ghcl ltd Management discussions

DISCLAIMER:

Readers are cautioned that this Management Discussion and Analysis contains forward-looking statements that involve risks and uncertainties. When used in this discussion, the words "anticipate", "believe", "estimate", "intend", "will", and "expected" and other similar expressions as they relate to the Company or its business are intended to identify such forward looking statements, whether as a result of new information, future events, or otherwise. Actual results, performances or achievements and risks and opportunities could differ materially from those expressed or implied in such forward-looking statements. The important factors that would make a difference to the Companys operations include economic conditions affecting demand supply and price conditions in the domestic and overseas markets, raw material prices, changes in the Governmental regulations, labour negotiations, tax laws and other statutes, economic development within India and the countries within which the Company conducts business and incidental factors. The Company undertakes no obligation to publicly amend, modify or revise any forward-looking statements on the basis, of any subsequent developments, information or events. This report is prepared on the basis of public information available on website / report / articles etc. of various institutions. The following discussion and analysis should be read in conjunction with the Companys financial statements included herein and the notes thereto.

MANAGEMENT DISCUSSION AND ANALYSIS

The management of GHCL Limited has provided an analysis of the companys division-wise performance and key business updates for the financial year ended on March 31, 2023, as well as an outlook for the future. The outlook is based on an analysis of the current economic landscape, although it may be impacted by socio-economic and political change due to future economic and related developments, both in India and internationally.

DEMERGER OF TEXTILES BUSINESS TO GHCL TEXTILES LIMITED.

With a view to enable the Company to focus on its chemicals business, the Board of Directors of the company at its meeting held on December 6, 2021 had approved the scheme of demerger of the Textiles business (spinning division) to a new company GHCL Textiles Ltd with a mirror shareholding. The objective of this demerger is to create value for all stakeholders of GHCL Ltd.

The demerger will enable the company to focus on its different businesses i.e. Chemical and Spinning separately based on their unique core competencies. The Chemical business is highly capital driven with long gestation period while the Textiles business, on the other hand, is more dynamic and volatile, which require different skill sets and capabilities. Management believes that the risk and reward associated with each of the aforesaid business verticals are different and are at different maturity stage in their life cycles. Each business verticals have a distinct attractiveness to divergent set of investors. With a view to unlock the potential of each of the business verticals, the Spinning Division has been demerged, into GHCL Textiles Limited.

Scheme Implementation update

During the course of the financial year ended March 31, 2023 GHCL Ltd obtained all requisite approvals including:

• The Equity Shareholders and Creditors of the Company approved the resolution with requisite majority (approx 100% in favour); in August 2022.

• Honble National Company Law Tribunal, Ahmedabad Bench ("Honble NCLT") approval order on February 8, 2023 and which was received by company of March 14, 2023 With effect from April 1, 2023, GHCL Ltd has demerged its Textiles business to GHCL Textiles Ltd

• Shareholders of GHCL Limited has been allotted shares in GHCL Textiles Limited; one share of Rs. 2 each for every share of Rs.10 each held in GHCL Limited

• Record date for allotment of shares in GHCL Textiles Limited was set as April 8, 2023 and shares were allotted on April 12, 2023.

• All assets and liabilities of the spinning business has been taken over by GHCL Textiles Ltd.

• The reorganization has been completed now in all respects and there are two separate legal entities viz GHCL Limited (Chemical Business) and GHCL Textiles Limited (Textiles Business)

• Shares of GHCL Textiles Limited are in process of Listing at BSE and NSE

REVIEW OF ECONOMY

Overview of Global Economy

The recent reopening of economies has fueled a faster-than-anticipated recovery. Global growth is forecast to change from 3.2 percent in 2022 and 2.7 percent in 2023. However, economic activity continues to be affected by the increase in interest rates aimed at combating inflation and financial market turbulence. The rapid spread of the COVIDf19 pandemic in China also impeded growth in 2022. Furthermore, Russias military intervention in Ukraine caused extensive damage to physical infrastructure and led to the displacement of over a million people. Accordingly, the strength of this projected recovery will vary across countries, depending on the severity of the pandemic, the extent of domestic disruptions, and the effectiveness of government policy support to stabilize their economies. Global inflation is expected to decline from 8.8 percent in 2022 to 6.6 percent in 2023 and further to 4.3 percent in 2024.

For advanced economies, the International Monetary Fund (IMF) has projected the growth rate to change from 2.7 percent in 2022 to 1.2 percent in 2023 before rising to 1.4 percent in 2024. The vast majority of advanced economies are expected to witness a contraction in their growth in the next year. On the other hand, emerging market and developing economies are projected to experience modest growth, from 3.9 percent in 2022 to 4.0 percent in 2023 and 4.2 percent in 2024, with an upward revision of 0.3 percentage point for 2023 and a downward revision of 0.1 percentage point for 2024. About half of emerging market and developing economies have lower growth in 2023 than in 2022.

The priority in most economies is to strive for sustained disinflation amid the cost-of-living crisis. This will pave the way for a more stable and prosperous global economy in the years to come.

Overview of Indian Economy

Indias economy has experienced a significant surge over the past nine years, elevating it from the 10th to the 5th position in the global rankings, thereby establishing its position as a major economic powerhouse on the world stage. For FY 2022-23, Standard & Poors credit rating for India stood at BBB(-) with a stable outlook, Moodys credit rating stood at Baa3 with a stable outlook, Fitchs credit rating was reported at BBB(-) with a negative outlook. In FY22, Indias nominal gross domestic product (GDP) at current prices was estimated at Rs. 232.15 trillion (US$ 3.12 trillion). Notably, India is home to over 100 unicorns valued at US$ 332.7 billion, making it the third-largest unicorn base globally.

While advising India, the World Bank has emphasized the need to prioritize reducing inequality while implementing growth-oriented policies to further strengthen the economy.

Indias economy primarily thrives on domestic demand, with consumption and investments accounting for 70% of economic activity. The Union Governments financial performance in the fiscal year 2022-23 has remained strong due to the revival of economic activity, an increase in gross tax revenues from direct taxes and Goods & Services Tax (GST), and realistic assumptions in the Budget. As the economy recovers from the Covid-19 pandemic, investments have been made across various sectors, boosted by government PLI schemes. The Union Government has maintained its focus on capital expenditure (Capex) during the year. The Centre has also incentivized the State Governments through interest-free loans and enhanced borrowing ceilings to prioritize their spending on Capex. Indias services exports have remained resilient during the Covid-19 pandemic and amid geopolitical uncertainties driven by higher demand for digital support. Despite external headwinds, the International Monetary Fund (IMF) has projected Indias growth at 6.1% for FY 2022-23 and 6.8% for FY 2023f24 in its January 2022 update of the World Economic Outlook. Indias domestic demand has been a key factor contributing to its resilience. The Economic Survey 2022-23, presented by the Honble Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman, forecasts Indias GDP growth to remain robust in FY24, expected to be in the range of 6.0f6.8%. This growth is anticipated to create new business opportunities. The Union Budget 2023f24 builds on the vision set out in previous budgets and provides a blueprint for steering the economy towards sustained high-growth. The budget allocates increased capital spending on infrastructure and asset-building projects, which is expected to generate positive growth multipliers in the medium term. According to Mr. Piyush Goyal, Honble Minister of Commerce and Industry, Consumer Affairs, Food, and Public Distribution and Textiles, Indian exports are expected to reach US$ 1 trillion by 2030. The government is prioritizing the adoption of renewable sources for energy generation and has set a target of achieving 40% of its total energy requirements from non-fossil fuel sources by 2030.

GLOBAL SODA ASH INDUSTRY

DEMANDfSUPPLY SCENARIO

Global soda ash demand has historically recorded 2.5f4.0% on-year growth basis. Soda Ash demand grew 3.1 percent during 2010f2015, while the overall demand growth has been put on hold during Covid-19, despite the impact of Covid-19 the soda ash demand reported a CAGR of 1.8 percent during 2015f22 but, if we exclude the Covid-19 period impact the demand of soda ash has registered a CAGR of 3.3 percent during the 2015f2022 period. Industrys major demand driver are growing applications with rising disposable income, increasing per capita consumption in various emerging economies and strong demand from the emerging ESG-driven applications which can enable exponential growth for soda ash such as solar glass, lithium carbonate, and flue gas treatment.

Global soda ash market is estimated to be 63.2 million metric tonnes (MMT) in 2022, with a projected CAGR of around 3.0-3.3 percent between 2022 and 2030. Every year, the end-user industry will require an additional 2f2.5 MMT of soda ash. As per estimates the ESG driven applications will be the key catalyst for demand growth and their current share of 7% in total soda ash demand is expected to reach 15% by 2030. The world estimated distribution of soda ash by end use for 2022 and 2030 is as under:

End Use	2022	2030
Traditional Segments:
Glass (excluding solar glass)	54%	49%
Detergent and Soap formulations	11%	10%
Chemical	15%	14%
Others (metal, mining, pulp and paper etc.)	13%	11%
ESG based applications:
Solar Glass, Lithium Carbonate, Flue Gas Treatment	7%	15%

Current global capacity of soda ash is 71 MMT, which is expected to reach 88 MMT by 2030. Currently manufacturing capacities of soda ash are highly concentrated in China, the United States (US), Turkey, and Western Europe. Globally, ~17 MMT of additional soda ash capacity is planned by 2030 in both the soda ash categories are natural and synthetic. China will add 7.5 MMT of natural soda ash in inner part of Mongolia and US is also expected to add 5 MMT of natural Soda ash capacity in stages. A small chunk of capacity expansion is also being planned by various players in Turkey and the Indian subcontinent also. Despite the announced capacity expansions of 17 MMT till 2030 there will be shortfall of 4 MMT based on growing demand trends enabling the room for industry to set up the new soda ash facilities.

Region wise demand supply scenario

China. China is the largest producer and consumer of Soda ash in the world and its consumption stood at approximately

29 MMT in 2022, accounting for 46% of total soda ash demand in 2022. The demand for soda ash in China has been growing rapidly due to the countrys growing economy, rising end use industry demand, and increasing industrialization. The demand for soda ash in the glass industry have reported a strong growth, driven by the growth of the construction and automotive industries. In addition, the increasing demand for environmentally friendly products has led to a rise in the use of soda ash as a substitute for other chemicals in the production of detergents and other cleaning products. China being the significant player in Electronic vehicles, Lithium batteries and solar glass has huge impetus for soda ash demand growth going forward and the discovery of soda ash reserves in Inner Mongolia represents will be key catalyst in serving this enhanced demand. US. Soda ash consumption in America stood at approximately

12 MMT in 2022. The US is one of the largest exporters of soda ash globally, driven by large production capacity. The country exports around half of its domestic production to other countries, especially neighboring countries like Canada, Mexico, Brazil and Argentina. Domestically, soda ash is used in various end-use sectors like the chemical, automotive and water treatment industries. Growing applications of soda ash in the glass industry represent one of the major growth drivers. Besides this, due to the implementation of stringent regulations by the government regarding industrial water, soda ash is utilized in wastewater treatment to improve the alkalinity of lakes and control the pH of water. Countries in South America such as Argentina, Chile and Bolivia have significant reserves of lithium, which has attracted investment from companies in the lithium industry. The growing demand for lithium carbonate in recent years due to the growing demand for electric vehicles, solar energy, and consumer electronics globally. This has, in turn, led to a growing demand for soda ash, which is used as a raw material in the production of lithium carbonate. EU. Soda Ash production is disrupted by high Natural gas prices due to Russian and Ukrainian conflicts and sanctions on Russian supplies and also imposing of carbon surcharge after December 2022. Europes soda ash consumption was 11.3 MMT in 2022. The European soda ash market is primarily driven by a significant rise in glass production due to the increasing construction activities and growing automobile sales across the region. Countries in Western Europe, such as Belgium, France, Germany, Italy, Spain, and the United Kingdom (UK), are some of the largest net importers of soda ash. Soda ash is also used in the wastewater treatment industry due to stringent regulations by the European Union and rising awareness regarding the depletion of natural resources. Moreover, one of the significant players in the region, is expected to increase its output of soda ash by 500,000 tonne/year, primarily across Italy, Bulgaria, and Spain by debottlenecking. Such capacity expansions are anticipated to catalyse the growth of the soda ash market in Europe.

INDIAN SODA ASH INDUSTRY

India is one of the fastest-growing economies in the world. It is expected to be the worlds third-largest consumer of soda ash. Historically, the India soda ash industry reported strong on-year growth of 4.5 percent. Average growth was 3.8 percent during 2015f2022, including the pandemic period. Excluding the pandemic period impact, growth would be 5.9 percent. The projected growth during the 2022f2030 period is 6.2 percent, which is mainly driven by rising demand from end user segment such as glass,soapsanddetergents,andotherchemicalproducts due to rising population, urbanisation, and higher disposable incomes, which have resulted in increased consumption of industrial products, demand for housing, transportation, consumer goods, processed foods, and beverages. Further ESG based applications such as solar glass, flue Gas treatment, and lithium carbonate batteries are also emerging as the key catalyst for domestic demand growth of soda ash.

In India, the total installed capacity of soda ash is 4.3 KT, with an estimated production of 3.6 MMT in 2022. The Indian soda ash market is highly consolidated, with four major players accounting for around 80 percent of the market and the balance demand is fed through Imports which is approximately 18 percent of the countrys demand. Share of imports have grown significantly from 8 percent in 2005 due to marginal capacities added by the domestic suppliers. In 2022, the gap between domestic soda ash production and demand is around 700 KT, which is expected to widen to 2,450 KT by 2030. The expected production from domestic capacities will not be able to meet the increasing demand hence there is need of new capacities otherwise dependency on imports will surge drastically from the existing 18% to 34% by 2030.

The Indian Soda Ash market constitutes of two varieties – Light grade, which is majorly used in detergent and other chemical industries; and the Dense grade, which is majorly used in the Glass industry, with an equal share.

All the major industry players are in situated in Gujarat due to proximity and availability of the main raw materials, namely limestone and salt and also the major demand centers.

GHCL SODA ASH BUSINESS

GHCLs Soda ash manufacturing facility located at Sutrapada, Gujarat, is one of Indias leading producers of Soda Ash (Anhydrous Sodium Carbonate) and has an annual production capacity of 1.2 Million MT per annum, which has been enhanced from 1.1 Million MT during the year. GHCL caters to almost 26% of the countrys annual domestic soda ash demand. We have embarked this remarkable journey from a market share of 17% in the FY 2005. GHCL shares highly successful client relationships and is the preferred supplier to all major soda ash consumers like Hindustan Unilever, P&G, Aditya Birla-Grasim, Patanjali Ayurveda, Fena, Gujarat Guardian, Borosil Renewables, Piramal Glass, ST. Gobain and Philips to name a few. GHCL has a competitive edge in the industry due to various unique factors such as customer centricity, use of high grade raw materials and higher capacity utilization. With powerful Soda Ash B2B and B2C supply chain existence our focus has always been on increasing our customer delight through our philosophy such as 24x7 serviceability and On-Time-In-Full (OTIF) tracking.

Our fundamental objective is to embrace long-term, sustainable business agenda based on simple business techniques. As an established player in the market, we understand the expectation of our key stakeholders. Over the years, we have been diligently observing, evaluating, and strengthening our sustainability targets. We worked on the appropriate management systems for successful execution, management, and evaluation to create the required strategies in consonance with the sustainability goal.

OPPORTUNITY AND CONCERNS

Our future growth strategy is based on several initiatives. We are pursuing Greenfield expansion, debottlenecking of existing soda ash facility, doubling sodium bi-carbonate capacity to 120 K MT, improving salt yield of our salt works and augmenting backward raw material capabilities. We have initiated our digital journey and enablers such as AI and IOT will enhance our capacity and capabilities in medium to longer term.

The growth in demand of SA is clearly visible, with more markets opening up, capacity addition in glass and stable import volumes, the Soda ash markets are expected to remain healthy in 2023.

Slowness in dyes, intermediates and specialty chemical industry due to low demand from specifically from China, however same will be showing strength in 2023. The requirement of Soda Ash from these industries is good and is expected to continue throughout the year. Detergent sector is stable in current year but will show further strength due to better rural demand. With many new announcements of capacity addition in solar glass and various government PLI schemes and expected ADD on import of Float Glass will boost the glass sector. However, additional large capacity coming mainly in China and US may disrupt the material balance in domestic market for temporary blip with increased imports. The major capacity expansions, including those planned in US and China, are expected to be absorbed through increase in demand from greener initiatives such as lithium carbonate and solar glass industry. Further, the new capacity in China is expected to cater mainly to the Chinese domestic markets increasing demand from Lithium carbonate and Solar Glass capacities. Imports of Soda Ash to India are expected to be on higher side in 2023 due to limited capacities additions in the country against rising demand from downstream segments and emerging green usages such as solar glass and flue gas treatment.

GHCL CONSUMER PRODUCTS BUSINESS

The business has its salt harvesting works at Vedaranyam, Tamil Nadu and the refinery for its edible salt manufacturing is at Chennai, Tamil Nadu. Our industrial salt commands a premium in the caustic soda industries, and our edible salt is available in ‘I FLO and ‘SAPAN brands in the consumer retail market. A consumer behaviour trend in the use of salt in daily life was an indeed a notable trend over the past few years. Consumers are becoming increasingly health-conscious and looking for healthier options when it comes to their diet. GHCL CPD is taking utmost care and is meticulously working towards proving the end user the best quality and user experience. Salt production saw a major downfall during the last three years due to unseasonal rains. This year salt production is expected to improve to 1.30f1.40 lakhs MT.

TEXTILES INDUSTRY

The textile sector is one of the critical sectors of the Indian economy, accounting for more than 2 percent of the total GDP and more than 12 percent of the manufacturing sector gross domestic product (GDP). The sector is also the second largest provider of employment in India, after agriculture. It provides employment to an estimated 45 million people directly and to another 60 million indirectly through allied activities. Not only is the textile sector highly labour intensive, it also employs unskilled and semi-skilled labour force and is also an important source of employment for women.

During and post the pandemic period, the textile sector witnessed robust demand as consumers remained at home and focused on health and hygiene factors. As a result the prices of cotton and yarn went up. This resulted in buoyant markets, high operating utilisation and gains to the textile industry including spinning mills. This scenario continued till the mid of current fiscal year. However, the scenarios changed with fall in demand from end user segments, resulting in lower cotton and yarn prices. The Spinning mills faced the headwinds as the spread between cotton and yearn was curtained. The lower demand resulted in reduced operations and utilisation of spinning mills. Now, the industry is poised for a turnaround during the current year. There are series of policy initiatives putting the textile industry back on growth path. This buoyant mood stems from the series of measures taken by the Union Government to revive the fortunes of the Textile Industry. These measures ranging from giving a push to technical textiles to the PLI scheme, launch of mega textile parks to signing of FTAs and MoUs with many countries. The aim of the Government was to take the Textile Industry to new heights. The above steps have long term vision for the benefits of the Textile Industry. Over and above cotton, efforts were also made to enable growth momentum in other key sectors namely silk, jute, wool, handloom and handicrafts sectors.

GHCL TEXTILES BUSINESS

(Discontinued Operations; Demerged to GHCL Textiles Limited)

As of April 1, 2023, this business has been demerged into GHCL Textiles Limited and reported as discontinued operations for the financial year ended March 31, 2023.

The GHCL spinning business modern manufacturing facilities comprise of 2.25 Lakh ring spindles, 3320 rotors, 5760 TFO spindles, and 5 Airjet Spinning (480 positions) located in Paravai in Madurai District and at Manaparai in Tiruchirapalli District in the state of Tamil Nadu. Additionally, we have developed significant renewable assets comprising of 57 MW of wind and solar power in the state of Tamil Naidu.

The yarn spinning division of GHCL produces value-added yarn such as GIZA, SUPIMA, Australian, and CmiA Yarn for the domestic and international markets. The division manufactures specialized products against tailor-made applications through specialized yarn, thereby enhancing the brand name through customer communication. The product basket has increased manifold, penetrating new markets for different applications to maintain sustainability. GHCL prioritizes traceability as per the needs of certain customers for authenticity and origin of premium cotton types such as Egyptian and Supima cotton. GHCL places great emphasis on establishing strategic business partnerships in both domestic and international markets, which has enabled the company to maintain a competitive edge and gradually expand. The company has expanded its customer base in existing markets and ventured into new geographic regions such as Egypt, Turkey, Peru, Sri Lanka, Portugal, South Korea and North Korea. The export of goods has sizably increased from 5% to 12%, and the company aims to continue growing in the coming years. In addition, GHCL has expanded its customer base in the domestic market and has forged strong partnerships with prominent brands and corporations, resulting in various benefits.

Operational excellence is a cornerstone of GHCLs success. The companys well-managed production process helps us to minimize waste and maximize productivity while maintaining a reliable supply chain for raw materials. Quality control is paramount, and GHCL consistently strives to deliver the best products to its customers. The companys dedication to worker safety and a clean work environment fosters a positive and productive workplace culture. Through operational performance, GHCL builds a strong reputation and drives profitability. The company has significantly reduced its receivables and stock of finished goods and highly penetrated into the value-added and premium segments. Our organization has a strong commitment to green energy, and we have made significant progress in this towards goal of 75% of total energy requirement from renewal means.

OPPORTUNITY AND CONCERNS

Our expansion of 40k spindles has positioned us well for medium-term benefits. As part of our commitment to increasing spindles capacity, we intend to expand our product basket, grow our value-added segment, realign our customer base, and achieve operational excellence. Additionally, we will continue to prioritize sustainability by deploying additional renewable energy sources to meet a minimum of 80% of our energy requirements from renewable assets. This approach underscores our belief in sustainability and innovation as the fundamental pillars of our strategy. Despite the aforementioned growth initiatives, we acknowledge the existence of certain market challenges, including volatility in cotton prices and the availability of high-quality cotton crops. We also anticipate headwinds in downstream segments, such as home textiles, while demand from the apparels and innerwear segment continues to recover. The domestic and Exports Textile markets may remain moderate for some more time. Furthermore, we anticipate that changes in trade policies and fluctuations in foreign exchange rates may impact the prices of imported cotton, potentially affecting our competitive position in the global market.

To maintain a sustainable and resilient business, we have adopted several key principles. These principles include cash conversion, in-depth knowledge of the cotton market, supply chain resilience, innovation, and a strong focus on customer satisfaction. These principles serve as critical enablers that set us apart from our competitors and contribute to our ability to sustainably grow and prosper in the future.

COMPANY PERFORMANCE - PERFORMANCE HIGHLIGHTS – CONTINUED OPERATIONS

• Revenue for the financial year ended March 31, 2023 is Rs 4584.05 Crore as against Rs. 3060.78 Crore for the previous Financial Year ended March 31, 2022.

• Profit before financial expenses and depreciation for the financial year ended March 31, 2023 is Rs. 1520.06 Crore as compared to Rs. 737.40 Crore for the previous Financial Year ended March 31, 2022.

• PBT (Profit Before Tax) for the financial year ended March 31, 2023 is at Rs. 1442.55 Crore against Rs. 574.16 Crore for the previous Financial Year ended March 31, 2022.

DETAILS OF SIGNIFICANT CHANGES IN THE KEY FINANCIAL RATIOS & RETURN ON NET WORTH

As per the Schedule V to the Listing Regulations read with Regulation 34(3) of the Listing Regulations, details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in Key Financial Ratios and any changes in Return on Net Worth of the Company including explanations therefor have been provided in note no. 46(8) of the Annual Report.

INTERNAL CONTROLS AND RISK MANAGEMENT

GHCL Limited has a well-established framework of internal controls across all the businesses and in all the areas of its operations. The Company has adequate monitoring procedures and has appointed competent personnel to safeguard its assets, protect loss from unauthorized use or disposition ensuring reliably authorized, accurately recorded and transparently reported transactions. Establishment of highly efficient management information and reporting systems combined with robust corporate policies form the overall control mechanisms. The Company conducts its business with integrity, high standards of ethical behavior and in compliance with all applicable laws and regulations that govern its business. To supplement the internal control mechanism, the Company has appointed external independent internal audit agencies to carry out concurrent internal audit at all its locations for all the business segments. Audit & Compliance Committee of the Board of Directors reviews the internal control systems on a regular basis to improve their effectiveness besides verifying statutory compliances. The Audit & Compliance Committee meets periodically to discuss findings of the internal auditors along with the remedial actions (i.e. Action Taken Report) that have been recorded or have been taken by the management to address weaknesses of the system. The statutory audits are conducted by globally recognized ‘Big 4 audit agencies to ensure that the companys practices are in line with global best practices. A compliance management tool had also been adopted to ensure timely compliance with legal, financial, environmental, labour, governance, safety and other relevant regulations.

At GHCL, Risk Management and Internal Audit functions complement each other to form an elaborate risk management system that evaluates the efficacy of the framework relating to risk identification and mitigation. The Company strives to adopt a de-risking strategy in its operations while making growth investments. This involves setting up and monitoring risks on a regular basis. GHCL has Risk & Sustainability Committee in line with the requirement of Regulation 21 of the Listing Regulations. The Company applies Risk Management in a well-defined, integrated framework, which promotes awareness of risks and an understanding of the Companys risk tolerances. The management monitors the internal control system, designed to identify, assess, monitor and manage risks, associated with the Company. Each risk is provided with different number of control measures depending upon its potential impact and probability of occurrence. The risk management framework incorporates both financial and non-financial risks, as explained in the section on "Risks and Opportunities" of Integrated Report.

HUMAN CAPITAL MANAGEMENT

In GHCL we are really proud of our "HUMAN RESOURCES". We believe that our employees make a key difference to our business success. It speaks volumes as to why GHCL is certified as a "Great Place to Work" consecutively for seven times in a row. Indeed it is a proud moment that we are also certified by GPTW as TOP 50 Great places to work in Manufacturing, an additional feather on the cap. Employees are one of our five key stakeholders and needless to mention that managing our human capital has been our key strength and pride. To corroborate this, the scores of our HR CULTURE Audit by GPTW shows a significant jump this year. It is our firm belief that nurturing and strengthening the human resource capital is of utmost importance to run the organization effectively and smoothly. Therefore, the HR function takes pride in managing the human capital both with warmth and care as a hallmark of a caring organization. The Human Capital is managed in a structured manner with key focus areas being Talent Management, Organizational capability Development, Employee Engagement and harmonious Industrial Relations. This contributes to our unique corporate identity in our journey towards high performance Coaching & Mentoring culture. Good human resource management is vital for the success of any business, therefore GHCL regularly reviews & revisits its various HR policies and practices to ensure that we comply with the values of the Company and can be benchmarked against the leaders in the industry. In fact our HR Mission emphasizes on creating a value driven, high performance learning organization in an engaged and digitized environment so that we are employer of choice. As on March 31, 2023, number of people employed are 7094 including all categories. For more details on Human Capital Management at GHCL, refer to ‘Human Capital section of Integrated Report.

CSR Initiatives

GHCL Limited, since beginning, has been determined to focus on the holistic development, including the growth of society as a whole, particularly in the region of its operations. This is done with the aim to establish social license to operate and maintain a harmonious relationship with local stakeholders. For last two years, more focus has been given on expanding the CSR footprint in our operational areas along with meeting the expectations of the people. In doing so, our NGO partners, through GHCL Foundation, play a pivotal role in strategically planning and systematically executing our CSR initiatives. For more details on Corporate Social Responsibility at GHCL Limited, refer to ‘Social & Relationship Capital section of the integrated report.