Tamilnadu Steel Tubes Ltd.
|BSE: 513540||Sector: Metals & Mining|
|NSE: N.A.||ISIN Code: INE176E01012|
|BSE 00:00 | 19 Dec||Tamilnadu Steel Tubes Ltd|
|NSE 05:30 | 01 Jan||Tamilnadu Steel Tubes Ltd|
|BSE: 513540||Sector: Metals & Mining|
|NSE: N.A.||ISIN Code: INE176E01012|
|BSE 00:00 | 19 Dec||Tamilnadu Steel Tubes Ltd|
|NSE 05:30 | 01 Jan||Tamilnadu Steel Tubes Ltd|
Your Directors are pleased to present the 40th Annual Report of theCompany together with the Audited Financial Statements for the year ended 31st March2019. The Management Discussion and Analysis also forms part of this report.
1. FINANCIAL RESULTS (standalone):
The Company's Financial Results for the year ended 31st March 2019 is summarized below:
2. OVERVIEW OF COMPANY'S FINANCIAL PERFORMANCE
Total income comprising Revenue from Operations (Net) and other income for the yearwas Rs.81.37 Crore as compared to Rs. 90.70 Crore in 2017-18. Total Revenue fromOperations (Net) Decreased in 2018-19.
Other Operating Revenue
Other operating revenue for the year ended March 31 2018 includes Rs.0.11 Crore (lastyear Rs. 0.07 Crore)
Profi t before Tax
Profi t before tax for the year is Rs.0.01 Crore as compared to Rs. 1.07 Crore in2017-18
Total Comprehensive Income
Total Comprehensive Income for the year is Rs.0.09 Crore as compared to Rs. 0.70 Crorein 2017-18.
Material Changes and Commitments
Except as disclosed elsewhere in this Report no material changes and commitments whichcould affect the Company's financial position have occurred between the end of thefinancial year of the Company and date of this Report.
3. TRANSFER TO RESERVES
The Company has not proposed to transfer any amount to the General Reserves.
4. CASH & CASH EQUIVALENT
Cash and Cash Equivalent as at March 31 2019 was Rs.3.62 Crores. The Company Continuesto focus on judicious management of its working capital. Receivables inventories andother working capital parameters were kept under strict check through continuousmonitoring.
Your Directors has not recommended any dividend for the financial year 2018-19.
6. SHARE CAPITAL
The Company's paid up Equity Share Capital as on March 31st 2019 is Rs.5.12 Crore. TheCompany has neither issued any shares with differential rights as to Dividend Voting orotherwise nor issued shares (including sweat equity shares) to the Employees or Directorsof the company under any Scheme. As on March 31 2019 none of the Directors of the Companyhold shares of convertible instruments of the Company.
No disclosure is required under Section 67(3)(c) of the Act in respect of votingrights not exercised directly by the employees of the Company as the provisions of thesaid Section are not applicable.
7. PARTICULARS OF 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 notes to the Financial Statements.
8. STANDALONE FINANCIAL STATEMENTS
The Standalone Financial Statements of the Company for the Financial Year Ended31.03.2019 are prepared in compliance with the applicable provisions of the Act IndianAccounting Standards (Ind-AS) and as prescribed by Securities and Exchange Board of India(SEBI) under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015(hereinafter referred to as the SEBI (LODR) Regulations 2015). The FinancialStatements of the Company for the year ended 31st March 2019 have been disclosed as perDivision ll of Schedule III to the Companies Act 2013.
Pursuant to the provisions of Section 136 of the Companies Act the FinancialStatements of the Company the Standalone Financial Statements along with all relevantdocuments and the Auditors' Report thereon form part of this Annual Report. The FinancialStatements as stated above are also available on the website of the company and can beaccessed at the web link www.tamilnadusteeltubesltd.com
9. AWARDS AND CERTIFICATIONS
In two consecutive years the company has conferred Export Award from EEPC for highestexport of their products.
10. CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES:
For the present the company is not falling under purview/ compliance of the same asper section 135 of the Companies Act 2013. However the Company's CSR Policy has beenre-stated making it more comprehensive and in alignment with the requirements of the Actwhen applicable. The Company is committed to Corporate Social Responsibility and stronglybelieves that the business objectives of the Company must be in congruence with thelegitimate development needs of the society in which it operates.
11. CORPORATE GOVERNANCE
A separate Section on Corporate Governance practices followed by the Company togetherwith a Certificate from the Company's Auditors confi rming compliance forms a part ofthis Annual Report as per SEBI (LODR) Regulations 2015.
12. ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on Conservation of Energy Technology absorption and Foreign Exchangeearnings and outgo as stipulated in Section 134(3)(m) of the Act and the Rules framedthere under is annexed herewith to the Board's Report.
13. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All transactions with related parties are placed before the Audit Committee as also theBoard of approval prior omnibus approval of the Audit Committee and the Board is obtainedfor the transactions which are of a foreseen and repetitive nature. The transactionsentered into pursuant to the omnibus approval so granted are audited and a statementgiving details of all related party transactions is placed before the Audit Committee andthe Board of Directors for their approval on a quarterly basis. The statement issupported by a Certificate from the CEO & MD and the CFO. Your Company has developed arelated party transactions manual standard operating procedures for the purpose ofidentification and monitoring of related party transactions.
The policy on related party transactions as approved by the board is available on theCompany's website and can be accessed through weblink: http://www.tamilnadusteeltubesltd.All transactions entered into with related parties during the year were on an arm's lengthpricing basis and were in the ordinary course of business. There were no material relatedparty transactions i.e transactions exceeding ten percent of the annual consolidatedturnover as per the last Audited Financial Statements entered into during the year.Accordingly there are no transactions that are required to be reported in form AOC 2.
None of the Directors or the Key Managerial Personnel has any pecuniary relationshipsor transactions vis--vis the Company.
14. DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Board of your Company is duly constituted in accordance with the requirements ofthe Companies Act 2013 and SEBI Regulations.
Directors and KMPs resigned and appointed during the year:
1 Mr. Jyotiprakash Sahoo Company Secretary & Compliance Officer also resigned w.e.f15.10.2018.
2 Mr. C Muruganandam an Associate Member of the Institute of Company Secretaries ofIndia has been appointed as the Company Secretary & Compliance Officer of the Companyw.e.f 15.05.2019.
3 Mr. Mahaveer Singh Whole-time Director has resigned w.e.f 14th August 2019.
4 Mr. N sudharsan has resigned as CFO and appointed as Whole-time Director w.e.f 14thAugust 2019.
5 Mrs. G Chitra has been appointed as CFO w.e.f 14th August 2019.
Further the Company has received declarations from all the Independent Directorsstating that they meet the criteria of Independence as given under Section 149(7) of theCompanies Act 2013 and the relevant provisions of the Listing Regulations.
Further in accordance with the provisions of Companies Act 2013 and the Articles ofAssociation of the Company Mr. M.T. Elumalai (DIN: 01278399)Director of the Companyretires by rotation at the ensuing Annual General Meeting and being eligible has offeredhimself for re-election. Mrs. Seshadhri
Rajalakshmi Independent Director of the Company Whose term of office has ended on19.07.2019 reappointed again for a term of further five years by the Board subject to theconsent of the members of the Company at the ensuing Annual General Meeting of theCompany.
The required information of the Directors being re-appointed pursuant to theprovisions of the Listing Regulations forms part of the Annual Report.
There was no change in the composition of the Board of Directors and the Key ManagerialPersonnel except as stated above.
The following persons have been designated as Key Managerial Personnel of the Companypursuant to section 2(51) and section 203 of the Act read with the Rules framed thereunder.
15. DIRECTORS' REMUNERATION POLICY AND CRITERIA FOR MATTERS UNDER SECTION 178
Information regarding Directors' Remuneration Policy and criteria for determiningqualifi cations positive attributes independence of a director and other mattersprovided under sub-section (3) of section 178 are provided in the Corporate GovernanceReport.
16. AUDITORS Statutory Auditors
The members in the 38th Annual General Meeting held on September 4 2017 appointedM/s. Abhaya Jain & Co. Chartered Accountants [Firm's Registration No. 000008S] asthe Statutory Auditors of the Company to hold office for a term of 5 (fi ve) years fromthe conclusion of the 38th Annual General Meeting (AGM) of the Company held in thefinancial year 2016-17 until the conclusion of the AGM of the Company for the financialyear 2021-22 on such remuneration as may be determined by the Board of Directors.
Pursuant to the amendment to Section 139 of the Companies Act 2013 which was notifiedon May 7 2018 ratifi cation of appointment of Statutory Auditors at every AGM is nolonger required. There are no qualifi cations reservation or adverse remark or disclaimermade in the audit report for the Financial Year 2018-19.
The notes to accounts referred to in the Auditors' Report are self-explanatory andtherefore do not call for any further comments.
On the recommendation of the Audit Committee the Board of Directors appointed FCMALatha Venkatesh Cost Accountants (Firm Registration No. 101017) as Cost Auditor of theCompany for the financial year 2019-20 under Section 148 of the Companies Act 2013 readwith The Companies (Cost Records and Audit) Amendment Rules 2014. CMA Latha Venkatesh hasconfirmed that they are free from disqualifi cation specified under Section 141 (3) andproviso to Section 148 (3) read with Section 141 (4) of the Companies Act 2013 and thattheir appointment meets the requirements of Section 141 (3) (g) of the Companies Act2013. They have further confirmed their independent status and an arm's lengthrelationship with the Company.
The remuneration payable to the Cost Auditor is required to be placed before theMembers at the ensuing AGM for their ratifi cation. Accordingly a Resolution for seekingMembers' ratifi cation for the remuneration payable to CMA Latha Venkatesh Cost Auditoris included at Item No. 4 of the notice convening the Annual General Meeting.
The Company has appointed Mr. VS Sowri Rajan (FCS 2368) / Company Secretaries inPractice to undertake the Secretarial Audit of the Company pursuant to the provisions ofSection 204 of the Companies Act 2013 and The Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 for the Financial Year 2018-19. The Report of theSecretarial Auditor is annexed to the Board's Report as Annexure.
17. MEETINGS Board Meetings
During the year under report Four (4) Board Meetings were convened and held thedetails of which are given in the Corporate Governance Report.
The Audit Committee comprises Six (6) members of which four including the chairman ofthe committee are Independent Directors. During the year Four (4) Audit CommitteeMeetings were convened and held. Details of the committee are given in the CorporateGovernance Report.
The CSR Committee comprises Five (5) members of which three including the Chairman ofthe Committee are Independent Directors. The Committee met once during the reportingperiod. Details of the Committee are given in the Corporate Governance Report.
18. SECRETARIAL STANDARDS OF ICSI
Pursuant to the approval given on 10 April 2015 by the Central Government to theSecretarial Standards specified by the Institute of Company Secretaries of India theSecretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings(SS-2) came into effect from 1 July 2015. The said standards were further amended w.e.f. 1October 2017. The Company is in compliance with the same.
19. EXTRACT OF ANNUAL RETURN
As required by Section 92(3) of the Act and the Rules framed there-under the extractof the Annual Return in Form MGT 9 is available on the website ofwww.tamilnadusteeltubesltd.com.
20. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12)
During the year under review there were no frauds reported by the auditors to theAudit Committee or the Board under section 143(12) of the Companies Act 2013.
21. DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief in accordance to the information andexplanations obtained by them your Directors make the following statement in terms ofSection 134 of the Companies Act 2013: a) that in the preparation of the Annual FinancialStatements for the Financial Year Ended March 31 2019 the applicable accountingstandards have been followed along with proper explanation relating to materialdepartures if any; b) that such accounting policies as mentioned in Note 2 of the Notesto the Accounts have been selected and applied consistently and judgment and estimateshave been made that are reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company as on March 31 2019 and of the Profit of the Company forthe year ended on that date; c) that proper and sufficient care has been taken for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; d) That the annual accounts have been preparedon a going concern basis; e) That proper internal financial controls laid down by theDirectors were followed by the Company and such internal financial controls are adequateand were operating effectively; and f) That proper systems to ensure compliance with theprovisions of all applicable laws have been devised and such systems were adequate andwere operating effectively
22. PARTICULARS OF EMPLOYEES
Disclosure pertaining to the remuneration and other details as required under Section197(12) of the Act and the Rules framed thereunder is enclosed as Annexure to the Board's Report. The information on Employees who were in receipt of remuneration will beprovided to any Member on a written request to the Company Secretary. In terms of Section136 of the Act the Report and Accounts are being sent to the Members and others entitledthereto excluding the aforesaid Annexure which is available for inspection by the Membersat the Registered office of the Company during business hours on working days of theCompany up to the date of the ensuing Annual General Meeting.
23. INTERNAL CONTROL SYSTEMS Internal Audit and their adequacy
The Company has in place well defined and adequate internal controls commensurate withthe size of the Company and the same were operating effectively throughout the year.
The company has an in-house Internal Audit (IA) function. The scope and authority ofthe Internal Audit function is defined in the Internal Audit Charter. To maintain itsobjectivity and independence the IA function reports to the Chairman of the AuditCommittee of the Board. The IA Department evaluates the effi cacy and adequacy of InternalControl System its compliance with operating systems and policies of the Company andaccounting procedures at all locations of the company. Based on the report of IA functionprocess owners undertake corrective action in their respective areas and therebystrengthen the controls. significant audit observations and corrective actions thereon arepresented to the Audit Committee of the Board.
Internal Controls over Financial Reporting
The Company has in place adequate internal financial controls commensurate with thesize scale and complexity of its operations. During the year such controls were testedand no reportable material weakness in the design or operations were observed. The Companyhas policies and procedures in place for ensuring for proper and efficient conduct of itsbusiness the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timely preparationof reliable financial information. The Company has adopted Accounting Policies which arein line with the Accounting Standards and the Act. These are in accordance with generallyaccepted accounting principles in India. Changes in policies if required are made inconsultation with the Auditors and are approved by the Audit Committee.
The company has a robust financial closure certifi cation mechanism for certifyingadherence to various accounting policies accounting hygiene and accuracy of provisionsand other estimates.
24. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a Vigil Mechanism named Ethical View Reporting Policy (EVRP) to reportconcerns about unethical behavior actual/suspected frauds and violation of company's codeof Conduct. Protected disclosures can be made by a whistle blower through severalchannels. An Ethical View Committee has been constituted to discuss the fi nding of theinvestigations of the complaints and to recommend remedial actions. The Audit Committee ofthe Board oversees the functioning of the Ethical View Committee. Also during the yearyour Company reached out extensively to employees to conduct greater awareness on ValueCreation in Competitive Environment (VCCE) and on Anti Bribery and Corruption Directive(ABCD) through e-learning modules and face to face sessions achieving a high level ofengagement and compliance. This reflects your company's strong commitment to Zerotolerance for non-compliances in this regard and to doing business the right way and withintegrity.
Board Effectiveness a. Familiarization Programme for the Independent Directors
In compliance with the requirements of SEBI (Listing Obligation and DisclosureRequirements) Regulations 2015 the Company has put in place of familiarization programmefor the Independent Directors to familiarize them with their role rights andresponsibility as Directors the working of the Company nature of the industry in whichthe company operates business model etc. The details of the familiarization programme areexplained in the Corporate Governance Report. b. Board Evaluation
Pursuant to the provisions of the Act and the SEBI (LODR) Regulations 2015 the Boardhas carried out the annual performance evaluation of its own performance the Directorsindividually as well as the evaluation of the working of its Audit Nomination &Remuneration and Compliance Committee. The criteria applied in the evaluationprocess are explained in the Corporate Governance Report.
25. ENHANCING SHAREHOLDER VALUE
Your Company firmly believes that its success in the marketplace and a good reputationare among the primary determinants of value to the Shareholder. The organizational visionis founded on the principles of good Governance and by the resolve to be acustomer-centric organization which motivates the Company's Management to be aligned todeliver leading-edge building products backed with dependable after sales services.
Your Company is committed to creating and maximizing long-term value for Shareholdersand essentially follows a four pronged approach to achieve this end. a) by increasingall-round operational effi ciencies. b) by identifying strategies that enhance itscompetitive advantage. c) by managing risks and pursuing opportunities for profitablegrowth and d) by cementing relationships with other important Stakeholder Groups throughmeaningful engagement processes and mutually rewarding associations that Enable it tocreate positive impacts on the economic societal and environmental dimensions of theTriple Bottom Line. Underlying this is also a dedication to value-friendly financialreporting that assures the Shareholder and investor of receiving transparent andunfettered information on the Company's performance.
26. ECONOMIC SCENARIO AND OUTLOOK
Indian economy followed a path of recovery registering growth in the Financial Year2018-19. The prospect for economic growth became buoyant with the agrarian and ruraleconomy benefiting from a good monsoon after two successive rain defi cient years. Thegrowth was affected in a few months during the year by the impact of the demonetizationscheme. The financial year is expected to end with GDP growth is estimated to have a rise.The second half of the financial year 2018-19 closed as a momentous year for the countrymarked by landmark economic reforms even as the global economic scenario was indifferent.That is the Goods and Services Tax (GST) a single tax intended to replace the existingCentral and State indirect taxes and the e-way Bill.
The outlook for the current financial year 2018-19 brightens as liquidity in theeconomy moves towards normalization with expectations for early revival and growth inoverall consumption across several sectors including Steel Pipe Industry. The Union Budgetfor 2018-19 was welcomed for its thrust on the rural sector infrastructure developmenthousing and a boost to the overall investment climate. If 2018-19 also experiences anormal monsoon GDP growth is likely to rebound in the current financial year. Betterliquidity and improved tax collections will enhance government's ability to spend oninfrastructure and other development projects leading to faster growth.
27. STAINLESS STEEL PIPES INDUSTRY - OUTLOOK AND OPPORTUNITIES
Consistent with the positive outlook for the Indian economy we foresee a similarrevival in demand for pipes. Signs of increased demand activity have been witnessed inindustrial and commercial segments. Besides this there are healthy indicators of anuptrend in demand for pipes from various projects such as power plants irrigationschemes ports railways and metro rail projects. TNT is one of the most trusted StainlessSteel Pipes and Tubes Manufacturing Company in South India since 1979. TNT was establishedwith a vision too manufacture and to provide Stainless Steel Tubular Pipes to theIndustry. The Promoters of the Company with an ample experience and expertise sensed theBoard in the fast emerging field and invested in the best available human resourcestechnology infrastructure. TNT offers a wide spectrum of Stainless Steel Pipes and Tubesfor use in a diverse range of industry including Oil Gas Power Fertilizer and HeatExchangers Paper and pulp water treatment diary sugar and food processing unlike etc.with its model production and quality assurance facilities. TNT provides its customerswith effective reliable and qualitatively superior products which enjoy lasting reputationand ensures total satisfaction of its customers.
The critical challenges before your Company in 2019 would include the following:
To pursue a judicious value-cum-volume strategy so as to maximizeutilization of existing capacity including the additional capacity from the newly expandedJamul plant.
To continue to step up the sale of value creating Premium products.
To further streamline channel management and strengthen marketingactivities in a manner that leverages the Company's brand equity.
To continue promotion and facilitation of cashless transactions in theretail network with a view to ensure uninterrupted retail off takes.
To develop the means to foresee changes in the value chain and theagility needed to keep strict control on the costs of fuel and raw materials amid volatileglobal prices. The above initiatives together with your Company's continued focus on costefficiency and other customer excellence initiatives should help in presenting an improvedperformance.
28. G.I. PIPES & TUBES PERFORMANCE
Costs Pipes & Tubes Business
During the year 2018-19 the Company maintained a close focus on effective costmanagement through various initiatives.
a) Cost of Materials consumed
Cost of materials consumed was Rs.7364.10 in 2018-19 as against Rs.7890.42 Lakhs duringthe year 2017-18.
b) Power & Fuel
The Power & Fuel spent in 2018-19 was Rs. 1.26 Crore as compared to Rs.1.38 Crorespent in 2017-18. The Company continues to focus on reducing the overall cost of fuel aswell as shifting its dependence on linkage by optimizing the fuel mix to enhance the useof alternative fuels.
c) Freight & Forwarding expenses
Freight and forwarding expenses during the year is Rs.0.35 Crore as compared to Rs.0.49Crore in 2017-18.
d) Employee costs
Overall employee costs as a share of total income from operations decreased to 14.12%in 2018-19
e) Other Expenditure
Other expenditure constitutes Rs.46.13 Crore of total income from operations of theCompany as compared to Rs. 50.43 Crore in 2017-18.
29. SUSTAINABLE DEVELOPMENT
The Company's Sustainable Development programme continues to be comprehensive androbust.
Your Company is committed to cut its carbon footprint in line with the Low CarbonTechnology Roadmap for the Pipe Industry.
Controlling Emissions: The installation of dust monitors as per the statutoryrequirement of TNPCB was completed at our plant.
Performance and to achieve a water positive status the Company has focused its effortson two approaches: i) Reduction of fresh water intake by lowering water demand in processand non-process areas and waste water recycling after treatment. Water metering andmonitoring systems were installed. ii) Conservation of water by rain water harvesting inplants and sustained water harvesting measures undertaken over the years has helped ourPlant become self-reliant without being dependent on natural water sources like rivers andbore wells. These two approaches have helped your Company reduce its specific waterconsumption.
Your Company is committed to the conservation of biodiversity. Efforts on biodiversityconservation are focused on following areas: i) To study and assess the biodiversityoperated by the Company. ii) On-ground implementation of activities which conservesbiodiversity: iii) Afforestation activities in and around our plant premises with nativespecies of trees at our Plant.
30. HEALTH & SAFETY (H & S Policy Initiatives)
H&S business processes and information systems across the Company were furtherstrengthened with the proposed launch of an online H&S application called"Click2Safety". This application helps streamline reporting in a manner thatgives access to all employees is standardized is faster and enriches the H & SDatabase.
31. LOGISTICS SAFETY
Logistics safety is one of the major focus areas for your Company. Ongoing initiativesundertaken in this regard included provisions of various plant and parking levelprotocols creation of certain hygiene factors for truck drivers and their crew such asamenities at truck parking yards improving tarpaulin tying practices improving PersonalProtective Equipment usage renewal of logistics contracts to include safety parametersand issue of "passports" for drivers as well as vehicles which are informalinternal databases that provide details of individual identity registrationroadworthiness and safety preparedness.
32. HUMAN RESOURCES
The Company adopted a functional organization structure which is intended to enable theorganization to be more collaborative agile and streamlined in implementing strategyharnessing internal functional expertise to the fullest and in enhancing stakeholdervalue.
The HR policy is intended as a part of the Company's continuous efforts to offer one ofthe "Best Places to Work" in the Pipe Industry. This policy was designed toattract new talent and motivate existing employees to contribute to their peak performancelevels. The Company's HR function is recognized in the sector for its engagement andleadership development processes in nurturing talent necessary to keep the Organization'stalent pool future ready. The Company continued with efforts to ensure that its pool ofhuman resources is "future ready" through its robust processes of learning &development capability building and its development programmes for shop floor associates.Efforts continued to be taken to develop leadership lines as well as to enhance technicaland functional capabilities with special focus on nurturing young talent in order to meetfuture challenges.
During the financial year 2018-19 the Company has introduced Stainless Steel Pipes (SSPipes) production and took initiative to introduce a more responsive efficient and leanorganization design in the Plant. This is continued to show its production withimprovement in the future years.
India Manufacturing Transformation (IMT)
The IMT Programme aims to make the work-culture in the core areas of production andmaintenance in the Steel Pipe Plant more contemporary. This envisages a lean manufacturingorganization design with multitasking standardization and simplifi cation ofmanufacturing processes improved productivity standards introduction of a centralizedmaintenance design with better planning and benchmarking with the best-in-class. Theseinitiatives will enable the Steel Pipe Plant operate more efficiently in a competitiveenvironment and render them compatible with National manufacturing standards.
Employee Relations at all the Units remained cordial. This has helped to build ahealthy relationship and resolve issues through mutual dialogue. A major achievement inthis area was the successful conclusion of a common long term wage settlement between theCompany and the employees. This accord incorporates novel elements such as a productivityenhancement scheme improvement in housekeeping elimination of waste and effectiveutilization of time. The settlement is expected to contribute towards enhancingproductivity at the Plant besides enjoining employees and shop-fl floor associates atPlant to adapt to a richer work culture.
Prevention of Sexual Harassment of Women at Workplace
The Company is an equal opportunity employer and consciously strives to build a workculture that promotes dignity of all employees. As required under the provisions of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013and Rules framed there under the Company has implemented a policy on preventionprohibition and Redressal of sexual harassment at the workplace. All women permanenttemporary or contractual including those of service providers are covered under thepolicy. An Internal Complaints Committee comprising five management staff has been set upto redress complaints relating to sexual harassment. Besides in the Unit there is onenodal person to receive and forward complaints to the "fi first instance person (FIP)who is a woman" or directly to the Committee.
During the year the Company has not received any complaint on sexual harassment andthere are no complaints pending. Awareness programmes were conducted across the Company tosensitize the employees to uphold the dignity of their colleagues at workplaceparticularly with respect to prevention of sexual harassment.
33. BUSINESS RISKS & OPPORTUNITIES
The Business Risk Management Committee chaired by an Independent Director isfunctioning as required under SEBI Regulations. The Committee met twice during the year.Details of this Committee its terms of reference and functioning are set out in theCorporate Governance Report.
The Company has implemented a Business Risk Management Policy which lays down theframework to identify business risks at both corporate level and at Business Segmentlevel.
The Company's approach to addressing business risks is comprehensive and enables timelyanticipation of risks and identification of opportunities enabling appropriate responsesthereby enhancing the Company's competitive advantage. Separate approaches are defined foreach of the main business segments of Steel Pipes and forms an integral part of thecompany's Mid Term Planning cycle. The Company is faced with various risks at anoperational level which very often have the potential to offer business opportunities.Some of the main risks are discussed herein:
The South India steel Industry is presently facing intense competition with the entryof new players and some existing manufacturers growing inorganically. We expect thissituation to continue. To mitigate this risk the Company is leveraging on its expertiseexperience and the additional Stainless Steel Pipes which are commissioned in Q1 2016.This enabled the Company to maintain its market share particularly in the Southern Region.Simultaneously the Company is implementing measures to enhance its brand equityvisibility and comparative advantage broaden its product portfolio and service offeringswhile leveraging on its ICI (Infrastructure Commercial and Institutional) Sales Team tooffer value to large customers. The Company is also closely monitoring its costs so as tobe more competitive in the Market Place.
Proactive Safety Culture
Your company has identified Health & Safety of employees and workmen as one of itskey focus areas. These include possibilities in the areas of the availability and souringof Raw Materials Energy Efficiency and Conservation Logistics and productiondevelopment and market segmentation based on research imbibing best practices inmanufacturing and other areas leading productivity improvement. Safety on Nationalroads is largely dependent on various factors such as the overall condition andmaintenance of roads vehicle road-worthiness and general observance of road traffi claws. As part of its Logistics Safety function and Indian Road Safety Programme theCompany has taken several initiatives including regular simulator-based driver trainingvehicle inspection for road-worthiness and the use of Global Positioning Systems (GPS) tomonitor outbound movement of Steel Pipes to the end user.
Your Company also regularly examines potential opportunities created from situationsinvolving business risks. These include possibilities in the areas of the availability andsourcing of raw materials energy efficiency and conservation logistics productdevelopment and market segmentation based on research imbibing best practices inmanufacturing and other areas leading to productivity improvement.
34. INTEGRATED REPORTING
Your company believes in transparent reporting that is value-friendly to shareholdersand investors. The Annual Report carries a detailed section containing the"Business Responsibility Report". The companies studying the requirements of theIntegrated Reporting Frame work.
Your Directors are thankful to the Central and State Government DepartmentsOrganizations and Agencies for their continued guidance and co-operation. The Directorsare grateful to all valuable Stakeholders of the Company viz. our Customers ShareholdersDealers Vendors Banks and other Business Associates for their excellent support and helprendered during the year. The Directors also acknowledge the unstinted commitment andvalued contribution of all employees of the Company.
36. CAUTIONARY STATEMENT
Statements in the Board's Report and the Management Discussion & Analysis isdescribing Company's objective expectations and forward-looking within the meaning ofapplicable Securities Laws and Regulations. Actual results may differ materially fromthose expressed in the statement. Important factors that could influence the Company'soperations with regard to demand and supply conditions affecting selling prices of fifinished goods input availability and prices changes in Government Regulations TaxLaws Economic Developments and other factors such as litigation and industrial relations.
For and on behalf of the Board