GOCL Corporation Ltd.

CHAIRMAN’S MESSAGE

Dear Shareholders,

On behalf of the Board of Directors and the Company, it is my pleasure to present the Annual Report along with the Audited Financial Statements for the year ended 31^st March, 2018 and also extend a warm welcome to you to the 57^th Annual General Meeting of your Company.

Economic Overview

The economy averaged a growth of 6.7%. However, Q4 of the fiscal year was strong at 7.7% aided by the manufacturing, construction and services sectors. With the economy adjusting to the impacts of the government’s demonetization and GST initiatives the growth slowly recovered in the third and fourth quarters of the year. Although export growth was flat, the recovery was due to increase in government expenditure and overall investment growth.

The Global Economic Prospects Report of the World Bank projects GDP growth at 7.3% during the on-going fiscal and 7.5% for the next two succeeding years. Moody has upgraded the country’s sovereign credit rating in nearly 14 years to Baa2 and changed its rating outlook to stable from positive as risks to India’s credit profile were broadly balanced. The positive mood was further strengthened by the fact that India was ranked 30 spots higher in the World Bank’s Ease of Doing Business Index.

Energetics and Explosives Businesses

Our Production and Sales volumes for the year were higher, however, due to fall in prices in major tenders, the consolidated revenue has shown a marginal decrease from Rs, 551 crores in the previous year to Rs, 500 crores, although, the profits from the business has been maintained.

While the competition and price realizations are going to remain on a downward trend, the Company and its wholly owned subsidiary IDL Explosives Limited ( IDLEL ) have initiated several projects for up gradation and modification of processes with additional capex to enhance quality, productivity and safety to create superior value. IDLEL has also obtained increase in licensed capacities at 13 locations which enhance production of bulk explosives by over one lakh tonnes.

R&D efforts are also underway to not only improve processes but also to introduce new products based on customer preference.

The activity in the defence sector is increasing, especially with the stabilization of the “Make in India” projects and initiatives. The niche areas which are catered to by our Special Product and Metal Cladding Groups are coming into prominence and we expect to develop more sophisticated products for these niche markets.

Currently, we have a good order book of Rs, 704 crores. More orders are in the pipeline, we, therefore, expect major growth over the next 2 - 3 years.

Realty

The first block of 14.54 lakhs sft ( Blocks 3A and 3B with MLCP for 2500 cars ) in the Company’s ‘Ecopolis’ project at Yelahanka, Bengaluru, a certified LEED Gold rated building, has inked its first lease. In line with the industry norms, after the initial rent-free period which is allowed for fit outs, revenue streams would follow. Block 2 of the SEZ area of 10.06 lakh sq.ft, another green building which is pre-certified LEED Gold rated, is also nearing completion. It will be ready for fit outs by Q4 of 2018-19. With this breakthrough, the Company and the Developer are actively considering proposals for early monetizing of these assets.

As announced recently, the first Lease Agreement has been signed with AXA Business Services Private Limited, one of the major leading multi-national insurance/financial companies for one full floor ( 73,465 sft ) in Block 3. The revenue stream will start after the fit out period from Q3 F 2019.

With the on-going improvement of social infrastructure including the Metro Rail, North Bengaluru will offer alternate IT corridor to already saturated prime markets of Outer Ring Road, SBD, CBD, Whitefield and Bannerghatta Road. Ecopolis can cater to the needs of occupiers looking for large floor-plates, in firming up their real estate requirements to expand operations in other corridors of IT/ITES office.

Hyderabad has been gaining prominence in the international business map as a Contemporary City. The recently held Global Entrepreneurship Summit being a testimony to it. Economic rents, occupier-friendly state government policies and robust supply pipeline are likely to invite cost-conscious occupiers to Hyderabad. The 100-acre integrated mixed use township is located in Kukatpally which is very close to the IT/ITES hotspots of Hitech City and Gachibowli. This township comprises of IT/ITeS office space, Retail segment, Educational Institution, Hotel, Hospital and Residential apartments. The master plan has been redesigned and a detailed design for Phase 1 of the development is currently being developed.

Investments

The FY 2018-19 promises to be an interesting one as planned combination between Houghton International and NYSE listed Quaker Chemical Corporation progresses. The 10% investment in Houghton International Inc. held through its wholly owned UK subsidiary will result in approximately 2% holding in the Quaker Chemical Corporation. The combination then will be a global leader in the space of process fluids, chemical specialties, and technical expertise to the global primary metals and metal working industries. Quaker Chemical Corporation continues to be in productive discussions with the European Commission and Federal Trade Commission regarding the Combination. Based on the information available to date, the Quaker Chemcial Corporation expects to receive approval from the regulatory authorities and close the Combination in the fourth quarter of 2018. As you would have observed from the financial statements prepared in accordance with the newly introduced accounting standards i.e., IndAS, fair value of this investment was Rs, 440 crores as on March 31, 2018.

I take this opportunity to convey my gratitude to my colleagues on the Board for their cooperation and valuable contributions during the year. I appreciate the Management and employees for their efforts in the major cost and process optimization and new product initiatives during the transition phase to build a more efficient and customer oriented business in line with future demand patterns.

I also extend my sincere thanks to all our Shareholders for their continued trust and support.

Warm regards,

Ajay P Hinduja

August 10, 2018

CHAIRMAN