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Directors Report of GHCL Ltd.

Mar 31, 2016

We are pleased to present the 33rd Annual Report together with the audited financial statements of the company for the financial year ended March 31, 2016.

OPERATIONAL RESULTS

The summary of the financial performance of the Company for the financial year ended March 31, 2016 compared to the previous year ended March 31, 2015 is given below:

(Rs. in Cr.)

Particulars year Ended year Ended March 31, March 31, 2016 2015

Net Sales /Income 2564.38 2384.87

Gross profit before interest and 635.30 533.64 depreciation

Finance Cost 161.65 163.84

Profit before depreciation and 473.65 369.80 amortisation - (Cash Profit)

Depreciation and Amortisation 81.74 84.45

PBT before exceptional items 391.91 285.35

Exceptional items (13.50) (27.41)

Profit before Tax (PBT) 378.41 257.94

Provision for Tax - Current 99.40 64.21

Provision for Tax - Deferred 22.39 10.71

Profit after Tax 256.62 183.02

Balance brought forward from 460.67 302.84 last year

Prior period adjustments (0.01) 0.09

Excess provision for tax for 1.17 1.20 earlier years

Amount available for 718.45 487.15 appropriation

Appropriations

Proposed Dividend 35.01 22.00

Tax on Dividend 7.12 4.48

Balance carried to Balance 676.32 460.67 Sheet

PERFORMANCE HIGHLIGHTS AND STATE OF COMPANY''S AFFAIRS

SODA ASH

World Soda Ash production in 2015 was around 58 Million Tons against a production capacity of approximately 67 Million Tons. Global demand for Soda Ash was around 57 Million Tons which grew at around 2% over the last year. Glass markets, which account more than half of global demand, are expected to remain the dominant end use for soda ash, while chemicals and detergents will also remain important downstream consumers. However, like many raw materials, the soda ash industry also has become very sensitive to fluctuations in economic conditions.

Despite major economic challenges, China continues to be the largest Soda Ash player in the world, having a capacity of 32.00

Million MT, which is 48% of the global capacity. Its actual production was around 26 Million Tons last year. It has, however, been observed that on account of the pressure faced by the domestic industry due to unhindered capacity expansions in the past, China has significantly slowed down additions to Capacity in a hope of creating a balance in the industry. Turkey would be major player in the Global Soda Ash market, with locally- based Ciner Group likely to add a further 3 million tons of Soda Ash capacity in coming years. This would exert pressure on the high cost European manufacturers. Additionally, some surplus volumes are also expected to compete with China/uS volumes in South East Asia and the Middle East. uSA which produces natural soda ash, has a capacity of 12.70 Million MT and it produced 11.5 million tons of soda ash. The uS production is stated to have de-grown by 1.2% in 2015 where as domestic demand for soda ash saw a modest growth of 1% versus 2014. They exported 6.4 Million tons; 50% of their exports are to North & South America which is their natural market. Their export to Indian Subcontinent is only 2%.

Although naturally produced soda ash has some cost benefits over synthetic material, there is not sufficient supply of natural soda ash to cater to the entire global market. Synthetic soda ash accounts for around three quarters of global consumption and is, therefore, here to stay.

Globally there is no major mismatch expected between Demand and Supply in soda ash industry, thereby giving it a reasonable stability.

As per domestic industry historical trends, the Indian Soda Ash demand is expected to grow by around 4 to 5% annually. Our market estimate indicate that downstream demand growth is gradually improving and 2016 is expected to be better than 2015. India''s GDP growth in real terms is slated to be better in the coming Financial Year with the projection of a better than normal monsoon. It is expected that downstream sectors like Detergents and Glass should be much more stable this year. A more stable economic outlook would help generate consumer confidence and therefore facilitate higher spending – both urban and rural, leading to a better outlook for Soda Ash.

Total Soda Ash installed capacity in India is 3.1 Million MT, with an estimated production of about 2.7 Million MT in last financial year (2015-16). Going forward GHCL is executing an expansion of 1 lac tons to come on line in March 2017. Nirma is also doing an expansion of 1.5 lac tons which is likely go on stream by December 2016. RSPL (Ghari Group) has also announced setting up a Soda Ash plant with capacity of 5 lac tons It is expected that domestic demand growth will lead to absorption of these expansions.

The total size of the Indian soda ash market is about 3.4 Million MT including internal consumption and almost all the major industry players are located in the state of Gujarat due to the closeness and ready availability of the main raw materials namely limestone and salt.

At present, your Soda Ash plant has a capacity of 8.50 Lacs MTPA. During the financial year 2015-16, your company has made the highest ever production of 7.49 lac tons and the highest sale of 7.01 lac tons of Soda Ash.

BI-CARBONATE (BICARB)

During the year, the Company achieved production of Bi- Carbonate 24541 tons against 23894 tons in the previous year. During the year the Company achieved sales of Bi-Carbonate 24265 tons against 23622 tons in the previous year.

HOME TEXTILE & YARN

The Indian Textile Industry, 2nd largest in the world, has been growing at 10% over last several years. Government of India has provided a number of export promotion policies for the Textile sector. In addition, States of Gujarat, Maharashtra, Madhya Pradesh have special incentive for textile industry. Hence, the outlook for the textile industry looks positive and there are huge opportunities in future for growth in this industry.

Your directors are pleased to inform that Textile Business of the Company has posted robust performance this year, which is despite the fact that the Spinning Industry went through troubled times during the year. The Made-ups (Home Textiles) Business operations have done considerably well mainly due to strong customer relations, product portfolio and consistent supply of quality material. This has led to increase in Capacity utilisation to 85% as compared to 70% last year.

Revenue of Textiles division stood at Rs. 1069 Cr. during the financial year 2015-16 against Rs. 965 Cr. in 2014-15. We are glad to inform that there is significant improvement in the margins over last year. This has been made possible due to higher capacity utilisation, our relentless customer focus which has enabled us to successfully strengthen our export markets and thus resulting in securing large replenishment orders from the big Global Retailers in US and Europe. Market sentiment in US looks better and the Company is focusing on US market with large volume programs. We strongly believe that our focus on customer realignment along with innovative designs, enhanced product basket with tie ups with Private labels shall provide a further impetus to both topline and margin improvement. However, fluctuations in the cotton price and quality of cotton have also become a big concern in this year. Due to adverse weather and whitefy infestation crops have been damaged. However, going forward, we expect an increase in demand for yarn as well as prices. Your company is taking effective steps to bring down the Power cost; 12.6 MW new Wind mills installed will meet 55% of power needs in spinning.

CONSUMER PRODUCTS

The Indian consumer segment is generally segregated into urban and rural markets, and is attracting marketers from across the globe. The sector comprises of a vast middle class, relatively large affluent class and a small, economically disadvantaged class, with spending anticipated to more than double by 2025.

Global corporations view India as one of the key markets from where future development is likely to come out. The increase in India''s consumer market would be primarily driven by a favourable population composition and increasing disposable incomes.

A recent survey hints that if India continues to rise at the current rate, average family incomes will triple over the following two decades, making the nation the world''s fifth-biggest consumer economy by 2025.

The growing purchasing power and growing influence of the social media have enabled Indian consumers to splurge on FMCG products. The Indian consumer sector has grown at an annual rate of 5.7 per cent between FY2005 to FY 2015. Annual growth in the Indian consumption market is estimated to be 6.7 percent during FY2015-20.

The fast-moving consumer goods sector is an important contributor to India''s GDP. FMCG sector is the fourth largest sector in the economy and creates employment for more than three million people. Its principal constituents are household care, personal care and food and beverages. The market is expected to maintain a high growth rate as the population converts to branded products.

At present edible salt plant has a capacity of 70000 MT & planning to increase the capacity to 100000 MT by end of January 2017. Company''s FMCG brand "''ifo'''' has the greatest reach of salt variants from basic refined iodised salt and crystal salt to specialised variants like Mild, Herbal & double fortified salt. As a part of our expansion plan, we have launched ''''ifo'''' Honey recently in south Indian markets and now also planning for a distribution expansion to Maharashtra and Goa this financial year.

DIVIDEND

Your Directors are pleased to inform that subsequent to the year end, the Board of Directors in its meeting held on May 19, 2016, has approved a Dividend policy of the Company. As per said policy, dividend pay-out (including tax, if any) will be 15 to 20 % of net proft of the Company.

Consequently, your Directors are pleased to recommend a dividend of Rs. 3.50 per Equity Share of Rs. 10 each (i.e. 35% on the paid-up capital) for the financial year ended March 31, 2016. The total dividend payout for the financial year 2015-16 shall be Rs. 42.14 Cr comprising of dividend amounting to Rs. 35.31 Cr and dividend distribution tax of Rs. 7.12 Cr. This dividend pay-out amounts to 16.42% of net profit of the Company for the financial year 2015-16.

SHARE CAPITAL

The paid up Equity Share Capital of the Company as on March 31, 2016 was Rs. 100,01,92,860/- comprising of 10,00,19,286 equity shares of Rs. 10/- each.

FINANCE

Project Loan

During the year 2015-16, your company embarked upon Soda Ash Expansion program at the project cost of Rs. 375 Cr. Your company successfully tied up Term Loan for Rs. 275 Cr. for a period of 10 years including moratorium period of 2 years at an average interest rate of 11.25% p.a.

Capex Program

GHCL has also undertaken several Capex program in Soda Ash, Home Textile and Yarn Divisions at the project cost of Rs. 173 Cr. and your company has successfully tied up term loan of Rs. 115 Cr. for a period of 10 years including moratorium period of 2 years at an average interest rate of 11.50% p.a.

Short Term Loan

During the year 2015-16, short term requirements were met through Cash Credit / Short Term Loan / Working Capital Demand Loan / Export Packing Credit / Pre-shipment in Foreign Currency / Buyers Credit whereby your company could manage to borrow at Weighted Average Interest rate at 6.25%.

Overall, your company could borrow Long Term Loan at an average rate of 11.40% and Short Term Loan at an average rate of 6.25% and maintained overall weighted average interest rate at 9.60%.

Due to timely repayment of interest and principal to various banks, CARE (Credit Analysis & Research Ltd) has maintained at CARE BBB for long term facilities and CARE A3 for short term facilities of the Company.

During the financial year, your Company has transferred to investors'' education and protection fund account (IEPF) a sum of Rs. 27.48 lacs towards unclaimed dividend/unclaimed deposits along with interest thereon.

DEPOSITS

Your Company discontinued inviting, accepting and renewing of fixed deposits effective from September 24, 2002. Further, your Company has not accepted deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014.

EMPLOYEES STOCK OPTION SCHEME

Your company has Employees Stock Option Scheme for its permanent employees as per the scheme approved by shareholders in their Annual General Meeting held on July 23, 2015. During the year under review, the Company has obtained in-principle approvals from the Stock Exchanges for issue of 50 lakh equity shares through Employees Stock Option Scheme. Subsequent to the year end, the Nomination and Remuneration Committee in its meeting held on May 19, 2016 have granted 12.10 Lacs Stock options to its 46 employees of grade General Manager and above, at an exercise price of Rs. 100 each. Employees may exercise their options after the vesting period, subject to compliance of other terms and conditions of the Scheme approved by the shareholders.

SUBSIDIARIES

Grace Home Fashion, LLC, a subsidiary of the Company in USA engaged in Home Textile segment is catering to some of the largest Home-Textile Retailers like Bed Bath Beyond and Babies R US. In addition, Grace Home Fashion is also doing online Home-Textile Business in USA through JC Penny and Kohls. com.

During the year, non-operating subsidiaries of the Company namely Teliforce Holding India Ltd. has been voluntarily dissolved with effect from April 28, 2015 and Indian England NV has been liquidated with effect from August 14, 2015. Further, Rosebys Interiors India Limited (RIIL) an Indian subsidiary, is under liquidation with effect from 15th July 2014.

Pursuant to requirement of Section 136 of the Companies Act, 2013, which has exempted companies from attaching the financial statements of the subsidiary companies along with the Annual Report of the Company. The Company will make available the annual financial statements of the subsidiary company and the related detailed information to any members of the company on receipt of a written request from them at the Registered Office of the Company. The annual financial statements of the subsidiary company will also be kept open for inspection at the Registered Office of the Company on any working day during business hours. The Consolidated Financial Statements presented by the Company include financial results of its subsidiary companies, associates etc. Details regarding subsidiaries have been provided in note no. 1 (refer page no. 84 of Annual Report) and also in the statement u/s 129(3) of the Companies Act, 2013 (refer page no. 76). The statements are also available on the website of the Company.

CONSOLIDATED FINANCIAL STATEMENTS

Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to the requirement of Regulation 33 & Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (hereinafter referred as Listing Regulations) read with other applicable provisions and prepared in accordance with Accounting Standard 21 (Consolidated Financial Statements) of Institute of Chartered Accountants of India, for financial year ended March 31, 2016.

MANAGEMENT DISCUSSION AND ANALYSIS

In terms of Regulation 34 of the Listing Regulations read with other applicable provisions, the detailed review of the operations, performance and future outlook of the Company and its business is given in the Management''s Discussion and Analysis Report which forms part of this Annual Report. The report on Management''s Discussion and Analysis is annexed with the Report.

CORPORATE GOVERNANCE

Pursuant to Regulation 34 of the Listing Regulations read with Schedule V to the said Regulations, a compliance report on Corporate Governance has been annexed as part of the Annual Report along with Auditor''s certificate for the compliance.

SECRETARIAL AUDIT REPORT

In line with the requirement of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 read with other applicable provisions, if any; the Board of Directors of the Company had appointed Mr. K. K. Mishra, Practicing Company Secretary to conduct Secretarial Audit of the Company for the financial year 2015-16. The Secretarial Audit Report for the financial year ended March 31, 2016 is annexed with the Board''s report and formed as part of the Annual Report. This report is self explanatory and does not call for any further comments.

LISTING OF THE EQUITY SHARES

The equity shares of your Company are listed at BSE Limited, Mumbai (BSE) and National Stock Exchange of India Limited, Mumbai (NSE). The annual listing fees for the year 2015-16 have been paid to all these Stock Exchanges.

DIRECTORS

Your directors would like to confirm that all Independent Directors of the Company have given their declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16 (1) (b) of the Listing Regulations. Mr. Sanjay Dalmia and Mr. Anurag Dalmia directors retire by rotation and being eligible, offer themselves for re-appointment. The Board recommends their appointments at the ensuing Annual General Meeting.

MEETING OF THE BOARD

During the financial year ended March 31, 2016, the Board of Directors meets regularly to review strategic, operational and financial matters and has a formal schedule of matters reserved for its decision. During the financial year ended March 31, 2016, four Board Meetings were held on May 22, 2015, July 30, 2015, October 31, 2015, and January 28, 2016. More details about the Board Meetings are mentioned in Corporate Governance Report.

BOARD EVALUATION

Pursuant to the provisions of Section 149 read with Schedule IV of the Companies Act, 2013 and conditions of the Listing Regulations, the Independent Directors in their separate meeting held on October 31, 2015 had reviewed the performance of Non-Independent Directors, the Board as a whole and the Chairperson of the Company after taking into accounts the views of Executive Directors and Non-Executive Directors of the Company. Independent Directors had also assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board and that the information supplied by the management to the Board was sufficient and relevant for the Board to perform their duties effectively. Further, pursuant to the requirement of Para VIII of Code of Independent Director as mentioned in Schedule IV of the Companies Act, 2013 read with Regulation 17 (10) of the Listing Regulations, the Board of Directors in its meeting held on October 31, 2015 had carried out the performance evaluation of Independent Directors, except the director being evaluated.

REMUNERATION POLICY

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report.

EXTRACTS OF ANNUAL RETURN

The extract of annual return as on the financial year ended March 31, 2016 in Form MGT – 9 is annexed herewith as Annexure-I and forming part of this Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company has been one of the foremost proponents of inclusive growth and since inception, has been continuing to undertake projects for overall development and welfare of the society. GHCL''s commitment to the development of weaker sections of society is continuing since more than two decades. GHCL through its "GHCL Foundation Trust" has upgraded its CSR activities to cover a larger section of the society and included to provide support to the downtrodden, needy and marginalized citizens and also to create social infrastructure for their sustenance.

As part of its initiatives under Corporate Social Responsibility (CSR), the Company has undertaken projects in the areas of Sanitation, Coastal Area Development, Education, Agro Based Livelihood, Health, Rain Water Harvesting, Woman Empowerment, Animal Husbandry etc. These projects are largely covered under Schedule VII of the Companies Act, 2013. Pursuant to the provisions of Section 135 of the Companies Act, 2013 and Rules thereto, a Corporate Social Responsibility (CSR) Committee of the Board has been constituted to monitor CSR related activities, comprising of Mr. Sanjiv Tyagi as the Chairman of the Committee, Mr. Neelabh Dalmia and Mr. R S Jalan as members of the Committee. The Annual Report of CSR activities are annexed herewith as Annexure-II and forming part of this Report.

BUSINESS RESPONSIBILITY REPORTING

As per Regulation 34 (2) (f) of the Listing Regulations, (corresponding to provisions of Clause 55 of the Listing Agreement), listed companies shall submit, as part of their Annual Reports, Business Responsibility Reports, describing the initiatives taken by them from an environmental, social and governance perspective, in the prescribed format. This provision is applicable to top 100 listed companies (based on market capitalisation as on March 31, 2016). Hence, this clause is not applicable to your company.

COMPOSITION OF AUDIT COMMITTEE

Audit Committee of the Board has been constituted as per Section 177 of the Companies Act, 2013 and rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014 and read with Regulation 18 of the Listing Regulations. The Audit Committee consists of four non-executive directors including three Independent Directors having expertise in financial and accounting areas, comprising of Dr. B C Jain, Mr. Neelabh Dalmia, Mr. G C Srivastava and Mr. Mahesh Kumar Kheria. Details regarding Audit Committee and other Committees are also stated in the Corporate Governance Report.

COMPOSITION OF STAKEHOLDERS RELATIONSHIP COMMITTEE

The Stakeholders Relationship Committee has been constituted as per section 178 (5) of the Companies Act, 2013 read with Regulation 20 of the Listing Regulations. The Stakeholders Relationship Committee shall consider and resolve the grievances of the security holders of the company including complaints related to transfer of shares, non-receipt of balance sheet and non-receipt of dividend etc. The Stakeholders Relationship committee consists of Executive and Non- Executive directors comprising of Mr. Mahesh Kumar Kheria, Mr. Neelabh Dalmia, Mr. R S Jalan and Mr. Raman Chopra.

COMPOSITION OF NOMINATION AND REMUNERATION COMMITTEE

Nomination and Remuneration Committee of the Board has been constituted as per Section 178 of the Companies Act, 2013 and rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014 and read with Regulation 19 of the Listing Regulations. The Nomination and Remuneration Committee shall determine qualifications, positive attributes and independence of a director and recommend to the Board a policy relating to the remuneration of the directors, Key Managerial Personnel and other employees. The Nomination and Remuneration Committee consists of four Non-Executive directors comprising of Mr. K C Jani, Mr. Sanjay Dalmia, Dr. B C Jain and Mr. Sanjiv Tyagi.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

As a conscious and vigilant organization, GHCL Limited believes in the conduct of the affairs of its constituents in a fair and transparent manner, by adopting the highest standards of professionalism, honesty, integrity and ethical behavior. In its endeavour to provide its employee a secure and fearless working environment, GHCL Limited has established the "Whistle Blower Policy". The Board of Directors in its meeting held on May 28, 2014, had approved the Whistle Blower Policy, which is effective from October 1, 2014 & the same has been duly amended effective from December 1, 2015. Mr. Mahesh Kumar Kheria, Independent Director of the Company and also a member of the Audit Committee is Ombudsperson.

The purpose of the policy is to create a fearless environment for the directors and employees to report any instance of unethical behaviour, actual or suspected fraud or violation of GHCL''s code of conduct or Ethics Policy to the Ombudsperson. Details regarding Whistle Blower Policy is also stated in the Corporate Governance Report. The Whistle Blower Policy is posted on the website of the Company.

RELATED PARTY TRANSACTIONS

There are no material related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All related party transactions that were entered into during the financial year were on an arm''s length basis and were in the ordinary course of business. A statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors on a quarterly basis. The statement is supported by a Certificate from the CFO. All Related Party Transactions are placed before the Audit Committee and also before the Board.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website. None of the Directors has any material pecuniary relationships or transactions vis-a-vis the Company.

PARTICULARS OF L OANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

RISK MANAGEMENT POLICY

Pursuant to the requirement of Regulation 21 of the Listing

Regulations, the Company had voluntarily constituted a Risk Management Committee. The details of Committee and other details are also set out in the Corporate Governance Report forming part of the Board''s Report. The policy on Risk Management as approved by the Board is uploaded on the Company''s website.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are given in Annexure-III forming part of this Report.

MANAGERIAL REMUNERATION & PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company are given in Annexure-IV forming part of this Report.

DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT 2013

Your Company is committed to creating and maintaining a secure work environment where its employees, agents, vendors and partners can work and pursue business together in an atmosphere free of harassment, exploitation and intimidation. To empower women and protect women against sexual harassment, a policy for prevention of sexual harassment has been rolled out and Internal Complaints Committee as per legal guidelines has been set up at all major locations of the Company. This policy allows employees to report sexual harassment at the workplace. The Internal Committee is empowered to look into all complaints of sexual harassment and facilitate free and fair enquiry process with clear timelines.

STATUTORY AUDITORS

Pursuant to the requirement of Rule 6(4) of Companies (Audit and Auditors) Rules, 2014, the Company may follow the policy of rotation of auditors such that, Joint Auditors, where applicable, may not retire at the same time. Hence, your directors would like to inform that in order to comply with said provisions read with other applicable provisions, if any and based on the recommendation of the Audit Committee, the Board of Directors has decided to place the proposal for appointment of M/s S.R. Batliboi LLP, Chartered Accountants, as one of the joint auditors of the Company, for a period of 5 years i.e. from the conclusion 33rd Annual General Meeting (AGM) till the conclusion of 38th AGM. They have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed thereunder for appointment as Auditors of the Company. As required under Regulation 33 (1) (d) of the Listing Regulations, they have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

Your director would like to further inform that in the last AGM (i.e. 32nd AGM) held on July 23, 2015, M/s Rahul Gautam Divan & Associates, Chartered Accountants, were appointed as one of the joint auditors of the Company for a period of two years i.e. from the conclusion 32nd AGM till the conclusion of 34th AGM. Ratification of appointment of M/s Rahul Gautam Divan & Associates is being sought from the members of the Company at the ensuing AGM.

The Board recommends their appointment and ratification.

AUDITOR''S REPORT

There is no qualification, reservation, adverse remark or disclaimer made by the Statutory Auditors and/or Secretarial Auditors of the Company in their report for the financial year ended March 31, 2016. Hence, they do not call for any further explanation or comment u/s 134 (3) (f) of the Companies Act, 2013.

COST AUDITORS

The Board has appointed M/s R J Goel & Company, Cost Accountants, New Delhi as Cost Auditors of the Company for all its divisions (i.e. Soda Ash, Yarn and Home Textile) for the financial year 2016-17.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

DIRECTORS'' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them and also based on the representations received from the Operating Management, your directors make the following statement in terms of Section 134 (3) (c) of the Companies Act, 2013 that:

a. in the preparation of the annual accounts for the financial year ended March 31, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b. such accounting policies as mentioned in the Notes to the Financial Statements have been selected 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 as at March 31, 2016 and of the profit and loss of the Company for the financial year ended March 31, 2016;

c. the proper and sufficient care has been taken by them for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the annual accounts for the financial year ended March 31, 2016 have been prepared by them on a going concern basis;

e. proper Internal financial controls have been followed by the company and that such internal financial controls are adequate and were operating effectively; and

f. proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENT

The Directors express their gratitude to Financial Institutions, Banks, and various other agencies for the co-operation extended to the Company. The Directors also take this opportunity to thank the shareholders, customers, suppliers, lenders, distributors and other stakeholders for the confidence reposed by them in the Company. The employees of the Company contributed significantly in achieving the results. The Directors take this opportunity of thanking them and hope that they will maintain their commitment to excellence in the years to come.

For and on behalf of the Board of Directors

For GHCL Limited



Sd/- Date: May 19, 2016 SANJAY DALMIA

Place: New Delhi Chairman


Mar 31, 2015

To The Members of GHCL Limited,

We are pleased to present the 32nd Annual Report together with the audited financial statements of the company for the financial year ended March 31,2015.

OPERATIONAL RESULTS

The summary of the financial performance of the Company for the financial year ended March 31, 2015 compared to the previous year ended March 31,2014 is given below:

(Rsin Lacs) Particulars Year Ended Year Ended March 31, March 31, 2015 2014

Net Sales/Income 2,38,486.70 2,22,920.76

Gross profit before interest 53,363.42 43,332.31 and depreciation

Finance cost 16,383.56 17,052.75

Profit before depreciation and 36,979.86 26,279.56 amortisation - (Cash Profit)

Depreciation and 8,445.31 8,156.77

Amortisation

PBT before exceptional items 28,534.55 18,122.79

Exceptional items (2,740.10) (3,097.20)

Profit before Tax (PBT) 25,794.45 15,025.59

Provision for Tax - Current 6,421.28 3,521.76

Provision for Tax - Deferred 1,070.69 (125.37)

Profit after Tax 18,302.48 11,629.20

Balance brought forward from 30,284.66 22,218.30 last year

Prior period adjustments 8.70 16.75

Excess provision for tax for 119.72 (76.31) earlier years

Amount available for 48,715.56 33,787.94 appropriation

Appropriations Transfer to General Reserve - 1,162.92

Proposed Dividend 2,200.42 2,000.39

Tax on Dividend 447.95 339.97

Balance carried to Balance 46,067.19 30,284.66 Sheet

performance highlights & STATE oF CoMPANY''S AFFAIRS

SODA ASH

The Global Soda Ash market which was around 54 million tons in 2013 is estimated to be approximately 56 million metric tons in 2014 against a capacity of about 67 Million MT. Global demand for Soda Ash grew approximately 3% annually over the last year and is expected to grow 3 to 4% annually through 2024.

Due to the global cost disparities, relative production costs will be a key issue for the soda ash industry in the future with the "Natural" process produces continuing to have a significant advantage over the synthetically produced soda ash.

The global soda ash market is undergoing significant structural change characterized by shifting capacity since naturally produced soda ash is now overtaking market supply and synthetically produced capacity, except in China and India, is declining. There has been an influx of new supply of natural soda ash from Turkey, which is both cost-competitive and more sustainable than synthetic production. As a result of this cheaper supply, more costly synthetic supply from high-cost producers, particularly in Europe, is being threatened, shut down or idled.

Patterns of trade for soda ash are beginning to experience more seismic adjustments, meanwhile, as higher cost production centers become displaced by cheaper, alternative sources, particularly in Europe and Australia, where domestic output makes way for supply from Turkey and the US, respectively.

The Indian economy has witnessed a robust growth of plus 7% in 2014-15. With the global economy expected to recover moderately, particularly on account of performance in some advanced economies, the economy can look forward to better growth prospects beyond 2014-15. According to Economic Survey, the measures taken by the government to improve investment climate and improved governance could push up growth to 8 % in the coming years. With the improved growth of the Indian economy, Soda Ash demand also witnessed a 6% growth in 2014-15. Other than Glass all other consuming segments led by Detergents recorded higher growth. It is expected that on the back of improved GDP growth projected and growth in Glass (Construction/Automobiles) and Detergents (FMCG penetration and growth) Soda Ash demand will continue to witness a reasonable growth.

The Indian Soda Ash market constitutes of two varieties - Light (used in detergent industry) & Dense (used in Glass industry), with share of 60% and 40% respectively. Total installed capacity in India was 3.1 Million MT. With an estimated production of about 2.6 Million MT in last financial year (2014-15), the capacity utilization was 85%.

At present your Soda Ash plant has a capacity of 8.50 lacs MTPA. During the financial year 2014-15 your company has produced 7.39 lacs MT soda ash against 7.12 lacs MT in previous year. This year, the Company has also achieved highest domestic sales i.e. 6.74 lacs MT against 6.44 lacs MT in previous year and total sales of Soda Ash is 6.86 lacs MT including exports against 6.71 lacs MT in previous year.

BI-CARBONATE (BICARB)

During the year, the Company achieved production of Bi- Carbonate 23894 tons against 21827 tons in the previous year. During the year the Company achieved sales of Bi-Carbonate 23622 tons against 21591 tons in the previous year.

HOME TEXTILES & YARN

The Indian Textile Industry, 2nd largest in the world, has been growing at 10% over last several years. Government of India has provided a number of export promotion policies for the Textile sector. In addition, States of Gujarat, Maharashtra, Madhya Pradesh have special incentive for textile industry. Hence, the outlook for the textile industry looks positive and there are huge opportunities in future for growth in this industry.

The revenue of Home Textile division was at 632 crore rupees during financial year 2014-15 compared with 662 crore rupees in the previous year. The reduction was mainly on account of loss of one key account of a retailer in uS market which has since been replaced with new business from other uS retailers. Market sentiment in uS looks better and we are focusing on that market with large volume programs. There is a lot of interest in uS retail to shift some more business to India and that is yet another positive for the Indian Home Textile Industry. Additionally, your company has also made inroads in European Market and has secured large replenishment orders from retailers in Europe. The outlook for the sector is positive and there are huge opportunities for growth. However, pricing pressure and volatility in forex still remain huge challenges, which may keep margins under pressure.

The revenues of the yarn division was at 441 crore rupees during 2014-15, unchanged from the previous year. Despite expansion in the spindle capacity during the year, the performance of the yarn division was lower when compared to growth seen in the previous year mainly due to lower demand of yarn as well as low yarn prices. Although, cotton prices also witnessed downtrend, the reduction in yarn prices was significantly higher than the reduction in cotton prices thereby impacting the performance of yarn business. Going forward, we expect an uptick in demand for yarn as well as prices. Your company is taking effective steps to bring down the cost of production by implementing EHT line (extra high tension line) and new wind mills. The outlook for spinning industry looks better. With stable cotton prices, timely cotton coverage and improved yarn price scenario, we expect a profitable period ahead for the company in this segment.

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs. 2.20 per Equity Share of Rs. 10 each (i.e. 22% on the paid-up capital) for the financial year ended March 31,2015. The total dividend payout for the financial year 2014-15 shall be Rs. 2648.37 lacs comprising of dividend amounting to Rs. 2200.42 lacs and dividend tax of Rs. 447.95 lacs.

SHARE CAPITAL

The paid up Equity Share Capital of the Company as on March 31, 2015 was Rs. 100,01,92,860/- comprising of 10,00,19,286 equity shares of Rs. 10/- each. During the year under review, the Company has neither issued any kind of shares nor granted any stock options. Details of Director''s shareholding have been stated in the annexure.

FINANCE

During the year 2014-15, your company has successfully raised resources in the form of Long Term and Short term to part finance several Capex programmes of the company besides meeting overall working capital requirements of the company. The details are as follows:

Nature of Borrowing Rsin Crores

1 Project Loan 100.00

2 Medium Term Loans 320.00

3 Working Capital Facilities 185.00 (Enhancement during the year)

Total 605.00

During the year, your company resorted to borrow Medium Term Loan and Project Loans in the form of Rupee Loan at could manage Weighted Average Interest Rate of 11.92%.

However, working capital requirements were met through Cash Credit / Short Term Loan / Working Capital Demand Loan / Export Packing Credit / Pre-shipment in Foreign Currency / Buyers Credit whereby we could maintain Weighted Average Interest rate at 5.08%.

Facility WAROI

Working Capital Loans 5.08%

Term Loans 11.92%

Overall 9.55%

Due to timely repayment of interest and principal to various banks, CARE (Credit Analysis & Research Ltd) has upgraded the rating to CARE BBB from CARE BBB for long term facilities and CARE A3 from CARE A3 for short term facilities of the Company.

During the financial year, your Company has transferred to investors'' education and protection fund account (IEPF) a sum of Rs. 29.76 lacs towards unclaimed dividend/unclaimed deposits along with interest thereon.

DEPOSITS

Your Company discontinued inviting, accepting and renewing of fixed deposits effective from September 24, 2002. Further, your Company has not accepted deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014.

EMPLOYEES STOCK OPTION SCHEME

Your company had Stock Option Scheme for its employees as per the scheme approved by shareholders in their Extra Ordinary General Meeting held on March 19, 2008. The options granted to the employees were vested effective from March 24, 2010, but none of the employees had exercised their vested rights. Further, in compliance of SEBI Circulars issued on January 17, 2013, May 13, 2013 and November 29, 2013, GHCL Employees Stock Option Trust had sold its entire shareholding except the shares which are part of litigation and the same shall be accounted for depending upon the outcome of the litigations. As per direction of the above SEBI circulars, Employees Stock Option Scheme ceased effective from July 1, 2014. However, the Trust will continue for the limited purpose of litigation.

Further, in order to retain talent and for rewarding performance of employees, your Company is proposing a new scheme, which is separately stated in the Notice.

SUBSIDIARIES

Grace Home Fashion, LLC, a subsidiary of the Company in uSA engaged in Home Textile segment is catering to some of the largest Home-Textile Retailers like Bed Bath Beyond and Babies R uS. In addition, Grace Home Fashion is also doing online Home-Textile Business in uSA through JC Penny and Kohls. com. The revenue of the company increased from Rs. 317.73 Crore in FY''13-14 to Rs. 319.08 Crore during FY''2014-15.

Rosebys Interiors India Limited (RIIL) a subsidiary, is under liquidation with effect from 15thJuly 2014.

During the year, non-operating step down subsidiary namely Indian Wales NV was voluntarily dissolved. Another subsidiary of the Company namely Indian England NV has been put under voluntary liquidation on March 10, 2015. Subsequent to the year end, a non-operating subsidiary of the Company namely

Teliforce Holding India Ltd. has been voluntarily dissolved with effect from April 28, 2015.

Pursuant to the circular dated February 8, 2011 issued by Ministry of Corporate Affairs, Government of India and Section 136 of the Companies Act, 2013, which has exempted companies from attaching the financial statements of the subsidiary companies along with the Annual Report of the Company. The Company will make available the annual financial statements of the subsidiary company and the related detailed information to any members of the company on receipt of a written request from them at the Registered Office of the Company. The annual financial statements of the subsidiary company will also be kept open for inspection at the Registered Office of the Company on any working day during business hours. The Consolidated Financial Statements presented by the Company include financial results of its subsidiary companies, associates etc. Details regarding subsidiaries have been provided in Form AOC-1 (refer page no. 80 of Annual Report). The statements are also available on the website of the Company www.ghcl.co.in

CONSOLIDATED FINANCIAL STATEMENTS

Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to Clause 32 read with Clause 41 of the Listing Agreement entered into with the Stock Exchanges and prepared in accordance with Accounting Standard 21 (Consolidated Financial Statements) of Institute of Chartered Accountants of India, for financial year ended March 31,2015.

MANAGEMENT DISCUSSION AND ANALYSIS

In terms of Clause 49 of the Listing Agreement of the Stock Exchanges, the detailed review of the operations, performance and future outlook of the Company and its business is given in the Management''s Discussion and Analysis Report which forms part of this Annual Report. The report on Management''s Discussion and Analysis is annexed with the Report.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a compliance report on Corporate Governance has been annexed as part of the Annual Report along with Auditor''s certificate for the compliance.

SECRETARIAL AuDIT REPORT

In line with the requirement of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 read with other applicable provisions, if any; the Board of Directors of the Company had appointed Dr. K.R. Chandratre, Practicing Company Secretary to conduct Secretarial Audit of the Company for the financial year 2014-15. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed with the Board''s report and formed as part of the Annual Report.

LISTING/DELISTING OF THE EQUITY SHARES

The equity shares of your Company are listed at BSE Limited, Mumbai (BSE) and National Stock Exchange of India Limited, Mumbai (NSE). The annual listing fees for the year 2014-15 have been paid to all these Stock Exchanges.

Further, your Board in their meeting held on May 28, 2014 had approved the proposal for voluntarily delisting of equity shares of the Company from Ahmedabad Stock Exchange Limited (ASEL) pursuant to provision of Regulations 6 and 7 of SEBI (Delisting of Equity Shares) Regulations, 2009 read with other applicable provisions, if any. Your directors are pleased to inform you that the Company had received approval for delisting of its equity shares, from ASEL vide their Ref. No.: 516 dated January 23, 2015. Accordingly, as per said approval, equity shares of GHCL Limited were delisted from ASEL with effect from January 27, 2015.

DIRECTORS

The Board of Directors had appointed Mr. K.C. Jani as an additional director of the company in the category of Independent Director with effect from September 18, 2014. The Company has received notice u/s 160 of the Companies Act, 2013 from Mr. Jani signifying the intention to propose his candidature at the ensuing Annual General Meeting, as an Independent Director of the Company. In the opinion of the Board Mr. Jani fulfil the conditions specified in the Companies Act, 2013 and rules made thereunder for his appointment as Independent Director of the Company and is independent of the management. The Board considers that his continued association would be of immense benefit to the Company and it is desirable to continue to avail valuable services of Mr. Jani as an Independent Director of the Company. Accordingly, as per Section 149 and other applicable provisions of the Companies Act, 2013 and the rules made thereunder, the Board recommends appointment of Mr. K C Jani at the ensuing Annual General Meeting for the approval by the members of the Company.

Your directors would like to confirm that all Independent Directors of the Company have given their declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

Mr. Neelabh Dalmia and Mr. Raman Chopra directors retire by rotation and being eligible, offer themselves for re-appointment. Further appointment of Mr Neelabh Dalmia as Director (Strategy) in an overseas subsidiary i.e. Grace Home Fashion, LLC is proposed under item no. 7. The Board recommends their appointments at the ensuing Annual General Meeting.

During the year, IDBI Bank Ltd. had nominated Mr. D C Jain in place of Mr. Ajoy Nath Jha as a Nominee Director of the Company and accordingly the Board of Directors had appointed Mr. D C Jain as a Nominee Director of the Company in place of Mr. Ajoy Nath Jha with effect from April 2, 2014. Exim Bank had also withdrawn nomination of Mr. R M V Raman and accordingly his directorship ceased with effect from June 13, 2014. Further, IDBI Bank Ltd. had again changed its nominee and nominated Mrs. Padma Vinod Betai in place of Mr. D C Jain. Accordingly the Board of Directors had appointed Mrs. Padma Vinod Betai as a Nominee Director of the Company with effect from September 6, 2014. Mr. S H Ruparell resigned from the directorship of the company due to his personal reasons with effect from September 15, 2014. Mr. Surendra Singh resigned from the directorship of the company due to his personal reasons with effect from October 4, 2014. The Board of Directors in its meeting held on November 24, 2014, had appointed Mr. Lavanya Rastogi as an Independent Director of the Company to fill casual vacancy caused due to resignation of Mr. Surendra Singh. Appointment of Mr. Rastogi is effective from November 24, 2014 till March 31, 2019. The Board of Directors placed on record their gratitude and

appreciation for the immense contribution made by the outgoing directors during their tenure as directors of the Company.

MEETING OF THE BOARD

During the financial year ended March 31, 2015, the Board of Directors meets regularly to review strategic, operational and financial matters and has a formal schedule of matters reserved for its decision.

During the financial year ended March 31, 2015, five Board Meetings were held on May 28, 2014, July 31, 2014, October 18, 2014, November 24, 2014 and January 27, 2015. More details about the Board Meetings are mentioned in Corporate Governance Report.

BOARD EVALUATION

Pursuant to the provisions of Section 149 read with Schedule IV of the Companies Act, 2013 and conditions of Corporate Governance, the Independent Directors in their separate meeting held on November 24, 2014 had reviewed the performance of Non-Independent Directors, the Board as a whole and the Chairperson of the Company after taking into accounts the views of Executive Directors and Non-Executive Directors of the Company. Independent Directors had also assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board and that the information supplied by the management to the Board was sufficient and relevant for the Board to perform their duties effectively. Further, pursuant to the requirement of Para VIII of Code of Independent Director as mentioned in Schedule IV of the Companies Act, 2013 read with Clause 49- II-B(5), the Board of Directors in its meeting held on November 24, 2014 had carried out the performance evaluation of Independent Directors, except the director being evaluated.

REMUNERATION POLICY

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. Highlights of the Remuneration Policy is stated in the Corporate Governance Report.

EXTRACTS OF ANNUAL RETURN

The extract of annual return as on the financial year ended March 31, 2015 in Form MGT - 9 is annexed herewith as Annexure-I and forming part of this Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company has been one of the foremost proponents of inclusive growth and since inception, has been continuing to undertake projects for overall development and welfare of the society. GHCL''s commitment to the development of weaker sections of society is continuing since more than two decades. GHCL through its "GHCL Foundation Trust" has upgraded its CSR activities to cover a larger section of the society and included to provide support to the downtrodden, needy and marginalized citizens and also to create social infrastructure for their sustenance.

As part of its initiatives under Corporate Social Responsibility (CSR), the Company has undertaken projects in the areas of Sanitation, Coastal Area Development, Education, Agro Based Livelihood, Health, Rain Water Harvesting, Woman

Empowerment, Animal Husbandry etc. These projects are largely covered under Schedule VII of the Companies Act, 2013. Pursuant to the provisions of Section 135 of the Companies Act, 2013 and Rules thereto, a Corporate Social Responsibility (CSR) Committee of the Board has been constituted to monitor CSR related activities, comprising of Mr. Sanjiv Tyagi as the Chairman of the Committee, Mr. Neelabh Dalmia and Mr. R S Jalan as members of the Committee. The Annual Report of CSR activities are annexed herewith as Annexure-II and forming part of this Report.

BUSINESS RESPONSIBILITY REPORTING

As per Clause 55 of the Listing Agreement with the Stock Exchanges,listed companies shall submit, as part of their Annual Reports, Business Responsibility Reports, describing the initiatives taken by them from an environmental, social and governance perspective, in the prescribed format. This clause 55 has been inserted pursuant to SEBI circular No. CIR/CFD/ DIL/8/2012 dated August 13, 2012 and clause is applicable to top 100 listed companies (based on market capitalisation as on March 31, 2012). Hence, this clause is not applicable to your company.

COMPOSITION OF AUDIT COMMITTEE

Audit Committee of the Board has been constituted as per Section 177 of the Companies Act, 2013 and rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014 and read with clause 49(III) of the Listing Agreement. The Audit Committee consists of four non-executive directors including three Independent Directors having expertise in financial and accounting areas, comprising of Dr. B C Jain, Mr. Neelabh Dalmia, Mr. G C Srivastava and Mr. Mahesh Kumar Kheria. Details regarding Audit Committee and other Committees are also stated in the Corporate Governance Report.

composition OF STAKEHOLDERS RELATIONSHIP COMMITTEE

The Stakeholders Relationship Committee has been constituted as per section 178 (5) of the Companies Act, 2013 read with Clause 49 (VIII)(E)(4) of the Listing Agreement. The Stakeholders Relationship Committee shall consider and resolve the grievances of the security holders of the company including complaints related to transfer of shares, non-receipt of balance sheet and non-receipt of dividend etc. The Stakeholders Relationship committee consists of Executive and Non- Executive directors comprising of Mr. Mahesh Kumar Kheria, Mr. Neelabh Dalmia, Mr. R S Jalan and Mr. Raman Chopra.

COMPOSITION OF NOMINATION AND REMUNERATION COMMITTEE

Nomination and Remuneration Committee of the Board has been constituted as per Section 178 of the Companies Act, 2013 and rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014 and read with clause 49(IV) of the Listing Agreement. The Nomination and Remuneration Committee shall determine qualifications, positive attributes and independence of a director and recommend to the Board a policy relating to the remuneration of the directors, Key Managerial Personnel and other employees. The Nomination and Remuneration Committee consists of four Non-Executive directors comprising of Mr. K C Jani, Mr. Sanjay Dalmia, Dr. B C Jain and Mr. Sanjiv Tyagi. Mr. K.C. Jani, Independent Director, is the Chairman of this Committee.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

As a conscious and vigilant organization, GHCL Limited believes in the conduct of the affairs of its constituents in a fair and transparent manner, by adopting the highest standards of professionalism, honesty, integrity and ethical behavior. In its endeavour to provide its employee a secure and fearless working environment, GHCL Limited has established the "Whistle Blower Policy". The Board of Directors in its meeting held on May 28, 2014, had approved the Whistle Blower Policy, which is effective from October 1, 2014. Mr. Mahesh Kumar Kheria, Independent Director of the Company and also a member of the Audit Committee is Ombudsperson.

The purpose of the policy is to create a fearless environment for the directors and employees to report any instance of unethical behaviour, actual or suspected fraud or violation of GHCL''s code of conduct or Ethics Policy to the Ombudsperson. Details regarding Whistle Blower Policy is also stated in the Corporate Governance Report. The Whistle Blower Policy is posted on the website of the Company.

RELATED PARTY TRANSACTIONS

There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All related party transactions that were entered into during the financial year were on an arm''s length basis and were in the ordinary course of business. A statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors on a quarterly basis. The statement is supported by a Certificate from the CFO. All Related Party Transactions are placed before the Audit Committee and also before the Board.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website. None of the Directors has any material pecuniary relationships or transactions vis-a-vis the Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

RISK Management Policy

Pursuant to the requirement of Clause 49 of the Listing Agreement, the Company has constituted a Risk Management Committee. The details of Committee and other details are also set out in the Corporate Governance Report forming part of the Board''s Report. The policy on Risk Management as approved by the Board is uploaded on the Company''s website.

CONSERVATION OF ENERGY, TECHNOLOGYABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are given in Annexure-III forming part of this Report.

MANAGERIAL REMuNERATION & PARTICuLARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and financial statements are being sent to the members and others entitled thereto, excluding the information on employees'' particulars which is available for inspection by the members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company in this regard.

disclosures under sexual HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT 2013

Your Company is committed to creating and maintaining a secure work environment where its employees, agents, vendors and partners can work and pursue business together in an atmosphere free of harassment, exploitation and intimidation. To empower women and protect women against sexual harassment, a policy for prevention of sexual harassment has been rolled out and Internal Complaints Committee as per legal guidelines has been set up. This policy allows employees to report sexual harassment at the workplace. The Internal Committee is empowered to look into all complaints of sexual harassment and facilitate free and fair enquiry process with clear timelines.

STATUTORY AUDITORS

M/s Jayantilal Thakkar & Co., Chartered Accountants and M/s Rahul Gautam Divan & Associates, Chartered Accountants, the Joint Auditors of the Company will retire at the ensuing Annual General Meeting and are eligible for re-appointment. Pursuant to the requirement of Rule 6(4) of Companies (Audit and Auditors) Rules, 2014, the Company may follow the policy of rotation of auditors such that, Joint Auditors, where applicable, may not retire at the same time. Hence, your directors would like to inform that in order to comply with said provisions read with other applicable provisions, if any and based on the recommendation of the Audit Committee, the Board of Directors has decided to place the proposals for re-appointment of M/s Jayantilal Thakkar & Co., Chartered Accountants, for a period of one year i.e. from the conclusion 32nd Annual General Meeting till the conclusion of 33rd Annual General Meeting and for re-appointment of M/s Rahul Gautam Divan & Associates, Chartered Accountants for a period of two years i.e. from the conclusion 32nd Annual General Meeting till the conclusion of 34th Annual General Meeting. They have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed thereunder for re-appointment as Auditors of the Company. As required under Clause 49 of the Listing Agreement, the auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. The Board recommends their re-appointment.

AUDITOR''S REPORT

There is no qualification, reservation, adverse remark or disclaimer made by the Statutory Auditors and/or Secretarial Auditors of the Company in their report for the financial year ended March 31, 2015. Hence, they do not call for any further explanation or comment u/s 134 (3) (f) of the Companies Act, 2013.

COST AUDITORS

The Board has appointed M/s R J Goel & Company, Cost Accountants, New Delhi as Cost Auditors of the Company for all its divisions (i.e. Soda Ash, Yarn and Home Textile) for the financial year 2015-16.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations. However, in line with the requirement of clause 36 of the listing agreement read with guidance note issued by the stock exchanges, the company has reported all the major cases/litigation matters etc. from time to time to the Stock Exchanges.

DIRECTORS'' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them and also based on the representations received from the Operating Management, your directors make the following statement in terms of Section 134 (3) (c) of the Companies Act, 2013 that:

a. in the preparation of the annual accounts for the financial year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b. such accounting policies as mentioned in the Notes to the Financial Statements have been selected 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 as at March

31.2015 and of the profit and loss of the Company for the financial year ended March 31,2015;

c. the proper and sufficient care has been taken by them for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the annual accounts for the financial year ended March

31.2015 have been prepared by them on a going concern basis;

e. proper Internal financial controls have been followed by the company and that such internal financial controls are adequate and were operating effectively; and

f. proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENT

The Directors express their gratitude to Financial Institutions, Banks, and various other agencies for the co-operation extended to the Company. The Directors also take this opportunity to thank the shareholders, customers, suppliers, lenders, distributors and other stakeholders for the confidence reposed by them in the Company. The employees of the Company contributed significantly in achieving the results. The Directors take this opportunity of thanking them and hope that they will maintain their commitment to excellence in the years to come.

For and on behalf of the Board of Directors For GHCL Limited Sd/- Date : May 22, 2015 SANJAY DALMIA Place : New Delhi Chairman


Mar 31, 2014

To The Members,

We are pleased to present the 31st Annual Report and the audited accounts of the company for the financial year ended March 31, 2014.

OPERATIONAL RESULTS

The summary of the financial performance of the Company for the financial year ended March 31, 2014 compared to the previous year ended March 31, 2013 is given below:

(Rs. in Lacs)

Particulars Year ended Year ended March 31, March 31, 2014 2013

Net Sales /Income 2,22,920.76 2,12,793.13

Gross profit before interest and 43,332.31 41,956.41 depreciation

Finance Cost

(a) Interest Cost 14,916.21 14,091.22

(b) Loss on foreign currency 2,136.54 1,704.96 transactions and translation (net)

Total Finance cost (a b) 17,052.75 15,796.18

profit before depreciation and 26,279.56 26,160.23 amortisation - (Cash profit)

Depreciation and Amortisation 8,156.77 8,196.72

PBT before exceptional items 18,122.79 17,963.51

Exceptional items (3,097.20) (3,958.32)

profit before Tax (PBT) 15,025.59 14,005.19

Provision for Tax – Current 3,521.76 2,819.45

Provision for Tax – Deferred (125.37) (306.91)

profit afiter Tax 11,629.20 11,492.65

Balance brought forward from 22,218.30 14,212.44 last year

Prior period adjustments 16.75 3.92

Excess provision for tax for (76.31) (1.08) earlier years

Amount available for 33,787.94 25,707.93

Appropriation

Appropriations

Transfer to General Reserve 1,162.92 1,149.27

Proposed Dividend 2,000.39 2000.39

Tax on Dividend 339.97 339.97

Balance carried to Balance 30,284.66 22,218.30 Sheet

PERFORMANCE HIGHLIGHTS

SODA ASH

The Global Soda Ash market which was around 52 million tons in 2012 is estimated to be approximately 54 million metric tons in 2013 against a capacity of about 65 Million MT.

Global demand for Soda Ash grew 2.8% annually over the last 5 years and is expected to grow 5% annually through 2017. The projected growth for this year is 4% with most of the growth expected to be in China, India, and South America. World operating rates will not improve due to continued over capacity.

Due to the global cost disparities, relative production costs will be a key issue for the soda ash industry in the future. Though demand for Soda Ash remained better during the year, price pressure from key inputs such as salt and energy weighed heavily.

Consumption of soda ash per person is expected to register healthy rise in the next few years with China leading the rankings with consumption from 10.85 kilograms in 2007 to an expected 12.00 kilograms in 2013. China is likely to add at least 2 Million MT capacities every year on the back of huge infrastructure investments.

The manufacturing and processing costs for producing soda ash from trona are more cost competitive than other manufacturing techniques partly because of the cost associated with procuring the material needed for synthetic production. In addition, trona- based production consumes less energy. The average cost of production per ton of soda ash (before freight and logistics costs) from trona is approximately one-third to one-half the cost per ton of soda ash from synthetic production. The future depends upon soda ash prices. Soda Ash prices fuctuate according to the demand supply situation in the global market, China in particular.

Due to depressed conditions prevailing in the Indian Economy, Soda Ash demand witnessed a fat growth in 2013-14. Market feedback suggests other than Detergents; all other consuming segments lead by Glass recorded lower growth. Most affected sectors are container glass and fat glass, which are under pressure because of over capacity and slow growth in demand. They are under pressure and continue to struggle with sharp decline in sales and stock pile up and also their financial status is still a cause of concern. Though reduced, imports continue to fow in high volumes. It is expected that on the back of improved GDP growth projected and growth in Glass (Construction/ Automobiles) and Detergents (FMCG penetration and growth) Soda Ash demand will continue to witness a reasonable growth. While domestic demand in 2013-14 has been fat, demand growth of 3 to 4% expected in the coming year 2014-15.

The Indian Soda Ash market constitutes of two varieties – Light (used in detergent industry) & Dense (used in Glass industry), with a share of 60% and 40% respectively. Total installed capacity in India was 3.1 Million MT. With an estimated production of about 2.5 Million MT in last financial year (2013- 14) the capacity utilization was of only 80%.

The total size of the Indian soda ash market is about 2.7 Million MT and almost all the major industry players are located in the state of Gujarat due to the closeness and ready availability of the main raw materials namely limestone and salt.

At present your Soda Ash plant has a capacity of 8.50 lacs MTPA. During the financial year 2013-14 your company has produced 7.12 lacs MT soda ash. This year, the Company has also achieved highest domestic sales i.e. 6.44 lacs MT and total sales of Soda Ash is 6.71 lacs MT including exports.

BI-CARBONATE (BICARB)

During the year, the Company achieved production of Bi- Carbonate 21827 tons against 23593 tons in the previous year. During the year the Company achieved sales of Bi-Carbonate 21591 tons against 23433 tons in the previous year.

HOME TEXTILES

The Indian Textile Industry, 2nd largest in the world, has been growing at 10% over last several years. Government of India has provided a number of export promotion policies for the Textile sector. In addition, States of Gujarat, Maharashtra, Madhya Pradesh have special incentive for textile industry. Hence, the outlook for the textile industry looks positive and there are huge opportunities in future for growth in this industry.

In the Textile Business of your company, the performance of Yarn business has improved as compared to the previous year, which is mainly due to better demand in yarn, increase in yarn prices and stability of cotton prices. Further, the Made-ups (Home Textile) Business operations are now fully stabilized and doing reasonably well mainly due to the better market sentiments in uS. However, pricing pressure and volatility in forex still remain huge challenges, which may keep margins under pressure.

The Revenue of Home Textile division is at Rs. 662.55 Crores during the financial year 2013-14 against Rs. 617.04 Crores in 2012-13, thereby registering a growth of around 7.38% over previous year. Due to its sustained marketing efforts, the company has successfully made deep in roads in export market and further secured large replenishment orders from the big Global Retailers in uS and Europe. Market sentiment in uS looks better and the Company is focusing on uS market with large volume programs. With depreciation in Indian Rupee, tremendous interest has been getting generated in uS retail to shifit some more business to India which further looked promising for Indian home textile industry going forward.

The Revenue of Yarn division is at Rs. 441.96 Crores during the financial year 2013-14 against Rs. 381.87 Crores in 2012-13, thereby registering a handsome growth of around 15.74% over previous year. The performance of Yarn business improved as compared to the previous year, which is mainly due to better demand in Yarn and increase in yarn prices. Both Domestic and international cotton prices remained stable. But, shortage of skilled labour as well as grim power situation is the main challenges for yarn industry including your Company. However, the aggressive power trading by the Company resulted in substantial savings partially offsetting the aforesaid impact. Overall outlook for Spinning Industry looks better and with stable cotton prices, timely cotton coverage and improved yarn price scenario, your directors expect a profitable period ahead for the Company.

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs. 2.00 per Equity Share (i.e. 20% on the paid up capital) for the financial year ended March 31, 2014. The total dividend payout for the financial year 2013-14 shall be Rs. 2340.36 lacs comprising of dividend amounting to Rs. 2000.39 lacs and dividend tax of Rs. 339.97 lacs.

FINANCE

During the year 2013-14, your company has successfully raised resources in the form of long term and short term to part finance several capex programmes of the company besides meeting overall working capital requirements of the company. The details are as follows:

During the current year 2013-14, rupee depreciated sharply against dollar by 27% and hence, your company resorted to borrow in the form of rupee in the form of Short Term Loan / Long Term Loan instead of borrowing under FCNR (B) route. Despite borrowing under rupee route, your company could manage to maintain Weighted Average Interest Rate approx. 9.55%.

Due to timely repayment of interest and principal payments to various banks, CARE (Credit Analysis & Research Ltd) has reaffrmed the rating of CARE BBB assigned for long term facilities of the Company.

During the financial year, your Company has transferred to investors'' education and protection fund account (IEPF) a sum of Rs. 26.15 lacs towards unclaimed dividend/unclaimed deposits along with interest thereon.

FIXED DEPOSITS

Your Company discontinued inviting, accepting and renewing of fixed deposits effective from September 24, 2002.

EMPLOYEES STOCK OPTION SCHEME

Your company had Stock Option Scheme for its employees as per the revised Scheme approved by shareholders in their Extra Ordinary General Meeting held on March 19, 2008 and accordingly Compensation Committee in their meeting held on March 24, 2008 had granted options to its eligible employees. Pursuant to Scheme, employees were entitled for minimum guaranteed return of 20% on the Market price of the shares i.e. the latest available closing price prior to the date when the options were granted, at the time of exercise of the option. The options granted to the employees were vested effective from March 24, 2010. So far none of the employees have exercised their vested rights. Further, in compliance of SEBI Circulars issued on January 17, 2013, May 13, 2013 and November 29, 2013, GHCL Employees Stock Option Trust had sold its entire shareholding except the shares which are part of litigation and the same shall be accounted for depending upon the outcome of the litigations. As per direction of the SEBI circular, Employees Stock Option Trust shall cease to be in existence effective from July 1, 2014. The details as per regulation 12 of SEBI (ESOS & ESPS) Guidelines 1999 are given as an Annexure – II forming part of this report.

SUBSIDIARIES

Grace Home Fashion, LLC, a subsidiary of the Company in uSA engaged in Home Textile segment is catering to some of the largest Home-Textile Retailers like Bed Bath Beyond and Babies R uS. In addition, Grace Home Fashion is also doing online Home-Textile Business in uSA through JC Penny and Kohls.com. The revenue of the company increased from Rs. 150.04 Crore in FY''12-13 to Rs. 317.73 Crore during FY''2013-14.

Operations of Rosebys Interiors India Limited (RIIL), a subsidiary, remained closed during the year. RIIL is meeting its statutory and other obligations through support of GHCL.

During the year, non-operating subsidiaries namely Colwell & Salmon Communications Inc. and Rosebys uK Limited were voluntarily dissolved. Another subsidiary of the Company namely Teliforce Holding India Ltd. has been put for voluntary liquidation on January 29, 2014. Subsequent to the year end, a non-operating step-down subsidiary of the Company namely GHCL Rosebys Limited (i.e. wholly owned subsidiary of Indian Wales N.V.) has been voluntarily dissolved with effect from May 6, 2014.

Ministry of Corporate Affairs, Government of India, vide its circular dated February 8, 2011, had exempted companies from attaching the Balance Sheet, profit and Loss Account and other documents of the subsidiary companies along with the Annual Report of the Company required u/s 212 of the Companies Act, 1956. As required under the said circular, the Board of Directors of your Company at its meeting held on May 28, 2014 has given its consent for not attaching the Balance Sheet of its subsidiaries. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any members of the company on receipt of a written request from them at the Registered office of the Company. The Annual Accounts of the subsidiary companies will also be kept open for inspection at the Registered office of the Company these documents on any working day during business hours. The Consolidated Financial Statements presented by the Company include financial results of its subsidiary companies. Details regarding subsidiaries have been provided in note no. 2.36 (refer page no. 57 of Annual Report) and also under Statement u/s 212 of the Companies Act, 1956 (refer page no. 64 and 65).

In line with the clarifcation issued by Ministry of Corporate Affairs vide its General Circular 08/2014 dated April 4, 2014, financial statements (including the documents required to be attached thereto), auditor''s report and Board''s report of the Company in respect of financial year ended at March 31, 2014 shall be governed as per the relevant provisions / Schedules / rules of the Companies Act, 1956. Accordingly, financial statements (including the documents required to be attached thereto), auditor''s report and Board''s report of the Company has been prepared as per the relevant provisions / Schedules / rules of the Companies Act, 1956.

CONSOLIDATED FINANCIAL STATEMENTS

Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to Clause 32 read with Clause 41 of the Listing Agreement entered into with the Stock Exchanges and prepared in accordance with Accounting Standard 21 (Consolidated Financial Statements) of Institute of Chartered Accountants of India, for financial year ended March 31, 2014.

MANAGEMENT DISCUSSION AND ANALYSiS

In terms of Clause 49 of the Listing Agreement of the Stock Exchanges, the detailed review of the operations, performance and future outlook of the Company and its business is given in the Management''s Discussion and Analysis Report which forms part of this Annual Report. The report on Management''s Discussion and Analysis is annexed with the Report.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a compliance report on Corporate Governance has been annexed as part of the Annual Report along with Auditor''s certifcate for the compliance.

SECRETARIAL AUDIT REPORT

In line with the requirement of Section 204 of the Companies Act, 2013 read other applicable provisions, if any, the Board of Directors of the Company appointed Dr. K.R. Chandratre, Practicing Company Secretary to conduct Secretarial Audit of the Company for the financial year 2014-15. Further, as a measure of good corporate Governance practice, the Board of Directors had also appointed Dr. K.R. Chandratre, Practicing Company Secretary to conduct Secretarial Audit of the Company for the financial year 2013-14. The Secretarial Audit Report for the financial year ended March 31, 2014 is annexed with the Board''s

report and formed as part of the Annual Report. The Secretarial Audit Report confirms that the Company has complied with all the applicable provisions of the Companies Act, 1956, Securities Contracts (Regulation) Act, 1956, Depositories Act, 1996, and all the Regulations and Guidelines of SEBI as applicable to the Company, including The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992, The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and Listing Agreements with the Stock Exchanges.

LISTING/DELISTING OF THE EQUITY SHARES

The equity shares of your Company are listed at BSE Limited (BSE), The National Stock Exchange of India Limited (NSE) and Ahmedabad Stock Exchange Limited (ASE). The annual listing fees for the year 2013-14 have been paid to all these Stock Exchanges. Further, your Board in their meeting held on May 28, 2014 has approved voluntarily delisting of equity shares from Ahmedabad Stock Exchange Limited.

DIRECTORS

Shri Anurag Dalmia and Shri R S Jalan directors retire by rotation and being eligible, offer themselves for re-appointment. The Board recommends their appointments at the ensuing Annual General Meeting.

Further, the Company is also placing proposals for appointment of five existing independent directors namely Dr. B C Jain, Shri Surendra Singh, Shri G C Srivastava, Shri Mahesh Kumar Kheria and Shri Sanjiv Tyagi, as per Section 149 and other applicable provisions of the Companies Act, 2013 and the rules made thereunder for five consecutive years for a term up to March 31, 2019. In the opinion of the Board these directors fulfl the conditions specified in the Companies Act, 2013 and rules made thereunder for their appointment as Independent Directors of the Company and are independent of the management. The Board considers that their continued association would be of immense benefit to the Company and it is desirable to continue to avail valuable services of them as Independent Directors. Accordingly, the Board recommends their appointments at the ensuing Annual General Meeting for the approval by the members of the Company.

Subsequent to the year end, IDBI Bank Ltd. had nominated Mr. D C Jain in place of Mr. Ajoy Nath Jha as a Nominee Director of the Company and accordingly the Board of Directors had appointed Mr. D C Jain as a Nominee Director of the Company and also a member of the Audit Committee and Project Committee in place of Mr. Ajoy Nath Jha w.e.f. April 2, 2014. Your Directors wish to record their gratitude and appreciation for the contribution by Mr. Ajoy Nath Jha during his tenure as Director of the Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO

Information pursuant to Section 217 (1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in Annexure-I forming part of this Report.

PARTICULARS OF EMPLOYEES

Particulars of employees as required under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, are set out in Annexure to the Directors'' Report and forms part of the Report.

However, having regard to the provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered office of the Company.

STATUTORY AUDITORS

M/s Jayantilal Thakkar & Co., Chartered Accountants and M/s Rahul Gautam Divan & Associates, Chartered Accountants, the Joint Auditors of the Company will retire at the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received certifcates from the auditors to the effect that their re-appointment, if made, would be in accordance with the provisions of the Companies Act, 1956. The Board recommends their re-appointment.

COST AUDITORS

The Board has appointed M/s R J Goel & Company, Cost Accountants, New Delhi, M/s SS & Associates, Cost Accountants, Chennai and M/s N D Birla & Co., Cost Accountants, Ahmedabad as Cost Auditors for the Soda Ash division, Yarn division (Madurai) and Home Textile division (Vapi) of the Company respectively for the financial year 2014-15. The Board has also appointed M/s R J Goel & Company as the Lead Cost Auditor of the Company for the financial year 2014-15, who would be responsible for the consolidation and fling the Cost Audit Report (in XBRL) of the Company (all three divisions i.e. Soda Ash, Yarn & Home Textile) and shall also fle the Compliance Report for Edible Salt unit of the Company. Further, in line with the requirement of clause (k) of General Circular No. 15/2011 (52/5/CAB-2011) dated April 11, 2011, issued by the Ministry of Corporate Affairs, Cost Audit Branch, necessary particulars of Cost Auditors for the financial year 2012-13 are as under:

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that:

a. in the preparation of the annual accounts for the financial year ended March 31, 2014 the applicable accounting standards read with requirements set out under Schedule VI to the Companies Act, 1956, have been followed and there has been no material departures from the same ;

b. appropriate accounting policies have been selected by them and applied the same consistently and judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as at March 31, 2014 and of the profits of the Company for the financial year ended March 31, 2014;

c. the proper and suffcient care has been taken by them 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; and

d. the annual accounts for the financial year ended March 31, 2014 have been prepared by them on a going concern basis.

ACKNOWLEDGEMENT

The Directors express their gratitude to Financial Institutions, Banks, and various other agencies for the co-operation extended to the Company. The Directors also take this opportunity to thank the shareholders, customers, suppliers, lenders, distributors and other stakeholders for the confdence reposed by them in the Company. The employees of the Company contributed significantly in achieving the results. The Directors take this opportunity of thanking them and hope that they will maintain their commitment to excellence in the years to come.

For and on behalf of the Board of Directors

For GHCL Limited

Sd/- Date: May 28, 2014 SANJAY DALMIA

Place: New Delhi Chairman


Mar 31, 2013

To The Members''

The are pleased to present the 30th Annual Report and the audited accounts of the company for the fi nancial year ended March 31'' 2013.

O PERATIONAL RESULTS

The summary of the fi nancial performance of the Company for the fi nancial year ended March 31'' 2013 compared to the previous year ended March 31'' 2012 is given below:

(Rs.in Lacs) Particulars Year Ended Year Ended March 31'' March 31'' 2013 2012

Net Sales /Income 2''12''793.13 190''635.81

Gross profi t before interest and 41''956.41 38''446.03 depreciation Finance Cost

(a) Interest Cost 14''091.22 14''576.31

(b) Loss on foreign currency 1''704.96 3''919.84 Transactions and translation (net)

Total Finance cost (a b) 15''796.18 18''496.15

Profi t before depreciation and 26''160.23 19''949.88

amortisation - (Cash Profit)

Depreciation and Amortisation 8''196.72 8''084.86

PBT before exceptional items 17''963.51 11''865.02

Exceptional items (3''958.32)

Profit before Tax (PBT) 14''005.19 11''865.02

Provision for Tax - Current 2''819.45 377.00

Provision for Tax - Deferred (306.91) (259.93)

Profi t after Tax 11''492.65 11''747.95

Balance brought forward from last year 14''212.44 14''570.27

Prior period adjustments 3.92 18.89

Excess provision for tax for earlier (1.08) 200.23 years

Amount available for appropriation 25''707.93 26''537.34

Appropriations

Transfer to General Reserve 1''149.27 10''000.00

Proposed Dividend 2000.39 2000.39

Tax on Dividend 339.96 324.51

Balance carried to Balance Sheet 22''218.31 14''212.44

PERFORMANCE HIGHLIGHTS SODA ASH

The Global Soda Ash demand which was around 50 million tons in 2011 is estimated to be slightly more than 51 million metric tons in 2012 against a capacity of about 60 Million MT

We are seeing demand growth'' despite the fact that the market is currently oversupplied. The projected growth for this year is 3 to 4% with most of the growth expected to be in China'' India'' Russia and South America. World operating rates will not improve due to continued over capacity.

Due to the global cost disparities'' relative production costs will be a key issue for the soda ash industry in the future. Though demand for Soda Ash remained little better during the year'' price pressure from key inputs such as salt and energy weighed heavily. Demand for glass and detergents in emerging world markets surged in the last few years.

Consumption of soda ash per person is expected to register healthy rise in the next few years with China leading the rankings with consumption from 10.85 kilograms in 2007 to an expected 12.00 kilograms in 2012. China is likely to add at least 1.00 to 1.5 Mn MT capacities every year on the back of huge infrastructure investments. IHS analysts expect Global market for soda ash is projected to reach 65 million metric tons by 2016.

The biggest threat to the global soda ash industry is the global economic outlook'' which remains quite delicate. The state of the global economy'' combined with the role that China will continue to play in the market'' is key to the future health of the soda ash industry. Global growth is set to pick up gradually and unevenly across the regions of the world. North America and Asia are on track to lead the way'' with many other emerging regions and economies also doing their part.

Despite depressed conditions prevailing in the Indian Economy'' Soda Ash demand witnessed a robust growth of around 9 to 10% in 2012-13. Market feedback suggests other than Glass; all other consuming segments lead by Detergents recorded handsome growth. Most affected sectors are container glass and fl at glass'' which are under pressure because of over capacity and slow growth in demand. They are under pressure and continue to struggle with sharp decline in sales and stock pile up and also their fi nancial status is a cause of concern. Despite implementation of Anti-Dumping Duty effective July 2012'' imports continue to fl ow in high volumes. The price differential between domestic and imported product is becoming bigger'' landed prices of imported product are much lower than those of domestic despite ADD which is impacting pricing and discounting. Higher import continued to exert pressure on domestic manufacturers.

Soda Ash supply in India remains in excess of demand due to the high level of imports that the market is having to absorb. Domestic manufacturers are confi dent that imports will be reduced in this year. The Finance Ministry'' Government of India has imposed a defi nitive anti-dumping duty on soda ash imports from Russia and Turkey. This anti-dumping duty will be valid for a period of fi ve years from 18th April'' 2013. The industry expects this additional trade restrictions (ADD) should bide well for the Indian Soda Ash industry. In addition'' there is a view that the current level of exports from China is not sustainable given that the Chinese are exporting below their production cost.

The Indian Soda Ash market constitutes of two varieties – Light (used in detergent industry) & Dense (used in Glass industry)'' with a share of 60% and 40% respectively. Total installed capacity in India was 3.1 Million MT. With an estimated production of about 2.5 Million MT in last fi nancial year (2012- 13) the capacity utilization was of only 81%.

The total size of the Indian soda ash market is about 2.7 Million MT and almost all the major industry players are located in the state of Gujarat due to the closeness and ready availability of the main raw materials namely limestone and salt.

At present your Soda Ash plant has a capacity of 8.50 lacs MTPA. During the fi nancial year 2012-13 your company has achieved highest production around 7.24 lacs MT. This year'' the Company has also achieved highest domestic sales i.e. 6.35 lacs MT and total sales of Soda Ash is 6.61 lacs MT including exports.

BI-CARBONATE (BICARB)

During the year'' the Company achieved production of Bi- Carbonate 23593 tons against 23369 tons in the previous year. During the year the Company achieved sales of Bi-Carbonate 23433 tons against 22939 tons in the previous year.

HOME TEXTILE

The Indian Textile Industry'' 2nd largest in the world'' after witnessing growth of around 10% in FY 2009-10 & 2010-11'' had shrank during the FY''2011-12 mainly due to weak global economy and extreme volatility in cotton prices. However'' FY 2012-13 started on a positive note for the Textile Industry'' mainly due to the reason that prices of cotton had stabilized and the Government of India providing a number of export promotion policies for the Textile sector including the continuation of TUFS (Technology Upgradation Fund Scheme). There is some recovery in demand and prices for textiles products in domestic as well as global markets; hence the outlook for the textile industry looks positive.

In the Textile Business of your company'' the performance of Yarn business has improved signifi cantly as compared to the previous year'' which is mainly due to better demand in yarn'' increase in yarn prices and stability of cotton prices. The Made- ups (Home Textile) Business operations are now fully stabilized and doing reasonably well mainly due to the market sentiments in US continue to show improving trends. However'' forex volatility signifi cantly impacted the performance of the Home Textile division.

The Revenue of Home Textile division is at Rs. 617.04 Crores during the fi nancial year 2012-13 against Rs. 543.15 Crores in 2011-12'' thereby registering a growth of 14% over previous year. Due to its sustained marketing efforts'' the company has successfully made deep in roads in export market and further secured large replenishment orders from the big Global Retailers in US and Europe like Bed Bath & Beyond'' Macys'' K-Mart'' Springs'' Revman and Belk etc. The Company''s Home Textile division got confi rmed annual business of approx US$50 million from an overseas retailer'' which is a long term business and will occupy about 40% of capacity and in turn this may help to achieve better capacity utilization in coming years.

The Revenue of Yarn division is at Rs. 381.87 Crores during the fi nancial year 2012-13 against Rs.296.57 Crores in 2011-12'' thereby registering a handsome growth of 29% over previous year. The performance of Yarn business improved signifi cantly as compared to the previous year'' which is mainly due to better demand in Yarn and increase in yarn prices. Both Domestic and international cotton prices remained stable. But'' shortage of skilled labour as well as grim power situation is the main challenges for yarn industry including your Company. However'' the aggressive power trading by the Company resulted in substantial savings partially offsetting the aforesaid impact. Overall outlook for Spinning Industry looks steady and with stable cotton prices'' timely cotton coverage and improved yarn price scenario'' your directors expect a profi table period ahead for the Company.

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs. 2.00 per Equity Share for the fi nancial year ended March 31'' 2013.

FINANCE

During the FY''2012-13'' your company has successfully arranged Project Loans of Rs. 84.50 crore to part fi nance CAPEX of around

Rs.117.80 crore. Additionally'' the company has also enhanced its working capital limits by Rs. 152 crore from Rs. 728 crore to Rs. 880 crore and further tied-up long term loans amounting to Rs. 150 crore to meet overall working capital requirements of the company.

During the year'' due to better cash-fl ow management / negotiation with various lenders in respect of interest rate besides reduction in base rate'' helped your company to reduce weighted average interest cost which is mentioned as follows:

Facility As on April 1'' 2012 As on March 31'' 2013

Working Capital 7.61% 6.09%

Loans

Term Loans 11.95% 11.46 %

Due to timely repayment of interest and principal payments to various banks'' CARE (Credit Analysis & Research Ltd) has reaffi rmed the rating of CARE BBB assigned for long term facilities of the Company.

During the fi nancial year'' your Company has transferred to investors'' education and protection fund account (IEPF) a sum of Rs. 25.40 lacs towards unclaimed dividend/unclaimed deposits along with interest thereon.

FIXED DEPOSITS

Your Company discontinued inviting'' accepting and renewing of fi xed deposits effective from September 24'' 2002. However'' unclaimed deposits of Rs. 0.20 lacs have been transferred to IEPF during the fi nancial year'' which is included in Rs. 25.40 lacs transferred'' as stated above.

EMPLOYEES STOCK OPTION SCHEME

Your company has Stock Option Scheme for its employees as per the Revised Scheme approved by shareholders in their Extra Ordinary General Meeting held on March 19'' 2008 and accordingly Compensation Committee in their meeting held on March 24'' 2008 had granted options to its eligible employees. Under the Scheme the employees are entitled for minimum guaranteed return of 20% on the Market price of the shares i.e. the latest available closing price prior to the date when the options were granted'' at the time of exercise of the option. The options granted to the employees are vested effective from March 24'' 2010 accordingly'' eligible employees can exercise their rights. So far none the employees have exercised their rights on vested options. In compliance of SEBI Circular issued on January 17'' 2013 on the Stock Option Scheme read with clarifi cation issued by SEBI vide its Circular dated May 13'' 2013'' the existing GHCL Employees Stock Option Scheme'' administered through Trust'' will complete its term on December 31'' 2013. The details as per regulation 12 of SEBI (ESOS & ESPS) Guidelines 1999 are given as an Annexure - II forming part of this report.

SUBSIDIARIES

Grace Home Fashion'' LLC'' a subsidiary of the Company in USA engaged in Home Textile segment is catering to some of the largest Home-Textile Retailers like Bed Bath Beyond and Babies R US. In addition'' Grace Home Fashion is also doing online Home-Textile Business in USA through JC Penny and Kohls. com. The revenue of the company increased from Rs. 74.98 Crore in FY''11-12 to Rs. 150.04 Crore during FY''2012-13.

GHCL Upsom'' Romania'' a step down subsidiary of the Company whose operations are lying closed since Jan''2010 was put under administration on November 21'' 2011. The control of GHCL Upsom SA'' has been taken over by Casa Transilvania Cluj (the offi cial liquidator) and hence Indian England NV (subsidiary of GHCL Limited) has no control on GHCL Upsom and will continue to stand as a creditor in the insolvency proceeding initiated w.e.f. November 12'' 2012. Further'' Creditors Committee of SC GHCL Upsom SA'' Romania in their meeting held on March 18'' 2013 had decided to accept the highest bid of Euros 6.00mn made by Aloref SRL in association with Ascom International SRL. Accordingly'' the assets of GHCL Upsom will only become the property of Ascom International when the price has been made in full.

Operations of Rosebys Interiors India Limited (RIIL)'' a subsidiary'' engaged in the business of Home and Life Style Retailing'' remained closed during the year. RIIL is meeting its statutory and other obligations through support of GHCL. Some of the creditors have fi led winding up petitions against RIIL which is adequately represented by the company.

Non-operating subsidiaries namely GHCL Inc. (USA) and Indian Britain B.V. (Netherlands) have been voluntarily dissolved during the year. Colwell & Salmon Communications Inc. (USA) was voluntarily dissolved on April 1'' 2013. Further Rosebys UK Limited another non operating company in UK was put under liquidation on 12th November 2012.

Ministry of Corporate Affairs'' Government of India'' vide its circular dated February 8'' 2011'' has exempted companies from attaching the Balance Sheet'' Profi t and Loss Account and other documents of the subsidiary companies along with the Annual Report of the Company required u/s 212 of the Companies Act'' 1956. As required under the said circular'' the Board of Directors of your Company at its meeting held on May 24'' 2013 has given its consent for not attaching the Balance Sheet of its subsidiaries. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any members of the company on receipt of a written request from them at the Registered Offi ce of the Company. The Annual Accounts of the subsidiary companies will also be kept open for inspection at the Registered Offi ce of the Company these documents on any working day during business hours. The Consolidated Financial Statements presented by the Company include fi nancial results of its subsidiary companies. Details regarding subsidiaries have been provided in note no. 2.39 (refer page no. 54 of Annual Report) and also under Statement u/s 212 of the Companies Act'' 1956 (refer page no. 62 to page no. 64).

AWARDS AND RECOGNITIONS

Your directors are pleased to inform you that GHCL Limited achieved a new milestone as the Home Textile Division'' Vapi has received "Texprocil''s Export – Bronze Award 2011-12".

CONSOLIDATED FINANCIAL STATEMENTS

Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to Clause 32 read with Clause 41 of the Listing Agreement entered into with the Stock Exchanges and prepared in accordance with Accounting Standard 21 (Consolidated Financial Statements) of Institute of Chartered Accountants of India'' for fi nancial year ended March 31'' 2013.

MANAGEMENT DISCUSSION AND ANALYSIS

In terms of Clause 49 of the Listing Agreement of the Stock Exchanges'' the detailed review of the operations'' performance and future outlook of the Company and its business is given in the Management''s Discussion and Analysis Report which forms part of this Annual Report. The report on Management''s Discussion and Analysis is annexed with the Report.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges'' a compliance report on Corporate Governance has been annexed as part of the Annual Report along with Auditor''s certifi cate for the compliance.

SECRETARIAL AUDIT REPORT

As a measure of good corporate governance practice'' the Board of Directors of the Company appointed Dr. K.R. Chandratre'' Practicing Company Secretary'' to conduct Secretarial Audit. The Secretarial Audit Report for the fi nancial year ended March 31'' 2013'' is provided in the Annual Report. The Secretarial Audit Report confi rms that the Company has complied with all the applicable provisions of the Companies Act'' 1956'' Securities Contracts (Regulation) Act'' 1956'' Depositories Act'' 1996'' and all the Regulations and Guidelines of SEBI as applicable to the Company'' including The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations'' 2011'' The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations'' 1992'' The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines'' 1999 and Listing Agreements with the Stock Exchanges.

LISTING/DELISTING OF THE EQUITY SHARES

The equity shares of your Company are listed at BSE Limited (BSE)'' The National Stock Exchange of India Limited (NSE) and Ahmedabad Stock Exchange Limited (ASE). The annual listing fees for the year 2013-14 have been paid to all these Stock Exchanges.

DIRECTORS

Shri Sanjay Dalmia'' Shri Neelabh Dalmia'' Shri Sanjiv Tyagi and Shri Mahesh Kheria directors retire by rotation and being eligible'' offer themselves for re-appointment. The Board recommends their appointments at the ensuing Annual General Meeting.

Mr. Raman Chopra'' Executive Director (Finance) was re- appointed as Whole Time Director for a period of fi ve years with effect from April 1'' 2013 subject to the approval of the shareholders. The Board recommends their appointments at the ensuing Annual General Meeting.

During the year'' IDBI Bank had nominated Mr. Ajoy Nath Jha in place of Mr. K. C. Jani as a Nominee Director of the Company with effect from January 15'' 2013. Mr. Tej Malhotra'' Sr. Executive Director (Operations) retired from the services of the Company at the close of offi ce hours on May 4'' 2012. Accordingly'' Mr. Tej Malhotra ceased as a Director on the Board of the Company with effect from May 5'' 2012. Your Directors wish to record their gratitude and appreciation for the contribution by Mr. K. C. Jani and Mr. Tej Malhotra during their tenure as Directors of the Company.

CONSERVATION OF ENERGY'' TECHNOLOGY ABSORPTION'' FOREIGN EXCHANGE EARNING AND OUTGO

Information pursuant to Section 217 (1)(e) of the Companies Act'' 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules'' 1988 are given in Annexure-I forming part of this Report.

PARTICULARS OF EMPLOYEES

Particulars of employees as required under Section 217 (2A) of the Companies Act'' 1956 read with the Companies (Particulars of Employees) Rules'' 1975'' as amended'' are set out in Annexure to the Directors'' Report and forms part of the Report.

However'' having regard to the provisions of Section 219 (1) (b) (iv) of the Companies Act'' 1956'' the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Offi ce of the Company.

STATUTORY AUDITORS

M/s Jayantilal Thakkar & Co.'' Chartered Accountants and M/s Rahul Gautam Divan & Associates'' Chartered Accountants'' the Joint Auditors of the Company will retire at the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received certifi cates from the auditors to the effect that their re-appointment'' if made'' would be in accordance with Section 224 (1B) of the Companies Act'' 1956. The Board recommends their re-appointment.

COST AUDITORS

The Board has appointed M/s R J Goel & Company'' Cost Accountants'' New Delhi'' M/s L S Sathiamurthi & Co.'' Cost Accountants'' Chennai and M/s N D Birla & Co.'' Cost Accountants'' Ahmedabad as Cost Auditors for the Soda Ash division'' Yarn division (Madurai) and Home Textile division (Vapi) of the Company respectively under Section 233B of the Companies Act'' 1956 for the fi nancial year 2013-14. The Board has also appointed M/s R J Goel & Company as the Lead Cost Auditor of the Company for the fi nancial year 2013-14'' who would be responsible for the consolidation and fi ling the Cost Audit Report (in XBRL) of the Company (all three divisions i.e. Soda Ash'' Yarn & Home Textile) and shall also fi le the Compliance Report for Edible Salt unit of the Company. Further'' in line with the requirement of clause (k) of General Circular No. 15/2011 (52/5/CAB-2011) dated April 11'' 2011'' issued by the Ministry of Corporate Affairs'' Cost Audit Branch'' necessary particulars of Cost Auditors for the fi nancial year 2011-12 are as under:

Name of Particulars of Cost Due date of Actual date Division Auditors filling of the of filling of the of the Cost Audit Cost Audit Company Report (in Report (in XBRL) for XBRL) for Financial Financial Year Year 2011-12 2011-12

Soda Ash M/s R. J. Goel & February 28'' Being Lead Co.'' Cost Auditors'' 2013 Cost Auditors of (Membership No. the Company'' 2171)'' Address - 31'' M/s R J Goel Community Centre'' & Company Ashok Vihar'' Delhi - filled the Cost 110052 Audit Report

Yarn M/s L. S. Sathiamurthi (in XBRL) on & Co.'' Cost Auditors'' January 30'' (Membership No. 2013. 3128)'' Address - 17/6'' Kumar Arcade Apartments'' 4th Street'' Nehru Nagar'' Adyar'' Chennai - 600020'' Tamil Nadu

Home M/s N. D. Birla & Textile Co.'' Cost Auditors'' (Membership No. 7907)'' Address - A-3'' Nirant Society'' Opp. Town Hall'' Nr. Karnavati Hospital'' Elisbridge'' Ahmedabad - 380006'' Gujarat

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act'' 1956'' the Directors'' based on the representations received from the Operating Management'' confi rm that:

a. in the preparation of the annual accounts for the fi nancial year ended March 31'' 2013 the applicable accounting standards read with requirements set out under Schedule VI to the Companies Act'' 1956'' have been followed and there has been no material departures from the same ;

b. appropriate accounting policies have been selected by them and applied the same consistently and judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as at March 31'' 2013 and of the profi ts of the Company for the fi nancial year ended March 31'' 2013;

c. the proper and suffi cient care has been taken by them 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; and

d. the annual accounts for the fi nancial year ended March 31'' 2013 have been prepared by them on a going concern basis.

ACKNOWLEDGEMENT

The Directors express their gratitude to Financial Institutions'' Banks'' and various other agencies for the co-operation extended to the Company. The Directors also take this opportunity to thank the shareholders'' customers'' suppliers'' lenders'' distributors and other stakeholders for the confi dence reposed by them in the Company. The employees of the Company contributed signifi cantly in achieving the results. The Directors take this opportunity of thanking them and hope that they will maintain their commitment to excellence in the years to come.

For and on behalf of the Board of Directors

For GHCL Limited

Sd/-

Date: May 24'' 2013 SANJAY DALMIA

Place: New Delhi Chairman


Mar 31, 2012

The are pleased to present the 29th Annual Report and the audited accounts of the company for the financial year ended March 31, 2012.

OPERATIONAL RESULTS

The summary of the financial performance of the Company for the financial year ended March 31, 2012 compared to the previous year ended March 31, 2011 is given below:

(Rs. in Lacs)

Particulars Year Ended Year Ended March 31, March 31, 2012 2011

Net Sales /Income 190,635.81 151,146.70

Gross profit before interest and 38,446.03 34,972.54 depreciation

Finance Cost

(a) Interest Cost 14,576.31 11,043.48

(b) Loss on foreign currency transactions 3,919.84 - and translation (net)

Total Finance cost (a b) 18,496.15 11,043.48

Profit before depreciation and amortisation 19,949.88 23,929.06

- (Cash Profit)

Depreciation and Amortisation 8,084.86 8,439.55

Profit before Tax 11,865.02 15,489.51

Provision for Tax - Current 377.00 42.52

Provision for Tax - Deferred (259.93) 3,814.451

Profit after Tax 11,747.95 11,632.54

Balance brought forward from last year 14,570.27 23,786.07

Prior period adjustments 18.89 64.29

Excess provision for tax for earlier years 200.23 75.52

Amount available for appropriation 26,537.34 35,558.42

Appropriations

Transfer to General Reserve 10,000 1,163.25

Transfer to General Reserve as per - 17,500.00 Scheme of Arrangement

Proposed Dividend 2,000.39 2,000.39

Tax on Dividend 324.51 324.51

Balance carried to Balance Sheet 14,212.44 14,570.27

PERFORMANCE HIGHLIGHTS

Soda Ash

The Global Soda Ash demand which was around 46-48 million tons in 2010 is estimated to be slightly more than 50 million metric tons in 2011against a capacity of about 57 Million MT.

We are seeing demand growth, despite the fact that the market is currently oversupplied specially from China. The world soda ash demand grew at an average annual rate of slightly more than 3%. China grew more than 7% and Rest of the world registered a growth of 1%. The demand for soda ash is forecast to grow about 3 to 4 percent per year over the next five years and this growth is expected to come from Latin America, India, China and Middle East countries due to higher GDP growth. Consumption of soda ash per person is expected to register healthy rise in the next few years with China leading the rankings with consumption from 10.85 kilograms in 2007 to an expected 12.00 kilograms in 2012.China is the largest Soda Ash player in the world, having a capacity of 27-28 Million MT which is around 50% of the global capacity. As per IHS Chemical report of February 2012 China's operating rates were around 84% in 2011, reporting a production of 24 million tons and domestic consumption of 22 million tons. There is an extremely sharp increase in input costs for soda ash manufacturers in all regions. Consequently, supported by rising demand and cost pressures prompted soda ash manufacturers to raise the sales prices of soda ash in 2011.

The biggest threat to the global soda ash industry is the global economic outlook, which remains quite delicate. The state of the global economy, combined with the role that China will continue to play in the market, is key to the future health of the soda ash industry. If the economies continue to stagnate, the demand for soda ash could fall, and we could see prices weaken and capacities idled.

The slow industrial growth of the Indian economy was witnessed in Soda Ash also as demand growth was almost flat in 2011-12 (approximately 1-2 %). But despite low GDP growth figure of 6.9 per cent, India remains one of the fastest growing economies of the world as all major countries including the fast growing emerging economies are seeing a significant slowdown. It is expected that on the back of higher GDP growth projected and strong growth in Glass (Construction/Automobiles) and Detergents (FMCG penetration and growth) Soda Ash demand will continue to grow at least 4-5 per cent in the FY 12-13.

Total installed capacity in India was 3.1 Million MT. With an estimated production of about 2.6 Million MT in last financial year (2011-12) the capacity utilization was around 81%. The total size of the Indian soda ash market is about 2.7 Million MT.

Dumped import of Soda Ash from China PR, Eu, Kenya, Iran, Pakistan, Turkey, uSA and ukraine has been a major concern for the Soda Ash Industry. Based on an application by the domestic producers of Soda Ash, the Director General of Anti-dumping & Allied Duties ("DGAD") had recommended the imposition of anti-dumping duty on imports of Soda Ash from the above Countries, which has been upheld by the Hon'ble High Court of Madras vide their order dated April 27, 2012. Now, the Ministry of Finance is expected to issue a notification imposing duty on imports of the Soda Ash from the above countries based on the final finding issued by the DGAD.

At present your Soda Ash plant has a capacity of 8.50 lacs MTPA. During the financial year 2011-12 your company has achieved highest production around 7.12 lacs MT. This year, the Company has also achieved highest domestic sales i.e. 6.02 lacs MT and total sales of Soda Ash is 6.67 lacs MT including exports.

Bi-Carbonate (BICARB)

During the year, the Company achieved production of Bi- Carbonate 23369 tons against 22378 tons in the previous year, which is higher by 4.43%. During the year the Company achieved sales of Bi-Carbonate 22939 tons against 22912 tons in the previous year. Sodium Bicarbonate sales expected to improve further with high demand season and lower imports.

Home Textiles

The Indian Textile Industry, 2nd largest in the world, after witnessing growth of around 10% in FY 2009-10 & 2010- 11, shrank during the FY'2011-12 mainly due to weak global economy and extreme volatility in cotton prices. The Confederation of Indian Textile Industry (CITI) in its Q3, 2011- 12 review of textile sector pointed out that "there was highest price volatility in cotton prices in the past 150 years followed by a collapse in April, 2011, which had immediate repercussions in the domestic market. Cotton yarn production was down by 15% and fabric production was down by 19% in the April - October 2011 period over the previous year. Textile Mills faced with high priced cotton inventories could not pass through the prices into yarn and fabrics as the price decline came suddenly in the month of April'2011. This led to a slowdown in production and reduced utilization of capacity". Additionally, India Government's ad hoc policies with respect to export of cotton have also affected the sentiments of textiles industry and cotton growers. However, for the past 3-4 months the prices of cotton have stabilized and the outlook for the textile industry now looks positive

In the Textile Business of your company, the Made-ups (Home Textiles) Business has been growing significantly year on year and has done exceedingly well during the FY'2011-12 both in terms of volume growth and profitability compared to the previous year. However, the Yarn business has underperformed substantially which was largely due to unprecedented volatility in both cotton and yarn prices which affected the spinning industry all over the country as afore mentioned. This has adversely affected the overall profitability of textile business during FY'11 -12

The Revenue of Home-Textiles division was at Rs. 530 Crores during the financial year 2011-12 against Rs. 276 Crores in 2010- 11, thereby registering a significant growth of 92% over previous year. Due to its sustained marketing efforts, the company has successfully made deep in roads in export market and further secured large replenishment orders from the big Global Retailers in US and Europe like Macys, Bed Bath & Beyond, K-Mart, Springs, Revman and Belk etc. However, as aforesaid FY'2011- 12 was an extremely challenging year for the entire Spinning Industry including yarn division of your company primarily due to extreme volatility in the cotton prices. The yarn industry got a doubly hit i.e. on one side, it was trapped with high cost inventory and on the other side the yarn prices crashed, thereby making most of the spinning units incur huge losses. Apart from the above said causes, frequent changes in the government policies as well as the grim power situation in Tamil Nadu had also affected the operations of yarn manufacturing industry including your company. However, the aggressive power trading by the Company resulted in substantial savings partially offsetting the aforesaid impact. Outlook for Spinning Industry now looks positive because the high cost inventory is out of the pipeline and with stable cotton prices and improved yarn price scenario, your directors expect a profitable period ahead.

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs. 2.00 per Equity Share for the financial year ended March 31, 2012.

FINANCE

During the FY'2011-12, your company has successfully arranged Project Loans of Rs.93.50 crore to part finance CAPEX of around Rs.129.25 crore. Additionally, the company has also enhanced its working capital limits by Rs.70 crore from Rs.658 crore to Rs.728 crore and further tied-up long term loans amounting to Rs.130 crore to meet overall working capital requirements of the company.

During the year, interest rate went up significantly due to increase in Repo Rate by RBI by atleast five times and this coupled with huge volatility in Forex has resulted in a significant increase in finance cost compared to previous year.

Due to timely repayment of interest and principal payments to various banks including timely honouring of corporate guarantee obligations, CARE (Credit Analysis & Research Ltd) has upgraded the rating for long term borrowing from CARE BBB- to CARE BBB.

During the financial year, your Company has transferred to investors' education and protection fund account (IEPF) a sum of Rs. 20.57 lacs towards unclaimed dividend/unclaimed deposits along with interest thereon.

FIXED DEPOSITS

Your Company discontinued inviting, accepting and renewing of fixed deposits effective from September 24, 2002. However, unclaimed deposits of Rs. 0.95 lacs have been transferred to IEPF during the financial year, which is included in Rs. 20.57 lacs transferred, as stated above.

EMPLOYEES STOCK OPTION SCHEME

Your company has Stock Option Scheme for its employees as per the Revised Scheme approved by shareholders in their Extra Ordinary General Meeting held on March 19, 2008 and accordingly Compensation Committee in their meeting held on March 24, 2008 had granted options to its eligible employees. Under the current ESOS Scheme the employees would be entitled for minimum guaranteed return of 20% on the Market price of the shares i.e. the latest available closing price prior to the date when the options are granted, at the time of exercise of the option. Pursuant to the approval given by the Compensation Committee, "vesting period" of options granted was two years from the date of grant (i.e March 24, 2008). Accordingly, eligible employees can exercise their rights on the valid options granted to them by the Committee on or after March 24, 2010. However, no employee has exercised his right on the vested option so far. The details as per regulation 12 of SEBI (ESOS & ESPS) Guidelines 1999 are given as an Annexure - II forming part of this report.

SUBSIDIARIES

Grace Home Fashion, LLC, a subsidiary of the Company in USA has significantly grown its Home-Textiles Business during the FY'11-12. The Company is catering to some of the largest Home-Textile Retailers like Bed Bath Beyond and Babies R US. In addition, Grace Home Fashion is also doing online Home- Textile Business in USA through JC Penny and Kohls.com. The revenue of the company increased from Rs.26.16 Crore in FY'10- 11 to Rs.74.98 Crore during FY'2011-12.

The soda ash production of GHCL Upsom, Romania, a step down subsidiary of the Company remains closed since Jan'2010 as the outstanding issues with gas supplier M/s Romgaz could not be resolved. Subsequently, during the current year GHCL Upsom has been put under administration on November 21, 2011. Your company is in dialogue with the Judicial Administrator to access the feasibility of putting together a viable re-organization plan. In order to make any viable re-organization plan, GHCL Upsom would require major investments as per the preliminary report received from Roland Berger, a Consultant engaged by the Company last year and also export incentives from the Romanian Government. In view of frequent changes in the Romanian Government, the Company could not initiate any dialogue last year. With the new Government now in place in Romania, the Management would initiate a dialogue with BCR Bank, Romgaz and Romanian Government to explore the possibility of revival of GHCL Upsom's Operations.

Rosebys Interiors India Limited (RIIL), a subsidiary engaged in the business of Home and Life Style Retailing, has significantly reduced its operations during the year in order to curtail the costs and losses. Keeping in view of long term strategy, the Board of Directors of GHCL in its meeting held on February 25, 2011 had given in-principal approval for sale of its investment held in RIIL. Accordingly, a merchant banking firm was engaged to identify a suitable buyer to meet its objective. But, due to slow down in overall retail Industry and RIIL's operations, the merchant banker was unable to find a suitable buyer for RIIL's stake sale. RIIL is meeting its obligations to the bankers through support from GHCL as per the guarantee obligation of GHCL.

The operations of Colwell & Salmon uSA, subsidiary company engaged in the IT outsourcing business remains dormant as the market is not conducive to recommence the operations. Additionally, two non operating subsidiaries registered in India namely Fabient Textiles Limited and Rosebys International Limited were closed down during the year by following the process of "Fast Track Exit Mode", u/s 560 of the Companies Act, 1956. Further, subsequent to the year end, GHCL Inc. (uSA) has been dissolved in May 2012.

Ministry of Corporate Affairs, Government of India, vide its circular dated February 8, 2011, has exempted companies from attaching the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary companies along with the Annual Report of the Company required u/s 212 of the Companies Act, 1956. As required under the said circular, the Board of Directors of your Company at its meeting held on May 30, 2012 has given its consent for not attaching the Balance Sheet of its subsidiaries. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any members of the company on receipt of a written request from them at the Registered Office of the Company. The Annual Accounts of the subsidiary companies will also be kept open for inspection at the Registered Office of the Company on any working day during business hours. The Consolidated Financial Statements presented by the Company include financial results of its subsidiary companies. Details regarding subsidiaries have been provided in note no. 2.38 (refer page no. 49 of Annual Report) and also under Statement u/s 212 of the Companies Act, 1956 (refer page no. 59 to page no. 61).

CONSOLIDATED FINANCIAL STATEMENTS

Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to Clause 32 read with Clause 41 of the Listing Agreement entered into with the Stock Exchanges and prepared in accordance with Accounting Standard 21 (Consolidated Financial Statements) of Institute of Chartered Accountants of India, for financial year ended March 31, 2012.

MANAGEMENT DISCUSSION AND analysis

In terms of Clause 49 of the Listing Agreement of the Stock Exchanges, the detailed review of the operations, performance and future outlook of the Company and its business is given in the Management's Discussion and Analysis Report which forms part of this Annual Report. The report on Management's Discussion and Analysis is annexed with the Report.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a compliance report on Corporate Governance has been annexed as part of the Annual Report along with Auditor's certificate for the compliance.

LISTING/DELISTING OF THE EQUITY SHARES

The equity shares of your Company are listed at BSE Limited (BSE), The National Stock Exchange of India Limited (NSE) and Ahmedabad Stock Exchange Limited (ASE). The annual listing fees for the year 2011-12 have been paid to all these Stock Exchanges. The application for voluntarily delisting of Company's ordinary shares is pending with The Calcutta Stock Exchange Ltd. (CSE), in spite of the fact that company had submitted all relevant information asked by CSE. Company had also requested SEBI to interfere in the matter and direct CSE to delist the shares of the Company as the Company had complied with all statutory requirement. Company on its own had stopped filing of information to CSE and listing fee.

DIRECTORS

Shri Anurag Dalmia, Shri S. H. Ruparell, Dr. B. C. Jain and Shri G. C. Srivastava directors retire by rotation and being eligible, offer themselves for re-appointment. The Board recommends their appointments at the ensuing Annual General Meeting. Mr. R. S. Jalan has been re-appointed as Managing Director for a period of five years with effect from June 7, 2012 subject to the approval of the shareholders.

During the year, Exim Bank had nominated Mr. R. M. V. Raman in place of Mr. R. W. Khanna as a Nominee Director of the Company with effect from April 30, 2011. Subsequent to the year end, Mr. Tej Malhotra, Sr. Executive Director (Operations) retired from the services of the Company at the close of office hours on May 4, 2012. Accordingly, Mr. Tej Malhotra ceased as a Director on the Board of the Company with effect from May 5, 2012. Your Directors wish to record their gratitude and appreciation for the contribution by Mr. R. W. Khanna and Mr. Tej Malhotra during their tenure as Directors of the Company.

CONSERVATION OF ENERGY, TECHNOLOGYABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO

Information pursuant to Section 217 (1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in Annexure-I forming part of this Report.

PARTICULARS OF EMPLOYEES

Particulars of employees as required under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, are set out in Annexure to the Directors' Report and forms part of the Report. However, having regard to the provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

STATUTORY AUDITORS

M/s Jayantilal Thakkar & Co., Chartered Accountants and M/s Rahul Gautam Divan & Associates, Chartered Accountants, the Joint Auditors of the Company will retire at the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received certificates from the auditors to the effect that their re-appointment, if made, would be in accordance with Section 224 (1B) of the Companies Act, 1956. The Board recommends their re-appointment.

COST AUDITORS

The Board has appointed M/s R J Goel & Company, Cost Accountants, New Delhi, M/s L S Sathiamurthi & Co., Cost Accountants, Chennai and M/s N D Birla & Co., Cost Accountants, Ahmedabad as Cost Auditors for the Soda Ash division, Yarn division (Madurai) and Home Textile division (Vapi) of the Company respectively under Section 233B of the Companies Act, 1956 for the financial year 2012-13. Further, in line with the requirement of clause (k) of General Circular No. 15/2011 (52/5/CAB-2011) dated April 11, 2011, issued by the Ministry of Corporate Affairs, Cost Audit Branch, necessary particulars of Cost Auditors for the financial year 2010-11 are as under:

Name of Particulars of Cost Due date of Actual date Division Auditors filing of the of filing of the of the Cost Audit Cost Audit Company Report for Report for Financial Year Financial Year 2010-11 2010-11

Soda Ash M/s R. J. Goel & September 30, September 30, Co., Cost Auditors, 2011 2011 (Membership No. 2171), Address - 31, Community Centre, Ashok Vihar, Delhi - 110052

Yarn M/s L. S. September 30, September 27, Sathiamurthi & 2011 2011 Co., Cost Auditors, (Membership No. 3128), Address - 17/6, Kumar Arcade Apartments, 4th Street, Nehru Nagar, Adyar, Chennai - 600020, Tamil Nadu

Home M/s N. D. Birla & September 30, September 30, Textiles Co., Cost Auditors, 2011 2011 (Membership No. 7907), Address - A-3, Nirant Society, Opp. Town Hall, Nr. Karnavati Hospital, Elisbridge, Ahmedabad - 380006, Gujarat

AUDITORS' REPORT

The Auditors have qualified on certain matters and the same are clarified in notes on accounts no. 2.28 and 2.55 which are forming part of Balance Sheet as at March 31, 2012 and Statement of Profit and Loss for the year ended on that date, are self explanatory and therefore do not call for any further comment u/s 217 (3) of the Companies Act, 1956.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that:

a. in the preparation of the annual accounts for the financial year ended March 31, 2012 the applicable accounting standards read with requirements set out under Revised Schedule VI to the Companies Act, 1956, have been followed and there has been no material departures from the same;

b. appropriate accounting policies have been selected by them and applied the same consistently and judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as at March 31, 2012 and of the profits of the Company for the financial year ended March 31, 2012;

c. the proper and sufficient care has been taken by them 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; and

d. the annual accounts for the financial year ended March 31, 2012 have been prepared by them on a going concern basis.

ACKNOWLEDGEMENT

The Directors express their gratitude to Financial Institutions, Banks, and various other agencies for the co-operation extended to the Company. The Directors also take this opportunity to thank the shareholders, customers, suppliers, lenders, distributors and other stakeholders for the confidence reposed by them in the Company. The employees of the Company contributed significantly in achieving the results. The Directors take this opportunity of thanking them and hope that they will maintain their commitment to excellence in the years to come.

For and on behalf of the Board of Directors

For GHCL Limited

Date: May 30, 2012 SANJAY DALMIA

Place: New Delhi Chairman

 
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