Godrej Industries posts Rs 10.7-crore loss in Q4

Our Marketing Bureau

Mumbai, May 7: GODREJ Industries Ltd (GIL) — formerly known as Godrej Soaps — has reported a net loss of Rs 10.77 crore in the fourth quarter period ended March 31, 2001, on account of a whopping 147 per cent increase in expenditure on advertising and sales promotion. The company had reported a net profit of Rs 3.29 crore in the corresponding quarter last year.

The company’s net profit for the fiscal ended March 31, 2001, dipped 33.3 per cent to Rs 40.65 crore as against Rs 60.99 crore in the previous year.

The company said that it has changed its accounting policy regarding advertisement expenses on new product launches. These will be charged to profit and loss account in the same year in which they are incurred with effect from fiscal 2000-01, as against the policy of deferment of such expenses over a period of 12 months from the date of launch of new products which was followed in 1999-2000. This change, the company said, has resulted in lower profit before tax of Rs 2 crore for the year. Income from operations rose 21 per cent to Rs 890.02 crore for the financial year as against Rs 735.25 crore last year. During the fourth quarter, income from operations were up 33 per cent to Rs 240.79 crore as against Rs 180.76 crore in the corresponding quarter last year.

Godrej’s consumer products brands witnessed a 20 per cent increase in sales to Rs 406.60 crore against Rs 324.44 crore last year. Sales of Godrej’s consumer products in the fourth quarter period stood at Rs 104 crore — a 20 per cent rise over the same period last year. The board in its meeting on Monday, recommended a final dividend of Rs 3 per share on a face value of Rs 10 as against Rs 2.70 per share last year.

According to GIL chairman Adi Godrej: “Despite a 44 per cent increase in advertising and sales promotion expenditure during 2000-2001, the A&P spend as a percentage of sales is low.”

Effective April 1, 2001, the consumer products business of Godrej Soaps has been demerged into Godrej Consumer Products Ltd, which will be a focused FMCG company and GIL, which will retain the businesses comprising manufacture and sale of industrial chemicals, trading in medical diagnostic equipment, investments in group companies and estate operations.