Mar 31, 2022
Your directors take pleasure in presenting the 4th Integrated Report, prepared as per the framework set forth by the International Integrated Reporting Council, (IIRC) and the 39th Annual Accounts on the business and operations of your Company, along with the summary of standalone and consolidated financial statements for the year ended March 31, 2022. The economic contraction in the initial part of the year (FY 2021-22) was very challenging due to 2nd wave of Covid 19 lockdown; however, after easing of lockdown restrictions and improving macro trends, which leads to enhanced traction across industries, almost back to pre-pandemic levels. Accordingly, your Company observed sequential improvement in its business during the year, supported by favourable demand -supply dynamics backed by positive pricing scenario. The financial highlights of the Company for FY 2021-22 are given below:
(H in Crores) |
||||
Standalone |
Consolidated |
|||
Particulars |
Year ended March 31, 2022 |
Year ended March 31, 2021 |
Year ended March 31, 2022 |
Year ended March 31, 2021 |
Net Sales /Income from Continued operations |
3789.17 |
2498.23 |
3790.50 |
2498.64 |
Profit before interest and depreciation from Continued operations |
992.29 |
604.05 |
991.15 |
609.90 |
Finance Cost from Continued operations |
63.57 |
74.32 |
63.57 |
74.32 |
Profit before depreciation and amortisation - (Cash Profit) from Continued operations |
928.72 |
529.73 |
927.58 |
529.58 |
Depreciation and Amortisation from Continued operations |
116.78 |
111.40 |
116.78 |
111.40 |
PBT before exceptional items from Continued operations |
811.94 |
418.33 |
810.80 |
418.18 |
Profit before Tax (PBT) from Continued operations |
786.97 |
418.33 |
810.80 |
418.18 |
Provision for Tax - Current from Continued operations |
204.10 |
104.85 |
204.10 |
104.85 |
Tax adjustment for earlier years from Continued operations |
(0.03) |
(0.93) |
(0.03) |
(0.93) |
Provision for Tax - Deferred from Continued operations |
8.43 |
7.42 |
8.43 |
7.42 |
Profit after Tax from Continued operations |
574.47 |
306.99 |
598.30 |
306.84 |
Profit from discontinued operations |
81.46 |
4.07 |
70.37 |
20.39 |
Tax Expense of discontinued operations |
(21.99) |
(1.08) |
(21.97) |
(1.11) |
Profit from discontinued operations after tax |
59.47 |
2.99 |
48.40 |
19.28 |
Profit for the year |
633.94 |
309.98 |
646.70 |
326.12 |
Other comprehensive income (OCI) |
1.65 |
4.73 |
1.65 |
4.73 |
Total Comprehensive income for the period |
635.59 |
314.71 |
648.35 |
330.85 |
Balance brought forward from last year |
2279.83 |
1971.07 |
2262.73 |
1937.83 |
Appropriations |
||||
FVTOCI Reserve |
0.33 |
(1.22) |
0.33 |
(1.22) |
Final Dividend |
(52.27) |
- |
(52.27) |
- |
Balance carried to Balance Sheet |
2861.83 |
2279.83 |
2857.50 |
2262.73 |
In terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosures Requirements) Regulations, 2015 ("Listing Regulationsâ) the Board of Directors of the Company has formulated and adopted the Dividend Distribution Policy (''DDP'') in its meeting held on May 19, 2016. As per the DDP, the Board''s endeavours is to ensure transparency in deciding the quantum of dividend and commit a dividend pay-out ratio including the dividend tax, in the range of 15% to 20%
of profits after tax (PAT) on standalone financials of the Company. The Board of Directors while taking decision for recommendation of the dividend will take guidance from this policy and would ensure to maintain a consistent approach to dividend pay-out plans.
The Dividend Distribution Policy is available on the Company''s website www.ghcl.co.in
As per section 194 of Income Tax Act, a company is required to deduct TDS @ 10% on dividend payment if it exceeds
Rs. 5000/-. However, no TDS shall be deducted in the case of any dividend payment to Life Insurance Corporation, General Insurance Corporation of India, any other insurer and Mutual Funds etc. specified u/s 10(23D) of Income Tax Act. Moreover, as per section 195 of the Income Tax Act, TDS is required to be deducted @ 20% plus surcharge on payment of Dividend to Non Resident.
Your Directors are pleased to inform that your Company has a consistent track-record of dividend payment for last 28 years.
In line with the Dividend Distribution Policy, the Board of Directors of the Company (''the Board'') has recommended total Dividend of Rs. 15 per equity share of Rs. 10 each i.e. 150% on the paid up equity capital, (comprises of regular Dividend of Rs.10 per share and Special Dividend of Rs. 5 per share) for the financial year ended March 31, 2022 to be paid to those equity shareholders whose names appear in the Register of Members as on record date i.e. Thursday, June 23, 2022 (Previous year dividend was Rs. 5.50 per equity share).
The dividend on equity shares is subject to the approval of the Shareholders at the ensuing Annual General Meeting of the Company scheduled to be held on Thursday, June 30, 2022.
The dividend once approved by Shareholders will be paid on and from July 4, 2022 (Monday) and the Record Date for the purpose of the dividend shall be June 23, 2022 (Thursday). The total dividend payout for the financial year 2021-22 shall be in line with the dividend distribution policy of the company.
The Board of Directors has decided to retain the entire amount of profits for FY 2021-22 in the profit and loss account.
The paid up Equity Share Capital of the Company as on March 31, 2022 is Rs. 95,35,07,860/- comprising of 9,53,50,786 equity shares of Rs. 10/- each; whereas paid up Equity Share Capital of the Company as on March 31, 2021 was 95,01,32,860/- comprising of 9,50,13,286 equity shares of Rs. 10/- each.
Your directors would like to inform that during the financial year, Nomination and Remuneration Committee in their meeting held on July 15, 2021 had made Allotment of 3,37,500 Equity Shares of Rs. 10 each to the employees of the Company against exercise of Employees Stock Options pursuant to GHCL ESOS 2015. Consequent to said allotment of 3,37,500 Equity Shares, the Issued, Subscribed & Paid-up Capital of the Company was increased from Rs. 95,01,32,860/- consisting of 9,50,13,286 equity shares of Rs. 10/- each to Rs. 95,35,07,860/- consisting of 9,53,50,786 equity shares of Rs. 10/- each.
5. Employees Stock Options Scheme
Your Company has Employees Stock Options Scheme for its permanent employees as per the scheme approved by shareholders in their Annual General Meeting held on July 23, 2015. The Company had obtained in-principle approvals from the Stock Exchanges for issue of 50 lakh equity shares through Employees Stock Option Scheme. Further, the Board of Directors, on recommendation of the NRC Committee has approved the vesting of ESOP to the eligible employees and the same shall be exercised by the employees of the company. Hence, after exercise of ESOP the paid up capital shall be increased and the same shall be reported to the stock exchanges.
During the year, there are no material changes in the ESOP scheme of the Company and the ESOP scheme is in compliance with the ESOP regulations. The Company has received a certificate from Dr. S Chandrasekaran, representing Chandrasekaran & Associates, Practicing Company Secretaries, New Delhi, Secretarial Auditor of the Company, certifying that GHCL Employees Stock Option Scheme 2015 (the scheme) is implemented in accordance with SEBI (Share Based Employees Benefits and Sweat Equity) Regulations, 2021 and the resolutions passed by the members. The certificate is available for inspection by members in electronic mode.
The details of the Employee Stock Options plan form part of the Notes to accounts of the financial statements in this Annual Report and is also annexed herewith as Annexure I and forming part of this Report.
6. Finance
6.1 Resource Mobilization Short Term
During the year your company arranged / renewed working capital facilities of Rs. 1065 Crs. (both fund based and non-
fund based limit) with participation from State Bank of India, Bank of Baroda, Union Bank of India, IDBI Bank Ltd., HDFC Bank Ltd. and Axis Bank Ltd. During the year, your company also arranged / renewed unsecured working capital facilities of Rs. 90 Crores (both fund based and nonfund based limit) from HDFC Bank Ltd. and Bank of Bahrain and Kuwait. Further, your company has arranged new unsecured working capital facility of Rs. 140 crores (both fund based and non-fund based limit) from ICICI Bank Ltd. (Rs. 50 crores) and CTBC Bank Co. Ltd. (Rs. 90 crores). During the year your company has close down working capital facility of Rs. 50 crores with IDFC First Bank.
Your Company has raised term loan of Rs. 100 crores by way of reimbursement of capital expenditure incurred during last year from ICICI Bank for a period of 5 years including moratorium period of 6 months and has availed the same during the current year.
Since your company has maintained excellent relationship with the lenders and also taking into consideration of timely repayment of principal and interest, your company has negotiated better interest rates with lenders.
The details of rate of interest are as under:
Borrowing |
Outstanding as on 31.03.2022 |
ROI P.A. |
Long Term Borrowing |
559.40 |
7.57% |
Short Term Borrowing |
208.05 |
4.90% |
Total Borrowing |
767.45 |
6.85% |
(i) Due to efficient cash flow management and timely repayment of interest and principal to lenders, CARE (Credit Analysis & Research Ltd) has upgraded external rating to CARE AA- with Stable Outlook from CARE A with Stable Outlook for Long Term facilities and for short Term Facilities, highest rating of CARE A1 with Stable Outlook has been reaffirmed.
(ii) India Rating has also upgraded Long Term Issuer Rating as to AA- with Stable Outlook from A with Positive Outlook.
(iii) |
Further, India Rating has affirmed Credit Rating for Issuance of Commercial Paper program as under: |
|
Instrument Type : |
Commercial Paper |
|
Size of Issue : |
Rs. 100 Crores |
|
Rating Assigned by the Agency : |
IND A1 (Highest) |
|
iv) |
CRISIL rating has assigned Credit NCD as under: |
Rating for issuance of |
Instrument Type : |
Non-convertible Debenture (NCD) |
|
Size of Issue : |
Rs. 150 Crores |
|
Rating Assigned by the Agency : |
CRISIL AA- with Stable Outlook |
6.4 Investors Education and Protection Fund
During the financial year, your Company has transferred a sum of Rs. 38.04 lacs towards unclaimed dividend to investors'' education and protection fund account (IEPF).
7. Change in Nature of Business
During the Financial Year 2021-22, there was no change in the nature of Company''s Business. No material change and/or commitment affecting the financial position of your Company has occurred between April 1, 2022 till the date of signing of this report.
8. Management Discussion & Analysis
In terms of Regulation 34 (2) (e) of the Listing Regulations, 2015 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 (MDA) which forms part of this Annual Report and is incorporated herein by reference and forms an integral part of this report.
B: INTEGRATED REPORT
Your Company believes that sustainable development calls for concerted efforts towards building an inclusive, sustainable and resilient future for people and planet through harmonising economic growth, social inclusion and environment protection. In furtherance to this commitment, your company had taken paradigm shift from compliance based reporting to governance based reporting and
adopted the Integrated Report (IR) framework developed by the International Integrated Reporting Council. Your Company create long-term value for all stakeholders through its strategy, activities, and commitments. The Integrated Report is a part of this Annual Report, which provides a clear, concise, and comprehensive vision of our business model.
C: PERFORMANCE HIGHLIGHTS AND STATE OF COMPANY''S AFFAIRS:
The detail of business performance and state of company''s affairs are given in MDA (from Page no. 148 to 154) and Integrated Report (Page no. 1 to 69).
1. Slump sale of the Home Textiles Business of the Company and Change in the Scheme of Arrangement for Demerger of the Textiles business
Your Directors are pleased to inform that in line with the approval of the Board of Directors of the Company in their meeting held on December 06, 2021, your Company (i.e. GHCL Limited) entered into a Business Transfer Agreement (''BTA'') for transfer of its Home Textiles Business (located at Vapi, Gujarat) (''HT Business'') to Indo Count Industries Limited (''ICIL'') by way of a slump sale, on a debt free basis. In addition, Grace Home Fashions LLP (''GHF''), USA, a wholly owned subsidiary of the Company also entered into an Asset Transfer Agreement (ATA) for transfer of its identified assets (i.e. inventory and intellectual property) to Indo Count Global Inc., USA (US subsidiary of ICIL). The Company realised a consolidated amount of INR 608.30 crores from the above transfers (subject to certain adjustments in accordance with the BTA) including certain assets to be realised by the Company themselves. Said transfer of HT Business had also been approved by the Shareholders of the Company by way of special resolution (pursuant to postal ballot) on January 21, 2022 and the transfer of HT Business was completed on April 2, 2022.
Consequently, HT Business of the Company had been considered and disclosed as ''Discontinued Operations'' as per Ind-AS 105 "Non-current Assets Held for Sale and Discontinued Operationsâ Accordingly, figures for all the prior periods have also been reclassified and disclosed separately under the head "Profits from the Discontinued Operationsâ. The effect of the transfer has been reflected in the financial information of the period in which the deal
is consummated post receipt of all the requisite regulatory approvals (i.e. quarter ended March''22).
Further, in view of the divestment of HT Business of the Company to ICIL pursuant to BTA, the Board of Directors of the Company, at their meeting held on December 6, 2021 had approved withdrawal of the then existing Scheme of Arrangement u/s 230-232 of the Companies Act 2013, involving demerger of its entire Textiles business into GHCL Textiles Limited (''Old Scheme'') and correspondingly approved a fresh Scheme of Arrangement consisting of demerger of Spinning Division of GHCL Limited ("Demerged Companyâ) into GHCL Textiles Limited (''Resulting Company'')â (the "New Schemeâ). Subsequently, on December 20, 2021, Hon''ble NCLT (Ahmedabad Bench) allowed the withdrawal petition. Further, the Company has received requisite approvals / NOC from the Stock Exchanges (NSE & BSE) and CCI on its new Scheme and in the process of obtaining requisite approvals from other regulatory authorities (including NCLT) as applicable. As per the new Scheme, the equity shares held by GHCL Limited in GHCL Textiles Limited shall be cancelled. Further, the Resulting Company''s shareholding pattern will mirror the shareholding pattern of the Demerged Company post Scheme. Also, shares of the Resulting Company shall be listed on the Stock Exchanges. Hence post completion of Demerger, there will be two listed entities i.e. GHCL Limited (Chemical business) and GHCL Textiles Limited (Spinning business).
Your Directors are pleased to inform that despite of unprecedented problems faced due to COVID - 19 and lockdown, your Company has received various awards and recognition during the financial year 2021-22. The details of the awards and recognition are given on page no. 8 of the Integrated Report.
Grace Home Fashion, LLC, a subsidiary of the Company in USA was engaged in Home Textile segment. Post divestment of HT business, management of the Company will take necessary steps to wind up this subsidiary at the appropriate time. As reported in the previous year, Rosebys Interiors India Limited (RIIL) an Indian subsidiary, is under liquidation with effect from 15th July 2014.
The Board of Directors of the Company at their meeting held on March 16, 2020 had approved a Scheme of Arrangement u/s 230-232 of the Companies Act 2013, involving demerger of Textiles Businesses of the Company into a separate company (i.e. Resulting Company). Accordingly, the Resulting Company was incorporated on June 17, 2020 with name of GHCL Textiles Limited as a wholly owned subsidiary of the company. This Company has not carried any manufacturing, trading, or service activities since its incorporation and also during the financial year ended on 31st March 2022 due to pendency of Scheme.
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 (including name of companies which have become or ceased to be its subsidiaries, joint ventures or associate companies during the year) have been provided in note no. 36 (refer page no. 287 of Annual Report) and also in the statement u/s 129(3) of the Companies Act, 2013 (refer page no. 309). The statements are also available on the website of the Company www.ghcl.co.in
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 applicable IND AS, for the financial year ended March 31, 2022.
The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirement set out by the SEBI. The Company has also implemented several best governance practices. The report on Corporate Governance under Regulation 34 of the SEBI Listing Regulations read with Schedule V of the said Regulations forms an integral part
of the Annual Report. The requisite certificate from the auditors of the Company confirming compliance with the conditions of the Corporate Governance is attached to the Report on Corporate Governance.
The Board meetings of your company are normally planned in advance in consultation with the Board Members. However, in certain emergency situation and / or to maintain the price sensitivity of the transaction, Board meeting was also convened on shorter notice after complying necessary requirement for the same. During the financial year ended March 31, 2022, the Board of Directors met six times to review strategic, operational and financial performance of the company. The details of the board''s meetings are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and the SEBI Listing Regulations, 2015.
Your Directors are pleased to inform that Mr. Anurag Dalmia, Non-Executive Vice Chairman of the Board and Mr. Raman Chopra, CFO & Executive Director (Finance) of the Company are directors retiring by rotation and being eligible, offer themselves for re-appointment. We would like to further inform that based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors in their meeting held on January 27, 2022, has reappointed Mrs. Vijaylaxmi Joshi (Retd.IAS) for a second term of five consecutive years with effect from April 20, 2022 and for a term up to April 19, 2027 subject to the approval of the shareholders. Also, based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors in their meeting held on April 30, 2022, has re-appointed Mr. R. S. Jalan as Managing Director of the Company for a period of five years with effect from June 7, 2022, subject to the approval of the shareholders. The Board recommends their appointments at the ensuing Annual General Meeting.
Your Directors would like to confirm that the Company has received declaration from all the Independent Directors confirming their independence as well as confirmation that "he / she is not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact his / her ability to discharge his / her duties
with an objective independent judgement and without any external influenceâ. Accordingly requirement of Section 149(6) of the Companies Act, 2013 and Regulation 16(1) (b) & Regulation 25 (8) of the Listing Regulations are duly complied with. Pursuant to the circular relating to the "enforcement of SEBI Order regarding appointment of directors by listed companiesâ dated June 20, 2018, any director of the Company, is not debarred from holding the office of director pursuant to any SEBI order.
Your Directors would like to confirm that as per opinion of the Board of Directors, all the Independent Directors of the Company meet the requirement of integrity, expertise and experience (including the proficiency) required for their appointment.
The Independent Directors of the Company have confirmed that they have enrolled themselves in the Independent Directors'' Databank maintained with the Indian Institute of Corporate Affairs (''IICA'') in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment & Qualification of Directors) Rules 2014. Out of five Independent Directors, two Independent Directors (i.e. Dr. Manoj Vaish & Mrs. Vijaylaxmi Joshi) are exempt from the requirement to undertake the online proficiency selfassessment test conducted by IICA and three Independent Directors [i.e. Justice (Retd.) Ravindra Singh, Mr. Arun Kumar Jain and Dr. Lavanya Rastogi] have successfully passed the online proficiency self-assessment test conducted by IICA well within the stipulated time period.
The Board of Directors in their meeting held on July 29, 2021 had appointed Dr. Manoj Vaish, Independent Director and Chairman of Audit & Compliance Committee as the Lead Independent Director of the Company with effect from July 29, 2021. The role and responsibilities of the Lead Independent Director are given in the Corporate Governance Report forming part of the Annual Report.
Details regarding procedure for nomination and appointment of Directors including the list of core skills expertise and competencies of the Board of Directors are given in the Corporate Governance Report forming part of the Annual Report.
Pursuant to Section 203 read with Section 2(51) of the Companies Act, 2013, the Key Managerial Personnel of the Company are Mr. R S Jalan, Managing Director, Mr. Raman Chopra, CFO & Executive Director (Finance) and Mr. Bhuwneshwar Mishra, Sr. GM - Sustainability & Company Secretary. During the year, there has been no change in the Key Managerial Personnel.
All new Independent Directors (''IDs'') inducted on the Board go through a structured orientation program. Executive Directors and Company Secretary makes presentations giving an overview of operations, to familiarize the new IDs with the Company''s business operations. The new IDs are given an orientation on Company''s product, corporate structure and subsidiaries, Board constitution and procedures, matters reserved for the Board, role responsibilities, code of conduct of IDs, risk management strategy and sustainability measures etc. Visits to Plant and locations where company does its CSR activities are organized on the request of the IDs with an objective to enable them to understand the business better. During the financial year, the Company had provided online learning platform "Skillsoftâ to all the Independent Directors and recommend to complete course in ESG, Risk Management, Stakeholders engagement, Climate changes, Diversity Equity and Inclusion (DEI), CSR, Cyber Security etc. Details of the same are given in Corporate Governance section of the Annual Report.
In line with the provisions of the Companies Act, 2013 and SEBI Guidance Note on Board evaluation issued on January 5, 2017 read with relevant provisions of the SEBI Listing Regulations, 2015, the Board has carried out an annual evaluation of its own performance and that of its Committees and individual Directors through the separate meeting of independent directors and the Board as a whole. The Board evaluated the effectiveness of its functioning, that of the Committees and of individual directors, after taking feedback from the directors and committee members. The performance of the independent directors was evaluated by the entire Board except the person being evaluated, in their meeting held on January 27, 2022.
A separate meeting of Independent Directors was held on January 25, 2022, to review the performance of NonIndependent Directors'', performance of the Board and Committee as a whole and performance of the Chairman of the Company, taking into account the views of Executive Directors and the Non-Executive Directors.
The exercise of performance evaluation was carried out electronically through a secure application. This resulted in saving paper, reducing the cycle time to make documents available to the Board/Committee Members and in increasing confidentiality and accuracy. The criteria for performance evaluation are broadly based on the Guidance Note issued by SEBI on Board Evaluation which included aspects such as structure and composition of Committees, effectiveness of Committee Meetings etc.
The performance evaluation of the Board and its constituents was conducted on the basis of functions, responsibilities, competencies, strategy, tone at the top, risk identification and its control, diversity, and nature of business. A structured questionnaire was circulated to the members of the Board covering various aspects of the Board''s functioning, Board culture, execution and performance of specific duties, professional obligations and governance. The questionnaire is designed to judge knowledge of directors, their independence while taking business decisions; their participation in formulation of business plans; their constructive engagement with colleagues and understanding the risk profile of the company etc. In addition to the above, the Chairman of the Board and / or committee is evaluated on the basis of his leadership, coordination and steering skills.
The Nomination and Remuneration Committee reviews the performance of individual Directors on the basis of their contribution as a member of the board or committee. The quantum of profit based commission, payable to directors is decided by the Nomination and Remuneration Committee on the basis of overall performance of individual directors. The entire process
Based on the recommendation of the Nomination & Remuneration Committee, the Board has approved the Nomination and Remuneration Policy for Directors, Key Managerial Personnel (''KMP'') and all other employees of the
Company. The Company''s Nomination and Remuneration Policy and Practices have been formulated and maintained to meet the following objectives:
1. To attract, retain and motivate qualified and competent individuals at Director, Key Managerial and other employee levels to carry out company''s business operations as assigned to them.
2. To ensure payment of salaries and perks that are comparable to market salary levels so as to remain competitive in the industry.
3. To revise the remuneration of its employees periodically for their performance, potential and value addition after systematic assessment of such performance and potential.
4. To ensure disbursal of salary and perks in total compliance to the applicable statutory provisions and prevailing tax laws of the Country.
The Nomination and Remuneration Policy is available on website www.ghcl.co.in of the company.
Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this report.
In terms of the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of employees drawing remuneration in excess of the limits set out in the said Rules forms part of the report as Annexure II.
Section 204 of the Companies Act, 2013 inter-alia requires every listed company to undertake Secretarial Audit and shall annex with its Board''s Report a Secretarial Audit Report given by a Company Secretary in practice, in the prescribed form.
GHCL has adopted a practice of ongoing Secretarial Audit throughout financial year and placed its periodic Secretarial Audit Report before Audit & Compliance Committee and Board. This has helped us in early detection of area of improvement and strengthening out level of compliance reporting.
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 Regulation 24A of the Listing Regulations and other applicable provisions, if any, the Board of Directors of the Company had appointed Dr. S Chandrasekaran, representing Chandrasekaran & Associates, Practicing Company Secretaries, New Delhi, to conduct Secretarial Audit of the Company for the financial year 2021-22.
The Secretarial Audit Report for the financial year ended March 31, 2022 are annexed with the Board''s report and formed as part of the Annual Report. This report is unqualified and self-explanatory and does not call for any further comments.
During the year under review, the Company has complied with all the applicable provisions of Secretarial Standards issued by Institute of Company Secretaries of India and notified by the Ministry of Corporate Affairs of India.
The equity shares of your Company are listed at BSE Limited, Mumbai and National Stock Exchange of India Limited, Mumbai (NSE). The annual listing fees for the year 2021-22 have been paid to all these Stock Exchanges.
In terms of Section 92(3) of the Companies Act, 2013 read with Rule 12 (1) of Companies (Management and Administration) Rules, 2014 and Section 134(3)(a) of the Companies Act, 2013, the Annual Return is put up on the Company''s website www.ghcl.co.in. and can be accessed at https://www.ghcl.co.in/performanc-reports. In addition, other policies / document of the Company are placed on the Company''s website www.ghcl.co.in as per the statutory requirement.
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 Trustâ 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.
The Company has in place a CSR Policy which provides guidelines to conduct its CSR activities. The CSR Policy and other necessary details related to CSR activities are available on the website of the Company www.ghcl.co.in. During the year, the Company spent Rs. 9.85 Crs. against statutory minimum of Rs. 9.79 Crs. (i.e. 2.00% of the average net profits of last three financial years) on CSR activities. Your Company had deposited Rs. 0.77 Crs. (to meet the requirement for unspent CSR amount for FY 2020-21) in a separate bank account opened in compliance of Section 135 of the Companies Act, 2013 and the same has been spent during FY 2021-22, for the planned CSR activities. Accordingly, the Company spent total Rs. 10.62 Crs. on CSR activities (i.e. Rs. 9.85 Crs. for FY 2021-22 and Rs. 0.77 Crs. against unspent CSR amount for FY 2020-21) against CSR budget of Rs. 10.39 Cr.
The Annual Report on CSR activities, in terms of Section 135 of the Companies Act, 2013 is annexed to this Report as Annexure III.
Your company under its CSR initiatives covers Agriculture & Animal Husbandry, Healthcare, Education & Vocational Training, Women Empowerment and other miscellaneous projects on need basis that are important to maintain social licence to operate the business. These projects are 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 had been constituted to monitor CSR related activities. As on March 31, 2022 CSR Committee is comprising of Mr. Anurag Dalmia as the Chairman of the Committee and Mrs. Vijaylaxmi Joshi, Mr. R S Jalan, Mr. Raman Chopra and Mr. Neelabh Dalmia as members of the Committee. Subsequent to the financial year ended March 31, 2022, the Board of Directors in their
meeting held on April 30, 2022, had reconstituted various committees and Justice (Retd.) Ravindra Singh is appointed as a member of the CSR Committee. Mr. Bhuwneshwar Mishra, Sr. GM - Sustainability & Company Secretary is the secretary of the CSR committee. During the financial year, CSR Committee met two times and all the members of the Committee were present in all the meeting.
In recent times, adapting to and mitigating climate change impact, inclusive growth and transitioning to a sustainable economy have emerged as major issues globally. There is an increased focus of investors and other stakeholders seeking businesses to be responsible and sustainable towards the environment and society. Thus, reporting of company''s performance on sustainability related factors has become as vital as reporting on financial and operational performance.
The Securities and Exchange Board of India (''SEBI'') in terms of amendment to Regulation 34(2)(f) of Listing Regulations, 2015 read with National Guidelines on Responsible Business Conduct (NGRBC) issued by Ministry of Corporate Affairs Government of India on March 13, 2019, requires top one thousand listed companies to prepare and present Business Responsibility and Sustainability Report (BRSR) in place of erstwhile Business Responsibility Report (BRR) to its stakeholders in the prescribed format, based on internationally accepted reporting frameworks such as GRI, SASB, TCFD, Integrated Reporting etc.
In terms of the aforesaid amendment, with effect from the financial year 2022-2023, filing of BRSR shall be mandatory for the top 1000 listed companies (by market capitalization) and shall replace the existing BRR. However, filing of BRSR is voluntary for the financial year 2021-22. As on March 31, 2022, GHCL Limited is mentioned on 463rd position at NSE and on 479th position at BSE, on the basis of capitalization.
The BRSR seeks disclosures from listed entities on their performance against the nine principles of the NGBRC and reporting under each principle is divided into essential and leadership indicators. The essential indicators are required to be reported on a mandatory basis while the reporting of leadership indicators is on a voluntary basis. GHCL on voluntary basis adopted BRSR for the financial year 202122 for reporting its economic, social, environmental and
governance performance. This is the first year of reporting under BRSR format, hence data are not comparable.
Further, in the interest of its stakeholders, your company, on voluntary basis adopted the Integrated Reporting (IR) framework of the International Integrated Reporting Council to report on all the six capital that your company uses to create long term stakeholder value.
Your company''s Integrated Report has been assessed and E&Y has provided the required assurance. Your company also provided the requisite mapping of principles between the Integrated Report, and the Business Responsibility and Sustainability Report (BRSR) as prescribed by SEBI. The same is available on Company website www.ghcl.co.in and is annexed herewith as an integral part of this report and also forms part of this Annual Report.
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 primary objective of the audit committee is to monitor and provide effective supervision of the Management''s financial reporting process, with the highest levels of transparency, integrity and quality of financial reporting.
In order to strengthen the governance norms and compliance system of the Company, the Board of Directors in their meeting held on July 29, 2021, had extended the scope of the Committee and renamed it to "Audit & Compliance Committeeâ.
The Committee met five times during the year, the details of which are given in the Corporate Governance Report. As on March 31, 2022, the committee comprises of Dr. Manoj Vaish as Chairman of the Committee and Mrs. Vijaylaxmi Joshi (Retd.IAS), Mr. Arun Kumar Jain (Retd.IRS) and Justice (Retd.) Ravindra Singh as members of the Committee, and all are Independent Directors and experts in finance, accounts, strategy, tax, law and general administration. Subsequent to the financial year ended March 31, 2022, the Board of Directors in their meeting held on April 30, 2022, had reconstituted various committees and Justice (Retd.) Ravindra Singh is no longer a member of the Audit & Compliance Committee; however he remains as a permanent invitee to the 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 annual report and non-receipt of dividend etc. As on March 31, 2022, the Stakeholders Relationship committee consists of Executive and Non-Executive directors comprising of Mr. Arun Kumar Jain (Ex-IRS) as Chairman of the Committee and Justice (Retd.) Ravindra Singh, Mr. R S Jalan, Mr. Raman Chopra and Mr. Neelabh Dalmia as members of the Committee. Subsequent to the financial year ended March 31, 2022, the Board of Directors in their meeting held on April 30, 2022, had reconstituted various committees, and Justice (Retd.) Ravindra Singh is appointed as Chairman of the Stakeholders Relationship Committee in place of Mr. Arun Kumar Jain and Mr. Arun Kumar Jain remains a member of the Committee.
Details of the Committee are given in the Corporate Governance Report. Company has disclosed its ''Investor Grievance Redressal Policy'' on website of the Company www.ghcl.co.in
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. As on March 31, 2022, the Nomination and Remuneration Committee consists of four Non-Executive directors comprising of Mrs. Vijaylaxmi, as Chairperson of the Committee, Mr. Sanjay Dalmia, Justice (Retd.) Ravindra Singh and Dr. Manoj Vaish as members of the Committee. This is in the ratio of 3 : 1 (three Independent Directors and one Promoter''s nominee) and headed by Independent Director. Subsequent to the financial year ended March 31, 2022, the Board of Directors in their meeting held on April 30, 2022, had reconstituted various committees including Nomination and Remuneration committee and to ensure good governance, Mr. Sanjay
Dalmia voluntarily opted out from membership of the Nomination & Remuneration Committee. The Committee details are given in the Corporate Governance Report.
24. 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 Policyâ. 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 from time to time. Mr. Arun Kumar Jain (IRS), Independent Director of the Company 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 are also stated in the Corporate Governance Report. The Whistle Blower Policy is posted on the website of the Company www.ghcl.co.in . In order to strengthen the system and to facilitate seamless reporting, your company had launched online platform (separate tab under website of the Company) for reporting any grievances under vigil mechanism. Pursuant to the requirement of the Schedule V of the Listing Regulations, we would like to affirm that no personnel has been denied access to the Audit & Compliance Committee of the Company. There are no complaints reported during the year under Vigil mechanism.
25. 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. Accordingly, the disclosure of related party transactions, as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is not applicable to the Company. All transactions with related parties were reviewed and approved by the Audit and Compliance Committee. Prior omnibus approval of the Audit & Compliance Committee is obtained for related party transactions which are of
repetitive nature and entered in the ordinary course of business and on an arm''s length basis. A statement giving details of all related party transactions is placed before the Audit & Compliance 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 & Compliance Committee and also before the Board.
The policy on Related Party Transactions as approved by the Board is uploaded on the website of the Company www. ghcl.co.in. None of the Directors has any material pecuniary relationships or transactions vis-a-vis the Company.
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 Committee has been constituted as per the requirement of Regulation 21 of the Listing Regulations. In order to strengthening Company''s position in governance, risk management, sustainability and compliance (GRC) and also for the developing framework for risk management and stakeholders'' value creation on sustainable basis, the Board of Directors in their meeting held on July 29, 2021, had extended the scope of the Committee and renamed it to "Risk & Sustainability Committeeâ. In said meeting, the Board had also reconstituted the Risk & Sustainability Committee, after nominating Mr. Anurag Dalmia as a member of the Committee with effect from July 29, 2021.
The Risk Management Committee consists of five Executive and Non-Executive directors comprising of Mr. Arun Kumar Jain, as Chairman of the Committee and Mr. Anurag Dalmia, Mr. R S Jalan, Mr. Raman Chopra and Mr. Neelabh Dalmia, as members of the Committee. The details of Committee and other particulars 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 www.ghcl.co.in.
Your company believes that several factors such as advancements in technology, prevalent geo-political environment and stringent regulatory and environmental requirements have consequential impacts across the value
chain of a business. These impacts are likely to continue and intensify over time and for a business to be sustainable, it needs to adapt to the environment by managing risks and opportunities in a systematic manner.
The Board of Directors of the Company are responsible for risk oversight functions. Risk & Sustainability Committee provide guidance for implementing the risk management policy across the organisation. The operational heads of each business units are primarilyresponsible for implementing theriskmanagement policy of the company and achieving the stated objective of developing a risk intelligent culture that helps to improve the company''s performance.
The responsibility of tacking and monitoring the key risks of the division / business unit periodically and implementing suitable mitigation plans proactively is with the senior executives of various functional units. These risk owners are expected to avoid any undue deviations or adverse events and ultimately help in creating value for the business.
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 -IV forming part of this Report.
29. Disclosures as per the 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, and as per the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 ("POSH Actâ) and Rules made thereunder, a policy for prevention of sexual harassment had been made and Internal Complaints Committee had 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. To build awareness in this regard, the Company
has been conducting various programme on a continuous basis. There are no complaints reported during the year under POSH.
Your directors would like to inform that in the 38th AGM held on June 19, 2021, M/s S. R. Batliboi & Co. LLP, Chartered Accountants (ICAI Firm Reg. No. 301003E / E300005), was re-appointed as statutory auditors of the Company for a period of five consecutive years i.e. from the conclusion 38th AGM till the conclusion of 43rd AGM.
M/s S. R. Batliboi & Co. LLP has audited the books of accounts of the Company for the financial year ended March 31, 2022 and has issued the Auditors'' Report thereon. There are no qualifications or reservations on adverse remarks or disclaimers in the said report. Further, there are no frauds has been reported by the Auditors to the Audit & Compliance Committee or the Board under Section 143(12) of the Companies Act, 2013.
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, 2022. Hence, they do not call for any further explanation or comment u/s 134 (3) (f) of the Companies Act, 2013.
In terms of Section 148 of the Companies Act, 2013, the Company maintains cost records as per the requirement and a Cost Accountant conducts audit of said cost records. In this connection, the Board of Directors of the Company has on the recommendation of the Audit & Compliance Committee, approved the appointment of 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) for the financial year ending March 31, 2023.
Further, the Cost Audit Report for the financial year ended March 31, 2022 as provided by M/s R J Goel, Cost Auditor does not have any qualification or adverse remarks which require any clarification/ explanation.
Based on the framework of internal financial controls established and maintained by the company, work
performed by the internal, statutory, secretarial and cost auditors and external agencies including audit of internal financial controls over financial reporting by the statutory auditors and reviews performed by the management and relevant Board Committees, including the Audit & Compliance Committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during financial year 2021-22. Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability confirm that:
a. in the preparation of the annual accounts for the financial year ended March 31, 2022, 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, 2022 and of the profit and loss of the Company for the financial year ended March 31, 2022;
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, 2022 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 were in place and that such systems were adequate and operating effectively.
Your Directors state that no disclosure or reporting is required in respect of the following matters as there is no transaction on these items during the year under review:
35. Acknowledgement
The Board of Directors express their gratitude to customers, vendors, dealers, investors, business associates and bankers for their continued support during the year. Your Directors place on record their appreciation of the commitment and contribution made by the employees at all levels. Our resilience to meet challenges was made possible by their hard work, solidarity, cooperation and support.
The Board would like to express its sincere thanks to the Government of India, the State Governments, statutory authorities and other government agencies for their support and look forward to their continued support in the future.
For and on behalf of the Board of Directors of GHCL Limited
Sanjay Dalmia
Date: April 30, 2022 Chairman
Place: New Delhi DIN: 00206992
(i) Details relating to deposits covered under Chapter V of the Act.
(ii) Issue of equity shares with differential rights as to dividend, voting or otherwise.
(iii) Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except Employees'' Stock Options Schemes referred to in this Report.
(iv) The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.
(v) No significant or material orders were passed by the Regulators or Courts or Tribunals, which impact the going concern status and Company''s operations in future.
(vi) There is no Corporate Insolvency Resolution Process initiated under the Insolvency and Bankruptcy Code, 2016.
Mar 31, 2018
BOARDâS REPORT
To The Members of GHCL Limited,
We are pleased to present the 35th Annual Report together with the audited financial statements of the company for the financial year ended March 31, 2018.
OPERATIONAL RESULTS
The summary of the financial performance of the Company for the financial year ended March 31, 2018 compared to the previous year ended March 31, 2017 is given below:
(Rs in Crores)
Standalone |
||
Particulars |
Year ended |
Year ended |
March 31, |
March 31, |
|
2018 |
2017 |
|
Net Sales /Income |
2,992.27 |
2,980.17 |
Gross profit before interest and depreciation |
649.17 |
724.39 |
Finance Cost |
124.16 |
133.77 |
Profit before depreciation and amortisation - (Cash Profit) |
525.00 |
590.62 |
Depreciation and Amortisation |
109.53 |
85.69 |
PBT before exceptional items |
415.48 |
504.93 |
Exceptional items |
- |
3.04 |
Profit before Tax (PBT) |
415.48 |
501.93 |
Provision for Tax - Current |
106.76 |
113.61 |
Tax adjustment for earlier years |
-89.81 |
-40.18 |
Provision for Tax - Deferred |
34.02 |
41.73 |
Profit after Tax |
364.51 |
386.77 |
Other comprehensive income (OCI) |
3.48 |
1.39 |
Total Comprehensive income for the period |
367.99 |
388.16 |
Balance brought forward from last year |
1,142.63 |
817.87 |
Appropriations |
||
Reserve created on account of |
2.61 |
0.55 |
buy back during the year |
||
FVTOCI Reserve |
-1.40 |
-2.65 |
Interim Dividend |
- |
15.01 |
Final Dividend |
34.20 |
35.01 |
Tax on Dividend |
6.96 |
10.18 |
Balance carried to Balance Sheet |
1,407.04 |
1,142.63 |
PERFORMANCE HIGHLIGHTS AND STATE OF COMPANYâS AFFAIRS
SODA ASH
As per latest estimates of IHS Chemical (Market Advisory Service), the total Global Demand in 2017 was approximately 59 Million Tons against an estimated capacity of approximately 68 million MT. Soda Ash demand remains strong in most global regions other than winter supply issues and China''s restriction problems which cause temporary pockets of tightness. There has been an influx of new supply of natural soda ash from Turkey, which is cost-competitive and hence more sustainable than synthetic production; in fact during 2017 Turkey has added 4 streams totalling 2.0 million MT which has caused significant disruption on the supply side. As a result of this cheaper supply, more costly synthetic supply from high-cost producers, particularly in Europe, has come under increasing pressure.
Soda Ash demand in Europe has improved over the last year and is expected to remain stable for some time. However, the supply side is disturbed due to new supplies from Turkey have started having an effect. Delayed commissioning of Kazan''s 5th line and high demand/low supplies from China into Asia and East Europe has been helping maintain some balance.
In spite of increasing economic problems that are affecting the financial viability of some operations, China continues to be the largest Soda Ash player in the world, having a capacity of 31 million tpa, which is 46% of the global capacity. Even after various restrictions and disturbances, overall Chinese soda ash output continues ahead of the 2 million MT month mark. Currently, another round of environmental inspections is carrying on in various provinces causing some disruptions and lower rate of operations. As per IHS Chemical report China''s operating rates were around 88% in 2017, reporting a production of 27 million tpa and domestic consumption of 25 million tpa, with 1.5 million tpa being exported. Our assumption of domestic growth in China is around 4 to 5% due to downstream improvement, especially flat glass.
US producers continue to enjoy the highly competitive production costs. Around 58% of US Soda Ash production is sold to export markets and shipment volumes have been increasing year by year. US capacity is 13 million tpa and they produced around 12 million tpa of soda ash and their annual production represents 91% operating rate. The US production is stated to have grown by 1% in 2017 where as domestic demand for soda ash also saw a growth of 1% versus 2016. The total domestic consumption was estimated at around 5 million tpa and they exported around 7 million tpa recording 3% growth. US exports are supported by good demand from South America, South East Asia (especially due to lower Chinese exports), Australia and parts of Europe. However, in future, US will face competition from Turkey in their traditional markets of South East Asia & Asia Pacific owing to the natural freight advantage that Turkey enjoys over US. In fact US may vacate some of these markets in favour of Turkey in this year.
Globally there is no major mismatch expected between Demand and Supply in soda ash industry, except for temporary disturbance caused due to Turkey''s additional volumes.
As regards Domestic Soda Ash market is concerned, after couple of years, the demand has witnessed a growth of 11% in FY 2017-18 as against last year. Indian soda ash markets remain strong with excellent growth in most of the downstream sectors. Our market estimate indicates that the momentum in the downstream demand growth will remain. The coming fiscal should see stable demand for soda ash with the main drivers being a strong detergent and float glass sector followed by a reasonably silicate and chemical sectors.
Total Soda Ash installed capacity in India is 3.5 million tons, with an estimated production of about 3 million tons in last financial year (2017-18). The total size of the Indian soda ash market is about 3.75 million tons 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 9.75 lacs tpa. During the financial year 2017-18 your company has produced 9.37 lacs tons soda ash. This year, the Company has also achieved highest domestic sales i.e. 8.47 lacs tons and total sales of Soda Ash is 8.69 lacs tons including exports.
Our ongoing 1.25 Lacs MT Brownfield expansion is likely to get completed by Q4 FY19. Going forward we are looking at another Brownfield expansion of 1.25 lacs metric ton to be completed over a period of 2 year. Your company is also aggressively working on Greenfield expansion of 5 lacs MTPA which is likely to be completed in 4-5 years.
BI-CARBONATE (BICARB)
During the year, the Company achieved production of BiCarbonate 35342 tons against 27677 tons in the previous year. During the year the Company achieved sales of Bi-Carbonate 34888 tons against 27638 tons in the previous year. Your company has doubled the capacity to 60000 MTPA which has been completed in January 2018. The full benefit of the expansion will be achieved in the coming year.
R & D INITIATIVES IN SODA ASH
Your company had initiated R&D activities for last five years to achieve following objectives (a) Introduce latest and economical technologies in the plant; (b) Provide innovative solutions to recurring problems and save natural resources; (c) To improve carbon foot print of company and contribute in national saving and environment improvements; (d) Energy conservation projects and (e) To improve soda ash production and plant productivity.
The R&D department operates with focused mandate (a) to Identify latest technology, superior design of equipment, improving process efficiency leading to reduced raw material consumption and reduced utility consumption resulting in better life of equipment and reduced cost of manufacture (b) to identify the possibility of producing value added products from wastes of soda ash manufacturing; (c) to identify suitable expert agencies who can find permanent solution to recurrent process problems; (d) to study possibility of catering to specific requirements of customers like soda ash briquettes (e) to suggest practices and procedures which can focus on reducing the energy consumption & reducing raw material consumption thus reducing carbon foot print .
We carry out above activities with the help of research department of premier chemical engineering institutes, reputed consultants & in house capabilities. During the year, your company has carried out following activities:
1) Alternate binder supplier.
We had only one briquette plant binder supplier capable of supplying binder suitable for our plant. We worked closely with various vendors and modified their process to manufacture binder confirming to our quality requirements. Now we have three alternate suppliers thereby strengthening our supplier base as well as better quality product.
2) Reduction of binder consumption.
Plant trials with higher viscosity of Pre-gel starch binder in coke briquetting plant have been taken up by working in co-ordination with few suppliers. Initial plant trials have indicated reduction of binder consumption by 1-1.2 %. Further trials are going on.
3) Value added product from our wastes.
In co-ordination with a leading Engineering College of South India, we have developed product equivalent to paver blocks from our wastes viz. fly ash, limestone fines & waste plastics. The blocks are water resistant having properties almost similar and strength equal to concrete. These blocks can be used for constructing path way, canal linings, floorings etc.
4) In close co-ordination with an International agency, exhaustive work has been carried out for improving the efficiency of carbonation towers. Expert guidelines issued by them are in implementation stage.
5) De-bottlenecking of certain carbonation towers has been successfully achieved resulting in increase in tower capacity by 50%.
6) Lump formation in Refined Sodium Bicarbonate bags:
After exhaustive studies and experimentation in association with an international agency through R & D efforts, we have developed solution for preventing soft lump formation in our refined sodium bicarbonate bags. We made changes in manufacturing stage of purge liquor during Refined Sodium Bicarbonate Manufacture resulting in saving of 5 MTPD of internal soda consumption.
7) We have adopted belt filter technology and installed same in our expansion phase for reducing steam consumption in Calciners. Further, high speed filter with technology from Germany is being commissioned. This shall also reduce the steam consumption in Calciners.
We stand committed in our endeavor to remain focused on our R&D initiatives in line with our Mission and Vision thus creating value for our stakeholders.
TEXTILES
The domestic textile industry in India is projected to reach US$ 250 billion by 2019 as per recent IBEF (India Brand Equity Foundation) report from US$ 150 billion in July 2017. Rising per capita income, favourable demographics and a shift in preference to branded products are likely to boost demand. Textile and apparel exports from India is expected to increase to US$ 82 billion by 2021 from US$ 37 billion in 2017. The Indian Textile Industry contributes to around 10% of industry output in value terms, 2% of India''s GDP and to 15% of the country''s export earnings. With a production of over 6,000 million kgs, India was the largest producer of cotton in the world in 2016-17. India is also the 2nd largest producer of man-made fibre and filament globally, with a production of over 2 million kgs in 2016-17. India is the second largest supply country with a share of 11% after China, with a share of 39%. Over 25% of the US imports in this industry originate from India.
Rising government focus and favourable policies is leading to growth in the industry. 100% FDI, under the automatic route, is allowed in the sector and US$ 140 billion worth of foreign exchange investments are expected. Under the Union Budget 2018-19, Government of India allocated around US$ 1.1 billion for the textile industry. Huge investments are being made by the government under the Scheme for Integrated Textile Parks (SITP) to the tune of US$ 185 million and the Technology Up gradation Fund Scheme (TUFS) to the tune of US$ 216 million, to encourage more private equity and to train workforce.
Your company has integrated textile manufacturing facilities centring around Spinning on one hand with 1.76 Lakh spindles and 3320 rotors and Home Textiles (Weaving, Processing and Cut & Sew of Bed Textiles) on the other. Our state-of-the art
Home Textiles facility in Vapi, Gujarat comprises of 190 Air Jet looms, 45 million meter of wide width processing capacity, 12 million meter of weaving capacity and 30 million meter of cut & sew. The Home Textiles division has recently increased weaving capacity by 18% and processing capacity by 25%. GHCL has also stepped up its focus on the domestic market and is working with major organized retail stores and brands in India.
The operating performance of the textiles business faced various industry level challenges like oversupply situation in USA resulting in the drop in the prices as well as margin, impact of GST and demonetisation, reduction in duty drawback etc. However, the Company has strengthened its marketing, product development and operating teams and has altered its focus to work around sustainability and innovation - two areas that are clearly competitive advantage drivers and are likely to see a huge improvement in the proliferation of business across geographies, with better margins, in times to come. As informed above, our Home Textile business is well integrated with our spinning business. Our Spinning units situated in Tamil Nadu are considered to be one of the most efficient and modern yarn manufacturing facilities in India. Our spinning units manufacture multiple varieties of yarn ranging from 100% cotton to blended yarns. This part of the business has performed well during the FY2017-18 and we expect that with the new cotton crop and buoyant yarn demand, the coming year should be even better.
The Revenue of Textiles division is at Rs. 1046 Crores during the financial year 2017-18 against Rs. 1229 Crores in 2016-17.
Our belief is that with our strong marketing and product development teams in place and launch of new innovative concepts such as REKOOP and FABFIT, we shall be able to create a differentiation through sustainability and innovation. We anticipate that with the acceptance of these two concepts, this business will not only grow top line and but also improve the profitability.
DIVIDEND
Your Directors are pleased to inform that your Company has a consistent track-record of dividend payment for last 24 years. The Board of Directors in its meeting held on May 19, 2016, had 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 profit of the Company.
Pursuant to the Dividend Policy, your Directors are pleased to recommend a dividend of Rs. 5.00 per Equity Share of Rs.
10 each (i.e. 50% on the paid-up capital) for the financial year ended March 31, 2018. Total dividend payout for the financial year 2017-18 shall be Rs. 58.60 crores comprising of dividend amounting to Rs. 48.70 crores and dividend tax of Rs. 9.90 crores. This dividend pay-out amounts to 16.29% of net profit of the Company for the financial year 2017-18 and the same is in line with the approved dividend policy of the Company.
SHARE CAPITAL
The paid up Equity Share Capital of the Company as on March 31, 2018 is Rs. 97,42,32,860/- comprising of 9,74,23,286 equity shares of Rs. 10/- each.
Details of changes in the paid-up share capital (after Buyback of equity share capital and Allotment of equity shares against ESOP) are as under:
Sl. No. |
Particulars |
No. of Equity shares of Rs. 10/- each |
1. |
No. of Equity Shares as on March 31, 2016 (Pre - Buyback) |
10,00,19,286 |
2. |
Less: Shares Bought back (during February 15, 2017 to August 14, 2017) |
31,56,000 |
3. |
No. of Equity Shares (Post - Buyback) (i.e. 1-2) |
9,68,63,286 |
4. |
Equity Shares allotted against conversion of ESOP (on October 24, 2017) Note: Final Listing & Trading approval was given by BSE & NSE effective from November 10 & November 14, 2017 respectively). |
5,60,000 |
5. |
No. of Equity Shares after allotment i.e. present shares (3 4) |
9,74,23,286 |
BUYBACK OF SHARES
The Board of Directors of GHCL Limited in their meeting held on January 31, 2017 had given their approval for Buy Back of the Company''s fully paid-up equity shares of Rs. 10/- each from the Open Market through Stock Exchange route, at a Maximum Buyback price of Rs. 315/- per Equity Share excluding transaction costs, for an aggregate amount of Rs. 80 Crores. The information in this regards had already been given in last annual report.
Your Directors are pleased to inform that in line with the said approval, since starting of buyback process, the Company had bought back 31,56,000 equity shares and extinguished the same. Out of which 5,73,438 equity shares were bought back and 546,550 equity shares were extinguished in Financial Year 2016-17 and balance 25,82,562 equity shares are bought back and 26,09,450 equity shares are extinguished during financial year 2017-18. Consequently after said extinguishment of equity shares, the issued & paid-up capital of the Company stands reduced to Rs. 96,86,32,860/- consisting of 9,68,63,286 equity shares (i.e. 10,00,19,286 equity shares minus 31,56,000 equity shares) as on September 30, 2017.
Your Directors are pleased to further inform that the price at which the equity shares were bought back was dependent on the price quoted on the stock exchanges. The highest and lowest price at which equity shares were bought back was Rs. 277.00 and Rs. 233.50 per equity share respectively. The average price (excluding brokerage and other charges) at which the equity shares have been bought back is Rs. 252.04 per equity share and the total amount deployed in the Buyback is Rs. 79.54 crores, which represents 99.43% of the Maximum Buyback Offer Size (excluding transaction cost).
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. The Company had obtained in-principle approvals from the Stock Exchanges for issue of 50 lakh equity shares through Employees Stock Option Scheme. During the year, the Nomination and Remuneration Committee in its meeting held on October 24, 2017 had granted 2.30 Lacs Stock Options to its 14 employees at an exercise price of Rs. 170 each. Subsequent to the year end, the Nomination and Remuneration Committee in its meeting held on April 25, 2018 had granted 21.30 Lacs Stock Options to its 58 employees (including three KMPs) at an exercise price of Rs. 150 each. Employees may exercise their options after vesting period, subject to compliance of other terms and conditions of the Scheme approved by the shareholders.
Further, the Committee in its meeting held on October 24, 2017 made allotment of 5.60 lakhs Equity Shares of Rs. 10 each to forty employees (including three KMPs) of the Company against conversion of Stock Options pursuant to GHCL ESOS 2015 -Series -1. Consequent to above allotment of 5.60 lakh Equity Shares, the Issued & Paid-up Capital of the Company stands increased to Rs. 97,42,32,860/- consisting of 9,74,23,286 equity shares of Rs. 10/- each from Rs. 96,86,32,860/- consisting of 9,68,63,286 equity shares of Rs. 10/- each.
The details of the Employee Stock Options plan form part of the Notes to accounts of the financial statements in this Annual Report and is also annexed herewith as Annexure-I and forming part of this Report.
FINANCE I. Soda Ash Expansion Loan
After successful completion of Soda Ash Expansion Phase
- I, your Company has started Phase - II with a Project Cost of Rs. 300 crores. Your company successfully tied up Term Loan for Rs. 225 Crores for a period of 10 years including moratorium period of 2 years at interest rate of 8.75% p.a. and availed disbursement of Term Loan of Rs. 80 crores during the current year.
II. Capex Program
Your company has also undertaken several Capex program in Home Textile and Yarn Divisions at the project cost of Rs. 88 Crores and your company has successfully tied up term loans for Rs. 58 crores for a period of 10 years including moratorium period of 2 years at an average interest rate of 8.5% p.a. Your company has availed term loan of Rs. 26 crores during the current year for the said capex program.
III. Conversion of Rupee Term Loan into Foreign Currency Loan
During the year, your company successfully converted some of high cost Rupee term loans carrying interest rate at 10% p.a. into Foreign Currency Loan at an average rate of 3.80%.
IV. Short Term Loan
During the year 2017-18 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 6.32%.
V. Also your company could borrow Long Term Loans which includes Rupee Term Loans and Foreign Currency Loans at an average rate of 8.49%
Thus your company could manage to borrow Long Term Loans and Short Term Loans at an average rate of 7.61%.
Due to efficient cash flow management and timely repayment of interest and principal to various banks, CARE (Credit Analysis & Research Ltd) has upgraded rating from CARE A- to CARE A for long term facilities and from CARE A2 to CARE A1 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. 32.48 lacs towards unclaimed dividend/unclaimed deposits along with interest thereon.
DEPOSITS
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.
AWARDS AND RECOGNITION
Your Directors are pleased to inform that during the financial year 2017-18, your Company has received various awards and recognition. The major ones among them are as follows:
(i) Special Commendation for Golden Peacock Award for Excellence in Corporate Governance for the year 2017.
(ii) Golden Peacock Award for Corporate Social Responsibility
- 2017 for the year 2017.
(iii) GHCL Limited has been declared as the Winner of âGolden Peacock National Quality Award'' for the year 2018.
(iv) GHCL Limited achieved 16th rank in Great Place to Work survey among India''s Great Place to Work manufacturing sector.
(v) The President of Association Other ways Management & Consultancy France, certify that GHCL Limited has been selected to receive the Green Era Award for Sustainability.
SUBSIDIARIES
Grace Home Fashion, LLC, a subsidiary of the Company in USA engaged in Home Textile segment is catering to some of the popular Home-Textile Retailers like Bed Bath Beyond, Wood and Steinmart. In addition, Grace Home Fashion is also doing online Home-Textile Business in USA through JC Penny and Kohls. com. As reported in the previous year, 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. 45 (refer page no. 171 of Annual Report) and also in the statement u/s 129(3) of the Companies Act, 2013 (refer page no. 120). 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, 201 5 (hereinafter referred as
Listing Regulations) read with other applicable provisions and prepared in accordance with applicable IND AS, for financial year ended March 31, 2018.
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. S Chandrasekaran, representing Chandrasekaran & Associates, Practicing Company Secretaries, New Delhi, to conduct Secretarial Audit of the Company for the financial year 2017-18. The Secretarial Audit Report for the financial year ended March 31, 2018 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 2017-18 have been paid to all these Stock Exchanges.
DIRECTORS
Mr. Sanjay Dalmia and Mr. Anurag Dalmia directors retire by rotation and being eligible, offer themselves for re-appointment. The Board of Directors in their meeting held on January 31, 2018, had re-appointed Mr. Raman Chopra as a Whole-time Director designated as CFO & Executive Director (Finance) of the Company for a period of five years with effect from April 1, 2018, subject to the approval of the shareholders. The Board recommends their appointments at the ensuing Annual General Meeting.
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.
During the year, Mr. Sanjiv Tyagi, one of the Independent Director of the Company, has ceased from the directorship of the Company with effect from October 24, 2017, as per the provisions of Section 167(1) read with Sections 164 (2) of the Companies Act, 2013 on account of his disqualification in other companies. The Board of Directors placed on record their gratitude and appreciation for the immense contribution made by the outgoing director during his tenure as director of the Company.
MEETING OF THE BOARD
During the financial year ended March 31, 2018, 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, 2018, four Board Meetings were held on May 20, 2017, July 29, 2017, October 24, 2017 and January 31, 2018. More details about the Board Meetings are mentioned in the Corporate Governance Report.
BOARD EVALUATION
In line with the provisions of the Companies Act, 2013 and SEBI Guidance Note on Board evaluation issued on January 5, 2017 read with relevant provisions of the SEBI Listing Regulations, 2015, the Board has carried out an annual evaluation of its own performance and that of its Committees and individual Directors through the separate meeting of independent directors and the Board as a whole.
The performance of the independent directors was evaluated by the entire Board except the person being evaluation in their meeting held on January 31, 2018. The performance of the Committees was evaluated by the Board seeking inputs from the Committee Members.
A separate meeting of Independent Directors was held on January 31, 2018, to review the performance of Non-Independent Directors'', performance of the Board and Committee as a whole and performance of the Chairman of the Company, taking into account the views of Executive Directors and the Non-Executive Directors.
The performance evaluation of the Board and its constituents was conducted on the basis of functions, responsibilities, competencies, strategy, tone at the top, risk identification and its control, diversity, and nature of business. A structured questionnaire was circulated to the members of the Board covering various aspects of the Board''s functioning, Board culture, execution and performance of specific duties, professional obligations and governance. The questionnaire was designed to judge knowledge of directors, their independence while taking business decisions; their participation in formulation of business plans; their constructive engagement with colleagues and understanding the risk profile of the company, etc. In addition to the above, the chairman of the Board and / or committee is evaluated on the basis of their leadership, coordination and steering skills.
Thereafter, the Nomination and Remuneration Committee used to review the performance of individual Directors on the basis of their contribution as a member of the board or committee. The quantum of profit based commission, payable to directors is decided by the Nomination and Remuneration Committee on the basis of overall performance of individual directors.
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, 2018 in Form MGT - 9 is annexed herewith as Annexure-II 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 âGHCL Foundation Trustâ 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, Vocational training institute, Education, Agro Based Livelihood, Health, cancer early detection camps, Rain Water Harvesting, Woman Empowerment, Animal Husbandry etc. These projects are 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. Mahesh Kumar Kheria as the Chairman of the Committee, Mr. Neelabh Dalmia and Mr. R S Jalan as members of the Committee. Subsequent to the year end, the Board of Directors in its meeting held on April 25, 2018, has reconstituted CSR Committee comprising of Mrs. Vijaylaxmi Joshi as the Chairperson of the Committee, and Mr. Mahesh
- Kumar Kheria, Mr. Neelabh Dalmia, Mr. R S Jalan and Mr. Raman Chopra as members of the Committee. The Annual Report of CSR activities are annexed herewith as Annexure-III and forming part of this Report
BUSINESS RESPONSIBILITY REPORTING
As per Regulation 34 (2) (f) of the Listing Regulations, listed companies shall submit, as part of their Annual Reports, Business Responsibility Report, describing the initiatives taken by them from an environmental, social and governance perspective, in the prescribed format. At present this provision is applicable to top 500 listed companies, based on market capitalisation as on March 31, 2018. As on March 31, 2017, GHCL Limited was on 456th position under NSE list and on 462nd position under BSE list. Hence, this clause was first time applicable to GHCL Limited in the last year. But, based on market capitalisation as on March 31, 2018, GHCL Limited is not part of the list of top 500 listed companies of NSE & BSE. However, your company will continue to publish Business Responsibility Report (BRR), for the purpose of establishing and strengthening the norms of Corporate Governance and setting the highest principle envisaged by SEBI under BRR reporting. The Business Responsibility Report of the Company for the financial year ended on March 31, 2018 is annexed herewith as Annexure-IV and forming part of this Report.
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. Presently, the Audit Committee consists of four Independent directors having expertise in financial and accounting areas, comprising of Dr. B C Jain, Mrs. Vijaylaxmi Joshi, Mr. G C Srivastava and Mr. K. C. Jani. 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 annual report and non-receipt of dividend etc. The Stakeholders Relationship committee consists of Executive and NonExecutive 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 three Non-Executive directors comprising of Mr. K C Jani, Mr. Sanjay Dalmia and Dr. B C Jain.
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 behaviour. 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 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 are also stated in the Corporate Governance Report. The Whistle Blower Policy is posted on the website of the Company. There are no complaints reported during the year under Vigil mechanism.
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 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 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, 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 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 in 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 had been rolled out and Internal Complaints Committee as per legal guidelines had 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 inquiry process with clear time lines. There are no complaints reported during the year regarding sexual harassment.
STATUTORY AUDITORS
Your directors would like to inform that in the 33rd AGM held on July 19, 2016, M/s S. R. Batliboi & Co. LLP, Chartered Accountants (Firm Reg. No. 30100CE / E300005), was appointed as statutory auditors of the Company for a period of five years i.e. from the conclusion 33rd AGM till the conclusion of 38th AGM subject to ratification by members at every AGM. Ratification of appointment of M/s S. R. Batliboi & Co. LLP is being sought from the members of the Company at the ensuing AGM. The Board recommends their ratification.
AUDITORâS 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, 2018. 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 2018-19.
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.
DIRECTORSâ 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, 2018, 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, 2018 and of the profit and loss of the Company for the financial year ended March 31, 2018;
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, 2018 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.
ACKNOWLEDGMENT
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
SANJAY DALMIA
Chairman
Date : April 25, 2018
Place : New Delhi
Mar 31, 2017
BOARDâS REPORT
To The Members of GHCL Limited,
We are pleased to present the 34th Annual Report together with the audited financial statements of the company for the financial year ended March 31, 2017.
OPERATIONAL RESULTS
The summary of the financial performance of the Company for the financial year ended March 31, 2017 compared to the previous year ended March 31, 2016 is given below:
(Rs in Crores)
Particulars |
Standalone |
|
Year ended March 31, 2017 |
Year ended March 31, 2016 |
|
Net Sales /Income |
2980.17 |
2716.22 |
Gross profit before interest and depreciation |
724.39 |
635.76 |
Finance Cost |
133.77 |
162.82 |
Profit before depreciation and amortization - (Cash Profit) |
590.62 |
472.94 |
Depreciation and Amortization |
85.69 |
81.74 |
PBT before exceptional items |
504.93 |
391.20 |
Exceptional items |
3.04 |
13.50 |
Profit before Tax (PBT) |
501.93 |
377.70 |
Provision for Tax - Current |
113.61 |
99.40 |
Tax adjustment for Earlier years |
(40.18) |
- |
Provision for Tax - Deferred |
41.73 |
21.67 |
Profit after Tax |
386.77 |
256.63 |
Other comprehensive income (OCI) |
1.39 |
(0.89) |
Total Comprehensive income for the period |
388.16 |
255.74 |
Balance brought forward from last year |
817.87 |
588.62 |
Appropriations |
||
Reserve created on account of buy back during the year |
0.55 |
- |
FVTOCI Reserve |
(2.65) |
- |
Interim Dividend |
15.01 |
- |
Final Dividend |
35.01 |
22.00 |
Tax on Dividend |
10.18 |
4.48 |
Balance carried to Balance Sheet |
1142.63 |
817.87 |
performance highlights and state of companyâs
AFFAIRS SODA ASH
The total Global Production in 2016 as per IHS Chemical report, was approximately 56 million tpa with an estimated capacity of approximately 65 million tpa. Global demand for Soda Ash reportedly grew approximately 2% annually 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.
In spite of increasing economic problems that are affecting the financial viability of some operations, China continues to be the largest Soda Ash player in the world, having a capacity of 30.00 million tpa, which is 47% of the global capacity. 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 in fact significantly slowed down additions to Capacity in a hope of creating a balance in the industry. Turkey will be the new major player in the Global Soda Ash market, with locally-based Ciner Group already added 0.5 million in the beginning of this year and due to add a further 2 million tpa soda ash capacity to the market by 2017 end. It is expected that during this phase, Turkey shall continue to exert pressure on the high cost European manufacturers. Some surplus volumes are also expected to compete with China/US volumes in South East Asia and the Middle East. US which produces natural soda ash have a capacity of 13.16 million tons and they produced
11.74 million tons of soda ash. The US production is stated to have grown by 2% in 2016 where as domestic demand for soda ash saw a negative growth of 2% versus 2015. They exported
6.67 million tons, 46% 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 capacity 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 5% annually. Our market estimate indicate that downstream demand growth is gradually improving and 2017 is expected to be better than 2016. India''s GDP growth in real terms is slated to be better in the coming Financial Year with the positive impact of reforms. 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 3.4 million tons, with an estimated production of about 2.8 million tons in last financial year (2016-17). Going forward we are looking at expansion of 0.25 lacs metric tons in 2017-18 and further expansion of 1.25 lacs metric tons in 2018-19
The total size of the Indian soda ash market is about 3.6 million tons 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 9.50 lacs tpa. During the financial year 2016-17 your company has produced 8.01 lacs tons soda ash. This year, the Company has also achieved highest domestic sales i.e. 7.40 lacs tons and total sales of Soda Ash is 7.50 lacs tons including exports.
BI-CARBONATE (BICARB)
During the year, the Company achieved production of BiCarbonate 27677 tons against 24541 tons in the previous year. During the year the Company achieved sales of Bi-Carbonate 27638 tons against 24265 tons in the previous year.
Going forward, your company is planning to double its capacity of Sodium Bicarbonate from the current level of 32500 Metric ton per annum to 65000 metric ton per annum to take advantage of the growing market of this product.
R & D INITIATIVES IN SODA ASH
Your company has initiated R&D activities since last four years to achieve following objectives (a) Introduce latest and economical technologies in the plant; (b) Provide innovative solutions to recurring problems and save natural resources;
(c) To improve carbon foot print of company and contribute in national saving and environment improvements; (d) Energy conservation projects and (e) To improve soda ash production and plant productivity.
The R&D department operates with focused mandate (a) to Identify latest technology, superior design of equipment, improving process efficiency leading to reduced raw material consumption and reduced utility consumption resulting in better life of equipment and reduced cost of manufacture (b) to identify the possibility of producing value added products from wastes of soda ash manufacturing; (c) to identify suitable expert agencies who can find permanent solution to recurrent process problems; (d) to study possibility of catering to specific requirements of customers like soda ash briquettes (e) to suggest practices and procedures which can focus on reducing the energy consumption & reducing raw material consumption thus reducing carbon foot print .
We carry out above activities with the help of research department of premier chemical engineering institutes, reputed consultants & in house capabilities. Your company has carried out following projects since last 18 months:
- Cost effective binder for briquetting of coke breeze and develop alternative supplier for pre-gel starch against existing pre-gel starch supplier.
- Value added product sodium per carbonate manufacture from soda ash;
- Manufacture of precipitated calcium carbonate from distiller waste and mother liquor purged from refined sodium bicarbonate plant.
- Value added products from wastes of soda ash manufacture.
- Efficiency improvement for carbonation tower.
- Improvement of product quality of refined sodium bicarbonate and remedial solution to avoid dilution due to purge mother liquor.
- Feasibility of utilization of 0-20 mm reject limestone to produce concentrated gas.
- Reduction in moisture of crude sodium bicarbonate at filtration to reduce steam consumption at downstream dryers.
- De-bottlenecking of C stream carbonating towers by modification of internal trays leading to increase in capacity.
- Increase in refined sodium bicarbonate production capacity by 30%.
TEXTILES
India''s textiles sector is one of the oldest industries in Indian economy. Based on the Annual Report 2016-17 released by the Ministry of Textiles, the Indian Textile Industry contributes to 10% of manufacturing production, 2% of India''s GDP and to 13% of the country''s export earnings. The Indian textiles industry is the second largest employer after agriculture, providing employment to over 45 million people directly and 60 million people indirectly. The Indian textile industry is set for strong growth, buoyed by both strong domestic consumption as well as export demand. The Indian textiles industry is expected to reach US$ 223 billion by 2021, from around US$ 108 billion in FY''15.
India''s home textile industry is expected to expand at a CAGR of 8.3 per cent during 2014-21 to USD8.2 billion in 2021 from USD4.7 billion in 2014. India accounts for 11 per cent of global home textiles trade. Superior quality makes companies in
India a leader in the US and the UK, contributing two-third to their exports. Indian products have gained a significant market share in global home textiles in the past few years in which depreciating rupee also played a major role when compared to China. The growth in the home textiles would be supported by growing household income, increasing population and growth of end use sectors like housing, hospitality, healthcare, etc. In 2016, Indian home textile industry is estimated at USD 5.5 billion. India is emerging as biggest exporter of Home Textiles capturing around 47% Market share in United States of America which is second biggest market for home textiles. The Indian Textiles Industry is the 2nd largest only after China.
Textiles industry has been growing at 10% over last several years. Government of India has provided a number of export promotion policies for the Textiles sector. It has also allowed 100 per cent FDI in the Indian Textiles sector under the automatic route.
Your company has integrated textile manufacturing facilities with an installed spinning capacity of around 1.76 lakh spindles and 3320 Rotors (Open End) manufacturing 100% cotton, polyester cotton & other blended yarns, 162 Air Jet looms, 36 million meter of wide width processing capacity, 12 million meter of weaving capacity and 30 million meter of cut & sew facility for manufacturing world class quality merchandise. Your company has state-of-art plant at Vapi, Gujarat that integrates weaving, processing and cut & sew facilities. The Home Textiles division is investing to increase weaving capacity by 18% and processing capacity by 25%, which will be operational in 3rd quarter of next fiscal year. Your company''s spinning units in Tamil Nadu are considered to be one of the most efficient and modern yarn manufacturing facilities in India. Spinning units manufacture multiple varieties of yarn ranging from 16s to 32s in open end, 30s to 120s in ring spun counts in 100% cotton and 30s to 70s counts in other blended yarns. Excellent product development capabilities has put your company in forefront of major markets internationally, mainly North America, Australia, Middle East, UK and Europe. GHCL has also started to focus on domestic market and working with major organized retail stores and brands for domestic market.
Overall in the textile business, your company has posted satisfactory performance this year, which is despite the demonetization impact. This is due to strong customer relations, product portfolio, consistent supply of quality products and strengthening organizational structure. This has led to increase in capacity utilization to 93% as compared to 85% last year in home textiles.
The Revenue of Textiles division is at Rs. 1,229 Crores during the financial year 2016-17 against Rs. 1,063 Crores in 2015-16. 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 utilization and our relentless customer focus.
Your company strongly believe that focus on customer realignment along with innovative products & designs, enhanced product basket with tie ups with private labels shall provide us further impetus to both top line and margin improvement. However, upward fluctuations in the cotton price and forex with strengthening Indian Rupee are becoming a big concern. Demonetization had affected the economy through the liquidity side and affected the demand in the domestic market. But, going forward we expect an increase in demand for yarn as well as prices. Your company has taken effective steps to bring down the power cost and total installed capacity of wind mills is around 27 MW, which will meet major power needs of the spinning and home textiles division.
DIVIDEND
Your Directors are pleased to inform that your Company has a consistent track-record of dividend payment for last 23 years. The Board of Directors in its meeting held on May 19, 2016, had 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 profit of the Company.
Pursuant to the Dividend Policy, the Board of Directors of your Company in its meeting held on January 31, 2017 had approved payment of interim dividend of Rs. 1.50 per equity share of Rs. 10 each (i.e. @ 15% on the paid-up capital).
Further, your Directors are pleased to recommend a final 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, 2017. With this, the total dividend payment for the financial year 2016-17 will be Rs. 5.00 per Equity Share of Rs. 10 each (i.e. 50% on the paid-up capital) and the total dividend payout for the financial year 2016-17 shall be Rs. 60.20 crores comprising of dividend amounting to Rs. 50.02 crores and dividend tax of Rs. 10.18 crores. This dividend pay-out amounts to 15.6% of net profit of the Company for the financial year 2016-17 and the same is in line with the approved dividend policy of the Company.
SHARE CAPITAL & BUYBACK OF SHARES
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.
Board of Directors of GHCL Limited in their meeting held on January 31, 2017 had given their approval for Buy Back of the Company''s fully paid-up equity shares of Rs. 10/- each from the Open Market through Stock Exchange route, at a Maximum Buyback price of Rs. 315/- per Equity Share excluding transaction costs, for an aggregate amount of Rs. 80 Crores.
Your Directors are pleased to inform that in line with the said approval, the Company had bought back 5,73,438 Equity Shares and extinguished 5,46,550 Equity Shares during the financial year ended March 31, 2017. Consequently after said extinguishment of equity shares, the issued & paid-up capital of the Company stands reduced from Rs. 100,01,92,860/consisting of 10,00,19,286 equity shares to Rs. 99,47,27,360/consisting of 9,94,72,736 equity shares (i.e. 10,00,19,286 equity shares minus 5,46,550 equity shares) as on March 31, 2017. Subsequent to the year end, the Company had bought back 12,98,162 Equity Shares and extinguished 5,89,450 Equity Shares till May 19, 2017. Consequently after said extinguishment of equity shares, the issued & paid-up capital of the Company stands reduced to Rs. 98,88,32,860/- consisting of 98,83,286 equity shares (i.e. 9,94,72,736 equity shares minus 5,89,450 equity shares) as on May 19, 2017.
FINANCE
I. Soda Ash Expansion Loan
During the year 2016-17, your company completed Soda Ash Expansion program at the project cost of Rs. 375 Crores and availed disbursement of Term Loan of Rs. 181 Crores during the current year. For the Expansion Program, Term Loan of Rs. 275 crores was tied up last year for a period of 10 years including moratorium period of 2 years at an average interest rate of 11.30% p.a.
II. Capex Program
Your company has also undertaken several Capex program in Home Textile and Yarn Divisions at the project cost of Rs. 78 Crores and your company has successfully tied up term loans for Rs. 54 crores for a period of 10 years including moratorium period of 2 years at an average interest rate of 10.45% p.a. Your company has availed term loan of Rs. 29 crores during the current year for the said capex program.
III. Conversion of Rupee Term Loan into Foreign Currency Loan
During the year, your company successfully converted some of high cost Rupee term loans carrying interest rate at 12.50% p.a. into Foreign Currency Loan at an average rate of 4.40% with average maturity of 3 to 4 years.
IV. Short Term Loan
During the year 2016-17 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 5.97%.
Overall, your company could borrow Long Term Loans at an average rate of 9.71% and Short Term Loan at an average rate of 5.97% and maintained overall weighted average interest rate at 8.12%.
Due to efficient cash flow management and timely repayment of interest and principal to various banks, CARE (Credit Analysis & Research Ltd) has upgraded rating from CARE BBB to CARE A- for long term facilities and from CARE A3 to CARE A2 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. 31.67 lacs towards unclaimed dividend/unclaimed deposits along with interest thereon.
DEPOSITS
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. The Company had obtained in-principle approvals from the Stock Exchanges for issue of 50 lakh equity shares through Employees Stock Option Scheme. During the year, the Nomination and Remuneration Committee in its meeting held on May 19, 2016 had granted 12.10 Lacs Stock options to its 46 employees at an exercise price of Rs. 100 each. Further, the Nomination and Remuneration Committee in its meeting held on January 31, 2017 had granted thirty thousand Stock options to its Chief Operating Officer - Home Textile Division at the same terms and conditions. Employees may exercise their options after vesting period, subject to compliance of other terms and conditions of the Scheme approved by the shareholders.
The details of the Employee Stock Options plan form part of the Notes to accounts of the financial statements in this Annual Report and is also annexed herewith as Annexure-I and forming part of this Report.
AWARDS AND RECOGNITION
Your Directors are pleased to inform that during the financial year 2016-17, your Company has received multiple awards and recognition. The major ones among them are Sustainability-4.0, 2017, Believer award and India Manufacturing Excellence award by Frost & Sullivan, Sustainable and Impactful CSR Project given by Gujarat State CSR Authority, and certificate for Great Place to Work.
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. As reported in the previous year, Rosebys Interiors India Limited (RIIL) an Indian subsidiary, is under liquidation with effect from 15th July 2014.
Pursuant to requirement of Section 1 36 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. 48 (refer page no. 182 of Annual Report) and also in the statement u/s 129(3) of the Companies Act, 2013 (refer page no.182). 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 applicable IND AS, for financial year ended March 31, 2017.
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. S Chandrasekaran, representing Chandrasekaran & Associates, Practicing Company Secretaries, New Delhi, to conduct Secretarial Audit of the Company for the financial year 2016-17. The Secretarial Audit Report for the financial year ended March 31, 2017 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 2016-17 have been paid to all these Stock Exchanges.
DIRECTORS
Mr. Neelabh Dalmia and Mr. Raman Chopra directors retire by rotation and being eligible, offer themselves for re-appointment. The Board of Directors in their meeting held on May 20, 2017, has re-appointed Mr. R. S. Jalan as Managing Director of the Company for a period of five years with effect from June 7, 2017, subject to the approval of the shareholders. The Board recommends their appointments at the ensuing Annual General Meeting.
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.
During the year, the Company had paid the final installment of loan taken from IDBI Bank Limited vide Loan agreement dated July 6, 2010. Accordingly, IDBI Bank Limited had withdrawn the nomination of Smt. Padma Vinod Betai with effect from January 25, 2017 as a Nominee Director from the Board of the Company. The Board of Directors placed on record their gratitude and appreciation for the immense contribution made by the outgoing director during her tenure as director of the Company. Subsequent to the year end, the Board of Directors had appointed Mrs. Vijaylaxmi Joshi (Ex-IAS) as an additional director of the company in the category of Independent Director with effect from April 20, 2017. The Company has received notice u/s 160 of the Companies Act, 2013 from Mrs. Joshi signifying the intention to propose her candidature at the ensuing Annual General Meeting, as an Independent Director of the Company. In the opinion of the Board, Mrs. Vijaylaxmi Joshi fulfil the conditions specified in the Companies Act, 2013 and rules made there under for her appointment as an Independent Director of the Company and is independent of the management. The Board considers that her continued association would be of immense benefit to the Company and it is desirable to continue to avail valuable services of Mrs. Joshi 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 there under, the Board recommends appointment of Mrs. Vijaylaxmi Joshi at the ensuing Annual General Meeting for the approval by the members of the Company.
MEETING OF THE BOARD
During the financial year ended March 31, 2017, 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, 2017, four Board Meetings were held on May 19, 2016, July 25, 2016, October 21, 2016, and January 31, 2017. 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 and based on the detailed statements / questionnaire circulated with the agenda, the Independent Directors in their separate meeting held on October 21, 2016 had reviewed the performance of Non-Independent Directors, the Board & Committees 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, and based on the detailed statements / questionnaire circulated with the agenda, the Board of Directors in its meeting held on October 21, 2016 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, 2017 in Form MGT - 9 is annexed herewith as Annexure-II 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 âGHCL Foundation Trustâ 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-III 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 500 listed companies based on market capitalization as on March 31, 2017. Hence, this clause is first time applicable to your company. The Business Responsibility Report of the Company for the financial year ended on March 31, 2017 has been provided separately and forming part of the Annual Report.
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. Presently, the Audit Committee consists of four Independent directors having expertise in financial and accounting areas, comprising of Dr. B C Jain, Mr. G C Srivastava, Mr. Mahesh Kumar Kheria and Mr. K. C. Jani. 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 annual report 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 âWhistle Blower Policyâ. 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 Ombudsmen.
The purpose of the policy is to create a fearless environment for the directors and employees to report any instance of unethical behavior, actual or suspected fraud or violation of GHCL''s code of conduct or Ethics Policy to the Ombudsmen. 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. There is no complaint reported during the year under Vigil Mechanism.
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. Prior Omnibus approval are granted by the audit committee for related party transactions as per requirement of the Companies Act and the Listing Regulations. 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. The details of transactions with related parties are provided in the accompanying financial statements.
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 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 earnings 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-IV 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-V 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. There are no complaints reported during the year regarding sexual harassment.
STATUTORY AUDITORS
Your directors would like to inform that in the last AGM (i.e. 33rd AGM) held on July 19, 2016, M/s S. R. Batliboi & Co. LLP, Chartered Accountants (Firm Reg. No. 30100CE / E300005), were appointed as statutory auditors of the Company for a period of five years i.e. from the conclusion 33rd AGM till the conclusion of 38th AGM subject to ratification by members at every AGM. Ratification of appointment of M/s S. R. Batliboi & Co. LLP is being sought from the members of the Company at the ensuing AGM. The Board recommends their ratification. Your directors would also like to inform that tenure of M/s Rahul Gautam Divan & Associates, Chartered Accountants would be completed on conclusion of 34th AGM of the Company.
The Board of Directors placed on record their gratitude and appreciation for the valuable contribution made by M/s Rahul Gautam Divan & Associates, Chartered Accountants.
AUDITORâS 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, 2017. 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 2017-18.
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.
directorsâ 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, 2017, 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, 2017 and of the profit and loss of the Company for the financial year ended March 31, 2017;
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, 2017 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/- Sd/-
R S Jalan Raman Chopra
Managing Director CFo & Executive Director (Finance)
DIN: 00121260 DIN 00954190
Date: May 20, 2017
Place: New Delhi
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 Â 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
Mar 31, 2011
The Members,
We are pleased to present the 28th Annual Report and the audited
accounts of the Company for the financial year ended March 31, 2011.
OPERATIONAL RESULTS
The summary of the financial performance of the Company for the
financial year ended March 31, 2011 compared to the previous year ended
March 31, 2010 is given below:
(Rs in Lacs)
Particulars Year Ended Year Ended
March 31, March 31,
2011 2010
Net Sales /Income 151,146.70 122,546.09
Gross profit before interest and 34,982.54 30,320.37
depreciation
Interest 11,043.48 10,544.94
Profit before depreciation and 23,939.06 19,775.43
amortisation - (Cash
Profit)
Depreciation / Amortisation 8,439.55 7,611.18
Profit before Tax 15,499.51 12,164.25
Provision for Taxation - Current 52.52 12.00
Provision for Taxation - Deferred 3814.45 (1,932.29)
Profit after Tax 11,632.54 14,084.55
Balance brought forward from last 23,786.07 28,431.93
year
Prior period adjustments 64.29 (11.29)
Excess provision for tax for earlier 75.52 21.93
years
Amount available for appropriation 35,558.42 42,527.15
Appropriations - -
Transfer to General Reserve 1,163.25 1,408.45
Transfer to General Reserve as 17,500.00 15,000.00
per Scheme of
Arrangement
Proposed Dividend 2,000.39 2,000.39
Tax on Dividend 324.51 332.24
Balance carried to Balance Sheet 14,570.27 23,786.07
PER FORMANCE HIGHLIGHTS
Soda Ash
The Global Soda Ash demand was 46 million tons in 2010 with a capacity
of 57 million tons. After growing at an average annual rate of almost 5
percent per year since 2004, world soda ash demand fell by about 9.5
percent in 2009. In 2010 the markets have recovered much faster than
the earlier expectation. Demand for Soda Ash remained robust during
the year, price pressure from key inputs such as salt and energy
weighed heavily. However, there has been a noticeable improvement in
the soda ash prices from the fourth quarter onwards and the industry is
optimistic about the price trend. Emerging economies à particularly in
China and the wider Southeast Asia region, the Middle East, South Asia
and South America continue to be "growth driver" for Soda Ash. Rising
GDPs and urbanization in these regions have led to a higher per capita
consumption of products manufactured using soda ash. Demand for glass
and detergents in emerging world markets surged in the last few years.
Hence the global outlook looks promising for soda ash. The demand for
soda ash is forecast to grow at about 3 to 4 percent per year over the
next five years.
The strong rebound of the Indian Economy was witnessed in Soda Ash also
as demand growth rebounded to a very healthy 6% in 2010. It is expected
that on the back of a strong growth in Glass (Construction/Automobiles)
and Detergents (FMCG penetration and growth) Soda Ash demand will
continue to grow at 5-6% in the current year. Import of Soda Ash from
Kenya, Europe, Pakistan & other countries like Turkey are a major
concern for Soda Ash industry. The Finance Ministry of Government of
India had imposed Safeguard Duty on all Soda Ash Imports from China as
part of its efforts to maintain a healthy domestic Soda Ash industry in
the Country. While the imposition of Safeguard Duty has tampered
Chinese Imports to some extent, the said duty has lapsed in April 2011.
Continued imports from other European producers like Turkey/Russia/
Romania and Ukraine where domestic markets still remain weak and
remains a challenge. An application for Anti-Dumping has been filed
with the ADD and continuous follow up is on to get an expeditious
order.
Your company had successfully completed its soda ash expansion during
2007-08 which has resulted increase in production capacity up to 8.50
lacs MTPA in India. The Company's domestic production of Soda Ash for
the year under review at 710012 tons, which was 8.12% higher as
compared to the previous year. The Company achieved sales of Soda Ash
656969 tons during the year including exports.
Soda Ash manufacturers are experiencing a tough time, as high input and
energy cost seem to affect the profit margins. Your company is better
placed because of its own captive lignite mines and in-house developed
briquette usages as an alternative source of fuel, which is cost
effective and also reduced dependability on other source of energy.
Bi-Carbonate (BICARB)
During the year, the Company achieved production of Bi- Carbonate 22378
tons against 20161 tons in the previous year, which is higher by
11.00%. During the year the Company achieved sales of Bi-Carbonate
22912 tons against 19648 tons in the previous year, which is higher by
17.00%.
Home Textiles
The Indian Textile Industry, 2nd largest in the world, continued its
growth journey during 2010-11, which was due to continuation of
Government of India's stimulus package especially the extension of TUFs
(Textile up-gradation Fund scheme). The industry registered a growth of
around 10% during the year 2010-11 with exports also registering a
significant growth.
GHCL has also achieved remarkable performance in its textile business
for the year 2010-11 in terms of overall performance and profitability
of the Company. The revenue has gone up by 49% to Rs 571 Crore as
compared to Rs 383 Crore in the last year and the operating profit has
sharply increased from Rs 18.07 Crore in 2009-10 to Rs 53.97 Crore in
2010-11 which is a signifi cant increase of 199%.
The above performance has been achieved due to our constant marketing
efforts winning us large orders from the major retailers of the world.
Your company, with its State-of-art textile facilities from spinning to
made-ups, has cautiously rationalized its customer base and
successfully made deep inroads with large Global Retailers for running
their replenishment programmes. Your company today boasts of a
customer base that comprises of Wal-Mart, K-Mart/Sears, Macys, Bed Bath
& Beyond, J C Penny and U.S. Polo in the USA and the likes of House of
Fraser, 3 Suisses and Galeries Lafayette in Europe. Additionally,
with other measures like excellent cotton coverage, timely investment
in value added segment like compact spinning, optimum utilization of
wind energy and power trading, your company has been able to achieve
significant improvement in profitability and operational performance in
its Textile Business as compared to previous year.
The Management is taking further initiatives in terms of adding more
capacities in value-add segment, Weaving and Cut & Sew Facility which
would have significant benefit in the coming years.
DIVIDEND
Your Directors are pleased to recommend a dividend of Rs 2.00 per
Equity Share for the financial year ended March 31, 2011.
FINANCE
The Company had issued an aggregate of US$ 80.5 million Foreign
Currency Convertible Bonds (FCCBs) at a coupon rate of 1% in 2005. The
subscribers had an option to convert bonds into shares at a price based
on price mechanism determined in the offering documents and Bond could
be converted at a price of Rs 147.9533 per share equivalent to USD
3.2278 is exercisable between September 2006 to March 2011. At the
beginning of Financial year 2010-11, the outstanding FCCBs were USD
29.00 million. During the Financial year 2010-11, the Company had
repurchased (bought back) FCCBs aggregating to face value of USD 21.00
million and extinguished the same in line with the approval received
from Reserve Bank of India. Further, on March 18, 2011, the Company
had paid full and final outstanding amount in respect of the balance
Bond having face value of USD 8.00 million along with interest &
premium thereon before the maturity date of said Bond i.e. March 21,
2011. After said buy back and redemption, there is no outstanding of
FCCBs as on March 31, 2011.
During the financial year your Company has transferred to investors'
education and protection fund account (IEPF) a sum of Rs 31.80 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 0.27 lacs have been transferred to IEPF during the financial
year, which is included in Rs 31.80 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 à II forming
part of this report.
SUBSIDIARIES
The soda ash production of GHCL Upsom, Romania, a step down subsidiary
of the Company, was adversely affected due to outstanding issues with
gas supplier M/s Romgaz and accordingly the management had taken
decision to close down production. Romgaz (gas supplier to GHCL Upsom)
has initiated insolvency proceedings against GHCL Upsom, Romania.
Thereafter, your company had engaged Roland Berger, a consultant to
conduct study and submit its report about operational viability of GHCL
Upsom. Based on the Preliminary findings, Roland Berger has reported
that resumption of operations may not be viable without major
investments and incentives from the Romanian Government. Accordingly,
the Management is in dialogue with BCR Bank, Romgaz and the Romanian
Government to work out a re- organization plan of GHCL Upsom, if
feasible.
Rosebys Interiors India Limited (RIIL), a subsidiary, is engaged in the
business of Home and Life Style Retailing. RIIL's Retail Business Model
was franchisee based model driven by minimum guarantee to the
franchises and the same has not proved financially viable for the last
two years. RIIL is now in the process completely revamping its
business. Keeping in view of long term strategy, the Board of Directors
of GHCL in its meeting held on February 25, 2011 had given in-principle
approval for sale of its investment held in Rosebys Interiors India
Limited. Accordingly, a merchant banking firm has been engaged to
locate a suitable buyer to meet its objective.
The operations of Colwell & Salmon USA, subsidiary company engaged in
the IT outsourcing business, have been stopped as the same are not
viable. Also, another non operating subsidiary namely Fabient Global
Limited has been voluntarily wound up during the year by following the
process of Easy Exit Scheme 2011.
In accordance with the general circular issued by the Ministry of
Corporate Affairs, Government of India, on February 8, 2011, the
Balance Sheet, Profit and Loss Account and other documents of the
subsidiary companies are not being attached with the Balance Sheet of
the Company. As required under the said circular, the Board of
Directors of your Company at its meeting held on July 18, 2011 give its
consent for not attaching the Balance Sheet of its subsidiaries, as
they would be made available to its members at the Company's website.
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. 12 (refer page no. 43 of
Annual Report) and also under Statement u/s 212 of the Companies Act,
1956 (refer page no. 54 to page no. 56).
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, 2011.
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/FCCBs
The equity shares of your Company are listed at Bombay Stock Exchange
Limited (BSE) and The National Stock Exchange of India Limited (NSE)
and Ahmedabad Stock Exchange Limited, (ASE). The annual listing fees
for the year 2010-11 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. The Foreign Currency
Convertible Bonds (FCCBs) issued by the Company are bought back and/ or
filly paid and there is no outstanding FCCB in the books of the
Company.
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.
Shri Surendra Singh was appointed as Additional Directors with effect
from November 23, 2010. The Company has received notice u/s 257 of the
Companies Act, 1956 from shareholder signifying intention to propose at
the ensuing Annual General Meeting the candidature of Shri Surendra
Singh Director of the Company. The Board recommends his appointment at
the ensuing Annual General Meeting.
Mr. Naresh Chandra, Director resigned w.e.f November 3, 2010. Your
Directors wish to record their gratitude and appreciation for the
contribution by above director 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 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 2011-12.
AUDITORS' REPORT
The Auditors have qualified on certain matters and the same are
clarified in notes on accounts no. 2 and 31 which are forming part of
Balance Sheet as at March 31, 2011 and profit and Loss Accounts 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 Sect ion 217 (2AA) of the Companies Act, 19 56, 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, 2011 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, 2011 and of
the profits of the Company for the financial year ended March 31, 2011;
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, 2011
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, bondholders, customers, suppliers, lenders and
distributors 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
SANJAY DALMIA
Chairman
Date: July 18, 2011
Place: New Delhi
Mar 31, 2010
We are delighted to present the 27th Annual Report of the Company
together with Audited Accounts of the Company for the Financial Year
ended March 31, 2010.
OPERATIONAL RESULTS
The summary of the financial performance of the Company for the
Financial Year ended March 31, 2010 compared to the previous year ended
March 31, 2009 are given below:
(Rs in Lacs)
Particulars Year Ended Year Ended
March 31, March 31,
2010 2009
Net Sales/Income 122,546.09 124,697.05
Gross profit before interest and 30,320.37 28,486.65
depreciation
interest 10,544.94 9,000.42
Profit before depreciation 19,775.43 19,486.23
and amortisation
- (Cash Profit)
Depreciation / Amortisation 7,611.18 6,961.12
Profit before Tax 12,164.25 12,525.11
Provision for Taxation - Current 12.00 491.66
Provision for Taxation - Deferred (1,932.29) 1,480.44
Fringe Benefit Tax - 123.21
Profit after Tax 14,084.55 10,429.80
Balance brought forward from 28,431.11 32,389.73
last year
Balance brought forward from - (1,222.49)
amalgamating company
Prior period adjustments (11.29) 99.12
Excess provision for tax for 21.97 118.29
earlier years
Amount available for appropriation 42,526.33 41,814.45
Appropriations
Transfer to General Reserve 1408.45 1,042.98
Transfer to Genera) Reserve as per 15,000.00 10,000.00
Scheme of Arrangement
Proposed Dividend 2,000.39 2,000.39
Tax on Dividend 332.24 339.97
Balance carried to Balance Sheet 23785.25 28,431.11
PERFORMANCE HIGHLIGHTS
Soda Ash
The Global Soda Ash demand was 44 million tons in 2009-10 with a
capacity of 57 million tons. After growing at an average annual rate of
almost 5 percent per year since 2004, world soda ash demand fell by
about 9.5 percent in 2009. This represented a loss in volume of about
4.6 million metric tons compared to 2008. As a result of weak demand,
world soda ash operating rates averaged just 76 percent of capacity in
2009, probably the lowest rate the industry has ever seen. The USD12.50
billion global soda ash market is being affected by the recession and a
downturn in the demand for glass from the construction and automotive
sectors. Rapid growth in the developing economies is expected to return
but full recovery may take quite a few years. Notwithstanding the
continuing economic and energy problems in certain areas of the world,
over all global demand for soda ash is expected to grow from 1.5% to 2%
annually for the next several years.
The global meltdown had affected Indian Industry also and Soda Ash
demand growth in the year 2008 was flat. The strong rebound of the
Indian Economy was witnessed in Soda Ash also as demand growth
rebounded to a very healthy 9% in 2009. It is expected that on the back
of a strong growth in Glass (Construction/Automobiles) and Detergents
(FMCG penetration and growth), Soda Ash demand will continue to grow
at 5-6% in the current year. Import of Soda Ash from China, Europe,
Pakistan & other countries like Turkey are a major concern for Soda
Ash industry. The Finance Ministry of Government of India had imposed
Safeguard Duty on all Soda Ash Imports from China as part of its
efforts to maintain a healthy domestic Soda Ash industry in the Country.
While the imposition of Safeguard Duty has tempered Chinese Imports
to some extent, continued imports from other European producers where
domestic markets still remain weak remains a challenge.
Your company had successfully completed its soda ash expansion during
2007-08 which has resulted increase in production capacity up to 8.50
lacs MTPA in India and globally 11.5 lacs MTPA. The Companys domestic
production of Soda Ash for the year under review at 676079 tons, which
was 9.47% higher as compared to the previous year. The Company achieved
sales of Soda Ash 656684 tons during the year including exports, which
was 16.74% higher than the previous year.
Soda Ash prices have declined YOY Further, the increase in cost of
energy and other raw-materials have significantly affected the margin
of Soda Ash manufacturers. However, your company is better placed
because of its own captive lignite mines and in house developed
briquette usages as an alternative source of fuel, which is cost
effective and also reduced dependability on other source of energy.
Bi-Carbonate (BICARB)
During the year, the Company achieved production of Bi- Carbonate 20161
tons against 12659 tons in the previous year, which is higher by
59.26%. During the year the Company achieved sales of Bi-Carbonate
19648 tons against 12343 tons in the previous year, which is higher by
60.48%.
Home-Textiles
The timely providing of "Stimulus Package" by the Government of India
in 2009 to tide over Global Financial crisis has had a tremendous
catalyst effect in turning around Indian Textile Industry in 2009-10.
The Indian Textile industry, 2nd largest in the world, after
registering a decline in 2008-09, rebounded magnificently by recording
more than 8% growth in 2009-10. The exports also registered a growth
of around 5%.
For GHCLs Textile Business also, the year 2009-10 has been remarkable
in terms of overall performance and profitability of the company. Your
company, with its state-of-art textile facilities from spinning to
made-ups, has cautiously rationalised its customer base and
successfully made deep inroads with large Global Retailers for running
their replenishment programmes. Your company today boasts of a
customer base that comprises of Wal-Mart, K-Mart/Sears, Macys, Bed
Bath & Beyond, J C Penny and U.S. Polo in the USA and the likes of
House of Fraser, 3 Suisses and Galeries Lafayette in Europe.
Additionally, with other measures like excellent cotton coverage,
timely investment in value added segment like compact spinning, optimum
utilization of wind energy and power trading, your company has been
able to achieve significant improvement in profitability and
operational performance in its Textile Business as compared to previous
year.
The operating profit of the textile division stood at Rs. 18.07 Crore
for 2009-10 as against operating loss of Rs. (14.13) Crore in 2008-09,
which signified a huge improvement of Rs. 32.20 Crore in profitability
as compared to last year.
The Management is taking further initiatives in terms of adding more
capacities in value-add segment, Printing and Cut & Sew facility which
would have significant benefits in the coming years. Retial Initiative
Your companys retail initiative under Rosebys Interiors India Limited
(RIIL) is primarily focused on home and life style retailing. Rosebys
has recently signed an agreement with National Textile Corporation
(NTC) to run their stores. The first one is already operational in a
premium shopping area in New Delhi and the others will be rolled out at
different places during the year. Rosebys in joint association with
NTC has been awarded Home- ware category license to sell Common Wealth
Games, (CWG) 2010 propriety products across India. Rosebys in
partnership with NTC would shortly launch a "Brand" to expand its Home-
Textiles Retail Business. DIVIDEND
Your Directors are pleased to recommend a dividend of Rs. 2.00 per
Equity Share for the financial year ended March 31, 2010. FINANCE
The Company had issued an aggregate of US$ 80.5 million Foreign
Currency Convertible Bonds (FCCBs) at a coupon rate of 1% in 2005. Out
of which USD 1.5 million FCCBs were converted into equity shares in the
financial year 2007-08. During the previous financial year ended on
March 31, 2009, pursuant to circular issued by RBI vide AP(DIR Series)
Circular No 39 dated December 8, 2008 and in line with the approval
obtained from RBI, your Company had bought back USD 11.00 million of
FCCBs at discount and extinguished the same. The total outstanding of
FCCB as on March 31, 2009 was USD 68.00 million. At the beginning of
financial year 2009-10, the outstanding FCCBs were USD 68.00 million.
During the Financial year 2009-10, the Company had repurchased (bought
back) FCCBs aggregating to face value of USD 39.00 million at discount
and extinguished the same in line with the approval received from
Reserve Bank of India. After said buy back, the outstanding FCCBs were
USD 29.00 million at the close of Financial Year 2009-10 i.e. March 31,
2010.
Subsequent to the year end, buy back process of FCCBs is still going on
pursuant to specific approval of the Reserve Bank of India and the
Company had bought back FCCBs aggregating to face value of USD 7.25
million at discount and extinguished the same. After said buy back, the
outstanding FCCBs is USD 21.75 million as on June 30, 2010.
During the financial year your Company has transferred to investors
education and protection fund account (IEPF) a sum of Rs. 31.64 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. 1.96 lacs have been transferred to IEPF during the financial
year, which is included in Rs. 31.64 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
During the financial year, your company has incorporated a company in
Cyprus with the name and style of Teliforce Holding India Limited, as a
wholly owned subsidiary on February 26, 2010. During the previous year
Rosebys group of companies in UK, the step down subsidiaries of the
Company went into pre - pack administration and the company had
acquired the brand "Rosebys" including all Intellectual Property Rights
and Trademarks through a wholly owned subsidiary of the company Rosebys
UK Limited. The Chapter 7 proceedings related to Dan River Inc USA is
still pending.
Soda Ash production of GHCL Upsom, Romania, a step down subsidiary of
the Company, is adversely affected due to outstanding issues with gas
suppliers M/s Romgaz and adverse weather conditions resulting in damage
to plant & equipment. Further, the Board of GHCL Upsom has decided to
send notice for collective dismissal of its employees retaining around
80 critical employees to ensure the safety and security of the plant
and to carry out essential repairs and maintenance to restart the plant
shortly. The Board of Upsom is in continuous dialogue with Romgaz and
Government Authorities. Details regarding subsidiaries have been
provided in note no. 1(c) to 1 (g) of Consolidated Accounts of the
Company and also under Statement u/s 212 of the Companies Act, 1956.
Ministry of Corporate Affairs, Government of India, vide order No.
47/508/2010-CL-III dated June 4, 2010 has granted approval that the
requirement to attach various documents in respect of subsidiary
companies, as set out in sub-section (1) of Section 212 of the
Companies Act, 1956, shall not apply to the Company. Accordingly, the
Balance Sheet, Profit and Loss Account and other documents of the
subsidiary companies are not being attached with the Annual Report of
the Company. Financial information of the subsidiary companies, as
required by the said order, is disclosed in the Annual Report.
Shareholders who wish to have a copy of the full report and accounts of
the subsidiaries will be provided the same on receipt of a written
request from them at the Registered Office of the Company. These
documents will also be available for inspection by any shareholder 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.
AWARDS AND RECOGNITIONS
Your directors are pleased to inform you that GHCL Limited achieved a
milestone because GHCL Sutrapada plant has been awarded "Darbari Seth
Award for Best Managed Plant in Soda Ash Industry - 2009" by Alkali
Manufacturers Association of India.
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, 2010.
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 Managements Discussion
and Analysis which forms part of this report. The report on
Managements Discussion and Analysis is annexed with this 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 Auditors certificate for the
compliance.
LISTING/DELISTING OF THE EQUITY SHARES/FCCBs
The equity shares of your Company are feted at Bombay Stock Exchange
Limited (BSE) and The National Stock Exchange of India Limited (NSE)
and Ahmedabad Stock Exchange Limited, (ASE). The annual listing fees
for the year 2009-10 have been paid to all these Stock Exchanges. The
application for voluntarily delisting of Companys 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. The Foreign Currency Convertible
Bonds (FCCBs) issued by the Company are listed on the Singapore Stock
Exchange.
DIRECTORS
Mr. S. H. Ruparell, Dr. B. C. Jain, Mr. G. C. Srivastava and Mr. Raman
Chopra, Directors retire by rotation and being eligible, offer
themselves for re-appointment. The Board recommends their appointments
at the ensuing Annual General Meeting.
Mr. Tej Malhotra, Sr. Director (Operations) was re-appointed as Whole
Time Director for a period of two years with effect from May 5, 2010
subject to the approval of the shareholders. The Board recommends their
appointments at the ensuing Annual General Meeting.
The Board of Directors had appointed Mr. Vijay Kumar as an Alternate
Director to Mr. S. H. Ruparell w.e.f July 18, 2009. However, by virtue
of operation of Section 313(2) of the Companies Act, 1956, the position
of alternate director has vacated with effect from April 26, 2010. Your
Directors wish to record their gratitude and appreciation for the
contribution made by Mr. Vijay Kumar 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 are set out in Annexure to this Report and forms part of
the Report. However, as per the provisions of Section 219 (1)(b) (iv)
of the Companies Act, 1956, the Report and the accounts are being sent
to the shareholders of the Company excluding the aforesaid information.
Any shareholder 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 à 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, Yam division (Madurai) and Home Textile division
(Vapi) of the Company respectively under Section 233B of the Companies
Act, 1956 for the financial year 2010-11. AUDITORS OBSERVATION
The Auditors have qualified on certain matters and the same are
clarified in notes on accounts no. 2,4 and 35 which are forming
part of Balance Sheet as at March 31, 2010 and profit and Loss
Accounts 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, 2010 the applicable accounting standards have been
followed and there has been no material departure;
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, 2010 and of
the profits of the Company for the financial year ended March 31, 2010;
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, 2010
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, bondholders, customers, suppliers, lenders and
distributors 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: July 29, 2010 SANJAY DALMIA
Place: New Delhi Chairman