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Notes to Accounts of GHCL Ltd.

Mar 31, 2016

1. In Accordance with the Scheme of Arrangement duly approved by Hon''ble High Court of Gujarat vide its order dated 30th November 2009, the Company has not taken any effect in the current financial statements for the year ended 31 March 2016. Consequently there is no change in Business Development Reserve.

2. Exceptional items represent one time employees'' separation cost incurred during the year on account of Voluntary Retirement Scheme (VRS) given to employees of Soda Ash division. The benefits of VRS would be accruing over a period of time

3. The following changes have taken place during the year with regard to Subsidiary Companies

4. Prior Period Item of Rs..0.01 Cr. (Previous year Rs. 0.09 Cr.) is on account of short provision for consultancy services of earlier year.

5. As per Accounting Standard-15 "Employee Benefits", the disclosures of Employee Benefits as defined in the Accounting Standard are given below :

6. Impairment of Assets

In pursuance of Accounting Standard - 28, the Company has reviewed its carrying cost of assets with value in use (determined based on future earnings) / net selling price (determined based on valuation). Based on such review, management is of the view that in the current financial year impairment of assets is not considered necessary.

7. ESOS Trust owns total 20,46,195 shares, out of which 15,79,922 shares were illegally sold by a party against which ESOS Trust has initiated legal proceedings and 4,66,273 shares are held by Stock Exchange based on an arbitration award. Pending final decision on these shares held by Trust, the Trust will continue for the limited purpose of litigation.

8. Corporate Social Responsibility ( CSR)

As per Section 135 of the Companies Act 2013 , a CSR committee has been formed by the company. The area for CSR activities are drinking water / sanitation, infrastructure for roof rain water harvesting, coastal area development projects, agriculture, agro based livelihood, irrigation, animal husbandry, healthcare, education/ literacy enhancement, employment enhancing vocational skill etc. The funds were primarily allocated to a corpus and utilised throughout the year on the activities which are specified in Schedule VII of the Companies Act, 2013.

2.47 The previous year''s/corresponding period''s figures have been regrouped / reclassified.


Mar 31, 2015

1) Working Capital Loans are secured by way of hypothecation of stock-in-trade and book debts of Soda Ash / Home Textile Division / Edible Salt / Textile Divisions and second charge on fixed assets of Soda Ash Division / Home Textile Division and Textile Division, both present and future.

2) Specified movable assets referred to in the above notes include all movable assets of Soda Ash Division, Home Textile Division and Textile Division both present and future but subject to prior charge created and / or that may be created in favour of Company''s Bankers on stock-in-trade for securing borrowing for working capital.

1. Building include a sum of Rs. 497.80 Lacs being cost of office premises acquired on ownership basis.

2. Leased mines represent expenditure incurred on development of mines.

3. Cash Subsidy amounting to Rs. 823.35 Lacs (previous year Rs. 823.35 Lacs) relating to Home Textile division at Vapi has been reduced from respective Fixed Assets.

4. As per transitional provision under Schedule-II when the remaining useful life of the assets is nil, the residual of those assets has been charged to Statement of Profit and Loss amounting to Rs. 656.12 Lacs in the year.

5. During the year, the management based on internal and external technical evaluation and due to Schedule II of the Companies Act, 2013 reassessed the remaining useful life of assets with effect from 1st April 2014. Accordingly the useful lives of certain assets required a change from the previous estimate

2.1 Impairment of Assets

In pursuance of Accounting Standard - 28, the Company has reviewed its carrying cost of assets with value in use (determined based on future earnings) / net selling price (determined based on valuation). Based on such review, management is of the view that in the current financial year impairment of assets is not considered necessary.

2.2 ESOS Trust owns total 20,46,195 shares, out of which 15,79,922 shares were illegally sold by a party against which ESOS Trust has initiated legal proceedings and 4,66,273 shares are held by Stock Exchange based on an arbitration award. Pending final decision on these shares held by Trust, the Trust will continue for the limited purpose of litigation.

2.3 Corporate Social Responsibility ( CSR)

As per Section 135 of the Companies Act 2013 , a CSR committee has been formed by the company. The area for CSR activities are drinking water / sanitation, infrastructure for roof rain water harvesting, coastal area development projects, agriculture, agro based livelihood, irrigation, animal husbandry, healthcare, education/ literacy enhancement, employment enhancing vocational skill etc. The funds were primarily allocated to a corpus and utilised throughout the year on the activities which are specified in Schedule VII of the Companies Act, 2013.

2.4 The previous year''s/corresponding period''s figures have been regrouped / reclassified.


Mar 31, 2014

1.1 In Accordance with the Scheme of Arrangement duly approved by Hon''ble High Court of Gujarat vide its order dated 30th November 2009, the Company has taken following effects in the current financial statements :- a) In accordance with the aforesaid Scheme, goodwill arising on amalgamation or acquisition or consolidation of financials statements of subsidiaries and which requires amortisation or impairment, any unrealizable assets whether fixed or current or tangible or intangible of the company, any diminution/write off in the value of the investments in its subsidiaries; whether in India or overseas, interest and other financial charges paid or payable on borrowings for subsidiaries by the company or by its subsidiaries or borrowings guaranteed by the company, mark to market adjustment on derivative instruments, currency swaps expenses, all the expenses / costs incurred in carrying out and implementing this Scheme, Integration expenses like plant shifiting / shutting down, expenses arising on voluntary retirement offered to the employees of acquired companies, expenses for suit for bankruptcy including costs associated with existing projects / subsidiaries / divisions in part and / or whole by the Transferee Company and any additional depreciation on account of any upward revaluation of assets are to be charged to Business Development Reserve Account.

Accordingly Rs. 27,679.47 Lacs (previous year Rs. NIL) has been charged to Business Development Reserve on account of diminution in the value of investments and loans & advances to and receivables from subsidiaries. Any further impairment arising out of such diminution shall be accounted for in subsequent years upon reasonable certainty that the same is non realisable and shall be charged to Business Development Reserve until such reserves exists. Further additional depreciation arising out of revaluation amounting to Rs.1937.65 Lacs (Previous year Rs. 1934.39 Lacs) has been charged to the Business Development Reserve.

1.2 Exceptional items are in respect of :

(a) Crystallized Loss amounting to Rs.1004.40 Lacs on sale of 8,81,191 Shares held by GHCL Employees Stock Option Trust in line with the circulars issued by SEBI on January 17, 2013, May 13, 2013 and November 29, 2013 on Employees Stock

Option Scheme (ESOS) and Employees Stock Purchase Scheme, GHCL ESOS Scheme will cease to be in existence by June 30, 2014 and accordingly all the shares controlled by the trust have been sold before the Balance Sheet date.

(b) Consequent to para (a) above, Rs. 240.85 lacs relating to the provision made in previous years for minimum price appreciation guarantee @ 20% as per the GHCL ESOS has been written back, since none of the employees have exercised the option during the period ended 31st March 2014.

(c) Write off amounting to Rs. 2333.65 Lacs due to permanent diminution in the value of 20,46,195 shares originally held by GHCL ESOS trust based on the difference in the average purchase price and current market value. Of these, 15,79,922 shares were illegally sold by a party against which ESOS trust has initiated legal proceedings and balance 4,66,273 shares are held by Stock exchange based on an arbitration award.

1.3 The following changes have taken place during the year with regard to Subsidiary Companies

a) Liquidation of the company Country Date of Liquidation

ROSEBYS UK LIMITED UK 24th DECEMBER 2013

b) Textile & Design Limited uK and Teliforce Holding India Limited Cyprus, subsidiaries of the company are under Liquidation since 25th September, 2009 & 29th January, 2014 respectively.

c) Subsequent to Balance Sheet date, GHCL Rosebys Limited, a step down subsidiary in uK has been voluntarily dissolved on 6th May 2014.

1.4 unquoted investments in subsidiary companies are of long term strategic value in the opinion of the management. Except as adjusted in the financial statements, the current diminution in the value of these investments is temporary in nature considering the inherent value and nature of investee''s business proposal and hence no provision is required.

1.5 In accordance with the requirements of Accounting Standard - 19 Leases issued by the Institute of Chartered Accountants of India, future obligation/rights as at Balance Sheet date for lease arrangements amount to:

1.6 The value of closing stock of Finished Goods includes excise duty not paid Rs. 85.97 Lacs (previous year Rs. 269.52 Lacs). The value of Lignite at mines includes excise duty, royalty & clean energy cess of Rs. 19.43 Lacs (previous year Rs. 37.66 Lacs) on the closing stock. The Value of Salt at Salt Fields includes Cess & Royalty of Rs. 18.57 Lacs (previous year Rs. 24.27 Lacs) on Closing Stock. This has however, no impact on the profit for the year.

1.7 Prior Period Item of Rs. 16.75 Lacs (Previous year Rs. 3.92 Lacs) is on account of excess provision for expenses of earlier year.

1.8 Loans & Advances includes Rs. 3308.99 Lacs (previous year Rs. 7617.29 Lacs) paid as advance for purchase of materials and services outstanding for more than six months and considered good.

1.9 As per Accounting Standard-15 "Employee benefits", the disclosures of Employee benefits as Defined in the Accounting Standard are given below :

Defined Contribution Plan

Provident Fund and Superannuation Fund are Defined Contribution Plan. Contribution paid for Provident Fund and Superannuation Fund are recognised as expense for the year :

The Company''s Provident Fund is exempt under section 17 of Employees'' Provident Fund and Miscellaneous Provision Act, 1952. Conditions for grant of exemption stipulate that the employer shall make good, defciency if any, in the interest rate declared by the trust vis-à-vis statutory rate

Defined benefit Plan

Gratuity (Funded)

The employees'' gratuity fund scheme managed by a Trust is a Defined benefit plan. The present value of the obligation is determined based on actuarial valuation using the Projected unit Credit Method, which recognises each year of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

Leave encashment (unfunded)

The Company recognises the leave encashment expenses in the Statement of profit & Loss based on actuarial valuation.

The expenses recognised in the Statement of profit & Loss and the Leave encashment liability at the beginning and at the end of the year :

1.10 Related Party Transactions a Subsidiaries & Associate :

Indian England N.V.

Indian Wales N.V.

Dan River Properties LLC

Grace Home Fashions LLC

Rosebys Interiors India Limited

Teliforce Holding India Limited ( under Liquidation since 29th January, 2014)

Textile & Design Limited (under Liquidation since 25th September, 2009)

Rosebys uK Limited (Liquidated as at 24th December 2013)

GHCL Rosebys Limited (Liquidated as at 6th May, 2014)

Indian Britain B.V. (Liquidated as at 30th November, 2012)

Colwell & Salmon Communications Inc. (Liquidated as at 1st April, 2013)

DM Solar Farm Pvt Limited

TCP Limited (w.e.f. 31st January, 2014)

b Key Management Personnel:

Mr. R. S. Jalan, Managing Director

Mr. Raman Chopra, CFO & Executive Director - Finance

Mr. Tej Malhotra, Sr. Executive Director - Operations (upto 4th May 2012)

c Relative of Key Management Personnel:

Mrs. Bharti Chopra, w/o Mr. Raman Chopra Ravi Shanker Jalan, HuF

d significant infuence

Dalmia Centre for Research & Development

1.11 Intangible Assets

Intangible Asset, meeting the defnition as per the provisions of Accounting Standard - 26 Intangible Assets issued by The Institute of Chartered Accountants of India, comprises of Sofitware and Trade mark Expenditure on purchased sofitware, ERP System, IT related expenses and Trade mark is being written off over a period of three years.

1.12 Impairment of Assets

In pursuance of Accounting Standard - 28 - Impairment of Assets issued by the Institute of Chartered Accountants of India, the Company has reviewed its carrying cost of assets with value in use (determined based on future earnings) / net selling price (determined based on valuation). Based on such review, management is of the view that in the current financial year impairment of assets is not considered necessary.

1.13 The GHCL ESOS Scheme, approved by the shareholders in their Extra Ordinary General Meeting held on 19th March, 2008 will cease to be in existence by 30th June 2014. The Consequential accounting entries have been passed as exceptional item in the Statement of profit and Loss during the year.

1.14 The previous year''s/corresponding period''s figures have been regrouped / reclassified.


Mar 31, 2013

1.1 In Accordance with the Scheme of Arrangement duly approved by Hon''ble High Court of Gujarat vide its order dated 30th November 2009'' the Company has taken following effects in the current fi nancial statements :- a) In accordance with the aforesaid Scheme'' goodwill arising on amalgamation or acquisition or consolidation of fi nancials statements of subsidiaries and which requires amortisation or impairment'' any unrealizable assets whether fi xed or current or tangible or intangible of the company'' any diminution/write off in the value of the investments in its subsidiaries; whether in India or overseas'' interest and other fi nancial charges paid or payable on borrowings for subsidiaries by the company or by its subsidiaries or borrowings guaranteed by the company'' mark to market adjustment on derivative instruments'' currency swaps expenses'' all the expenses / costs incurred in carrying out and implementing this Scheme'' Integration expenses like plant shifting / shutting down'' expenses arising on voluntary retirement offered to the employees of acquired companies'' expenses for suit for bankruptcy including costs associated with existing projects / subsidiaries / divisions in part and / or whole by the Transferee Company and any additional depreciation on account of any upward revaluation of assets are to be charged to Business Development Reserve Account.

Accordingly NIL (previous year Rs. 10330.51 Lacs) has been charged to Business Development Reserve on account of diminution in the value of investments in and loans & advances to and receivables from subsidiaries. Any further impairment arising out of such diminution shall be accounted for in subsequent years upon reasonable certainty that the same is non realisable and shall be charged to Business Development Reserve until such reserves exists. Further additional depreciation arising out of revaluation amounting to Rs. 1934.39 Lacs (Previous year Rs. 1936.31 Lacs) has been charged to the Business Development Reserve.

b) As per the Scheme'' NIL (Previous year Rs. 9989.96 Lacs) pertaining to investment in subsidiary has been written off and adjusted against General Reserve.

1.2 Exceptional items are in respect of write off of investment of Rs.1934.53 Lacs in Indian Britain B. V. (subsidiary company liquidated on 30th November'' 2012) and Rs. 2023.79 Lacs on account of arbitration settlement entered into by GHCL Employees Stock Option Trust for loss on investment in company shares held by the ESOS Trust.

1.3 Provision for taxation has been made during the year under the Minimum Alternate Tax (MAT) as per the provision of the Income tax Act''1961 which can be set off in subsequent years based on the provisions of Section 115JB.

1.4 The Company has received draft assessment order from the Income tax Department for the Assessment Year 2009-10 (relevant to Accounting Year 2008-09) showing addition of Rs. 3339.66 Lacs in the total income on account of various disallowances. The Company is disputing and denying additions proposed in draft assessment order based on legal opinion available with it and has approached the Dispute Resolution Panel (DRP) for adjudication. Hence no provision is considered necessary in the books of accounts.

1.5 The value of closing stock of Finished Goods includes excise duty not paid Rs. 269.52 Lacs (previous year Rs.62.70 Lacs). The value of Lignite at mines includes excise duty'' royalty & clean energy cess of Rs. 37.66 Lacs (previous year Rs. 22.16 Lacs) on the closing stock. The Value of Salt at Salt Fields includes Cess & Royalty of Rs. 24.27 Lacs (previous year Rs. 19.11 Lacs) on Closing Stock.

This has however'' no impact on the profi t for the year.

1.6 Prior Period Item of Rs. 3.92 Lacs (Previous year Rs. 18.89 Lacs) is on account of excess provision for expenses of earlier year.

1.7 Loans & Advances includes Rs. 7''617.29 Lacs (previous year Rs. 7650.18 Lacs) paid as advance for purchase of materials and services outstanding for more than six months and considered good.

1.8 As per Accounting Standard-15 "Employee Benefi ts"'' the disclosures of Employee Benefi ts as defi ned in the Accounting Standard are given below :

Defi ned Contribution Plan

Provident Fund and Superannuation Fund are Defi ned Contribution Plan. Contribution paid for Provident Fund and Superannuation Fund are recognised as expense for the year :

1.9 Related Party Transactions a Subsidiaries & Associate :

Indian England N.V. Indian Wales N.V.

Dan River Properties LLC

Grace Home Fashions LLC

GHCL Rosebys Limited

Rosebys Interiors India Limited

Teliforce Holding India Limited

Rosebys UK Limited (under Liquidation since12th November'' 2012)

Textile & Design Limited (under Liquidation since 25th September'' 2009)

GHCL Inc. (Dissolved as at 14th May'' 2012)

Indian Britain B.V. (Liquidated as at 30th November'' 2012)

S C GHCL Upsom SA (ownership upto 12th November'' 2012)

Colwell & Salmon Communications Inc. (Liquidated as at 1st April'' 2013)

Fabient Textile Limited (Dissolved as at 31st January 2012)

Rosebys International Limited (Dissolved as at 31st January 2012)

DM Solar Farm Pvt Limited ( w. e. f. 04th June'' 2012)

b Key Management Personnel:

Mr. R. S. Jalan'' Managing Director

Mr. Tej Malhotra'' Sr. Executive Director - Operations (upto 4th May 2012)

Mr. Raman Chopra'' Executive Director - Finance

c Relative of Key Management Personnel:

Mrs. Bharti Chopra'' w/o Mr. Raman Chopra Ravi Shanker Jalan'' HUF

d Signifi cant infl uence

Dalmia Centre for Research & Development ( w. e. f. 1st August'' 2012)

1.10 Intangible Assets

Intangible Asset'' meeting the defi nition as per the provisions of Accounting Standard - 26 Intangible Assets issued by The Institute of Chartered Accountants of India'' comprises of Software and Trade mark Expenditure on purchased software'' ERP System'' IT related expenses and Trade mark is being written off over a period of three years.

1.11 Impairment of Assets

In pursuance of Accounting Standard - 28 - Impairment of Assets issued by the Institute of Chartered Accountants of India'' the Company has reviewed its carrying cost of assets with value in use (determined based on future earnings) / net selling price (determined based on valuation). Based on such review'' management is of the view that in the current fi nancial year impairment of assets is not considered necessary.

1.12 The details of amounts outstanding to Micro'' Small and Medium Enterprises under the "Micro'' Small and Medium Enterprises Development Act'' 2006 (MSMED Act)'' based on the available information with the Company are as under''

1.13 Category-wise quantitative data about derivative instruments that are outstanding are disclosed as per the requirement of Accounting Standard - 30 issued by the Institute of Chartered Accountants of India.

1.14 The shareholders in their Extra Ordinary General Meeting held on 19th March'' 2008 had approved the Employees Stock Option Scheme (ESOS 2008). Accordingly'' the Employees Stock Option granted pursuant to ESOS 2006 (Series - 1) had been cancelled and equivalent number of options were granted by the compensation committee meeting held on 24th March'' 2008. Under ESOS 2008 the compensation committee has assured a minimum price appreciation guarantee @ 20% on the Exercise Price i.e. Rs. 76.95 per share i.e. the latest available closing price prior to the date of grant of options i.e. 24th March'' 2008.

As per SEBI (ESOS & ESPS) Guidelines 1999 the Employees Stock Option Scheme is administered by the registered Trust named GHCL Employees Stock Option Trust (ESOS Trust). The balance amount of interest free loan that the Company has advanced for the year for the purpose of purchase of shares from the open market for allotment of shares to the eligible employees upon exercising their option from time to time is of Rs. 4''353.57 Lacs (Previous year 6''377.36 Lacs).

The current market value of the shares held by ESOS Trust is lower than the cost of acquisition of these shares by Rs. 3''274 Lacs which is on account of market volatility. The impact of fall in market value'' if any would be appropriately considered by the company in its Statement of Profi t and Loss at the time of exercise of Options by the eligible employees. As per ESOS scheme'' 15'' 65''000 option have been vested with the eligible employees as on March 24th 2010 with an exercise period of 4 years ending on 24th March 2014. However'' in line with the circulars issued by SEBI on January 17'' 2013 and May 13'' 2013 on Employees Stock option Scheme and Employees Stock Purchase Scheme'' GHCL ESOS Scheme will cease to be in existence by December 31'' 2013 and accordingly all the shares held by the trust will be disposed off on or before December 31'' 2013. None of the employees have exercised the option during the period ended 31 March 2013.

The total number of shares purchased by ESOS Trust was 4''995''386 shares. Of these'' 1''579''922 shares were illegally sold by a party against which ESOS trust has initiated legal proceedings. Pursuant to arbitration award dated February 14'' 2013'' ESOS trust has set off Rs.1''057.00 Lacs Loan taken from various companies against 2''068''000 shares pledged on their behalf to third parties.

1.15 The previous years/corresponding period fi gures have been regrouped/reclassifi ed.


Mar 31, 2012

Rupee Term Loans from Banks / Institutions have been secured against :-

a) Loan aggregating to Rs. 17432.16 Lacs is secured by extension of first charge on pari passu basis, by way of equitable mortgage on immovable properties of the Soda Ash Division situated at Sutrapada, Veraval, Gujarat and extension of hypothecation charge on movable assets, both present and future of the company's Soda Ash division situated at village - Sutrapada, Veraval in Gujarat with other term lenders of the said project. The remaining tenure of the loans is 4 to 6 years.

b) Loan aggregating to Rs. 6878.49 Lacs is secured by exclusive charge on the specific fixed assets created out of the proceeds of the loan for Company's Soda Ash Division situated at village Sutrapada, Veraval in Gujarat. The remaining tenure of the loans is 7 to 9 years.

c) Loan aggregating to Rs. 16435.14 Lacs is secured by way of first pari passu charge on movable fixed assets of Soda Ash Division situated at village Sutrapada, Veraval in Gujarat. The remaining tenure of the loans is 1 to 5 years.

d) Loan aggregating to Rs. 8130.50 Lacs is secured by first charge on pari passu basis by way of equitable mortgage on fixed assets of the Textile Division situated at Vapi, Gujarat and hypothecation of movable assets both present and future of the Company's Textile Division at Vapi, Gujarat with other term lenders of the said project. The said loan is availed under Technology upgradation Fund Scheme for Textile. The remaining tenure of the loans is 3 to 4 years.

e) Loan aggregating to Rs. 1317.35 Lacs is secured by exclusive charge on the specific fixed assets created out of the proceeds of the loan for Company's Home Textile Division situated at Vapi in Gujarat. The remaining tenure of the loans is 7 to 10 years.

f) Loan aggregating to Rs. 3600.00 Lacs is secured by first charge on pari passu basis by way of equitable mortgage on Factory Land & Building of Textile Division situated at Paravai and Manaparai, Tamil Nadu and hypothecation of specified movable assets, both present and future of the Company's Textile Division. The said loan is availed under Technology upgradation Fund Scheme for Textile. The remaining tenure of the loans is 3 to 5 years.

g) Loan aggregating to Rs. 2452.62 Lacs is secured by exclusive charge on the specific fixed assets created out of the proceeds of the loan for Company's Textile Division situated at Madurai, Tamil Nadu. The remaining tenure of the loans is 7 to 10 years.

h) Loan aggregating to Rs. 10748.18 Lacs is secured by extension of first charge on pari passu basis on Factory Land & Building of Textile Division situated at Paravai and Manaparai, Tamil Nadu with other term lenders of the said project. The remaining tenure of the loans is 1 to 4 years.

i) Loan aggregating to Rs. 346.95 Lacs is secured by an exclusive first charge by way of equitable mortgage on immovable properties pertaining to Wind Mill Division - I situated at Irukkandurai village, Tirunelveli District in the state of Tamil Nadu and hypothecation of all present and future movable assets of Wind Mill Division - I. The said loan is availed under Technology upgradation Fund Scheme for Textile. The remaining tenure of the loan is 3 years.

j) Loan aggregating to Rs. 503.55 Lacs is secured by an exclusive first charge on all present and future movable assets of Wind Mill Division - II situated at Chinnaputhur, near Poolavadi in the state of Tamil Nadu. The said loan is availed under Technology upgradation Fund Scheme for Textile. The remaining tenure of the loan is 3 years.

k) Loan aggregating to Rs. 1750.00 Lacs is secured by extension of first charge on all present movable assets of Edible Salt division situated at Thiruporur, Vedaranyam and Industrial Salt Division and exclusive first charge on the factory land and building situated at Thiruporur village, Chengalpattu Taluka, Kancheepuram District. The remaining tenure of the loan is 2 years.

l) Loan aggregating to Rs. 4583.33 Lacs is secured by an exclusive charge on immovable property situated at Plot No.B-38, Section-I, New Okhla Industrial Area (Noida), Dist.-Gautam Budh Nagar, uttar Pradesh. The remaining tenure of the loan is 4 years

m) Loan aggregating to Rs. 3000.00 Lacs is secured by an exclusive charge on immovable property situated at GHCL House, Swastik Society, Navrangpura, Ahmedabad, Gujarat. The remaining tenure of the loan is 5 years.

n) Out of all the aforesaid secured Loans appearing in note 2.3 (a) to 2.3 (m) totalling Rs. 77178.27 lacs, an amount of Rs. 7960.83 lacs is due for payment in next 12 months and accordingly reported under note no 2.9 under the head " others Current Liabilities" as Rs.current maturities of Long Term Debt'.

1) Working Capital Loans are secured by way of hypothecation of stock-in-trade and book debts of Soda Ash / Home Textile Division / Edible Salt / Textile Divisions and second charge on fixed assets of Soda Ash Division / Home Textile Division and Textile Division, both present and future.

2) Specified movable assets referred to in the above notes include all movable assets of Soda Ash Division, Home Textile Division and Textile Division both present and future but subject to prior charge created and / or that may be created in favour of Company's Bankers on stock-in-trade for securing borrowing for working capital.

1. Deletion of Building include a sum of Rs. 91.40 Lacs being cost of office premises acquired on ownership basis sold during the year.

2. Leased mines represent expenditure incurred on development of mines.

3. Cash Subsidy amounting to Rs. 855.70 Lacs (previous year Rs. 823.35 Lacs) relating to Home Textile division at Vapi has been reduced from respective Fixed Assets.

4. Some of the fixed assets have been revalued as on 1st April 2008 as per Scheme of Arrangement duly approved by Hon'ble High Court of Gujarat vide its order dated 30th November 2009 by Rs. 1,01,184.68 lacs (refer note no. 2.28).

5. Deletion of Free Hold Land includes Rs. 548.97 lacs being revaluation amount of land of Sree Meenakshi Mills Division at Madurai and Plant & Machinery of Rs. 9.04 Lacs of Soda Ash Division sold during the year.

*During the year the company has been impacted due to highly volatile forex market and huge devaluation of Rupee. The total impact of this fluctuation resulted into an exchange loss of Rs. 5101.11 Lakh for the year. The Company had some borrowings in foreign currency instruments which carry lower interest rate as compared to Indian Rupee borrowing rate, resulting into to lower interest cost of Rs. 3919.84 lakh. Therefore, out of total exchange loss of Rs. 5101.11 lakh, a sum of Rs. 3919.84 has been recognized under finance cost as "Applicable loss on foreign currency transactions and translation" and balance Rs. 1181.27 Lakh has been shown as Foreign Exchange Loss.

1.1 In Accordance with the Scheme of Arrangement duly approved by Hon'ble High Court of Gujarat vide its order dated 30th November 2009, the Company has taken following effects in the current financial statements :-

a) In accordance with the aforesaid Scheme, goodwill arising on amalgamation or acquisition or consolidation of financials statements of subsidiaries and which requires amortisation or impairment, any unrealizable assets whether fixed or current or tangible or intangible of the company, any diminution/write off in the value of the investments in its subsidiaries; whether in India or overseas, interest and other financial charges paid or payable on borrowings for subsidiaries by the company or by its subsidiaries or borrowings guaranteed by the company, mark to market adjustment on derivative instruments, currency swaps expenses, all the expenses / costs incurred in carrying out and implementing this Scheme, Integration expenses like plant shifting / shutting down, expenses arising on voluntary retirement offered to the employees of acquired companies, expenses for suit for bankruptcy including costs associated with existing projects / subsidiaries / divisions in part and / or whole by the Transferee Company and any additional depreciation on account of any upward revaluation of assets are to be charged to Business Development Reserve Account.

Accordingly Rs.10,330.51 Lacs (previous year Rs. 2,654.45 Lacs) has been charged to Business Development Reserve on account of diminution in the value of investments in and loans & advances to and receivables from subsidiaries. Any further impairment arising out of such diminution shall be accounted for in subsequent years upon reasonable certainty that the same is non realisable and shall be charged to Business Development Reserve until such reserves exists. Further additional depreciation arising out of revaluation amounting to Rs. 1,936.31 Lacs (Previous year Rs. 1,936.95 Lacs) has been charged to the Business Development Reserve. Also an amount of Rs. 2,958.90 lakhs (Previous year Rs. 151.62 lakh gain and ignored) being marked to market impact on derivatives has been charged to Business Development Reserve. An amount of Rs. 10,000 Lacs charged to Business Development Reserve as provision in earlier year has been written back during the current year.

b) As per the Scheme, a sum of Rs. 9,989.96 Lacs (Previous year Rs.18,475.11 Lacs) pertaining to investment in/receivables from subsidiaries have been written off and adjusted against General Reserve.

1.2 Rates and Taxes includes Rs. 10 Lacs (previous year Rs. 10.00 Lacs) for Wealth Tax

b) During the year, a wholly owned step down subsidary Indian England N.V. (Netherlands) has been converted into a wholly owned direct subsidary of the company on 21st February 2012.

c) Textile & Design Limited uK, subsidiary of the company which had filed for administration during 2008-09 is under Liquidation since 28th September, 2009.

d) During the year GHCL upsom, Romania, a step down subsidiary of the company, the plant of which was lying closed since January 2010 due to impending gas issues, has been put under administration on 21st November 2011. The Company is in dialogue with the Judical Administrator to assess the feasiblity of a re-organization plan.

e) Subsequent to Balance Sheet date, GHCL Inc, a step down subsidiary in uSA has been voluntary dissolved on 14th May 2012.

1.3 unquoted investments in subsidiary companies are of long term strategic value in the opinion of the management. Except for as adjusted in the financial statements (as per Note 2.12 above), the current diminution in the value of these investments is temporary in nature considering the inherent value and nature of investee's business proposal and hence no provision is required.

1.4 Rosebys Interiors India Limited, a subsidiary of the company has been classified as a Non-current investment during the year.

1.5 In accordance with the requirements of Accounting Standard - 19 Leases issued by the Institute of Chartered Accountants of India, future obligation/rights as at Balance Sheet Date for lease arrangements amount to

1.6 The value of closing stock of Finished Goods includes excise duty not paid Rs. 62.70 Lacs (previous year Rs.75.16 Lacs). The value of Lignite at mines includes excise duty, royalty & clean energy cess of Rs. 22.16 Lacs (previous year Rs. 19.60 Lacs) on the closing stock. The Value of Salt at Salt Fields includes Cess & Royalty of Rs. 19.11 Lacs (previous year Rs. 15.11 Lacs) on Closing Stock. This has however, no impact on the profit for the year.

1.7 Prior Period Item of Rs. 18.89 Lacs is on account of excess provision of legal expenses of earlier year.

1.8 Loans & Advances includes Rs. 7,650.18 Lacs (previous year Rs. 7524.94 Lacs) paid as advance for purchase of materials and services outstanding for more than six months and considered good.

1.9 As per Accounting Standard-15 "Employee Benefits", the disclosures of Employee Benefits as defined in the Accounting Standard are given below :

The Company's Provident Fund is exempt under section 17 of Employees' Provident Fund and Miscellanous Provision Act, 1952. Conditions for grant of exemption stipulate that the employer shall make good, deficiency if any, in the interest rate declared by the trust vis-a-vis statutory rate.

Defined Benefit Plan

Gratuity (Funded)

The employees' gratuity fund scheme managed by a Trust is a defined benefit plan. The present value of the obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each year of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

Leave Encashment (Unfunded)

The Company recognises the leave encashment expenses in the Statement of Profit and Loss based on actuarial valuation.

The expenses recognised in the Statement of Profit and Loss and the Leave encashment liability at the beginning and at the end of the year:

1.10 Related Party Transactions a Subsidiaries :

Colwell & Salmon Communications Inc.

Indian Britain B.V.

Indian England N.V.

Indian Wales N.V.

Dan River Properties LLC

Grace Home Fashions LLC

GHCL Rosebys Limited

Rosebys uK Limited

S C GHCL upsom SA (under administration since 21st November, 2011)

Rosebys Interiors India Limited

Teliforce Holding India Limited

GHCL Inc.(Dissolved as at 14th May, 2012)

Textile & Design Limited (under Liquidation since 28th September, 2009) Fabient Textile Limited (Dissolved as at 31st January, 2012)

Rosebys International Limited (Dissolved as at 31st January, 2012) GHCL International Inc. (Dissolved as at 13th September, 2011)

b Key Management Personnel:

Mr. R. S. Jalan, Managing Director

Mr. Tej Malhotra, Sr. Executive Director - Operations

Mr. Raman Chopra, Executive Director - Finance

c Relative of Key Management Personnel:

Mrs. Bharti Chopra, w/o Mr. Raman Chopra

1.11 Intangible Assets

Intangible Asset, meeting the definition as per the provisions of Accounting Standard - 26 Intangible Assets issued by The Institute of Chartered Accountants of India, comprises of :

a Salt Pans

Expenditure on the development of salt pans is being written off over a period of five years

b Software

Expenditure on purchased software, ERP System and IT related expenses is being written off over a period of three years.

1.12 Impairment of Assets

In pursuance of Accounting Standard - 28 - Impairment of Assets issued by the Institute of Chartered Accountants of India, the Company has reviewed its carrying cost of assets with value in use (determined based on future earnings) / net selling price (determined based on valuation). Based on such review, management is of the view that in the current financial year impairment of assets is not considered necessary.

1.13 The Company has exercised the option granted vide notification F.No.17/33/2008/CL.V dated December 29, 2011 issued by the Ministry of Corporate Affairs and accordingly the exchange differences arising on revaluation of long term foreign currency monetary items for the year ended 31st March, 2012 has been recognised over the maturity period. The unamortised balance is presented as "Foreign Currency Monetary item Translation Difference Account" (FCMTDA). Accordingly an amount of Rs. 428. 68 lacs has been chagred to the Statement of Profit and Loss and an aggregate amount of Rs. 996.15 lacs is deferred and recognised as an asset under FCMTDA.

1.14 The Company provides for the estimated expenditure required to restore quarries and mines. The total estimate of restoration expenses is apportioned over the estimate of mineral reserves and a provision is made based on minerals extracted during the year. The total estimate of restoration expenses will be review periodically, on the basis of technical estimates.

1.15 The shareholders in their Extra Ordinary General Meeting held on 19th March, 2008 had approved the Employees Stock Option Scheme (ESOS 2008). Accordingly, the Employees Stock Option granted pursuant to ESOS 2006 (Series - 1) had been cancelled and equivalent number of options were granted by the compensation committee meeting held on 24th March, 2008. under ESOS 2008 the compensation committee has assured a minimum price appreciation guarantee @ 20% on the Exercise Price i.e. Rs. 76.95 per share i.e. the latest available closing price prior to the date of grant of options i.e. 24th March, 2008.

As per SEBI (ESOS & ESPS) Guidelines 1999 the Employees Stock Option Scheme is administered by the registered Trust named GHCL Employees Stock Option Trust (ESOS Trust). The Company has advanced interest free loan of Rs. 6,377.36 Lacs (Previous year 6,403.20 Lacs) to the Trust for the purpose of purchase of shares from the open market for allotment of shares to the eligible employees upon exercising their option from time to time.

The current market value of the shares held by ESOS Trust is lower than the cost of acquisition of these shares by Rs. 5,692 Lacs which is on account of market volatility. The impact of fall in market value, if any would be appropriately considered by the company in its Statement of Profit and Loss at the time of exercise of Options by the eligible employees. As per ESOS scheme, 15, 65,000 option have been vested with the eliglible empolyees as on March 24th 2010 with an exercise period of 4 years ending on 24th March 2014. However none of the employees have exercised the option during the period ended 31 March 2012.

The total number of shares purchased by ESOS Trust was 4,995,386 shares. Of these, 1,579,922 shares were illegally sold by a party against which ESOS trust has initiated legal proceedings and has got a favorable award from the Court. Additionally, ESOS Trust had taken a loan of Rs.1,057.00 Lacs from various companies and had created a third-party pledge of 2,068,000 shares on behalf of these lender companies. The lender companies could not fulfill their obligations toward the aforesaid third parties and consequently the pledge was invoked by these parties. ESOS trust got a favorable arbitration award against the lender companies whereby the lender companies would restore 2,068,000 shares in favour of ESOS Trust upon ESOS trust repaying their loan of Rs. 967.00 Lacs.

The details as per regulation 12 of SEBI (ESOS & ESPS) Guidelines 1999 are as follows:

* The stock options in respect of two employees i.e. Mr. Nikhil Sen (75000 options, resigned on 31-3-2011) and Mr. Jagdish Daral (20000 options, resigned on 3-12-2011) have lapsed as they have not exercised their vested options within 60 days of date of their resignations.

** Mr. P Surlivelu (20000 options, retired on 30-4-2010), Mr. N K Masand (20000 options, retired on 30-9-2010) and Mr. T Malayarasan (20000 options, retired on 30-6-2011) have not exercised their vested options.

1.16 The previous year's /corresponding period's figures have been regrouped / reclassified to be in conformity with the Revised Schedule VI of the Companies Act. 1956.


Mar 31, 2011

1.

As at As at 31st March, 31st March, 2011 2010 (Rs in (Rs in Lacs) lacs)

b) Contingent Liabilities :

(i) Guarantees issued by banks 1,316.07 1,108.84

(ii) Letters of Credit 76.05 526.68

(ii) Bills discounted with banks (since realized) 3,512.80 989.77

(iv) Claims against the Company not acknowledged as debts

- Income Tax & Wealth Tax 140.49 48.66

- Sales Tax / VAT 5.99 3.99

- Excise & Service Tax 2,769.16 2,205.70

- Other claims 620.00 736.91

(v) Corporate guarantee to Bank on behalf of subsidiaries of the Company 45,192.84 63,298.69

(vi) Premium on redemption of Foreign Currency Convertible Bonds - 5,134.80

2. In Accordance with the Scheme of Arrangement duly approved by Hon'ble High Court of Gujarat vide its order dated 30th November 2009, the Company has taken following effects in the current financial statements :-

a) Gains realised /(premium) paid on account of buyback/redemption and cancellation of 2,900 (Previous year 3,900) Foreign Currency Convertible Bonds (FCCBs) of USD 10,000 each at discount /(premium) amounting to (Rs 926.81 Lacs) (Previous year Rs 2357.36 Lacs) has been transferred to Business Development Reserve Account in accordance with the Scheme.

b) In accordance with the aforesaid Scheme, goodwill arising on amalgamation or acquisition or consolidation of financials statements of subsidiaries and which requires amortisation or impairment, any unrealizable assets whether fixed or current or tangible or intangible of the company, any diminution/write off in the value of the investments in its subsidiaries; whether in India or overseas, interest and other financial charges paid or payable on borrowings for subsidiaries by the company or by its subsidiaries or borrowings guaranteed by the company, mark to market adjustment on derivative instruments, currency swaps expenses, all the expenses / costs incurred in carrying out and implementing this Scheme, Integration expenses like plant shifting / shutting down, expenses arising on voluntary retirement offered to the employees of acquired companies, expenses for suit for bankruptcy including costs associated with existing projects / subsidiaries / divisions in part and / or whole by the Transferee Company and any additional depreciation on account of any upward revaluation of assets are to be charged to Business Development Reserve Account.

Accordingly Rs 2654.45 Lacs (previous year Rs 4,242.70 Lacs) has been charged to Business Development Reserve on account of diminution in the value investments in and loans & advances to and receivables from subsidiaries. Any further impairment arising out of such diminution shall be accounted for in subsequent years upon reasonable certainty that the same is non realisable and shall be charged to Business Development Reserve until such reserves exists. Further additional depreciation arising out of revaluation amounting to Rs 1936.95 Lacs (Previous year Rs 1,936.95 Lacs) has been charged to the Business Development Reserve.

c) As per the Scheme, a sum of Rs 18,475.11 Lacs (Previous year Rs 16,622.24 Lacs) pertaining to receivables from subsidiaries have been written off and adjusted against General Reserve.

d) As per the Scheme, the Profit and Loss Account Balance as appearing in the Balance Sheet of the Company as on 31st March 2010 shall be in part or full, without any further act, instrument or deed, stand re-organised and be appropriated to the General Reserve, as may be considered appropriate by the management in the interest of the company. Accordingly Rs 17,500.00 Lacs (Previous year Rs 15,000 Lacs) has been transferred from Profit and Loss Balance to General Reserve Account.

3. Provision for taxation includes Rs 10.00 Lacs (previous year Rs 12.00 Lacs) for Wealth Tax .

4. The following changes have taken place during the year with regard to Subsidiary Companies

b) Textile & Design Limited UK, subsidiary of the company which had filed for administration during 2008-09 is under Liquidation since 28th September, 2009.

5. Unquoted investments in subsidiary companies are of long term strategic value in the opinion of the management. Except for as adjusted in the financial statements, the current diminution in the value of these investments is temporary in nature considering the inherent value and nature of investee's business proposal and hence no provision is required.

6. Rosebys Interiors India Limited, a subsidiary, was incorporated with a view to separately set up home textiles retail segment and with an the intention to divest ownership and control in the near future. Hence such investment is classified as a current investment. Management is actively looking at divestment opportunity and has accordingly engaged a Merchant Banking Firm to achieve its objective of divestment.

8. The value of closing stock of Finished Goods includes excise duty not paid Rs 75.16 Lacs (previous year Rs 36.65 Lacs). The value of Lignite at mines includes excise duty, royalty & clean energy cess of Rs 19.60 Lacs (previous year Rs 0.74 Lacs) on the closing stock. The Value of Salt at Salt Fields includes Cess & Royalty of Rs 15.11 Lacs (previous year Rs 38.95 Lacs) on Closing Stock. This has however, no impact on the profit for the year.

9. Prior Period Item of Rs 64.29 Lacs is on account of reversal of Excess provision for Wealth Tax and expenses.

10. Loans & Advances includes Rs 7,524.94 Lacs (previous year Rs 7348.08 Lacs) paid as advance for purchase of materials and services outstanding for more than six months and considered good.

11. As per Accounting Standard-15 "Employee Benefits", the disclosures of Employee Benefits as defined in the Accounting Standard are given below :

The Company's Provident Fund is exempted under section 17 of Employees' Provident Fund and Miscellaneous Provision Act, 1952. Conditions for grant of exemption stipulate that the employer shall make good, deficiency if any, in the interest rate declared by the trust vis-à-vis statutory rate.

Defined Benefit Plan

Gratuity (Funded)

The employees' gratuity fund scheme managed by a Trust is a defined benefit plan. The present value of the obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each year of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

Leave Encashment (Unfunded)

The Company recognises the leave encashment expenses in the Profit & Loss Account based on actuarial valuation.

12. a. Related Party Transactions Subsidiaries :

Colwell & Salmon Communications Inc.

Indian Britain B.V.

Indian England N.V.

Indian Wales N.V.

GHCL Inc.

GHCL International Inc.

Dan River Properties LLC

Grace Home Fashions LLC

GHCL Rosebys Limited

Textile & Design Limited

Rosebys UK Limited

S C GHCL Upsom SA

Rosebys Interiors India Limited

Fabient Textile Limited

Rosebys International Limited

Teliforce Holding India Limited

Old Apparel Inc (Dissolved as at 7th April 2010)

Old Apparel Properties Inc. (Dissolved as at 7th April 2010)

Textile & Design (No.3) (Dissolved as at 22nd June 2010)

Dan River Inc. (Dissolved as at 10th September 2010)

Dan River International Limited (Dissolved as at 10th September 2010)

Dan River Factory Stores Inc. (Dissolved as at 10th September 2010)

The Bibb Company LLC (Dissolved as at 10th September 2010)

Fabient Global Limited (Dissolved as at 31st December 2010)

b. Key Management Personnel:

Mr. R. S. Jalan, Managing Director

Mr. Tej Malhotra, Sr. Executive Director - Operations

Mr. Raman Chopra, Executive Director - Finance

c. Relative of Key Management Personnel:

Mrs. Bharti Chopra, w/o Mr. Raman Chopra

13. Deferred Revenue Expenditure

Deferred Revenue Expenditure comprises of carrying amount as per Accounting Standard - 26 on Intangible Assets issued by The Institute of Chartered Accountants of India.

Voluntary Retirement Scheme Expenses

Compensation under the Company's voluntary retirement scheme paid/provided is being written off equally over a period of three years.

14. Intangible Assets

Intangible Asset, meeting the definition as per the provisions of Accounting Standard - 26 Intangible Assets issued by The Institute of Chartered Accountants of India, comprises of :

a. Salt Pans

Expenditure on the development of salt pans is being written off over a period of five years.

b. Software

Expenditure on purchased software, ERP System and IT related expenses is being written off over a period of three years.

15. Impairment of Assets

In pursuance of Accounting Standard - 28 - Impairment of Assets issued by the Institute of Chartered Accountants of India, the Company has reviewed its carrying cost of assets with value in use (determined based on future earnings) / net selling price (determined based on valuation). Based on such review, management has provided for an appropriate impairment of assets.

16. Category-wise quantitative data about derivative instruments that are outstanding are disclosed as per the requirement of Accounting Standard - 30 issued by the Institute of Chartered Accountants of India.

b) The Company entered the derivative instruments to hedge the foreign currency risk of fluctuation and protect interest rate risk and not for speculation purposes. Mark to Market profit on outstanding derivatives instruments as on 31st March 2011 stood Rs 151.62. lacs (Previous Year loss Rs 511.34 lacs) arising from hedging transactions by the company for its foreign currency related exposures. The company has not taken credit for the profit on mark to market basis during the year.Since the same would considered on maturity of the contracts.

17. The shareholders in their Extra Ordinary General Meeting held on 19th March, 2008 had approved the Employees Stock Option Scheme (ESOS 2008). Accordingly, the Employees Stock Option granted pursuant to ESOS 2006 (Series - 1) had been cancelled and equivalent number of options were granted by the compensation committee meeting held on 24th March, 2008. Under ESOS 2008 the compensation committee has assured a minimum price appreciation guarantee @ 20% on the Exercise Price i.e. Rs 76.95 per share i.e. the latest available closing price prior to the date of grant of options i.e. 24th March, 2008. Company has made a appropriate provison for a same during the year.

As per SEBI (ESOS & ESPS) Guidelines 1999 the Employees Stock Option Scheme is administered by the registered Trust named GHCL Employees Stock Option Trust (ESOS Trust). The Company had advanced interest free loan of Rs 6,403.20 Lacs (Previous year 6,430.10 Lacs) to the Trust for the purpose of purchased of shares from the open market for allotment of shares to the eligible employees upon exercising their option.

The current market value of the shares held by ESOS Trust is lower than the cost of acquisition of these shares by Rs 5,395 Lacs which is on account of market volatility. The impact of fall in market value, if any would be appropriately considered by the company in its profit and loss account at the time of exercise of Options by the eligible employees. As per ESOS scheme, 15, 65,000 option have been vested with the eliglible empolyees March 24th 2010. However none of the employees has exercised the option during the year ended 31 March 2011.

The total number of shares purchased by ESOS Trust was 4,995,386 shares. Of these, 1,579,922 shares were illegally sold by a party against which ESOS trust has initiated legal proceedings and has got a favorable award from the Court. Additionally, ESOS Trust had taken a loan of Rs 1,057.00 Lacs from various companies and had created a third-party pledge of 2,068,000 shares on behalf of these lender companies. The lender companies could not fulfill their obligations toward the aforesaid third parties and consequently the pledge was invoked by these parties. ESOS trust got a favorable arbitration award against the lender companies whereby the lender companies would restore 2,068,000 shares in favour of ESOS Trust upon ESOS trust repaying their loan of Rs 967.00 Lacs.

The details as per regulation 12 of SEBI (ESOS & ESPS) Guidelines 1999 are as follows:

Particulars Details

a) No of Options granted 16,55,000 (Each option is equivalent to one equity share on exercise of option)

b) Pricing Formula Rs 76.95 (Market Price i.e. the latest available closing price prior to the date of grant of options)

c) Options Vested 15,65,000 (Vesting period is two years from the date of grant i.e. March 24, 2008 to March 24, 2010)

d) Options Exercised Nil

e) Total Number of shares arising as a result of exercise of options Nil

f) Option Lapsed Nil

g) Variation of Terms of Options Nil

h) Money realized by exercise of options Nil

i) Total Number of Options 16,55,000

j) Number of options lapsed for 5 employees left/retired during/earlier 90,000 year

k) Total Number of Options in force as at 31st March, 2011 1,565,000

l) Number of employees to whom options are granted 33

(i) Senior Managerial person at the time of grant of option

Name No. of Name No. of Options Options Granted Granted

Mr. R.S. Jalan 200,000 Mr. BRD 75,000 Krishnamoorthy

Mr. Tej Malhotra 125,000 Mr. R S Pandey 75,000

Mr. Raman Chopra 100,000 Mr. N N Radia 75,000

Mr. Sunil Bhatnagar 100,000 Mr. M 75,000 Sivabalasubra maniun Mr. K V Rajendran 100,000 Mr. Neeraj Jalan 75,000

Mr. Nikhil Sen 75,000

(ii) Any other employee who receives a grant in None any one year of options amounting to 5% or more of option granted during that year

(iii) Identified employees who where granted None options, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant.

m) Diluted Earning Per Share (EPS) pursuant Not Applicable to issue of shares on exercise of option calculated in accordance with Accounting Standard (AS) 20 "Earning Per Share"

n) Where the Company has calculated the Not Applicable employee compensation cost using the intrinsic value of the stock options, the difference between the employee compensation cost so computed and the employee compensation cost that shall have been recognized if it had used the fair value of the options, shall be disclosed. The impact of this difference on profits and on EPS of the company shall also be disclosed.

o) Weighted Average exercise prices and weighted Not Applicable average fair values of options shall be disclosed separately for options whose exercise price either equals or exceeds or is less than the market price of the stock.

p) A description of the method and significant Options are assumptions used during granted the year to estimate the fair values of options, at Market including the following weighted average price information :

Risk - Free interest Rate Not Applicable

Expected Life Not Applicable

Expected Volatility Not Applicable

Expected Dividends Not Applicable

The price of the underlying share in the market at the time of grant Rs 76.95 per of option share

18. Subsequent to the Balance Sheet date, GHCL Upsom, Romania, a step down subsidiary of the Company, the plant of which was lying closed since January 2010 due to impending gas issues, has been put under administration on 8th June, 2011. The Company is in dialogue with Bankers and government agencies to work out a feasible re-organisation plan.

19 Previous year figures have been regrouped and reclassified wherever necessary.


Mar 31, 2010

1 Provision for taxation includes Rs. 12.00 Lacs (previous year Rs. 15.00 Lacs) for Wealth Tax.

2 During the earlier year the operations of certain subsidiaries have been adversely affected due to the unprecedented Global meltdown. As a result of the meltdown certain operating subsidiaries of the Company have had financial difficulties. Accordingly the Company has not accounted for interest income on loans granted to all its subsidiary companies as a matter of prudence.

3 Sundry Debtors, Creditors and Loans and Advances are subject to confirmation and consequential adjustment, if any.

4 Pursuant to the Guidelines on Buyback of Foreign Currency Convertible Bonds (FCCBs) issued by Reserve Bank of India (RBI) and subsequent approval from the RBI, the Company has bought back and cancelled 3,900 (Previous year 1,100) FCCBs of Face Value of USD 10,000 each at a discount. At the Balance Sheet date FCCBs worth USD 29 Million (Previous year USD 68 Million) were outstanding. Subsequent to the Balance Sheet date, the Company has further bought back 725 bonds of USD 10,000 each.

5 Unquoted investments in subsidiary companies are of long term strategic value in the opinion of the management. Except for as adjusted in the financial statements, the current diminution in the value of these investments is temporary in nature considering the inherent value and nature of investees business proposal and hence no provision is required.

6 Rosebys Interiors India Limited, a wholly owned subsidiary, was incorporated with a view to separately set up home textiles retail segment and with an the intention to divest ownership and control in the near future. Hence such investments are classified as a current investments. Management is actively looking at divestment opportunity and subsequent to the Balance Sheet date, the company has signed a non binding MOU with regard to the divestment of its stake in retail business, for which company expects to have a positive outcome.

7 Provision for doubtful debts includes Rs. 76.07 Lacs for balance receivable from Product Direct Limited due to an unfavorable decree issued . The sundry debtors balance shall be written off after appropriate approval from Reserve Bank of India is granted.

8 In accordance with the requirements of Accounting Standard - 19 Leases issued by the Institute of Chartered Accountants of India, future obligation/rights as at Balance Sheet Date for lease arrangements amount to

9 The value of closing stock of Finished Goods includes excise duty not paid Rs. 36.65 Lacs (previous year Rs.190.99 Lacs). The value of Lignite at mines includes royalty of Rs. 0.74 Lacs (previous year Rs. 7.56 Lacs) on the closing stock. The Value of Salt at Salt Fields includes Cess & Royalty of Rs. 38.95 Lacs (previous year Rs. 23.45 Lacs) on Closing Stock. This has however, no impact on the profit for the year.

10 Prior Period Item of Rs. 11.29 Lacs is on account of provision for repairs and maintenance of machinery due to non receipt of invoice.

11 Loans & Advances includes Rs. 7,348.08 Lacs (previous year Rs. 7,281.59 Lacs) paid as advance for purchase of materials and services outstanding for more than six months and considered good.

12 As per Accounting Standard-15 "Employee Benefits", the disclosures of Employee Benefits as defined in the Accounting Standard are given below :

Defined Contribution Plan

Provident Fund and Superannuation Fund are Defined Contribution Plan. Contribution paid for Provident Fund and Superannuation Fund are recognised as expense for the year :

The Companys Provident Fund has applied for exemption under section 17 of Employees Provident Fund Act, 1952. Conditions for grant of exemptions stipulates that the employer shall make good deficiency, if any, in the interest rate declared by the trust vis-a-vis statutory rate.

Defined Benefit Plan

Gratuity (Funded)

The employees gratuity fund scheme managed by a Trust is a defined benefit plan. The present value of the obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each year of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. Leave Encashment (Unfunded)

The Company recognises the leave encashment expenses in the Profit & Loss Account based on actuarial valuation.

The expenses recognised in the Profit & Loss Account and the Leave encashment liability at the beginning and at the end of the year:

13 a Related Party Transactions Subsidiaries :

Colwell & Salmon Communications Inc.

Indian Britain B.V.

Indian England N.V.

Indian Wales N.V.

GHCL Global Sourcing Limited (Dissolved w.e.f. from 3rd June , 2009)

GHCL Inc.

GHCL International Inc.

Dan River Inc. (Upto 20th April, 2008)

Dan River International Limited (Upto 20th April, 2008)

Dan River Factory Stores Inc. (Upto 20th April, 2008)

Dan River Properties LLC

The Bibb Company LLC ((Upto 20th April, 2008)

Old Apparel Inc

Old Apparel Properties Inc.

GHCL Rosebys Limited

Textile and Design Limited

Textile & Design (No.1) Limited (Dissolved as at 23rd Sept, 2009) Textile and Design (No.2) Limited (Dissolved as at 23rd Sept, 2009) Textile & Design (No.3) Rosebys UK Limited S C GHCL Upsom SA Rosebys Interiors India Limited Fabient Global Limited Fabient Textile Limited Grace Home Fashions LLC Rosebys International Limited Teliforce Holding India Limited

b Key Management Personnel:

Mr. R. S. Jalan, Managing Director Mr. Tej Malhotra, Sr. Executive Director - Operations Mr. Raman Chopra, Executive Director - Finance c Relative of Key Management Personnel: Mrs. Bharti Chopra, w/o Mr. Raman Chopra

14 Deferred Revenue Expenditure

Deferred Revenue Expenditure comprises of carrying amount as per Accounting Standard - 26 on Intangible Assets issued by The Institute of Chartered Accountants of India.

a Voluntary Retirement Scheme Expenses

Compensation under the Companys voluntary retirement scheme paid/provided is being written off equally over a period of three years.

b Prepayment Premium

Premium paid on prepayment of Term Loans/Non - Convertible Debenture is charged off over the tenure of the loan in proportion to the principle amount outstanding.

15 Intangible Assets

Intangible Asset, meeting the definition as per the provisions of Accounting Standard - 26 Intangible Assets issued by The Institute of Chartered Accountants of India, comprises of:

a Salt Pans

Expenditure on the development of salt pans is being written off over a period of five years.

b Software

Expenditure on purchased software, ERP System and IT related expenses is being written off over a period of three years.

c Goodwill

Goodwill is amortized over a period of five years.

16 Impairment of Assets

In pursuance of Accounting Standard - 28 - Impairment of Assets issued by the Institute of Chartered Accountants of India, the Company has reviewed its carrying cost of assets with value in use (determined based on future earnings) / net selling price (determined based on valuation). Based on such review, management is of the view that in the current financial year impairment of assets is not considered necessary.

17 The shareholders in their Extra Ordinary General Meeting held on 19th March, 2008 had approved the Employees Stock Option Scheme (ESOS 2008). Accordingly, the Employees Stock Option granted pursuant to ESOS 2006 (Series -1) had been cancelled and equivalent number of options were granted by the compensation committee meeting held on 24th March, 2008. Under ESOS 2008 the compensation committee has assured a minimum price appreciation guarantee @ 20% on the Exercise Price i.e. Rs. 76.95 per share i.e. the latest available closing price prior to the date of grant of options i.e. 24th March, 2008. Company has made an appropriate provison for a same during the year

As per SEBI (ESOS & ESPS) Guidelines 1999 the Employees Stock Option Scheme is administered by the registered Trust named GHCL Employees Stock Option Trust (ESOS Trust). The Company has advanced interest free loan of Rs. 6,430.10 Lacs (Previous year 6,371.10 Lacs) to the Trust for the purpose of purchase of shares from the open market for allotment of shares to the eligible employees upon exercising their option from time to time.

The current market value of the shares held by ESOS Trust is lower than the cost of acquisition of these shares by Rs. 5,288.52 Lacs which is on account of market volatility. The impact of fall in market value, if any would be appropriately considered by the company in its profit and loss account at the time of exercise of Options by the eligible employees. As per ESOS scheme, 15, 65,000 options have been vested with the eliglible empolyees on March 24, 2010. However, none of the employees have exercised the options during the period ended 31 March 2010.

The total number of shares purchased by ESOS Trust was 4,995,386 shares. Of these, 1,579,922 shares were illegally sold by a party against which ESOS trust has initiated legal proceedings and has got a favorable award from the Court. Additionally, ESOS Trust had taken a loan of Rs.1,057.00 Lacs from various companies and had created a third-party pledge of 2,068,000 shares on behalf of these lender companies. The lender companies could not fulfill their obligations toward the aforesaid third parties and consequently the pledge was invoked by these parties. ESOS trust got a favorable arbitration award against the lender companies whereby the lender companies would restore 2,068,000 shares in favour of ESOS Trust upon ESOS trust repaying their loan of Rs. Lacs.

18 Previous year figures have been regrouped and reclassified wherever necessary.

 
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