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DCW Ltd.

BSE: 500117 Sector: Industrials
NSE: DCW ISIN Code: INE500A01029
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VOLUME 60630
52-Week high 55.35
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Mkt Cap.(Rs cr) 879
Buy Price 40.00
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Sell Price 40.25
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OPEN 40.20
CLOSE 40.80
VOLUME 60630
52-Week high 55.35
52-Week low 27.70
P/E
Mkt Cap.(Rs cr) 879
Buy Price 40.00
Buy Qty 238.00
Sell Price 40.25
Sell Qty 500.00

DCW Ltd. (DCW) - Director Report

Company director report

TO THE MEMBERS

Your Directors present their 78th Annual Report and Audited Financial Statements forthe Financial Year ended 31st March 2017 -

1. Financial Results

31-03-2017 31-3-2016
(Rs. in lakhs) (Rs. in lakhs)
Gross Sales 130491.45 139879.50
Gross Profit 9294.21 9574.75
Less : Provisions
Depreciation 6792.91 6897.42
Profit Before Tax/(Loss) 2501.30 2677.33
Tax: Current Period 485.00 650.00
Previous Period 15.00 -
MAT Credit available for set off / Utilized (475.00) (617.00)
25.00 33.00
Profit/(Loss)After Current Tax & Tax Adjustments 2476.30 2644.33
Deferred Tax 461.57 932.24
Profit after Tax/(Loss) 2014.73 1712.09
Add: Balance brought forward 13671.41 11959.32
Profit available for Appropriation 15686.14 13671.41
Appropriations:
General Reserves - -
Proposed Dividend - -
Dividend Distribution Tax - -
Balance carried forward 15686.13 13671.41

2. Dividend:

Due to lower profits on the operations of the company during the year and to conservecash required for the operations of the company your Directors have not recommended anydividend for the year on the equity shares of the Company.

3. Operations:

The sales for the year are Rs.1304.91 crores compared to Rs. 1398.80 crores in theprevious year. The profit for the year (before depreciation) was Rs.92.94 crores against aprofit of Rs. 95.75 crores in the previous year. The profit before tax amounted toRs.25.01 crores as against profit of Rs. 26.77 crores in the previous year. The profitafter provision of current tax / taxes for the year is Rs.24.76 crores against a profit ofRs.26.44 crores of the previous year and profit after deferred tax was Rs. 20.15 croresagainst profit of Rs.17.12 crores for previous year.

4. Exports:

The Company's exports were of Rs.165.98 crores as compared to Rs 177.53crores in the previous year.

5.1 Division wise Performance :

a) PVC Division:

The turnover of the division was Rs.658.17 crores as compared to Rs.648.93 crores inthe previous year. The demand for PVC continues to show positive growth. The Governmenthas identified irrigation power and infrastructure as thrust areas and increasedactivity in these sectors are likely to boost demand for PVC Resin. b) Caustic SodaDivision:

The turnover of the division was Rs. 413.92 crores as compared to Rs.508.68 crores inthe previous year a reduction of 18.62%. The decrease in turnover of the division ismainly on account of shortage of water due to near draught condition in Tamilnadu andstrike of workers lasting about 18 days in Sahupuram Works during the year.

c) Soda Ash Division:

The turnover of the division was Rs. 193.66 crores as compared to Rs.217.77 crores ofthe previous year a reduction of 11.07%. The decrease in Turnover was due to shut down ofthe plant for more than one month for repairs and maintenance during the year. The workingof this division is stable and the demand in this segment is consistent. Also looking tothe demand and supply position in coming years and no major new capacities coming up innear future the working of this division is expected to be stable. 5.2 There are nomaterial changes and commitments affecting the financial position of the Company whichhave occurred between the end of the financial year 2016-17 and the date of this Report.

5.3 DCW Pigments Limited ceased to be a Subsidiary /Associate Company of the Companyduring the year.

6. PROJECTS IMPLEMENTED

Chlorinated Poly Vinyl Chloride (C-PVC) Project.

The Company's Chlorinated Poly Vinyl Chloride (C-PVC) Plant at its Sahupuram Facilityin Tamilnadu set up with Technology from Arkema of France had commissioned during the yearand has since stabilized. Your company is the first to manufacture C-PVC in India and thisbeing import substitute will help the country save on valuable foreign exchange.

7. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

7.1 Industry Structure and Developments

7.1.1 Caustic Soda is an Alkaline used in sectors like soaps detergents paper andchemicals (alumina sector). The demand for Caustic Soda is driven by the upturn in theproduction growth in these sectors. The installed capacity of caustic soda is about 28.60lakhs tonnes out of which 50% of the capacities are in Western part of India 25% inSourthern India.

7.1.2 Soda Ash is mainly used in industries such as Detergents Dye intermediariesSodium Silicate Ore refining Glass industry Pesticides Paper Pharmaceuticals andMining industries. Sodium Bi-carbonate which is manufactured by Soda Ash industries isbeing used in bakeries and also by chemical and pharmaceutical industries. The totalinstalled capacity in soda ash industry is 33.61 lakh MT. All these capacities areconcentrated in Western part of India due to availability of required raw materials i.e.salt lime stone and coal/lignite. The demand for soda ash is increasing by 5% annuallymainly due to demand from detergent and glass sector. India is exporting soda ash to SouthEast Asian countries.

7.1.3 PolyVinyl Chloride (PVC)

Poly Vinyl Chloride (PVC) is the most commonly used thermoplastic. PVC is produced fromVinyl Chloride Monomer (VCM) which is obtained from Ethylene Dichloride (EDC) aderivative of ethylene and chlorine. PVC is used in a variety of items such as pipes andfittings wires and cables calendared sheets blow molded bottles profiles footwearroofing automotive parts table cloths shower curtains and furniture. In India the percapita consumption of PVC is significantly less as compared with developed countries.

Total domestic installed capacity of PVC industry is 1.35 Mill.TPA The domestic demandof PVC is about 2.65 Mill. TPA. The shortfall of 1.3 Mill.TPA in supply is met by imports.The market for PVC is expanding by 5 to 6% p.a. and hence there is scope for increasingcapacities.

7.2 Opportunities and Threats

The domestic demand for all the products manufactured by the Company is growing whichgives opportunity to expand its production capacities and take benefit of theexpanding market. Company's Caustic Soda Synthetic Rutile and PVC Units are near toTuticorin Port in Tamilnadu and this gives opportunity to the Company to easily export itsproducts. Company has opportunity to go for backward/forward integration in the productsit manufactures which can make the Company more competitive.

The low cost imports coming in to the country can be a threat in future. HoweverCompany's efforts over the years have made it a low cost producer and hence the Company iscapable of facing international competition.

7.3 Segment-wise or product-wise performance.

7.3.1 Caustic Soda Division:

The Company continues to be a major player in South India with a market share ofapproximately 20%. The demand for caustic soda is expected to grow at a steady rate dueto increased demand from alumina manufacturers. The Company has captive use of HCL &Chlorine which helps to maintain Caustic Production at full level.

7.3.2 Soda Ash Division:

The Soda Ash Industry continues to grow at a compounded rate of 4% - 5% per annum andthis trend is expected to continue. Antidumping duty imposed on import of Soda Ash fromcountries of Iran Pakistan China Ukraine Kenya Turkey Russia European Union and theUS by Govt. of India will protect the industry against dumping of Soda Ash from thesecountries.

7.3.3 PVC Division:

The Company one of the country's five producers of PVC resin has maintained itsmarket share of nearly 7%. Anti-dumping duty imposed on PVC resin imports from China USAMexico European Union Indonesia will protect the domestic industry against dumping ofPVC resin from these countries. Automation cum De-bottlenecking program implemented inthis unit will help the Company in reducing cost and increasing production of thisdivision.

7.3.4 Synthetic Iron Oxide Pigment Division:

With starting of Synthetics Iron Oxide Pigment (SIOP) Division the company enteredinto speciality chemical business. The plant was under stablisation stage and has sincestarted production. This plant has been established with company's patented technology andtechnological help from Huntsman pigments (formerly Rockwood Pigments). This plant willconsume leach liquor generated from Synthetic Rutile plant and will help in reducingpollution. This division once fully operational will give more stability to the bottomline.

7.3.5 C-PVC :

The new C-PVC Plant which was commissioned and has since stabilized is a specialitychemical and your company is first in India to manufacture C-PVC domestically. At presententire C-PVC demand is being met by way of imports. This plant will help the country toconserve foreign exchange and also will help the country to move towards Make in India.This product being speciality chemical it needs to pass acceptability tests by the userindustry. The product has since stabilized and company will be able to achieve fullproduction in this plant by second half of the year.

7.4 Outlook :

The Company has diversified operations with three major business segments viz. PVCChlor Alkali and Soda Ash. It is thus reasonably protected from the vagaries of individualbusiness cycles of these products. By the commencement of commercial production atcompany's new Synthetic Iron Oxide Pigment plant company has entered into specialtychemical segment and this will give more stability to the bottom line of the company.

7.5 Risks and concerns

The Company's performance depends upon number of factors viz. fluctuations in theexchange rates of

Rupee with major International currencies change in raw-material prices change induty structure on the raw materials imported and Company's various products change inGovernment policies in the sectors in which company operates etc.

7.6 Internal Control Systems and their adequacy

Company has adequate internal control system commensurating with the nature of itsbusiness and size of its operations. Internal Audit is conducted on a regular basis by areputed firm of Chartered Accountants. The reports of the internal audit along withcomments from the management are placed for review before Audit Committee

7.7 Financial Performance with respect to Operational Performance

The Gross Revenue of the Company for the year was Rs.1304.91 crores against the grossrevenue of Rs.1398.79 crores of the previous year. The Profit Before Tax was Rs.25.01crores compared to Rs.26.77 crores of the previous year. Water shortage at Sahupuram Worksdue to near draught condition in Tamilnadu workers strike in Sahupuram Works lastingabout 18 days and shut down of Soda Ash Plant at Dhrangadhra Gujarat for a period ofabout one month for repairs and maintenance during the year has caused decrease in revenueand profitability of the Company.

7.8 Material Developments in Human Resources/Industrial Relation front includingnumber of people employed.

Company continuous to give atmost importance to human resources development and keepsrelations cordial. However there was strike at Sahupuram Works Tamilnadu by workerslasting about 18 days during the year relating to wage settlement which was finallyamicably resolved. Number of permanent employees have been mentioned hereinafter.

7.9 Cautionary Note:

Statement in this report describing the company's objectives projections estimatesexpectation and prediction may be "forward looking statements". Actual resultscould differ materially from those expressed or implied due to variations in prices of rawmaterials and realization of finished goods changes in government regulation taxregimes economic developments and other incidental factors

8. Directors & Key Managerial Personnel

A. Retirement by rotation

In accordance with the provisions of Section 152 (6) of the Companies Act 2013 Mr.Vivek Jain (DIN No.00502027) retires by rotation at the ensuing Annual General Meeting ofthe Company and being eligible offer himself for re-appointment. The Board recommends hisre-appointment

B. Appointment of Independent Directors

With coming into force of the Companies Act 2013 all the existing IndependentDirectors viz. Shri Sodhsal Singh Dev of Dhrangadhra (DIN No.00682550) Smt. SujataRangenekar (DIN No.06425371) Shri D. Ganapathy (DIN No.02707898) and Shri Salil Kapoor(DIN No.02256540) were appointed as Independent Directors by the members of the Company atthe Annual General Meeting held on 13th August 2014 under Section 149 and otherapplicable provisions of the Companies Act 2013 for a term of 5 consecutive years uptothe conclusion of the 80th Annual General Meeting in the calendar year 2019. TheIndependent Directors have submitted the declaration of Independence as required pursuantto Section 149(7) of the Companies Act 2013 stating that they meet the criteria ofindependence as provided in sub-section (6) and there has been no change in thecircumstances which may affect their status as independent director during the year.

C. Performance Evaluation -

In compliance with the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Performance evaluation of the Board was carried outduring the year under review and a structured questionnaire was prepared covering variousaspects of the Board's functioning such as participation adequate preparationcontribution to strategy and other areas quality of decision making high quality ofdebate with robust and probing discussions etc. The Nomination and Remuneration Committeeevaluated the performance of the Directors. Independent Directors at a separate meetingheld by them have evaluated the performance of the non-Independent Directors Board ofDirectors as a whole and also evaluated the performance of the chairman taking intoconsideration the views of Managing Directors and Non-Executive Directors. The IndependentDirectors in the said meeting also assessed the quality quantity and timeliness of flowof information between the management of the Company and the board of directors that isnecessary for the board of directors to effectively and reasonably perform their duties.The Board of Directors have also evaluated its own performance and that of its Committeesand individual Directors.

Mr P.K. Jain Chairman & Managing Director Mr Bakul Jain Mr Mudit Jain Mr VivekJain Managing Directors and Mr Vimal Jain Chief Financial Officer and Ms. Jigna KarnickCompany Secretary are Key Managerial Personnel under Section 203 of the Companies Act2013.

9. Particulars of employees

9.1The information required under Section 197 of the Companies Act 2013 and Rule 5 (2)of Companies Appointment and Remuneration of Managerial Personnel) Rules 2014 forms partof this Report as

Annexure 'A'.

9.2The information required under Section 197 of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow:

a. The ratio of the remuneration of each director to the median remuneration of theemployees of the

Company for the financial year;

Managing Directors Ratio to median remuneration
Shri P.K. Jain 32.34
Shri Bakul Jain 32.34
Shri Mudit Jain 32.34
Shri Vivek Jain 32.34

For this purpose sitting fees paid to the Directors have not been considered asremuneration

b. The percentage increase in remuneration of each Director Chief Executive OfficerChief Financial

Officer Company Secretary in the financial Year.

Directors Chief Executive Officer Chief Financial Officer and Company Secretary % increase in remuneration in the financial Year
Shri P. K. Jain - Chairman & Managing Director 0.41 %
Shri Bakul Jain - Managing Director 0.41 %
Shri Mudit Jain - Managing Director 0.41 %
Shri Vivek Jain - Managing Director 0.41 %
Shri Vimal Jain - Chief Financial Officer 8.95 %
Ms. Jigna Karnick - Company Secretary 10.04 %

c. The percentage increase in the median remuneration of employees in the financialyear : 23% d. The number of permanent employees on the rolls of Company : 1850 e. Averagepercentile increase already made in the salaries of employees other than the managerialpersonnel in the last financial year and its comparison with the percentile increase inthe managerial remuneration and justification thereof and point out if there are anyexceptional circumstances for increase in the managerial remuneration:

The average increase in remuneration is 23% for employees other than ManagerialPersonnel and there was 0.41% increase in the Managerial remuneration. f.Affirmation that the remuneration is as per the remuneration policy of the Company:

The Company affirm that remuneration is as per the remuneration policy of the Company.

10. Statutory Auditors

M/s. V. Sankar Aiyar & Co. Chartered Accountants Statutory Auditors of theCompany will hold office until the conclusion of the ensuing Annual General Meeting. Interms of provisions of Section 139(2) of the Companies Act 2013 M/s V.Sankar Aiyar &Co. ceases to be the Statutory Auditors on the conclusion of the forthcoming AnnualGeneral Meeting. M/s V.Sankar Aiyar & Co. has been associated with the Company formore than 7 decades and the Board has put on record their appreciation for the valuableservice rendered by them during their long tenure.

M/s. Chhajed & Doshi is a well known 54 years old Chartered Accountants Firm.This Firm was established in 1964 by late Shri S.P.Chhajed who was President of Instituteof Chartered Accountants of India. M/s Chhajed & Doshi has furnished certificate oftheir eligibility and given their consent under Section 141 of the Companies Act 2013 andthe Rules made thereunder. M/s. Chhajed & Doshi have also confirmed that they hold avalid certificate issued by the Peer Review Board of the ICAI and have submitted copy ofthe Certificate dated 11th January 2017.

The members are requested to appoint M/s. Chhajed & Doshi Chartered Accountants asAuditors of the Company to holdoffice from the conclusion of the ensuing Annual GeneralMeeting till the conclusion of the 83rd Annual General Meeting on the terms and conditionsas will be stated in the notice convening the forthcoming Annual General Meeting.

The Auditors' Report to the Shareholders for the year under review does not contain anyqualification. The Report given by the Statutory Auditors for the financial Statements forthe year ended 31st March 2017 read with explanatory notes thereon do not call for anyexplanation or comments from the Board under Section 134(3) of the Companies Act 2013.

11. Cost Auditor And Cost Audit Report

Pursuant to Section 148 of the Companies Act 2013 read with Companies (Cost Recordsand Audit) Amendment Rules 2014 the Board of Directors on the recommendation of the AuditCommittee appointed M/s. N.D. Birla & Co. Ahmedabad and M/s. R. Nanabhoy & Co.Mumbai for conducting cost audit of the company's Soda Ash and Caustic Soda divisionsrespectively for the financial year 2016-17.

They have conducted Cost Audit for the financial year 2016-17 of the respectivedivisions and will be filing Cost Audit Report with the Central Govt. The remunerationpayable to Cost Auditors is required to be determined by the Shareholders at the AnnualGeneral Meeting. They have also been appointed to do the cost audit of the said respectivedivisions for the year 2017-18:

12. Secretarial Auditor and Secretarial Audit Report.

M/s. S. K. Jain & Co. (Proprietor Dr. S. K. Jain) Practicing Company Secretary wasappointed to conduct Secretarial Audit of the Company for financial year 2016-17 asrequired under section 204 of the Companies Act 2013 and the rules thereunder. TheSecretarial Audit report for financial year 2016-17 forms part of the annual report as "AnnexureB" to the Boards Report. The said report does not contain any observation orqualification requiring explanation or comments from the Board under Section 134 (3) ofthe Companies Act 2013.

13. Conservation of Energy Technology and Foreign Exchange.

Information on conservation of energy technology absorption foreign exchange earningsand out go required to be given pursuant to provision of Section 134 of the CompaniesAct 2013 read with the Companies (Accounts) Rules 2014 is annexed here to marked "AnnexureC" and forms part of this report.

14. Extract of the Annual Return

Pursuant to the provisions of Section 134 (3) (a) of the Companies Act 2013 Extractof the Annual Return for the financial year ended 31st March 2017 made under theprovisions of Section 92 (3) of the Act in Form MGT-9 is annexed herewith as "AnnexureD". 15. Public Deposits

The Company has not accepted/renewed any amount falling within the purview ofprovisions of Section 73 of the Companies Act. 2013 read with the Companies (Acceptance ofDeposit) Rules 2014 during the year under review. Hence the requirement for furnishingof details of deposits which are not in compliance with the Chapter V of the Act is notapplicable.

16. Transfer to Reserve

During the year under review the Company has not transferred any amount to Reserve.

17. Committees of the Board.

The Board has constituted the following mandatory committees viz. Audit CommitteeStakeholders Relationship Committee Nomination and Remuneration Committee CorporateSocial Responsibility Committee Risk Management Committee and Internal ComplianceCommittee. The terms of reference of these committees are as required under the provisionsof the respective Acts /SEBI (Listing obligations and Disclosure Requirements) 2015 and asdetermined by the Board. Meeting of each of these committees are convened by therespective Chairman of the Committees and minutes of the meetings of these committees areplaced at the Board Meetings. The details of these committees are stated in this Report /Annexures to this Report.

17.1 Corporate Social Responsibility (CSR) Committee

Pursuant to Section 135 of the Companies Act 2013 and the relevant rules the Boardhas constituted the Corporate Social Responsibility (CSR) Committee under the Chairmanshipof the Board Chairman Mr. P.K. Jain. The other members of the Committee are Mr. BakulJain Managing Director and Mr. Sodhsal Singh Dev of Dhrangadhra Independent Director. Adetailed CSR Policy has also been framed which is placed on the company's website. Otherdetails for the CSR activities as required under Section 135 of the Companies Act 2013 aregiven in the CSR Report at "Annexure E".

17.2 Internal Compliance Committee.

In terms of the provisions of the Sexual Harassment of Women at Work place (PreventionProhibition and Redressal) Act 2013. the Company has formed Internal ComplianceCommittees at its Head Office at Mumbai and its Works at Sahupuram Tamilnadu andDhrangadhra Gujarat. The Board also has approved a policy for prevention of SexualHarassment at Work place. There were no Complaints filed till date under the said policy.

17.3 Risk Management Committee

The Board of the Company has formed a Risk Management Committee to frame implement andmonitor the Risk Management Plan for the Company. The Risk Management Committee isresponsible for reviewing the Risk Management Plan and ensuring its effectiveness. TheAudit Committee has additional oversight in the area of financial risk and controls. Majorrisks identified by the businesses at functions are systematically addressed throughmitigating actions on a continuing basis.

17.4 Audit Committee.

Audit Committee comprises 3 Independent Directors and Shri Sodhsal Singh Dev ofDhrangadhra is the Chairman of the Committee. Shri D. Ganapathy and Ms. Sujata Rangnekarare the other members of the Committee they possess sound knowledge on accounts auditfinance taxation Internal Control etc.the details of the composition of the AuditCommittee are given in the Corporate Governance Report The Company Secretary of theCompany Acts as Secretary of the Committee.

During the year there are no instances where the Board had not accepted therecommendation of Audit Committee.

17.5 Nomination & Remuneration Committee & Policy

The Company has duly constituted Nomination & Remuneration Committee to align withthe requirements prescribed under the provisions of the Companies Act 2013 and SEBI(Listing obligations and Disclosure Requirements) Regulation 2015.

The details of the Composition of the Nomination & Remuneration Committee are givenin the Corporate Governance Report.

The Board has framed a policy for selection and appointment of Directors KeyManagerial Personel Senior Management and their Remuneration. The policy provides fordetermining qualification positive attributes and independence of a Director.

18. Details in respect of adequacy of internal financial controls with reference to thefinancial statements.

A strong internal control culture is pervasive in the company. The Company hasimplemented a robust and comprehensive internal control system for all the major processesto ensure reliability of financial reporting timely feedback on achievement ofoperational and strategic goals compliance with policies procedures laws andregulations safeguarding of assets and economical and efficient use of resources. Theinternal audit department continuously monitors efficiency of internal controls withobjective of providing to the audit committee and the board of directors an independentobjective and reasonable assurance on the adequacy and effectiveness of the organizationsrisk management controls and governance processes.

Your Company operates in SAP ERP environment and has its accounting records stored inan electronic form and backed up periodically. The ERP system is configured to ensure thatall transactions are integrated seamlessly with the underlying books of account. YourCompany has automated processes to ensure accurate and timely updation of various masterdata in the underlying ERP system.

19. Indian Accounting Standards (Ind AS)

As mandated by the Ministry of Corporate Affairs the Company has adopted IndianAccounting Standards ("Ind AS") from 1st April 2016 with a transition date of1st April 2015. The Financial Results for the year 2016-17 have been prepared inaccordance with Ind AS prescribed under Section 133 of the Companies Act 2013 read withthe relevant rules issued thereunder and the other recognized accounting practices andpolicies to the extent applicable. The Financial Result for all the periods of 2016-17presented have been prepared in accordance with Ind AS.

20. Related Party Transactions:

All the related party transactions are entered on arms length basis and are incompliance with the applicable provisions of the Act and the SEBI (Listing Obligations andDisclosure Requirements ) Regulation 2015. All related party transactions are presented tothe Audit Committee and the Board. Omnibus approval is obtained for the transactions whichare foreseen and repetitive in nature. A statement of all related party transactions ispresented before the audit committee on a quarterly basis specifying the nature value andterms and conditions of the transactions.

The Related Party Transactions Policy as approved by the Board is uploaded at theCompany's website. The details of transaction with Related Party are provided in theaccompanying financial statements.

21. Particulars of loans guarantees and investments.

The particulars of loans guarantees and investments have been disclosed in thefinancial statements.

22. Vigil Mechanism / Whistle Blower Policy

In terms of the provisions of Section 177 (9) & (10) of the Companies Act 2013company has established a Vigil Mechanism for Directors and employees to report genuineconcerns about unethical behavior or suspected fraud or violation of the Company's Code ofConduct by Directors / employees. The Audit Committee oversees the Vigil Mechanism. VigilMechanism has been disclosed by the Company on its website.

23. Corporate Governance Report

The report on Corporate Governance is annexed to this report as "AnnexureF".

24. Directors' Responsibility Statement

In terms of section 134 (3) (c ) of the Companies Act 2013 your Directors have:

(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures; (b) thedirectors had selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company at the end of the financial year and of the profitand loss of the company for that period; (c) the directors had taken proper and sufficientcare for the maintenance of adequate accounting records in accordance with the provisionsof this Act for safeguarding the assets of the company and for preventing and detectingfraud and other irregularities; (d) the directors had prepared the annual accounts on agoing concern basis; and (e) the directors had laid down internal financial controls to befollowed by the company and that such internal financial controls are adequate and wereoperating effectively. (f) the directors had devised proper systems to ensure compliancewith the provisions of all applicable laws and that such systems were adequate andoperating effectively.

25. Significant/Material Orders passed by the Regulators

There are no significant/material orders passed by the Regulators or Courts orTribunals impacting the going concern status of the Company and its operations in future.

26. Insurance

All the properties of the Company are adequately insured.

27. Industrial Relations:

Company's operations at its Sahupuram Works Tamilnadu were halted during the period4th February 2017 to 22nd February 2017 due to strike of the workers in connection withthe dispute on the terms of Agreement with the Unions. Otherwise relations between theemployees and the management were cordial throughout the year.

28. Acknowledgements

The Board expresses its sincere thanks to all employees customers suppliersinvestors lenders regulatory and government authorities and stock exchanges for theirco-operation and support and look forward to their continued support in future. The Boardplaces on record their grateful appreciation for the assistance and co-operation receivedfrom the Financial Institutions and the Banks.

For and on behalf of the Board of Directors

P.K. Jain

Chairman & Managing Director

Place: Mumbai

Date: 30th May 2017