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Manali Petrochemicals Ltd.

BSE: 500268 Sector: Industrials
NSE: MANALIPETC ISIN Code: INE201A01024
BSE 00:00 | 10 Dec 30.65 -0.80
(-2.54%)
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32.95

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32.95

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30.55

NSE 00:00 | 10 Dec 30.55 -0.95
(-3.02%)
OPEN

31.65

HIGH

31.65

LOW

30.45

OPEN 32.95
PREVIOUS CLOSE 31.45
VOLUME 37898
52-Week high 55.75
52-Week low 29.75
P/E 6.89
Mkt Cap.(Rs cr) 527
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 32.95
CLOSE 31.45
VOLUME 37898
52-Week high 55.75
52-Week low 29.75
P/E 6.89
Mkt Cap.(Rs cr) 527
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Manali Petrochemicals Ltd. (MANALIPETC) - Director Report

Company director report

and Management Discussion & Analysis Report to the Shareholders

The Directors present their 31st Annual Report on the business andoperations of your Company and the Audited Financial Statements for the year ended 31stMarch 2017.

Financial Results

(Rs. in crore)

DESCRIPTION 2016-17 2015-16
Profit Before interest & depreciation 70.79 77.66
Interest 1.86 2.52
Depreciation 7.84 5.88
Profit Before Tax 61.09 69.26
Provision for Taxation 20.66 21.05
Profit After Tax 40.43 48.21

Operational Highlights

Gross revenue from operations during the year was Rs. 643.35 crore against Rs. 642.46crore during the year 2015-16. Unlike in the previous year there were no major productioncuts due to natural calamities and the Company could improve its capacity utilization withthe removal of the restrictions on the production. Though the sales volume improved duringthe year due to stiff competition from the overseas suppliers the realizations wereaffected and so the revenue remained at similar level in spite of higher production. Theimpact of demonetization also affected the sales as some of the user industries operatein unorganized sector doing business more in cash and so there was a fall in demand duringthe last two quarters. The gross profit margin came down to about 9.30% against 10.60%during 2015-16. It could also be seen that the net profit for the year at Rs. 41.28 crorewas 15% lower than the previous year signifying the squeezed margins.

The bio mass Captive Power Plant was not operated during the year as it was moreeconomical to use the furnace oil based energy. The Company continues to source power fromthird parties besides the power supplied by TANGEDCO.

Financial Review

During the year under review no changes were made to the Cash Reserve Ratio by RBI butthe Statutory Liquidity Ratio was reduced from 21.50% to 20.50%. The Bank Rate which was7.75% in March 2016 was reduced to 6.75% in March 2017. The deposit rates remained thesame but the lending rates came down marginally. The rupee appreciated significantlyagainst the US Dollar and the forward premia also registered considerable reduction Vis aVis at the beginning of the year. The average inflation during the year was 2.33% against4.97% in the previous year. The finance cost for the year at Rs. 1.86 crore was lower byabout 26% Vis a Vis the previous year through better treasury management.

The Company has been reaffirmed with ratings of CARE A- signifying ‘low creditrisk' for long-term bank facilities and CARE A1 signifying ‘lowest credit risk' forshort-term bank facilities for borrowings upto Rs. 100 crore.

Dividend

With the margins in the domestic market shrinking year on year the Company hasembarked on global acquisitions for better growth. The capital expenditure plans toimprove the domestic sales and profitability as also to upgrade the effluent treatmentprocess to higher standards are also carried on to the required extent and so the Companyneeds to preserve its resources to meet the long term funding requirements.

In the light of this and as per the policy to sustain the dividend track record yourDirectors recommend a dividend of 10% i.e. fifty paise per equity share of Rs. 5/- eachfully paid-up for the year 2016-17 aggregating to Rs. 8.60 crore excluding dividenddistribution tax. The Board is happy to highlight that your Company has been declaringdividend continuously for the past twelve years.

Industry structure and development:

Your company operates in the Polyurethanes (PU) industry. PU is one of the mostversatile polymers available in the current age and in many forms ranging from soft foamsto very rigid and tough materials. This provides opportunity for almost infiniteapplications which are evolving continuously. During 2010 to 2016 the global PU markethas grown by over 30% to nearly 18000 KMT from 13650 KMT and the aggregated revenue hasenhanced by over 68% to 55.5 billion from 33 billion.

Your Company specializes in manufacture of propylene glycol and polyether polyol and isthe only Indian manufacturer of Propylene Oxide the input material for the aforesaidderivative products.

Polyols are made in four grades viz. Flexible Slabstock Flexible Cold Cure Rigidand Elastomers. These find application in the automobile refrigeration and temperaturecontrol adhesive sealant coatings furniture and textile industries.

Propylene Glycol is widely used in pharmaceuticals food flavour and fragranceindustries and also for manufacture of polyester resins carbonless paper and automobileconsumables like brake fluid and anti-freeze liquid. Some of the major applications of PGinclude medicines canned food body sprays perfumes cosmetics soaps and detergents.The off-take of PG for industrial purposes is generally low due to availability ofalternate cheaper materials.

Your Company also produces Propylene Glycol Mono Methyl Ether (PGMME) anenvironment-friendly solvent used in the paints and coatings electronics industries andas clouding agent in drilling applications.

Indian PU market has been infiltrated by huge imports and world-over new Polyolcapacities have come up in the past few years especially in Thailand and Singapore withoutcorresponding demand for the product in their region. This coupled with the slowdown inChina has further pushed the imports into India over the past few quarters. Pricing hasbeen a major issue wearing away the margins which may continue in future unless there isany marked improvement in the global economic growth.

Opportunities and threats:

Polyurethane materials due to their versatility perform extremely well as part of anyapplication that is subject to dynamic stress. They provide many advantages includingresilience high tear resistance low viscosity and low heat build-up. Polyurethane can beused for varied applications like building insulations refrigeration furniturefootwear automotive coatings and adhesives sealants etc. The development ofpolyurethane materials is still evolving and new applications are regularly being created.

It has been reported that the Indian PU market is anticipated to grow at a CAGR of 7%during the period 2016 to 2020 simulated by increased use in construction applicationsreplacing the conventional fibreglass mineral wool etc. Though this market is still notmatured in India given the advantages such as higher insulation living space energyefficiency and environmental friendly the usage is expected to grow further in the nearfuture and open up better opportunities for the new products of your Company underdevelopment.

However as mentioned earlier the unabated imports of Polyol and PG dampen the outlookand the margins are bound to decline further. The Company continues its effort to ward offthe threat through the available avenues in law and also through product development andconcentrating on value added products such as water proofing footwear applications etc.The global investment plans are also aimed at improving the earnings of the Company.

Indian Market Scenario:

The Indian Polyol and PG markets continued to be dominated by imports. There has beenno letup in the inbound volumes of Polyols in spite of levy of Anti-Dumping Duty (ADD) bythe Government on imports of FSP from Singapore Australia and EU in 2015-16. The importshave further increased with the new Polyol facilities set up in Thailand and Singaporebecoming operational and the ADD on imports from China and Korea expiring in August 2015.Based on the application by your Company ADD has been levied on imports from Thailand fromApril 2017.

The imports of PG also has increased and the sales during the year under review wasfurther affected due to the ban on fixed dose combination drugs by the Government imposedin March 2016 which however was revoked by the Delhi High Court in December 2016. Duringthe year the Company identified trading as a new segment in addition to manufacturing. Thesegment wise performance details are furnished in the Notes to the Financial Statements.

Risk Management Policy

The Company has established a structured frame work for addressing business riskmanagement issues. A risk management plan has been framed implemented and monitored bythe Board through the Risk Management Committee of Directors (RMC) comprising Ms.Sashikala Srikanth as the Chairperson Mr. T K Arun Director and Mr. Muthukrishnan RaviManaging Director as the other Members.

The Company has two employee-level Committees viz. a sub-committee and an ApexCommittee headed by the Wholetime Director (Works) to review and assess the risks thatcould affect the Company's business. The sub-committee brings out the matters that couldaffect the operations and the Apex Committee determines the issues that could becomebusiness risks. The mitigation actions are also suggested by the Committee and the reportof the Risk Controller is submitted to the Risk Management Committee of Directors (RMC).The RMC meets periodically reviews the report of the Risk Controller and recommendsactions to be taken in this regard.

As required under S. 177 of the Companies Act 2013 (the Act) the Audit Committee alsoreviews the risk management process periodically.

Risks and Concerns

The duty concessions for import of polyols and other products under the free tradeagreements with countries across the globe continue to boost cheaper imports into Indiadenying level playing field to the local manufacturers. The new facilities set up by majorplayers such as DOW BASF elsewhere with high capacities offer higher quantity of Polyolsto Indian market at very low prices.

The Company continues to defend the case pending before the Southern Bench of theNational Green Tribunal Chennai against the marine disposal of the treated effluent.Further improving the quality of the treated effluent to meet stricter standards has beenanother big challenge in spite of various actions taken by the Company and the Company isin the process of implementing new techniques for the same.

Outlook:

As per the World Economic Outlook released by the World Bank in January 2017 globaleconomic activities are projected to pick up pace in 2017 and 2018. While the outlook fordeveloped economies has improved for 2017 and 2018 the prospects for emerging anddeveloping economies has worsened where the financial conditions have tightenedgenerally.

The World Output for 2017 and 2018 are projected at 3.4% and 3.6% Vis a Vis theestimate of 3.1% for 2016. Though a marginal increase is noticed these are still belowthe average of 5% in 1990.

The world trade growth for 2017 is stated at 2.4% but taking into account the forecastrisk due to uncertainty about the near-term economic and policy development a range of1.8% to 3.4% has been indicated for 2017 and 2.1% to 4% for 2018.

The growth forecast for India for FY 2016-17 and 2017-18 were trimmed by one percentagepoint and 0.4 percentage point respectively over the previous estimates in October 2016.It has been stated that such a reduction is primarily due to the temporary negativeconsumption induced by cash shortages and payment disruptions associated with the currencynote withdrawal and exchange initiative. Notwithstanding the pruning of the growthprospects India is projected to grow @ 7.2% in 2017 and 7.7% in 2018 better than China @6.5% and 6.6%. The projections for Indonesia and Thailand have also been pruned and thismay lead to increase in imports from this region.

Though the government has imposed Anti-Dumping Duty on import of Polyols from somecountries no visible relief has been felt so far. Also the introduction of GST isexpected to benefit the importer-traders through better input credits which would bringdown their cost that may be passed on to the customers.

New applications development for footwear seat cushions for two wheelers specialtypolyols drilling applications water proofing etc. are in progress but catering to themarket in a large scale could take a longer time.

It is expected that the Green Building Code hitherto a guideline would be mademandatory in the year 2017 across the country. This is expected to increase the demand forPU insulation products. The Code aims to make bigger buildings water and energy efficientfor which it would be obligatory to insulate the walls and reduce the power requirement.While some States have notified the Code already the remaining states are expected toimplement the same in the year 2017-18.

The bulk storage facilities for imported raw materials in Ennore Port helps the Companyto increase the capacity of the derivative plants and go for more of value added productsbut the prices have been going up. The facility for PO manufacturing being set up byanother Company in Manali is expected to be completed during the current year or earlynext year. This would help to bring down the input cost by avoiding high cost imports.

As stated previously the Company has been focusing on acquisition of overseasbusinesses to maximize the stakeholder values through its subsidiaries.

Subsidiaries

As at the year end the Company had one Wholly Owned Subsidiary (WOS) and two Step DownSubsidiaries (SDS) all of which are incorporated outside India. The financials of allthese subsidiaries have been consolidated and the financial and other information havebeen furnished in the Consolidated Financial Statement (CFS) attached to this Report.

AMCHEM Singapore

AMCHEM Speciality Chemicals Private Limited Singapore became the WOS of the Companyin 2015-16 to hold all the foreign assets of the Company. The Company has invested US$16.32 million (Rs. 110.32 crore) in the WOS to part fund the acquisition of a system housein the UK and also for further exploratory work.

During the year under review the WOS set up AMCHEM Speciality Chemicals UK Limited asits WOS which acquired Notedome Limited. Thus AMCHEM UK and Notedome have become the SDSof MPL during the year. AMCHEM Singapore continues to explore other opportunities foracquisition of existing overseas facilities to further improve the global presence of MPL.It has been reported that options for taking up other activities such as tradingtransaction facilitations business & project consultancy are also looked at by thesubsidiary.

AMCHEMUK

AMCHEM Speciality Chemicals UK Limited London was established in August 2016 by AMCHEMSingapore as its WOS. AMCHEM UK is an SPV for acquisition of Notedome Limited CoventryUK. The acquisition of Notedome Limited is effective 1st October 2016 which wasachieved through the equity contributions from AMCHEM Singapore and loans.

Notedome Limited UK

Notedome established in 1979 is a System House with more than 30 years' experiencemanufacturing Neuthane Polyurethane Cast Elastomers catering to customers across 45countries. Neuthane polyurethanes are used in diverse range of industries andapplications in the automotive sector for anti-roll bar suspension and shock bushes forbuses trucks and other high performance vehicles limit or bump stops material handlingetc. and in the agriculture sector for Rollers Harvester components and idler wheels ontrack laying tractors. From the CFS it could be seen that the acquisition of Notedome hasenhanced the consolidated earnings and hence has improved the overall performance within ashort period of time.

Environment and Safety

Your Company has laid down clear policies for quality environment and safety and hasset-up various teams and committees to monitor and improve observance of the saidpolicies. Besides periodical in-house reviews and audits surveillance audits of ISO 9001and ISO 14000 have been done regularly ensuring proper adherence to the qualityenvironment and safety requirements. World Environment Day is celebrated and to mark theoccasion tree planting and similar activities are undertaken. During the cyclone inDecember 2016 many trees were uprooted and the Company has taken immediate steps forplanting new ones.

Your Company pays special attention to safety of men and material and variouscompetitions are held during the Safety Week to create awareness among the employees aboutthe need to adhere to safe manufacturing practices. Training is provided to the employeesin safety related matters including first aid and mock drills are conducted to ensure thatthe systems and processes are in place to meet any eventualities. The Company has beenawarded to first prizes for the year 2013 for longest accident free man hours and lowestaccident frequency.

Audit Committee

The details are furnished under the Corporate Governance Report (CGR) annexed to thisReport. All the recommendations of the Committee were accepted by the Board.

Vigil Mechanism

As required under S. 177 of the Act and Regulation 22 of the SEBI (Listing Obligations& Disclosure Requirements) Regulations 2015 (the Regulations) the Company hasestablished a vigil mechanism for directors and employees to report genuine concernsthrough the whistle blower policy of the Company as published in the website of theCompany. As prescribed under the Act and the Regulations provision has been made fordirect access to the Chairperson of the Audit Committee in appropriate or exceptionalcases.

Human Resources

Your Company believes that achievement of its goals is reliant on the abilities of itsworkforce to convert the plans into actions. Therefore every effort is taken to retainthe talents and also introduce newer ideas from the younger generation for the successstory to continue. Various HR initiatives are also taken to enhance the competency of theemployees through inclusive decision making process by delegation recognition leadershipdevelopment etc. Your Company imparts need based training to its employees with specialfocus on youngsters stimulating them to play an important role in shaping the Company'sfuture. The industrial relations have generally been cordial except in relation to a wagedispute with the workmen from 2001 being contested earlier in the Supreme Court and nowin the Madras High Court. The Management's efforts to settle the issue through dialogueshave partially succeeded with a majority of the workmen accepting the offer but othersare persisting with the case.

In order to encourage better employee participation the Company conducts open housesand has introduced employees suggestions scheme for them to provide ideas forproduct/process improvements and cost control.

As on 31st March 2017 your Company had 359 employees on its roll atdifferent locations including Senior Management Personnel Engineers Technicians andTrainees.

Related Party Transactions

During the year under review there were no transactions not at arms' length within themeaning of Section 188 of the Act or any material transactions with the related parties interms of the policy framed by the Audit Committee of the Company as published in thewebsite of the Company viz. http://www.manalipetro.com/wp-content/uploads/2016/08/Policy-on-Transactions-with- Related-Parties.pdf.

Board of Directors and related disclosures

The Board comprises of eight directors of whom four are independent including a womandirector. All the Independent Directors have furnished necessary declaration under Section149 (7) of the Act and as per the said declarations they meet the criteria ofindependence as provided in Section 149 (6) of the Act.

The Board met six times during the year under review and the relevant details arefurnished in the CGR.

The Board has approved the Remuneration Policy as recommended by the Nomination andRemuneration Committee (NRC) which inter alia contains the criteria for determining thepositive attributes and independence of a director as formulated by the NRC. The policy onremuneration to directors is disclosed in the CGR annexed to this Report.

The term of office of Mr. G Balasubramanian WTD (Works) ends on 27th May2017 and the Board wishes to place on record its appreciation to Mr. Balasubramanian forhis services during his tenure as a Director.

Mr. C Subash Chandra Bose has been appointed as an Additional Director and WholetimeDirector (Works) for a period of three years with effect from 28th May 2017.

Mr. Bose will hold office till the ensuing Annual General Meeting (AGM) and requisitenotice and deposit have been received under Section 160 of the Act for his appointment asa Director at the AGM. The proposal for his appointment and remuneration as the WholetimeDirector (Works) has also been placed for consideration of the Members at the AGM.

The term of office of Mr. Muthukrishnan Ravi (DIN:03605222) ends on 29thJuly 2017. The Board at the meeting held on 31st January 2017 has reappointedhim for a further period of three years subject to the approval of the Central Governmentand the Members at the ensuing AGM. Mr. Ravi will not draw any remuneration from theCompany and the proposal has been included in the notice of the AGM for consideration andapproval by the Members by way of a special resolution. The Company has filed applicationwith the Central Government for approval of the appointment of Mr. Ravi as he has notbeen an Indian Resident for the 12 months preceding the reappointment within the meaningof Schedule V Part I. Mr. Ashwin C Muthiah [DIN: 00255679] Director retires by rotationand being eligible offers himself for re-election. There has been no change in the KeyManagerial Personnel since the last Annual General Meeting.

Annual Evaluation of the Board Committees and Directors

Board evaluated its performance taking the following aspects into account viz.Structure Meetings Functions Risk Evaluation process adopted grievance redressalmechanism stakeholder value and responsibility corporate culture and ethics and othermatters. Board also took into account facilitation to the Independent Directors tofunction independently and perform their roles as another important parameter for theevaluation. The performance of each of the Committees was evaluated taking into accountthe clarity and disclosure of the composition mandate & working procedureseffectiveness structure and meetings independence and contribution in decision makingprocess.

The evaluation of the two Executive Directors was done based on their assigned rolesand responsibilities. As regards the other Directors including the independent directorsthe evaluation was done taking into account the following parameters viz. qualificationexperience competency adequacy of knowledge about the Company and its sector ofoperation understanding about the strategic direction ethical behaviour participationin the risk evaluation process resolving conflict of interests attendance andparticipation at the meetings ability to work as a team player and voluntary sharing ofinformation for the larger benefit of the Company and the like.

In compliance with the requirements of Schedule VII to the Act and the Regulations aseparate meeting of the Independent Directors was held during the year.

Directors' Responsibility Statement

Pursuant to the requirement of sub-sections 3 (c) and 5 of Section 134 of the Act it ishereby confirmed that

(a) in the preparation of the annual accounts for the financial year ended 31stMarch 2017 the applicable Accounting Standards had been followed along with properexplanation relating to material departures;

(b) the Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that were 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 of the Company for the year under review.

(c) 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

(d) the Directors had prepared the accounts for the financial year ended 31stMarch 2017 on a "going concern" basis.

(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls were adequate and were operatingeffectively and

(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.

Details of unclaimed Share Certificates

In accordance with the requirements of the Clause 5A of the erstwhile ListingAgreement shares remaining unclaimed even after 3 reminders have been transferred andheld in a separate demat account. As per the information provided by the Registrars andTransfer Agent out of the 1593201 shares which remained unclaimed by 6572shareholders at the beginning of the year 8700 shares were released to 24 shareholdersduring the year. As at the end of the year 1584501 shares remained unclaimed by 6548shareholders. As specified under the Regulations the voting right on the above sharesremain frozen.

Pursuant to the requirement under Section 125 of the Act read with the relevant Rulesnotices have been sent to the shareholders who have not encashed any dividend for sevenyears for transfer of the related shares to the IEPF.

Auditors

M/s. Deloitte Haskins & Sells Chartered Accountants Chennai were appointed as theAuditors of the Company at the 30th Annual General Meeting (AGM) held on 21stSeptember 2016 to hold office till the conclusion of 31st AGM. In compliancewith the provisions for rotation of auditors the Company is required to appoint newAuditors at the ensuing AGM.

In this connection the Audit Committee has recommended the appointment of M/sBrahmayya & Co Chartered Accountants Chennai as the Auditors of the Company on a feeof Rs. 10.75 lakh plus applicable taxes and reimbursement of out of pocket expenses forapproval by the Members. As per S. 139 (1) the new Auditors will hold office for a periodof five years viz. till the 36th AGM to be held in the year 2022 subject toratification of the Members at every AGM to be held till the conclusion of their office.

Cost Audit

Mr. S Gopalan Proprietor S Gopalan & Associates Cost Accountants Chennai wasappointed as the Cost Auditor of the Company for the financial year 2016-17 on aremuneration of Rs. 3.50 lakh plus applicable taxes and reimbursement of out of pocketexpenses which was ratified by the Members at the 30th AGM held on 21stSeptember 2016. The Cost Auditor holds office till 30th September 2017 orsubmission of his report for the year 2016-17 whichever is earlier.

Adequacy of Internal Financial Controls Your company has in place adequate internalfinancial control systems combined with delegation of powers and periodical review of theprocess. The control system is also supported by internal audits and management reviewswith documented policies and procedures. The system was also reviewed by an externalagency and no major weaknesses were reported. To ensure effective operation of thesystem periodical reviews are made by the Internal Auditors and their findings discussedby the Audit Committee and with the Auditors. The Auditors of the Company have alsofurnished certificates in this regard which are attached to their Reports.

Corporate Governance

Your Company has complied with the requirements of Corporate Governance stipulatedunder the Regulations. A Report on Corporate Governance is given as Annexure A alongwith a Certificate from the Auditors is attached to this report.

Secretarial Audit Report

As required under Section 204 of the Act the Secretarial Audit Report issued by Mrs. BChandra Company Secretary in practice is annexed to this Report (Annexure B).

Disclosures under Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014

a. The ratio of remuneration of Mr. G Balasubramanian Wholetime Director (Works) tothe median remuneration of the employees of the Company was 13.

b. The percentile increase in remuneration of the Company Secretary was 10%

c. The percentage increase in the median remuneration of the employees (other thanworkmen who are covered under wage settlement for which a litigation is pending before theMadras High Court) was 6%

d. As at the year end there were 255 permanent employees including MD and WTD butother than trainees and probationers.

e. During the year the average percentile increase in the salaries other thanmanagerial remuneration was about 7% and there was no increase in the managerialremuneration.

f. Information required under Rule 5(2) are given in Annexure E to this Report.

g. The remuneration paid to the employees are as per the remuneration policy of theCompany.

Other disclosures

a. Information on conservation of energy technology absorption foreign exchangeearnings and outgo prescribed under Section 134 of the Act read with Rule 8 of theCompanies (Accounts) Rules 2014 to the extent applicable are given in Annexure C.

b. The extract of the Annual Return in Form MGT-9 is given in Annexure D.

c. The Company has not accepted any deposits from the public during the year underreport.

d. The information under Section 186 of the Act relating to investments loans etc. asat the year- end has been furnished in notes to the Financial Statement.

e. The CSR Policy related disclosures are given in Annexure F.

Acknowledgement

Your Directors express their sincere gratitude to the Government of India theGovernment of Tamilnadu the Promoters and the consortium of Banks for the assistanceco-operation and support extended to the Company. The Directors thank the shareholders fortheir continued support. The Directors also place on record their appreciation of theconsistent good work put in by all cadres of employees.

Disclaimer

The Management Discussion and Analysis contained herein is based on the informationavailable to the Company and assumptions based on experience in regard to domestic andglobal economy on which the Company's performance is dependent. It may be materiallyinfluenced by changes in economy government policies environment and the like on whichthe Company may not have any control which could impact the views perceived or expressedherein.

For and on behalf of the Board
Ashwin C Muthiah
Chennai DIN : 00255679
May 16 2017 Chairman