GODREJ INDUSTRIES LIMITED
ANNUAL REPORT 2011-2012
CHAIRMAN`S REPORT
Dear Shareholders,
I am extremely pleased to share with you the events and developments of
your Company during the course of 2011-12. Strong operating results have
been achieved across all our core businesses despite a challenging macro-
economic environment. The year gone by is representative of the value that
Godrej Industries has and would endeavor to create for all the
stakeholders. Though the economic slow-down and uncertainty particularly in
the developed countries can impact emerging nations, we are confident of
navigating this turbulent environment through well-defined strategies
adapted to match the dynamics of a changing environment.
As a multi-business group with diverse business interests, growth at the
consolidated level is pursued through competitively growing our core
businesses, building an environment to enable transformation while also
nurturing and investing in emergent businesses of the future. This approach
is captured in our approach called CREATE which stands for:
Let me summarize the year at GIL for each dimension of our CREATE approach:
C-Consumer and Chemicals Consumer (GCPL):
Godrej Consumer Products, in FY2012, has not only maintained leadership
position in India in the three core categories-Home Care, Hair Care and
Personal Wash, but has also recorded significant traction on the
international front. As we focus on integrating the acquisitions made
during the year, we have witnessed meaningful growth in the emerging
geographies in Asia, Africa and Latin America. While we recognize the
challenges posed by an uncertain global market environment, we are
confident that consistent efforts at innovating to cater to the changing
consumer needs and strengthening our brands, will translate into improved
performance in the future as in the past.
Chemicals:
During the year, our Chemicals business enhanced the top-line and stable
margins with increasing contribution from exports and specialty chemicals.
Our strong distribution network and differentiated manufacturing process
make us the preferred supplier to key players across industries we cater
to, enabling us to capture value from healthy demand in the domestic and
international markets. Our diversified end-user industries and concerted
efforts at moving towards specialty chemicals give us confidence in
maintaining our performance in the future as well.
R E-Real Estate (GPL):
Despite a challenging environment for the real estate sector, Godrej
Properties recorded the highest number of Joint Development Agreements in
its history, thereby significantly augmenting its development portfolio. In
a significant development during the year, Godrej Properties entered into a
landmark deal with Godrej and Boyce for all future development on the
Vikhroli land parcel. This will prove to be a highly value accretive deal,
and is expected to generate significant risk free cash flow for Godrej
Properties. With a pan-India presence and a business model that provides
down-side protection while enabling capture of upside potential, we firmly
believe that in the coming years we will be able to achieve bigger
milestones to take GPL to the next level.
I would like to take this opportunity to discuss the change in leadership
at Godrej Properties. The Board has appointed Pirojsha Godrej as the
Managing Director and Chief Executive Officer of GPL with effect from April
1, 2012. Pirojsha has played an integral part in the growth of GPL since he
first joined the Company in 2004 and the Board is very confident that he
will successfully lead the Company through its next phase of growth. In
addition, the Board has appointed Mr. V. Srinivasan as an Executive
Director at GPL with effect from April 1st, 2012. Mr. Srinivasan has played
several leadership roles across various Godrej companies and the Board
believes that he will add tremendous value to GPL.
I am also glad to share with you that in March 2012, GPL successfully
concluded the first IPP in India and raised ~ Rs. 4.71 billion in the midst
of a capital scarce market environment.
A-Agri Business (GAVL):
We have come a long way since we started operations with the animal feed
segment and have progressed to a diversified agri-business Company with
interests in animal feed, oil palm plantations, agri-inputs and poultry.
The Company concluded the year on a strong note with robust performance
delivered across verticals. Further, the outlook for oil-palm and agri-
input segments remains extremely optimistic. During the year, we
successfully launched Godrej Seeds and Genetics Limited (GSGL) to give
shape to our plans of venturing into the seeds business. Given encouraging
business prospects and a solid execution framework, we believe that our
endeavor will contribute significantly to both the top-line and bottom-line
in the years to come.
T-Transformation:
As a group we believe in inclusive growth that aims at enhancing the
competitiveness of our businesses while simultaneously advancing the
economic and social conditions of the communities in which we operate. This
focus is implemented Group wide through the shared value initiative called
`Godrej Good and Green`. As part of Good & Green, the Group aspires by
2020, to create a more employable Indian workforce, a greener India and
innovate for products that are greener or cater to the bottom of the income
pyramid. I am pleased to tell you that we have as a Group made good
progress on this vision in the last fiscal year.
Building on our human capital has always been a priority and during the
year we undertook various activities that assisted in enhancing leadership
capabilities through specially designed programs. To help us objectively
understand the progress made, in FY2012, we conducted a survey across both
domestic and international businesses in association with Aon Hewitt, a
leading HR consultancy firm. I am delighted to share with you that GILAC
India (including the Consumer Product, Real Estate, Agrovet and Chemicals
businesses of the group) employee engagement level is high (68%) and falls
within the Aon Hewitt Best Employer Range.
E-Emergent Businesses:
Through the years, we have incubated businesses successfully. Godrej
Agrovet is one such example which today is contributing meaningfully to the
consolidated performance and has tremendous future potential. Natures
Basket, our gourmet food retailing business, has been ramping up very well
with a spread of 20 stores across 5 key metros in India. I am pleased to
share with you that a select portfolio is now available for online sale as
well.
Before I conclude, I would like to say that as we enter into the next
fiscal year, we stay committed to improving operational efficiencies,
building and strengthening alliances, deriving value from group synergies
and continuing to reward stakeholders with a shared commitment towards
profitability and sustainability.
Finally, I would like to express my appreciation to all our employees, for
their contributions towards the performance of Godrej Industries. I would
also like to extend my gratitude towards our business partners and
associates, vendors, and also the Central and the State governments for
their continued support. And to all of our shareholders, I would like to
express my sincere appreciation for their continued faith, trust,
encouragement and support.
Yours sincerely,
Adi Godrej
Chairman |