Mumbai, July 28, 2001                      

Godrej Industries Limited (GIL), the leading chemicals manufacturer in India, has recorded a net profit (PAT) of Rs11.18 crore as against a PAT of Rs 14.40 crore in the same period last year.

The company's profit before tax was Rs 12.96 crore as compared to Rs 15.20 crore in the same period last year. The consumer products business of the company (formerly Godrej Soaps Limited) was de-merged into Godrej Consumer Products Limited wirth effect from April 1, 2001, pursuant to a 'scheme of arrangement' approved by the High Court, Mumbai. The figures for the last year include the results of the consumer products business. Therefore, the results for the quarter ended June 30, 2001 are not comparable with the results for the corresponding quarter in the previous year.

Income from operations was Rs 105.09 crore for this quarter. The income from operations for the quarter ended June 30, 2000, was Rs 199.41 crore, which included Rs 103.87 crore of income from the consumer products business. The growth in income from operations from the continuing operations was 10 per cent.

The board of directors of both GIL and Godrej Foods Limited (GFL) met today and decided to de-merge the manufacturing business of GFL together with its marketing, sales, finance and other related functions into GIL with June 30, 2001, as the appointed date. The trading business will continue to be carried out by GFL.

As a part of the 'scheme of arrangement' under Sections 391-394 of the Companies Act, and subject to various approvals, including those from shareholders, creditors, regulatory authorities and the courts, as may be applicable, every shareholder of GFL will be issued 1 share of GIL (par value of Rs 6) for 15 shares of GFL (par value of Rs10). Further, the par value of each share of GFL will stand reduced to Re 1. GFL will continue to be listed on the stock exchanges where it is currently listed.

Over the last couple of years, the processed foods and edible oils manufacturing activity of GFL witnessed declined profitability margins, which resulted in a significant erosion of its net worth. This was due to the increasing cost of capital and competitive pressures brought about by additions to the overall industry capacity.

Considering the financial position of GFL and the significant stake of GIL in it, it is desirable to restructure GFL. Accordingly, the boards of both the companies decided to bring the manufacturing business of GFL into the GIL fold. The manufacturing business of GFL is expected to perform better in the hands of a financially strong entity such as GIL.

GIL is a leading manufacturer of surface-active agents and oleochemicals. The company employs more than 1,500 people and has two modern manufacturing facilities, one at Vikhroli, Mumbai, and the other at Valia in Gujarat. GIL's associate companies include Godrej Consumer Products Limited, Godrej Sara Lee Limited, Godrej Foods Limited, Godrej Agrovet Limited and Godrej Properties & Investments Ltd.

                                                                       
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