Report on Corporate Governance 4, Company’s Philosophy on Corporate Governance: [At Gocre), Corporate Governance has been practiood ‘over the past 112 years. The Company®: phiosonhy cn Comporate Goveinencs envisages attsementof the highast levels of ransparency, accountability and equity in all facets of its operations ‘ead mall ts interactions. with its stakeholders including sharehickiors, employaes, landers and the Government ‘Tre Gomany is commited to achieve. ancl maintain the highest standards of Corporaie Gaverance. The ‘Company boleves that all ts actions must serve the underbing goal of enhancing overs stakeholder valve ver a sustained period of time. ‘The Company continues to erioy a.comorate governance rating of CGR2+ (pronounced as CGA two plus) and Stokeholder Value Onestion aneé Governance Rating of SVG! (prenaunoed as SVG 1) assigned by ICRA. “The two ratings wvaluale whether a Garmeany is being ran on the principles of Corporate Govemance and whathar the practices followed by the Company lead to value: creation for all its shareholders. ‘The COR? rating is on a rating snale of OGY to CGRG where CGR? denotes the highest rating. The OGR2+ caling eres that in ORAS currant coinion, the rated Company has adopted and tolows such practices, conventions and codas as would provide its Ananci stexahilcees a high level of assurance on the quality of corporate governance, The SVGI rating 1s cn a ratng scale of SVG1 10 SVGS where SVG1 denotes the highest rating, The SVGI rating implies. that In ORAS curent opinion, the Company belongs to the Highast Category on the ‘cornposita parameters of stakeholder value creation and managetnenit as ales corporate gavernance practions. eve2, Board of Directo’ 8) Composition of the- Board: 4) Number of Board Meetings: As of March 31, 2010, the Gourd of Directors af Gecre| Consumer Products Limited (GCRL) Consisted of twelve Directors, three of whem are \Whola-time Executive Directors. The remaining nine re Non-Executive Directors, with six being Indopendent Directors, Mr Hoshedar Press, Vico Chairman, is retiring tare the Company on Apri 90, 2010 after a kang snd lustrious career with the Godrej group, ‘The composition of the Board of Ometars as on ‘March 31, 2010 is givanin Table 1, ‘The Bosrtof Directors of GCPL hold elght meetings ‘uring the year on Ape 30, 2008, way 27, 2009, uly 25, 2008, Ocinber 20, 2009, November 25, 2008, December 15, 2008. January 23, 2010 and March 26, 2010. The masimum gap between ary two board mestings curing the year Was 86 days.¢) Ditectors' Attendance Record and Directorships Herd: Table +: Datalls about GCPL's Board of Directors, MA. Mahaeaan Ee 8 sve tm 6 2 e | e 5 76) ‘ 3 8 o Yes an 2 . = 4 a a & yes wih 1 @ Doss rotincude Deetorships in Pinas Correa, Section 25 comparies and Forign Gomearics Figures in racksts danato Dreciorhips in Hetad companies. @a Doesnerincucs Chaemanshyo | Merroershipn Bos Gommtees otter han the Audt Commies, tre Shareholder Grsiancs Commétes end Chakmanahip / Merberchn n Board Goreitiees i cornpanias ther ther pub bites comparses mgisteres hninda,Aocording to the Gauss 40 of the isting agieernent, “dependent director” shall mean a nor-angouthey ‘Grector af the company who: 8) apart from recaiving drectors remuneration, does ot have any material pecuniary relationships or ‘wansactions eth the Gampeny, its promoters, Bs clrectors, its senior management or its boicing ‘company, its subsiotarias and associates which may attect indepencionce ofthe Director, } is not related 10 promoters or persons secupyiag ‘hanagement positions at the board level, a at ano level below the board, ©) hes not been an executhe of the Company in the immedtately preceding three nancial years; og nota partner, or an executive, oF was not partner ‘orn exscutive chit the preceding three years, ct any of the follwing: 4) the statutory aut firm, oF the internal auc firm that is associsted with the Company, and. TW thelegal frmis}andeanguting fimis) that have ‘a material association wth the cermpary. @) 8 not a material supper, sewvice provider or customer, oF a lessor, or lessee of the Company, which may aifect indapendenoe of the clector, and 4} not @ substantal shareholder of the Company Le. onning two percent or mare of the black of voting shares. 4) isnotiees man 21 years ctaga, None of the Olecters is a member of more than 10 boarc-iovel comminises, ers Chatman of mare than five sich committees, a3 prescribed undar Cage 49 of the listing agreement, )_Re-appaintment of Directors Liabie to Retire by Rotation: ‘According ta the ticks of Assocation of CCPL, at every nrust goneral meeting ofthe Comparwy ane:third othe Drractors are table ta retire by tation Thus Ms. Rams Bljapurkar Mr. Bharat Doshi ancl Mi Nadir Godraj shall retie at the ensuing Annual General Meeting of the Company and boing eligible, ter themselves for re-appointment. Tha abbreviotod raumas of the Directors seeking re-appciniment are as toons,@) Information supplied to the Board: Among others, this includes: |) Arrust operating plans and budgets and any upetates. i) Capital agets and ary undates. 1) Quarterly results for the Company and its operating divisions or business Segments. My Minutes of mwctings of audit committee ond ‘thee committaas of the board, formation on recruitment and remuneration Lal senior officers just bolow the board level, fpelucing appointment or removal ot Chist Financal Officer and the Company Secratay. Show cause, demand, prasecution notices and penalty tices, which are materly iemportart vi) Fetal or serious socidents, dlangerous ‘occurences, any material eftlyentor pobution problems. Wi) Any mated detaut in fhanciel obiigalions to and by the Company, or substantia non payment for goods sald by the Campa. i) Ary fssun, sich invokes poste pubis or product labity claims of substantial nature, Irekding any judgement or order which, may ‘uve paced strictures on the conduct of the Campary oF taken an adverse view regarding another enterpise that can have nagative implications on the company, 2) Disials of ary Joint venture or collaboration agreement. od) Transactions that inwolve substantial payment: towards goodwill, brand equity, oF intellectual property 18) Signiicantiabour problems a shar proposed solitons, sy sigrifcant dovelcoment in Human ResourceancistrilRations est hs ining of wage aqroertent, erglementatin of ‘Yuntary Retest Scheme. et. ‘xij Salo of pratorial nature, of investments, saiosideries, assets, wich natn tho nocal “The Committee pastions daclosed abave comprise of arte ES ‘ohly those committees as are mandatory under Clause {89 of the listing agreement.22v) Quarterly detalsiot foreign exchange exposures ‘and the steps takan by meragement to lit the risks of adverse exchange rata mevernent, materia, 2) Nan-complianos of ariy requir, statutory ov fating requirements and shareholders: service ‘such as non-payment of dhicend, day in share transfer etc, The Board of GCPL is mguarly presented with all Information under these heads, «whenever sop These are submitted either as cart of the agenda panes val in acvanoa of the Board meetings, ar are tabled in the course of tne Board meetings, 3. Committees of the Board a) Audit Committee: WY Constitution: ‘The Audit Commities. constituted ty the Bosc of Directors at its meeting held on Apt 28, 2001, in Accordance with Section 2924 of the Companies Act, 1956 and Clguse 49 of the listing agreement wih the stock exchanges, was last reconstituted on May 4, 2009, The composition of the Aucit Commnittes is as uncer: (Me Bharat Dosti idepindant Beater Charperson ‘The Company Secretary of the Company acts as the: ‘Secretary to the Cornmitien. Me. Bhorat Doshi, the Chairmen ofthe Audit Commrttes, is knoelecansble inall areas of fnancs, accounts, carrpany lav and has vast experience in corporate affairs, Al the members of thé committee ore eminent professionals snd draw upan the experience and expertise across a wide: ‘spectrum of functional areas suchas finance, information systems, marketing and comovste strategy. Minutes of ‘each Audit Commftes mostng are placed beta and siscussed inthe fal Bara. ii) Tecms of Reference: ‘The terms of reference of the Ault Committes includes tne matiets specified in Section 292A of tha Companios ‘Act, 1956, a8 well os Clause 49 of the listing agreement (as amended) with the stock exchanges such as; 1. Oversight of the Companys frencial reporting [process.and the disciosura ofits fnencial information 1O.ansure that the financial statements are corract, suffioent and credible, 2. Recommending to the Boad, the appointment, re-appointment and it required, the rpdacemont cr remowal of the statutory aucttor and the fiation ob au fees, 8. Approval of payment to statutory autos for any ‘othe! Services rendered by the statutory aucttors 4 Reviewing, wih the management, the annual franca stztements below subrission to the board for approves with particule reference to: a) Matters required tbe includledin the Director's Responsibility Statement to be iickuded in the Board's report in tame: of Clause AA) of Seotion 217 of the Companies Act, 1956, BE Changes, if any, in accounting policies ant practices and reasons for the same ©} Major accounting antes Invelving estimates based on the exercise of Axdgement by management d) Significant adjustments mada in the francial slaternents arising ext of aut indinas. 9) Comptionce with listing and other Jagat fequirerents relating to francial statements, 4) Disclosure cf any reotec party transactions: 9} Qualifications in the drat aud report 5. Hevening. with the management, the quarterly ‘nano staternents etor® surmission to the boar! {or approval 6. Reviewng, vith the management, the nertormanoe of statutory and internal auchors, an adequacy at the internal contro! systerns, 7. Reviewing the adequacy of the intemal auc function including the stricture of the intemal auctt department, stating. and seniority of the offi heading the department, ‘eparting structure coverage and trequency of internal aut,8 Bisoussion with internal aueitors any signiicant Findings ancl tofows ug there on. 9. Reviewing the fringe of any internal investigations by the intemal auditors into matters where thore is suspected fraud or inequlaity ora falure of Inter) control systems of 2 material nature and reporting ‘he matter to the Borel 10, Discussion with stalulory auditors before the sudit ‘cornmenoes, about the nature andi scope of aust, 98 Well 29 post-aucit ciscussian ta ascertain any area of conparn, 11, To look into the reasons for substantial defaults in the payment to the depositors, debenture holders. shareholders (n case of non-payment of declared cdviends) and creditors. 12, To review the functioning of the Whiste Blower ‘machanisen. i) Mestings and Attendance During the year: The Auch Committee met four imes during the year on ‘Asvil 90, 2008, July 25, 2000, Octebar 29, 2009 ang January 23, 2010. The allendance at the Audit Committes: meotings was as under: ‘Me Bae Belachenaran F Siwy De Omar Gossears — © Stora by 7 teecorenren, a Arman Ma “4 | Me. 0 siivskurmar(appoirtoa 7S a in the commits wth emact from tay 1, 2003), 6) Human Resources & Campensation Committee: Constitutions Sating up of a remuneration committes for determining the Company’ ely on remuneration packages Jor Executive Directors conettutes a non-mandatory nrovicion of Clause 48 of the tina anreement with stock exchanges The Company has alsa set up a Employes stock option scheme for the benefit of the employees of the Company anc of the subsidiaries of the Company. The SEB! (Employees Steck Option Schama and Employes Stock Purchase Schema) Guidelines requres stock ‘option schemas to faa administered and supendsed by the campeneation committes consisting maqorty of Independent Dirocters. GOP hai set up two separate committees vie Huma Fesourees Commitioe which was Set up In Apr 2001 in fre with the nan mandatory racommencstion of the lieing agreement) sed Compensation Coretten which was set Up on January 20, 2007 in pursuanoe ofthe SEE ESOP gudsines for administration of Employee stock ception pls) The above separate corimittess wera merped into one committee namely Human Resource & Compensation Committee with etlect Irom May 1. 2008) The erstnbile Human Rasouree Committes which wins in existence tif Apri 90, 2009 enrwisted of the following Independent Directors viz. Ms, Rams Bfapurkar as Chairperson, Me, Bila Balachandran, Mr, Bharat Doshi Dr. Omkar Goswarni and Mr Aman Mehta. The erstwhile Compensation Committee: which was if exstonoe til April 30, 2008 consisted: ot the fotoweng Indenendent Dinectors vie. Mr. Baia Balachandran 29. Chakman, Ms. Rama Biapurcar, Mr Bharat Dosty Dr Omkse Gogeamiand Me. Aman Matta Me Rama Bijgpurkar was eppainted as Chairperson of the merged committee viz. Human Resouces & Compensation Gommitiee with affect tram May 1, 2008, Mc. D. Stivshurnay who jined the Board as any Independant Drector with affact from April 30, 2009 was ‘isq inducted into the Humian Resouroe & Compensation Committas vat effect trom May 1, 2009, ‘The composition of the merged Human Resources & Campaneation Cornmittee is a under: Commits war afct from May 1, 2009)The Company Secratary ot the Company acis as the ‘Secretary to the Committee. 4) Brlof Description of Terms of Reference: ‘The following are terns of referance of the Human Fissources & Compensation Comittee: 1. Review of human resource slices and practioas Ot the Company and in particle. poles regarding fomuneration of wholo-time Directors and. Sarvcr Managers. Mprinciple approval of Compénsation Philosophy, FReviow of senior management compensation [induction of new people, ation, ate. 7 = pop To formuiste stated terms and concttions of Empioyae Stock Option Pian (ESCP)incucing - 1 The quarium of Employee Stock Options to be granted undor the GCPL ESOP Scheme per Employee and in aggregate 1. The elciity citer The concitions under which the Emptoyoe Stock Options vested in Emgloyees may ‘spe in case of tecmiation of employment for misconduct NN. The exercise period vithin wich the empioyoe Should exercise the Options and the Options thot would lapse on tall to exercise the same vithin the exercise peri. Vv. The Specitiod time pare within which the Smipioyee shall exercise the vested options in {this event of termination oF resignation of an employes VW The procedure for making afar and reasonabie ‘ddustmant to the number of options and! te the exersce price in case of corporate aetion ‘such as rights issues, bonus issues, merger, sale of dvion and cihars, in this regaet the folowing shal be tahon into consideration by the Compertzation Commitee: tthe number and the price of the GOAL ESCP chal be aavstedin a manner such that the total valve of the GGPL ESOP romaine the same afler the corporate action; 8) for this purpose, global best practees in this rea inctuding the procedures folowed by the derivative markets in India £20 abroad shel be consid. ©) the Vesting Period and the le of the Employee Stock Options shal be lett ‘unaltered as far as possible to protect tha ‘ights of the Option Grantee: vi Tho grant, vesting and exarcise of Empioyee Stock ‘Sptions in case of employees who are on long eave. Mil. The srocedura for eashiess exercise of Options, i requred, % Frame suitable policies and systems to ensure that thera is: violation of fa) Securities and Exchange Board of India (insider Tracing) Reguistions, 1992: % Fiking the exercise price: 3. -Roprove forma, writings andlor agreements for use in pursuance ol the Employee Stock Option Pan. xi) Ta forma Trust and appoint Trustees. Flemuneration Policy: GGPL has adopted EVA as a tool for diving performance, and fas Inked impeoverents in EVA to Performance Lied Variable Remuneration (PLVR) for Whote-Time rectors, Manogers and Otfonrs of the Campany. fi) Meetings and Attendance aluring the Year: During the year ended March 31, 2010, the erstwhile Human Rescurce Gommittes which was in existence tit Apr 30, 2008, met ance on Apri 30, 2000. Al the members ofthat committee were present in the meoting, The eretwtiio Compensation Garimities which was i {existence til Apdl 30, 2009 also met ance on Ape 30, 2008. Af the members of that eemmittes ware present in hme meeting The merged Human Resowoe & Compensation Commitias whieh vas formed an May 1, 2000 met 89 October 20, 2008 and December 15, 2009 The ‘Committee also passed five tasolutions in cicusatin. The attendance record of the Human Resources & (Compensation Gommitioe is 08 under:38 Me. Bharat Desks 2 2 WW) Remuneration of Directors: Sitting tees, salary, perquisites aid commission “The datais of the remuneration package af Directors and their rationstins with each other are as under: 1. inthe cane of Mk Adi Goce, salary inokides basic salary and leave travel assistance. The meoetary value ol penquisiles ineluds accommodation, ferishing, chi f2e6, sleeticty and telephone ‘xponsee, rimbusement of medical / hoepasation expenses incuree for sal and fri, medical surance promi pay the Carraory land Company/s coniributon to prowdent fund 2 inthe case of Mr, Hoshedar Press and Mr Dalip Sehgn, salary includes basic sale, Mouse rent ahowance, education alonance, medical remburcoment, supplarienry alonance, feaee ncashreni and s9ve trav assistance The monetary valua of perqustas mcudes expenses ‘Di Orkar Goswart (Mr. Stresaurner | appointed inthe ve Arvan M, committee with afisct from May 1, 2003) v fins. lac) 1005 NA 1180 NA 10 NA 1125 NA + 38017 via s0017 Na were 6 TST 0.00 oagzePIBOR 161418 on car, accommedalicn, furishing, food vouchers, telephone reimbursement, petrol reimbursement, ‘anc Company'e contribution to provicent fund. 3. The Performance Liked Variable Remuneration to Mc. Adi Gadra), Mr. Heshedar Press and Mr Dalio ‘Sehgal is the amount payable for the francial yecr 2009-10. The samo is based on the Economic VME ‘eked (EVAN in the business and other relevant factors, 4. The service contract of Mi: Adi Gods is for a periog ‘of tvee yeass beginning fom Acn 1, 2007. Pursuant 1 the reackaion passed by the shareholders in the: AArrual General Meeting held on ouiy 25, 2008, ‘ie. Aci Godre has been reappointed as Chairman for & period of three years rom Apri, 2080.The service contract of Mc Hochedar Press is for a Dpetiod of three years and ons month beainning from Apa 1, 2007, . Hosheder Press is retin fron {he servos of the Campany at the close of working hours on April 90, 2010 ‘The sence contract of Mr Dalp Sehgal ls for period of three yesre begining from Api 1, 2000. ‘Tha contracts wth all the above dirctors are torrinabie vith a notice period of tes marth by. either sie. 5. The Non-Executive Olectors are eligible tor a ‘Commission cn Profits at the rate of 15 of the net profits, or Rs.10 lec for each drector. whichover is Foe, ‘The Compary Secretary of the Gompany acts as the Sacretary to the Cemsrittos. Tors of Reference: © Vide special rascition passod on Merch 14, 2007, the shorehollee hove pance to tig Meters of eerance of the Nemsnaton Comente ae Company for the sating up of an Employes Stock Option Plan (ESOP) for the elgible employoon ? Directors of the Cargany and of tne Gompars/s Slbsidisies, In accordance vith thé GOPL ESOP: ‘and pursuant to thes approval of shareholders, the Comperty has setup an indopenddent inust| viz. Gods) Consumer Products Lid Employee Stock Gption rust (GOPL ESOP Tust) The Company or Its subsidiaries provides loan to the GCPL ESGR shares of the Company from the cacondary market. Against the shares se acquired, options se grantad Ideetity ard nominate for the Boards sogecral, suitable candidates to fll Boerd vacancies ag and when thay sree 2 Drawing up selection exiteia and appointment brocecures for Directors, 9: Periodically rovew the structure, size andi Somposition finclucing ths skis, knowledge 2d wwerience) of the Based and make ‘recommendations to the Board with regord to any changes, tothe amooyeesot the Company or the employes — 4 Of the raspreting subakry company. Mi Op See Reet Samal, Meragra Director has bat ranted i) sMeetings and Attendance During tho Year 2,00,000 options an June 18, 2008 and! 1,00,000 ‘options on August 13, 2009, The wecting dates for these Options am three yoars from the rspacthm date of grant af options and the sare shall be SxerGisable within 2 years orn the respective chix Of vesting, Tha exercise price vail ba the market price on the day prior to tha date of grant of options Plus interes! at @ rate not less than the bank rata, 2) Nomination Cormmittee: Constitution: AS & part of its Corporste Governante inilatives, the Board of Directors cf GCPL at ts meeting held on October 27, 2004, constituted & Nomination Cornmting although ihe same is not required under Cause 49 of tho sting ogiement. The current constitution of the ‘Committes is a& under: During the year ended March 31, 2010, the Gonwettes Was not reeadrad ta hold any mesting, ) Shareholders’ Committee: @ Constitution: ‘The Shareholders’ Committee constituted ty the Board of Dikectors at its meeting hald on Api 28, 2001 was last Feconstituted on October 30, 209%. The constitution at the Committee ts curently ae under: ‘Bidependért —Chosparcon =" ———— 3 ar = f Se = easeccen a [Meneerercran —— REREESg@Q6 1) Mernber : Be (apposed wt i (Mr Bharat Dosh ea Member Crete nia ae * [fenton oe‘The Company Secretary of the Company acts as the Seconteey to the Comrnitiee, UW) Torms of Reference: Among other functions, this Gommittes looks into redressing ef dhwrehcidar complaints like transfer of shares, non-receipt of balance sheet and non-recolot of ocired dividends, as roqulredt in clause 4a the Listing Agroement fil) Meetings and Attendance during the Yoar: Baring the year the Committee met on April 2, 2009, od 25, 2000, ly 9, 2009, July 23, 2009, August 20. 2008, September 10, 2008, Ociober 8, 2008, Neverber '9, 2008, November 28, 2008, December 24, 2009, ianusey 14, 2010, January 28, 2010. February 16, 2010. March 2, 2010 and March 22, 2010. ivr ® Ganesh, Exaoutive Vos President (Finance & Commercial) & Company Secretary is the Compliance ‘Officer "Number of shareholders complaints/quentes rensived 80 oF, number not solved to the satistaction of shareholders, number of pending shave trsnsters are given in the tate 2 WonRoonbt et swe cogeatir GB 08 teelevonturae 3. Non-seceotcfrefunderdet 1 is ‘Ske complains for nor-recent of laden pending a= cn March 31, 2010 has since been resolved. ‘There xe nc pening share tancters.as on March 31.2010. Onthe Company request, Te Bombay Stock Exchange ited andthe National Siock Exchange! India Limite have confirmed that there were io pescing omploints rogetered againat the Company as on March 31, 2010. General Body Meetings ‘The dotats of last three Annual General Meetings of GOPL ae as folFebnuary 1, 1 Te arrounoe thw recut of porta bet in respect of esciaions assed for acausion | zo » of balance 51% stake n Goda Sera Loe Lt, titi of rights sae proces for 2.00pm, 7 ‘uncing the aequéiton of uelrce 51% stake in Goorei Sava Lee Lid. ire in c ‘Auttorsed Geotal Aberaton in Coptal Ouse afta america of Assocation, - ‘Aeration n Aricies of Ascoetation and Further istun of secufes Uproar ol \ a | F.2000 cro, Creston of Mortgage cn the Company's assets. Roneuntg fh eunese of pal un cal and ions. 5. Postal Ballot: the Senuinizer for concucting the pastal bafot process in fair and ansaerent manner subsntied tie mport to the: (Chairman, The results wert armounced by the Charman on February 10, 2010. The détails of the rsolstions and the voting pattem are as below TBS Acorsionciearcnsis cae GodSus 87 aati 855000 oct | Ries ineliontienetanesoee sor oe irs Comer na 2 BRE ein t ornima moma innga al SEAT GN Gala we pepeteto sas oe Sn 3 Oriinary Inotase in vse autnersed capil rom F.S6.7) BUF 2eR.417,148 ORT ROD oe efor hide ria 549,100,000 ecu shares | of toma wie F.t each snd 2O.000000 Uroltsed eres of fa, each to Pe? toe Shc 410,000,000 cas saves trom ade Fa. each sha 70,000000 ncaa Bras of Re. Aloraon nthe canta tiiusocfihohlerorandun 2807 — 203.411, 144 of Associaton consequent t0 the nerease ft utherand carta steed above - Soecil!) Ateraion in te Arie 3 of the Anicies of 27 —269,4)),144 soon consecuent tothe moreaoe sipotodcopiaied Mates we = 6 PBR Farner icsum oF copeal uncer Secton 8} of 2607 ZERIT 8026 1070 008 » the Companies Act, 1856 upto an amount of e-soon roe 7 ERE] Centon ctmergoge ana/orchaneon atorery 286? BSAati.tke Bice mar Obs | © atthe Comeanys maveale rrnevebia anor iiangbe soos WDidinnny Gorrow in excess of paid up capil and fee 2057 208411,144 81.00 © sere puskent 1p the provsons of Section atte Comeanie Ac,1058 Note: At mesons ves passed wt the ele macy‘The Board of Directors iv ts meeting held on March 26, 2010, approved the folovring proposals subject to the ‘approval of sharehwakders by means of a postal ballot. ‘Uitsatn of rigs issue proceeds. tor ‘unang he sequen cf Ture, Niger! { i ‘The Company has camialeted the patch of the postal bale! forms. alongwith postage prepaid envelope on Ape 16, 2019, ‘Mr Kalldes Varipe, Practising Compary Secretany or tating him Mr Bharat Shemioni, Practising Chartered ‘Accountant, has been appoinied as the Sonutizer for ‘conducting the Pastal Balot in 0 foi ond transparent manner. The last daie for turn of the pastel bakit form to the Scrutinizer is Friday, May 21, 2010, on or befor the clase of the working hours 405.90 p.m), The Charman or the Manage Director cr any other Director ofthe Company wil announce th resis of the Postal Bit cr Tuned, May 25, 2010 at 11.00 am. at the Company's Reistered Office viz. Frcishanagar, Eastem Express Highway, Vikhno(E), Mumbai 00 079. 6. Disclosures: a) Details of Shares hold by the ‘Dividend paid to thenn: cs 4.905 on719 14,083,139 * snetucas 10,28,724 shares held on behall of miner son. 1b) Materiaily significant related party transaction that may have potential conflict with theinterests of the Company at tarye: During 2009-10, there were no materialy significant rolled parly tansactons Le. transactions of the ‘Company of material nature, with ts promoters, the: raciors oF the management, thelr subsidianes or Folatves etc. that may have potential confict with the interests of the Company at large. ©) Particulars of Loans | Advances and investments: The shareholders of the Company vide speciat regolutton passed on March 14, 2007 approved the setting up of Gore} Consumer Products Lid Employee Stock Option Plan (GCPL ESOP, to be administered by a trust viz. Gocke| Conauime: Products LidSiock Option Trust (CPL. ESOP Trust), Pursuant to the approvals recaived m the above meeting ard! i the mesting dated Apa 24, 2008, the Company can grant Loans to the GCPL ESOP “Trust, to enable the trust to aoquire a masimum of 4,500,000 equity shares tor allotting « maximum ot 4,500,000 stock options convertible info 4,500,000 ‘nity shares o!fapa value P.1 ech tothe efile ‘exroloyoes of the Campany, The Company has granted a foan amounting 40 Fis.4430.64 lac (being the maximum amount ct fan outstanding duting te year) ka the Goora| ‘Consumer Products Limits ESOP Trust, 9 ust se up for adrrinistering the Empioyee Stock Option ion of the Company sot up for the employees / rectorsof the Compsry and/or ofthe Gomparw’ ubsidiares and the balance cutsiancing a8. at the yeor end is Fs.6221 fac including interest ‘sutstanding) othe GOPL ESOP Trust. ‘The Trust shall repay the Loan commencing ftom the date on which the frst employee has exercised fis option under the Employee Stock Option plan or al the ond cf fue (5) years trom tne date of grant of the loan, whichever is war. The interaet rae shal rot be less than the bank rate prevaling fom time to tena. The Curent interast rate 6 @ 19.00% pa ‘The trust has used the loan for acquiring 3,108,000. equily shares of tha Company ti March 31, 2010 against which options have been granted 1a ligible employees of the Company. As on. Macch 31, 2070, 2,834,000 ontions are osAstaring The ootians granted shal yest in the ebgibls employees witin such period as may be prescribed by the Cermponeation Commates, which period‘shall not be leas than one year and may extand un {0 thaoe years fiom the dale of grant of the option. Vesting may secur in tranches stibject to the teams and conditions ot vesting. The option is exercisable within tro years after vesting, The Company has fat given any loans or advances in the nature of loans to-subsidaries or associates cor loans and odvances 9 the nature of loans where there is no repayment séhadula, or repayment beyord seven yoars, or no Inturest oF interost is ‘Payala below the imit stipulated under séiction S728 ofthe Companies Act, 1956, ‘There are no loans and advances in ths nature of foans to finns’comparias in which Diectors are imevestes Whistle Blower Pony: With.a view to establish 2 machanism for protecting employees reporting unethical bebavious, auds or \Wolation of the Company's Code of Conduct, the Board of Directors has: adopted 4 Whistle Blower (9 Details of Non-compliance: (©) Renwreration of cers a (i) Paley [a nonmendatory requiement as por ‘There: has not been any nan-cenpkince by: the ‘Clause 49 to the sting agreement). During thes year Compary and no penaies oF sinciees wre 2009-10, no person has besn denied access to the moveed on the Company by the Stock Exchanges, ‘Aucit Commies, oF SEB, or ary statutory authodty. an any matter ©) Details of Compliance with Mandatory refoted to capital markets, Requirements: eo — (GCPL has sont the Crainmian’s statement and unaudited financial resuts tor the hall-year ended Septemiber 30, 2008, to all the shareholders. Moreover GEPL has its own west Boor of Droctors 8 Compein of Sas = ‘ za! ‘elaling to the Company vd its porforrance, ©) Nenana iecion’ TEM | | Gusimly resutn pron weacee and Deke compensation & undales/comorate preseriations are posted on the Saces =—_ ‘seb-site, The quartary, h-yeary and anrusl reas of the Companys performance ate genta, published 1h leading Enoish dalies euch o¢ The Ecorame Times, Bushes Stand, and Businees Line and also in the Marathi newspaper Msharaghta Times, The Chairman holds conierence calismestings with fisancial analysts (Gh Oe prowions as 16 ‘ea ves ) Guaided & neepencere | ULAGAIA) Yeo once a quarter ond their transcripts are posted on the eo Board and Comeniteas Aust Commitee \wobsita soon theraatter. (8) Moser of Aude +0) Pursuant to Ciauoe 91 of he isting agreement wich was Tonite a ip @xistence fil March 31, 2010, the Company had fled {Pers of Aucit Cornmittew if) ‘Quarterly fesults and the annual report an the Electronic # Connie ABE Data Inioemation Fling anil Retrieval (EDIFAR) website 2) Fon etumn copies EEA ‘wich was maintained ty Natlanal Informatics Cerin (NIG). With otfect rom Apa 1, 2010, SEBI has deleted Suse 51 af the listing agreement and nsertod elaues ‘52, pursuant to which the Cortipary Is required to fl the Corporate Filing and Dissemination System (CFDS), fe. et. corpiling con auch statemenis andl reports asmay be specified iy the stock exchanges. The quarterly resxlts of thi Company are also avaiable on the website ff The Bombay Stock Exchenge Limited end Nations! ‘Stock Exchange of India Lid viz werbeeindls.com and vwaveunssinclan. coe respectively “This annual report has a detated chapter an management iscussion and analysis. b) Disclosures by Management to the Board: ‘Al deta relating to tnoncial and commercial wancactions where Diestors may nave a potential interest are povided to the Board and the interested Directors either participate in he discussion, nor do they vats on ‘such matters 9, Shareholde a) Communication to Shareholders: The Chaiman's statement and unauctted financial results ‘or thw halt year enc September 30, 2009, was sent 40 al the sharenoiders. The quarterly and arrwal results, ‘official press releases and presentations to analysts! performance updates are posted on the web-site is, \nteecgndkeico.com and a copy at tha same are gent 12 the stock exchanges. b) Investor Grievances: As meniioned belora, the Company has consbtutedt fa Sharcholders’ Committee to lagk ini and redress sharehaiders and investor complaints tke transfer of shaves, nonseceipt of Balance shoot, nonteosict of deplared dhicionds, at 6) Share Transfer: GCPL has outsourced iis share transfer functon to Ws. Computech Sharecap L1d., which is registered with the SEBI as a Category 1 Registrar @) Dividends for Financial Year 2009-10: ‘at ini for FY 2009-10 ‘ev for FY 2000-10 ‘rd ntti or FY 2000-70 in rian for FY 9008-10 Total 10. Declaration by Chairman for compliance with Code of onduct: The declaration by the Chaimen pursuant ta Clause 49(H)0) of the listing agreement, stating that all the Board Members and sevior management personne! have atfemed their compliance with the said code of conduct for year endad Miah 31, 2010, i annexed to the corporate governance report. 11. Auditor’s Certificate on Corporate Governance: AAs stipulated In Clause 49 ot the Listing Agreement, ther auditors certificate regarding compliance of conciilons Of corporate governance is: annaxed to the Directors" Plepont. 42. General Shareholder Information: 8) Annual Goneral Meeting: Dale andtime ; Saturday uty 24, 2010 at 3.20pm ¥. B Chavan Centre, Genaral Jagenath Bhosale Marg, Nariman Point, Mumbal -400 021, b} Financial Calendar: Wonve ‘Francia year Apa! to Macht For the year ended Marah a1, 2010, results were anncunced + Frat quarter aly 25, 2009 Halt yearly ‘Seiober 90, 2008 + Thi quarter daruary 23. 2010 + Fount quarter and annual + Apa 26, 2010 ©} Book Closure: Thee was an annual book clesure on March 23, 2010, pursuant to Clause 16 of the listing agreement. There wit bbe no. book elosure at the time of the Annual General Mocting, ‘Ra, 1.00 Fe. 1.00 Fe 125 Fsd25@) Listing: The Company's shares are Usted and traded of) the folowing stock exchanges: 1, The Bombay Stock Exchange Limmed Phiroze Jsjesbhoy Towers, Dalal Stroat, Mumbai - 409.091 2. The National Stock Exchange of xg Litited Exchange Plaza, 4th Floor, Bancra-Kuris Complex, Mums! - 400 051. Goce] Consumer Proguets Lid. serip figures in the BSE AG [National Stock Excnange of haa Lira ‘The ISIN Number of GCPL on both the NSDL ang the ‘GOS is INE1O2001028. 3) Market Price Data: ‘Tha monthly high end low paces and woumes of GPL at The Bombay Stock Exchange Lid., (BSE) and the Nationa! Stock Exchange of india Lid, MSE) for the yase ‘ended March 31, 2010, ate as under 2,226,116 9,678,701 Mey 2000 139.00 June 008 182.20 a0, 443 ay co “ec sana.er Ast 208 mac gene September 2008 “2005 sai5oH6 | October 2003 00.001 8176 November 2009 “760.50 1.687.674 December 2009 eas ‘ary 2010 1.985.731 Fateuary 2610 ee ee es zse0a s.ans.209 ‘March 2010 =~ (283.00 - 244.00 i 134,267 Note: High and! tow are in-ruposs per traded shere. Volume isthe total monthly valine of trade fn numbers) in GCPL. shares on BSE 9nd NSE respectivelyfh) GOPUs Share Price at the BSE versus the Sensex: ‘GPL shara performance compared ty the BSE Sensex for FY 2609-10 se sinc, cm. cet A TOT nies a8 8 € € Pb Fe FP GE ® € $§ 3 $ § § # 8 4 @ 43 ot Bom SSE Sensor! GOPL rar price ve nue to 100 the begin of he facil yan, i) Registrar and Share Transfer Agents: Corputech Sharecap Ltd :7, M.G. Road, Opp. Jeange Art Gallery, Mumbaé-400001 Tol, No. : 491 22 22635000001 Fax No. : #91 2222635005 E-mail ID : gopléicomputechshareéap.com Website : wenw-commuechsherecap.com i) Share Transfer: ‘Share transfers and related operations for GPL are Conducted bry Gomputech Sharecan Ld, which js registered with tho SEB! a9 a Category 1 register, Share transter is norrnalty effected within the maximum period of 30 days from ths date of receipt, ital the required documentation is submitted. K) Distribution of Sharenotoing- DDistibution of shareholding by size class as of March 31, 2010: ‘3001 — 400 | 16s 517.790 nts ‘4001 — 5600) cord aps.oea nate ‘007 - 16000 oe 295,100 O8eh 10001 & abows one 2ens21 26 53.85% Total ‘100.0% ‘8,190,088 100.0085Distribution of sharehcicing by ownership as of March 81, 2010: 9 Shares Hole in Physical and Dematerialised Form: ‘Break up of physical and demoteriaised shares as on March 31, 2010: mi} Outstanding GDRs / ADRs / Warrants Convertible Instruments and their lnpact on Equity: GOPL does not have any outstanding GORs / ADRs / warrants / cothverible instruants. 1) Details of Public Funding Obtained in the Last Three Years: The Company had not obtained any publ funding if tha year 2008-10. uring the year 2008-09, the Company made a rights issue of 92,269,440 equity shares of nominal valve Pest each at a premium of Ris 122 par equity share in the ratio of ce share for every seven shares held ‘Against the above tssue, the Company received vals subscription lor 82.292.516 equity shares aagregating 1 is.3,661,574,208, Tha balance 31,124 equity shares ava been kept in abeyance dus to vivious suite fled In courteterums by thid parties for which final order is ‘awaited, Consequenty, during the fhancial yaar 2008- 9 the substibed anv paid-up capil of the Gompary has increased by Fis.82,282.516 and security premigm — soggoee bby Fis.8,082,942.562, The Company has also durng ine yyoar 2008-08 bought back 1,122,484 equily shares of Fe.t each at an average pce of Rs.192.74 per share aggregating to Fs. 148,999, 990 ‘Tho Company has not obtained any pubjic Tuncing in the year 2007-08, ©} Plant Locations: 1. U-30, Industrial Area, Malarnour, District Bhind, Magy Pradesh Prot No. 85-88, EP IP Phase i ‘Viloge Thang, Tesi Nalagarh District Solan, Himachal Pradesh - 173 104. 3, Plot No. 6, Apparel Park cum Industrial rea, Katha PO Badd, Tehsl Nelagarh, Disbict Solan, Hmachal Pradesh - 179 104, 4. Shed Nos. 8012, BamauniMaidan industial Estate Bamauni Maidan, Guwahati - 781021, Assam, 5. Vilage - Mamring, Namthag Rad, P.O.» Marncing (via = Rangpot, District = Narnchi. (South Skin), ‘Sken - 787 132. 77116.Pl Adress for Correspondence: Members can contact us a ou Registered Oto: ‘Godire| Consumer Products Umi, Fircishanagar, Eastom Expross Highwey, ‘VitEwok (East, Mumbal - 400 079 “Tal No: «01 22 25188010/20/90 Fax No.: +81 2225180040 [E-mail [D:invostorrtionstagacrejop.com ‘Website: wenn aodreicp.com Investor conespondence shouid be adcressed to: ‘Computach Sharecap Lid 147, MiG, Road, Opo. Jehanalr Art Galery Mumbal-06 001, Tela: +91 22 226350000) Fax Nos +91 22 22625005 E-mail ID: gepiaicomputechsnarecap com Website: wa.comoutechsharscap.com To allow Us to. sanice shareholders with greater speed end efficiency, the Company strorialy esammends &-mat bbaved correspondence on ailissues which do not require signature varticaticn for baing processed @ National Electronic Clearing Services (NECS) for Payment of Dividend: The NECS foclity administered by RB! ensures faster cmeci of OMoends as didends are directly ‘recited in electronic form to the: bark accounts of the shareholders, Morsover, by aveling ts toc, sharchoiders avoid the risk ot loss of dvicena warrants in postal iranait or frdaduleit ncastaneet Sharehalders holding shares in physical form ee who have not opted for NECS may post the NECS ectoration form to Gomputech Sharecan Ltd, fat shavementioned ackiress), Shareholders can obtain the NECS dectaration form ether from GCPLS registered office or ram Gomputech Shavecap Ltd, fe downioad the sama trom the investors page of the Company's website warn. godkelap com, ‘Shareholders holding shares in demat form are ‘requested to provide details to NSDL'ODSL thvough their respective: depository pasticinants. If may be noted that IF tho. charcholders holding eharoe 9 3 famat form provide Ene NECS data directly to the ‘Company, the Company wil not be able to act oe the same and consequently dividends cannot be remitted through NEGS, ‘Bemerger: Computation of Acquisition Gast for (Capital Gains: ‘With effect tom Apri 1, 2001, the consumer products division of Godre| Soaps Limited GSU} was de-moiged and transferred to Godre) Consumer rodusts Linited (CPL), an Gada) Sans Liritod ‘was renamed Gods) Industries Lived (GIL), AB a cconecquence, the face value of each ecnity shave ‘1 GIL vas reduced from Fis-10 to Rs.6, and each equity sharehoider in GSL was aloted one share ‘of GCPL with a aoe valve of Ris. which has been subdivided into shares of face valbe of Re.1 each ‘wih efect oem September 1, 2006), In respect of sharas of GOPL allotted to erstwhile shareholders of GSL, for the purpose at camauting capital gains, the date of acquisition wilbs the samo as the date of acquisition of GSL shares, Thus, the cost af acquisition of GCPL shares wil difler with regpact 10 e3ch shareholder, and is equal to: cost (of noquistion of GSL shares x (net book value of assets wanslared ta GOL, te. RS48.6 crore} / (et Worth of GS. immediately betore de-marger i». Fis 286.9 crore, 8, 15.89% at hacost of acauistion of GSL shares Consolidation of Shares Under Ove Fat: The Company would urge shareholders. holding, ssharas of GCPL under ciflerent folios but in the sama order of names, to consoldate the shares Under one flo, This would substantially reduce Rober work and transaction costs, and bent both sharahelcers and the Comper. Sharshciders. can do 0 by Wing tO the registrar with details of the folio numbers, order of names, shares hald under each folio and the Folia under which all shareholding should be consolidated, The oeifcates need nat be sant,Declaration by Chairman | Ack Godt. Charnan of Godrej Consumer Products Uimled {GOPL, hereby eontkm pursuant to Clause 48{V¥0) of the sting agreement, that * The Board of Directors of GPL has laid down a cade of conduct forall oat member and sariormdnagerent of he Compary, The sac code af eerduct has also been posted in the IniatorsBoard of Directors page in the Company’ watalte Vz. swwn.godrsjep.com *_Althe Board Members and senior management personnel have stirmed their compilance-with the said code of Conduct for year enced March 31, 2010. Adi Godre} Mumbai. Agri 26, 2010 ‘ChairmanEGeNomtc AL UE. ASDEDWhat is EVA? GOPL Is an Eoonemis Value Added {EVil) company. EWA, developed by Stem, Stewart and Company is & measure ‘of corperate value creation. This measure leis us winather the management of @ Company generates retuens that ‘sover the crncrtunity cost of scarce capstal, _ When does EVA improve? EVA improves © Operating erofts grow without employing mare capita, mpying greater efficiencies + Aaditional capital is invested in protects that return more than the cost of eapital Capital is curtsied in activités that donot cover its costs ~ minimising or slminateny urprocuctve canal EVA ls tho excess of operating profts aver the cost of Capital empieyec, Its calculated as: EVA = NOPAT ~(WAGC x CB) Where NOFAT = Met operating proft attr taxes WACG = Weighted average cost of capital CE = Tota! cacital employad NOPAT Is equal to Proft Before Tax (PST) plus interest Payments minus cash operating tax. Table 1 gies the detailed cabulations of NOPAT far GOPL. Table 1: Caleultor ot NOPAT fh Ris, crore Profit of sx (PET) Intoret ne. forex cation) (Cash oparating ts on rteest Tac Achstmerts Not oberding Pott ter tax NoPany How is Cost of Capital Tp calculate the WAGC for a company. we nid to calculate the cost of equity and the cost of debt. Market, asa whole, would demand an xa ome to invest in isle, non-contact! resicut ctams to corporate sash flow. This is the market premium (9). Company. specitc risks aver and above the market risk premium, measuring the volatiity of the Company's stock relative 10 the market average, |s captured by the leveraged beta {@,, which is tho rats ef tha coaticlent of variation of a ‘company’s stock pcos compared to the mat as a whole, The cost of ecpity, which isthe Fisk foo rtm bblus a company premium ip x 6) is weighted by thw ratio of equity to market valve (a) to get the weighted cost of exuity. Mutioving the pretax cost of borrowing () witty the retention fats (1-lax ral) gives txcadusted cost of dab Ths isthen weights by tw ratio of dabt to market vale (0) lo arrive at the weighted cost of det, Bly acing the \weighted cost of equity and tho weighiod cast of dobt, we get WADC. Table 2 gives the calculation of WAKE for CPL. Ths WACC for 2008-10 waa set at the bogrevng ‘of the year Table 2: Caiuéation of WACC Leverage beta O76 [Mahe sk preeriom (2) “7.00% “Euty ak pramiam P38) 5.20% Fis rw eum 798% (Cost orenuin r+ ay Taz0% Eaatyimeret voi) 97 WE Cont of equity leIPBihe 128% [Pretarcost or neroutrg 00% [tein na 5588 oT a 008 Coster et f-ah 188, [Wace ist GCPLs average capital employed for 2008-10 is Fis. 182.69 crore (Fs. 148.76 crora for 2008-09). Giver a WACD af 19%. (13% for 2008-08) ins traneistag inte: 18 capita) charge of Fs, 19.85 crore (ls. 19.47 crore for 2008-09), EVA generated by GPL EVA = NOPAT~ lx (1-tax rate) x o] + ti pf) x a x Capital employed. ‘Table 3: EVA IRs. in crore) Nora 749-20) Capra ane — aan {a aos Tabi 4 shoves the EVA generated by GOPL|Conaciiated Table 4: EVA (Rs, in crore}DIRECTORS. (REPORTTaThe Sherchoiders, ‘Your Directors nave plaasure in presenting their Report ‘long with the Audited Accounts for the year ended on March 31, 2010, _ Operating Results Your Company's financial performance for the year Under review has been encouraning and is summarisad below: “Total Expenditun othr then terest snd Depreciasan rest sn Franc Changs nt) ‘Prose ‘batore Tax Prowtton fora ‘Cuneta Appropriation Your Drectors recommend appropration as under: Imterim Dien oe [Taxon cotiaed pats Forthe year 2003-10. thre inten dividends yiure pie an shares of face value Re1 each — Ri par share oe August 17, 2008, Hie.1 per share on November 24, 2008 and Fte,1 par share on February 15, 2010, {in addition to the above, the Board of Dirpetors has also Xdociared a fourth intenm dividend on Apel 26, 2010 at the rate of Rs.1.25 per share on equity shares af nominal \value Re.t each, The receed date for the same has beser faxed a May 4, 2010. ‘The total civitend payault fer the year anded March 31) 2010 stands at Ris.4.25 per share (425% on shares of the tse value of Fe.1/- each) Your Directors recommend that the aforesaid interim ‘lvidends aggregating to Rs.4.25 per share on sharas of face vaiue Ret each be declared as final dividend tor ‘he year ended on March 31, 2010. Review of Operations uring the year under review your Company earned Profit Aftar Tax (PAT) of Rs. 248.1 crore The comparison of the curent year’s Sales with the Previous year (5 va in table 1 below. ‘Sates of Godke) rands have increased by 19 percent ‘rom Fis, 1040.9 crore in 2008-09 to Ris. 1239.4 crore in 2009-10) A dtaled analysis of your Company’s performance: is contained in the Management Discussion and Analysis Raport‘Table 1 Comparison of Current year sales with the ‘previous year Rs, Crore) By prove ms 52 te) Total Tyre ees Acquisitions. 48% stake in Godrej Sara Lee Ltd. The Honorable High Court of Juckcatura at Bombay has vide order dated October 8, 2009, sanctioned the Scheme of amalgemation of Goxro| ConsumerEz Lic (GOBL) and Godro) Hygiene Care Lid. (GHCL) wit Godhe Consumer Products Lit, (SCRt}, The appointed date of the Schorna was June 1, 2008 and! the ettective dale, was Ootober 15, 2008 (being the date on which Ihe certied opy of the court order was: ec wath thee egitrar of Companies, Murtoa) GOBL and GHOL held 2998 and 205% respectively ir Gocre| Sema Lee Lid, (GSLL), which ia 2 49:51 unlisted Jot venture company betwen the Gore} Group act ‘Savalee Corporation, USA, Pursuant to the ameigamation, the assots and fabiiies of CCBL end GHCL have been tranctorrad to GCPL wath sffact from the appointed date and therefore GCPL holds 49% stake in the equily of GSLL. tn terms of the Schama, Godke| & Bayoo hig. Co. Lt {G80} and Gocre industies Lid. (GIL), the shareholders ‘of OCL are G1NCL reepectvty, wera 1 be iaouod and ‘iloted 10 shares in GOPL for every 14 shores held by hem In GCBL and GHOL respectively: Accordingly, GCPL has issued and allotted 9,02,.96.727 equity shares of face value Re.1 each to GAB and 2,09,90,4C8 equily fies of face vate Ae.1 each 10 GIL The new shares aggregating fo 5,12,08,1936 rank par passu wih the ‘exiting equity shares. ‘Gonseauent to the above aloimen of shares. the ‘gsud and paid-up equity share capital of GCPL stands increased {0 90,81,00,04 equity shares of face value ct Ro.1 ach aggregating R.30.81, 90.044, ‘Performance of GSLL in FY 2609-10 Godel Sera Lee Lid, has retarded a growth of 20% in 708s Sales and 31% in Proft alter Tex quer the previous yer, Good knight Active plusinitativa vasa geat success and recorded a good sales growth. Other naw iitiatives in household msecticides category viz, GoodKright Naturals and GK Advanced Cols were able to gat a good ‘consumer response. The Garoany winessed a strong smaghet share increase ® Electrics and Aerosol formats household iwacticids categary during the year Bangladesh vtnessag coving of sales on the back ot the nev csirbution model The Company mainte is focus of growng South East sion roxkets Meudon Bangiadash, Sei Lanka and Nepal. Jura, Nigeria fn March 2010, your Company entered into an agreement to acquit Tura fem the Tura Group, Nigeria Tura, 2 household name in many Atican markets, Is a market-leading personal care brand with & range of products that distroutes a range of products Including soaps, moisturising ‘otons. and skintaning creams. Its medcated bar soap is amanget the top three i its category in Nigeria, The acuistion wil serve as @ ste platform for introducing your Company's porto nto, [Nigeria and other Wastem Arican countries. ‘Megasari, indonesia. After the close of he financial yaa’, your Company has centered in fo an agrwement to acquire PT, Megas ‘Mekenur Group andits dstnoutien comgany inindonesia, Mogae! Group manulactures and distrbutos a wide range of hovsehole! products inctusing household insecticides, wet tissues and air iesheners. Megasari sraup’s products are market Feaders in Indonesia in most of the categories that the company participates in. Megasari Group arorkias your Compary a stong pater fo etablah a significant feethald in irons ‘which is arang the legast consumer markals #1 Asia ‘Gyan Megagori Group's leasing position in housshoid ‘product eategorios in indonasia andthe Godkey Groups “song presenca inthis category in nda, wo below this -acaqssttion wil provide significant synergies and create value tor shareholders.Subsidiaries Keying Brands Limited, UK posted = turover of GBP 29.0 milion and 3 profit alter tax of GBF 2.8 milion faa er local GAAP), Rapidol Pty. Limited, South Africa posted a tunover of ZAR 113.2 mulion and a proft after tax of ZAR 20.6 milion, Godrs| Gobal Mideast FZE posted a turnover of AED 13.6 millon ane! a prof alter tax ol AED 0.7 mitten. Kinky Grou Pry. Lic. posted 8 tumovar of ZAR 117.6 Imilicn andl a profit after tax of ZAR 14.9 milion (as por loeal GAAP) ‘Your Company had made an appication to the Cantal ‘Government pursuant to Section 212 of the Companies Act, 1988 for soking exemption from attaching with its accounts the individual acoaunts of each of the subsidiaries. The application vas made in respect of the following 10 subsidavi aon the date of the appication \iz...Gocke| Nethertands 8.V, Godrej Cansumer Products (UK)Liited. Keyine Bands Lirited, necto Manufacturing Liited, Ranidol Ply: Limited, Godrej Global Mignast FZE, Gocka) Consumer Products (Maurits) Limited, Gocte, inky Halcings Limited, Kinky Grown Py. Lid. and Gocke| Hypone Product timited ‘Accordingly the Central Government gava is approval and sxempted your Gompany tram attaching to its accounts, the individual accounts of each of the above subsictaies. The accounts of the subsiiiary companies and tha ‘elated detailed information wil be made avaiable to any shareholder sedking such information at any point of time, The accounts of the subsidiary companies are uploaded in the website of the Company vz -snta. gotefep.com and are also available for inspection ‘byany sharehotcee at the registoredotice ofthe Company ‘9 atthe registered offices of tha subsidiary companies, In respect of the following companies which were incorporated as subsicaries of your Company during the last quarter of the current financial! yoar, your Compaty dig not prefer an application to the Cantral Gowernment Pursuant to Section 212 of the Companies Act, 1956. ee Nerenanas) BV | Goce) Consumer Products ‘Nether ey March 31, 2010 ‘Outat the above sicsuscfarias, the tolowing companies ‘ve., Gacre| Nigeria Limited, Goce} Consumer Products Daten Cooperatle UA (Netheriancls), Godra) Consumer Holdings (Mitharlands) BV and Goorej Consumar Products Patheraos) B.V are yet to issue thak capital and they la not carry OU any eperatons dung the Yyesr under review. Hence, the fnaneal statements of these subsidines were not requied to be prepared ‘and arrexed fo your Company's Annual Report, The ‘sepouns oF the: Balanoe twa Subsickties vi, Gooey ‘Nigeria Holdings Livited and Godrej Gonsumer Proctcts Holding (Mauritius) Lt, forms part ofthe Anrwal Report and the accounts of Gedire| Consumer Products Lid ‘The Consolidated Finanetal Statements of the Company and iis subsidies, prepared im accordance wth Accounting Standard 21 issued by thy inate of Chartered Accountants of India, also forms part of tha Antwal Papert and accounts of your Company. \h accordance with the conditions stipulated by the Minisiy cf Comparate Airs, while granting exemption from attaching the indlidual accounts of some ct the subsdiones, 8 one page financial summary tor those subsidares is dsclsed in the consoldaled balsnce sheet Employee Stock Option Plan ‘The sharchoidars of the Company vide spacial recoktion assed on March 14, 2007 approved the setting up of ‘Bocte| Consumer Products Lid. Employee Stock Option Plan (GGPL ESOP}, Pursuant ta the approvals recewedt Inthe above meeting and in the meeting dated Apri 24, 2008, the Contpery can grant 45,00,000 stack optians ‘convertible into 45,00,000 equity shares of the nominal value Re. 1 each ts the elgito enpioyaesitirectors ol the Company and of the Company's subsiciaias.af ‘Tho GCPL ESOP is adiministored by a trust set up for this purpose wic,, Godel Consumer Products Ltd. Employee ‘Stock Option Trust. As on March 31, 2010, 28,24,000 options sanvertile Into 28,24,000-shaees of nominal value of Fe. 1 each are ulstariing in respeet of options granted to employees of the Company, 95-01-00 “Te dotale ot no Options altted uwler GOPL ESOP. as alco the disclosures in complianoa with Glause 12 of the Secu and Exchange Board of feta (Employee Stock Opsion scheme an Employee Stock Purchase Scher] ‘Guidelines, 1999 are set out in Annexure Ato tres report Sino the exercise price-at GGPL optionsis thelast closing pice on the sicck exchangs, there is no compensation cost in Financial Yaar 2009-10 based on the intrinsic value ofthe options. Ratings Tha Company contnuasto enjoy Corporate Governance ting of OGRZ4. tbronounced as CORZ push and a Stakehoider Vale Creation and Governance Rating Gf SVGI (pronounced as SVG 1}, The + sign indicates relative higher standing within the caleaory indicated by the rating, The aboveratings aré on a rating Seale ott to 6, where 1 Is the rghest rating, ‘The two ratings evaluate whether a Company's being mun oF the principles of Corporate Gavemance and whetner the practices tolnwed by the Company lead to value rwation for ats shareholders, The OGR2 rating is on a rating scale of CGR to CGRS whare CGAY denotes the highest rating. The GGR2+ ‘atieg imple that in IGRAS ounent opinion, the rated Company has adopted and tolows such practices, comentions and codes a5 would provide its thancia slakeholdees # high level of assurance on the quality of ‘comporate gevernance, The SVGt mating i on a rating scale of SVT to SVGS vnbere SVGI denotes the highest ‘ating. The SVG1 railing implies that #1 CRAG current pinion, the Company belongs to the highest category on the ‘compas parameters of stakeholder value creation and rmenagemont as also corporate governance practions Directors [Me Hoshatar Pace is. retting from your Company wit tect orn close of business hours.on Apri 30, 2090 ater 2 leg and usticus career with the Goce) Group. The Board places on record nis valuable contributions mage atl levels during his career wth the grou, In.aseordance wth Article 120 and 131 of the Articles of Association of your Company, Ms Fama Bljaourkar, Mr. Bharat Dstt and Me Nadir Goda retire by rotation arch being olble afer themneeves for reappoiinert Listing The shares of your Gompany are listed at The Bombay ‘Stock Exchange Limited and The Nabonal Stock Exchange af India Lid, The annual isting lee hs been paid to each of he above enchangos hefore the dus date Auditors Theaucitars, Kalyrieralla Mistry Chartered Mecourtants, Muribai, rare and off themselves for re-appointment, Pursuant to directions trom the Dapariment ct Company ‘Afi, P,M, Nanathoy & Co. Cast Avoauntants have been ppotnied as Cost Auxttors fo the year 2008-10, They ore requred to eubmit the report to the Central Government \wahie 180 clays-from the end of the accourting yea Purpuat tothe provisions contained in Section 217 (2A) cfthe Companies Act, 1956, your Directors, based on the ‘mpresamiaiion receved fom the Qaeratina Managment, and ater due enc, confirm:2} that in the preperation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same; ) that they heve selected such accounting policies and applied them consistently and made judgements ‘and estimates that are reasonable and prudent 80 8 to give a true and fair view of the state of affairs of ‘the Company at the end of the financial year and of the profit of the Company for that period: ©) that they have taken proper and suffcient 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 end detecting fraud and other Ireguiarties; 1) that they have prepared the annual accounts on a going concer basis. ‘Annexure B to this Report gives the information inrespect Cf conservation of Energy, Technology absorption and Foreign Exchange earings and outgo, required under ‘Section 217(1)(e) of the Companies Act, 1958, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 and forms a pert of the Directors’ Report. Information as per Section 217(2A) ofthe Companies Act, 1966 read with the Companies (Particular of Employees) ules, 1975 forms part ofthis Report. As par provisions: of Section 219(1}\(u) of the Companias Act, 1956, the Report and Accounts ere being sent ta the Shareholders. ofthe Company, axclucing the statement of particulars of the employee under Section 217(2A) of the Compares ‘Act, 1956. Any shareholder interested in obtaining a copy of the statement may write to the Company Secretary at the Registered Office of the Company. ‘The notes to the Accounts referred to in the Aucitors’ FReport are sel-explanatory and therefore do not cal for any further explanation. Group for Interse Transfer of Shares ‘As required under Ciause (1/6) of the Secures and Exchange Board of India (Substantial Acquistion of Shares and Takeovers) Reguations, 1997 persons constituting "Group" (within the meaning as defined inthe Monopolies and Restrictive Trade Practoes Act, 1969) ‘or the purpose of avaling exemption from applicablity Of the provisions of Regulation 10 to 12 of the aforesaid Reguations, are given in the Annexure © attached herewith and forms part ofthis Annual Report Corporate Governance Pursuant to Clause 49 of the Listing Agreements, the Management Discussion and Analysis Report and ‘the Report on Corporate Governance are included in ‘the Annual Report. The Auditors Certificate certifying ‘the Company's compliance with the requirements of Corporate Governance in tems of Ciause 49 of the Listing Agreement, is attached as Annexure D and forms part ofthis Annual Report. Acknowledgement Your Directors wish to piace their sinoere thanks to the Urion Goverment and the Governments of Maharashtra, Madhya Pradesh, Assam, Himachal Pradesh and Sikkim, as also to all the Government agencies, banks, customers, shercholders, vendors and other related organisations who, through their continued support and co-operation, have helped, as partners, in your Companys progress. For and on behat of ne Board of Directors ‘Adi Godrej Chairman Mumbei, Apri 26. 2010 a7Annexure A forming part of the Directors’ Report ‘As por the Socuntios & Exchange Board of india Employee Stock Option Scheme & Employee Stock Purchase Scheme} Guidetines, 1999 following information is disclosed in respect of Godre| Consumer Products Limited Employee Stock Option Plan: Market Price ps Interest at such a rete not] boing loss than the Bank Rate then prevaing| ‘compoundebie on an anual basis for the} etiod commensing forn tho date of Grant of] ‘the Option and ending on the dete of ntmating| {619,000 lapsed and foreted (on account of ‘employees leewrg the covioe ofthe Compary | batore the dato of vesting).s ‘stock options. Had the fair value method been | fF ood, i recpect of stock options gated the| FH erloyse comooneaton cost wou have been | Exercise price RS.148.17 pus inerest as pIGB. | mentioned in pricing formula ‘The fair value ofthe optons grated has been | | caldated using lack ~ Schols Options ping | formula and the signsicant assumptions made in Note: 1 - Variation of terms of options 1. Amenciment to clause 5.7(¢) the GCPL ESOP (Clause before the amendment “In the event of separation from employment for reasons of normal Retirement of Retirement specifically approved by a Participating Company, {) all Vested Options should be Exercised by the Option Grantee immecatoly ater, but in no event later than six months from the date of such Option Grantee's Retirement, {all Urvested Options will apse as on the date of such Reticement, uniess otherwise determined by the ‘Compensation Committee and which determination wil be final and binding” Clause after the amendment “In the event of separation from employment for reasons of normal Retirement oF Retirement speciicaly ‘approved by a Perticiating Company, () all Unvested Options shall vest in the employee on the date of retiement or at an earlier date as may be dacided by the Compensation Committee, subject to the requirement of minimum vesting period specified in clause 5.4 of the GCPL ESOP fi) all Vested Options should be Exercised by the Option Grantes immeciately on rattement, but in no event later than six months ‘trom the date of such Option Grantee's Retirement, 592. Change in vesting date of options “The HR & Compensation Committee of the Company approved the change in vesting dates in respect of ‘options granted to certain employees. Note: 2 - Employee wise details of options grantedAnnexure B forming part of the Directors’ Report INFORMATION PURSUANT TO SECTION 217(1)(6) 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 4. (A) Energy Conservation measures undertaken: 1. Right sizing of following pumps done based on process requirement 8) Criling cooling tower pumps b)_FADP #3 tempered cooing tower pumps ©) SWEP #3 cooling tower pumps ) FADP &FSP.#3 feed pumps ©) FADP # 3 steam separator water feed pump. 2. Two numbers of Energy efficiont motor EEF-1 provided in place of low effciont EEF-O motors. 3. Provided oxygen analyzer in 10 TPH medium pressure boier. Provided arrangements for utlzing the surplus waste hat of FADP # 2 for tha preheating of feed water of LP boller # 2. 5. Modifications done in steam network for improving the boler loadings. 6. Started colecting waste condensate in Raw 8 storage tank farm and using for process. purpose. (8) Proposed energy conservation measures: 4, Provision of Ar Pre-heater in TP-25. 2. Provision of LED lights in place of conventional Fights. 3. Provision of VED in induction motors. 4, Optimization of high pressure steam generators In order to rectus fuel consumption. 5. Provision of Energy eficient motors in place of low efficiency motors, 6. Optimization of brine ching plants. Wl. Impact of measures on reduction of energy ‘consumption and consequont impact on the ‘cost of production of goods:- Saving in energy costs during the period under ‘consideration, B. Technology Absorption Research and Development (R&D) ‘GOPL R&D operates on a strategy that moves in tandem with the long-term organizational goals. It aims to ccater to the demands of the market place and growing ‘consumer expectations. The continuous focus of efforts ‘at R&D is on creating distinctively new products that are ‘also consumer centric and backs it with a strong quality assurance process. 1. Specific areas in which R&D carried out by the ‘Company - 1. Hair Care ‘Skin Care ‘Customer Centricity Packaging Development Fabric care Hygiene Products Il. Benefits derived as @ result of the above R&D efforts ~ During the fnancial year, your Company derived ‘several bene from its RD operations, resuting in the launch of several products, 1. Godrej No.1 ‘Moisturising Soap’ and Godre| No. 1 with Lime and Avoe vera, 2. Godrej Protekt range consisting of Hand ‘Sanitizer, Hand wash and Hand Wipes. 3. Two new shades in Renew Hair colour range — Wine Red and Plurn Crazy, 4, Onthal Skin Protection Talc. 6tIM, Future Pian of Action: 1. Focus on new categories. 2. Exploration of new technologies in existng categories. 3. Explore a varioty of fashion hair colours with ‘added benefits, hair colour highlights and ‘newer forrnats for hair colouring. M Expenditure on R&D (@) Total RED expenditure es @ percentage of tot sles tue ‘Commerciaization of new product formats such as Hand Sanitizer gels and wipes. 2. Benefits derived as arecuit of the above efforts, 2g, product improvement, cost reduction, product development, import substitution, etc.: The above efforts helped in’ cost reduction, ‘customer satisfaction and top line and bottom ine improvements. 3. Imported Technology: ‘The Compery has not imported any technology since incorporation, C. Foreign Exchange earnings and outgo: (Rs. in Crore)Annexure C forming part of the Directors’ Report “Group” for interse transfer of shares under Clause 3(1)(e)of the Securities & Exchange Board of India (Substantial Acquistion of Shares and Takeovers) Regulations, 1997. + | Godrej & Boyes Mtg. Co, Lia {82 | Goldon Feed Products Li, [83 | Godrej Oi! Paim Lt a - Cauvery Palmoi Lic. 4 | Goce) investments Prt Ltd. 95 | Natures Basket Uta, '5_|Gocre|Etacec Automation & Robotics Lid. [36_ Cocke) Tyson Foods Liited [97 |Aadhaar Retain Limited |S Gox Pa Oi, 39 | Godrej Gold Coin Aquateed Ltd, 40 |Potychem Hygiene Laboratoros Pv, Lta 41 | Creamine Dary Products Lid |42_ ACI Godkel agrovet Pvt. Lid. 8 | Geometric Lid. | Mercury Manure Co Ld 410 | Godrej Malaysia) St 11 | Gocke} (Singaoore) Pte, Lic, 112 JT Dragon Pe. Uta 13 | Gockel vetnam Compary Lt 14 Veromatic iteration EV 15 | Veromatc Sovies BV (16 [Water Wonder Benetux BV hh 2 tor [21 [Goce Properties Lis, 22 | Godrej Realty Pvt. Ltd. 26 | Gockej Real Estate Pvt. 25 | Godrej Developers Pvt. Lt. ‘56 | Master Sohvab N. Godrej 26 | Godrej Seaview Properties Pvt.Ltd. [87 Mast Homuza N. Godre 27 | Godrej Estate Developers Pvt. Lt. Vigy M. Crishna 28 | Hagpy Highises Lid. 2 [Tani Properties Ltd. 80 | Godrej Agrovet Ltd. | 1 | Bahar Agro Chem &Annexure D forming part of the Directors’ Report To the Members of ‘Godrej Consumer Products Limited, Mumba, We have examined the compliance of conditions of Corporate Governance by Godke| Consumer Products Limited (the Company) forthe year ended on March 31, 2010, as stipulated in Clause 49 of the Listing Agreements ofthe saic Company with the Stock Exchanges in India. The compliance of conditions of Corporate Governance is the responshity of the Menagement, Our examination was liited to procedures and implementation thereof, adopted by the Company for ensuring compliance with the Conditions of Corporate Governance. Its neither an audit, nor an expression of opinion on the financial statements of the Company. In our opinion and to the bast of our information and according to the explanations given to us and the representations made by the Dectors and the Management, we certify thatthe Company has complied with the concitions of Corporate Governance as stipulated in the ebove-mentioned Listing Agreement, ‘spor the records ofthe Company, there ware no investor grevances remahing unattended for a period exceacing ‘one month against the Company. We futher stato that such compliance is neitner an assurance as tothe future viabity of tha Company nor the efciency oF effectiveness with which the Managemnt has conducted the affairs of the Company. For and on behatf of Kalyaniwalla & Mistry Chartered Accountants Daralus Z. Fraser Partner M.No.: 42454 Mumbsi, Apri 2, 2010