Notes to Accounts of GHCL Ltd.

Mar 31, 2025

l) Provisions

General

Provisions are recognised when the Company has a
present obligation (legal or constructive) as a result of
a past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle
the obligation and a reliable estimate can be made of
the amount of the obligation. The expense relating to
a provision is presented in the statement of profit and
loss net of any reimbursement.

If the effect of the time value of money is material,
provisions are discounted using a current pre-tax rate
that reflects, when appropriate, the risks specific to the
liability. When discounting is used, the increase in the
provision due to the passage of time is recognised as
a finance cost.

Provision for mines restoration

The Company has recognized a provision for mines
restoration based on its best estimates. In determining
the fair value of the provision, assumptions and
estimates are made in relation to the expected
future inflation rates, discount rate, expected cost of

restoration of mines, expected balance of reserves
available in mines and the expected life of mines.

Decommissioning liability

The present value of the expected cost for the
decommissioning of an asset after its use and leasehold
improvements on termination of lease is included
in the cost of the respective asset if the recognition
criteria for a provision are met. The Company records
a provision for decommissioning costs of its plant for
manufacturing of Soda Ash and leasehold improvements
at the leasehold land. Decommissioning costs are
provided at the present value of expected costs to
settle the obligation using estimated cash flows and are
recognised as part of the cost of the particular asset.
The cash flows are discounted at a current pre-tax rate
that reflects the risks specific to the decommissioning
liability. The unwinding of the discount is expensed as
incurred and recognised in the statement of profit and
loss as a finance cost. The estimated future costs of
decommissioning are reviewed annually and adjusted
as appropriate. Changes in the estimated future costs
or in the discount rate applied are added to or deducted
from the cost of the asset.

The impact of climate-related matters on remediation
of environmental damage is considered with
determining the decommissioning liability on the
manufacturing facility.

Onerous Contracts

If the Company has a contract that is onerous, the
present obligation under the contract is recognised
and measured as a provision. However, before
a separate provision for an onerous contract is
established, the Company recognises any impairment
loss that has occurred on assets dedicated to that
contract. An onerous contract is a contract under
which the unavoidable costs (i.e., the costs that the
Company cannot avoid because it has the contract)
of meeting the obligations under the contract exceed
the economic benefits expected to be received under
it. The unavoidable costs under a contract reflect the
least net cost of exiting from the contract, which is the
lower of the cost of fulfilling it and any compensation
or penalties arising from failure to fulfil it. The cost
of fulfilling a contract comprises the costs that
relate directly to the contract (i.e., both incremental
costs and an allocation of costs directly related to
contract activities).

m) Gratuity and other post-employment benefits

Retirement benefit in the form of provident fund
and superannuation fund is a defined contribution
scheme. The Company has no obligation, other than
the contribution payable to the provident fund and
superannuation fund. The Company recognizes
contribution payable to the provident fund and
superannuation fund scheme as an expense, when
an employee renders the related service. If the
contribution payable to the scheme for service
received before the balance sheet date exceeds the
contribution already paid, the deficit payable to the
scheme is recognized as a liability after deducting
the contribution already paid. If the contribution
already paid exceeds the contribution due for services
received before the balance sheet date, then excess
is recognized as an asset to the extent that the pre¬
payment will lead to, for example, a reduction in future
payment or a cash refund.

The Company operates a defined benefit gratuity
plan, which requires contributions to be made to a
separately administered fund. The cost of providing
benefits under the defined benefit plan is determined
using the projected unit credit method.

Remeasurements, comprising of actuarial gains
and losses, the effect of the asset ceiling, excluding
amounts included in net interest on the net defined
benefit liability and the return on plan assets (excluding
amounts included in net interest on the net defined
benefit liability), are recognised immediately in the
balance sheet with a corresponding debit or credit to
retained earnings through OCI in the period in which
they occur. Remeasurements are not reclassified to
profit or loss in subsequent periods.

Past service costs are recognised in profit or loss on
the earlier of:

• The date of the plan amendment or
curtailment, and

• The date that the Company recognises related
restructuring costs

Net interest is calculated by applying the discount
rate to the net defined benefit liability or asset. The
Company recognises the following changes in the
net defined benefit obligation as an expense in the
statement of profit and loss:

• Service costs comprising current service
costs, past-service costs, gains and losses on
curtailments and non-routine settlements; and

• Net interest expense or income
Short-term employee benefits

The undiscounted amount of short-term employee
benefits expected to be paid in exchange for the
services rendered by employees are recognized on an
undiscounted accrual basis during the year when the
employees render the services. These benefits include
performance incentive and compensated absences
which are expected to occur within twelve months
after the end of the period in which the employee
renders the related services.

Long-term employee benefits

Compensated absences which are not expected to
occur within twelve months after the end of the period
in which the employee renders the related service are
recognized as a liability at the present value of the
defined benefit obligation as at the Balance Sheet date.
The cost of providing benefits is determined using the
projected unit credit method, with actuarial valuations
being carried out at each Balance Sheet date. Actuarial
gains and losses are recognized in the Statement
of Profit and Loss in the period in which they occur.
The Company presents the entire leave liability as
current liability, since it does not have an unconditional
right to defer its settlement for 12 months after the
reporting period.

n) Share-based payments

Employees (including senior executives) of the
Company receive remuneration in the form of share-
based payments, whereby employees render services
as consideration for equity instruments (equity-settled
transactions).

Equity-settled transactions

The cost of equity-settled transactions is determined
by the fair value at the date when the grant is made
using an appropriate valuation model.

That cost is recognised, together with a corresponding
increase in share-based payment (SBP) reserves in
equity, over the year in which the performance and/
or service conditions are fulfilled in employee benefits
expense. The cumulative expense recognised for

equity-settled transactions at each reporting date
until the vesting date reflects the extent to which
the vesting year has expired and the Company''s best
estimate of the number of equity instruments that will
ultimately vest. The expense or credit in the statement
of profit and loss for a year represents the movement
in cumulative expense recognised as at the beginning
and end of that year and is recognised in employee
benefits expense.

Service and non-market performance conditions are
not taken into account when determining the grant date
fair value of awards, but the likelihood of the conditions
being met is assessed as part of the Company''s best
estimate of the number of equity instruments that
will ultimately vest. Market performance conditions
are reflected within the grant date fair value. Any
other conditions attached to an award, but without
an associated service requirement, are considered to
be non-vesting conditions. Non-vesting conditions are
reflected in the fair value of an award and lead to an
immediate expensing of an award unless there are also
service and/or performance conditions.

No expense is recognised for awards that do not
ultimately vest because non-market performance
and/or service conditions have not been met. Where
awards include a market or non-vesting condition,
the transactions are treated as vested irrespective
of whether the market or non-vesting condition is
satisfied, provided that all other performance and/or
service conditions are satisfied.

When the terms of an equity-settled award are
modified, the minimum expense recognised is the
grant date fair value of the unmodified award,
provided the original vesting terms of the award are
met. An additional expense, measured as at the date
of modification, is recognised for any modification
that increases the total fair value of the share-based
payment transaction, or is otherwise beneficial to the
employee. Where an award is cancelled by the entity or
by the counterparty, any remaining element of the fair
value of the award is expensed immediately through
profit or loss.

The dilutive effect of outstanding options is reflected
as additional share dilution in the computation of
diluted earnings per share.

o) Financial instruments

A financial instrument is any contract that gives rise to
a financial asset of one entity and a financial liability or
equity instrument of another entity.

Financial assets

Initial recognition and measurement

All financial assets are recognised initially at fair value
plus, in the case of financial assets not recorded at fair
value through profit or loss, transaction costs that are
attributable to the acquisition of the financial asset.
Purchases or sales of financial assets that require
delivery of assets within a time frame established by
regulation or convention in the market place (regular
day trades) are recognised on the trade date, i.e.,
the date that the Company commits to purchase or
sell the asset.

Subsequent measurement

For purposes of subsequent measurement, financial
assets are classified in three categories:

• Financial assets at amortised cost
(debt instruments)

• Financial assets designated at fair value
through OCI with no recycling of cumulative
gains and losses upon derecognition
(equity instruments)

• Financial assets at fair value through profit or loss

Financial assets at amortised cost (debt instruments)

A ''financial asset'' is measured at the amortised cost if
both the following conditions are met:

(a) The asset is held within a business model
whose objective is to hold assets for collecting
contractual cash flows, and

(b) Contractual terms of the asset give rise on
specified dates to cash flows that are solely
payments of principal and interest (SPPI) on the
principal amount outstanding.

This category is the most relevant to the Company.
After initial measurement, such financial assets are
subsequently measured at amortised cost using the
effective interest rate (EIR) method. Amortised cost

is calculated by taking into account any discount or
premium on acquisition and fees or costs that are an
integral part of the EIR. The EIR amortisation is included
in finance income in the profit or loss. The losses
arising from impairment are recognised in the profit or
loss. The Company financial assets at amortised cost
includes trade receivables and loans included under
other financial assets.

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss
are carried in the balance sheet at fair value with net
changes in fair value recognised in the statement of
profit and loss.

This category includes derivative instruments and
mutual/liquid funds investments which the Company
had not irrevocably elected to classify at fair value
through OCI. Dividends on listed equity investments
are recognised in the statement of profit and loss when
the right of payment has been established.

Financial assets designated at fair value through FVTPL
/FVTOCI (equity instruments)

Upon initial recognition, the Company can elect to
classify irrevocably its equity investments as equity
instruments designated at fair value through OCI
when they meet the definition of equity under Ind AS
32 Financial Instruments: Presentation and are not
held for trading. The classification is determined on an
instrument-by-instrument basis. Equity instruments
which are held for trading and contingent consideration
recognised by an acquirer in a business combination to
which Ind AS103 applies are classified as at FVTPL.

Gains and losses on these financial assets are never
recycled to profit or loss. Dividends are recognised as
other income in the statement of profit and loss when
the right of payment has been established, except when
the Company benefits from such proceeds as a recovery
of part of the cost of the financial asset, in which case,
such gains are recorded in OCI. Equity instruments
designated at fair value through OCI are not subject to
impairment assessment.

Equity instruments included within the FVTPL category
are measured at fair value with all changes recognized
in the Statement of Profit and Loss.

Derecognition

A financial asset (or, where applicable, a part of a
financial asset or part of a Company of similar financial
assets) is primarily derecognised (i.e. removed from the
Company''s balance sheet) when:

• The rights to receive cash flows from the asset
have expired, or

• The Company has transferred its rights to receive
cash flows from the asset or has assumed an
obligation to pay the received cash flows in full
without material delay to a third party under a
''pass-through'' arrangement; and either (a) the
company has transferred substantially all the
risks and rewards of the asset, or (b) the company
has neither transferred nor retained substantially
all the risks and rewards of the asset, but has
transferred control of the asset.

When the Company has transferred its rights to receive
cash flows from an asset or has entered into a pass¬
through arrangement, it evaluates if and to what extent
it has retained the risks and rewards of ownership.
When it has neither transferred nor retained
substantially all of the risks and rewards of the asset,
nor transferred control of the asset, the Company
continues to recognise the transferred asset to the
extent of the Companies continuing involvement. In
that case, the Company also recognises an associated
liability. The transferred asset and the associated
liability are measured on a basis that reflects the rights
and obligations that the Company has retained.

Continuing involvement that takes the form of a
guarantee over the transferred asset is measured at
the lower of the original carrying amount of the asset
and the maximum amount of consideration that the
Company could be required to repay.

Impairment of financial assets

The Company recognises an allowance for expected
credit losses (ECLs) for all debt instruments not held
at fair value through profit or loss. ECLs are based on
the difference between the contractual cash flows due
in accordance with the contract and all the cash flows
that the Company expects to receive, discounted at an
approximation of the original effective interest rate.

The expected cash flows will include cash flows from
the sale of collateral held or other credit enhancements
that are integral to the contractual terms.

ECLs are recognised in two stages. For credit exposures
for which there has not been a significant increase in
credit risk since initial recognition, ECLs are provided
for credit losses that result from default events that
are possible within the next 12-months (a 12-month
ECL). For those credit exposures for which there has
been a significant increase in credit risk since initial
recognition, a loss allowance is required for credit
losses expected over the remaining life of the exposure,
irrespective of the timing of the default (a lifetime ECL).

For trade receivables, the Company applies a simplified
approach in calculating ECLs. Therefore, the Company
does not track changes in credit risk, but instead
recognises a loss allowance based on lifetime ECLs at
each reporting date. The Company has established a
provision matrix that is based on its historical credit
loss experience, adjusted for forward-looking factors
specific to the debtors and the economic environment.

Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition,
as financial liabilities at fair value through profit or
loss, loans and borrowings, payables, or as derivatives
designated as hedging instruments in an effective
hedge, as appropriate.

All financial liabilities are recognised initially at fair
value and in the case of loans and borrowings and
payables, net of directly attributable transaction costs.

The Company''s financial liabilities include trade and
other payables, loans and borrowings and derivative
financial instruments.

Subsequent measurement

For purposes of subsequent measurement, financial
liabilities are classified in two categories:

• Financial liabilities at fair value through
profit or loss

• Financial liabilities at amortised cost (loans
and borrowings)

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss
include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at fair
value through profit or loss. Financial liabilities are
classified as held for trading if they are incurred for the
purpose of repurchasing in the near term. This category
also includes derivative financial instruments entered
into by the Company that are not designated as
hedging instruments in hedge relationships as defined
by Ind-AS 109.

Gains or losses on liabilities held for trading are
recognised in the profit or loss.

Financial liabilities designated upon initial recognition
at fair value through profit or loss are designated at
the initial date of recognition, and only if the criteria
in Ind-AS 109 are satisfied. For liabilities designated as
FVTPL, fair value gains/ losses attributable to changes
in own credit risk are recognized in OCI. These gains/
losses are not subsequently transferred to Statement
of Profit and Loss. However, the Company may transfer
the cumulative gain or loss within equity. All other
changes in fair value of such liability are recognised in
the statement of profit or loss. The Company has not
designated any financial liability as at fair value through
profit and loss.

Financial liabilities at amortised cost (Loans and Borrowings)

This is the category most relevant to the Company.
After initial recognition, interest-bearing loans
and borrowings are subsequently measured at
amortised cost using the EIR method. Gains and
losses are recognised in profit or loss when the
liabilities are derecognised as well as through the EIR
amortisation process.

Amortised cost is calculated by taking into account
any discount or premium on acquisition and fees
or costs that are an integral part of the EIR. The
EIR amortisation is included as finance costs in the
statement of profit and loss.

This category generally applies to borrowings. For
more information refer Note 16.

Derecognition

A financial liability is derecognised when the obligation
under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced
by another from the same lender on substantially
different terms, or the terms of an existing liability
are substantially modified, such an exchange or
modification is treated as the derecognition of the
original liability and the recognition of a new liability.
The difference in the respective carrying amounts is
recognised in the statement of profit or loss.

Reclassification of financial assets

The Company determines classification and
measurement of financial assets and liabilities
on initial recognition. After initial recognition, no
reclassification is made for financial assets which are
equity instruments and financial liabilities. For financial
assets which are debt instruments, a reclassification is
made only if there is a change in the business model for
managing those assets. Changes to the business model
are expected to be infrequent. The Company''s senior
management determines change in the business model
as a result of external or internal changes which are
significant to the Company''s operations. Such changes
are evident to external parties. A change in the business
model occurs when the Company either begins or
ceases to perform an activity that is significant to
its operations. If the Company reclassifies financial
assets, it applies the reclassification prospectively from
the reclassification date which is the first day of the
immediately next reporting year following the change
in business model. The Company does not restate
any previously recognised gains, losses (including
impairment gains or losses) or interest. The following
table shows various reclassification and how they are
accounted for as per below:

i) Amortised cost to FVTPL - Fair value is measured
at reclassification date. Difference between
previous amortized cost and fair value is
recognised in P&L.

ii) FVTPL to Amortised Cost - Fair value at
reclassification date becomes its new gross
carrying amount. EIR is calculated based on the
new gross carrying amount.

iii) Amortised cost to FVTOCI - Fair value is
measured at reclassification date. Difference
between previous amortised cost and fair value

is recognised in OCI. No change in EIR due to
reclassification.

iv) FVTOCI to Amortised cost - Fair value at
reclassification date becomes its new amortised
cost carrying amount. However, cumulative
gain or loss in OCI is adjusted against fair value.
Consequently, the asset is measured as if it had
always been measured at amortised cost.

v) FVTPL to FVTOCI -

date becomes its new carrying amount. No other
adjustment is required.

vi) FVTOCI to FVTPL - Assets continue to be
measured at fair value. Cumulative gain or loss
previously recognized in OCI is reclassified
to Statement of Profit and Loss at the
reclassification date.

Offsetting of financial instruments

Financial assets and financial liabilities are offset
and the net amount is reported in the balance sheet
if there is a currently enforceable legal right to offset
the recognised amounts and there is an intention to
settle on a net basis, to realise the assets and settle the
liabilities simultaneously.

p) Derivative financial instruments

Initial recognition and subsequent measurement

The Company uses derivative financial instruments,
such as forward currency contracts, to hedge its foreign
currency risks. Such derivative financial instruments
are initially recognised at fair value on the date on
which a derivative contract is entered into and are
subsequently re-measured at fair value. Derivatives
are carried as financial assets when the fair value
is positive and as financial liabilities when the fair
value is negative.

Any gains or losses arising from changes in the fair
value of derivatives are taken directly to profit or loss.

q) Cash and cash equivalents

Cash and cash equivalents in the balance sheet
comprise cash at banks and on hand and short-term
deposits with an original maturity of three months or
less, that are readily convertible to a known amount of
cash and subject to an insignificant risk of changes in
value. Bank balances other than the balance included
in cash and cash equivalents represents balance

on account of unpaid dividend and margin money
deposit with banks.

r) Dividend

The Company recognises a liability to pay dividend
to equity holders when the distribution is authorised
and the distribution is no longer at the discretion of
the Company. As per the corporate laws in India, a
distribution is authorised when it is approved by the
shareholders. A corresponding amount is recognised
directly in equity.

s) Foreign currencies

The Company''s financial statements are presented in
INR, which is also the Company''s functional currency.

Transactions and balances

Transactions in foreign currencies are initially recorded
in the functional currency, using the spot exchange
rates at the date of the transaction first qualifies
for recognition. Monetary assets and liabilities
denominated in foreign currencies are translated
at the functional currency spot rates of exchange at
the reporting date. Exchange differences that arise
on settlement of monetary items are recognised in
Statement of Profit and Loss. Non-monetary items that
are measured in terms of historical cost in a foreign
currency are translated using the exchange rates at
the dates of the initial transactions. Non-monetary
items measured at fair value in a foreign currency are
translated using the exchange rates at the date when
the fair value is determined. The gain or loss arising on
translation of nonmonetary items measured at fair value
is treated in line with the recognition of the gain or loss
on the change in fair value of the item (i.e., translation
differences on items whose fair value gain or loss is
recognised in OCI or profit or loss are also recognised
in OCI or profit or loss, respectively).

t) Investment in subsidiary

Investment in subsidiary is carried at cost in the
separate financial statements. Investment carried at
cost is tested for impairment as per IND AS 36.

u) Contingent Liabilities

A Contingent liability is a possible obligation that arises
from past events whose existence will be confirmed
by the occurrence or non-occurrence of one or more

uncertain future events beyond the control of the
Company or a present obligation that is recognized
because it is not probable that an outflow of resources
will be required to settle the obligation. A contingent
liability also arises in extremely rare cases where
there is a liability that cannot be recognized because
cannot be measured reliably. Therefore the Company
does not recognize a contingent liability but discloses
its existence in the financial statements. Contingent
assets are only disclosed when it is probable that the
economic benefits will flow to the entity.

v) Earnings per share

Basic earnings per share is calculated by dividing the
net profit or loss attributable to equity holders of the
Company by the weighted average number of equity
shares outstanding during the year.

For the purpose of calculating diluted earnings per
share, the net profit for the year attributable to equity
shareholders of the Company and the weighted average
number of shares outstanding during the year are
adjusted for the effects of all dilutive potential equity
shares. Treasury shares are reduced while computing
basic and diluted earnings per share.

w) Treasury shares

The Company has created a GHCL Employees Stock
Option Trust for providing share-based payment to its
employees. The Company uses GHCL Employees Stock
Option Trust as a vehicle for distributing shares to
employees under the employee remuneration schemes.
The GHCL Employees Stock Option Trust buys shares
of the Company from the market, for giving shares
to employees. The Company treats GHCL Employees
Stock Option Trust as its extension and shares held by
GHCL Employees Stock Option Trust are treated as
treasury shares.

Own equity instruments that are reacquired (treasury
shares) are recognised at cost and deducted from
equity. No gain or loss is recognised in profit or loss
on the purchase, sale, issue or cancellation of the
Company''s own equity instruments. Any difference
between the carrying amount and the consideration,
if reissued, is recognised in Securities premium. Share
options exercised during the reporting period are
satisfied with treasury shares.

31 Significant accounting judgements, estimates and assumptions

The preparation of Company''s financial statements requires management to make judgments, estimates and assumptions that affect
the reported amounts of assets, liabilities, income and expenses and the accompanying disclosures and disclosure of contingent
liabilities. Uncertainty about the assumptions and estimates could result in outcomes that require a material adjustment to the
carrying value of assets or liabilities affected in future years.

Other disclosures relating to the Company''s exposure to risks and uncertainties includes:

• Financial risk management objectives and policies in Note 40

• Sensitivity analyses disclosures in Note 32 and Note 40

• Capital Management Note 41

(i) Judgements

In the process of applying the accounting policies, management has made the following judgements, which have significant
effect on the amounts recognised in the Standalone''s financial statements:

Determining the lease term of contracts with renewal and termination options - Company as lessee

The Company determines the lease term as the non-cancellable year of a lease, together with any years covered by an option
to extend the lease if the Company is reasonably certain to exercise that option; or years covered by an option to terminate
the lease if the Company is reasonably certain not to exercise that option. In assessing whether the Company is reasonably
certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease, it considers all relevant facts
and circumstances that create an economic incentive for the Company to exercise the option to extend the lease, or not to
exercise the option to terminate the lease. The Company revises the lease term if there is a change in the non-cancellable
year of a lease.

31 Significant accounting judgements, estimates and assumptions

Revenue from contracts with customers

The Company applied the following judgements that significantly affect the determination of the amount and timing of
revenue from contracts with customers:

Revenues from customer contracts are considered for recognition and measurement when the contract has been approved,
in writing, by the parties to the contract, the parties to contract are committed to perform the irrespective obligations under
the contract, and the contract is legally enforceable.

Judgement is required to determine the transaction price for the contract and to ascertain the transaction price to each
distinct performance obligation. The transaction price could be either a fixed amount of customer consideration or variable
consideration with elements such as a right of return the goods within a specified year, volume discounts, cash discount and
price incentives. Any consideration payable to the customer is adjusted to the transaction price, unless it is a payment for a
distinct product from the customer. The Company allocates the elements of variable considerations to all the performance
obligations of the contract unless there is observable evidence that they pertain to one or more distinct performance obligations.

Provisions and contingencies

The assessments undertaken in recognising provisions and contingencies have been made in accordance with Ind AS 37,
''Provisions, contingent liabilities and contingent assets''. The evaluation of the likelihood of the contingent events has required
best judgment by management regarding the probability of exposure to potential loss.

Assessment of equity instruments

The Company has designated investments in equity instruments as FVTOCI investments since the Company expects to hold
these investment with no intention to sale. The difference between the instrument''s fair value and carrying amount has been
recognized in retained earnings.

(ii) Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have
a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial
year, are described below. The Company based its assumptions and estimates on parameters available when the financial
statements were prepared. Existing circumstances and assumptions about future developments, however, may change due
to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the
assumptions when they occur.

(iii) Provision for expected credit losses of trade receivables and contract assets

ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk
since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next
12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since
initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective
of the timing of the default (a lifetime ECL).

For trade receivables, the Company applies a simplified approach in calculating ECLs. Therefore, the Company does not track
changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Company
has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors
specific to the debtors and the economic environment.

(iv) Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the
higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on
available data from binding sales transactions, conducted at arm''s length, for similar assets or observable market prices less

31 Significant accounting judgements, estimates and assumptions

incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived
from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to
or significant future investments that will enhance the asset''s performance of the CGU being tested. The recoverable amount
is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used
for extrapolation purposes. These estimates are most relevant to impairment assessment of Property plant and equipment and
intangible assets.

(v) Share-based payments

For the measurement of the fair value of equity-settled transactions with employees at the grant date, the Company uses a
Black-Scholes model for Employee Share Option Plan (ESOP). The assumptions and models used for estimating fair value for
share-based payment transactions are disclosed in Note 33.

(vi) Useful lives of Property, plant and equipment

The estimated useful lives of property, plant and equipment are based on a number of factors including the effects of
obsolescence, demand, competition, internal assessment of user experience and other economic factors (such as the stability
of the industry, and known technological advances) and the level of maintenance expenditure required to obtain the expected
future cash flows from the asset. The Company reviews the useful life of Property, plant and equipment at the end of each
reporting date.

(vii) Post-retirement benefit plans

Employee benefit obligations (gratuity obligation) are determined using actuarial valuations. An actuarial valuation
involves making various assumptions that may differ from actual developments in the future. These include the
determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the
valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions.
All assumptions are reviewed at each reporting date. The parameter most subject to change is the discount rate. In
determining the appropriate discount rate for plans operated in India, the management considers the interest rates of
government bonds where remaining maturity of such bond correspond to expected term of defined benefit obligation.
The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval in
response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates.
Further details about gratuity obligations are given in Note 32."

(viii) Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the Balance sheet cannot be measured based on
quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs
to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is
required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility.
Changes in assumptions about these factors could affect the reported fair value of financial instruments. Refer Note 39A for
further disclosures.

(ix) Leases - Estimating the incremental borrowing rate

The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing
rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow over a
similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a
similar economic environment. The IBR therefore reflects what the Company ''would have to pay'', which requires estimation
when no observable rates are available or when they need to be adjusted to reflect the terms and conditions of the lease. The
Company estimates the IBR using observable inputs (such as market interest rates) when available and is required to make
certain entity-specific estimates.

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

Employees who are in continuous service for a year of 5 years are eligible for gratuity. The amount of gratuity payable to an
employee upon leaving the Company is the 50% of Fixed cost to Company per month computed proportionately for 15/26 days
salary multiplied for the number of years of service. The gratuity plan is a funded plan and the Company makes contributions to
Gratuity Trust registered under Income Tax Act, 1961.

The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity were carried
out as at March 31, 2025. The present value of the defined benefit obligations and the related current service cost and past service
cost, were measured using the Projected Unit Credit Method.

The plan assets are managed by the Gratuity Trust formed by the Company. The management of 100% of the funds is entrusted
according to norms of Gratuity Trust, whose pattern of investment is available with the Company.

The Company contributes provident fund liability to GHCL Officers Provident Fund Trust. As per the applicable accounting
standards, provident funds set up by the employers, which require interest shortfall to be met by the employer, needs to be
treated as defined benefit plan. The actuarial valuation of Provident Fund was carried out in accordance with the guidance note
issued by Actuarial Society of India for measurement of provident fund liabilities and a provision has been recognised in respect of
future anticipated shortfall with regard to interest rate obligation as at the balance sheet date. The following tables summarize the
components of net employee benefit expenses recognised in the statement of profit and loss and the funded status and amounts
recognised in the balance sheet for the above mentioned plan:

33 Share based compensation

In accordance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and the Guidance
Note on accounting for ''Employees share-based payments, the Scheme detailed below is managed and administered, compensation
benefits in respect of the scheme is assessed and accounted by the Company. To have an understanding of the Scheme, relevant
disclosures are given below:

a) The Shareholders at their Annual General Meeting held on July 23, 2015, approved a maximum limit of 50,00,000 number of
stock options under the Employee Stock Option Scheme “GHCL ESOS 2015”. The following details show the actual status of
ESOS granted during the financial year ended on March 31, 2025 :

b) During the year, 30,800 equity shares of H 10 each were issued and allotted under the GHCL Employees Stock Option Scheme -
2015 (“ESOS”).

''represents (a) demands due to MAT credit & carry forward losses not allowed for assessment year 2015-2016, (b) demands
of income tax mainly on account of transfer pricing adjustments for the assessment years 2016 - 2017 to 2020 - 2021 and (c)
demands of income tax on account of certain disallowances for assessment years 2021 - 2022 & 2022 - 2023. The Company has
filed appeals and rectification applications against the abovesaid income tax matters.

''As per Appendix C to Ind AS 12, the Company considered whether it has any uncertain tax positions. The Company''s tax filings includes
deduction related to 80IA, deduction allowances on subsidiary losses, 14A disallowances, transfer pricing matters, disallowance
u/s 56(2)(x) and others. The taxation authorities may challenge those tax treatments. The Company determined, basedon its tax
compliance and transfer pricing study, that it is probable that its tax treatments will be accepted by the taxation authorities.

The aforesaid Appendix did not have an impact on the financial statements of the Company.

"Represents disputed matters on account of (a) denial of CENVAT credits (b) differential customs duties on account of classifications
under different chapters of CETA and (c) other indirect tax matters.

''*'' Government of India had vide its Notification dated March 29, 2020, issued under the National Disaster Management Act
2005, directed that all employers shall make full payment of wages, of their workers at their workplaces, for the year of closure
under the lockdown. Subsequently, on the petitions filed by some of the employers against the aforementioned notification, the
Hon''ble Supreme Court of India, passed an interim order dated June 12, 2020 and directed employers to enter into negotiation
and settlement with workers for wages payment during the lockdown year. The aforesaid notification stood withdrawn w.e.f May
18, 2020. In the meanwhile, the Company had made payments to its workers and decided to do the final settlement, if any as per

35 Commitments and contingencies

the final order of the Hon''ble Supreme Court of India. During the current year, the Hon''ble Supreme Court has vide its order dated
May 17, 2024 dismissed all the civil writ petitions filed by the employers challenging the Notification dated March 29, 2020, issued
under the National Disaster Management Act 2005, by reserving or leaving the rights of both, the employers and the workmen to
be decided by the forum having appropriate jurisdiction if, and when such issues are agitated before such forum. There are no such
issue are agitated till date.

""Claims under this heading relate to legal cases pending in different courts under the jurisdiction of Gujarat High Court and
the courts subordinate to it. The matters are relating to (a) certain claims relating to contractor''s workmen, whose services were
terminated by the concerned contractor and the matter is between the contractor and their workmen and GHCL is made a party to
the dispute only, (b) water charges in dispute.

On the basis of current status of individual case for respective years and as per legal advice obtained by the Company, wherever
applicable, the Company is confident of winning the above cases and is of the view that no provision is required in respect
of above cases.

37 Segment information

The Company''s operations pertain to one segment i.e. Inorganic Chemicals and the Chief Operating Decision Maker (CODM)
reviews the operations of the Company as a whole, hence there is no reportable segments as per Ind AS 108 “Operating Segments”.
The management considers that the various goods provided by the Company constitutes single business segment, since the risk and
rewards from these products are not different from one another. However the Company has disclosed the following geographical
information as follows:

Notes:

(i) The revenue information above is based on the locations of the customers.

(ii) Non-current assets for this purpose consist of Property, plant and equipment and Intangible assets, Right of use asset and
Capital work in progress.

(iii) There are no customers having revenue exceeding 10% of total revenue of the Company

38 Hedging activities and derivatives

The Company is exposed to certain risks relating to its ongoing business operations. The primary risks managed using derivative
instruments are foreign currency risk.

The Company''s risk management strategy and how it is applied to manage risk are explained in Note 40.

Derivatives not designated as hedging instruments

The Company uses foreign exchange forward contracts to manage some of its transaction exposures. The foreign exchange forward
contracts are not designated as cash flow hedges and are entered into for a period consistent with foreign currency exposure of the
underlying transactions, generally upto 4 months. These contracts are not designated in hedge relationships and are measured at
fair value through profit or loss.

The management assessed that cash and cash equivalents, bank balances other than cash and cash equivalents, trade
receivables,Interest accrued on Bank deposits, others (Insurance Claim receivable) trade payables and other current financial
liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. The other current
financial liabilities represents Dealer deposits, Security deposits, Capital creditors and Unpaid dividend the carrying value of which
approximates the fair values as on the reporting date.

The following methods and assumptions were used to estimate the fair values:

i The fair value of the financial assets and liabilities is included at the amount at which the instrument is exchanged in a current
transaction between willing parties, other than in a forced or liquidation sale.

40 Financial risk management objectives and policies

The Company''s principal financial liabilities, other than derivatives, comprise loans and borrowings, lease liabilities trade and other
payables. The main purpose of these financial liabilities is to finance the Company''s operations and to provide guarantees to
support its operations. The Company''s principal financial assets include loans, trade and other receivables, and cash and cash
equivalents that derive directly from its operations. The Company also holds FVTOCI & FVTPL investments and enters into
derivative transactions.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management
of these risks. The Company''s senior management is supported by a Banking and Operations committee that advises on financial
risks and the appropriate financial risk governance framework for the Company. The financial risk committee provides assurance to
the Company''s senior management that the Company''s financial risk activities are governed by appropriate policies and procedures
and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. All
derivative activities for risk management purposes are carried out by expert team that have the appropriate skills, experience and
supervision. It is the Company''s policy, that no trading in derivatives for speculative purposes may be undertaken. The Board of
Directors reviews and agrees policies for managing each of these risks, which are summarised below.

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market
prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk. Financial
instruments affected by market risk include investments, loans and borrowings, deposits and derivative financial instruments.

The sensitivity analyses in the following sections relate to the position as at March 31, 2025 and March 31, 2024. The sensitivity
analysis have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt
are all constant.

a) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s
long-term debt obligations with floating interest rates.

In order to optimize the Company''s position with regards to interest income and interest expenses and to manage the interest rate
risk, treasury performs a comprehensive corporate interest rate management by balancing the proportion of fixed rate and floating
rate financial instruments in its total portfolio.

The Company is not exposed the significant interest rate as at a respective reporting date.

c) Equity price risk

The Company''s investments in listed equity securities and mutual funds are susceptible to market price risk arising from
uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification
and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Company''s
senior management on a regular basis. The Company''s Board of Directors reviews and approves all equity investment decisions.

At the reporting date, the exposure to listed equity securities at fair value was INR 16.85 crore as on March 31, 2025 (INR 13.86
crores as on March 31, 2024). A decrease of 10% on the NSE/BSE market index could have an impact of approximately INR 1.69
crores on the OCI or equity attributable to the Company. An increase of 10% in the value of the listed securities would also impact
OCI and equity. These changes would not have an effect on profit or loss.

Further, at reporting date, the Company has exposure to investments in mutual funds of INR 634.18 crores (INR 406.51 crores as
on March 31, 2024). A decrease of 10% in the NAV of mutual funds could have an impact of approximately INR 63.42 crores on the
statement of profit and loss.

40 Financial risk management objectives and policies

d) Commodity risk

The Company is impacted by the price volatility of coal and other raw materials. Its operating activities require continuous
manufacture of Soda Ash, and therefore require a regular supply of coal and other raw materials. Due to the significant volatility of
the price of coal in international market, the Company has entered into purchase contract for coal with its designated vendor(s). The
price in the purchase contract is linked to the certain indexes. The Company''s commercial department has developed and enacted
a risk management strategy regarding commodity price risk and its mitigation.

e) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a
financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing
activities, including deposits with Banks and financial institutions, foreign exchange transactions and other financial instruments.

Trade receivables

Customer credit risk is managed by business unit subject to the Company''s established policy, procedures and control relating
to customer credit risk management. Credit quality of a customer is assessed based on customer profiling, credit worthiness and
market intelligence. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally
covered by letters of credit or other forms of credit insurance.

An impairment analysis is performed at each reporting date on an individual basis for major customers. In addition, a large number
of minor receivables are categorized and assessed for impairment collectively. The calculation is based on exchange losses historical
data. The Company does not hold collateral as security except for Letter of Credits for export customers. The Company evaluates
the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries
and operate in largely independent markets.

Financial instruments and cash deposits

Credit risk from balances with banks is managed by the Company''s treasury department in accordance with the Company''s policy.
Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty.
Counter

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Mar 31, 2023

Terms / rights attached to equity shares

The Company has one class of equity shares having a par value of INR 10 per share. Each shareholder is entitled to one vote per equity share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuring Annual General Meeting, except in case of interim dividend. In the event of liquidation on the Company, the equity shareholders are eligible to receive remaining assets of the Company, after distribution of all preferential amounts, in proportion to their shareholding. The Company declares and pay dividend in Indian Rupee.

As per records of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

No shares have been issued by the Company for consideration other than cash, during the year of five years immediately preceding the reporting date.

Shares reserved for issue under options

For details of shares reserved for issue under the Share based payment plan of the company, please Refer Note 33

In earlier years, an amount of INR 16.36 crores (equivalent to nominal value of the equity shares bought back and cancelled by the Company) has been transferred to Capital Redemption Reserve from General Reserves pursuant to the provisions of Section 69 of the Companies Act, 2013 and the Article 7 of the Article of Association of the Company.

During the previous year, the Company had issued 3,37,500 equity shares of INR 10 each under ESOS Scheme. The excess of aggregate consideration received over the face value of shares amounting to INR 10.69 crores is credited to Securities premium. Further, during the current year, the Company has issued 2,35,000 equity shares of INR 10 each under ESOS Scheme. The excess of aggregate consideration received over the face value of shares amounting to INR 7.58 crores is credited to Securities premium

Retained earnings are the profit/(loss) that the Company has earned/incurred till date, less any transfers to general reserve, dividends or other distributions paid to shareholders. Retained earnings include re-measurement gain / (loss) on defined benefit plans, net of taxes that will not be reclassified to Statement of Profit and Loss.

* Net of dividend paid on Treasury shares acquired by GHCL Employees Stock Option Trust.

Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that if a dividend distribution in a given year is more than 10% of the paid-up capital of the Company for that year, then the total dividend distribution is less than the total distributable results for that year. Consequent to introduction of Companies Act 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the general reserve can be utilised only in accordance with the specific requirements of Companies Act, 2013.

16.1 Term loans from Banks / institutions have been secured against: -

a) Loan aggregating to INR 3.81 crores (March 31, 2022 INR 12.83 crores) is secured by exclusive charge on the specific fixed assets created out of the proceeds of the loan for Company''s Soda Ash Division situated at village Sutrapada, Veraval in Gujarat. The said loan carries interest rate ranging from 7.50% to 8.65%. The said loan is repayable in 3 installments till December 2023.

b) Loan aggregating to INR 342.23 crores (March 31, 2022 INR 441.42 crores) is secured by way of first pari passu charge on movable fixed assets of Soda Ash Division situated at village Sutrapada, Veraval, Gujarat excluding assets exclusively charged to other lenders both present and future. The said loans carries interest rates ranging from 6.60% to 8.65%. The remaining tenure of the loans is 2 to 6 years

c) Loan aggregating to INR 69.62 crores (March 31, 2022 INR 92.21 crores) is secured by exclusive charge on the specific fixed assets created out of the proceeds of the loan for Company''s Textile Division situated at Madurai, Tamil Nadu. The remaining tenure of the loans is 2 to 5 years. The said loan carries interest rate ranging from 7.25% to 8.80%. The said loan has been disclosed as Discountinued Operations of Spinning Division and is not included in above table (Refer Note 45).

d) Loan aggregating to INR 8.97 crores (March 31, 2022 12.95 crores) is secured by an exclusive first charge over movable fixed assets pertaining to Windmill Project situated at Tirunelveli District, Tamilnadu, both present and future, created out of the proceeds of the loan. The said loan carries interest rate ranging from 3.21% to 7.01% (excluding forward premium). The remaining tenure of the loan is 2 years. The said loan has been disclosed as Discountinued Operations of Spinning Division and is not included in above table (Refer Note 45)

e) Out of all the aforesaid secured Loans appearing in Note 16 (1) (a) to 16 (1) (b) totaling Rs. 346.04 crores (March 31, 2022 INR 559.40 crores), an amount of Rs. 103.42 crores (March 31, 2022 INR 134.80 crores) is due for payment in next 12 months and accordingly reported under Note 16(b) under the head "Short term borrowings” as "current maturities of Long Term Borrowings”

16.2 Short term borrowings: This facility is secured by way of hypothecation on inventory and trade receivables and borrowed as under:

(a) Credit Facilities in Indian Rupees: The facilities availed by way of cash credit and working capital demand loan were repayable on demand and carried an average interest rate of 4.90% p.a on the amount outstanding.

(b) Quarterly returns or statements of current assets filed by the Company with banks or financial institutions are in agreement with the books of accounts.

16.3 The Company has satisfied all the loan covenants

16.4 As at March 31 2023, the Company had available INR 300 crores (As at March 31 2022: INR 242 crores) of undrawn committed borrowing facilities. Further, the Company also has undrawn committed borrowing facilities of INR 300 crores in respect of its Discountinued Spinning Division disclosed as Discountinued Operation (Refer Note 45)

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

30 Earnings per share

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by weighted average number of equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares

31 Significant accounting judgements, estimates and assumptions

The preparation of financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses and the accompanying disclosures and disclosure of contingent liabilities. Uncertainty about the assumptions and estimates could result in outcomes that require a material adjustment to the carrying value of assets or liabilities affected in future periods.

Other disclosures relating to the Company''s exposure to risks and uncertainties includes

• Financial riskmanagementobjectives andpoliciesinNote40

• Sensitivity analyses disclosures in Note 32 and Note 40

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the year in which the estimates are revised and in any future periods affected.

Information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is included in the following notes:Judgements

(i) Judgements

In the process of applying the accounting policies, management has made the following judgements, which have significant effect on the amounts recognised in the Standalone''s financial statements:

Determining the lease term of contracts with renewal and termination options - Company as lessee

The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116. Identification of a lease requires significant judgment. The Company uses significant judgement in assessing the lease term (including anticipated renewals) and the applicable discount rate.

The Company determines the lease term as the noncancellable year of a lease, together with both years covered by an option to extend the lease if the Company is reasonably certain to exercise that option; and years covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option. In assessing whether the Company is reasonably certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease, it considers all relevant facts and circumstances that create an economic incentive for the Company to exercise the option to extend the lease, or not to exercise the option to terminate the lease. The Company revises the lease term if there is a change in the non-cancellable year of a lease

Revenue from contracts with customers

The Company applied the following judgements that significantly affect the determination of the amount and timing of revenue from contracts with customers:

Revenues from customer contracts are considered for recognition and measurement when the contract has been approved, in writing, by the parties to the contract, the parties to contract are committed to perform the irrespective obligations under the contract, and the contract is legally enforceable

The Company''s contracts with customers could include promises to transfer multiple product. The Company assesses the products promised in a contract and identifies distinct performance obligations in the contract. Identification of distinct performance obligation involves judgement to determine the deliverables and the ability of the customer to benefit independently from such deliverables

Judgement is also required to determine the transaction price for the contract and to ascertain the transaction price to each distinct performance obligation. The transaction price could be either a fixed amount of customer consideration or variable consideration with elements such as volume discounts, cash discount, price concessions and incentives. The transaction price is also adjusted for the effects of the time value of money if the contract includes a significant financing component. Any consideration payable to the customer is adjusted to

the transaction price, unless it is a payment for a distinct product from the customer. The estimated amount of variable consideration is adjusted in the transaction price only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur and is reassessed at the end of each reporting year. The Company allocates the elements of variable considerations to all the performance obligations of the contract unless there is observable evidence that they pertain to one or more distinct performance obligations.

Provisions and contingencies

The assessments undertaken in recognising provisions and contingencies have been made in accordance with Ind AS 37, ''Provisions, contingent liabilities and contingent assets''. The evaluation of the likelihood of the contingent events has required best judgment by management regarding the probability of exposure to potential loss.

Assessment of equity instruments

The Company has designated investments in equity instruments as FVTOCI investments since the Company expects to hold these investment with no intention to sale. The difference between the instrument''s fair value and Indian GAAP carrying amount has been recognized in retained earnings.

(ii) Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur

(iii) Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal

calculation is based on available data from binding sales transactions, conducted at arm''s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset''s performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. These estimates are most relevant to impairment assessment of Property plant and equipment

(iv) Share-based payments

For the measurement of the fair value of equity-settled transactions with employees at the grant date, the Company uses a Black-Scholes model for Employee Share Option Plan (ESOP). The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 33

(v) Useful lives of Property, plant and equipment

The estimated useful lives of property, plant and equipment are based on a number of factors including the effects of obsolescence, demand, competition, internal assessment of user experience and other economic factors (such as the stability of the industry, and known technological advances) and the level of maintenance expenditure required to obtain the expected future cash flows from the asset. The Company reviews the useful life of Property, plant and equipment at the end of each reporting date.

(vi) Post-retirement benefit plans

Employee benefit obligations (gratuity obligation) are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. Further details about gratuity obligations are given in Note 32.

(vii) Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the Balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. Refer Note 41 for further disclosures.

(viii) Leases - Estimating the incremental borrowing rate

The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Company ''would have to pay'', which requires estimation when no observable rates

are available or when they need to be adjusted to reflect the terms and conditions of the lease. The Company estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates.

(ix) Judgements, estimates and assumptions for Discontinued operations

a) Pursuant to the terms of the BTA, certain assets pertaining to Home Textile Business and Spinning Division are pass through in nature (i.e. the beneficial ownership of these assumed assets continued to be with the Company) such as export incentives receivable, claims receivables which would be transferred immediately to the Company by the Purchaser whenever received post-closing date. Consequently, such receivables have been retained by the Company and is forming part of the continuing operations.

b) Contingent liabilities of the Home Textile business and Spinning Business have been reported on the basis of list of assumed litigations read with excluded liabilities as per the terms specified in the BTA subject to the amendments and substitution vide Supplemental BTA.

32 Defined benefit and contribution plan

Defined contribution plan

The Company makes contributions towards provident fund and superannuation fund to a defined contribution retirement benefit plan for qualifying employees. Under the plan, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit plan to fund the benefits. Contribution paid for provident fund and superannuation fund are recognised as expense for the year

Defined benefit plan

Gratuity (funded)

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

Employees who are in continuous service for a year of 5 years are eligible for gratuity. The amount of gratuity payable to an employee upon leaving the Company is the 50% of Fixed cost to Company per month computed proportionately for 15/26 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and the Company makes contributions to Gratuity Trust registered under Income Tax Act, 1961.

The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity were carried out as at March 31, 2023. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

The plan assets are managed by the Gratuity Trust formed by the Company. The management of 100% of the funds is entrusted according to norms of Gratuity Trust, whose pattern of investment is available with the Company.

33 Share based compensation

In accordance with the Securities and Exchange Board of India (share based employee benefits) Regulations, 2014 and the Guidance Note on accounting for ''Employees share-based payments, the Scheme detailed below is managed and administered, compensation benefits in respect of the scheme is assessed and accounted by the Company. To have an understanding of the Scheme, relevant disclosures are given below.

a) As approved by the shareholders at their Annual General Meeting held on 23rd July 2015, the Company has got 50,00,000 number of Options under the Employee Stock Option Scheme "GHCL ESOS 2015". The following details show the actual status of ESOS granted during the financial year ended on March 31, 2023.

b) During the year 95,000 equity share options lapsed upon cessation of employment.

34 Leases

Company as a lessee

The Company has lease contracts for various items of Building and Salt works (fields taken on lease for salt production) in its operations. Leases of Building generally have lease terms between 1 and 9 years, while salt works generally have lease term of 30 years. Generally, the Company is restricted from assigning and subleasing the leased assets and some contracts require the Company to maintain certain financial ratios. There are no major lease contracts that include extension and termination options and variable lease payments.

The Company had total cash outflows including discontinued operations for leases of INR 5.74 crores in March 31, 2023 (INR 6.09 crores in March 31, 2022). There are no non cash additions to right-of-use assets and lease liabilities. There are no future cash outflows relating to leases that have not yet commenced.

35 Commitments and contingencies
Particulars	As at March 31, 2023	As at March 31, 2022
a) Estimated value of contracts remaining to be executed on Capital Account and not provided for (excluding INR 188.25 crores pertaining to Discontinued Operations as at March 31, 2023)	89.06	293.67
b) Contingent liabilities :
- Claims against the Company not acknowledged as debts1
- Income tax	12.31	12.78
- Sales tax / VAT	0.04	0.04
- Excise, Custom & Service Tax (excluding INR 0.03 crores pertaining to Discontinued Operations as at March 31, 2023)	131.87	127.36
- Unpaid labour dues (excluding INR 1.57 crores pertaining to Discontinued Operations) #	3.00	4.57
- Other claims (excluding INR 4.12 crores pertaining to Discontinued Operations) "	11.76	17.93

The sales to related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended March 31, 2023, the Company has not recorded any impairment of receivables relating to amounts owed by related parties. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

37 Segment information

The Company operated two segments i.e. Inorganic Chemicals and Textiles. Pursuant to the Scheme of Demerger (Refer Note 45), Company''s Textiles segment which included Spinning Division has been disclosed as Discontinuing Operations. Accordingly, the Company''s continuing operations pertain to one segment i.e. Inorganic Chemicals

38 Hedging activities and derivatives

The Company is exposed to certain risks relating to its ongoing business operations. The primary risks managed using derivative instruments are foreign currency risk.

The Company''s risk management strategy and how it is applied to manage risk are explained in Note 40.

i) Derivatives not designated as hedging instruments

The Company uses foreign exchange forward contracts to manage some of its transaction exposures. The foreign exchange forward contracts are not designated as cash flow hedges and are entered into for periods consistent with foreign currency exposure of the underlying transactions, generally upto 4 months. These contracts are not designated in hedge relationships and are measured at fair value through profit or loss..

The management assessed that cash and cash equivalents, bank balances other than cash and cash equivalents, trade receivables, export incentives receivable, GST refund receivable, subvention receivable, others (Insurance Claim receivable) trade payables and other current financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. The other current financial liabilities represents Dealer deposits, Security deposits, Capital creditors, Unpaid dividend and Interest accrued on Bank deposits, the carrying value of which approximates the fair values as on the reporting date.

The following methods and assumptions were used to estimate the fair values:

i The fair value of the financial assets and liabilities is included at the amount at which the instrument is exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

ii The fair values of the FVTOCI financial assets are derived from quoted market prices in active markets.

40 Financial risk management objectives and policies

The Company''s principal financial liabilities, other than derivatives, comprise loans and borrowings, lease liabilities trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations and to provide guarantees to support its operations. The Company''s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company also holds FVTOCI & FVTPL investments and enters into derivative transactions. The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Company''s senior management is supported by a Banking and Operations committee that advises on financial risks and the appropriate financial risk governance framework for the Company. The financial risk committee provides assurance to the Company''s senior management that the Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. All derivative activities for risk management purposes are carried out by expert list teams that have the appropriate skills, experience and supervision. It is the Company''s policy, that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk. Financial instruments affected by market risk include investments, loans and borrowings, deposits and derivative financial instruments.

The sensitivity analyses in the following sections relate to the position as at March 31, 2023 and March 31, 2022. The sensitivity analysis have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt are all constant.

a) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s long-term debt obligations with floating interest rates.

In order to optimize the Company''s position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.

The Company is not exposed the significant interest rate as at a respective reporting date.

b) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to its operating activities. The Company manages its foreign currency risk by hedging transactions that are expected to occur within a maximum 12 month for hedges of forecasted sales and purchases in foreign currency. The hedging is done through foreign currency forward contracts.

c) Equity price risk

The Company''s listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Company''s senior management on a regular basis. The Company''s Board of Directors reviews and approves all equity investment decisions.

At the reporting date, the exposure to unlisted equity securities at fair value was Nil as on March 31, 2023 excluding discontinued operations INR 1.23 crores (INR 1.38 crores as on March 31, 2022).

At the reporting date, the exposure to listed equity securities at fair value was INR 14.93 crore as on March 31, 2023 (INR 15.13 crores as on March 31, 2022). A decrease of 10% on the NSE/BSE market index could have an impact of approximately INR 1.49 crore on the OCI or equity attributable to the Company. An increase of 10% in the value of the listed securities would also impact OCI and equity. These changes would not have an effect on profit or loss

Further, at reporting date, the Company has exposure to investments in mutual funds of INR 364.84 crores (Nil as on March 31, 2022). A decrease of 10% in the value of Mutual fund company.

d) Commodity risk

The Company is impacted by the price volatility of coal and cotton (cotton included in Discontinued Operations). Its operating activities require continuous manufacture of Soda Ash, and therefore require a regular supply of coal. Cotton is the key raw material for the Spinning Division. Due to the significant volatility of the price of coal and cotton in international market, the Company has entered into purchase contract for coal with its designated vendor(s). The price in the purchase contract is linked to the certain indices. The Company''s commercial department has developed and enacted a risk management strategy regarding commodity price risk and its mitigation.

e) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with Banks and financial institutions, foreign exchange transactions and other financial instruments.

Trade receivables

Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on customer profiling, credit worthiness and market intelligence. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally covered by letters of credit or other forms of credit insurance.

An impairment analysis is performed at each reporting date on an individual basis for major customers. In addition, a large number of minor receivables are categorized and assessed for impairment collectively. The calculation is based on exchange losses historical data. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

Financial instruments and cash deposits

Credit risk from balances with banks is managed by the Company''s treasury department in accordance with the Company''s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company''s Board of Directors on an annual basis, and may be updated throughout the year subject to approval of the Banking & Operations Committee. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.

The Company''s maximum exposure to credit risk for the components of the Balance sheet at March 31, 2023 and March 31, 2022 is the carrying amounts as given in Note 9 except for derivative financial instruments. The Company''s maximum exposure relating to financial guarantees and financial derivative instruments is noted in note on commitments and contingencies and the liquidity table below.

Liquidity risk

Liquidity risk is the risk that the Company will encounter in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The approach of the Company to manage liquidity is to ensure, as far as possible, that it should have sufficient liquidity to meet its respective liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risk damage to their reputation. The Company also believes a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due. The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low.

The table below summarises the maturity profile of the Company''s financial liabilities based on contractual undiscounted payments excluding Discontinued operations :

41 Capital management (continuing operations)

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by

total capital plus net debt. The Company''s policy is to keep the gearing ratio of less than 75%. The Company includes within net debt, interest bearing loans and borrowings, lease liabilities, trade and other payables, less cash and cash equivalents

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current year.

No changes were made in the objectives, policies or processes for managing capital during the year ended March 31, 2023 and March 31, 2022.

43 In prior years as per SEBI (ESOS & ESPS) guidelines 1999 the Employees Stock Option Schemes of GHCL was administered by the registered Trust named GHCL Employees Stock Option Trust. However, the SEBI circular dated November 29, 2013, required the closure of all Employee Stock Option Trusts by June 2014. Accordingly, GHCL closed its ESOS Scheme, disposed of GHCL shares but retained its ESOS Trust for a limited purpose of litigation. ESOS Trust owns 20,46,195 GHCL shares, out of which 15,79,922 shares were illegally sold by broker involved, against which ESOS Trust has initiated legal proceedings and 4,66,273 shares were blocked for transactions by Stock exchange under legal proceedings. During the earlier year, 4,66,273 shares were transferred/released to ESOS Trust as per NSE order dated July 24, 2019 and are currently held by the Trust

During the tenure of ESOS Trust, the Company had advanced INR 29.54 crores interest free loan to the Trust to buy the shares and at the end of March, 2014, the Company had written off an amount of INR 23.34 crores due from ESOS Trust on account of permanent diminution in the value of 20,46,195 shares as on March 31, 2014 held by the Trust.

Once the legal matter will settle ESOS Trust will get the possession of 15,79,922 shares also, the sale proceeds from the disposal of these 20,46,195 shares by ESOS Trust will first be used to repay the loan amounting to INR 29.54 crores due to the Company which includes restatement of earlier write-off of INR 23.34 crores taken in March, 2014 and the balance surplus (if any) will be used for the benefit of the employees of the Company as per the recommendation of GHCL''s Compensation Committee.

45 Discontinued Operations :

(A) Home Textile Business

Pursuant to the Business Transfer Agreement dated December 06, 2021 and Amendment to Business Transfer Agreement dated March 30, 2022 with Indo Count Industries Limited (ICIL), the Company on April 02, 2022 transferred its Home Textile Business (comprising of weaving, processing, cutting and sewing of Home Textiles products, hereinafter referred as "HT Business”) as a going concern on a slump sale basis during the current year after satisfaction of conditions precedent as stipulated in these agreements at a consideration of INR 562.34 crores. In addition, Grace Home Fashions LLP (''GHF''), a wholly owned erstwhile subsidiary of the Company also transferred its identified assets (i.e., inventory and intellectual property) to Indo Count Global Inc., USA (US subsidiary of ICIL) on April 02, 2022 at a consideration of INR 31.77 crores pursuant to fulfillment of conditions precedent as per the Asset Transfer Agreement (ATA) dated December 06, 2021 and Amendment agreement (''AATA'') dated March 30, 2022 for transfer of its identified assets. Consequent to the above, the resultant profit of INR 64.15 crores (net of current and deferred tax impact of INR 4.11 crores on such sale of the HT Business recognised under Exceptional Items. The Company''s current tax obligation arising from such sale had been booked in accordance with the provision of the Income Tax Act, 1961.

(B) Spinning Division

The Board of Directors of the Company at their meeting held on December 06, 2021 approved a Scheme of Arrangement under Section 230-232 of the Companies Act 2013 consisting of demerger of Spinning Division of GHCL Limited (""Demerged Company/ Company"") into GHCL Textiles Limited (''Resulting Company'')"" (the ""Scheme""). Upon the Scheme becoming effective, the Spinning division (along with all assets and liabilities thereof as at the appointed date stated in the Scheme) shall be transferred to the Resulting Company on a going concern basis. As a consideration for the Demerger, the resulting Company will issue its equity shares to the shareholders of the Company as on the record date in a 1:1 swap ratio (i.e. One share of INR 2 each will be issued by the Resulting Company for every one share of INR 10 each held in the Company). The Scheme has been approved by the Hon''ble National Company Law Tribunal, Ahmedabad (NCLT) vide its order dated February 08, 2023. As per the Scheme, the accounting in respect of the Scheme will be carried out on the Appointed date mentioned in the Scheme i.e. the date on which the Company files the Certified True Copy of the NCLT order along with the sanctioned Scheme with the ROC i.e. April 01, 2023. However, Appendix A of Ind AS 10 ''Distribution of Non-cash Assets to Owners'' prescribed under Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time requires the Company to account for such Scheme in the current year, since the substantial conditions relating to transfer of the demerged undertaking were met during the current year. Since, the Certified True Copy of the NCLT order along with the sanctioned Scheme with the ROC was filed after the year end no accounting effect in respect of the Scheme has been given in these standalone financial Statements, as the approved Scheme prevail over the applicable Indian Accounting Standards."

(C) The net results of Home Textiles Business and Spinning Division has been disclosed separately as discontinued operation as required by Indian Accounting Standard (Ind AS) 105 Asset Held for Sale and Discontinued Operations and Schedule Ill to the Companies Act, 2013. Consequently, the Company''s Statement of Profit and Loss for the year ended March 31, 2023 pertains to its continuing operations only and for that purpose the statement of profit and loss for the year ended March 31, 2022 have been restated accordingly.

The following information relates to discontinued operations of Home Textiles Division and Spinning Division

46 Additional regulatory information:

1 The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property

2 The Company do not have any transactions with Companies struck off.

3 The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period

4 The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.

5 The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

6 The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(B) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,

7 The Company have not any such transaction which are not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961

48 A The Company had adopted Ind AS with transition date as April 01, 2015 and its first Ind AS standalone financial statements were prepared for the year ended March 31, 2017. The Company had revalued land, buildings and certain property, plant and equipment during the financial year ended March 31, 2009 and such revaluation surplus was credited to "Business Development Reserve” under Reserves and surplus in accordance with the Scheme of Arrangement approved by Hon''ble Gujarat High Court. Under the previous GAAP (Indian GAAP), deferred taxes were not required to be recognised on such revaluation surplus.

On the date of transition to Ind AS, the Company carried the carrying cost of property, plant and equipment as deemed cost as per Ind AS 101. Further, the Company was required to create deferred tax liability on difference between the carrying amount of such revalued assets in the balance sheet and its tax base on the date of transition to Ind AS). However, such deferred tax liabilities were not recognised in its first Ind AS financial statements for the year ended March 31, 2017 on the transition date.

Such non recognition of deferred tax liabilities has been corrected in the financial statements of the current year by retrospectively restating the comparative information as per Ind AS 8. A third balance sheet as at the beginning of the earliest period (i.e. April 1, 2021) has also been presented.

48 B The Company during the current year has re-evaluated the terms of arrangement of its contracts with customers with reference to Ind AS 115 and relevant guidance and determined that the amount of freight recovered from customers on sales of goods should have been presented as Revenue from contracts with customers under the head "Revenue from Operations” since the Company is acting as a principal as against presenting such amount of freight recovered as a deduction from the freight expenses under the head "Other Expenses”. Based on such reassessment, in accordance with the Indian Accounting Standards, the Company has corrected this by reclassifying the amounts of freight recovered from "Other Expenses” to "Revenue from Operations” for the previous year ended March 31, 2022. Such reclassification does not have any impact on the profit before or after tax or other equity of the Company.

49 The Company has entered into a Business Transfer Agreement ("BTA”) with Ajmera Cements Private Limited ("Seller”) on February 16, 2023 for the acquisition of a specified Business Undertaking located in the Junagarh district of Gujarat, as a going concern on a slump sale basis for an estimated consideration of INR. 27 crores, subject to certain adjustments in terms of the BTA ("Proposed Acquisition”). On March 31, 2023, both the parties have mutually agreed to extend the long stop date of the BTA to June 30, 2023 subject to the satisfaction of conditions precedent as stipulated in the BTA and upon securing requisite approvals from competent authorities.

50 Coronavirus (COVID-19)/War in Ukraine Impact on Financial Reporting - Accounting Year Ending March 31, 2023

The Company has considered the possible effects that may result from COVID-19/War in Ukraine in the preparation of these Standalone financial statements including the recoverability of carrying amounts of financial and non-financial assets. Based on the current year performance and estimates arrived at using internal and external sources of information, the Company does not expect any material impact on such carrying values. Based on the projected cash flows for the next one year the management is confident of liquidating its liabilities as and when they fall due and the Going Concern Assumption used for preparation of these financial statements is appropriate.

51 The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified and the final rules/interpretation have not yet been issued. The Company is in the process of assessing the impact of the code and will record the same, if any, in the year the Code becomes effective.

52 Exceptional Item

Exceptional item for the current year represents: (a) Profit of Rs. 64.15 crores (net of current and deferred tax impact of Rs. 4.11 crores on sale of the Home Textiles Business and (b) loss of Rs. 8.77 crores (net of tax Rs. 2.95 crores) on reassessement of balances recoverable from GHF, a wholly owned subsidiary of the Company (Refer Note 45 for details). Exceptional item for the previous year pertained to provision for diminution in the value of investment made in a wholly owned subsidiary in view of its negative net-worth & projected business plan as at March 31, 2022.

53 As per the Transfer Pricing Rules of the Income Tax Act, 1961 every company is required to get a transfer pricing study conducted to determine whether the transactions with associated enterprises were undertaken at an arm''s length basis for each financial year end. Transfer pricing study for the transaction pertaining to the year ended March 31, 2023 is currently in progress and hence adjustments if any which may arise there from have not been taken into account in these financial statements for the year ended March 31, 2023 and will be effective in the financial statements for the year ended March 31, 2024. However, in the opinion of the Company''s management, adjustments, if any, are not expected to be material.

54 Previous year''s figures have been regrouped / rearranged wherever necessary, to conform to the current year''s presentation. As required by Indian Accounting Standard (Ind AS) 105 "Asset Held for Sale and Discontinued Operations”, the Statement of Profit and Loss for the year ended March 31, 2022 has been restated to make it comparable, however Balance Sheet as at March 31, 2022 has not been reclassified or re-presented (except as stated in Note 48).

55 Standards notified but not yet effective:

There are no new standards that are notified, but not yet effective, upto the date of issuance of the Company''s financial statements.

1

Cases pending before Appellate Authorities/Dispute Resolution Panel in respect of which the Company has filed appeals.

On the basis of current status of individual case for respective years and as per legal advice obtained by the Company, wherever applicable, the Company is confident of winning the above cases and is of the view that no provision is required in respect of above cases.

# Government of India vide its notification dated March 29, 2020, issued under the National Disaster Management Act 2005, directed that all employers shall make full payment of wages, of their workers at their workplaces, for the period of closure under the lockdown. Subsequently on the petition filed by some of the employers against the aforementioned notification , the Hon''ble Supreme Court of India, passed an interim order dated June 12, 2020 and directed employers to enter into a negotiation and settlement with workers for wages payment during the lockdown period. The aforesaid notification also stands withdrawn w.e.f May 18, 2020. In the meanwhile, the Company had made payments to its workers and will do the final settlement if any as per the final order of the Hon''ble Supreme Court of India. If the Hon''ble Supreme Court upheld the notification of Government of India, the Company will have to pay further wages of INR 4.57 crores to the workers, whereas based on the management''s assessment the chances of the same is remote.

"Claims under this heading relate to legal cases pending in different courts under the jurisdiction of Gujarat High Court and the courts subordinate to it. Some of the cases relates to execution of ex-parte foreign decrees which are not enforceable in India. Certain claims relate to contractor''s workmen, whose services have been terminated by the concerned contractor and the matter is in between the contractor and their workmen and GHCL is made a party to the dispute only. Other cases relate to some ex-workmen who after opting VRS scheme duly approved by the regional Labour Officer challenged the same and this case is a week case since workmen have already lost one round of litigation till Hon''ble SC where directions were issued to deposit the entire amount received during VRS before initiating the legal proceedings. Apart from theses certain civil disputes are also pending which on merit are weak and GHCL has fair chances in winning these cases. Further, a matter relating to payment of water dues is under dispute with Water Dam Authorities.

---

Mar 31, 2022

Property plant and equipment are subject to charge to secure the company''s borrowings as discussed in Note 16

On transition to Ind AS (i.e. 1 April 2015), the company has elected to continue with the carrying value of all Property, plant and equipment measured as per the previous GAAP and use that carrying value as the deemed cost of Property, plant and equipment.

Leasehold Land *

Land for soda ash plant and for corporate office are taken on lease from the Government of India for a year of 90 to 99 years. leasehold lands are capitalised and amortised over the life of lease or life of assets (whichever is lower).

Leased Mines #

Leased mines represents expenditure incurred on development of mines.

Asset held for sale **

Assets held for sale represents the assets of Home textile business at Vapi unit to be transferred by the company pursuent to a Business transfer agreement and Land in Madurai (Yarn Unit) approved by Board for transfer in future. ( Refer Note no 47)

Capitalised borrowing costs

The amount of borrowing cost capitalised during the year ended March 31, 2022 was NIL (for the year March 31, 2021: INR 0.34 Crore) on account of capacity expansion of soda ash plant and other capital expenditure. The rate used to determine the amount of borrowing costs eligible for capitalisation was NIL (for the year March 31 2021: 8.25%) which is the effective interest rate of the specific borrowing.

Intangible assets include license for trademark acquired for obtaining exclusive manufacturing and marketing rights for one of its innovative textile product in USA.

On transition to Ind AS (i.e. 1 April 2015), the company has elected to continue with the carrying value of all Intangible assets measured as per the previous GAAP and use that carrying value as the deemed cost of Intangible assets.

Investments at fair value through OCI (fully paid) reflect investment in quoted and unquoted equity securities and quoted debt securities. These equity shares are designated as FVTOCI as they are not held for trading purpose and are not in similar line of business as the Company. Thus disclosing their fair value fluctuation in profit or loss will not reflect the purpose of holding. The Company has not transferred any gain or loss within equity in the previous year. Refer note 39 for determination of their fair values.

# Amount being in thousands are not appearing

# As per the guidelines of the Ministry of Coal, Government of India all Coal Mine owners who are operating Coal Mines are required to prepare a Mine Closure Plan and on approval of such plan need to open an escrow for depositing money towards mine closure activity. Annual amount to be deposited shall be as per mine closure plan. Total amount deposited along with interest shall be refunded as per conditions of approved mine plan.

* Margin money held with banks against opening of letter of credit (LC) and bank gurantee

No Loans are due from directors or other officer of the Company either severally or jointly with any other person. Nor any loans are due from firm or any private companies respectively in which any director is a partner, a director or a member other than stated above.

Loans and receivables are non-derivative financial assets which generate a fixed or variable interest income for the Company. The carrying value may be affected by changes in the credit risks of the counter parties.

Terms / rights attached to equity shares

The Company has one class of equity shares having a par value of INR 10 per share. Each shareholder is entitled to one vote per equity share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuring Annual General Meeting, except in case of interim dividend. In the event of liquidation on the Company, the equity shareholders are eligible to receive remaining assets of the Company, after distribution of all preferential amounts, in proportion to their shareholding.

As per records of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

No shares have been issued by the Company for consideration other than cash, during the year of five years immediately preceding the reporting date.

Shares reserved for issue under options

For details of shares reserved for issue under the Share based payment plan of the company, please Refer Note 33

16.1 Term loans from banks / institutions have been secured against: -

a) Loan aggregating to H 12.83 crores (Previous Year H 23.43 crores) is secured by exclusive charge on the specific fixed assets created out of the proceeds of the loan for Company''s Soda Ash Division situated at village Sutrapada, Veraval in Gujarat. The remaining tenure of the loans is 1 to 2 years.

b) Loan aggregating to H 441.42 crores (Previous Year H 329.60 crores) is secured by way of first pari passu charge on movable fixed assets of Soda Ash Division situated at village Sutrapada, Veraval, Gujarat excluding assets exclusively charged to other lenders both present and future. The remaining tenure of the loans is 3 to 6 years.

c) Loan aggregating to Nil (Previous Year H 46.20 crores) is secured by exclusive charge on specific fixed assets created out of the proceeds of the for Company''s Home Textile Division situated at Vapi in Gujarat.

d) Loan aggregating to NIL (Previous Year H 5.73 crores) is secured by an exclusive first charge over movable fixed assets pertaining to Windmill Project situated at Jodia, Jamnagar District, Gujarat, both present and future, created out of the proceeds of the loan. The term loan has been prepaid during current year.

e) Loan aggregating to H 92.21 crores (Previous Year H144.42 crores) is secured by exclusive charge on the specific fixed assets created out of the proceeds of the loan for Company''s Textile Division situated at Madurai, Tamil Nadu. The remaining tenure of the loans is 3 to 6 years.

f) Loan aggregating to NIL (Previous Year H 124.74 crores) is secured by first charge on pari passu basis over movable fixed assets of Company''s Textile division present and future situated at Paravai and Manaparai, Tamilnadu excluding movable assets already hypothecated on exclusive charge basis. Term Loan has been prepaid during current year.

g) Loan aggregating to NIL (Previous Year H 9.88 crores) is secured by first exclusive charge on movable fixed assets of Textile Division (including Phase I, II, III) Madurai, Tamil Nadu. The loan has been repaid during current year.

h) Loan aggregating to NIL (Previous Year H 17.24 crores) is secured by an exclusive first charge over movable and immovable fixed assets pertaining to Windmill Project situated at Tirunelveli District, Tamilnadu, both present and future, created out of the proceeds of the loan. The term loan has been prepaid during current year.

i) Loan aggregating to H 12.95 (Previous Year H25.51 crores) crores is secured by an exclusive first charge over movable fixed assets pertaining to Windmill Project situated at Tirunelveli District, Tamilnadu, both present and future, created out of the proceeds of the loan. The remaining tenure of the loan is 3 years.

j) Out of all the aforesaid secured Loans appearing in Note 16 (1) (a) to 16 (1) (i) totaling H 559.40 crores (Previous Year H 726.75 crores), an amount of H 134.80 crores (Previous Year H 162.93 crores) is due for payment in next 12 months and accordingly reported under Note 16(b) under the head "Short term borrowings” as "current maturities of Long Term Borrowings”.

k) The Company has satisfied all the loan covenants..

16.2 Short term borrowings: This facility is secured by way of hypothecation on inventory and trade receivables and borrowed as under:

(a) Credit Facilities in Indian Rupees: The facilities availed by way of Cash Credit, Working capital demand loan and Bill Discounting are repayable on demand and carries an average interest rate of 4.90% p.a (Previous Year 5.70% p.a) on the amount outstanding.

(b) Credit facilities in foreign currency : The facilities availed by way of foreign currency demand loan, packing credit in foreign currency, Export Bill discounting and Supplier''s Credit are repayable as per maturity dates being not more than 1 year and carries an average interest NIL (without forward premium) (Previous Year 0.45% p.a) on the amount outstanding.

(c ) Quarterly returns or statements of current assets filed by the Company with banks or financial institutions are in agreement with the books of accounts.

16.3 The Company has satisfied all the loan covenants.

16.4 As at March 31 2022, the Company had available INR 242 Crores (As at March 31 2021: INR 630 Crores) of undrawn committed borrowing facilities.

16.5 The Company''s long term borrowings under indian rupees carry interest rate in range of 6.60% to 8.4% p.a. (excluding TUFS benefit availed in few Textile loans)

16.6 The Company''s long term borrowings under foreign currency carry interest rate of 3.21% p.a.

*MCA has notified Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021, Companies (Amendment) Act 2019, Companies (Amendment) Act 2021. The notification states that"any amount remaining unspent under section 135 (5), pursuant to any ongoing project, fulfilling such conditions as may be prescribed, undertaken by a company in pursuance of its Corporate Social Responsibility Policy, shall be transferred by the company within a period of thirty days from the end of the financial year to a special account to be opened by the company in that behalf for that financial year in any scheduled bank to be called the Unspent Corporate Social Responsibility Account, and such amount shall be spent by the company in pursuance of its obligation towards the Corporate Social Responsibility Policy within a period of three financial years from the date of such transfer, failing which, the company shall transfer the same to a Fund specified in Schedule VII, within a period of thirty days from the date of completion of the third financial year".

30 Earnings per share

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the company by weighted average number of equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the company by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares..

31 Significant accounting judgements, estimates and assumptions

The preparation of financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses and the accompanying disclosures. Uncertainty about the assumptions and estimates could result in outcomes that require a material adjustment to the carrying value of assets or liabilities affected in future years.

Other disclosures relating to the Company''s exposure to risks and uncertainties includes:

• Financial risk management objectives and policies in Note 40

• Sensitivity analyses disclosures in Note 32 and Note 40

• Estimation uncertainty relating to the Global health pandemic on Covid 19 in Note 49

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the year in which the estimates are revised and in any future years affected.

Information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is included in the following notes:

(i) Judgements

In the process of applying the accounting policies, management has made the following judgements, which have significant effect on the amounts recognised in the Company''s financial statements:

Determining the lease term of contracts with renewal and termination options - Company as lessee

The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116. Identification of a lease requires significant judgment. The Company uses significant judgement in assessing the lease term (including anticipated renewals) and the applicable discount rate.

The Company determines the lease term as the non-cancellable year of a lease, together with both years covered by an option to extend the lease if the Company is reasonably certain to exercise that option; and years covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option. In assessing whether the Company is reasonably certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease, it considers all relevant facts and circumstances that create an economic incentive for the Company to exercise the option to extend the lease, or not to exercise the option to terminate the lease. The Company revises the lease term if there is a change in the non-cancellable year of a lease.

Revenue from contracts with customers

The Company applied the following judgements that significantly affect the determination of the amount and timing of revenue from contracts with customers:

Revenues from customer contracts are considered for recognition and measurement when the contract has been approved, in writing, by the parties to the contract, the parties to contract are committed to perform the irrespective obligations under the contract, and the contract is legally enforceable.

The Company''s contracts with customers could include promises to transfer multiple product. The Company assesses the products promised in a contract and identifies distinct performance obligations in the contract. Identification of distinct performance obligation involves judgement to determine the deliverables and the ability of the customer to benefit independently from such deliverables.

Judgement is also required to determine the transaction price for the contract and to ascribe the transaction price to each distinct performance obligation. The transaction price could be either a fixed amount of customer consideration or variable consideration with elements such as volume discounts, cash discount, price concessions and incentives. The transaction price is also adjusted for the effects of the time value of money if the contract includes a significant financing component. Any consideration payable to the customer is adjusted to the transaction price, unless it is a payment for a distinct product from the customer. The estimated amount of variable consideration is adjusted in the transaction price only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur and is reassessed at the end of each reporting year. The Company allocates the elements of variable considerations to all the performance obligations of the contract unless there is observable evidence that they pertain to one or more distinct performance obligations.

Provisions and contingencies

The assessments undertaken in recognising provisions and contingencies have been made in accordance with Ind AS 37, ''Provisions, contingent liabilities and contingent assets''. The evaluation of the likelihood of the contingent events has required best judgment by management regarding the probability of exposure to potential loss.

Assessment of equity instruments

The Company has designated investments in equity instruments as FVTOCI investments since the Company expects to hold these investment with no intention to sale. The difference between the instrument''s fair value and Indian GAAP carrying amount has been recognized in retained earnings.

(ii) Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the company. Such changes are reflected in the assumptions when they occur.

Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm''s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset''s performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. These estimates are most relevant to impairment assessment of property plant and equipment and investment in subsidiary companies, recognised by the Company. Company had done the impairment assessment of Home Textile Division during the previous year.

Share-based payments

For the measurement of the fair value of equity-settled transactions with employees at the grant date, the Company uses a Black-Scholes model for Employee Share Option Plan (GESP). The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 33.

Useful lives of property, plant and equipment

The estimated useful lives of property, plant and equipment are based on a number of factors including the effects of obsolescence, demand, competition, internal assessment of user experience and other economic factors (such as the stability of the industry, and known technological advances) and the level of maintenance expenditure required to obtain the expected future cash flows from the asset. The Company reviews the useful life of property, plant and equipment at the end of each reporting date.

Post-retirement benefit plans

Employee benefit obligations (gratuity obligation) are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. Further details about gratuity obligations are given in Note 32.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. Refer Note 41 for further disclosures

Leases - Estimating the incremental borrowing rate

The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Company ''would have to pay'', which requires estimation when no observable rates are available or when they need to be adjusted to reflect the terms and conditions of the lease. The Company estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates.

Judgements, estimates and assumptions for Dicontinued operations

a) Sale of Yarn to Home Textile undertaking at Vapi unit in normal course of business has been considered by the Company as part of its revenue from continued operations.

b) Pursuant to the terms of the BTA, certain assets pertaining to HT Business are pass through in nature (i.e. the beneficial ownership of these assumed assets continued to be with the Company) such as export incentives receivable, claims receivables which would be transferred immediately to the Company by the Purchaser whenever received post-closing date. Consequently, such receivables have been retained by the Company and is forming part of the continuing operations.

c) Contingent liabilities of the HT Business have been reported on the basis of list of assumed litigations read with excluded liabilities as per the terms specified in the BTA subject to the amendments and substitution vide Supplemental BTA.

32 Defined benefit and contribution plan

Defined contribution plan

The Company makes contributions towards provident fund and superannuation fund to a defined contribution retirement benefit plan for qualifying employees. Under the plan, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit plan to fund the benefits. Contribution paid for provident fund and superannuation fund are recognised as expense for the year :

Defined benefit plan Gratuity (funded)

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

Employees who are in continuous service for a year of 5 years are eligible for gratuity. The amount of gratuity payable to an employee upon leaving the company is the 50% of Fixed cost to company per month computed proportionately for 15/26 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and the Company makes contributions to Group Gratuity Trust registered under Income Tax Act-1961.

The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity were carried out as at 31 March 2022. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

The plan assets are managed by the Gratuity Trust formed by the Company. The management of 100% of the funds is entrusted according to norms of Gratuity Trust, whose pattern of investment is available with the Company.

33 Share based compensation

In accordance with the Securities and Exchange Board of India (share based employee benefits) Regulations, 2014 and the guidance Note on accounting for ''Employees share-based payments, the scheme detailed below is managed and administered, compensation benefits in respect of the scheme is assessed and accounted by the company. To have an understanding of the scheme, relevant disclosures are given below.

a) As approved by the shareholders at their Annual General Meeting held on 23rd July 2015, the Company has got 50,00,000 number of Options under the employee stock option scheme "GHCL ESOS 2015”. The following details show the actual status of ESOS granted during the financial year ended on March 31, 2022.

34 Leases

Company as a lessee

The Company has lease contracts for various items of Building and Salt works (fields taken on lease for salt production) in its operations. Leases of Building generally have lease terms between 1 and 10 years, while salt works generally have lease terms between 3 and 30 years. The Company''s obligations under its leases are secured by the lessor''s title to the leased assets. Generally, the Company is restricted from assigning and subleasing the leased assets and some contracts require the Company to maintain certain financial ratios. There are no major lease contracts that include extension and termination options and variable lease payments.

* Cases pending before appellate authorities/dispute resolution panel in respect of which the Company has filed appeals.

On the basis of current status of individual case for respective years and as per legal advice obtained by the company, wherever applicable, the company is confident of winning the above cases and is of the view that no provision is required in respect of above cases.

** ''In previous year, an order passed by Income Tax Appellate Tribunal (ITAT), Ahmedabad dated March 05,2021, ITAT has disposed off cases pertaining to AY2009-10, AY2010-11, AY2011-12, AY 2012-13, AY 2013-14 and AY 2014-15 and decided in favour of the company. As the Income Tax Authorities (the Department) has not filed an appeal to the High Count against the Appellate Tribunal''s order within stipulated time, therefore the amount pertains to above mentioned assessment years i.e. INR 154.65 Crores is not considered as contingent liability as on 31st March 2022.

# Government of India vide its notification dated March 29,2021, issued under the National Disaster Management Act 2005, directed that all employers shall make full payment of wages, of their workers at their workplaces, for the period of closure under the lockdown. Subsequently on the petition filed by some of the employers against the aforementioned notification , the Honourable Supreme Court of India, passed an interim order dated June 12, 2021 and directed employers to enter into a negotiation and settlement with workers for wages payment during the lockdown period. The aforesaid notification also stands withdrawn w.e.f May 18,2021. In the meanwhile, the Company had made payments to its workers and will do the final settlement if any as per the final order of the Honourable Supreme Court of India. If the Honourable Supreme Court upheld the notification of Government of India , the Company will have to pay further wages of H 4.57 Crores to the workers, whereas based on the management''s assessment the chances of the same is remote.

##Claims under this heading relate to legal cases pending in different courts under the jurisdiction of Gujarat High Court and the courts subordinate to it. Some of the cases relates to execution of ex-parte foreign decrees which are not enforceable in India. Certain claims relate to contractor''s workmen, whose services have been terminated by the concerned contractor and the matter is in between the contractor and their workmen and GHCL is made a party to the dispute only. Other cases relate to some ex-workmen who after opting VRS scheme duly approved by the regional Labour Officer challenged the same and this case is a week case since workmen have already lost one round of litigation till Hon''ble SC where directions were issued to deposit the entire amount received during VRS before initiating the legal proceedings. Apart from theses certain civil disputes are also pending which on merit are weak and GHCL has fair chances in winning these cases.

These include claims against the Company for recovery lodged by various parties.

37 Segment information

The Company is primarily engaged in the business of manufacture of inorganic chemicals and textiles and based on this it has two reportable segments:

Inorganic chemicals segment majorly includes manufacture of soda ash which is an important raw material for detergent and glass industry. Major raw materials to manufacture soda ash are salt, limestone, coke, briquette, coal and lignite. The total Inorganic chemical segment contributes approximately 76% of total Indian Standalone revenue.

Textiles segment manufactures cotton yarn and polyester yarn and home textile products. GHCL Limited is one of the largest integrated textile manufacturers own spinning, weaving and processing & dyeing and cutting & sewing manufacturing facility.

The management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements. Income taxes are managed on Company basis and are not allocated to Operating segments.

Adjustments and eliminations

Finance income and costs, and fair value gains and losses on financial assets are not allocated to individual segments as the underlying instruments are managed on a company basis.

Current taxes, deferred taxes and certain financial assets and liabilities are not allocated to those segments as they are also managed on a company basis.

Capital expenditure consists of additions of property, plant and equipment and intangible assets.

38 Hedging activities and derivatives

Derivatives not designated as hedging instruments

The Company is exposed to certain risks relating to its ongoing business operations. The primary risks managed using derivative instruments are foreign currency risk.

The Company''s risk management strategy and how it is applied to manage risk are explained in Note 40.

The Company uses foreign exchange forward contracts to manage some of its transaction exposures. The foreign exchange forward contracts are not designated as cash flow hedges and are entered into for years consistent with foreign currency exposure of the underlying transactions, generally from one to 24 months.

These contracts are not designated in hedge relationships and are measured at fair value through profit or loss.

The management assessed that cash and cash equivalents, Bank balances other than cash and cash equivalents, trade receivables, Export incentives receivable, GST refund receivable, Subvention receivable, trade payables and other current financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. The other current financial liabilities represents Dealer deposits, Security deposits, Capital creditors, Unpaid dividend and Interest accrued on bank deposits, the carrying value of which approximates the fair values as on the reporting date.

* Investments excludes investment in subsidiary which is carried at cost.

*** The other non-current financial assets represents bank deposits and Insurance claim receivable.

The following methods and assumptions were used to estimate the fair values:

i The fair value of the financial assets and liabilities is included at the amount at which the instrument is exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

ii The fair values of the FVTOCI financial assets are derived from quoted market prices in active markets.

40 Financial risk management objectives and policies

The Company''s principal financial liabilities, other than derivatives, comprise loans and borrowings, lease liabilities trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations and to provide guarantees to support its operations. The Company''s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company also holds FVTOCI investments and enters into derivative transactions.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Company''s senior management is supported by a banking and operations committee that advises on financial risks and the appropriate financial risk governance framework for the Company. The financial risk committee provides assurance to the Company''s senior management that the Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. All derivative activities for risk management purposes are carried out by expert list teams that have the appropriate skills, experience and supervision. It is the Company''s policy, that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk. Financial instruments affected by market risk include loans and borrowings, deposits and derivative financial instruments.

The sensitivity analyses in the following sections relate to the position as at March 31, 2022 and March 31, 2021. The sensitivity analysis have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt are all constant.

a) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s long-term debt obligations with floating interest rates.

In order to optimize the Company''s position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.

The Company is not exposed the significant interest rate as at a respective reporting date.

b) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to its operating activities. The company manages its foreign currency risk by hedging transactions that are expected to occur within a maximum 12 month for hedges of forecasted sales and purchases in foreign currency. The hedging is done through foreign currency forward contracts.

b) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to its operating activities. The company manages its foreign currency risk by hedging transactions that are expected to occur within a maximum 12 month for hedges of forecasted sales and purchases in foreign currency. The hedging is done through foreign currency forward contracts.

c) Equity price risk

The Company''s listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Company''s senior management on a regular basis. The Company''s Board of Directors reviews and approves all equity investment decisions.

At the reporting date, the exposure to unlisted equity securities at fair value was INR 1.38 crores as on March 31, 2022 (INR 1.29 crores as on March 31, 2021).

At the reporting date, the exposure to listed equity securities at fair value was INR 15.13 Crore as on March 31, 2022 (INR 13.82 as on March 31, 2021). A decrease of 10% on the NSE/BSE market index could have an impact of approximately INR 1.51 Crore on the OCI or equity attributable to the company. An increase of 10% in the value of the listed securities would also impact OCI and equity. These changes would not have an effect on profit or loss.

d) Commodity risk

The Company is impacted by the price volatility of coal and cotton. Its operating activities require continuous manufacture of soda ash, and therefore require a regular supply of coal. Cotton is the key raw material for the spinning unit. Due to the significant volatility of the price of coal and cotton in international market, the company has entered into purchase contract for coal with its designated vendor(s). The price in the purchase contract is linked to the certain indices. The Company''s commercial department has developed and enacted a risk management strategy regarding commodity price risk and its mitigation.

e) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.

Trade receivables

Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on customer profiling, credit worthiness and market intelligence. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally covered by letters of credit or other forms of credit insurance.

An impairment analysis is performed at each reporting date on an individual basis for major customers. In addition, a large number of minor receivables are Companyed into homogenous Company''s and assessed for impairment collectively. The calculation is based on exchange losses historical data. The Company does not hold collateral as security. The company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

Financial instruments and cash deposits

Credit risk from balances with banks is managed by the Company''s treasury department in accordance with the Company''s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company''s Board of Directors on an annual basis, and may be updated throughout the year subject to approval of the Banking & Operations Committee. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.

The company''s maximum exposure to credit risk for the components of the balance sheet at March 31, 2022 and March 31, 2021 is the carrying amounts as illustrated in Note 9 except for financial guarantees and derivative financial instruments. The company''s maximum exposure relating to financial guarantees and financial derivative instruments is noted in note on commitments and contingencies and the liquidity table below.

Liquidity risk

Liquidity risk is the risk that the company will encounter in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The approach of the company to manage liquidity is to ensure , as far as possible, that it should have sufficient liquidity to meet its respective liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risk damage to their reputation. The Company also beleives a significant liquidity risk with regard to its lease liabilities as the current aseets are sufficient to meet the obligations related to lease liabilities as and when they fall due.

The company assessed the concentration of risk with respect to refinancing its debt and concluded it to below.

41 Capital management

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company''s policy is to keep the gearing ratio of less than 75%. The Company includes within net debt, interest bearing loans and borrowings, lease liabilities, trade and other payables, less cash and cash equivalents.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current year.

No changes were made in the objectives, policies or processes for managing capital during the year ended March 31, 2022.

43 In prior years as per SEBI (ESOS & ESPS) guidelines 1999 the Employees Stock Option Schemes of GHCL was administered by the registered Trust named GHCL Employees Stock Option Trust. However, the SEBI circular dated November 29, 2013, required the closure of all Employee Stock Option Trusts by June 2014. Accordingly, GHCL closed its ESOS Scheme, disposed of GHCL shares but retained its ESOS Trust for a limited purpose of litigation. ESOS Trust owns 20,46,195 GHCL shares, out of which 15,79,922 shares were illegally sold by broker involved, against which ESOS Trust has initiated legal proceedings and 4,66,273 shares were blocked for transactions by Stock exchange under legal proceedings. During the earlier year, 4,66,273 shares were transferred/released to ESOS Trust as per NSE order dated July 24, 2019 and are currently held by the Trust.

During the tenure of ESOS Trust, the company had advanced INR 29.54 crores interest free loan to the Trust to buy the shares and at the end of March''2014, the company had written off an amount of INR 23.34 crores due from ESOS Trust on account of permanent diminution in the value of 20,46,195 shares as on March 31, 2014 held by the Trust.

Once the legal matter will settle ESOS Trust will get the possession of 15,79,922 shares also, the sale proceeds from the disposal of these 20,46,195 shares by ESOS Trust will first be used to repay the loan amounting to INR 29.54 crores due to GHCL which includes restatement of earlier write-off of INR 23.34 crores taken in March, 2014 and the balance surplus (if any) will be used for the benefit of the employees of the company as per the recommendation of GHCL''s Compensation Committee.

A. The Board of Directors and shareholders of GHCL Limited (''Company'') at their respective meetings held on December 6, 2021 and January 21, 2022 (through Postal Ballot), approved the sale and transfer of the Company''s Home Textiles Business (comprising of weaving, processing and cutting and sewing of home textiles products) to Indo Count Industries Limited ("ICIL”) on a going concern basis under a slump sale arrangement. Accordingly, a Business Transfer Agreement (''BTA'') was executed on December 6, 2021 between the Company and ICIL (read with the Amendment agreement (''ABTA'') dated March 30, 2022 entered into to record the amendment and substitution of certain provisions of the BTA). In addition, Grace Home Fashions LLP (''GHF''), a wholly owned subsidiary of the Company also entered into an Asset Transfer Agreement (ATA) on December 6, 2021 for transfer of its identified assets (i.e., inventory and intellectual property) to Indo Count Global Inc., USA (US subsidiary of ICIL), Indo Count Global Inc., USA together with "ICIL” known as "Purchaser” (read with the Amendment agreement (''AATA'') dated March 30, 2022 entered into to record the amendment and substitution of certain provisions of the ATA).

B. The transfer of Home Textile Business and identified assets of GHF ("Divestment”) to the Purchaser was subject to the satisfaction of conditions precedent as stipulated in the BTA, AA and ATA and receipt of applicable permissions and consents from concerned authorities. The Company and GHF successfully completed the divestment on April 2, 2022 in accordance with the terms of BTA and ATA for a consolidated consideration of H 592.8 Crores (subject to validation of customary closing date adjustment of working capital in terms of the BTA and ATA), In addition the Company/GHF expects to realise H 15.5 crores on its own account. The Company has received H 300 crores as advance from the said consideration on March 30, 2022.

C. In the Standalone Financial Statements, Assets and liabilities of Home Textiles business covered by the BTA have been disclosed as held for sale and disclosed separately in the Balance Sheet as at March 31, 2022 as "Assets of discontinued operations classified as held for sale” and "Liabilities of discontinued operations classified as held for sale” respectively. As mandated by Indian Accounting Standard (Ind AS) 105 Asset Held for Sale and Discontinued Operations ("Ind AS 105”), assets and liabilities have not been reclassified or re-presented for prior period i.e. year ended March 31, 2021

D. Further the net results of Home Textile Business and GHF have been disclosed separately as discontinued operation as required by Ind AS 105. Consequently, the Company''s Statement of Profit and Loss for the year ended March 31, 2022 presented pertains to its continuing operations only and for that purpose the Statement of Profit and Loss for the year ended March 31, 2021 has been restated accordingly.

E. The closing date being subsequent to the balance sheet date, no gain/loss with respect to the Divestment have been recognized in the Statement of Profit and Loss for the year ended March 31, 2022. The total assets and liabilities of the Home Textile business and GHF are H 572.65 Cr and H 82.49 Cr lakhs respectively as at March 31, 2022

46 Demerger

In view of the divestment of HT Business of the Company to ICIL pursuant to BTA (mentioned above), the Board of Directors of the Company, at their meeting held on December 06, 2021 approved withdrawal of the existing Scheme of Arrangement u/s 230-232 of the Companies Act 2013, involving demerger of its entire Textiles business into GHCL Textiles Limited (''Original Scheme'') and correspondingly approved "Scheme of Arrangement consisting of demerger of Spinning Division of GHCL Limited ("Demerged Company”) into GHCL Textiles Limited (''Resulting Company'')” (the "Scheme”). Subsequently, on December 20, 2021, Hon''ble NCLT (Ahmedabad Bench) allowed the withdrawal petition. The Company has received the observation letter/ approval from BSE,NSE on March 03, 2022 and competition commission of india on March 24, 2022 .The Company is in process of filing the 1st motion petition along with requisite documents with the Ahmedabad jurisdiction of NCLT.

Upon the Scheme becoming effective, the Textile Business (along with all assets and liabilities thereof) shall be carved out and transferred to the Resulting Company on a going concern basis. As a consideration for the Demerger, the Resulting Company would issue its equity shares to the shareholders of GHCL as on the record date in a 1:1 swap ratio (i.e. One (1) share of INR 2 each would be issued by the Resulting Company for every one (1) share of INR 10 each held in GHCL), following which the shareholding of both Companies shall be same as at the record date.

Post Demerger, GHCL shall continue with the Chemicals Business while the Resulting Company shall house the Textiles Spinning division. Shares of GHCL shall continue to be listed on the BSE and NSE and that of the Resulting Company shall also be listed on the BSE and NSE. The Demerger is expected to facilitate focused growth, concentrated approach, business synergies and increased operational and customer focus for respective business verticals apart from exploring independent business opportunities with efficient capital allocation.

(i) For details relating Discontinued operations ( Home Textiles business at Vapi, Gujarat) refer note no 45

(ii) The management has balance excessive and surplus land of 50.75 acres (Previous Year 48.33 acres) outside the premises of factory at Madurai, that is being disposed off and balance is held as non current asset held for sale. During the year the Company has sold/disposed 0.47 acres (Previous Year 12.25 acres) of land. Also the Company has transferred 2.42 acres (Previous Year 33.19 acres) of land from Property, Plant and Equipment being to be sold after the approval of Board of directors.

48 Additional regulatory information

1 The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

2 The Company do not have any transactions with companies struck off.

3 The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period,

4 The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.

5 The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

48 Other Statutory Information

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

6 The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,

7 The Company have not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961

49 Coronavirus (COVID-19) Impact on Financial Reporting - Accounting Year Ending March 31, 2022

The Company has considered the possible effects that may result from COVID-19 in the preparation of these Standalone financial statements including the recoverability of carrying amounts of financial and non-financial assets. Based on the current year performance and estimates arrived at using internal and external sources of information, the company does not expect any material impact on such carrying values. Based on the projected cash flows for the next one year the management is confident of liquidating its liabilities as and when they fall due and the Going concern assumption used for preparation of these financial statements is appropriate.

50 The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified and the final rules/interpretation have not yet been issued. The Company is in the process of assessing the impact of the code and will record the same, if any, in the year the Code becomes effective.

51 Exceptional item pertains to provision for diminution in the value of investment made in a wholly owned subsidiary in view of its negative net-worth & projected business plan as at March 31, 2022.

52 As per the Transfer Pricing Rules of the Income Tax Act, 1961 every company is required to get a transfer pricing study conducted to determine whether the transactions with associated enterprises were undertaken at an arm''s length basis for each financial year end. Transfer pricing study for the transaction pertaining to the year ended March 31, 2022 is currently in progress and hence adjustments if any which may arise there from have not been taken into account in these financial statements for the year ended March 31, 2022 and will be effective in the financial statements for the year ended March 31, 2023. However, in the opinion of the Company''s management, adjustments, if any, are not expected to be material.

53 Standards notified but not yet effective

There are no new standards that are notified, but not yet effective, upto the date of issuance of the Company''s financial statements.

54 Previous year''s figures have been regrouped / rearranged wherever necessary, to conform to current year''s presentation. As required by Indian Accounting Standard (Ind AS) 105 "Asset Held for Sale and Discontinued Operations”, the Statement of Profit and Loss for the year ended March 31, 2021 has been restated to make it comparable, however Balance Sheet as at March 31, 2021 has not been reclassified or re-presented.

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Mar 31, 2018

1. Segment information

The Company is primarily engaged in the business of manufacture of inorganic chemicals and textiles and based on this it has two reportable segments:

Inorganic chemicals segment majorly includes manufacture of soda ash which is an important raw material for detergent and glass industry. Major raw materials to manufacture soda ash are salt, limestone, coke, briquette, coal and lignite. The total Inorganic chemical segment contributes approximately 60 % of total Indian Standalone revenue.

Textiles segment manufactures cotton yarn and polyester yarn and home textile products. GHCL Limited is one of the largest integrated textile manufacturers own spinning, weaving and processing & dyeing and cutting & sewing manufacturing facility.

The management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements. Income taxes are managed on Company basis and are not allocated to Operating segments.

2. Related party transactions

a) The following table provides the list of related parties and total amount of transactions that have been entered into wi related parties for the relevant financial years.

A) Wholly owned subsidiaries

Dan River Properties LLC Grace Home Fashions LLC

B) Key managerial personnel

Mr. R. S. Jalan, Managing Director

Mr. Raman Chopra, CFO & Executive Director (Finance)

Mr. Bhuwneshwar Mishra, Sr. General Manager & Company Secretary

C) Non-whole-time directors

Mr. Sanjay Dalmia Mr. Anurag Dalmia Mr. Neelabh Dalmia Dr. B. C. Jain Mr. G. C. Srivastava

Mrs. Vijaylaxmi Joshi (w.e.f. April 20, 2017)

Mr. Sanjiv Tyagi

Mr. Mahesh Kumar Kheria

Mr. K C. Jani

Mr. Lavanya Rastogi

D) Relative of key managerial personnel

Mrs. Sarita Jalan, w/o Mr. R. S. Jalan

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

Mrs. Vandana Mishra, w/o Mr. Bhuwneshwar Mishra

E) Enterprises over which key managerial personnel are able to exercise significant influence

Dalmia Centre for Research & Development

GHCL Foundation Trust

GHCL Employees Group Gratuity Scheme

Gujarat Heavy Chemical Limited Superannuation Scheme

Dalmia Biz Private Limitd.

Dalmia Healthcare Limited

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 March 2018, the Company has not recorded any impairment of receivables relating to amounts owed by related parties. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

3 Hedging activities and derivatives

Derivatives not designated as hedging instruments

The Company uses foreign exchange forward contracts to manage some of its transaction exposures. The foreign exchange forward contracts are not designated as cash flow hedges and are entered into for periods consistent with foreign currency exposure of expected sales and purchases, generally from one to 24 months.

These contracts are not designated in hedge relationships and are measured at fair value through profit or loss.

4 Financial risk management objectives and policies

The Company''s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations and to provide guarantees to support its operations. The Company''s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company also holds FVTOCI investments and enters into derivative transactions.

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk. Financial instruments affected by market risk include loans and borrowings, deposits and derivative financial instruments.

The sensitivity analyses in the following sections relate to the position as at 31 March 2018. The sensitivity analysis have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt are all constant.

a) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s long-term debt obligations with floating interest rates.

In order to optimize the Company''s position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.

The Company is not exposed the significant interest rate as at a respective reporting date.

b) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to its operating activities. The company manages its foreign currency risk by hedging transactions that are expected to occur within a maximum 12 month periods for hedges of forecasted sales and purchases in foreign currency. The hedging is done through foreign currency forward contracts.

c) Equity price risk

The Company''s listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Company''s senior management on a regular basis. The Company''s Board of Directors reviews and approves all equity investment decisions.

At the reporting date, the exposure to unlisted equity securities at fair value was INR 0.20 crores.

At the reporting date, the exposure to listed equity securities at fair value was INR 10.07 Crore. A decrease of 10% on the NSE/BSE market index could have an impact of approximately INR 1.02 Crore on the OCI or equity attributable to the company. An increase of 10% in the value of the listed securities would also impact OCI and equity. These changes would not have an effect on profit or loss.

d) Commodity risk

The Company is impacted by the price volatility of coal. Its operating activities require continuous manufacture of soda ash, and therefore require a regular supply of coal. Due to the significant volatility of the price of coal in international market, the company has entered into purchase contract for coal with its designated vendor(s). The price in the purchase contract is linked to the certain indices. The Company''s commercial department has developed and enacted a risk management strategy regarding commodity price risk and its mitigation.

e) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.

Trade receivables

Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on customer profiling, credit worthiness and market intelligence. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally covered by letters of credit or other forms of credit insurance.

An impairment analysis is performed at each reporting date on an individual basis for major customers. In addition, a large number of minor receivables are grouped into homogenous group''s and assessed for impairment collectively. The calculation is based on exchange losses historical data. The Company does not hold collateral as security. The company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

Financial instruments and cash deposits

Credit risk from balances with banks is managed by the Company''s treasury department in accordance with the Company''s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company''s Board of Directors on an annual basis, and may be updated throughout the year subject to approval of the Banking & Operations Committee. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.

The company''s maximum exposure to credit risk for the components of the balance sheet at 31st March 2018 and March 2017 is the carrying amounts as illustrated in Note 9 except for financial guarantees and derivative financial instruments. The company''s maximum exposure relating to financial guarantees and financial derivative instruments is noted in note on commitments and contingencies and the liquidity table below.

Liquidity risk

Liquidity risk is the risk that the company will encounter in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The approach of the company to manage liquidity is to ensure , as far as possible, that it should have sufficient liquidity to meet its respective liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risk damage to their reputation.

The company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low.

The table below summarises the maturity profile of the company''s financial liabilities based on contractual undiscounted payments.

5 Capital management

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company''s policy is to keep the gearing ratio of less than 75%. The Company includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current year.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2018.

6Significant accounting judgements, estimates and assumptions

The preparation of financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses and the accompanying disclosures. Uncertainty about the assumptions and estimates could result in outcomes that require a material adjustment to the carrying value of assets or liabilities affected in future periods.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

Information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is included in the following notes:

(i) Judgements

In the process of applying the accounting policies, management has made the following judgements, which have significant effect on the amounts recognised in the Company''s financial statements:

Provisions and contingencies

The assessments undertaken in recognising provisions and contingencies have been made in accordance with Ind AS 37, ‘Provisions, contingent liabilities and contingent assets''. The evaluation of the likelihood of the contingent events has required best judgment by management regarding the probability of exposure to potential loss.

Assessment of lease contracts

Classification of leases under finance lease or operating lease requires judgment with regard to the estimated economic life and estimated cost of the asset. The Company has analyzed each lease contract on a case to case basis to classify the arrangement as operating or finance lease, based on an evaluation of the terms and conditions of the arrangements.

Assessment of equity instruments

The Company has designated investments in equity instruments as FVTOCI investments since the Company expects to hold these investment with no intention to sale.

(ii) Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the company. Such changes are reflected in the assumptions when they occur.

Taxes

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

Useful lives of property, plant and equipment

The estimated useful lives of property, plant and equipment are based on a number of factors including the effects of obsolescence, demand, competition, internal assessment of user experience and other economic factors (such as the stability of the industry, and known technological advances) and the level of maintenance expenditure required to obtain the expected future cash flows from the asset. The Company reviews the useful life of property, plant and equipment at the end of each reporting date.

Post-retirement benefit plans

Employee benefit obligations (gratuity obligation) are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

7 Standards issued but not yet effective up to the date of Financial Statements Standards issued but not yet effective:

The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Company''s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.

The Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) Amendment Rules, 2017 and Companies (Indian Accounting Standards) Amendment Rules, 2018 amending the following standard:

i) Ind AS 115 Revenue from Contracts with Customers

Ind AS 115 was issued on 28 March 2018 and establishes a five-step model to account for revenue arising from contracts with customers. Under Ind AS 115, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer.

The new revenue standard will supersede all current revenue recognition requirements under Ind AS. Either a full retrospective application or a modified retrospective application is required for annual periods beginning on or after 1 April 2018.

The Company is engaged in sale of goods of Inorganic Chemicals (mainly manufacture and sale of Soda Ash) and Home Textile division (comprising of yarn manufacturing, weaving, processing and cutting and sewing of home textiles products).

Ind AS 115 impact on sale of goods

The Company''s contracts with customers usually involve sale of goods as the only performance obligation, therefore adoption of Ind AS 115 is not expected to have any significant impact on the revenue and profit or loss. The Company expects the revenue recognition to occur at a point in time when control of the asset is transferred to the customer, generally on delivery of the goods.

Volume rebates

For few of its customers, the Company provide concessions in the form of volume discounts and special discounts. These amounts are subsequently paid to customers in cash or are adjusted with related trade receivables. The Company is in the process of evaluating the accounting impact of these concessions being treated as variable consideration under Ind AS 115. Thus, financial impact on revenues and profit on March 31, 2018 is not known.

Presentation and disclosure requirements

The presentation and disclosure requirements in Ind AS 115 are more detailed than under current Ind AS. The presentation requirements represent a significant change from current practice and significantly increases the volume of disclosures required in the Company''s financial statements. In particular, the Company expects that the notes to the financial statements will be expanded because of the disclosure of significant judgements made particularly for determining the transaction price of those contracts that include variable consideration.

In addition, as required by Ind AS 115, the Company will disaggregate revenue recognised from contracts with customers into categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. It will also disclose information about the relationship between the disclosure of disaggregated revenue and revenue information disclosed for each reportable segment.

ii) Amendments to Ind 112 Disclosure of Interests in Other Entities: Clarification of the scope of disclosure requirements in Ind AS 112

The amendments clarify that the disclosure requirements in Ind AS 112, other than those in paragraphs B10-B16, apply to an entity''s interest in a subsidiary, a joint venture or an associate (or a portion of its interest in a joint venture or an associate) that is classified (or included in a disposal Company that is classified) as held for sale.

These amendments are unlikely to affect the Company''s financial statements.

iii) Amendments to Ind AS 12 Recognition of Deferred Tax Assets for Unrealised Losses

The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of that deductible temporary difference. Furthermore, the amendments provide guidance on how an entity should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount.

Entities are required to apply the amendments retrospectively. However, on initial application of the amendments, the change in the opening equity of the earliest comparative period may be recognised in opening retained earnings (or in another component of equity, as appropriate), without allocating the change between opening retained earnings and other components of equity. Entities applying this relief must disclose that fact.

These amendments are effective for annual periods beginning on or after 1 April 2018.

These amendments are not expected to have any impact on the Company as the Company has no deductible temporary differences or assets that are in the scope of the amendments.

iv) Transfers of Investment Property — Amendments to Ind AS 40

The amendments clarify when an entity should transfer property, including property under construction or development into, or out of investment property. The amendments state that a change in use occurs when the property meets, or ceases to meet, the definition of investment property and there is evidence of the change in use. A mere change in management''s intentions for the use of a property does not provide evidence of a change in use.

Entities should apply the amendments prospectively to changes in use that occur on or after the beginning of the annual reporting period in which the entity first applies the amendments. An entity should reassess the classification of property held at that date and, if applicable, reclassify property to reflect the conditions that exist at that date. Retrospective application in accordance with Ind AS 8 is only permitted if it is possible without the use of hindsight.

The amendments are effective for annual periods beginning on or after 1 April 2018. The Company will apply amendments when they become effective. However, since Company''s current practice is in line with the clarifications issued, the Company does not expect any effect on its financial statements.

v) Appendix B to Ind AS 21 Foreign Currency Transactions and Advance Consideration

The Appendix clarifies that, in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the de-recognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which an entity initially recognises the non-monetary asset or nonmonetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, then the entity must determine the transaction date for each payment or receipt of advance consideration.

Entities may apply the Appendix requirements on a fully retrospective basis. Alternatively, an entity may apply these requirements prospectively to all assets, expenses and income in its scope that are initially recognised on or after:

- The beginning of the reporting period in which the entity first applies the Appendix, or

- The beginning of a prior reporting period presented as comparative information in the financial statements of the reporting period in which the entity first applies the Appendix.

The Appendix is effective for annual periods beginning on or after 1 April 2018. However, since the Company''s current practice is in line with the Interpretation, the Company does not expect any effect on its financial statements.

8 The financial statements for the previous year ended March 31, 2017 prepared in accordance with accounting standards notified under Section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP) were jointly audited by the predecessor joint auditor and continuing auditor.

* The above reclassifications in the prior year''s published numbers have been made for better presentation in the financial statements and to conform to the current year''s classification/disclosure. This does not have any impact on the profit and hence no change in the basic and diluted earnings per share of previous year.

* The above restatements does not have any impact at the beginning of the previous year i.e., 01st April, 2016.

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Mar 31, 2017

* The Board of Directors of the Company, at its meeting held on January 31, 2017, has approved a proposal to buy back up to 32,00,000 equity shares of the Company for an aggregate amount not exceeding Rs. 80 crore, being 3.2% of the total paid up equity share capital at amount per share not exceeding Rs. 315. During the year, the Company has bought back 5,73,438 equity share out of which 5,46,550 equity shares have been extinguished at 31.03.2017. The balance 26,888 shares has been cancelled post 31st March 2017.

In earlier years, Certain Fixed assets of the Company were revalued at their respective fair value as determined by government approved competent valuer appointed by the Company. The amount of such revaluation was transferred to Business development reserve, as per scheme of arrangement as approved by Hon''ble Gujarat High Court on 30th November, 2008. During the current year, the Company has adjusted the written down book value of revalued assets under business development reserve upon sale/write-off.

The Company had issued 10,000,000/- 10.75% Cumulative Redeemable Preference Shares (CRPS) of Rs. 10/- each, to IDBI Bank Limited during financial year 1999-2000 which was subsequently redeemed by the Company in the financial year 2001 02, pursuant to the provisions of Section 80 of the Companies Act, 1956 and the article 7 of the Article of Association of the Company. Accordingly, the Capital Redemption Reserve account to the extent of 100% of the value of CRPS redeemed (i.e. Rs. 10 Crore), was created out of profit of the Company available for payment of dividend.

An amount of Rs. 0.55 Crore (equivalent to nominal value of the equity shares bought back & cancelled by the Company during the year) has been transferred to Capital Redemption Reserve from General Reserves pursuant to the provisions of Section 69 of the Companies Act, 2013 and the article 7 of the Article of Association of the Company. (Refer Note No. 14) 16.1 Rupee Term Loans from Banks / Institutions have been secured against: -

a) Loan aggregating to Rs.102.45 crores is secured by exclusive charge on the specific fixed assets created out of the proceeds of the loan for Company''s Soda Ash Division situated at village Sutrapada, Veraval in Gujarat. The remaining tenure of the loans is 2 to 8 years.

b) Loan aggregating to Rs 202.58 crores is secured by way of first pari passu charge on movable fixed assets of Soda Ash Division situated at village Sutrapada, Veraval, Gujarat excluding assets exclusively charged to other lenders both present and future. The remaining tenure of the loans is 9 years.

c) Loan aggregating to Rs 161.81 crores is secured by way of first pari passu charge on movable fixed assets of Soda Ash Division situated at village Sutrapada, Veraval in Gujarat. The remaining tenure of the loans is 2 to 3 years.

d) Loan aggregating to Rs. 51.85 crores is secured by exclusive charge on the specific fixed assets created out of the proceeds of the loan for Company''s Home Textile Division situated at Vapi in Gujarat. The remaining tenure of the loans is to 10 years.

e) Loan aggregating to Rs. 8.69 crores is secured by an exclusive first charge over movable fixed assets situated at Jodia, Jamnagar District, Gujarat, both present and future, created out of the proceeds of the loan. The remaining tenure of the loan is 10 years.

f) Loan aggregating to Rs. 12.96 crores is secured by way of first pari passu charge on movable fixed assets of Home Textile Division situated at Vapi in Gujarat. The remaining tenure of the loans is 1 year.

g) Loan aggregating to Rs.107.86 crores is secured by exclusive charge on the specific fixed assets created out of the proceeds of the loan for Company''s Textile Division situated at Madurai, Tamil Nadu. The remaining tenure of the loans is to 10 years.

h) Loan aggregating to Rs. 74.88 crores is secured by extension of first charge on pari passu basis on Factory Land & Building of Textile Division situated at Paravai and Manaparai, Tamil Nadu with other term lenders of the said project. The remaining tenure of the loans is 1 to 3 years.

i) Loan aggregating to Rs. 69.94 crores is secured by first exclusive charge on movable fixed assets of Textile Division situated at Paravai and Manaparai, Tamil Nadu, both present and future, excluding assets exclusively charged to other lenders. The remaining tenure of the loan is 4 years.

j) Loan aggregating to Rs. 47.66 crores is secured by an exclusive first charge on movable fixed assets situated at Tirunelveli District, Tamilnadu, both present and future, created out of the proceeds of the loan. The remaining tenure of the loan is 8 years.

k) Loan aggregating to Rs. 30.22 crores is secured by an exclusive first charge on movable and immovable fixed assets situated at Tirunelveli District, Tamilnadu, both present and future, created out of the proceeds of the loan. The remaining tenure of the loan is 9 years.

l) Loan aggregating to Rs. 45.77 crores is secured by extension of first charge on movable fixed assets of Consumer Product division situated at Chennai and Industrial Salt Division situated at Bhavnagar and exclusive first charge on the factory land and building situated at Thiruporur village, Chengalpattu Taluka, Kancheepuram District, Chennai. The remaining tenure of the loan is 3 years.

m) Out of all the aforesaid secured Loans appearing in note 16 (a) to16 (l) totaling Rs. 916.67 crores, an amount of Rs. 218.71 crores is due for payment in next 12 months and accordingly reported under note no 19 under the head “ Other Current financial liabilities” as ‘current maturities of long term borrowing''.

16.2 Short Term Borrowings: This facility is secured by way of hypothecation on inventory & trade receivables & borrowed as under:

(a) Credit Facilities in Indian Rupees: The facilities availed by way of Cash Credit, Working capital demand loan, Export Packing Credit and Bill Discounting are repayable on demand and carries an average interest rate of 7.66% p.a on the amount outstanding.

(b) Credit Facilities in Foreign Currency : The facilities availed by way of Foreign currency nonresident borrowing, Packing Credit in foreign currency and Buyer''s Credit are repayable as per maturity dates being not more than 1 year and carries an average interest rate of 2.19% p.a on the amount outstanding.

* Provision for mines restoration

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

Information as required to be furnished as per section 22 of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) for the year ended March 31, 2017 is given below. This information has been determined to the extent such parties have been identified on the basis of information available with the Company32 Segment information

The Company is primarily engaged in the business of manufacture of Inorganic Chemicals and Textiles and based on this it has two reportable segments:

Inorganic Chemicals segment majorly includes manufacture of Soda Ash which is an important raw material for detergent and glass industry. Major raw materials to manufacture Soda Ash are Salt, limestone, coke, briquette, coal and lignite. The total Inorganic Chemical Segment contributes approx. 60 % of total Indian Standalone revenue.

Textiles segment manufactures cotton yarn and polyester yarn and home textile products. GHCL Limited is one of the largest integrated textile manufacturers own spinning, weaving and processing & dyeing and cutting & sewing manufacturing facility.

The management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements. Income taxes are managed on Company basis and are not allocated to Operating segments.

Defined Benefit Plan Gratuity (Funded)

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

1.elated Party Transactions

a) The following table provides the list of related parties and total amount of transactions that have been entered into with related parties for the relevant financial years.

A) Wholly owned subsidiaries

Dan River Properties LLC Grace Home Fashions LLC

B) Key Managerial Personnel

Mr. R. S. Jalan, Managing Director

Mr. Raman Chopra, CFO & Executive Director (Finance)

Mr. Bhuwneshwar Mishra, General Manager & Company Secretary

C) Non-whole-time directors Mr. Sanjay Dalmia

Mr. Anurag Dalmia

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 March 2017, the Company has not recorded any impairment of receivables relating to amounts owed by related parties. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

2. Hedging activities and derivatives

Derivatives not designated as hedging instruments

The Company uses foreign exchange forward contracts to manage some of its transaction exposures. The foreign exchange forward contracts are not designated as cash flow hedges and are entered into for periods consistent with foreign currency exposure of expected sales and purchases, generally from one to 24 months.

These contracts are not designated in hedge relationships and are measured at fair value through profit or loss. (Refer Note 38(b))

3 Fair Values

Set out below, is a comparison by class of the carrying amounts and fair value of the Company''s financial instruments, other than those with carrying amounts that are reasonable approximations of fair values:

The management assessed that cash and cash equivalents, trade receivables, trade payables and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The following methods and assumptions were used to estimate the fair values:

i The fair value of the financial assets and liabilities is included at the amount at which the instrument is exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

ii The fair values of the FVTOCI financial assets are derived from quoted market prices in active markets.

The following table provides the fair value measurement hierarchy of the Company’s assets and liabilities.

Quantitative disclosures fair value measurement hierarchy for assets as at 31 March 2017:

4.inancial risk management objectives and policies

The Company''s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations and to provide guarantees to support its operations. The Company''s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company also holds FVTOCI investments and enters into derivative transactions.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management overseas the management of these risks. The Company''s senior management is supported by a Banking and Operations committee that advises on financial risks and the appropriate financial risk governance framework for the Company. The financial risk committee provides assurance to the Company''s senior management that the Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. All derivative activities for risk management purposes are carried out by expert list teams that have the appropriate skills, experience and supervision. It is the Company''s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below.

Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk. Financial instruments affected by market risk include loans and borrowings, deposits and derivative financial instruments.

The sensitivity analyses in the following sections relate to the position as at 31 March 2017. The sensitivity analysis have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt are all constant.

a) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s long-term debt obligations with floating interest rates.

In order to optimize the Company''s position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.

The Company is not exposed the significant interest rate as at a respective reporting date.

b) Foreign currency risk

Foreign Currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to its operating activities. The Company manages its foreign currency risk by hedging transactions that are expected to occur within a maximum 12 month periods for hedges of forecasted sales and purchases in foreign currency. The hedging is done through foreign currency forward contracts.

c) Equity price risk

The Company''s listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Company''s senior management on a regular basis. The Company''s Board of Directors reviews and approves all equity investment decisions.

At the reporting date, the exposure to unlisted equity securities at fair value was INR 0.10 crores.

At the reporting date, the exposure to listed equity securities at fair value was INR 8.68 Crore. A decrease of 10% on the NSE/ BSE market index could have an impact of approximately INR 0.86 Crore on the OCI or equity attributable to the Company. An increase of 10% in the value of the listed securities would also impact OCI and equity. These changes would not have an effect on profit or loss.

d) Commodity Risk

The Company is impacted by the price volatility of coal. Its operating activities require continuous manufacture of soda ash, and therefore require a regular supply of coal. Due to the significant volatility of the price of coal in international market, the Company has entered into purchase contract for coal with its designated vendor(s). The price in the purchase contract is linked to the certain indices. The Company''s Commercial Department has developed and enacted a risk management strategy regarding commodity price risk and its mitigation.

e) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.

Trade Receivables

Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on customer profiling, credit worthiness and market intelligence. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally covered by letters of credit or other forms of credit insurance.

An impairment analysis is performed at each reporting date on an individual basis for major customers. In addition, a large number of minor receivables are grouped into homogenous group''s and assessed for impairment collectively. The calculation is based on exchange losses historical data. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

Financial instruments and cash deposits

Credit risk from balances with banks is managed by the Company''s treasury department in accordance with the Company''s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company''s Board of Directors on an annual basis, and may be updated throughout the year subject to approval of the Banking & Operations Committee. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.

The Company''s maximum exposure to credit risk for the components of the balance sheet at 31st March 2017,March 2016 and

1 April 2015 is the carrying amounts as illustrated in Note 9 except for financial guarantees and derivative financial instruments. The Company''s maximum exposure relating to financial guarantees and financial derivative instruments is noted in note on commitments and contingencies and the liquidity table below.

Liquidity Risk

Liquidity risk is the risk that the Company will encounter in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The approach of the Company to manage liquidity is to ensure , as far as possible, that these will have sufficient liquidity to meet their respective liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risk damage to their reputation.

The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low.

The table below summarizes the maturity profile of the Company''s financial liabilities based on contractual undiscounted payments.

5.apital Management

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximize the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company''s policy is to keep the gearing ratio of less than 75%. The Company includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.

No changes were made in the objectives, policies or processes for managing capital during the year ended 31 March 2017.

6.ignificant accounting judgments, estimates and assumptions

The preparation of financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses and the accompanying disclosures. Uncertainty about the assumptions and estimates could result in outcomes that require a material adjustment to the carrying value of assets or liabilities affected in future periods

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements is included in the following notes:

(i) Judgments

In the process of applying the accounting policies, management has made the following judgments, which have significant effect on the amounts recognized in the Company''s financial statements:

Provisions and contingencies

The assessments undertaken in recognizing provisions and contingencies have been made in accordance with Ind AS 37, ‘Provisions, Contingent Liabilities and Contingent Assets''. The evaluation of the likelihood of the contingent events has required best judgment by management regarding the probability of exposure to potential loss.

Assessment of lease contracts

Classification of leases under finance lease or operating lease requires judgment with regard to the estimated economic life and estimated cost of the asset. The Company has analyzed each lease contract on a case to case basis to classify the arrangement as operating or finance lease, based on an evaluation of the terms and conditions of the arrangements.

Assessment of Equity instruments

The Company has designated investments in equity instruments as FVTOCI investments since the Company expects to hold these investment with no intention to sale. The difference between the instrument''s fair value and Indian GAAP carrying amount has been recognized in retained earnings.

(ii) Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

Taxes

Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

Useful lives of property, plant and equipment

The estimated useful lives of property, plant and equipment are based on a number of factors including the effects of obsolescence, demand, competition, internal assessment of user experience and other economic factors (such as the stability of the industry, and known technological advances) and the level of maintenance expenditure required to obtain the expected future cash flows from the asset. The Company reviews the useful life of property, plant and equipment at the end of each reporting date. Post-retirement benefit plans

Employee benefit obligations (gratuity obligation) are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date

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

8. Share Based Compensation

In accordance with the Securities and Exchange Board of India (Share Based Employee benefits) Regulations, 2014 and the Guidance Note on Accounting for ''Employees Share-based Payments, the scheme detailed below is managed and administered, compensation benefits in respect of the scheme is assessed and accounted by the Company. To have an understanding of the scheme, relevant disclosures are given below.

a) As approved by the shareholders at their Annual General Meeting held on 23rd July 2015, the Company has got 50,00,000 number of Options under the employee stock option scheme "GHCL ESOS 2015". The following details show the actual status of ESOS granted during the financial year ended on 31st March 2017.

Note: The previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purposes of this note.

Notes to the reconciliation of equity as at 1st April 2015 and 31st March 2016 and Total comprehensive income for the year ended 31st March 2016

1 Fair Valuation of Investments

Under Indian GAAP, investments in equity instruments were classified as long term investments based on the intended holding period and reliability. Long term investments were carried at cost less provision for other than temporary diminution in the value of investments.

Accordingly, the Company has designated investments in equity instruments as FVTOCI investments. The difference between the instrument''s fair value and Indian GAAP carrying amount has been recognized in retained earnings.

2 Derivative Instruments

The fair value of derivative instruments (i.e. forward contracts and options) is recognized under Ind AS whereas the same was not recognized under Indian GAAP. The Company has not designated these derivative instruments as hedging instruments under Indian GAAP as well as under Ind AS. Accordingly, difference on account of fair valuation of these instruments has been adjusted in retained earnings.

3 Borrowings

Under Indian GAAP, transaction costs incurred in connection with borrowings are amortized upfront and charged to profit or loss for the period. Under Ind AS, transaction costs are included in the initial recognition amount of financial liability and charged to profit or loss using the effective interest method.

4 Proposed Dividend

Under Indian GAAP, proposed dividend (including DDT) is recognized as a liability in the period to which it relates, irrespective of when it is declared. Under Ind AS, proposed dividend is recognized as a liability in the period in which it is declared by the Company (usually when approved by shareholders in a general meeting) or paid.

In the case of the Company, the declaration of dividend occurs after period end. Therefore, the liability for the year ended 31st March 2015 recorded for the proposed dividend for the year along with dividend distribution tax is de-recognized and provided in the financial year in which it is declared or paid under IND AS.

5 Defined benefit obligation

Both under Indian GAAP and Ind AS, the Company recognizes costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind AS, re-measurements comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI. Thus the employee benefit cost is increased by INR 0.89 crore (net of Tax) and re-measurement gains/ losses on defined benefit plans has been recognized in the OCI net of tax.

6 Sale of goods

Under Indian GAAP, sale of goods was presented as net of excise duty. However, under Ind AS, sale of goods includes excise duty. Excise duty on sale of goods is separately presented on the face of statement of profit and loss. Thus sale of goods under Ind AS has increased by INR 176.56 Crore for the period ended 31 March 2016 with a corresponding increase in other expense.

7 Deferred tax

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS has resulted in recognition of deferred tax on temporary differences which was not required under Indian GAAP.

In addition, the various transitional adjustments lead to temporary differences. According to the accounting policies adopted by the Company it has to account for such differences. Deferred tax adjustments are recognized in correlation to the underlying transaction either in retained earnings or a separate component of equity.

8 Statement of cash flows

The transition from Indian GAAP to Ind AS has not had a material impact on the statement of cash flows.

9 Other comprehensive income

Under Indian GAAP, the Company has not presented other comprehensive income (OCI) separately. Hence, it has reconciled Indian GAAP profit or loss to profit or loss as per Ind AS. Further, Indian GAAP profit or loss is reconciled to total comprehensive income as per Ind AS.

9.irst Time Adoption Of Indian Accounting Standards

These are Company''s first financial statements prepared in accordance with Ind AS. For periods up to and including the year ended 31 March 2016, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ended 31 March 2017, together with the comparative period data as at and for the year ended 31 March 2016, as described in the summary of significant accounting policies. In preparing these financial statements, the Company''s opening balance sheet was prepared as at 1 April 2015, the Company''s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 1 April 2015 and the financial statements as at and for the year ended 31 March 2016

Exemptions Applied

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:

1 Mandatory exemptions :

I Estimates

An entity estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

Ind AS estimates at April 1, 2015 are consistent with the estimates as at the same date made in conformity with previous GAAP

2 Optional exemptions:

I Deemed Cost for Property Plant & equipment

Ind AS 101 permits a first time adopter to elect to fair value its property, plant and equipment as recognized in financial statements as at the date of transition to Ind AS, measured as per previous GAAP and use that as its deemed cost as at the date of transition or apply principles of Ind AS retrospectively. Ind AS 101 also permits the first time adopter to elect to continue with the carrying value for all of its property plant and equipment as recognized in the financial statements as at the date of transition to Ind AS. This exemption can be also used for intangible assets covered by Ind-AS 38.

Accordingly, as per Ind AS 101, the Company has elected to consider fair value of its property, plant and equipment, capital work in progress and intangibles as its deemed cost on the date of transition to Ind AS.

II Leases

Appendix C to Ind AS 17-" Leases" requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. Ind AS 101 allows a first-time adopter to determine whether an arrangement existing at the date of transition to Ind AS contains a lease on the basis of facts and circumstances existing at that date. except where the effect is expected to be not material.

The Company has elected to apply this exemption for such contracts/arrangements.

3 Fair value measurement of financial assets and liabilities

Under IGAAP the financial assets and liabilities were being carried at the transaction value.

First-time adopters may apply Ind AS 109 to day one gain or loss provisions prospectively to transactions occurring on or after the date of transition to Ind AS. Therefore, unless a first-time adopter elects to apply Ind AS 109 retrospectively to day one gain or loss transaction, transactions that occurred prior to the date of transition to Ind AS do not need to be retrospectively restated.

The Company has measured its financial assets and liabilities at amortized cost or fair value.

4 Investments in subsidiaries

Ind AS 101 permits the first time adopter to measure investment in subsidiaries in accordance with Ind AS 27 at one of the following:

a) Cost determined in accordance with Ind AS 27 or

b) Deemed cost:

(i) fair value at date of transition

(ii) previous GAAP carrying amount at that date.

The Company has elected to consider previous GAAP carrying amount of its investments in subsidiaries on the date of transition to Ind AS its deemed cost for the purpose of determining cost in accordance with principles of IND AS 27- "Separate financial statements".

5 Embedded Derivatives

As per Ind AS 101 a first-time adopter shall assess whether an embedded derivative is required to be separated from the host contract and accounted for as a derivative on the basis of the conditions that existed at the later of the date it first became a party to the contract and the date of reassessment. The Company has evaluated all its agreements on the basis of conditions that existed at the later of the date it first became a party to the contract and the date of reassessment.

10.andards issued but not yet effective up to the date of Financial Statements

The amendments to standards that are issued, but not yet effective, up to the date of issuance of the group''s financial statements are disclosed below. The group intends to adopt these standards, if applicable, when they become effective.

The Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) Amendment Rules, 2017 and has amended the following standard:

I) Amendment to Ind AS 7 Statement of Cash Flows

The amendments to Ind AS 7 requires an entity to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes.

On initial application of the amendment, entities are not required to provide comparative information for preceding periods. These amendments are effective for annual periods beginning on or after 1 April 2017. Application of this amendments will not have any recognition and measurement impact. However, it will require additional disclosure in the financial statements.

II) Amendment to Ind AS 102 Share-based Payment

The MCA has issued amendments to Ind AS 102 that address three main areas: the effects of vesting conditions on the measurement of a cash-settled share-based payment transaction, the classification of a share-based payment transaction with net settlement features for withholding tax obligations, and accounting where a modification to the terms and conditions of a share-based payment transaction changes its classification from cash settled to equity settled. The amendments are effective for annual periods beginning on or after 1 April 2017. Application of this amendments will not have any recognition and measurement impact.

The group will adopt these amendments from their applicability date.

11. The financial statements for the previous year ended March 31, 2016 prepared in accordance with accounting standards notified under Section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP) were audited by one of the predecessor joint auditor and continuing joint auditor.

12. revious period figures have been regrouped / reclassified, wherever considered necessary.

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Mar 31, 2016

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

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

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

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

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

6. Impairment of Assets

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

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

8. Corporate Social Responsibility ( CSR)

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

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

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Mar 31, 2015

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

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

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

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

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

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

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

2.1 Impairment of Assets

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

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

2.3 Corporate Social Responsibility ( CSR)

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

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

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Mar 31, 2014

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

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

1.2 Exceptional items are in respect of :

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

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

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

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

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

a) Liquidation of the company Country Date of Liquidation

ROSEBYS UK LIMITED UK 24th DECEMBER 2013

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

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

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

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

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

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

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

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

Defined Contribution Plan

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

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

Defined benefit Plan

Gratuity (Funded)

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

Leave encashment (unfunded)

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

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

1.10 Related Party Transactions a Subsidiaries & Associate :

Indian England N.V.

Indian Wales N.V.

Dan River Properties LLC

Grace Home Fashions LLC

Rosebys Interiors India Limited

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

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

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

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

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

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

DM Solar Farm Pvt Limited

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

b Key Management Personnel:

Mr. R. S. Jalan, Managing Director

Mr. Raman Chopra, CFO & Executive Director - Finance

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

c Relative of Key Management Personnel:

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

d significant infuence

Dalmia Centre for Research & Development

1.11 Intangible Assets

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

1.12 Impairment of Assets

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

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

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

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Mar 31, 2013

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

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

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

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

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

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

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

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

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

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

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

Defi ned Contribution Plan

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

1.9 Related Party Transactions a Subsidiaries & Associate :

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

Dan River Properties LLC

Grace Home Fashions LLC

GHCL Rosebys Limited

Rosebys Interiors India Limited

Teliforce Holding India Limited

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

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

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

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

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

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

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

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

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

b Key Management Personnel:

Mr. R. S. Jalan'' Managing Director

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

Mr. Raman Chopra'' Executive Director - Finance

c Relative of Key Management Personnel:

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

d Signifi cant infl uence

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

1.10 Intangible Assets

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

1.11 Impairment of Assets

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

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

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

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

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

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

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

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

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Mar 31, 2012

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Defined Benefit Plan

Gratuity (Funded)

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

Leave Encashment (Unfunded)

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

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

1.10 Related Party Transactions a Subsidiaries :

Colwell & Salmon Communications Inc.

Indian Britain B.V.

Indian England N.V.

Indian Wales N.V.

Dan River Properties LLC

Grace Home Fashions LLC

GHCL Rosebys Limited

Rosebys uK Limited

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

Rosebys Interiors India Limited

Teliforce Holding India Limited

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

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

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

b Key Management Personnel:

Mr. R. S. Jalan, Managing Director

Mr. Tej Malhotra, Sr. Executive Director - Operations

Mr. Raman Chopra, Executive Director - Finance

c Relative of Key Management Personnel:

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

1.11 Intangible Assets

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

a Salt Pans

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

b Software

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

1.12 Impairment of Assets

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

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

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

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

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

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

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

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

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

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

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

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Mar 31, 2011

1.

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

b) Contingent Liabilities :

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

(ii) Letters of Credit 76.05 526.68

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

(iv) Claims against the Company not acknowledged as debts

- Income Tax & Wealth Tax 140.49 48.66

- Sales Tax / VAT 5.99 3.99

- Excise & Service Tax 2,769.16 2,205.70

- Other claims 620.00 736.91

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Defined Benefit Plan

Gratuity (Funded)

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

Leave Encashment (Unfunded)

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

12. a. Related Party Transactions Subsidiaries :

Colwell & Salmon Communications Inc.

Indian Britain B.V.

Indian England N.V.

Indian Wales N.V.

GHCL Inc.

GHCL International Inc.

Dan River Properties LLC

Grace Home Fashions LLC

GHCL Rosebys Limited

Textile & Design Limited

Rosebys UK Limited

S C GHCL Upsom SA

Rosebys Interiors India Limited

Fabient Textile Limited

Rosebys International Limited

Teliforce Holding India Limited

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

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

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

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

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

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

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

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

b. Key Management Personnel:

Mr. R. S. Jalan, Managing Director

Mr. Tej Malhotra, Sr. Executive Director - Operations

Mr. Raman Chopra, Executive Director - Finance

c. Relative of Key Management Personnel:

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

13. Deferred Revenue Expenditure

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

Voluntary Retirement Scheme Expenses

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

14. Intangible Assets

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

a. Salt Pans

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

b. Software

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

15. Impairment of Assets

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

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

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

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

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

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

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

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

Particulars Details

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

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

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

d) Options Exercised Nil

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

f) Option Lapsed Nil

g) Variation of Terms of Options Nil

h) Money realized by exercise of options Nil

i) Total Number of Options 16,55,000

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

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

l) Number of employees to whom options are granted 33

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

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

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

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

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

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

Mr. Nikhil Sen 75,000

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

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

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

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

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

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

Risk - Free interest Rate Not Applicable

Expected Life Not Applicable

Expected Volatility Not Applicable

Expected Dividends Not Applicable

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

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

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

---

Mar 31, 2010

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

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

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

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

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

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

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

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

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

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

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

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

Defined Contribution Plan

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

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

Defined Benefit Plan

Gratuity (Funded)

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

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

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

13 a Related Party Transactions Subsidiaries :

Colwell & Salmon Communications Inc.

Indian Britain B.V.

Indian England N.V.

Indian Wales N.V.

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

GHCL Inc.

GHCL International Inc.

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

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

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

Dan River Properties LLC

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

Old Apparel Inc

Old Apparel Properties Inc.

GHCL Rosebys Limited

Textile and Design Limited

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

b Key Management Personnel:

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

14 Deferred Revenue Expenditure

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

a Voluntary Retirement Scheme Expenses

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

b Prepayment Premium

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

15 Intangible Assets

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

a Salt Pans

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

b Software

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

c Goodwill

Goodwill is amortized over a period of five years.

16 Impairment of Assets

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

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

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

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

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

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