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Srikalahasthi Pipes Ltd.

BSE: 513605 Sector: Metals & Mining
NSE: SRIPIPES ISIN Code: INE943C01027
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OPEN 320.95
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VOLUME 24112
52-Week high 402.00
52-Week low 240.60
P/E 9.19
Mkt Cap.(Rs cr) 1,229
Buy Price 309.05
Buy Qty 5.00
Sell Price 0.00
Sell Qty 0.00
OPEN 320.95
CLOSE 321.05
VOLUME 24112
52-Week high 402.00
52-Week low 240.60
P/E 9.19
Mkt Cap.(Rs cr) 1,229
Buy Price 309.05
Buy Qty 5.00
Sell Price 0.00
Sell Qty 0.00

Srikalahasthi Pipes Ltd. (SRIPIPES) - Director Report

Company director report

Dear Shareholders

Your Directors have great pleasure in presenting the 24th Annual Report of the Companytogether with the Audited accounts for the Financial Year ended 31st March 2016.

FINANCIAL RESULTS: Rs. in Lakhs
Particulars 2015-16 2014-15
Gross revenue from operations 117767.06 112304.37
Net revenue from operations 114561.25 108355.08
Other income 1733.03 86.6.03
Total Revenue 116294.28 109221.11
Earnings Before Interest Taxes Depreciation & Amortisation (EBITDA) 28381.48 19427.99
Finance Costs 4204.59 4369.37
Depreciation 2708.84 3116.90
Profit/(Loss) Before Taxation 21468.05 11941.72
Less: Tax including Deferred Tax 5587.80 3724.96
Profit/(Loss) After Taxation 15880.25 8216.76
Profit Brought Forward from Previous Year 2797.09 1016.07
Amount available for Appropriation 18677.34 9232.83
Appropriations are made as under :
-General Reserve 5000.00 5000.00
-Proposed Dividend including tax thereon 2392.90 1435.74
Balance Carried Forward to Next Year 11284.43 2797.09

DIVIDEND:

Your Directors have recommended a dividend of Rs.5.00 (50%) per equity share of Rs.10/-each for the financial year ended 31st March 2016 (previous year Rs.3.00 per share)amounting to Rs.2392.90 lakhs (including Rs.404.75 lakhs towards dividend tax). Thedividend payout is subject to approval of members at the ensuing Annual General Meeting.

REVIEW OF OPERATIONS:

Your Company is associated in the nation building activity of water supply andinfrastructure development. During the FY 2015-16 your company's Ductile Iron Pipes ofabout 5500 KM have been used across the country for transportation of potable water andsewerage under its brand name "SRIPIPES". The Covt. of Andhra Pradesh hasdeclared your company as "Public Utility Services Unit" as a special case.

Your Directors are pleased to inform that your company achieved robust performanceduring the year under review in terms of operational and financial performance.

Operational performance highlights at a glance:

Product 2015-16 2014-1 5
Production in MT % of Increase
Ductile Iron Pipes 225465 169500 33
Liquid metal from MBF 259120 218206 19
Cement 87359 85770 2

Capacity Utilization of Ductile Iron Pipe Plant(2012 - 2016):

During the year under review the company has successfully achieved 100% of its ratedcapacity of Ductile Iron Pipe Plant established through capital expenditure programmeundertaken in the FY 2014-15. This has resulted in increased production of Ductile IronPipes by about 55965 MT registering an increase of about 33% over FY 2014-15. The DuctileIron Pipes revenue grew by 19.48% to Rs.995.08 Crores from Rs.832.86 Crores in FY 2014-15which has significantly improved the performance of the company.

Besides significant increase in the volumes of Ductile Iron Pipes in its constantendeavour to remain low cost manufacturer your Company has undertaken various costreduction measures during the year under review such as reduction of coke consumption inMBF HSD oil in Ductile Iron Pipe Plant. The continued favourable trend in the prices ofmajor raw materials viz. iron ore coal facilitated the Company in maintaining the lowercost of production.

The operational efficiencies and lower finance cost improved the overall performancethus achieving pre-tax profit of Rs.214.68 Crores in the FY 2015-16 as against Rs.119.42Crores reported in the FY 2014-15.

Pre-tax Profit (2012 -2016):

The improved internal cash accruals helped your Company to prepay the Term Loansborrowed from Indusind Bank Limited in March 2016 and Kotak Mahindra Bank Limited inApril 2016 amounting to Rs.47 crores and the company funded its CAPEX program during theyear under review from internal accruals.

Debt Equity Ratio 2012 - 2016:

Your company is maintaining a healthy debt equity ratio of 0.35:1.

FUTURE PROSPECTS:

During the year under review your Company has initiated yet another capitalexpenditure programme entailing an investment of Rs.100 Crores towards upgradation/modification of Blast Furnace which includes installation of Pulverized Coal Injection(PCI) and Bell Less Top equipment facilities capacity expansion of Dl Pipe Plant whichincludes installation of new spinning machine and additional finishing line. Thesefacilities are likely to be commissioned during 3rd quarter of the FY 2016-17.

Upon the successful completion of CAPEX Programme of Rs.100 cores under implementationthe production capacity of Ductile Iron Pipes shall increase from 225000 TPA to 300000TPA. Besides measures o t increase volumes the cost saving measures like Pulverized CoalInjection facility in MBF and fuel saving measures in Ductile Iron Pipe Plant would helpthe Company to remain low cost manufacturer and thus have competitive edge in theindustry.

Your Company is exploring the viability of putting up a double walled corrugated pipeplant to meet the growing demand of pipes required for sewerage and drainage.

As a further measure of cost reduction initiatives and as part of its constant attemptto achieve self-reliance in sourcing major and critical raw/essential materials yourCompany has planned to set up a Ferro Alloys Plant with an outlay of Rs.55 Crores to meetthe requirement of Ferro Silicon Silico Manganese and Ferro Manganese in domestic andoverseas markets besides catering captive requirement of the Company. This additionalfacility would help the Company in achieving higher revenues in addition to maintaininglower cost of production. This facility will be commissioned during second quarter of2017-18. This project would be funded out of internal accruals.

The Company bagged orders worth Rs.1151 Cores for supply of pipes to various watersupply projects of Telangana Government establishing a comfortable order book.

Further upcoming ambitious water supply projects Amaravathi Capital DevelopmentProjects and infrastructure projects in 100 Smart Cities and 500 other Cities under AMRUT(Atal Mission for Rejuvenation and Urban Transformation) of Central Govt and use ofDuctile Iron Pipe in the non conventional sector like irrigation schemes etc.will ensureregular business and the company is hopeful of maintaining its growth.

CREDIT RATING:

Your Company has been rated with the rating as "CARE A+ (Single A Plus)" forlong term bank facilities. This indicates adequate degree of safety regarding timelyservicing of financial obligations and carry very low credit risk. The rating assigned forshort term facilities is "CARE A1+ (A One Plus)" and indicates having verystrong degree of safety regarding timely payment of financial obligations and carrieslowest credit risk.

DIRECTORS/KEY MANAGERIAL PERSONNEL:

Andhra Pradesh Industrial Development Corporation (APIDC) Hyderabad has withdrawn itsnominee Shri J S Venkateswara Prasad IAS with effect from 10th December 2015 andnominated Shri Shamsher Singh Rawat IAS on the Board of Directors of your Company witheffect from 4th February 2016.

Your Directors place on record their appreciation for the active participation andvaluable services rendered to the Company by Mr.J. S. Venkateswara Prasad IAS in hiscapacity as Director.

Shareholders at the last Annual General Meeting approved the appointment ofMs.S.Hemamalini as Independent Director (under non executive cadre) and Mr. Gouri ShankarRathi as Whole Time Director on the Board of Directors of the Company with effect from25th July 2015 for a period of 5 years.

Shri S.Y.Rajagopalan and Shri G.S.Rathi retire by rotation at the ensuing AnnualGeneral Meeting and being eligible offer themselves for re-appointment.

The Company has received declarations from the Independent Directors of the Companyconfirming that they meet with the criteria of independence as prescribed both undersub-section (6) of Section 149 of the Companies Act 2013 and under Listing Regulations2015.

During the year under review Mr. A R Surana CFO & Company Secretary has resignedfrom the position of Company Secretary and continues to be the CFO of the company. Mr.Manoj K Shah has been appointed as Company Secretary of the Company and on hisresignation Mr. K Raghuram has been appointed as Company Secretary w.e.f. 4.2.2016.

The Board of Directors of your company confirms that plans are in place for orderlysuccession for appointment t o the Board of Directors and senior Management and they arereviewed year on year.

CORPORATE GOVERNANCE:

Corporate governance is an ethically driven business process that is committed tovalues aimed at enhancing an organization's brand and reputation. This is ensured bytaking ethical business decisions and conducting business with a firm commitment tovalues while meeting stakeholders' expectations. It is imperative that your company'saffairs are managed in a fair and transparent manner. This is vital to gain and retain thetrust of the stakeholders.

Your Company complies with the Securities and Exchange Board of India (SEBI) guidelineson corporate governance. The Corporate governance report for the financial year 2015-16and the auditors' Certificate on Corporate Governance as stipulated under regulation 34 ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 are annexed videAnnexure I and forms part of this report.

INTERNAL FINANCIAL CONTROLS & ADEQUECY:

Your Company has an effective internal financial control and risk management systemwhich are constantly assessed and strengthened with new/ revised standard operatingprocedures. The Company's internal control system is commensurate with its size scale andcomplexity of operations. The internal audit is carried out by M/s Chaturvedi & Co. areputed firm of Chartered Accountants in Chennai. The main thrust of internal audit is totest and review controls appraisal of risks and business processes besides benchmarkingcontrols with best practices in the industry.

The Company has developed a strong two tier internal control framework comprisingentity level controls and process level controls. The entity level controls of the Companyinclude elements such as code of conduct whistle blower policy management review &MIS and strong internal audit mechanism. The process level controls have been ensured byimplementing appropriate checks and balances to ensure adherence to Company's policies andprocedures efficiency in operations and also reduce the risk of frauds.

The Audit committee of the Board of Directors actively reviews the adequacy andeffectiveness of internal control systems and suggests improvements to strengthen thesame. The Company has a robust Management Information System which is an integral part ofthe control mechanism.

The Audit committee of the Board of Directors Statutory Auditors and the Businessheads are periodically appraised of the internal audit findings and corrective actionstaken. Audit plays a key role in providing assurance to the Board of Directors.Significant internal audit observations and the responses of the management are presentedto the Audit committee of the Board for its suggestions followed by corrective actions.

MANAGEMENT DISCUSSION AND ANALYSIS:

Please refer to the Management Discussion and Analysis section appearing in Annexure IIto this Report.

RISK MANAGEMENT POLICY :

The Company has a framework of identifying prioritizing and mitigating risks which mayimpact attainment of short term and long-term business goals of the company. The riskmanagement framework is interwoven with the strategic planning and deployment and capitalproject evaluation process of the Company. The process aims to analyse the external andinternal environment and manage economic financial market operational compliance andsustainability risks and capitalizes opportunities for business success. The Companyalready identified the key risks which may affect the business goals and periodicallyrevisits the relevance of the identified risks and progress of the mitigation plansundertaken. In order to strengthen the governance framework the Company has in place awell defined Risk Management Policy which can be accessed at the website of the Company atwww. srikalahasthipipes.com which ensures sustainable business growth with stability andpromotes a pro-active approach in reporting evaluating and resolving risks associatedwith the business. The elements of risk associated with the business which may likely tohave a bearing on the performance of the Company and the focused initiatives taken by theCompany for mitigation of risks is covered elsewhere under Risk Management Section in theAnnual Report.

NOMINATION & REMUNERATION POLICY:

The Board of Directors of your Company has put in place a policy which lays down aframework in relation to remuneration of Directors Key Managerial Personnel and SeniorManagement of the Company. This policy also lays down criteria for selection andappointment of Board Members. The Policy is available in the company's website atwww.srikalahasthipipes.com.

Nomination and Remuneration Committee constituted by the Board is in line with theprovisions of Section 178 of the Companies Act 2013 read along with the applicable rulesthereto and Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. The Committee shall guide the Board :

a) In relation to appointment and removal of Directors Key Managerial Personnel andSenior Management.

b) In evaluating the performance of the members of the Board and provide necessaryreport to the Board for further evaluation of the Board.

c) In formulating the criteria for determining qualifications positive attributes andindependence of a director.

d) In recommending to the Board on remuneration payable to the Directors KeyManagerial Personnel and Senior Management.

CORPORATE SOCIAL RESPONSIBILITY POLICY:

The Board has adopted a Corporate Social Responsibility Policy (CSR Policy) inaccordance with Schedule VII of the Companies Act 2013 and a report on CSRactivities/initiatives which include the contents of the CSR Policy composition of theCommittee and other details as required to be provided in Annual Report on CSR inaccordance with Section 135 of the Companies Act 2013 read with Rule 8 of the Companies(Corporate Social Responsibility Policy) Rules 2014are disclosed in Annexure III to thisReport.

During the year under review the amount spent by your Company for CSR activitiesremained lower than 2% of average net profits of last three years. As FY 2014-15 and2015-16 being initial years of implementation of CSR Policy the Company has beenevaluating various focus areas for its CSR activities in the areas of village developmenteduction health sanitation poverty eradication and livelihood generation. As the groundwork for effective implementation of CSR activities has already taken place the Companywould see improved action and corresponding spend on CSR in the coming years.

WHISTLE BLOWER MECHANISM (POLICY) :

Vigil Mechanism called 'Whistle Blower Policy' established by the Company for theDirectors Employees and all the Stakeholders of the Company to report concerns aboutunethical behaviour actual or suspected fraud or violation of the company's code ofconduct or ethics policy is in line with the provisions of Section 177(9) of the CompaniesAct 2013 read with its respective rules and Regulation 19 of SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015. It provides for adequate safeguardsagainst victimization of employees who avail of the mechanism and also provide for directaccess to the Chairperson of the Audit Committee. The guidelines are meant for all membersof the Organization from the day they join and are designed to ensure that they may raiseany specific concern on integrity value adherence without fear of being punished forraising that concern. The Whistle Blower Policy is available in the Company's website atwww .'srikalahasthipipes.com.

This Policy covers malpractices and events which have taken place / suspected to havetaken place misappropriation of monies manipulations negligence causing danger topublic health and safety misuse or abuse of authority fraud or suspected fraudviolation of company rules and other matters or activity by which the Company's interestis affected and formally reported by whistle blowers concerning its employees. The Companyhas not received any complaint under this Policy during the FY 2015-16.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013:

Your Company has in place a Prevention of Sexual Harassment Policy in line with therequirement of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. An Internal Complaints Committee (ICC) was set up to redresscomplaints received regarding sexual harassment. During the year 2015-16 there were nocomplaints received by the ICC.

EVALUATION OF PERFORMANCE OF BOARD MEMBERS:

SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 mandates thatthe Board shall monitor and review the Board evaluation framework. The Companies Act 2013states that a formal annual evaluation needs to be made by the Board of its ownperformance and that of its committees and individual directors. Schedule IV of theCompanies Act 2013 states that the performance evaluation of independent directors shallbe done by the entire Board of Directors excluding the director being evaluated. Theevaluation of all the directors and the Board as a whole was conducted based on thecriteria and framework as suggested by Nomination & Remuneration Committee adopted bythe Board. The Board approved the evaluation results as collated by the nomination andremuneration committee.

The review includes:

(a) Comparing the performance of the Board with the requirements of its Charter;

(b) Examination of the Board's interaction with management;

(c) The nature of information provided to the Board by management; and

(d) Management's performance in assisting the Board to meet its objectives.

A similar review is conducted for each Committee by the Board with the aim of assessingthe performance of each Committee and identifying areas where improvements can be made.

Based upon the results of these evaluations it was observed that the board and itscommittees are operating effectively and that the individual director's performancecontinues to be effective and demonstrates the level of commitment expected by theCompany.

NUMBER OF MEETINGS OF THE BOARD:

The details of the number of Meetings of the Board held during the Financial Year2015-16 are given in the Corporate Governance Report which forms part of this report.

RELATED PARTY TRANSACTIONS:

As per the provisions of Regulation 19 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 your Company has established a Policy on materiality ofRelated Party Transactions and on dealing with Related Party Transactions. The Policy onRelated Party Transactions asapproved by the Board of Directors is available on thewebsite of the Company at www. srikalahasthipipes.com. Al l transactions entered withRelated Parties for the year under review were on arm's length basis and in the ordinarycourse of business. All Related Party Transactions are placed before the Audit Committeeand the Board for approval. Omnibus approval was granted by the Audit Committee on yearlybasis for transactions which are repetitive in nature. Also approval of shareholders hasbeen obtained for material related party transactions to be entered into with relatedparties before the transaction took place. A statement giving details of all Related PartyTransactions are placed before the Audit Committee and the Board for review andratification on a quarterly basis. Further as required by the provisions of Section 134(3)(h) read with rule 8(2) of the Companies Act 2013 disclosure of particulars ofcontracts / arrangements entered into by the Company with related parties referred to inSection 188(1) of the Companies Act 2013 are given by way of Annexure IV to this report.

EMPLOYEES:

Your Directors are happy to inform you that a four year long term settlement till May2019 with the workmen has been concluded and wish to place on record their appreciationfor the committed services rendered by the employees of your Company at all levelsduringthe year under review and for their co-operation in maintaining cordial relations.

The statement containing particulars of employees as required under Section 197 (12)ofthe Companies Act 2013 read with Rule 5 (2) of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 forms part of this report. However in terms of Section136 of the Companies Act 2013 the Annual Report excluding the aforesaid information isbeing sent t o all the members of the Company and others entitled thereto. Any memberinterested in obtaining such particulars may write to the Company Secretary at theRegistered Office of the Company.

The ratio of the remuneration of each Director to the median employee's remunerationand other details in terms of sub-section 12 of Section 197 of the Companies Act 201 3read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is forming part of this report vide Annexure V.

STATUTORY INFORMATION:

Information as per Companies (Accounts) Rules 2014 related to conservation of energytechnology absorption foreign exchange earnings and outgo are given in Annexure - VIattached hereto and forms part of this report.

OTHER INFORMATION:

Particulars of information forming part of the Board's Report pursuant to Section 134of the Companies Act 201 3 and relevant Rules thereof not covered elsewhere in thereport due to non applicability are given hereunder :-

1. There are no qualifications reservations or adverse remarks or disclaimer made bythe Statutory Auditors in their report or by the practicing Company Secretary in theSecretarial Audit Report.

2. The Company has granted loans aggregating Rs.13.56 lakhs during the year ended 31stMarch 2016 . These primarily consist of loans to employees as per the policy of theCompany. The closing balances of these loans are disclosed under the schedule of Loans& Advances in the financial statements. The Company has not given any guarantees ormade any investments during the years which would be covered by Section 186 of theCompanies Act 2013.

3. Discussion on state of Company's affairs has been covered as part of the ManagementDiscussion and Analysis.

4. Particulars of the amounts proposed to be carried to reserves have been covered aspart of the financial performance of the Company at the beginning of the Report.

5. There are no material changes or commitments occurring after 31st March 2016 whichmay affect the financial position of the Company or may require disclosure.

6. During the year under review there has been no change in the nature of business ofthe Company.

7. The Company did not have any subsidiaries joint ventures and associate companieswhich have ceased during the year.

8. The Company has not accepted deposits under Chapter Vof the Companies Act 2013.

9. The Company has not received any such orders from Regulators Courts or Tribunalsduring the year which may impact the going concern status or the Company's operations infuture.

STATUTORY AUDITORS:

At the Annual General Meeting held on 24th August 2015 M/s. K R Bapuji & Co.Chartered Accountants (Registration No: 000395S)Hyderabad were appointed as statutoryauditors of the Company to hold office till the conclusion of the 25th Annual GeneralMeeting t o be held in the calendar year 2017. In terms of the first provision to Section139 of the Companies Act 2013 the appointment of the auditors shall be placed forratification at every Annual General Meeting. Accordingly the appointment of M/s. K RBapuji & Co. Chartered Accountants as statutory auditors of the Company is placedfor ratification by the shareholders. In this regard the Company has received acertificate from the auditors to the effect that if they are reappointed it would be inaccordance with the provisions of Section 141 of the Companies Act2013.

The Auditors' Report addressed to the shareholders of the Company does not contain anyqualification.

COST AUDITORS:

The Company has appointed M/s.Narasimhamurthy & Co. Cost Accountants Hyderabadas Cost Auditors for conducting the audit of cost accounts maintained by the Company forthe financial year 2015-16. The Cost Audit Report for the previous financial year 2014-15was filed in Extensible Business Reporting Language (XBRL) mode within due date.

SECRETARIAL AUDITORS:

Mr. S Chidambaram Company Secretary in Practice Hyderabad was appointed asSecretarial Auditor to conduct the Secretarial Audit of the Company for the financial year2015-16 as required under Section 204 of the Companies Act 2013 and Rules madethereunder. The Secretarial Audit Report for financial year 2015-16 issued byMr.S.Chidambaram Company Secretary in Practice in form MR-3 is provided in Annexure-VIIto the Board's report. The Secretarial Auditor's Report is self-explanatory and do notcall for any further comments.

GREEN INITIATIVE :

The Company started a sustainability initiative with the aim of going green andminimizing the impact on the environment. Electronic copies of the Annual Report 2014-1 5and Notice of the 23rd Annual General Meeting were sent to all members whose emailaddresses are registered with the Company / Depository Participant(s).

Shareholders who are yet to register their E-mail addresses are requested to takenecessary steps for registering the same so that they can also become a part of theinitiative and contribute towards a Greener environment. However physical copies can besent upon a request made to the Company.

ANNEXURES TO THE BOARD'S REPORT :

(i) Corporate Governance Report is enclosed vide Annexure - I.

(ii) Pursuant to Regulation 34 of Listing Regulations 2015 Management Discussion andAnalysis Report isenclosed vide Annexure - II.

(iii) Pursuant to Section 135 (4) (a) of the Companies Act 2013 read with Rule 8 (1)of the Companies (Corporate Social Responsibility Policy) Rules 2014 the annual reporton CSR activities in the prescribed format forming part of the Directors' Report isenclosed vide Annexure - III.

(iv) Pursuant to Section 134 (3) (h) of the Companies Act 2013 read with Rule 8 (2) ofCompanies (Accounts) Rules 2014particulars of contracts or arrangements with relatedparties in the prescribed Form AOC-2 forming part of Directors' Report is enclosed videAnnexure - IV.

(v) Disclosure under Section 197 (12) read with Rule 5(1) of the Companies (Appointmentand remuneration of managerial personnel) Rules 2014 isenclosed vide Annexure - V.

(vi) Pursuant to Section 134 (3) (m) of the Companies Act 2013 information relatingto Conservation of Energy Technology absorption and foreign exchange earnings and outgois enclosed vide Annexure - VI.

(vii) Pursuant to Section 204 (1) of the Companies Act 201 3 and Rule 9 of theCompanies (Appointment and remuneration of managerial personnel) Rules 2014 theSecretarial Audit Report isenclosed vide Annexure - VII.

(viii) Pursuant to Section 1 34 (3) (a) of the Companies Act 2013 the extract of theAnnual Return as provided under sub section (3) of Section 92 is enclosed vide Annexure -VIII.

DIRECTORS' RESPONSIBILITY STATEMENT:

The Board of Directors of the Company confirms that:

i) In the preparation of annual accounts the applicable accounting standards have beenfollowed and there has been no material departure.

ii) The selected accounting policies were applied consistently and the Directors madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at 31st March 2016.

iii) Proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 201 3 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities.

iv) The annual accounts have been prepared on a going concern basis.

v) Sufficient internal financial controls have been laid down and such internalfinancial controls are adequate and were operating effectively and

vi) Proper systems to ensure compliance with the provisions of all applicable laws havebeen devised and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENTS:

Your Directors would like to place on record their sincere appreciation for theassistance and co-operation received from the financial institutions banks Governmentauthorities customers vendors and members of the Company during the year under review.Your Directors also wish to express their gratitude on the dedicated and committedservices of the employees at all levels. The Company's consistent growth was made possibleby their hard work solidarity cooperation and support and look forward to theircontinued support in the future.

For and on behalf of the Board of Directors
Place: Chennai.
Date: 9th May2016
R.K. Khanna Mayank Kejriwal
Director Managing Director
DIN 05180042 DIN 00065980