TO THE MEMBERS
Your Directors present their 77th Annual Report and Audited Financial Statements forthe Financial Year ended 31st March 2016 -
1. Financial Results
| ||31-03-2016 ||31-3-2015 |
| ||(Rs. in lacs) ||(Rs. in lacs) |
|Net Sales ||127159.80 ||125446.82 |
|Gross Profit ||9513.21 ||4723.64 |
|Less : Provisions || || |
|Depreciation ||6621.65 ||5200.17 |
|Profit Before Tax/(Loss) ||2891.56 ||(476.54) |
|Tax: Current Period ||650.00 ||- |
|Previous Period ||- ||26.09 |
|MAT Credit available for set off / Utilized ||(617.00) ||211.73 |
| ||33.00 ||(237.82) |
|Profit/(Loss)After Current Tax & Tax Adjustments ||2858.56 ||(714.36) |
|Deferred Tax ||1003.98 ||(122.19) |
|Profit after Tax/(Loss) ||1854.58 ||(592.17) |
|Add: Balance brought forward ||7709.19 ||8301.36 |
|Profit available for Appropriation ||9563.77 ||7709.19 |
|Appropriations: || || |
|General Reserves ||- ||- |
|Proposed Dividend ||- ||- |
|Dividend Distribution Tax ||- ||- |
|Balance carried forward ||9563.77 ||7709.18 |
Due to lower profits from the operations of the Company during the year and to conservecash required for the ongoing projects of the Company your Directors have not recommendedany dividend for the year on the equity shares of the Company.
The sales for the year are Rs.1271.60 crores compared to Rs.1254.47 crores in theprevious year. The profit for the year (before depreciation) was Rs.95.13 crores against aprofit of Rs. 47.24 crores in the previous year. The profit before tax amounted toRs.28.92 crores as against loss of Rs. 4.77 crores in the previous year. The profit afterprovision of current tax / taxes for the year is Rs.28.59 crores against a loss of Rs.7.14 crores for previous year and profit after deferred tax was Rs. 18.55 crores againstloss of Rs. 5.92 crores for previous year.
The Company's exports were of Rs. 177.54 crores as compared to Rs. 158.30 croresin the previous year. The increase in Export Turnover is on account of higher sale ofSynthetic Rutile
5. Subsidiary :
DCW Pigments Limited has not yet commenced its operations and is not likely tocommence any business activities in future. The Board of Directors in its meeting held on25th May 2016 has decided to dispose of the investment made in the equity shares of thesaid Subsidiary. Hence in accordance with Accounting Standard 21(AS-21) the Company hasdiscontinued the preparation of Consolidated financial statements from the financial year2015 -2016.
5.1 Division wise performance:
a) PVC Division:
The turnover of the division was Rs. 577.26 crores as compared to Rs. 596.56 crores inthe previous year a reduction of 3.24%. This fall in turnover is mainly on account lowerrealization of PVC which is in line with fall in raw material prices. The demand for PVCcontinues to show positive growth. The Government has identified irrigation power andinfrastructure as thrust areas and increased activity in these sectors are likely toboost demand of PVC Resin.
b) Caustic Soda Division:
The turnover of the division was Rs. 478.90 crores as compared to Rs.450.18 crores inthe previous year an increase of 6.38%. The increase in turnover of the division ismainly on account of higher sales of Synthetic Rutile.
c) Soda Ash Division:
The turnover of the division was Rs.195.57 crores as compared to Rs.192.84 crores. Theworking of this division is stable and the demand in this segment is consistent. Lookingto the comfortable demand and supply positions in coming years and no major additionalcapacities coming up in near future the working of this division is expected to bestable.
5.2 There are no material changes and commitments affecting the financial positionof the Company which have occurred between the end of the financial year 2015-2016 and thedate of this Report.
6. PROJECT UNDER IMPLEMENTATION.
Chlorinated Poly Vinyl Chloride (C-PVC) Project.
The Company has signed Technology License agreement with Arkema of France for puttingup Chlorinated Poly Vinyl Chloride (C-PVC) Plant at its Sahupuram Works in Tamilnadu. TheUHDE India has been appointed to do detailed engineering for the project. The work onthis project is in advanced stage of completion.
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 tones out of which 50% of the capacities are in western part of India 25% inSouthern 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 demands from detergent and glass sectors. India is also exporting soda ashto South East Asian countries.
7.1.3 Poly Vinyl Chloride (PVC) is the most commonly used thermoplastic. PVC isproduced from Vinyl Chloride Monomer (VCM) which is obtained from ethylene dichloride(EDC) a derivative of ethylene and chlorine. PVC is used in a variety of items such aspipes and fittings wires and cables calendared sheets blow molded bottles profilesfootwear roofing automotive parts table cloths shower curtains and furniture in India.The per capita consumption of PVC is significantly lower as compared with developedcountries.
Total installed capacity of PVC industry is 1.35 Million Tons. The domestic demand ofPVC is about 2.65 Million Tons. The shortfall of 1.30 Million Tons in supply is met byimports.
Based on the demand supply projections substantial deficit is expected in thepolyvinyl chloride market which will be met by imports. The market for PVC is expandingby 5 to 6% p.a. and hence there is scope for increasing capacities.
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 the expandingmarket. Company's Caustic Soda Synthetic Rutile and PVC Units are near to Tuticorin Portin Tamilnadu and this gives opportunity to the Company to easily export its products.Company has opportunity to go in backward/forward integration in the products itmanufactures 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. Company is exporting its products againstinternational competition.
7.3 Segment-wise or product-wise performance.
7.3.1 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 on imports from ChinaUSA Mexico European Union Indonesia will protect the domestic industry against dumpingof PVC resin from these countries. Automation cum Debottlenecking program implemented inthis unit will help the Company in reducing cost and increasing production of thisdivision.
7.3.2 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 ratespecially with increased demand from alumina manufacturers. The Company has captive use ofHCL & Chlorine which helps to maintain Caustic Production at full level.
7.3.3 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.
7.3.4 Synthetic Iron Oxide Pigment Division:
The new Synthetic Iron Oxide Pigment Division of the company has started production andwith this the company has entered into specialty chemical segment. This segment productionwill give more stability to the profitability of the company.
7.4 Outlook :
The Company has diversified operations with three major business segments viz. PVCChloro Alkali and Soda Ash. It is thus reasonably protected from the vagaries ofindividual business cycles of these products. By the commencement of commercial productionat company'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-materialprices change in duty structure on the raw materials imported and Company's variousproducts change in Government 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
Company has achieved a good result in the financial year. Although the revenues haveimproved only by 1.37% to Rs.127159.80 lakhs against the revenue of Rs.125446.82 lacscompared to previous year the profit before tax has increased to Rs.2891.56 lakhs ascompared to loss of Rs.(416.38) lacs of the previous year. These improvements are due tocontinuous upgradation of our technical capabilities and better performance of our SodaAsh PVC and Caustic Soda divisions.
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.
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) Mr. P.K. Jain (DIN No.00380458)retires by rotation at the ensuing Annual General Meeting of the Company and beingeligible offer himself for re-appointment. The Board recommends his re-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.
C. Performance Evaluation -
Pursuant to the provisions of the companies act 2013 and revised clause 49 of thelisting agreement Regulation 17(10) of SEBI (LODR) Regulation 2015 the Board hascarried out an Annual Evaluation of its own performance and that of its committees as wellas performance ofthe Directors individually.Feedback was sought by way of a structuredquessionaire covering various aspects of the Board's functioning such as participationadequate preparation contribution to strategy and other areas quality of decisionmaking high quality of debate with robust and probing discussions etc.
The Nomination and Remuneration Committee evaluated the performance of the Directors.Independent Directors at a separate meeting held by them have evaluated the performance ofthe non-Independent Directors and also evaluated the performance of the Chairman takinginto consideration the views of Managing Directors.
The Board of Directors have also evaluated the performance of each of the IndependentDirectors.The Directors expressed their satisfaction with the evaluation process.
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
9.1 The information required under Section 197 of the Companies Act 2013 and Rule 5(2) of Companies Appointment and Remuneration of Managerial Personnel) Rules 2014 formspart of this Report as Annexure 'A'.
9.2 The 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) 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 ||33:1 |
|Shri Bakul Jain ||33:1 |
|Shri Mudit Jain ||33:1 |
|Shri Vivek Jain ||33:1 |
For this purpose sitting fees paid to the Directors have not been considered asremuneration. b. The percentage increase in remuneration of each director Chief ExecutiveOfficer Chief Financial Officer Company Secretary in the financial Year.
|Directors Chief Executive Officer Chief Financial ||% increase in remuneration |
|Officer and Company Secretary ||in the financial Year |
|Shri P.K. Jain - Chairman & Managing Director ||Nil |
|Shri Bakul Jain - Managing Director ||Nil |
|Shri Mudit Jain - Managing Director ||Nil |
|Shri Vivek Jain - Managing Director ||Nil |
|Shri Vimal Jain - Chief Financial Officer ||6.85 |
|Ms. Jigna Karnick - Company Secretary ||11.00 |
c. The percentage increase in the median remuneration of employees in the financialyear : 7%
d. The number of permanent employees on the rolls of Company : 1989
e. The explanation on the relationship between average increase in remuneration andCompany performance: There is no direct relationship between average increase inremuneration of employee and company performance.
f. Comparison of the remuneration of the Key Managerial Personnel against theperformance of the Company:
|Aggregate remuneration of key managerial ||540.43 |
|personnel (KMP) (Rs. in lakhs) || |
|Revenue (Rs. in lakhs) ||127159.80 |
|Remuneration of KMPs (as % of revenue) ||0.04 |
|Profit before Tax (PBT) (Rs. in lakhs) ||2891.56 |
|Remuneration of KMP (as % of PBT) ||18.69 |
g Variations in the market capitalization of the Company price earnings ratio as atthe closing date of the current financial year and previous financial year:
|Particulars ||March 31 2016 ||March 31 2015 ||% Change |
|Market Capitalisation (Rs.in crores) ||526.136 ||358.671 ||47.13 |
|Price Earnings Ratio ||27.85 ||- ||- |
h. Percentage increase over decrease in the market quotations of the shares of theCompany in comparison to the rate at which the Company came out with the last public offer
|Market price as on 31st March 2016 (face value Rs.2 per share) ||Rs. 23.95 |
|Price at which the Rights Issue was made in 1988 (face value Rs.10 per share) ||Rs. 25.00 |
|% increase of Market price over the price at which the above Rights issue was made ||1437%* |
* Adjustments made for (i) Bonus shares issued @ 1:1 in 1988 & (ii) Bonus sharesissued @ 3:5 in 1991 & (iii) subdivision of shares from Rs. 10 to Rs.2 in the year2000.
i. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:
The average increase in remuneration is 7% for employees other than ManagerialPersonnel and there was no increase in the Managerial remuneration.
j. Comparison of each remuneration of the key managerial personnel against theperformance of the Company:
|Name ||Designation ||Remuneration (Rs. in lakhs) ||% of increase in Remuneration ||PAT (Rs. in lakhs) ||% increase in PAT |
|Mr. P.K. Jain ||Chairman & Managing Director ||133.63 ||- ||1854.60 ||313% |
|Mr. Bakul Jain ||Managing Director ||133.63 ||- ||1854.60 ||313% |
|Mr. Mudit Jain ||Managing Director ||133.63 ||- ||1854.60 ||313% |
|Mr. Vivek Jain ||Managing Director ||133.63 ||- ||1854.60 ||313% |
|Mr. Vimal Jain ||Chief Financial Officer ||54.54 ||6.85 ||1854.60 ||313% |
|Ms. Jigna Karnick ||Company Secretary ||10.12 ||11 ||1854.60 ||313% |
k. The key parameters for any variable component of remuneration availed by theDirectors:
Each of the Managing Director are entitled for commission @ 25% of the differencebetween 10% of the net profits as computed under Section 198 of the Companies Act 2013in a financial year and the aggregate of the salary and perquisites and benefits paid toall the Managing Directors in that year subject to the overall ceilings stipulated inSections 197 of the Companies Act 2013.
Non Executive Directors are entitled for commission aggregating not more than 1% of thenet profits of the Company in a financial year subject to a maximum of Rs.300000/- perDirector as approved by the members of the Company at the Extra-Ordinary General Meetingheld on December 19 2013 besides the sitting fees for meetings of the Board and itscommittees attended by them.
l. The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year. :
There are no employees of the Company who receive remuneration in excess of the highestpaid Director of the Company.
m. 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 andare eligible for re-appointment as per Section 139 of the Companies Act 2013.
M/s. V. Sankar Aiyar & Co. have expressed their willingness to get re-appointed asthe Statutory Auditors of the company and has furnished a certificate of their eligibilityand consent under Section 141 of the Companies Act 2013 and the Rules framed there under.In terms of the Listing Agreement the Auditors have confirmed that they hold a validcertificate issued by the Peer Review Board of the ICAI and have submitted copy of thecertificate dated 4th May 2016.
The members are requested to appoint M/s. V. Sankar Aiyar & Co. CharteredAccountants as Auditors from the conclusion of the ensuing Annual General Meeting till theconclusion of the next Annual General Meeting in 2017 on the terms and conditions as willbe 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 for the yearended 31st March 2016 read with explanatory notes thereon do not call for any explanationor 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) Amendments 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 ending 31st March 2016 as per following details
|Sr. No ||Names of the Cost Auditor ||Industry ||Audit Fees (Rs.) |
|1 ||Nanabhoy & Company ||Chemicals (Caustic Soda) ||75000/- (Rupees Seventy Five Thousand only) |
|2 ||N. D. Birla & Company ||Chemicals (Soda Ash) ||45000/- (Rupees Forty Five Thousand only) |
They have conducted Cost Audit for the financial year 2015-16 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 AGM. Theyhave also been appointed to do the Cost audit of the said respective divisions for theyear 2016-17.
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 2015-2016 asrequired under section 204 of the Companies Act 2013 and the rules thereunder. TheSecretarial Audit report for financial year 2015-2016 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. Share Capital
During the year your company has allotted 6186750 equity shares of Rs.2 each at apremium of Rs.21 per share on 23/11/2015 to promoters group & business associatesincluding relatives of business associates on preferential basis. Consequently the equityshare capital has increased from Rs. 426989314/-divided into 213494657 equity sharesof Rs.2 each to Rs. 439362814/- divided into 219681407 equity shares of Rs. 2 each.
15. 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 2016 made under theprovisions of Section 92 (3) of the Act in Form MGT-9 is annexed herewith as "AnnexureD".
16. 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.
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 / Listing Agreement with Stock Exchanges SEBI (Listing obligationsand Disclosure Requirements) Regulations 2015 as determined by the Board. Meeting of eachof these committees are convened by the respective Chairman of the Committees and minutesof the meetings of these committees are placed at the Board Meetings. The details of thesecommittees 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 2013are given 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 risks and controls.Major risks identified by the businesses and functions are systematically addressedthrough mitigating 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 this Committee. Shri D. Ganapathy and Ms. Sujata Rangnekarare the other members of the Committee.They possess sound knowledge on Accounts AuditFinance Taxation Internal Controls etc. The details of the Composition of the AuditCommittee are given in the Corporate Governance Report.
The Company Secretary of the Company 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 SeniorManagement and their Remuneration. The policy provides for determining qualificationpositive 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. 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 to the Audit Committee and the Board.Omnibus approval is obtained for the transactions which are foreseen and repetitive innature. A statement of all related party transactions is presented before the auditcommittee on a quarterly basis specifying the nature value and terms and conditions of thetransactions.
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 the accompanyingfinancial statements.
20. Particulars of loans guarantees and investments.
The particulars of loans guarantees and investments have been disclosed in thefinancial statements.
21. 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.
22. Corporate Governance Report
The report on Corporate Governance is annexed to this report as "AnnexureF".
23. 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) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concern basis; and
(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
24. 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.
All the properties of the Company are adequately insured.
26. Industrial Relations:
The relations between the employees and the management were cordial and an atmosphereof understanding prevailed throughout the year.
The Board places on record their grateful appreciation for the assistance andco-operation received from the Financial Institutions and the Banks.
For and on behalf of the Board of Directors
Chairman & Managing Director
Date: 25th May 2016