Description
The report for the financial year 2009 - 2010 of Godrej industries limited.
BRIGHTER FUTURE.
GODREJ INDUSTRIES LIMITED
INNOVATING FOR A
Annual Report 2009–2010
GODREJ INDUSTRIES LIMITED
DIRECTORS A.B. Godrej J.N. Godrej N.B. Godrej 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 M. Eipe Executive Director & President (Marketing) Executive Director & President (Chemicals) Managing Director Chairman
COMPANY SECRETARY V. Srinivasan
AUDITORS Kalyaniwalla & Mistry, Chartered Accountants
1
REGISTERED OFFICE
:
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 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
FACTORIES
:
Vikhroli
Valia (DTA & EOU)
CONTENTS
Page Nos.
Wadala
Chairman’s Statement .............................. 03 Financial Highlights .................................. 04 Notice ................................................. 05 Directors’ Report along with Management Discussion and Analysis Report .................... 11 Report on Corporate Governance ................. 24 Shareholders’ Information .......................... 31 Auditors’ Report...................................... 33 Standalone Accounts ................................ 36 Consolidated Accounts .............................. 66 Statement Pursuant to Section 212............... 88 SUBSIDIARIES Godrej Agrovet Limited ............................. 92 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 REGISTRARS & TRANSFER AGEN T : BANKERS : London Kolkata BRANCHES : Delhi
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.
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 : [email protected]
2
Annual Report 2009–2010
CHAIRMAN’S STATEMENT
D Dear Shareholders, 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 ef?ciencies 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 bene?ts in this current growth cycle. O Our diversi?ed business model is unique with interests in the form of operating businesses, s subsidiaries, 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, c consumer 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 pro?t margins this year due to consistently strong demand and normalized raw material prices. In addition, we have signi?cantly improved ef?ciencies 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 rede?ning the Godrej brand to strengthen brand unity across our broad range of businesses. We reinforced our commitment to innovation, adding technology while improving ef?ciency 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 BALANCE SHEET SOURCES OF FUNDS : Shareholders’ Funds Share Capital Reserves & Surplus Secured Loans Unsecured Loans Deferred Tax Liability APPLICATION OF FUNDS : Fixed Assets Investments Net Working Capital Miscellaneous Expenditure INCOME AND PROFIT Total Income Expenditure other than Interest and Depreciation Pro?t before Interest, Depreciation and Tax Interest (net) Pro?t before Depreciation and Tax Depreciation Pro?t before Tax and exceptional items Exceptional items - (expense)/income Provision for Current Tax Net Pro?t after Tax Provision for Deferred Tax Adjustment in respect of prior years - (expense)/income Net Pro?t after taxes and adjustments 99,169.73 82,306.87 16,862.86 6,024.79 10,838.07 2,838.80 7,999.27 (13.47) 8,012.74 (80.00) 8,092.74 97,148.32 86,745.94 10,402.38 6,106.12 4,296.26 2,646.19 1,650.07 26.00 123.27 1,552.80 (341.00) (86.11) 1,807.69 83,881.74 67,119.44 16,762.30 3,443.74 13,318.56 2,547.00 10,771.56 310.28 561.87 10,519.97 (361.00) 10,880.97 78,291.22 64,077.98 14,213.24 3,830.78 10,382.46 2,426.36 7,956.10 94.75 82.77 7,968.08 162.00 7,806.08 80,270.00 69,661.00 10,609.00 2,837.00 7,772.00 2,259.00 5,513.00 3,510.80 545.16 8,478.64 1,316.00 50.08 7,112.56 82,353.00 70,117.00 12,236.00 2,582.00 9,654.00 2,148.00 7,506.00 401.00 7,105.00 (470.00) 2.00 7,577.00 29,828.78 114,761.99 15,638.07 160,228.84 28,870.84 114,808.02 22,022.14 385.87 166,086.87 27,142.37 77,548.43 47,269.56 1,067.89 153,028.25 28,704.33 48,566.78 12,937.47 1,602.11 91,810.69 28,594.00 37,135.00 5,719.00 2,219.00 73,667.00 25,100.00 33,577.00 2,868.00 126.00 61,671.00 3,176.25 99,093.36 20,418.89 34,342.14 3,198.20 160,228.84 3,197.59 99,514.61 23,282.16 36,814.31 3,278.20 166,086.87 3,197.59 102,644.47 24,948.07 18,618.92 3,619.20 153,028.25 2,918.52 38,142.56 33,092.48 13,677.13 3,980.00 91,810.69 2,919.00 34,217.00 24,910.00 7,803.00 3,818.00 73,667.00 2,919.00 30,618.00 22,075.00 3,557.00 2,502.00 61,671.00 2008-09 2007-08 2006-07 2005-06 2004-05
Total Income 2009-2010
Break-up of Total Income Rs. Lac
Total Expenditure 2009-2010
Break-up of Total Expenditure Rs. Lac Materials 51,680.87 10,582.61 2,838.80 6,024.79
Chemicals Estate
78,123.55 2,775.39
Staff Costs Depreciation Interest
Finance & Investment 17,081.77
Others
1,189.02 99,169.73
Other Operating Expenses
20,043.39 91,170.46
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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 Pro?t & 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 ?nancial 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 of?ce 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 ?x their remuneration. M/s. Kalyaniwalla & Mistry, Chartered Accountants, the retiring Auditors are eligible for reappointment. SPECIAL BUSINESS: To consider and if thought ?t, to pass with or without modi?cation(s), the following resolutions :8. Approval for not ?lling 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 ?lled 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 of?ce 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 of?ce 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 pro?t in any ?nancial 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 identi?cation,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 modi?cation 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 speci?ed 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 Of?ce : 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 bene?cial 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 ?nancial 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 31.03.2004 31.03.2005 31.03.2006 31.03.2007 31.03.2008 31.03.2009 Due date for transfer 25.08.2010 26.07.2011 26.07.2012 24.07.2013 27.07.2014 29.07.2015 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 Of?ce of the Company to facilitate clari?cations 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 ?lled 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 of?ce 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 pro?le 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 pro?tability 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 ?nancial 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, bene?ts, 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 of?cial 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 ?nancial year. Encashment/accumulation of leave will be permissible in accordance with the Rules speci?ed 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 speci?ed above or paid additionally in accordance with the rules of the Company in any ?nancial 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 pro?ts or its pro?ts 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 speci?ed 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-codi?cation 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 noti?cations 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. Of?ce of the Company Investment as on date in Rs. Crore and % of existing holding Amount of proposed investment (Rs. Crore) 2.00 Development of IT Park, IT and ITES, Software Development, BPO activities A good investment opportunity Internal sources/ borrowings Principal business of the Company Purpose of investment Source of funds Nature of Concern/ interest of Directors None of the Directors are interested in the resolution.
CBay Infotech 1.00 Ventures Pvt. Ltd. (8%) Godrej Industries Complex, Gate No. 4, Pirojshanagar, Eastern Express Highway, Vikhroli (East), Mumbai – 400 079.
8
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 Quali?cation(s) Mr. F.P. Sarkari 78 Indian 30-01-2002 Mr. S.A. Ahmadullah 70 Indian 03-01-1995 Mr. A.B. Godrej 68 Indian 07-03-1988 Mr. K.K. Dastur 68 Indian 01-04-2001 Mr. A.B. Choudhury Mr. N.B. Godrej 67 Indian 05-08-2009 58 Indian 07-03-1988
20,000 F.C.A.
6,000 B.A. (Cantab.)
Nil B.S., M.S. from Massachusetts Institute of Technology, U.S.A.
3,606 B.Com., A.C.A.
Nil
12,20,572
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 speci?c 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 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
Mr. K.K. Dastur 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
Mr. A.B. Choudhury Mr. N.B. Godrej 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 Of?ce : Pirojshanagar, Eastern Express Highway, Vikhroli (East), Mumbai 400 079.
10
Annual Report 2009–2010
DIRECTORS’ REPORT
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 Year ended March 31, 2010 2009 816.37 817.45 175.33 154.03 991.70 971.48 823.07 168.63 28.39 140.24 60.25 79.99 (0.14) 80.13 (0.80) 80.93 – 80.93 – 867.46 104.02 26.46 77.56 61.06 16.50 1.23 15.27 (3.41) 18.68 0.26 18.94 (0.86)
MANAGEMENT DISCUSSION AND ANALYSIS 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 ?nancial 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 Pro?t 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 pro?t. The Animal Feed business recorded a growth of 16% in revenue and 31% in pro?t. The pro?tability grew due to expansion of contribution margins and control over fixed overheads. The expansion of contribution margins was possible due to ef?cient sourcing, improved formulation and successful R & D efforts. The Agricultural Inputs business grew by 19% in revenue and 22% in pro?tability. 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 signi?cantly lower borrowing costs on account of ef?cient treasury management. GAVL also successfully implemented SAP in its Animal Feed business and the implementation has started yielding signi?cant business bene?ts. 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
Sales of products and services Other Income Total Income Total Expenditure other than Interest and Depreciation Profit before Interest, Depreciation and Tax Depreciation Pro?t before Interest and Tax Interest and Financial Charges (net) Pro?t before Tax Provision for Current Tax Pro?t after Current Tax Provision for Deferred Tax Pro?t after Current and Deferred Taxation Pro?t on sale of undertaking (extraordinary item, net of tax) Net Pro?t Adjustments in respect of prior years Surplus brought forward (after adjusting excess provision for dividend & tax on distributed pro?t) Pro?t after Tax available for appropriation Appropriation Your Directors recommend appropriation as under: Dividend on Equity Shares Tax on distributed pro?ts Transfer to General Reserve Surplus Carried Forward Total Appropriation
294.18 375.11
324.37 342.45
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 Pro?t 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 ?nal 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).
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 pro?t 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 ?rst 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 pro?ts increased by about 11% to US$ 1.53 million from US$ 1.38 million. The company improved its turnover and pro?ts despite dif?cult 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 bene?ts 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 ?rst 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 signi?cant 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 pro?t 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 ?nancial 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-certi?ed 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 recerti?ed 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 certi?cates. 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, oil?eld 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 speci?c 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 ?nancial 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 de?ned 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 ?ve 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 in?uencing 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 ?y 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 / modi?ed in Generation / Transfer/ Treatment / Monitoring and disposal pattern of waste water and treated water. Achieved signi?cant 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
articulars 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/pro?t 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 de?nitive 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 ?x their remuneration. The retiring auditors, Kalyaniwalla and Mistry, Chartered Accountants, are eligible for reappointment. A certi?cate 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 . Sarkari (Chairman), Mr. V.N. Gogate, Mr. S.A. Ahmadullah and .P 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 con?rm: 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 ?nancial year and of the pro?t or loss of the Company for that period; c) 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;
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 of?ce of the Company. The Notes to the Accounts referred to in the Auditors’ Report is self-explanatory. However in respect of the quali?cations 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 ?led 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 ?nal disposal of the suit ?led by the investee company and the application made by minority shareholders under section 397/398 before the Hon’ble High Court. The Company has ?led 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 Your Directors thank the Union Government, the Governments of Maharashtra and Gujarat as also all the Government agencies, banks, ?nancial institutions, shareholders, customers, employees, ?xed deposit holders, vendors and other business associates, 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 A.B. Godrej Chairman Mumbai, June 4, 2010 15
d) that the annual accounts have been prepared on a going concern basis. 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 certi?ed
ANNEXURE “A” FORMING PART OF THE DIRECTORS’ REPORT MANAGEMENT DISCUSSIONS AND ANALYSIS Business Structure GIL
Own business Chemicals, Estate Management, Finance & Investment
Shareholding %
Godrej Agrovet 75.2%
Godrej Consumer Products 23.5%
Godrej Hershey 43.4%
Godrej Properties 69.4%
Other Investments
Godrej Sara Lee Ltd. Keyline, Rapidol, Godrej Hygiene, GGME
Nutrine Confectionery 100%
Various SPVs
Godrej Feed Products 100%
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 in?ation 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 2009-10 816.37 991.70 2008-09 817.45 971.48
Particulars Pro?t Before Taxation Pro?t After Current Taxation Pro?t After Current & Deferred Taxation Earnings per Equity Share (Rs.) Pro?tability 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 79.99 80.13 80.93 2.54 17.00 8.07 8.16 8.61 7.67 2.54 0.52 2.33 2009-10 781.24 27.75 170.82 11.89 991.70
2008-09 16.50 15.27 18.68 0.56 10.71 1.70 1.86 4.70 1.71 0.56 0.57 1.27 Rs. Crore 2008-09 778.19 31.54 147.26 14.49 971.48
16
Annual Report 2009–2010
Segment Performance 2. Segment Results (PBIT) Chemicals Estate Finance & Investments Others Total Less: Interest (Net) Less: Unallocated expenses (Net) Pro?t Before Tax 3. Segment Capital Employed Chemicals Estate Finance & Investments Others Unallocated Total
2009-10 52.38 18.19 158.28 (5.39) 223.46 (60.25) (83.22) 79.99 266.00 61.12 1,276.63 22.95 (604.00) 1,022.70
Rs. Crore 2008-09 (18.32) 21.78 147.26 (4.80) 145.92 (61.06) (68.36) 16.50 250.11 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 ?scal, 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 Ole?n 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 ef?ciency 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 diversi?cation 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 pro?tability 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 pro?tability. ESTATE MANAGEMENT The Ghatkopar - Vikhroli – Kanjur - Powai belt, of Mumbai suburb is continuing to witness major development activity. The area around the registered of?ce of your Company at Vikhroli is developing at a brisk pace. The ongoing projects of widening of the Eastern Express Highway, additional ?yovers 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 ?led 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 ?nancial parameters based on which your Company received additional consideration during the year which is re?ected 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 certi?ed, 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 ?nancial and other records are reliable for preparing ?nancial 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 Of?cer, 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 certi?ed. 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 bene?ts of the location such as assured power supply, better connectivity and infrastructural bene?ts. 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 identi?cation 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 signi?cant 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, signi?cant 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 Particulars
c d e
f g h i j
k
l
m
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 speci?c grant, including any unallotted shares lying with the Trust if utilized for that speci?c 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) identi?ed 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, Pro?t after tax lower by Rs. 11.02 crore and impact of this difference on pro?ts 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 signi?cant 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 signi?cant 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. which period shall be not less than one year and may extend upto ?ve 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.
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
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 de?ned 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. 2. Cartini India Ltd. 3. Godrej Investments Pvt. Ltd. 4. Godrej Efacec Automation & Robotics Ltd. 5. Godrej Holdings Pvt. Ltd. 6. Godrej (Malaysia) Sdn. Bhd. 7. Godrej (Singapore) Pte. Ltd. 8. J T Dragon Pte. Ltd. 9. Mercury Mfg. Co. Ltd. 10. Veromatic International BV 11. Water Wonder Benelux BV 12. Geomeric Ltd. 13. Godrej & Khimji (Middle East) LLC 14. Godrej Infotech Ltd. 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. 40. ACI Godrej Agrovet Pvt. Ltd. 41. Godrej Hersheys Ltd. 42. Nutrine Confectionery Co. Ltd. 43. Godrej SaraLee Ltd. 44. Tahir Properties Ltd. 45. Godrej Consumer Products Ltd. 46. Rapidol (Pty) Ltd. 47. Godrej Netherlands BV 48. Godrej Global Mid East FZE 49. Godrej Consumer Products Mauritius Ltd. 50. Godrej Hygiene Products Ltd. (formerly known as SCA Hygiene) 51. Godrej Consumer Products Holdings Mauritius Ltd. 52. Godrej Consumer Products Dutch Cooperatief U.A. (Netherlands) 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
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. Conservation of Energy I. (A) Energy Conservation measures undertaken: Vikhroli 1. Heat Exchanger for ?aker installed to reduce the power consumption & improve the quality of stearic acid. Annual savings of Rs. 0.01 crore accrued. 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. 2. Saving in power due to stopping of chiller & utilizing of VAM in ?aker 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. 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: 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. 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. 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.
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. (A) Power and Fuel consumption Electricity This Year i) Purchased Units (KWH in lac) Total Amount (Rs. in crore) Rate per Unit (Rs.) Own generated through D.G. Sets Units (KWH in lac) Cost (Rs. in crore) Rate per unit (Rs.) Previous Year 290.55 19.35 6.66
313.27 20.55 6.56
ii)
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.) Fuel Oil (LSHS, FO and LDO) Total Quantity (KL) Total Amount (Rs. in crore) Rate per Unit (Rs. per litre) Natural Gas Total Quantity (SM3 lac) Total Amount (Rs. in crore) Rate per Unit (Rs. per SM3) Pitches Total Quantity (MT) Total Cost (Rs. in crore) Rate per unit (Rs. per MT)
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
683.05 957.05 0.88 1.51 12,870.00 15,812.00
(B) Consumption per unit of production
Particulars Fatty Acid Fatty Alcohol A.O.S. Glycerin Oils & Vanaspati 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 79.28 96.49 22.12 343.74 56.95 89.57 16.39 247.43 77.07 429.96 142.89 606.30 144.09 76.01 424.64 146.22 614.59 174.72 18.82 3.24 1.26 58.17 24.69 7.61 4.38 109.08 60.00 54.28 15.86 1.38 49.46 85.86
22
Annual Report 2009–2010
B. Technology Absorption, Adaptation and Innovation I. Speci?c 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 Premium quality fatty acids from economy grade raw materials. Understanding the impact of raw material quality and manufacturing process on the quality of the ?nished goods. Manufacture of high value pure cut fatty acids, speci?cally for the polymer, oil ?eld and lubricant industries. Quali?cation 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. 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.
IV. Expenditure on R&D : This Year Capital Recurring Total Total R&D expenditure as a percentage of total sales turnover C. Foreign Exchange earnings and outgo (a) (b) (c) (d) Nil 3.27 3.27 0.40%
Rs. crore Previous Year Nil 1.73 1.73 0.21%
II. Bene?ts derived as a result of the above R&D. : • •
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 re?ned 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 : •
•
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 de?nition 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 ?nancial 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: 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
Table 1: Details about the Company’s Board of Directors & meetings attended by the Directors during the year Name of Director Category Board meetings held during the year Board meetings attended during the year
A.B. Godrej 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
V.F. Banaji T.A. Dubash M. Eipe M.P. Pusalkar Note: (i) $ Alternate directorships and directorships in (ii) Figures in ( ) denote listed companies.
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
4 4 4 4 4 4 4 4 4 1 2 4 4 4 4 4 4
4 3 4 4 3 4 4 3 4 1 2 4 4 4 3 4 3
Yes Yes Yes Yes Yes Yes Yes Yes Yes NA NA Yes Yes Yes Yes Yes Yes
11(3) 9(5) 14(5) 1(1) 8(5) 4(1) 7(3) 3(3) 1(1) NA 6(3) 5(1) 1(1) 2(2) 6(1) 3(1) 2(2)
4 1 1 4 3 NA 1 2 1
1 3 2 1 4 1 1 NA 4 2 1 2 1 2
private companies, foreign companies and associations are excluded.
24
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. (iv) Board Meetings held during the year represent the number of meetings held during the tenure of that director. None of the Directors is a member of more than 10 Board-level committees, or a Chairman of more than ?ve such committees, as required under Clause 49 of the listing agreement. 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 of?cers 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 ?nancial 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,
Signi?cant development in the human resources and industrial relations front, Sale of material nature of investments, subsidiaries, assets, which is not in the normal course of business, Quarterly details of foreign exchange exposure and the steps taken by management to limit the risks of adverse exchange rate movement, 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. Amt. in Rs.
Table 2: Remuneration in Rupees paid or payable to Directors for the year ended March 31, 2010 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 pro?ts 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 Nil Nil 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 Provident Fund Nil 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 Total 1,60,000 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
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
25
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 second holder ** Shares held as third holder 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
Table 4: Attendance record of audit committee members 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 ?nancial reporting process and the disclosure of its ?nancial information to ensure that the ?nancial statement is correct, suf?cient and credible. Recommending the appointment/removal of external auditor, ?xation of audit fees and approval for payment for any other services. Reviewing with management the annual ?nancial 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. Signi?cant adjustments made in the ?nancial statements arising out of audit ?ndings. Compliance with listing and other requirements relating to ?nancial statements. Disclosure of any related party transactions. Any quali?cation in the draft audit report. Reviewing with the management, the quarterly ?nancial 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, staf?ng and seniority of the of?cial heading the department, reporting structure coverage and frequency of internal audit. Discussion with internal auditors any signi?cant ?ndings and follow up thereon. Reviewing the ?ndings 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.
Committees of the Board
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 ?nance, 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 ?nance 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
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. 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 Mr. V. Srinivasan, Executive Vice-President (Finance & Estate) & Company Secretary acts as the secretary to the 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 Of?cers 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 Of?cer: Mr. V. Srinivasan, Executive Vice-President (Finance & Estate) & Company Secretary. Name of Director
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 6. MANAGEMENT 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 signi?cant related party transaction that may have potential con?ict of interests of Company at large During the year 2009-10, there were no materially signi?cant 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 con?ict 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. 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. Nil 20 20 Nil
There are no pending share transfers as on March 31, 2010.
27
d) Details of compliance with mandatory requirement Particulars Clause of Compliance Listing Status Agreement Yes / No 49 I Yes 49 (IA) Yes 49 (IB) 49 (IC) 49 (ID) 49 (II) 49 (IIA) 49 (IIB) 49 (IIC) 49 (IID) 49 (IIE) 49 (III) 49 (IV) 49 (IV A) 49 (IV B) 49 (IV C) 49 (IV D) 49 (IV E) 49 (IV F) 49 (IV G) 49 (V) 49 (VI) 49 (VII) Yes Yes Yes
b) Details of Special Resolutions Passed in previous three Annual General Meetings. Date of Number AGM of Special Resolution passed July 27, 2007 July 29, 2008 1 1) Details of Special Resolution Passed
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) Quali?ed & 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 Certi?cation Report on Corporate Governance Compliance e) Details of Non-compliance
Reappointment and remuneration payable to Mr. N.B. Godrej as Managing Director of the Company.
6
Yes Yes Yes Yes Yes Yes
}
Yes Yes Not applicable at present Yes Yes Yes Yes Yes Yes
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 af?rmed 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 Venue Y. B. Chavan Centre, Nariman Point, Mumbai 400 021. - do - do Date July 27, 2007 Time 4.30 P.M. July, 29 2009 5
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. 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.
2007-08 2008-09
July 29, 2008 July 29, 2009
4.30 P.M. 4.30 P.M.
28
Annual Report 2009–2010
c)
Postal Ballot 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
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 :-
Sr. No.
Date of Nature of Item announcement resolution of results September 23,2009 Special 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. Modi?cation of the Godrej Industries Limited Employees Stock Option Plan
Total no. of votes polled 1550
No. of votes in favour % 99.96
No. of votes against % 0.01
No. of invalid votes % 0.03
1.
Special
1550
99.80
0.01
0.19
2.
March 26, 2010 Special
2206
99.38
0.30
0.32
d) Procedure adopted for Postal Ballot (i) 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.
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 ?lled up. 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, of?cial 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 ?nancial results and shareholdings pattern on electronic data information ?ling 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.cor?ling.co.in. 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 of?cer. 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
(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. (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.
Declaration by Managing Director
I, N.B. Godrej, Managing Director of Godrej Industries Limited (GIL), hereby con?rm 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 af?rmed their compliance with the said code of conduct for the year ended March 31, 2010. Mumbai, May 26, 2010 N.B. Godrej Managing Director
Auditors’ Certi?cate 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 ?nancial 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 ef?ciency or effectiveness with which the management has conducted the affairs of the Company. For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants V.R. Mehta Partner Membership No. 32083 Firm Registration No. 104607W
Mumbai, May 26, 2010
30
Annual Report 2009–2010
Shareholders’ Information
i) 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. 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 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. Chart A – The Company’s share performance compared to the BSE Sensex for FY 2009-2010
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. 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. v) Stock Data 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. 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.
BSE Sensex
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%
GIL Share Price (Rs.)
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 % of holding
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: Computech Sharecap Limited 147, M.G. Road, Opp. Jehangir Art Gallery, Mumbai 400 001. Tel: 022-22635000 / 22635001 Email: [email protected] Fax: 022-22635001
79.10 – 0.02 4.13 2.15 3.69 10.48 0.41 100.00
32
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 Pro?t and Loss Account and Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These ?nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these ?nancial 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 ?nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial 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 speci?ed 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, Pro?t 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. f) 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 ?nancial statements. 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 pro?t for the year and the reserves as at March 31, 2010 could not be ascertained. 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;
g)
ii) in the case of the Pro?t and Loss Account, of the pro?t of the Company for the year ended on that date; and iii) in the case of the Cash Flow Statement, of the cash ?ows 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 disquali?ed 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.
d) In our opinion, the Balance Sheet, Pro?t 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
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 ?xed 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 veri?cation of ?xed assets at periodic intervals. In our opinion, the period of veri?cation 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 veri?ed during the year. (c) In our opinion the ?xed 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 veri?cation of inventory at reasonable intervals. (b) In our opinion, the procedures of physical veri?cation 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 ?xed 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 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 Of?cer Assistant Commissioner Commissioner Tribunal High Court 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 ?ows 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
Custom Duty
Sales Tax
40.13 1996-00,2001-02,2003-05,2006-07 76.97 2000-03,2004-05,2006-07 63.10 1990-92,1994-96,1997-98,2003-05 9.88 2003-04 Others Stamp Duty Municipal Taxes Entry Tax 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 ?nancial year and it has not incurred any cash losses in the current and immediately preceding ?nancial 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 ?nancial 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 bene?t 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 ?nancial institutions are not prejudicial to the interest of the Company.
35
Godrej Industries Limited BALANCE SHEET AS AT MARCH 31, 2010
Schedule SOURCES OF FUNDS 1. Shareholders’ Funds (a) Share capital (b) Reserves & surplus 2. Loan Funds (a) Secured loans (b) Unsecured loans 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 5. Investments 6. Current Assets, Loans and Advances (a) Inventories (b) Sundry debtors (c) Cash and bank balances (d) Loans and advances Less : Current Liabilities and Provisions (a) Liabilities (b) Provisions Net Current Assets 7. Miscellaneous Expenditure (To the extent not written off or adjusted) TOTAL Signi?cant Accounting Policies Notes to Accounts The Schedules referred to above form an integral part of the Balance Sheet. As per our Report attached For and on behalf of Kalyaniwalla & Mistry Chartered Accountants V. R. Mehta Partner Mumbai, May 26, 2010 36 Signatures to Balance Sheet and Schedules 1 to 13, 21 and 22 A.B. Godrej Chairman M. Eipe Executive Director & President (Chemicals) N.B. Godrej Managing Director V. Srinivasan Executive Vice President (Finance & Estate) & Company Secretary Rs. lac This Year Rs. lac Previous Year Rs. lac
1 2
3,176.25 99,093.36 102,269.61
3,197.59 99,514.61 102,712.20 23,282.16 36,814.31 60,096.47 3,278.20 166,086.87
3 4
20,418.89 34,342.14 54,761.03 3,198.20 160,228.84
5 61,512.98 33,881.80 27,631.18 2,197.60 6 7 8 9 10 13,476.87 11,086.55 1,508.61 17,535.41 43,607.44 21,035.53 6,933.84 27,969.37 15,638.07 — 160,228.84 21 22 29,828.78 114,761.99 57,854.70 31,467.99 26,386.71 2,484.13 28,870.84 114,808.02 9,355.62 16,099.98 2,851.17 14,794.20 43,100.97 14,045.42 7,033.41 21,078.83 22,022.14 385.87 166,086.87
11 12
13
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 EXPENDITURE Materials consumed and purchase of goods Expenses Inventory change Interest and ?nancial charges (net) Depreciation (Net of transfer from Revaluation Reserve Rs. 99.50 lac, Previous year Rs. 133.69 lac) Pro?t before Taxation and Extraordinary Items Provision for Taxation - Current Tax - MAT credit - Deferred Tax - Fringe bene?t Tax - Adjustment for tax of previous years (net) Pro?t after Taxation and before Extraordinary Items Extraordinary Items (Net of Tax) Pro?t after Extraordinary Items Prior Period adjustments (net) Net Pro?t Surplus brought forward Add : Excess provision of proposed dividend Add : Excess provision of tax on distributed pro?t Amount Available For Appropriation Appropriations Proposed Dividend - Final Tax on distributed pro?ts 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) Signi?cant Accounting Policies Notes to Accounts This Year Rs. lac 85,629.45 3,992.70 81,636.75 17,532.98 99,169.73 53,416.89 30,626.00 (1,736.02) 6,024.79 2,838.80 91,170.46 7,999.27 877.00 (877.00) (80.00) (13.47) (93.47) 8,092.74 8,092.74 8,092.74 29,387.78 26.05 4.43 29,418.26 37,511.00 4,764.37 791.30 809.28 31,146.05 37,511.00 2.54 2.54 21 22 Previous Year Rs. lac 87,468.82 5,723.44 81,745.38 15,402.94 97,148.32 54,317.99 30,173.54 2,254.41 6,106.12 2,646.19 95,498.25 1,650.07 (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 3,996.99 679.29 180.77 29,387.78 34,244.83 0.56 0.57
14
15 16 17 18
19 20
The Schedules referred to above form an integral part of the Pro?t & Loss Account. As per our Report attached For and on behalf of Kalyaniwalla & Mistry Chartered Accountants V. R. Mehta Partner Mumbai, May 26, 2010 37 Signatures to Pro?t and Loss Account and Schedules 14 to 22 A.B. Godrej Chairman M. Eipe Executive Director & President (Chemicals) N.B. Godrej Managing Director V. Srinivasan Executive Vice President (Finance & Estate) & Company Secretary
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 : Pro?t before tax Adjustments for : Depreciation Unrealised Foreign exchange Pro?t on sale of investments Pro?t on sale of ?xed 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 Pro?t/(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 ?xed assets Proceeds from sale of ?xed 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 ?nancing activities : Proceeds from borrowings Repayments of borrowings Equity share capital bought back Bank overdrafts (net) Interest paid Dividend paid Tax on distributed pro?ts Net Cash (used in)/from ?nancing 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 ?nance 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 ?gures of previous year have been regrouped wherever necessary.
As per our Report attached Signatures to Cash Flow Statement
7,999.27 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 (4,121.25) 4,516.48 6,320.95 8,924.70 (1,227.00) 12.56 7,710.26 (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 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 1,504.39 4.22 1,508.61
1,650.07 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) 10,415.57 9,501.27 (10,714.37) 6,427.07 (2,384.91) 407.86 4,450.02 (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) 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 2,845.86 5.31 2,851.17
For and on behalf of Kalyaniwalla & Mistry Chartered Accountants V. R. Mehta Partner Mumbai, May 26, 2010 38
A.B. Godrej Chairman M. Eipe Executive Director & President (Chemicals)
N.B. Godrej Managing Director 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
SCHEDULE 1 : SHARE CAPITAL Authorised: 800,000,000 100,000,000 Equity shares of Re. 1 each Unclassi?ed Shares of Rs.10 each 8,000.00 10,000.00 18,000.00 3,176.25 3,176.25 8,000.00 10,000.00 18,000.00 3,197.59 3,197.59
Previous Year Rs. lac
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. Rs. lac 58,515.68 (2,865.24) This Year Rs. lac Previous Year Rs. lac 58,515.68 58,515.68 25.00 3,125.00 3,125.00 1,671.21 1,286.38 (261.28) 1,409.93 6,870.44 180.77 7,051.21 29,387.79 99,514.61 12,170.00 4,612.16 6,500.00 23,282.16
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 Revaluation Reserve As per last balance sheet Less : Depreciation on revalued component and deduction due to sale/discard of ?xed assets General Reserve As per last balance sheet Less: Transfer to Capital Redemption Reserve Add :Transferred from pro?t & loss account Pro?t & 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
55,650.44 25.00
3,125.00 21.34 1,409.93 (123.55) 7,051.21 (21.34) 809.28
3,146.34
7,839.15 31,146.05 99,093.36 10,000.00 1,418.89 2,500.00 6,500.00 20,418.89
18,500.00 — — 6,000.00 9,742.14 100.00 34,342.14 25,610.31
21,000.00 2,500.00 8,000.00 3,000.00 2,164.31 150.00 36,814.31 26,650.00 39
Godrej Industries Limited
SCHEDULE 5 : FIXED ASSETS
Rs. Lac ASSETS 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 2,597.88 463.00 964.84 — — 3,074.02 870.10 — 136.75 100.87 14.55 — 68.00 — — 2.83 460.18 — 62.13 34.01 17.91 — — 113.90 147.97 9,730.31 44,552.32 127.06 1,269.18 1,204.20 2,594.52 463.00 1,032.84 — 25.86 2,477.52 25,824.88 57.46 701.71 598.42 396.60 378.12 805.57 — — 0.07 427.14 — 44.66 15.93 16.71 — — — 1.54 209.62 2,225.62 3.68 78.25 55.01 199.99 46.30 64.65 — 27.40 2,687.07 27,623.36 61.14 735.30 637.50 579.88 424.42 870.22 113.90 120.57 7,043.24 16,928.96 65.92 533.88 566.70 2,014.64 38.58 162.62 113.90 122.11 4,181.60 18,317.52 69.60 492.85 538.92 2,201.28 84.88 159.27
Tangible Assets Land - Freehold - Leasehold Buildings Plant & Machinery Research Centre Furniture & Fixtures Of?ce & Other Equipments Vehicles / Vessels Intangible Assets Trademarks Software Assets acquired under ?nance lease Vehicles TOTAL - This Year - Previous Year Capital Work-in-Progress TOTAL 1. 2. 3. 4. 5.
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 ?xed 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 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 Notes Amount As on As on 31.03.10 31.03.09 Rs. lac Rs. lac
10 10
440,000 5,000,000
-
-
440,000 5,000,000 (a)
44.00 450.00
44.00 450.00
1 10 £0.25 10 100 10 10 10 100
55,369,989 195,577 13,692 32,258 114 32,587,046 12,222 209,370 25
21,074,631 6,626 1,805 -
4,000,000 72,444,620 15,497 202,203 32,258 114 32,587,046 12,222 209,370 25
(b)
51,372.93 1,242.83 100.00 11.57 17,740.44 125.00 191.33 0.01
49,223.86 1,142.83 124.55 100.00 11.57 17,740.44 125.00 191.33 0.01
(c) (d)
(a)
$0.10 $0.01 $1 $1.90
8,182,148 4,091,073 1,055,629 2,631,578
-
-
8,182,148 4,091,073 1,055,629 2,631,578
3,809.30 253.52 688.09 1,142.34
3,809.30 253.52 688.09 1,142.34
40
Annual Report 2009–2010
Face value (Rs.) Number Acquired Sold/adjusted during the during the year year 97 13,135,050 175,737 Amount As on As on 31.03.10 31.03.09 Rs. lac Rs. lac 0.02 397.60 299.68 673.03 469.21 0.10 0.01 0.02 83.19 397.60 299.68 673.03 469.21 1,313.51 17.57 0.10 0.01
Investee Company / Institutions
Qty. as on 01.04.09
Qty. as on 31.03.10
Notes
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 Less : Provision for diminution in value of Investments Aggregate book value of Investments Quoted Unquoted Market Value of Quoted Investments NOTES: (a) Uncalled Liability on partly paid shares (b) (c) (d) (e) (f) Tahir Properties Ltd. - Equity - Rs. 80 per share. Tahir Properties Ltd. - Preference - Rs. 30 per share. Wadala Commodities Limited - Preference - Re. 1 per share.
25 97 13,135,050 175,737 1,000 -
25 1,000 -
(a) (c) (e) (f) (f) (g)
48,495,209 3,774,160 9,112,956 2,584 2,355,000 500,000
22,533,350 7,050,000
- 48,495,209 23,033,350 3,774,160 9,112,956 2,584 2,355,000 7,050,000
18,528.60 1,318.94 16,317.91 41.86 1,651.61 501.25 117,371.18 (2,609.19) 114,761.99 73,710.83 41,051.16 114,761.99 443,052.00
18,528.60 1,318.94 16,317.91 41.86 1,651.61 4.00 116,163.68 (1,355.67) 114,808.02 53,033.16 61,774.86 114,808.02 75,725.27
(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. 1,805 equity shares received on conversion of loan notes. The said shares have been refused for registration by the investee company. Optionally Convertible Notes are convertible as under : Verseon Corporation - After December 1, 2008 until the due date but not later than Sepember 15, 2012. 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. 12% promissory notes repayable on or before March 31, 2011 along with interest on maturity.
(g)
41
Godrej Industries Limited
This Year Rs. lac SCHEDULE 7: INVENTORIES (at lower of cost and net realisable value) Stores and spares Raw materials Work-in-progress Finished goods SCHEDULE 8: SUNDRY DEBTORS (Unsecured) Debts outstanding over six months Considered doubtful Other debts Considered good Less: Provision for doubtful debts SCHEDULE 9: CASH AND BANK BALANCES Cash and cheques on hand Balances with scheduled banks - on current account - on deposit account (refer note 8) SCHEDULE 10: LOANS AND ADVANCES (Unsecured and considered good unless otherwise stated) Loans and Advances (refer note 9 a) Loan to GIL ESOP Trust (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 Rs. 585.67 lac, previous year Rs.549.58 lac) Intercorporate deposits Deposits and balances with - Customs & excise authorities - Others Advance payment of taxes (Net of Provision for tax Rs. 1670.91 lac, previous year Rs.761.90 lac) 17,535.41 14,794.20 540.62 776.56 3,081.68 619.19 687.48 1,853.78 1,964.60 1,387.51 1,932.72 35.00 2,482.64 7,301.80 2,307.33 7,358.70 1,459.56 33.50 1,508.61 215.32 2,621.50 2,851.17 15.55 14.35 11,086.55 11,188.76 102.21 11,086.55 16,099.98 16,244.61 144.63 16,099.98 102.21 144.63 1,192.44 5,030.25 4,237.76 3,016.42 13,476.87 1,333.39 2,504.07 2,676.28 2,841.88 9,355.62 Previous Year Rs. lac
42
Annual Report 2009–2010
This Year Rs. lac 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 - Unclaimed Matured Deposits - Unclaimed interest on Matured Deposits Other liabilities Interest accrued but not due on loans * 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 pro?ts Provision for retirement bene?ts 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 SCHEDULE 14: OTHER INCOME Interest (Gross) : - Debentures - Income tax refund - Deposits (Tax deducted at source Rs. 121.11 lac, previous year Rs. 584 lac) Dividend - from subsidiary companies - from long term investments Pro?t on sale of ?xed assets (Net) Pro?t on sale of long term investments (refer notes 6 and 16) Pro?t on sale of current investments Provision for diminution in investment written back (refer note 16) Bad debt recovered Miscellaneous income 101.15 747.97 699.40 17,532.98 1,384.58 2,895.53 9.44 10,437.56 76.27 1,181.08 385.87 (385.87) 4,764.37 791.30 1,378.16 6,933.84 16.97 9.46 4.87 423.42 267.42 21,035.53 85.28 18,399.08 307.22 1,521.81
Previous Year Rs. lac
47.17 10,906.31 577.76 1,280.79 18.74 9.21 864.32 341.12 14,045.42
3,996.99 679.29 2,357.13 7,033.41
1,067.89 (682.02) 385.87
159.46 41.98 1,537.60
2,132.25 2,889.14 99.01 5,626.55 312.63 1,686.04 9.24 909.04 15,402.94
43
Godrej Industries Limited
This Year 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 SCHEDULE 16: 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 853.70 706.15 27.48 140.66 2,557.85 388.44 378.66 1,264.97 627.36 (25.56) 1,253.52 194.79 5.22 2,904.85 (217.50) 30,626.00 703.34 646.46 159.30 128.40 3,146.21 351.38 286.08 1,095.29 821.54 480.63 429.64 2,160.50 2,828.84 (625.73) 30,173.54 9,273.84 731.23 577.54 797.21 6,561.57 648.50 440.44 535.08 7,033.16 662.42 597.28 1,203.58 6,820.18 292.12 418.17 534.75 2,504.07 55,556.98 58,061.05 5,030.25 53,030.80 386.09 53,416.89 10,380.37 45,917.74 56,298.11 2,504.07 53,794.04 523.95 54,317.99 Previous Year Rs. lac
Insurance Freight Commission Discount Advertisement and publicity Selling and distribution expenses Provision for doubtful debts and advances Provision for depletion in value of investments Excise duty (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
Annual Report 2009–2010
Rs. lac SCHEDULE 17 : INVENTORY CHANGE Stocks at the commencement of the year Finished goods Work-in-progress 2,841.88 2,676.28
This Year Rs. lac
Previous Year Rs. lac
3,447.66 4,324.91 5,518.16 7,772.57 (2,841.88) (2,676.28) (7,254.18) (5,518.16) 2,254.41 (1,736.02)
Less: Stocks at the close of the year : Finished goods Work-in-progress (3,016.42) (4,237.76)
(Increase)/Decrease in Inventory SCHEDULE 18 : INTEREST AND FINANCIAL CHARGES (Net) Interest paid on ?xed loans on bank overdrafts other interest 4,367.92 25.14 667.83
4,627.93 36.12 375.40 5,060.89 5,039.45 5.68 2.67 17.31 8.35 5,031.10 811.20 263.82 6,106.12 26.00 26.00 5,043.58 981.21 6,024.79
Less: Interest received on Customer balances, etc. others 17.31 -
Net Interest Other ?nancial charges Foreign exchange loss SCHEDULE 19 : EXTRAORDINARY ITEMS Pro?t on sale of Medical Diagnostics business
-
SCHEDULE 20 : PRIOR PERIOD ADJUSTMENTS Short provision for expenses (86.11) (86.11)
45
Godrej Industries Limited SCHEDULE 21: SIGNIFICANT ACCOUNTING POLICIES
1. Accounting Convention The ?nancial 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 ?nancial 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 ?nancial statements and reported amounts of income and expenses during the period. Management believes that the estimates used in the preparation of ?nancial 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 ?nance 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 ?ows 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 con?rmed 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 Pro?t and Loss Account. (ii) Forward exchange contracts other than those entered into to hedge foreign currency risk of ?rm 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 Pro?t 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 Pro?t 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.
2.
3.
4.
5.
6.
7.
46
Annual Report 2009–2010
SCHEDULE 21: SIGNIFICANT ACCOUNTING POLICIES
12. Research and Development Expenditure Revenue expenditure on Research & Development is charged to the Pro?t 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 ?xed assets. 13. Depreciation Leasehold land is amortised equally over the lease period. Leasehold improvements are amortised over ?ve years. Depreciation is provided on the straight line method at the rates speci?ed 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 certi?ed by the valuers. Such depreciation is withdrawn from Revaluation Reserve and credited to Pro?t and Loss Account. 14. Employee Bene?ts 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) De?ned Contribution Plan Employee bene?ts in the form of Provident Fund and family pension are considered as de?ned contribution plans and the contributions are charged to the Pro?t and Loss of the year when the contributions to the respective funds are due. (ii) De?ned Bene?t Plan Retirement bene?ts in the form of Gratuity and Pension plan for eligible employees considered as defined bene?t 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 bene?ts 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 Pro?t 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 pro?t 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 pro?t and loss account, whereas, the unrealized pro?t is ignored. Gains or losses on the commodity futures contracts is recorded in the pro?t & loss account under cost of materials consumed. 17. Deferred Revenue Expenditure The compensation payable under the Voluntary Retirement Schemes, the bene?t of which is expected to accrue in future is deferred over its payback period. The compensation is generally amortised over three to ?ve 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 suf?cient 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 ?xed 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 re?ected as unallocated corporate income / expenses.
47
Godrej Industries Limited SCHEDULE 22: NOTES TO ACCOUNTS
1. 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 This Year Previous Year Rs. Lac Rs. Lac Estimated value of contracts remaining to be executed on capital account, to the extent not provided 4. 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 pro?t due to Buyback of shares is added in surplus brought forward of pro?t & loss account 5. Loans 1,124.04 a) Term loans from banks are secured by ?rst 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. This Year Previous Year Rs. Lac Rs. Lac (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 204.71 224.43
666.65
2,225.00 84.26 50.03
104.13
This Year Previous Year Rs. Lac Rs. Lac
a) Claims against the Company not acknowledged as debts: (i) Excise duty demands relating to disputed classi?cation, 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, classi?cation, 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 classi?cation 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 48
86.35
1,694.43
1,198.23
856.94
1,697.68
182.23
b) c)
1,220.36
Annual Report 2009–2010
SCHEDULE 22: NOTES TO ACCOUNTS
d)
(Contd.) 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. 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. 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 ?led 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 ?nal disposal of the suit ?led by the investee company and the application made by minority shareholders under Section 397/398 before the Hon’ble High Court. The company has ?led 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
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. The Company had sold its entire holding in Godrej Hicare Limited, a subsidiary company, in March 2009. The pro?t 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 ?nancial 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:
This Year Previous Year
6. Investments a)
5.18 1.59
123.27 18.71 49.32 21.33 25.60 0.02 5.44 1.59
b)
17.67 4.57
4,741.61 -
18.50
18.50
c)
Mutual Funds Liquid - Growth schemes 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
No. of Unts 88,296,420 141,505,480 18,592,371 545,617 55,087,628 -
Rs Lac 12,715.00
No. of Unts 96,361,450
Rs Lac 13,080.00 19,870.00 2,000.00 10,425.00 16,875.00 23,695.00 6,155.00
25,742.00 160,464,990 3,455.00 12,196,981 - 69,580,260 7,710.00 1,223,373 11,000.00 158,554,280 476,664
4,364,601 87,569,997
500.00
385,209 32,822,955 76,356,419
4,485.00 4,230.00 8,140.00 19,190.00
15,869.00 113,755,533
Godrej Industries Limited SCHEDULE 22: NOTES TO ACCOUNTS
(Contd.) ESOP I
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 Previous Year No. of Wt. Options average exercise price ( * )
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 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 I. Rs. Lac 550.00 455.00 Rs. Lac 455.00
7,799,950 2,100,000 119,250 5,580,700
190.43 91.84 284.45 228.06
7,309,500 340,000 835,450 150,000 835,000 7,799,950
177.10 284.60 276.70 254.45 209.87 190.43
Previous Year Rs. Lac -
35.00
19.00
35.00
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 de?ned 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:
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
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 ?ve 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. Modi?cation 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.
50
Annual Report 2009–2010
SCHEDULE 22: NOTES TO ACCOUNTS
(Contd.) The aggregate future minimum lease payments are as under : Period Lease payment recognised in the pro?t & loss account Future lease payments - Within one year - Later than one year and not later than ?ve years Lease taken by the Company (b) Operating Lease: The Company’s signi?cant leasing arrangements are in respect of operating lease for land, of?ce premises, residential premises, machinery and storage tanks. The agreegate lease rentals paid by the Company are charged to pro?t & loss account. Period Lease payment recognised in the pro?t & loss account Future lease commitments - Within one year - Later than one year and not later than ?ve years (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 ?ve years 62.97 10.54 Present value of minimum lease payments This Year Previous Year Rs. Lac Rs. Lac 440.44 418.17 This Year Previous Year Rs. Lac Rs. Lac 2,625.40 2,949.71
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 pro?t 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 1,072.14 735.55 Amt. Rs. 0.58 0.25 0.57 0.23
Net Pro?t (as reported) Less : Stock based compensation expense determined under fair value based method (Pro Forma) 1,102.33 Net Pro?t (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
2,625.72 4,719.23
2,791.35 2,745.00
b) The independent ESOP trust has purchased shares of the Company from the market against the options granted. The purchases are ?nanced 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). 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 ?nancial 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: This Year Previous Year Rs. Lac Rs. Lac 1,913.45 1,785.95 870.14 50.89 763.43 50.87
399.87 323.41
412.53 336.07
Rs. Lac 45.71 11.73
57.44
Gross carrying amount of premises Accumulated depreciation Depreciation for the period
51
Godrej Industries Limited SCHEDULE 22: NOTES TO ACCOUNTS
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 bene?ts 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 ?rm 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) 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 (Contd.) 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 16. Exceptional Items This Year Previous Year Rs Lac Rs Lac 10,437.56 5,626.55 1,686.04 607.58 180.20 2,803.19 3,590.97 1,048.51 963.18 3,140.68 5,152.37
i) ii)
Pro?t on sale of long term investments Write back / (Provision) for diminution in investment
17. Pro?t & Loss Account a) Exchange differences recognised in the Pro?t & 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 Pro?t & Loss Account amounts to Rs. 327.31 lac (Previous year Rs.173.30 lac).
b)
52
Annual Report 2009–2010
SCHEDULE 22: NOTES TO ACCOUNTS
18. Earning Per Share
(Contd.)
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 pro?t after tax excluding extraordinary items Rs. lac 8,092.74 1,781.69 c) Net pro?t 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 Chemicals Estate Finance & Investments Others This Year Previous This Year Previous This Year Previous This Year Previous Year Year Year Year 78123.55 78123.55 5238.25 77818.57 77818.57 (1832.02) 2775.39 2775.39 1819.47 3154.26 3154.26 2177.91 17081.77 17081.77 15828.25 14726.08 14726.08 14726.08 1189.02 1189.02 (539.48) 1449.41 1449.41 (480.10) Total This Year Previous Year 99169.73 99169.73 22346.49 (8322.43) (6024.79) 7999.27 93.47 8092.74 44848.58 18248.42 902.36 2083.57 38806.09 13795.00 1261.72 2034.48 7943.25 1831.58 3057.49 108.97 5571.54 129455.39 1335.98 1688.52 64.92 1792.64 17.91 155.50 134973.07 664.75 1,724.12 59.98 2836.10 541.05 14.67 237.14 8092.74 3157.69 185083.32 3114.89 188198.21 606.82 22413.69 63514.91 85928.60 7.77 3992.43 213.72 2585.18 253.62 2838.80 97148.32 97148.32 14591.87 (6835.68) (6106.12) 1650.07 217.73 1867.80 26.00 (86.11) 1807.69 182508.39 4657.31 187165.70 16402.55 68050.95 84453.50 4682.13 2373.10 273.09 2646.19
Revenue External Sales Inter segment sale Total Income Results Segment result before interest and tax Unallocated expenses Interest Expense (net) Pro?t before tax Taxes Pro?t after taxes and before extraordinary items Add: Extraordinary Items (Net of taxes) Add/(Less): Prior Period Items Net Pro?t 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
Information about Secondary Business Segments Revenue by Geographical markets India Outside India Total Carrying Amount of Segment Assets India Outside India Total
69199.69 29970.04 99169.73 188198.21 188198.21
64737.13 32390.47 97127.60 187165.70 187165.70
53
Godrej Industries Limited SCHEDULE 22: NOTES TO ACCOUNTS
Notes:
(Contd.)
1. The Company has disclosed Business Segment as the primary segment. Segments have been identi?ed 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 Ole?n Sulphonates and Re?ned 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 re?ned 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)
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 signi?cant in?uence 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.
54
Annual Report 2009–2010
SCHEDULE 22: NOTES TO ACCOUNTS (Contd.)
b) Transaction with Related Parties
Nature of Transaction Holding Company Subsidiary Companies Fellow Associate/ Key Relative Subsidiaries Joint Venture Management of Key Companies Personnel Management Personnel 7.69 0.78 0.89 7.40 19.11 8.00 8.00 935.93 1,277.97 753.97 761.99 157.55 198.38 182.99 178.89 426.66 707.30 18.09 41.71 756.33 1,192.16 243.07 168.62 2.24 6.12 2,895.51 2,889.12 35,129.26 405.00 17.44 405.00 22.30 16.00 4,747.72 70.93 68.62 1,024.39 792.16 1.60 2.1 0 100.00 64.68 82.31 249.23 729.47 87.07 55.74 Enterprises over which Key Mangement Personnel exercise signi?cant in?uence 13.54 5.29 0.06 9.45 0.02 3.40 0.49 0.84 3.50 -
(Rs. lac)
Total
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
0.73 23.29 45.48 207.10 0.27 0.39 0.12 1.11 30.90 294.49 304.36 2,340.03 2,340.03 4,291.80 -
5.64 4.94 17.87 4.78 883.30 1,441.40 123.59 105.14 203.12 165.66 22.63 28.85 175.86 154.75 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 4,729.78 525.00 265.78 575.00 231.15 1,005.00 1,300.00 550.00 1,300.00 -
955.11 1,283.26 4.94 772.57 790.12 928.78 1,748.49 157.55 198.38 306.58 284.03 630.05 890.49 40.84 71.69 932.97 1,382.11 659.64 649.17 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 9,021.58 930.00 283.22 980.00 253.45 1,005.00 1,300.00 566.00 1,300.00 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
55
Godrej Industries Limited SCHEDULE 22: NOTES TO ACCOUNTS (Contd.)
c) The Signi?cant Related Party transactions are as under: 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. 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. 531.11 225.02 44.36 100.00 46.87 5.86 Inter Corporate Deposits - Accepted - Ensemble Holdings & Finance Ltd. - Godrej Consumer Products Ltd. Inter Corporate Deposits - Repaid - Ensemble Holdings & Finance Ltd. - Godrej Consumer Products Ltd. This Year Rs. Lac 35.71 25.72 2.24 Previous Year Rs. Lac 3.50 17.22 Nature of Transaction Sale of goods - Godrej Consumer Products Ltd. - Rapidol PTY Ltd. - Godrej Properties Ltd. - Godrej Saralee Ltd. Sale of ?xed assets - Godrej Properties Ltd. Purchase of Fixed Assets - Godrej Properties Ltd. - Godrej & Boyce Mfg. Co. 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. Commission / Royalty received - Godrej Hershey Ltd. - Godrej Properties Ltd. - Godrej Consumer Products Ltd. - Natures Basket Ltd. - Godrej Global Solutions Ltd.
-
12.51 8.00 6.12
6.54 8.00 -
883.30 45.48
157.55
198.38
538.07 215.16 17.87 0.73 -
525.00 405.00
250.00 -
575.00 405.00
200.00 -
180.04 122.34 2.95 1.25 -
Inter Corporate Deposits - Advanced 173.43 - Godrej Properties Ltd. 102.63 - Natures Basket Ltd. 5.46 - Godrej Agrovet Ltd. 2.51 Inter Corporate Deposits - Repayment Received - Godrej Properties Ltd. - Swadeshi Detergents Ltd.
550.00 455.00 -
1,300.00
550.00 16.00 -
1,300.00
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.
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. Dividend income - Godrej Consumer Products Ltd. - Godrej Properties Ltd. - Godrej Agrovet Ltd. - Godrej Saralee Ltd. - Ensemble Holdings & Finance Ltd. Dividend paid - Godrej & Boyce Mfg. Co. Ltd.
2,895.51 1,212.38 91.13 -
1,854.93 1,961.86 91.13 1,034.19 79.26
2,340.03
2,340.03
56
Annual Report 2009–2010
SCHEDULE 22: NOTES TO ACCOUNTS (Contd.)
Nature of Transaction Other Income - Godrej Agrovet Ltd. - Godrej Consumer Products Ltd. - Godrej Hershey Ltd. - Godrej Properties Ltd. - Natures Basket Ltd. - Godrej Saralee Ltd. - Godrej Hicare Ltd. - Godrej & Boyce Mfg. Co. Ltd. 20.07 11.14 5.66 1.37 1.18 1.29 This Year Previous Year Nature of Transaction Rs. Lac Rs. Lac Remuneration to Key Management Personnel 22.32 - Mr. N. B. Godrej 17.65 - Mr. V. F. Banaji 10.98 - Mr. M. P. Pusalkar 3.64 - Ms. T. A. Dubash - - Mr. M. Eipe 13.08 - Mr. C. K. Vaidya 2.89 1.11 Remuneration to Relatives of Key Management Personnel - Ms. Nisaba A. Godrej Recovery of Establishment & other expenses - Godrej Consumer Products Ltd. - Godrej Agrovet Ltd. - Godrej Hershey Ltd. - Godrej Properties Ltd. - Godrej Saralee Ltd. - Godrej Hicare Ltd. - Godrej & Boyce Mfg. Co. Ltd. - Godrej SCA Hygiene Ltd. - Godrej Global Solutions Ltd. Rent, Establishment & other exps paid - Godrej & Boyce Mfg. Co. Ltd. - Godrej Consumer Products Ltd. - Ms. R.N. Godrej - Godrej Properties Ltd. - Godrej Hershey Ltd. - Wadala Commodities Ltd. - Godrej Agrovet Ltd. - Natures Basket Ltd. - Godrej Infotech Ltd. - Godrej Saralee Ltd. - Godrej Hicare Ltd. 294.49 232.14 64.68 42.63 7.26 5.77 3.92 2.96 1.63 304.36 136.39 Shares in Associate company acquired under a scheme of arrangement 82.31 - Godrej Consumer Products Ltd. 18.24 6.38 29.31 2.88 9.85 32.20 26.38 4,747.72 686.49 121.14 63.22 54.50 6.24 983.25 96.31 Sale of Investments 108.88 - Godrej Oil Palm Ltd. 41.04 - Godrej & Boyce Mfg. Co. Ltd. 100.00 - Godrej Hygiene Care Pvt. Ltd. 16.52 30.90 Purchase of Investments 3.42 - Godrej Agrovet Ltd. 0.89 - Godrej Hygiene Care Pvt. Ltd. - Godrej Consumer Products Ltd. - Godrej Hershey Ltd. 501.25 4,743.72 4.00 31,689.26 3,440.00 17.57 4,291.80 4,729.78 - Mr. Pirojsha Godrej 87.07 53.57 2.17 241.34 211.36 199.78 194.83 177.08 219.84 151.58 131.84 137.82 135.02 16.06 This Year Rs. Lac Previous Year Rs. Lac
57
Godrej Industries Limited SCHEDULE 22 : NOTES TO ACCOUNTS (Contd.)
Rs.’lac 21. Computation of Pro?ts under Section 349 of the Companies Act, 1956 Pro?t for the year after tax as per Pro?t & Loss Account Add: Depreciation as per accounts Managerial Remuneration Directors’ Fees Pro?t / (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 Previous Year Rs.’lac
8,092.74 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 Pro?t / (loss) on sale of assets as per books Pro?t on sale of investments Pro?t 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 Pro?t 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 ?gures 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 Certi?cation and other services Tax Consultation and representation Consultation and management services Out of pocket expenses TOTAL
2,812.80 9.44 10,437.56 4,867.33 18,127.13 (4,830.73) 1,024.39 902.65 32.93 88.81 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) 827.26 686.97 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
58
Annual Report 2009–2010
SCHEDULE 22 : NOTES TO ACCOUNTS (Contd.)
24. Turnover (Net) Item Unit 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
Fatty Acids Glycerin Alpha Ole?n and its precursors Synthetic Detergent Medical Diagnostic Products Others TOTAL 25. Inventories - Finished Goods Item Unit
MT MT MT MT
Fatty Acids Glycerin Alpha Ole?n and its precursors Synthetic Detergent Others TOTAL 26. Raw Materials Consumed
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
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
Unit
Oils & Fats Chemicals and Catalysts Packing Materials, etc. TOTAL
MT MT
This Year Quantity Value Rs.’lac 127646 39731.74 22540 9512.07 3786.99 53030.80
Previous Year Quantity Value Rs.’lac 103421 39893.90 22412 10208.01 3692.13 53794.04
Raw materials consumption includes consumption for production of captively consumed items. 27. Purchase of Goods Unit This Year Quantity Value Rs.’lac 262.82 123.27 386.09 Previous Year Quantity Value Rs.’lac 361.72 162.23 523.95
Re?ned oil, Soaps, Toileteries, etc. Others TOTAL
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 This Year 59488 9230 49696 6354 23126 Actual Production Previous Year 50969 8663 47154 9189 22738 -
Fatty Acids MT } Glycerin MT } Alpha Ole?n and its precursors MT } Re?ned 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 Noti?cation 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 Re?ned Oils & Vanaspati is under process contract. 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 23,095.75 183.62 1.69 23,281.06 22,264.53 156.93 247.65 1,251.24 23,920.35 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 33,844.55 % 63 This Year Rs.’lac Previous Year Rs.’lac
27,133.02 51 53,030.80 100 232.89 29
19,949.49 37 53,794.04 100 370.54 31
83.05 675.70
33.53 62.21 1,553.56
564.32 71 797.21 100
833.04 69 1,203.58 100
135.81 21.05 13.79 929.40
136.26 23.05 12.14 1,820.75
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
0.07 0.07
32,183.63
206.84 32,390.47
60
Annual Report 2009–2010
SCHEDULE 22 : NOTES TO ACCOUNTS (Contd.)
34. Employee Bene?ts
The amounts recognised in the Company’s ?nancial statements as at the year end are as under: Gratuity This Year Previous Year Rs.’lac Rs.’lac a) 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 Bene?ts Paid Past Service Cost Amalgamations Curtailments Settlements 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 Bene?ts Paid Amalgamations Settlements Fair value of Plan Assets at the end of the year 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 Amounts Recognised in the statement of Pro?t 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 Actual return on Plan Assets Estimated contribution to be made in next ?nancial year Actuarial Assumptions i) Discount Rate ii) Expected Rate of Return on Plan Assets iii) Salary Escalation Rate iv) Employee Turnover v) Mortality 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 2,435.53 106.44 183.46 12.67 (2.22) 2,735.88 1,536.33 115.22 (46.40) 900.00 2,597.95 2,735.88 2,597.95 137.93 106.44 183.46 (115.22) (33.71) 140.97 161.61 2,214.96 102.70 177.20 (57.45) (1.88) 2,435.53 1,458.81 116.70 39.18 1,536.33 2,435.53 1,536.33 899.20 102.70 177.20 (116.70) (18.28) 144.92 77.53 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 -
d)
e) f) g)
The estimates of future salary increases, considered in actuarial valuation, take account of in?ation, 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 Percentage of Ownership interest as at 31st March, 2010 43.00% Percentage of Ownership interest as at 31st March, 2009 43.00%
Godrej SaraLee Ltd. (upto 28 March 2009) Godrej Hersheys Ltd
India India
Household Insectisides Beverages & Foods
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: This year Rs. ‘lac I. 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 INCOME 1. Turnover (net of excise) 2. Other Income EXPENSES 1. Material consumed and purchase of goods 2. Expenses 3. Inventory change 4. Depreciation 5. Interest 6. Provision for Taxation OTHER MATTERS 1. Contingent Liabilities 2. Capital Commitments 3,565.13 1,765.15 633.39 564.59 2,856.06 Previous year Rs. ‘lac 3,522.56 17,740.44 2,278.14 1,142.08 664.78 2,304.36
II.
3,669.19 4,031.25 2,492.71 248.54 -
5,772.32 462.25 2,443.69 287.24 -
III.
15,404.32 774.86
32,772.45 329.42
IV.
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
V.
1,828.36 263.16
683.70 13.33
62
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. Registration Details Registration No. State Code Balance Sheet Date Capital raised during the year (Amount in Rs. lac) Public Issue Rights Issue Bonus Issue Private Placement Position of mobilisation and deployment of funds (Amount in Rs. lac) Total Liabilities Total Assets Sources of Funds Paid-up Capital Reserves & Surplus Secured Loans Unsecured Loans Defered Tax Liability Application of Funds Net Fixed Assets Investments Net Current Assets Misc. Expenditure Accumulated Losses 4. Performance of Company (Amount in Rs. lac) Turnover (Total Income) Total Expenditure Pro?t/(Loss) before tax (Including extra ordinary income) Pro?t/(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
: : : : : : :
97781 11 31/3/2010 Nil Nil Nil Nil
2.
3.
: :
160,228.84 160,228.84
: : : : :
3,176.25 99,093.36 20,418.89 34,342.14 3,198.20
: : : : :
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/Re?ned Oils
(*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 of Godrej Industries Limited and its subsidiaries as at March 31, 2010, and also the Consolidated Pro?t and Loss Account and Consolidated Cash Flow Statement for the year then ended, both annexed thereto. These consolidated ?nancial statements are the responsibility of Godrej Industries Limited’s management. Our responsibility is to express an opinion on these ?nancial 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 whether the financial statements are free of material misstatements. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. (a) We did not audit the ?nancial statements of certain subsidiaries and joint ventures, whose ?nancial statements re?ect 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 in?ows amounting to Rs. 91.99 lakhs for the year ended on that date as considered in the consolidated ?nancial statements. These ?nancial 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 ?nancial statements of a Jointly controlled entity, whose ?nancial statements re?ect 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 ?nancial statements on the basis of unaudited management accounts. (c) As stated in Note 2 of Schedule 23, the ?nancial statements of certain associates whose ?nancial statements re?ect 64 5. Without qualifying our opinion, we draw attention to Note 15 (b) of Schedule 23 – Notes to Accounts, regarding a loan of Rs.17,330 lakh to a Trust for purchase of the Godrej Industries Ltd. 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. 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 ?nancial 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 pro?t for the year and the reserves as at March 31, 2010 could not be ascertained. the Group’s share of associates’ profit upto March 31, 2010 of Rs. 1,325.14 lakhs and the share of pro?t for the year of Rs. 387.62 lakhs has been included in the consolidated ?nancial statements on the basis of unaudited management accounts. 4. We report that the consolidated ?nancial statements have been prepared by the management of Godrej Industries Limited in accordance with the requirements of Accounting Standard (AS) 21 - Consolidated Financial Statements, Accounting Standard (AS) 23 – Accounting for Investments in Associates in Consolidated Financial Statements and Accounting Standard (AS) 27 – Financial Reporting of Interests in Joint Ventures issued by the Institute of Chartered Accountants of India.
Annual Report 2009–2010
7. Based on our audit and on consideration of the reports of other auditors on separate ?nancial statements and the management’s certification of the unaudited financial statements, in our opinion, the consolidated financial statements, subject to the observations in paragraphs 3 and 6 above, give a true and fair view in conformity with the accounting principles generally accepted in India: a) in case of the Consolidated Balance Sheet, of the consolidated state of affairs of the Godrej Industries Limited Group as March 31, 2010; b) in case of the Consolidated Pro?t and Loss Account, of the consolidated results of operations for the year ended on that date; and
c)
in case of the Consolidated Cash Flow Statement, of the consolidated cash ?ows for the year ended on that date.
For and on behalf of Kalyaniwalla & Mistry Chartered Accountants Registration No. 104607W Viraf R. Mehta Partner Membership No: 32083 Mumbai, May 26, 2010
65
Godrej Industries Limited — Consolidated Account CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2010
This Year Rs. lac Previous Year Rs. lac
Schedule SOURCES OF FUNDS 1. Shareholders’ Funds (a) Share capital (b) Reserves & surplus 2. Minority Interest 3. Loan Funds (a) Secured loans (b) Unsecured loans 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 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 Less : Current Liabilities and Provisions (a) Liabilities (b) Provisions Net Current Assets 9. Miscellaneous Expenditure (To the extent not written off or adjusted) TOTAL Signi?cant Accounting Policies Notes to Accounts 6 7 8 9 10
Rs. lac
1 2
3,176.26 173,382.79 176,559.05 31,546.64
3,197.59 137,590.92 140,788.51 11,831.77 80,264.90 77,081.89 157,346.79 5,016.16 314,983.23
3 4
71,494.68 76,624.40 148,119.08 5,078.50 361,303.27
5 92,508.15 44,841.35 47,666.80 3,857.57 51,524.37 48,096.18 92,747.15 103,581.11 42,305.82 14,788.78 23.34 84,498.52 245,197.57 67,949.70 8,312.30 76,262.00 168,935.57 361,303.27 22 23 86,908.24 41,811.79 45,096.45 2,454.54 47,550.99 52,346.04 65,266.38 74,335.73 87,519.93 12,520.42 21.94 77,718.56 252,116.58 94,525.35 8,287.59 102,812.94 149,303.64 516.18 314,983.23
11 12
13
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 V. R. Mehta Partner Mumbai, May 26, 2010 66
A.B. Godrej Chairman M. Eipe Executive Director & President (Chemicals)
N.B. Godrej Managing Director V. Srinivasan Executive Vice President (Finance & Estate) & Company Secretary
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 EXPENDITURE Materials consumed and purchase of goods Cost of sales - Property Development Expenses Inventory change Interest and ?nancial charges (net) Depreciation (Net of transfer from Revaluation Reserve Rs. 99.50 lac previous year Rs. 133.69 lac) Pro?t Before Tax & Extraordinary Items Pro?t from continuing operations before tax Income tax - current tax - MAT credit entitlement - deferred tax - Adjustment for tax of previous years (net) Pro?t from continuing operations after tax Pro?t from discontinuing operations before tax Income tax - current tax - deferred tax Pro?t from discontinuing operations after tax Pro?t for the year after taxation before extraordinary items Extraordinary Items (net of tax) Pro?t for the year after extraordinary items Prior Period adjustments (net) Share of pro?t in Associates Pro?t before Minority Interest Share of Minority Interest Pro?t after Minority Interest Surplus brought forward Excess provision of proposed dividend Excess provision of tax on distributed pro?t Adjustment of opening pro?t 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 pro?ts 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) Signi?cant Accounting Policies Notes to Accounts
Rs. lac
This Year Rs. lac
345,802.11 4,384.96 341,417.15 36,705.14 378,122.29 249,771.66 20,004.58 68,740.66 (1,671.29) 14,961.81 5,017.27 356,824.69 21,297.60
Previous Year Rs. lac
343,467.80 7,298.81 336,168.99 25,175.62 361,344.61 240,819.35 12,123.89 72,048.13 3,583.96 14,959.54 4,702.77 348,237.64 13,106.97 12,976.80 (5,158.47) 29.88 (166.41) 7,681.80 130.17 (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 3,996.99 1,135.14 27.97 1,305.48 41,254.15 47,719.73 2.82 3.49
14 15 16 17 18 19
21,297.60 (5,252.58) 877.04 (95.69) (5.47) 16,820.90 20 21 16,820.90 16,820.90 16,820.90 8,102.60 24,923.50 (4,598.78) 20,324.72 41,254.15 26.05 4.43 (1,806.20) 39,478.43 59,803.15 4,764.37 1,327.89 64.04 2,278.37 51,368.48 59,803.15 6.39 6.39 22 23
The Schedules referred to above form an integral part of the Pro?t and Loss Account. As per our Report attached Signatures to Pro?t and Loss account and Shedules 14 to 23 For and on behalf of Kalyaniwalla & Mistry Chartered Accountants V. R. Mehta Partner Mumbai, May 26, 2010 A.B. Godrej Chairman M. Eipe Executive Director & President (Chemicals) N.B. Godrej Managing Director V. Srinivasan Executive Vice President (Finance & Estate) & Company Secretary
67
Godrej Industries Limited — Consolidated Account CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010
This year Rs. lac A. Cash Flow from operating activities : Pro?t before tax Adjustments for : Depreciation Unrealised Foreign exchange Pro?t on sale of investments (Loss)/Pro?t on sale of ?xed 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 pro?t 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 ?xed assets Proceeds from sale of ?xed 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 ?nancing 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 pro?ts Net Cash from ?nancing activities Net increase/(decrease) in cash and cash equivalents 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 Cash and cash equivalents (Closing Balance) (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 ?at buyers and held in trust. 3. The above cash?ow statement includes share of cash?ows from jointly controlled entities as under: a. Net cash used in operating activities b. Net cash used in investing activities c. Net cash from ?nancing 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 ?ows of the Company. 5. The ?gures of previous year have been regrouped wherever necessary. 21,297.60 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 (30,594.47) 37,819.53 (20,286.20) (5,571.87) (5,494.70) 12.56 (486.33) (11,540.34) (9,460.17) 177.25 (112,664.01) 117,453.21 (362.54) 9,809.00 326.04 5,278.78 5,278.78 (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 3,307.15 12,520.42 (1,038.79) 14,788.78 Previous year Rs. lac 13,106.97 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 (10,587.80) (22,241.61) (7,278.80) (28,818.53) (8,965.26) 408.44 (37,375.35) (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) 1,371.13 151,045.60 (105,546.62) 8,870.35 (14,773.73) (3,248.47) (1,186.79) 36,531.47 (23,744.10) 36,491.60 23.92 (251.00) 12,520.42
B.
C.
14,630.24 158.54 14,788.78
12,515.11 5.31 12,520.42
(738.82) (1,054.08) 2,128.58
As per our Report attached For and on behalf of Kalyaniwalla & Mistry Chartered Accountants V. R. Mehta Partner Mumbai, May 26, 2010
Signatures to Cash Flow Statement A.B. Godrej Chairman M. Eipe Executive Director & President (Chemicals) N.B. Godrej Managing Director V. Srinivasan Executive Vice President (Finance & Estate) & Company Secretary
68
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010
This Year Rs. lac SCHEDULE 1 : SHARE CAPITAL Authorised: 800,000,000 Equity shares of Re. 1 each 100,000,000 Unclassi?ed 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 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.
Previous Year Rs. lac 8,000.00 10,000.00 18,000.00 3,197.59 3,197.59
8,000.00 10,000.00 18,000.00 3,176.26 3,176.26
SCHEDULE 2 : RESERVES AND SURPLUS As at 1.4.2009 Securities Premium Account 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 Pro?t & Loss Account Total - This Year Total - Previous Year 80,200.24 81,804.71 71.04 52.27 1,409.93 1,671.21 194.95 166.98 3,125.00 3,301.34 3.87 10,875.12 10,316.14 456.62 (176.79) 41,254.15 36,308.58 137,590.92 133,444.44 Additions 31,935.05 18.77 64.02 27.97 21.34 3.87 1,697.98 1,305.48 (432.44) 764.93 20,355.20 11,147.00 53,641.15 13,268.02 Deductions 6,933.24 1,604.47 123.55 261.28 176.34 21.34 746.50 131.52 8,434.67 6,518.42 15,512.80 9,438.53 Adjustment on aquisition/deletion (537.63) 7.35 (1,806.20) 316.99 (2,336.48) 316.99 36,931.40 2,156.00 17,474.81 2,500.00 6,500.00 5,932.47 71,494.68 As at 31.03.2010 105,202.05 80,200.24 71.04 71.04 1,286.38 1,409.93 258.97 194.95 3,146.34 3,125.00 3.87 3.87 12,014.13 10,875.12 31.52 456.62 51,368.48 41,254.15 173,382.79 137,590.92 39,144.71 2,156.00 25,338.37 6,500.00 7,125.82 80,264.90
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
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.)
This Year Rs. lac 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 17,231.57 750.72 6,000.00 47,656.57 466.74 4,518.80 76,6 24.40 Previous Year Rs. lac 2,164.31 300.00 3,000.00 60,150.28 2,500.00 8,000.00 466.74 500.56 77,081.89
Rs. Lac As on 01.04.2009 Tangible Assets Land - Freehold - Leasehold Buildings Plant & Machinery Research Centre Furniture & Fixtures Of?ce & 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 988.96 170.84 9,473.96 52,398.27 164.13 1,768.40 1,856.38 3,266.00 117.03 1,180.47 200.00 1,057.23 GROSS BLOCK Deductions/ As on Additions Adjustments 31.03.2010 395.94 188.89 3,294.84 3,145.01 0.20 231.16 344.74 138.13 737.22 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 1,180.47 200.00 1,794.07 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 39.95 449.85 199.98 829.55 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 (0.01) 0.15 82.17 158.26 35.43 3,933.88 31,320.75 73.75 983.25 877.46 806.44 59.91 532.02 199.99 987.66 1,384.36 324.84 8,819.99 23,484.95 72.37 881.87 1,200.23 2,428.56 57.12 648.45 0.01 806.41 984.83 143.41 5,999.05 23,361.96 83.70 824.46 1,037.16 2,628.88 77.08 730.62 0.02 227.68
SCHEDULE 5 : FIXED ASSETS ASSETS
306.63 13,959.94 86,908.24 91,262.05
912.52 9,388.65 6,035.11
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
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 3,857.57 51,524.37
104.78 8,892.80 45,096.43 2,454.54 47,550.97
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 ?xed 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 Certi?cate 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 certi?cate 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 10
440,000 5,000,000
-
-
440,000 5,000,000 (a)
44.00 450.00
44.00 450.00
1 10 10
55,369,989 15,423 -
21,074,631 122,050
4,000,000 72,444,620 (b) 15,423 7,716 114,334
58,040.80 87.35 7.58 1,689.46 306.99 1,080.43 100.00 11.57 0.01 100.50 125.00 2,099.50 253.52 688.09 1,142.34 922.70 4,258.30
51,163.47 54.11 7.68 1,504.98 242.21 132.24 980.43 100.00 11.57 0.01 100.50 125.00 121.21 253.52 688.09 1,142.34 1,042.30 4,316.50 0.02 0.25 83.19 397.60 299.68 673.03 469.21 1,313.51 0.13 0.02 0.01
10 10 10 10 £0.25 10 10 100 100 10 10 10 $0.01 $1 $1.90 £1.00 $0.10 100 £1000 $1,000,000 $750,000 $1,550,000 $950,000 10 10 500 10 -
209,370 2,671,993 455,000 389,269 13,692 195,577 32,258 114 25 250,000 12,222 1,900,000 4,091,073 1,067,754 2,631,578 100 9,604,540 25 97 13,135,050 2,000 3 25,000 -
1,805 6,626 2,565,000 2,500 -
15,497 97 13,135,050 -
209,370 2,671,993 455,000 389,269 -
(c)
202,203 32,258 114 (d) 25 (a) 250,000 12,222 4,465,000 4,091,073 1,067,754 2,631,578 100 9,604,540 25 4,500 3 25,000 (c) (e) (f) (f) (g) (a)
0.02 397.60 299.68 673.03 469.21 0.45 0.02 0.03 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 61,945.03 30,802.12 92,747.15 194,388.98
65,716.81 (450.43) 65,266.38 55,034.56 10,231.82 65,266.38 73,559.03
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 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 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 pro?ts Provision for retirement bene?ts 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 Pro?t on sale of ?xed assets (Net) Pro?t on sale of long term investments (refer note 19) Pro?t on sale of current investments Provision for depletion in value of investment written back Bad debt recovered Miscellaneous income Share in jointly controlled entities This Year Previous Year Rs. lac Rs. lac 12,359.30 38,189.03 3,694.02 2,463.87 16.97 11.29 4.87 7,009.70 613.34 3,587.31 67,949.70 4,764.37 1,327.89 1,917.87 302.17 8,312.30 2,131.81 30,321.59 44,598.35 2,070.00 18.74 16.82 7,727.20 667.64 6,973.20 94,525.35 3,996.99 956.60 2,788.80 545.20 8,287.59
2,506.44 500.11 3,006.55 38,593.42 41,599.97 (500.11) 41,099.86 1,205.96 42,305.82 756.40 6,356.39 6,315.99 1,360.00 14,788.78
1,878.50 744.33 2,622.83 82,962.61 85,585.44 (789.00) 84,796.44 2,723.49 87,519.93 1,019.74 4,623.28 5,242.80 1,634.60 12,520.42
-
386.75 129.43 516.18
2,482.64 18,524.85 10,881.44
5,135.76 15,375.82 12,757.21
14.84 2,765.71 7,073.41 326.04 24,549.96 102.88 747.97 1,082.69 41.64 36,705.14
159.46 41.98 2,702.32 4,921.11 563.35 80.64 13,168.66 322.05 1,688.19 9.24 1,173.12 345.50 25,175.62
3,417.43 2,839.63 562.26 32,643.85 6,777.18 3,692.25 2,676.99 84,498.52
4,254.77 1,973.75 635.28 21,650.90 8,704.80 2,437.37 4,792.90 77,718.56
72
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS (contd.)
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 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 ?xed loans - on bank overdrafts - on Intercorporate deposits - other interest Less: Interest received - on loans & deposits - on Customer balances, etc. - others Net Interest Other ?nancial charges Foreign exchange loss Share in jointly controlled entities SCHEDULE 20 : EXTRAORDINARY ITEMS Pro?t on Sale of business SCHEDULE 21 : PRIOR PERIOD ADJUSTMENTS Short provision for expenses This Year Previous Year Rs. lac Rs. lac
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
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
47,586.42 44,927.34 92,513.76 72,509.18 20,004.58 15,844.26 1,121.04 983.41 1,321.29 8,522.70 5,229.55 1,190.35 664.71 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) 1,022.42 133.30 194.79 4.91 6,264.14 11,222.71 68,740.66
28,479.19 31,231.12 59,710.31 47,586.42 12,123.89 12,483.81 990.99 983.86 1,717.51 8,757.36 4,920.46 1,106.45 632.61 992.03 683.43 218.80 203.65 4,363.60 5,636.75 286.24 1,816.18 821.39 285.39 1,127.83 429.64 2,155.55 7,214.61 14,219.99 72,048.13
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 17.31 3.32 20.63 12,844.51 1,423.71 693.59 14,961.81 -
7,004.19 4,174.71 223.55 1,416.99 12,819.44 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 ?nancial 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. b) Use of Estimates The preparation of ?nancial 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 ?nancial statements and reported amounts of income and expenses during the period. Management believes that the estimates used in the preparation of ?nancial statements are prudent and reasonable. Actual results could differ from the estimates. c) 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 ?nance lease are capitalised at the lower of their face value and present value of the minimum lease payments. d) Intangible Assets 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 ?ows. The intangible assets are amortised over the estimated useful lives as follows. Particulars Goodwill Trade marks Technical Know-how Non-compete fees Computer software e) Impairment of Assets 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. f) 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. Borrowing costs incurred for the development of long term projects are included under Construction work in 74 Estimated useful lives 8 - 20 years 8 - 15 years 10 years 7 - 8 years 4 - 6 years j) g) progress/Management Project Receivables at weighted average of the borrowing cost/rates as per agreement respectively. 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 ?ows from the investment. 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. 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) 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 con?rmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. 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 Pro?t and Loss Account.
ii) Forward exchange contracts other than those entered into to hedge foreign currency risk of ?rm 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 Pro?t 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
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 Pro?t and Loss Account. k) Revenue Recognition 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 Pro?t 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 ?xed assets. m) Depreciation Leasehold land is amortised equally over the lease period. Leasehold improvements are amortised over ?ve years. Depreciation is provided on the straight line method at the rates speci?ed 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 certi?ed by the valuers. Such depreciation is withdrawn from Revaluation Reserve and credited to Pro?t and Loss Account. n) Employee Bene?ts Liability is provided for the retirement bene?ts of provident fund, gratuity, leave encashment and pension bene?t in respect of all eligible employees of the Group. i) De?ned Contribution Plan Employee bene?ts in the form of Provident Fund and family pension are considered as de?ned contribution plans and the contributions are charged to the Pro?t and Loss of the year when the contributions to the respective funds are due. ii) De?ned Bene?t Plan Retirement bene?ts in the form of Gratuity and Pension plan for eligible employees considered as defined bene?t 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 Bene?ts 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 Pro?t and Loss Account. 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 pro?t 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 pro?t and loss account, whereas, the unrealized pro?t is ignored. Gains or losses on the Commodity futures contracts is recorded in the pro?t & loss account under cost of materials consumed. q) Deferred Revenue Expenditure The compensation payable under the Voluntary Retirement Schemes, the bene?t of which is expected to accrue in future is deferred over its payback period. The compensation is generally amortised over three to ?ve 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 suf?cient 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 ?xed 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 re?ected as unallocated corporate income / expenses. 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 ?nancial statements of the parent and its subsidiaries are combined on a line by line basis and intra group balances, intra group transactions and unrealized pro?ts or losses are fully eliminated. In the consolidated ?nancial 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 ?nancial 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 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.) 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 pro?ts or losses is included in the carrying cost of investments. 2. The ?nancial 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 certi?ed by their respective management. 3. Information on subsidiaries, joint ventures and associates: (a) The subsidiary companies considered in the consolidated ?nancial statements are: Sr. Name of the Company No. Country of Percentage of Holding Incorporation This Year Previous Year India 75.26% 75.26% India 75.26% 75.26%
3
India
60.21%
60.21%
4
India
67.73%
38.38%
5
India
75.26%
75.26%
India
100.00%
0.00%
6 7
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. 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 Percentage of Holding This Year Previous Year 20.00% 20.00%
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
1 India 35.91% 41.51% 2 India 70.42% 81.40%
India
54.74%
81.40%
3
India
35.91%
81.40%
4
India
35.91%
81.40%
5
India
100%
100%
6
India UK
100% 100%
100% 100% 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
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) 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 bene?ts are not in consonance with the group accounting policies. No effect has been given in the consolidated ?nancial statements on account of such differing accounting policies, where the impact is not expected to be material. 5. The break-up of Investment in Associates is as under:
No. Sr. Name of the Company Cost of Acquisition Goodwill included in cost of acquisition Share in Provision Carrying pro?ts / 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 (42.04) (42.04) 651.46 466.98 61.05 55.51 – – No. Sr. Name of the Company Cost of Acquisition Goodwill included in cost of acquisition Share in Provision Carrying pro?ts / for cost of (loss) of diminution Investments associates in the post value of acquisition investments
5
Al Rahba International Trading LLC Polychem Hygiene Lab Pvt. Ltd. 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)
–
– –
6
162.75 162.75
88.99 88.99
144.24 79.46 – 73.87 7,283.16 2,373.97
–
306.99 242.21
7
– – 124.54 80.56 52,883.38 35,915.48 50,858.85 38,617.17
– – 66.17 132.24 129.29 60,037.25 189.92 53,042.90
6. Contingent Liabilities
Sr. Description No. (a) Claims against the Company not acknowledged as debts: 1) Excise duty demands relating to disputed classi?cation, 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, classi?cation, 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 classi?cation 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 ?led by Processors for claiming various expenses (h) Share in Jointly Controlled Entities This Year Previous Year Rs. Lac Rs. Lac
2,388.53
2,029.35
286.08 557.75 1,217.63 330.73 1,561.02 219.59 238.07 733.04 6,932.97 617.74 50.03 41.70 1,828.36
856.94 2,054.42 1,124.04 330.73 2,297.56 234.60 289.67 666.65 4,313.66 84.26 41.70 50.11 104.13 1,106.70
1
Swadeshi Detergents Ltd.
191.32 191.32
91.46 91.46
2
3
4
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
– 58,040.80 – 51,163.47
7.
68.24 68.24 – – – – 1,689.46 1,504.98
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
78
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 pro?t due to Buyback of shares is added in surplus brought forward of pro?t & loss account. 9. Loans a) Term loans from banks are secured by ?rst 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”. a) The Company had sold its entire holding in Godrej Hicare Limited, a subsidiary company, in March 2009. The pro?t 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 ?nancial 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 ?at 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 bene?ts Provision for doubtful debts/advances VRS Expenses Others This Year Previous Year 228.64 547.55 215.00 581.31 1,572.50 521.00 784.71 298.00 (213.42) 1,390.29 6,385.94 20.51 6,406.45 5,016.16
Liabilities Depreciation 6,648.53 Share in Jointly Controlled Entities 2.47 6,651.00 Net Deferred Tax Liability 5,078.50 Loans & Advances:
10. Investments
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 speci?ed 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 ?led 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 ?nal disposal of the suit ?led by the investee company and the application made by minority shareholders under Section 397/398 before the Hon’ble High Court. The Company has ?led 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. 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. 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). 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 Previous Year No. of Wt. Options average exercise price ( * ) 7,309,500 177.10
ESOP II :
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 Previous Year No. of Wt. Options average exercise price ( * ) -
-
-
860,000 860,000
179.86 179.86
-
-
GPL ESOP
This Year No. of Wt. average Options exercise price ( * ) 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 Previous Year No. of Wt. Options average exercise price ( * ) 442,700 442,700 620.00 620.00
442,700 39,000 403,700
620.00 620.00 620.00
(*) 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. Modi?cation of the ESOP scheme : 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. The exercise period of unvested options of retiring employees increased from 6 months to 2 years. 3. The options granted to the employees of participating company shall continue in case of restructuring including sale of shares of participating Company.
7,799,950
190.43
2,100,000 119,250 5,580,700
91.84 284.45 235.48
340,000 835,450 150,000 835,000 7,799,950
284.60 276.70 254.45 209.87 190.43
80
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS (contd.)
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 pro?t and earnings per share would have been as per the pro forma amounts indicated below. This Year Previous Year Rs. Lac Rs. Lac Net Pro?t (as reported) Less : Stock based compensation expense determined under fair value based method (Pro Forma) Net Pro?t (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 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: This Year Rs Lac 1,913.45 870.14 50.89 This Year Rs Lac 3,157.87 Previous Year Rs Lac 1,785.95 763.43 50.87 Previous Year Rs Lac 3,433.55
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 pro?t & loss account Future lease payments - Within one year - Later than one year and not later than ?ve years Lease taken by the group b) Operating Lease: The Company’s signi?cant leasing arrangements are in respect of operating lease for land, of?ce premises, residential premises, machinery and storage tanks. The agreegate lease rentals paid by the Company are charged to pro?t & loss account Period Lease payment recognised in the pro?t & loss account Future lease commitments - Within one year - Later than one year and not later than ?ve years 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: 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 This Year Rs Lac 440.44 Previous Year Rs Lac 418.17
2,665.86 17,651.48 Amt. Rs.
2,645.00 8,502.00 Amt. Rs.
3,484.95 6,622.90
3,347.89 3,632.33
6.39
2.82
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 ?nanced 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 ?nancial statements. 16 Leases: Leases granted by the group 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
399.87 323.41
412.53 336.07
Period
Within one year Later than one year and not later than ?ve years
Godrej Industries Limited — Consolidated Account
SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS (contd.)
17. Hedging Contracts The group uses forward exchange contracts to hedge its foreign exchange exposure relating to the underlying transactions and ?rm 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) Details Total number of contracts outstanding Foreign currency value - US Dollar (million) - Euro (million) Details Uncovered Foreign exchange exposure as at the year end - US Dollar (million) - Euro (million) - GBP (million) 18. Turnover This Year Rs Lac i) ii) iii) iv) v) vi) vii) 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 539.83 180.20 2,494.50 2,230.18 717.84 145.52 12,604.92 18,912.99 Previous Year Rs Lac 948.01 963.18 6,679.45 1,352.69 45.10 84.87 13,949.39 24,022.69 This Year Previous Year Purchase Sale Purchase Sale 1 1,040 6 4,500 19. Exceptional Items This Year Rs Lac Included under Other Income i) Pro?t 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
Forward Exchange contracts This Year Previous Year Purchase Sale Purchase Sale 31 9.47 9 1.85 2.00 24 10.04 6 2.42 0.50
20. Pro?t & Loss Account a) Exchange differences recognised in the Pro?t & 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 Pro?t & 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 pro?t after tax excluding extraordinary items c. Net pro?t 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. Nos.
319,758,602 317,624,892
319,758,602 319,758,602
ii) Un-hedged foreign currency exposures This Year Purchase Sale Previous Year Purchase Sale
Nos.
318,247,978
319,758,602
Rs. 'lac Rs. 'lac
20,324.72 20,324.72
9,024.68 11,147.00
13.78 0.04 -
8.42 0.03
2.08 0.04 -
3.56 0.17 -
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.
82
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 signi?cant in?uence 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 Holding Company Fellow Subsidiaries Associate/ Joint Venture Companies 945.78 1,327.34 687.92 1,087.79 4.16 89.81 198.38 105.57 178.89 397.27 15.40 772.04 1,991.57 267.96 174.51 2.24 2.26 27.68 167.75 2,895.51 1,854.93 39,331.56 20,357.72 4,202.30 405.00 17.44 405.00 22.30 175.00 16.00 175.00 4.72 187.14 450.29 319.23 2,156.00 2,156.00 1,431.21 2,225.00 Key Management Personnel 20.16 173.00 23.99 2.40 2.17 147.26 135.17 92.40 1,830.76 1,258.80 2.23 4.17 Relative of Key Management Personnel 40.00 100.00 193.76 117.33 264.03 729.47 87.07 55.74 Enterprises over which Key Mangement Personnel exercise signi?cant in?uence 13.53 49.28 1,218.72 1.99 2.39 0.49 0.84 3.50 31.92 71.33 12.61 9.65 32.55 0.12 Rs. Lac Total
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
19.88 29.09 140.13 88.22 76.84 141.57 233.17 242.00 0.27 0.39 0.12 1.11 30.90 1,656.58 1,604.75 7,334.07 2,340.03 4,291.80 302.97 29.93 212.64 90.06 -
7.69 2.13 0.89 52.57 21.73 8.00 8.00 3.11 0.13 0.27 6.84 -
979.19 1,405.71 140.13 148.38 173.00 23.99 1,983.48 1,231.35 233.17 346.16 89.81 198.38 105.57 178.89 397.54 8.08 15.52 1.11 778.96 2,023.36 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 22.30 175.00 16.00 175.00 302.97 2.23 4.17 20.44 226.85 695.75 416.25 2,156.00 2,156.00 1,431.21 2,225.00
84
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS (contd.)
c) The signi?cant Related Party transactions are as under:
Nature of Transaction 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 Purchase of Fixed Assets - Godrej & Boyce Mfg. Co. 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. Commission received - Godrej Hershey Ltd. - Godrej Consumer Products Ltd. Licence fee / Storage income - Godrej Consumer Products Ltd. - Compass BPO Ltd. - Godrej Saralee Ltd. - Godrej Hershey Ltd. Other Income - Godrej Consumer Products Ltd. - Godrej Hershey Ltd. - Godrej Saralee Ltd. 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. 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 Advance given - Godrej & Boyce Mfg. Co. Ltd. - Ms. M. Mahendran Loan given - Mr. A. Mahendran Loan repaid - Mr. A. Mahendran - Mr. Ravi Venkateswar Issue of equity shares - Godrej & Boyce Mfg. Co. Ltd. 302.97 This Year Rs. Lac 927.98 19.88 11.95 11.44 6.36 233.17 1,218.72 538.07 149.26 76.84 0.59 89.81 102.62 2.95 182.26 154.79 31.78 28.43 11.14 3.23 1.03 716.41 50.26 4.99 2.28 0.38 1,656.58 260.90 129.07 64.68 46.80 5.77 4.14 2.93 140.13 Previous Year Nature of Transaction Rs. Lac 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 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. 198.38 Inter Corporate Deposits - Repayment Received - Swadeshi Detergents Ltd. - Godrej Hershey Ltd. This Year Rs. Lac 2.24 21.56 8.00 6.12 405.00 405.00 16.00 2,895.51 7,334.07 65.47 64.38 53.36 53.36 31.14 132.79 117.59 105.22 241.34 211.36 199.78 194.83 177.08 149.46 78.66 130.49 84.74 7.41 Previous Year Rs. Lac 3.50 147.26 2.26 8.00 167.75 175.00 175.00 1,854.93 2,340.03 23.78 71.33 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
173.43 Dividend income 5.46 - Godrej Consumer Products Ltd. 211.72 172.69 238.14 84.75 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.
87.07 8,610.00 7,000.00 -
53.57 2.17 4,291.80 4,202.30 31,689.26 3,440.00
Shares in Associate Compnay acquired under a scheme of arrangement - Godrej Consumer Products Ltd.
4,747.72
-
85
86
(Rs. lac)
Chemicals This Year 53827.63 48012.35 100.50 308.95 53928.13 48321.30 (100.50) (308.95) 53827.63 48012.35 (44.52) 24592.46 17349.22 165.47 3171.31 (1561.80) (300.16) 11431.97 10527.95 6233.85 32022.48 1958.74 546.79 0.15 32569.27 1958.89 (546.79) (0.15) 32022.48 1958.74 19490.78 16063.87 1.47 92.52 19492.25 16156.39 (1.47) (92.52) 19490.78 16063.87 17727.17 96.76 17823.93 (96.76) 17727.17 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 51755.68 378122.29 35.19 5663.72 51790.87 383786.01 (35.19) (5663.72) 51755.68 378122.29 6076.84 50047.31 Previous Year This Year Previous Year This Year Previous Year This Year Previous Year This Year Animal Feed Veg Oils Estate & Property Development This Previous Year Year Household Beverages & Foods Insecticides This Previous This Previous Year Year Year Year Finance & Investments This Previous Year Year Others Total Previous Year 361344.61 7529.00 368873.61 (7529.00) 361344.61 37943.99 3638.26 173369.69 148857.11 1360.64 18682.70 7.77 3184.60 927.16 0.00 310.09 423.55 54632.79 0.00 3275.18 2711.15 2730.93 474.72 0.00 6238.98 9034.76 9769.19 135345.32 140208.92 32446.88 1792.64 17.91 664.75 1,917.97 6902.16 2521.63 (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 1138.86 9411.72 49.94 359.88 179.75 28.38 222.27 331.96 245.96 155.50 59.98 1299.35 993.78 4728.40 288.87 5017.27 Total This Year Previowus Year 283339.85 270259.70 94782.44 91084.91 378122.29 361344.61 (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 6471.04 179.63 6650.67 4248.24 454.53 4702.77 This Year Previous Year 432449.01 412944.23 5116.29 4851.94 437565.30 417796.17
SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS (contd.)
23. Segment Information
Godrej Industries Limited — Consolidated Account
Information about primary business segments
(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) Pro?t before tax Taxes Add : Extra Ordinary items (Net of Tax) Add: Prior Period items Pro?t after taxes Share of pro?t in associates Pro?t before Minority Interest Share of Minority Interest Net Pro?t 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
India Outside India Total
Notes: 1. The Company has disclosed Business Segment as the primary segment. Segments have been identi?ed 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, re?ned glycerine, Alfa Ole?n 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 ?sh. 4. Veg oils segment includes the business of processing and bulk trading of re?ned 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 re?ned 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.
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS (contd.)
24. Employee Bene?ts
The amounts recognised in the Company’s ?nancial 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 Bene?ts 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 Bene?ts Paid Amalgamations Settlements Fair value of Plan Assets at the end of the year 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 d) Amounts Recognised in the statement of Pro?t 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 ?nancial 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.) 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% 1,872.84 143.01 (66.31) 1,035.75 (139.62) 2,978.29 3,369.53 2,985.39 384.14 173.43 233.20 (143.01) 31.28 8.60 303.50 209.32 1,806.12 144.69 48.68 83.76 (113.05) 1,872.84 3,029.24 1,882.86 1,146.38 172.37 228.76 (144.69) 0.87 257.31 96.01 14.20 8.75 (11.03) 0.86 12.78 18.33 7.83 19.29 45.45 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 -
The estimates of future salary increases, considered in actuarial valuation, take account of in?ation, 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 Godrej Agrovet Limited Godrej Properties Limited Ensemble Holdings & Finance Limited Godrej International Limited Natures Basket Limited Godrej Oil Palm Ltd.
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 pro?t/(Loss) of the subsidiary company so far it concerns the members of the Company A. For the ?nancial 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 ?nancial 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
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%
7,050,000 (See note 7,050,000 1 below) 10 100.00%
Rs. lac
Rs. lac
Rs. lac
Rs. lac
Rs. lac
2,452.13 —
8,647.93 —
320.12 —
725.85 —
(624.07) —
B.
3,195.70 3,294.33
10,209.77 7,606.35
(347.58) 560.80
26,510.57 11,348.28
— —
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.
A.B. Godrej Chairman M. Eipe Executive Director & President (Chemicals) Mumbai, May 26, 2010
N.B. Godrej Managing Director 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 ?nancial 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: 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 and Pro?t & 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 ?x their remuneration. The retiring Auditors M/s. Kalyaniwalla & Mistry, Chartered Accountants, Mumbai are eligible for re-appointment. A certi?cate 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 speci?ed by the Board from time to time has made recommendations to the Board in respect of internal control systems, half-yearly & annual ?nancial 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 con?rm :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 ?nancial year and of the pro?t or loss of the Company for that period; that they have taken proper and suf?cient 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; that they have prepared the annual accounts on a going concern basis.
Total Income Pro?t Before Taxation (PBT) Less : Provision for Taxation Add : Extraordinary Income/(Expense)(Net) Pro?t 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
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 pro?tability. This represents the ful?llment 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 pro?tability. Despite almost-?at sales volumes, pro?tability grew due to expansion of contribution margins and control over ?xed 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 dif?cult 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 ef?cient 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 ?sh 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 pro?tability. 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 pro?tability. 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-speci?c selective herbicides, synthesis of intermediates, and innovation of a next generation PGR for cereals. FINANCE AND INFORMATION SYSTEMS: Your Company managed treasury operations very ef?ciently. Excellent treasury management resulted in your Company procuring funds at a signi?cantly 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 of?ce. Implementation of SAP in your Company has already started to yield signi?cant business bene?ts. 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 Of?ces in addition to the accreditation for Information Security Management System in its Corporate Of?ce. 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 ?nancial 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 Pro?t & Loss Accounts, Directors’ Reports and Auditors’ Reports are attached to the Balance Sheet
c) d)
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 of?ce of the Company. For and on behalf of the Board of Directors Mumbai, May 17, 2010. N. B. GODREJ Chairman
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Annual Report 2009–2010
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 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 of?ce weekly off to power staggering day 4) Maintenance of power factor level at 0.98 5) Installation of wood ?re boiler in place of diesel ?re 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 bene?ts 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
II.
Nimin, a urea use ef?ciency enhancer being evaluated at the University of Mauritius 5. 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. (a) (b) (c) (d)
4.
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 For and on behalf of the Board of Directors N. B. GODREJ Chairman
Mumbai, May 17, 2010.
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 Pro?t and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These ?nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these ?nancial 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 ?nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial 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 speci?ed 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) 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. 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 bene?ts of future pro?tability of these companies being non-quanti?able at this stage, we are unable to determine the quantum of the possible diminution in the value of these investments / advances. 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 ?nancial 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 Pro?t 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 Pro?t 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 ?nancial 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 Pro?t and Loss Account, of the pro?t for the year ended on that date. iii) in the case of the Cash Flow Statement, of the cash ?ows 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 disquali?ed 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
2.
3.
4.
c)
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Godrej Agrovet Limited
Annexure to the Auditors’ Report
Referred to in paragraph (3) of our report of even date. 1) (a) (b) The Company has maintained proper records showing full particulars, including quantitative details and situation of ?xed assets. As explained to us, the Company has a program for physical veri?cation of ?xed assets at periodic intervals. In our opinion, the period of veri?cation is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies have been reported on such veri?cation. In our opinion, the disposal of ?xed assets during the year does not affect the going concern assumption. The Management has conducted physical veri?cation of inventory at reasonable intervals. In our opinion, the procedures of physical veri?cation of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. The Company is maintaining proper records of inventory. The discrepancies noticed on physical veri?cation 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. 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. 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. As informed to us the receipt of principal and interest, to the extent due, has been regular. 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. The Company has not taken any loans, secured or unsecured from companies, ?rms 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. 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. The payment of principal amounts and interest was also regular. 10) 11) Sales Tax Act (b) 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. 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: Nature of the Dues Excise duty & interest from April 2006 to March 2010 on account of Classi?cation matter. Sales tax & interest thereon from FY 199394 to 1995-96. Demand raised for AY 2007-08 Amount Forum where dispute is (Rs.’000) pending 119,648 Commissioner of Central Excise
(c) 2) (a) (b)
Name of Statute Excise Duty Act
(c)
34,151 Commissioner, Appellate Tribunal and High Court 2,929 Commissioner of Income Tax (Appeals)
3)
(a)
Income Tax Act
The Company does not have accumulated losses at the end of the ?nancial year and it has not incurred any cash losses in the current and immediately preceding ?nancial year. 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 ?nancial 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 bene?t 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 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. According to the information and explanations given to us, term loans were applied for the purpose for which the loans 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 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, no major fraud on or by the Company, has been noticed or reported during the year.
(b)
12)
(c) (d)
13)
14) 15)
(e)
(f) (g) 4)
16) 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, ?xed 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. 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.
18) 19) 20) 21)
5)
(b)
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. 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. 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. (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 Place: Mumbai Dated: May 17, 2010.
For and on behalf of KALYANIWALLA & MISTRY CHARTERED ACCOUNTANTS Firm Registration No.: 104607W E. K. IRANI PARTNER Membership No. 35646
7) 8)
9)
94
Annual Report 2009–2010
BALANCE SHEET AS AT MARCH 31, 2010
THIS YEAR Schedule SOURCES OF FUNDS SHAREHOLDERS’ FUNDS Share Capital Reserves & Surplus LOAN FUNDS Secured Loans Unsecured Loans DEFERRED TAX LIABILITY TOTAL APPLICATION OF FUNDS FIXED ASSETS Gross Block Less: Depreciation Net Block Capital work-in-progress/ Advances 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 TOTAL NOTES TO ACCOUNTS 15 8 9 2,619,376 58,837 2,678,213 1,175,156 3,955,234 1,471,616 40,770 1,512,386 2,757,409 5,134,089 6 7 1,334,991 935,349 92,384 55 1,490,590 3,853,369 1,198,601 868,572 311,922 60 1,890,640 4,269,796 5 1,200,117 445,810 754,307 76,054 830,361 1,949,717 1,094,958 423,515 671,443 41,523 712,966 1,663,714 3 4 580,675 400,263 980,938 102,004 3,955,234 290,294 2,036,165 2,326,459 124,050 5,134,089 1 2 121,188 2,751,104 2,872,292 121,188 2,562,393 2,683,580 Rs.’000 Rs.’000 PREVIOUS YEAR Rs.’000
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010
Schedule INCOME From Operations Other Income EXPENDITURE Materials Expenses Interest and Financial Charges Depreciation 10 11 Rs.’000 THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000 Rs.’000 14,077,595 53,042 14,130,637 12 13 14 11,418,404 2,248,445 151,082 63,384 13,881,315 249,322 250,623 54,300 — (22,046) 32,254 218,369 Pro?t/(Loss) on Discontinuing Operations for Live Bird Business Provision for Tax Current Tax Pro?t/(Loss) on Discontinuing Operations for Processed Chicken Provision for Tax Current Tax Fringe Bene?t Tax Profit/(Loss) on Discontinuing Operations for Retail Business Provision for Tax Fringe Bene?t Tax PROFIT BEFORE EXTRAORDINARY INCOME/EXPENSE Extraordinary Income (on transfer of) Part of Processed Chicken Business Provision for Current Tax Extraordinary Income (on transfer of) of Retail Business Provision for Current Tax Extraordinary Expenditure for Employee Bene?ts 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 (1,301) 12,935,470 271,418 13,206,888 10,512,600 2,093,989 259,668 72,185 12,938,442 268,446 310,155 115,603 9,112 10,280 134,995 175,160 —
PROFIT BEFORE TAX AND EXTRAORDINARY INCOME Pro?t on Continuing Operations Provision for Tax Current Tax Fringe Bene?t Tax Deferred Tax
— (1,301) —
— (19,800)
— — — —
— 195 (19,995) (21,910)
— — 217,068 — — — — — — — — — — 217,068 1,153,509 1,370,577
91 (22,001) 133,165 476,654 476,654 7,376 7,376 (17,568) (1,795) (14,099) (33,462) 583,732 598,782 1,182,514
24,236 4,120 21,707 1,320,514 1,370,577 17.91 17.91
12,118 2,060 14,828 1,153,509 1,182,514 10.99 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 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
The Schedules referred to above form an integral part of the Pro?t and Loss Account. Signatures to Pro?t & 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 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 GENERAL RESERVE As per last Balance Sheet Add : Transferred from Pro?t & Loss Account PROFIT AND LOSS ACCOUNT TOTAL SCHEDULE 3 : SECURED LOANS 150,000 121,188 150,000 121,188 From Banks Term Loans (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 8,102 — 8,102 131,000 21,707 152,707 1,320,514 2,751,104 1,392,125 122,343 1,269,782 5,602 2,500 8,102 116,172 14,828 131,000 1,153,509 2,562,393 From Banks Term Loans (Amount due within a year Rs. Nil, Previous year Rs. 2,036,165 thousand) Interest Accrued and due TOTAL 263 400,263 — 2,036,165 400,000 2,036,165 580,675 290,294 300,675 90,094 280,000 200,200 PREVIOUS YEAR THIS YEAR Rs.’000 Rs.’000 Rs.’000
SCHEDULE 5 : FIXED ASSETS GROSS BLOCK Additions Deletions DEPRECIATION For the Year Deductions/ Adjustments (Rs.’000) NET BLOCK As at As at 31.3.10 31.3.2009 123,092 20,373 107,835 406,218 16,594 1,276 23,304 28,842 644 26,128 1 754,307 76,054 830,361 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) 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 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 83,498 1,717 109,042 395,012 20,821 1,730 24,687 33,526 1,409 — 1 671,443 41,523 712,966
ASSETS Tangible Assets Freehold Land Leasehold Land Buildings Plant & Machinery Furniture & Fixtures Leasehold Improvements Of?ce & Other Equipments Vehicles Research Centre Intangible Assets SAP Software Technical Know-How Fees TOTAL Previous Year Capital Work-In-Progress/Advances
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
As at 31.3.10 123,092 21,176 179,451 710,431 30,470 3,611 36,762 45,986 1,906 27,232 20,000 1,200,117 1,094,958
Upto 1.4.2009 — 570 66,080 281,875 16,054 2,133 14,767 19,739 2,298 — 19,999 423,515 619,743
Upto 31.3.10 — 803 71,616 304,213 13,876 2,335 13,458 17,144 1,262 1,104 19,999 445,810 423,515
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
233 5,975 46,574 1,594 454 2,400 4,925 125 1,104 63,384 72,185
— 439 24,236 3,772 252 3,709 7,520 1,161
41,089 268,413
THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000 Rs.’000
103,800 16,275 198,729 63,542
103,800 16,275 198,729 63,542
500 398,395 —
500 398,395 70,500
209,950
81,700
311,510 710,405
142,830 612,225
555,521 1,238,669
506,035 1,050,845
90,042 810
79,954 810
2 1,949,076
2 1,663,072
96
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 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 (B) 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 [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)] 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 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 849,783 254,101 170,398 16,989 43,720 1,334,991 748,521 226,965 205,576 7,192 10,347 1,198,601 TOTAL SCHEDULE 9 : PROVISIONS Proposed Dividend Tax on Dividend Gratuity Leave Encashment TOTAL SCHEDULE 10 : INCOME FROM OPERATIONS Sales 218,078 35,597 253,675 717,271 970,946 35,597 935,349 204,216 59,970 264,186 664,356 928,542 59,970 868,572 Less : Excise Duty recovered on Sales Net Sales Claims and Compensations Financial Operations Dividend on Investments (Gross) Interest (Gross) (Tax at Source Rs. 22,245 thousand; Previous year Rs. 19,533 thousand) TOTAL SCHEDULE 11 : OTHER INCOME Pro?t on sale of Investments Miscellaneous Income 65,783 20,475 33,350 236,586 TOTAL SCHEDULE 12 : MATERIALS a) RAW MATERIALS CONSUMED Opening stock 6,126 92,384 55 41,986 311,922 60 Add : Purchases during the year Less : Sales during the year Less : Closing Stocks b) 1,213,990 27,109 1,241,099 27,109 1,213,990 1,456,629 66,452 1,523,081 66,452 1,456,629 c) PURCHASE FOR RESALE INVENTORY CHANGE Opening Stock Finished Goods Stock under cultivation Poultry Stock Less : Transferred on sale/demerger of business 25,060 122,100 397 57,700 93,190 201,600 419 64,366 Less : Closing Stock Finished Goods Stock under cultivation Poultry Stock 254,101 16,989 170,398 441,488 71,343 1,490,590 3,853,369 74,436 1,890,640 4,269,796 (1,755) 11,418,404 226,965 7,192 205,576 439,733 (42,793) 10,512,600 226,965 7,192 205,576 439,733 439,733 224,847 10,983 191,753 427,583 30,643 396,940 748,521 10,915,477 11,663,998 58,578 11,605,420 849,783 10,755,637 664,522 666,955 10,117,700 10,784,655 187,507 10,597,148 748,521 9,848,627 706,766 53,042 53,042 235,376 36,042 271,418 152,526 159,752 14,077,595 93,270 100,234 12,935,470 7,226 6,964 13,916,059 13,916,059 1,784 12,834,626 12,834,626 610 Rs.’000 THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000 1,235,930 — — 57 1,177,742 1,177,799 111,962 93,685 2,619,376 213,181 — 11,700 — 1,062,442 1,074,142 107,820 76,473 1,471,616
316 326 642 1,949,717
316 326 642 1,663,714
24,236 4,120 10,826 19,655 58,837
12,118 2,060 6,444 20,148 40,770
(C)
(D) (E)
97
Godrej Agrovet Limited
SCHEDULES ATTACHED TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED ON MARCH 31, 2010
Rs.'000 SCHEDULE 13 : EXPENSES 1. 2. 3. 4. 5. 6. 7. 8. 9. Salaries, Wages, Bonus, Gratuity and Allowances Contribution to Provident Fund and Other Funds and Administration Charges Employee Welfare Expenses Processing charges Consumable Stores Power and Fuel Rent Rates and Taxes Repairs & Maintenance Building Plant & Machinery Other assets 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. Insurance Postage, telephony and stationery Auditor's Remuneration Legal & Professional Fees Freight, Coolie and Cartage Discount, Commission and Selling Expenses Advertisement and Publicity Travelling Expenses Bad Debts/Advances written off (Write Back)/Provision for Doubtful Debts and Advances Loss on Sale of Investments Loss on Sale of Fixed Assets/Write off Research Expenses General Expenses Less: Shared Expenses recovered TOTAL SCHEDULE 14 : INTEREST AND FINANCIAL CHARGES (a) Interest paid on ?xed loans i) ii) Banks Inter Corporate Deposits 130,340 — 130,340 (b) Interest paid on other loans i) ii) (c) Banks Others 597 5,157 5,754 Other Financial Charges TOTAL 14,988 151,082 3,915 3,131 7,046 6,131 259,668 ii) 236,909 9,582 246,491 h) g) 2,755 13,985 5,562 22,302 8,571 27,727 4,956 18,496 95,563 635,678 4,893 81,948 39,212 (43,412) 20,500 14,077 5,976 80,603 2,264,045 (15,600) 2,248,445 3,633 22,646 3,570 29,849 5,701 29,667 4,440 28,552 102,263 524,249 11,710 74,825 24,072 67,286 — 1,747 1,065 75,531 2,109,964 (15,975) 2,093,989 f) (ii) (iii) 2) (b) d) 478,404 27,002 38,317 441,761 41,331 165,748 42,272 12,118 378,758 20,078 35,355 446,636 36,843 164,528 39,533 7,275 c) b) THIS YEAR PREVIOUS YEAR Rs.'000 Rs.'000 SCHEDULE 15 : NOTES TO ACCOUNTS 1 SIGNIFICANT ACCOUNTING POLICIES: a) The ?nancial 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. 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. 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. Depreciation/Amortisation 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. 1) Depreciation is provided on the straight line method at the rates speci?ed in schedule XIV to the Companies Act, 1956, except for computer hardware which is depreciated over its estimated useful life of four years. Amortizations (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) e) 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. Grants/Subsidies related to speci?c ?xed assets are shown as a deduction from the gross value of the asset concerned in arriving at its book value. Grants/Subsidies related to revenue are presented as a credit to the pro?t and loss statement or are deducted in reporting the related expense. Asset type Leasehold Land Leasehold improvements and equipments 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
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. 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. Employee Bene?ts: i) Short-term employee bene?ts (payable wholly within twelve months of rendering the service): Short-term bene?ts 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. Post-employment bene?ts: De?ned 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 Pro?t 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 de?ciency shall be made good by the Company. The Company's PF does not have any existing De?cit 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 de?ciency 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. De?ned Bene?t Plans: The Company's gratuity and leave encashment/longterm compensated absences schemes are de?ned bene?t plans. The Company's liability for the de?ned bene?t 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 bene?t 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 bene?t 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 Pro?t and Loss Account. Terminal Benefits: All terminal benefits including voluntary retirement compensation are fully written off to the Pro?t and Loss Account. i) Miscellaneous expenditure: i) ii) j) Non-Compete fee is amortised over a period of ?ve years or the period of the agreement (wherever applicable). Front-end fee paid on loans raised from ?nancial institutions is amortized over the period of the loan. THIS YEAR Rs.'000 3 4 CAPITAL COMMITMENTS: The estimated value of contracts remaining to be executed on Capital Account to the extent not provided for. SECURED LOANS: a) b) c) 29,030 PREVIOUS YEAR Rs.'000 17,357
Term Loans from Banks are secured by an equitable mortgage of speci?ed immovable properties and hypothecation of speci?ed movable assets of the Company. Cash Credit and other facilities from banks are secured by hypothecation of stocks and book debts of the Company (both present and future). 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). 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. 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 con?rmation 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.
Revenue is recognized when goods are despatched to external customers. Sales are inclusive of realized exchange ?uctuations on export receivables but net of returns, sales tax, rebates, etc. Revenue expenditure on Research and Development is charged to Pro?t 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". 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. 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 Pro?t and Loss Account. 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 suf?cient 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. 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. 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 con?rmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. THIS YEAR Rs.'000 PREVIOUS YEAR Rs.'000 5,922
k)
5
FIXED ASSETS: a)
l)
b)
m)
6
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 ?nancial involvement in, and the future pro?tability 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).
n)
o)
7
p)
2
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 ?led 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 ?led 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 classi?cation 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 ?led by Processors for claiming various expenses
2,929
34,151
35,674
119,648
83,112
448,706 55,187
125,839 61,927
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 ?elds 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
4,170
4,170
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 13 70 378 64 11,906 11,906 4,197 65,370 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 12,676 317 70 5 15 9,376 9,376 4,197 14 4,197 37,605 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 Unit THIS YEAR Quantity Value Rs. '000 39 477 PREVIOUS YEAR Quantity Value Rs. '000 63,292
MT
5,151
KL MT KL
535 6,390 2,536 -
TOTAL RAW MATERIALS CONSUMED: Cakes & Brans Extractions Others
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
MT MT
221,422 268,286
1,721,242 4,437,535 4,596,860 10,755,637
248,483 400,129
2,027,835 4,404,741 3,416,051 9,848,627
TOTAL 15
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 cancellable operating leases for each of the following periods: THIS YEAR PREVIOUS YEAR Rs. '000 Rs. '000 Not later than one year Later than one year and not later than ?ve years Later than ?ve years Lease payments recognised in the statement of Pro?t & Loss for the period : Minimum lease payments
Item a) Animal Feeds 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
i. ii. iii.
4,550 10,658 10,112
8,604 16,273 6,006
9
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 de?ned 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. DEFERRED TAX: The tax effects of signi?cant 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 THIS YEAR Quantity Value Rs. '000 PREVIOUS YEAR Quantity Value Rs. '000
b.
466
3,252
16
LICENSED & INSTALLED CAPACITY AND ACTUAL PRODUCTION:
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 -
10
b) Tissue Culture Plants c) Agri Inputs (i) Plant Growth Promoter Liquids (ii) Plant Growth Regulator Granules
17
11
SALES TURNOVER: Animal Feeds Agro Inputs Integrated Poultry Business Retail Segment Parent Chicks Others
12
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
MT
(a) COMPUTATION OF PROFIT FOR THE PURPOSE OF MANAGERIAL REMUNERATION: THIS YEAR PREVIOUS YEAR Rs.'000 Rs.'000 Pro?t after tax as per Pro?t 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)/Pro?t on sale of Fixed Assets (net) 14,077 1,747 20,500 (Loss)/Pro?t on sale of Investments 99,851 240,653 Less : Depreciation as per Section 350 of the Companies Act, 1956 63,384 72,185 Less : Pro?t on transfer of business 484,029 Less : Pro?t on sale of Investments 235,376 63,384 791,591 Net Pro?t / (Loss) for the purpose of Directors' remuneration 5% thereof MAXIMUM REMUNERATION PERMISSIBLE UNDER THE ACT (Computed on the basis of inadequacy of pro?ts as per Schedule XIII- Part II) 253,535 12,677 12,677 32,794 1,640 4,200
100
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 (b) MANAGERIAL REMUNERATION a) Salaries b) Contribution to Provident Fund c) Estimated monetary value of perquisites d) 18 Directors' Sitting Fees 12,320 527 110 12,957 91 13,048 8,760 412 3 9,175 75 9,250 THIS YEAR PREVIOUS YEAR Rs '000 Rs '000 Change in plan assets Fair value of plan assets as at 1st April 2009 Expected return on plan assets Contributions Bene?ts 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 27,760 2,220 6,450 (9,824) 2,718 29,324 40,405 29,324 11,081 2,475 2,736 (2,221) 8,097 11,087 28,539 2,283 7,000 (8,424) (1,639) 27,760 34,203 27,759 6,444 3,704 2,973 (2,283) 422 4,816
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. AUDITORS' REMUNERATION: Audit fees Audit under Other Statutes Tax representation before Authorities Management Consultancy Certi?cation Reimbursement of Expenses TOTAL 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
19
20
295,178 18,832 314,010 742 806 1,548 7,320 7,320
326,518 4,804 940 332,262 5,928 1,679 7,607 15,173 15,173 25 26
% % 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 in?ation, 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. Research & Development Expenditure of revenue nature charged to the Pro?t and Loss Account amounts to Rs.21,222 thousand (previous year Rs.12,999 thousand). The amount of exchange difference included in the Pro?t 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 pro?t and loss account of subsequent accounting periods Rs. 450 thousand (Previous Year Rs. Nil thousand). 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 ?nancial statements. EARNINGS PER SHARE: Pro?t / (Loss) after tax before extraordinary income Pro?t/ (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 17.91 17.91 10.00 10.99 10.99 48.17 48.17 10.00
21
22
27
23
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. De?ned Contribution Plans:
PREVIOUS YEAR Rs.'000 % 129,865 1% 9,718,762 99% 9,848,627 100 – – 36,843 100 36,843 100 28
24
THIS YEAR PREVIOUS YEAR Rs '000 Rs '000 Contribution to De?ned Contribution Plan, recognised as expense for the year are as under: Employers' Contribution to Provident Fund 19,503 9,827 II. De?ned Bene?t 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 de?ned bene?t 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 bene?cial to the employees. The following table sets out the funded status of the gratuity plan and the amounts recognised in the Company's ?nancial 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 Bene?ts 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
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 (A) 11,462,048 (158,553) 11,303,495 393,671 Agri (B) 1,292,906 1,292,906 191,791 For the year ended 31st March 2010 Integrated Other Unallocated Poultry Business Business (C) (D) (E) 1,410,030 67,222 (157,594) 1,252,437 26,137 67,222 7,715 (378,661) (151,082) 152,526 7,226 393,671 393,671 393,671 1,813,979 2,048,229 120,611 35,043 191,791 191,791 191,791 718,509 89,198 1,579 1,957 26,137 26,137 26,137 406,672 61,148 6,173 8,399 7,715 7,715 7,715 223,743 13,990 14,295 (369,991) 32,254 (402,245) (402,245) 3,470,543 1,534,413 34,721 3,689 Rs.'000 Total (A+B+C+D+E+F) 14,232,206 (316,147) 13,916,059 611,180 (370,528) (151,082) 152,526 7,226 249,322 32,254 217,068 217,068 6,633,448 3,746,977 163,084 63,384 Revenue Total Sales Less : Inter-segment External Sales Result Segment Result Unallocated expenditure net of unallocated income Interest expenses Interest Income Dividend Income and Pro?t on sale of Investments Pro?t before taxation and exceptional items Provision for taxation Pro?t after taxation and before exceptional items Exceptional Items Exceptional item (net of Tax) Prior years adjustments Pro?t after taxation and exceptional items Other Information Segment assets Segment liabilities Capital expenditure Depreciation Animal Feeds (A) 9,995,075 -255331 9,739,745 300,245 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 1,733,834 234,635 156,870 (21,910) 7,044 5,747 (255,492) (259,668) 93,270 242,340 300,245 300,245 156,870 (21,910) 156,870 (21,910) 7,044 7,044 5,747 5,747 (179,551) 135,281 (314,832) 450,567 450,567 300,245 1,650,011 963,693 42,638 27,334 156,870 (21,910) 599,008 72,036 1,353 2,215 6,317 3,567 7,044 479,197 69,177 11,180 13,508 Rs.'000 Total 13,089,956 (255,331) 12,834,626 6,646,476 79,734 5,747 235,457 11,545 282 14,544 135,736 3,682,803 2,846,450 17,963 11,016 Rs.'000 Total (A+B+C+D+E+F) 13,089,956 (255,331) 12,834,626 447,996 (255,492) (259,668) 93,270 242,340 268,446 135,281 133,165 450,567 450,567 583,732 6,646,476 3,962,901 79,734 72,185
Revenue Total Sales Less : Inter-segment External Sales Result Segment Result Unallocated expenditure net of unallocated income Interest expenses Interest Income Dividend Income and Pro?t on sale of Investments Pro?t before taxation and exceptional items Provision for taxation Pro?t after taxation and before exceptional items Pro?t after taxation and exceptional items Other Information Segment assets Segment liabilities Capital expenditure Depreciation
(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
(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 ?xed assets 79,734
Outside India 16,260 16,260 -
30
RELATED PARTY DISCLOSURES: Related party disclosures as required by AS - 18, "Related Party Disclosures", are given below 1. Relationships : (i) Holding Companies: 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. (ii) Subsidiary Companies: Golden Feed Products Ltd. Cauvery Palm Oil Ltd. Godrej Oil Palm Ltd. Natures Basket Ltd. (upto June 30, 2009) (iii) Fellow Subsidaries: 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) Joint Ventures: ACI Godrej Agrovet Private Ltd. Godrej Tyson Foods Ltd. Godrej Gold Coin Aquafeed Ltd. Godrej IJM Palm Oil Ltd. (v) Associates: Creamline Dairy Products Ltd. Polchem Hygiene Laboratories Private Ltd. Al Rahaba International Trading LLC (vi) Other related parties where persons mentioned in (viii) below exercise signi?cant in?uence: Avesthagen Ltd. 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 signi?cant in?uence (and their relatives): Mr. A.B. Godrej Mr. N.B. Godrej
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), (ii), (iii), (iv),(v) and (vi) above
Nature of Transactions Holding Subsidiaries Fellow Joint Companies Subsidiaries Ventures (i) 843 633 (ii) 70,000 168,681 500 (iii) 50,000 (iv) 252 Associates (v) Rs.'000 Other related Parties (vi)
1 2 3 4 5 6 7 8 9
Purchase / Transfer of ?xed assets Sale of Business / Investments Investment in share capital Advances given during the year Intercorporate deposits placed during the year Intercorporate deposits taken during the year Loan Given Sale of materials / ?nished goods Sundry deposits placed
464,832 73,943 93,462 27,764
30,100 19,825
230,000 86,600 580,000 53,932 45,500 24,222 4,875 8,636 55,418 55,892 8,135 (636) 125,000 1,241,709 1,264,135 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 17,599 232 121,872 124,656 11 26 40,000
10 Purchase of materials / ?nished goods 11 Expenses charged to other companies 12 Expenses charged by other companies 13 Interest income on loan given 14 Interest expense on intercorporate deposits taken 15 Interest income on intercorporate deposits placed 16 Intercorporate deposits written off 17 Dividend Income 18 Dividend paid 19 Outstanding Loans Receivable 20 Outstanding receivables, net of (payables) 21 Guarantees issued in favour of 22 Gurantees Outstanding
6,811 3,154 369 318 1,856 22,692 21,627
1,008 7,617 282 8,243 7,373
1,722
3,140 5,022
2,016 3,888 2,057 7,226 6,680 71,575 169,607 146,498 19,200 19,200 125,843 129,039 -
9,113 9,113 (541) (1,360) 15,906 115,245 19,255 343
4,355 49,796
(3,246) 33,213
(ii) Details relating to persons referred to in items 1 (vii) & (viii) above THIS YEAR PREVIOUS YEAR 12,957 9,175 586 586 15 20
1 2 3
Remuneration Dividend Paid Director's Sitting Fees
102
Annual Report 2009–2010
SCHEDULES ATTACHED TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED ON MARCH 31, 2010
3. Signi?cant 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) Natures Basket Ltd. Investment in Share Capital Cauvery Palm Oil Ltd. Natures Basket Ltd. 500 ACI Godrej Agrovet Pvt. Ltd. Godrej Gold Coin Aquafeed Ltd. Loan Given Al Rahba International Trading LLC Godrej Gold Coin Aquafeed Ltd. Godrej Tyson Foods Ltd. Godrej & Boyce Mfg. Co. Ltd. 843 633 Godrej Tyson Foods Ltd. Godrej Tyson Foods Ltd. — Godrej Tyson Foods Ltd. 200,000 226 Godrej IJM Palm Oil Ltd. 464,832 27 17,640 27,764 70,000 168,681 Amount Fellow Subsidiaries (iii) Natures Basket Ltd. Amount Joint Ventures (iv) 50,000 Amount Associate Companies (v) Amount Other related Parties (vi) Bahar Agrochem & Feeds Private Ltd. 30,100 Godrej Tyson Foods Ltd. 49,485 Bahar Agrochem & Feeds Private Ltd. 19,825 Amount
40,832 24,458 34,990
125,000 Sale of Business
1
Purchase/Transfer of ?xed assets
2
Intercorporate deposits taken during the year
Godrej Industries Ltd. 230,000
Ensemble Holdings & Finance Ltd. Cauvery Palm Oil Ltd. 25,500 Natures Basket Ltd. 61,600 Godrej Properties Ltd. 350,000 Godrej Hi Care Ltd. 30,000 Godrej Hershey Ltd.
45,500 Aadhar Retailing Ltd. 53,932 40,000
2
Intercorporate deposits placed during the year
2
Sale of materials/?nished goods/debtors
Godrej Industries Ltd.
Godrej Oil Palm Ltd. Golden Feed Products Ltd. 24,222 —
Godrej Gold Coin Aqua Feed Ltd. Godrej IJM Palm Oil Ltd. Godrej Tyson Foods 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
—
ACI Godrej Agrovet Pvt. Ltd. 3 Sundry Deposits Placed Godrej & Boyce Mfg. Co. Ltd. Godrej Industries Ltd. 4 Interest Income on Intercorporate Deposits 3 2,100 6,808 1,054 Godrej Oil Palm Ltd. Cauvery Palm Oil Ltd. Natures Basket Ltd. 2,709 Godrej Hershey Ltd. 431 Godrej Hi Care Ltd. 2,555 Godrej Properties Ltd. 2,467 Natures Basket Ltd. 4,462 Godrej Consumer Products Ltd. 8,378 — Godrej Tyson Foods Ltd. 2,082
Aadhaar Retailing Ltd. 2,057
842
964 2,016 Godrej Gold Coin Aquafeed Limited 334 Polchem Hygiene Laboratories Pvt. Ltd. 42 19,829 Bahar Agrochem & Feeds Pvt. Ltd. 52,723 121,872
5
Purchase of materials/ ?nished goods
Godrej & Boyce Mfg. Co. Ltd.
Godrej Oil Palm Limited
369
898
124,656
103
Godrej Agrovet Limited
SCHEDULES ATTACHED TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED ON MARCH 31, 2010
3. Signi?cant Related Party Transactions (Contd.)
Nature of Transactions
Holding Companies (i)
Amount Subsidiaries (ii) Cauvery Palm Oil Ltd. Golden Feed Products Ltd.
Amount Fellow Subsidiaries (iii) Godrej Hershey Ltd. 258 413
Amount Joint Ventures (iv) Godrej Tyson Foods Ltd. 15 Godrej IJM Palm Oil Ltd. — Godrej Gold Coin Aquafeed Ltd. 28 2,992 Godrej IJM Palm Oil Ltd.
Amount Associate Companies (v) 10,531 Aadhaar Retailing Ltd. 7,776
Amount Other related Parties (vi)
Amount
823
6
Expenses charged to other companies
Golden Feed Products Ltd.
— Godrej Hershey Ltd 107 52,459 Godrej Consumer Products Ltd. 52,475 2,959 3,311
4,268 11,080 Aadhaar Retailing Ltd. 6,371 8,265 Creamline Dairy Products Ltd.
Bahar Agrochem & Feeds Pvt. Ltd. 17,599 25 Kritika Agro Farm Chemical & Engineering Industries Pvt. Ltd.
11
Godrej Oil Palm Ltd.
16 Godrej Tyson Foods Ltd. Godrej Hi Care Ltd. — ACI Godrej Agrovet Pvt. Ltd. 229 AL Rahba International Trading LLC 49 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.
Cauvery Palm Oil Ltd. Godrej Industries Ltd. 318 1,856
13,267 72,686 1,283 1,606 545 230
26
Godrej Properties Ltd. Godrej Sara Lee Ltd. Natures Basket Ltd. 8,135 Godrej Consumer Products Ltd. (636) Natures Basket Ltd. Godrej Hi Care Ltd. Godrej Infotech Ltd.
31
7
Expenses charged by other companies
Godrej Industries Ltd.
18,372 Godrej Oil Palm Ltd. 21,344
16,369 Aadhaar Retailing Ltd. 924 177 (3,980) 2,309 232
Godrej & Boyce Mfg. Co. Ltd.
4,319 283
8
Interest income on loan given Interest expense on intercorporate deposits taken Dividend paid
—
9,252 1,955
9
Godrej Industries Ltd. 1,722 9,113
Ensemble Holdings & Finance Ltd. Ensemble Holdings & Finance Ltd. Creamline Dairy Products Ltd. Polchem Hygiene Laboratories Pvt. Ltd. 6,680 6,680 546
10
Godrej Industries Ltd.
9,113 8 Dividend Income
Outstanding Loans Receivable
Godrej Gold Coin Aquafeed Ltd. Godrej Tyson Foods Ltd. (323) Golden Feed Products Ltd. (1,360) Godrej Oil PalmLtd. 11,906 Godrej Hi Care Ltd. 9,376 (769) - Godrej Gold Coin Aquafeed Ltd. Godrej IJM Palm Oil Ltd.
72,100 (525)
11 9
Outstanding intercorporate — deposits receivable Outstanding receivables, net Godrej Industries of (payables) Ltd.
95,891 Creamline Dairy Products Ltd. 81,869 949
4,068 Bahar Agrochem & Feeds Pvt. Ltd. 1,738 Kritika Agro Farm Chemical & Engineering Industries Pvt. Ltd.
(3,246)
29,017
Godrej & Boyce Mfg. Co. Ltd.
(219)
14,008 Godrej Properties Ltd.
64
(13,132) Aadhaar Retailing Ltd.
4,197
104
Annual Report 2009–2010
SCHEDULES ATTACHED TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED ON MARCH 31, 2010
3. Signi?cant Related Party Transactions (contd.) :
Nature of Transactions Holding Companies (i) Amount Subsidiaries (ii) (1) Cauvery Palm Oil Ltd. Amount Fellow Subsidiaries (iii) 4,769 28,811 Amount Joint Ventures (iv) 15 Godrej Tyson Foods Ltd. — 5 ACI Godrej Agrovet Pvt. Ltd. 378 AL Rahba International Trading LLC 16 — 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 2,324 Polchem Hygiene Laboratories Pvt. Ltd. 35,597 5,073 4,558 65,370 37,605 Amount Associate Companies (v) Amount Other related Parties (vi) 51,754 287 Amount
Natures Basket Ltd.
— Godrej Sara Lee Ltd 63,051 Godrej Consumer Products Ltd. Godrej Hershey Ltd. Godrej International Ltd. Natures Basket Ltd.
(3,695)
Guraantees Issued
Guarantees outstanding
105
Godrej Agrovet Limited
SCHEDULES ATTACHED TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED ON MARCH 31, 2010
31. 32. Figures of the previous year have been regrouped & re-classi?ed wherever necessary to conform to the current year's classi?cation. INFORMATION REQUIRED TO BE FURNISHED UNDER PART IV OF SCHEDULE VI OF THE COMPANIES ACT, 1956: i) Registration Details Registration No. State Code Balance Sheet Date Capital raised during the year Public Issue Rights Issue Bonus Issue Private Placement iii) 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) Performance of Company Turnover Total Expenditure Pro?t before tax before extraordinary income Pro?t before tax after extraordinary income Pro?t after tax Earning Per Share before extraordinary Earning Per Share after extraordinary Dividend rate v) Generic Names of three principal products/services of Company Item Code No. Product Description (Rupees ’000) 14,130,637 13,881,315 249,322 249,322 217,068 17.91 17.91 20.00% (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 (Rupees ’000) Nil Nil Nil Nil 1. Name of the Subsidiary 16655 11 31/3/2010 Golden Feed Products Limited July 14, 2003 Cauvery Palm Oil Limited March 1, 2008 Godrej Oil Palm Limited August 18, 2006 STATEMENT REGARDING SUBSIDIARY COMPANY PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956.
2. Date on which it became a Subsidiary 3. Financial Year ending 4. The Company's interest in the Subsidiary as on 31.3.2010
ii)
March 31, 2010 March 31, 2010 March 31, 2010
a) Number of fully paid Equity Shares held b) Face Value 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 : i) Not dealt with in the Books of Account 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 Account of the Company ii) Dealt with in the Books of Account of the Company
50,000 Rs. 10 100% (Rs.’000)
34,20,000 Rs. 10 90% (Rs.’000)
56,400 Rs. 10 80% (Rs.’000)
-
-
-
-
-
-
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
23099010 Animal Feeds
106
Annual Report 2009–2010
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010
THIS YEAR PREVIOUS YEAR THIS YEAR PREVIOUS YEAR
Rs. (’000) Rs. (’000)
A. Cash Flow from Operating Activities : Net Pro?t Before Taxes(after extraordinary income) Adjustment for: Depreciation Loss on sale of ?xed assets Extraordinary Income: Pro?t on transfer of business Pro?t on Demerger — Exchange difference Dividend income Finance charges Interest income Interest expenses Provision for Doubtful Debts and Advances Loss on sales on investments Bad Debts Written off Operating Pro?t Before Working Capital Changes Adjustments for: Inventories Debtors and Other Receivables Creditors and Other Payables (136,389) 257,978 1,128,742 450 (7,226) — (152,526) 151,082 (43,412) 20,500 — 63,384 14,077
Rs. (’000)
Rs. (’000)
C. Cash Flow from Financing Activities : other ?nancial charges
Rs. (’000) Rs. (’000)
(2,326,460) 580,675 400,263 (151,082) (12,118)
Rs. (’000)
Rs. (’000)
(6,131) (258,200) 372,093 (253,538) (12,118)
249,322
718,733
Repayment of Borrowings Proceeds from Secured Borrowings Proceeds from Unsecured Borrowings
72,185 1,747 (484,029) (484,029) (152) (6,964) 6,131 (93,270) 253,538 67,286 (235,376)
Interest Paid Dividend Paid Dividend Tax Paid Net Cash used in Financing Activities
(2,060) (1,510,781)
(2,060) (159,952) (219,539)
311,922
Net increase in Cash and Cash equivalents Cash and Cash equivalents (Opening balance) Cash and Cash equivalents (Closing balance)
12,757
299,165
92,384
311,922
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 ?ows by operating, investing and ?nancing activities. Figures in brackets are out?ows/deductions. 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. Figures for the previous year have been regrouped/restated wherever necessary to conform to this year’s classi?cation.
39,212 85,542
334,864
— (418,905)
299,828
2 3
(97,382) (120,038) (463,541)
1,250,331
Cash Generated from Operations Direct Taxes paid (net of refund received) Net Cash Flow from Operating Activities B. Cash Flow from Investing Activities : Capital subsidy received Acquisition of ?xed assets Proceeds from sale of ?xed 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 Proceeds from Extraordinary Items; Proceeds from transfer of business/ demerger (Note 3) Net Cash used in Investing Activities after extraordinary item — (197,614) 2,759 79,500 (356,503) 50,000 — 152,526 7,226 (262,107) 1,585,194 (31,845)
(680,962)
(381,134) (134,800)
4
For and on behalf of KALYANIWALLA & MISTRY CHARTERED ACCOUNTANTS
For and on behalf of the Board
1,553,349
(515,934)
2,500 (95,850) 6,408 (85,900) (138,721)
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
30,100 73,737 6,964 (200,762)
— (262,107)
889,405 688,643
107
Golden Feed Products 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 ?nancial 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. Lac) This Year Total Income Loss before Taxation Add: Provision for Taxation Loss after Taxation Balance Brought Forward from previous year Balance Carried Forward to Balance Sheet REVIEW OF OPERATIONS 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 ?nancial year under review. HOLDING COMPANY Your Company continues to be a subsidiary of Godrej Agrovet Limited as de?ned under Section 4(1)(b) of the Companies Act, 1956. SUBSIDIARY COMPANIES The Company has no subsidiary companies during the year under review. DIRECTORS The Board of Directors of the Company presently comprises of the following Directors: 1. 2. 3. Mr. B. S. Yadav Dr. P. N. Narkhede Dr. S. L. Anaokar Mumbai, May 14, 2010 d) c) 1.61 1.61 (160.90) (159.29) Previous Year (2.22) (2.22) (158.68) (160.90) b) C) B) 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. 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. Directors’ Responsibility Statement Pursuant to the provisions contained in Section 217(2AA) of the Companies Act, 1956, the Directors of your Company con?rm: 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; 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 ?nancial year and of the pro?t or loss of the Company for that period; that they have taken proper and suf?cient 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; that they have prepared the annual accounts on a going concern basis.
HUMAN RESOURCES There are no employees in the Company. For and on behalf of the Board B. S. Yadav Director P. N. Narkhede Director
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 ?x their remuneration. The retiring Auditors M/s. Kalyaniwalla & Mistry, Chartered Accountants, Mumbai, are eligible for re-appointment and a certi?cate 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 quali?ed 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 ?nance will continue to be available to the Company for its working capital requirements from its holding company Godrej Agrovet Limited. 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.
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. B. C. Conservation of Energy The Company has not established any manufacturing facility this year. Technology absorption, adaptation and innovation Not Applicable since the Company does not have any manufacturing facility at present. Foreign Exchange earnings and outgo Your Company had no foreign exchange earning as well as outgo.
For and on behalf of the Board B. S. Yadav Director Mumbai, May 14, 2010 P. N. Narkhede Director
108
Annual Report 2009–2010
REPORT OF THE AUDITORS TO THE MEMBERS OF GOLDEN FEED PRODUCTS LIMITED
1. We have audited the attached Balance Sheet of Golden Feed Products Limited, as at 31st March 2010 and also the Pro?t and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These ?nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these ?nancial 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 ?nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial 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 speci?ed 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 ?nance will continue to be available to the Company for working capital requirements. 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. 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. The Balance Sheet, the Pro?t and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account. Mumbai, May 14, 2010 In our opinion, the Balance Sheet, the Pro?t 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 ?nancial 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 Pro?t 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 ?ows 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 disquali?ed 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. e)
2.
3.
5.
4.
b) c) d)
For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants Firm Registration No.: 104607W 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) The Company does not have any Fixed Assets and hence maintenance of records, physical veri?cation and disposal of ?xed assets does not arise. The Company does not have any inventories. (a) The Company has not granted any loans, secured or unsecured to companies, ?rms or parties covered in the register maintained under section 301 of the Companies Act, 1956. 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. 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. The Loan as aforesaid is interest free and the other terms and conditions are not prejudicial to the interest of the company. There is no schedule of repayment and hence the question of regular repayment does not arise. 13) 10) (b) 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. 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.
(b)
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 ?nancial year and also in the immediately preceding ?nancial year. 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, ?nancial 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 bene?t 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 ?nancial institutions. The Company has not taken any term loans during the year. 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 have outstanding 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.
(c)
11)
12)
(d) (e) 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, ?xed 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. 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.
14) 15) 16) 17)
5)
18) 19) 20) 21)
(b)
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. 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. 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. (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
7) 8)
9)
For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants Firm Registration No.: 104607W ERMIN K. IRANI Partner Membership No. 35646
Mumbai, May 14, 2010
109
Golden Feed Products Limited
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 This Year Previous Year Rs.’000 Rs.’000
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010
Schedule INCOME Sales Credit Balances Written Back This Year Previous Year Rs. ’000 Rs. ’000
1
500 500 11,906 12,406 25
500 500 9,376 9,876 25
413 413
4,417 4,417
2
413 413
6 43 18 67
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 (De?cit) Brought Forward DEFICIT CARRIED OVER TO BALANCE SHEET Earnings per share (Basic/Diluted ) in Rs. (Refer Note 4) NOTES TO ACCOUNTS
405 55 2 61 (310) 39 252 161 161 (16,090) (15,929) 3.22 4
55 4,467 54 63 4,639 (222) (222) (15,868) (16,090) (4.45)
3
3,961 3,961 (3,548) 15,929 12,406
6,305 6,305 (6,239) 16,090 9,876
4 The Schedules referred to above form an integral part of the Pro?t and Loss Account As per our Report of even date attached Signatures to Pro?t 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 B. S. YADAV Director P. N. NARKHEDE Director
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 ERMIN K. IRANI Partner Membership No. 35646 Mumbai, May 14, 2010 B. S. YADAV Director P. N. NARKHEDE Director
SCHEDULES TO THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010
This Year Rs.’000 SCHEDULE 1 : SHARE CAPITAL AUTHORISED 100,000 Equity Shares of Rs. 10 each 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 Considered Doubtful Other Debts TOTAL Less: Provisions for doubtful debts 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 1,450 3 2,427 81 3,961 1,045 2,437 2,823 6,305 (v) (i) (ii) (iii) (iv) 2) 4,157 4,157 413 4,570 4,157 413 4,467 4,467 4,467 4,467 (b) d) c) 500 500 b) 1,000 1,000 This Year Previous Year Rs.’000 Rs.’000 SCHEDULE 4 : NOTES TO ACCOUNTS 1. SIGNIFICANT ACCOUNTING POLICIES a) The ?nancial 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. 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. 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. Depreciation/Amortisation 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. 1) Depreciation is provided on the straight line method at the rates speci?ed in Schedule IV to the Companies Act, 1956, except for computer hardware which is depreciated over its estimated useful life of four years. Amortisations Asset type Leasehold Land Leasehold improvements and equipments Signages Technical Knowhow, technical knowhow fees of a capital nature Computer software Period Primary lease period Primary lease period or 16 years whichever is less 3 years
10 years 6.17 years
110
Annual Report 2009–2010
SCHEDULES TO THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010
e) Raw materials are valued at weighted average cost. 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 bene?ts to employees comprise payments under de?ned contribution plans like provident fund and family pension. Payments under de?ned contribution plans are charged to the pro?t and loss account. The liability in respect of de?ned bene?t schemes like gratuity and leave encashment bene?t on retirement is provided on the actual basis. g) h) Revenue is recognised when goods are despatched to external customers. 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 suf?cient 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. 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. Provisions are recognised in the accounts in respect of present probable obligations, the amount of which can be reliably estimated. This Year Previous Year Rs. Audit fees Reimbursement of Expenses TOTAL 3. 55,150 55,150 Rs. 55,150 55,150 A. Cash Flow from Operating Activities : Net Pro?t Before Taxes (after extraordinary income) Adjustment for: Provision for Doubtful Debts written (back)/off Advances written off Operating Pro?t Before Working Capital Changes Adjustments for: Debtors and Other Receivables Creditors and Other Payables Cash Generated from Operations Direct Taxes paid (net of refund received) Net Cash Flow from Operating Activities B. C. Cash Flow from Investing Activities: Cash Flow from Financing Activities: Proceeds from Unsecured Borrowings Net Cash used in 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 ?ows by operating, investing and ?nancing activities. Figures in brackets are out?ows/deductions. Figures for the previous year have been regrouped/restated wherever necessary to conform to this year’s classi?cation. 2,530 2,530 (9) 6 (3) (15,084) (15,084) (39) 45 6 (103) (2,347) (2,450) (2,539) (2,539) 15,191 (4,391) 10,800 15,045 15,045 (310) 61 (250) (89) 4,467 4,467 4,245 161 (222) Mumbai, May 14, 2010 5. 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 Part IV of Schedule VI of the Companies Application of Funds Net Fixed Assets Investments Net Current Assets Misc. Expenditure Accumulated Losses Performance of Company Turnover Total Expenditure Pro?t before tax Pro?t after tax Earning Per Share in Rs. Dividend rate
25 (3,548) 15,929 (Rupees ’000) 413 252 161 161 3.22 -
i)
Generic names of three principal products/services of Company Item Code No. 23099010 Product Description Animal Feeds
For and on behalf of the Board B. S. YADAV Director P. N. NARKHEDE Director
j) 2.
AUDITORS’ REMUNERATION
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010
Rs. ’000 This Year Previous Year Rs. ’000 Rs. ’000
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
Nature of Transactions 1. Loan taken 2. 3. Loan repaid Expenses charged to other companies
4. 5.
Sale of Material/Finished Goods Outstanding payables, net of (receivables)
* All transactions are with Godrej Agrovet Limited. 4. EARNINGS PER SHARE This Year Previous Year Rs. Rs. 161 (222) 50,000 50,000 3.22 (4.45) 3 (4.45) 10.00 10.00
2. 3.
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 14, 2010 For and on behalf of the Board
Pro?t 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
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 ?nancial 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: THIS YEAR (Rs. lac) Total Income Pro?t Before Taxation (PBT) Less : Provision for Taxation Pro?t After Taxation (PAT) Balance brought forward from previous year Total Balance Carried Forward to Balance Sheet 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 ef?ciencies 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 suf?ciency 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. 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 ?nancial year under review. HOLDING COMPANY The Company is a subsidiary of Godrej Agrovet Limited as de?ned under Section 4(1)(b) of the Companies Act, 1956. SUBSIDIARY COMPANIES The Company has no subsidiary companies during the year under review. DIRECTORS: 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) d) c) 6465.82 1068.20 387.91 680.29 1426.96 2107.25 2107.25 PREVIOUS YEAR (Rs. lac) 7431.68 975.35 385.29 590.05 868.36 1426.96 1426.96 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. AUDITORS You are requested to appoint Auditors for the current year and ?x their remuneration. The retiring Auditors M/s. Kalyaniwalla & Mistry, Chartered Accountants, Mumbai are eligible for reappointment and a certi?cate 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) 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 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 con?rm:a) b) 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; 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 ?nancial year and of the pro?t or loss of the Company for that period; that they have taken proper and suf?cient 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; that they have prepared the annual accounts on a going concern basis.
HUMAN RESOURCES 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. For and on behalf of the Board of Directors N. B. Godrej Chairman
Mumbai, May 17, 2010 c) d) B] I.
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 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. The measures adopted by the Company during the year under review for conservation of energy include the following:1) 2) 3) 4) 5) 6) 7) 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 ef?cient 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 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. The Company’s expenditure on R&D is given below: THIS YEAR Rs. lac (a) (b) (c) (d) Capital Recurring Total Total R & D expenditure as a percentage of total turnover 6 1 7 0.1% PREVIOUS YEAR Rs. lac Nil Nil Nil Nil
Technology absorption, adaptation and innovation
II.
C]
Foreign Exchange earnings and outgo THIS YEAR Rs. lac I. II. Foreign exchange used Foreign exchange earned Nil Nil PREVIOUS YEAR Rs. lac 0.66 Nil
The adoption of above energy conservation measures has resulted in accrual of the following bene?ts to the Company:a) b) Reduction of load on cables Improvement in power factor level Mumbai, May 17, 2010
For and on behalf of the Board of Directors N. B. Godrej Chairman
112
Annual Report 2009–2010
REPORT OF THE AUDITORS TO THE MEMBERS OF GODREJ OIL PALM LIMITED
1. We have audited the attached Balance Sheet of Godrej Oil Palm Limited, as at March 31, 2010 and also the Pro?t and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These ?nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these ?nancial 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 ?nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial 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 speci?ed 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) 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. 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 bene?ts over a long period, the amount paid towards the same is amortised over a 20-year period. c) d) e) 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. The Balance Sheet, the Pro?t and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account. In our opinion, the Balance Sheet, the Pro?t 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. In our opinion and to the best of our information and according to the explanations given to us, the said ?nancial 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) ii) iii) 5. in the case of the Balance Sheet, the state of affairs of the Company as at March 31, 2010; and in the case of the Pro?t and Loss Account, of the pro?t for the period ended on that date. in the case of the Cash Flow Statement, the cash ?ows of the Company for the period ended on that date.
2.
f)
3.
4.
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 disquali?ed 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 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) The Company has maintained proper records showing full particulars, including quantitative details and situation of ?xed assets. (b) As explained to us, the Company has a program for physical veri?cation of ?xed assets at periodic intervals. In our opinion, the periodic veri?cation is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies have been reported on such veri?cation. (c) In our opinion, the disposal of ?xed assets during the year does not affect the going concern assumption. (a) The Management has conducted physical veri?cation of inventory at reasonable intervals. (b) In our opinion, the procedures of physical veri?cation 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 veri?cation. (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, ?xed 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 (a) 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 ?ve years the question of commenting on its accumulated losses being less than ?fty percent of its net worth does not arise. The Company has not incurred cash loss during the ?nancial year or in the immediately preceding ?nancial 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, ?nancial 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 bene?t 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 ?nancial 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 ERMIN K. IRANI Partner Membership No. 35646
9)
2)
10)
3)
11)
12)
13)
14) 15) 16) 17)
4)
18) 19)
5)
20) 21)
6)
7) 8)
Mumbai, May 17, 2010
113
Godrej Oil Palm Limited
BALANCE SHEET AS AT MARCH 31, 2010
Schedule SOURCES OF FUNDS SHAREHOLDERS’ FUNDS Share Capital Reserves & Surplus LOAN FUNDS Unsecured Loans DEFERRED TAX LIABILITY TOTAL APPLICATION OF FUNDS FIXED ASSETS Gross Block Less: Depreciation Net Block Capital work-in-progress/ Advances 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 TOTAL NOTES TO ACCOUNTS 1 2 3 THIS YEAR Rs.’000 705 708,014 708,719 46,674 91,779 847,172 679,950 97,352 582,598 6,778 589,376 5 68,378 108,614 20,796 139 87,663 285,590 6 25,649 2,145 27,794 257,796 847,172 11 Signatures to Balance Sheet and Schedules 1 to 6 and 11 For and on behalf of the Board 18,753 7,505 26,258 272,469 743,054 50,425 131,690 84,392 60 32,160 298,727 PREVIOUS YEAR Rs.’000 Rs.’000 705 639,985 640,690 49,376 52,988 743,054 497,842 56,882 440,960 29,625 470,585
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010
Schedule INCOME Sales Other income EXPENDITURE Materials Expenses Interest Depreciation PROFIT BEFORE TAXATION Provision for Taxation Current Tax including MAT credit entitlement Fringe Bene?t Tax MAT Credit entitlement Deferred Tax PROFIT AFTER TAXATION Prior years adjustments Pro?t 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 THIS YEAR Rs.’000 638,769 7,813 646,582 8 9 10 408,392 89,245 1,560 40,565 539,762 106,820 Rs.’000 PREVIOUS YEAR Rs.’000 742,805 364 743,168 539,492 75,950 250 29,941 645,633 97,535
7
4
18,200 (18,200) 38,791 38,791 68,029 68,029 142,696 210,725 964.95 11
16,281 714 21,534 38,529 59,005 3,145 55,860 86,836 142,696 792.34
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 ERMIN K. IRANI Partner Membership No. 35646 Mumbai, May 17, 2010
The Schedules referred to above form an integral part of the Pro?t & Loss Account 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
Signatures to Pro?t and Loss Account & Schedules 7 to 11 For and on behalf of the Board
N. B. GODREJ Chairman
R. R. GOVINDAN Director
N. B. GODREJ Chairman
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 Pro?t and Loss Account TOTAL SCHEDULE 4: FIXED ASSETS ASSETS As on 01.04.09 Tangible Assets Freehold Land Buildings Plant & Machinery Furniture & Fixtures Of?ce & Other Equipments Vehicles Tree Development Cost Computer Intangible Assets Grant of Licenses Total Previous Year Capital Work-In-Progress/Advance 2,980 39,382 87,748 422 812 2,271 11,703 679 351,845 497,842 476,549 Rs.’000 PREVIOUS YEAR Rs.’000 SCHEDULE 3 : UNSECURED LOANS 100,000 705 100,000 705 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 THIS YEAR Rs.’000 Rs.’000 PREVIOUS YEAR Rs.’000
-
2,500 202 2,702 46,674 49,376
Sales Tax Deferment facility (Refer Note 3) TOTAL 497,289 210,725 708,014 497,289 142,696 639,985
46,674 46,674
GROSS BLOCK Additions Deductions
As on 31.03.10 2,980 61,853 246,798 525 1,075 2,271 11,703 900 351,845 679,950 497,842
As on 01.04.09 2,550 14,677 122 98 73 3,994 183 35,184 56,881 26,943
DEPRECIATION For the Year On Deductions 1,939 18,408 67 57 297 1,997 207 17,593 40,565 29,941 55 7 17 15 94 3
Upto 31.03.10 4,489 33,030 182 138 370 5,991 375 52,777 97,352 56,882
(Rs.’000) NET BLOCK As on As on 31.03.10 31.03.09 2,980 57,364 213,768 343 937 1,901 5,712 525 299,068 582,598 6,778 589,376 2,980 36,832 73,070 301 713 2,198 7,709 496 316,661 440,960 29,625 470,585
22,471 159,231 117 323 259 182,401 21,307
181 14 60 38 293 14
114
Annual Report 2009–2010
SCHEDULES ATTACHED TO AND FORMING PART OF THE ACCOUNTS FOR THE PERIOD ENDED MARCH 31,2010
THIS YEAR Rs.’000 SCHEDULE 5 : CURRENT ASSETS, LOANS & ADVANCES (A) INVENTORIES : Raw Materials Finished Products Stores and Spares Stock under Cultivation (B) 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 (C) CASH AND BANK BALANCES : Cash and Cheques on hand Balances with Scheduled Banks i) ii) (D) (E) In Current Accounts In Fixed Deposit Accounts 11,128 9,500 20,796 OTHER CURRENT ASSETS : Interest Accrued LOANS AND ADVANCES : (Unsecured and considered good) Advances recoverable in cash or in kind or for value to be received Inter Corporate Deposits Advance Income Tax Paid (net of Provision Rs. 51,883 thousand Previous year Rs. Nil) Deposits i) ii) TOTAL SCHEDULE 6 : LIABILITIES & PROVISIONS LIABILITIES Sundry Creditors Dues to Micro, Small & Medium Enteriprises (refer Note 6) Others Investors Education and Protection Fund Advances from Customers Sundry Deposits TOTAL PROVISIONS For Taxes (net of advance tax paid Rs. Nil previous year Rs. 45,960 thousand) For Gratuity For Leave Encashment TOTAL 1,542 603 2,145 27,794 5,923 1,167 415 7,505 26,258 24,898 24,898 481 270 25,649 17,263 17,263 853 637 18,753 18. 19. 20. 21. 10. 11. 12. 13. 14. 15. 16. 17. Insurance Postage, Telephony and Stationery Auditor’s Remuneration Legal & Professional Fees Bank Charges Freight, Coolie and Cartage Advertisement and Publicity Travelling Expenses Provision for Doubtful Debts and Advances/(Writeback) Loss on sale of Fixed Assets/Write off Discounts, Commission & Brokerage General Expenses TOTAL SCHEDULE 10 : INTEREST 1. 2. On Debenture On Inter Corporate Deposit 63 1,497 1,560 250 250 Government Authorities Others 1,506 1,421 87,663 285,590 1,004 1,782 32,160 298,727 4,251 67,915 29,374 139 60 4,211 80,000 84,392 TOTAL SCHEDULE 9 : EXPENSES 1. 2. 3. 4. 5. 12,570 6. 7. 8. 9. Salaries, Wages, Bonus,Gratuity and Allowances Contribution to Provident Fund and Other Funds and Administration Charges Employee Welfare Expenses Processing Charges Consumable Stores Power and Fuel Rent Rates and Taxes Repairs & Maintenance Building Plant & Machinery Other Assets 180 4,202 12 4,394 522 844 217 2,232 223 3,336 142 1,820 36 174 3,320 18,901 89,245 211 2,080 76 2,367 235 786 210 2,267 560 2,201 154 1,138 (131) 8 3,675 19,031 75,950 1,269 458 8,397 4,460 9,742 944 391 852 339 5,459 4,659 8,701 824 2,249 ` 27,423 20,365 168 181 30,542 36 30,578 78,072 108,650 36 108,614 40,476 40,476 91,214 131,690 131,690 b) c) 217 5,177 2,120 60,864 68,378 547 3,242 2,127 44,509 50,425 Rs.’000 PREVIOUS YEAR Rs.’000 SCHEDULE 7 : OTHER INCOME Interest Income (Gross) (Tax at Sources Rs.740 thousands previous year Rs. 1 thousand) Sundry Balances written back Sundry income TOTAL SCHEDULE 8 : MATERIALS a) RAW MATERIALS CONSUMED Opening stock Add : Purchases during the year Less : Closing Stocks PURCHASE FOR RESALE INVENTORY CHANGE Opening Stock Finished Goods Stock under Cultivation Less : Closing Stock Finished Goods Stock under Cultivation 5,177 60,864 66,041 (18,290) 408,392 3,242 44,509 47,751 (3,244) 539,492 3,242 44,509 47,751 4,576 39,931 44,507 547 392,087 392,634 217 392,417 34,265 1,224 498,826 500,050 547 499,503 43,233 7,486 47 280 7,813 303 54 7 364 THIS YEAR Rs.’000 Rs.’000 PREVIOUS YEAR Rs.’000
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. SIGNIFICANT ACCOUNTING POLICIES: a) The ?nancial 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 speci?ed 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 Bene?ts: i) Short-term employee bene?ts (payable wholly within twelve months of rendering the service): Short-term bene?ts 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 bene?ts: De?ned 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 Pro?t 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 de?ciency shall be made good by the Company. The Company’s PF does not have any existing De?cit 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 de?ciency 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. De?ned Bene?t Plans: The Company’s gratuity and leave encashment/longterm compensated absences schemes are de?ned bene?t plans. The Company’s liability for the de?ned bene?t 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 bene?t that the employees have earned in return for their services in the current and prior periods that bene?t 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 Pro?t and Loss Account. Terminal Bene?ts: All terminal bene?ts including voluntary retirement compensation are fully written off to the Pro?t and Loss Account. g) Revenue is recognised when goods are dispatched to external customers. Sales are inclusive of realised exchange ?uctuations 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 Pro?t 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 suf?cient future taxable income will be available against which such deferred tax assets can be realised. The tax effect is
2.
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) 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 con?rmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. CAPITAL COMMITMENTS: THIS YEAR Rs.’000 PREVIOUS 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 ?oated by the Directorate of Industries, Government of Andhra Pradesh is classi?ed 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 bene?ts 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 THIS YEAR PREVIOUS YEAR Rs. ‘000 Rs. ‘000 449 4,957 27,872 27,872 -
(i) (ii) 6.
Godrej Agrovet Limited Maximum Balance during the year Cauvery Palm Oil Limited Maximum Balance during the year
7.
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: Unit Crude Palm Oil Palm Kernel Oil Palm Kernel Cake Seedlings Agri Inputs Others TOTAL MT MT MT Nos THIS YEAR Quantity 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: Crude Palm Oil MT Palm Kernel Oil MT Palm Kernel Cake MT Agri Inputs TOTAL PURCHASES FOR RESALE: Agri Inputs TOTAL RAW MATERIALS CONSUMED: Fresh Fruit Bunches Palm Nuts Palm Kernel Palm Sprouts Others TOTAL MT MT MT Nos 78,873.81 9,144.98 556,740 30.72 3.05 4.70 823 99 28 4,227 5,177 34,265 34,265 344,800 4,947 42,573 97 392,417 73,833.02 9,300.17 399.91 1,009,078 70.66 6.07 57.54 1,544 176 247 1,275 3,242 43,233 43,233 429,740 11,441 8,868 45,524 3,931 499,504
9.
10.
11.
LICENSED & INSTALLED CAPACITY AND ACTUAL PRODUCTION: 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. Item For the year ended
116
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 Rs.’000 68,029 40,565 4,025 38,791 174 151,584 40,565 40,565 Net pro?t/(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 111,019 5,551 5,551 3,811 186 28 4,025 19. THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000 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 1,542 1,542 1,167 1,167
Pro?t after Tax as per Pro?t & 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
148 65 242 455
139 139
13.
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 : THIS YEAR PREVIOUS YEAR Rs. ’000 Rs. ’000 458 509 458 509
% % Discount Rate 8 8 Salary escalation rate 5 4 The estimates of future salary increases, considered in actuarial valuation, take into account in?ation, 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: THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000 Asset Provision for Doubtful Debts Others Liabilities Depreciation on Fixed Assets Net Deferred Tax Liability EARNINGS PER SHARE: 12 6,188 6,200 (97,979) (97,979) 91,779 538 538 (53,526) (53,526) 52,988
14.
Not later than one year Later than one year and not later than ?ve years iii. Later than ?ve years b. Lease payments recognised in the statement of Pro?t & Loss for the period : AUDITORS’ REMUNERATION:
i. ii.
20.
15.
Audit fees Audit under Other Statutes Taxation Services TOTAL EXPENDITURE IN FOREIGN CURRENCY: Travelling Expenses TOTAL
THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000 165 138 50 44 28 215 210 21. 66 66
Pro?t after tax and prior period expenses Weighted average number of equity shares outstanding Basic earnings per share (Rs.) Diluted earnings per share (Rs.) Nominal value of shares (Rs.) SEGMENT INFORMATION FOR THE YEAR ENDED MARCH 31, 2010 (i) Information about Primary Business Segments
Revenue
THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000 68,029 55,860 70,500 70,500 964.95 792.34 964.95 792.34 10 10
16.
VALUE OF CONSUMPTION OF RAW MATERIALS, SPARES & TOOLS: THIS YEAR Rs.’000 RAW MATERIALS : Imported items (including duty content) Indigenous TOTAL SPARES & TOOLS : Imported items Indigenous TOTAL 392,417 392,417 4,460 4,460 % 100 100 100 100 PREVIOUS YEAR Rs.’000 499,504 499,504 4,659 4,659 % 100 100 100 100
17. 18.
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. De?ned Contribution Plans: Contribution to De?ned Contribution Plan, recognised as expense for the year are as under: THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000 1,269 852
Total Sales Less : Inter-segment External Sales Result Segment Result Unallocated expenditure net of unallocated income Interest expenses Interest Income Dividend Income and Pro?t on sale of Investments Pro?t before taxation and exceptional items Provision for taxation Pro?t after taxation and before exceptional items Exceptional Items Prior years adjustments Pro?t after taxation and exceptional items Other Information Segment assets Segment liabilities Capital expenditure Depreciation Non-cash expenses other than depreciation Revenue
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 7,486 98,367 98,367 967 967 7,486 38,791 (31,305) 737,629 74,428 159,554 40,565 4,968 40 132,368 91,779 638,769 99,334 7,486 106,820 38,791 68,029 68,029 874,966 166,247 159,554 40,565
II.
Employers’ Contribution to Provident Fund De?ned Bene?t 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 bene?cial to the employees. The following table sets out the funded status of the gratuity plan and the amounts recognised in the Company's ?nancial 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 Bene?ts 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
Total Sales Less : Inter-segment External Sales Result Segment Result Unallocated expenditure net of unallocated income Interest expenses Interest Income Dividend Income and Pro?t on sale of Investments Pro?t before taxation and exceptional items Provision for taxation Pro?t after taxation and before exceptional items Exceptional Items Prior years adjustments Pro?t after taxation and exceptional items Other Information Segment assets Segment liabilities Capital expenditure Depreciation Impairment Loss Non-cash expenses other than depreciation
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 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
105,457 105,457
1,928 1,928
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.)
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 identi?ed and reported taking into account, the nature of products and services, the differing risks and returns, the organisation structure, and the internal ?nancing 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 identi?able 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 signi?cant in?uence: 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 : (ii)
10 11 12 Recoveries by other Group Companies Outstanding Payables Outstanding receivables Godrej Agrovet Ltd. Godrej Agrovet Ltd. 35,771 Godrej IJM Oil Palm Ltd. - Godrej IJM Oil Palm Ltd. (14,008) 769 Cauvery Palm Oil Ltd. 68 206 (875) 103 27,872
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.
23. 24.
Figures of the previous year have been regrouped and re-classi?ed wherever necessary to conform to the current year’s classi?cation. Information required to be furnished under Part IV of Schedule VI of the Companies Act, 1956.
i) 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 Pro?t before tax Pro?t 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 -
22.
ii)
iii)
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
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/?nished 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. Signi?cant Related Party Transactions :
Nature of Transactions 1 Expenses Charged by other Companies Holding Companies (i) Godrej Agrovet Ltd. Godrej Industries Ltd. 2 3 Expenses Charged to other Companies Sale of materials/?nished goods Godrej Agrovet Ltd. Godrej Industries Ltd. Godrej Agrovet Ltd. Other Related Parties Amount 3,414 Cauvery Palm Oil Ltd. (52,475) 512 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 68 1,931 2,415 Godrej IJM Oil Palm Ltd. (636) 63 (846) Amount 447 2683 322 83 1,296 (2,044) 384 25,500 40,000
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010
A. Cash Flow from Operating Activities: Pro?t 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 Pro?t before Working Capital Changes Adjustments for: Inventories Debtors increase/decrease Other receivable increase/decrease Loans and advances increase/decrease Creditors and Other payables THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000 Rs.’000 106,820 40,565 174 (7,486) 1,560 36 (47) 97,535 29,941 8 (303) 250 34,802 141,622 (3,145) 26,751 124,286 (3,185) (39,308) (330) 79,098 4,413 40,688 164,974 (45,960) 119,014 (36,651) 3 303 (36,344) 202 (71,975) (63,596) 84,392 20,796 (250) (48) 82,622 1,769 84,392
(17,953) 23,040 (79) 24,982 7,303
B.
C.
4
Purchase of Material
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
37,293 178,915 (18,493) 160,422
(152,043)
5 6 7 8 9
Inter Corporate Deposit placed Fixed Assets Purchased Advance paid for Fixed Assets Debenture redumption with interest repayment Recoveries from other Group Companies Godrej Agrovet Ltd. Godrej & Boyce Mfg. Co.Ltd. Godrej & Boyce Mfg. Co.Ltd. Godrej Industries Ltd.
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
For and on behalf of Board
N. B. GODREJ Chairman
R. R. GOVINDAN Director
118
Annual Report 2009–2010
Cauvery Palm Oil Limited
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 ?x their remuneration. The retiring Auditors M/s. Kalyaniwalla & Mistry, Chartered Accountants, Mumbai are eligible for reappointment and a certi?cate 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) 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 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 con?rm:a) b) 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; 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 ?nancial year and of the pro?t or loss of the Company for that period; that they have taken proper and suf?cient 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; that they have prepared the annual accounts on a going concern basis.
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 ?nancial 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 Pro?t Before Taxation (PBT) Less : Provision for Taxation Pro?t After Taxation (PAT) Adjustment to Capital Reserve for previous year depreciation Balance brought forward from previous year Total Balance Carried Forward to Balance Sheet OPERATIONAL HIGHLIGHTS 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 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 ?nancial 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 bene?t of which is goint to be ?own in the coming years. 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. 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 ?nancial year under review. HOLDING COMPANY The Company is a subsidiary of Godrej Agrovet Limited as de?ned under Section 4(1)(b) of the Companies Act, 1956. SUBSIDIARY COMPANIES The Company has no subsidiary companies during the year under review. DIRECTORS The following are the present Directors of the Company: 1. Dr. V. Krishnamurthy 2. Mr. Jayakar Krishnamurthy 3. Mr. N. B. Godrej 4. Mr. B. S. Yadav 5. Mr. R. R. Govindan (Chairman) (Director) (Director) (Director) (Director) Mumbai, May 17, 2010 For and on behalf of the Board of Directors V. Krishnamurthy Chairman d) c) 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)
HUMAN RESOURCES 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.
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 bene?ts to the Company:a) Considerable saving on energy cost. b) Increase in the life of plant & machinery. B] 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:This Year Rs. in Lac Nil Nil Nil Nil Previous Year Rs. in Lac Nil Nil Nil Nil
C]
(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
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
Mumbai, May 17, 2010
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 Pro?t and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These ?nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these ?nancial 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 ?nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial 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 speci?ed 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. The Balance Sheet, the Pro?t 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 Pro?t 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 ?nancial 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 Pro?t 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 ?ows 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 disquali?ed 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 e)
5.
ANNEXURE TO THE AUDITORS’ REPORT Referred to in paragraph (3) of our report of even date
1) The Company has maintained proper records showing full particulars, including quantitative details and situation of ?xed assets. (b) As explained to us, the Company has a program for physical veri?cation of ?xed assets at periodic intervals. In our opinion, the periodic veri?cation is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies have been reported on such veri?cation. (c) In our opinion, the disposal of ?xed assets during the year does not affect the going concern assumption. (a) The Management has conducted physical veri?cation of inventory at reasonable intervals. (b) In our opinion, the procedures of physical veri?cation 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 veri?cation. (a) The Company has not granted any loans, secured or unsecured to companies, ?rms 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, ?xed 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. (a) 9) 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 ?nancial year exceed ?fty percent of its net worth. The Company has incurred cash losses in the current ?nancial year and also in the immediately preceding ?nancial 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, ?nancial 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 bene?t 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 ?nancial 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 (a)
2)
10)
11)
3)
12)
13)
14) 15) 16)
4)
17)
18) 19) 20) 21)
5)
6)
7) 8)
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Annual Report 2009–2010
BALANCE SHEET AS AT MARCH 31, 2010
Schedule SOURCES OF FUNDS Shareholders’ Funds Share Capital Reserves & Surplus Loan Funds Secured Loans Unsecured Loans 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 Less: Current Liabilities & Provisions Current Liabilities Provisions Net Current Assets Miscellaneous Expenditure (to the extent not written off or adjusted) Pro?t & Loss Account TOTAL Notes to Accounts & Signi?cant Accounting Policies 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 ERMIN K. IRANI Partner Membership No. 35646 Mumbai, May 17, 2010 Nilesh N. Pingale Company Secretary This Year Previous Year Rs. Rs.
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010
Schedule
This Year Rs. 13,348,807 8,268,540 284,197 21,901,544
Previous Year Rs. 15,067,287 23,454,055 64,243 38,585,585 10,511,104 14,419,336 24,026,248 5,841,271 2,415,124
1 2 3 4
38,000,000 25,730,017 59,409,919 28,302,594 151,442,530
38,000,000 26,775,013 35,568,732 27,033,896 127,377,641
Income Sales - Palm Oil Mill Revenue from Nursery Operations Other Income 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 (Loss) before tax Provision for Taxation - Current - Deferred (Note 13 of Schedule 15) - Fringe Bene?t Tax (Loss) after Tax Adjustment of Capital Reserve for Previous Years to Depreciation De?cit brought forward from previous year De?cit carried to Balance Sheet Earnings Per Share (Basic/Diluted) in Rs. (Refer Note 8 Schedule 15) Notes to Accounts & Signi?cant Accounting Policies
10
5 6 7
48,869,150 12,177,091 36,692,059 13,800,000 19,818,322 14,523,850 303,694 717,995 35,363,861
49,640,849 10,632,189 39,008,660 14,950,000 21,257,643 14,578,807 982,743 835,598 37,654,791 5,929,276 2,615,940 8,545,216 29,109,575 19,053,394 25,256,012 127,377,641
11 12 13 14 2,171,308
8,951,082 15,748,526 18,467,199 9,063,453
1,044,996
8 10,377,242 950,582 11,327,824 24,036,037 18,739,082 58,175,352 151,442,530 15 Signatures to Balance Sheet and Schedules 1 to 9 and 15 For and on behalf of the Board
1,126,312 1,045,001 1,150,000 314,312 54,820,884 (32,919,340) – – – (32,919,340) (25,256,012) (58,175,352) (8.66)
1,370,123 1,150,000 320,371 57,638,453 (19,052,868) 283,000 (19,335,868) 4,180,004 (10,100,148) (25,256,012) (5.09)
9
15
The Schedules referred to above form an integral part of the Pro?t and Loss Account 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 Nilesh N. Pingale Company Secretary
Signatures to Pro?t and Loss and Schedules 10 to 15 For and on behalf of the Board
V. Krishnamurthy Chairman
R. R. Govindan Director
V. Krishnamurthy Chairman
R. R. Govindan Director
SCHEDULES TO ACCOUNTS
This Year Rs. 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 Share Premium Account TOTAL 50,000,000 50,000,000 38,000,000 Previous Year Rs. SCHEDULE 3: SECURED LOANS 50,000,000 50,000,000 38,000,000 From Bank - Term Loan (including Interest Accrued and Due Rs.24,15,243) Repayable within One Year: Rs.33,58,596 (Previous Year: Rs.18,14,594) - Overdraft (Refer Note 5 of Schedule 15) TOTAL SCHEDULE 4: UNSECURED LOANS 38,000,000 22,000,018 4,180,004 1,045,001 15,730,017 10,000,000 25,730,017 16,775,013 10,000,000 26,775,013 38,000,000 Inter Corporate Deposit Interest accrued and due on Inter Corporate Deposits TOTAL 25,500,000 2,802,594 28,302,594 25,500,000 1,533,896 27,033,896 20,232,983 59,409,919 15,598,045 35,568,732 39,176,936 19,970,687 This Year Rs. Previous Year Rs.
SCHEDULE 5: FIXED ASSETS Particulars 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
Rs. 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 -
Lands - Freehold Lands - Leasehold Buildings Plant & Machinery Of?ce Equipment Furniture & Fixtures Computers Vehicles TOTAL PREVIOUS YEAR
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 Bene?t 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 Pro?t 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 This Year Rs. 14,950,000 1,150,000 13,800,000 Previous Year Rs. 16,100,000 1,150,000 14,950,000 This Year Rs. 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 14,582,810 886,575 279,141 15,748,526 251,339 354,972 240,637 237,270 1,349,144 876,852 6,616,850 454,415 659,964 1,166,730 102,320 1,138,816 13,600 427,591 52,360 4,524,339 18,467,199 4,316,240 3,113,993 1,399,805 233,415 9,063,453 Previous Year Rs. 13,195,851 967,378 256,107 14,419,336 382,142 245,000 1,686,112 305,653 1,634,435 755,619 9,891,028 736,744 917,290 40,950 127,871 964,870 49,495 510,293 28,408 5,750,338 24,026,248 705,775 2,539,603 2,297,210 298,683 5,841,271
657,197 230,480 18,930,645 19,818,322 8,803,530 5,720,320 14,523,850 5,976 175,170 122,548 303,694 652,837 65,158 717,995
1,146,019 469,937 19,641,687 21,257,643 4,123,100 10,455,707 14,578,807 37,562 238,736 706,445 982,743 725,220 13,117 97,261 835,598
624,066 19,377 9,733,799 10,377,242 327,347 623,235 950,582
2,366,667 168,025 3,394,584 5,929,276 607,711 1,147,582 845,647 15,000 2,615,940
314,312 314,312 18,739,082 18,739,082 18,739,082 12,274,765 1,074,042 13,348,807 8,268,540 8,268,540 21,504 66,082 196,611 284,197 8,711,625 8,711,625 469,937 230,480 239,457 8,951,082
6,067 6,067 628,616 314,304 314,312 18,739,082 18,739,082 19,053,394 13,204,369 1,862,918 15,067,287 9,420,000 14,034,055 23,454,055 14,293 49,950 64,243 10,744,828 10,744,828 236,213 469,937 (233,724) 10,511,104
SCHEDULE 15 : NOTES TO ACCOUNTS 1. Signi?cant Accounting Policies a. Cost Convention The ?nancial 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 speci?ed 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 Bene?ts a) Short-term employee bene?ts: All employee bene?ts payable wholly within twelve months of rendering the service are classi?ed as short-term employee bene?ts. Bene?ts 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 bene?ts: (i) De?ned Contribution Plans: Payments made to de?ned contribution plans such as Provident Fund are charged as an expense as they fall due. (ii) De?ned Bene?t Plans: Gratuity: The Company accounts its liability for future gratuity bene?ts based on actuarial valuation as at the Balance Sheet date, determined using the Projected Unit Credit method. Gratuity bene?t is funded with Life Insurance Corporation of India. Actuarial gains and losses are recognised immediately in the Pro?t & 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 bene?ts are charged to the Pro?t and Loss Account. Other Bene?ts: All other bene?ts are either paid or provision is created in the Accounts.
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Annual Report 2009–2010
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 Pro?t 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 ?nance 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 suf?cient 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 ?nancial 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 ?nancial 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 ?nancial years 2002-03 and 2003-04, the Company received a total ?nancial 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 Pro?t/(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 ?nancial 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 Pro?t 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 ?ve years of balance sheet date Due after ?ve years of balance sheet date This Year Rs. 1,138,816 1,100,438 1,829,982 Previous Year Rs. 938,720 1,088,475 2,428,348 h. 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. De?ned Contribution Plans: Contribution to De?ned Contribution Plan, recognised as expense for the year are as under: This Year Rs. Employers’ Contribution to Provident Fund 886,575 II. De?ned Bene?t 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 bene?t obligations This Year Rs. Change in projected bene?t obligation Obligations at period beginning Service Cost Interest Cost Bene?ts 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 de?ned bene?t 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 Assumptions Discount Rate Salary Escalation Rate 13. Deferred Tax This Year In Rs. A. Deferred Tax Liabilities arising from: Differences between carrying amount of ?xed Assets in ?nancial statements & the Income Tax Return 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 5,102,587 5,102,587 B. – 97,355 77,685 4,927,547 187,535 64,584 (80,300) (26,851) 144,968 8% 5%
2.
3. 4.
5.
6.
7. 8.
9.
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 MT Rs. MT Rs. This Year 370.236 12,274,765 247.635 1,074,042 This Year MT 2079.570 This Year Rs NIL Previous Year 358.833 13,204,369 251.558 1,862,918 Previous Year MT 1987.573 Previous Year Rs 3,427,481 Sl. No. Particulars a. Crude Palm Oil b. C. Oil Palm Nuts Break-up of Raw Material Consumed 2. (iii) Other related parties where persons mentioned (v) below exercise signi?cant in?uence : 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 1 2 3 4 5 6 7 8
Total (A)+(B) 38,571 38,571 (13,225) 5,841 14 (19,052) (283) (19,335)
Sl. No. Particulars a. D. Fresh Fruit Bunches of Oil Palm (FFBs) C.I.F. Value of Imports
Sl. No. Particulars a. E. Oil Palm Sprouts Value of Raw Material Consumed
Expenses Charged by other Companies Expenses Charged to other Companies Purchase of materials/?nished goods Sale of materials/?nished goods Inter Corporate Deposit Accepted Inter Corporate Deposit Repaid Recoveries made by other Companies Fixed Assets Purchased Fixed Assets Sold
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 ?gures have been regrouped and reclassi?ed wherever necessary. 17. Segment Information for Tthe Year ended March 31, 2010 (i) Information about Primary business Segments Rs.'000
This Year Revenue Area Oil Palm Expansion Plantations & Nursery Unallocated (A) (B) 13,349 8,269 263 13,349 (3,211) 8,269 (20,929) 263 Total (A)+(B) 21,881 21,881 Previous year Oil Palm Plantations (A) 15,067 15,067 (1,884) Area Expansion & Nursery Unallocated (B) 23,454 50 23,454 (11,391) 50 50 5,841 14 (1,884) (283) (2,167) (11,391) (11,391) (5,777) (5,777)
Sl. No. Particulars
9
Total Sales Less : Inter-segment External Sales Result Segment Result Unallocated expenditure net of unallocated income Interest expenses Interest Income Dividend Income and Pro?t on sale of Investments Pro?t before taxation and exceptional items Provision for taxation Pro?t after taxation and before exceptional items Exceptional Items Prior years adjustments Pro?t after taxation and exceptional items Other Information Segment assets Segment liabilities Capital expenditure Depreciation Non-cash expenses other than depreciation
10 Outstanding Payables 11 Outstanding Receivable 3. Signi?cant Related Party Transactions :
Nature of Transactions
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
Other Amount Related Parties (iii)
263 (23,877) 9,063 21 9,063 21
Holding Amount Fellow Amount Companies Subsidiaries (i) (ii) 431 Godrej Oil Palm Ltd. 3,311 29 Godrej Oil Palm Ltd. -
(3,211) (3,211)
(20,929) (20,929)
(8,779) (32,919) (8,779) (32,919)
1
Expenses Charged by Godrej other Companies Agrovet Ltd. Expenses Charged to other Companies Godrej Agrovet Ltd.
2,683 1,208 Godrej IJM Palm Oil Ltd. 83 384 25,500 -
2
(3,211) 162,770 162,770 5 10,036 (20,929) (8,779) (32,919) 162,770 162,770 69 12,177 (2,167) 135,923 135,923 1,623 8,360 (11,391) (5,777) (19,335)
52 -
3
135,923 135,923 1,623 10,632 -
purchase of materials/?nished goods Sale of materials/ ?nished goods Godrej Agrovet Ltd. Godrej Agrovet Ltd. Godrej Agrovet Ltd. Godrej Agrovet Ltd. Godrej Agrovet Ltd. Godrej Agrovet Ltd.
Godrej Oil Palm Ltd.
64 2,141
2,272
4
1,691 Godrej Oil Palm Ltd. 258 - Godrej Oil Palm Ltd. 28,055 25,500 2,970 32 211 4,769 Godrej Oil Palm Ltd. 3,311
(ii)
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 identi?ed and reported taking into account, the nature of products and services, the differing risks and returns, the organisation structure, and the internal ?nancing 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 identi?able 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
5
Inter Corporate Deposit Accepted
6
Inter Corporate Deposit Repaid
7
Recoveries made by other Companies
Godrej IJM Palm Oil Ltd.
2 -
8
Fixed Assets Purchased
9
Fixed Assets Sold
10 Outstanding Payables Godrej Agrovet Ltd. 11 Outstanding Receivable
27,872 Godrej IJM Palm Oil Ltd. 50 -
124
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 Pro?le: I. 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 Pro?t/(Loss) Before Tax Pro?t/(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. 162,770,354 162,770,354 38,000,000 25,730,017 59,409,919 28,302,594 50,492,059 24,036,037 18,739,082 58,175,352 21,901,544 54,820,884 (32,919,340) (32,919,340) (8.66) -
CASH FLOW STATEMENT FOR THE PERIOD ENDED MARCH 31, 2010
This Year Rs. A. Cash Flow from Operating Activities: Pro?t before Tax and Operational Items Adjustment for: Depreciation Loss/(Pro?t) on sale of Fixed Assets Interest Expense Project Development Cost/Miscellaneous Expenditure written off Operating Pro?t before Working Capital Changes Adjustments for: Inventories Debtors and Other receivables Creditors and Other payables 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) (32,919,340) 1,126,312 (66,082) 9,063,453 1,464,312 11,587,995 (21,331,345) 1,439,321 172,560 2,782,608 4,394,490 (16,936,856) (16,936,856) (69,094) 280,469 211,375 25,109,885 (9,063,453) 16,046,432 (679,049) 982,743 303,694 Previous Year Rs. (19,052,868) 1,370,123 40,950 5,841,271 1,470,371 8,722,715 (10,330,153) (7,301,621) (7,519,819) 4,951,576 (9,869,864) (20,200,017) (283,000) (20,483,017) (1,622,462) (1,622,462) 27,500,000 (2,500,000) (7,000,000) 10,714,750 (5,841,271) 22,873,479 768,000 214,743 982,743
II.
III.
B.
IV.
C.
V.
Crude Palm Oil Oil Palm Nuts
For and on behalf of the Board Nilesh N. Pingale Company Secretary V. Krishnamurthy Chairman R. R. Govindan Director
For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants Nilesh N. Pingale ERMIN K. IRANI Company Secretary Partner Membership No. 35646 Mumbai, May 17, 2010
For and on behalf of the Board
V. Krishnamurthy Chairman
R. R. Govindan Director
Mumbai, May 17, 2010
125
Natures Basket Limited
DIRECTORS’ REPORT FOR THE PERIOD ENDED MARCH 31, 2010
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. FINANCIAL RESULTS AND PERFORMANCE: (Rs in Lac) Particulars Total Income Loss before taxation Loss after taxation Balance brought forward from previous year Balance carried forward to Balance sheet DIVIDEND: THIS YEAR PREVIOUS YEAR 3391.23 852.64 825.39 699.64 1525.03 1553.00 702.14 699.64 0.00 699.64 iv) iii) ii) DIRECTORS’ RESPONSIBILITY STATEMENT: As required under the provisions of Section 217(2AA) of the Companies Act, 1956, the Directors hereby con?rm: 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; 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 ?nancial year ended March 31, 2010 and the loss of the Company for the year under review; that proper and suf?cient 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; that the Annual Accounts for the year ended March 31, 2010, have been prepared on a ‘going concern’ basis.
AUDITORS: You are requested to appoint Auditors for the current year and ?x 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 dif?cult 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. FOR AND ON BEHALF OF THE BOARD MOHIT KHATTAR Managing Director A. MAHENDRAN Director
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 dif?cult 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 signi?cantly reduced levels as compared to the previous ?nancial 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 ?xed 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 ?rst 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. HOLDING COMPANY: Your Company is subsidiary of Godrej Industries Limited as de?ned under Section 4(1) (b) of the Companies Act, 1956. SUBSIDIARIES: The Company has no subsidiary companies during the year under review. DIRECTORS: The following are the current Directors of the Company: 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 of?ce upto the date of Annual General Meeting has been con?rmed 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 of?ce upto last Annual General Meeting have been con?rmed 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.
Mumbai, May 21,2010
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. B. Conservation of Energy, Technology absorption, adaptation and innovation These provisions are Not Applicable the Company during the year under review. Foreign Exchange earnings and outgo: Foreign Exchange earnings : Foreign Exchange outgo : NIL NIL FOR AND ON BEHALF OF THE BOARD MOHIT KHATTAR Managing Director A. MAHENDRAN Director
Mumbai, May 21,2010
126
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 Pro?t and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These ?nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these ?nancial 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 ?nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial 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 speci?ed 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) 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. 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. 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. The Balance Sheet, the Pro?t and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account. Mumbai, May 21, 2010 e) In our opinion, the Balance Sheet, the Pro?t 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. In our opinion and to the best of our information and according to the explanations given to us, the said ?nancial 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 Pro?t and Loss Account, of the loss for the year ended on that date. in the case of the Cash Flow Statement, of the cash ?ows of the Company for the year ended on that date.
f)
2.
3.
4.
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 disquali?ed 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 AND MISTRY Chartered Accountants Firm Registration No. 104607W ERMIN K IRANI Partner Membership No. 35646
c) d)
Annexure to the Auditors' Report
Referred to in paragraph (3) of our report of even date. 1) The Company has maintained proper records showing full particulars, including quantitative details and situation of ?xed assets purchased after April 01, 2009. In respect of ?xed assets acquired / purchased prior to April 01, 2009, the register is not complete in respect of particulars such as quantitative details and situation of ?xed assets. (b) As explained to us, the Company has a program for physical veri?cation of ?xed assets at periodic intervals. In our opinion, the period of veri?cation is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies have been reported on such veri?cation. (c) In our opinion the disposal of ?xed assets during the year does not affect the going concern assumption. (a) The Management has conducted physical veri?cation of inventory at reasonable intervals. (b) In our opinion, the procedures of physical veri?cation 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 veri?cation 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, ?rms 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 ?rms 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 ?xed 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 ?xed 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. (a) 7) 8) 9) 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 ?ve years the question of commenting on its accumulated losses being less than ?fty percent of its net worth and whether the Company has incurred cash losses in the current ?nancial year and in the immediately preceding ?nancial 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, ?nancial 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 bene?t 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 ?nancial 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
2)
10)
11) 12) 13) 14) 15) 16) 17) 18) 19) 20) 21)
3)
4)
5)
6)
127
Natures Basket Limited
BALANCE SHEET AS AT MARCH 31, 2010
Schedule SOURCES OF FUNDS SHAREHOLDERS’ FUNDS Share Capital Reserves & Surplus LOAN FUNDS Secured Loans Unsecured Loan Rs. ‘000 As at 31.03.2010 Rs. ‘000 As at 31.03.2009 Rs. ‘000
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010
For the Year Ended 31.03.2010 Rs. ‘000 For the Period Ended 31.03.2009 Rs. ‘000 154,515 785 339,123 EXPENDITURE Purchase of Traded Goods Acquisition of Traded goods on Business Transfer Inventory Change 8 9 10 Expenses 274,093 (5,697) 127,327 13,101 15,564 424,388 (LOSS) BEFORE TAX Less: Provision For Tax Current Tax (2,837) 112 (2,725) (LOSS) AFTER TAX (De?cit) Brought Forward (DEFICIT) CARRIED TO BALANCE SHEET Earnings Per Share (Basic/Diluted) in Rs. (Refer Note 9) NOTES TO ACCOUNTS 11 (82,540) (69,964) (152,504) (11.71) (431) 181 (250) (69,964) (69,964) (13.23) (85,265) 133,724 16,484 (19,672) 80,768 3,586 10,624 225,514 (70,214) 155,300
1
70,500 70,500
70,500 70,500 63,008 63,008 133,508
Schedule INCOME Sales Other Income
Rs. ‘000 333,853 5,270
2 3
42,763 110,572 153,335
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 LESS: CURRENT LIABILITIES & PROVISIONS Liabilities Provisions NET CURRENT ASSETS PROFIT & LOSS ACCOUNT TOTAL NOTES TO ACCOUNTS
223,835 4 107,282 41,853 5 6 25,936 4,548 5,046 29,299 9 64,838 7 61,128 1,101 62,229 2,609 152,504 223,835 11 Signatures to the Balance Sheet and Schedules 1 to 7 and 11 For and on behalf of the Board 65,429 25 3,268
74,775 26,299 48,476 431
Interest & Financial Charges Depreciation/Amortisation
19,672 2,781 661 14,759 37,873
Deferred Tax Fringe Bene?t Tax Fringe Bene?t Tax of previous year
22,585 650 23,235 14,638 69,964 133,508
The Schedules referred to above form an integral part of the Balance Sheet. As per our Report attached. For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants ERMIN K. IRANI Partner Membership No. 35646 Mumbai, May 21, 2010
The Schedules referred to above form an integral part of the Pro?t & Loss Account. As per our Report attached. For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants ERMIN K. IRANI Partner Membership No. 35646 Mumbai, May 21, 2010
Signatures to the Pro?t & Loss Account and Schedules 8 to 11 For and on behalf of the Board
MOHIT KHATTAR Managing Director
A. MAHENDRAN Director
MOHIT KHATTAR Managing Director
A. MAHENDRAN Director
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 ?xed 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 As at 31.03.2010 Rs. ‘000 1,000,000 70,500 As at 31.03.2009 Rs. ‘000 1,000,000 70,500
Tangible Assets Computers Furniture & Fixtures Equipments Air Conditioners/ Water Coolers 7,376 5,792 6,200 11,799 435 35,797 2,475 1,878 2,358 7,217 18,637 47 11 9,851 7,670 8,558 18,969 424 54,434 3,893 1,307 687 1,164 143 18,551 1,885 585 629 650 41 11,036 5 5 5,778 1,892 1,316 1,809 180 29,587 4,073 5,778 7,242 17,160 244 24,847 3,483 4,486 5,513 10,634 291 17,246
SCHEDULE 4: FIXED ASSETS
ASSETS As At 01.04.09 GROSS BLOCK Assets Taken Over Additions DEPRECIATION DeducAs At Upto Accum tions 31.12.09 01.04.09 Depn On Assets Taken Over For the period
Rs. ‘000
NET BLOCK On Upto As At As At Deduc- 31.03.10 31.03.10 31.03.09 tions
42,400
-
Motor Cars Leasehold Improvements Intangible Assets
363 42,763 110,568 4 110,572
61,100 1,908 63,008
Goodwill Total Previous Year
7,376 74,775 -
62,607
32,565 12,169
-
7,376
553 26,299 -
15,675
738 15,564 10,624
10 -
1,291 41,853 26,299
6,085 65,429 48,476
6,823 48,476 -
58 107,282 74,775
128
Annual Report 2009–2010
SCHEDULES ATTACHED AND FORMING PART OF THE ACCOUNTS FOR THE PERIOD ENDED MARCH 31, 2010
SCHEDULE 5: INVESTMENTS As at 31.03.2010 Rs. ‘000 As at 31.03.2009 Rs. ‘000 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 ?xed 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
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 (B) SUNDRY DEBTORS (Unsecured and considered good unless otherwise stated) Debts outstanding for a period exceeding six months Other Debts 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)
25
-
19,671 25,368 (5,697) 34,656 1,635 1,886 11,350 3,437 30,930 233 880 153 2,209 3,065 14,783 582 513 2,441 5,222 3,341 3,148 1,954 29 4,880 127,327
19,672 (19,672) 17,498 670 1,075 8,650 21,032 378 1,662 78 977 2,639 9,413 114 469 1,750 7,078 613 3,156 620 2,896 80,768
25
-
25,368 568 25,936
19,672 19,672
4,548 4,548
2,781 2,781 423 238 -
(C)
1,544 2,852 650
5,046 (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) 9
661 -
6,598 744 261 21,696
975 186 13,569
1,076 9,569 10,645 2,456 13,101
2,467 2,467 1,119 3,586
29,299 64,838
29 14,759 37,873
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
44,314 44,314 16,814 61,128
16,345 16,345 6,240 22,585 413 237 650 23,235
581 520 1,101 62,229
SCHEDULE 11 : NOTES TO ACCOUNTS 1. Signi?cant Accounting Policies a) The ?nancial 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 speci?ed 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 bene?ts to employees comprise payments under de?ned contribution plans like provident fund and family pension. Payments under de?ned contribution plans are charged to the pro?t and loss account. The liability in respect of de?ned bene?t schemes like gratuity and leave encashment bene?t 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
Revenue is recognised when goods are despatched to external customers. Sales are net of returns, sales tax rebates, etc. 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 suf?cient 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 con?rmed 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 de?ned 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. h) THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000 The tax effects of signi?cant 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 : Not later than one year 44,521 Later than one year and not later than ?ve 108,606 years iii. Later than ?ve years b. Lease payments recognised in the statement of Pro?t & Loss for the period : 30,930 Managerial Remuneration a) Computation of Pro?t for the purpose of Managerial Remuneration (Loss) After Tax as per Pro?t & Loss Account Add: Depreciation as per Accounts Managerial Remuneration Provision for Tax (including Deferred Tax) Loss on Sale of Fixed Assets 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 pro?ts) Managerial Remuneration i. Salaries ii. Contribution to Provident Fund (82,540) 15,564 2,766 2,725 29 (61,455) 15,564 (77,019) 1,750 i. ii. 25,550 44,278 21,032 9. (69,964) 10,624 250 (59,090) 10,624 (69,714) 10. g) 7. Auditors Remuneration THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000 403 358 110 110 513 469
8.
Audit fees Audit under Other Statutes TOTAL Employee Bene?ts
2.
3.
4.
5.
6.
I. De?ned Contribution Plans: Contribution to De?ned Contribution Plan, recognised as expense for the period are as under: Employers’ Contribution to Provident Fund 1,429 670 II. De?ned Bene?t 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 bene?cial to the employees. The following table sets out the funded status of the gratuity plan and the amounts recognised in the Company’s ?nancial 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 Bene?ts 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 Bene?ts 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 in?ation, 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 Pro?t after tax and before extraordinary items (Rs.’000) (82,540) (69,964) Pro?t after tax and after extraordinary items (Rs.’000) (82,540) (69,964) Weighted average number of equity shares outstanding 7,050 5,288 Basic and Diluted earnings per share before extraordinary (11.71) (13.23) 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 signi?cant in?uence (and their relatives) Mrs. T. Dubash Mr. A. Mahendran
b)
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
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 Rs.’000 Other Related Parties (iii) & (iv)
11 Nature of Transactions 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)
1 2 3 4 5 6 7 8 9 10 11 12 13 14 3.
Nature of Transactions Issue of share capital (incl. Premium) Business acquired during the year Intercorporate deposits taken during the year Intercorporate deposits repaid during the year Interest expense on intercorporate deposits taken Outstanding Intercorporate deposits Intercorporate deposits placed during the year Recovery of Intercorporate deposit placed Interest income on intercorporate deposit placed Expenses charged by other companies Outstanding receivables, net of (payables) Interest Accrued and due on Intercorporate deposits Sale of Traded Goods Remuneration
Holding Fellow Company Subsidiaries (i) (ii) 70,500 72,556 20,753 41,764 61,100 50,000 2,922 1,908 45,500 63,051 2,277 10,000 10,000 31 1,724 619 (28) (43) 4 1,908
12
Interest Accrued and due on Intercorporate deposits
Godrej Industries Ltd.
4
Godrej Agrovet Ltd. 13 14 Sale of Traded Goods Remuneration
1,908 Mrs. T. Dubash Mr. Mohit Khattar 448 2,766 -
11. 12.
The previous year’s ?gures are for a period of nine months and hence are not strictly comparable with those of the current year. Previous period amounts have been reclassi?ed wherever necessary to con?rm with current year’s classi?cation.
448 2,766 Rs.’000 Amount
Signi?cant Related Party Transactions :
Nature of Transactions Holding Company (i) Godrej Agrovet Ltd. Godrej Agrovet Ltd. Godrej Industries Ltd. Godrej Agrovet Ltd. Amount Fellow Subsidiaries (ii) Amount Other Related Parties (iii)
1
Issue of share capital (incl. Premium) Business acquired during the year Intercorporate deposits taken during the year
70,500 72,556 20,500 Godrej Agrovet Ltd. 253 Godrej Oil Palm Ltd. 61,100 50,000 1,928 Godrej Agrovet Ltd. 994 Godrej Oil Palm Ltd. 1,908 45,500 63,051
2
3
1,764 40,000 -
4
Intercorporate deposits repaid during the year Interest expense on intercorporate deposits taken
Godrej Industries Ltd. Godrej Industries Ltd.
5
758
Godrej Agrovet Ltd. 6 Outstanding Intercorporate deposits Godrej Industries Ltd. Godrej Agrovet Ltd.
1,519 -
7
Intercorporate deposits placed during the year
Godrej Properties Ltd. Godrej Properties Ltd. Godrej Properties Ltd. Godrej Industries Ltd. Godrej Agrovet Ltd. 1,724 619
10,000
8
Recovery of Intercorporate deposit placed Interest income on intercorporate deposit placed Expenses charged by other companies
10,000
9
31
10
131
Natures Basket Limited
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. State Code. Balance Sheet Date. II Capital Raised during the period Public Issue Rights Issue Bonus Issue Private Placement III Position of mobilisation and deployment of funds Total Liabilities Total Assets Sources of Funds Paid-up Capital Reserves and Surplus Secured Loans Unsecured Loans Application of Funds Net Fixed Assets Investments Net Current Assets Misc Expenditure Accumulated Losses IV Performance of Company Turnover Total Expenditure (Loss) / Pro?t before tax (Loss) / Pro?t after tax Earnings per share Rs. (on an annualised basis) Dividend rate % V Generic Names of principal products/services of the Company Item code no Product description 651 Retail Trade in Vegetables and Fruits together 659 Retail trade in food and food articles, beverages, tobacco and intoxicants not elsewhere classi?ed. ( * 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 A. MAHENDRAN Director 333,853 424,388 (85,265) (82,540) (11.71) 65,429 25 2,609 152,504 C. 70,500 42,763 110,572 B. U15310MH2008PLC182816 11 31.03.2010 (Amounts in Rs. ‘000) NIL NIL NIL NIL (Amounts in Rs. ‘000) 286,064 286,064 A. Cash Flow from Operating Activities : (Loss)/Pro?t Before Taxes Adjustments for: Depreciation Loss On Sale Of Assets Interest expenses Interest income Operating Pro?t Before Working Capital Changes Adjustments for: Inventories Debtors and Other Receivables Creditors and Other Payables 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) Rs. ‘000
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010
For the Year For the Period Ended Ended 31.03.2010 31.03.2009 Rs. ‘000 Rs. ‘000 (85,265) 15,564 29 10,645 (41) 26,197 (59,068) (70,214) 10,624 2,467 13,091 (57,123)
(6,264) (16,337) 38,994 16,393 (42,675) 83 (42,758) (32,565) 19 (25) (10,000) 10,000 31 (32,540) 141,868 (50,000) (12,185) 79,683 4,385 661 5,046
(5,744) (3,922) 10,769 1,102 (56,021) 210 (56,231) (12,169) (12,169) 70,500 384 (2,467) 68,417 17 644 661
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 ?ows by operating, investing and ?nancing activities. 2. Figures in brackets are out?ows/deductions. For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants ERMIN K. IRANI Partner Membership no. 35646 Mumbai, May 21, 2010 For and on behalf of the Board
MOHIT KHATTAR Managing Director
A. MAHENDRAN Director
132
Annual Report 2009–2010
Ensemble Holdings & Finance Limited
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 ?x 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 con?rm: 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 ?nancial year and of the pro?t of the Company for that year; c) that they have taken proper and suf?cient 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
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:THIS YEAR (Rs.’000) PREVIOUS YEAR (Rs.’000)
Gross Revenue earned Total Expenditure Pro?t / (Loss) for the year before Tax Provision for Taxation Pro?t / (Loss) after Tax Adjustment in respect of prior years Pro?t 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 de?cit in P&L A/c Loss brought forward Loss carried forward
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 ?nal 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 Certi?cate 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 noti?cation 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
REPORT OF THE AUDITORS
To The Members of ENSEMBLE HOLDINGS & FINANCE LIMITED
1. We have audited the attached Balance Sheet of Ensemble Holdings and Finance Limited as at March 31, 2010 and also the Pro?t and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto. These ?nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these ?nancial 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 ?nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial 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 speci?ed 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 Pro?t and Loss Account dealt with by this report are in agreement with the books of account;
2.
5.
3.
In our opinion, the Pro?t 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 Pro?t and Loss Account, of the Pro?t of the Company for the year ended on that date (iii) in the case of Cash Flow Statement, of the cash ?ow 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 disquali?ed 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.
d.
4.
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 ?nancial 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 bene?t 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 ?nancial 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 ?ows 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 ?nancial 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.
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 ?nancial year are more than ?fty percent of its net worth. The company has not incurred cash losses during the current ?nancial year and in the immediate preceding ?nancial year.
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Ensemble Holdings & Finance Limited
BALANCE SHEET AS AT MARCH 31, 2010
Schedule SOURCE OF FUNDS 1 SHAREHOLDERS’ FUNDS (a) (b) Share Capital Reserves & Surplus 1 2 37,741,600 123,585,245 161,326,845 APPLICATION OF FUNDS 1 2 INVESTMENTS CURRENT ASSETS, LOANS AND ADVANCES (a) (b) (c) Cash & Bank Balances Other Current Assets Loans and Advances 4 5 6 168,114 386,137 30,711,660 31,265,911 LESS: CURRENT LIABILITIES AND PROVISIONS Current Liabilities Provisions 7 140,943 22,005,004 22,145,947 NET CURRENT ASSETS 3 PROFIT AND LOSS ACCOUNT TOTAL NOTES TO ACCOUNTS 10 9,119,964 78,255,064 161,326,845 159,112 1,346,980 1,506,092 50,203,969 78,662,729 146,232,727 1,840,175 1,104,004 48,765,882 51,710,061 3 73,951,817 17,366,029 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 de?cit in P&L A/c Loss brought forward Loss Carried Forward Earnings Per Share NOTES TO ACCOUNTS 10 (5) 10 37,741,600 113,979,815 151,721,415 AS AT 31.03.10 Rupees AS AT 31.03.09 Rupees INCOME Interest Income Dividend Pro?t on sale of investments (Net) Pro?t on sale of Mutual Funds Sundry Income Reversal of Prov. for depletion in Investment EXPENDITURE Expenses
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010
Schedule 8 YEAR ENDED 31.03.10 Rupees 5,503,538 1,811,748 2,567,195 173,359 74,141 23,110,000 33,239,981 166,242 166,242 33,073,739 1,300,000 31,773,739 244,360 32,018,099 YEAR ENDED 31.03.09 Rupees 5,533,647 3,045,473 5,973,980 942,121 215,293 15,710,514 167,252 167,252 15,543,262 1,416,000 14,127,262 (12,917) 14,114,345
9
18,870,800 3,134,204 6,403,620 3,201,810 31,610,434 407,665 (78,662,729) (78,255,064) 8.48
– 7,925,736 1,346,980 2,822,869 1,411,434 13,507,019 607,326 (79,270,055) (78,662,729) 3.74
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 & ASSOCIATES Chartered Accountants V.M. PADWAL Partner Mumbai, May 26, 2010 M.G. SUBRAMANIAM Company Secretary Signatures to Balance Sheet and Schedules 1 to 7 and 10 For and on behalf of the Board
The Schedules referred to above form an integral part of the Pro?t and Loss Account As per our Report of even date attached For and on behalf of KALYANIWALLA MISTRY & ASSOCIATES Chartered Accountants V.M. PADWAL Partner Mumbai, May 26, 2010 M.G. SUBRAMANIAM Company Secretary Signatures to Pro?t & Loss Account and Schedules 8 to 10 For and on behalf of the Board
M. EIPE Director
B.S. YADAV Director
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 SCHEDULE 1 : SHARE CAPITAL AUTHORISED 5,000,000 Equity Shares of Rs.10/- each 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) 37,741,600 37,741,600 50,000,000 50,000,000 SCHEDULE 2 : RESERVES & SURPLUS SHARE PREMIUM As per last Balance Sheet Special Reserves u/s 45IC of RBI Act, 1934 Opening Balance Add : Transferred from Pro?t & Loss A/c 37,741,600 37,741,600 General Reserve Opening Balance Add : Transferred from Pro?t & Loss A/c 9,541,258 3,201,810 12,743,068 123,585,245 9,541,258 113,979,815 19,493,517 6,403,620 25,897,137 19,493,517 84,945,040 84,945,040 AS AT 31.03.09 AS AT 31.03.10 Rupees AS AT 31.03.09 Rupees
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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 Less : Provision for diminution in value of Investments Aggregate Book Value of Investments : Quoted Investments Unquoted Investments Market Value of quoted investments AS AT 31.03.10 Rupees 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 Pro?ts 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 1,561 166,553 168,114 386,137 386,137 AS AT 31.03.09 Rupees 1,301 1,838,874 1,840,175 1,104,004 1,104,004 Fac Value Quantity as on 01.04.09 Quantity Acquired during the year Sold during the year Quantity as on 31.03.10 Amount As on As on 31/03/10 Rupees 31.03.09 (Rupees)
10 10 10 1 10 1 10 1 5 10 10 10 10 10 10 10 10 10
691,155 1 1 3 1 751 1 40 2 1 1 15,423 – 8,100 2 250,000 389,269 160
122,050 -
15,423 7,716 160
691,155 1 1 3 1 751 1 40 2 1 1 114,334 8,100 2 250,000 389,269 -
5,488,688 53 151 59 31 90,589 400 271 255 490 37 – 8,734,664 1,809,717 3,240 10,050,000 11,027,991 47,773,359 84,979,995 11,028,178 73,951,817 14,315,688 59,636,129 73,951,817 370,078,667
5,488,688 53 151 59 31 90,589 400 271 255 490 37 5,410,332 1,808,707 3,240 10,050,000 11,027,991 1,600 28,394,207 11,028,178 17,366,029 5,502,668 17,352,049 22,854,717 5,458,501
– 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 18,870,800 3,134,204 22,145,947 1,290,555 4,212,823 160 5,503,538 60,000 2,500 25,120 60,665 17,957 166,242
159,112 – 1,346,980 1,506,092 2,447,977 3,040,300 45,370 – 5,533,647 60,000 2,500 49,635 44,944 10,173 167,252
SCHEDULE 10 : NOTES TO ACCOUNTS 1. Signi?cant Accounting Policies a. Accounting Convention: The ?nancial 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) Pro?t/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 ?ows 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 suf?cient 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: 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
LIC Mutual Fund SBI Mutual Fund Fem Care Pharma Mafatlal Industries Godrej Global Solutions Ltd. (Pref. shares)
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Ensemble Holdings & Finance Limited
SCHEDULE 10: NOTES TO ACCOUNTS (Contd.)
THIS YEAR PREVIOUS YEAR Rupees Rupees 3. Amount due from a Company under the same management Godrej Hicare Ltd. Godrej Industries Ltd. Auditors’ Remuneration: (includes service tax wherever applicable) Audit Fees Tax Audit Fees Earnings per share a. Net Pro?t/(Loss) after Tax available for shareholders b. Weighted Average Number of Equity Shares c. Basic and Diluted Earnings per Share of Rs.10 each 33,090 16,545 49,635 32,018,099 3,774,160 8.48 23,110,000 5,000,000 28,110,000 33,090 16,545 49,635 4,110,101 3,774,160 3.74 9. 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 Pro?t before tax : 33,074 Pro?t 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
4.
5.
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 signi?cant in?uence over the enterprise Ms. T. A. Dubash Mr. H. K. Press Mr. M. Eipe b) Transactions with Related Parties (Rs. in Lac)
Holding Subsidiary Fellow Associate/ Key Relatives Company Company Subsidiary Joint Management of Key Venture Personnel Mangement Personnel 525.00 250.00 575.00 200.00 12.51 6.54 79.26 17.36 28.57 0.60 0.60 Total
Sr. No.
Nature of Transaction
As per our Report attached For and on behalf of KALYANIWALLA MISTRY & ASSOCIATES Chartered Accountants V.M. PADWAL Partner Mumbai, May 26, 2010 M.G. SUBRAMANIAM Company Secretary
Signatures to Balance sheet Statement For and on behalf of Board
i)
Dividend Received Previous year
17.36 28.57 525.00 250.00 575.00 200.00 12.51 6.54 79.26 0.60 0.60
M. EIPE Director
B.S. YADAV Director
ii)
ICD Placed Previous year
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010
Cash ?ow from Operating Activities Pro?t before tax Adjustments for : Dividend Income Pro?t on sale of long term investments Pro?t on sale of Mutual Funds Reversal of Provision for Dimunition in value of Investments/Loan Interest Income Operating Pro?t 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 Cash ?ow from Investing Activities Proceeds from sale of investments Dividend Income New investments made Interest Income Interest Income Loans Net cash generated / (used) from investing activities Cash ?ow from Financing Activities Dividend Paid Tax on Distributed Pro?ts Net cash generated / (used) from ?nancing 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. (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 47,812,960 1,811,748 (95,925,146) 1,250,959 42,801,000 (2,248,479) 67,482,850 (57,280,607) 653,589 (28,424,363) (17,568,531) YEAR ENDED 31.03.10 Rupees 33,073,739 (1,811,748) (2,567,195) (173,359) (23,110,000) (1,250,959) 4,160,478 717,867 (18,169) 4,860,176 (2,936,778) 1,923,398 YEAR ENDED 31.03.09 Rupees 15,543,262 (5,973,980) (942,121) (215,293) (653,589) 7,758,279 826,985 1,345,470 9,930,734 (1,387,216) 57,988 8,601,506
iii)
ICD Refunded Previous year
iv)
Interest Received on ICD Previous year
v)
Dividend Paid Previous year
vi)
Remuneration Previous year
c)
The signi?cant Related Party Transactions are as under (Rs. in Lac) Amount Nature of Transaction Interest recd on ICD placed 525.00 Godrej Industries Limited Remunertion 575.00 Mr. H. K. Press 0.60 12.51 Amount
Nature of Transaction Placement of ICD Godrej Industries Limited Refund of ICD Godrej Industries Limited 7. 8.
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 ?gures have been regrouped/reclassi?ed wherever necessary.
inter-corporate loans and
As per our Report attached For and on behalf of KALYANIWALLA MISTRY & ASSOCIATES Chartered Accountants V.M. PADWAL Partner Mumbai, May 26, 2010 M.G. SUBRAMANIAM Company Secretary
Signatures to Cash Flow Statement For and on behalf of Board
M. EIPE Director
B.S. YADAV Director
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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) 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 * Please see Note 1 below ASSETS SIDE : Amount outstanding (3) 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)
(1)
Amount outstanding NIL NIL NIL NIL NIL NIL NIL NIL NIL
Amount overdue NIL NIL NIL NIL NIL NIL NIL NIL NIL
(2)
NIL NIL NIL
NIL NIL NIL
NIL NIL 290.00 17.12
(4)
NIL NIL NIL NIL NIL NIL
(5)
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
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Ensemble Holdings & Finance Limited
(6) Borrower group-wise classi?cation of all leased assets, stock-on-hire and loans and advances : Please see Note 2 below Category Secured 1. Related Parties ** (a) Subsidiaries (b) Companies in the same group : Loans (c) 2. Other related parties Inter Corporate Deposits NIL NIL Amount net of provisions Unsecured NIL NIL Total NIL NIL
NIL NIL NIL NIL
NIL 17.12 290.00 307.12
NIL 17.12 290.00 307.12
Other than related parties a) Advance Tax Payment b) Inter Corporate Deposits Total
(7)
Investor group-wise classi?cation of all investments (current and long term) in shares and securities (both quoted and unquoted): Please see note 3 below Category 1. Related Parties ** (a) Subsidiaries (b) Companies in the same group : Quoted Unquoted (c) Other related parties Other than related parties Quoted : Unquoted : Total Market Value / Break up for fair value or NAV NIL 3546.32 18.13 NIL 154.47 787.63 4506.55 Book Value (Net of Provisions) NIL 54.89 18.13 NIL 88.27 578.23 739.52
2.
** As per Accounting Standard of ICAI (Please see Note 3) # Start up Company hence fair value considered at face value. (8) (i) Other information Particulars Gross Non-Performing Assets (a) Related parties (b) Other than related parties (ii) Net Non-Performing Assets (a) Related parties (b) Other than related parties (iii) Assets acquired in satisfaction of debt NIL NIL NIL Amount
NIL NIL
Notes: 1. As de?ned in Paragraph 2(1)(xii) of the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998. 2. 3. Provisioning norms shall be applicable as prescribed in the Non-Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 1998. 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 classi?ed as long term or current in column (5) above.
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Annual Report 2009–2010
Godrej Properties Limited
7. DEPOSITORY SYSTEM: 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. 8. 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 certi?ed 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. 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. Ranked one of India’s Top 10 Builders by the Construction World Architect and Builder Awards, 2009. 2,794.00 464.05 1,220.00 15195.39 19,673.44 1,510.51 256.71 750.00 7,510.69 10,027.91 11. 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. SUBSIDIARY COMPANIES: A. Subsidiaries Accounts The audited Balance Sheet as at March 31, 2010 and Pro?t & 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. Transfer of Stake The Company has diluted its stake in the following Subsidiaries:1) 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. 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. 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.
DIRECTORS’ REPORT FOR THE FINANCIAL YEAR ENDED ON MARCH 31, 2010
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. OPERATING RESULTS: Your Company’s performance during the year as compared to the previous period is summarised below: 2009 – 2010 (Rs. In Lacs) Pro?t before Taxation Provision for Taxation Provision for Fringe Bene?t Tax Provision for deferred tax Pro?t after taxation Add: Surplus brought forward Prior year tax adjustments AMOUNT AVAILABLE FOR APPROPRIATION Appropriations: Your Directors recommend appropriations as under: Proposed Dividend Dividend Distribution Tax Transfer to General Reserve Surplus carried forward TOTAL APPROPRIATIONS 2. INITIAL PUBLIC OFFER: 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. Your Company’s shares were listed on the Bombay Stock Exchange Limited and National Stock Exchange of India Limited on January 5, 2010. Your Directors take this opportunity to thank all the investor for their overwhelming response and the con?dence reposed by them. 3. 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. REVIEW OF OPERATIONS: Your Company posted a total income of Rs. 35,701.18 lacs during the year ended March 31, 2010. During the year, the company successfully completed several projects, most notably the 1 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. 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. 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. 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 Of?cer. 5. FUTURE PROSPECTS AND OUTLOOK OF THE COMPANY: Your Company has a well diversi?ed portfolio spread across established Tier-1 and emerging Tier-II and III locations. The strategy of partnering with leading ?rms 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. 6. 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.
st
2008-2009 (Rs. in Lacs) 10,603.42 (3,124.00) (16.50) 10.61 7,473.53 2,655.39 (101.01) 10,027.91
15,874.60 (3,669.83) (20.65) 12,184.12 7,510.69 (21.37) 19,673.44
2)
3)
Now the Company holds 51% of the paid up capital of the above mentioned subsidiaries. C. 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. 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 ?scal year 2010. The Company has already utilised an amount of Rs. 25 crores in ?scal 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
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Godrej Properties Limited
DIRECTORS’ REPORT FOR THE FINANCIAL YEAR ENDED ON MARCH 31, 2010
remaining area by March 2011. Accordingly, the Company shall utilise the balance amount of Rs. 107 Crores in ?scal year 2011 as compared to utilizing this amount in ?scal 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 ?scal 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 ?scal year 2011 when the aggregation of land is completed. In relation to the property located at Pune, the Company was required to pay an amount of Rs. 51.00 crores in ?scal year 2010. However, the owners of the property at Pune did not receive a certi?cate of conversion of land to non-agricultural use in ?scal year 2010. Accordingly, the Company shall pay the amount of Rs. 51.00 crores in ?scal 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 ?scal year 2010, Rs. 40.00 crores was to be utilised in ?scal year 2011 and
S. No. 1. 2. 3. Expenditure Items Total Estimated Cost 444.82 100.84 172.00 717.66 Amount deployed till November 15, 2009 152.50 22.82 Nil 175.32 Balance Payable as on November 15, 2009 292.32 78.02 172.00 542.34 Proposed to be funded by internal accruals Nil Nil Nil Nil
Rs. 15.00 crores was to be utilised in ?scal 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 ?scal year 2011 and Rs. 15.00 crores in ?scal year 2012 towards construction of the project. 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 ?scal year 2011 and Rs. 15.00 crores in ?scal year 2012 in this project through the subsidiary, GEDPL. 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)
Amount upto which will be ?nanced from Net Proceeds 203.00 75.00 150.17 428.17 Estimated schedule of deployment of Net Proceeds for FY 2010 25.00* #
FY 2011 178.00** 60.00
#3
FY 2012 15.00 15.00
Acquisition of land development rights for our Forthcoming Projects Construction of our Forthcoming project Repayment of loans Total
150.17 175.17
238.00
* **
# #3
The Prospectus stated that an amount of Rs. 203.00 crores was proposed to be utilised in ?scal year 2010. Now amended to state that Rs. 25.00 crores was utilised in ?scal year 2010. The Prospectus stated that no amount was proposed to be utilised in ?scal year 2011. Now amended to state that Rs. 178.00 crores is proposed to be utilised in ?scal year 2011. The Prospectus stated that an amount of Rs. 20.00 crores was proposed to be utilised in ?scal year 2010, Now amended to state that no amount was utilised in ?scal year 2010 The Prospectus stated that an amount of Rs. 40.00 crores was proposed to be utilised in ?scal year 2011, Now amended to state that the amount of Rs. 60..00 crores is proposed to be utilised in ?scal year 2011. 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. 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 of?ce 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. (i) (ii) (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:
13.
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. The Company has not earned any Foreign Exchange during the year. 17. 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 de?ned 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. 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 con?rms : (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 ?nancial year ended March 31, 2010 and of the pro?t of the Company for that year; (iii) that the Directors had taken proper and suf?cient 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
14.
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.
COMMITTEES OF DIRECTORS: a) 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. 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 Of?ce 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
b)
c)
16.
ADDITIONAL INFORMATION: (a)
(b)
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Annual Report 2009–2010
ANNEXURE A
Disclosure Relating To Employees Stock Option Plan
Particulars Options granted Exercise price of options Details 442,700 Rs. 620 per share plus interest at a compounding rate of 10 % per annum or at such other rate as may be de?ned 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. Nil Nil 442,700 39,000 Nil Nil 403,700 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. Please see Note 1 below Nil Nil
Total options vested Options exercised Total number of Equity Shares that would arise as a result of full exercise of options already granted Options forfeited/ lapsed/ cancelled Variations in terms of options Money realised by exercise of options Options outstanding (in force) Vesting schedule
Person wise details of options granted to i) ii) iii) Directors and key management employees 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 Identi?ed 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
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’. 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 pro?ts and EPS of the Company 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 Description of the method and signi?cant 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 Lock-in Impact on pro?ts of the last three years and on the EPS of the last three years if the issuer had followed the accounting policies speci?ed 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
There is no fresh issue of shares on exercise of option therefore the same is not applicable. Nil
Weighted average exercise price is Rs. 620 per share plus interest N.A.
Three years from the date of grant i.e., December 28, 2007 Nil
Details regarding options granted to our Directors and our Key Management Personnel are set forth below:
Name Mr. Milind S. Korde Mr. K. T. Jithendran Mr. Nishikant Shimpi Mr. K. P. Sudheer Mr. Nitin Wagle Mr. Shodhan A. Kembhavi Mr. Rajendra Khetawat Mr. Santosh Tamhane Ms. Krishnakoli S. Kumar Ms. Aylona D’Souza Managing Director Executive Director Executive Vice President (Bangalore region) Vice President (Mumbai region) Vice President (Operations) Vice President (Legal) and Company Secretary Vice President (Finance and Accounts) Vice President (Projects) Vice President (Marketing and Sales) Vice President (Human Resources and Administration) Position Number of options granted under ESOP 60,000 30,000 20,000 20,000 10,000 10,000 10,000 10,000 10,000 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) ?rst 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 de?nition 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 speci?c grant, including any unalloted shares lying with the Trust if utilized for that speci?c 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) 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
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Annual Report 2009–2010
REPORT OF THE AUDITORS TO THE MEMBERS OF GODREJ PROPERTIES LIMITED
1. We have audited the attached Balance Sheet of GODREJ PROPERTIES LIMITED, as at 31st March, 2010, the Pro?t and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These ?nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these ?nancial 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 ?nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial 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 speci?ed 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, Pro?t 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, Pro?t 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 ?nanced 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 pro?ts/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 ?nancial statements. b) 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 ?nancial 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 Pro?t and Loss Account, of the pro?t of the Company for the year ended on that date and iii) in the case of the Cash Flow Statement, of the cash ?ows 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 disquali?ed 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
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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) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of ?xed assets. (b) As explained to us, the Company has a program for physical veri?cation of ?xed assets at periodic intervals. In our opinion, the period of veri?cation is reasonable having regard to the size of the Company and the nature of its assets. (c) In our opinion, the disposal of ?xed assets during the year does not affect the going concern assumption. (a) The Management has conducted physical veri?cation of inventory at reasonable intervals. (b) In our opinion, the procedures of physical veri?cation 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 veri?cation. (a) The Company has not granted any loans, secured or unsecured to companies, ?rms 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, ?xed 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) 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:
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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 ?nancial year and has not incurred any cash losses in the current and immediately preceding ?nancial 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 ?nancial 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 bene?t 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 ?nancial 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 veri?ed 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.
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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
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Godrej Properties Limited
BALANCE SHEET AS AT 31ST MARCH, 2010
Schedule As at 31.03.2010 Rupees SOURCES OF FUNDS SHAREHOLDERS' FUNDS Share Capital Reserves & Surplus LOAN FUNDS Secured Loans Unsecured Loans APPLICATION OF FUNDS FIXED ASSETS Gross Block Less: Depreciation Net Block Capital Work-In-Progress / Advances INVESTMENTS DEFERRED TAX ASSET CURRENT ASSETS, LOANS & ADVANCES Inventories Sundry Debtors Cash & Bank Balances Loans & Advances LESS: CURRENT LIABILITIES & PROVISIONS Current Liabilities Provisions 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 17, 2010 19 Signatures to the Balance Sheet and Schedules 1 to 12 and 19 11 12 1,268,608,022 364,333,950 1,632,941,972 10,117,657,881 12,703,236,464 682,915,473 196,165,031 879,080,504 6,820,284,710 7,452,597,399 7 8 9 10 1,435,939,077 1,377,092,002 723,493,415 8,214,075,359 11,750,599,853 525,039,067 1,140,203,131 147,337,283 5,886,785,733 7,699,365,214 6 5 165,480,100 60,419,981 105,060,119 105,060,119 2,477,723,964 2,794,500 75,040,934 37,313,275 37,727,659 32,536,657 70,264,316 557,189,373 4,859,000 Pro?t for the year Provision for Taxation for Current Tax for Fringe Bene?t Tax for Deferred Tax Pro?t After Tax Less : Prior years tax adjustments Surplus brought forward Amount Available for Appropriation Less : Proposed Dividend Dividend Distribution Tax Transfer to General Reserve Surplus carried forward to Balance Sheet Earnings per share Basic/ Diluted in Rs. (Refer Note 10) NOTES TO ACCOUNTS & ACCOUNTING POLICIES The Schedules referred to above form an integral part of the Pro?t and Loss Account As per our Report of even date. For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants ERMIN K. IRANI Partner Mumbai, Dated : May 17, 2010 19 Signatures to the Pro?t and Loss Account and Schedules 13 and 19 279,400,036 46,404,854 122,000,000 1,519,538,846 19.31 151,050,648 25,671,058 75,000,000 751,069,518 12.20 (366,983,000) (2,064,500) 1,218,411,466 (2,137,248) 751,069,518 1,967,343,736 (312,400,000) (1,650,000) 1,061,000 747,353,632 (10,101,372) 265,538,964 1,002,791,224 3 4 1,284,680,753 3,264,337,035 12,703,236,464 2,566,929,456 1,903,589,895 7,452,597,399 1 2 698,500,090 7,455,718,586 604,202,590 2,377,875,458 INCOME Sales Operating Income Other Income TOTAL INCOME EXPENDITURE Cost of sales Employee Remumeration & Bene?ts Administration Expenses Interest & Finance Charges Depreciation 15 16 17 18 1,038,528,297 106,851,547 141,490,427 671,317,930 24,528,123 1,982,716,324 1,587,458,966 644,528,613 37,508,060 99,708,180 512,956,238 10,677,865 1,305,378,956 1,060,342,632 13 14 1,123,900,693 1,019,813,958 1,426,460,639 3,570,175,290 1,259,401,567 685,207,029 421,112,992 2,365,721,588 As at 31.03.2009 Rupees
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010
Schedule For the year ended 31.03.2010 Rupees For the year ended 31.03.2009 Rupees
Adi. B. GODREJ Chairman
MILIND S. KORDE Managing Director
Adi. B. GODREJ Chairman
MILIND S. KORDE Managing Director
SHODHAN A. KEMBHAVI Company Secretary
SHODHAN A. KEMBHAVI Company Secretary
SCHEDULES FORMING PART OF THE ACCOUNTS
As at 31.03.2010 Rupees SCHEDULE 1 SHARE CAPITAL AUTHORISED 100,000,000 Equity Shares of Rs. 10/- each 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 by Godrej Industries Ltd., the Holding Company) Of the above 54,239,845 (previous year 54,239,845) shares issued as Bonus shares by capitalising Share Premium, General Reserve & Pro?t & Loss Account 698,500,090 604,202,590 Pro?t and Loss Account 698,500,090 604,202,590 General Reserve - As per last Balance Sheet Add : Transfer from Pro?t & Loss Account 1,000,000,000 1,000,000,000 1,000,000,000 1,000,000,000 As at 31.03.2009 Rupees SCHEDULE 2 RESERVES & SURPLUS Share Premium As per last Balance Sheet Add : Received during the year Less : Utilised for Initial Public Issue expenses 1,475,805,940 4,594,173,800 406,800,000 5,663,179,740 151,000,000 122,000,000 273,000,000 1,519,538,846 7,455,718,586 1,475,805,940 1,475,805,940 76,000,000 75,000,000 151,000,000 751,069,518 2,377,875,458 As at 31.03.2010 Rupees As at 31.03.2009 Rupees
144
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE ACCOUNTS
As at 31.03.2010 Rupees SCHEDULE 3 SECURED LOANS 1) Cash Credit / Working Capital Demand Loan (Secured by equitable mortgage of immovable property of the Company's Project at Juhu, Mumbai) 2) Short Term Loan from Banks (Secured by way of equitable mortgage of its interest, in the immovable property of the project undertaken by the Company at Chandigarh 1,284,680,753 Of the above, Repayable within a year (Other than cash credit accounts) SCHEDULE 5 : FIXED ASSETS ASSETS As at 1st April, 2009 Rs. Tangible Assets Building Leasehold Improvement Of?ce Equipment Site Equipments Furniture & Fixtures Computer Motor Vehicle Intangible Assets Licenses & Software Total Previous Year Capital Work-in-progress 12,844,708 10,799,115 2,072,120 13,237,691 20,871,953 6,654,645 8,560,702 75,040,934 54,138,926 GROSS BLOCK Additions Deductions Rs. 17,031,600 15,981,411 7,158,788 3,816,383 3,486,202 6,526,978 39,429,675 93,431,037 22,141,833 Rs. 461,606 217,574 424,622 1,888,069 2,991,871 1,239,825 As at As at 31st March, 1st April, 2009 2010 Rs. Rs. 17,031,600 28,826,119 17,496,297 2,072,120 16,836,500 23,933,533 11,293,554 47,990,377 165,480,100 75,040,934 8,667,024 3,369,810 1,593,219 6,375,541 12,672,051 2,421,065 2,214,568 37,313,278 27,357,996 DEPRECIATION For the Year Deductions Rs. 6,809,838 1,754,256 66,615 1,693,702 4,036,212 2,117,664 8,049,836 24,528,123 10,677,865 Rs. 88,171 132,554 125,607 1,075,088 1,421,420 722,584 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 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 As at 31st March 2010 Rs. 15,476,862 5,035,895 1,659,834 7,936,689 16,582,656 3,463,641 10,264,404 60,419,981 37,313,278 NET BLOCK As at As at 31st March 31st April, 2009 2010 Rs. Rs. 17,031,600 13,349,257 12,460,402 412,286 8,899,811 7,350,877 7,829,913 37,725,973 105,060,119 37,727,657 105,060,119 As at 31.03.2010 Rupees 266 4,177,684 7,429,305 478,901 6,862,150 8,199,902 4,233,580 6,346,134 37,727,657 32,536,657 70,264,314 As at 31.03.2009 Rupees 266 600,000,000 2,566,929,456 600,000,000 Of the above, Repayable within a year (other than cash credit accounts) 2,440,193,000 1,903,589,895 1,284,680,753 1,966,929,456 As at 31.03.2009 Rupees SCHEDULE 4 UNSECURED LOANS Fixed Deposits Banks Companies 748,943,000 2,515,394,035 3,264,337,035 1,883,589,895 20,000,000 1,903,589,895 As at 31.03.2010 Rupees As at 31.03.2009 Rupees
742 -
742 616
2,370 23,652 7,564 16,088 10,000 2,500
2,370 24,268 7,765 16,503 10,000 2,500
1,066 1,366 3,081 1,241 1,641
1,066 1,366 3,081 1,241 1,641
5,100,000 76,500,000
5,100,000 76,500,000
1,516
1,516
5,100,000 147,900,000
5,100,000 147,900,000
891 6,366
891 6,366
388,636 500,000 340,320 163,568,489
500,000 500,000 340,320 320,720,050
2,485 621
2,485 621
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Godrej Properties Limited
SCHEDULES FORMING PART OF THE ACCOUNTS
As at 31.03.2010 Rupees 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 SCHEDULE 8 : SUNDRY DEBTORS (UNSECURED, CONSIDERED GOOD) 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 Development Manager Fees Accrued but not due (Refer Note 7 (b) Interest Accrued Deposits SCHEDULE 11 : CURRENT LIABILITIES Sundry Creditors (Refer Note 11) Investor Education and Protection Fund Advances received against sale of ?ats 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 60,230,839 75,236,194 2,775,846,940 8,214,075,359 485,786,105 220,256,051 250,590 183,000 433,284,414 128,847,862 1,268,608,022 18,907,926 834,666,553 305,536,578 1,140,203,131 66,444,003 42,959,442 37,933,838 147,337,283 255,000 399,681,033 As at 31.03.2009 Rupees 500,000 557,189,373 SCHEDULE 13 : OPERATING INCOME (GROSS) Income From Development Projects Compensation Received from Project Project Management fees Other Income from Customers Lease Rent 353,303,226 194,855,426 Licence Fees Interest Income - Customers - Projects and landlords 193,111,414 - Others Tax Deducted at source SCHEDULE 14 : OTHER INCOME Dividends 353,515,422 353,284,168 252,341,587 24,352,353 2,078,042,931 2,477,723,964 23,652 1,142,410 4,816,919 1,431,122,158 1,435,939,077 557,189,373 24,268 611,739 3,628,193 521,410,874 525,039,067 Pro?t on sale of Fixed Assets (Net) Pro?t on sale of Long Term Investments Miscellaneous Income SCHEDULE 15 : COST OF SALES Own Projects Opening Stock: Add : Expenditure/ Transfers from Advances during the period Stock-In-Trade Acquired during the year Development Rights Construction, Material & Labour Architect Fees Advertisement Expenses Overheads Interest Less : Project transferred to Subsidiary Company Less : Closing Stock: 317,741,314 115,882,000 974,292,348 75,974,660 41,859,043 377,376,685 305,833,636 2,208,959,686 (259,531,382) (1,435,939,077) 1,038,528,297 1,038,528,297 SCHEDULE 16 : EMPLOYEE REMUNERATION & BENEFITS Salaries, Bonus, Gratuity & Allowances Contribution to Provident & other funds Other Employee Bene?ts 2,501,432,277 89,091,768 282,842,884 870,480,333 60,230,839 67,412,273 2,015,295,359 5,886,785,733 103,978,759 5,707,812 250,590 761,000 529,652,976 42,564,336 682,915,473 7,093,175 SCHEDULE 17 : ADMINISTRATION EXPENSES Cost of Project Management Consultancy Charges Service Charges Loss on sale of Fixed Assets (Net) Power & Fuel Rent Insurance Rates & Taxes Repairs & Maintenance Other Operating Expenses Dimunition in value of investments written back SCHEDULE 18 : INTEREST AND FINANCE CHARGES Interest Paid - Banks - Inter Corporate Deposits - Projects and landlords 279,400,036 46,404,854 7,625,984 11,995,150 364,333,950 151,050,648 25,671,058 6,450,060 5,900,090 196,165,031 - Others Total Interest Paid Add : Brokerage & other Financial charges Total Interest/ Finance Charges Paid 526,978,921 8,234,384 76,841,766 32,952,168 645,007,239 26,310,691 671,317,930 406,638,640 1,566,422 64,905,596 2,142,981 475,253,639 37,702,599 512,956,238 187,177 7,094,890 135,478 4,445,260 28,094,016 234,543 119,371 19,472,695 81,706,582 415 141,490,427 1,321,416 7,861,766 98,139 17,548 3,516,734 10,971,849 263,030 21,284 235,645 75,400,769 99,708,180 98,665,676 8,185,871 106,851,547 30,994,798 6,489,379 23,883 37,508,060 100,000,000 474,430,413 52,628,095 7,481,511 270,052,154 149,423,052 1,054,015,225 (525,039,070) 644,528,613 644,528,613 525,039,070 115,552,452 24,417,754 5,932 1,398,581,955 3,454,998 1,426,460,639 7,469 419,903,138 1,202,385 421,112,992 2,250 659,090,950 48,909,476 1,019,813,958 353,279,335 61,459,829 82,879 425,219,562 59,110,844 685,207,029 94,282,458 227,228,811 70,000,000 3,888 14,552,183 14,400 12,000 188,348,882 3,900,000 31,676 8,486,786 14,400 12,000 For the period ended 31.03.2010 Rupees For the period ended 31.03.2009 Rupees
146
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE ACCOUNTS
SCHEDULE 19 : NOTES TO ACCOUNTS & ACCOUNTING POLICIES 1) Accounting Policies: a) General The ?nancial 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 speci?ed in Schedule XIV of the Companies Act, 1956. Assets acquired on lease are depreciated over the period of the lease. Leasehold improvements are amortized over a period of lease or ?ve years whichever is less. Intangible Assets are amortized over a period of six years. d) Investments Investments are classi?ed 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 recognize a decline, other than of a temporary nature. Current investments are carried individually at lower of cost and fair value and the resultant decline, if any, is charged to revenue. e) Inventories Inventories are valued as under: Completed Flats - At lower of Cost or Market value l) j) i) (iii)
The fair value of the plan assets is reduced from the gross obligation under the de?ned bene?t plan, to recognize the obligation on net basis. Past service cost is recognized as expense on a straight-line basis over the average period until the bene?ts become vested. Other long-term employee bene?ts: Other long-term employee bene?ts viz., leave encashment is recognized as an expense in the pro?t 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 bene?ts are charged to the pro?t and loss account. Borrowing Cost Interest and ?nance 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. 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. k) 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 suf?cient 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 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 Pro?t and Loss Account. m) Allocation of Expenses Corporate Employee Remuneration and Administration expenses are allocated to various projects on a reasonable basis as estimated by the management. n) 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 con?rmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. 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 Utilization of Funds upto March 31, 2010 Funding to part ?nance the acquisition of land developments rights and construction costs Repayment of Loans Issue Expenses Balance unutilised Amount temporarily invested in Mutual Funds Fixed Deposit / Bank Balance TOTAL 20,559.01 5,000.00 46,884.71 2,500.00 15,017.00 3,808.70 (Rs. in Lacs) 46,884.71
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 Pro?t & 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. Revenue on bulk deals on sale of its properties is recognized on execution of documents. 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. Dividend income is recognized when the right to receive the same is established. g) Development Manager Fees 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. h) Employee Bene?ts a) Short-term employee bene?ts: All employee bene?ts payable wholly within twelve months of rendering the service are classi?ed as short term employee bene?ts. Bene?ts 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 bene?ts: (i) De?ned Contribution Plans: Payments made to de?ned contribution plans such as Provident Fund are charged as an expense as they fall due. (ii) De?ned Bene?t Plans: The cost of providing bene?ts 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 Pro?t & Loss Account.
As on 31st March 2010, unutilized funds have been temporarily invested in mutual funds schemes and ?xed deposit / balance with banks as mentioned in the prospectus of the Company.
147
Godrej Properties Limited
SCHEDULES FORMING PART OF THE ACCOUNTS
3) Contingent Liabilities: Matters As at 3 1st March 2010 (Rs.) 7,850/As at 31st March 2009 (Rs.) 7,850/8) b) 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 speci?ed in the respective Agreements and have been disclosed as Development Manager Fees accrued but not due in Schedule 10. The Company’s signi?cant 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 Future minimum lease receipts under noncancelable operating leases Not later than 1 year Later than 1 year and not later than 5 years b) Current Year Rs. Previous Year Rs.
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 ?led 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/-) 4) Inventories Stock - in - Trade includes shares in the following Companies - at cost or market value (whichever is lower): Particulars Tahir Properties Limited 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: a) 1,400 5,250 1,400 5,250 Current Year (Rs.) Previous Year (Rs.) 9)
a)
26,400 105,600
26,400 105,600
The Company’s signi?cant 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 Current Year Rs. Previous 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)
28,603,511 33,332,065 6,047,901
23,191,357 30,558,198 7,061,962
During the ?nancial 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. 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. Particulars No. of Options Current Previous Year Year 412,700 442,700 9,000 403,700 30,000 412,700 Weighted Average Exercise Price 620.00 (plus interest) 620.00 (plus interest)
5)
Balances with scheduled banks on deposit accounts include Rs.34,422,705/- (Previous year Rs. 34,014,876/-) received from ?at buyers and held in trust on their behalf in a corpus fund. 6) Loans and Advances: a) Amounts due from companies under the same management: Maximum Debit Balance during the year 3,249,136 Balance as on March 31, 2010 3,249,136 Balance as on March 31, 2009 1,649,136
Particulars
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
Godrej Industries Ltd. b)
Loan & Advance to Subsidiary Companies: Maximum Debit Balance during the year 16,032,697 768,962,487 141,219,295 983,867,205 768,328,450 1,227,097,105 590,977,587 Balance as on March 31, 2010 16,032,697 556,396,071 141,085,481 983,867,205 501,260,304 1,227,097,105 590,596,924 Balance as on March 31, 2009 15,344,207 203,194,595 22,379 845,998,414 392,825,438 885,915,640 18,000
Particulars
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. 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 ?nancial 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. 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 ?nancial statements.
Godrej Realty Private Limited Godrej Waterside Properties Private Limited Godrej Sea View Properties Private Limited Godrej Real Estate Private Limited Godrej Developers Private Limited Happy Highrises Limited Godrej Estate Developers Private Limited c) 7)
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.
Inventories, Current Assets, Loans and Advances: a)
148
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE ACCOUNTS
10) Earnings Per Share Particulars Pro?t after tax and prior years tax adjustments as per Pro?t & Loss Account Weighted average No. of equity shares outstanding Basic earnings per share Nominal value of shares 11) Dues to Micro, Small and Medium Industries Disclosure of sundry creditors under current liabilities is based on the information available with the Company regarding the status of the suppliers as de?ned 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) 13) The amount of exchange difference included in the Pro?t and Loss Account, under the related heads of expenses is Rs. (25,624/-). (Previous Year Rs. 13,971,672/-). Expenditure in Foreign Currency Particulars Travelling Expenses Other Expenditure Total 14) Deferred Tax The tax effect of signi?cant temporary differences that resulted in deferred tax assets are: Particulars Depreciation on Fixed Assets Others Deferred Tax Asset 15) Current Year Rs. (3,523,000) 6,317,500 2,794,500 Previous Year Rs. 661,000 4,198,000 4,859,000 Current Year Rs. 1,788,397 64,963,887 66,752,284 Previous Year Rs. 1,663,605 46,588,039 48,251,644 Current Year Rs. 1,216,274,218 62,977,917 Rs. 19.31 Rs.10 /Previous Year Rs. 737,252,260 60,420,259 Rs. 12.20 Rs. 10 /-
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. Related Party Disclosures: 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 Signi?cant In?uence : Mr. A. B. Godrej Mr. N. B. Godrej 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) and (iii) above Godrej & Boyce Mfg. Co. Ltd. (i) 16,358,085 2,977,879 8,822,568 Godrej Industries Ltd. (ii) 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 26,706,213 5,323,036 121,238,023 196,185,842 (7,838,443) 24,136 3,225,000 1,625,000 Subsidiaries (iii) 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 9,604,511 7,178,648 4,016,335,787 2,347,580,672 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 10,864 353,686 4,919,625 8,112,751 -
18) 1. (i)
(ii)
(iii)
(iv)
Computation of Net Pro?t under Section 349 of the Companies Act, 1956 Particulars Pro?t before Tax as per Pro?t and Loss Account Add :Managerial Remuneration Depreciation Loss on sale of Fixed Asset Less
epreciation Pro?t on sale of Fixed Asset Net Pro?t for the purpose of Directors Remuneration (a) 11% (Previous Year 11%) of Net Pro?t as computed above Managerial Remunerationarticulars A B C D E F Notes: 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. 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 24,528,123 5,932 1,627,207,765 178,992,854 10,677,865 1,089,627,776 119,859,055 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Current Year Rs. 1,963,340 1,036,820 1,384,265 118,703 4,412 8,553 Previous Year Rs. 2,525,870 904,460 3,418,553 108,995 495,788 2,121 1. 2. 39,754,731 24,528,123 29,267,596 10,677,865 17,548 Sr. No. Current Year Rs. 1,587,458,966 Previous Year Rs. 1,060,342,632 (v)
2.
Description
Investment in equity/ preference share capital Sale of Investments (Preference Shares) Purchase of ?xed assets Advances given Advance received against sale of ?ats Loans & Advances repaid Deposit given Deposit repaid
16)
Amounts paid to Auditors: Particulars Audit Fees Audit under other Statutes Certi?cation under other Statutes Other Certi?cations Consultancy Charges Reimbursement of Expenses
13. 14. 15. 16.
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 -
149
Godrej Properties Limited
SCHEDULES FORMING PART OF THE ACCOUNTS
Figures in italics are for previous year. (ii) Details relating to persons referred to in items 1 (iv) & (v) above Sr. No. 1. 2. 3. 4. 3. Key Management Personnel Remuneration Reimbursement of Travel Expenses Dividend Paid Individuals exercising signi?cant In?uence : Dividend paid – Mr. N.B. Godrej Current Year Rs. 33,749,731 240,000 1,466,868 4,325,625 Previous Year Rs. 23,695,536 217,200 2,477,724 7,133,210 19) Employee Bene?ts (i) De?ned Contribution Plans: Contribution to De?ned Contribution Plan, recognized as expense for the year are as under: Particulars Employers’ Contribution to Provident Fund Employers’ Contribution to ESIC (ii) De?ned Bene?t 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 bene?cial to the employees. The following table sets out the funded status of the gratuity plan and the amounts recognized in the Company’s ?nancial statements: Particulars Change in present value of obligation Present value of obligation as at beginning of the year Interest Cost Service Cost Bene?ts 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 Current Year (Rs.) 6,450,060 499,880 1,231,678 (1,224,663) 238,552 430,477 7,625,984 (430,477) (430,477) 1,231,678 499,880 430,477 2,162,035 (In %) 7.75 4.75 Previous Year (Rs.) 4,211,619 336,929 727,433 (392,197) 841,500 724,776 6,450,060 (724,776) (724,776) 727,433 336,929 724,776 1,789,138 (In %) 7.75 4.75 Current Year (Rs.) 8,144,688 41,183 Previous Year (Rs.) 6,444,909 44,470
Signi?cant Related Party Transactions Subsidiaries & Other Related Parties in the Godrej Group Godrej Estate Developers Pvt. Ltd. Godrej Developers Private Limited Godrej & Boyce Mfg. Co. Limited Godrej Industries 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 77,778,258 136,308,667 118,101,621 108,151,756 61,571,202 47,353,570
Nature of Transactions Investment in equity share capital Sale of Investments (Preference Shares) Purchase of ?xed assets
Advances given
Godrej Waterside Properties Private Limited Godrej Developers Private Limited Godrej Estate Developers Private Limited Godrej Waterside Properties Private Limited Godrej Developers Private Limited
Advances repaid
Advance received against sale of ?ats 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 Deposit repaid Construction & other expenses incurred on behalf of other companies
Godrej Industries Limited Godrej Industries Limited Happy Highrises Ltd. Godrej Waterside Properties Private Ltd. Godrej Real Estate Private Limited Godrej Developers Private Limited Godrej Estate Developers Pvt. Ltd.
The estimates of future salary increases, considered in actuarial valuation, take into account in?ation, 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 Coliseum, Mumbai Woodsman Estate, Bengaluru Gold County, Bengaluru Planet Godrej, Mumbai Glenelg, Mumbai Edenwoods, Mumbai Shivajinagar, Pune Bhugaon, Pune Avalon Project Sanjay Khan, Bengaluru Grenville Park, Mumbai Godrej Garden City, Ahmedabad K. Syama Raju, Bengaluru Vikhroli Kochi Umbarde, Kalyan 21) 22) Area Sharing/Revenue Sharing Revenue Sharing Pro?t Sharing Area Sharing Area Sharing Pro?t Sharing Development of the following Residential/ Commercial Projects: Pro?t sharing Revenue Sharing Pro?t Sharing Pro?t Sharing Pro?t Sharing Revenue / Pro?t Sharing Pro?t Sharing
Expenses charged by other companies (net) Interest (Paid)/Received on InterCorporate Deposits given
Outstanding receivables, net of (payables)
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 Godrej Industries Limited Godrej Industries Limited 121,238,023 196,185,842 3,225,000 1,625,000
Revenue Sharing Revenue Sharing
Previous year's ?gures have been regrouped/rearranged wherever necessary to con?rm to current year’s classi?cation. Additional information as required under Part IV of Schedule VI of the Companies Act, 1956 to the extent not applicable has not been given.
Dividend paid Deposit receivable
150
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE ACCOUNTS
23) 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 Pro?le a) Registration Details Registration No. State Code Balance Sheet Date Capital raised during the year (Amount in Rs. Thousands) Public Issue (Including Premium) Rights Issue Bonus Issue Private Placement 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 Performance of Company (Amount in Rs. thousands) Turnover Total Expenditure (Net of other income) Pro?t before tax Pro?t after tax Earning per Share in Rs. (on an annualized basis) Dividend rate % Generic Name of three principal products/services of Company
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010
Current year Rupees Cash Flow from Operating Activities Pro?t for the Year before Taxation Adjustment for: Depreciation Interest Paid 24,528,123 671,317,930 (5,932) (201) 616 (708,002,676) (24,417,754) (1,398,590,265) 152,288,807 (910,900,009) (236,888,871) (2,319,465,704) 588,980,038 (2,725,985,739) Taxes Paid (Net) Net Cash Flow from Operating activities Cash Flow from Investing Activities Purchase of Fixed Assets Sale of Fixed Assets Purchase of Investments Sale of Investments Interest Received Dividend Received Net Cash Flow from Investing Activities Cash Flow from Financing Activities Proceeds from Issue of Equity Share Capital (Net of Issue Expenses) Change in Cash Credit (Repayment)/ Proceeds from Term Loan Proceeds from Unsecured Borrowings (Repayment)/ Proceeds from Inter Company Deposit (Repayment)/ Acceptance of Fixed Deposits Interest Paid Payment of Dividend Tax on Distributed Pro?ts
103,592 203,120 10 51.00%
Previous year Rupees
U74120MH1985PLC035308 11 March 31, 2010
1,587,458,966
1,060,342,632 10,677,865 512,956,238 17,548 (484,413,285) (7,469) (419,903,138) 679,670,391 (409,486,615) (400,673,167) (941,598,612) (394,976,650) (1,467,064,653) (422,073,561) (1,889,138,213) (52,537,298) 499,693 (500,000) 420,162,818 450,878,689 7,469 818,511,371 981,174,047 600,000,000 372,843,185 20,000,000 (19,098,000) (512,956,239) (246,124,143) (41,828,800) 1,154,010,050 83,383,208 63,954,075 147,337,283
b)
4,688,471 Nil Nil Nil
(Pro?t) /Loss on sale of Fixed Asset (Net) Provision for Dimunition in value of Investment written back Investment Written Off Interest Income Dividend Received Pro?t on Sale of Long Term & Current Investment Operating Pro?t before working capital changes Adjustment for: Change in Inventory Change in Sundry Debtors Change in Loans & Advances Change in Current Liabilities / Provisions
c)
14,336,178 14,336,178 698,500 7,455,719 1,284,681 3,264,337 105,060 2,477,724 10,117,658 Nil 2,795 Nil
(357,305,497) (3,083,291,236) (60,894,380) 1,576,383 (2,978,561,060) 2,456,616,320 700,178,755 24,417,754 143,333,772 4,285,654,795 (682,248,703) (600,000,000) 631,804,140 (20,000,000) 748,943,000 (671,317,930) (151,050,648) (25,671,058) 3,516,113,596 576,156,132 147,337,283 723,493,415
d)
3,570,175 1,982,716 1,587,459 1,218,411 19.31 40% N.A
e)
STATEMENT REGARDING SUBSIDIARY COMPANY PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956
1 Name of the Subsidiary Company Godrej Godrej Godrej Developers Estate Real Estate Private Developers Private Limited Private Limited Limited Godrej Godrej Godrej Realty Sea View Waterside Private Properties Properties Limited Private Private Limited Limited Happy Highrises Limited
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 pro?t/ (loss) of the subsidiary company so far it concerns the members of the Company A. For the ?nancial 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 ?nancial 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
34,032 66,730 10 51.00%
25,500 50,000 10 51.00%
50,000
510,000
388,636
510,000
Net Cash Flow from Financing Activities Net Increase in Cash & Cash Equivalent Cash & Cash Equivalent -Opening Balance Cash & Cash Equivalent -Closing Balance Notes :1.
50,000 1,000,000 10 10 100.00% 51.00%
500,000 1,000,000 1 10 77.73% 51.00%
The cash ?ow statement has been prepared under the 'Indirect Method' as set out in the Accounting Standard (AS) 3 on 'Cash Flow Statement', and presents cash ?ows by operating, investing and ?nancing activities. Figures for the previous year have been regrouped / restated wherever necessary to conform to this year's classi?cation. Adi. B. GODREJ Chairman MILIND S. KORDE Managing Director
2.
(35,678) (29,397) (388,913) 2,824,096 (25,239) 2,005,492 10,659,915 -
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 (13,606) -
SHODHAN A. KEMBHAVI Company Secretary
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 ?nalized 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 con?rm: (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 ?nancial year ended March 31, 2010 and of the pro?t of the Company for that year; (iii) that the Directors had taken proper and suf?cient 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. 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 Place : Mumbai Dated : May 14, 2010 Director NARESH NADKARNI Director
8.
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 Pro?t and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These ?nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these ?nancial 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 ?nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial 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 speci?ed 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, Pro?t 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, Pro?t 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 ?nanced 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 pro?ts/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 Pro?t and Loss Account, of the pro?t of the Company for the year ended on that date and iii) in the case of the Cash Flow Statement, of the cash ?ows 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 disquali?ed 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 ?xed assets. (b) As explained to us, the Company has a program for physical veri?cation of ?xed assets at periodic intervals. In our opinion, the period of veri?cation is reasonable having regard to the size of the Company. (c) There is no disposal of ?xed assets during the year. 2) (a) The management has conducted physical veri?cation of inventory at reasonable intervals. (b) In our opinion, the procedures of physical veri?cation 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 veri?cation. 3) (a) The Company has not granted any loans, secured or unsecured to companies, ?rms 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, ?rms 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, ?xed 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 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 ?nancial year and has not incurred any cash losses in the current and immediately preceding ?nancial 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 ?nancial 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 bene?t 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 ?nancial 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
152
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 Net Current Assets Notes To Accounts & Accounting Policies 12
As at 31.03.2010 Rupees
As at 31.03.2009 Rupees
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010 For the Schedule For the
Year ended 31.03.2010 Rupees 9,654,565 Year ended 31.03.2009 Rupees 28,785,599 INCOME Interest Income (Tax deducted at Source Rs.9,70,762/- [Previous Year Rs. 6,507,756/-]) EXPENDITURE Cost of Sales Administration Expenses Interest & Finance Charges 9 10 11 1,500,150 1,953 8,152,462 (2,614,000) 5,538,462 (1,019) 5,537,443 5,537,443 5.54 0.41 12 Signatures to Pro?t and Loss Account and Schedules 9 to 12 23,451 24,727,520 7,917 4,026,711 (1,248,000) (4,000) 2,774,711 (2,100,239) 674,472 674,472 2.77 0.65
1 2 3
10,000,000 6,211,915 150,000,000 1,000 166,212,915
10,000,000 674,472 150,000,000 1,000 160,675,472
4
247,525 22,421 225,104 90,702,935 105,396,053 3,925,054 200,024,042 34,036,231 34,036,231 165,987,811 166,212,915
247,525 20,468 227,057 84,163,008 101,915,567 9,490,264 195,568,839 35,120,424 35,120,424 160,448,415 160,675,472
Depreciation Pro?t/ (Loss) for the Year Provision for Taxation For Current Tax For Deferred Tax Pro?t/ (Loss) After Tax Prior Year Tax Adjustment De?cit Brought Forward Amount available for appropriation Transfer to Debenture Redemmption Reserve Balance Carried Forward Earning per share Basic in Rs. (Refer Note 5) Earning per share Diluted in Rs. (Refer Note 5) Notes to Accounts & Accounting Policies The Schedules referred to above form an integral part of the Pro?t and Loss Account As per our Report of even date. For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants
5 6 7
8
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
Signatures to Balance sheet and Schedules 1 to 8 and 12
MILIND S. KORDE NARESH NADKARNI Directors
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 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 (Out of the above 510,000 equity shares are held by Godrej Properties Limited, the Holding Company and its nominee) SCHEDULE 2 : RESERVES & SURPLUS DEBENTURE REDEMPRION RESERVE Balance as per last Balance Sheet Transferred from Pro?t & Loss Account Less : Utilised during the year Balance at the end of the year PROFIT & LOSS ACCOUNT Balance at the end of the year SCHEDULE 3 : SECURED LOANS 1% Secured Redeemable optionally Convertible Debentures (Refer Note 2) 150,000,000 SCHEDULE 4 : FIXED ASSET
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 Particulars
As at 31.03.2009 Rupees SCHEDULE 5 : INVENTORY Construction Work in Progress
As at 31.03.2010 Rupees 90,702,935 90,702,935 SCHEDULE 6 : CASH & BANK BALANCE Cash in Hand 667 105,395,386 105,396,053 - on Fixed Deposit Account
As at 31.03.2009 Rupees 84,163,008 84,163,008 667 410,413 101,504,487 101,915,567
10,000,000 10,000,000 10,000,000
10,000,000 10,000,000 10,000,000
Balance with Scheduled Bank - on Current Account
10,000,000
10,000,000
SCHEDULE 7 : LOANS & ADVANCES (Unsecured & considered good unless otherwise stated) Advances recoverable in cash or kind or for value to be received Others Advance Tax and Tax Deducted at Source (Net of provision for Tax of Rs. 38,62,000/- previous year Rs. 15,82,610/- ) 3,925,054 SCHEDULE 8 : CURRENT LIABILITIES Sundry Creditors ( Refer Note 3) Other Liabilities Interest Accrued but not due 888,634 369,923 32,777,674 34,036,231 9,490,264 809,480 2,883,271 31,427,673 35,120,424 412 3,924,642 3,922,385 5,567,879
674,472 5,537,443 6,211,915 6,211,915 150,000,000
674,472 674,472 674,472 150,000,000 150,000,000
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 2) that there is a reasonable certainty that suf?cient 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 Pro?t 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 con?rmed 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 speci?c 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 Pro?t 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 de?ned 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 signi?cant temporary differences that resulted in deferred tax liabilities are : Particulars Liabilities -Depreciation on Fixed Assets Deferred Tax Liabilities 5) Earnings per share Particulars Pro?t for the year as per Pro?t & 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) Amounts paid to Auditors: Particulars Current Year(Rs.) Previous Year (Rs.) Audit Fees 159,935 159,935 Audit & Other Statutes 55,150 55,150 Certi?cation 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 1 Expenses Charged to other Companies 2 3 4 5 6 7 9) 10) G&B GPL HDFC Venture Trustee Company Limited 735,000 5,718,904 (16,744,977) (16,083,477) 73,500,000 73,500,000 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 Current Year(Rs.) Previous Year (Rs.) (1,000) (1,000) (1,000) (1,000)
11,761,030 11,761,030 17,494,151 200 29,255,381 4,527,861 24,727,520
3)
4)
SCHEDULE 12 : NOTES TO ACCOUNTS AND ACCOUNTING POLICIES 1) Accounting Policies a) General The ?nancial 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 speci?ed 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 Pro?t & 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 ?nance 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
7)
8)
9,604,511 4,612,506 Expenses Charged by other Companies 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
(Figures in italics are for previous year)
Previous year ?gures have been rearranged / regrouped wherever necessary to con?rm to current year’s classi?cation. Additional Information as required under Part IV of Schedule VI of the Companies Act, 1956 to the extent not applicable has not been given.
154
Annual Report 2009–2010
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 Pro?le 1 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 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 Performance of Company (Amount in Rs. thousands) Total Expenditure Pro?t / (Loss) before Tax Pro?t / (Loss) after Tax Earning per Share (Basic) in Rs. Earning per Share (Diluted) in Rs. Dividend Rate % 5 Generic Names of three principal products / services of Company N.A. 1,502 8,152 5,537 5.54 0.41 200,249 200,249 10,000 6,212 150,000 1 225 165,988 Nil Nil Nil Nil Nil
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2010
Particulars Current Year Rupees Previous Year Rupees
U70100MH2005PTC154268 11 31st March, 2010
2
Cash Flow from Operating Activities Pro?t / (Loss) for the Year Adjustment for: Depreciation Interest Paid (Pro?t) /Loss on sale of Fixed Asset (Net) Interest Income Operating Pro?t / (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 Cash & Cash Equivalent -Opening Balance Cash & Cash Equivalent -Closing Balance Notes :
1.
8,152,462 1,953 1,500,000 (9,654,565) (150)
4,026,711 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 3,480,486 101,915,567 105,396,053
25,333 28,785,599 28,810,932 82,891,584 19,023,983 101,915,567
has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard (AS) 3 on ‘Cash Flow Statement’, and presents cash ?ows by operating, investing and ?nancing activities. 2. Figures for the previous year have been regrouped/restated wherever necessary to conform to this year’s classi?cation. For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants ERMIN K. IRANI Partner Mumbai, Dated: May 14, 2010 MILIND S. KORDE NARESH NADKARNI Directors
The cash ?ow statement
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 de?cit 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 pro?ts, 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 con?rm: (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 ?nancial year ended 31st March, 2010 and of the loss of the Company for that year; (iii) that the Directors had taken proper and suf?cient 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 Pro?t and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These ?nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these ?nancial 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 ?nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial 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 speci?ed 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, Pro?t 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, Pro?t 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 ?nanced 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 pro?ts/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 Pro?t 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 ?ows 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 disquali?ed 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. 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.
2.
3. 4.
Annexure to the Auditors’ Report
1. (a) (b) (c) 2. (a) (b) (c) 3. (a) (b)
Referred to in paragraph (3) of our report of even date. The Company is maintaining proper records showing full particulars, including quantitative details and situation of ?xed assets. As explained to us, the Company has a program for physical veri?cation of ?xed assets at periodic intervals. In our opinion, the period of veri?cation is reasonable having regard to the size of the Company. There is no disposal of ?xed assets during the year. The management has conducted physical veri?cation of inventory at reasonable intervals. In our opinion, the procedures of physical veri?cation of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. The company is maintaining proper records of inventory and no material discrepancies were noticed on physical veri?cation. The Company has not granted any loans, secured or unsecured to companies, ?rms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. 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. The Company has not taken any loan, secured or unsecured from companies, ?rms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. 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. 10. 11. (b)
12.
13. 14. 15. 16. 17.
(c) (d)
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, ?xed 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. 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.
18. 19. 20. 21.
5.
(b)
The Company’s accumulated losses at the end of the ?nancial year are more than ?fty percent of its net worth. The Company has not incurred any Cash losses during the current and immediately preceding ?nancial 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 ?nancial 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 bene?t 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 ?nancial 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.
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. 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. 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.
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
7. 8.
156
Annual Report 2009–2010
BALANCE SHEET AS AT 31ST MARCH, 2010
Schedule As at 31.03.2010 Rupees As at 31.03.2009 Rupees
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010
Schedule For the Year Ended 31.03.2010 Rupees 7 8 400,071 1,842 (401,913) 13,000 (388,913) (75,917) (464,830) (7.78) 9 For the Year Ended 31.03.2009 Rupees 32,518 1,842 (34,360) (34,360) (41,557) (75,917) (0.69)
SOURCES OF FUNDS Shareholders’ Funds Share Capital Loan Funds APPLICATION OF FUNDS Fixed Assets Gross Block Less : Depreciation Net Block INVESTMENTS DEFERRED TAX ASSETS CURRENT ASSETS, LOANS & ADVANCES Inventory Cash & Bank Balances Loans and advances LESS : CURRENT LIABILITIES & PROVISIONS Current Liabilities 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 ERMIN K. IRANI Partner Mumbai, Dated : May 14, 2010
1
500,000 500,000
500,000 500,000
INCOME EXPENDITURE Cost of sales Interest & Finance Charges Depreciation Preliminary Expenses written off De?cit for the Year Deferred Tax (Loss) / Pro?t for the Year De?cit Brought Forward De?cit Carried Forward to Balance Sheet Earning per share Basic/Diluted in Rs. (Refer Note 4) NOTES TO ACCOUNTS & ACCOUNTING POLICIES
2 2,272,694 446,373 1,826,321 13,000 3 4 5 985,846,618 68,345 7,303,998 993,218,961 995,034,164 995,034,164 (1,815,203) 99,990 46,302 53,688 857,517,086 218,014 8,830,043 866,565,143 866,207,642 866,207,642 357,501
6
11,052 464,830 500,000 9 Signatures to the Balance Sheet and Schedules 1 to 6 and 9
12,894 75,917 500,000 The Schedules referred to above form an integral part of the Pro?t & Loss Account. 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 Signatures to the Pro?t & Loss Account and Schedules 7 to 9
MILIND S. KORDE K.T. JITHENDRAN Directors
MILIND S. KORDE K.T. JITHENDRAN Directors
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 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
500,000 500,000 500,000
500,000 500,000 500,000
985,846,618 985,846,618
857,517,086 857,517,086
500,000 SCHEDULE 2: FIXED ASSETS
Particulars As at 1st April 2009 Rs. 7,990 1,455,099 92,000 152,588 99,990 2,172,704 99,990 Gross Block Additions Deductions 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 32,518 263,159 1,191,940 114,472 130,116 446,373 1,826,321 46,302 53,688
500,000
5,224 63,121 68,345
131 217,883 218,014
Of?ce Equipment Furniture & Fixtures Computer TOTAL Previous Year
Rs. 565,017
Rs. -
As at 31st March 2010 Rs. 573,007
Net Block As at As at 31st 31st March March 2009 2010 Rs. Rs. 504,265 6,481 47,207 53,688 –
7,303,998 7,303,998
8,830,043 8,830,043
1,455,099 244,588 2,272,694 99,990
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
For the year ended 31.03.2010 Rupees 857,517,086 For the year ended 31.03.2009 Rupees 728,176,550 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 Pro?t 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 suf?cient 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 con?rmed 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 signi?cant 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 Future minimum lease Payment under non-cancelable operating leases Not later than 1 year Later than 1 year and not later than 5 years 3) 1,384,320 3,918,395 1,384,320 5,299,117 Current Year Rs. Previous Year Rs.
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
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 -
2)
SCHEDULE 9 1) Accounting Policies a) General The ?nancial 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 speci?ed 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 Pro?t & 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
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 de?ned 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 Pro?t / (Loss) as per Pro?t & Loss Account (Rs.) Weighted average no. of equity shares outstanding Basic / Diluted earnings per share (Rs.) Nominal value of shares (Rs.) Current Year (388,913) 50,000 (7.78) 10 /Previous Year (34,360) 50,000 (0.69) 10 /-
4)
5)
Deferred Tax The Tax effect of signi?cant temporary differences that resulted in the deferred tax assets are: Particulars Assets - Depreciation on Fixed Assets Deferred Tax Assets Current Year (Rs.) 13,000 13,000 Current Year (Rs.) 159,935 40,388 200,323 Previous Year (Rs.) Previous Year (Rs.) 159,935 33,708 1,93,643
6)
Amounts paid to Auditors Particulars Audit Fees Consultancy Charges Total
7)
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. 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.
158
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 1. 2. 3. 4. 5. Particulars Expenses charged by other companies Purchase of Fixed Assets Advances received Advances repaid Outstanding payables GPL 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 -
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010
Current Year Rupees Cash Flow from Operating Activities Loss for the Year Adjustment for: Depreciation Interest Paid Preliminary expenses Operating Loss before working capital changes Adjustment for: Change in Inventory Change in Loans & Advances Change in Current Liabilities / Provisions Net Cash Flow from Operating activities Cash Flow from Investing Activities Purchase of Fixed Assets Net 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 Notes : 1. The cash ?ow statement has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard (AS) 3 on ‘Cash Flow Statement’, and presents cash ?ows by operating, investing and ?nancing activities. Figures for the previous year have been regrouped/ restated wherever necessary to conform to this year’s classi?cation. (2,172,704) (2,172,704) (149,669) 218,014 68,345 89,057 128,957 218,014 (128,329,532) 1,526,045 38,248,231 2,023,035 (129,340,535) (7,152,543) 54,960,253 89,057 400,071 90,578,291 1,842 90,578,291 32,518 81,621,882 1,842 81,621,882 (401,913) (34,360) Previous Year Rupees
9) 10) 11)
Figures in italics are for previous year Previous year ?gures have been rearranged / regrouped wherever necessary to con?rm to current year’s classi?cation. 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 Pro?le
1 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
2
3
2.
: : : : : : : : : :
500 1,826 13 (1,815) 11 465
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
5
Performance of Company (Amount in Rs. thousands) Turnover : Total Expenditure : Pro?t/(Loss) before Tax : Pro?t/(Loss) after Tax : Earning per Share in Rs. : Dividend Rate % : Generic Names of three principal products/services of Company :
(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 de?cit 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 of?ce to the new building has been initiated. 3. DIVIDEND: As there are no pro?ts, 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 of?ce 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 con?rm: (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 ?nancial year ended March 31, 2010 and of the loss of the Company for that year; (iii) that the Directors had taken proper and suf?cient 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
7.
8.
REPORT OF THE AUDITORS TO THE MEMBERS OF GODREJ DEVELOPERS PRIVATE LIMITED
1. We have audited the attached Balance Sheet of GODREJ DEVELOPERS PRIVATE LIMITED, as at 31st March 2010, the Pro?t and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These ?nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these ?nancial 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 ?nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial 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 speci?ed 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, Pro?t 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 Pro?t 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 ?nanced 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 pro?ts/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 Pro?t 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 ?ows 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 disquali?ed 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)
2.
3. 4.
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 ?xed assets. (b) As explained to us, the Company has a program for physical veri?cation of ?xed assets at periodical intervals. In our opinion, the period of veri?cation is reasonable having regard to the size of the Company. (c) There is no disposal of ?xed assets during the year. 2) (a) The management has conducted physical veri?cation of inventory at reasonable intervals. (b) In our opinion, the procedures of physical veri?cation 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 veri?cation. 3) (a) The Company has not granted any loans, secured or unsecured to companies, ?rms 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, ?rms 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, ?xed 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 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 ?nancial year are less than ?fty percent of its networth. Further, the company has not incurred any cash losses in the current and immediately preceding ?nancial 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 ?nancial 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 bene?t 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 ?nancial 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
160
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 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 Net Current Assets Miscellaneous Expenditure (to the extent not written off or adjusted) Preliminary Expenditure Pro?t & 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 ERMIN K. IRANI Partner Mumbai, Dated: May 05, 2010 MILIND S. KORDE K T JITHENDRAN Directors 11 Signatures to the Balance Sheet and Schedules 1 to 8 and 11 As at 31.03.2010 Rupees As at 31.03.2009 Rupees
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010
Schedule For the year ended 31.03.2010 Rupees 9 10 55,115 1,842 (56,957) (13,000) (69,957) (73,021) (142,978) (1.05) 11 For the year ended 31.03.2009 Rupees 43,406 1,842 (45,248) (45,248) (27,773) (73,021) (0.72)
1 2 3
667,300 453,900,000 13,000 454,580,300
667,300 667,300
INCOME EXPENDITURE Cost of Sales Interest & Finance Charges Depreciation Preliminary Expenses written off De?cit for the year Provision for Deferred Tax De?cit After Tax De?cit Brought Forward De?cit Carried Forward to Balance Sheet Earning per share Basic/Diluted in Rs. (Refer Note 6) NOTES TO ACCOUNTS & ACCOUNTING POLICIES
4
173,585 98,521 75,064 808,334,259 5,585,346 197,458,358 1,011,377,963 557,026,757 557,026,757 454,351,206 11,052 142,978 454,580,300
139,464 43,406 96,058 313,882,169 102,229 100,272,825 414,257,223 413,771,896 413,771,896 485,327 12,894 73,021 667,300
5 6 7
8
The Schedules referred to above form an integral part of the Pro?t & Loss Account. As per our Report of even date. For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants ERMIN K. IRANI Partner Mumbai, Dated: May 05, 2010
Signatures to Pro?t & Loss Account and Schedules 9 to 11
MILIND S. KORDE K T JITHENDRAN Directors
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 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) SCHEDULE 4 : FIXED ASSETS
Particulars Gross Block As at Additions Deductions 1st April 2009 Rs. Rs. Rs. Of?ce Equipment Computer Total Previous Year 139,464 139,464 5,063 29,058 34,121 139,464 As at 31st March 2010 Rs. 5,063 As at 1st April 2009 Rs. Depreciation For the Year Rs. 546 54,569 55,115 43,406 Net Block As at As at 31st 31st March March 2010 2010 Rs. Rs. 546 97,975 98,521 43,406 4,517 70,547 75,064 96,058 As at 31st March 2009 Rs. 96,058 96,058 –
As at 31.03.2009 Rupees 900,000 100,000 1,000,000 667,300 667,300 214,844,318 (214,844,318) 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 808,334,259 808,334,259 54,119 5,531,227 5,585,346
As at 31.03.2009 Rupees 313,882,169 313,882,169 10,622 91,607 102,229
900,000 100,000 1,000,000 667,300 667,300 453,900,000 453,900,000
97,062,129 100,396,229 197,458,358 42,034,294 514,992,463 557,026,757
100,272,825 100,272,825 13,435,028 400,336,868 413,771,896
168,522 43,406 173,585 43,406 139,464 -
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 Less : Closing Stock: Cost of Sales SCHEDULE 10: INTEREST AND FINANCIAL CHARGES Interest Paid - Banks - Others Total Interest Paid Less: Transferred to Cost of Sales NET INTEREST 313,882,169 379,990,860 6,563,741 39,387,620 68,509,869 808,334,259 808,334,259 16,651,505 51,858,364 68,509,869 68,509,869 141,768,467 42,400,487 10,112,400 108,714,649 10,886,166 313,882,169 313,882,169 38 10,886,128 10,886,166 10,886,166 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 Pro?t 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 con?rmed 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) Current Year (Rs.) 10,163 Previous Year (Rs.) 10,163
2)
3)
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 speci?ed 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 Pro?t & 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 suf?cient 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
5)
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 de?ned 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 signi?cant temporary differences that resulted in the deferred tax liabilities are : Particulars Liabilities - Depreciation on Fixed Assets Deferred Tax Liabilities Current Year (Rs.) 13,000 13,000 Previous Year (Rs.) -
6)
Earnings Per Share Particulars Loss for the year as per Pro?t & Loss Account(Rs.) Weighted average no. of equity shares outstanding Basic Earnings Per Share (Rs.) Nominal value of shares (Rs.) Current Year (69,957) 66,730 (1.05) 10 /Previous Year (45,248) 62,513 (0.72) 10 /-
7)
Amounts paid to Auditors Particulars Audit Fees Certi?cation Consultancy Charges Total Current Year (Rs.) 159,935 33,092 40,388 233,415 Previous Year (Rs.) 159,935 11,236 171,171
8)
9)
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 2 3 4 5 6 7 Issue of Equity/Preference Shares Redemption of Preference Shares Expenses Charged by other companies Expenses Charged to other companies Advances received Advances paid Outstanding payables GPL 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 RFIREB 215,011,618 -
Figures in italics are for previous year
162
Annual Report 2009—2010
10) Previous year ?gures have been regrouped / rearranged where ever necessary to con?rm to current year’s classi?cation. 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 Pro?le 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) Pro?t / (Loss) before Tax : (57) Pro?t / (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 Cash Flow from Operating Activities Loss For the period Adjustment for: Depreciation Interest Paid Preliminary Expenses Operating Pro?t before working capital changes Adjustment for: Change in Inventory Change in Loans & Advances Change in Current Liabilities/Provisions Net Cash Flow from Operating activities 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 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 Notes : 1. The cash ?ow statement has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard (AS) 3 on ‘Cash Flow Statement’, and presents cash ?ows by operating, investing and ?nancing activities. Figures for the previous year have been regrouped/ restated wherever necessary to conform to this year’s classi?cation. 453,900,000 (11,736,328) 442,163,672 5,483,117 102,229 5,585,346 215,011,618 (214,944,318) (38) 67,262 (103,760) 205,989 102,229 (34,121) (34,121) (139,464) (139,464) (494,452,090) (97,185,533) 86,481,320 (436,646,434) (172,113,702) 155,185 161,040,793 (31,558) 55,115 68,509,869 1,842 68,509,869 43,406 10,886,166 1,842 10,886,166 (56,957) (45,248) Previous Year Rupees
2.
For and on behalf of KALYANIWALLA & MISTRY CHARTERED ACCOUNTANTS ERMIN K. IRANI Partner Mumbai, Dated: May 05, 2010 MILIND S. KORDE K. T. JITHENDRAN Director
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 de?cit 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 ?nalized the design for the First Phase of the Project. 3. DIVIDEND: As there are no pro?ts, 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 con?rm: (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; 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 ?nancial year ended 31st March, 2010 and of the loss of the Company for that year; (iii) that the Directors had taken proper and suf?cient 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. iii. Technology Absorption : It is an on going process. Foreign Exchange Earning & Outgo : The Company has not earned any Foreign Exchange nor incurred any Foreign Exchange Expenditure during the year. (ii)
8.
9.
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 K.T. JITHENDRAN
Directors
Mumbai, Dated: May 14, 2010
REPORT OF THE AUDITORS TO THE MEMBERS OF GODREJ SEA VIEW PROPERTIES PRIVATE LIMITED
1. We have audited the attached Balance Sheet of GODREJ SEA VIEW PROPERTIES PRIVATE LIMITED, as at 31st March, 2010, the Pro?t and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These ?nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these ?nancial 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 ?nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial 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 speci?ed 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, Pro?t 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 ?nanced 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 pro?ts/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 Pro?t 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 ?ows 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 disquali?ed 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.
2.
3. 4.
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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) The Company has maintained proper records showing full particulars, including quantitative details and situation of ?xed assets. As explained to us, the Company has a program for physical veri?cation of ?xed assets at periodical intervals. In our opinion, the period of veri?cation is reasonable having regard to the size of the Company. (c) There is no disposal of ?xed assets during the year. (a) The management has conducted physical veri?cation of inventory at reasonable intervals. (b) In our opinion, the procedures of physical veri?cation 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 veri?cation. (a) The Company has not granted any loans, secured or unsecured to companies, ?rms 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, ?rms 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, ?xed 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) (a) 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 ?nancial yearare less than ?fty percent of its networth. In Current year the Company has not incurred cash losses, however, it has incurred cash losses in the immediately preceding ?nancial 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 ?nancial 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 bene?t 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 ?nancial 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 ?ows 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.
2)
10) 11) 12) 13) 14) 15) 16) 17) 18) 19) 20) 21)
3)
4)
5)
6) 7) 8) 9)
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
164
Annual Report 2009–2010
BALANCE SHEET AS AT MARCH 31, 2010
Schedule As at 31.03.2010 Rupees As at 31.03.2009 Rupees
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
SOURCES OF FUNDS SHAREHOLDERS' FUNDS Share Capital LOAN FUNDS DEFERRED TAX LIABILITY
1
500,000 — 31,000 531,000
500,000 — — 500,000
INCOME Interest Income EXPENDITURE Cost of Sales 8 9 10 — — — 7,967 1,842 5,745 (1,000) 1,000 (31,000) (25,255) (145,288) (170,543) (0.05) 11 — 77,186 — — 1,842 (79,028) — — — (79,028) (66,260) (145,288) (0.16) Administration Expenses 15,554 —
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 NET CURRENT ASSETS 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. 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
2 587,902 7,967 579,935 2,182,485 2,762,420 — 3 4 5 36,331,024 19,926,791 82,945,430 139,203,245 6 7 141,616,260 — 141,616,260 (2,413,015) — — — — — — — 392,781 — 392,781 50,963 — 50,963 341,818
Interest & Finance Charges Depreciation Preliminary Expenses written off Pro?t / (Defecit) for the Year Provision for Taxation For Current Tax For MAT Credit Entitlement For Deferred Tax De?cit After Tax De?cit Brought Forward De?cit carried to the Balance sheet Earning per share - Basic in Rs. (Refer Note 3) NOTES TO ACCOUNTS & ACCOUNTING POLICIES
11,052 170,543 531,000 11
12,894 145,288 500,000
Signatures to the Balance Sheet and Schedules 1 to 7 and 11
The Schedules referred to above form an integral part of the Pro?t & Loss Account. As per our Report of even date. For and on behalf of KALYANIWALLA & MISTRY CHARTERED ACCOUNTANTS
Signatures to Pro?t & Loss Account and Schedules 8 to 11
MILIND S. KORDE K.T. JITHENDRAN Directors
ERMIN K. IRANI Partner Mumbai, Dated: May 14, 2010
MILIND S. KORDE K.T. JITHENDRAN Directors
SCHEDULES FORMING PART OF THE ACCOUNTS
As at 31.03.2010 Rupees SCHEDULE 1 : SHARE CAPITAL Authorised 500,000 Equity shares of Re. 1/- each (Previous Year 50,000 Equity shares of Rs. 10/- each) As at 31.03.2009 Rupees SCHEDULE 2 : FIXED ASSETS
Particulars Gross Block As at 1st Additions Deductions April, 2009 Rs. Rs. 135,000 152,061 300,841 587,902 — — Rs. — — — Of?ce Equipment Furniture & Fixtures Computer TOTAL Previous Year Capital Work-inProgress As at 31st March, 2010 Rs. 135,000 152,061 300,841 Depreciation Upto 1st For the Year April, 2009 Rs. — — — — — — Rs. 848 528 6,591 7,967 — — TOTAL Upto 31st March, 2010 Rs. 848 528 6,591 7,967 — — Net Block As at As at 31st 31st March, March, 2010 2009 Rs. 134,152 151,533 294,250 579,935 — — — — Rs. — — —
500,000 500,000
500,000 500,000 500,000
— — — — — —
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)
500,000
— 587,902 — — — —
500,000
500,000
2,182,485 2,762,420
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Godrej Sea View Properties Private Limited
As at 31.03.2010 Rupees SCHEDULE 3 INVENTORY Construction Work-in-Progress As at 31.03.2009 Rupees 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 speci?ed 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 Pro?t & 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 suf?cient 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 Pro?t 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 con?rmed 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 de?ned 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 Pro?t & Loss Account Weighted average no. of equity shares outstanding Basic / Diluted earnings per share (Rs.) Nominal value of shares (Rs.)
split of shares during the year.
36,331,024 36,331,024
— —
SCHEDULE 4 CASH & BANK BALANCE Cash & Cheques-in-Hand Balance with Scheduled Bank - on Current Account - on Fixed Deposit Accounts
1,960 674,831 19,250,000 19,926,791
— 392,781 392,781
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 2,929,876 15,554 80,000,000 82,945,430 — — — —
SCHEDULE 6 CURRENT LIABILITIES Sundry Creditors (Refer Note 2) Other Liabilities
1,009 141,615,251 141,616,260
23,388 27,575 50,963
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
— —
— —
— 27,403,964 10,000 8,677,327 239,733 36,331,024 36,331,024 —
— — — — — — — —
— — —
27,575 49,611 77,186
SCHEDULE 10 INTEREST AND FINANCE CHARGES (NET) INTEREST PAID Interest Paid - Others TOTAL INTEREST PAID Less: Transferred to Cost of Sales NET INTEREST
239,733 239,733 239,733 —
— — — —
2)
SCHEDULE 11 NOTES TO ACCOUNTS AND ACCOUNTING POLICIES 1) Accounting Policies a. General The ?nancial 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.
3)
4)
Current Year (Rs.) (25,255) 500,000 (0.05) 1/-
Previous Year (Rs.) (79,028) 500,000 (0.16)* 1/-
* Earning per share of previous year has been recomputed based on the no of shares outstanding after
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Annual Report 2009–2010
5) Deferred Tax The Tax effect of signi?cant temporary differences that resulted in the deferred tax liabilities are : Particulars Liabilities - Depreciation on Fixed Assets Deferred Tax Liabilities 6) Lease The Company’s signi?cant 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 Future minimum lease payments under non-cancelable operating leases - Not later than 1 year - Later than 1 year and not later than 5 years - Later than 5 years 7) Amounts paid to Auditors: Current Year (Rs.) 159,935 40,388 200,323 Previous Year (Rs.) 27,575 33,708 61,283 4. 2,241,396 9,709,390 2,030,206 NIL NIL NIL Current Year (Rs.) Previous Year (Rs.) 3. Current Year Previous Year (Rs.) (Rs.) 31,000 31,000 2. 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 Pro?le. 1. Registration Details Registration No. State Code Balance Sheet Date : : : U45200MH2007PTC168730 11 31st March, 2010
Audit Fees Consultancy Charges Total 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. 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. 1 2. 3. 4. Particulars Reimbursement of Expenses Advance Received/(Given) Purchase of Fixed Assets Outstanding payables/(Receivable) GPL 29,170,686 1,149 109,839,114 – 2,454,873 – 141,085,481 22,379 G&B – – (304,284) (304,284) 5.
9)
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 Pro?t/(Loss) before Tax : 6 Pro?t/(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
Current Year Rupees Cash Flow from Operating Activities Pro?t/(Loss) for the Year Adjustment for: Depreciation Interest Paid Preliminary Expenses Ineterst Received Operating Pro?t 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 ?ow statement has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard (AS) 3 on ‘Cash Flow Statement’, and presents cash ?ows by operating, investing and ?nancing activities. 2. Figures for the previous year have been regrouped/ restated wherever necessary to conform to this year’s classi?cation. 5,745 7,967 239,733 1,842 (15,554) 239,733 (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 Previous Year Rupees (79,028) – – 1,842 – (77,186) – – 1,643 (75,543) – – (75,543) 468,324 392,781
Figures in italics are for previous year. 10) Previous year ?gures have been regrouped / rearranged whereever necessary to con?rm to current year’s classi?cation. 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.
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 MILIND S. KORDE K.T. JITHENDRAN Directors
167
Happy Highrises Limited
DIRECTORS’ REPORT FOR THE YEAR ENDED MARCH 31, 2010
TO THE SHAREHOLDERS 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 pro?t 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. 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. 4. DIVIDEND: There is no Dividend declared for the year ended March 31, 2010. CHANGE IN SHAREHOLDING PATTERN: 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. Post transfer of shares to Milestone India Real Estate Fund Godrej Properties Limited now holds 51% stake in the Company. 5. DIRECTORS: 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. 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 con?rm: (i) that in the preparation of the annual accounts, the applicable accounting standards have been followed; Place : Mumbai Dated : May 14, 2010 9. (iv) 8. (a) (iii) (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 ?nancial year ended March 31, 2010 and of the pro?t of the Company for that year; that the Directors had taken proper and suf?cient 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. 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. 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) (ii) (iii) Conservation of Energy : Expenses on account of Energy are negligible. Technology Absorption: It is an on going process. 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 K.T. JITHENDRAN DIRECTORS
ADDITIONAL INFORMATION:
(b)
REPORT OF THE AUDITORS TO THE MEMBERS OF HAPPY HIGHRISES LIMITED
1. We have audited the attached Balance Sheet of HAPPY HIGHRISES LIMITED, as at 31st March, 2010, the Pro?t and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These ?nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these ?nancial 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 ?nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial 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 speci?ed 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 Pro?t 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 Pro?t 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. 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 Pro?t and Loss Account, of the pro?t of the Company for the year ended on that date and iii) in the case of the Cash Flow Statement, of the cash ?ows 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 disquali?ed 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. e)
2.
5.
3.
4.
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
168
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 ?xed assets. (b) As explained to us, the Company has a program for physical veri?cation of ?xed assets at periodicals intervals. In our opinion, the period of veri?cation is reasonable having regard to the size of the Company. (c) There is no disposal of ?xed assets during the year. 2) (a) The management has conducted physical veri?cation of inventory at reasonable intervals. (b) In our opinion, the procedures of physical veri?cation 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 veri?cation. 3) (a) The Company has not granted any loans, secured or unsecured to companies, ?rms 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, ?rms 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, ?xed 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 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 ?nancial year and has not incurred any cash losses in the current and immediately preceding ?nancial 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 ?nancial 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 bene?t 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 ?nancial 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 ?ows 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.
10) 11) 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
BALANCE SHEET AS AT 31ST MARCH, 2010
Schedule SOURCES OF FUNDS SHAREHOLDERS’ FUNDS Share Capital Reserve & Surplus LOAN FUNDS DEFERRED TAX LIABILITY APPLICATION OF FUNDS FIXED ASSETS Gross Block Less : Depreciation Net Block INVESTMENTS CURRENT ASSETS, LOANS & ADVANCES Inventory Debtors Cash & Bank Balances Loans & Advances LESS : CURRENT LIABILITIES & PROVISIONS Current Liabilities Provisions NET CURRENT ASSETS MISCELLANEOUS EXPENDITURE (to the extent not written off or adjusted) Preliminary Expenditure PROFIT & LOSS ACCOUNT NOTES TO ACCOUNTS & ACCOUNTING POLICIES 12 As at 31.03.2010 Rupees 2,031,200 14,472,024 12,000 16,515,224 2,618,114 392,900 2,225,214 1,256,666,886 67,616,112 14,481,093 19,898,842 1,358,662,933 1,336,263,427 8,121,578 1,344,385,005 14,277,928 12,082 16,515,224 As at 31.03.2009 Rupees 2,031,200 2,031,200 137,360 33,445 103,915 907,618,712 87,980 1,155,172 908,861,864 907,020,485 907,020,485 1,841,379 13,808 72,098 2,031,200
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010
Schedule For the Year ended 31.03.2010 Rupees 121,057,106 10 11 97,971,803 359,455 1,726 22,724,122 (8,168,000) (12,000) 14,544,122 (72,098) 14,472,024 71.60 12 For the Year ended 31.03.2009 Rupees 30,245 1,726 (31,971) (31,971) (40,127) (72,098) (0.16)
1 2
3
4 5 6 7 8 9
INCOME Sales EXPENDITURE Cost of Sales Interest & Finance Charges Depreciation Preliminary Expenses written off Pro?t / (Defecit) for the Year Provision for Tax for Current Tax for Deferred Tax Pro?t / (Defecit) after tax De?cit Brought Forward Pro?t Carried Forward to Balance Sheet Earning per share Basic/Diluted in Rs. (Refer Note 3) NOTES TO ACCOUNTS & ACCOUNTING POLICIES
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
The Schedules referred to above form an integral part of the Pro?t & Loss Account. Signatures to Pro?t & 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
As at 31.03.10 Rupees 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 31.03.00 Rupees 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
2,500,000 2,500,000 2,031,200
2,500,000 2,500,000 2,031,200
907,618,712 123,579,224 1,416,852 32,826,545 182,866,518 106,330,838 1,354,638,689 1,256,666,886 97,971,803
774,188,736 5,662,615 545,093 39,873,381 87,348,887 907,618,712 907,618,712 -
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 Of?ce Equipments Computers Total 137,360 2,480,754 Previous Year 3,200 134,160 2,618,114 137,360 33,445 3,200 359,455 30,245 392,900 2,225,214 33,445 103,915 103,915 Gross Block Additions Deductions Depreciation As at Upto For the Upto 31st 1st April, Year 31st March, 2009 March, 2010 2010 Rs. Rs. Rs. Rs. 1,369,693 389,446 858,975 3,200 30,245 156,032 38,151 165,272 Net Block As at As at 31st 31st March, March, 2010 2009 Rs. Rs. 103,915
Rs.
Rs. -
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 -
- 1,369,693 3,200 134,160 386,246 724,815
156,032 1,213,661 41,351 195,517 348,095 663,458
As at 31.03.2010 Rupees SCHEDULE 4 INVENTORY Construction work in progress SCHEDULE 5 SUNDRY DEBTORS (UNSECURED, CONSIDERED GOOD) Others (Includes unbilled revenue of Rs. 57,999,721/- (Previous year Rs. NIL)) SCHEDULE 6 CASH & BANK BALANCE Cash & Cheques-in-Hand Balances with Scheduled Bank 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 SCHEDULE 8 CURRENT LIABILITIES Sundry Creditors (Refer Note 2) Investor Education & Protection Fund Advances received against Sale Other liabilities 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/-) 8,121,578 8,121,578 90,373,592 1,278,797 1,244,611,038 1,336,263,427 16,212,613 3,686,229 19,898,842 54,110 14,426,983 14,481,093 67,616,112 67,616,112 1,256,666,886 1,256,666,886
As at 31.03.2009 Rupees
907,618,712 907,618,712
-
14,085 73,895 87,980
1,108,750 46,422 1,155,172
1,087,650 905,932,835 907,020,485
-
-
SCHEDULE 12 : NOTES TO ACCOUNT AND ACCOUNTING POLICIES 1) Accounting Policies a) General The ?nancial 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 speci?ed 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 Pro?t & 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 ?nance 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
170
Annual Report 2009–2010 SCHEDULES FORMING PART OF THE ACCOUNTS
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 suf?cient 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 Pro?t 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 con?rmed 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 de?ned 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 Pro?t / (Loss) for the period as per Pro?t & Loss Account (Rs.) Weighted average no. of equity shares outstanding Earnings Per Share (Basic /Diluted) (Rs.) 4. Current Year 14,544,122 203,120 71.60 Previous Year (31,971) 203,120 (0.16) 10. 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 Pro?le 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 Pro?t/(Loss) before Tax : 22,724 Pro?t/(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.
1
j)
2
k)
3
2.
3.
4
Nominal value of shares (Rs.) 10/10/Deferred Tax The Tax effect of signi?cant temporary differences that resulted in deferred tax liabilities are : Particulars Liabilities - Depreciation on Fixed Assets Deferred Tax Liabilities Amounts paid to Auditors Current Year (Rs.) 12,000 12,000 Current Year (Rs.) 1,59,935 55,150 40,388 255,473 Previous Year (Rs.) Previous Year (Rs.) 1,59,935 159,935
5
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010
Current Year Rupees Cash Flow from Operating Activities Pro?t / (Loss) before taxation Adjustment for: Depreciation Interest Paid Preliminary Expenses Operating Pro?t /(Loss) before working capital changes Adjustment for: Change in Inventory Increase in Sundry Debtors Change in Loans & Advances Change in Current Liabilities / Provisions Net Cash Flow from Operating Activities Cash Flow from Investing Activities Purchase of Fixed Assets Net 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 Notes : 1. The cash ?ow statement has been prepared under the 'Indirect Method' as set out in the Accounting Standard (AS) 3 on 'Cash Flow Statement', and presents cash ?ows by operating, investing and ?nancing activities. Figures for the previous year have been regrouped/ restated wherever necessary to conform to this year's classi?cation. (2,480,754) (2,480,754) 14,393,113 87,980 14,481,093 (134,160) (134,160) (1,907,960) 1,995,940 87,980 (349,048,174) (67,616,112) (18,790,092) 322,912,104 16,873,867 (133,429,976) (705,278) 45,012,567 (1,773,800) 359,455 106,330,838 1,726 129,416,141 30,245 87,348,887 1,726 87,348,887 22,724,122 (31,971) Previous Year Rupees
5.
6.
7.
2.
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 1. 2. 3. 4. 5. Expenses incurred by other company towards Construction work in progress and Revenue expenditure Advances Received Advances Repaid Outstanding payables Purchase of Fixed Assets GPL Amount Rs. 181,214,018 114,240,742 202,500,000 31,270,000 31,900,000 1,227,097,105 885,915,639 G&B Rs. 81,702 -
2.
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
8. 9.
Figures in italics are for previous year Previous year ?gures have been rearranged / regrouped wherever necessary to con?rm to current year’s classi?cation. Additional Information as required under Part IV of Schedule VI of the Companies Act, 1956 to the extent not applicable has not been given.
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 of?ce 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 Con?rm: (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 ?nancial year ended March 31, 2010 and of the pro?t of the Company for that year; (iii) that the Directors had taken proper and suf?cient 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
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REPORT OF THE AUDITORS TO THE MEMBERS OF GODREJ WATERSIDE PROPERTIES PRIVATE LIMITED
1. We have audited the attached Balance Sheet of GODREJ WATERSIDE PROPERTIES PRIVATE LIMITED, as at 31st March 2010, the Pro?t and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These ?nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these ?nancial 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 ?nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial 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 speci?ed 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, Pro?t 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 Pro?t 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 ?nanced 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 pro?ts/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 Pro?t and Loss Account, of the pro?t of the Company for the year ended on that date and iii) in the case of the Cash Flow Statement, of the cash ?ows 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 disquali?ed 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.
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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
172
Annual Report 2009–2010
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 ?xed assets. (b) As explained to us, the Company has a program for physical veri?cation of ?xed assets at periodical intervals. In our opinion, the period of veri?cation is reasonable having regard to the size of the Company. (c) There is no disposal of ?xed assets during the year. 2. (a) The management has conducted physical veri?cation of inventory at reasonable intervals. (b) In our opinion, the procedures of physical veri?cation 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 veri?cation. 3. (a) The Company has not granted any loans, secured or unsecured to companies, ?rms 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, ?rms 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, ?xed 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
ANNEXURE TO THE AUDITORS’ REPORT
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 ?nancial year and has not incurred any cash losses in the current and immediately preceding ?nancial 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 ?nancial 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 bene?t 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 ?nancial 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 ?ows 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
BALANCE SHEET AS AT 31ST MARCH, 2010
Schedule SOURCES OF FUNDS Shareholders’ Funds Share Capital Reserve & Surplus Loan Funds Secured Loans 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 Less : Current Liabilities & Provisions Current Liabilities Provisions 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 As at 31.03.2010 Rupees 10,000,000 16,875,800 2,167,300,000 2,194,175,800 4,218,878 2,065,890 2,152,988 30,000 2,371,895,669 353,254,319 40,233,572 139,307,911 2,904,691,471 711,233,052 1,465,607 712,698,659 2,191,992,812 2,194,175,800 As at 31.03.2009 Rupees 10,000,000 12,943,462 2,167,300,000 2,190,243,462 3,958,506 1,449,504 2,509,002 4,000 2,070,421,912 245,317,300 18,190,356 326,307,823 2,660,237,391 465,089,851 7,417,080 472,506,931 2,187,730,460 2,190,243,462
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED ON 31ST MARCH, 2010
Schedule For the year ended 31.03.2010 Rupees
1 2 3
For the year ended 31.03.2009 Rupees 592,449,300 3,169,314 595,618,614 566,538,934 3,169,314 691,460 570,399,708 25,218,906 (8,890,000) 23,000 16,351,906 (3,408,444) 12,943,462 12,943,462 16.35 0.55
INCOME Sales Other Income (Tax Deducted at Source Rs.361,270 /- [Previous year Rs. 718,167/-]) EXPENDITURE Cost of Sales Interest & Finance Charges Depreciation Pro?t for the Year Provision for Taxation for Current Tax for Deferred Tax Pro?t / (Loss) After Tax De?cit 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) Notes To Accounts & Accounting Policies The Schedules referred to above form an integral part of the Pro?t and Loss Account 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
11
870,207,675 3,662,561 873,870,236
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5 6 7 8 9 10
863,770,951 3,662,561 616,386 868,049,898 5,820,338 (1,914,000) 26,000 3,932,338 3,932,338 3,932,338 3.93 0.13
14 Signatures to Pro?t and Loss Account and Schedules 11 to 14
Milind S. Korde Naresh Nadkarni Directors
Milind S. Korde Naresh Nadkarni Directors
173
Godrej Waterside Properties Private Limited
SCHEDULES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED ON 31st MARCH, 2010
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 Pro?t & Loss Account Less : Utilised during the year Balance at the end of the year Pro?t & 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 4 : FIXED ASSETS
Particulars Gross Block As at 1st April Deduc2009 Additions tions Rs. Rs. Rs. Land (Refer Note 2) 356,380 Of?ce 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. Depreciation Upto 1st April 2009 Rs. Upto 31st March 2010 Rs. Net Block As at As at 31st 31st March March 2010 2009 Rs. Rs.
SCHEDULE 14 : NOTES TO ACCOUNTS AND ACCOUNTING POLICIES 1) Accounting Policies a) General The ?nancial 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 speci?ed 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 Pro?t & 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 Pro?t 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 suf?cient 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 con?rmed 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
As at 31.03.2010 Rupees
As at 31.03.2009 Rupees
10,000,000 10,000,000 10,000,000 10,000,000 12,943,462 3,932,338 16,875,800 16,875,800 290,000,000 1,877,300,000 2,167,300,000
10,000,000 10,000,000 10,000,000 10,000,000 12,943,462 12,943,462 12,943,462 290,000,000 1,877,300,000 2,167,300,000
For the Year 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
As at 31.03.2010 Rupees
As at 31.03.2009 Rupees
2,371,895,669 2,371,895,669 353,254,319 353,254,319 53,799 32,079,773 8,100,000 40,233,572
2,070,421,912 2,070,421,912 245,317,300 245,317,300 55,700 18,134,656 18,190,356
128,072,448 11,235,463 139,307,911 107,553,132 4,602,544 562,654,237 36,423,139 711,233,052 1,465,607 1,465,607 3,662,561 3,662,561 361,270 2,070,421,912 801,220,508 3,351,975 3,656,835 98,870,978 258,144,412 3,235,666,620 2,371,895,669 863,770,951 211,191,523 50,615,450 261,806,973 258,144,412 3,662,561
182,218,588 139,063,304 5,025,931 326,307,823 185,152,842 246,123,870 33,813,139 465,089,851 7,417,080 7,417,080 3,169,314 3,169,314 718,167 992,961,241 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 97,990,609 58,077,680 156,068,289 152,898,975 3,169,314
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174
Annual Report 2009–2010
3) 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 speci?c 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 Pro?t 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 de?ned 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: Current Year Previous Year Rs. Rs. Travelling Expenses 9,244 Other Expenditure 68,510,943 Total 68,520,187 Deferred Tax The Tax effect of signi?cant temporary differences that resulted in the deferred tax assets are : Particulars Assets - Depreciation on Fixed Assets Deferred Tax Asset Earnings per share Particulars Current Year (Rs.) 30,000 30,000 Current Year Rs. 3,932,339 1,000,000 30,000,000 Previous Year (Rs.) 4,000 4,000 Previous Year Rs. 16,351,906 1,000,000 30,000,000 Particulars 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 Pro?le 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 Pro?t/(Loss) before Tax 5,820 Pro?t/(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 Current Year Rupees Cash Flow from Operating Activities Pro?t for the Year Adjustment for: Depreciation Interest Paid Interest Income Operating Pro?t 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 5,820,338 616,386 261,806,973 (3,662,561) 264,581,136 Previous Year Rupees 25,218,906 691,460 156,068,289 (3,169,314) 178,809,341
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Pro?t / (Loss) for the Year as per Pro?t & 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 signi?cant 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 Future minimum lease payments under non-cancelable operating leases - Not later than 1 year Amounts paid to Auditors Particulars Current Year (Rs.) 4,18,192 Current Year (Rs.) 159,935 55,150 33,092 40,388 288,565 Previous Year (Rs.) NIL Previous Year (Rs.) 159,935 55,150 28,635 33,708 277,446
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11)
Audit Fees Audit under other Statutes Certi?cation 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 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
(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) (211,191,523) (211,191,523) 22,043,216 18,190,356 40,233,572 (860,216) 718,167 (142,049) 1,877,300,000 (80,942,500) 1,796,357,500 17,666,559 523,797 18,190,356
Sr. No
1. Expenses charged by other company 2. Interest on Debentures 3. Advances Received 4. Advances repaid/given 5. Outstanding payables 6. Debentures Outstanding
Notes : 1. The cash ?ow statement has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard (AS) 3 on ‘Cash Flow Statement’, and presents cash ?ows by operating, investing and ?nancing activities. 2. Figures for the previous year have been regrouped/ restated wherever necessary to conform to this year’s classi?cation. For and on behalf of Kalyaniwalla & Mistry Chartered Accountants Ermin K. Irani Partner Mumbai, Dated : May 14, 2010 Milind S. Korde Naresh Nadkarni Directors
Figures in italics are for previous year 12) Previous year ?gures have been regrouped / rearranged where ever necessary to con?rm to current year’s classi?cation. 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.
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 de?cit 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 pro?ts, 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 con?rm: (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 ?nancial year ended 31st March, 2010 and of the loss of the Company for that year; (iii) that the Directors had taken proper and suf?cient 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.
(iv) 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. 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
8.
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 Pro?t and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These ?nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these ?nancial 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 ?nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial 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 speci?ed 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) b) c) d) 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. 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. The Balance Sheet, Pro?t and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account. 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. 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 5. f) term contracts undertaken and/or ?nanced 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 pro?ts/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) ii) iii) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010; in the case of the Pro?t and Loss Account, of the loss of the Company for the year ended on that date and, in the case of the Cash Flow Statement, of the cash ?ows of the Company for the year ended on that date.
2.
3.
4.
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 disquali?ed 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
e)
176
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 ?xed assets. As explained to us, the Company has a program for physical veri?cation of ?xed assets at periodical intervals. In our opinion, the period of veri?cation is reasonable having regard to the size of the Company. (c) There is no disposal of ?xed assets during the year. (a) The management has conducted physical veri?cation of inventory at reasonable intervals. (b) In our opinion, the procedures of physical veri?cation 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 veri?cation. (a) The Company has not granted any loans, secured or unsecured to companies, ?rms 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, ?rms 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, ?xed 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) 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 ?nancial year are less than ?fty 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 ?nancial 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 ?nancial 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 bene?t 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 ?nancial 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.
2)
10) 11) 12) 13) 14) 15) 16) 17) 18) 19) 20) 21)
3)
4)
5)
6) 7) 8) 9)
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
BALANCE SHEET AS AT 31ST MARCH, 2010
Schedule As at 31.03.2010 Rupees As at 31.03.2009 Rupees
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010
Schedule For the year ended 31.03.2010 Rupees 37,849 For the Period 11.07.2008 to 31.03.2009 Rupees —
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 Net Current Assets Miscellaneous Expenditure (to the extent not written off or adjusted) Preliminary Expenditure Pro?t and 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 ERMIN K. IRANI Partner Mumbai, May 14, 2010
1
500,000 — 49,000 549,000
500,000 — — 500,000
INCOME Interest Income (Tax deducted at Source Rs.2,090/[Previous Year Nil]) EXPENDITURE Cost of Sales Administration Expenses Interest & Finance Charges Depreciation Preliminary Expenses written off Pro?t / (Defecit) for the Year Provision for Taxation For Current Tax For MAT Credit Entitlement For Deferred Tax Pro?t/ (Loss) After Tax De?cit Brought Forward (3,000) 3,000 (49,000) (29,879) (45,095) (74,974) — — — (45,095) — (45,095) (0.90) 7 8 9
2
1,425,010 17,008 1,408,002 — 265,201,213 45,817,082 279,637,849 590,656,144 591,603,880 591,603,880 (947,736)
— — — — — 500,000 — 500,000 60,575 60,575 439,425
— — — 17,008 1,720 19,121
— 43,375 — — 1,720 (45,095)
3 4 5
6
13,760 74,974 549,000 10 Signatures to the Balance Sheet and Schedules 1 to 6 and 10
15,480 45,095 500,000
Earning per share Basic in Rs. (Refer Note 3) Notes to Accounts & Accounting Policies 10
(0.60)
The Schedules referred to above form an integral part of the Pro?t & Loss Account. As per our Report of even date. For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants
Signatures to the Pro?t & Loss Account and Schedules 7 and 10
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 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
500,000 500,000 500,000
500,000 500,000 500,000
— — —
27,575 15,800 43,375
500,000 SCHEDULE 2 FIXED ASSETS
Particulars Gross Block As at Additions Deduc1st tions April, 2009 Rs. Rs. Rs. Of?ce Equipment Furniture & Fixtures Computer Motor Vehicle TOTAL Previous Year — — — — — 358,017 58,213 299,015 709,765 — — — — — — Depreciation As at As at 31st 1st March, April, 2010 2009 Rs. Rs. 358,017 58,213 299,015 709,765 — — — — — — For the Year Rs. 1,774 376 8,313 6,545 — As at 31st March, 2010 Rs. 1,774 376 8,313 6,545 —
500,000
3,225,620 3,225,620 3,225,620 —
— — — —
Net Block As at As at 31st 31st March, March, 2010 2009 Rs. Rs. 356,243 57,837 290,702 703,220 — — — — — —
— 1,425,010
— 1,425,010
— 17,008
17,008 1,408,002
As at 31.03.2010 Rupees 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
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 For the Year ended 31.03.2010 Rupees
13,300 — 47,275 60,575 For the Period 11.07.2008 to 31.03.2009 Rupees
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
— 259,531,383 505,541 1,938,669 3,225,620 265,201,213 265,201,213 —
— — — — — — — —
SCHEDULE 10 NOTES TO ACCOUNTS AND ACCOUNTING POLICIES 1) Accounting Policies a. General The ?nancial 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 speci?ed 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 Pro?t & 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 suf?cient 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.
178
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE ACCOUNTS
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 Pro?t 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 con?rmed 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 de?ned 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 Pro?t & Loss Account (Rs.) Weighted average no. of equity shares outstanding Basic/Diluted earnings per share (Rs.) Nominal value of shares (Rs.) 4) Current Year (Rs.) (29,879) 50,000 (0.60) 10/Previous Year (Rs.) (45,095) 50,000 (0.90) 10/i.
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 Pro?le
1. 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 592,153 592,153 500 — — — 49 1,408 — (948) 14 75 — 19 19 (30) (0.60) — N.A.
2.
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 Performance of Company (Amount in Rs. Thousands) Turnover Total Expenditure Pro?t/(Loss) before Tax Pro?t/(Loss) after Tax Earning per Share in Rs. Dividend Rate % Generic Names of three principal products/services of Company
2)
3)
4.
Deferred Tax The Tax effect of signi?cant temporary differences that resulted in the deferred tax liabilities are: Particulars Liabilities - Depreciation on Fixed Assets Deferred Tax Liabilities Current Year (Rs.) (49,000) (49,000) Previous Year (Rs.) — —
5.
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010
Current Period Rupees Cash Flow from Operating Activities Pro?t/(Loss) for the Year Adjustment for: Depreciation Interest Paid Preliminary Expenses Interest Received Operating Pro?t/(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 19,121 17,008 3,225,620 1,720 (37,849) 3,225,620 (265,201,213) (279,600,000) 588,317,685 — 46,742,092 2,090 46,740,002 (1,425,010) — 2,090 (1,422,920) 45,317,082 500,000 45,817,082 Previous Year Rupees (45,095) — — 1,720 — (43,375) — — 60,575 (17,200) — — — — 500,000 — 500,000 500,000 — 500,000
5)
Amounts paid to Auditors: Particulars Audit Fees Total Current Year (Rs.) 159,935 159,935 Previous Year (Rs.) 27,575 27,575
6)
7)
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 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
Notes : 1. The cash ?ow statement has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard (AS) 3 on ‘Cash Flow Statement’, and presents cash ?ows by operating, investing and ?nancing activities. 2. Figures for the previous year have been regrouped / restated wherever necessary to conform to this year's classi?cation.
8) 9)
Previous year ?gures have been regrouped/rearranged where ever necessary to con?rm to current year’s classi?cation. Additional Information as required under Part IV of Schedule VI of the Companies Act, 1956 to the extent not applicable has not been given.
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 signi?cant 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 pro?ts of 9.08%. Directors The following persons served as directors during the year: 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) 2010 1 2009 1 and of the pro?t 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 ?nancial 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 con?rms 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
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 ?nancial 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
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 Pro?t and Loss Account, the Balance Sheet, the Cash Flow Statement, the Statement of Total Recognised Gains and Losses and the related notes. The ?nancial 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 satis?ed 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 suf?cient 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 signi?cant 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 pro?t 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 ?nancial 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 speci?ed 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. – (Senior Statutory Auditor) for and on behalf of Keith Woods & Co.LLC Accountants and Statutory Auditors April 28, 2010 Heritage House Ramsey Road Peel Isle of Man IM5 1RH –
BALANCE SHEET AS AT 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 Pro?t and Loss Account Shareholders’ funds 3 4 2010 US $ 3,055,000 3,301,638 2,635,139 5,936,777 (15,000) 5,921,777 8,976,777 — 8,976,777 6 7 3,805,361 5,171,416 8,976,777 Rs. Lac 1,371.70 1,482.44 1,183.18 2,665.61 (6.74) 2,658.88 4,030.57 2009 US $ 3,055,000 3,225,756 2,651,558 5,877,314 (7,574) 5,869,740 8,924,740 Rs. Lac 1,549.50 1,636.10 1,344.87 2,980.97 (3.84) 2,977.13 4,526.63 (749.97) 3,776.65 1,930.08 1,846.58 3,776.65
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010
2010 Notes Turnover Cost of sales Gross pro?t Administrative expenses Operating pro?t Interest receivable Interest payable Pro?t on ordinary activities before taxation Tax on pro?t on ordinary activities Pro?t for the ?nancial year 2 US $ 120,267,513 Rs. Lac 54,000.11 2009 US $ 115,504,010 Rs. Lac 58,583.63 (57,731.15) 852.48 (140.64) 711.85 16.01 (28.11) 699.74 — 699.74
(118,446,906) (53,182.66) (113,823,249) 1,820,607 (283,324) 1,537,283 7,000 (13,592) 1,530,691 — 1,530,691 817.45 (127.21) 690.24 3.14 (6.10) 687.28 — 687.28 1,680,761 (277,280) 1,403,481 31,561 (55,431) 1,379,611 — 1,379,611
5
— (1,478,655) 4,030.57 7,446,085 1,708.61 2,321.97 4,030.57 3,805,361 3,640,724 7,446,085
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 Approved by the board on April 28, 2010
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)
180
Annual Report 2009–2010 STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES FOR THE YEAR ENDED MARCH 31, 2010
Notes Pro?t for the ?nancial year Total recognised gains and losses related to the year 2010 US $ Rs. Lac 1,530,691 687.28 1,530,691 687.28 2009 US $ 1,379,611 1,379,611 Rs. Lac 699.74 699.74 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. 4. Debtors Trade debtors Amounts owed by group undertakings and undertakings in which the company has a participating interest Other debtors Prepayments and accrued income 2010 US $ Rs. Lac (106,340) (47.75) 2009 US $ Rs. Lac 3,322,526 1,685.19
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)
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010
2010 US $ Cash generated from operations Operating pro?t Reconciliation to cash generated from operations: Increase in debtors Increase in creditors Cash from other sources Interest received 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 Consisting of: Cash at bank and in hand 2,635,139 1,183.18 2,651,558 1,344.87 (13,592) (13,592) (1,755,947) — (1,755,947) (6.10) (6.10) (788.42) — (788.42) 19,167 19,167 388,380 — 388,380 9.72 9.72 187.26 — 187.26 7,000 7,000 3.14 3.14 (23,870) (23,870) (12.11) (12.11) 1,537,283 690.24 1,403,481 711.85 Rs. Lac 2009 US $ Rs. Lac
108,203 3,299,775 — 3,301,638 2010
48.58 1,481.60 — 1,482
108,764 (210,946) 5,412 3,225,756 2009
55.17 (106.99) 2.74 1,636.10
(3,301,638) 15,000 (1,749,355)
(1,482.44) 6.74 (785.46)
(1,017,763) 7,365 393,083
(516.21) 3.74 199.37 5.
Creditors: amounts falling due within one year Trade creditors Accruals and deferred income Other creditors Share capital Allotted, called up and fully paid: Ordinary shares of £1 each 2010 No. 2009 No.
US $ — — 15,000 15,000
Rs. Lac — — —
US $ (2,425) 9,999 — 7,574 2009 US $
Rs. Lac (1.23) 5.07 — 3.84 Rs. Lac
6.
2010 US $ Rs. Lac
2,355,000 2,355,000 3,805,361 2010 US $ 3,640,725 1,530,691 5,171,416
1,708.61 Rs. Lac 1,634.69 687.28 2,321.97
3,805,361 2009 US $ 2,261,113 1,379,612 3,640,725
1,930.08 Rs. Lac 1,146.84 699.74 1,846.58
7.
Pro?t and Loss Account At April 1, 2009 Pro?t for the year At March 31, 2010
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. Accounting policies 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. 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 Pro?t and Loss Account. 2. Interest payable Interest payable 3. Investments Other investments US $ Cost At April 1, 2009 At March 31, 2010 Other investments Unlisted investments 2010 US $ Rs. Lac 3,055,000 1,371.70 3,055,000 3,055,000 2009 US $ 3,055,000 Rs. Lac 2010 US $ 13,592 Rs. Lac 6.10 2009 US $ 55,431 Rs. Lac 28.11
8.
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 ?nancial statements of Godrej Industries Limited are available from : The Secretary, Godrej Industries Limited, Eastern Express Highway, Vikhroli, Mumbai 400079, India.
Rs. Lac 1,549.50
181
Godrej International Limited
NOTES
182
Godrej Industries Limited
Registered Of?ce : 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 Of?ce : 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 ?t. Signed this ................. day of ......................... 2010. Af?x Re 1/Revenue Stamp Signature ........................................................... Note : Proxy Forms must reach the Company’s Registered Of?ce not less than 48 hours before the Meeting.
www.godrejinds.com
G O D R E J I N D U S T R I E S L T D.
doc_921295881.pdf
The report for the financial year 2009 - 2010 of Godrej industries limited.
BRIGHTER FUTURE.
GODREJ INDUSTRIES LIMITED
INNOVATING FOR A
Annual Report 2009–2010
GODREJ INDUSTRIES LIMITED
DIRECTORS A.B. Godrej J.N. Godrej N.B. Godrej 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 M. Eipe Executive Director & President (Marketing) Executive Director & President (Chemicals) Managing Director Chairman
COMPANY SECRETARY V. Srinivasan
AUDITORS Kalyaniwalla & Mistry, Chartered Accountants
1
REGISTERED OFFICE
:
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 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
FACTORIES
:
Vikhroli
Valia (DTA & EOU)
CONTENTS
Page Nos.
Wadala
Chairman’s Statement .............................. 03 Financial Highlights .................................. 04 Notice ................................................. 05 Directors’ Report along with Management Discussion and Analysis Report .................... 11 Report on Corporate Governance ................. 24 Shareholders’ Information .......................... 31 Auditors’ Report...................................... 33 Standalone Accounts ................................ 36 Consolidated Accounts .............................. 66 Statement Pursuant to Section 212............... 88 SUBSIDIARIES Godrej Agrovet Limited ............................. 92 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 REGISTRARS & TRANSFER AGEN T : BANKERS : London Kolkata BRANCHES : Delhi
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.
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 : [email protected]
2
Annual Report 2009–2010
CHAIRMAN’S STATEMENT
D Dear Shareholders, 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 ef?ciencies 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 bene?ts in this current growth cycle. O Our diversi?ed business model is unique with interests in the form of operating businesses, s subsidiaries, 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, c consumer 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 pro?t margins this year due to consistently strong demand and normalized raw material prices. In addition, we have signi?cantly improved ef?ciencies 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 rede?ning the Godrej brand to strengthen brand unity across our broad range of businesses. We reinforced our commitment to innovation, adding technology while improving ef?ciency 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 BALANCE SHEET SOURCES OF FUNDS : Shareholders’ Funds Share Capital Reserves & Surplus Secured Loans Unsecured Loans Deferred Tax Liability APPLICATION OF FUNDS : Fixed Assets Investments Net Working Capital Miscellaneous Expenditure INCOME AND PROFIT Total Income Expenditure other than Interest and Depreciation Pro?t before Interest, Depreciation and Tax Interest (net) Pro?t before Depreciation and Tax Depreciation Pro?t before Tax and exceptional items Exceptional items - (expense)/income Provision for Current Tax Net Pro?t after Tax Provision for Deferred Tax Adjustment in respect of prior years - (expense)/income Net Pro?t after taxes and adjustments 99,169.73 82,306.87 16,862.86 6,024.79 10,838.07 2,838.80 7,999.27 (13.47) 8,012.74 (80.00) 8,092.74 97,148.32 86,745.94 10,402.38 6,106.12 4,296.26 2,646.19 1,650.07 26.00 123.27 1,552.80 (341.00) (86.11) 1,807.69 83,881.74 67,119.44 16,762.30 3,443.74 13,318.56 2,547.00 10,771.56 310.28 561.87 10,519.97 (361.00) 10,880.97 78,291.22 64,077.98 14,213.24 3,830.78 10,382.46 2,426.36 7,956.10 94.75 82.77 7,968.08 162.00 7,806.08 80,270.00 69,661.00 10,609.00 2,837.00 7,772.00 2,259.00 5,513.00 3,510.80 545.16 8,478.64 1,316.00 50.08 7,112.56 82,353.00 70,117.00 12,236.00 2,582.00 9,654.00 2,148.00 7,506.00 401.00 7,105.00 (470.00) 2.00 7,577.00 29,828.78 114,761.99 15,638.07 160,228.84 28,870.84 114,808.02 22,022.14 385.87 166,086.87 27,142.37 77,548.43 47,269.56 1,067.89 153,028.25 28,704.33 48,566.78 12,937.47 1,602.11 91,810.69 28,594.00 37,135.00 5,719.00 2,219.00 73,667.00 25,100.00 33,577.00 2,868.00 126.00 61,671.00 3,176.25 99,093.36 20,418.89 34,342.14 3,198.20 160,228.84 3,197.59 99,514.61 23,282.16 36,814.31 3,278.20 166,086.87 3,197.59 102,644.47 24,948.07 18,618.92 3,619.20 153,028.25 2,918.52 38,142.56 33,092.48 13,677.13 3,980.00 91,810.69 2,919.00 34,217.00 24,910.00 7,803.00 3,818.00 73,667.00 2,919.00 30,618.00 22,075.00 3,557.00 2,502.00 61,671.00 2008-09 2007-08 2006-07 2005-06 2004-05
Total Income 2009-2010
Break-up of Total Income Rs. Lac
Total Expenditure 2009-2010
Break-up of Total Expenditure Rs. Lac Materials 51,680.87 10,582.61 2,838.80 6,024.79
Chemicals Estate
78,123.55 2,775.39
Staff Costs Depreciation Interest
Finance & Investment 17,081.77
Others
1,189.02 99,169.73
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 Pro?t & 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 ?nancial 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 of?ce 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 ?x their remuneration. M/s. Kalyaniwalla & Mistry, Chartered Accountants, the retiring Auditors are eligible for reappointment. SPECIAL BUSINESS: To consider and if thought ?t, to pass with or without modi?cation(s), the following resolutions :8. Approval for not ?lling 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 ?lled 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 of?ce 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 of?ce 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 pro?t in any ?nancial 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 identi?cation,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 modi?cation 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 speci?ed 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 Of?ce : 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 bene?cial 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 ?nancial 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 31.03.2004 31.03.2005 31.03.2006 31.03.2007 31.03.2008 31.03.2009 Due date for transfer 25.08.2010 26.07.2011 26.07.2012 24.07.2013 27.07.2014 29.07.2015 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 Of?ce of the Company to facilitate clari?cations 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 ?lled 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 of?ce 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 pro?le 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 pro?tability 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 ?nancial 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, bene?ts, 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 of?cial 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 ?nancial year. Encashment/accumulation of leave will be permissible in accordance with the Rules speci?ed 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 speci?ed above or paid additionally in accordance with the rules of the Company in any ?nancial 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 pro?ts or its pro?ts 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 speci?ed 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-codi?cation 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 noti?cations 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. Of?ce of the Company Investment as on date in Rs. Crore and % of existing holding Amount of proposed investment (Rs. Crore) 2.00 Development of IT Park, IT and ITES, Software Development, BPO activities A good investment opportunity Internal sources/ borrowings Principal business of the Company Purpose of investment Source of funds Nature of Concern/ interest of Directors None of the Directors are interested in the resolution.
CBay Infotech 1.00 Ventures Pvt. Ltd. (8%) Godrej Industries Complex, Gate No. 4, Pirojshanagar, Eastern Express Highway, Vikhroli (East), Mumbai – 400 079.
8
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 Quali?cation(s) Mr. F.P. Sarkari 78 Indian 30-01-2002 Mr. S.A. Ahmadullah 70 Indian 03-01-1995 Mr. A.B. Godrej 68 Indian 07-03-1988 Mr. K.K. Dastur 68 Indian 01-04-2001 Mr. A.B. Choudhury Mr. N.B. Godrej 67 Indian 05-08-2009 58 Indian 07-03-1988
20,000 F.C.A.
6,000 B.A. (Cantab.)
Nil B.S., M.S. from Massachusetts Institute of Technology, U.S.A.
3,606 B.Com., A.C.A.
Nil
12,20,572
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 speci?c 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 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
Mr. K.K. Dastur 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
Mr. A.B. Choudhury Mr. N.B. Godrej 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 Of?ce : Pirojshanagar, Eastern Express Highway, Vikhroli (East), Mumbai 400 079.
10
Annual Report 2009–2010
DIRECTORS’ REPORT
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 Year ended March 31, 2010 2009 816.37 817.45 175.33 154.03 991.70 971.48 823.07 168.63 28.39 140.24 60.25 79.99 (0.14) 80.13 (0.80) 80.93 – 80.93 – 867.46 104.02 26.46 77.56 61.06 16.50 1.23 15.27 (3.41) 18.68 0.26 18.94 (0.86)
MANAGEMENT DISCUSSION AND ANALYSIS 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 ?nancial 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 Pro?t 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 pro?t. The Animal Feed business recorded a growth of 16% in revenue and 31% in pro?t. The pro?tability grew due to expansion of contribution margins and control over fixed overheads. The expansion of contribution margins was possible due to ef?cient sourcing, improved formulation and successful R & D efforts. The Agricultural Inputs business grew by 19% in revenue and 22% in pro?tability. 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 signi?cantly lower borrowing costs on account of ef?cient treasury management. GAVL also successfully implemented SAP in its Animal Feed business and the implementation has started yielding signi?cant business bene?ts. 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
Sales of products and services Other Income Total Income Total Expenditure other than Interest and Depreciation Profit before Interest, Depreciation and Tax Depreciation Pro?t before Interest and Tax Interest and Financial Charges (net) Pro?t before Tax Provision for Current Tax Pro?t after Current Tax Provision for Deferred Tax Pro?t after Current and Deferred Taxation Pro?t on sale of undertaking (extraordinary item, net of tax) Net Pro?t Adjustments in respect of prior years Surplus brought forward (after adjusting excess provision for dividend & tax on distributed pro?t) Pro?t after Tax available for appropriation Appropriation Your Directors recommend appropriation as under: Dividend on Equity Shares Tax on distributed pro?ts Transfer to General Reserve Surplus Carried Forward Total Appropriation
294.18 375.11
324.37 342.45
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 Pro?t 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 ?nal 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).
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 pro?t 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 ?rst 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 pro?ts increased by about 11% to US$ 1.53 million from US$ 1.38 million. The company improved its turnover and pro?ts despite dif?cult 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 bene?ts 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 ?rst 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 signi?cant 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 pro?t 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 ?nancial 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-certi?ed 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 recerti?ed 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 certi?cates. 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, oil?eld 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 speci?c 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 ?nancial 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 de?ned 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 ?ve 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 in?uencing 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 ?y 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 / modi?ed in Generation / Transfer/ Treatment / Monitoring and disposal pattern of waste water and treated water. Achieved signi?cant 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
articulars 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/pro?t between your Company and GPL, whoAnnual 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 de?nitive 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 ?x their remuneration. The retiring auditors, Kalyaniwalla and Mistry, Chartered Accountants, are eligible for reappointment. A certi?cate 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 . Sarkari (Chairman), Mr. V.N. Gogate, Mr. S.A. Ahmadullah and .P 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 con?rm: 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 ?nancial year and of the pro?t or loss of the Company for that period; c) 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;
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 of?ce of the Company. The Notes to the Accounts referred to in the Auditors’ Report is self-explanatory. However in respect of the quali?cations 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 ?led 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 ?nal disposal of the suit ?led by the investee company and the application made by minority shareholders under section 397/398 before the Hon’ble High Court. The Company has ?led 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 Your Directors thank the Union Government, the Governments of Maharashtra and Gujarat as also all the Government agencies, banks, ?nancial institutions, shareholders, customers, employees, ?xed deposit holders, vendors and other business associates, 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 A.B. Godrej Chairman Mumbai, June 4, 2010 15
d) that the annual accounts have been prepared on a going concern basis. 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 certi?ed
ANNEXURE “A” FORMING PART OF THE DIRECTORS’ REPORT MANAGEMENT DISCUSSIONS AND ANALYSIS Business Structure GIL
Own business Chemicals, Estate Management, Finance & Investment
Shareholding %
Godrej Agrovet 75.2%
Godrej Consumer Products 23.5%
Godrej Hershey 43.4%
Godrej Properties 69.4%
Other Investments
Godrej Sara Lee Ltd. Keyline, Rapidol, Godrej Hygiene, GGME
Nutrine Confectionery 100%
Various SPVs
Godrej Feed Products 100%
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 in?ation 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 2009-10 816.37 991.70 2008-09 817.45 971.48
Particulars Pro?t Before Taxation Pro?t After Current Taxation Pro?t After Current & Deferred Taxation Earnings per Equity Share (Rs.) Pro?tability 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 79.99 80.13 80.93 2.54 17.00 8.07 8.16 8.61 7.67 2.54 0.52 2.33 2009-10 781.24 27.75 170.82 11.89 991.70
2008-09 16.50 15.27 18.68 0.56 10.71 1.70 1.86 4.70 1.71 0.56 0.57 1.27 Rs. Crore 2008-09 778.19 31.54 147.26 14.49 971.48
16
Annual Report 2009–2010
Segment Performance 2. Segment Results (PBIT) Chemicals Estate Finance & Investments Others Total Less: Interest (Net) Less: Unallocated expenses (Net) Pro?t Before Tax 3. Segment Capital Employed Chemicals Estate Finance & Investments Others Unallocated Total
2009-10 52.38 18.19 158.28 (5.39) 223.46 (60.25) (83.22) 79.99 266.00 61.12 1,276.63 22.95 (604.00) 1,022.70
Rs. Crore 2008-09 (18.32) 21.78 147.26 (4.80) 145.92 (61.06) (68.36) 16.50 250.11 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 ?scal, 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 Ole?n 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 ef?ciency 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 diversi?cation 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 pro?tability 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 pro?tability. ESTATE MANAGEMENT The Ghatkopar - Vikhroli – Kanjur - Powai belt, of Mumbai suburb is continuing to witness major development activity. The area around the registered of?ce of your Company at Vikhroli is developing at a brisk pace. The ongoing projects of widening of the Eastern Express Highway, additional ?yovers 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 ?led 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 ?nancial parameters based on which your Company received additional consideration during the year which is re?ected 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 certi?ed, 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 ?nancial and other records are reliable for preparing ?nancial 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 Of?cer, 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 certi?ed. 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 bene?ts of the location such as assured power supply, better connectivity and infrastructural bene?ts. 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 identi?cation 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 signi?cant 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, signi?cant 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 Particulars
c d e
f g h i j
k
l
m
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 speci?c grant, including any unallotted shares lying with the Trust if utilized for that speci?c 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) identi?ed 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, Pro?t after tax lower by Rs. 11.02 crore and impact of this difference on pro?ts 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 signi?cant 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 signi?cant 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. which period shall be not less than one year and may extend upto ?ve 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.
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
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 de?ned 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. 2. Cartini India Ltd. 3. Godrej Investments Pvt. Ltd. 4. Godrej Efacec Automation & Robotics Ltd. 5. Godrej Holdings Pvt. Ltd. 6. Godrej (Malaysia) Sdn. Bhd. 7. Godrej (Singapore) Pte. Ltd. 8. J T Dragon Pte. Ltd. 9. Mercury Mfg. Co. Ltd. 10. Veromatic International BV 11. Water Wonder Benelux BV 12. Geomeric Ltd. 13. Godrej & Khimji (Middle East) LLC 14. Godrej Infotech Ltd. 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. 40. ACI Godrej Agrovet Pvt. Ltd. 41. Godrej Hersheys Ltd. 42. Nutrine Confectionery Co. Ltd. 43. Godrej SaraLee Ltd. 44. Tahir Properties Ltd. 45. Godrej Consumer Products Ltd. 46. Rapidol (Pty) Ltd. 47. Godrej Netherlands BV 48. Godrej Global Mid East FZE 49. Godrej Consumer Products Mauritius Ltd. 50. Godrej Hygiene Products Ltd. (formerly known as SCA Hygiene) 51. Godrej Consumer Products Holdings Mauritius Ltd. 52. Godrej Consumer Products Dutch Cooperatief U.A. (Netherlands) 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
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. Conservation of Energy I. (A) Energy Conservation measures undertaken: Vikhroli 1. Heat Exchanger for ?aker installed to reduce the power consumption & improve the quality of stearic acid. Annual savings of Rs. 0.01 crore accrued. 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. 2. Saving in power due to stopping of chiller & utilizing of VAM in ?aker 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. 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: 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. 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. 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.
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. (A) Power and Fuel consumption Electricity This Year i) Purchased Units (KWH in lac) Total Amount (Rs. in crore) Rate per Unit (Rs.) Own generated through D.G. Sets Units (KWH in lac) Cost (Rs. in crore) Rate per unit (Rs.) Previous Year 290.55 19.35 6.66
313.27 20.55 6.56
ii)
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.) Fuel Oil (LSHS, FO and LDO) Total Quantity (KL) Total Amount (Rs. in crore) Rate per Unit (Rs. per litre) Natural Gas Total Quantity (SM3 lac) Total Amount (Rs. in crore) Rate per Unit (Rs. per SM3) Pitches Total Quantity (MT) Total Cost (Rs. in crore) Rate per unit (Rs. per MT)
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
683.05 957.05 0.88 1.51 12,870.00 15,812.00
(B) Consumption per unit of production
Particulars Fatty Acid Fatty Alcohol A.O.S. Glycerin Oils & Vanaspati 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 79.28 96.49 22.12 343.74 56.95 89.57 16.39 247.43 77.07 429.96 142.89 606.30 144.09 76.01 424.64 146.22 614.59 174.72 18.82 3.24 1.26 58.17 24.69 7.61 4.38 109.08 60.00 54.28 15.86 1.38 49.46 85.86
22
Annual Report 2009–2010
B. Technology Absorption, Adaptation and Innovation I. Speci?c 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 Premium quality fatty acids from economy grade raw materials. Understanding the impact of raw material quality and manufacturing process on the quality of the ?nished goods. Manufacture of high value pure cut fatty acids, speci?cally for the polymer, oil ?eld and lubricant industries. Quali?cation 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. 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.
IV. Expenditure on R&D : This Year Capital Recurring Total Total R&D expenditure as a percentage of total sales turnover C. Foreign Exchange earnings and outgo (a) (b) (c) (d) Nil 3.27 3.27 0.40%
Rs. crore Previous Year Nil 1.73 1.73 0.21%
II. Bene?ts derived as a result of the above R&D. : • •
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 re?ned 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 : •
•
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 de?nition 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 ?nancial 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: 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
Table 1: Details about the Company’s Board of Directors & meetings attended by the Directors during the year Name of Director Category Board meetings held during the year Board meetings attended during the year
A.B. Godrej 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
V.F. Banaji T.A. Dubash M. Eipe M.P. Pusalkar Note: (i) $ Alternate directorships and directorships in (ii) Figures in ( ) denote listed companies.
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
4 4 4 4 4 4 4 4 4 1 2 4 4 4 4 4 4
4 3 4 4 3 4 4 3 4 1 2 4 4 4 3 4 3
Yes Yes Yes Yes Yes Yes Yes Yes Yes NA NA Yes Yes Yes Yes Yes Yes
11(3) 9(5) 14(5) 1(1) 8(5) 4(1) 7(3) 3(3) 1(1) NA 6(3) 5(1) 1(1) 2(2) 6(1) 3(1) 2(2)
4 1 1 4 3 NA 1 2 1
1 3 2 1 4 1 1 NA 4 2 1 2 1 2
private companies, foreign companies and associations are excluded.
24
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. (iv) Board Meetings held during the year represent the number of meetings held during the tenure of that director. None of the Directors is a member of more than 10 Board-level committees, or a Chairman of more than ?ve such committees, as required under Clause 49 of the listing agreement. 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 of?cers 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 ?nancial 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,
Signi?cant development in the human resources and industrial relations front, Sale of material nature of investments, subsidiaries, assets, which is not in the normal course of business, Quarterly details of foreign exchange exposure and the steps taken by management to limit the risks of adverse exchange rate movement, 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. Amt. in Rs.
Table 2: Remuneration in Rupees paid or payable to Directors for the year ended March 31, 2010 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 pro?ts 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 Nil Nil 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 Provident Fund Nil 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 Total 1,60,000 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
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
25
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 second holder ** Shares held as third holder 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
Table 4: Attendance record of audit committee members 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 ?nancial reporting process and the disclosure of its ?nancial information to ensure that the ?nancial statement is correct, suf?cient and credible. Recommending the appointment/removal of external auditor, ?xation of audit fees and approval for payment for any other services. Reviewing with management the annual ?nancial 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. Signi?cant adjustments made in the ?nancial statements arising out of audit ?ndings. Compliance with listing and other requirements relating to ?nancial statements. Disclosure of any related party transactions. Any quali?cation in the draft audit report. Reviewing with the management, the quarterly ?nancial 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, staf?ng and seniority of the of?cial heading the department, reporting structure coverage and frequency of internal audit. Discussion with internal auditors any signi?cant ?ndings and follow up thereon. Reviewing the ?ndings 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.
Committees of the Board
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 ?nance, 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 ?nance 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
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. 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 Mr. V. Srinivasan, Executive Vice-President (Finance & Estate) & Company Secretary acts as the secretary to the 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 Of?cers 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 Of?cer: Mr. V. Srinivasan, Executive Vice-President (Finance & Estate) & Company Secretary. Name of Director
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 6. MANAGEMENT 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 signi?cant related party transaction that may have potential con?ict of interests of Company at large During the year 2009-10, there were no materially signi?cant 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 con?ict 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. 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. Nil 20 20 Nil
There are no pending share transfers as on March 31, 2010.
27
d) Details of compliance with mandatory requirement Particulars Clause of Compliance Listing Status Agreement Yes / No 49 I Yes 49 (IA) Yes 49 (IB) 49 (IC) 49 (ID) 49 (II) 49 (IIA) 49 (IIB) 49 (IIC) 49 (IID) 49 (IIE) 49 (III) 49 (IV) 49 (IV A) 49 (IV B) 49 (IV C) 49 (IV D) 49 (IV E) 49 (IV F) 49 (IV G) 49 (V) 49 (VI) 49 (VII) Yes Yes Yes
b) Details of Special Resolutions Passed in previous three Annual General Meetings. Date of Number AGM of Special Resolution passed July 27, 2007 July 29, 2008 1 1) Details of Special Resolution Passed
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) Quali?ed & 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 Certi?cation Report on Corporate Governance Compliance e) Details of Non-compliance
Reappointment and remuneration payable to Mr. N.B. Godrej as Managing Director of the Company.
6
Yes Yes Yes Yes Yes Yes
}
Yes Yes Not applicable at present Yes Yes Yes Yes Yes Yes
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 af?rmed 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 Venue Y. B. Chavan Centre, Nariman Point, Mumbai 400 021. - do - do Date July 27, 2007 Time 4.30 P.M. July, 29 2009 5
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. 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.
2007-08 2008-09
July 29, 2008 July 29, 2009
4.30 P.M. 4.30 P.M.
28
Annual Report 2009–2010
c)
Postal Ballot 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
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 :-
Sr. No.
Date of Nature of Item announcement resolution of results September 23,2009 Special 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. Modi?cation of the Godrej Industries Limited Employees Stock Option Plan
Total no. of votes polled 1550
No. of votes in favour % 99.96
No. of votes against % 0.01
No. of invalid votes % 0.03
1.
Special
1550
99.80
0.01
0.19
2.
March 26, 2010 Special
2206
99.38
0.30
0.32
d) Procedure adopted for Postal Ballot (i) 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.
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 ?lled up. 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, of?cial 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 ?nancial results and shareholdings pattern on electronic data information ?ling 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.cor?ling.co.in. 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 of?cer. 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
(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. (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.
Declaration by Managing Director
I, N.B. Godrej, Managing Director of Godrej Industries Limited (GIL), hereby con?rm 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 af?rmed their compliance with the said code of conduct for the year ended March 31, 2010. Mumbai, May 26, 2010 N.B. Godrej Managing Director
Auditors’ Certi?cate 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 ?nancial 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 ef?ciency or effectiveness with which the management has conducted the affairs of the Company. For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants V.R. Mehta Partner Membership No. 32083 Firm Registration No. 104607W
Mumbai, May 26, 2010
30
Annual Report 2009–2010
Shareholders’ Information
i) 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. 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 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. Chart A – The Company’s share performance compared to the BSE Sensex for FY 2009-2010
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. 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. v) Stock Data 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. 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.
BSE Sensex
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%
GIL Share Price (Rs.)
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 % of holding
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: Computech Sharecap Limited 147, M.G. Road, Opp. Jehangir Art Gallery, Mumbai 400 001. Tel: 022-22635000 / 22635001 Email: [email protected] Fax: 022-22635001
79.10 – 0.02 4.13 2.15 3.69 10.48 0.41 100.00
32
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 Pro?t and Loss Account and Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These ?nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these ?nancial 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 ?nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial 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 speci?ed 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, Pro?t 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. f) 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 ?nancial statements. 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 pro?t for the year and the reserves as at March 31, 2010 could not be ascertained. 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;
g)
ii) in the case of the Pro?t and Loss Account, of the pro?t of the Company for the year ended on that date; and iii) in the case of the Cash Flow Statement, of the cash ?ows 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 disquali?ed 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.
d) In our opinion, the Balance Sheet, Pro?t 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
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 ?xed 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 veri?cation of ?xed assets at periodic intervals. In our opinion, the period of veri?cation 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 veri?ed during the year. (c) In our opinion the ?xed 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 veri?cation of inventory at reasonable intervals. (b) In our opinion, the procedures of physical veri?cation 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 ?xed 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 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 Of?cer Assistant Commissioner Commissioner Tribunal High Court 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 ?ows 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
Custom Duty
Sales Tax
40.13 1996-00,2001-02,2003-05,2006-07 76.97 2000-03,2004-05,2006-07 63.10 1990-92,1994-96,1997-98,2003-05 9.88 2003-04 Others Stamp Duty Municipal Taxes Entry Tax 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 ?nancial year and it has not incurred any cash losses in the current and immediately preceding ?nancial 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 ?nancial 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 bene?t 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 ?nancial institutions are not prejudicial to the interest of the Company.
35
Godrej Industries Limited BALANCE SHEET AS AT MARCH 31, 2010
Schedule SOURCES OF FUNDS 1. Shareholders’ Funds (a) Share capital (b) Reserves & surplus 2. Loan Funds (a) Secured loans (b) Unsecured loans 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 5. Investments 6. Current Assets, Loans and Advances (a) Inventories (b) Sundry debtors (c) Cash and bank balances (d) Loans and advances Less : Current Liabilities and Provisions (a) Liabilities (b) Provisions Net Current Assets 7. Miscellaneous Expenditure (To the extent not written off or adjusted) TOTAL Signi?cant Accounting Policies Notes to Accounts The Schedules referred to above form an integral part of the Balance Sheet. As per our Report attached For and on behalf of Kalyaniwalla & Mistry Chartered Accountants V. R. Mehta Partner Mumbai, May 26, 2010 36 Signatures to Balance Sheet and Schedules 1 to 13, 21 and 22 A.B. Godrej Chairman M. Eipe Executive Director & President (Chemicals) N.B. Godrej Managing Director V. Srinivasan Executive Vice President (Finance & Estate) & Company Secretary Rs. lac This Year Rs. lac Previous Year Rs. lac
1 2
3,176.25 99,093.36 102,269.61
3,197.59 99,514.61 102,712.20 23,282.16 36,814.31 60,096.47 3,278.20 166,086.87
3 4
20,418.89 34,342.14 54,761.03 3,198.20 160,228.84
5 61,512.98 33,881.80 27,631.18 2,197.60 6 7 8 9 10 13,476.87 11,086.55 1,508.61 17,535.41 43,607.44 21,035.53 6,933.84 27,969.37 15,638.07 — 160,228.84 21 22 29,828.78 114,761.99 57,854.70 31,467.99 26,386.71 2,484.13 28,870.84 114,808.02 9,355.62 16,099.98 2,851.17 14,794.20 43,100.97 14,045.42 7,033.41 21,078.83 22,022.14 385.87 166,086.87
11 12
13
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 EXPENDITURE Materials consumed and purchase of goods Expenses Inventory change Interest and ?nancial charges (net) Depreciation (Net of transfer from Revaluation Reserve Rs. 99.50 lac, Previous year Rs. 133.69 lac) Pro?t before Taxation and Extraordinary Items Provision for Taxation - Current Tax - MAT credit - Deferred Tax - Fringe bene?t Tax - Adjustment for tax of previous years (net) Pro?t after Taxation and before Extraordinary Items Extraordinary Items (Net of Tax) Pro?t after Extraordinary Items Prior Period adjustments (net) Net Pro?t Surplus brought forward Add : Excess provision of proposed dividend Add : Excess provision of tax on distributed pro?t Amount Available For Appropriation Appropriations Proposed Dividend - Final Tax on distributed pro?ts 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) Signi?cant Accounting Policies Notes to Accounts This Year Rs. lac 85,629.45 3,992.70 81,636.75 17,532.98 99,169.73 53,416.89 30,626.00 (1,736.02) 6,024.79 2,838.80 91,170.46 7,999.27 877.00 (877.00) (80.00) (13.47) (93.47) 8,092.74 8,092.74 8,092.74 29,387.78 26.05 4.43 29,418.26 37,511.00 4,764.37 791.30 809.28 31,146.05 37,511.00 2.54 2.54 21 22 Previous Year Rs. lac 87,468.82 5,723.44 81,745.38 15,402.94 97,148.32 54,317.99 30,173.54 2,254.41 6,106.12 2,646.19 95,498.25 1,650.07 (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 3,996.99 679.29 180.77 29,387.78 34,244.83 0.56 0.57
14
15 16 17 18
19 20
The Schedules referred to above form an integral part of the Pro?t & Loss Account. As per our Report attached For and on behalf of Kalyaniwalla & Mistry Chartered Accountants V. R. Mehta Partner Mumbai, May 26, 2010 37 Signatures to Pro?t and Loss Account and Schedules 14 to 22 A.B. Godrej Chairman M. Eipe Executive Director & President (Chemicals) N.B. Godrej Managing Director V. Srinivasan Executive Vice President (Finance & Estate) & Company Secretary
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 : Pro?t before tax Adjustments for : Depreciation Unrealised Foreign exchange Pro?t on sale of investments Pro?t on sale of ?xed 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 Pro?t/(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 ?xed assets Proceeds from sale of ?xed 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 ?nancing activities : Proceeds from borrowings Repayments of borrowings Equity share capital bought back Bank overdrafts (net) Interest paid Dividend paid Tax on distributed pro?ts Net Cash (used in)/from ?nancing 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 ?nance 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 ?gures of previous year have been regrouped wherever necessary.
As per our Report attached Signatures to Cash Flow Statement
7,999.27 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 (4,121.25) 4,516.48 6,320.95 8,924.70 (1,227.00) 12.56 7,710.26 (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 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 1,504.39 4.22 1,508.61
1,650.07 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) 10,415.57 9,501.27 (10,714.37) 6,427.07 (2,384.91) 407.86 4,450.02 (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) 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 2,845.86 5.31 2,851.17
For and on behalf of Kalyaniwalla & Mistry Chartered Accountants V. R. Mehta Partner Mumbai, May 26, 2010 38
A.B. Godrej Chairman M. Eipe Executive Director & President (Chemicals)
N.B. Godrej Managing Director 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
SCHEDULE 1 : SHARE CAPITAL Authorised: 800,000,000 100,000,000 Equity shares of Re. 1 each Unclassi?ed Shares of Rs.10 each 8,000.00 10,000.00 18,000.00 3,176.25 3,176.25 8,000.00 10,000.00 18,000.00 3,197.59 3,197.59
Previous Year Rs. lac
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. Rs. lac 58,515.68 (2,865.24) This Year Rs. lac Previous Year Rs. lac 58,515.68 58,515.68 25.00 3,125.00 3,125.00 1,671.21 1,286.38 (261.28) 1,409.93 6,870.44 180.77 7,051.21 29,387.79 99,514.61 12,170.00 4,612.16 6,500.00 23,282.16
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 Revaluation Reserve As per last balance sheet Less : Depreciation on revalued component and deduction due to sale/discard of ?xed assets General Reserve As per last balance sheet Less: Transfer to Capital Redemption Reserve Add :Transferred from pro?t & loss account Pro?t & 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
55,650.44 25.00
3,125.00 21.34 1,409.93 (123.55) 7,051.21 (21.34) 809.28
3,146.34
7,839.15 31,146.05 99,093.36 10,000.00 1,418.89 2,500.00 6,500.00 20,418.89
18,500.00 — — 6,000.00 9,742.14 100.00 34,342.14 25,610.31
21,000.00 2,500.00 8,000.00 3,000.00 2,164.31 150.00 36,814.31 26,650.00 39
Godrej Industries Limited
SCHEDULE 5 : FIXED ASSETS
Rs. Lac ASSETS 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 2,597.88 463.00 964.84 — — 3,074.02 870.10 — 136.75 100.87 14.55 — 68.00 — — 2.83 460.18 — 62.13 34.01 17.91 — — 113.90 147.97 9,730.31 44,552.32 127.06 1,269.18 1,204.20 2,594.52 463.00 1,032.84 — 25.86 2,477.52 25,824.88 57.46 701.71 598.42 396.60 378.12 805.57 — — 0.07 427.14 — 44.66 15.93 16.71 — — — 1.54 209.62 2,225.62 3.68 78.25 55.01 199.99 46.30 64.65 — 27.40 2,687.07 27,623.36 61.14 735.30 637.50 579.88 424.42 870.22 113.90 120.57 7,043.24 16,928.96 65.92 533.88 566.70 2,014.64 38.58 162.62 113.90 122.11 4,181.60 18,317.52 69.60 492.85 538.92 2,201.28 84.88 159.27
Tangible Assets Land - Freehold - Leasehold Buildings Plant & Machinery Research Centre Furniture & Fixtures Of?ce & Other Equipments Vehicles / Vessels Intangible Assets Trademarks Software Assets acquired under ?nance lease Vehicles TOTAL - This Year - Previous Year Capital Work-in-Progress TOTAL 1. 2. 3. 4. 5.
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 ?xed 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 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 Notes Amount As on As on 31.03.10 31.03.09 Rs. lac Rs. lac
10 10
440,000 5,000,000
-
-
440,000 5,000,000 (a)
44.00 450.00
44.00 450.00
1 10 £0.25 10 100 10 10 10 100
55,369,989 195,577 13,692 32,258 114 32,587,046 12,222 209,370 25
21,074,631 6,626 1,805 -
4,000,000 72,444,620 15,497 202,203 32,258 114 32,587,046 12,222 209,370 25
(b)
51,372.93 1,242.83 100.00 11.57 17,740.44 125.00 191.33 0.01
49,223.86 1,142.83 124.55 100.00 11.57 17,740.44 125.00 191.33 0.01
(c) (d)
(a)
$0.10 $0.01 $1 $1.90
8,182,148 4,091,073 1,055,629 2,631,578
-
-
8,182,148 4,091,073 1,055,629 2,631,578
3,809.30 253.52 688.09 1,142.34
3,809.30 253.52 688.09 1,142.34
40
Annual Report 2009–2010
Face value (Rs.) Number Acquired Sold/adjusted during the during the year year 97 13,135,050 175,737 Amount As on As on 31.03.10 31.03.09 Rs. lac Rs. lac 0.02 397.60 299.68 673.03 469.21 0.10 0.01 0.02 83.19 397.60 299.68 673.03 469.21 1,313.51 17.57 0.10 0.01
Investee Company / Institutions
Qty. as on 01.04.09
Qty. as on 31.03.10
Notes
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 Less : Provision for diminution in value of Investments Aggregate book value of Investments Quoted Unquoted Market Value of Quoted Investments NOTES: (a) Uncalled Liability on partly paid shares (b) (c) (d) (e) (f) Tahir Properties Ltd. - Equity - Rs. 80 per share. Tahir Properties Ltd. - Preference - Rs. 30 per share. Wadala Commodities Limited - Preference - Re. 1 per share.
25 97 13,135,050 175,737 1,000 -
25 1,000 -
(a) (c) (e) (f) (f) (g)
48,495,209 3,774,160 9,112,956 2,584 2,355,000 500,000
22,533,350 7,050,000
- 48,495,209 23,033,350 3,774,160 9,112,956 2,584 2,355,000 7,050,000
18,528.60 1,318.94 16,317.91 41.86 1,651.61 501.25 117,371.18 (2,609.19) 114,761.99 73,710.83 41,051.16 114,761.99 443,052.00
18,528.60 1,318.94 16,317.91 41.86 1,651.61 4.00 116,163.68 (1,355.67) 114,808.02 53,033.16 61,774.86 114,808.02 75,725.27
(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. 1,805 equity shares received on conversion of loan notes. The said shares have been refused for registration by the investee company. Optionally Convertible Notes are convertible as under : Verseon Corporation - After December 1, 2008 until the due date but not later than Sepember 15, 2012. 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. 12% promissory notes repayable on or before March 31, 2011 along with interest on maturity.
(g)
41
Godrej Industries Limited
This Year Rs. lac SCHEDULE 7: INVENTORIES (at lower of cost and net realisable value) Stores and spares Raw materials Work-in-progress Finished goods SCHEDULE 8: SUNDRY DEBTORS (Unsecured) Debts outstanding over six months Considered doubtful Other debts Considered good Less: Provision for doubtful debts SCHEDULE 9: CASH AND BANK BALANCES Cash and cheques on hand Balances with scheduled banks - on current account - on deposit account (refer note 8) SCHEDULE 10: LOANS AND ADVANCES (Unsecured and considered good unless otherwise stated) Loans and Advances (refer note 9 a) Loan to GIL ESOP Trust (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 Rs. 585.67 lac, previous year Rs.549.58 lac) Intercorporate deposits Deposits and balances with - Customs & excise authorities - Others Advance payment of taxes (Net of Provision for tax Rs. 1670.91 lac, previous year Rs.761.90 lac) 17,535.41 14,794.20 540.62 776.56 3,081.68 619.19 687.48 1,853.78 1,964.60 1,387.51 1,932.72 35.00 2,482.64 7,301.80 2,307.33 7,358.70 1,459.56 33.50 1,508.61 215.32 2,621.50 2,851.17 15.55 14.35 11,086.55 11,188.76 102.21 11,086.55 16,099.98 16,244.61 144.63 16,099.98 102.21 144.63 1,192.44 5,030.25 4,237.76 3,016.42 13,476.87 1,333.39 2,504.07 2,676.28 2,841.88 9,355.62 Previous Year Rs. lac
42
Annual Report 2009–2010
This Year Rs. lac 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 - Unclaimed Matured Deposits - Unclaimed interest on Matured Deposits Other liabilities Interest accrued but not due on loans * 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 pro?ts Provision for retirement bene?ts 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 SCHEDULE 14: OTHER INCOME Interest (Gross) : - Debentures - Income tax refund - Deposits (Tax deducted at source Rs. 121.11 lac, previous year Rs. 584 lac) Dividend - from subsidiary companies - from long term investments Pro?t on sale of ?xed assets (Net) Pro?t on sale of long term investments (refer notes 6 and 16) Pro?t on sale of current investments Provision for diminution in investment written back (refer note 16) Bad debt recovered Miscellaneous income 101.15 747.97 699.40 17,532.98 1,384.58 2,895.53 9.44 10,437.56 76.27 1,181.08 385.87 (385.87) 4,764.37 791.30 1,378.16 6,933.84 16.97 9.46 4.87 423.42 267.42 21,035.53 85.28 18,399.08 307.22 1,521.81
Previous Year Rs. lac
47.17 10,906.31 577.76 1,280.79 18.74 9.21 864.32 341.12 14,045.42
3,996.99 679.29 2,357.13 7,033.41
1,067.89 (682.02) 385.87
159.46 41.98 1,537.60
2,132.25 2,889.14 99.01 5,626.55 312.63 1,686.04 9.24 909.04 15,402.94
43
Godrej Industries Limited
This Year 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 SCHEDULE 16: 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 853.70 706.15 27.48 140.66 2,557.85 388.44 378.66 1,264.97 627.36 (25.56) 1,253.52 194.79 5.22 2,904.85 (217.50) 30,626.00 703.34 646.46 159.30 128.40 3,146.21 351.38 286.08 1,095.29 821.54 480.63 429.64 2,160.50 2,828.84 (625.73) 30,173.54 9,273.84 731.23 577.54 797.21 6,561.57 648.50 440.44 535.08 7,033.16 662.42 597.28 1,203.58 6,820.18 292.12 418.17 534.75 2,504.07 55,556.98 58,061.05 5,030.25 53,030.80 386.09 53,416.89 10,380.37 45,917.74 56,298.11 2,504.07 53,794.04 523.95 54,317.99 Previous Year Rs. lac
Insurance Freight Commission Discount Advertisement and publicity Selling and distribution expenses Provision for doubtful debts and advances Provision for depletion in value of investments Excise duty (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
Annual Report 2009–2010
Rs. lac SCHEDULE 17 : INVENTORY CHANGE Stocks at the commencement of the year Finished goods Work-in-progress 2,841.88 2,676.28
This Year Rs. lac
Previous Year Rs. lac
3,447.66 4,324.91 5,518.16 7,772.57 (2,841.88) (2,676.28) (7,254.18) (5,518.16) 2,254.41 (1,736.02)
Less: Stocks at the close of the year : Finished goods Work-in-progress (3,016.42) (4,237.76)
(Increase)/Decrease in Inventory SCHEDULE 18 : INTEREST AND FINANCIAL CHARGES (Net) Interest paid on ?xed loans on bank overdrafts other interest 4,367.92 25.14 667.83
4,627.93 36.12 375.40 5,060.89 5,039.45 5.68 2.67 17.31 8.35 5,031.10 811.20 263.82 6,106.12 26.00 26.00 5,043.58 981.21 6,024.79
Less: Interest received on Customer balances, etc. others 17.31 -
Net Interest Other ?nancial charges Foreign exchange loss SCHEDULE 19 : EXTRAORDINARY ITEMS Pro?t on sale of Medical Diagnostics business
-
SCHEDULE 20 : PRIOR PERIOD ADJUSTMENTS Short provision for expenses (86.11) (86.11)
45
Godrej Industries Limited SCHEDULE 21: SIGNIFICANT ACCOUNTING POLICIES
1. Accounting Convention The ?nancial 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 ?nancial 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 ?nancial statements and reported amounts of income and expenses during the period. Management believes that the estimates used in the preparation of ?nancial 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 ?nance 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 ?ows 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 con?rmed 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 Pro?t and Loss Account. (ii) Forward exchange contracts other than those entered into to hedge foreign currency risk of ?rm 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 Pro?t 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 Pro?t 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.
2.
3.
4.
5.
6.
7.
46
Annual Report 2009–2010
SCHEDULE 21: SIGNIFICANT ACCOUNTING POLICIES
12. Research and Development Expenditure Revenue expenditure on Research & Development is charged to the Pro?t 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 ?xed assets. 13. Depreciation Leasehold land is amortised equally over the lease period. Leasehold improvements are amortised over ?ve years. Depreciation is provided on the straight line method at the rates speci?ed 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 certi?ed by the valuers. Such depreciation is withdrawn from Revaluation Reserve and credited to Pro?t and Loss Account. 14. Employee Bene?ts 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) De?ned Contribution Plan Employee bene?ts in the form of Provident Fund and family pension are considered as de?ned contribution plans and the contributions are charged to the Pro?t and Loss of the year when the contributions to the respective funds are due. (ii) De?ned Bene?t Plan Retirement bene?ts in the form of Gratuity and Pension plan for eligible employees considered as defined bene?t 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 bene?ts 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 Pro?t 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 pro?t 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 pro?t and loss account, whereas, the unrealized pro?t is ignored. Gains or losses on the commodity futures contracts is recorded in the pro?t & loss account under cost of materials consumed. 17. Deferred Revenue Expenditure The compensation payable under the Voluntary Retirement Schemes, the bene?t of which is expected to accrue in future is deferred over its payback period. The compensation is generally amortised over three to ?ve 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 suf?cient 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 ?xed 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 re?ected as unallocated corporate income / expenses.
47
Godrej Industries Limited SCHEDULE 22: NOTES TO ACCOUNTS
1. 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 This Year Previous Year Rs. Lac Rs. Lac Estimated value of contracts remaining to be executed on capital account, to the extent not provided 4. 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 pro?t due to Buyback of shares is added in surplus brought forward of pro?t & loss account 5. Loans 1,124.04 a) Term loans from banks are secured by ?rst 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. This Year Previous Year Rs. Lac Rs. Lac (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 204.71 224.43
666.65
2,225.00 84.26 50.03
104.13
This Year Previous Year Rs. Lac Rs. Lac
a) Claims against the Company not acknowledged as debts: (i) Excise duty demands relating to disputed classi?cation, 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, classi?cation, 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 classi?cation 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 48
86.35
1,694.43
1,198.23
856.94
1,697.68
182.23
b) c)
1,220.36
Annual Report 2009–2010
SCHEDULE 22: NOTES TO ACCOUNTS
d)
(Contd.) 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. 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. 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 ?led 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 ?nal disposal of the suit ?led by the investee company and the application made by minority shareholders under Section 397/398 before the Hon’ble High Court. The company has ?led 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
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. The Company had sold its entire holding in Godrej Hicare Limited, a subsidiary company, in March 2009. The pro?t 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 ?nancial 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:
This Year Previous Year
6. Investments a)
5.18 1.59
123.27 18.71 49.32 21.33 25.60 0.02 5.44 1.59
b)
17.67 4.57
4,741.61 -
18.50
18.50
c)
Mutual Funds Liquid - Growth schemes 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
No. of Unts 88,296,420 141,505,480 18,592,371 545,617 55,087,628 -
Rs Lac 12,715.00
No. of Unts 96,361,450
Rs Lac 13,080.00 19,870.00 2,000.00 10,425.00 16,875.00 23,695.00 6,155.00
25,742.00 160,464,990 3,455.00 12,196,981 - 69,580,260 7,710.00 1,223,373 11,000.00 158,554,280 476,664
4,364,601 87,569,997
500.00
385,209 32,822,955 76,356,419
4,485.00 4,230.00 8,140.00 19,190.00
15,869.00 113,755,533
Godrej Industries Limited SCHEDULE 22: NOTES TO ACCOUNTS
(Contd.) ESOP I
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 Previous Year No. of Wt. Options average exercise price ( * )
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 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 I. Rs. Lac 550.00 455.00 Rs. Lac 455.00
7,799,950 2,100,000 119,250 5,580,700
190.43 91.84 284.45 228.06
7,309,500 340,000 835,450 150,000 835,000 7,799,950
177.10 284.60 276.70 254.45 209.87 190.43
Previous Year Rs. Lac -
35.00
19.00
35.00
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 de?ned 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:
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
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 ?ve 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. Modi?cation 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.
50
Annual Report 2009–2010
SCHEDULE 22: NOTES TO ACCOUNTS
(Contd.) The aggregate future minimum lease payments are as under : Period Lease payment recognised in the pro?t & loss account Future lease payments - Within one year - Later than one year and not later than ?ve years Lease taken by the Company (b) Operating Lease: The Company’s signi?cant leasing arrangements are in respect of operating lease for land, of?ce premises, residential premises, machinery and storage tanks. The agreegate lease rentals paid by the Company are charged to pro?t & loss account. Period Lease payment recognised in the pro?t & loss account Future lease commitments - Within one year - Later than one year and not later than ?ve years (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 ?ve years 62.97 10.54 Present value of minimum lease payments This Year Previous Year Rs. Lac Rs. Lac 440.44 418.17 This Year Previous Year Rs. Lac Rs. Lac 2,625.40 2,949.71
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 pro?t 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 1,072.14 735.55 Amt. Rs. 0.58 0.25 0.57 0.23
Net Pro?t (as reported) Less : Stock based compensation expense determined under fair value based method (Pro Forma) 1,102.33 Net Pro?t (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
2,625.72 4,719.23
2,791.35 2,745.00
b) The independent ESOP trust has purchased shares of the Company from the market against the options granted. The purchases are ?nanced 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). 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 ?nancial 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: This Year Previous Year Rs. Lac Rs. Lac 1,913.45 1,785.95 870.14 50.89 763.43 50.87
399.87 323.41
412.53 336.07
Rs. Lac 45.71 11.73
57.44
Gross carrying amount of premises Accumulated depreciation Depreciation for the period
51
Godrej Industries Limited SCHEDULE 22: NOTES TO ACCOUNTS
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 bene?ts 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 ?rm 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) 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 (Contd.) 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 16. Exceptional Items This Year Previous Year Rs Lac Rs Lac 10,437.56 5,626.55 1,686.04 607.58 180.20 2,803.19 3,590.97 1,048.51 963.18 3,140.68 5,152.37
i) ii)
Pro?t on sale of long term investments Write back / (Provision) for diminution in investment
17. Pro?t & Loss Account a) Exchange differences recognised in the Pro?t & 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 Pro?t & Loss Account amounts to Rs. 327.31 lac (Previous year Rs.173.30 lac).
b)
52
Annual Report 2009–2010
SCHEDULE 22: NOTES TO ACCOUNTS
18. Earning Per Share
(Contd.)
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 pro?t after tax excluding extraordinary items Rs. lac 8,092.74 1,781.69 c) Net pro?t 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 Chemicals Estate Finance & Investments Others This Year Previous This Year Previous This Year Previous This Year Previous Year Year Year Year 78123.55 78123.55 5238.25 77818.57 77818.57 (1832.02) 2775.39 2775.39 1819.47 3154.26 3154.26 2177.91 17081.77 17081.77 15828.25 14726.08 14726.08 14726.08 1189.02 1189.02 (539.48) 1449.41 1449.41 (480.10) Total This Year Previous Year 99169.73 99169.73 22346.49 (8322.43) (6024.79) 7999.27 93.47 8092.74 44848.58 18248.42 902.36 2083.57 38806.09 13795.00 1261.72 2034.48 7943.25 1831.58 3057.49 108.97 5571.54 129455.39 1335.98 1688.52 64.92 1792.64 17.91 155.50 134973.07 664.75 1,724.12 59.98 2836.10 541.05 14.67 237.14 8092.74 3157.69 185083.32 3114.89 188198.21 606.82 22413.69 63514.91 85928.60 7.77 3992.43 213.72 2585.18 253.62 2838.80 97148.32 97148.32 14591.87 (6835.68) (6106.12) 1650.07 217.73 1867.80 26.00 (86.11) 1807.69 182508.39 4657.31 187165.70 16402.55 68050.95 84453.50 4682.13 2373.10 273.09 2646.19
Revenue External Sales Inter segment sale Total Income Results Segment result before interest and tax Unallocated expenses Interest Expense (net) Pro?t before tax Taxes Pro?t after taxes and before extraordinary items Add: Extraordinary Items (Net of taxes) Add/(Less): Prior Period Items Net Pro?t 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
Information about Secondary Business Segments Revenue by Geographical markets India Outside India Total Carrying Amount of Segment Assets India Outside India Total
69199.69 29970.04 99169.73 188198.21 188198.21
64737.13 32390.47 97127.60 187165.70 187165.70
53
Godrej Industries Limited SCHEDULE 22: NOTES TO ACCOUNTS
Notes:
(Contd.)
1. The Company has disclosed Business Segment as the primary segment. Segments have been identi?ed 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 Ole?n Sulphonates and Re?ned 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 re?ned 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)
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 signi?cant in?uence 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.
54
Annual Report 2009–2010
SCHEDULE 22: NOTES TO ACCOUNTS (Contd.)
b) Transaction with Related Parties
Nature of Transaction Holding Company Subsidiary Companies Fellow Associate/ Key Relative Subsidiaries Joint Venture Management of Key Companies Personnel Management Personnel 7.69 0.78 0.89 7.40 19.11 8.00 8.00 935.93 1,277.97 753.97 761.99 157.55 198.38 182.99 178.89 426.66 707.30 18.09 41.71 756.33 1,192.16 243.07 168.62 2.24 6.12 2,895.51 2,889.12 35,129.26 405.00 17.44 405.00 22.30 16.00 4,747.72 70.93 68.62 1,024.39 792.16 1.60 2.1 0 100.00 64.68 82.31 249.23 729.47 87.07 55.74 Enterprises over which Key Mangement Personnel exercise signi?cant in?uence 13.54 5.29 0.06 9.45 0.02 3.40 0.49 0.84 3.50 -
(Rs. lac)
Total
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
0.73 23.29 45.48 207.10 0.27 0.39 0.12 1.11 30.90 294.49 304.36 2,340.03 2,340.03 4,291.80 -
5.64 4.94 17.87 4.78 883.30 1,441.40 123.59 105.14 203.12 165.66 22.63 28.85 175.86 154.75 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 4,729.78 525.00 265.78 575.00 231.15 1,005.00 1,300.00 550.00 1,300.00 -
955.11 1,283.26 4.94 772.57 790.12 928.78 1,748.49 157.55 198.38 306.58 284.03 630.05 890.49 40.84 71.69 932.97 1,382.11 659.64 649.17 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 9,021.58 930.00 283.22 980.00 253.45 1,005.00 1,300.00 566.00 1,300.00 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
55
Godrej Industries Limited SCHEDULE 22: NOTES TO ACCOUNTS (Contd.)
c) The Signi?cant Related Party transactions are as under: 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. 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. 531.11 225.02 44.36 100.00 46.87 5.86 Inter Corporate Deposits - Accepted - Ensemble Holdings & Finance Ltd. - Godrej Consumer Products Ltd. Inter Corporate Deposits - Repaid - Ensemble Holdings & Finance Ltd. - Godrej Consumer Products Ltd. This Year Rs. Lac 35.71 25.72 2.24 Previous Year Rs. Lac 3.50 17.22 Nature of Transaction Sale of goods - Godrej Consumer Products Ltd. - Rapidol PTY Ltd. - Godrej Properties Ltd. - Godrej Saralee Ltd. Sale of ?xed assets - Godrej Properties Ltd. Purchase of Fixed Assets - Godrej Properties Ltd. - Godrej & Boyce Mfg. Co. 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. Commission / Royalty received - Godrej Hershey Ltd. - Godrej Properties Ltd. - Godrej Consumer Products Ltd. - Natures Basket Ltd. - Godrej Global Solutions Ltd.
-
12.51 8.00 6.12
6.54 8.00 -
883.30 45.48
157.55
198.38
538.07 215.16 17.87 0.73 -
525.00 405.00
250.00 -
575.00 405.00
200.00 -
180.04 122.34 2.95 1.25 -
Inter Corporate Deposits - Advanced 173.43 - Godrej Properties Ltd. 102.63 - Natures Basket Ltd. 5.46 - Godrej Agrovet Ltd. 2.51 Inter Corporate Deposits - Repayment Received - Godrej Properties Ltd. - Swadeshi Detergents Ltd.
550.00 455.00 -
1,300.00
550.00 16.00 -
1,300.00
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.
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. Dividend income - Godrej Consumer Products Ltd. - Godrej Properties Ltd. - Godrej Agrovet Ltd. - Godrej Saralee Ltd. - Ensemble Holdings & Finance Ltd. Dividend paid - Godrej & Boyce Mfg. Co. Ltd.
2,895.51 1,212.38 91.13 -
1,854.93 1,961.86 91.13 1,034.19 79.26
2,340.03
2,340.03
56
Annual Report 2009–2010
SCHEDULE 22: NOTES TO ACCOUNTS (Contd.)
Nature of Transaction Other Income - Godrej Agrovet Ltd. - Godrej Consumer Products Ltd. - Godrej Hershey Ltd. - Godrej Properties Ltd. - Natures Basket Ltd. - Godrej Saralee Ltd. - Godrej Hicare Ltd. - Godrej & Boyce Mfg. Co. Ltd. 20.07 11.14 5.66 1.37 1.18 1.29 This Year Previous Year Nature of Transaction Rs. Lac Rs. Lac Remuneration to Key Management Personnel 22.32 - Mr. N. B. Godrej 17.65 - Mr. V. F. Banaji 10.98 - Mr. M. P. Pusalkar 3.64 - Ms. T. A. Dubash - - Mr. M. Eipe 13.08 - Mr. C. K. Vaidya 2.89 1.11 Remuneration to Relatives of Key Management Personnel - Ms. Nisaba A. Godrej Recovery of Establishment & other expenses - Godrej Consumer Products Ltd. - Godrej Agrovet Ltd. - Godrej Hershey Ltd. - Godrej Properties Ltd. - Godrej Saralee Ltd. - Godrej Hicare Ltd. - Godrej & Boyce Mfg. Co. Ltd. - Godrej SCA Hygiene Ltd. - Godrej Global Solutions Ltd. Rent, Establishment & other exps paid - Godrej & Boyce Mfg. Co. Ltd. - Godrej Consumer Products Ltd. - Ms. R.N. Godrej - Godrej Properties Ltd. - Godrej Hershey Ltd. - Wadala Commodities Ltd. - Godrej Agrovet Ltd. - Natures Basket Ltd. - Godrej Infotech Ltd. - Godrej Saralee Ltd. - Godrej Hicare Ltd. 294.49 232.14 64.68 42.63 7.26 5.77 3.92 2.96 1.63 304.36 136.39 Shares in Associate company acquired under a scheme of arrangement 82.31 - Godrej Consumer Products Ltd. 18.24 6.38 29.31 2.88 9.85 32.20 26.38 4,747.72 686.49 121.14 63.22 54.50 6.24 983.25 96.31 Sale of Investments 108.88 - Godrej Oil Palm Ltd. 41.04 - Godrej & Boyce Mfg. Co. Ltd. 100.00 - Godrej Hygiene Care Pvt. Ltd. 16.52 30.90 Purchase of Investments 3.42 - Godrej Agrovet Ltd. 0.89 - Godrej Hygiene Care Pvt. Ltd. - Godrej Consumer Products Ltd. - Godrej Hershey Ltd. 501.25 4,743.72 4.00 31,689.26 3,440.00 17.57 4,291.80 4,729.78 - Mr. Pirojsha Godrej 87.07 53.57 2.17 241.34 211.36 199.78 194.83 177.08 219.84 151.58 131.84 137.82 135.02 16.06 This Year Rs. Lac Previous Year Rs. Lac
57
Godrej Industries Limited SCHEDULE 22 : NOTES TO ACCOUNTS (Contd.)
Rs.’lac 21. Computation of Pro?ts under Section 349 of the Companies Act, 1956 Pro?t for the year after tax as per Pro?t & Loss Account Add: Depreciation as per accounts Managerial Remuneration Directors’ Fees Pro?t / (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 Previous Year Rs.’lac
8,092.74 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 Pro?t / (loss) on sale of assets as per books Pro?t on sale of investments Pro?t 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 Pro?t 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 ?gures 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 Certi?cation and other services Tax Consultation and representation Consultation and management services Out of pocket expenses TOTAL
2,812.80 9.44 10,437.56 4,867.33 18,127.13 (4,830.73) 1,024.39 902.65 32.93 88.81 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) 827.26 686.97 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
58
Annual Report 2009–2010
SCHEDULE 22 : NOTES TO ACCOUNTS (Contd.)
24. Turnover (Net) Item Unit 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
Fatty Acids Glycerin Alpha Ole?n and its precursors Synthetic Detergent Medical Diagnostic Products Others TOTAL 25. Inventories - Finished Goods Item Unit
MT MT MT MT
Fatty Acids Glycerin Alpha Ole?n and its precursors Synthetic Detergent Others TOTAL 26. Raw Materials Consumed
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
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
Unit
Oils & Fats Chemicals and Catalysts Packing Materials, etc. TOTAL
MT MT
This Year Quantity Value Rs.’lac 127646 39731.74 22540 9512.07 3786.99 53030.80
Previous Year Quantity Value Rs.’lac 103421 39893.90 22412 10208.01 3692.13 53794.04
Raw materials consumption includes consumption for production of captively consumed items. 27. Purchase of Goods Unit This Year Quantity Value Rs.’lac 262.82 123.27 386.09 Previous Year Quantity Value Rs.’lac 361.72 162.23 523.95
Re?ned oil, Soaps, Toileteries, etc. Others TOTAL
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 This Year 59488 9230 49696 6354 23126 Actual Production Previous Year 50969 8663 47154 9189 22738 -
Fatty Acids MT } Glycerin MT } Alpha Ole?n and its precursors MT } Re?ned 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 Noti?cation 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 Re?ned Oils & Vanaspati is under process contract. 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 23,095.75 183.62 1.69 23,281.06 22,264.53 156.93 247.65 1,251.24 23,920.35 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 33,844.55 % 63 This Year Rs.’lac Previous Year Rs.’lac
27,133.02 51 53,030.80 100 232.89 29
19,949.49 37 53,794.04 100 370.54 31
83.05 675.70
33.53 62.21 1,553.56
564.32 71 797.21 100
833.04 69 1,203.58 100
135.81 21.05 13.79 929.40
136.26 23.05 12.14 1,820.75
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
0.07 0.07
32,183.63
206.84 32,390.47
60
Annual Report 2009–2010
SCHEDULE 22 : NOTES TO ACCOUNTS (Contd.)
34. Employee Bene?ts
The amounts recognised in the Company’s ?nancial statements as at the year end are as under: Gratuity This Year Previous Year Rs.’lac Rs.’lac a) 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 Bene?ts Paid Past Service Cost Amalgamations Curtailments Settlements 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 Bene?ts Paid Amalgamations Settlements Fair value of Plan Assets at the end of the year 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 Amounts Recognised in the statement of Pro?t 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 Actual return on Plan Assets Estimated contribution to be made in next ?nancial year Actuarial Assumptions i) Discount Rate ii) Expected Rate of Return on Plan Assets iii) Salary Escalation Rate iv) Employee Turnover v) Mortality 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 2,435.53 106.44 183.46 12.67 (2.22) 2,735.88 1,536.33 115.22 (46.40) 900.00 2,597.95 2,735.88 2,597.95 137.93 106.44 183.46 (115.22) (33.71) 140.97 161.61 2,214.96 102.70 177.20 (57.45) (1.88) 2,435.53 1,458.81 116.70 39.18 1,536.33 2,435.53 1,536.33 899.20 102.70 177.20 (116.70) (18.28) 144.92 77.53 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 -
d)
e) f) g)
The estimates of future salary increases, considered in actuarial valuation, take account of in?ation, 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 Percentage of Ownership interest as at 31st March, 2010 43.00% Percentage of Ownership interest as at 31st March, 2009 43.00%
Godrej SaraLee Ltd. (upto 28 March 2009) Godrej Hersheys Ltd
India India
Household Insectisides Beverages & Foods
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: This year Rs. ‘lac I. 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 INCOME 1. Turnover (net of excise) 2. Other Income EXPENSES 1. Material consumed and purchase of goods 2. Expenses 3. Inventory change 4. Depreciation 5. Interest 6. Provision for Taxation OTHER MATTERS 1. Contingent Liabilities 2. Capital Commitments 3,565.13 1,765.15 633.39 564.59 2,856.06 Previous year Rs. ‘lac 3,522.56 17,740.44 2,278.14 1,142.08 664.78 2,304.36
II.
3,669.19 4,031.25 2,492.71 248.54 -
5,772.32 462.25 2,443.69 287.24 -
III.
15,404.32 774.86
32,772.45 329.42
IV.
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
V.
1,828.36 263.16
683.70 13.33
62
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. Registration Details Registration No. State Code Balance Sheet Date Capital raised during the year (Amount in Rs. lac) Public Issue Rights Issue Bonus Issue Private Placement Position of mobilisation and deployment of funds (Amount in Rs. lac) Total Liabilities Total Assets Sources of Funds Paid-up Capital Reserves & Surplus Secured Loans Unsecured Loans Defered Tax Liability Application of Funds Net Fixed Assets Investments Net Current Assets Misc. Expenditure Accumulated Losses 4. Performance of Company (Amount in Rs. lac) Turnover (Total Income) Total Expenditure Pro?t/(Loss) before tax (Including extra ordinary income) Pro?t/(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
: : : : : : :
97781 11 31/3/2010 Nil Nil Nil Nil
2.
3.
: :
160,228.84 160,228.84
: : : : :
3,176.25 99,093.36 20,418.89 34,342.14 3,198.20
: : : : :
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/Re?ned Oils
(*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 of Godrej Industries Limited and its subsidiaries as at March 31, 2010, and also the Consolidated Pro?t and Loss Account and Consolidated Cash Flow Statement for the year then ended, both annexed thereto. These consolidated ?nancial statements are the responsibility of Godrej Industries Limited’s management. Our responsibility is to express an opinion on these ?nancial 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 whether the financial statements are free of material misstatements. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. (a) We did not audit the ?nancial statements of certain subsidiaries and joint ventures, whose ?nancial statements re?ect 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 in?ows amounting to Rs. 91.99 lakhs for the year ended on that date as considered in the consolidated ?nancial statements. These ?nancial 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 ?nancial statements of a Jointly controlled entity, whose ?nancial statements re?ect 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 ?nancial statements on the basis of unaudited management accounts. (c) As stated in Note 2 of Schedule 23, the ?nancial statements of certain associates whose ?nancial statements re?ect 64 5. Without qualifying our opinion, we draw attention to Note 15 (b) of Schedule 23 – Notes to Accounts, regarding a loan of Rs.17,330 lakh to a Trust for purchase of the Godrej Industries Ltd. 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. 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 ?nancial 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 pro?t for the year and the reserves as at March 31, 2010 could not be ascertained. the Group’s share of associates’ profit upto March 31, 2010 of Rs. 1,325.14 lakhs and the share of pro?t for the year of Rs. 387.62 lakhs has been included in the consolidated ?nancial statements on the basis of unaudited management accounts. 4. We report that the consolidated ?nancial statements have been prepared by the management of Godrej Industries Limited in accordance with the requirements of Accounting Standard (AS) 21 - Consolidated Financial Statements, Accounting Standard (AS) 23 – Accounting for Investments in Associates in Consolidated Financial Statements and Accounting Standard (AS) 27 – Financial Reporting of Interests in Joint Ventures issued by the Institute of Chartered Accountants of India.
Annual Report 2009–2010
7. Based on our audit and on consideration of the reports of other auditors on separate ?nancial statements and the management’s certification of the unaudited financial statements, in our opinion, the consolidated financial statements, subject to the observations in paragraphs 3 and 6 above, give a true and fair view in conformity with the accounting principles generally accepted in India: a) in case of the Consolidated Balance Sheet, of the consolidated state of affairs of the Godrej Industries Limited Group as March 31, 2010; b) in case of the Consolidated Pro?t and Loss Account, of the consolidated results of operations for the year ended on that date; and
c)
in case of the Consolidated Cash Flow Statement, of the consolidated cash ?ows for the year ended on that date.
For and on behalf of Kalyaniwalla & Mistry Chartered Accountants Registration No. 104607W Viraf R. Mehta Partner Membership No: 32083 Mumbai, May 26, 2010
65
Godrej Industries Limited — Consolidated Account CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2010
This Year Rs. lac Previous Year Rs. lac
Schedule SOURCES OF FUNDS 1. Shareholders’ Funds (a) Share capital (b) Reserves & surplus 2. Minority Interest 3. Loan Funds (a) Secured loans (b) Unsecured loans 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 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 Less : Current Liabilities and Provisions (a) Liabilities (b) Provisions Net Current Assets 9. Miscellaneous Expenditure (To the extent not written off or adjusted) TOTAL Signi?cant Accounting Policies Notes to Accounts 6 7 8 9 10
Rs. lac
1 2
3,176.26 173,382.79 176,559.05 31,546.64
3,197.59 137,590.92 140,788.51 11,831.77 80,264.90 77,081.89 157,346.79 5,016.16 314,983.23
3 4
71,494.68 76,624.40 148,119.08 5,078.50 361,303.27
5 92,508.15 44,841.35 47,666.80 3,857.57 51,524.37 48,096.18 92,747.15 103,581.11 42,305.82 14,788.78 23.34 84,498.52 245,197.57 67,949.70 8,312.30 76,262.00 168,935.57 361,303.27 22 23 86,908.24 41,811.79 45,096.45 2,454.54 47,550.99 52,346.04 65,266.38 74,335.73 87,519.93 12,520.42 21.94 77,718.56 252,116.58 94,525.35 8,287.59 102,812.94 149,303.64 516.18 314,983.23
11 12
13
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 V. R. Mehta Partner Mumbai, May 26, 2010 66
A.B. Godrej Chairman M. Eipe Executive Director & President (Chemicals)
N.B. Godrej Managing Director V. Srinivasan Executive Vice President (Finance & Estate) & Company Secretary
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 EXPENDITURE Materials consumed and purchase of goods Cost of sales - Property Development Expenses Inventory change Interest and ?nancial charges (net) Depreciation (Net of transfer from Revaluation Reserve Rs. 99.50 lac previous year Rs. 133.69 lac) Pro?t Before Tax & Extraordinary Items Pro?t from continuing operations before tax Income tax - current tax - MAT credit entitlement - deferred tax - Adjustment for tax of previous years (net) Pro?t from continuing operations after tax Pro?t from discontinuing operations before tax Income tax - current tax - deferred tax Pro?t from discontinuing operations after tax Pro?t for the year after taxation before extraordinary items Extraordinary Items (net of tax) Pro?t for the year after extraordinary items Prior Period adjustments (net) Share of pro?t in Associates Pro?t before Minority Interest Share of Minority Interest Pro?t after Minority Interest Surplus brought forward Excess provision of proposed dividend Excess provision of tax on distributed pro?t Adjustment of opening pro?t 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 pro?ts 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) Signi?cant Accounting Policies Notes to Accounts
Rs. lac
This Year Rs. lac
345,802.11 4,384.96 341,417.15 36,705.14 378,122.29 249,771.66 20,004.58 68,740.66 (1,671.29) 14,961.81 5,017.27 356,824.69 21,297.60
Previous Year Rs. lac
343,467.80 7,298.81 336,168.99 25,175.62 361,344.61 240,819.35 12,123.89 72,048.13 3,583.96 14,959.54 4,702.77 348,237.64 13,106.97 12,976.80 (5,158.47) 29.88 (166.41) 7,681.80 130.17 (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 3,996.99 1,135.14 27.97 1,305.48 41,254.15 47,719.73 2.82 3.49
14 15 16 17 18 19
21,297.60 (5,252.58) 877.04 (95.69) (5.47) 16,820.90 20 21 16,820.90 16,820.90 16,820.90 8,102.60 24,923.50 (4,598.78) 20,324.72 41,254.15 26.05 4.43 (1,806.20) 39,478.43 59,803.15 4,764.37 1,327.89 64.04 2,278.37 51,368.48 59,803.15 6.39 6.39 22 23
The Schedules referred to above form an integral part of the Pro?t and Loss Account. As per our Report attached Signatures to Pro?t and Loss account and Shedules 14 to 23 For and on behalf of Kalyaniwalla & Mistry Chartered Accountants V. R. Mehta Partner Mumbai, May 26, 2010 A.B. Godrej Chairman M. Eipe Executive Director & President (Chemicals) N.B. Godrej Managing Director V. Srinivasan Executive Vice President (Finance & Estate) & Company Secretary
67
Godrej Industries Limited — Consolidated Account CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010
This year Rs. lac A. Cash Flow from operating activities : Pro?t before tax Adjustments for : Depreciation Unrealised Foreign exchange Pro?t on sale of investments (Loss)/Pro?t on sale of ?xed 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 pro?t 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 ?xed assets Proceeds from sale of ?xed 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 ?nancing 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 pro?ts Net Cash from ?nancing activities Net increase/(decrease) in cash and cash equivalents 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 Cash and cash equivalents (Closing Balance) (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 ?at buyers and held in trust. 3. The above cash?ow statement includes share of cash?ows from jointly controlled entities as under: a. Net cash used in operating activities b. Net cash used in investing activities c. Net cash from ?nancing 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 ?ows of the Company. 5. The ?gures of previous year have been regrouped wherever necessary. 21,297.60 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 (30,594.47) 37,819.53 (20,286.20) (5,571.87) (5,494.70) 12.56 (486.33) (11,540.34) (9,460.17) 177.25 (112,664.01) 117,453.21 (362.54) 9,809.00 326.04 5,278.78 5,278.78 (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 3,307.15 12,520.42 (1,038.79) 14,788.78 Previous year Rs. lac 13,106.97 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 (10,587.80) (22,241.61) (7,278.80) (28,818.53) (8,965.26) 408.44 (37,375.35) (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) 1,371.13 151,045.60 (105,546.62) 8,870.35 (14,773.73) (3,248.47) (1,186.79) 36,531.47 (23,744.10) 36,491.60 23.92 (251.00) 12,520.42
B.
C.
14,630.24 158.54 14,788.78
12,515.11 5.31 12,520.42
(738.82) (1,054.08) 2,128.58
As per our Report attached For and on behalf of Kalyaniwalla & Mistry Chartered Accountants V. R. Mehta Partner Mumbai, May 26, 2010
Signatures to Cash Flow Statement A.B. Godrej Chairman M. Eipe Executive Director & President (Chemicals) N.B. Godrej Managing Director V. Srinivasan Executive Vice President (Finance & Estate) & Company Secretary
68
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010
This Year Rs. lac SCHEDULE 1 : SHARE CAPITAL Authorised: 800,000,000 Equity shares of Re. 1 each 100,000,000 Unclassi?ed 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 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.
Previous Year Rs. lac 8,000.00 10,000.00 18,000.00 3,197.59 3,197.59
8,000.00 10,000.00 18,000.00 3,176.26 3,176.26
SCHEDULE 2 : RESERVES AND SURPLUS As at 1.4.2009 Securities Premium Account 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 Pro?t & Loss Account Total - This Year Total - Previous Year 80,200.24 81,804.71 71.04 52.27 1,409.93 1,671.21 194.95 166.98 3,125.00 3,301.34 3.87 10,875.12 10,316.14 456.62 (176.79) 41,254.15 36,308.58 137,590.92 133,444.44 Additions 31,935.05 18.77 64.02 27.97 21.34 3.87 1,697.98 1,305.48 (432.44) 764.93 20,355.20 11,147.00 53,641.15 13,268.02 Deductions 6,933.24 1,604.47 123.55 261.28 176.34 21.34 746.50 131.52 8,434.67 6,518.42 15,512.80 9,438.53 Adjustment on aquisition/deletion (537.63) 7.35 (1,806.20) 316.99 (2,336.48) 316.99 36,931.40 2,156.00 17,474.81 2,500.00 6,500.00 5,932.47 71,494.68 As at 31.03.2010 105,202.05 80,200.24 71.04 71.04 1,286.38 1,409.93 258.97 194.95 3,146.34 3,125.00 3.87 3.87 12,014.13 10,875.12 31.52 456.62 51,368.48 41,254.15 173,382.79 137,590.92 39,144.71 2,156.00 25,338.37 6,500.00 7,125.82 80,264.90
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
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.)
This Year Rs. lac 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 17,231.57 750.72 6,000.00 47,656.57 466.74 4,518.80 76,6 24.40 Previous Year Rs. lac 2,164.31 300.00 3,000.00 60,150.28 2,500.00 8,000.00 466.74 500.56 77,081.89
Rs. Lac As on 01.04.2009 Tangible Assets Land - Freehold - Leasehold Buildings Plant & Machinery Research Centre Furniture & Fixtures Of?ce & 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 988.96 170.84 9,473.96 52,398.27 164.13 1,768.40 1,856.38 3,266.00 117.03 1,180.47 200.00 1,057.23 GROSS BLOCK Deductions/ As on Additions Adjustments 31.03.2010 395.94 188.89 3,294.84 3,145.01 0.20 231.16 344.74 138.13 737.22 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 1,180.47 200.00 1,794.07 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 39.95 449.85 199.98 829.55 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 (0.01) 0.15 82.17 158.26 35.43 3,933.88 31,320.75 73.75 983.25 877.46 806.44 59.91 532.02 199.99 987.66 1,384.36 324.84 8,819.99 23,484.95 72.37 881.87 1,200.23 2,428.56 57.12 648.45 0.01 806.41 984.83 143.41 5,999.05 23,361.96 83.70 824.46 1,037.16 2,628.88 77.08 730.62 0.02 227.68
SCHEDULE 5 : FIXED ASSETS ASSETS
306.63 13,959.94 86,908.24 91,262.05
912.52 9,388.65 6,035.11
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
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 3,857.57 51,524.37
104.78 8,892.80 45,096.43 2,454.54 47,550.97
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 ?xed 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 Certi?cate 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 certi?cate 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 10
440,000 5,000,000
-
-
440,000 5,000,000 (a)
44.00 450.00
44.00 450.00
1 10 10
55,369,989 15,423 -
21,074,631 122,050
4,000,000 72,444,620 (b) 15,423 7,716 114,334
58,040.80 87.35 7.58 1,689.46 306.99 1,080.43 100.00 11.57 0.01 100.50 125.00 2,099.50 253.52 688.09 1,142.34 922.70 4,258.30
51,163.47 54.11 7.68 1,504.98 242.21 132.24 980.43 100.00 11.57 0.01 100.50 125.00 121.21 253.52 688.09 1,142.34 1,042.30 4,316.50 0.02 0.25 83.19 397.60 299.68 673.03 469.21 1,313.51 0.13 0.02 0.01
10 10 10 10 £0.25 10 10 100 100 10 10 10 $0.01 $1 $1.90 £1.00 $0.10 100 £1000 $1,000,000 $750,000 $1,550,000 $950,000 10 10 500 10 -
209,370 2,671,993 455,000 389,269 13,692 195,577 32,258 114 25 250,000 12,222 1,900,000 4,091,073 1,067,754 2,631,578 100 9,604,540 25 97 13,135,050 2,000 3 25,000 -
1,805 6,626 2,565,000 2,500 -
15,497 97 13,135,050 -
209,370 2,671,993 455,000 389,269 -
(c)
202,203 32,258 114 (d) 25 (a) 250,000 12,222 4,465,000 4,091,073 1,067,754 2,631,578 100 9,604,540 25 4,500 3 25,000 (c) (e) (f) (f) (g) (a)
0.02 397.60 299.68 673.03 469.21 0.45 0.02 0.03 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 61,945.03 30,802.12 92,747.15 194,388.98
65,716.81 (450.43) 65,266.38 55,034.56 10,231.82 65,266.38 73,559.03
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 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 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 pro?ts Provision for retirement bene?ts 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 Pro?t on sale of ?xed assets (Net) Pro?t on sale of long term investments (refer note 19) Pro?t on sale of current investments Provision for depletion in value of investment written back Bad debt recovered Miscellaneous income Share in jointly controlled entities This Year Previous Year Rs. lac Rs. lac 12,359.30 38,189.03 3,694.02 2,463.87 16.97 11.29 4.87 7,009.70 613.34 3,587.31 67,949.70 4,764.37 1,327.89 1,917.87 302.17 8,312.30 2,131.81 30,321.59 44,598.35 2,070.00 18.74 16.82 7,727.20 667.64 6,973.20 94,525.35 3,996.99 956.60 2,788.80 545.20 8,287.59
2,506.44 500.11 3,006.55 38,593.42 41,599.97 (500.11) 41,099.86 1,205.96 42,305.82 756.40 6,356.39 6,315.99 1,360.00 14,788.78
1,878.50 744.33 2,622.83 82,962.61 85,585.44 (789.00) 84,796.44 2,723.49 87,519.93 1,019.74 4,623.28 5,242.80 1,634.60 12,520.42
-
386.75 129.43 516.18
2,482.64 18,524.85 10,881.44
5,135.76 15,375.82 12,757.21
14.84 2,765.71 7,073.41 326.04 24,549.96 102.88 747.97 1,082.69 41.64 36,705.14
159.46 41.98 2,702.32 4,921.11 563.35 80.64 13,168.66 322.05 1,688.19 9.24 1,173.12 345.50 25,175.62
3,417.43 2,839.63 562.26 32,643.85 6,777.18 3,692.25 2,676.99 84,498.52
4,254.77 1,973.75 635.28 21,650.90 8,704.80 2,437.37 4,792.90 77,718.56
72
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS (contd.)
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 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 ?xed loans - on bank overdrafts - on Intercorporate deposits - other interest Less: Interest received - on loans & deposits - on Customer balances, etc. - others Net Interest Other ?nancial charges Foreign exchange loss Share in jointly controlled entities SCHEDULE 20 : EXTRAORDINARY ITEMS Pro?t on Sale of business SCHEDULE 21 : PRIOR PERIOD ADJUSTMENTS Short provision for expenses This Year Previous Year Rs. lac Rs. lac
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
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
47,586.42 44,927.34 92,513.76 72,509.18 20,004.58 15,844.26 1,121.04 983.41 1,321.29 8,522.70 5,229.55 1,190.35 664.71 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) 1,022.42 133.30 194.79 4.91 6,264.14 11,222.71 68,740.66
28,479.19 31,231.12 59,710.31 47,586.42 12,123.89 12,483.81 990.99 983.86 1,717.51 8,757.36 4,920.46 1,106.45 632.61 992.03 683.43 218.80 203.65 4,363.60 5,636.75 286.24 1,816.18 821.39 285.39 1,127.83 429.64 2,155.55 7,214.61 14,219.99 72,048.13
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 17.31 3.32 20.63 12,844.51 1,423.71 693.59 14,961.81 -
7,004.19 4,174.71 223.55 1,416.99 12,819.44 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 ?nancial 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. b) Use of Estimates The preparation of ?nancial 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 ?nancial statements and reported amounts of income and expenses during the period. Management believes that the estimates used in the preparation of ?nancial statements are prudent and reasonable. Actual results could differ from the estimates. c) 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 ?nance lease are capitalised at the lower of their face value and present value of the minimum lease payments. d) Intangible Assets 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 ?ows. The intangible assets are amortised over the estimated useful lives as follows. Particulars Goodwill Trade marks Technical Know-how Non-compete fees Computer software e) Impairment of Assets 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. f) 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. Borrowing costs incurred for the development of long term projects are included under Construction work in 74 Estimated useful lives 8 - 20 years 8 - 15 years 10 years 7 - 8 years 4 - 6 years j) g) progress/Management Project Receivables at weighted average of the borrowing cost/rates as per agreement respectively. 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 ?ows from the investment. 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. 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) 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 con?rmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. 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 Pro?t and Loss Account.
ii) Forward exchange contracts other than those entered into to hedge foreign currency risk of ?rm 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 Pro?t 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
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 Pro?t and Loss Account. k) Revenue Recognition 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 Pro?t 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 ?xed assets. m) Depreciation Leasehold land is amortised equally over the lease period. Leasehold improvements are amortised over ?ve years. Depreciation is provided on the straight line method at the rates speci?ed 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 certi?ed by the valuers. Such depreciation is withdrawn from Revaluation Reserve and credited to Pro?t and Loss Account. n) Employee Bene?ts Liability is provided for the retirement bene?ts of provident fund, gratuity, leave encashment and pension bene?t in respect of all eligible employees of the Group. i) De?ned Contribution Plan Employee bene?ts in the form of Provident Fund and family pension are considered as de?ned contribution plans and the contributions are charged to the Pro?t and Loss of the year when the contributions to the respective funds are due. ii) De?ned Bene?t Plan Retirement bene?ts in the form of Gratuity and Pension plan for eligible employees considered as defined bene?t 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 Bene?ts 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 Pro?t and Loss Account. 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 pro?t 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 pro?t and loss account, whereas, the unrealized pro?t is ignored. Gains or losses on the Commodity futures contracts is recorded in the pro?t & loss account under cost of materials consumed. q) Deferred Revenue Expenditure The compensation payable under the Voluntary Retirement Schemes, the bene?t of which is expected to accrue in future is deferred over its payback period. The compensation is generally amortised over three to ?ve 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 suf?cient 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 ?xed 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 re?ected as unallocated corporate income / expenses. 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 ?nancial statements of the parent and its subsidiaries are combined on a line by line basis and intra group balances, intra group transactions and unrealized pro?ts or losses are fully eliminated. In the consolidated ?nancial 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 ?nancial 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 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.) 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 pro?ts or losses is included in the carrying cost of investments. 2. The ?nancial 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 certi?ed by their respective management. 3. Information on subsidiaries, joint ventures and associates: (a) The subsidiary companies considered in the consolidated ?nancial statements are: Sr. Name of the Company No. Country of Percentage of Holding Incorporation This Year Previous Year India 75.26% 75.26% India 75.26% 75.26%
3
India
60.21%
60.21%
4
India
67.73%
38.38%
5
India
75.26%
75.26%
India
100.00%
0.00%
6 7
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. 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 Percentage of Holding This Year Previous Year 20.00% 20.00%
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
1 India 35.91% 41.51% 2 India 70.42% 81.40%
India
54.74%
81.40%
3
India
35.91%
81.40%
4
India
35.91%
81.40%
5
India
100%
100%
6
India UK
100% 100%
100% 100% 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
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) 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 bene?ts are not in consonance with the group accounting policies. No effect has been given in the consolidated ?nancial statements on account of such differing accounting policies, where the impact is not expected to be material. 5. The break-up of Investment in Associates is as under:
No. Sr. Name of the Company Cost of Acquisition Goodwill included in cost of acquisition Share in Provision Carrying pro?ts / 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 (42.04) (42.04) 651.46 466.98 61.05 55.51 – – No. Sr. Name of the Company Cost of Acquisition Goodwill included in cost of acquisition Share in Provision Carrying pro?ts / for cost of (loss) of diminution Investments associates in the post value of acquisition investments
5
Al Rahba International Trading LLC Polychem Hygiene Lab Pvt. Ltd. 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)
–
– –
6
162.75 162.75
88.99 88.99
144.24 79.46 – 73.87 7,283.16 2,373.97
–
306.99 242.21
7
– – 124.54 80.56 52,883.38 35,915.48 50,858.85 38,617.17
– – 66.17 132.24 129.29 60,037.25 189.92 53,042.90
6. Contingent Liabilities
Sr. Description No. (a) Claims against the Company not acknowledged as debts: 1) Excise duty demands relating to disputed classi?cation, 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, classi?cation, 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 classi?cation 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 ?led by Processors for claiming various expenses (h) Share in Jointly Controlled Entities This Year Previous Year Rs. Lac Rs. Lac
2,388.53
2,029.35
286.08 557.75 1,217.63 330.73 1,561.02 219.59 238.07 733.04 6,932.97 617.74 50.03 41.70 1,828.36
856.94 2,054.42 1,124.04 330.73 2,297.56 234.60 289.67 666.65 4,313.66 84.26 41.70 50.11 104.13 1,106.70
1
Swadeshi Detergents Ltd.
191.32 191.32
91.46 91.46
2
3
4
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
– 58,040.80 – 51,163.47
7.
68.24 68.24 – – – – 1,689.46 1,504.98
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
78
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 pro?t due to Buyback of shares is added in surplus brought forward of pro?t & loss account. 9. Loans a) Term loans from banks are secured by ?rst 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”. a) The Company had sold its entire holding in Godrej Hicare Limited, a subsidiary company, in March 2009. The pro?t 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 ?nancial 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 ?at 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 bene?ts Provision for doubtful debts/advances VRS Expenses Others This Year Previous Year 228.64 547.55 215.00 581.31 1,572.50 521.00 784.71 298.00 (213.42) 1,390.29 6,385.94 20.51 6,406.45 5,016.16
Liabilities Depreciation 6,648.53 Share in Jointly Controlled Entities 2.47 6,651.00 Net Deferred Tax Liability 5,078.50 Loans & Advances:
10. Investments
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 speci?ed 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 ?led 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 ?nal disposal of the suit ?led by the investee company and the application made by minority shareholders under Section 397/398 before the Hon’ble High Court. The Company has ?led 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. 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. 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). 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 Previous Year No. of Wt. Options average exercise price ( * ) 7,309,500 177.10
ESOP II :
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 Previous Year No. of Wt. Options average exercise price ( * ) -
-
-
860,000 860,000
179.86 179.86
-
-
GPL ESOP
This Year No. of Wt. average Options exercise price ( * ) 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 Previous Year No. of Wt. Options average exercise price ( * ) 442,700 442,700 620.00 620.00
442,700 39,000 403,700
620.00 620.00 620.00
(*) 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. Modi?cation of the ESOP scheme : 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. The exercise period of unvested options of retiring employees increased from 6 months to 2 years. 3. The options granted to the employees of participating company shall continue in case of restructuring including sale of shares of participating Company.
7,799,950
190.43
2,100,000 119,250 5,580,700
91.84 284.45 235.48
340,000 835,450 150,000 835,000 7,799,950
284.60 276.70 254.45 209.87 190.43
80
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS (contd.)
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 pro?t and earnings per share would have been as per the pro forma amounts indicated below. This Year Previous Year Rs. Lac Rs. Lac Net Pro?t (as reported) Less : Stock based compensation expense determined under fair value based method (Pro Forma) Net Pro?t (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 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: This Year Rs Lac 1,913.45 870.14 50.89 This Year Rs Lac 3,157.87 Previous Year Rs Lac 1,785.95 763.43 50.87 Previous Year Rs Lac 3,433.55
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 pro?t & loss account Future lease payments - Within one year - Later than one year and not later than ?ve years Lease taken by the group b) Operating Lease: The Company’s signi?cant leasing arrangements are in respect of operating lease for land, of?ce premises, residential premises, machinery and storage tanks. The agreegate lease rentals paid by the Company are charged to pro?t & loss account Period Lease payment recognised in the pro?t & loss account Future lease commitments - Within one year - Later than one year and not later than ?ve years 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: 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 This Year Rs Lac 440.44 Previous Year Rs Lac 418.17
2,665.86 17,651.48 Amt. Rs.
2,645.00 8,502.00 Amt. Rs.
3,484.95 6,622.90
3,347.89 3,632.33
6.39
2.82
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 ?nanced 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 ?nancial statements. 16 Leases: Leases granted by the group 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
399.87 323.41
412.53 336.07
Period
Within one year Later than one year and not later than ?ve years
Godrej Industries Limited — Consolidated Account
SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS (contd.)
17. Hedging Contracts The group uses forward exchange contracts to hedge its foreign exchange exposure relating to the underlying transactions and ?rm 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) Details Total number of contracts outstanding Foreign currency value - US Dollar (million) - Euro (million) Details Uncovered Foreign exchange exposure as at the year end - US Dollar (million) - Euro (million) - GBP (million) 18. Turnover This Year Rs Lac i) ii) iii) iv) v) vi) vii) 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 539.83 180.20 2,494.50 2,230.18 717.84 145.52 12,604.92 18,912.99 Previous Year Rs Lac 948.01 963.18 6,679.45 1,352.69 45.10 84.87 13,949.39 24,022.69 This Year Previous Year Purchase Sale Purchase Sale 1 1,040 6 4,500 19. Exceptional Items This Year Rs Lac Included under Other Income i) Pro?t 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
Forward Exchange contracts This Year Previous Year Purchase Sale Purchase Sale 31 9.47 9 1.85 2.00 24 10.04 6 2.42 0.50
20. Pro?t & Loss Account a) Exchange differences recognised in the Pro?t & 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 Pro?t & 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 pro?t after tax excluding extraordinary items c. Net pro?t 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. Nos.
319,758,602 317,624,892
319,758,602 319,758,602
ii) Un-hedged foreign currency exposures This Year Purchase Sale Previous Year Purchase Sale
Nos.
318,247,978
319,758,602
Rs. 'lac Rs. 'lac
20,324.72 20,324.72
9,024.68 11,147.00
13.78 0.04 -
8.42 0.03
2.08 0.04 -
3.56 0.17 -
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.
82
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 signi?cant in?uence 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 Holding Company Fellow Subsidiaries Associate/ Joint Venture Companies 945.78 1,327.34 687.92 1,087.79 4.16 89.81 198.38 105.57 178.89 397.27 15.40 772.04 1,991.57 267.96 174.51 2.24 2.26 27.68 167.75 2,895.51 1,854.93 39,331.56 20,357.72 4,202.30 405.00 17.44 405.00 22.30 175.00 16.00 175.00 4.72 187.14 450.29 319.23 2,156.00 2,156.00 1,431.21 2,225.00 Key Management Personnel 20.16 173.00 23.99 2.40 2.17 147.26 135.17 92.40 1,830.76 1,258.80 2.23 4.17 Relative of Key Management Personnel 40.00 100.00 193.76 117.33 264.03 729.47 87.07 55.74 Enterprises over which Key Mangement Personnel exercise signi?cant in?uence 13.53 49.28 1,218.72 1.99 2.39 0.49 0.84 3.50 31.92 71.33 12.61 9.65 32.55 0.12 Rs. Lac Total
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
19.88 29.09 140.13 88.22 76.84 141.57 233.17 242.00 0.27 0.39 0.12 1.11 30.90 1,656.58 1,604.75 7,334.07 2,340.03 4,291.80 302.97 29.93 212.64 90.06 -
7.69 2.13 0.89 52.57 21.73 8.00 8.00 3.11 0.13 0.27 6.84 -
979.19 1,405.71 140.13 148.38 173.00 23.99 1,983.48 1,231.35 233.17 346.16 89.81 198.38 105.57 178.89 397.54 8.08 15.52 1.11 778.96 2,023.36 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 22.30 175.00 16.00 175.00 302.97 2.23 4.17 20.44 226.85 695.75 416.25 2,156.00 2,156.00 1,431.21 2,225.00
84
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS (contd.)
c) The signi?cant Related Party transactions are as under:
Nature of Transaction 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 Purchase of Fixed Assets - Godrej & Boyce Mfg. Co. 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. Commission received - Godrej Hershey Ltd. - Godrej Consumer Products Ltd. Licence fee / Storage income - Godrej Consumer Products Ltd. - Compass BPO Ltd. - Godrej Saralee Ltd. - Godrej Hershey Ltd. Other Income - Godrej Consumer Products Ltd. - Godrej Hershey Ltd. - Godrej Saralee Ltd. 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. 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 Advance given - Godrej & Boyce Mfg. Co. Ltd. - Ms. M. Mahendran Loan given - Mr. A. Mahendran Loan repaid - Mr. A. Mahendran - Mr. Ravi Venkateswar Issue of equity shares - Godrej & Boyce Mfg. Co. Ltd. 302.97 This Year Rs. Lac 927.98 19.88 11.95 11.44 6.36 233.17 1,218.72 538.07 149.26 76.84 0.59 89.81 102.62 2.95 182.26 154.79 31.78 28.43 11.14 3.23 1.03 716.41 50.26 4.99 2.28 0.38 1,656.58 260.90 129.07 64.68 46.80 5.77 4.14 2.93 140.13 Previous Year Nature of Transaction Rs. Lac 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 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. 198.38 Inter Corporate Deposits - Repayment Received - Swadeshi Detergents Ltd. - Godrej Hershey Ltd. This Year Rs. Lac 2.24 21.56 8.00 6.12 405.00 405.00 16.00 2,895.51 7,334.07 65.47 64.38 53.36 53.36 31.14 132.79 117.59 105.22 241.34 211.36 199.78 194.83 177.08 149.46 78.66 130.49 84.74 7.41 Previous Year Rs. Lac 3.50 147.26 2.26 8.00 167.75 175.00 175.00 1,854.93 2,340.03 23.78 71.33 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
173.43 Dividend income 5.46 - Godrej Consumer Products Ltd. 211.72 172.69 238.14 84.75 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.
87.07 8,610.00 7,000.00 -
53.57 2.17 4,291.80 4,202.30 31,689.26 3,440.00
Shares in Associate Compnay acquired under a scheme of arrangement - Godrej Consumer Products Ltd.
4,747.72
-
85
86
(Rs. lac)
Chemicals This Year 53827.63 48012.35 100.50 308.95 53928.13 48321.30 (100.50) (308.95) 53827.63 48012.35 (44.52) 24592.46 17349.22 165.47 3171.31 (1561.80) (300.16) 11431.97 10527.95 6233.85 32022.48 1958.74 546.79 0.15 32569.27 1958.89 (546.79) (0.15) 32022.48 1958.74 19490.78 16063.87 1.47 92.52 19492.25 16156.39 (1.47) (92.52) 19490.78 16063.87 17727.17 96.76 17823.93 (96.76) 17727.17 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 51755.68 378122.29 35.19 5663.72 51790.87 383786.01 (35.19) (5663.72) 51755.68 378122.29 6076.84 50047.31 Previous Year This Year Previous Year This Year Previous Year This Year Previous Year This Year Animal Feed Veg Oils Estate & Property Development This Previous Year Year Household Beverages & Foods Insecticides This Previous This Previous Year Year Year Year Finance & Investments This Previous Year Year Others Total Previous Year 361344.61 7529.00 368873.61 (7529.00) 361344.61 37943.99 3638.26 173369.69 148857.11 1360.64 18682.70 7.77 3184.60 927.16 0.00 310.09 423.55 54632.79 0.00 3275.18 2711.15 2730.93 474.72 0.00 6238.98 9034.76 9769.19 135345.32 140208.92 32446.88 1792.64 17.91 664.75 1,917.97 6902.16 2521.63 (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 1138.86 9411.72 49.94 359.88 179.75 28.38 222.27 331.96 245.96 155.50 59.98 1299.35 993.78 4728.40 288.87 5017.27 Total This Year Previowus Year 283339.85 270259.70 94782.44 91084.91 378122.29 361344.61 (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 6471.04 179.63 6650.67 4248.24 454.53 4702.77 This Year Previous Year 432449.01 412944.23 5116.29 4851.94 437565.30 417796.17
SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS (contd.)
23. Segment Information
Godrej Industries Limited — Consolidated Account
Information about primary business segments
(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) Pro?t before tax Taxes Add : Extra Ordinary items (Net of Tax) Add: Prior Period items Pro?t after taxes Share of pro?t in associates Pro?t before Minority Interest Share of Minority Interest Net Pro?t 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
India Outside India Total
Notes: 1. The Company has disclosed Business Segment as the primary segment. Segments have been identi?ed 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, re?ned glycerine, Alfa Ole?n 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 ?sh. 4. Veg oils segment includes the business of processing and bulk trading of re?ned 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 re?ned 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.
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS (contd.)
24. Employee Bene?ts
The amounts recognised in the Company’s ?nancial 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 Bene?ts 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 Bene?ts Paid Amalgamations Settlements Fair value of Plan Assets at the end of the year 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 d) Amounts Recognised in the statement of Pro?t 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 ?nancial 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.) 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% 1,872.84 143.01 (66.31) 1,035.75 (139.62) 2,978.29 3,369.53 2,985.39 384.14 173.43 233.20 (143.01) 31.28 8.60 303.50 209.32 1,806.12 144.69 48.68 83.76 (113.05) 1,872.84 3,029.24 1,882.86 1,146.38 172.37 228.76 (144.69) 0.87 257.31 96.01 14.20 8.75 (11.03) 0.86 12.78 18.33 7.83 19.29 45.45 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 -
The estimates of future salary increases, considered in actuarial valuation, take account of in?ation, 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 Godrej Agrovet Limited Godrej Properties Limited Ensemble Holdings & Finance Limited Godrej International Limited Natures Basket Limited Godrej Oil Palm Ltd.
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 pro?t/(Loss) of the subsidiary company so far it concerns the members of the Company A. For the ?nancial 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 ?nancial 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
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%
7,050,000 (See note 7,050,000 1 below) 10 100.00%
Rs. lac
Rs. lac
Rs. lac
Rs. lac
Rs. lac
2,452.13 —
8,647.93 —
320.12 —
725.85 —
(624.07) —
B.
3,195.70 3,294.33
10,209.77 7,606.35
(347.58) 560.80
26,510.57 11,348.28
— —
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.
A.B. Godrej Chairman M. Eipe Executive Director & President (Chemicals) Mumbai, May 26, 2010
N.B. Godrej Managing Director 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 ?nancial 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: 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 and Pro?t & 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 ?x their remuneration. The retiring Auditors M/s. Kalyaniwalla & Mistry, Chartered Accountants, Mumbai are eligible for re-appointment. A certi?cate 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 speci?ed by the Board from time to time has made recommendations to the Board in respect of internal control systems, half-yearly & annual ?nancial 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 con?rm :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 ?nancial year and of the pro?t or loss of the Company for that period; that they have taken proper and suf?cient 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; that they have prepared the annual accounts on a going concern basis.Total Income Pro?t Before Taxation (PBT) Less : Provision for Taxation Add : Extraordinary Income/(Expense)(Net) Pro?t 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
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 pro?tability. This represents the ful?llment 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 pro?tability. Despite almost-?at sales volumes, pro?tability grew due to expansion of contribution margins and control over ?xed 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 dif?cult 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 ef?cient 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 ?sh 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 pro?tability. 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 pro?tability. 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-speci?c selective herbicides, synthesis of intermediates, and innovation of a next generation PGR for cereals. FINANCE AND INFORMATION SYSTEMS: Your Company managed treasury operations very ef?ciently. Excellent treasury management resulted in your Company procuring funds at a signi?cantly 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 of?ce. Implementation of SAP in your Company has already started to yield signi?cant business bene?ts. 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 Of?ces in addition to the accreditation for Information Security Management System in its Corporate Of?ce. 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 ?nancial 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 Pro?t & Loss Accounts, Directors’ Reports and Auditors’ Reports are attached to the Balance Sheet
c) d)
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 of?ce of the Company. For and on behalf of the Board of Directors Mumbai, May 17, 2010. N. B. GODREJ Chairman
92
Annual Report 2009–2010
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 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 of?ce weekly off to power staggering day 4) Maintenance of power factor level at 0.98 5) Installation of wood ?re boiler in place of diesel ?re 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 bene?ts 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
II.
Nimin, a urea use ef?ciency enhancer being evaluated at the University of Mauritius 5. 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. (a) (b) (c) (d)
4.
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 For and on behalf of the Board of Directors N. B. GODREJ Chairman
Mumbai, May 17, 2010.
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 Pro?t and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These ?nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these ?nancial 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 ?nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial 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 speci?ed 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) 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. 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 bene?ts of future pro?tability of these companies being non-quanti?able at this stage, we are unable to determine the quantum of the possible diminution in the value of these investments / advances. 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 ?nancial 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 Pro?t 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 Pro?t 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 ?nancial 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 Pro?t and Loss Account, of the pro?t for the year ended on that date. iii) in the case of the Cash Flow Statement, of the cash ?ows 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 disquali?ed 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
2.
3.
4.
c)
93
Godrej Agrovet Limited
Annexure to the Auditors’ Report
Referred to in paragraph (3) of our report of even date. 1) (a) (b) The Company has maintained proper records showing full particulars, including quantitative details and situation of ?xed assets. As explained to us, the Company has a program for physical veri?cation of ?xed assets at periodic intervals. In our opinion, the period of veri?cation is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies have been reported on such veri?cation. In our opinion, the disposal of ?xed assets during the year does not affect the going concern assumption. The Management has conducted physical veri?cation of inventory at reasonable intervals. In our opinion, the procedures of physical veri?cation of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. The Company is maintaining proper records of inventory. The discrepancies noticed on physical veri?cation 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. 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. 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. As informed to us the receipt of principal and interest, to the extent due, has been regular. 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. The Company has not taken any loans, secured or unsecured from companies, ?rms 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. 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. The payment of principal amounts and interest was also regular. 10) 11) Sales Tax Act (b) 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. 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: Nature of the Dues Excise duty & interest from April 2006 to March 2010 on account of Classi?cation matter. Sales tax & interest thereon from FY 199394 to 1995-96. Demand raised for AY 2007-08 Amount Forum where dispute is (Rs.’000) pending 119,648 Commissioner of Central Excise
(c) 2) (a) (b)
Name of Statute Excise Duty Act
(c)
34,151 Commissioner, Appellate Tribunal and High Court 2,929 Commissioner of Income Tax (Appeals)
3)
(a)
Income Tax Act
The Company does not have accumulated losses at the end of the ?nancial year and it has not incurred any cash losses in the current and immediately preceding ?nancial year. 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 ?nancial 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 bene?t 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 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. According to the information and explanations given to us, term loans were applied for the purpose for which the loans 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 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, no major fraud on or by the Company, has been noticed or reported during the year.
(b)
12)
(c) (d)
13)
14) 15)
(e)
(f) (g) 4)
16) 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, ?xed 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. 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.
18) 19) 20) 21)
5)
(b)
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. 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. 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. (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 Place: Mumbai Dated: May 17, 2010.
For and on behalf of KALYANIWALLA & MISTRY CHARTERED ACCOUNTANTS Firm Registration No.: 104607W E. K. IRANI PARTNER Membership No. 35646
7) 8)
9)
94
Annual Report 2009–2010
BALANCE SHEET AS AT MARCH 31, 2010
THIS YEAR Schedule SOURCES OF FUNDS SHAREHOLDERS’ FUNDS Share Capital Reserves & Surplus LOAN FUNDS Secured Loans Unsecured Loans DEFERRED TAX LIABILITY TOTAL APPLICATION OF FUNDS FIXED ASSETS Gross Block Less: Depreciation Net Block Capital work-in-progress/ Advances 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 TOTAL NOTES TO ACCOUNTS 15 8 9 2,619,376 58,837 2,678,213 1,175,156 3,955,234 1,471,616 40,770 1,512,386 2,757,409 5,134,089 6 7 1,334,991 935,349 92,384 55 1,490,590 3,853,369 1,198,601 868,572 311,922 60 1,890,640 4,269,796 5 1,200,117 445,810 754,307 76,054 830,361 1,949,717 1,094,958 423,515 671,443 41,523 712,966 1,663,714 3 4 580,675 400,263 980,938 102,004 3,955,234 290,294 2,036,165 2,326,459 124,050 5,134,089 1 2 121,188 2,751,104 2,872,292 121,188 2,562,393 2,683,580 Rs.’000 Rs.’000 PREVIOUS YEAR Rs.’000
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010
Schedule INCOME From Operations Other Income EXPENDITURE Materials Expenses Interest and Financial Charges Depreciation 10 11 Rs.’000 THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000 Rs.’000 14,077,595 53,042 14,130,637 12 13 14 11,418,404 2,248,445 151,082 63,384 13,881,315 249,322 250,623 54,300 — (22,046) 32,254 218,369 Pro?t/(Loss) on Discontinuing Operations for Live Bird Business Provision for Tax Current Tax Pro?t/(Loss) on Discontinuing Operations for Processed Chicken Provision for Tax Current Tax Fringe Bene?t Tax Profit/(Loss) on Discontinuing Operations for Retail Business Provision for Tax Fringe Bene?t Tax PROFIT BEFORE EXTRAORDINARY INCOME/EXPENSE Extraordinary Income (on transfer of) Part of Processed Chicken Business Provision for Current Tax Extraordinary Income (on transfer of) of Retail Business Provision for Current Tax Extraordinary Expenditure for Employee Bene?ts 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 (1,301) 12,935,470 271,418 13,206,888 10,512,600 2,093,989 259,668 72,185 12,938,442 268,446 310,155 115,603 9,112 10,280 134,995 175,160 —
PROFIT BEFORE TAX AND EXTRAORDINARY INCOME Pro?t on Continuing Operations Provision for Tax Current Tax Fringe Bene?t Tax Deferred Tax
— (1,301) —
— (19,800)
— — — —
— 195 (19,995) (21,910)
— — 217,068 — — — — — — — — — — 217,068 1,153,509 1,370,577
91 (22,001) 133,165 476,654 476,654 7,376 7,376 (17,568) (1,795) (14,099) (33,462) 583,732 598,782 1,182,514
24,236 4,120 21,707 1,320,514 1,370,577 17.91 17.91
12,118 2,060 14,828 1,153,509 1,182,514 10.99 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 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
The Schedules referred to above form an integral part of the Pro?t and Loss Account. Signatures to Pro?t & 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 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 GENERAL RESERVE As per last Balance Sheet Add : Transferred from Pro?t & Loss Account PROFIT AND LOSS ACCOUNT TOTAL SCHEDULE 3 : SECURED LOANS 150,000 121,188 150,000 121,188 From Banks Term Loans (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 8,102 — 8,102 131,000 21,707 152,707 1,320,514 2,751,104 1,392,125 122,343 1,269,782 5,602 2,500 8,102 116,172 14,828 131,000 1,153,509 2,562,393 From Banks Term Loans (Amount due within a year Rs. Nil, Previous year Rs. 2,036,165 thousand) Interest Accrued and due TOTAL 263 400,263 — 2,036,165 400,000 2,036,165 580,675 290,294 300,675 90,094 280,000 200,200 PREVIOUS YEAR THIS YEAR Rs.’000 Rs.’000 Rs.’000
SCHEDULE 5 : FIXED ASSETS GROSS BLOCK Additions Deletions DEPRECIATION For the Year Deductions/ Adjustments (Rs.’000) NET BLOCK As at As at 31.3.10 31.3.2009 123,092 20,373 107,835 406,218 16,594 1,276 23,304 28,842 644 26,128 1 754,307 76,054 830,361 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) 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 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 83,498 1,717 109,042 395,012 20,821 1,730 24,687 33,526 1,409 — 1 671,443 41,523 712,966
ASSETS Tangible Assets Freehold Land Leasehold Land Buildings Plant & Machinery Furniture & Fixtures Leasehold Improvements Of?ce & Other Equipments Vehicles Research Centre Intangible Assets SAP Software Technical Know-How Fees TOTAL Previous Year Capital Work-In-Progress/Advances
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
As at 31.3.10 123,092 21,176 179,451 710,431 30,470 3,611 36,762 45,986 1,906 27,232 20,000 1,200,117 1,094,958
Upto 1.4.2009 — 570 66,080 281,875 16,054 2,133 14,767 19,739 2,298 — 19,999 423,515 619,743
Upto 31.3.10 — 803 71,616 304,213 13,876 2,335 13,458 17,144 1,262 1,104 19,999 445,810 423,515
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
233 5,975 46,574 1,594 454 2,400 4,925 125 1,104 63,384 72,185
— 439 24,236 3,772 252 3,709 7,520 1,161
41,089 268,413
THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000 Rs.’000
103,800 16,275 198,729 63,542
103,800 16,275 198,729 63,542
500 398,395 —
500 398,395 70,500
209,950
81,700
311,510 710,405
142,830 612,225
555,521 1,238,669
506,035 1,050,845
90,042 810
79,954 810
2 1,949,076
2 1,663,072
96
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 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 (B) 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 [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)] 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 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 849,783 254,101 170,398 16,989 43,720 1,334,991 748,521 226,965 205,576 7,192 10,347 1,198,601 TOTAL SCHEDULE 9 : PROVISIONS Proposed Dividend Tax on Dividend Gratuity Leave Encashment TOTAL SCHEDULE 10 : INCOME FROM OPERATIONS Sales 218,078 35,597 253,675 717,271 970,946 35,597 935,349 204,216 59,970 264,186 664,356 928,542 59,970 868,572 Less : Excise Duty recovered on Sales Net Sales Claims and Compensations Financial Operations Dividend on Investments (Gross) Interest (Gross) (Tax at Source Rs. 22,245 thousand; Previous year Rs. 19,533 thousand) TOTAL SCHEDULE 11 : OTHER INCOME Pro?t on sale of Investments Miscellaneous Income 65,783 20,475 33,350 236,586 TOTAL SCHEDULE 12 : MATERIALS a) RAW MATERIALS CONSUMED Opening stock 6,126 92,384 55 41,986 311,922 60 Add : Purchases during the year Less : Sales during the year Less : Closing Stocks b) 1,213,990 27,109 1,241,099 27,109 1,213,990 1,456,629 66,452 1,523,081 66,452 1,456,629 c) PURCHASE FOR RESALE INVENTORY CHANGE Opening Stock Finished Goods Stock under cultivation Poultry Stock Less : Transferred on sale/demerger of business 25,060 122,100 397 57,700 93,190 201,600 419 64,366 Less : Closing Stock Finished Goods Stock under cultivation Poultry Stock 254,101 16,989 170,398 441,488 71,343 1,490,590 3,853,369 74,436 1,890,640 4,269,796 (1,755) 11,418,404 226,965 7,192 205,576 439,733 (42,793) 10,512,600 226,965 7,192 205,576 439,733 439,733 224,847 10,983 191,753 427,583 30,643 396,940 748,521 10,915,477 11,663,998 58,578 11,605,420 849,783 10,755,637 664,522 666,955 10,117,700 10,784,655 187,507 10,597,148 748,521 9,848,627 706,766 53,042 53,042 235,376 36,042 271,418 152,526 159,752 14,077,595 93,270 100,234 12,935,470 7,226 6,964 13,916,059 13,916,059 1,784 12,834,626 12,834,626 610 Rs.’000 THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000 1,235,930 — — 57 1,177,742 1,177,799 111,962 93,685 2,619,376 213,181 — 11,700 — 1,062,442 1,074,142 107,820 76,473 1,471,616
316 326 642 1,949,717
316 326 642 1,663,714
24,236 4,120 10,826 19,655 58,837
12,118 2,060 6,444 20,148 40,770
(C)
(D) (E)
97
Godrej Agrovet Limited
SCHEDULES ATTACHED TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED ON MARCH 31, 2010
Rs.'000 SCHEDULE 13 : EXPENSES 1. 2. 3. 4. 5. 6. 7. 8. 9. Salaries, Wages, Bonus, Gratuity and Allowances Contribution to Provident Fund and Other Funds and Administration Charges Employee Welfare Expenses Processing charges Consumable Stores Power and Fuel Rent Rates and Taxes Repairs & Maintenance Building Plant & Machinery Other assets 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. Insurance Postage, telephony and stationery Auditor's Remuneration Legal & Professional Fees Freight, Coolie and Cartage Discount, Commission and Selling Expenses Advertisement and Publicity Travelling Expenses Bad Debts/Advances written off (Write Back)/Provision for Doubtful Debts and Advances Loss on Sale of Investments Loss on Sale of Fixed Assets/Write off Research Expenses General Expenses Less: Shared Expenses recovered TOTAL SCHEDULE 14 : INTEREST AND FINANCIAL CHARGES (a) Interest paid on ?xed loans i) ii) Banks Inter Corporate Deposits 130,340 — 130,340 (b) Interest paid on other loans i) ii) (c) Banks Others 597 5,157 5,754 Other Financial Charges TOTAL 14,988 151,082 3,915 3,131 7,046 6,131 259,668 ii) 236,909 9,582 246,491 h) g) 2,755 13,985 5,562 22,302 8,571 27,727 4,956 18,496 95,563 635,678 4,893 81,948 39,212 (43,412) 20,500 14,077 5,976 80,603 2,264,045 (15,600) 2,248,445 3,633 22,646 3,570 29,849 5,701 29,667 4,440 28,552 102,263 524,249 11,710 74,825 24,072 67,286 — 1,747 1,065 75,531 2,109,964 (15,975) 2,093,989 f) (ii) (iii) 2) (b) d) 478,404 27,002 38,317 441,761 41,331 165,748 42,272 12,118 378,758 20,078 35,355 446,636 36,843 164,528 39,533 7,275 c) b) THIS YEAR PREVIOUS YEAR Rs.'000 Rs.'000 SCHEDULE 15 : NOTES TO ACCOUNTS 1 SIGNIFICANT ACCOUNTING POLICIES: a) The ?nancial 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. 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. 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. Depreciation/Amortisation 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. 1) Depreciation is provided on the straight line method at the rates speci?ed in schedule XIV to the Companies Act, 1956, except for computer hardware which is depreciated over its estimated useful life of four years. Amortizations (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) e) 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. Grants/Subsidies related to speci?c ?xed assets are shown as a deduction from the gross value of the asset concerned in arriving at its book value. Grants/Subsidies related to revenue are presented as a credit to the pro?t and loss statement or are deducted in reporting the related expense. Asset type Leasehold Land Leasehold improvements and equipments 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
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. 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. Employee Bene?ts: i) Short-term employee bene?ts (payable wholly within twelve months of rendering the service): Short-term bene?ts 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. Post-employment bene?ts: De?ned 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 Pro?t 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 de?ciency shall be made good by the Company. The Company's PF does not have any existing De?cit 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 de?ciency 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. De?ned Bene?t Plans: The Company's gratuity and leave encashment/longterm compensated absences schemes are de?ned bene?t plans. The Company's liability for the de?ned bene?t 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 bene?t 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 bene?t 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 Pro?t and Loss Account. Terminal Benefits: All terminal benefits including voluntary retirement compensation are fully written off to the Pro?t and Loss Account. i) Miscellaneous expenditure: i) ii) j) Non-Compete fee is amortised over a period of ?ve years or the period of the agreement (wherever applicable). Front-end fee paid on loans raised from ?nancial institutions is amortized over the period of the loan. THIS YEAR Rs.'000 3 4 CAPITAL COMMITMENTS: The estimated value of contracts remaining to be executed on Capital Account to the extent not provided for. SECURED LOANS: a) b) c) 29,030 PREVIOUS YEAR Rs.'000 17,357
Term Loans from Banks are secured by an equitable mortgage of speci?ed immovable properties and hypothecation of speci?ed movable assets of the Company. Cash Credit and other facilities from banks are secured by hypothecation of stocks and book debts of the Company (both present and future). 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). 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. 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 con?rmation 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.
Revenue is recognized when goods are despatched to external customers. Sales are inclusive of realized exchange ?uctuations on export receivables but net of returns, sales tax, rebates, etc. Revenue expenditure on Research and Development is charged to Pro?t 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". 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. 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 Pro?t and Loss Account. 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 suf?cient 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. 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. 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 con?rmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. THIS YEAR Rs.'000 PREVIOUS YEAR Rs.'000 5,922
k)
5
FIXED ASSETS: a)
l)
b)
m)
6
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 ?nancial involvement in, and the future pro?tability 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).
n)
o)
7
p)
2
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 ?led 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 ?led 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 classi?cation 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 ?led by Processors for claiming various expenses
2,929
34,151
35,674
119,648
83,112
448,706 55,187
125,839 61,927
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 ?elds 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
4,170
4,170
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 13 70 378 64 11,906 11,906 4,197 65,370 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 12,676 317 70 5 15 9,376 9,376 4,197 14 4,197 37,605 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 Unit THIS YEAR Quantity Value Rs. '000 39 477 PREVIOUS YEAR Quantity Value Rs. '000 63,292
MT
5,151
KL MT KL
535 6,390 2,536 -
TOTAL RAW MATERIALS CONSUMED: Cakes & Brans Extractions Others
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
MT MT
221,422 268,286
1,721,242 4,437,535 4,596,860 10,755,637
248,483 400,129
2,027,835 4,404,741 3,416,051 9,848,627
TOTAL 15
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 cancellable operating leases for each of the following periods: THIS YEAR PREVIOUS YEAR Rs. '000 Rs. '000 Not later than one year Later than one year and not later than ?ve years Later than ?ve years Lease payments recognised in the statement of Pro?t & Loss for the period : Minimum lease payments
Item a) Animal Feeds 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
i. ii. iii.
4,550 10,658 10,112
8,604 16,273 6,006
9
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 de?ned 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. DEFERRED TAX: The tax effects of signi?cant 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 THIS YEAR Quantity Value Rs. '000 PREVIOUS YEAR Quantity Value Rs. '000
b.
466
3,252
16
LICENSED & INSTALLED CAPACITY AND ACTUAL PRODUCTION:
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 -
10
b) Tissue Culture Plants c) Agri Inputs (i) Plant Growth Promoter Liquids (ii) Plant Growth Regulator Granules
17
11
SALES TURNOVER: Animal Feeds Agro Inputs Integrated Poultry Business Retail Segment Parent Chicks Others
12
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
MT
(a) COMPUTATION OF PROFIT FOR THE PURPOSE OF MANAGERIAL REMUNERATION: THIS YEAR PREVIOUS YEAR Rs.'000 Rs.'000 Pro?t after tax as per Pro?t 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)/Pro?t on sale of Fixed Assets (net) 14,077 1,747 20,500 (Loss)/Pro?t on sale of Investments 99,851 240,653 Less : Depreciation as per Section 350 of the Companies Act, 1956 63,384 72,185 Less : Pro?t on transfer of business 484,029 Less : Pro?t on sale of Investments 235,376 63,384 791,591 Net Pro?t / (Loss) for the purpose of Directors' remuneration 5% thereof MAXIMUM REMUNERATION PERMISSIBLE UNDER THE ACT (Computed on the basis of inadequacy of pro?ts as per Schedule XIII- Part II) 253,535 12,677 12,677 32,794 1,640 4,200
100
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 (b) MANAGERIAL REMUNERATION a) Salaries b) Contribution to Provident Fund c) Estimated monetary value of perquisites d) 18 Directors' Sitting Fees 12,320 527 110 12,957 91 13,048 8,760 412 3 9,175 75 9,250 THIS YEAR PREVIOUS YEAR Rs '000 Rs '000 Change in plan assets Fair value of plan assets as at 1st April 2009 Expected return on plan assets Contributions Bene?ts 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 27,760 2,220 6,450 (9,824) 2,718 29,324 40,405 29,324 11,081 2,475 2,736 (2,221) 8,097 11,087 28,539 2,283 7,000 (8,424) (1,639) 27,760 34,203 27,759 6,444 3,704 2,973 (2,283) 422 4,816
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. AUDITORS' REMUNERATION: Audit fees Audit under Other Statutes Tax representation before Authorities Management Consultancy Certi?cation Reimbursement of Expenses TOTAL 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
19
20
295,178 18,832 314,010 742 806 1,548 7,320 7,320
326,518 4,804 940 332,262 5,928 1,679 7,607 15,173 15,173 25 26
% % 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 in?ation, 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. Research & Development Expenditure of revenue nature charged to the Pro?t and Loss Account amounts to Rs.21,222 thousand (previous year Rs.12,999 thousand). The amount of exchange difference included in the Pro?t 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 pro?t and loss account of subsequent accounting periods Rs. 450 thousand (Previous Year Rs. Nil thousand). 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 ?nancial statements. EARNINGS PER SHARE: Pro?t / (Loss) after tax before extraordinary income Pro?t/ (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 17.91 17.91 10.00 10.99 10.99 48.17 48.17 10.00
21
22
27
23
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. De?ned Contribution Plans:
PREVIOUS YEAR Rs.'000 % 129,865 1% 9,718,762 99% 9,848,627 100 – – 36,843 100 36,843 100 28
24
THIS YEAR PREVIOUS YEAR Rs '000 Rs '000 Contribution to De?ned Contribution Plan, recognised as expense for the year are as under: Employers' Contribution to Provident Fund 19,503 9,827 II. De?ned Bene?t 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 de?ned bene?t 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 bene?cial to the employees. The following table sets out the funded status of the gratuity plan and the amounts recognised in the Company's ?nancial 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 Bene?ts 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
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 (A) 11,462,048 (158,553) 11,303,495 393,671 Agri (B) 1,292,906 1,292,906 191,791 For the year ended 31st March 2010 Integrated Other Unallocated Poultry Business Business (C) (D) (E) 1,410,030 67,222 (157,594) 1,252,437 26,137 67,222 7,715 (378,661) (151,082) 152,526 7,226 393,671 393,671 393,671 1,813,979 2,048,229 120,611 35,043 191,791 191,791 191,791 718,509 89,198 1,579 1,957 26,137 26,137 26,137 406,672 61,148 6,173 8,399 7,715 7,715 7,715 223,743 13,990 14,295 (369,991) 32,254 (402,245) (402,245) 3,470,543 1,534,413 34,721 3,689 Rs.'000 Total (A+B+C+D+E+F) 14,232,206 (316,147) 13,916,059 611,180 (370,528) (151,082) 152,526 7,226 249,322 32,254 217,068 217,068 6,633,448 3,746,977 163,084 63,384 Revenue Total Sales Less : Inter-segment External Sales Result Segment Result Unallocated expenditure net of unallocated income Interest expenses Interest Income Dividend Income and Pro?t on sale of Investments Pro?t before taxation and exceptional items Provision for taxation Pro?t after taxation and before exceptional items Exceptional Items Exceptional item (net of Tax) Prior years adjustments Pro?t after taxation and exceptional items Other Information Segment assets Segment liabilities Capital expenditure Depreciation Animal Feeds (A) 9,995,075 -255331 9,739,745 300,245 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 1,733,834 234,635 156,870 (21,910) 7,044 5,747 (255,492) (259,668) 93,270 242,340 300,245 300,245 156,870 (21,910) 156,870 (21,910) 7,044 7,044 5,747 5,747 (179,551) 135,281 (314,832) 450,567 450,567 300,245 1,650,011 963,693 42,638 27,334 156,870 (21,910) 599,008 72,036 1,353 2,215 6,317 3,567 7,044 479,197 69,177 11,180 13,508 Rs.'000 Total 13,089,956 (255,331) 12,834,626 6,646,476 79,734 5,747 235,457 11,545 282 14,544 135,736 3,682,803 2,846,450 17,963 11,016 Rs.'000 Total (A+B+C+D+E+F) 13,089,956 (255,331) 12,834,626 447,996 (255,492) (259,668) 93,270 242,340 268,446 135,281 133,165 450,567 450,567 583,732 6,646,476 3,962,901 79,734 72,185
Revenue Total Sales Less : Inter-segment External Sales Result Segment Result Unallocated expenditure net of unallocated income Interest expenses Interest Income Dividend Income and Pro?t on sale of Investments Pro?t before taxation and exceptional items Provision for taxation Pro?t after taxation and before exceptional items Pro?t after taxation and exceptional items Other Information Segment assets Segment liabilities Capital expenditure Depreciation
(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
(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 ?xed assets 79,734
Outside India 16,260 16,260 -
30
RELATED PARTY DISCLOSURES: Related party disclosures as required by AS - 18, "Related Party Disclosures", are given below 1. Relationships : (i) Holding Companies: 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. (ii) Subsidiary Companies: Golden Feed Products Ltd. Cauvery Palm Oil Ltd. Godrej Oil Palm Ltd. Natures Basket Ltd. (upto June 30, 2009) (iii) Fellow Subsidaries: 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) Joint Ventures: ACI Godrej Agrovet Private Ltd. Godrej Tyson Foods Ltd. Godrej Gold Coin Aquafeed Ltd. Godrej IJM Palm Oil Ltd. (v) Associates: Creamline Dairy Products Ltd. Polchem Hygiene Laboratories Private Ltd. Al Rahaba International Trading LLC (vi) Other related parties where persons mentioned in (viii) below exercise signi?cant in?uence: Avesthagen Ltd. 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 signi?cant in?uence (and their relatives): Mr. A.B. Godrej Mr. N.B. Godrej
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), (ii), (iii), (iv),(v) and (vi) above
Nature of Transactions Holding Subsidiaries Fellow Joint Companies Subsidiaries Ventures (i) 843 633 (ii) 70,000 168,681 500 (iii) 50,000 (iv) 252 Associates (v) Rs.'000 Other related Parties (vi)
1 2 3 4 5 6 7 8 9
Purchase / Transfer of ?xed assets Sale of Business / Investments Investment in share capital Advances given during the year Intercorporate deposits placed during the year Intercorporate deposits taken during the year Loan Given Sale of materials / ?nished goods Sundry deposits placed
464,832 73,943 93,462 27,764
30,100 19,825
230,000 86,600 580,000 53,932 45,500 24,222 4,875 8,636 55,418 55,892 8,135 (636) 125,000 1,241,709 1,264,135 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 17,599 232 121,872 124,656 11 26 40,000
10 Purchase of materials / ?nished goods 11 Expenses charged to other companies 12 Expenses charged by other companies 13 Interest income on loan given 14 Interest expense on intercorporate deposits taken 15 Interest income on intercorporate deposits placed 16 Intercorporate deposits written off 17 Dividend Income 18 Dividend paid 19 Outstanding Loans Receivable 20 Outstanding receivables, net of (payables) 21 Guarantees issued in favour of 22 Gurantees Outstanding
6,811 3,154 369 318 1,856 22,692 21,627
1,008 7,617 282 8,243 7,373
1,722
3,140 5,022
2,016 3,888 2,057 7,226 6,680 71,575 169,607 146,498 19,200 19,200 125,843 129,039 -
9,113 9,113 (541) (1,360) 15,906 115,245 19,255 343
4,355 49,796
(3,246) 33,213
(ii) Details relating to persons referred to in items 1 (vii) & (viii) above THIS YEAR PREVIOUS YEAR 12,957 9,175 586 586 15 20
1 2 3
Remuneration Dividend Paid Director's Sitting Fees
102
Annual Report 2009–2010
SCHEDULES ATTACHED TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED ON MARCH 31, 2010
3. Signi?cant 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) Natures Basket Ltd. Investment in Share Capital Cauvery Palm Oil Ltd. Natures Basket Ltd. 500 ACI Godrej Agrovet Pvt. Ltd. Godrej Gold Coin Aquafeed Ltd. Loan Given Al Rahba International Trading LLC Godrej Gold Coin Aquafeed Ltd. Godrej Tyson Foods Ltd. Godrej & Boyce Mfg. Co. Ltd. 843 633 Godrej Tyson Foods Ltd. Godrej Tyson Foods Ltd. — Godrej Tyson Foods Ltd. 200,000 226 Godrej IJM Palm Oil Ltd. 464,832 27 17,640 27,764 70,000 168,681 Amount Fellow Subsidiaries (iii) Natures Basket Ltd. Amount Joint Ventures (iv) 50,000 Amount Associate Companies (v) Amount Other related Parties (vi) Bahar Agrochem & Feeds Private Ltd. 30,100 Godrej Tyson Foods Ltd. 49,485 Bahar Agrochem & Feeds Private Ltd. 19,825 Amount
40,832 24,458 34,990
125,000 Sale of Business
1
Purchase/Transfer of ?xed assets
2
Intercorporate deposits taken during the year
Godrej Industries Ltd. 230,000
Ensemble Holdings & Finance Ltd. Cauvery Palm Oil Ltd. 25,500 Natures Basket Ltd. 61,600 Godrej Properties Ltd. 350,000 Godrej Hi Care Ltd. 30,000 Godrej Hershey Ltd.
45,500 Aadhar Retailing Ltd. 53,932 40,000
2
Intercorporate deposits placed during the year
2
Sale of materials/?nished goods/debtors
Godrej Industries Ltd.
Godrej Oil Palm Ltd. Golden Feed Products Ltd. 24,222 —
Godrej Gold Coin Aqua Feed Ltd. Godrej IJM Palm Oil Ltd. Godrej Tyson Foods 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
—
ACI Godrej Agrovet Pvt. Ltd. 3 Sundry Deposits Placed Godrej & Boyce Mfg. Co. Ltd. Godrej Industries Ltd. 4 Interest Income on Intercorporate Deposits 3 2,100 6,808 1,054 Godrej Oil Palm Ltd. Cauvery Palm Oil Ltd. Natures Basket Ltd. 2,709 Godrej Hershey Ltd. 431 Godrej Hi Care Ltd. 2,555 Godrej Properties Ltd. 2,467 Natures Basket Ltd. 4,462 Godrej Consumer Products Ltd. 8,378 — Godrej Tyson Foods Ltd. 2,082
Aadhaar Retailing Ltd. 2,057
842
964 2,016 Godrej Gold Coin Aquafeed Limited 334 Polchem Hygiene Laboratories Pvt. Ltd. 42 19,829 Bahar Agrochem & Feeds Pvt. Ltd. 52,723 121,872
5
Purchase of materials/ ?nished goods
Godrej & Boyce Mfg. Co. Ltd.
Godrej Oil Palm Limited
369
898
124,656
103
Godrej Agrovet Limited
SCHEDULES ATTACHED TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED ON MARCH 31, 2010
3. Signi?cant Related Party Transactions (Contd.)
Nature of Transactions
Holding Companies (i)
Amount Subsidiaries (ii) Cauvery Palm Oil Ltd. Golden Feed Products Ltd.
Amount Fellow Subsidiaries (iii) Godrej Hershey Ltd. 258 413
Amount Joint Ventures (iv) Godrej Tyson Foods Ltd. 15 Godrej IJM Palm Oil Ltd. — Godrej Gold Coin Aquafeed Ltd. 28 2,992 Godrej IJM Palm Oil Ltd.
Amount Associate Companies (v) 10,531 Aadhaar Retailing Ltd. 7,776
Amount Other related Parties (vi)
Amount
823
6
Expenses charged to other companies
Golden Feed Products Ltd.
— Godrej Hershey Ltd 107 52,459 Godrej Consumer Products Ltd. 52,475 2,959 3,311
4,268 11,080 Aadhaar Retailing Ltd. 6,371 8,265 Creamline Dairy Products Ltd.
Bahar Agrochem & Feeds Pvt. Ltd. 17,599 25 Kritika Agro Farm Chemical & Engineering Industries Pvt. Ltd.
11
Godrej Oil Palm Ltd.
16 Godrej Tyson Foods Ltd. Godrej Hi Care Ltd. — ACI Godrej Agrovet Pvt. Ltd. 229 AL Rahba International Trading LLC 49 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.
Cauvery Palm Oil Ltd. Godrej Industries Ltd. 318 1,856
13,267 72,686 1,283 1,606 545 230
26
Godrej Properties Ltd. Godrej Sara Lee Ltd. Natures Basket Ltd. 8,135 Godrej Consumer Products Ltd. (636) Natures Basket Ltd. Godrej Hi Care Ltd. Godrej Infotech Ltd.
31
7
Expenses charged by other companies
Godrej Industries Ltd.
18,372 Godrej Oil Palm Ltd. 21,344
16,369 Aadhaar Retailing Ltd. 924 177 (3,980) 2,309 232
Godrej & Boyce Mfg. Co. Ltd.
4,319 283
8
Interest income on loan given Interest expense on intercorporate deposits taken Dividend paid
—
9,252 1,955
9
Godrej Industries Ltd. 1,722 9,113
Ensemble Holdings & Finance Ltd. Ensemble Holdings & Finance Ltd. Creamline Dairy Products Ltd. Polchem Hygiene Laboratories Pvt. Ltd. 6,680 6,680 546
10
Godrej Industries Ltd.
9,113 8 Dividend Income
Outstanding Loans Receivable
Godrej Gold Coin Aquafeed Ltd. Godrej Tyson Foods Ltd. (323) Golden Feed Products Ltd. (1,360) Godrej Oil PalmLtd. 11,906 Godrej Hi Care Ltd. 9,376 (769) - Godrej Gold Coin Aquafeed Ltd. Godrej IJM Palm Oil Ltd.
72,100 (525)
11 9
Outstanding intercorporate — deposits receivable Outstanding receivables, net Godrej Industries of (payables) Ltd.
95,891 Creamline Dairy Products Ltd. 81,869 949
4,068 Bahar Agrochem & Feeds Pvt. Ltd. 1,738 Kritika Agro Farm Chemical & Engineering Industries Pvt. Ltd.
(3,246)
29,017
Godrej & Boyce Mfg. Co. Ltd.
(219)
14,008 Godrej Properties Ltd.
64
(13,132) Aadhaar Retailing Ltd.
4,197
104
Annual Report 2009–2010
SCHEDULES ATTACHED TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED ON MARCH 31, 2010
3. Signi?cant Related Party Transactions (contd.) :
Nature of Transactions Holding Companies (i) Amount Subsidiaries (ii) (1) Cauvery Palm Oil Ltd. Amount Fellow Subsidiaries (iii) 4,769 28,811 Amount Joint Ventures (iv) 15 Godrej Tyson Foods Ltd. — 5 ACI Godrej Agrovet Pvt. Ltd. 378 AL Rahba International Trading LLC 16 — 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 2,324 Polchem Hygiene Laboratories Pvt. Ltd. 35,597 5,073 4,558 65,370 37,605 Amount Associate Companies (v) Amount Other related Parties (vi) 51,754 287 Amount
Natures Basket Ltd.
— Godrej Sara Lee Ltd 63,051 Godrej Consumer Products Ltd. Godrej Hershey Ltd. Godrej International Ltd. Natures Basket Ltd.
(3,695)
Guraantees Issued
Guarantees outstanding
105
Godrej Agrovet Limited
SCHEDULES ATTACHED TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED ON MARCH 31, 2010
31. 32. Figures of the previous year have been regrouped & re-classi?ed wherever necessary to conform to the current year's classi?cation. INFORMATION REQUIRED TO BE FURNISHED UNDER PART IV OF SCHEDULE VI OF THE COMPANIES ACT, 1956: i) Registration Details Registration No. State Code Balance Sheet Date Capital raised during the year Public Issue Rights Issue Bonus Issue Private Placement iii) 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) Performance of Company Turnover Total Expenditure Pro?t before tax before extraordinary income Pro?t before tax after extraordinary income Pro?t after tax Earning Per Share before extraordinary Earning Per Share after extraordinary Dividend rate v) Generic Names of three principal products/services of Company Item Code No. Product Description (Rupees ’000) 14,130,637 13,881,315 249,322 249,322 217,068 17.91 17.91 20.00% (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 (Rupees ’000) Nil Nil Nil Nil 1. Name of the Subsidiary 16655 11 31/3/2010 Golden Feed Products Limited July 14, 2003 Cauvery Palm Oil Limited March 1, 2008 Godrej Oil Palm Limited August 18, 2006 STATEMENT REGARDING SUBSIDIARY COMPANY PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956.
2. Date on which it became a Subsidiary 3. Financial Year ending 4. The Company's interest in the Subsidiary as on 31.3.2010
ii)
March 31, 2010 March 31, 2010 March 31, 2010
a) Number of fully paid Equity Shares held b) Face Value 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 : i) Not dealt with in the Books of Account 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 Account of the Company ii) Dealt with in the Books of Account of the Company
50,000 Rs. 10 100% (Rs.’000)
34,20,000 Rs. 10 90% (Rs.’000)
56,400 Rs. 10 80% (Rs.’000)
-
-
-
-
-
-
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
23099010 Animal Feeds
106
Annual Report 2009–2010
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010
THIS YEAR PREVIOUS YEAR THIS YEAR PREVIOUS YEAR
Rs. (’000) Rs. (’000)
A. Cash Flow from Operating Activities : Net Pro?t Before Taxes(after extraordinary income) Adjustment for: Depreciation Loss on sale of ?xed assets Extraordinary Income: Pro?t on transfer of business Pro?t on Demerger — Exchange difference Dividend income Finance charges Interest income Interest expenses Provision for Doubtful Debts and Advances Loss on sales on investments Bad Debts Written off Operating Pro?t Before Working Capital Changes Adjustments for: Inventories Debtors and Other Receivables Creditors and Other Payables (136,389) 257,978 1,128,742 450 (7,226) — (152,526) 151,082 (43,412) 20,500 — 63,384 14,077
Rs. (’000)
Rs. (’000)
C. Cash Flow from Financing Activities : other ?nancial charges
Rs. (’000) Rs. (’000)
(2,326,460) 580,675 400,263 (151,082) (12,118)
Rs. (’000)
Rs. (’000)
(6,131) (258,200) 372,093 (253,538) (12,118)
249,322
718,733
Repayment of Borrowings Proceeds from Secured Borrowings Proceeds from Unsecured Borrowings
72,185 1,747 (484,029) (484,029) (152) (6,964) 6,131 (93,270) 253,538 67,286 (235,376)
Interest Paid Dividend Paid Dividend Tax Paid Net Cash used in Financing Activities
(2,060) (1,510,781)
(2,060) (159,952) (219,539)
311,922
Net increase in Cash and Cash equivalents Cash and Cash equivalents (Opening balance) Cash and Cash equivalents (Closing balance)
12,757
299,165
92,384
311,922
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 ?ows by operating, investing and ?nancing activities. Figures in brackets are out?ows/deductions. 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. Figures for the previous year have been regrouped/restated wherever necessary to conform to this year’s classi?cation.
39,212 85,542
334,864
— (418,905)
299,828
2 3
(97,382) (120,038) (463,541)
1,250,331
Cash Generated from Operations Direct Taxes paid (net of refund received) Net Cash Flow from Operating Activities B. Cash Flow from Investing Activities : Capital subsidy received Acquisition of ?xed assets Proceeds from sale of ?xed 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 Proceeds from Extraordinary Items; Proceeds from transfer of business/ demerger (Note 3) Net Cash used in Investing Activities after extraordinary item — (197,614) 2,759 79,500 (356,503) 50,000 — 152,526 7,226 (262,107) 1,585,194 (31,845)
(680,962)
(381,134) (134,800)
4
For and on behalf of KALYANIWALLA & MISTRY CHARTERED ACCOUNTANTS
For and on behalf of the Board
1,553,349
(515,934)
2,500 (95,850) 6,408 (85,900) (138,721)
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
30,100 73,737 6,964 (200,762)
— (262,107)
889,405 688,643
107
Golden Feed Products 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 ?nancial 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. Lac) This Year Total Income Loss before Taxation Add: Provision for Taxation Loss after Taxation Balance Brought Forward from previous year Balance Carried Forward to Balance Sheet REVIEW OF OPERATIONS 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 ?nancial year under review. HOLDING COMPANY Your Company continues to be a subsidiary of Godrej Agrovet Limited as de?ned under Section 4(1)(b) of the Companies Act, 1956. SUBSIDIARY COMPANIES The Company has no subsidiary companies during the year under review. DIRECTORS The Board of Directors of the Company presently comprises of the following Directors: 1. 2. 3. Mr. B. S. Yadav Dr. P. N. Narkhede Dr. S. L. Anaokar Mumbai, May 14, 2010 d) c) 1.61 1.61 (160.90) (159.29) Previous Year (2.22) (2.22) (158.68) (160.90) b) C) B) 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. 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. Directors’ Responsibility Statement Pursuant to the provisions contained in Section 217(2AA) of the Companies Act, 1956, the Directors of your Company con?rm: 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; 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 ?nancial year and of the pro?t or loss of the Company for that period; that they have taken proper and suf?cient 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; that they have prepared the annual accounts on a going concern basis.
HUMAN RESOURCES There are no employees in the Company. For and on behalf of the Board B. S. Yadav Director P. N. Narkhede Director
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 ?x their remuneration. The retiring Auditors M/s. Kalyaniwalla & Mistry, Chartered Accountants, Mumbai, are eligible for re-appointment and a certi?cate 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 quali?ed 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 ?nance will continue to be available to the Company for its working capital requirements from its holding company Godrej Agrovet Limited. 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.
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. B. C. Conservation of Energy The Company has not established any manufacturing facility this year. Technology absorption, adaptation and innovation Not Applicable since the Company does not have any manufacturing facility at present. Foreign Exchange earnings and outgo Your Company had no foreign exchange earning as well as outgo.
For and on behalf of the Board B. S. Yadav Director Mumbai, May 14, 2010 P. N. Narkhede Director
108
Annual Report 2009–2010
REPORT OF THE AUDITORS TO THE MEMBERS OF GOLDEN FEED PRODUCTS LIMITED
1. We have audited the attached Balance Sheet of Golden Feed Products Limited, as at 31st March 2010 and also the Pro?t and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These ?nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these ?nancial 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 ?nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial 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 speci?ed 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 ?nance will continue to be available to the Company for working capital requirements. 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. 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. The Balance Sheet, the Pro?t and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account. Mumbai, May 14, 2010 In our opinion, the Balance Sheet, the Pro?t 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 ?nancial 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 Pro?t 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 ?ows 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 disquali?ed 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. e)
2.
3.
5.
4.
b) c) d)
For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants Firm Registration No.: 104607W 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) The Company does not have any Fixed Assets and hence maintenance of records, physical veri?cation and disposal of ?xed assets does not arise. The Company does not have any inventories. (a) The Company has not granted any loans, secured or unsecured to companies, ?rms or parties covered in the register maintained under section 301 of the Companies Act, 1956. 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. 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. The Loan as aforesaid is interest free and the other terms and conditions are not prejudicial to the interest of the company. There is no schedule of repayment and hence the question of regular repayment does not arise. 13) 10) (b) 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. 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.
(b)
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 ?nancial year and also in the immediately preceding ?nancial year. 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, ?nancial 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 bene?t 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 ?nancial institutions. The Company has not taken any term loans during the year. 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 have outstanding 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.
(c)
11)
12)
(d) (e) 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, ?xed 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. 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.
14) 15) 16) 17)
5)
18) 19) 20) 21)
(b)
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. 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. 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. (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
7) 8)
9)
For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants Firm Registration No.: 104607W ERMIN K. IRANI Partner Membership No. 35646
Mumbai, May 14, 2010
109
Golden Feed Products Limited
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 This Year Previous Year Rs.’000 Rs.’000
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010
Schedule INCOME Sales Credit Balances Written Back This Year Previous Year Rs. ’000 Rs. ’000
1
500 500 11,906 12,406 25
500 500 9,376 9,876 25
413 413
4,417 4,417
2
413 413
6 43 18 67
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 (De?cit) Brought Forward DEFICIT CARRIED OVER TO BALANCE SHEET Earnings per share (Basic/Diluted ) in Rs. (Refer Note 4) NOTES TO ACCOUNTS
405 55 2 61 (310) 39 252 161 161 (16,090) (15,929) 3.22 4
55 4,467 54 63 4,639 (222) (222) (15,868) (16,090) (4.45)
3
3,961 3,961 (3,548) 15,929 12,406
6,305 6,305 (6,239) 16,090 9,876
4 The Schedules referred to above form an integral part of the Pro?t and Loss Account As per our Report of even date attached Signatures to Pro?t 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 B. S. YADAV Director P. N. NARKHEDE Director
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 ERMIN K. IRANI Partner Membership No. 35646 Mumbai, May 14, 2010 B. S. YADAV Director P. N. NARKHEDE Director
SCHEDULES TO THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010
This Year Rs.’000 SCHEDULE 1 : SHARE CAPITAL AUTHORISED 100,000 Equity Shares of Rs. 10 each 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 Considered Doubtful Other Debts TOTAL Less: Provisions for doubtful debts 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 1,450 3 2,427 81 3,961 1,045 2,437 2,823 6,305 (v) (i) (ii) (iii) (iv) 2) 4,157 4,157 413 4,570 4,157 413 4,467 4,467 4,467 4,467 (b) d) c) 500 500 b) 1,000 1,000 This Year Previous Year Rs.’000 Rs.’000 SCHEDULE 4 : NOTES TO ACCOUNTS 1. SIGNIFICANT ACCOUNTING POLICIES a) The ?nancial 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. 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. 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. Depreciation/Amortisation 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. 1) Depreciation is provided on the straight line method at the rates speci?ed in Schedule IV to the Companies Act, 1956, except for computer hardware which is depreciated over its estimated useful life of four years. Amortisations Asset type Leasehold Land Leasehold improvements and equipments Signages Technical Knowhow, technical knowhow fees of a capital nature Computer software Period Primary lease period Primary lease period or 16 years whichever is less 3 years
10 years 6.17 years
110
Annual Report 2009–2010
SCHEDULES TO THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010
e) Raw materials are valued at weighted average cost. 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 bene?ts to employees comprise payments under de?ned contribution plans like provident fund and family pension. Payments under de?ned contribution plans are charged to the pro?t and loss account. The liability in respect of de?ned bene?t schemes like gratuity and leave encashment bene?t on retirement is provided on the actual basis. g) h) Revenue is recognised when goods are despatched to external customers. 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 suf?cient 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. 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. Provisions are recognised in the accounts in respect of present probable obligations, the amount of which can be reliably estimated. This Year Previous Year Rs. Audit fees Reimbursement of Expenses TOTAL 3. 55,150 55,150 Rs. 55,150 55,150 A. Cash Flow from Operating Activities : Net Pro?t Before Taxes (after extraordinary income) Adjustment for: Provision for Doubtful Debts written (back)/off Advances written off Operating Pro?t Before Working Capital Changes Adjustments for: Debtors and Other Receivables Creditors and Other Payables Cash Generated from Operations Direct Taxes paid (net of refund received) Net Cash Flow from Operating Activities B. C. Cash Flow from Investing Activities: Cash Flow from Financing Activities: Proceeds from Unsecured Borrowings Net Cash used in 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 ?ows by operating, investing and ?nancing activities. Figures in brackets are out?ows/deductions. Figures for the previous year have been regrouped/restated wherever necessary to conform to this year’s classi?cation. 2,530 2,530 (9) 6 (3) (15,084) (15,084) (39) 45 6 (103) (2,347) (2,450) (2,539) (2,539) 15,191 (4,391) 10,800 15,045 15,045 (310) 61 (250) (89) 4,467 4,467 4,245 161 (222) Mumbai, May 14, 2010 5. 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 Part IV of Schedule VI of the Companies Application of Funds Net Fixed Assets Investments Net Current Assets Misc. Expenditure Accumulated Losses Performance of Company Turnover Total Expenditure Pro?t before tax Pro?t after tax Earning Per Share in Rs. Dividend rate
25 (3,548) 15,929 (Rupees ’000) 413 252 161 161 3.22 -
i)
Generic names of three principal products/services of Company Item Code No. 23099010 Product Description Animal Feeds
For and on behalf of the Board B. S. YADAV Director P. N. NARKHEDE Director
j) 2.
AUDITORS’ REMUNERATION
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010
Rs. ’000 This Year Previous Year Rs. ’000 Rs. ’000
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
Nature of Transactions 1. Loan taken 2. 3. Loan repaid Expenses charged to other companies
4. 5.
Sale of Material/Finished Goods Outstanding payables, net of (receivables)
* All transactions are with Godrej Agrovet Limited. 4. EARNINGS PER SHARE This Year Previous Year Rs. Rs. 161 (222) 50,000 50,000 3.22 (4.45) 3 (4.45) 10.00 10.00
2. 3.
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 14, 2010 For and on behalf of the Board
Pro?t 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
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 ?nancial 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: THIS YEAR (Rs. lac) Total Income Pro?t Before Taxation (PBT) Less : Provision for Taxation Pro?t After Taxation (PAT) Balance brought forward from previous year Total Balance Carried Forward to Balance Sheet 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 ef?ciencies 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 suf?ciency 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. 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 ?nancial year under review. HOLDING COMPANY The Company is a subsidiary of Godrej Agrovet Limited as de?ned under Section 4(1)(b) of the Companies Act, 1956. SUBSIDIARY COMPANIES The Company has no subsidiary companies during the year under review. DIRECTORS: 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) d) c) 6465.82 1068.20 387.91 680.29 1426.96 2107.25 2107.25 PREVIOUS YEAR (Rs. lac) 7431.68 975.35 385.29 590.05 868.36 1426.96 1426.96 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. AUDITORS You are requested to appoint Auditors for the current year and ?x their remuneration. The retiring Auditors M/s. Kalyaniwalla & Mistry, Chartered Accountants, Mumbai are eligible for reappointment and a certi?cate 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) 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 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 con?rm:a) b) 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; 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 ?nancial year and of the pro?t or loss of the Company for that period; that they have taken proper and suf?cient 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; that they have prepared the annual accounts on a going concern basis.
HUMAN RESOURCES 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. For and on behalf of the Board of Directors N. B. Godrej Chairman
Mumbai, May 17, 2010 c) d) B] I.
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 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. The measures adopted by the Company during the year under review for conservation of energy include the following:1) 2) 3) 4) 5) 6) 7) 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 ef?cient 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 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. The Company’s expenditure on R&D is given below: THIS YEAR Rs. lac (a) (b) (c) (d) Capital Recurring Total Total R & D expenditure as a percentage of total turnover 6 1 7 0.1% PREVIOUS YEAR Rs. lac Nil Nil Nil Nil
Technology absorption, adaptation and innovation
II.
C]
Foreign Exchange earnings and outgo THIS YEAR Rs. lac I. II. Foreign exchange used Foreign exchange earned Nil Nil PREVIOUS YEAR Rs. lac 0.66 Nil
The adoption of above energy conservation measures has resulted in accrual of the following bene?ts to the Company:a) b) Reduction of load on cables Improvement in power factor level Mumbai, May 17, 2010
For and on behalf of the Board of Directors N. B. Godrej Chairman
112
Annual Report 2009–2010
REPORT OF THE AUDITORS TO THE MEMBERS OF GODREJ OIL PALM LIMITED
1. We have audited the attached Balance Sheet of Godrej Oil Palm Limited, as at March 31, 2010 and also the Pro?t and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These ?nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these ?nancial 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 ?nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial 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 speci?ed 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) 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. 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 bene?ts over a long period, the amount paid towards the same is amortised over a 20-year period. c) d) e) 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. The Balance Sheet, the Pro?t and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account. In our opinion, the Balance Sheet, the Pro?t 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. In our opinion and to the best of our information and according to the explanations given to us, the said ?nancial 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) ii) iii) 5. in the case of the Balance Sheet, the state of affairs of the Company as at March 31, 2010; and in the case of the Pro?t and Loss Account, of the pro?t for the period ended on that date. in the case of the Cash Flow Statement, the cash ?ows of the Company for the period ended on that date.
2.
f)
3.
4.
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 disquali?ed 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 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) The Company has maintained proper records showing full particulars, including quantitative details and situation of ?xed assets. (b) As explained to us, the Company has a program for physical veri?cation of ?xed assets at periodic intervals. In our opinion, the periodic veri?cation is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies have been reported on such veri?cation. (c) In our opinion, the disposal of ?xed assets during the year does not affect the going concern assumption. (a) The Management has conducted physical veri?cation of inventory at reasonable intervals. (b) In our opinion, the procedures of physical veri?cation 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 veri?cation. (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, ?xed 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 (a) 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 ?ve years the question of commenting on its accumulated losses being less than ?fty percent of its net worth does not arise. The Company has not incurred cash loss during the ?nancial year or in the immediately preceding ?nancial 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, ?nancial 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 bene?t 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 ?nancial 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 ERMIN K. IRANI Partner Membership No. 35646
9)
2)
10)
3)
11)
12)
13)
14) 15) 16) 17)
4)
18) 19)
5)
20) 21)
6)
7) 8)
Mumbai, May 17, 2010
113
Godrej Oil Palm Limited
BALANCE SHEET AS AT MARCH 31, 2010
Schedule SOURCES OF FUNDS SHAREHOLDERS’ FUNDS Share Capital Reserves & Surplus LOAN FUNDS Unsecured Loans DEFERRED TAX LIABILITY TOTAL APPLICATION OF FUNDS FIXED ASSETS Gross Block Less: Depreciation Net Block Capital work-in-progress/ Advances 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 TOTAL NOTES TO ACCOUNTS 1 2 3 THIS YEAR Rs.’000 705 708,014 708,719 46,674 91,779 847,172 679,950 97,352 582,598 6,778 589,376 5 68,378 108,614 20,796 139 87,663 285,590 6 25,649 2,145 27,794 257,796 847,172 11 Signatures to Balance Sheet and Schedules 1 to 6 and 11 For and on behalf of the Board 18,753 7,505 26,258 272,469 743,054 50,425 131,690 84,392 60 32,160 298,727 PREVIOUS YEAR Rs.’000 Rs.’000 705 639,985 640,690 49,376 52,988 743,054 497,842 56,882 440,960 29,625 470,585
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010
Schedule INCOME Sales Other income EXPENDITURE Materials Expenses Interest Depreciation PROFIT BEFORE TAXATION Provision for Taxation Current Tax including MAT credit entitlement Fringe Bene?t Tax MAT Credit entitlement Deferred Tax PROFIT AFTER TAXATION Prior years adjustments Pro?t 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 THIS YEAR Rs.’000 638,769 7,813 646,582 8 9 10 408,392 89,245 1,560 40,565 539,762 106,820 Rs.’000 PREVIOUS YEAR Rs.’000 742,805 364 743,168 539,492 75,950 250 29,941 645,633 97,535
7
4
18,200 (18,200) 38,791 38,791 68,029 68,029 142,696 210,725 964.95 11
16,281 714 21,534 38,529 59,005 3,145 55,860 86,836 142,696 792.34
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 ERMIN K. IRANI Partner Membership No. 35646 Mumbai, May 17, 2010
The Schedules referred to above form an integral part of the Pro?t & Loss Account 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
Signatures to Pro?t and Loss Account & Schedules 7 to 11 For and on behalf of the Board
N. B. GODREJ Chairman
R. R. GOVINDAN Director
N. B. GODREJ Chairman
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 Pro?t and Loss Account TOTAL SCHEDULE 4: FIXED ASSETS ASSETS As on 01.04.09 Tangible Assets Freehold Land Buildings Plant & Machinery Furniture & Fixtures Of?ce & Other Equipments Vehicles Tree Development Cost Computer Intangible Assets Grant of Licenses Total Previous Year Capital Work-In-Progress/Advance 2,980 39,382 87,748 422 812 2,271 11,703 679 351,845 497,842 476,549 Rs.’000 PREVIOUS YEAR Rs.’000 SCHEDULE 3 : UNSECURED LOANS 100,000 705 100,000 705 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 THIS YEAR Rs.’000 Rs.’000 PREVIOUS YEAR Rs.’000
-
2,500 202 2,702 46,674 49,376
Sales Tax Deferment facility (Refer Note 3) TOTAL 497,289 210,725 708,014 497,289 142,696 639,985
46,674 46,674
GROSS BLOCK Additions Deductions
As on 31.03.10 2,980 61,853 246,798 525 1,075 2,271 11,703 900 351,845 679,950 497,842
As on 01.04.09 2,550 14,677 122 98 73 3,994 183 35,184 56,881 26,943
DEPRECIATION For the Year On Deductions 1,939 18,408 67 57 297 1,997 207 17,593 40,565 29,941 55 7 17 15 94 3
Upto 31.03.10 4,489 33,030 182 138 370 5,991 375 52,777 97,352 56,882
(Rs.’000) NET BLOCK As on As on 31.03.10 31.03.09 2,980 57,364 213,768 343 937 1,901 5,712 525 299,068 582,598 6,778 589,376 2,980 36,832 73,070 301 713 2,198 7,709 496 316,661 440,960 29,625 470,585
22,471 159,231 117 323 259 182,401 21,307
181 14 60 38 293 14
114
Annual Report 2009–2010
SCHEDULES ATTACHED TO AND FORMING PART OF THE ACCOUNTS FOR THE PERIOD ENDED MARCH 31,2010
THIS YEAR Rs.’000 SCHEDULE 5 : CURRENT ASSETS, LOANS & ADVANCES (A) INVENTORIES : Raw Materials Finished Products Stores and Spares Stock under Cultivation (B) 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 (C) CASH AND BANK BALANCES : Cash and Cheques on hand Balances with Scheduled Banks i) ii) (D) (E) In Current Accounts In Fixed Deposit Accounts 11,128 9,500 20,796 OTHER CURRENT ASSETS : Interest Accrued LOANS AND ADVANCES : (Unsecured and considered good) Advances recoverable in cash or in kind or for value to be received Inter Corporate Deposits Advance Income Tax Paid (net of Provision Rs. 51,883 thousand Previous year Rs. Nil) Deposits i) ii) TOTAL SCHEDULE 6 : LIABILITIES & PROVISIONS LIABILITIES Sundry Creditors Dues to Micro, Small & Medium Enteriprises (refer Note 6) Others Investors Education and Protection Fund Advances from Customers Sundry Deposits TOTAL PROVISIONS For Taxes (net of advance tax paid Rs. Nil previous year Rs. 45,960 thousand) For Gratuity For Leave Encashment TOTAL 1,542 603 2,145 27,794 5,923 1,167 415 7,505 26,258 24,898 24,898 481 270 25,649 17,263 17,263 853 637 18,753 18. 19. 20. 21. 10. 11. 12. 13. 14. 15. 16. 17. Insurance Postage, Telephony and Stationery Auditor’s Remuneration Legal & Professional Fees Bank Charges Freight, Coolie and Cartage Advertisement and Publicity Travelling Expenses Provision for Doubtful Debts and Advances/(Writeback) Loss on sale of Fixed Assets/Write off Discounts, Commission & Brokerage General Expenses TOTAL SCHEDULE 10 : INTEREST 1. 2. On Debenture On Inter Corporate Deposit 63 1,497 1,560 250 250 Government Authorities Others 1,506 1,421 87,663 285,590 1,004 1,782 32,160 298,727 4,251 67,915 29,374 139 60 4,211 80,000 84,392 TOTAL SCHEDULE 9 : EXPENSES 1. 2. 3. 4. 5. 12,570 6. 7. 8. 9. Salaries, Wages, Bonus,Gratuity and Allowances Contribution to Provident Fund and Other Funds and Administration Charges Employee Welfare Expenses Processing Charges Consumable Stores Power and Fuel Rent Rates and Taxes Repairs & Maintenance Building Plant & Machinery Other Assets 180 4,202 12 4,394 522 844 217 2,232 223 3,336 142 1,820 36 174 3,320 18,901 89,245 211 2,080 76 2,367 235 786 210 2,267 560 2,201 154 1,138 (131) 8 3,675 19,031 75,950 1,269 458 8,397 4,460 9,742 944 391 852 339 5,459 4,659 8,701 824 2,249 ` 27,423 20,365 168 181 30,542 36 30,578 78,072 108,650 36 108,614 40,476 40,476 91,214 131,690 131,690 b) c) 217 5,177 2,120 60,864 68,378 547 3,242 2,127 44,509 50,425 Rs.’000 PREVIOUS YEAR Rs.’000 SCHEDULE 7 : OTHER INCOME Interest Income (Gross) (Tax at Sources Rs.740 thousands previous year Rs. 1 thousand) Sundry Balances written back Sundry income TOTAL SCHEDULE 8 : MATERIALS a) RAW MATERIALS CONSUMED Opening stock Add : Purchases during the year Less : Closing Stocks PURCHASE FOR RESALE INVENTORY CHANGE Opening Stock Finished Goods Stock under Cultivation Less : Closing Stock Finished Goods Stock under Cultivation 5,177 60,864 66,041 (18,290) 408,392 3,242 44,509 47,751 (3,244) 539,492 3,242 44,509 47,751 4,576 39,931 44,507 547 392,087 392,634 217 392,417 34,265 1,224 498,826 500,050 547 499,503 43,233 7,486 47 280 7,813 303 54 7 364 THIS YEAR Rs.’000 Rs.’000 PREVIOUS YEAR Rs.’000
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. SIGNIFICANT ACCOUNTING POLICIES: a) The ?nancial 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 speci?ed 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 Bene?ts: i) Short-term employee bene?ts (payable wholly within twelve months of rendering the service): Short-term bene?ts 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 bene?ts: De?ned 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 Pro?t 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 de?ciency shall be made good by the Company. The Company’s PF does not have any existing De?cit 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 de?ciency 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. De?ned Bene?t Plans: The Company’s gratuity and leave encashment/longterm compensated absences schemes are de?ned bene?t plans. The Company’s liability for the de?ned bene?t 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 bene?t that the employees have earned in return for their services in the current and prior periods that bene?t 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 Pro?t and Loss Account. Terminal Bene?ts: All terminal bene?ts including voluntary retirement compensation are fully written off to the Pro?t and Loss Account. g) Revenue is recognised when goods are dispatched to external customers. Sales are inclusive of realised exchange ?uctuations 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 Pro?t 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 suf?cient future taxable income will be available against which such deferred tax assets can be realised. The tax effect is
2.
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) 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 con?rmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. CAPITAL COMMITMENTS: THIS YEAR Rs.’000 PREVIOUS 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 ?oated by the Directorate of Industries, Government of Andhra Pradesh is classi?ed 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 bene?ts 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 THIS YEAR PREVIOUS YEAR Rs. ‘000 Rs. ‘000 449 4,957 27,872 27,872 -
(i) (ii) 6.
Godrej Agrovet Limited Maximum Balance during the year Cauvery Palm Oil Limited Maximum Balance during the year
7.
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: Unit Crude Palm Oil Palm Kernel Oil Palm Kernel Cake Seedlings Agri Inputs Others TOTAL MT MT MT Nos THIS YEAR Quantity 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: Crude Palm Oil MT Palm Kernel Oil MT Palm Kernel Cake MT Agri Inputs TOTAL PURCHASES FOR RESALE: Agri Inputs TOTAL RAW MATERIALS CONSUMED: Fresh Fruit Bunches Palm Nuts Palm Kernel Palm Sprouts Others TOTAL MT MT MT Nos 78,873.81 9,144.98 556,740 30.72 3.05 4.70 823 99 28 4,227 5,177 34,265 34,265 344,800 4,947 42,573 97 392,417 73,833.02 9,300.17 399.91 1,009,078 70.66 6.07 57.54 1,544 176 247 1,275 3,242 43,233 43,233 429,740 11,441 8,868 45,524 3,931 499,504
9.
10.
11.
LICENSED & INSTALLED CAPACITY AND ACTUAL PRODUCTION: 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. Item For the year ended
116
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 Rs.’000 68,029 40,565 4,025 38,791 174 151,584 40,565 40,565 Net pro?t/(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 111,019 5,551 5,551 3,811 186 28 4,025 19. THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000 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 1,542 1,542 1,167 1,167
Pro?t after Tax as per Pro?t & 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
148 65 242 455
139 139
13.
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 : THIS YEAR PREVIOUS YEAR Rs. ’000 Rs. ’000 458 509 458 509
% % Discount Rate 8 8 Salary escalation rate 5 4 The estimates of future salary increases, considered in actuarial valuation, take into account in?ation, 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: THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000 Asset Provision for Doubtful Debts Others Liabilities Depreciation on Fixed Assets Net Deferred Tax Liability EARNINGS PER SHARE: 12 6,188 6,200 (97,979) (97,979) 91,779 538 538 (53,526) (53,526) 52,988
14.
Not later than one year Later than one year and not later than ?ve years iii. Later than ?ve years b. Lease payments recognised in the statement of Pro?t & Loss for the period : AUDITORS’ REMUNERATION:
i. ii.
20.
15.
Audit fees Audit under Other Statutes Taxation Services TOTAL EXPENDITURE IN FOREIGN CURRENCY: Travelling Expenses TOTAL
THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000 165 138 50 44 28 215 210 21. 66 66
Pro?t after tax and prior period expenses Weighted average number of equity shares outstanding Basic earnings per share (Rs.) Diluted earnings per share (Rs.) Nominal value of shares (Rs.) SEGMENT INFORMATION FOR THE YEAR ENDED MARCH 31, 2010 (i) Information about Primary Business Segments
Revenue
THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000 68,029 55,860 70,500 70,500 964.95 792.34 964.95 792.34 10 10
16.
VALUE OF CONSUMPTION OF RAW MATERIALS, SPARES & TOOLS: THIS YEAR Rs.’000 RAW MATERIALS : Imported items (including duty content) Indigenous TOTAL SPARES & TOOLS : Imported items Indigenous TOTAL 392,417 392,417 4,460 4,460 % 100 100 100 100 PREVIOUS YEAR Rs.’000 499,504 499,504 4,659 4,659 % 100 100 100 100
17. 18.
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. De?ned Contribution Plans: Contribution to De?ned Contribution Plan, recognised as expense for the year are as under: THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000 1,269 852
Total Sales Less : Inter-segment External Sales Result Segment Result Unallocated expenditure net of unallocated income Interest expenses Interest Income Dividend Income and Pro?t on sale of Investments Pro?t before taxation and exceptional items Provision for taxation Pro?t after taxation and before exceptional items Exceptional Items Prior years adjustments Pro?t after taxation and exceptional items Other Information Segment assets Segment liabilities Capital expenditure Depreciation Non-cash expenses other than depreciation Revenue
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 7,486 98,367 98,367 967 967 7,486 38,791 (31,305) 737,629 74,428 159,554 40,565 4,968 40 132,368 91,779 638,769 99,334 7,486 106,820 38,791 68,029 68,029 874,966 166,247 159,554 40,565
II.
Employers’ Contribution to Provident Fund De?ned Bene?t 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 bene?cial to the employees. The following table sets out the funded status of the gratuity plan and the amounts recognised in the Company's ?nancial 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 Bene?ts 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
Total Sales Less : Inter-segment External Sales Result Segment Result Unallocated expenditure net of unallocated income Interest expenses Interest Income Dividend Income and Pro?t on sale of Investments Pro?t before taxation and exceptional items Provision for taxation Pro?t after taxation and before exceptional items Exceptional Items Prior years adjustments Pro?t after taxation and exceptional items Other Information Segment assets Segment liabilities Capital expenditure Depreciation Impairment Loss Non-cash expenses other than depreciation
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 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
105,457 105,457
1,928 1,928
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.)
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 identi?ed and reported taking into account, the nature of products and services, the differing risks and returns, the organisation structure, and the internal ?nancing 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 identi?able 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 signi?cant in?uence: 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 : (ii)
10 11 12 Recoveries by other Group Companies Outstanding Payables Outstanding receivables Godrej Agrovet Ltd. Godrej Agrovet Ltd. 35,771 Godrej IJM Oil Palm Ltd. - Godrej IJM Oil Palm Ltd. (14,008) 769 Cauvery Palm Oil Ltd. 68 206 (875) 103 27,872
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.
23. 24.
Figures of the previous year have been regrouped and re-classi?ed wherever necessary to conform to the current year’s classi?cation. Information required to be furnished under Part IV of Schedule VI of the Companies Act, 1956.
i) 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 Pro?t before tax Pro?t 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 -
22.
ii)
iii)
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
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/?nished 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. Signi?cant Related Party Transactions :
Nature of Transactions 1 Expenses Charged by other Companies Holding Companies (i) Godrej Agrovet Ltd. Godrej Industries Ltd. 2 3 Expenses Charged to other Companies Sale of materials/?nished goods Godrej Agrovet Ltd. Godrej Industries Ltd. Godrej Agrovet Ltd. Other Related Parties Amount 3,414 Cauvery Palm Oil Ltd. (52,475) 512 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 68 1,931 2,415 Godrej IJM Oil Palm Ltd. (636) 63 (846) Amount 447 2683 322 83 1,296 (2,044) 384 25,500 40,000
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010
A. Cash Flow from Operating Activities: Pro?t 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 Pro?t before Working Capital Changes Adjustments for: Inventories Debtors increase/decrease Other receivable increase/decrease Loans and advances increase/decrease Creditors and Other payables THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000 Rs.’000 106,820 40,565 174 (7,486) 1,560 36 (47) 97,535 29,941 8 (303) 250 34,802 141,622 (3,145) 26,751 124,286 (3,185) (39,308) (330) 79,098 4,413 40,688 164,974 (45,960) 119,014 (36,651) 3 303 (36,344) 202 (71,975) (63,596) 84,392 20,796 (250) (48) 82,622 1,769 84,392
(17,953) 23,040 (79) 24,982 7,303
B.
C.
4
Purchase of Material
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
37,293 178,915 (18,493) 160,422
(152,043)
5 6 7 8 9
Inter Corporate Deposit placed Fixed Assets Purchased Advance paid for Fixed Assets Debenture redumption with interest repayment Recoveries from other Group Companies Godrej Agrovet Ltd. Godrej & Boyce Mfg. Co.Ltd. Godrej & Boyce Mfg. Co.Ltd. Godrej Industries Ltd.
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
For and on behalf of Board
N. B. GODREJ Chairman
R. R. GOVINDAN Director
118
Annual Report 2009–2010
Cauvery Palm Oil Limited
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 ?x their remuneration. The retiring Auditors M/s. Kalyaniwalla & Mistry, Chartered Accountants, Mumbai are eligible for reappointment and a certi?cate 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) 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 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 con?rm:a) b) 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; 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 ?nancial year and of the pro?t or loss of the Company for that period; that they have taken proper and suf?cient 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; that they have prepared the annual accounts on a going concern basis.
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 ?nancial 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 Pro?t Before Taxation (PBT) Less : Provision for Taxation Pro?t After Taxation (PAT) Adjustment to Capital Reserve for previous year depreciation Balance brought forward from previous year Total Balance Carried Forward to Balance Sheet OPERATIONAL HIGHLIGHTS 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 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 ?nancial 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 bene?t of which is goint to be ?own in the coming years. 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. 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 ?nancial year under review. HOLDING COMPANY The Company is a subsidiary of Godrej Agrovet Limited as de?ned under Section 4(1)(b) of the Companies Act, 1956. SUBSIDIARY COMPANIES The Company has no subsidiary companies during the year under review. DIRECTORS The following are the present Directors of the Company: 1. Dr. V. Krishnamurthy 2. Mr. Jayakar Krishnamurthy 3. Mr. N. B. Godrej 4. Mr. B. S. Yadav 5. Mr. R. R. Govindan (Chairman) (Director) (Director) (Director) (Director) Mumbai, May 17, 2010 For and on behalf of the Board of Directors V. Krishnamurthy Chairman d) c) 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)
HUMAN RESOURCES 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.
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 bene?ts to the Company:a) Considerable saving on energy cost. b) Increase in the life of plant & machinery. B] 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:This Year Rs. in Lac Nil Nil Nil Nil Previous Year Rs. in Lac Nil Nil Nil Nil
C]
(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
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
Mumbai, May 17, 2010
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 Pro?t and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These ?nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these ?nancial 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 ?nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial 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 speci?ed 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. The Balance Sheet, the Pro?t 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 Pro?t 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 ?nancial 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 Pro?t 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 ?ows 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 disquali?ed 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 e)
5.
ANNEXURE TO THE AUDITORS’ REPORT Referred to in paragraph (3) of our report of even date
1) The Company has maintained proper records showing full particulars, including quantitative details and situation of ?xed assets. (b) As explained to us, the Company has a program for physical veri?cation of ?xed assets at periodic intervals. In our opinion, the periodic veri?cation is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies have been reported on such veri?cation. (c) In our opinion, the disposal of ?xed assets during the year does not affect the going concern assumption. (a) The Management has conducted physical veri?cation of inventory at reasonable intervals. (b) In our opinion, the procedures of physical veri?cation 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 veri?cation. (a) The Company has not granted any loans, secured or unsecured to companies, ?rms 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, ?xed 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. (a) 9) 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 ?nancial year exceed ?fty percent of its net worth. The Company has incurred cash losses in the current ?nancial year and also in the immediately preceding ?nancial 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, ?nancial 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 bene?t 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 ?nancial 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 (a)
2)
10)
11)
3)
12)
13)
14) 15) 16)
4)
17)
18) 19) 20) 21)
5)
6)
7) 8)
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Annual Report 2009–2010
BALANCE SHEET AS AT MARCH 31, 2010
Schedule SOURCES OF FUNDS Shareholders’ Funds Share Capital Reserves & Surplus Loan Funds Secured Loans Unsecured Loans 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 Less: Current Liabilities & Provisions Current Liabilities Provisions Net Current Assets Miscellaneous Expenditure (to the extent not written off or adjusted) Pro?t & Loss Account TOTAL Notes to Accounts & Signi?cant Accounting Policies 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 ERMIN K. IRANI Partner Membership No. 35646 Mumbai, May 17, 2010 Nilesh N. Pingale Company Secretary This Year Previous Year Rs. Rs.
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010
Schedule
This Year Rs. 13,348,807 8,268,540 284,197 21,901,544
Previous Year Rs. 15,067,287 23,454,055 64,243 38,585,585 10,511,104 14,419,336 24,026,248 5,841,271 2,415,124
1 2 3 4
38,000,000 25,730,017 59,409,919 28,302,594 151,442,530
38,000,000 26,775,013 35,568,732 27,033,896 127,377,641
Income Sales - Palm Oil Mill Revenue from Nursery Operations Other Income 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 (Loss) before tax Provision for Taxation - Current - Deferred (Note 13 of Schedule 15) - Fringe Bene?t Tax (Loss) after Tax Adjustment of Capital Reserve for Previous Years to Depreciation De?cit brought forward from previous year De?cit carried to Balance Sheet Earnings Per Share (Basic/Diluted) in Rs. (Refer Note 8 Schedule 15) Notes to Accounts & Signi?cant Accounting Policies
10
5 6 7
48,869,150 12,177,091 36,692,059 13,800,000 19,818,322 14,523,850 303,694 717,995 35,363,861
49,640,849 10,632,189 39,008,660 14,950,000 21,257,643 14,578,807 982,743 835,598 37,654,791 5,929,276 2,615,940 8,545,216 29,109,575 19,053,394 25,256,012 127,377,641
11 12 13 14 2,171,308
8,951,082 15,748,526 18,467,199 9,063,453
1,044,996
8 10,377,242 950,582 11,327,824 24,036,037 18,739,082 58,175,352 151,442,530 15 Signatures to Balance Sheet and Schedules 1 to 9 and 15 For and on behalf of the Board
1,126,312 1,045,001 1,150,000 314,312 54,820,884 (32,919,340) – – – (32,919,340) (25,256,012) (58,175,352) (8.66)
1,370,123 1,150,000 320,371 57,638,453 (19,052,868) 283,000 (19,335,868) 4,180,004 (10,100,148) (25,256,012) (5.09)
9
15
The Schedules referred to above form an integral part of the Pro?t and Loss Account 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 Nilesh N. Pingale Company Secretary
Signatures to Pro?t and Loss and Schedules 10 to 15 For and on behalf of the Board
V. Krishnamurthy Chairman
R. R. Govindan Director
V. Krishnamurthy Chairman
R. R. Govindan Director
SCHEDULES TO ACCOUNTS
This Year Rs. 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 Share Premium Account TOTAL 50,000,000 50,000,000 38,000,000 Previous Year Rs. SCHEDULE 3: SECURED LOANS 50,000,000 50,000,000 38,000,000 From Bank - Term Loan (including Interest Accrued and Due Rs.24,15,243) Repayable within One Year: Rs.33,58,596 (Previous Year: Rs.18,14,594) - Overdraft (Refer Note 5 of Schedule 15) TOTAL SCHEDULE 4: UNSECURED LOANS 38,000,000 22,000,018 4,180,004 1,045,001 15,730,017 10,000,000 25,730,017 16,775,013 10,000,000 26,775,013 38,000,000 Inter Corporate Deposit Interest accrued and due on Inter Corporate Deposits TOTAL 25,500,000 2,802,594 28,302,594 25,500,000 1,533,896 27,033,896 20,232,983 59,409,919 15,598,045 35,568,732 39,176,936 19,970,687 This Year Rs. Previous Year Rs.
SCHEDULE 5: FIXED ASSETS Particulars 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
Rs. 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 -
Lands - Freehold Lands - Leasehold Buildings Plant & Machinery Of?ce Equipment Furniture & Fixtures Computers Vehicles TOTAL PREVIOUS YEAR
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 Bene?t 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 Pro?t 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 This Year Rs. 14,950,000 1,150,000 13,800,000 Previous Year Rs. 16,100,000 1,150,000 14,950,000 This Year Rs. 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 14,582,810 886,575 279,141 15,748,526 251,339 354,972 240,637 237,270 1,349,144 876,852 6,616,850 454,415 659,964 1,166,730 102,320 1,138,816 13,600 427,591 52,360 4,524,339 18,467,199 4,316,240 3,113,993 1,399,805 233,415 9,063,453 Previous Year Rs. 13,195,851 967,378 256,107 14,419,336 382,142 245,000 1,686,112 305,653 1,634,435 755,619 9,891,028 736,744 917,290 40,950 127,871 964,870 49,495 510,293 28,408 5,750,338 24,026,248 705,775 2,539,603 2,297,210 298,683 5,841,271
657,197 230,480 18,930,645 19,818,322 8,803,530 5,720,320 14,523,850 5,976 175,170 122,548 303,694 652,837 65,158 717,995
1,146,019 469,937 19,641,687 21,257,643 4,123,100 10,455,707 14,578,807 37,562 238,736 706,445 982,743 725,220 13,117 97,261 835,598
624,066 19,377 9,733,799 10,377,242 327,347 623,235 950,582
2,366,667 168,025 3,394,584 5,929,276 607,711 1,147,582 845,647 15,000 2,615,940
314,312 314,312 18,739,082 18,739,082 18,739,082 12,274,765 1,074,042 13,348,807 8,268,540 8,268,540 21,504 66,082 196,611 284,197 8,711,625 8,711,625 469,937 230,480 239,457 8,951,082
6,067 6,067 628,616 314,304 314,312 18,739,082 18,739,082 19,053,394 13,204,369 1,862,918 15,067,287 9,420,000 14,034,055 23,454,055 14,293 49,950 64,243 10,744,828 10,744,828 236,213 469,937 (233,724) 10,511,104
SCHEDULE 15 : NOTES TO ACCOUNTS 1. Signi?cant Accounting Policies a. Cost Convention The ?nancial 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 speci?ed 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 Bene?ts a) Short-term employee bene?ts: All employee bene?ts payable wholly within twelve months of rendering the service are classi?ed as short-term employee bene?ts. Bene?ts 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 bene?ts: (i) De?ned Contribution Plans: Payments made to de?ned contribution plans such as Provident Fund are charged as an expense as they fall due. (ii) De?ned Bene?t Plans: Gratuity: The Company accounts its liability for future gratuity bene?ts based on actuarial valuation as at the Balance Sheet date, determined using the Projected Unit Credit method. Gratuity bene?t is funded with Life Insurance Corporation of India. Actuarial gains and losses are recognised immediately in the Pro?t & 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 bene?ts are charged to the Pro?t and Loss Account. Other Bene?ts: All other bene?ts are either paid or provision is created in the Accounts.
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Annual Report 2009–2010
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 Pro?t 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 ?nance 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 suf?cient 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 ?nancial 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 ?nancial 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 ?nancial years 2002-03 and 2003-04, the Company received a total ?nancial 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 Pro?t/(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 ?nancial 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 Pro?t 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 ?ve years of balance sheet date Due after ?ve years of balance sheet date This Year Rs. 1,138,816 1,100,438 1,829,982 Previous Year Rs. 938,720 1,088,475 2,428,348 h. 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. De?ned Contribution Plans: Contribution to De?ned Contribution Plan, recognised as expense for the year are as under: This Year Rs. Employers’ Contribution to Provident Fund 886,575 II. De?ned Bene?t 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 bene?t obligations This Year Rs. Change in projected bene?t obligation Obligations at period beginning Service Cost Interest Cost Bene?ts 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 de?ned bene?t 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 Assumptions Discount Rate Salary Escalation Rate 13. Deferred Tax This Year In Rs. A. Deferred Tax Liabilities arising from: Differences between carrying amount of ?xed Assets in ?nancial statements & the Income Tax Return 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 5,102,587 5,102,587 B. – 97,355 77,685 4,927,547 187,535 64,584 (80,300) (26,851) 144,968 8% 5%
2.
3. 4.
5.
6.
7. 8.
9.
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 MT Rs. MT Rs. This Year 370.236 12,274,765 247.635 1,074,042 This Year MT 2079.570 This Year Rs NIL Previous Year 358.833 13,204,369 251.558 1,862,918 Previous Year MT 1987.573 Previous Year Rs 3,427,481 Sl. No. Particulars a. Crude Palm Oil b. C. Oil Palm Nuts Break-up of Raw Material Consumed 2. (iii) Other related parties where persons mentioned (v) below exercise signi?cant in?uence : 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 1 2 3 4 5 6 7 8
Total (A)+(B) 38,571 38,571 (13,225) 5,841 14 (19,052) (283) (19,335)
Sl. No. Particulars a. D. Fresh Fruit Bunches of Oil Palm (FFBs) C.I.F. Value of Imports
Sl. No. Particulars a. E. Oil Palm Sprouts Value of Raw Material Consumed
Expenses Charged by other Companies Expenses Charged to other Companies Purchase of materials/?nished goods Sale of materials/?nished goods Inter Corporate Deposit Accepted Inter Corporate Deposit Repaid Recoveries made by other Companies Fixed Assets Purchased Fixed Assets Sold
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 ?gures have been regrouped and reclassi?ed wherever necessary. 17. Segment Information for Tthe Year ended March 31, 2010 (i) Information about Primary business Segments Rs.'000
This Year Revenue Area Oil Palm Expansion Plantations & Nursery Unallocated (A) (B) 13,349 8,269 263 13,349 (3,211) 8,269 (20,929) 263 Total (A)+(B) 21,881 21,881 Previous year Oil Palm Plantations (A) 15,067 15,067 (1,884) Area Expansion & Nursery Unallocated (B) 23,454 50 23,454 (11,391) 50 50 5,841 14 (1,884) (283) (2,167) (11,391) (11,391) (5,777) (5,777)
Sl. No. Particulars
9
Total Sales Less : Inter-segment External Sales Result Segment Result Unallocated expenditure net of unallocated income Interest expenses Interest Income Dividend Income and Pro?t on sale of Investments Pro?t before taxation and exceptional items Provision for taxation Pro?t after taxation and before exceptional items Exceptional Items Prior years adjustments Pro?t after taxation and exceptional items Other Information Segment assets Segment liabilities Capital expenditure Depreciation Non-cash expenses other than depreciation
10 Outstanding Payables 11 Outstanding Receivable 3. Signi?cant Related Party Transactions :
Nature of Transactions
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
Other Amount Related Parties (iii)
263 (23,877) 9,063 21 9,063 21
Holding Amount Fellow Amount Companies Subsidiaries (i) (ii) 431 Godrej Oil Palm Ltd. 3,311 29 Godrej Oil Palm Ltd. -
(3,211) (3,211)
(20,929) (20,929)
(8,779) (32,919) (8,779) (32,919)
1
Expenses Charged by Godrej other Companies Agrovet Ltd. Expenses Charged to other Companies Godrej Agrovet Ltd.
2,683 1,208 Godrej IJM Palm Oil Ltd. 83 384 25,500 -
2
(3,211) 162,770 162,770 5 10,036 (20,929) (8,779) (32,919) 162,770 162,770 69 12,177 (2,167) 135,923 135,923 1,623 8,360 (11,391) (5,777) (19,335)
52 -
3
135,923 135,923 1,623 10,632 -
purchase of materials/?nished goods Sale of materials/ ?nished goods Godrej Agrovet Ltd. Godrej Agrovet Ltd. Godrej Agrovet Ltd. Godrej Agrovet Ltd. Godrej Agrovet Ltd. Godrej Agrovet Ltd.
Godrej Oil Palm Ltd.
64 2,141
2,272
4
1,691 Godrej Oil Palm Ltd. 258 - Godrej Oil Palm Ltd. 28,055 25,500 2,970 32 211 4,769 Godrej Oil Palm Ltd. 3,311
(ii)
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 identi?ed and reported taking into account, the nature of products and services, the differing risks and returns, the organisation structure, and the internal ?nancing 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 identi?able 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
5
Inter Corporate Deposit Accepted
6
Inter Corporate Deposit Repaid
7
Recoveries made by other Companies
Godrej IJM Palm Oil Ltd.
2 -
8
Fixed Assets Purchased
9
Fixed Assets Sold
10 Outstanding Payables Godrej Agrovet Ltd. 11 Outstanding Receivable
27,872 Godrej IJM Palm Oil Ltd. 50 -
124
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 Pro?le: I. 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 Pro?t/(Loss) Before Tax Pro?t/(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. 162,770,354 162,770,354 38,000,000 25,730,017 59,409,919 28,302,594 50,492,059 24,036,037 18,739,082 58,175,352 21,901,544 54,820,884 (32,919,340) (32,919,340) (8.66) -
CASH FLOW STATEMENT FOR THE PERIOD ENDED MARCH 31, 2010
This Year Rs. A. Cash Flow from Operating Activities: Pro?t before Tax and Operational Items Adjustment for: Depreciation Loss/(Pro?t) on sale of Fixed Assets Interest Expense Project Development Cost/Miscellaneous Expenditure written off Operating Pro?t before Working Capital Changes Adjustments for: Inventories Debtors and Other receivables Creditors and Other payables 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) (32,919,340) 1,126,312 (66,082) 9,063,453 1,464,312 11,587,995 (21,331,345) 1,439,321 172,560 2,782,608 4,394,490 (16,936,856) (16,936,856) (69,094) 280,469 211,375 25,109,885 (9,063,453) 16,046,432 (679,049) 982,743 303,694 Previous Year Rs. (19,052,868) 1,370,123 40,950 5,841,271 1,470,371 8,722,715 (10,330,153) (7,301,621) (7,519,819) 4,951,576 (9,869,864) (20,200,017) (283,000) (20,483,017) (1,622,462) (1,622,462) 27,500,000 (2,500,000) (7,000,000) 10,714,750 (5,841,271) 22,873,479 768,000 214,743 982,743
II.
III.
B.
IV.
C.
V.
Crude Palm Oil Oil Palm Nuts
For and on behalf of the Board Nilesh N. Pingale Company Secretary V. Krishnamurthy Chairman R. R. Govindan Director
For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants Nilesh N. Pingale ERMIN K. IRANI Company Secretary Partner Membership No. 35646 Mumbai, May 17, 2010
For and on behalf of the Board
V. Krishnamurthy Chairman
R. R. Govindan Director
Mumbai, May 17, 2010
125
Natures Basket Limited
DIRECTORS’ REPORT FOR THE PERIOD ENDED MARCH 31, 2010
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. FINANCIAL RESULTS AND PERFORMANCE: (Rs in Lac) Particulars Total Income Loss before taxation Loss after taxation Balance brought forward from previous year Balance carried forward to Balance sheet DIVIDEND: THIS YEAR PREVIOUS YEAR 3391.23 852.64 825.39 699.64 1525.03 1553.00 702.14 699.64 0.00 699.64 iv) iii) ii) DIRECTORS’ RESPONSIBILITY STATEMENT: As required under the provisions of Section 217(2AA) of the Companies Act, 1956, the Directors hereby con?rm: 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; 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 ?nancial year ended March 31, 2010 and the loss of the Company for the year under review; that proper and suf?cient 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; that the Annual Accounts for the year ended March 31, 2010, have been prepared on a ‘going concern’ basis.
AUDITORS: You are requested to appoint Auditors for the current year and ?x 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 dif?cult 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. FOR AND ON BEHALF OF THE BOARD MOHIT KHATTAR Managing Director A. MAHENDRAN Director
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 dif?cult 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 signi?cantly reduced levels as compared to the previous ?nancial 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 ?xed 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 ?rst 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. HOLDING COMPANY: Your Company is subsidiary of Godrej Industries Limited as de?ned under Section 4(1) (b) of the Companies Act, 1956. SUBSIDIARIES: The Company has no subsidiary companies during the year under review. DIRECTORS: The following are the current Directors of the Company: 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 of?ce upto the date of Annual General Meeting has been con?rmed 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 of?ce upto last Annual General Meeting have been con?rmed 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.
Mumbai, May 21,2010
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. B. Conservation of Energy, Technology absorption, adaptation and innovation These provisions are Not Applicable the Company during the year under review. Foreign Exchange earnings and outgo: Foreign Exchange earnings : Foreign Exchange outgo : NIL NIL FOR AND ON BEHALF OF THE BOARD MOHIT KHATTAR Managing Director A. MAHENDRAN Director
Mumbai, May 21,2010
126
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 Pro?t and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These ?nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these ?nancial 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 ?nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial 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 speci?ed 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) 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. 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. 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. The Balance Sheet, the Pro?t and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account. Mumbai, May 21, 2010 e) In our opinion, the Balance Sheet, the Pro?t 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. In our opinion and to the best of our information and according to the explanations given to us, the said ?nancial 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 Pro?t and Loss Account, of the loss for the year ended on that date. in the case of the Cash Flow Statement, of the cash ?ows of the Company for the year ended on that date.
f)
2.
3.
4.
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 disquali?ed 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 AND MISTRY Chartered Accountants Firm Registration No. 104607W ERMIN K IRANI Partner Membership No. 35646
c) d)
Annexure to the Auditors' Report
Referred to in paragraph (3) of our report of even date. 1) The Company has maintained proper records showing full particulars, including quantitative details and situation of ?xed assets purchased after April 01, 2009. In respect of ?xed assets acquired / purchased prior to April 01, 2009, the register is not complete in respect of particulars such as quantitative details and situation of ?xed assets. (b) As explained to us, the Company has a program for physical veri?cation of ?xed assets at periodic intervals. In our opinion, the period of veri?cation is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies have been reported on such veri?cation. (c) In our opinion the disposal of ?xed assets during the year does not affect the going concern assumption. (a) The Management has conducted physical veri?cation of inventory at reasonable intervals. (b) In our opinion, the procedures of physical veri?cation 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 veri?cation 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, ?rms 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 ?rms 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 ?xed 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 ?xed 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. (a) 7) 8) 9) 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 ?ve years the question of commenting on its accumulated losses being less than ?fty percent of its net worth and whether the Company has incurred cash losses in the current ?nancial year and in the immediately preceding ?nancial 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, ?nancial 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 bene?t 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 ?nancial 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
2)
10)
11) 12) 13) 14) 15) 16) 17) 18) 19) 20) 21)
3)
4)
5)
6)
127
Natures Basket Limited
BALANCE SHEET AS AT MARCH 31, 2010
Schedule SOURCES OF FUNDS SHAREHOLDERS’ FUNDS Share Capital Reserves & Surplus LOAN FUNDS Secured Loans Unsecured Loan Rs. ‘000 As at 31.03.2010 Rs. ‘000 As at 31.03.2009 Rs. ‘000
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010
For the Year Ended 31.03.2010 Rs. ‘000 For the Period Ended 31.03.2009 Rs. ‘000 154,515 785 339,123 EXPENDITURE Purchase of Traded Goods Acquisition of Traded goods on Business Transfer Inventory Change 8 9 10 Expenses 274,093 (5,697) 127,327 13,101 15,564 424,388 (LOSS) BEFORE TAX Less: Provision For Tax Current Tax (2,837) 112 (2,725) (LOSS) AFTER TAX (De?cit) Brought Forward (DEFICIT) CARRIED TO BALANCE SHEET Earnings Per Share (Basic/Diluted) in Rs. (Refer Note 9) NOTES TO ACCOUNTS 11 (82,540) (69,964) (152,504) (11.71) (431) 181 (250) (69,964) (69,964) (13.23) (85,265) 133,724 16,484 (19,672) 80,768 3,586 10,624 225,514 (70,214) 155,300
1
70,500 70,500
70,500 70,500 63,008 63,008 133,508
Schedule INCOME Sales Other Income
Rs. ‘000 333,853 5,270
2 3
42,763 110,572 153,335
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 LESS: CURRENT LIABILITIES & PROVISIONS Liabilities Provisions NET CURRENT ASSETS PROFIT & LOSS ACCOUNT TOTAL NOTES TO ACCOUNTS
223,835 4 107,282 41,853 5 6 25,936 4,548 5,046 29,299 9 64,838 7 61,128 1,101 62,229 2,609 152,504 223,835 11 Signatures to the Balance Sheet and Schedules 1 to 7 and 11 For and on behalf of the Board 65,429 25 3,268
74,775 26,299 48,476 431
Interest & Financial Charges Depreciation/Amortisation
19,672 2,781 661 14,759 37,873
Deferred Tax Fringe Bene?t Tax Fringe Bene?t Tax of previous year
22,585 650 23,235 14,638 69,964 133,508
The Schedules referred to above form an integral part of the Balance Sheet. As per our Report attached. For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants ERMIN K. IRANI Partner Membership No. 35646 Mumbai, May 21, 2010
The Schedules referred to above form an integral part of the Pro?t & Loss Account. As per our Report attached. For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants ERMIN K. IRANI Partner Membership No. 35646 Mumbai, May 21, 2010
Signatures to the Pro?t & Loss Account and Schedules 8 to 11 For and on behalf of the Board
MOHIT KHATTAR Managing Director
A. MAHENDRAN Director
MOHIT KHATTAR Managing Director
A. MAHENDRAN Director
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 ?xed 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 As at 31.03.2010 Rs. ‘000 1,000,000 70,500 As at 31.03.2009 Rs. ‘000 1,000,000 70,500
Tangible Assets Computers Furniture & Fixtures Equipments Air Conditioners/ Water Coolers 7,376 5,792 6,200 11,799 435 35,797 2,475 1,878 2,358 7,217 18,637 47 11 9,851 7,670 8,558 18,969 424 54,434 3,893 1,307 687 1,164 143 18,551 1,885 585 629 650 41 11,036 5 5 5,778 1,892 1,316 1,809 180 29,587 4,073 5,778 7,242 17,160 244 24,847 3,483 4,486 5,513 10,634 291 17,246
SCHEDULE 4: FIXED ASSETS
ASSETS As At 01.04.09 GROSS BLOCK Assets Taken Over Additions DEPRECIATION DeducAs At Upto Accum tions 31.12.09 01.04.09 Depn On Assets Taken Over For the period
Rs. ‘000
NET BLOCK On Upto As At As At Deduc- 31.03.10 31.03.10 31.03.09 tions
42,400
-
Motor Cars Leasehold Improvements Intangible Assets
363 42,763 110,568 4 110,572
61,100 1,908 63,008
Goodwill Total Previous Year
7,376 74,775 -
62,607
32,565 12,169
-
7,376
553 26,299 -
15,675
738 15,564 10,624
10 -
1,291 41,853 26,299
6,085 65,429 48,476
6,823 48,476 -
58 107,282 74,775
128
Annual Report 2009–2010
SCHEDULES ATTACHED AND FORMING PART OF THE ACCOUNTS FOR THE PERIOD ENDED MARCH 31, 2010
SCHEDULE 5: INVESTMENTS As at 31.03.2010 Rs. ‘000 As at 31.03.2009 Rs. ‘000 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 ?xed 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
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 (B) SUNDRY DEBTORS (Unsecured and considered good unless otherwise stated) Debts outstanding for a period exceeding six months Other Debts 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)
25
-
19,671 25,368 (5,697) 34,656 1,635 1,886 11,350 3,437 30,930 233 880 153 2,209 3,065 14,783 582 513 2,441 5,222 3,341 3,148 1,954 29 4,880 127,327
19,672 (19,672) 17,498 670 1,075 8,650 21,032 378 1,662 78 977 2,639 9,413 114 469 1,750 7,078 613 3,156 620 2,896 80,768
25
-
25,368 568 25,936
19,672 19,672
4,548 4,548
2,781 2,781 423 238 -
(C)
1,544 2,852 650
5,046 (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) 9
661 -
6,598 744 261 21,696
975 186 13,569
1,076 9,569 10,645 2,456 13,101
2,467 2,467 1,119 3,586
29,299 64,838
29 14,759 37,873
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
44,314 44,314 16,814 61,128
16,345 16,345 6,240 22,585 413 237 650 23,235
581 520 1,101 62,229
SCHEDULE 11 : NOTES TO ACCOUNTS 1. Signi?cant Accounting Policies a) The ?nancial 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 speci?ed 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 bene?ts to employees comprise payments under de?ned contribution plans like provident fund and family pension. Payments under de?ned contribution plans are charged to the pro?t and loss account. The liability in respect of de?ned bene?t schemes like gratuity and leave encashment bene?t 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
Revenue is recognised when goods are despatched to external customers. Sales are net of returns, sales tax rebates, etc. 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 suf?cient 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 con?rmed 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 de?ned 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. h) THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000 The tax effects of signi?cant 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 : Not later than one year 44,521 Later than one year and not later than ?ve 108,606 years iii. Later than ?ve years b. Lease payments recognised in the statement of Pro?t & Loss for the period : 30,930 Managerial Remuneration a) Computation of Pro?t for the purpose of Managerial Remuneration (Loss) After Tax as per Pro?t & Loss Account Add: Depreciation as per Accounts Managerial Remuneration Provision for Tax (including Deferred Tax) Loss on Sale of Fixed Assets 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 pro?ts) Managerial Remuneration i. Salaries ii. Contribution to Provident Fund (82,540) 15,564 2,766 2,725 29 (61,455) 15,564 (77,019) 1,750 i. ii. 25,550 44,278 21,032 9. (69,964) 10,624 250 (59,090) 10,624 (69,714) 10. g) 7. Auditors Remuneration THIS YEAR PREVIOUS YEAR Rs.’000 Rs.’000 403 358 110 110 513 469
8.
Audit fees Audit under Other Statutes TOTAL Employee Bene?ts
2.
3.
4.
5.
6.
I. De?ned Contribution Plans: Contribution to De?ned Contribution Plan, recognised as expense for the period are as under: Employers’ Contribution to Provident Fund 1,429 670 II. De?ned Bene?t 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 bene?cial to the employees. The following table sets out the funded status of the gratuity plan and the amounts recognised in the Company’s ?nancial 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 Bene?ts 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 Bene?ts 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 in?ation, 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 Pro?t after tax and before extraordinary items (Rs.’000) (82,540) (69,964) Pro?t after tax and after extraordinary items (Rs.’000) (82,540) (69,964) Weighted average number of equity shares outstanding 7,050 5,288 Basic and Diluted earnings per share before extraordinary (11.71) (13.23) 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 signi?cant in?uence (and their relatives) Mrs. T. Dubash Mr. A. Mahendran
b)
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
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 Rs.’000 Other Related Parties (iii) & (iv)
11 Nature of Transactions 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)
1 2 3 4 5 6 7 8 9 10 11 12 13 14 3.
Nature of Transactions Issue of share capital (incl. Premium) Business acquired during the year Intercorporate deposits taken during the year Intercorporate deposits repaid during the year Interest expense on intercorporate deposits taken Outstanding Intercorporate deposits Intercorporate deposits placed during the year Recovery of Intercorporate deposit placed Interest income on intercorporate deposit placed Expenses charged by other companies Outstanding receivables, net of (payables) Interest Accrued and due on Intercorporate deposits Sale of Traded Goods Remuneration
Holding Fellow Company Subsidiaries (i) (ii) 70,500 72,556 20,753 41,764 61,100 50,000 2,922 1,908 45,500 63,051 2,277 10,000 10,000 31 1,724 619 (28) (43) 4 1,908
12
Interest Accrued and due on Intercorporate deposits
Godrej Industries Ltd.
4
Godrej Agrovet Ltd. 13 14 Sale of Traded Goods Remuneration
1,908 Mrs. T. Dubash Mr. Mohit Khattar 448 2,766 -
11. 12.
The previous year’s ?gures are for a period of nine months and hence are not strictly comparable with those of the current year. Previous period amounts have been reclassi?ed wherever necessary to con?rm with current year’s classi?cation.
448 2,766 Rs.’000 Amount
Signi?cant Related Party Transactions :
Nature of Transactions Holding Company (i) Godrej Agrovet Ltd. Godrej Agrovet Ltd. Godrej Industries Ltd. Godrej Agrovet Ltd. Amount Fellow Subsidiaries (ii) Amount Other Related Parties (iii)
1
Issue of share capital (incl. Premium) Business acquired during the year Intercorporate deposits taken during the year
70,500 72,556 20,500 Godrej Agrovet Ltd. 253 Godrej Oil Palm Ltd. 61,100 50,000 1,928 Godrej Agrovet Ltd. 994 Godrej Oil Palm Ltd. 1,908 45,500 63,051
2
3
1,764 40,000 -
4
Intercorporate deposits repaid during the year Interest expense on intercorporate deposits taken
Godrej Industries Ltd. Godrej Industries Ltd.
5
758
Godrej Agrovet Ltd. 6 Outstanding Intercorporate deposits Godrej Industries Ltd. Godrej Agrovet Ltd.
1,519 -
7
Intercorporate deposits placed during the year
Godrej Properties Ltd. Godrej Properties Ltd. Godrej Properties Ltd. Godrej Industries Ltd. Godrej Agrovet Ltd. 1,724 619
10,000
8
Recovery of Intercorporate deposit placed Interest income on intercorporate deposit placed Expenses charged by other companies
10,000
9
31
10
131
Natures Basket Limited
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. State Code. Balance Sheet Date. II Capital Raised during the period Public Issue Rights Issue Bonus Issue Private Placement III Position of mobilisation and deployment of funds Total Liabilities Total Assets Sources of Funds Paid-up Capital Reserves and Surplus Secured Loans Unsecured Loans Application of Funds Net Fixed Assets Investments Net Current Assets Misc Expenditure Accumulated Losses IV Performance of Company Turnover Total Expenditure (Loss) / Pro?t before tax (Loss) / Pro?t after tax Earnings per share Rs. (on an annualised basis) Dividend rate % V Generic Names of principal products/services of the Company Item code no Product description 651 Retail Trade in Vegetables and Fruits together 659 Retail trade in food and food articles, beverages, tobacco and intoxicants not elsewhere classi?ed. ( * 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 A. MAHENDRAN Director 333,853 424,388 (85,265) (82,540) (11.71) 65,429 25 2,609 152,504 C. 70,500 42,763 110,572 B. U15310MH2008PLC182816 11 31.03.2010 (Amounts in Rs. ‘000) NIL NIL NIL NIL (Amounts in Rs. ‘000) 286,064 286,064 A. Cash Flow from Operating Activities : (Loss)/Pro?t Before Taxes Adjustments for: Depreciation Loss On Sale Of Assets Interest expenses Interest income Operating Pro?t Before Working Capital Changes Adjustments for: Inventories Debtors and Other Receivables Creditors and Other Payables 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) Rs. ‘000
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010
For the Year For the Period Ended Ended 31.03.2010 31.03.2009 Rs. ‘000 Rs. ‘000 (85,265) 15,564 29 10,645 (41) 26,197 (59,068) (70,214) 10,624 2,467 13,091 (57,123)
(6,264) (16,337) 38,994 16,393 (42,675) 83 (42,758) (32,565) 19 (25) (10,000) 10,000 31 (32,540) 141,868 (50,000) (12,185) 79,683 4,385 661 5,046
(5,744) (3,922) 10,769 1,102 (56,021) 210 (56,231) (12,169) (12,169) 70,500 384 (2,467) 68,417 17 644 661
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 ?ows by operating, investing and ?nancing activities. 2. Figures in brackets are out?ows/deductions. For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants ERMIN K. IRANI Partner Membership no. 35646 Mumbai, May 21, 2010 For and on behalf of the Board
MOHIT KHATTAR Managing Director
A. MAHENDRAN Director
132
Annual Report 2009–2010
Ensemble Holdings & Finance Limited
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 ?x 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 con?rm: 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 ?nancial year and of the pro?t of the Company for that year; c) that they have taken proper and suf?cient 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
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:THIS YEAR (Rs.’000) PREVIOUS YEAR (Rs.’000)
Gross Revenue earned Total Expenditure Pro?t / (Loss) for the year before Tax Provision for Taxation Pro?t / (Loss) after Tax Adjustment in respect of prior years Pro?t 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 de?cit in P&L A/c Loss brought forward Loss carried forward
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 ?nal 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 Certi?cate 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 noti?cation 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
REPORT OF THE AUDITORS
To The Members of ENSEMBLE HOLDINGS & FINANCE LIMITED
1. We have audited the attached Balance Sheet of Ensemble Holdings and Finance Limited as at March 31, 2010 and also the Pro?t and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto. These ?nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these ?nancial 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 ?nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial 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 speci?ed 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 Pro?t and Loss Account dealt with by this report are in agreement with the books of account;
2.
5.
3.
In our opinion, the Pro?t 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 Pro?t and Loss Account, of the Pro?t of the Company for the year ended on that date (iii) in the case of Cash Flow Statement, of the cash ?ow 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 disquali?ed 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.
d.
4.
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 ?nancial 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 bene?t 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 ?nancial 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 ?ows 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 ?nancial 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.
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 ?nancial year are more than ?fty percent of its net worth. The company has not incurred cash losses during the current ?nancial year and in the immediate preceding ?nancial year.
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Ensemble Holdings & Finance Limited
BALANCE SHEET AS AT MARCH 31, 2010
Schedule SOURCE OF FUNDS 1 SHAREHOLDERS’ FUNDS (a) (b) Share Capital Reserves & Surplus 1 2 37,741,600 123,585,245 161,326,845 APPLICATION OF FUNDS 1 2 INVESTMENTS CURRENT ASSETS, LOANS AND ADVANCES (a) (b) (c) Cash & Bank Balances Other Current Assets Loans and Advances 4 5 6 168,114 386,137 30,711,660 31,265,911 LESS: CURRENT LIABILITIES AND PROVISIONS Current Liabilities Provisions 7 140,943 22,005,004 22,145,947 NET CURRENT ASSETS 3 PROFIT AND LOSS ACCOUNT TOTAL NOTES TO ACCOUNTS 10 9,119,964 78,255,064 161,326,845 159,112 1,346,980 1,506,092 50,203,969 78,662,729 146,232,727 1,840,175 1,104,004 48,765,882 51,710,061 3 73,951,817 17,366,029 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 de?cit in P&L A/c Loss brought forward Loss Carried Forward Earnings Per Share NOTES TO ACCOUNTS 10 (5) 10 37,741,600 113,979,815 151,721,415 AS AT 31.03.10 Rupees AS AT 31.03.09 Rupees INCOME Interest Income Dividend Pro?t on sale of investments (Net) Pro?t on sale of Mutual Funds Sundry Income Reversal of Prov. for depletion in Investment EXPENDITURE Expenses
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010
Schedule 8 YEAR ENDED 31.03.10 Rupees 5,503,538 1,811,748 2,567,195 173,359 74,141 23,110,000 33,239,981 166,242 166,242 33,073,739 1,300,000 31,773,739 244,360 32,018,099 YEAR ENDED 31.03.09 Rupees 5,533,647 3,045,473 5,973,980 942,121 215,293 15,710,514 167,252 167,252 15,543,262 1,416,000 14,127,262 (12,917) 14,114,345
9
18,870,800 3,134,204 6,403,620 3,201,810 31,610,434 407,665 (78,662,729) (78,255,064) 8.48
– 7,925,736 1,346,980 2,822,869 1,411,434 13,507,019 607,326 (79,270,055) (78,662,729) 3.74
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 & ASSOCIATES Chartered Accountants V.M. PADWAL Partner Mumbai, May 26, 2010 M.G. SUBRAMANIAM Company Secretary Signatures to Balance Sheet and Schedules 1 to 7 and 10 For and on behalf of the Board
The Schedules referred to above form an integral part of the Pro?t and Loss Account As per our Report of even date attached For and on behalf of KALYANIWALLA MISTRY & ASSOCIATES Chartered Accountants V.M. PADWAL Partner Mumbai, May 26, 2010 M.G. SUBRAMANIAM Company Secretary Signatures to Pro?t & Loss Account and Schedules 8 to 10 For and on behalf of the Board
M. EIPE Director
B.S. YADAV Director
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 SCHEDULE 1 : SHARE CAPITAL AUTHORISED 5,000,000 Equity Shares of Rs.10/- each 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) 37,741,600 37,741,600 50,000,000 50,000,000 SCHEDULE 2 : RESERVES & SURPLUS SHARE PREMIUM As per last Balance Sheet Special Reserves u/s 45IC of RBI Act, 1934 Opening Balance Add : Transferred from Pro?t & Loss A/c 37,741,600 37,741,600 General Reserve Opening Balance Add : Transferred from Pro?t & Loss A/c 9,541,258 3,201,810 12,743,068 123,585,245 9,541,258 113,979,815 19,493,517 6,403,620 25,897,137 19,493,517 84,945,040 84,945,040 AS AT 31.03.09 AS AT 31.03.10 Rupees AS AT 31.03.09 Rupees
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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 Less : Provision for diminution in value of Investments Aggregate Book Value of Investments : Quoted Investments Unquoted Investments Market Value of quoted investments AS AT 31.03.10 Rupees 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 Pro?ts 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 1,561 166,553 168,114 386,137 386,137 AS AT 31.03.09 Rupees 1,301 1,838,874 1,840,175 1,104,004 1,104,004 Fac Value Quantity as on 01.04.09 Quantity Acquired during the year Sold during the year Quantity as on 31.03.10 Amount As on As on 31/03/10 Rupees 31.03.09 (Rupees)
10 10 10 1 10 1 10 1 5 10 10 10 10 10 10 10 10 10
691,155 1 1 3 1 751 1 40 2 1 1 15,423 – 8,100 2 250,000 389,269 160
122,050 -
15,423 7,716 160
691,155 1 1 3 1 751 1 40 2 1 1 114,334 8,100 2 250,000 389,269 -
5,488,688 53 151 59 31 90,589 400 271 255 490 37 – 8,734,664 1,809,717 3,240 10,050,000 11,027,991 47,773,359 84,979,995 11,028,178 73,951,817 14,315,688 59,636,129 73,951,817 370,078,667
5,488,688 53 151 59 31 90,589 400 271 255 490 37 5,410,332 1,808,707 3,240 10,050,000 11,027,991 1,600 28,394,207 11,028,178 17,366,029 5,502,668 17,352,049 22,854,717 5,458,501
– 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 18,870,800 3,134,204 22,145,947 1,290,555 4,212,823 160 5,503,538 60,000 2,500 25,120 60,665 17,957 166,242
159,112 – 1,346,980 1,506,092 2,447,977 3,040,300 45,370 – 5,533,647 60,000 2,500 49,635 44,944 10,173 167,252
SCHEDULE 10 : NOTES TO ACCOUNTS 1. Signi?cant Accounting Policies a. Accounting Convention: The ?nancial 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) Pro?t/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 ?ows 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 suf?cient 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: 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
LIC Mutual Fund SBI Mutual Fund Fem Care Pharma Mafatlal Industries Godrej Global Solutions Ltd. (Pref. shares)
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Ensemble Holdings & Finance Limited
SCHEDULE 10: NOTES TO ACCOUNTS (Contd.)
THIS YEAR PREVIOUS YEAR Rupees Rupees 3. Amount due from a Company under the same management Godrej Hicare Ltd. Godrej Industries Ltd. Auditors’ Remuneration: (includes service tax wherever applicable) Audit Fees Tax Audit Fees Earnings per share a. Net Pro?t/(Loss) after Tax available for shareholders b. Weighted Average Number of Equity Shares c. Basic and Diluted Earnings per Share of Rs.10 each 33,090 16,545 49,635 32,018,099 3,774,160 8.48 23,110,000 5,000,000 28,110,000 33,090 16,545 49,635 4,110,101 3,774,160 3.74 9. 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 Pro?t before tax : 33,074 Pro?t 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
4.
5.
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 signi?cant in?uence over the enterprise Ms. T. A. Dubash Mr. H. K. Press Mr. M. Eipe b) Transactions with Related Parties (Rs. in Lac)
Holding Subsidiary Fellow Associate/ Key Relatives Company Company Subsidiary Joint Management of Key Venture Personnel Mangement Personnel 525.00 250.00 575.00 200.00 12.51 6.54 79.26 17.36 28.57 0.60 0.60 Total
Sr. No.
Nature of Transaction
As per our Report attached For and on behalf of KALYANIWALLA MISTRY & ASSOCIATES Chartered Accountants V.M. PADWAL Partner Mumbai, May 26, 2010 M.G. SUBRAMANIAM Company Secretary
Signatures to Balance sheet Statement For and on behalf of Board
i)
Dividend Received Previous year
17.36 28.57 525.00 250.00 575.00 200.00 12.51 6.54 79.26 0.60 0.60
M. EIPE Director
B.S. YADAV Director
ii)
ICD Placed Previous year
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010
Cash ?ow from Operating Activities Pro?t before tax Adjustments for : Dividend Income Pro?t on sale of long term investments Pro?t on sale of Mutual Funds Reversal of Provision for Dimunition in value of Investments/Loan Interest Income Operating Pro?t 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 Cash ?ow from Investing Activities Proceeds from sale of investments Dividend Income New investments made Interest Income Interest Income Loans Net cash generated / (used) from investing activities Cash ?ow from Financing Activities Dividend Paid Tax on Distributed Pro?ts Net cash generated / (used) from ?nancing 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. (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 47,812,960 1,811,748 (95,925,146) 1,250,959 42,801,000 (2,248,479) 67,482,850 (57,280,607) 653,589 (28,424,363) (17,568,531) YEAR ENDED 31.03.10 Rupees 33,073,739 (1,811,748) (2,567,195) (173,359) (23,110,000) (1,250,959) 4,160,478 717,867 (18,169) 4,860,176 (2,936,778) 1,923,398 YEAR ENDED 31.03.09 Rupees 15,543,262 (5,973,980) (942,121) (215,293) (653,589) 7,758,279 826,985 1,345,470 9,930,734 (1,387,216) 57,988 8,601,506
iii)
ICD Refunded Previous year
iv)
Interest Received on ICD Previous year
v)
Dividend Paid Previous year
vi)
Remuneration Previous year
c)
The signi?cant Related Party Transactions are as under (Rs. in Lac) Amount Nature of Transaction Interest recd on ICD placed 525.00 Godrej Industries Limited Remunertion 575.00 Mr. H. K. Press 0.60 12.51 Amount
Nature of Transaction Placement of ICD Godrej Industries Limited Refund of ICD Godrej Industries Limited 7. 8.
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 ?gures have been regrouped/reclassi?ed wherever necessary.
inter-corporate loans and
As per our Report attached For and on behalf of KALYANIWALLA MISTRY & ASSOCIATES Chartered Accountants V.M. PADWAL Partner Mumbai, May 26, 2010 M.G. SUBRAMANIAM Company Secretary
Signatures to Cash Flow Statement For and on behalf of Board
M. EIPE Director
B.S. YADAV Director
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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) 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 * Please see Note 1 below ASSETS SIDE : Amount outstanding (3) 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)
(1)
Amount outstanding NIL NIL NIL NIL NIL NIL NIL NIL NIL
Amount overdue NIL NIL NIL NIL NIL NIL NIL NIL NIL
(2)
NIL NIL NIL
NIL NIL NIL
NIL NIL 290.00 17.12
(4)
NIL NIL NIL NIL NIL NIL
(5)
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
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Ensemble Holdings & Finance Limited
(6) Borrower group-wise classi?cation of all leased assets, stock-on-hire and loans and advances : Please see Note 2 below Category Secured 1. Related Parties ** (a) Subsidiaries (b) Companies in the same group : Loans (c) 2. Other related parties Inter Corporate Deposits NIL NIL Amount net of provisions Unsecured NIL NIL Total NIL NIL
NIL NIL NIL NIL
NIL 17.12 290.00 307.12
NIL 17.12 290.00 307.12
Other than related parties a) Advance Tax Payment b) Inter Corporate Deposits Total
(7)
Investor group-wise classi?cation of all investments (current and long term) in shares and securities (both quoted and unquoted): Please see note 3 below Category 1. Related Parties ** (a) Subsidiaries (b) Companies in the same group : Quoted Unquoted (c) Other related parties Other than related parties Quoted : Unquoted : Total Market Value / Break up for fair value or NAV NIL 3546.32 18.13 NIL 154.47 787.63 4506.55 Book Value (Net of Provisions) NIL 54.89 18.13 NIL 88.27 578.23 739.52
2.
** As per Accounting Standard of ICAI (Please see Note 3) # Start up Company hence fair value considered at face value. (8) (i) Other information Particulars Gross Non-Performing Assets (a) Related parties (b) Other than related parties (ii) Net Non-Performing Assets (a) Related parties (b) Other than related parties (iii) Assets acquired in satisfaction of debt NIL NIL NIL Amount
NIL NIL
Notes: 1. As de?ned in Paragraph 2(1)(xii) of the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998. 2. 3. Provisioning norms shall be applicable as prescribed in the Non-Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 1998. 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 classi?ed as long term or current in column (5) above.
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Annual Report 2009–2010
Godrej Properties Limited
7. DEPOSITORY SYSTEM: 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. 8. 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 certi?ed 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. 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. Ranked one of India’s Top 10 Builders by the Construction World Architect and Builder Awards, 2009. 2,794.00 464.05 1,220.00 15195.39 19,673.44 1,510.51 256.71 750.00 7,510.69 10,027.91 11. 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. SUBSIDIARY COMPANIES: A. Subsidiaries Accounts The audited Balance Sheet as at March 31, 2010 and Pro?t & 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. Transfer of Stake The Company has diluted its stake in the following Subsidiaries:1) 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. 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. 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.
DIRECTORS’ REPORT FOR THE FINANCIAL YEAR ENDED ON MARCH 31, 2010
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. OPERATING RESULTS: Your Company’s performance during the year as compared to the previous period is summarised below: 2009 – 2010 (Rs. In Lacs) Pro?t before Taxation Provision for Taxation Provision for Fringe Bene?t Tax Provision for deferred tax Pro?t after taxation Add: Surplus brought forward Prior year tax adjustments AMOUNT AVAILABLE FOR APPROPRIATION Appropriations: Your Directors recommend appropriations as under: Proposed Dividend Dividend Distribution Tax Transfer to General Reserve Surplus carried forward TOTAL APPROPRIATIONS 2. INITIAL PUBLIC OFFER: 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. Your Company’s shares were listed on the Bombay Stock Exchange Limited and National Stock Exchange of India Limited on January 5, 2010. Your Directors take this opportunity to thank all the investor for their overwhelming response and the con?dence reposed by them. 3. 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. REVIEW OF OPERATIONS: Your Company posted a total income of Rs. 35,701.18 lacs during the year ended March 31, 2010. During the year, the company successfully completed several projects, most notably the 1 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. 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. 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. 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 Of?cer. 5. FUTURE PROSPECTS AND OUTLOOK OF THE COMPANY: Your Company has a well diversi?ed portfolio spread across established Tier-1 and emerging Tier-II and III locations. The strategy of partnering with leading ?rms 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. 6. 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.
st
2008-2009 (Rs. in Lacs) 10,603.42 (3,124.00) (16.50) 10.61 7,473.53 2,655.39 (101.01) 10,027.91
15,874.60 (3,669.83) (20.65) 12,184.12 7,510.69 (21.37) 19,673.44
2)
3)
Now the Company holds 51% of the paid up capital of the above mentioned subsidiaries. C. 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. 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 ?scal year 2010. The Company has already utilised an amount of Rs. 25 crores in ?scal 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
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Godrej Properties Limited
DIRECTORS’ REPORT FOR THE FINANCIAL YEAR ENDED ON MARCH 31, 2010
remaining area by March 2011. Accordingly, the Company shall utilise the balance amount of Rs. 107 Crores in ?scal year 2011 as compared to utilizing this amount in ?scal 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 ?scal 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 ?scal year 2011 when the aggregation of land is completed. In relation to the property located at Pune, the Company was required to pay an amount of Rs. 51.00 crores in ?scal year 2010. However, the owners of the property at Pune did not receive a certi?cate of conversion of land to non-agricultural use in ?scal year 2010. Accordingly, the Company shall pay the amount of Rs. 51.00 crores in ?scal 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 ?scal year 2010, Rs. 40.00 crores was to be utilised in ?scal year 2011 and
S. No. 1. 2. 3. Expenditure Items Total Estimated Cost 444.82 100.84 172.00 717.66 Amount deployed till November 15, 2009 152.50 22.82 Nil 175.32 Balance Payable as on November 15, 2009 292.32 78.02 172.00 542.34 Proposed to be funded by internal accruals Nil Nil Nil Nil
Rs. 15.00 crores was to be utilised in ?scal 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 ?scal year 2011 and Rs. 15.00 crores in ?scal year 2012 towards construction of the project. 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 ?scal year 2011 and Rs. 15.00 crores in ?scal year 2012 in this project through the subsidiary, GEDPL. 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)
Amount upto which will be ?nanced from Net Proceeds 203.00 75.00 150.17 428.17 Estimated schedule of deployment of Net Proceeds for FY 2010 25.00* #
FY 2011 178.00** 60.00
#3
FY 2012 15.00 15.00
Acquisition of land development rights for our Forthcoming Projects Construction of our Forthcoming project Repayment of loans Total
150.17 175.17
238.00
* **
# #3
The Prospectus stated that an amount of Rs. 203.00 crores was proposed to be utilised in ?scal year 2010. Now amended to state that Rs. 25.00 crores was utilised in ?scal year 2010. The Prospectus stated that no amount was proposed to be utilised in ?scal year 2011. Now amended to state that Rs. 178.00 crores is proposed to be utilised in ?scal year 2011. The Prospectus stated that an amount of Rs. 20.00 crores was proposed to be utilised in ?scal year 2010, Now amended to state that no amount was utilised in ?scal year 2010 The Prospectus stated that an amount of Rs. 40.00 crores was proposed to be utilised in ?scal year 2011, Now amended to state that the amount of Rs. 60..00 crores is proposed to be utilised in ?scal year 2011. 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. 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 of?ce 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. (i) (ii) (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:
13.
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. The Company has not earned any Foreign Exchange during the year. 17. 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 de?ned 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. 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 con?rms : (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 ?nancial year ended March 31, 2010 and of the pro?t of the Company for that year; (iii) that the Directors had taken proper and suf?cient 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
14.
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.
COMMITTEES OF DIRECTORS: a) 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. 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 Of?ce 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
b)
c)
16.
ADDITIONAL INFORMATION: (a)
(b)
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Annual Report 2009–2010
ANNEXURE A
Disclosure Relating To Employees Stock Option Plan
Particulars Options granted Exercise price of options Details 442,700 Rs. 620 per share plus interest at a compounding rate of 10 % per annum or at such other rate as may be de?ned 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. Nil Nil 442,700 39,000 Nil Nil 403,700 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. Please see Note 1 below Nil Nil
Total options vested Options exercised Total number of Equity Shares that would arise as a result of full exercise of options already granted Options forfeited/ lapsed/ cancelled Variations in terms of options Money realised by exercise of options Options outstanding (in force) Vesting schedule
Person wise details of options granted to i) ii) iii) Directors and key management employees 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 Identi?ed 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
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’. 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 pro?ts and EPS of the Company 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 Description of the method and signi?cant 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 Lock-in Impact on pro?ts of the last three years and on the EPS of the last three years if the issuer had followed the accounting policies speci?ed 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
There is no fresh issue of shares on exercise of option therefore the same is not applicable. Nil
Weighted average exercise price is Rs. 620 per share plus interest N.A.
Three years from the date of grant i.e., December 28, 2007 Nil
Details regarding options granted to our Directors and our Key Management Personnel are set forth below:
Name Mr. Milind S. Korde Mr. K. T. Jithendran Mr. Nishikant Shimpi Mr. K. P. Sudheer Mr. Nitin Wagle Mr. Shodhan A. Kembhavi Mr. Rajendra Khetawat Mr. Santosh Tamhane Ms. Krishnakoli S. Kumar Ms. Aylona D’Souza Managing Director Executive Director Executive Vice President (Bangalore region) Vice President (Mumbai region) Vice President (Operations) Vice President (Legal) and Company Secretary Vice President (Finance and Accounts) Vice President (Projects) Vice President (Marketing and Sales) Vice President (Human Resources and Administration) Position Number of options granted under ESOP 60,000 30,000 20,000 20,000 10,000 10,000 10,000 10,000 10,000 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) ?rst 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 de?nition 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 speci?c grant, including any unalloted shares lying with the Trust if utilized for that speci?c 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) 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
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Annual Report 2009–2010
REPORT OF THE AUDITORS TO THE MEMBERS OF GODREJ PROPERTIES LIMITED
1. We have audited the attached Balance Sheet of GODREJ PROPERTIES LIMITED, as at 31st March, 2010, the Pro?t and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These ?nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these ?nancial 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 ?nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial 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 speci?ed 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, Pro?t 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, Pro?t 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 ?nanced 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 pro?ts/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 ?nancial statements. b) 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 ?nancial 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 Pro?t and Loss Account, of the pro?t of the Company for the year ended on that date and iii) in the case of the Cash Flow Statement, of the cash ?ows 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 disquali?ed 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
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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) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of ?xed assets. (b) As explained to us, the Company has a program for physical veri?cation of ?xed assets at periodic intervals. In our opinion, the period of veri?cation is reasonable having regard to the size of the Company and the nature of its assets. (c) In our opinion, the disposal of ?xed assets during the year does not affect the going concern assumption. (a) The Management has conducted physical veri?cation of inventory at reasonable intervals. (b) In our opinion, the procedures of physical veri?cation 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 veri?cation. (a) The Company has not granted any loans, secured or unsecured to companies, ?rms 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, ?xed 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) 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:
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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 ?nancial year and has not incurred any cash losses in the current and immediately preceding ?nancial 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 ?nancial 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 bene?t 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 ?nancial 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 veri?ed 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.
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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
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Godrej Properties Limited
BALANCE SHEET AS AT 31ST MARCH, 2010
Schedule As at 31.03.2010 Rupees SOURCES OF FUNDS SHAREHOLDERS' FUNDS Share Capital Reserves & Surplus LOAN FUNDS Secured Loans Unsecured Loans APPLICATION OF FUNDS FIXED ASSETS Gross Block Less: Depreciation Net Block Capital Work-In-Progress / Advances INVESTMENTS DEFERRED TAX ASSET CURRENT ASSETS, LOANS & ADVANCES Inventories Sundry Debtors Cash & Bank Balances Loans & Advances LESS: CURRENT LIABILITIES & PROVISIONS Current Liabilities Provisions 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 17, 2010 19 Signatures to the Balance Sheet and Schedules 1 to 12 and 19 11 12 1,268,608,022 364,333,950 1,632,941,972 10,117,657,881 12,703,236,464 682,915,473 196,165,031 879,080,504 6,820,284,710 7,452,597,399 7 8 9 10 1,435,939,077 1,377,092,002 723,493,415 8,214,075,359 11,750,599,853 525,039,067 1,140,203,131 147,337,283 5,886,785,733 7,699,365,214 6 5 165,480,100 60,419,981 105,060,119 105,060,119 2,477,723,964 2,794,500 75,040,934 37,313,275 37,727,659 32,536,657 70,264,316 557,189,373 4,859,000 Pro?t for the year Provision for Taxation for Current Tax for Fringe Bene?t Tax for Deferred Tax Pro?t After Tax Less : Prior years tax adjustments Surplus brought forward Amount Available for Appropriation Less : Proposed Dividend Dividend Distribution Tax Transfer to General Reserve Surplus carried forward to Balance Sheet Earnings per share Basic/ Diluted in Rs. (Refer Note 10) NOTES TO ACCOUNTS & ACCOUNTING POLICIES The Schedules referred to above form an integral part of the Pro?t and Loss Account As per our Report of even date. For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants ERMIN K. IRANI Partner Mumbai, Dated : May 17, 2010 19 Signatures to the Pro?t and Loss Account and Schedules 13 and 19 279,400,036 46,404,854 122,000,000 1,519,538,846 19.31 151,050,648 25,671,058 75,000,000 751,069,518 12.20 (366,983,000) (2,064,500) 1,218,411,466 (2,137,248) 751,069,518 1,967,343,736 (312,400,000) (1,650,000) 1,061,000 747,353,632 (10,101,372) 265,538,964 1,002,791,224 3 4 1,284,680,753 3,264,337,035 12,703,236,464 2,566,929,456 1,903,589,895 7,452,597,399 1 2 698,500,090 7,455,718,586 604,202,590 2,377,875,458 INCOME Sales Operating Income Other Income TOTAL INCOME EXPENDITURE Cost of sales Employee Remumeration & Bene?ts Administration Expenses Interest & Finance Charges Depreciation 15 16 17 18 1,038,528,297 106,851,547 141,490,427 671,317,930 24,528,123 1,982,716,324 1,587,458,966 644,528,613 37,508,060 99,708,180 512,956,238 10,677,865 1,305,378,956 1,060,342,632 13 14 1,123,900,693 1,019,813,958 1,426,460,639 3,570,175,290 1,259,401,567 685,207,029 421,112,992 2,365,721,588 As at 31.03.2009 Rupees
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010
Schedule For the year ended 31.03.2010 Rupees For the year ended 31.03.2009 Rupees
Adi. B. GODREJ Chairman
MILIND S. KORDE Managing Director
Adi. B. GODREJ Chairman
MILIND S. KORDE Managing Director
SHODHAN A. KEMBHAVI Company Secretary
SHODHAN A. KEMBHAVI Company Secretary
SCHEDULES FORMING PART OF THE ACCOUNTS
As at 31.03.2010 Rupees SCHEDULE 1 SHARE CAPITAL AUTHORISED 100,000,000 Equity Shares of Rs. 10/- each 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 by Godrej Industries Ltd., the Holding Company) Of the above 54,239,845 (previous year 54,239,845) shares issued as Bonus shares by capitalising Share Premium, General Reserve & Pro?t & Loss Account 698,500,090 604,202,590 Pro?t and Loss Account 698,500,090 604,202,590 General Reserve - As per last Balance Sheet Add : Transfer from Pro?t & Loss Account 1,000,000,000 1,000,000,000 1,000,000,000 1,000,000,000 As at 31.03.2009 Rupees SCHEDULE 2 RESERVES & SURPLUS Share Premium As per last Balance Sheet Add : Received during the year Less : Utilised for Initial Public Issue expenses 1,475,805,940 4,594,173,800 406,800,000 5,663,179,740 151,000,000 122,000,000 273,000,000 1,519,538,846 7,455,718,586 1,475,805,940 1,475,805,940 76,000,000 75,000,000 151,000,000 751,069,518 2,377,875,458 As at 31.03.2010 Rupees As at 31.03.2009 Rupees
144
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE ACCOUNTS
As at 31.03.2010 Rupees SCHEDULE 3 SECURED LOANS 1) Cash Credit / Working Capital Demand Loan (Secured by equitable mortgage of immovable property of the Company's Project at Juhu, Mumbai) 2) Short Term Loan from Banks (Secured by way of equitable mortgage of its interest, in the immovable property of the project undertaken by the Company at Chandigarh 1,284,680,753 Of the above, Repayable within a year (Other than cash credit accounts) SCHEDULE 5 : FIXED ASSETS ASSETS As at 1st April, 2009 Rs. Tangible Assets Building Leasehold Improvement Of?ce Equipment Site Equipments Furniture & Fixtures Computer Motor Vehicle Intangible Assets Licenses & Software Total Previous Year Capital Work-in-progress 12,844,708 10,799,115 2,072,120 13,237,691 20,871,953 6,654,645 8,560,702 75,040,934 54,138,926 GROSS BLOCK Additions Deductions Rs. 17,031,600 15,981,411 7,158,788 3,816,383 3,486,202 6,526,978 39,429,675 93,431,037 22,141,833 Rs. 461,606 217,574 424,622 1,888,069 2,991,871 1,239,825 As at As at 31st March, 1st April, 2009 2010 Rs. Rs. 17,031,600 28,826,119 17,496,297 2,072,120 16,836,500 23,933,533 11,293,554 47,990,377 165,480,100 75,040,934 8,667,024 3,369,810 1,593,219 6,375,541 12,672,051 2,421,065 2,214,568 37,313,278 27,357,996 DEPRECIATION For the Year Deductions Rs. 6,809,838 1,754,256 66,615 1,693,702 4,036,212 2,117,664 8,049,836 24,528,123 10,677,865 Rs. 88,171 132,554 125,607 1,075,088 1,421,420 722,584 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 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 As at 31st March 2010 Rs. 15,476,862 5,035,895 1,659,834 7,936,689 16,582,656 3,463,641 10,264,404 60,419,981 37,313,278 NET BLOCK As at As at 31st March 31st April, 2009 2010 Rs. Rs. 17,031,600 13,349,257 12,460,402 412,286 8,899,811 7,350,877 7,829,913 37,725,973 105,060,119 37,727,657 105,060,119 As at 31.03.2010 Rupees 266 4,177,684 7,429,305 478,901 6,862,150 8,199,902 4,233,580 6,346,134 37,727,657 32,536,657 70,264,314 As at 31.03.2009 Rupees 266 600,000,000 2,566,929,456 600,000,000 Of the above, Repayable within a year (other than cash credit accounts) 2,440,193,000 1,903,589,895 1,284,680,753 1,966,929,456 As at 31.03.2009 Rupees SCHEDULE 4 UNSECURED LOANS Fixed Deposits Banks Companies 748,943,000 2,515,394,035 3,264,337,035 1,883,589,895 20,000,000 1,903,589,895 As at 31.03.2010 Rupees As at 31.03.2009 Rupees
742 -
742 616
2,370 23,652 7,564 16,088 10,000 2,500
2,370 24,268 7,765 16,503 10,000 2,500
1,066 1,366 3,081 1,241 1,641
1,066 1,366 3,081 1,241 1,641
5,100,000 76,500,000
5,100,000 76,500,000
1,516
1,516
5,100,000 147,900,000
5,100,000 147,900,000
891 6,366
891 6,366
388,636 500,000 340,320 163,568,489
500,000 500,000 340,320 320,720,050
2,485 621
2,485 621
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Godrej Properties Limited
SCHEDULES FORMING PART OF THE ACCOUNTS
As at 31.03.2010 Rupees 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 SCHEDULE 8 : SUNDRY DEBTORS (UNSECURED, CONSIDERED GOOD) 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 Development Manager Fees Accrued but not due (Refer Note 7 (b) Interest Accrued Deposits SCHEDULE 11 : CURRENT LIABILITIES Sundry Creditors (Refer Note 11) Investor Education and Protection Fund Advances received against sale of ?ats 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 60,230,839 75,236,194 2,775,846,940 8,214,075,359 485,786,105 220,256,051 250,590 183,000 433,284,414 128,847,862 1,268,608,022 18,907,926 834,666,553 305,536,578 1,140,203,131 66,444,003 42,959,442 37,933,838 147,337,283 255,000 399,681,033 As at 31.03.2009 Rupees 500,000 557,189,373 SCHEDULE 13 : OPERATING INCOME (GROSS) Income From Development Projects Compensation Received from Project Project Management fees Other Income from Customers Lease Rent 353,303,226 194,855,426 Licence Fees Interest Income - Customers - Projects and landlords 193,111,414 - Others Tax Deducted at source SCHEDULE 14 : OTHER INCOME Dividends 353,515,422 353,284,168 252,341,587 24,352,353 2,078,042,931 2,477,723,964 23,652 1,142,410 4,816,919 1,431,122,158 1,435,939,077 557,189,373 24,268 611,739 3,628,193 521,410,874 525,039,067 Pro?t on sale of Fixed Assets (Net) Pro?t on sale of Long Term Investments Miscellaneous Income SCHEDULE 15 : COST OF SALES Own Projects Opening Stock: Add : Expenditure/ Transfers from Advances during the period Stock-In-Trade Acquired during the year Development Rights Construction, Material & Labour Architect Fees Advertisement Expenses Overheads Interest Less : Project transferred to Subsidiary Company Less : Closing Stock: 317,741,314 115,882,000 974,292,348 75,974,660 41,859,043 377,376,685 305,833,636 2,208,959,686 (259,531,382) (1,435,939,077) 1,038,528,297 1,038,528,297 SCHEDULE 16 : EMPLOYEE REMUNERATION & BENEFITS Salaries, Bonus, Gratuity & Allowances Contribution to Provident & other funds Other Employee Bene?ts 2,501,432,277 89,091,768 282,842,884 870,480,333 60,230,839 67,412,273 2,015,295,359 5,886,785,733 103,978,759 5,707,812 250,590 761,000 529,652,976 42,564,336 682,915,473 7,093,175 SCHEDULE 17 : ADMINISTRATION EXPENSES Cost of Project Management Consultancy Charges Service Charges Loss on sale of Fixed Assets (Net) Power & Fuel Rent Insurance Rates & Taxes Repairs & Maintenance Other Operating Expenses Dimunition in value of investments written back SCHEDULE 18 : INTEREST AND FINANCE CHARGES Interest Paid - Banks - Inter Corporate Deposits - Projects and landlords 279,400,036 46,404,854 7,625,984 11,995,150 364,333,950 151,050,648 25,671,058 6,450,060 5,900,090 196,165,031 - Others Total Interest Paid Add : Brokerage & other Financial charges Total Interest/ Finance Charges Paid 526,978,921 8,234,384 76,841,766 32,952,168 645,007,239 26,310,691 671,317,930 406,638,640 1,566,422 64,905,596 2,142,981 475,253,639 37,702,599 512,956,238 187,177 7,094,890 135,478 4,445,260 28,094,016 234,543 119,371 19,472,695 81,706,582 415 141,490,427 1,321,416 7,861,766 98,139 17,548 3,516,734 10,971,849 263,030 21,284 235,645 75,400,769 99,708,180 98,665,676 8,185,871 106,851,547 30,994,798 6,489,379 23,883 37,508,060 100,000,000 474,430,413 52,628,095 7,481,511 270,052,154 149,423,052 1,054,015,225 (525,039,070) 644,528,613 644,528,613 525,039,070 115,552,452 24,417,754 5,932 1,398,581,955 3,454,998 1,426,460,639 7,469 419,903,138 1,202,385 421,112,992 2,250 659,090,950 48,909,476 1,019,813,958 353,279,335 61,459,829 82,879 425,219,562 59,110,844 685,207,029 94,282,458 227,228,811 70,000,000 3,888 14,552,183 14,400 12,000 188,348,882 3,900,000 31,676 8,486,786 14,400 12,000 For the period ended 31.03.2010 Rupees For the period ended 31.03.2009 Rupees
146
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE ACCOUNTS
SCHEDULE 19 : NOTES TO ACCOUNTS & ACCOUNTING POLICIES 1) Accounting Policies: a) General The ?nancial 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 speci?ed in Schedule XIV of the Companies Act, 1956. Assets acquired on lease are depreciated over the period of the lease. Leasehold improvements are amortized over a period of lease or ?ve years whichever is less. Intangible Assets are amortized over a period of six years. d) Investments Investments are classi?ed 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 recognize a decline, other than of a temporary nature. Current investments are carried individually at lower of cost and fair value and the resultant decline, if any, is charged to revenue. e) Inventories Inventories are valued as under: Completed Flats - At lower of Cost or Market value l) j) i) (iii)
The fair value of the plan assets is reduced from the gross obligation under the de?ned bene?t plan, to recognize the obligation on net basis. Past service cost is recognized as expense on a straight-line basis over the average period until the bene?ts become vested. Other long-term employee bene?ts: Other long-term employee bene?ts viz., leave encashment is recognized as an expense in the pro?t 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 bene?ts are charged to the pro?t and loss account. Borrowing Cost Interest and ?nance 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. 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. k) 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 suf?cient 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 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 Pro?t and Loss Account. m) Allocation of Expenses Corporate Employee Remuneration and Administration expenses are allocated to various projects on a reasonable basis as estimated by the management. n) 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 con?rmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. 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 Utilization of Funds upto March 31, 2010 Funding to part ?nance the acquisition of land developments rights and construction costs Repayment of Loans Issue Expenses Balance unutilised Amount temporarily invested in Mutual Funds Fixed Deposit / Bank Balance TOTAL 20,559.01 5,000.00 46,884.71 2,500.00 15,017.00 3,808.70 (Rs. in Lacs) 46,884.71
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 Pro?t & 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. Revenue on bulk deals on sale of its properties is recognized on execution of documents. 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. Dividend income is recognized when the right to receive the same is established. g) Development Manager Fees 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. h) Employee Bene?ts a) Short-term employee bene?ts: All employee bene?ts payable wholly within twelve months of rendering the service are classi?ed as short term employee bene?ts. Bene?ts 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 bene?ts: (i) De?ned Contribution Plans: Payments made to de?ned contribution plans such as Provident Fund are charged as an expense as they fall due. (ii) De?ned Bene?t Plans: The cost of providing bene?ts 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 Pro?t & Loss Account.
As on 31st March 2010, unutilized funds have been temporarily invested in mutual funds schemes and ?xed deposit / balance with banks as mentioned in the prospectus of the Company.
147
Godrej Properties Limited
SCHEDULES FORMING PART OF THE ACCOUNTS
3) Contingent Liabilities: Matters As at 3 1st March 2010 (Rs.) 7,850/As at 31st March 2009 (Rs.) 7,850/8) b) 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 speci?ed in the respective Agreements and have been disclosed as Development Manager Fees accrued but not due in Schedule 10. The Company’s signi?cant 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 Future minimum lease receipts under noncancelable operating leases Not later than 1 year Later than 1 year and not later than 5 years b) Current Year Rs. Previous Year Rs.
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 ?led 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/-) 4) Inventories Stock - in - Trade includes shares in the following Companies - at cost or market value (whichever is lower): Particulars Tahir Properties Limited 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: a) 1,400 5,250 1,400 5,250 Current Year (Rs.) Previous Year (Rs.) 9)
a)
26,400 105,600
26,400 105,600
The Company’s signi?cant 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 Current Year Rs. Previous 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)
28,603,511 33,332,065 6,047,901
23,191,357 30,558,198 7,061,962
During the ?nancial 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. 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. Particulars No. of Options Current Previous Year Year 412,700 442,700 9,000 403,700 30,000 412,700 Weighted Average Exercise Price 620.00 (plus interest) 620.00 (plus interest)
5)
Balances with scheduled banks on deposit accounts include Rs.34,422,705/- (Previous year Rs. 34,014,876/-) received from ?at buyers and held in trust on their behalf in a corpus fund. 6) Loans and Advances: a) Amounts due from companies under the same management: Maximum Debit Balance during the year 3,249,136 Balance as on March 31, 2010 3,249,136 Balance as on March 31, 2009 1,649,136
Particulars
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
Godrej Industries Ltd. b)
Loan & Advance to Subsidiary Companies: Maximum Debit Balance during the year 16,032,697 768,962,487 141,219,295 983,867,205 768,328,450 1,227,097,105 590,977,587 Balance as on March 31, 2010 16,032,697 556,396,071 141,085,481 983,867,205 501,260,304 1,227,097,105 590,596,924 Balance as on March 31, 2009 15,344,207 203,194,595 22,379 845,998,414 392,825,438 885,915,640 18,000
Particulars
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. 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 ?nancial 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. 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 ?nancial statements.
Godrej Realty Private Limited Godrej Waterside Properties Private Limited Godrej Sea View Properties Private Limited Godrej Real Estate Private Limited Godrej Developers Private Limited Happy Highrises Limited Godrej Estate Developers Private Limited c) 7)
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.
Inventories, Current Assets, Loans and Advances: a)
148
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE ACCOUNTS
10) Earnings Per Share Particulars Pro?t after tax and prior years tax adjustments as per Pro?t & Loss Account Weighted average No. of equity shares outstanding Basic earnings per share Nominal value of shares 11) Dues to Micro, Small and Medium Industries Disclosure of sundry creditors under current liabilities is based on the information available with the Company regarding the status of the suppliers as de?ned 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) 13) The amount of exchange difference included in the Pro?t and Loss Account, under the related heads of expenses is Rs. (25,624/-). (Previous Year Rs. 13,971,672/-). Expenditure in Foreign Currency Particulars Travelling Expenses Other Expenditure Total 14) Deferred Tax The tax effect of signi?cant temporary differences that resulted in deferred tax assets are: Particulars Depreciation on Fixed Assets Others Deferred Tax Asset 15) Current Year Rs. (3,523,000) 6,317,500 2,794,500 Previous Year Rs. 661,000 4,198,000 4,859,000 Current Year Rs. 1,788,397 64,963,887 66,752,284 Previous Year Rs. 1,663,605 46,588,039 48,251,644 Current Year Rs. 1,216,274,218 62,977,917 Rs. 19.31 Rs.10 /Previous Year Rs. 737,252,260 60,420,259 Rs. 12.20 Rs. 10 /-
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. Related Party Disclosures: 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 Signi?cant In?uence : Mr. A. B. Godrej Mr. N. B. Godrej 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) and (iii) above Godrej & Boyce Mfg. Co. Ltd. (i) 16,358,085 2,977,879 8,822,568 Godrej Industries Ltd. (ii) 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 26,706,213 5,323,036 121,238,023 196,185,842 (7,838,443) 24,136 3,225,000 1,625,000 Subsidiaries (iii) 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 9,604,511 7,178,648 4,016,335,787 2,347,580,672 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 10,864 353,686 4,919,625 8,112,751 -
18) 1. (i)
(ii)
(iii)
(iv)
Computation of Net Pro?t under Section 349 of the Companies Act, 1956 Particulars Pro?t before Tax as per Pro?t and Loss Account Add :Managerial Remuneration Depreciation Loss on sale of Fixed Asset Less
epreciation Pro?t on sale of Fixed Asset Net Pro?t for the purpose of Directors Remuneration (a) 11% (Previous Year 11%) of Net Pro?t as computed above Managerial Remunerationarticulars A B C D E F Notes: 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. 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 24,528,123 5,932 1,627,207,765 178,992,854 10,677,865 1,089,627,776 119,859,055 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Current Year Rs. 1,963,340 1,036,820 1,384,265 118,703 4,412 8,553 Previous Year Rs. 2,525,870 904,460 3,418,553 108,995 495,788 2,121 1. 2. 39,754,731 24,528,123 29,267,596 10,677,865 17,548 Sr. No. Current Year Rs. 1,587,458,966 Previous Year Rs. 1,060,342,632 (v)2.
Description
Investment in equity/ preference share capital Sale of Investments (Preference Shares) Purchase of ?xed assets Advances given Advance received against sale of ?ats Loans & Advances repaid Deposit given Deposit repaid
16)
Amounts paid to Auditors: Particulars Audit Fees Audit under other Statutes Certi?cation under other Statutes Other Certi?cations Consultancy Charges Reimbursement of Expenses
13. 14. 15. 16.
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 -
149
Godrej Properties Limited
SCHEDULES FORMING PART OF THE ACCOUNTS
Figures in italics are for previous year. (ii) Details relating to persons referred to in items 1 (iv) & (v) above Sr. No. 1. 2. 3. 4. 3. Key Management Personnel Remuneration Reimbursement of Travel Expenses Dividend Paid Individuals exercising signi?cant In?uence : Dividend paid – Mr. N.B. Godrej Current Year Rs. 33,749,731 240,000 1,466,868 4,325,625 Previous Year Rs. 23,695,536 217,200 2,477,724 7,133,210 19) Employee Bene?ts (i) De?ned Contribution Plans: Contribution to De?ned Contribution Plan, recognized as expense for the year are as under: Particulars Employers’ Contribution to Provident Fund Employers’ Contribution to ESIC (ii) De?ned Bene?t 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 bene?cial to the employees. The following table sets out the funded status of the gratuity plan and the amounts recognized in the Company’s ?nancial statements: Particulars Change in present value of obligation Present value of obligation as at beginning of the year Interest Cost Service Cost Bene?ts 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 Current Year (Rs.) 6,450,060 499,880 1,231,678 (1,224,663) 238,552 430,477 7,625,984 (430,477) (430,477) 1,231,678 499,880 430,477 2,162,035 (In %) 7.75 4.75 Previous Year (Rs.) 4,211,619 336,929 727,433 (392,197) 841,500 724,776 6,450,060 (724,776) (724,776) 727,433 336,929 724,776 1,789,138 (In %) 7.75 4.75 Current Year (Rs.) 8,144,688 41,183 Previous Year (Rs.) 6,444,909 44,470
Signi?cant Related Party Transactions Subsidiaries & Other Related Parties in the Godrej Group Godrej Estate Developers Pvt. Ltd. Godrej Developers Private Limited Godrej & Boyce Mfg. Co. Limited Godrej Industries 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 77,778,258 136,308,667 118,101,621 108,151,756 61,571,202 47,353,570
Nature of Transactions Investment in equity share capital Sale of Investments (Preference Shares) Purchase of ?xed assets
Advances given
Godrej Waterside Properties Private Limited Godrej Developers Private Limited Godrej Estate Developers Private Limited Godrej Waterside Properties Private Limited Godrej Developers Private Limited
Advances repaid
Advance received against sale of ?ats 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 Deposit repaid Construction & other expenses incurred on behalf of other companies
Godrej Industries Limited Godrej Industries Limited Happy Highrises Ltd. Godrej Waterside Properties Private Ltd. Godrej Real Estate Private Limited Godrej Developers Private Limited Godrej Estate Developers Pvt. Ltd.
The estimates of future salary increases, considered in actuarial valuation, take into account in?ation, 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 Coliseum, Mumbai Woodsman Estate, Bengaluru Gold County, Bengaluru Planet Godrej, Mumbai Glenelg, Mumbai Edenwoods, Mumbai Shivajinagar, Pune Bhugaon, Pune Avalon Project Sanjay Khan, Bengaluru Grenville Park, Mumbai Godrej Garden City, Ahmedabad K. Syama Raju, Bengaluru Vikhroli Kochi Umbarde, Kalyan 21) 22) Area Sharing/Revenue Sharing Revenue Sharing Pro?t Sharing Area Sharing Area Sharing Pro?t Sharing Development of the following Residential/ Commercial Projects: Pro?t sharing Revenue Sharing Pro?t Sharing Pro?t Sharing Pro?t Sharing Revenue / Pro?t Sharing Pro?t Sharing
Expenses charged by other companies (net) Interest (Paid)/Received on InterCorporate Deposits given
Outstanding receivables, net of (payables)
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 Godrej Industries Limited Godrej Industries Limited 121,238,023 196,185,842 3,225,000 1,625,000
Revenue Sharing Revenue Sharing
Previous year's ?gures have been regrouped/rearranged wherever necessary to con?rm to current year’s classi?cation. Additional information as required under Part IV of Schedule VI of the Companies Act, 1956 to the extent not applicable has not been given.
Dividend paid Deposit receivable
150
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE ACCOUNTS
23) 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 Pro?le a) Registration Details Registration No. State Code Balance Sheet Date Capital raised during the year (Amount in Rs. Thousands) Public Issue (Including Premium) Rights Issue Bonus Issue Private Placement 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 Performance of Company (Amount in Rs. thousands) Turnover Total Expenditure (Net of other income) Pro?t before tax Pro?t after tax Earning per Share in Rs. (on an annualized basis) Dividend rate % Generic Name of three principal products/services of Company
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010
Current year Rupees Cash Flow from Operating Activities Pro?t for the Year before Taxation Adjustment for: Depreciation Interest Paid 24,528,123 671,317,930 (5,932) (201) 616 (708,002,676) (24,417,754) (1,398,590,265) 152,288,807 (910,900,009) (236,888,871) (2,319,465,704) 588,980,038 (2,725,985,739) Taxes Paid (Net) Net Cash Flow from Operating activities Cash Flow from Investing Activities Purchase of Fixed Assets Sale of Fixed Assets Purchase of Investments Sale of Investments Interest Received Dividend Received Net Cash Flow from Investing Activities Cash Flow from Financing Activities Proceeds from Issue of Equity Share Capital (Net of Issue Expenses) Change in Cash Credit (Repayment)/ Proceeds from Term Loan Proceeds from Unsecured Borrowings (Repayment)/ Proceeds from Inter Company Deposit (Repayment)/ Acceptance of Fixed Deposits Interest Paid Payment of Dividend Tax on Distributed Pro?ts
103,592 203,120 10 51.00%
Previous year Rupees
U74120MH1985PLC035308 11 March 31, 2010
1,587,458,966
1,060,342,632 10,677,865 512,956,238 17,548 (484,413,285) (7,469) (419,903,138) 679,670,391 (409,486,615) (400,673,167) (941,598,612) (394,976,650) (1,467,064,653) (422,073,561) (1,889,138,213) (52,537,298) 499,693 (500,000) 420,162,818 450,878,689 7,469 818,511,371 981,174,047 600,000,000 372,843,185 20,000,000 (19,098,000) (512,956,239) (246,124,143) (41,828,800) 1,154,010,050 83,383,208 63,954,075 147,337,283
b)
4,688,471 Nil Nil Nil
(Pro?t) /Loss on sale of Fixed Asset (Net) Provision for Dimunition in value of Investment written back Investment Written Off Interest Income Dividend Received Pro?t on Sale of Long Term & Current Investment Operating Pro?t before working capital changes Adjustment for: Change in Inventory Change in Sundry Debtors Change in Loans & Advances Change in Current Liabilities / Provisions
c)
14,336,178 14,336,178 698,500 7,455,719 1,284,681 3,264,337 105,060 2,477,724 10,117,658 Nil 2,795 Nil
(357,305,497) (3,083,291,236) (60,894,380) 1,576,383 (2,978,561,060) 2,456,616,320 700,178,755 24,417,754 143,333,772 4,285,654,795 (682,248,703) (600,000,000) 631,804,140 (20,000,000) 748,943,000 (671,317,930) (151,050,648) (25,671,058) 3,516,113,596 576,156,132 147,337,283 723,493,415
d)
3,570,175 1,982,716 1,587,459 1,218,411 19.31 40% N.A
e)
STATEMENT REGARDING SUBSIDIARY COMPANY PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956
1 Name of the Subsidiary Company Godrej Godrej Godrej Developers Estate Real Estate Private Developers Private Limited Private Limited Limited Godrej Godrej Godrej Realty Sea View Waterside Private Properties Properties Limited Private Private Limited Limited Happy Highrises Limited
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 pro?t/ (loss) of the subsidiary company so far it concerns the members of the Company A. For the ?nancial 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 ?nancial 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
34,032 66,730 10 51.00%
25,500 50,000 10 51.00%
50,000
510,000
388,636
510,000
Net Cash Flow from Financing Activities Net Increase in Cash & Cash Equivalent Cash & Cash Equivalent -Opening Balance Cash & Cash Equivalent -Closing Balance Notes :1.
50,000 1,000,000 10 10 100.00% 51.00%
500,000 1,000,000 1 10 77.73% 51.00%
The cash ?ow statement has been prepared under the 'Indirect Method' as set out in the Accounting Standard (AS) 3 on 'Cash Flow Statement', and presents cash ?ows by operating, investing and ?nancing activities. Figures for the previous year have been regrouped / restated wherever necessary to conform to this year's classi?cation. Adi. B. GODREJ Chairman MILIND S. KORDE Managing Director
2.
(35,678) (29,397) (388,913) 2,824,096 (25,239) 2,005,492 10,659,915 -
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 (13,606) -
SHODHAN A. KEMBHAVI Company Secretary
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 ?nalized 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 con?rm: (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 ?nancial year ended March 31, 2010 and of the pro?t of the Company for that year; (iii) that the Directors had taken proper and suf?cient 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. 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 Place : Mumbai Dated : May 14, 2010 Director NARESH NADKARNI Director
8.
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 Pro?t and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These ?nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these ?nancial 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 ?nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial 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 speci?ed 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, Pro?t 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, Pro?t 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 ?nanced 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 pro?ts/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 Pro?t and Loss Account, of the pro?t of the Company for the year ended on that date and iii) in the case of the Cash Flow Statement, of the cash ?ows 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 disquali?ed 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 ?xed assets. (b) As explained to us, the Company has a program for physical veri?cation of ?xed assets at periodic intervals. In our opinion, the period of veri?cation is reasonable having regard to the size of the Company. (c) There is no disposal of ?xed assets during the year. 2) (a) The management has conducted physical veri?cation of inventory at reasonable intervals. (b) In our opinion, the procedures of physical veri?cation 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 veri?cation. 3) (a) The Company has not granted any loans, secured or unsecured to companies, ?rms 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, ?rms 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, ?xed 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 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 ?nancial year and has not incurred any cash losses in the current and immediately preceding ?nancial 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 ?nancial 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 bene?t 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 ?nancial 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
152
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 Net Current Assets Notes To Accounts & Accounting Policies 12
As at 31.03.2010 Rupees
As at 31.03.2009 Rupees
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010 For the Schedule For the
Year ended 31.03.2010 Rupees 9,654,565 Year ended 31.03.2009 Rupees 28,785,599 INCOME Interest Income (Tax deducted at Source Rs.9,70,762/- [Previous Year Rs. 6,507,756/-]) EXPENDITURE Cost of Sales Administration Expenses Interest & Finance Charges 9 10 11 1,500,150 1,953 8,152,462 (2,614,000) 5,538,462 (1,019) 5,537,443 5,537,443 5.54 0.41 12 Signatures to Pro?t and Loss Account and Schedules 9 to 12 23,451 24,727,520 7,917 4,026,711 (1,248,000) (4,000) 2,774,711 (2,100,239) 674,472 674,472 2.77 0.65
1 2 3
10,000,000 6,211,915 150,000,000 1,000 166,212,915
10,000,000 674,472 150,000,000 1,000 160,675,472
4
247,525 22,421 225,104 90,702,935 105,396,053 3,925,054 200,024,042 34,036,231 34,036,231 165,987,811 166,212,915
247,525 20,468 227,057 84,163,008 101,915,567 9,490,264 195,568,839 35,120,424 35,120,424 160,448,415 160,675,472
Depreciation Pro?t/ (Loss) for the Year Provision for Taxation For Current Tax For Deferred Tax Pro?t/ (Loss) After Tax Prior Year Tax Adjustment De?cit Brought Forward Amount available for appropriation Transfer to Debenture Redemmption Reserve Balance Carried Forward Earning per share Basic in Rs. (Refer Note 5) Earning per share Diluted in Rs. (Refer Note 5) Notes to Accounts & Accounting Policies The Schedules referred to above form an integral part of the Pro?t and Loss Account As per our Report of even date. For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants
5 6 7
8
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
Signatures to Balance sheet and Schedules 1 to 8 and 12
MILIND S. KORDE NARESH NADKARNI Directors
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 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 (Out of the above 510,000 equity shares are held by Godrej Properties Limited, the Holding Company and its nominee) SCHEDULE 2 : RESERVES & SURPLUS DEBENTURE REDEMPRION RESERVE Balance as per last Balance Sheet Transferred from Pro?t & Loss Account Less : Utilised during the year Balance at the end of the year PROFIT & LOSS ACCOUNT Balance at the end of the year SCHEDULE 3 : SECURED LOANS 1% Secured Redeemable optionally Convertible Debentures (Refer Note 2) 150,000,000 SCHEDULE 4 : FIXED ASSET
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 Particulars
As at 31.03.2009 Rupees SCHEDULE 5 : INVENTORY Construction Work in Progress
As at 31.03.2010 Rupees 90,702,935 90,702,935 SCHEDULE 6 : CASH & BANK BALANCE Cash in Hand 667 105,395,386 105,396,053 - on Fixed Deposit Account
As at 31.03.2009 Rupees 84,163,008 84,163,008 667 410,413 101,504,487 101,915,567
10,000,000 10,000,000 10,000,000
10,000,000 10,000,000 10,000,000
Balance with Scheduled Bank - on Current Account
10,000,000
10,000,000
SCHEDULE 7 : LOANS & ADVANCES (Unsecured & considered good unless otherwise stated) Advances recoverable in cash or kind or for value to be received Others Advance Tax and Tax Deducted at Source (Net of provision for Tax of Rs. 38,62,000/- previous year Rs. 15,82,610/- ) 3,925,054 SCHEDULE 8 : CURRENT LIABILITIES Sundry Creditors ( Refer Note 3) Other Liabilities Interest Accrued but not due 888,634 369,923 32,777,674 34,036,231 9,490,264 809,480 2,883,271 31,427,673 35,120,424 412 3,924,642 3,922,385 5,567,879
674,472 5,537,443 6,211,915 6,211,915 150,000,000
674,472 674,472 674,472 150,000,000 150,000,000
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 2) that there is a reasonable certainty that suf?cient 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 Pro?t 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 con?rmed 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 speci?c 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 Pro?t 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 de?ned 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 signi?cant temporary differences that resulted in deferred tax liabilities are : Particulars Liabilities -Depreciation on Fixed Assets Deferred Tax Liabilities 5) Earnings per share Particulars Pro?t for the year as per Pro?t & 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) Amounts paid to Auditors: Particulars Current Year(Rs.) Previous Year (Rs.) Audit Fees 159,935 159,935 Audit & Other Statutes 55,150 55,150 Certi?cation 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 1 Expenses Charged to other Companies 2 3 4 5 6 7 9) 10) G&B GPL HDFC Venture Trustee Company Limited 735,000 5,718,904 (16,744,977) (16,083,477) 73,500,000 73,500,000 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 Current Year(Rs.) Previous Year (Rs.) (1,000) (1,000) (1,000) (1,000)
11,761,030 11,761,030 17,494,151 200 29,255,381 4,527,861 24,727,520
3)
4)
SCHEDULE 12 : NOTES TO ACCOUNTS AND ACCOUNTING POLICIES 1) Accounting Policies a) General The ?nancial 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 speci?ed 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 Pro?t & 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 ?nance 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
7)
8)
9,604,511 4,612,506 Expenses Charged by other Companies 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
(Figures in italics are for previous year)
Previous year ?gures have been rearranged / regrouped wherever necessary to con?rm to current year’s classi?cation. Additional Information as required under Part IV of Schedule VI of the Companies Act, 1956 to the extent not applicable has not been given.
154
Annual Report 2009–2010
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 Pro?le 1 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 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 Performance of Company (Amount in Rs. thousands) Total Expenditure Pro?t / (Loss) before Tax Pro?t / (Loss) after Tax Earning per Share (Basic) in Rs. Earning per Share (Diluted) in Rs. Dividend Rate % 5 Generic Names of three principal products / services of Company N.A. 1,502 8,152 5,537 5.54 0.41 200,249 200,249 10,000 6,212 150,000 1 225 165,988 Nil Nil Nil Nil Nil
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2010
Particulars Current Year Rupees Previous Year Rupees
U70100MH2005PTC154268 11 31st March, 2010
2
Cash Flow from Operating Activities Pro?t / (Loss) for the Year Adjustment for: Depreciation Interest Paid (Pro?t) /Loss on sale of Fixed Asset (Net) Interest Income Operating Pro?t / (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 Cash & Cash Equivalent -Opening Balance Cash & Cash Equivalent -Closing Balance Notes :
1.
8,152,462 1,953 1,500,000 (9,654,565) (150)
4,026,711 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 3,480,486 101,915,567 105,396,053
25,333 28,785,599 28,810,932 82,891,584 19,023,983 101,915,567
has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard (AS) 3 on ‘Cash Flow Statement’, and presents cash ?ows by operating, investing and ?nancing activities. 2. Figures for the previous year have been regrouped/restated wherever necessary to conform to this year’s classi?cation. For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants ERMIN K. IRANI Partner Mumbai, Dated: May 14, 2010 MILIND S. KORDE NARESH NADKARNI Directors
The cash ?ow statement
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 de?cit 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 pro?ts, 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 con?rm: (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 ?nancial year ended 31st March, 2010 and of the loss of the Company for that year; (iii) that the Directors had taken proper and suf?cient 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 Pro?t and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These ?nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these ?nancial 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 ?nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial 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 speci?ed 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, Pro?t 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, Pro?t 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 ?nanced 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 pro?ts/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 Pro?t 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 ?ows 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 disquali?ed 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. 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.
2.
3. 4.
Annexure to the Auditors’ Report
1. (a) (b) (c) 2. (a) (b) (c) 3. (a) (b)
Referred to in paragraph (3) of our report of even date. The Company is maintaining proper records showing full particulars, including quantitative details and situation of ?xed assets. As explained to us, the Company has a program for physical veri?cation of ?xed assets at periodic intervals. In our opinion, the period of veri?cation is reasonable having regard to the size of the Company. There is no disposal of ?xed assets during the year. The management has conducted physical veri?cation of inventory at reasonable intervals. In our opinion, the procedures of physical veri?cation of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. The company is maintaining proper records of inventory and no material discrepancies were noticed on physical veri?cation. The Company has not granted any loans, secured or unsecured to companies, ?rms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. 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. The Company has not taken any loan, secured or unsecured from companies, ?rms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. 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. 10. 11. (b)
12.
13. 14. 15. 16. 17.
(c) (d)
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, ?xed 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. 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.
18. 19. 20. 21.
5.
(b)
The Company’s accumulated losses at the end of the ?nancial year are more than ?fty percent of its net worth. The Company has not incurred any Cash losses during the current and immediately preceding ?nancial 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 ?nancial 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 bene?t 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 ?nancial 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.
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. 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. 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.
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
7. 8.
156
Annual Report 2009–2010
BALANCE SHEET AS AT 31ST MARCH, 2010
Schedule As at 31.03.2010 Rupees As at 31.03.2009 Rupees
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010
Schedule For the Year Ended 31.03.2010 Rupees 7 8 400,071 1,842 (401,913) 13,000 (388,913) (75,917) (464,830) (7.78) 9 For the Year Ended 31.03.2009 Rupees 32,518 1,842 (34,360) (34,360) (41,557) (75,917) (0.69)
SOURCES OF FUNDS Shareholders’ Funds Share Capital Loan Funds APPLICATION OF FUNDS Fixed Assets Gross Block Less : Depreciation Net Block INVESTMENTS DEFERRED TAX ASSETS CURRENT ASSETS, LOANS & ADVANCES Inventory Cash & Bank Balances Loans and advances LESS : CURRENT LIABILITIES & PROVISIONS Current Liabilities 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 ERMIN K. IRANI Partner Mumbai, Dated : May 14, 2010
1
500,000 500,000
500,000 500,000
INCOME EXPENDITURE Cost of sales Interest & Finance Charges Depreciation Preliminary Expenses written off De?cit for the Year Deferred Tax (Loss) / Pro?t for the Year De?cit Brought Forward De?cit Carried Forward to Balance Sheet Earning per share Basic/Diluted in Rs. (Refer Note 4) NOTES TO ACCOUNTS & ACCOUNTING POLICIES
2 2,272,694 446,373 1,826,321 13,000 3 4 5 985,846,618 68,345 7,303,998 993,218,961 995,034,164 995,034,164 (1,815,203) 99,990 46,302 53,688 857,517,086 218,014 8,830,043 866,565,143 866,207,642 866,207,642 357,501
6
11,052 464,830 500,000 9 Signatures to the Balance Sheet and Schedules 1 to 6 and 9
12,894 75,917 500,000 The Schedules referred to above form an integral part of the Pro?t & Loss Account. 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 Signatures to the Pro?t & Loss Account and Schedules 7 to 9
MILIND S. KORDE K.T. JITHENDRAN Directors
MILIND S. KORDE K.T. JITHENDRAN Directors
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 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
500,000 500,000 500,000
500,000 500,000 500,000
985,846,618 985,846,618
857,517,086 857,517,086
500,000 SCHEDULE 2: FIXED ASSETS
Particulars As at 1st April 2009 Rs. 7,990 1,455,099 92,000 152,588 99,990 2,172,704 99,990 Gross Block Additions Deductions 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 32,518 263,159 1,191,940 114,472 130,116 446,373 1,826,321 46,302 53,688
500,000
5,224 63,121 68,345
131 217,883 218,014
Of?ce Equipment Furniture & Fixtures Computer TOTAL Previous Year
Rs. 565,017
Rs. -
As at 31st March 2010 Rs. 573,007
Net Block As at As at 31st 31st March March 2009 2010 Rs. Rs. 504,265 6,481 47,207 53,688 –
7,303,998 7,303,998
8,830,043 8,830,043
1,455,099 244,588 2,272,694 99,990
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
For the year ended 31.03.2010 Rupees 857,517,086 For the year ended 31.03.2009 Rupees 728,176,550 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 Pro?t 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 suf?cient 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 con?rmed 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 signi?cant 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 Future minimum lease Payment under non-cancelable operating leases Not later than 1 year Later than 1 year and not later than 5 years 3) 1,384,320 3,918,395 1,384,320 5,299,117 Current Year Rs. Previous Year Rs.
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
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 -
2)
SCHEDULE 9 1) Accounting Policies a) General The ?nancial 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 speci?ed 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 Pro?t & 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
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 de?ned 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 Pro?t / (Loss) as per Pro?t & Loss Account (Rs.) Weighted average no. of equity shares outstanding Basic / Diluted earnings per share (Rs.) Nominal value of shares (Rs.) Current Year (388,913) 50,000 (7.78) 10 /Previous Year (34,360) 50,000 (0.69) 10 /-
4)
5)
Deferred Tax The Tax effect of signi?cant temporary differences that resulted in the deferred tax assets are: Particulars Assets - Depreciation on Fixed Assets Deferred Tax Assets Current Year (Rs.) 13,000 13,000 Current Year (Rs.) 159,935 40,388 200,323 Previous Year (Rs.) Previous Year (Rs.) 159,935 33,708 1,93,643
6)
Amounts paid to Auditors Particulars Audit Fees Consultancy Charges Total
7)
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. 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.
158
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 1. 2. 3. 4. 5. Particulars Expenses charged by other companies Purchase of Fixed Assets Advances received Advances repaid Outstanding payables GPL 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 -
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010
Current Year Rupees Cash Flow from Operating Activities Loss for the Year Adjustment for: Depreciation Interest Paid Preliminary expenses Operating Loss before working capital changes Adjustment for: Change in Inventory Change in Loans & Advances Change in Current Liabilities / Provisions Net Cash Flow from Operating activities Cash Flow from Investing Activities Purchase of Fixed Assets Net 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 Notes : 1. The cash ?ow statement has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard (AS) 3 on ‘Cash Flow Statement’, and presents cash ?ows by operating, investing and ?nancing activities. Figures for the previous year have been regrouped/ restated wherever necessary to conform to this year’s classi?cation. (2,172,704) (2,172,704) (149,669) 218,014 68,345 89,057 128,957 218,014 (128,329,532) 1,526,045 38,248,231 2,023,035 (129,340,535) (7,152,543) 54,960,253 89,057 400,071 90,578,291 1,842 90,578,291 32,518 81,621,882 1,842 81,621,882 (401,913) (34,360) Previous Year Rupees
9) 10) 11)
Figures in italics are for previous year Previous year ?gures have been rearranged / regrouped wherever necessary to con?rm to current year’s classi?cation. 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 Pro?le
1 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
2
3
2.
: : : : : : : : : :
500 1,826 13 (1,815) 11 465
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
5
Performance of Company (Amount in Rs. thousands) Turnover : Total Expenditure : Pro?t/(Loss) before Tax : Pro?t/(Loss) after Tax : Earning per Share in Rs. : Dividend Rate % : Generic Names of three principal products/services of Company :
(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 de?cit 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 of?ce to the new building has been initiated. 3. DIVIDEND: As there are no pro?ts, 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 of?ce 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 con?rm: (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 ?nancial year ended March 31, 2010 and of the loss of the Company for that year; (iii) that the Directors had taken proper and suf?cient 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
7.
8.
REPORT OF THE AUDITORS TO THE MEMBERS OF GODREJ DEVELOPERS PRIVATE LIMITED
1. We have audited the attached Balance Sheet of GODREJ DEVELOPERS PRIVATE LIMITED, as at 31st March 2010, the Pro?t and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These ?nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these ?nancial 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 ?nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial 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 speci?ed 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, Pro?t 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 Pro?t 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 ?nanced 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 pro?ts/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 Pro?t 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 ?ows 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 disquali?ed 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)
2.
3. 4.
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 ?xed assets. (b) As explained to us, the Company has a program for physical veri?cation of ?xed assets at periodical intervals. In our opinion, the period of veri?cation is reasonable having regard to the size of the Company. (c) There is no disposal of ?xed assets during the year. 2) (a) The management has conducted physical veri?cation of inventory at reasonable intervals. (b) In our opinion, the procedures of physical veri?cation 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 veri?cation. 3) (a) The Company has not granted any loans, secured or unsecured to companies, ?rms 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, ?rms 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, ?xed 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 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 ?nancial year are less than ?fty percent of its networth. Further, the company has not incurred any cash losses in the current and immediately preceding ?nancial 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 ?nancial 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 bene?t 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 ?nancial 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
160
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 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 Net Current Assets Miscellaneous Expenditure (to the extent not written off or adjusted) Preliminary Expenditure Pro?t & 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 ERMIN K. IRANI Partner Mumbai, Dated: May 05, 2010 MILIND S. KORDE K T JITHENDRAN Directors 11 Signatures to the Balance Sheet and Schedules 1 to 8 and 11 As at 31.03.2010 Rupees As at 31.03.2009 Rupees
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010
Schedule For the year ended 31.03.2010 Rupees 9 10 55,115 1,842 (56,957) (13,000) (69,957) (73,021) (142,978) (1.05) 11 For the year ended 31.03.2009 Rupees 43,406 1,842 (45,248) (45,248) (27,773) (73,021) (0.72)
1 2 3
667,300 453,900,000 13,000 454,580,300
667,300 667,300
INCOME EXPENDITURE Cost of Sales Interest & Finance Charges Depreciation Preliminary Expenses written off De?cit for the year Provision for Deferred Tax De?cit After Tax De?cit Brought Forward De?cit Carried Forward to Balance Sheet Earning per share Basic/Diluted in Rs. (Refer Note 6) NOTES TO ACCOUNTS & ACCOUNTING POLICIES
4
173,585 98,521 75,064 808,334,259 5,585,346 197,458,358 1,011,377,963 557,026,757 557,026,757 454,351,206 11,052 142,978 454,580,300
139,464 43,406 96,058 313,882,169 102,229 100,272,825 414,257,223 413,771,896 413,771,896 485,327 12,894 73,021 667,300
5 6 7
8
The Schedules referred to above form an integral part of the Pro?t & Loss Account. As per our Report of even date. For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants ERMIN K. IRANI Partner Mumbai, Dated: May 05, 2010
Signatures to Pro?t & Loss Account and Schedules 9 to 11
MILIND S. KORDE K T JITHENDRAN Directors
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 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) SCHEDULE 4 : FIXED ASSETS
Particulars Gross Block As at Additions Deductions 1st April 2009 Rs. Rs. Rs. Of?ce Equipment Computer Total Previous Year 139,464 139,464 5,063 29,058 34,121 139,464 As at 31st March 2010 Rs. 5,063 As at 1st April 2009 Rs. Depreciation For the Year Rs. 546 54,569 55,115 43,406 Net Block As at As at 31st 31st March March 2010 2010 Rs. Rs. 546 97,975 98,521 43,406 4,517 70,547 75,064 96,058 As at 31st March 2009 Rs. 96,058 96,058 –
As at 31.03.2009 Rupees 900,000 100,000 1,000,000 667,300 667,300 214,844,318 (214,844,318) 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 808,334,259 808,334,259 54,119 5,531,227 5,585,346
As at 31.03.2009 Rupees 313,882,169 313,882,169 10,622 91,607 102,229
900,000 100,000 1,000,000 667,300 667,300 453,900,000 453,900,000
97,062,129 100,396,229 197,458,358 42,034,294 514,992,463 557,026,757
100,272,825 100,272,825 13,435,028 400,336,868 413,771,896
168,522 43,406 173,585 43,406 139,464 -
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 Less : Closing Stock: Cost of Sales SCHEDULE 10: INTEREST AND FINANCIAL CHARGES Interest Paid - Banks - Others Total Interest Paid Less: Transferred to Cost of Sales NET INTEREST 313,882,169 379,990,860 6,563,741 39,387,620 68,509,869 808,334,259 808,334,259 16,651,505 51,858,364 68,509,869 68,509,869 141,768,467 42,400,487 10,112,400 108,714,649 10,886,166 313,882,169 313,882,169 38 10,886,128 10,886,166 10,886,166 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 Pro?t 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 con?rmed 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) Current Year (Rs.) 10,163 Previous Year (Rs.) 10,163
2)
3)
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 speci?ed 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 Pro?t & 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 suf?cient 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
5)
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 de?ned 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 signi?cant temporary differences that resulted in the deferred tax liabilities are : Particulars Liabilities - Depreciation on Fixed Assets Deferred Tax Liabilities Current Year (Rs.) 13,000 13,000 Previous Year (Rs.) -
6)
Earnings Per Share Particulars Loss for the year as per Pro?t & Loss Account(Rs.) Weighted average no. of equity shares outstanding Basic Earnings Per Share (Rs.) Nominal value of shares (Rs.) Current Year (69,957) 66,730 (1.05) 10 /Previous Year (45,248) 62,513 (0.72) 10 /-
7)
Amounts paid to Auditors Particulars Audit Fees Certi?cation Consultancy Charges Total Current Year (Rs.) 159,935 33,092 40,388 233,415 Previous Year (Rs.) 159,935 11,236 171,171
8)
9)
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 2 3 4 5 6 7 Issue of Equity/Preference Shares Redemption of Preference Shares Expenses Charged by other companies Expenses Charged to other companies Advances received Advances paid Outstanding payables GPL 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 RFIREB 215,011,618 -
Figures in italics are for previous year
162
Annual Report 2009—2010
10) Previous year ?gures have been regrouped / rearranged where ever necessary to con?rm to current year’s classi?cation. 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 Pro?le 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) Pro?t / (Loss) before Tax : (57) Pro?t / (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 Cash Flow from Operating Activities Loss For the period Adjustment for: Depreciation Interest Paid Preliminary Expenses Operating Pro?t before working capital changes Adjustment for: Change in Inventory Change in Loans & Advances Change in Current Liabilities/Provisions Net Cash Flow from Operating activities 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 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 Notes : 1. The cash ?ow statement has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard (AS) 3 on ‘Cash Flow Statement’, and presents cash ?ows by operating, investing and ?nancing activities. Figures for the previous year have been regrouped/ restated wherever necessary to conform to this year’s classi?cation. 453,900,000 (11,736,328) 442,163,672 5,483,117 102,229 5,585,346 215,011,618 (214,944,318) (38) 67,262 (103,760) 205,989 102,229 (34,121) (34,121) (139,464) (139,464) (494,452,090) (97,185,533) 86,481,320 (436,646,434) (172,113,702) 155,185 161,040,793 (31,558) 55,115 68,509,869 1,842 68,509,869 43,406 10,886,166 1,842 10,886,166 (56,957) (45,248) Previous Year Rupees
2.
For and on behalf of KALYANIWALLA & MISTRY CHARTERED ACCOUNTANTS ERMIN K. IRANI Partner Mumbai, Dated: May 05, 2010 MILIND S. KORDE K. T. JITHENDRAN Director
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 de?cit 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 ?nalized the design for the First Phase of the Project. 3. DIVIDEND: As there are no pro?ts, 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 con?rm: (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; 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 ?nancial year ended 31st March, 2010 and of the loss of the Company for that year; (iii) that the Directors had taken proper and suf?cient 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. iii. Technology Absorption : It is an on going process. Foreign Exchange Earning & Outgo : The Company has not earned any Foreign Exchange nor incurred any Foreign Exchange Expenditure during the year. (ii)
8.
9.
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 K.T. JITHENDRAN
Directors
Mumbai, Dated: May 14, 2010
REPORT OF THE AUDITORS TO THE MEMBERS OF GODREJ SEA VIEW PROPERTIES PRIVATE LIMITED
1. We have audited the attached Balance Sheet of GODREJ SEA VIEW PROPERTIES PRIVATE LIMITED, as at 31st March, 2010, the Pro?t and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These ?nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these ?nancial 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 ?nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial 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 speci?ed 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, Pro?t 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 ?nanced 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 pro?ts/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 Pro?t 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 ?ows 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 disquali?ed 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.
2.
3. 4.
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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) The Company has maintained proper records showing full particulars, including quantitative details and situation of ?xed assets. As explained to us, the Company has a program for physical veri?cation of ?xed assets at periodical intervals. In our opinion, the period of veri?cation is reasonable having regard to the size of the Company. (c) There is no disposal of ?xed assets during the year. (a) The management has conducted physical veri?cation of inventory at reasonable intervals. (b) In our opinion, the procedures of physical veri?cation 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 veri?cation. (a) The Company has not granted any loans, secured or unsecured to companies, ?rms 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, ?rms 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, ?xed 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) (a) 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 ?nancial yearare less than ?fty percent of its networth. In Current year the Company has not incurred cash losses, however, it has incurred cash losses in the immediately preceding ?nancial 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 ?nancial 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 bene?t 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 ?nancial 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 ?ows 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.
2)
10) 11) 12) 13) 14) 15) 16) 17) 18) 19) 20) 21)
3)
4)
5)
6) 7) 8) 9)
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
164
Annual Report 2009–2010
BALANCE SHEET AS AT MARCH 31, 2010
Schedule As at 31.03.2010 Rupees As at 31.03.2009 Rupees
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
SOURCES OF FUNDS SHAREHOLDERS' FUNDS Share Capital LOAN FUNDS DEFERRED TAX LIABILITY
1
500,000 — 31,000 531,000
500,000 — — 500,000
INCOME Interest Income EXPENDITURE Cost of Sales 8 9 10 — — — 7,967 1,842 5,745 (1,000) 1,000 (31,000) (25,255) (145,288) (170,543) (0.05) 11 — 77,186 — — 1,842 (79,028) — — — (79,028) (66,260) (145,288) (0.16) Administration Expenses 15,554 —
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 NET CURRENT ASSETS 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. 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
2 587,902 7,967 579,935 2,182,485 2,762,420 — 3 4 5 36,331,024 19,926,791 82,945,430 139,203,245 6 7 141,616,260 — 141,616,260 (2,413,015) — — — — — — — 392,781 — 392,781 50,963 — 50,963 341,818
Interest & Finance Charges Depreciation Preliminary Expenses written off Pro?t / (Defecit) for the Year Provision for Taxation For Current Tax For MAT Credit Entitlement For Deferred Tax De?cit After Tax De?cit Brought Forward De?cit carried to the Balance sheet Earning per share - Basic in Rs. (Refer Note 3) NOTES TO ACCOUNTS & ACCOUNTING POLICIES
11,052 170,543 531,000 11
12,894 145,288 500,000
Signatures to the Balance Sheet and Schedules 1 to 7 and 11
The Schedules referred to above form an integral part of the Pro?t & Loss Account. As per our Report of even date. For and on behalf of KALYANIWALLA & MISTRY CHARTERED ACCOUNTANTS
Signatures to Pro?t & Loss Account and Schedules 8 to 11
MILIND S. KORDE K.T. JITHENDRAN Directors
ERMIN K. IRANI Partner Mumbai, Dated: May 14, 2010
MILIND S. KORDE K.T. JITHENDRAN Directors
SCHEDULES FORMING PART OF THE ACCOUNTS
As at 31.03.2010 Rupees SCHEDULE 1 : SHARE CAPITAL Authorised 500,000 Equity shares of Re. 1/- each (Previous Year 50,000 Equity shares of Rs. 10/- each) As at 31.03.2009 Rupees SCHEDULE 2 : FIXED ASSETS
Particulars Gross Block As at 1st Additions Deductions April, 2009 Rs. Rs. 135,000 152,061 300,841 587,902 — — Rs. — — — Of?ce Equipment Furniture & Fixtures Computer TOTAL Previous Year Capital Work-inProgress As at 31st March, 2010 Rs. 135,000 152,061 300,841 Depreciation Upto 1st For the Year April, 2009 Rs. — — — — — — Rs. 848 528 6,591 7,967 — — TOTAL Upto 31st March, 2010 Rs. 848 528 6,591 7,967 — — Net Block As at As at 31st 31st March, March, 2010 2009 Rs. 134,152 151,533 294,250 579,935 — — — — Rs. — — —
500,000 500,000
500,000 500,000 500,000
— — — — — —
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)
500,000
— 587,902 — — — —
500,000
500,000
2,182,485 2,762,420
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Godrej Sea View Properties Private Limited
As at 31.03.2010 Rupees SCHEDULE 3 INVENTORY Construction Work-in-Progress As at 31.03.2009 Rupees 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 speci?ed 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 Pro?t & 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 suf?cient 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 Pro?t 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 con?rmed 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 de?ned 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 Pro?t & Loss Account Weighted average no. of equity shares outstanding Basic / Diluted earnings per share (Rs.) Nominal value of shares (Rs.)
split of shares during the year.
36,331,024 36,331,024
— —
SCHEDULE 4 CASH & BANK BALANCE Cash & Cheques-in-Hand Balance with Scheduled Bank - on Current Account - on Fixed Deposit Accounts
1,960 674,831 19,250,000 19,926,791
— 392,781 392,781
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 2,929,876 15,554 80,000,000 82,945,430 — — — —
SCHEDULE 6 CURRENT LIABILITIES Sundry Creditors (Refer Note 2) Other Liabilities
1,009 141,615,251 141,616,260
23,388 27,575 50,963
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
— —
— —
— 27,403,964 10,000 8,677,327 239,733 36,331,024 36,331,024 —
— — — — — — — —
— — —
27,575 49,611 77,186
SCHEDULE 10 INTEREST AND FINANCE CHARGES (NET) INTEREST PAID Interest Paid - Others TOTAL INTEREST PAID Less: Transferred to Cost of Sales NET INTEREST
239,733 239,733 239,733 —
— — — —
2)
SCHEDULE 11 NOTES TO ACCOUNTS AND ACCOUNTING POLICIES 1) Accounting Policies a. General The ?nancial 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.
3)
4)
Current Year (Rs.) (25,255) 500,000 (0.05) 1/-
Previous Year (Rs.) (79,028) 500,000 (0.16)* 1/-
* Earning per share of previous year has been recomputed based on the no of shares outstanding after
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Annual Report 2009–2010
5) Deferred Tax The Tax effect of signi?cant temporary differences that resulted in the deferred tax liabilities are : Particulars Liabilities - Depreciation on Fixed Assets Deferred Tax Liabilities 6) Lease The Company’s signi?cant 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 Future minimum lease payments under non-cancelable operating leases - Not later than 1 year - Later than 1 year and not later than 5 years - Later than 5 years 7) Amounts paid to Auditors: Current Year (Rs.) 159,935 40,388 200,323 Previous Year (Rs.) 27,575 33,708 61,283 4. 2,241,396 9,709,390 2,030,206 NIL NIL NIL Current Year (Rs.) Previous Year (Rs.) 3. Current Year Previous Year (Rs.) (Rs.) 31,000 31,000 2. 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 Pro?le. 1. Registration Details Registration No. State Code Balance Sheet Date : : : U45200MH2007PTC168730 11 31st March, 2010
Audit Fees Consultancy Charges Total 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. 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. 1 2. 3. 4. Particulars Reimbursement of Expenses Advance Received/(Given) Purchase of Fixed Assets Outstanding payables/(Receivable) GPL 29,170,686 1,149 109,839,114 – 2,454,873 – 141,085,481 22,379 G&B – – (304,284) (304,284) 5.
9)
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 Pro?t/(Loss) before Tax : 6 Pro?t/(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
Current Year Rupees Cash Flow from Operating Activities Pro?t/(Loss) for the Year Adjustment for: Depreciation Interest Paid Preliminary Expenses Ineterst Received Operating Pro?t 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 ?ow statement has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard (AS) 3 on ‘Cash Flow Statement’, and presents cash ?ows by operating, investing and ?nancing activities. 2. Figures for the previous year have been regrouped/ restated wherever necessary to conform to this year’s classi?cation. 5,745 7,967 239,733 1,842 (15,554) 239,733 (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 Previous Year Rupees (79,028) – – 1,842 – (77,186) – – 1,643 (75,543) – – (75,543) 468,324 392,781
Figures in italics are for previous year. 10) Previous year ?gures have been regrouped / rearranged whereever necessary to con?rm to current year’s classi?cation. 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.
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 MILIND S. KORDE K.T. JITHENDRAN Directors
167
Happy Highrises Limited
DIRECTORS’ REPORT FOR THE YEAR ENDED MARCH 31, 2010
TO THE SHAREHOLDERS 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 pro?t 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. 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. 4. DIVIDEND: There is no Dividend declared for the year ended March 31, 2010. CHANGE IN SHAREHOLDING PATTERN: 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. Post transfer of shares to Milestone India Real Estate Fund Godrej Properties Limited now holds 51% stake in the Company. 5. DIRECTORS: 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. 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 con?rm: (i) that in the preparation of the annual accounts, the applicable accounting standards have been followed; Place : Mumbai Dated : May 14, 2010 9. (iv) 8. (a) (iii) (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 ?nancial year ended March 31, 2010 and of the pro?t of the Company for that year; that the Directors had taken proper and suf?cient 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. 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. 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) (ii) (iii) Conservation of Energy : Expenses on account of Energy are negligible. Technology Absorption: It is an on going process. 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 K.T. JITHENDRAN DIRECTORS
ADDITIONAL INFORMATION:
(b)
REPORT OF THE AUDITORS TO THE MEMBERS OF HAPPY HIGHRISES LIMITED
1. We have audited the attached Balance Sheet of HAPPY HIGHRISES LIMITED, as at 31st March, 2010, the Pro?t and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These ?nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these ?nancial 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 ?nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial 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 speci?ed 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 Pro?t 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 Pro?t 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. 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 Pro?t and Loss Account, of the pro?t of the Company for the year ended on that date and iii) in the case of the Cash Flow Statement, of the cash ?ows 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 disquali?ed 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. e)
2.
5.
3.
4.
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
168
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 ?xed assets. (b) As explained to us, the Company has a program for physical veri?cation of ?xed assets at periodicals intervals. In our opinion, the period of veri?cation is reasonable having regard to the size of the Company. (c) There is no disposal of ?xed assets during the year. 2) (a) The management has conducted physical veri?cation of inventory at reasonable intervals. (b) In our opinion, the procedures of physical veri?cation 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 veri?cation. 3) (a) The Company has not granted any loans, secured or unsecured to companies, ?rms 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, ?rms 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, ?xed 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 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 ?nancial year and has not incurred any cash losses in the current and immediately preceding ?nancial 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 ?nancial 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 bene?t 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 ?nancial 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 ?ows 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.
10) 11) 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
BALANCE SHEET AS AT 31ST MARCH, 2010
Schedule SOURCES OF FUNDS SHAREHOLDERS’ FUNDS Share Capital Reserve & Surplus LOAN FUNDS DEFERRED TAX LIABILITY APPLICATION OF FUNDS FIXED ASSETS Gross Block Less : Depreciation Net Block INVESTMENTS CURRENT ASSETS, LOANS & ADVANCES Inventory Debtors Cash & Bank Balances Loans & Advances LESS : CURRENT LIABILITIES & PROVISIONS Current Liabilities Provisions NET CURRENT ASSETS MISCELLANEOUS EXPENDITURE (to the extent not written off or adjusted) Preliminary Expenditure PROFIT & LOSS ACCOUNT NOTES TO ACCOUNTS & ACCOUNTING POLICIES 12 As at 31.03.2010 Rupees 2,031,200 14,472,024 12,000 16,515,224 2,618,114 392,900 2,225,214 1,256,666,886 67,616,112 14,481,093 19,898,842 1,358,662,933 1,336,263,427 8,121,578 1,344,385,005 14,277,928 12,082 16,515,224 As at 31.03.2009 Rupees 2,031,200 2,031,200 137,360 33,445 103,915 907,618,712 87,980 1,155,172 908,861,864 907,020,485 907,020,485 1,841,379 13,808 72,098 2,031,200
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010
Schedule For the Year ended 31.03.2010 Rupees 121,057,106 10 11 97,971,803 359,455 1,726 22,724,122 (8,168,000) (12,000) 14,544,122 (72,098) 14,472,024 71.60 12 For the Year ended 31.03.2009 Rupees 30,245 1,726 (31,971) (31,971) (40,127) (72,098) (0.16)
1 2
3
4 5 6 7 8 9
INCOME Sales EXPENDITURE Cost of Sales Interest & Finance Charges Depreciation Preliminary Expenses written off Pro?t / (Defecit) for the Year Provision for Tax for Current Tax for Deferred Tax Pro?t / (Defecit) after tax De?cit Brought Forward Pro?t Carried Forward to Balance Sheet Earning per share Basic/Diluted in Rs. (Refer Note 3) NOTES TO ACCOUNTS & ACCOUNTING POLICIES
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
The Schedules referred to above form an integral part of the Pro?t & Loss Account. Signatures to Pro?t & 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
As at 31.03.10 Rupees 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 31.03.00 Rupees 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
2,500,000 2,500,000 2,031,200
2,500,000 2,500,000 2,031,200
907,618,712 123,579,224 1,416,852 32,826,545 182,866,518 106,330,838 1,354,638,689 1,256,666,886 97,971,803
774,188,736 5,662,615 545,093 39,873,381 87,348,887 907,618,712 907,618,712 -
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 Of?ce Equipments Computers Total 137,360 2,480,754 Previous Year 3,200 134,160 2,618,114 137,360 33,445 3,200 359,455 30,245 392,900 2,225,214 33,445 103,915 103,915 Gross Block Additions Deductions Depreciation As at Upto For the Upto 31st 1st April, Year 31st March, 2009 March, 2010 2010 Rs. Rs. Rs. Rs. 1,369,693 389,446 858,975 3,200 30,245 156,032 38,151 165,272 Net Block As at As at 31st 31st March, March, 2010 2009 Rs. Rs. 103,915
Rs.
Rs. -
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 -
- 1,369,693 3,200 134,160 386,246 724,815
156,032 1,213,661 41,351 195,517 348,095 663,458
As at 31.03.2010 Rupees SCHEDULE 4 INVENTORY Construction work in progress SCHEDULE 5 SUNDRY DEBTORS (UNSECURED, CONSIDERED GOOD) Others (Includes unbilled revenue of Rs. 57,999,721/- (Previous year Rs. NIL)) SCHEDULE 6 CASH & BANK BALANCE Cash & Cheques-in-Hand Balances with Scheduled Bank 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 SCHEDULE 8 CURRENT LIABILITIES Sundry Creditors (Refer Note 2) Investor Education & Protection Fund Advances received against Sale Other liabilities 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/-) 8,121,578 8,121,578 90,373,592 1,278,797 1,244,611,038 1,336,263,427 16,212,613 3,686,229 19,898,842 54,110 14,426,983 14,481,093 67,616,112 67,616,112 1,256,666,886 1,256,666,886
As at 31.03.2009 Rupees
907,618,712 907,618,712
-
14,085 73,895 87,980
1,108,750 46,422 1,155,172
1,087,650 905,932,835 907,020,485
-
-
SCHEDULE 12 : NOTES TO ACCOUNT AND ACCOUNTING POLICIES 1) Accounting Policies a) General The ?nancial 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 speci?ed 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 Pro?t & 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 ?nance 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
170
Annual Report 2009–2010 SCHEDULES FORMING PART OF THE ACCOUNTS
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 suf?cient 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 Pro?t 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 con?rmed 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 de?ned 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 Pro?t / (Loss) for the period as per Pro?t & Loss Account (Rs.) Weighted average no. of equity shares outstanding Earnings Per Share (Basic /Diluted) (Rs.) 4. Current Year 14,544,122 203,120 71.60 Previous Year (31,971) 203,120 (0.16) 10. 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 Pro?le 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 Pro?t/(Loss) before Tax : 22,724 Pro?t/(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.
1
j)
2
k)
3
2.
3.
4
Nominal value of shares (Rs.) 10/10/Deferred Tax The Tax effect of signi?cant temporary differences that resulted in deferred tax liabilities are : Particulars Liabilities - Depreciation on Fixed Assets Deferred Tax Liabilities Amounts paid to Auditors Current Year (Rs.) 12,000 12,000 Current Year (Rs.) 1,59,935 55,150 40,388 255,473 Previous Year (Rs.) Previous Year (Rs.) 1,59,935 159,935
5
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010
Current Year Rupees Cash Flow from Operating Activities Pro?t / (Loss) before taxation Adjustment for: Depreciation Interest Paid Preliminary Expenses Operating Pro?t /(Loss) before working capital changes Adjustment for: Change in Inventory Increase in Sundry Debtors Change in Loans & Advances Change in Current Liabilities / Provisions Net Cash Flow from Operating Activities Cash Flow from Investing Activities Purchase of Fixed Assets Net 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 Notes : 1. The cash ?ow statement has been prepared under the 'Indirect Method' as set out in the Accounting Standard (AS) 3 on 'Cash Flow Statement', and presents cash ?ows by operating, investing and ?nancing activities. Figures for the previous year have been regrouped/ restated wherever necessary to conform to this year's classi?cation. (2,480,754) (2,480,754) 14,393,113 87,980 14,481,093 (134,160) (134,160) (1,907,960) 1,995,940 87,980 (349,048,174) (67,616,112) (18,790,092) 322,912,104 16,873,867 (133,429,976) (705,278) 45,012,567 (1,773,800) 359,455 106,330,838 1,726 129,416,141 30,245 87,348,887 1,726 87,348,887 22,724,122 (31,971) Previous Year Rupees
5.
6.
7.
2.
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 1. 2. 3. 4. 5. Expenses incurred by other company towards Construction work in progress and Revenue expenditure Advances Received Advances Repaid Outstanding payables Purchase of Fixed Assets GPL Amount Rs. 181,214,018 114,240,742 202,500,000 31,270,000 31,900,000 1,227,097,105 885,915,639 G&B Rs. 81,702 -
2.
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
8. 9.
Figures in italics are for previous year Previous year ?gures have been rearranged / regrouped wherever necessary to con?rm to current year’s classi?cation. Additional Information as required under Part IV of Schedule VI of the Companies Act, 1956 to the extent not applicable has not been given.
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 of?ce 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 Con?rm: (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 ?nancial year ended March 31, 2010 and of the pro?t of the Company for that year; (iii) that the Directors had taken proper and suf?cient 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
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REPORT OF THE AUDITORS TO THE MEMBERS OF GODREJ WATERSIDE PROPERTIES PRIVATE LIMITED
1. We have audited the attached Balance Sheet of GODREJ WATERSIDE PROPERTIES PRIVATE LIMITED, as at 31st March 2010, the Pro?t and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These ?nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these ?nancial 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 ?nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial 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 speci?ed 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, Pro?t 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 Pro?t 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 ?nanced 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 pro?ts/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 Pro?t and Loss Account, of the pro?t of the Company for the year ended on that date and iii) in the case of the Cash Flow Statement, of the cash ?ows 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 disquali?ed 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.
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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
172
Annual Report 2009–2010
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 ?xed assets. (b) As explained to us, the Company has a program for physical veri?cation of ?xed assets at periodical intervals. In our opinion, the period of veri?cation is reasonable having regard to the size of the Company. (c) There is no disposal of ?xed assets during the year. 2. (a) The management has conducted physical veri?cation of inventory at reasonable intervals. (b) In our opinion, the procedures of physical veri?cation 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 veri?cation. 3. (a) The Company has not granted any loans, secured or unsecured to companies, ?rms 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, ?rms 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, ?xed 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
ANNEXURE TO THE AUDITORS’ REPORT
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 ?nancial year and has not incurred any cash losses in the current and immediately preceding ?nancial 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 ?nancial 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 bene?t 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 ?nancial 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 ?ows 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
BALANCE SHEET AS AT 31ST MARCH, 2010
Schedule SOURCES OF FUNDS Shareholders’ Funds Share Capital Reserve & Surplus Loan Funds Secured Loans 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 Less : Current Liabilities & Provisions Current Liabilities Provisions 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 As at 31.03.2010 Rupees 10,000,000 16,875,800 2,167,300,000 2,194,175,800 4,218,878 2,065,890 2,152,988 30,000 2,371,895,669 353,254,319 40,233,572 139,307,911 2,904,691,471 711,233,052 1,465,607 712,698,659 2,191,992,812 2,194,175,800 As at 31.03.2009 Rupees 10,000,000 12,943,462 2,167,300,000 2,190,243,462 3,958,506 1,449,504 2,509,002 4,000 2,070,421,912 245,317,300 18,190,356 326,307,823 2,660,237,391 465,089,851 7,417,080 472,506,931 2,187,730,460 2,190,243,462
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED ON 31ST MARCH, 2010
Schedule For the year ended 31.03.2010 Rupees
1 2 3
For the year ended 31.03.2009 Rupees 592,449,300 3,169,314 595,618,614 566,538,934 3,169,314 691,460 570,399,708 25,218,906 (8,890,000) 23,000 16,351,906 (3,408,444) 12,943,462 12,943,462 16.35 0.55
INCOME Sales Other Income (Tax Deducted at Source Rs.361,270 /- [Previous year Rs. 718,167/-]) EXPENDITURE Cost of Sales Interest & Finance Charges Depreciation Pro?t for the Year Provision for Taxation for Current Tax for Deferred Tax Pro?t / (Loss) After Tax De?cit 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) Notes To Accounts & Accounting Policies The Schedules referred to above form an integral part of the Pro?t and Loss Account 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
11
870,207,675 3,662,561 873,870,236
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5 6 7 8 9 10
863,770,951 3,662,561 616,386 868,049,898 5,820,338 (1,914,000) 26,000 3,932,338 3,932,338 3,932,338 3.93 0.13
14 Signatures to Pro?t and Loss Account and Schedules 11 to 14
Milind S. Korde Naresh Nadkarni Directors
Milind S. Korde Naresh Nadkarni Directors
173
Godrej Waterside Properties Private Limited
SCHEDULES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED ON 31st MARCH, 2010
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 Pro?t & Loss Account Less : Utilised during the year Balance at the end of the year Pro?t & 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 4 : FIXED ASSETS
Particulars Gross Block As at 1st April Deduc2009 Additions tions Rs. Rs. Rs. Land (Refer Note 2) 356,380 Of?ce 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. Depreciation Upto 1st April 2009 Rs. Upto 31st March 2010 Rs. Net Block As at As at 31st 31st March March 2010 2009 Rs. Rs.
SCHEDULE 14 : NOTES TO ACCOUNTS AND ACCOUNTING POLICIES 1) Accounting Policies a) General The ?nancial 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 speci?ed 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 Pro?t & 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 Pro?t 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 suf?cient 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 con?rmed 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
As at 31.03.2010 Rupees
As at 31.03.2009 Rupees
10,000,000 10,000,000 10,000,000 10,000,000 12,943,462 3,932,338 16,875,800 16,875,800 290,000,000 1,877,300,000 2,167,300,000
10,000,000 10,000,000 10,000,000 10,000,000 12,943,462 12,943,462 12,943,462 290,000,000 1,877,300,000 2,167,300,000
For the Year 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
As at 31.03.2010 Rupees
As at 31.03.2009 Rupees
2,371,895,669 2,371,895,669 353,254,319 353,254,319 53,799 32,079,773 8,100,000 40,233,572
2,070,421,912 2,070,421,912 245,317,300 245,317,300 55,700 18,134,656 18,190,356
128,072,448 11,235,463 139,307,911 107,553,132 4,602,544 562,654,237 36,423,139 711,233,052 1,465,607 1,465,607 3,662,561 3,662,561 361,270 2,070,421,912 801,220,508 3,351,975 3,656,835 98,870,978 258,144,412 3,235,666,620 2,371,895,669 863,770,951 211,191,523 50,615,450 261,806,973 258,144,412 3,662,561
182,218,588 139,063,304 5,025,931 326,307,823 185,152,842 246,123,870 33,813,139 465,089,851 7,417,080 7,417,080 3,169,314 3,169,314 718,167 992,961,241 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 97,990,609 58,077,680 156,068,289 152,898,975 3,169,314
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174
Annual Report 2009–2010
3) 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 speci?c 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 Pro?t 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 de?ned 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: Current Year Previous Year Rs. Rs. Travelling Expenses 9,244 Other Expenditure 68,510,943 Total 68,520,187 Deferred Tax The Tax effect of signi?cant temporary differences that resulted in the deferred tax assets are : Particulars Assets - Depreciation on Fixed Assets Deferred Tax Asset Earnings per share Particulars Current Year (Rs.) 30,000 30,000 Current Year Rs. 3,932,339 1,000,000 30,000,000 Previous Year (Rs.) 4,000 4,000 Previous Year Rs. 16,351,906 1,000,000 30,000,000 Particulars 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 Pro?le 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 Pro?t/(Loss) before Tax 5,820 Pro?t/(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 Current Year Rupees Cash Flow from Operating Activities Pro?t for the Year Adjustment for: Depreciation Interest Paid Interest Income Operating Pro?t 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 5,820,338 616,386 261,806,973 (3,662,561) 264,581,136 Previous Year Rupees 25,218,906 691,460 156,068,289 (3,169,314) 178,809,341
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Pro?t / (Loss) for the Year as per Pro?t & 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 signi?cant 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 Future minimum lease payments under non-cancelable operating leases - Not later than 1 year Amounts paid to Auditors Particulars Current Year (Rs.) 4,18,192 Current Year (Rs.) 159,935 55,150 33,092 40,388 288,565 Previous Year (Rs.) NIL Previous Year (Rs.) 159,935 55,150 28,635 33,708 277,446
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11)
Audit Fees Audit under other Statutes Certi?cation 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 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
(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) (211,191,523) (211,191,523) 22,043,216 18,190,356 40,233,572 (860,216) 718,167 (142,049) 1,877,300,000 (80,942,500) 1,796,357,500 17,666,559 523,797 18,190,356
Sr. No
1. Expenses charged by other company 2. Interest on Debentures 3. Advances Received 4. Advances repaid/given 5. Outstanding payables 6. Debentures Outstanding
Notes : 1. The cash ?ow statement has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard (AS) 3 on ‘Cash Flow Statement’, and presents cash ?ows by operating, investing and ?nancing activities. 2. Figures for the previous year have been regrouped/ restated wherever necessary to conform to this year’s classi?cation. For and on behalf of Kalyaniwalla & Mistry Chartered Accountants Ermin K. Irani Partner Mumbai, Dated : May 14, 2010 Milind S. Korde Naresh Nadkarni Directors
Figures in italics are for previous year 12) Previous year ?gures have been regrouped / rearranged where ever necessary to con?rm to current year’s classi?cation. 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.
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 de?cit 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 pro?ts, 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 con?rm: (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 ?nancial year ended 31st March, 2010 and of the loss of the Company for that year; (iii) that the Directors had taken proper and suf?cient 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.
(iv) 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. 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
8.
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 Pro?t and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These ?nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these ?nancial 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 ?nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial 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 speci?ed 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) b) c) d) 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. 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. The Balance Sheet, Pro?t and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account. 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. 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 5. f) term contracts undertaken and/or ?nanced 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 pro?ts/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) ii) iii) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010; in the case of the Pro?t and Loss Account, of the loss of the Company for the year ended on that date and, in the case of the Cash Flow Statement, of the cash ?ows of the Company for the year ended on that date.
2.
3.
4.
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 disquali?ed 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
e)
176
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 ?xed assets. As explained to us, the Company has a program for physical veri?cation of ?xed assets at periodical intervals. In our opinion, the period of veri?cation is reasonable having regard to the size of the Company. (c) There is no disposal of ?xed assets during the year. (a) The management has conducted physical veri?cation of inventory at reasonable intervals. (b) In our opinion, the procedures of physical veri?cation 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 veri?cation. (a) The Company has not granted any loans, secured or unsecured to companies, ?rms 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, ?rms 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, ?xed 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) 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 ?nancial year are less than ?fty 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 ?nancial 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 ?nancial 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 bene?t 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 ?nancial 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.
2)
10) 11) 12) 13) 14) 15) 16) 17) 18) 19) 20) 21)
3)
4)
5)
6) 7) 8) 9)
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
BALANCE SHEET AS AT 31ST MARCH, 2010
Schedule As at 31.03.2010 Rupees As at 31.03.2009 Rupees
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010
Schedule For the year ended 31.03.2010 Rupees 37,849 For the Period 11.07.2008 to 31.03.2009 Rupees —
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 Net Current Assets Miscellaneous Expenditure (to the extent not written off or adjusted) Preliminary Expenditure Pro?t and 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 ERMIN K. IRANI Partner Mumbai, May 14, 2010
1
500,000 — 49,000 549,000
500,000 — — 500,000
INCOME Interest Income (Tax deducted at Source Rs.2,090/[Previous Year Nil]) EXPENDITURE Cost of Sales Administration Expenses Interest & Finance Charges Depreciation Preliminary Expenses written off Pro?t / (Defecit) for the Year Provision for Taxation For Current Tax For MAT Credit Entitlement For Deferred Tax Pro?t/ (Loss) After Tax De?cit Brought Forward (3,000) 3,000 (49,000) (29,879) (45,095) (74,974) — — — (45,095) — (45,095) (0.90) 7 8 9
2
1,425,010 17,008 1,408,002 — 265,201,213 45,817,082 279,637,849 590,656,144 591,603,880 591,603,880 (947,736)
— — — — — 500,000 — 500,000 60,575 60,575 439,425
— — — 17,008 1,720 19,121
— 43,375 — — 1,720 (45,095)
3 4 5
6
13,760 74,974 549,000 10 Signatures to the Balance Sheet and Schedules 1 to 6 and 10
15,480 45,095 500,000
Earning per share Basic in Rs. (Refer Note 3) Notes to Accounts & Accounting Policies 10
(0.60)
The Schedules referred to above form an integral part of the Pro?t & Loss Account. As per our Report of even date. For and on behalf of KALYANIWALLA & MISTRY Chartered Accountants
Signatures to the Pro?t & Loss Account and Schedules 7 and 10
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 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
500,000 500,000 500,000
500,000 500,000 500,000
— — —
27,575 15,800 43,375
500,000 SCHEDULE 2 FIXED ASSETS
Particulars Gross Block As at Additions Deduc1st tions April, 2009 Rs. Rs. Rs. Of?ce Equipment Furniture & Fixtures Computer Motor Vehicle TOTAL Previous Year — — — — — 358,017 58,213 299,015 709,765 — — — — — — Depreciation As at As at 31st 1st March, April, 2010 2009 Rs. Rs. 358,017 58,213 299,015 709,765 — — — — — — For the Year Rs. 1,774 376 8,313 6,545 — As at 31st March, 2010 Rs. 1,774 376 8,313 6,545 —
500,000
3,225,620 3,225,620 3,225,620 —
— — — —
Net Block As at As at 31st 31st March, March, 2010 2009 Rs. Rs. 356,243 57,837 290,702 703,220 — — — — — —
— 1,425,010
— 1,425,010
— 17,008
17,008 1,408,002
As at 31.03.2010 Rupees 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
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 For the Year ended 31.03.2010 Rupees
13,300 — 47,275 60,575 For the Period 11.07.2008 to 31.03.2009 Rupees
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
— 259,531,383 505,541 1,938,669 3,225,620 265,201,213 265,201,213 —
— — — — — — — —
SCHEDULE 10 NOTES TO ACCOUNTS AND ACCOUNTING POLICIES 1) Accounting Policies a. General The ?nancial 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 speci?ed 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 Pro?t & 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 suf?cient 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.
178
Annual Report 2009–2010
SCHEDULES FORMING PART OF THE ACCOUNTS
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 Pro?t 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 con?rmed 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 de?ned 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 Pro?t & Loss Account (Rs.) Weighted average no. of equity shares outstanding Basic/Diluted earnings per share (Rs.) Nominal value of shares (Rs.) 4) Current Year (Rs.) (29,879) 50,000 (0.60) 10/Previous Year (Rs.) (45,095) 50,000 (0.90) 10/i.
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 Pro?le
1. 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 592,153 592,153 500 — — — 49 1,408 — (948) 14 75 — 19 19 (30) (0.60) — N.A.
2.
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 Performance of Company (Amount in Rs. Thousands) Turnover Total Expenditure Pro?t/(Loss) before Tax Pro?t/(Loss) after Tax Earning per Share in Rs. Dividend Rate % Generic Names of three principal products/services of Company
2)
3)
4.
Deferred Tax The Tax effect of signi?cant temporary differences that resulted in the deferred tax liabilities are: Particulars Liabilities - Depreciation on Fixed Assets Deferred Tax Liabilities Current Year (Rs.) (49,000) (49,000) Previous Year (Rs.) — —
5.
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010
Current Period Rupees Cash Flow from Operating Activities Pro?t/(Loss) for the Year Adjustment for: Depreciation Interest Paid Preliminary Expenses Interest Received Operating Pro?t/(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 19,121 17,008 3,225,620 1,720 (37,849) 3,225,620 (265,201,213) (279,600,000) 588,317,685 — 46,742,092 2,090 46,740,002 (1,425,010) — 2,090 (1,422,920) 45,317,082 500,000 45,817,082 Previous Year Rupees (45,095) — — 1,720 — (43,375) — — 60,575 (17,200) — — — — 500,000 — 500,000 500,000 — 500,000
5)
Amounts paid to Auditors: Particulars Audit Fees Total Current Year (Rs.) 159,935 159,935 Previous Year (Rs.) 27,575 27,575
6)
7)
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 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
Notes : 1. The cash ?ow statement has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard (AS) 3 on ‘Cash Flow Statement’, and presents cash ?ows by operating, investing and ?nancing activities. 2. Figures for the previous year have been regrouped / restated wherever necessary to conform to this year's classi?cation.
8) 9)
Previous year ?gures have been regrouped/rearranged where ever necessary to con?rm to current year’s classi?cation. Additional Information as required under Part IV of Schedule VI of the Companies Act, 1956 to the extent not applicable has not been given.
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 signi?cant 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 pro?ts of 9.08%. Directors The following persons served as directors during the year: 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) 2010 1 2009 1 and of the pro?t 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 ?nancial 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 con?rms 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
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 ?nancial 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
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 Pro?t and Loss Account, the Balance Sheet, the Cash Flow Statement, the Statement of Total Recognised Gains and Losses and the related notes. The ?nancial 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 satis?ed 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 suf?cient 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 signi?cant 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 pro?t 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 ?nancial 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 speci?ed 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. – (Senior Statutory Auditor) for and on behalf of Keith Woods & Co.LLC Accountants and Statutory Auditors April 28, 2010 Heritage House Ramsey Road Peel Isle of Man IM5 1RH –
BALANCE SHEET AS AT 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 Pro?t and Loss Account Shareholders’ funds 3 4 2010 US $ 3,055,000 3,301,638 2,635,139 5,936,777 (15,000) 5,921,777 8,976,777 — 8,976,777 6 7 3,805,361 5,171,416 8,976,777 Rs. Lac 1,371.70 1,482.44 1,183.18 2,665.61 (6.74) 2,658.88 4,030.57 2009 US $ 3,055,000 3,225,756 2,651,558 5,877,314 (7,574) 5,869,740 8,924,740 Rs. Lac 1,549.50 1,636.10 1,344.87 2,980.97 (3.84) 2,977.13 4,526.63 (749.97) 3,776.65 1,930.08 1,846.58 3,776.65
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010
2010 Notes Turnover Cost of sales Gross pro?t Administrative expenses Operating pro?t Interest receivable Interest payable Pro?t on ordinary activities before taxation Tax on pro?t on ordinary activities Pro?t for the ?nancial year 2 US $ 120,267,513 Rs. Lac 54,000.11 2009 US $ 115,504,010 Rs. Lac 58,583.63 (57,731.15) 852.48 (140.64) 711.85 16.01 (28.11) 699.74 — 699.74
(118,446,906) (53,182.66) (113,823,249) 1,820,607 (283,324) 1,537,283 7,000 (13,592) 1,530,691 — 1,530,691 817.45 (127.21) 690.24 3.14 (6.10) 687.28 — 687.28 1,680,761 (277,280) 1,403,481 31,561 (55,431) 1,379,611 — 1,379,611
5
— (1,478,655) 4,030.57 7,446,085 1,708.61 2,321.97 4,030.57 3,805,361 3,640,724 7,446,085
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 Approved by the board on April 28, 2010
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)
180
Annual Report 2009–2010 STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES FOR THE YEAR ENDED MARCH 31, 2010
Notes Pro?t for the ?nancial year Total recognised gains and losses related to the year 2010 US $ Rs. Lac 1,530,691 687.28 1,530,691 687.28 2009 US $ 1,379,611 1,379,611 Rs. Lac 699.74 699.74 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. 4. Debtors Trade debtors Amounts owed by group undertakings and undertakings in which the company has a participating interest Other debtors Prepayments and accrued income 2010 US $ Rs. Lac (106,340) (47.75) 2009 US $ Rs. Lac 3,322,526 1,685.19
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)
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010
2010 US $ Cash generated from operations Operating pro?t Reconciliation to cash generated from operations: Increase in debtors Increase in creditors Cash from other sources Interest received 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 Consisting of: Cash at bank and in hand 2,635,139 1,183.18 2,651,558 1,344.87 (13,592) (13,592) (1,755,947) — (1,755,947) (6.10) (6.10) (788.42) — (788.42) 19,167 19,167 388,380 — 388,380 9.72 9.72 187.26 — 187.26 7,000 7,000 3.14 3.14 (23,870) (23,870) (12.11) (12.11) 1,537,283 690.24 1,403,481 711.85 Rs. Lac 2009 US $ Rs. Lac
108,203 3,299,775 — 3,301,638 2010
48.58 1,481.60 — 1,482
108,764 (210,946) 5,412 3,225,756 2009
55.17 (106.99) 2.74 1,636.10
(3,301,638) 15,000 (1,749,355)
(1,482.44) 6.74 (785.46)
(1,017,763) 7,365 393,083
(516.21) 3.74 199.37 5.
Creditors: amounts falling due within one year Trade creditors Accruals and deferred income Other creditors Share capital Allotted, called up and fully paid: Ordinary shares of £1 each 2010 No. 2009 No.
US $ — — 15,000 15,000
Rs. Lac — — —
US $ (2,425) 9,999 — 7,574 2009 US $
Rs. Lac (1.23) 5.07 — 3.84 Rs. Lac
6.
2010 US $ Rs. Lac
2,355,000 2,355,000 3,805,361 2010 US $ 3,640,725 1,530,691 5,171,416
1,708.61 Rs. Lac 1,634.69 687.28 2,321.97
3,805,361 2009 US $ 2,261,113 1,379,612 3,640,725
1,930.08 Rs. Lac 1,146.84 699.74 1,846.58
7.
Pro?t and Loss Account At April 1, 2009 Pro?t for the year At March 31, 2010
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. Accounting policies 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. 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 Pro?t and Loss Account. 2. Interest payable Interest payable 3. Investments Other investments US $ Cost At April 1, 2009 At March 31, 2010 Other investments Unlisted investments 2010 US $ Rs. Lac 3,055,000 1,371.70 3,055,000 3,055,000 2009 US $ 3,055,000 Rs. Lac 2010 US $ 13,592 Rs. Lac 6.10 2009 US $ 55,431 Rs. Lac 28.11
8.
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 ?nancial statements of Godrej Industries Limited are available from : The Secretary, Godrej Industries Limited, Eastern Express Highway, Vikhroli, Mumbai 400079, India.
Rs. Lac 1,549.50
181
Godrej International Limited
NOTES
182
Godrej Industries Limited
Registered Of?ce : 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 Of?ce : 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 ?t. Signed this ................. day of ......................... 2010. Af?x Re 1/Revenue Stamp Signature ........................................................... Note : Proxy Forms must reach the Company’s Registered Of?ce not less than 48 hours before the Meeting.
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