the interests of the Company, payment of regular principal and the interest does not arise. 4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchases of inventory, fixed assets and for the sale of goods. There are no sales of service. During the course of our audit, we have not observed a continuing failure to correct major weaknesses in internal controls. 5. (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the particulars of contracts and arrangements referred to in Section 301 of the Companies Act, 1956 have been entered into the register required to be maintained under that section. (b) The transactions made in pursuance of such contracts or arrangements, were made at prices which are reasonable having regard to prevailing market prices at the relevant time, where comparable market price exist. 6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public hence the provisions of Section 58A and 58AA or any other provisions of the Companies Act, 1956, are not applicable. 7. The Company has an internal audit system, which in our opinion is commensurate with the size of the Company and nature of its business. 8. In our opinion and according to the information and explanations given to us, the Central Government has not been prescribed maintenance of cost records under section 209(1) (d) of the Companies Act, 1956, in respect of the activities carried on by the Company. 9. (a) According to the information and explanations given to us and on the basis of our examination of books of accounts, during the year, the Company has been generally
BALANCE SHEET AS AT 31ST MARCH, 2010 Schedule SOURCES OF FUNDS Shareholders’ Funds Share Capital Reserve & Surplus Loan Funds Secured Loans
As at 31.03.2010 Rupees
As at 31.03.2009 Rupees
1 2
10,000,000 16,875,800
10,000,000 12,943,462
3
2,167,300,000 2,194,175,800
2,167,300,000 2,190,243,462
4
4,218,878 2,065,890 2,152,988 30,000
3,958,506 1,449,504 2,509,002 4,000
Application Of Funds Fixed Assets Gross Block Less : Depreciation Net Block Investments Deferred Tax Asset Current Assets, Loans & Advances Inventory Debtors Cash & Bank Balances Loans & Advances
5 6 7 8
2,371,895,669 353,254,319 40,233,572 139,307,911 2,904,691,471
2,070,421,912 245,317,300 18,190,356 326,307,823 2,660,237,391
Less : Current Liabilities & Provisions Current Liabilities Provisions
9 10
711,233,052 1,465,607 712,698,659 2,191,992,812 2,194,175,800
465,089,851 7,417,080 472,506,931 2,187,730,460 2,190,243,462
Net Current Assets Notes To Accounts & Accounting Policies The Schedules referred to above form an integral part of the Balance Sheet As per our Report of even date For and on behalf of Kalyaniwalla & Mistry Chartered Accountants Ermin K. Irani Partner Mumbai, Dated : May 14, 2010
14 Signatures to the Balance Sheet and Schedules 1 to 10 and 14
Milind S. Korde Naresh Nadkarni Directors
10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21.
regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income Tax, Value Added Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess and other statutory dues incurred during the year. According to the information and explanations given to us, there are no undisputed dues, payable in respect of above as at 31st March 2010 for a period of more than six months from the date they became payable. (b) According to the information and explanations given to us, there are no dues outstanding of Sales Tax, Value Added Tax, Income Tax, Wealth Tax, Excise Duty, cess on account of any dispute. The Company’s does not have accumulated losses at the end of the financial year and has not incurred any cash losses in the current and immediately preceding financial year. According to the information and explanations given to us and based on documents and records produced to us, the Company has not defaulted in repayment of dues to debenture holders, banks and financial institutions. According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/ mutual benefit fund/ societies. In our opinion and according to the information and explanations given to us, the Company does not deal in shares, securities, debentures and other investments. In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions. According to the information and explanations given to us and based on the documents and records examined by us, on an overall basis, the term loan has been applied for the purpose for which the loan was obtained. According to the information and explanations given to us and an overall examination of the Balance Sheet and cash flows of the Company, we report that the Company has not utilized funds raised on short term basis for long term investments. The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956. The Company did not issue any debentures during the year. The Company has not raised any money through a public issue during the year. Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.
For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants Firm Registration No.: 104607W ERMIN K. IRANI Partner Membership No. 35646 Place: Mumbai Dated: May 14, 2010
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED ON 31ST MARCH, 2010 Schedule
INCOME Sales Other Income (Tax Deducted at Source Rs.361,270 /- [Previous year Rs. 718,167/-]) EXPENDITURE Cost of Sales Interest & Finance Charges Depreciation
11
12 13
Profit for the Year Provision for Taxation for Current Tax for Deferred Tax Profit / (Loss) After Tax Deficit Brought Forward Amount available for appropriation Transfer to Debenture Redemption Reserve Balance Carried Forward to Balance Sheet Earning per share Basic in Rs. (Refer Note 7) Earning per share Diluted in Rs. (Refer Note 7)
For the year ended 31.03.2010 Rupees
For the year ended 31.03.2009 Rupees
870,207,675 3,662,561
592,449,300 3,169,314
873,870,236
595,618,614
863,770,951 3,662,561 616,386 868,049,898 5,820,338
566,538,934 3,169,314 691,460 570,399,708 25,218,906
(1,914,000) 26,000 3,932,338 3,932,338 3,932,338 3.93 0.13
(8,890,000) 23,000 16,351,906 (3,408,444) 12,943,462 12,943,462 16.35 0.55
Notes To Accounts & Accounting Policies
14
The Schedules referred to above form an integral part of the Profit and Loss Account As per our Report of even date For and on behalf of Kalyaniwalla & Mistry Chartered Accountants
Signatures to Profit and Loss Account and Schedules 11 to 14
Ermin K. Irani Partner
Milind S. Korde Naresh Nadkarni Directors
Mumbai, Dated : May 14, 2010
173
Godrej Waterside Properties Private Limited SCHEDULES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED ON 31st MARCH, 2010 As at 31.03.2010 Rupees
SCHEDULE 1 : SHARE CAPITAL Authorised 1.000,000 Equity shares of Rs. 10/- each Issued, Subscribed & Paid Up 1,000,000 Equity shares of Rs. 10/- each, fully paid -up (510,000 equity shares are held by Godrej Properties Limited the Holding Company & its nominee) SCHEDULE 2 : RESERVES & SURPLUS DEBENTURE REDEMPTION RESERVE Balance as per last Balance Sheet Transferred from Profit & Loss Account Less : Utilised during the year Balance at the end of the year Profit & Loss Account SCHEDULE 3 : SECURED LOANS 1% Secured Redeemable Optionally Convertible Debentures (Refer Note 3) Term Loan from State Bank of India (Secured by charge of development rights of company's project Godrej Waterside IT Park at Kolkata)
SCHEDULE 14 : NOTES TO ACCOUNTS AND ACCOUNTING POLICIES 1)
As at 31.03.2009 Rupees
10,000,000 10,000,000
10,000,000 10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
12,943,462 3,932,338 16,875,800 16,875,800
12,943,462 12,943,462 12,943,462
290,000,000
290,000,000
1,877,300,000 2,167,300,000
1,877,300,000 2,167,300,000
SCHEDULE 4 : FIXED ASSETS Particulars
Gross Block
Depreciation
As at 1st April Deduc2009 Additions tions Rs. Rs. Rs. Land (Refer Note 2) 356,380 Office Equipments 427,943 197,462 Furniture & Fixtures 948,920 Computers 1,388,771 62,910 Motor Car 836,492 Total 3,958,506 260,372 Previous Year 3,098,290 860,216
As at 31st March 2010 Rs.
Upto 1st April 2009 Rs.
Net Block As at As at 31st 31st March March 2010 2009 Rs. Rs.
- 356,380 - 356,380 356,380 - 625,405 103,993 66,651 170,644 454,761 323,950 - 948,920 294,721 118,410 413,131 535,789 654,199 - 1,451,681 687,318 308,860 996,178 455,503 701,453 - 836,492 363,472 122,465 485,937 350,555 473,020 - 4,218,878 1,449,504 616,386 2,065,890 2,152,988 2,509,002 - 3,958,506 758,044 691,460 1,449,504 2,509,002 -
SCHEDULE 5 : INVENTORY Construction work in progress SCHEDULE 6 : SUNDRY DEBTORS (UNSECURED, CONSIDERED GOOD) Due over Six months Others (Includes unbilled revenue of Rs. 343,305,025/- (Previous Year Rs. 206,398,200/-)) SCHEDULE 7 : CASH & BANK BALANCE Cash Balance with Scheduled Bank - On current Account - On Fixed Deposit Accounts (Refer Note 2) SCHEDULE 8 : LOANS & ADVANCES (Unsecured & considered good) Advances recoverable in cash or kind or for value to be received - Secured (Secured against Bank / Corporate Guarantee) - Others Interest accrued SCHEDULE 9 : CURRENT LIABILITIES Sundry Creditors (Refer Note 4) Investor Education & Protection Fund Advances received against Sale Other liabilities Interest Accrued but not due SCHEDULE 10 : PROVISIONS Provision for Income Tax (Net of Advance Tax and TDS Rs. 9,338,393/- (Previous Year 1,418,920/-)) SCHEDULE 11 : INCOME Interest received Tax deducted at source SCHEDULE 12 : COST OF SALES Opening Stock Add : Expenditure during the period Construction Material & Labour Architect Fees Advertisment Expenses Over heads Interest Less: Closing Stock Cost of Sales SCHEDULE 13 : INTEREST AND FINANCIAL CHARGES Interest Paid - Bank Interest Paid - Others Total Interest/Finance Charges Paid Less: Transferred to Cost of Sales Net Interest
174
For the Year Rs.
Upto 31st March 2010 Rs.
As at 31.03.2010 Rupees
As at 31.03.2009 Rupees
2,371,895,669 2,371,895,669
2,070,421,912 2,070,421,912
353,254,319 353,254,319
245,317,300 245,317,300
53,799 32,079,773 8,100,000 40,233,572
55,700 18,134,656 18,190,356
128,072,448 11,235,463 139,307,911
182,218,588 139,063,304 5,025,931 326,307,823
107,553,132 4,602,544 562,654,237 36,423,139 711,233,052
185,152,842 246,123,870 33,813,139 465,089,851
1,465,607
7,417,080
1,465,607
7,417,080
3,662,561 3,662,561 361,270
3,169,314 3,169,314 718,167
2,070,421,912
992,961,241
801,220,508 3,351,975 3,656,835 98,870,978 258,144,412 3,235,666,620 2,371,895,669 863,770,951
1,347,051,271 33,324,612 15,713,436 95,011,311 152,898,975 2,636,960,846 2,070,421,912 566,538,934
211,191,523 50,615,450 261,806,973 258,144,412 3,662,561
97,990,609 58,077,680 156,068,289 152,898,975 3,169,314
2)
Accounting Policies a) General The financial statements are prepared under the historical cost convention in accordance with Generally Accepted Accounting Principles in India, the Accounting Standards issued by The Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956. b) Fixed Assets Fixed assets are stated at cost of acquisition or construction less accumulated depreciation. Cost includes all incidental expenses related to acquisition and installation, other pre-operation expenses and interest in case of construction. Carrying amount of cash generating units / assets are reviewed at balance sheet date to determine whether there is any indication of impairment. If such indication exists, the recoverable amount is estimated as the net selling price or value in use, whichever is higher. Impairment loss, if any, is recognized whenever carrying amount exceeds the recoverable amount. c) Depreciation / Amortization Depreciation has been provided on Written Down Value basis, at the rates specified in Schedule XIV of the Companies Act, 1956. d) Inventories Inventories are valued as under : a) Completed Flats - At lower of Cost or Market value b) Construction Work-in-Progress - At cost Construction Work in Progress includes cost of land, premium for development rights, construction costs, allocated interest and expenses incidental to the projects undertaken by the Company. e) Revenue Recognition The Company is following the “Percentage of Completion Method� of accounting. As per this method, revenue in Profit & Loss Account at the end of the accounting year is recognized in proportion to the actual cost incurred as against the total estimated cost of projects under execution with the Company. Determination of revenues under the percentage of completion method necessarily involves making estimates by the Company, some of which are of a technical nature, concerning, where relevant, the percentages of completion, costs to completion, the expected revenues from the project/activity and the foreseeable losses to completion. Such estimates have been relied upon by the auditors. Income from operation of commercial complexes is recognized over the tenure of the lease/ service agreement. Interest income is accounted on an accrual basis at contracted rates. f) Borrowing cost Interest and Finance charges incurred in connection with borrowing of funds, which are incurred for the development of long term projects are transferred to Construction Work in Progress / Due on Management Project, as a part of the cost of the projects at weighted average of the borrowing cost / rates as per Agreements respectively. Other borrowing costs are recognized as an expense in the period in which they are incurred. g) Earnings Per Share The basic earnings per share is computed using the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the period, except where the results would be anti-dilutive. h) Foreign Currency Transactions Transactions in foreign currency are recorded at the exchange rates prevailing on the date of the transaction. Assets and liabilities related to foreign currency transactions, remaining unsettled at the year end, are transalated at the year end exchange rates. Forward exchange contracts, remaining unsetteled at the year end, backed by underlying assets or liabilities are also translated at year end exchange rates.The premium payable on foreign exchange contracts is amortized over the period of the contract. Exchange gains / losses are recognised in the Profit and Loss Account. i) Provision for taxation Tax expense comprises both current and deferred tax. Current tax is measured at the amount expected to be paid to the tax authorities, using the applicable tax rates and tax laws. Deferred tax is recognized on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets, subject to consideration of prudence, are recognized and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. The tax effect is calculated on the accumulated timing difference at the year-end based on the tax rates and laws enacted or substantially enacted on the balance sheet date. j) Provisions and Contingent Liabilities Provisions are recognized in the accounts in respect of present probable obligations, the amount of which can be reliably estimated. Contingent liabilities are disclosed in respect of possible obligations that arise from the past events but their existence is confirmed by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the Company. Contingent Liabilities: Matters a)
Guarantees given by Bank, counter guaranteed by the Company (The said bank guarantee is issued by marking a lien on Fixed Deposit of Rs. 81,00,000/- held with State Bank of India)
As at 31st March 2010 (Rs.) 81,00,000/-
As at 31st March 2009 (Rs.) NIL
Annual Report 2009–2010 3)
4)
5)
Secured Loans 29,000,000 1% Secured redeemable optionally Convertible Debentures of Rs. 10 each are redeemable at the end of the 7 years from the deemed date of allotment 4th July 2007 and are secured to the extent of specific immovable assets of the Company disclosed under the head “Fixed Assets”. The Company has created a Debenture Redemption Reserve as required under Section 117 (C) of the Companies Act, 1956 to the extent of Profit available for distribution. Due to Micro, Small and Medium Enterprises Disclosure of sundry creditors under current liabilities is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small & Medium Enterprises Development Act 2006". There is no amount overdue as on 31st March, 2010 to Micro, Small and Medium Enterprises on account of principal amount together with interest and also during the previous year. Expenditure in Foreign Currency: Particulars
6)
Current Year Rs.
Travelling Expenses Other Expenditure Total Deferred Tax The Tax effect of significant temporary differences that resulted in the deferred tax assets are : Particulars
7)
Current Year (Rs.)
Assets - Depreciation on Fixed Assets Deferred Tax Asset Earnings per share Particulars
8)
Future minimum lease payments under non-cancelable operating leases - Not later than 1 year Amounts paid to Auditors Particulars
10)
11)
Sr. No
Previous Year (Rs.)
30,000 30,000
4,000 4,000
Current Year Rs. 3,932,339 1,000,000 30,000,000
Previous Year Rs. 16,351,906 1,000,000 30,000,000
Current Year (Rs.)
Previous Year (Rs.)
Profit / (Loss) for the Year as per Profit & Loss Account Weighted average no. of Equity Shares outstanding Weighted average no. of Potential Equity Shares outstanding Basic Earnings Per Share Rs. 3.93 Rs.16.35 Diluted Earnings Per Share Rs. 0.13 Rs. 0.55 Nominal value of shares 10/10/Lease The Company’s significant leasing arrangements are in respect of operating leases for Commercial premises. Lease expenditure for operating leases is recognized on a straightline basis over the period of lease. The particulars of the premises taken under operating leases are as under : Particulars
9)
Previous Year Rs. 9,244 68,510,943 68,520,187
4,18,192
NIL
Current Year (Rs.) 159,935 55,150 33,092 40,388 288,565
Previous Year (Rs.) 159,935 55,150 28,635 33,708 277,446
Audit Fees Audit under other Statutes Certification Consultancy charges Total Segment Information As the company has only one business segment, disclosure under Accounting Standard 17 on “Segment Reporting” issued by the Institute of Chartered Accountants of India is not applicable. Related Party Disclosure 1. Relationships: (i) Shareholders in the Company : Godrej Properties Limited (GPL) holds 51% of the share capital of the Company. GPL is the Subsidiary of Godrej Industries Limited (GIL). GIL is subsidiary of Godrej & Boyce Manufacturing Company Limited (G&B), the ultimate holding company. (ii) Investing party in respect of which the reporting enterprise is an associate. – HDFC Venture Trustee Company Limited 2. The following transactions were carried out with the related party in the ordinary course of the business: Particulars
1. Expenses charged by other company 2. Interest on Debentures 3. Advances Received 4. Advances repaid/given 5. Outstanding payables 6. Debentures Outstanding
G&B 36,319,950 21,457,218 13,708,809 5,440,871 (4,599,669) -
GPL HDFC Venture Trustee Company Limited 76,299,258 136,308,667 1,479,000 11,507,835 763,850,000 1,186,033,000 500,752,038 1,674,651,328 (556,396,071) (220,439,297) 147,900,000 147,900,000
1,421,000 11,056,548 (17,847,337) (16,568,438) 142,100,000 142,100,000
Figures in italics are for previous year 12) Previous year figures have been regrouped / rearranged where ever necessary to confirm to current year’s classification. 13) Additional Information as required under Part IV of Schedule VI of the Companies Act, 1956 to the extent not applicable has not been given.
14) ADDITIONAL INFORMATION AS REQUIRED UNDER PART IV OF THE SCHEDULE VI TO THE COMPANIES ACT, 1956 Balance Sheet Abstract for the year ended 31st March, 2010 and Company’s General Business Profile 1 Registration Details Registration No. U70100MH2005PTC154255 State Code 11 Balance Sheet Date 31st March, 2010 2 Capital raised during the year (Amount in Rs. thousands) Public Issue Nil Rights Issue Nil Bonus Issue Nil Private Placement - Capital Nil - Premium Nil 3 Position of mobilisation and deployment of funds (Amount in Rs. thousands) Total Liabilities 2,906,874 Total Assets 2,906,874 Sources of Funds Paid-up capital 10,000 Reserves & Surplus 16,876 Secured Loans 2,167,300 Unsecured Loans Deferred Tax Liability Application of Funds Net Fixed Assets 2,153 Investments Net Current Assets 2,191,993 Deferrred Tax Asset 30 Misc. Expenditure Accumulated Losses 4 Performance of Company (Amount in Rs. thousands) Turnover 873,870 Total Expenditure 868,050 Profit/(Loss) before Tax 5,820 Profit/(Loss) after Tax 3,932 Earning per Share (Basic) in Rs. 3.93 Earning per Share (Diluted) in Rs. 0.13 Dividend Rate % 5 Generic Names of three principal products/services of Company N.A. CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010
Cash Flow from Operating Activities Profit for the Year Adjustment for: Depreciation Interest Paid Interest Income Operating Profit before working capital changes Adjustment for: Change in Inventory Increase in Sundry Debtors Change in Loans & Advances Change in Current Liabilities / Provisions Taxes Paid (Net) Net Cash Flow from Operating activities Cash Flow from Investing Activities Purchase of Fixed Assets Interest Received Net Cash Flow from Investing Activities Cash Flow from Financing Activities Increase in Secured Loan Interest Paid Net Cash Flow from Financing Activities Net Increase/ (Decrease) in Cash & Cash Equivalent Cash & Cash Equivalent -Opening Balance Cash & Cash Equivalent -Closing Balance
Current Year Rupees
Previous Year Rupees
5,820,338
25,218,906
616,386 261,806,973 (3,662,561) 264,581,136
691,460 156,068,289 (3,169,314) 178,809,341
(301,473,757) (1,077,460,671) (107,937,019) (245,317,300) 193,209,444 (60,208,861) 195,527,751 (573,653,234) 243,907,555 (1,777,830,725) (7,865,473) (718,167) 236,042,082 (1,778,548,892) (260,372) (2,546,971) (2,807,343)
(860,216) 718,167 (142,049)
(211,191,523) (211,191,523) 22,043,216 18,190,356 40,233,572
1,877,300,000 (80,942,500) 1,796,357,500 17,666,559 523,797 18,190,356
Notes : 1. The cash flow statement has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard (AS) 3 on ‘Cash Flow Statement’, and presents cash flows by operating, investing and financing activities. 2. Figures for the previous year have been regrouped/ restated wherever necessary to conform to this year’s classification. For and on behalf of Kalyaniwalla & Mistry Chartered Accountants Ermin K. Irani Partner
Milind S. Korde Naresh Nadkarni Directors
Mumbai, Dated : May 14, 2010
175
Godrej Estate Developers Private Limited BOARD OF DIRECTORS’ REPORT FOR THE YEAR ENDED 31ST MARCH, 2010 TO THE SHAREHOLDERS Your Directors have pleasure in submitting their Report together with the Audited Accounts for the period ended 31st March, 2010. 1. FINANCIAL HIGHLIGHTS: The accounting results for the period ended 31st March, 2010 reveal that there is a deficit at the end of the period. 2. REVIEW OF OPERATIONS: The Company has executed an assignment agreement with Godrej Properties Limited for undertaking development of their project called ‘Godrej Eternia’ at Chandigarh. Further HDFC PMS (under HDFC Asset Management Company Limited Portfolio Management Services Real Estate Portfolio-I, through its Portfolio Manager HDFC Asset Management Company Limited) has purchased 49% equity shares in the Company. Post transfer of shares to HDFC PMS, Godrej Properties Limited now holds 51% stake in the Company. The Company is developing a commercial cum retail project and has commenced construction on site. 3. DIVIDEND: As there are no profits, the Directors regret that no dividend can be recommended. 4. DIRECTORS: During the year Mr. Vipul Roongta was appointed as a nominee Director of HDFC Asset Management Company Limited w.e.f. March 20, 2010. Mr. K. T. Jithendran retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. 5. APPOINTMENT OF AUDITORS: M/s. Kalyaniwalla & Mistry, Chartered Accountants retire at the ensuing Annual General Meeting and are eligible for re-appointment for which they have given their consent. 6. DIRECTORS’ RESPONSIBILITY STATEMENT: Your Directors confirm: (i) that in the preparation of the annual accounts, the applicable accounting standards have been followed; (ii) that the Directors have selected such accounting policies and applied them 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 ended 31st March, 2010 and of the loss of the Company for that year;
(iii)
(iv)
that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; that the Directors have prepared the annual accounts on a going concern basis.
7.
ADDITIONAL INFORMATION: (a) Since the company has no employees, the particulars of the employees to be disclosed u/s 217 (2A) of the Companies Act, 1956 read with Companies (particulars of employees) Rules, 1975, are not given. (b) Information in respect of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is provided hereunder: (i) Conservation of Energy: Expenses on account of Energy are negligible. (ii) Technology Absorption: It is an on going process. (iii) Foreign Exchange Earning & Outgo: The Company has not earned any Foreign Exchange nor incurred any Foreign Exchange Expenditure during the year.
8.
ACKNOWLEDGEMENT: Your Directors take this opportunity to thank all the associates and authorities for their co-operation. For and on Behalf of the Board of Directors MILIND S. KORDE
K.T. JITHENDRAN
Directors
Mumbai, Dated: May 14, 2010
REPORT OF THE AUDITORS TO THE MEMBERS OF GODREJ ESTATE DEVELOPERS PRIVATE LIMITED 1.
We have audited the attached Balance Sheet of GODREJ ESTATE DEVELOPERS PRIVATE LIMITED, as at 31st March, 2010, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
2.
We have conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
3.
As required by the Companies (Auditor’s Report) Order, 2003, issued by the Central Government in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.
4.
Further to our comments in the Annexure referred to in paragraph (3) above, we report that:
176
term contracts undertaken and/or financed by the Company, we have relied upon the management’s estimates of the percentage of completion, costs to completion and on the projections of revenues expected from projects owing to the technical nature of such estimates, on the basis of which profits/losses have been accounted, interest income accrued and realizability of the construction work-in-progress and project advances determined. f)
5.
In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: i)
in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010;
ii)
in the case of the Profit and Loss Account, of the loss of the Company for the year ended on that date and,
iii)
in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.
On the basis of the written representations received from the directors as on 31st March, 2010, and taken on record by the Board of Directors, we report that, none of the directors is disqualified as on 31st March, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.
a)
We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit.
b)
In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of such books.
For and on behalf of
c)
The Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account.
KALYANIWALLA & MISTRY Chartered Accountants Firm Registration No. : 104607W
d)
In our opinion, the Balance Sheet and the Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.
ERMIN K. IRANI Partner Membership No. 35646
e)
Without qualifying our opinion, we draw attention to the fact that as referred to in Note 1(e) of Schedule 10-Notes to Accounts, in respect of projects under long
Place: Mumbai Dated: May 14, 2010
Annual Report 2009–2010
ANNEXURE TO THE AUDITORS’ REPORT REFERRED TO IN PARAGRAPH (3) OF OUR REPORT OF EVEN DATE. 1)
(a)
The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. As explained to us, the Company has a program for physical verification of fixed assets at periodical intervals. In our opinion, the period of verification is reasonable having regard to the size of the Company. (c) There is no disposal of fixed assets during the year. (a) The management has conducted physical verification of inventory at reasonable intervals. (b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. (c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification. (a) The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. (b) Consequently, the question of commenting on the rates of interest, terms and conditions of the loans granted being prejudicial to the interests of the Company, receipt of regular principal and interest and reasonable steps for recovery of the same does not arise. (c) The Company has not taken any loan, secured or unsecured from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. (d) Consequently, the question of commenting on the rates of interest and others terms and conditions of the loans taken being prejudicial to the interests of the Company, payment of regular principal and the interest does not arise. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchases of inventory, fixed assets and for the sale of goods. There are no sales of service. During the course of our audit, we have not observed a continuing failure to correct major weaknesses in internal controls. (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the particulars of contracts and arrangements referred to in Section 301 of the Companies Act, 1956 have been entered into the register required to be maintained under that section. (b) The transactions made in pursuance of such contracts or arrangements, were made at prices which are reasonable having regard to prevailing market prices at the relevant time, where comparable market price exist. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public hence the provisions of Section 58A and 58AA or any other provisions of the Companies Act, 1956, are not applicable. The Company has an internal audit system, which in our opinion is commensurate with the size of the Company and nature of its business. In our opinion and according to the information and explanations given to us, The Central Government has not been prescribed maintenance of cost records under section 209(1) (d) of the Companies Act, 1956, in respect of the activities carried on by the Company. (a) According to the information and explanations given to us and on the basis of our examination of books of accounts, during the year, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income Tax, Value (b)
2)
3)
4)
5)
6) 7) 8) 9)
BALANCE SHEET AS AT 31ST MARCH, 2010 Schedule
SOURCES OF FUNDS SHAREHOLDERS’ FUNDS Share Capital LOAN FUNDS DEFERRED TAX LIABILITY APPLICATION OF FUNDS Fixed Assets Gross Block Less : Depreciation Net Block INVESTMENTS Current Assets, Loans & Advances Inventory Cash & Bank Balances Loans & Advances Less : Current Liabilities & Provisions Current Liabilities
1
Notes to Accounts & Accounting Policies
As at 31.03.2009 Rupees
500,000 — 49,000 549,000
500,000 — — 500,000
2
3 4 5
1,425,010 17,008 1,408,002 — 265,201,213 45,817,082 279,637,849 590,656,144
— — — — — 500,000 — 500,000
Partner Mumbai, May 14, 2010
12) 13) 14) 15) 16) 17) 18) 19) 20) 21)
For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants Firm Registration No. : 104607W ERMIN K. IRANI Partner Membership No. 35646 Place: Mumbai Dated: May 14, 2010
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010 Schedule
For the year ended 31.03.2010 Rupees
For the Period 11.07.2008 to 31.03.2009 Rupees
37,849
—
INCOME Interest Income (Tax deducted at Source Rs.2,090/[Previous Year Nil]) Cost of Sales
7
—
—
Administration Expenses
8
—
43,375
Interest & Finance Charges
9
—
—
Depreciation Preliminary Expenses written off Profit / (Defecit) for the Year
6
591,603,880 591,603,880 (947,736)
13,760 74,974 549,000
60,575 60,575 439,425
15,480 45,095 500,000
17,008
—
1,720
1,720
19,121
(45,095)
(3,000)
—
Provision for Taxation For Current Tax For MAT Credit Entitlement
3,000
—
For Deferred Tax
(49,000)
—
Profit/ (Loss) After Tax
(29,879)
(45,095)
Deficit Brought Forward
(45,095)
—
(74,974)
(45,095)
(0.60)
(0.90)
Earning per share Basic in Rs. (Refer Note 3) Notes to Accounts & Accounting Policies
10
10 Signatures to the Balance Sheet and Schedules 1 to 6 and 10
For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants ERMIN K. IRANI
11)
EXPENDITURE
Net Current Assets Miscellaneous Expenditure (to the extent not written off or adjusted) Preliminary Expenditure Profit and Loss Account
The Schedules referred to above form an integral part of the Balance Sheet. As per our Report of even date.
As at 31.03.2010 Rupees
10)
Added Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, cess and other statutory dues incurred during the year. According to the information and explanations given to us, there are no undisputed dues, payable in respect of above as at 31st March, 2010 for a period of more than six months from the date they became payable. (b) According to the information and explanations given to us, there are no dues outstanding of Sales Tax, Value Added Tax, Income Tax, Wealth Tax, Excise Duty, cess on account of any dispute. The Company’s accumulated losses at the end of the financial year are less than fifty percent of its net worth. In Current year the Company has not incurred cash losses, however, it has incurred cash losses in the immediately preceding financial year. According to the information and explanations given to us and based on documents and records produced to us, the Company has not defaulted in repayment of dues to bank. The Company does not have any outstanding debentures or dues to financial institutions. According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/mutual benefit fund/societies. In our opinion and according to the information and explanations given to us, the Company does not deal in shares, securities, debentures and other investments. In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions. Based on our examination and according to the information and explanations given to us, there were no term loans taken during the year. According to the information and explanations given to us and an overall examination of the Balance Sheet and Cash Flows of the Company, we report that the Company has not utilized funds raised on short term basis for long term investments. The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956. The Company did not issue any debentures during the year. The Company has not raised any money through a public issue during the year. Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.
The Schedules referred to above form an integral part of the Profit & Loss Account. As per our Report of even date.
Signatures to the Profit & Loss Account and Schedules 7 and 10
For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants MILIND S. KORDE
K.T. JITHENDRAN
Directors
ERMIN K. IRANI Partner Mumbai, May 14, 2010
MILIND S. KORDE K.T. JITHENDRAN Directors
177
Godrej Estate Developers Private Limited SCHEDULES FORMING PART OF THE ACCOUNTS As at 31.03.2010 Rupees SCHEDULE 1 SHARE CAPITAL AUTHORISED 50,000 Equity shares of Rs. 10/- each ISSUED, SUBSCRIBED & PAID UP 50,000 Equity shares of Rs. 10/- each, fully paid-up (Of the above 25,500 (Previous year 50,000) shares are held by Godrej Properties Limited, the Holding Company and its nominee)
As at 31.03.2009 Rupees
500,000 500,000
500,000 500,000
500,000
500,000
500,000
500,000
SCHEDULE 2 FIXED ASSETS Particulars
Gross Block
Depreciation
As at Additions Deduc1st tions April, 2009 Rs. Rs. Rs.
As at As at 31st 1st March, April, 2010 2009 Rs. Rs.
For the Year
Net Block
Rs.
As at 31st March, 2010 Rs.
Office Equipment
—
358,017
—
358,017
—
1,774
1,774
356,243
Furniture & Fixtures
—
58,213
—
58,213
—
376
376
57,837
—
Computer
—
299,015
—
299,015
—
8,313
8,313
290,702
—
709,765
—
709,765
—
6,545
6,545
703,220
—
Motor Vehicle
—
TOTAL
— 1,425,010
— 1,425,010
— 17,008
Previous Year
—
—
—
—
—
SCHEDULE 3 INVENTORY Construction Work-in-Progress SCHEDULE 4 CASH & BANK BALANCE Cash & Cheques-in-Hand Balance with Scheduled Bank - On Current Account - On Fixed Deposit Accounts SCHEDULE 5 LOANS & ADVANCES (Unsecured & considered good unless otherwise stated) Advances recoverable in cash or kind or for value to be received Interest accrued Advance Tax and Tax Deducted at Source (Net of Provision for Tax and MAT Credit Entitlement of Rs. 3,000/-) Deposits SCHEDULE 6 CURRENT LIABILITIES Sundry Creditors (Refer Note 2) Investor Education and Protection Fund Other Liabilities
SCHEDULE 7 COST OF SALES Opening Stock Add : Stock-In-Trade Acquired during the year Advertisment Expenses Overheads Interest Less : Closing Stock Cost of Sales
178
—
As at As at 31st 31st March, March, 2010 2009 Rs. Rs. —
17,008 1,408,002 —
—
—
As at 31.03.2010 Rupees
As at 31.03.2009 Rupees
265,201,213 265,201,213
— —
31,038
—
386,044 45,400,000 45,817,082
500,000 — 500,000
29,600,000
—
35,759 2,090
— —
250,000,000 279,637,849
— —
514,348 — 591,089,532 591,603,880
13,300 — 47,275 60,575
For the Year ended 31.03.2010 Rupees
For the Period 11.07.2008 to 31.03.2009 Rupees
— 259,531,383 505,541 1,938,669 3,225,620 265,201,213 265,201,213 —
— — — — — — — —
SCHEDULE 8 ADMINISTRATION EXPENSES Audit fees Other Operating Expenses SCHEDULE 9 INTEREST AND FINANCE CHARGES (NET) INTEREST PAID Interest Paid - Others TOTAL INTEREST PAID Less: Transferred to Cost of Sales NET INTEREST
For the Year ended 31.03.2010 Rupees
For the Period 11.07.2008 to 31.03.2009 Rupees
— — —
27,575 15,800 43,375
3,225,620 3,225,620 3,225,620 —
— — — —
SCHEDULE 10 NOTES TO ACCOUNTS AND ACCOUNTING POLICIES 1) Accounting Policies a. General The financial statements are prepared under the historical cost convention in accordance with Generally Accepted Accounting Principles in India, the Accounting Standards issued by The Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956. b. Fixed Assets Fixed assets are stated at cost of acquisition or construction less accumulated depreciation. Cost includes all incidental expenses related to acquisition and installation, other pre-operation expenses and interest in case of construction. Carrying amount of cash generating units/assets are reviewed at balance sheet date to determine whether there is any indication of impairment. If such indication exists, the recoverable amount is estimated as the net selling price or value in use, whichever is higher. Impairment loss, if any, is recognized whenever carrying amount exceeds the recoverable amount. c. Depreciation/Amortization Depreciation has been provided on Written Down Value basis, at the rates specified in Schedule XIV of the Companies Act, 1956. d. Inventories Inventories are valued as under : a) Completed Flats - At lower of Cost or Market value b) Construction Work-in-Progress - At Cost Construction Work in Progress includes cost of land, premium for development rights, construction costs, allocated interest and expenses incidental to the projects undertaken by the Company. e. Revenue Recognition The Company is following the “Percentage of Completion Method” of accounting. As per this method, revenue in Profit & Loss Account at the end of the accounting year is recognized in proportion to the actual cost incurred as against the total estimated cost of projects under execution with the Company. Determination of revenues under the percentage of completion method necessarily involves making estimates by the Company, some of which are of a technical nature, concerning, where relevant, the percentages of completion, costs to completion, the expected revenues from the project/activity and the foreseeable losses to completion. Such estimates have been relied upon by the auditors. f. Borrowing Cost Interest and Finance charges incurred in connection with borrowing of funds, which are incurred for the development of long term projects are transferred to Construction Work in Progress as a part of the cost of the projects at weighted average of the borrowing cost. g. Provision for taxation Tax expense comprises both current and deferred tax. Current tax is measured at the amount expected to be paid to the tax authorities, using the applicable tax rates and tax laws. Deferred tax is recognized on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets, subject to consideration of prudence, are recognized and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. The tax effect is calculated on the accumulated timing difference at the year-end based on the tax rates and laws enacted or substantially enacted on the balance sheet date. h. Earning Per Share The basic earnings per share is computed using the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the period, except where the results would be anti-dilutive.
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE ACCOUNTS i.
2)
3)
Foreign Currency Transactions Transactions in foreign currency are recorded at the exchange rates prevailing on the date of the transaction. Assets and liabilities related to foreign currency transactions, remaining unsettled at the year end, are transalated at the year end exchange rates. Forward exchange contracts, remaining unsetteled at the year end, backed by underlying assets or liabilities are also translated at year end exchange rates.The premium payable on foreign exchange contracts is amortized over the period of the contract. Exchange gains/losses are recognised in the Profit and Loss Account. j. Provisions And Contingent Liabilities Provisions are recognized in the accounts in respect of present probable obligations, the amount of which can be reliably estimated. Contingent liabilities are disclosed in respect of possible obligations that arise from the past events but their existence is confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. There is no contingent liability as on the balance sheet date. k. Miscellaneous Expenditure Miscellaneous expenditure is amortized over a period of 10 years. Due to Micro, Small and Medium Enterprises Disclosure of sundry creditors under current liabilities is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small & Medium Enterprises Development Act 2006". There is no amount overdue as on 31st March, 2010 to Micro, Small and Medium Enterprises on account of principal amount together with interest and also during the previous year. Earnings per share Particulars
Current Year (Rs.)
Previous Year (Rs.)
Loss for the Year as per Profit & Loss Account (Rs.)
(29,879)
(45,095)
Weighted average no. of equity shares outstanding
50,000
50,000
(0.60)
(0.90)
10/-
10/-
Basic/Diluted earnings per share (Rs.) Nominal value of shares (Rs.) 4)
Deferred Tax The Tax effect of significant temporary differences that resulted in the deferred tax liabilities are: Particulars
5)
6)
7)
Current Year (Rs.)
Previous Year (Rs.)
Liabilities - Depreciation on Fixed Assets
(49,000)
—
Deferred Tax Liabilities
(49,000)
—
Amounts paid to Auditors: Particulars
Current Year (Rs.)
Previous Year (Rs.)
Audit Fees
159,935
27,575
Total
159,935
27,575
Segment Information As the company has only one business segment, disclosure under Accounting Standard 17 on “Segment Reporting” issued by the Institute of Chartered Accountants of India is not applicable. Related Party Disclosure Related party disclosures as required by AS-18, “Related Party Disclosures”, are given below: 1. Relationships: (i) Shareholders (the Godrej Group Shareholding) in the Company Godrej Properties Limited (GPL) holds 51% in the Company. GPL is the Subsidiary of Godrej Industries Limited (GIL). GIL is subsidiary of Godrej & Boyce Manufacturing Company Limited (G&B), the ultimate holding company. (ii) Investing party in respect of which the reporting enterprise is an associate. – HDFC PMS. 2. The following transactions were carried out with the related party in the ordinary course of the business: Sr. Particulars No 1 2 3 4 5 6 7
8) 9)
Issue of Equity Share Capital Expenses charged by other companies Advances received Advances repaid Repayment of Expenses Charged Purchase of Fixed Assets Outstanding payables
Current Year (Rs.) GPL — 264,496,384 329,645,356 4,825 4,660,439 1,425,010 590,596,924
Previous Year (Rs.) GPL 500,000 18,000 — — — — 18,000
Previous year figures have been regrouped/rearranged where ever necessary to confirm to current year’s classification. Additional Information as required under Part IV of Schedule VI of the Companies Act, 1956 to the extent not applicable has not been given.
ADDITIONAL INFORMATION AS REQUIRED UNDER PART IV OF THE SCHEDULE VI TO THE COMPANIES ACT, 1956 Balance Sheet Abstract for the Year ended 31st March, 2010 and Company’s General Business Profile 1.
2.
3.
4.
5.
Registration Details Registration No. State Code Balance Sheet Date Capital raised during the year (Amount in Rs. Thousands) Public Issue Rights Issue Bonus Issue Private Placement - Capital - Premium
U70102MH2008PTC184595 11 31st March, 2010 Nil Nil Nil Nil Nil
Position of mobilisation and deployment of funds (Amount in Rs. Thousands) Total Liabilities Total Assets Sources of Funds Paid-up Capital Reserves & Surplus Secured Loans Unsecured Loans Deferred Tax Liability Application of Funds Net Fixed Assets Investments Net Current Assets Misc. Expenditure Accumulated Losses Performance of Company (Amount in Rs. Thousands) Turnover Total Expenditure Profit/(Loss) before Tax Profit/(Loss) after Tax Earning per Share in Rs. Dividend Rate % Generic Names of three principal products/services of Company
592,153 592,153 500 — — — 49 1,408 — (948) 14 75 — 19 19 (30) (0.60) — N.A.
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010 Cash Flow from Operating Activities Profit/(Loss) for the Year Adjustment for: Depreciation Interest Paid Preliminary Expenses Interest Received Operating Profit/(Loss) before working capital changes Adjustment for: Change in Inventory Change in Loans & Advances Changes in Current Liabilities & Provisions Preliminary Expenses Incurred Net Cash Flow from Operating Activities Taxes Paid (Net) Net Cash Flow from Operating Activities Cash Flow (used) from Financing Activities Purchase of Fixed Assets Issue of Share Capital Interest Received Net Cash Flow from Financing Activities Net Increase in Cash & Cash Equivalent Cash & Cash Equivalent - Opening Balance Cash & Cash Equivalent - Closing Balance
Current Period Rupees
Previous Year Rupees
19,121
(45,095)
17,008 3,225,620 1,720 (37,849) 3,225,620
— — 1,720 — (43,375)
(265,201,213) (279,600,000) 588,317,685 — 46,742,092 2,090 46,740,002
— — 60,575 (17,200) — — —
(1,425,010) — 2,090 (1,422,920) 45,317,082 500,000
— 500,000 — 500,000 500,000 —
45,817,082
500,000
Notes : 1. The cash flow statement has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard (AS) 3 on ‘Cash Flow Statement’, and presents cash flows by operating, investing and financing activities. 2. Figures for the previous year have been regrouped / restated wherever necessary to conform to this year's classification.
For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants ERMIN K. IRANI Partner Mumbai, Dated : May 14, 2010
MILIND S. KORDE K.T. JITHENDRAN Directors
179
Godrej International Limited DIRECTORS’ REPORT The directors aim to maintain the management policies which have resulted in the company’s substantial growth in recent years. They consider that the next year will show a further significant growth in sales. Principal activities The company’s principal activity during the year continued to be trading worldwide in vegetable oils. The recovery in commodity prices improved the market outlook through the year. The company has reported higher sales by 4.06% and higher profits of 9.08%. Directors The following persons served as directors during the year: 2010 1 -
Adi B Godrej (Indian) Nadir B Godrej (Indian) Aspi K Bardy (Indian) (Deceased December 27, 2009) Dorab E Mistry (British) Andrew B Byers Lynsey Elliott (British)
2009 1 -
The Directors acknowledge the contribution made by the late Mr Aspi K Bardy right from the establishment of the company, who sadly passed away during the year. Directors’ responsibilities The directors are responsible for preparing the report and accounts in accordance with applicable law and regulations. Company law requires the directors to prepare accounts for each financial year. Under that law the directors have elected to prepare the accounts in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). The accounts are required by law to give a true and fair view of the state of affairs of the company
and of the profit or loss of the company for that period. In preparing these accounts, the directors are required to: – select suitable accounting policies and then apply them consistently; – make judgements and estimates that are reasonable and prudent; – prepare the accounts on the going concern basis unless it is inappropriate to presume that the company will continue in business. The directors are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the accounts comply with the Isle of Man Companies Acts 1931 to 2004. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Disclosure of information to auditors Each person who was a director at the time this report was approved confirms that: – so far as he is aware, there is no relevant audit information of which the company’s auditor is unaware; and – he has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company’s auditor is aware of that information. Small company provisions This report has been prepared in accordance with the provisions of the Isle of Man Companies Acts 1931 to 2004 applicable to companies subject to the small companies regime. This report was approved by the board on April 28, 2010. Mr D Mistry Director Date : April 28, 2010
INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF GODREJ INTERNATIONAL LIMITED We have audited the accounts of Godrej International Limited for the year ended March 31, 2010 which comprise the Profit and Loss Account, the Balance Sheet, the Cash Flow Statement, the Statement of Total Recognised Gains and Losses and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and the Financial Reporting Standard For Smaller Entities (effective April 2008) (United Kingdom Generally Accepted Accounting Practice applicable to Smaller Entities). This report is made solely to the company’s members, as a body, in accordance with the Isle of Man Companies Acts 1931 to 2004. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of directors and auditors As explained more fully in the Statement of Directors’ Responsibilities, the directors are responsible for the preparation of the accounts and for being satisfied that they give a true and fair view. Our responsibility is to audit the accounts in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors. Scope of the audit opinion An audit involves obtaining evidence about the amounts and disclosures in the accounts sufficient to give reasonable assurance that the accounts are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the accounts. Opinion on the accounts In our opinion the accounts:
give a true and fair view of the state of the company’s affairs as at March 31, 2010 and of its profit for the year then ended; have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice applicable to Smaller Entities; and – have been prepared in accordance with the requirements of the Isle of Man Companies Acts 1931 to 2004. Opinion on other matters prescribed by the Isle of Man Companies Acts 1931 to 2004 In our opinion the information given in the Directors’ Report for the financial year for which the accounts are prepared is consistent with the accounts. Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Isle of Man Companies Acts 1931 to 2004 requires us to report to you if, in our opinion: adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or the accounts are not in agreement with the accounting records and returns; or certain disclosures of directors’ remuneration specified by law are not made; or we have not received all the information and explanations we require for our audit; or the directors were not entitled to prepare the accounts and the Directors’ Report in accordance with the small companies regime.
BALANCE SHEET AS AT MARCH 31, 2010
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010
Notes Fixed assets Investments Current assets Debtors Cash at bank and in hand Creditors: amounts falling due within one year Net current assets Total assets less current liabilities Creditors: amounts falling due after more than one year Net assets Capital and reserves Called up share capital Profit and Loss Account Shareholders’ funds
2010 US $
Rs. Lac
2009 US $
Approved by the board on April 28, 2010
180
–
(Senior Statutory Auditor) for and on behalf of Keith Woods & Co.LLC Accountants and Statutory Auditors April 28, 2010
Notes
US $
Rs. Lac
US $
Rs. Lac
120,267,513
54,000.11
115,504,010
58,583.63
Cost of sales
(118,446,906) (53,182.66) (113,823,249)
(57,731.15)
3,055,000
1,371.70
3,055,000
1,549.50
4
3,301,638 2,635,139 5,936,777
1,482.44 1,183.18 2,665.61
3,225,756 2,651,558 5,877,314
1,636.10 1,344.87 2,980.97
(15,000) 5,921,777
(6.74) 2,658.88
(7,574) 5,869,740
(3.84) 2,977.13
8,976,777
4,030.57
8,924,740
4,526.63
Interest payable
— 8,976,777
— (1,478,655) 4,030.57 7,446,085
(749.97) 3,776.65
6 7
3,805,361 5,171,416 8,976,777
1,708.61 2,321.97 4,030.57
3,805,361 3,640,724 7,446,085
1,930.08 1,846.58 3,776.65
2009
Turnover
3
5
Heritage House Ramsey Road Peel Isle of Man IM5 1RH
2010 Rs. Lac
Note: The Rupee equivalent of US $ have been given at the closing exchange rates as on March 31, 2010 (US $ 1 = Rupees 44.90) and March, 2009 (US $ 1 = Rupees 50.72) Mr. D Mistry Director
–
Gross profit
1,820,607
817.45
1,680,761
852.48
Administrative expenses
(283,324)
(127.21)
(277,280)
(140.64)
Operating profit
1,537,283
690.24
1,403,481
711.85
7,000
3.14
31,561
16.01
(13,592)
(6.10)
(55,431)
(28.11)
Profit on ordinary activities before taxation
1,530,691
687.28
1,379,611
699.74
Tax on profit on ordinary activities
—
—
—
—
1,530,691
687.28
1,379,611
699.74
Interest receivable
Profit for the financial year
2
Note: The Rupee equivalent of US $ have been given at the closing exchange rates as on March 31, 2010 (US $ 1 = Rupees 44.90) and March, 2009 (US $ 1 = Rupees 50.72)
Annual Report 2009–2010 STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES FOR THE YEAR ENDED MARCH 31, 2010 Notes Profit for the financial year Total recognised gains and losses related to the year
2010 US $ Rs. Lac 1,530,691 687.28
2009 US $ 1,379,611
Rs. Lac 699.74
1,530,691
1,379,611
699.74
687.28
On April 4, 2001, the company invested US$1million in 495,000 C Bay Systems Ltd. (C Bay) 8% Series E Cumulative Convertible Redeemable Preferred Stock of US$ 0.1 per share at a price of US$ 0.2 per share. As a result of organisational restructuring of C Bay, the company now holds 721,195 common stock in C Bay Systems USA Ltd. and 1,422,392 shares in C Bay Systems Holdings Limited BVI. On March 8, 2004, the company invested US$2,055,000 in equity shares of Newmarket Limited, a company incorporated in the Isle of Man. This represents approximately 18% of the issued share capital of Newmarket Limited.
Note: The Rupee equivalent of US $ have been given at the closing exchange rates as on March 31, 2010 (US $ 1 = Rupees 44.90) and March, 2009 (US $ 1 = Rupees 50.72) 4.
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010 2010 US $
2009 US $
Rs. Lac
Trade debtors Amounts owed by group undertakings and undertakings in which the company has a participating interest Other debtors Prepayments and accrued income
Rs. Lac
Cash generated from operations Operating profit Reconciliation to cash generated from operations: Increase in debtors Increase in creditors
1,537,283
690.24
1,403,481
711.85
(3,301,638)
(1,482.44)
(1,017,763)
(516.21)
15,000
6.74
7,365
3.74
(1,749,355)
(785.46)
393,083
199.37
7,000
3.14
(23,870)
(12.11)
7,000
3.14
(23,870)
(12.11)
Debtors
5.
Application of cash Interest paid Net decrease in cash Cash at bank and in hand less overdrafts at April 1 Cash at bank and in hand less overdrafts at March 31
(13,592)
(6.10)
19,167
9.72
(13,592)
(6.10)
19,167
9.72
(1,755,947)
(788.42)
388,380
187.26
—
—
—
—
(1,755,947)
(788.42)
388,380
187.26
2,635,139
1,183.18
2,651,558
1,344.87
6.
7.
Note: The Rupee equivalent of US $ have been given at the closing exchange rates as on March 31, 2010 (US $ 1 = Rupees 44.90) and March, 2009 (US $ 1 = Rupees 50.72)
NOTES TO THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010 1.
Basis of preparation The accounts have been prepared under the historical cost convention and in accordance with the Financial Reporting Standard for Smaller Entities (effective April 2008). Turnover Turnover represents the invoiced value of goods supplied by the company, net of value added tax and trade discounts.
Share capital
2010 No.
108,203 3,299,775
48.58 1,481.60
108,764 (210,946)
55.17 (106.99)
— 3,301,638
— 1,482
5,412 3,225,756
2.74 1,636.10
US $
Rs. Lac
US $
Rs. Lac
—
—
(2,425)
(1.23)
— 15,000 15,000
—
9,999 — 7,574
5.07 — 3.84
2009 No.
2009
—
2010 US $ Rs. Lac
2,355,000 2,355,000 3,805,361
Profit and Loss Account At April 1, 2009 Profit for the year At March 31, 2010
8.
Accounting policies
Creditors: amounts falling due within one year Trade creditors Accruals and deferred income Other creditors
Allotted, called up and fully paid: Ordinary shares of £1 each
Consisting of: Cash at bank and in hand
2009 US $ Rs. Lac 3,322,526 1,685.19
2010
Cash from other sources Interest received
2010 US $ Rs. Lac (106,340) (47.75)
2009 US $
Rs. Lac
1,708.61
3,805,361
2010 US $
Rs. Lac
2009 US $
1,930.08 Rs. Lac
3,640,725 1,530,691 5,171,416
1,634.69 687.28 2,321.97
2,261,113 1,379,612 3,640,725
1,146.84 699.74 1,846.58
Controlling party In April 2001 Godrej Soaps Limited, the owner of all the company's share capital, was demerged into two separate entities: Godrej Consumer Products Limited and Godrej Industries Limited. The assets and liabilities of Godrej Soaps Limited were divided between the two new companies. The entire share capital of Godrej International Limited is now held by Godrej Industries Limited. Godrej Industries Limited is currently listed on the Mumbai Stock Exchange as well as the National Stock Exchange of India. The financial statements of Godrej Industries Limited are available from : The Secretary, Godrej Industries Limited, Eastern Express Highway, Vikhroli, Mumbai 400079, India.
Turnover is attributable to one continuing activity, the trading of vegetable oils. Foreign currencies Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the Balance Sheet date. All differences are taken to the Profit and Loss Account. 2.
Interest payable Interest payable
3.
2010 US $ 13,592
Rs. Lac 6.10
2009 US $ 55,431
Rs. Lac 28.11
Investments Other investments US $ Cost At April 1, 2009 At March 31, 2010 Other investments Unlisted investments
Rs. Lac
3,055,000 3,055,000 2010 US $ Rs. Lac 3,055,000 1,371.70
2009 US $ 3,055,000
Rs. Lac 1,549.50
181
Godrej International Limited
NOTES
182
Godrej Industries Limited Registered Office : Pirojshanagar, Eastern Express Highway, Vikhroli (East), Mumbai – 400 079.
ATTENDANCE SLIP
Folio No. ............................... Client ID No. .......................... DP ID No. ..............................
I hereby record my presence at the TWENTY-SECOND ANNUAL GENERAL MEETING of the Company to be held at Y.B. Chavan Centre, Nariman Point, Mumbai - 400 021 on Tuesday, July 27, 2010 at 4.30 p.m.
..................................................................................................... Name of attending Member/Proxy
.......................................................................... Member’s/Proxy’s Signature (To be signed at the time of handing over this slip)
Notes : 1. Shareholder/Proxyholder wishing to attend the Meeting must bring the Attendance Slip to the Meeting and hand-over at the entrance duly signed. 2. Shareholder/Proxyholder should bring his/her copy of the Annual Report for reference at the Meeting.
Godrej Industries Limited Registered Office : Pirojshanagar, Eastern Express Highway, Vikhroli (East), Mumbai – 400 079.
PROXY FORM
Folio No. ............................... Client ID No. .......................... DP ID No. ..............................
I/We .................................................................................................................................................... of ................................................................................................................................. being a member/ members of the abovementioned Company, hereby appoint ................................................................................ or failing him ...................................................................... as my/our proxy to vote for me/us on my/our behalf at the TWENTY-SECOND ANNUAL GENERAL MEETING of the Company to be held on Tuesday, July 27, 2010 at 4.30 p.m. and at any adjournment thereof. This form is to be used in favour of the resolution(s)............................................................. ............ /against the resolution/s..................................................................................................... Unless otherwise instructed the proxy will act as he thinks fit. Signed this ................. day of ......................... 2010. Affix Re 1/Revenue Stamp Signature ........................................................... Note : Proxy Forms must reach the Company’s Registered Office not less than 48 hours before the Meeting.
INNOVATING FOR A
BRIGHTER FUTURE. www.godrejinds.com G O D R E J
I N D U S T R I E S
L T D.
File : GIL Annual Report10 Pg 9-26 / Size: Close Size: 20.3cm(w)x26cm(h)
GODREJ INDUSTRIES LIMITED