You are here » Home » Companies » Company Overview » Gujarat Alkalies & Chemicals Ltd

Gujarat Alkalies & Chemicals Ltd.

BSE: 530001 Sector: Industrials
NSE: GUJALKALI ISIN Code: INE186A01019
BSE LIVE 15:40 | 17 Oct 659.05 27.65
(4.38%)
OPEN

632.80

HIGH

673.60

LOW

617.00

NSE 15:52 | 17 Oct 657.85 28.05
(4.45%)
OPEN

633.65

HIGH

674.00

LOW

615.10

OPEN 632.80
PREVIOUS CLOSE 631.40
VOLUME 79739
52-Week high 726.00
52-Week low 305.60
P/E 15.26
Mkt Cap.(Rs cr) 4,840
Buy Price 0.00
Buy Qty 0.00
Sell Price 658.90
Sell Qty 100.00
OPEN 632.80
CLOSE 631.40
VOLUME 79739
52-Week high 726.00
52-Week low 305.60
P/E 15.26
Mkt Cap.(Rs cr) 4,840
Buy Price 0.00
Buy Qty 0.00
Sell Price 658.90
Sell Qty 100.00

Gujarat Alkalies & Chemicals Ltd. (GUJALKALI) - Director Report

Company director report

To

The Members

Your Directors present this 43rd Annual Report of the Company on thebusiness and operations of the Company together with Audited Balance Sheet and Statementof Profit & Loss for the Financial Year ended 31st March 2016 and thereport of the Auditors thereon.

PERFORMANCE AND FINANCIAL RESULTS

The performance of the Company in Financial Year 2015-16 has been as follows:

FINANCIAL RESULTS (Rs. in Lakhs)

Particulars 2015-16 2014-15
Sales (excluding Excise Duty) and Other Income 201232 199707
Profit before Interest Depreciation and Taxation (PBIDT) 38027 32287
Profit before Taxation (PBT) 26509 21548
Less: Provision for Taxation 4342 (1238)
Profit after Taxation (PAT) 22167 22786
Add: P&L A/c Balance brought forward from Previous Year 65390 57974
Amount available for appropriations 87557 80760
Your Directors recommend the following Appropriations:
Proposed Dividend 3304 3304
Tax on Proposed Dividend 673 673
Transferred to General Reserve 11084 11393
Balance Carried to Balance Sheet 72496 65390
Earning per Share Rs.30 Rs.31
Dividend per Share Rs.4.50 Rs. 4.50
Book Value per Share Rs.308 Rs.286

RESULTS OF OPERATIONS AND THE STATE OF COMPANY’S AFFAIRS :

The highlights of the Company’s performance are as under :> The Company hasachieved highest ever sales (including Excise Duty) of Rs.2178.62 Crores during the year2015-16 as against Rs.2157.17 Crores in the previous year.

> Total production of all the products has increased by 1.55% to 1470197 MT duringthe year 2015-16 as against 1447788 MT in previous year.

> Other Operating income decreased by Rs.6.18 Crores to Rs.10.13 Crores during theyear 2015-16 as against Rs.16.31 Crores in previous year.

> Other income decreased by Rs.2.73 Crores to Rs.46.22 Crores during the year2015-16 as against Rs.48.95 Crores in previous year.

> Gross Profit has increased by 17.78% to Rs.380.27 Crores during the year 2015-16from Rs.322.87 Crores in previous year.

> Profit Before Tax has increased by 23.02% to Rs.265.09 Crores during the year2015-16 from Rs.215.48 Crores in previous year.

> Profit After Tax has decreased by 2.72% from Rs.227.86 Crores in previous year toRs.221.67 Crores in the year 2015-16.

The Financial Year 2015-16 was a challenging year for Chlor-Alkali sector. The highestever sales have been achieved inspite of the stiff competition adverse market situationand loss of top line due to mothballing of Calcium Chloride Plant at Baroda Complexstaggered operations of Calcium Chloride at Dahej Complex stoppage of Sodium CyanidePlant due to non-availability of raw material and decline in job work production ofChlorinated Paraffin Wax. The Company had initiated various cost control measures whichresulted in the Profit Before Tax of Rs.265.09 Crores for the year 2015-16 as againstRs.215.48 Crores in the previous year.

DIVIDEND

Your Directors are glad to recommend a Dividend @ Rs.4.50 per share (i.e. 45%) on73436928 Equity Shares of Rs.10/- each fully paid up for the year ended 31stMarch 2016.

ENERGY CONSERVATION TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

Information pertaining to conservation of energy technology absorption foreignexchange earnings and outgo as required under Section 134(3)(m) of the Companies Act 2013read with Rule 8(3) of the Companies (Accounts) Rules 2014 is given in the Annexure -1 to this report.

SUBSIDIARY JOINT VENTURE OR ASSOCIATE COMPANIES

During the year the Company (GACL) and National Aluminium Company Limited (NALCO) aGovernment of India Enterprise (a Navratna Company) have jointly incorporated a new JointVenture Company viz. GACL-NALCO Alkalies & Chemicals Pvt. Ltd. (JV Company) on 4thDecember 2015 for setting up of 800 TPD Caustic Soda Plant and 100-120 MW Coal basedPower Plant at Dahej Gujarat. As on 31.03.2016 the Company holds 60% (i.e. 60000 EquityShares of Rs.10/- each). Since there is no major activity / transactions in the JV /Subsidiary Company during the Financial Year ended 31.03.2016 the Accounts of the Companyare prepared on standalone basis.

The Managing Director of the Company is Chairman of the JV Company. The ManagingDirector of the Company does not draw any commission from the Company nor draws anyremuneration or commission from the JV Company except the sitting fees of Rs.2500/- andincidental expenses of Rs.2500/- for attending the meetings of the Board of Directors orCommittees thereof. The sitting fees are paid by the JV Company directly to GACL.

As required under Rule 8(1) of the Companies (Accounts) Rules 2014 the Board’sReport has been prepared on standalone financial statements. As per Section 129(3) of theCompanies Act 2013 read with Rule 5 of the Companies (Accounts) Rules 2014 a separatestatement containing the salient features of financial statement of the Joint Venture /Subsidiary Company in Form AOC-1 forms part of the Annual Report.

In accordance with third proviso of Section 136(1) of the Companies Act 2013 theAnnual Report of the Company containing therein its standalone financial statements willbe placed on the website of the Company www.gacl.com. Further as per fourth proviso ofthe said section audited annual accounts of the Joint Venture / Subsidiary Company willalso be placed on the website of the Company www.gacl.com. Shareholders interested inobtaining a copy of the audited annual accounts of the subsidiary company may write to theCompany Secretary at the address of the Company’s Registered Office.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weakness in the design or operation of Internal Control System was observed. Asper the relevant provisions of the Companies Act 2013 the Statutory Auditors haveexpressed their views on the adequacy of Internal Financial Control in their Audit Report.

CREDIT RATING

Your Company’s financial discipline and prudence is reflected in the strong creditrating described by rating agency as per the following particulars :

Instrument Rating Agency Rating Outlook Remarks
Long Term Bank Facilities Credit Analysis & Research Ltd. (CARE) CARE AA+ (Double A Plus) Stable outlook for Caustic Soda industry & GACL being industry leader in domestic market is likely to benefit from various factors. This rating is considered to have high degree of safety regarding timely servicing of financial obligations. Such instruments carry low credit risk.
Short Term Bank Facilities Credit Analysis & Research Ltd. (CARE) CARE A1+ (A One Plus) This rating is considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.

RISK MANAGEMENT

The Company has constituted Internal Risk Management Committee comprising of SeniorExecutives of the Company who are heading respective departments viz. FinanceManufacturing Marketing Purchase Project HR Secretarial and Legal functions. TheExecutive Director (Finance) & CFO is the Chairman of the Internal Risks ManagementCommittee. The Internal Risk Management Committee reports to the Managing Director and therisks identified by the said Committee alongwith proposed mitigation actions are discussedperiodically with the Managing Director. Out of the various risks identified by theInternal Risk Management Committee the Audit Committee has identified certain criticalrisks which are reviewed by Audit Committee and by the Board of Directors on quarterlybasis. A Report on the steps taken to mitigate those critical risks is also submitted tothe Audit Committee and the Board of Directors.

As per the Regulation 21 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 every Company (top 100 listed companies by market capitalization) isrequired to constitute a Risk Management Committee of Directors which may also includethe Senior Executives of the Company however the majority should be the Directors. TheChairperson of the Risk Management Committee shall be Member of the Board of Directors ofthe Company.

Accordingly although not required but as abundant caution the Board of Directors atits 353rd Meeting held on 11th February 2016 has constituted theRisk Management Committee of Directors. The existing Internal Risk Management Committee ofSenior Executives of the Company continues to function.

VIGIL MECHANISM / WHISTLE BLOWER MECHANISM

The Company has formulated a Vigil Mechanism-cum-Whistle Blower Policy("Policy") as per the requirements of Section 177 of the Companies Act 2013 andas per Clause 49 of the Listing Agreement / Regulation 22 of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015. The Policy is applicable to all Directorsand Employees of the Company.

As per the Policy protected disclosures can be made by whistle blower to the Chairmanof the Audit Committee. During the Financial Year 2015-16 no unethical and improperpractice or any other wrongful conduct in the Company by any person was reported under thesaid Policy.

The Vigil Mechanism-cum-Whistle Blower Policy may be accessed on the Company’swebsite at the link : http:// www.gacl.com/public_html/new/policy/VIGIL_MECHANISM_CUM_WHISTLE_BLOWER_POLICY.pdf

CORPORATE SOCIAL RESPONSIBILITY

As per the provisions of Section 135 read with Schedule VII of the Companies Act 2013and the Companies (Corporate Social Responsibility Policy) Rules 2014 the Company hasconstituted Corporate Social Responsibility (CSR) Committee and formulated CSR Policy. Thecomposition of CSR Committee is given in the Corporate Governance Report. The CorporateSocial Responsibility Committee (CSR Committee) has formulated and recommended to theBoard a Corporate Social Responsibility Policy (CSR Policy) identifying the activities tobe carried out by the Company and the said CSR Policy has been approved by the Board ofDirectors at their Meeting held on 23.07.2014. The Board of Directors at their Meetingheld on 26.05.2015 have approved some modifications in the CSR Policy including toundertake CSR activities through GACL Education Society (GES). GES is a registered Societyunder the Societies Registration Act 1860 and also under the Bombay Public Trust Act1950. It was formed with an objective for promotion and development of education invarious fields and branches of Engineering Management Technology Information &Communication etc. and carry out such other projects having similar objects.

GES has altered its object clause so as to carry out various CSR activities of theCompany (GACL) through GES for charitable purpose and as per the mandatory provisionsapplicable to GACL.

The details about various activities carried out by the Company under CSR through GESas well as directly are given in the Management Discussion and Analysis which forms partof Annual Report.

The revised CSR Policy may be accessed on the Company’s website at the link:http://www.gacl.com/ public_html/new/pdf/CSR_POLICY.pdf

Out of the Budget approved by the Board the Company has spent an amount of Rs.4.26Crore towards the CSR activities during Financial Year 2015-16. Whereas 2% of the AverageNet Profits for last three years as per the provisions of Section 135 of the CompaniesAct 2013 comes to Rs.5.07 Crore for the Financial Year 2015-16. The unspent amount ofRs.81.57 lakhs during the Financial Year 2015-16 is earmarked by the Company and the samewill be spent under the projects like Baroda Museum Contribution to Gujarat CSRAuthority Generic Medical stores Life Spring hospitals or other CSR activities duringFinancial Year 2016-17. During Financial Year 2015-16 due to various reasons the Companycould not spend the full budget amount in the activities of Education Children KanyaKelavani & Shaala Praveshotsav IIT - Gandhinagar Officers Club - Baroda anddeveloping Dediapada Taluka.

The Annual Report on CSR activities for the Financial Year 2015-16 is annexed herewithas Annexure - 2.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Appointment / Reappointment / Cessation of Directors & Key Managerial Personnel

Shri G C Murmu IAS Non-Executive Director has resigned as a Director from the Boardof Directors of the Company effective from 01.05.2015 due to his transfer as JointSecretary Ministry of Finance Department of Expenditure Government of India. Dr. SukhDev has expressed his unwillingness to be reappointed as an Independent Director due toold age whose term was expiring on 42nd Annual General Meeting (i.e.18.09.2015) and accordingly he ceased to be a Director of the Company effective from19.09.2015. Shri D J Pandian IAS (Retd.) has resigned as Chairman of the Company videletter dated 30.05.2015 effective from 03.07.2015 (i.e. date of receipt by the Company)due to his superannuation from the services as Chief Secretary. Shri A M Tiwari IAS hasresigned as the Managing Director of the Company effective from 18.02.2016 consequent uponhis transfer by Government of Gujarat.

The Board placed on record its deep appreciation of the valuable services rendered tothe Company by Shri D J Pandian IAS (Retd.) as Director and Chairman Shri A M TiwariIAS as Managing Director Shri G C Murmu IAS as Director and Dr. Sukh Dev as IndependentDirector of the Company.

Shri G R Aloria IAS Chief Secretary to Government of Gujarat was appointed asGovernment Nominee Non Rotational Director and Chairman of the Board of Directors of theCompany w.e.f. 28.07.2015 as per the provisions of Articles of Association of the Company.During the year Shri Rajiv Lochan Jain has been appointed by the Board as IndependentDirector of the

Company for a term of five years effective from 06.01.2016. The Independent Directorhas submitted the declaration under Section 149(6) of the Companies Act 2013 to theeffect that he qualifies to be appointed as Independent Director of the Company. As perSection 149 of the Companies Act 2013 Shri Rajiv Lochan Jain Director is eligible forappointment as Independent Director. Your Directors recommend the appointment of ShriRajiv Lochan Jain as Independent Director for a period of 5 years.

Shri Arvind Agarwal IAS has been appointed as a Director by the Board of Directors ofthe Company effective from 18.09.2015 to fill casual vacancy caused due to resignation ofShri G C Murmu IAS. Shri Arvind Agarwal IAS holds office upto the date of this AnnualGeneral Meeting and his appointment will be regularized at this Annual General Meeting.

Thus as on the date of this Report there are eight Directors on the Board ofDirectors of the Company. The Chairman Managing Director four Independent Directors areNon-Rotational Directors two Directors are rotational Directors viz. Dr. J N Singh IASand Shri Arvind Agarwal IAS of which Shri Arvind Agarwal IAS will be retiring at thisAnnual General Meeting and being eligible to be appointed by the Members at this AnnualGeneral Meeting and Dr. J N Singh IAS who was appointed as Director at the 42nd AnnualGeneral Meeting of the Company held on 18.09.2015 will retire by rotation at this AnnualGeneral Meeting and being eligible has offered himself for re-appointment.

Shri P K Gera IAS Managing Director Shri Rajiv Lochan Jain Independent DirectorShri Arvind Agarwal IAS and Dr. J N Singh IAS Non-Executive Directors will be appointed/ regularized / reappointed at this Annual General Meeting. Thus the appointment /reappointment / regularization of four Directors are being placed before the Shareholdersat this Annual General Meeting. A brief resume of the Directors being appointed /re-appointed forms part of the Notice of the ensuing Annual General Meeting. Shri P KGera IAS Managing Director was also appointed by the Board as Key Managerial Personnelof the Company effective from 19.02.2016 pursuant to provisions of Section 203 of theCompanies Act 2013. Dr. H. B. Patel Chief Financial Officer and Shri Sanjay S BhattCompany Secretary are the Key Managerial Personnel of the Company effective from14.05.2014.

B. Board Evaluation

Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 ("Listing Regulations") the Boardhas carried out an annual performance evaluation of its own performance the Directorsindividually as well as the evaluation of the working of its Committees. The manner inwhich the evaluation has been carried out has been explained in the Corporate GovernanceReport.

C. Nomination and Remuneration Policy

The Board has on the recommendation of the Nomination-cum-Remuneration Committeeformulated a Nomination & Remuneration-cum-Board Diversity Policy for selectionappointment of Directors and Senior Management and their remuneration. Information aboutthe Policy is provided in the Corporate Governance Report.

D. Meetings

During the year 9 (nine) Board Meetings and 5 (five) Audit Committee Meetings wereconvened and held. The details of which are given in the Corporate Governance Report. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 /Listing Regulations. Further the composition of Audit Committee is given in the CorporateGovernance Report.

AUDITORS

A. Internal Auditors

M/s. Talati & Talati Chartered Accountants Vadodara were appointed as InternalAuditors for conducting Internal Audit of the Company for the period from 1st July2015 to 30th June 2016.

The Board of Directors of the Company at its meeting held on 26th May 2016re-appointed M/s. Talati & Talati Chartered Accountants Vadodara as InternalAuditors for conducting Internal Audit of the Company for the period from 1stJuly 2016 to 30th June 2017. The Internal Auditors independently evaluate theinternal controls adherence to and compliance with the procedures guidelines andstatutory requirements. The Audit Committee of Directors periodically reviews the reportsof the Internal Auditors and the corrective actions if any are taken by the Management.

B. Statutory Auditors

M/s. Deloitte Haskins & Sells Chartered Accountants Vadodara (Firm Regn. No.117364W) were appointed as the Statutory Auditors of the Company from the conclusion of 41stAnnual General Meeting till the conclusion of 46th Annual General Meeting i.e.for a period of five years (subject to ratification of the appointment by the members atevery AGM). You are requested to ratify the appointment of M/s. Deloitte Haskins &Sells Chartered Accountants Vadodara as Statutory Auditors from the conclusion of 43rdAnnual General Meeting till conclusion of 44th Annual General Meeting as perthe provisions of Section 139 of the Companies Act 2013.

The Board of Directors of the Company at their Meeting held on 26th May2016 have approved the reappointment of M/s. Deloitte Haskins & Sells CharteredAccountants Vadodara for the Financial Year 2016-17. Accordingly a Resolution forratification of appointment of the Statutory Auditors for the Financial Year 2016-17 isplaced at Item No. 4 of the Notice.

Your Directors recommend the said Resolution for ratification for your approval.

The Auditors’ Report to the Members for the year under review does not contain anyqualification.

C. Cost Auditors

The Board of Directors of the Company at its Meeting held on 26th May 2016has appointed M/s. R.K. Patel & Co. Cost Accountants Vadodara as Cost Auditors forthe Financial Year 2016-17 as per the provisions of the Companies Act 2013 to conduct theCost Audit of all products manufactured by the Company falling under Chapter 28 29 &38 of Central Excise Tariff Act 1985 as per Notification dated 31st December2014 issued by Ministry of Corporate Affairs Government of India at the remuneration ofRs.495000/- plus service tax as applicable.

Your Directors recommend the remuneration of the Cost Auditors appointed by the Boardof Directors for the Financial Year 2016-17 for your ratification and approval as perprovisions of the Companies Act 2013.

D. Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. Samdani Kabra & Associates a firm of Practicing Company Secretaries toundertake the Secretarial Audit of the Company. The Report of the Secretarial Auditors isannexed herewith as Annexure-3. The Report does not contain any qualification.

CORPORATE GOVERNANCE

The Company has been following the principles and practices of good CorporateGovernance and has ensured compliance of the requirements stipulated under Clause 49 ofthe Listing Agreement with Stock Exchanges (upto 30.11.2015) and SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 (effective from 01.12.2015).

A detailed report on Corporate Governance along with Certificate issued by CompanySecretary in Practice in terms of provisions of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is attached herewith.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 of the Companies Act 2013 read withRule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014in respect of employees of the Company are provided in the Annexure - 4. Furtherthere was no employee holding 2% or more of the Equity Shares of the Company during theFinancial Year 2015-16.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The Audit Committee of Directors at its Meeting held on 26th May 2015 hasaccorded omnibus approval to execute transactions with related parties up to the value ofRs.1 Crore. During the financial year the transactions entered into by the Company withRelated Parties were in the ordinary course of business at arm’s length price andwithin the omnibus approval granted by the Audit Committee. The Company has not enteredinto contracts / arrangements / transactions with Related Parties which could beconsidered material in accordance with Section 188 of the Act read with the Companies(Meetings of Board and its Powers) Rules 2014 and the Policy of the Company on RelatedParty Transactions. Since all the contracts / arrangements / transactions with RelatedParties during the year were in the ordinary course of business and the same were atarm’s length as well as under the special omnibus approval route not being materialtransaction as defined under the Act / Rules disclosure in Form AOC-2 under Section134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules 2014 is notrequired.

The Policy on Related Party Transactions and Material Related Party Transactions asapproved by the Board of Directors may be accessed on the Company’s website at thelink : http://www.gacl.com/public_html/new/policy/ related_party_tran_policy-1.pdf TheAudit Committee of Directors at its Meeting held on 29th March 2016 hasaccorded omnibus approval to execute transactions with related parties up to the value ofRs.1 Crore. Your Directors draw attention of the Members to Note No. 33 to the FinancialStatement which sets out Related Party disclosures.

LOANS GUARANTEES AND INVESTMENTS

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the Note No. 4 8 11 12 13 and 29 (i) (e)of the Notes to the Financial Statements.

INSURANCE

The Company has taken adequate insurance for all its properties. The Company has alsotaken necessary insurance cover as required under the Public Liability Insurance Act1991.

LISTING AGREEMENT / LISTING REGULATIONS COMPLIANCE

Your Company’s Equity Shares are listed on BSE Ltd. and National Stock Exchange ofIndia Ltd. (NSE) and their listing fees for the Financial Years 2015-16 and 2016-17 havebeen paid and the conditions of Listing Agreements / SEBI (LODR) Regulations 2015 havebeen complied with.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT-9 is annexedherewith as Annexure - 5.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of thefollowing items since there were no transactions in these matters and/or they are notapplicable to the Company during the year under review :

1. Business Responsibility Reporting is not applicable as the Company does not fallunder list of top 500 listed companies.

2. Details relating to deposits covered under Chapter V of the Act.

3. Issue of equity shares with differential rights as to dividend voting or otherwise.

4. Issue of shares (including sweat equity shares) to employees of the Company underESOS.

5. No significant or material orders were passed by the Regulators / Courts orTribunals which would impact the going concern status of the Company and its futureoperations.

You Directors further state that your Company has constituted prevention of SexualHarassment Committee and during the year under review no complaint was received and nocase was pending pursuant to the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.

DIRECTORS RESPONSIBILITY STATEMENT

Your Directors state that :

i) in the preparation of the annual accounts for the Financial Year ended 31stMarch 2016 the applicable accounting standards read with requirements set out underSchedule III to the Act have been followed and there are no material departures from thesame;

ii) 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 as at 31st March 2016 and ofthe profit of the Company for the year ended on that date;

iii) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

iv) the Directors have prepared the annual accounts on a going concern basis;

v) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and

vi) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

MANAGEMENT DISCUSSION AND ANALYSIS

A report on Management Discussion and Analysis forms part of the Board’s Reportand it deals with inter-alia the Business Operations & Financial PerformanceResearch

& Development Expansion & Diversification Risk Management MarketingStrategy Safety & Environment Corporate Social Responsibility Material Developmentin Human Resources etc.

ACKNOWLEDGEMENTS

The Board expresses its gratitude and appreciation to the Government of IndiaGovernment of Gujarat Financial Institutions Insurance Companies Banks other businessassociates Promoters Shareholders and employees of the Company for their continuedsupport. The Directors also gratefully acknowledge all stakeholders of the Company viz. :customers members dealers vendors banks and other business partners for the excellentsupport received from them during the year. The Directors place on record their sincereappreciation to all employees of the Company for their unstinted commitments and continuedcontribution to the Company.

For and on behalf of the Board
Sd/-
(G R ALORIA IAS)
CHAIRMAN
Place: Gandhinagar
Date : 28.07.2016