GHCL Ltd Directors Report.

To the Members of GHCL Limited,

Your directors take pleasure in presenting the 3rd Integrated Report, prepared as per the framework set forth by the international Integrated Reporting Council, and the 38th 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, 2021. The economic contraction in first half of FY 2020-21 was very challenging due to Covid - 19 lockdown; however, business activities returned to normalcy due to its zeal and commitment. The Company has witnessed gradual recovery in the domestic demand back to pre-COVID level in all the business segments. The financial highlights of the Company for FY 2020-21 are given below:

A: Financial Results

Standalone

Consolidated

Particulars Year ended March 31, 2021 Year ended March 31, 2020 Year ended March 31, 2021 Year ended March 31, 2020
Net Sales /Income 2,849.71 3,272.44 2,927.12 3,322.72
Gross profit before interest and depreciation 645.80 753.16 663.16 745.60
Finance Cost 90.21 118.18 91.18 119.79
Profit before depreciation and amortisation - (Cash Profit) 555.59 634.98 571.98 625.81
Depreciation and Amortisation 133.19 130.51 133.41 131.21
PBT before exceptional items 422.40 504.47 438.57 494.60
Profit before Tax (PBT) 422.40 504.47 438.57 494.60
Provision for Tax - Current 105.86 143.38 105.89 143.39
Tax adjustment for earlier years -0.93 -2.48 -0.93 -2.48
Provision for Tax - Deferred 7.49 -42.93 7.49 -42.93
Profit after Tax 309.98 406.50 326.12 396.62
Other comprehensive income (OCI) 4.73 -5.53 7.60 -5.79
Total Comprehensive income for the period 314.71 400.97 333.72 390.83
Balance brought forward from last year 1,971.08 1,672.61 1,937.83 1,649.25
Appropriations
FVTOCI Reserve 5.95 -3.44 -5.95 -3.44
Final Dividend 0.00 77.52 0.00 77.52
Tax on Dividend and Tax paid on Buy back of share 0.00 28.42 0.00 28.42
Balance carried to Balance Sheet 2,279.83 1,971.08 2,262.73 1,937.83

1. Dividend Distribution Policy

In terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosures Requirements) Regulations, 2015 ("Listing Regulations") the Board of Directors of the Company has formulated and adopted the Dividend Distribution Policy (DDP). As per the DDP, the Boards 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 annexed to this report as Annexure I and is also available on the Companys 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 exceed 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 specified u/s 10(23D) of Income Tax Act.

Moreover, as per section 195 of the Act TDS is required to deduct @ 20% plus surcharge on payment of Dividend to Non Resident.

2. Dividend

Your Directors are pleased to inform that your Company has a consistent track-record of dividend payment for last 27 years. The Board of Directors in its meeting held on May 19, 2016, had approved a Dividend Distribution 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.

In line with the Dividend Distribution Policy, the Board of Directors of the Company (the Board) has recommended a dividend of Rs. 5.50 per fully paid up equity share on 9,50,13,286 equity shares of face value Rs. 10 each for the year ended March 31, 2021 (Previous year Rs. 3.00 per equity share as an Interim Dividend).

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 Saturday, June 19, 2021. The dividend once approved by Shareholders will be paid on and from Wednesday June 23, 2021. The total dividend payout for the financial year 2020-21 shall be approx. Rs. 52.26 crores.

The Register of Members and Share Transfer Books of the Company will remain closed from June 13, 2021 to June 19, 2021 (both days inclusive) for the purpose of payment of dividend for the financial year ended March 31, 2021 and the Annual General Meeting.

3. Transfer to Reserves:

The Board of Directors has decided to retain the entire amount of profits in the profit and loss account.

4. Share Capital

The paid up Equity Share Capital of the Company as on March 31, 2021 is Rs. 95,01,32,860/- comprising of 9,50,13,286 equity shares of Rs. 10/- each. We would like to inform to our shareholders that there is no change in the paid up equity capital of the Company during FY 2020-21.

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.

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 II 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) and completed documentation formalities with participation from State Bank of India, Bank of Baroda, Union Bank of India, IDBI Bank Ltd, HDFC Bank Ltd and Axis Bank Limited. During the year, your company also arranged / renewed unsecured working capital facilities of Rs. 140 Crores (both fund based and non fund based limit) from HDFC Bank Ltd., IDFC First Bank Ltd. and Bank of Bahrain and Kuwait.

Long Term

Since your company has maintained excellent relationship with the lenders and also taking into consideration of timely repayment of principal and interest, your company approached various lenders of Long Term loans and requested for reduction in interest rate by 1%.

Accordingly, lenders have reduced the interest rate from 8.75% to 7.70% resulted interest cost reduction by approx. Rs. 9 Crs (Long Term).

The details of rate of interest are as under:

Borrowing Outstanding as on 31.03.2021 (Rs. in Crs) ROI P.A.
Long Term Borrowing 726.75 7.70%
Short Term Borrowing 161.85 1.77%
(including Suppliers
Credit)*
Total Borrowing 888.60 6.62%

* Without considering forward premium.

6.2. Reaffirmation of Credit Rating

(i) Due to timely repayment of interest and principal to lenders, CARE (Credit Analysis & Research Ltd) has reaffirmed rating of CARE A+ with Stable Outlook for Long Term facilities and CARE A1+ with Stable Outlook for short term facilities of the Company.

(ii) 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 A+ (Highest)

(iii) India Rating has also affirmed Issuer Rating as A+ with outlook revised from Stable to Positive.

6.3. Investors Education and Protection Fund

During the financial year, your Company has transferred to investors education and protection fund account (IEPF) a sum of Rs. 41.37 lacs towards unclaimed dividend.

7. 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 Managements 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 business model.

C. Performance Highlights and State of Companys Affairs

The detail of business performance and state of companys affairs are given in MDA (from Page No. 155 to Page No. 161) and Integrated Report (from Page No. 1 to Page No. 81).

COVID -19 pandemic has affected operations of the company and management took all possible steps to safeguard the health and safety of its employees and other stakeholders. The detailed write up on the Covid -19 and steps taken by the company is given in its integrated report on page no 6 to 9

1. Demerger of the Textiles Business of the Company

The Board of Directors of the company in their meeting held on March 16, 2020, had approved the Scheme of Arrangement between GHCL Limited (Demerged Company or GHCL) and GHCL Textiles Limited (Resulting Company) and their respective shareholders and creditors pursuant to the provisions of Sections 230 to 232 of the Companies Act, 2013 and other applicable provisions thereof, in respect of demerger of the Textiles Business of GHCL Limited into its wholly owned subsidiary, GHCL Textiles Limited (Resulting Company). As per the Scheme, the equity shares held by GHCL Limited in GHCL Textiles Limited shall be cancelled. Further, the Resulting Companys 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.

Pursuant to the Order dated January 22, 2021 passed by the Honble National Company Law Tribunal (NCLT), Ahmedabad Bench, and in terms of Sections 230 to 232 of the Companies Act, 2013 read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, the Members and the Unsecured Creditors of the Company at their separate meetings held on April 8, 2021 approved the Scheme by the requisite majority.

However, in the Secured Creditors meeting held on April 8, 2021, based on the request received from State Bank of India (lead banker), the proposal was placed for adjournment of the Secured Creditors Meeting for a period of three months, due to the reason that member banks in consortium are required to scrutinize the data/report received by them and obtain approval from competent authorities of the respective banks.

Keeping in view of the adjournment request from the Lead bankers, and pursuant to power conferred on the chairman of the meeting in paragraph no. 14(xii) of the order dated 22.01.2021 passed in CA (CAA) 1 of 2021 by Honble NCLT, Mr. Jaimin Dave, the Chairman of the Meeting of Secured Creditors, accepted the adjournment request of the Lead bankers. Accordingly, Mr. Jaimin Dave announced in the meeting of secured creditors that adjourned meeting of the Secured Creditors shall be held on Thursday, July 8, 2021 at 11.30 a.m. and requested the Company Secretary to issue fresh notice for the meeting of the Secured Creditors. On April 16, 2021, the Company has completed dispatch of the Notice of the adjourned meeting of secured creditors scheduled to be held on July 8, 2021.

Hence, the Company has not filed second motion application before NCLT, Ahmedabad Bench as Secured Creditors Meeting is yet to be held. It is important to note that the Scheme shall become effective upon filing of the certified copy of the Order of NCLT sanctioning the Scheme with the Registrar of Companies.

2. Awards and Recognition:

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 2020-21. The details of the awards and recognition are given in the Integrated Report.

3. Subsidiaries:

Grace Home Fashion, LLC, a subsidiary of the Company in USA engaged in Home Textile segment. It caters to some of the major Home Textile retailers like Bed Bath & Beyond, Dillards, TJ Max group, Burlington, Macys, Amazon, Walmart, Kohls, Overstock and various other retailers. 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 has been 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 during the financial year ended on 31st March 2021 due to pendency of Scheme. As per the Scheme, the equity shares held by GHCL Limited in GHCL Textiles Limited shall be cancelled. Further, the Resulting Companys shareholding pattern will be the mirror image of the shareholding pattern of the Demerged Company post Scheme. Also, shares of the Resulting Company shall be listed on the Stock Exchanges.

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. 47 (refer page no. 390 of Annual Report) and also in the statement u/s 129(3) of the Companies Act, 2013 (refer page no. 297). The statements are also available on the website of the Company www.ghc1.co.in

4. 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, 2021.

5. Corporate Governance:

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.

6. Board Meetings:

The Board meetings of your company are planned in advance in consultation with the Board Members. During the financial year ended March 31, 2021, the Board of Directors met four times to review strategic, operational and financial performance of the company. The details of the boards 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.

7. Directors:

Your directors are pleased to inform that Mr. Sanjay Dalmia, Non-Executive Chairman of the Board and Mr. Ravi Shanker Jalan, Managing Director of the company are directors retiring by rotation and being eligible, offer themselves for re-appointment. 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 influence" 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 companies" 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.

8. Key Managerial Personnel:

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. General Manager - Sustainability & Company Secretary. During the year, there has been no change in the Key Managerial Personnel.

9. Familiarization program for Independent Directors:

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 Companys business operations. The new IDs are given an orientation on Companys product, corporate structure and subsidiaries, Board constitution and procedures, matters reserved for the Board, role responsibilities, code of conduct of IDs and measure risk and risk management strategy. 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. Details of the same are given in Corporate Governance section of the Annual Report.

10. 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 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 28, 2021.

A separate meeting of Independent Directors was held on January 15, 2021, 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 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 Boards 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.

11. Nomination and Remuneration Policy

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 Companys 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 companys 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 annexed to this report as Annexure III and is available on website www.ghcl.co.in of the company.

12. Managerial Remuneration & Particulars of employees:

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 IV.

13. Secretarial Audit Report

Section 204 of the Companies Act, 2013 inter-alia requires every listed company to undertake Secretarial Audit and shall annex with its Boards Report a Secretarial Audit Report given by a Company Secretary in practice, in the prescribed form.

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 Mr. S Chandrasekaran, representing Chandrasekaran & Associates, Practicing Company Secretaries, New Delhi, to conduct Secretarial Audit of the Company for the financial year 2020-21.

The Secretarial Audit Report for the financial year ended March 31, 2021 are annexed with the Boards report and formed as part of the Annual Report. This report is unqualified and self-explanatory and does not call for any further comments.

14. Listing of the Equity Shares

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 2020-21 have been paid to all these Stock Exchanges.

15. Web address for annual return and other policies / documents

As required under Section 134(3)(a) of the Companies Act, 2013, the Annual Return is put up on the Companys 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 Companys website www.ghcl.co.in as per the statutory requirement.

16. Extracts of Annual Return

The extract of annual return as on the financial year ended March 31, 2021 in Form MGT - 9 is annexed herewith as Annexure-V and forming part of this Report.

17. 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. GHCLs 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.

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. 9.03 Crs. against statutory minimum of Rs. 9.74 Crs. (i.e. 2.00% of the average net profits of last three financial years) on CSR activities, whereas CSR budget for 2020-21 was Rs. 9.80 Cr. Accordingly, your Company shall deposit H 0.77 Crs. in a separate bank account opened in compliance of Section 135 of the Companies Act, 2013 and the same shall be used for the planned CSR activities.

The Annual Report on CSR activities, in terms of Section 135 of the Companies Act, 2013 is annexed to this Report as Annexure VI.

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, comprising of Mr. Anurag Dalmia as the Chairman of the Committee and Mrs. Vijaylaxmi Joshi, Mr. Neelabh Dalmia, Mr. R S Jalan and Mr. Raman Chopra as members of the Committee. Mr. Bhuwneshwar Mishra, Sr. General Manager - Sustainability & Company Secretary is the secretary of the CSR committee.

18. Business Responsibility Report

The Securities and Exchange Board of India (SEBI) under Regulation 34(2)(f) of Listing Regulations, 2015 read with National Guidelines on Responsible Business Conduct issued by Ministry of Corporate Affairs Government of India on March 13, 2019, requires top one thousand listed companies to prepare and present a Business Responsibility Report (BRR) to its stakeholders in the prescribed format describing the initiatives taken by the Company on Environmental, Social and Governance perspective. As on March 31, 2021, GHCL Limited is mentioned on 548th position on the basis of capitalization at NSE and on 566th position at BSE.

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 companys 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 Report 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.

19. 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 primary objective of the audit committee is to monitor and provide effective supervision of the Managements financial reporting process, with the highest levels of transparency, integrity and quality of financial reporting.

The Committee met four times during the year, the details of which are given in the Corporate Governance Report. As on date of this report, the committee comprises of Dr. Manoj Vaish as Chairman of the Committee and Mrs. Vijayiaxmi Joshi IAS, Mr. Arun Kumar Jain, IRS and Justice Ravindra Singh as members of the Committee, who are experts in finance, accounts, strategy, tax, law and general administration.

20. 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. Arun Kumar Jain, IRS as Chairman of the Committee and Justice Ravindra Singh, Mr. R S Jaian, Mr. Raman Chopra and Mr. Neeiabh Daimia as members of the Committee. The Committee details are given in the Corporate Governance Report.

21. 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 Mrs. Vijayiaxmi Joshi, IAS as Chairperson of the Committee, Mr. Sanjay Daimia, Justice Ravindra Singh and Dr. Manoj Vaish as members of the Committee. The Committee details are given in the Corporate Governance Report.

22. 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 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 GHCLs 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.ghci.co.in . During the year, the Company received one complaint under Vigii Mechanism against an employee of yarn division of the Company. The Whistle Blower Committee was formed to conduct the investigation. The said committee conducted details investigation and had one to one discussion with the complainant and the defendant along with such other employees who were reasonably be expected to provide information about the complaint. The committee did not find any merit in the complaint and disposed the matter. The copy of the investigation report was provided to the complainant. The complainant was also advised that the appeal against the finding of the committee couid be filed before the Chairman of the Audit committee.

During the reporting year, your company has successfully launched online platform for reporting grievances under vigii mechanism.

23. 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 Committee. Prior omnibus approval of the Audit Committee is obtained for related party transactions which are of repetitive nature and entered in the ordinary course of business and on an arms length basis. 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 website of the Company www. ghcl.co.in. None of the Directors has any material pecuniary relationships or transactions vis-a-vis the Company.

24. 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.

25. Risk Management

Risk Management Committee has been constituted as per the requirement of Regulation 21 of the Listing Regulations. The Risk Management Committee consists of four Executive and Non-Executive directors comprising of Mr. Arun Kumar Jain, IRS as Chairman of the Committee and Mr. R S Jalan, Mr. Raman Chopra and Mr. Neelabh Dalmia, as members of the Committee. The details of Committee and other details are also set out in the Corporate Governance Report forming part of the Boards Report. The policy on Risk Management as approved by the Board is uploaded on the Companys 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 Management Committee provide guidance for implementing the risk management policy across the organisation. The operation heads of each business units are primarily responsible for implementing the risk management policy of the company and achieving the stated objective of developing a risk intelligent culture that helps to improve the companys 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.

26. 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 -VII forming part of this Report.

27. 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 Act") 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.

During the year, the Company received one complaint under POSH against an employee of the Company. The Internal Committee was constituted with majority being women and independent lady member and did detailed investigation. The committee concluded that there was no merit into the complaint with respect to sexual harassment at workplace is concerned; however, it was found that the respondent was tough and demanding with his team members due to implementation of project in a scheduled period.

28. 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 consecutive years i.e. from the conclusion 33rd AGM till the conclusion of 38th AGM.

Hence, in line with the requirement of Section 139 and Section 142 of the Companies Act, 2013 read with rules made thereunder and 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 re-appointment of M/s S. R. Batliboi & Co. LLP, Chartered Accountants (Firm Reg. No. 30100CE / E300005), as the auditors of the Company, for a period of five years i.e. from the conclusion 38th Annual General Meeting (AGM) till the conclusion of 43rd 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 directors would like to inform that re-appointment of Auditors shall be for a period of five years with initial annual remuneration of Rs. 1.20 Crs. plus applicable taxes and the increment of Auditors remuneration shall be in line with the Companys policy and also as per directions of Audit Committee / Board in line with the overall approval given by members of the Company. The Board recommends re-appointment of the Auditors.

M/s S. R. Batliboi & Co. LLP has audited the books of accounts of the Company for the financial year ended March 31, 2021 and has issued the Auditors Report thereon. There are no qualifications or reservations on adverse remarks or disclaimers in the said report.

29. Auditors 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, 2021. Hence, they do not call for any further explanation or comment u/s 134 (3) (f) of the Companies Act, 2013.

30. Cost Auditors

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 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 and Home Textile) for the financial year ending March 31, 2022.

31. Directors Responsibility Statement

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 Committee, the Board is of the opinion that the Companys internal financial controls were adequate and effective during financial year 2020-21. 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, 2021, 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, 2021 and of the profit and loss of the Company for the financial year ended March 31, 2021;

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, 2021 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.

32. General Disclosures

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:

(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 Companys operations in future.

(vi) No fraud has been reported by the Auditors to the Audit Committee or the Board.

(vii) There is no Corporate Insolvency Resolution Process initiated under the Insolvency and Bankruptcy Code, 2016.

33. Acknowledgement

The directors express their gratitude to customers, vendors, dealers, investors, business associates and bankers for their continued support during the year. We place on record our 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.

We thank the Government of India, the State Governments and 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 28, 2021 Chairman
Place: Noida DIN: 00206992