To the Members of GHCL Limited
Your directors take pleasure in presenting the 2nd Integrated Report (prepared as per the framework set forth by the International Integrated Reporting Council) and the 37th 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 2020. The World is facing challenges due to pandemic Covid-19 which has locked down entire humanity and business operations. The operations of your company were suspended for some time and work from home initiatives have been taken to ensure safety and health of the employees. Due to lockdown the operational performance of the company got impacted and the management is taking all proactive steps to have sustainable operations going forward. The financial highlights of the Company for FY 2019-20 are given below:
A: Financial Results
|Particulars||Year ended||Year ended||Year ended||Year ended|
|March 31 2020||March 31 2019||March 31 2020||March 31 2019|
|Net Sales /Income||3272.44||3384.72||3322.72||3356.83|
|Gross profit before interest and depreciation||753.16||783.72||745.60||774.91|
|Profit before depreciation and amortisation - (Cash Profit)||634.98||657.40||625.81||647.57|
|Depreciation and Amortisation||130.51||116.29||131.21||116.94|
|PBT before exceptional items||504.47||541.11||494.60||530.63|
|Profit before Tax (PBT)||504.47||541.11||494.60||530.63|
|Provision for Tax - Current||143.38||153.84||143.39||153.81|
|Tax adjustment for earlier years||-2.48||0.84||-2.48||0.84|
|Provision for Tax - Deferred||-42.93||25.40||-42.93||25.40|
|Profit after Tax||406.50||361.03||396.61||350.58|
|Other comprehensive income (OCI)||-5.53||1.64||-5.79||-3.24|
|Total Comprehensive income for the period||400.97||362.67||390.82||347.34|
|Balance brought forward from last year||1672.61||1369.92||1649.25||1357.03|
|Tax on Dividend and Tax paid on Buy back of share||28.42||10.01||28.42||10.01|
|Balance carried to Balance Sheet||1971.08||1672.61||1937.83||1649.25|
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 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 annexed to this report as Annexure I and is also available on the Company's website www.ghcl.co.in
Your Directors are pleased to inform that your Company has a consistent track-record of dividend payment for last 26 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.
Pursuant to the Dividend Policy the Board of Directors of your Company in its meeting held on March 16 2020 had approved payment of interim dividend of INR 3.00 per equity share of INR 10 each (i.e. @ 30% on the paid-up capital).
Due to ongoing Covid -19 situations the focus of management is on preserving its cash flow which it believes is the most important steps for the next few months. During the FY 2019-20 the management has rewarded to its shareholders through interim dividend of @ INR 3 per share (aggregating to approx. INR 28.50 Cr.) and by way of buyback of equity shares of around INR 56.81 Cr. (without Transaction Charges and Tax) from open market. Therefore to conserve its cash flow the management is not recommending any final dividend due to Covid 19 situations.
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 & Buyback of Shares
The paid up Equity Share Capital of the Company as on March 31 2020 is INR 950132860/- comprising of 95013286 equity shares of INR 10/- each; whereas paid up Equity Share Capital of the Company as on March 31 2019 was INR 980282860/-comprising of 98028286 equity shares of INR 10/- each.
Your directors would like to inform that during the financial year Nomination and Remuneration Committee in their meeting held in Noida on July 29 2019 had made Allotment of 1.85 lakhs Equity Shares of INR 10 each to the employees of the Company against exercise of Employees Stock Options pursuant to GHCL ESOS 2015. Consequent to said allotment of 1.85 lakh Equity Shares the Issued & Paid-up Capital of the Company was increased from INR 980282860/- consisting of 98028286 equity shares of INR 10/- each to INR 982132860/- consisting of 98213286 equity shares of INR 10/- each.
Further Board of Directors of GHCL Limited in their meeting held on January 23 2020 had given their approval for Buy Back of the Company's fully paid-up equity shares of INR 10/- each from the Open Market through Stock Exchange route at a Maximum Buyback price of INR 250/- per Equity Share excluding transaction costs for an aggregate amount of INR 60 Crores.
Your Directors are pleased to inform that in line with the said approval the Company had bought back 3200000 Equity Shares and extinguished 3200000 Equity Shares during the financial year ended March 31 2020. Consequently after said extinguishment of equity shares the issued & paid-up capital of the Company stands reduced from INR 982132860/- consisting of 98213286 equity shares to INR 950132860/- comprising of 95013286 equity shares of INR 10/- each (i.e. 98213286 equity shares minus 3200000 equity shares) as on March 31 2020.
5. 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 July 29 2019 had allotted 1.85 lakh equity shares of INR 10 each to its 34 employees (including Company Secretary) against exercise of Employees Stock Options pursuant to GHCL ESOS 2015. Employees may exercise their options during valid 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 II and forming part of this Report.
I. Reaffirmation of Credit Rating
a. 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.
b. Further India Rating has affirmed Credit Rating IND A+ (Highest) for Issuance of Commercial Paper for issue size of INR 100 Cr.
c. India Rating has also affirmed Issuer Rating as A+ with outlook revised from Stable to Positive.
II. Resource Mobilization
(a) Soda Ash Expansion Loan
Your Company has started Phase - II Soda Ash expansion at Sutrapada Veraval with a Project Cost of INR 300 crores last year. Your company successfully tied up Term Loan for INR 225 Crores for a period of 10 years including moratorium period of 2 years. Your Company has incurred expenditure of 293 crores and availed disbursement of Term Loan of INR 220 crores till the end of current year.
(b) Capex Program
Your company has also undertaken Capex program in Yarn Division at Madurai Tamil Nadu at the project cost of INR 60 Crores and your company has successfully tied up term loan for INR 40 crores for a period of 10 years including moratorium period of 2 years. Your company has incurred expenditure of INR 59 crores and availed term loan of INR 39 crores during the current year for the said capex program.
(c) Medium Term Loan
i. Your Company has raised medium term loan of INR 100 crores to part finance normal capital expenditure of the Company for a period of 5 years including moratorium period of 6 months and has availed the same during the current year.
ii. Your Company has raised medium term loan of INR 50 crores to increase Net Working Capital of the company for a period of 5 years including moratorium period of 6 months and has availed the same during the current year.
(d) Commercial Paper
Your Company has raised short term funds by issuing Commercial Paper during the current year. Funds raised in 6 trenches of INR 25 crores each aggregating to INR 150 crores for tenor of 70 to 90 days at weighted average interest rate of 7.90% p. a. All commercial papers are redeemed on due date and at the end of current year liability is nil.
III. Interest Rate
(a) Short Term Borrowing
During the year 2019-20 short term requirements were met through Cash Credit / Short Term Loan / Working Capital Demand Loan / Packing Credit / Pre-shipment in Foreign Currency / Commercial Paper / Supplier's Credit whereby your company could manage to borrow at Weighted Average Interest rate at 4.98% p.a.
(b) Your company could borrow Long Term borrowing which includes Rupee Term Loans and Foreign Currency Loans at an average rate of 8.75%.
(c) Thus your company could manage to borrow Long Term Loans and Short Term Loans at an average rate of 7.67%.
|Borrowing||Outstanding as on 31.3.2020||ROI P.A.|
|H in Crores|
IV. Education and Protection Fund
During the financial year your Company has transferred to investors' education and protection fund account (IEPF) a sum of INR 40.87 lacs towards unclaimed dividend/unclaimed deposits along with interest thereon.
7. Management Discussion and 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 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 has 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 Company's Affairs
The detail of business performance and state of company's affairs are given in MDA (from Page No. 138 to Page No. 145) and Integrated Report (from Page No. 01 to Page No. 86).
It is important to note that the Board of Directors in their meeting held on March 16 2020 had approved a scheme of demerger; where Textiles business of the Company will be demerged into a separate Company.
Awards and Recognition
Your Directors are pleased to inform that during the financial year 2019-20 your Company has received various awards and recognition. The major ones among them are as follows:
a. Mine Award under A2 category at 26th Mines Environment and Mineral Conservation week
b. Par Excellence Award at the 6th National Conclave on 5S Ankleshwar Chapter Quality Circle Form of India (QCFI).
c. GHCL Yarn division received SIMA Technofacts Award at the 13th CEO Conference
d. GHCL Foundation Trust received `Saurashtra Eminence Award - 2019' for the great work done towards `Rural Development and CSR' from Divya Bhaskar Group.
e. The Federation of Indian Mineral Industries (FIMI) awarded GHCL for innovation in the field of water management and soil fertility in and around the villages of the mining areas. The `Jury Special Social Awareness Award' was presented to the Bhimdeval Limestone Mines GHCL at the Excellence Sustainability Health Safety and Social Awareness Awards FY 2018-19.
f. GHCL received award for `Excellence in E-procurement' at procurement Tech Summit for FY 2019.
Grace Home Fashion LLC a subsidiary of the Company in USA engaged in Home Textile segment is catering to some of the major Home-Textile Players like Bed Bath Beyond and Ross and Stein-mart. In addition Grace Home Fashion is also doing online Home Textile Business in USA through Amazon.com and various other online portals. 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 (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. 381 of Annual Report) and also in the statement u/s 129(3) of the Companies Act 2013 (refer page no. 293). 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 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 2020.
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 planned in advance in consultation with the Board Members. During the financial year ended March 31 2020 the Board of Directors met five 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 and Mr. Raman Chopra are directors retiring by rotation and being eligible offer themselves for re-appointment. The Board of Directors in their meeting held on January 23 2020 had appointed Mr. Neelabh Dalmia as a Whole-time Director designated as Executive Director (Textiles) of the Company for a period of five years with effect from February 1 2020 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 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.
During the year the tenure of directorship of Mr. K C Jani Independent director has been completed on September 17 2019 and accordingly he is ceased from the directorship of the Company effective from September 18 2019. The Board of Directors placed on record their gratitude and appreciation for the immense contribution made by Mr. Jani during his tenure as director of the Company.
Key Managerial Personnel
Pursuant to Section 203 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 & Company Secretary. During the year there has been no change in the Key Managerial Personnel.
Familiarisation Programme for Independent Director
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 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.
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 23 2020.
>A separate meeting of Independent Directors was held on January 23 2020 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 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.
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 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.
In order to captivate Covid-19 effect and maintain its employee centric approach the Sr. management has voluntarily offered cut in their salary as follows and protected 92% of the total workforce from any reduction in their salary and pay.
|Reduction on CTC|
|MD President and ED||13 & 14||30%|
|Sr. Vice President||12||25%|
|Sr. General Manager||10||15%|
|Dy General Manager & GM||8 & 9||10%|
Further it has also been decided to hold on increment and promotion until situation normalises. Except the above during the year there have been no changes to the Policy. Above changes in the Remuneration Policy is effective from April 1 2020 and the same is approved by the Nomination and Remuneration Committee through circular resolution and noted in their meeting held on May 20 2020. 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.
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.
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 Board's 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 2019-20.
The Secretarial Audit Report for the financial year ended March 31 2020 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.
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 2019-20 have been paid to all these Stock Exchanges.
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 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.
Extracts of Annual Return
The extract of annual return as on the financial year ended March 31 2020 in Form MGT - 9 is annexed herewith as Annexure-V and forming part of this Report.
Corporate Social Responsibility (CSR)
YourCompanyhasbeenoneoftheforemostproponentsofinclusive 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.
The Company has in place a CSR Policy which provides guidelines to conduct its CSR activities. The CSR Policy is available on the website of the Company www.ghcl.co.in.
During the year the Company spent INR 9.75 Crs. (around 2.00% of the average net profits of last three financial years) on 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 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 had been reconstituted with effect from July 30 2019 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.
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 2020 GHCL Limited is mentioned on 558th position on the basis of capitalization at NSE and on 577th position at BSE.
On voluntary basis GHCL followed 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 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.
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 Management's financial reporting process with the highest levels of transparency integrity and quality of financial reporting.
The Committee met five 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. Vijaylaxmi Joshi Mr. Arun Kumar Jain (Ex-IRS) and Justice (Retd.) Ravindra Singh as members of the Committee who are experts in finance accounts strategy tax law and general administration.
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 as Chairman of the Committee and Justice (Retd.) Ravindra Singh Mr. Neelabh Dalmia Mr. R S Jalan and Mr. Raman Chopra as members of the Committee. The Committee details are given in the Corporate Governance Report.
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. Vijaylaxmi Joshi as Chairperson of the Committee Mr. Sanjay Dalmia Justice (Retd.) Ravindra Singh and Dr. Manoj Vaish as members of the Committee. The Committee details are given in the Corporate Governance Report.
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 from time to time. Mr. Arun Kumar Jain (Ex-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.
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. 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 arm's 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.
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 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 as Chairman of the Committee and Mr. Neelabh Dalmia Mr. R S Jalan and Mr. Raman Chopra 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 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 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 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.
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.
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. There are no complaints reported during the year regarding sexual harassment.
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.
In terms of the provisions relating to statutory auditors forming part of the Companies Amendment Act 2017 notified on May 7 2018 ratification of appointment of Statutory Auditors at every AGM is no more a legal requirement.
Accordingly the notice convening the ensuing AGM does not carry any resolution on ratification of the appointment of the Statutory Auditors.
M/s S. R. Batliboi & Co. LLP has audited the books of accounts of the Company for the financial year ended March 31 2020 and has issued the Auditors' Report thereon. There are no qualifications or reservations on adverse remarks or disclaimers in the said 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 2020. 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 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 2021.
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 Company's internal financial controls were adequate and effective during financial year 2019-20. 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 2020 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 2020 and of the profit and loss of the Company for the financial year ended March 31 2020;
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 2020 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:
(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) 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.
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
|Date: May 20 2020||Chairman|
|Place: New Delhi||DIN: 00206992|