PRATIBHA INDUSTRIES LIMITED ANNUAL REPORT 2008-2009 DIRECTOR'S REPORT To The Members, Your Directors have great pleasure in presenting the 14th Annual Report together with the Statement of Accounts for the financial year ended 31st March, 2009. The performance of the Company for the financial year ended 31st March, 2009, is summarised below: FINANCIAL RESULTS: (Rupees in Crores) Particulars Consolidated 31.03.2009 31.03.2008 Income 810.78 565.11 EBIDTA 96.62 66.04 Less : Interest & Finance Charges 34.05 22.27 Less : Depreciation & Amortisation 7.13 3.60 Profit Before Tax 55.44 40.17 Provision for Tax 10.71 5.91 Profit After Tax (PAT) 44.73 34.26 APPROPRIATIONS: Proposed Dividend on Equity Shares 3.34 3.34 Tax on Dividend 0.57 0.57 Transfer to General Reserve 3.50 3.50 Balance Carried to the Balance Sheet 37.32 26.86 Earning Per Share - Basic & Diluted (in Rs.) 26.81 22.88 PERFORMANCE REVIEW: The company in its continued pursuit of excellence, again delivered a robust performance and has clocked a record consolidated turnover of over Rs.810 Crores, with an impressive increase of over 43% compare to last year s turnover of Rs.565 crores. Despite execution of substantial portion of work, the company has maintained its balance order book position over Rs.2100 Crores. The execution period of these orders ranges from one year to four years. Your company is very confident and bullish on getting few more big sized orders, which will have substantial positive impact on the working, profitability and standing of the company in the infrastructure and pipes manufacturing industries. Last couple of years, your company has taken a conscious decision of diversification and accordingly, diverting its attention and emphasis from purely water segment company to full fledged infrastructure development company. The management's endeavour to shift focus has yielded positive results and company is successfully executing diversified projects that include Tunnels, Airports, High rises, Speciality Buildings, Road and Urban Infrastructure etc. Currently, the company is executing two major airport projects viz., Amritsar Airport and Ahmedabad Airport, two tunnel projects for the Brihanmumbai Municipal Corporation, Mumbai. The company further wishes to explore lucrative Hydro Carbon and other fields. The Company s foray into relatively new fields is an indication of the Company's desire to diversify itself and play a role of the full fledged infrastructure development Company. The efforts for diversifying activities will enable Company to execute more projects involving extreme engineering in future. Your Company further wishes to diversify and embark upon lucrative and complex highway construction projects of NHAI, Hydra projects and hydro carbon projects in near future. Despite the company s thrust to explore other infrastructure segment, the company has maintained its edge in the water segment, which historically has played a pivotal role in the growth of the company. Traditionally, the water segment plays an important and crucial role in the performance of the company and contributes substantially towards the turnover and profitability of the company. It still constitutes approximately 60-70% of total turnover of the Company; the order book also consists major projects from the water segment. During the financial year under review, the company has successfully commissioned the crucial and sizeable second and third phase of the NMMC water pipeline project. SAW PIPE DIVISION - Coating Plant: The Company has successfully commissioned its Coating Pipes Division and commercial production has been started. With commissioning of the plant, the company is in position to manufacture 'Spirally Welded Mild Steel Pipes (H- Saw Pipes) API 5 grade. The Saw Pipes division has a capacity of 92000 TPA. The Pipe division, which is also having crucial coating division viz., 3 LP coating plant, has successfully been commissioned and started the commercial. The capacity of 3 LP coating plant is 1.7 million sq. mtrs. per annum. The encouraging response of existing pipe division and long term requirements of high quality pipes, lead the management to contemplate further expansion of pipe division in a big way. SCHEME OF ARRANGEMENT AND AMALGAMATION: During the year under review, due to adverse market condition and changed economic scenario and also due to global financial market meltdown, the Company had withdrawn the composite scheme of merger and demerger before the Hon'ble High Court of Bombay and accordingly, the Hon'ble High Court of Bombay has passed an order dated 9th April, 2009, for withdrawal of the scheme. DIVIDEND: The Board recommends dividend of Rs.2/- (Rupees Two) per equity share i.e. 20%. The total outgo on this account shall be approximately Rs. 3.90 Crores including dividend distribution tax. TRANSFER TO RESERVE: Your directors propose to transfer a sum of Rs. 350.00 Lacs to the General Reserve account. FIXED DEPOSITS: The Company has not accepted any fixed deposits attracting the provision of Section 58A of the Companies Act, 1956, during the period under review. DIRECTORS: Mr. S.T. Gadre and Mr. Vinayak B. Kulkarni retire by rotation at the forthcoming Annual General Meeting and are eligible for reappointment. The information on the particulars of Directors seeking re-appointment as required under Clause 49 of the Listing Agreement executed with the Stock Exchanges have been given under Corporate Governance of this Report. In addition to directors retire by rotation, the term of executive directors are also expiring in the financial year, therefore, the Board in its meeting held on 09.05.2009, has re-appointed Mr. Ajit B. Kulkarni as Managing Director, Mrs. Usha B. Kulkarni as Executive Chairperson and Mr. Vinayak B. Kulkarni as Whole Time Director of the Company for a further period of five (5) years w.e.f. 01.04.2009. The board has appointed Mr. Ramakant Jha as an additional director of the company in place of Mr. A.G. Karkhanis, who has expressed his inability to continue as director on the board of the company due to his pressing professional commitments. The Board expresses its sincere gratitude towards the guidance and services extended by Mr. A.G. Karkhanis during his tenure with the company, DIRECTORS RESPONSIBILITY STATEMENT: Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed that: (i) in the preparation of the annual accounts, the applicable accounting standards have been followed; (ii) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2009 and of the profit of the Company for the year ended on that date; (iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and (iv) the Directors have prepared the annual accounts of the Company on a going concern basis. SUBSIDIARY: The Company is having a wholly owned subsidiary Company i.e. Pratibha Infrastructure Private Limited (PIPL). A statement pursuant to Section 212 of the Companies Act, 1956. CONSOLIDATED FINANCIAL STATEMENTS: In accordance with the Accounting Standard AS-21 on Consolidated Financial Statements read with Accounting Standard AS-27 on Accounting for Investments in Joint Ventures, your Directors provide the audited Consolidated Financial Statements in the Annual Report. As stipulated by Clause 32 of the Listing Agreement with the Stock Exchanges, the attached consolidated financial statements have been prepared in accordance with the Accounting Standard AS-21 & AS-27 on Consolidated Financial Statements read with Accounting Standard AS-23 on Accounting for Investments in Associates. PERSONNEL: In accordance with the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are set out in the Annexure to the Directors Report. However, as per the provisions of Section 219 (1) (b) (v) of the Companies Act, 1956, the Report and Accounts is being sent to all the shareholders of the Company excluding the aforesaid information. Any shareholder interested in obtaining such particulars may write to the Company Secretary of the Company. AUDITORS AND AUDITORS' REPORT: M/s. Jayesh Spnghrajka & Co., Chartered Accountants, Statutory Auditors of the Company, holds office until the conclusion of the ensuing Annual General Meeting and being eligible for re-appointment. The Company has received confirmation from them to the effect that their re-appointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956, and that they are not disqualified for such re-appointment within the meaning of Section 226 of the said Act. The Notes on Accounts referred to in the Auditors Report are self- explanatory and therefore do not call for any further comments. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: Information with respect to conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to Section 217 (1) (e) of the Act read with Rule 2 of the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, form part of this Report. SAFETY, HEALTH AND ENVIRONMENTAL AUDIT: Your company committed to norms applicable for conservation and protection of environment, health and safety. In a major voluntary initiative, your company has formulated a comprehensive environment, health and safety policy. In addition to rigorous compliance of the environment, health and safety policy, all the departments, various sites and locations of the company are subjected to environment, health and safety audit. The company has successfully undergone audits under EMS (ISO-14001) and OHSAS - 18001 and is likely get certification very shortly. These audits under EMS (ISO- 14001) and OHSAS - 18001 are undertaken by external independent agencies. CORPORATE GOVERNANCE: Being observant and responsible, the company is committed to high standards of the corporate ethics, professionalism and transparency. As per Clause 49 of the Listing Agreement, a separate section on Corporate Governance forms part of the Annual Report. Your Company has complied with the requirements of the Listing Agreement and necessary disclosures have been made in this regard in the Corporate Governance Report section. Compliances under corporate governance nomes are subject to concurrent audit by internal auditors and also subject to confirmation from statutory auditors. A certificate from the Statutory Auditors of the Company confirming the compliance of conditions of corporate governance under Clause 49 of the Listing Agreement is also attached to this Report. MANAGEMENT DISCUSSION AND ANALYSIS: Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report. PLEDGE OF SHARES: None of the equity shares owned by the directors or promoters are pledged with any banks, financial institutions. EMPLOYEE RELATIONSHIP: The Company enjoyed very cordial and fruitful relations with the employees during the year under review and the Management wishes to place on record its sincere appreciation of the efforts put in by the Companys workers, staff and executives for achieving excellent results under demanding circumstances. The company is proud to place on record that the company has very low attrition rate as compared to its peers in the industries. ACKNOWLEDGMENT: Your Directors would like to express their sincere appreciation and gratitude for the support and co-operation received from the Central and State Governments, Civic Corporation and authorities, Financial Institutions, Banks, Customers, Suppliers, Associates, Vendors, Sub - Contractors and Members during the year under review. The Directors also wish to thank all the employees for their committed and sincere services and continued cooperation throughout the year. For and on behalf of the Board of Directors Date : 21st May, 2009 Usha B. Kulkarni Place : Mumbai Chairperson ANNEXURE TO DIRECTORS' REPORT: Information under Section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988, and forming part of Directors Report for the period ended 31st March, 2009. (A) Conservation of Energy: (a) Energy Conservation and efficiency measures undertaken: Energy Conservation during the financial year has accrued as a result of the following steps: Spiral Plant: * Modification was done to stop Hydraulic Power Pack within 5 minutes automatically when there is no operation. * Installation of VFD drives for various process like Conveyors, Cross Welding Boom, Main Pinch Role. 3LPE Coating Plant: * Installation of VFD drives for various processes like Internal Shot Blaster, External Shot Blaster, Conveyors, Diabolo Conveyor, Adhesive Extruder, PE Adhesive, End Brushing and Compressor. General: * Maintaining power factor from 0.99 to 1 for MSEDCL power. (b) Additional Proposals being implemented for further conservation of energy: * Installation of 2 Nos. Compressor (5kW) for Pipe UT and Plate UT. * Installation of Automatic Timer Circuit for Street Light Illumination Control. * Installation of Automatic Timer Circuit for Shade Light On/Off operation. (c) Impact of the above measures for reduction of energy consumption and consequent impact on cost of production of goods: * The measures stated in (a) and (b) above would improve electrical energy efficiency and reduce consumption as well as improvement in productivity. (d) Total energy consumption and energy consumption per unit of production as per Form A: Form A: Power and Fuel Consumption From 1 April 2008 to 31 March 2009: Unit Total cost Rs. Per unit Electricity 1915950 Rs.9,933,243/- Rs.4.76/unit Own generation 245978 Rs.3,216,035/- Rs.13.07/Unit (Through Diesel Generator) Or any other mode Coal N.A. N.A. N.A. Furnace Oil N.A. N.A. N.A. Consumption per unit of production from 1st April 2008 to 31st March 2009: Particulars Total Unit Total Production Unit/MT (MT) Electricity 2161928 39526.374 Ton 0.01828 Ton/Unit (Rs. In lacs) Year ended 31.03.2009 31.03.2008 (i) Foreign Exchange earned 423.28 Nil (ii) Foreign Exchange used 3213.96 3329.46 (B) Technology Absorption: 1. Efforts, in brief, made towards technology : Not applicable Absorption, adaptation and innovation 2. Benefits derived as a result of the above : Not applicable efforts 3. Details about imported technology (imported : Not applicable During the last five years reckoned from the date Of beginning of financial year, if any. Total Foreign exchange used and earned: (C) Research & Development: 1. Specific Areas in which R & D is carried out by the company : Nil 2. Benefits derived as result of above R & D : Nil 3. Future Plan of Action : Nil 4. Expenditure on R & D : Nil (D) Foreign Exchange Earnings and Outgo: Activities relating to Exports : The Company's entire SAW pipes sold in India. MANAGEMENT DISCUSSION AND ANALYSIS: Industry Structure - General: Today, the Indian economy needs nothing more than a robust infrastructure to revive and sustain the targeted pace of growth. After spending years in oblivion, the Indian Infrastructure sector has suddenly emerged as the cynosure of all eyes. With due government encouragement, the industry is a warehouse of opportunities. Infrastructure Industry in India has been experiencing a rapid growth in different segments due to the increase in urbanization and ever increasing foreign investments in this sector as a whole. Road, housing infrastructure, urban water supply & sanitation and development of airports are among the key areas of attention. As per the estimates of the Planning Commission, about US$ 500 billion needs to be spent over the 11 * Five Year Plan period of 2007-08 to 2011-12 on building India's infrastructure. A growth of 2.2 times in investments is expected in key Infrastructure sectors during 2007-08 to 2011-12 as compared to that over the previous 5 years period. According to Crisil Research, the substantial investment over the period 2008-12 is gauged at : US$ 60 billion for roads, US$ 75 billion for power, US$ 22 billion for telecom, US$ 10 billion for ports, US$ 69.39 billion for railways, US$ 9.25 billion for civil aviation. In recent times, major initiatives have been taken to maximize the role of public-private partnerships (PPPs). This includes creation of Special Purpose Vehicles and a Viability Gap Funding scheme for financing infrastructure projects. There is a growing trend of Public-Private Partnership (PPP) in implementation of infrastructure projects in India. WATER SUPPLY & SEWERAGE: In Water sector, the prevailing conditions and trends in Urban India indicates that 85 percent of population in general have access to safe water supply, which is even less (65 percent) in slums. Urban Water and Sanitation Services are characterized by inefficiency and poor service quality. So far there is no provision for 24 hour quality water supply in any Indian city. In fact most cities are having intermittent water supply of varying periodicity and quantity. Government of India has created fund for assisting the State Governments and the Urban Local Bodies in the economic reform, with the water and sanitation reforms forming a core of the approach. Water supply and sanitation in India continue to be inadequate, despite long standing efforts by the various levels of government and communities at improving coverage. The situation is particularly inadequate for sanitation, since only one of three Indians has access to basic sanitation facilities. While the share of those with access to an improved water source is much higher than for sanitation, the quality of service is poor and most users that are counted as having access receive water of dubious quality and only on an intermittent basis. None of the 35 Indian cities with a population of more than one million distribute water for more than a few hours per day, despite generally sufficient infrastructure. Owing to inadequate pressure people struggle to collect water even when it is available. According to Indian norms, access to improved water supply exists if at least 40 liters/capita/day of safe drinking water are provided within a distance of 1.6km or 100 meter of elevation difference, to be relaxed as per field conditions. There should be at least one pump per 250 persons. Most Indians depend on on-site sanitation facilities. Recently, access to on-site sanitation have increased in both rural and urban areas. In rural areas, total sanitation has been successful. In urban areas, a good practice is the Slum Sanitation Program in Mumbai that has provided access to sanitation for a quarter million slum dwellers. Sewerage, where available, is often in a bad state. In Delhi the sewerage network has lacked maintenance over the years and overflow of raw sewage in open drains is common, due to blockage, settlements and inadequate pumping capacities. The capacity of the 17 existing waste water treatment plants in Delhi is adequate to cater a daily production of waste water of less than 50% of the drinking water produced. The situation in other urban cities of the country is also not different, the sanitation and sewerages system needs to be revamped substantially, if not completely. Some 700 million Indians do not have access to a proper toilet. Open defecation is widespread even in urban areas of India. URBAN INFRASTRUCTURE: The key to sustaining India's growth rate during a global meltdown lies in quality infrastructure. A large number of Indian cities and towns need adequate quality infrastructure facilities, specifically, in the areas of water management, roads, transportation, housing, sanitation, sewage etc. Keeping this in mind, the government is targeting an investment of US$ 20.38 billion over the next two years in the infrastructure sector. The scheme aims to take up infrastructure projects under public-private partnership (PPP). The government has asked the Infrastructure Investment Finance Company Ltd. (IIFCL) to put together a corpus of over US$ 8.15 billion for this purpose. IIFCL plans to provide US$ 1.2 billion for infrastructure projects during 2009-10, which is nearly double the amount disbursed by it during 2008-09. The company had disbursed US$ 640.8 million for various projects during 2008-09. This is in addition to the US$ 320 billion that the government plans to invest for the upgradation of ports, railroads, highways and airports over the next 15 years. Apart from the committed investment, the Govt has initiated various initiatives such as allowing 100 per cent FDI in urban infrastructure projects, investment with repatriation benefit in many housing and real estate projects, 100 per cent FDI is permitted for the development of integrated townships, including housing, commercial buildings, hotels, resorts, etc., tax holiday for urban infrastructure projects. This is available to developers, and those carrying out operations and maintenance of water supply, sewerage, sanitation, etc. ROADS: India has the world's second largest road network, aggregating over 3.34 million kilometers (km). The Govt. has earmarked about INR 45000 million for construction and upgradation of various roads, including 11th Five Year Plan. Apart from construction of Highways, the Govt. is also upgrading thousands of kilometers of National Highway Development Programme (NHDP) under Phase-III. For the roads and bridges sector, the Eleventh Five Year Plan envisages a total investment of approximately US$ 78.5 billion over the five-year period starting from 2007-08. According to Crisil Research estimates, Indian roadways is among the eight infrastructure sectors expected to draw more than US$ 337.49 billion investment in India between 2007-12. The report further forecasts that during the specified period, Indian roadways are likely to grow at an amazing 100 per cent. As part of a larger plan to improve the country's infrastructure, the government has given the nod to 10 road projects which will be built in public-private partnership at an estimated cost of INR 12000 Crores. The projects are aimed at four-lane of national highways in eight states. The Initiatives from the government include Allowing 100 per cent FDI under the automatic route, tax holiday, the NHAI provides grants/viability gap funding for marginal projects, formulation of model concession agreements, relaxation in the overseas borrowing norms etc. According to a consultation paper by the Planning Commission, investment in the roads sector during the Eleventh Plan is projected at US$ 93.11 billion. According to a KPMG report, investments of the order of US$ 500 billion are expected to take place in the coming years for developing roads and infrastructure in India. The Asian Development Bank (ADB) is extending a US$ 420 million loan to the Indian state of Bihar for the upgradation and expansion of the state highway network, over a period of 25 years. POWER: As the Indian economy continues to surge ahead, its power sector has been expanding concurrently to support the growth rate. The demand for power is growing exponentially and the scope of growth of this sector is immense. India s total installed capacity of electricity generation has expanded from 105,045.96 MW at the end of 2001-02 to 145,554.97 MW at the end of September 2008. In fact, India ranks sixth globally in terms of total electricity generation. The government has revised its target of power capacity addition to 90,000 MW in the 11th Five-Year-Plan (2007-12), up by 11,423 MW from the earlier estimate of 78,577 MW to sustain the growth momentum of the economy. According to a report by KPMG and CII, India s energy sector will require an investment of around US$ 120 billion-US$ 150 billion over the next five years. Further, according to the Planning Commission estimates, renewable energy (RE) projects worth US$ 16.50 billion, for the generation of 15,000 MW power, would come up in the 11th Plan. Moreover, the government has earmarked a total capital subsidy of US$ 6.88 billion for providing electricity connections and for the distribution of infrastructure to rural households. Subsequent to the Indo-US nuclear deal and India getting clearance from the Nuclear Suppliers Group (NSG), nuclear power generation is likely to provide an opportunity of US$ 10 billion in the next five years, according to a JP Morgan estimate. India will now also be partnering several countries for nuclear fuel technology projects. OIL & GAS: The oil and gas industry has been instrumental in fuelling the rapid growth of the Indian economy. The petroleum and natural gas sector which includes transportation, refining and marketing of petroleum products and gas constitutes over 15 per cent of the GDP. In November 2008, the Cabinet Committee on Economic Affairs awarded 44 oil and gas exploration blocks under the seventh round of auction of the New Exploration Licensing Policy (Nelp-VII). The overall number of blocks brought under exploration now exceeds 200. The allocation is likely to bring in investments worth US$ 1.5 billion, which will open large opportunities for the pipe industries as transport of oil and gas through pipe lines is much cheaper than the surface transport mode. AIRPORTS: With a growth rate of 18 per cent per annum, the Indian aviation industry is one of the fastest growing aviation industries in the world. The government s open sky policy has led to many overseas players entering the market and the industry has been growing both in terms of players and number of aircrafts. By 2020, Indian airports are expected to handle more than 100 million passengers including 60 million domestic passengers and around 3.4 million tonnes of cargo per annum. The government plans to invest US$ 9 billion to modernize existing airports by 2010. The government is also planning to develop around 300 unused airstrips. Over the next five years, AAI has planned a massive investment of US$ 3.07 billion for upgrading non-metro airports and modernizing the existing aeronautical facilities. This massive committed investment by the Govt. will not only bring the airports of the country at par with the state-of-the-art airports of western countries but will also open altogether new era of opportunities for the companies operating in the segment. Opportunities - Specific to Pratibha Industries Limited: Infrastructure & Construction: The government is committed to improve infrastructure of the country and has earmarked substantial funds for growth of the sector. With the committed efforts and investment, India is likely to witness next two decades of massive infrastructure activities to meet the increasing needs of a developing nation and a growing population. The rapidly growing urban population and the massive existing shortage of modern housing and commercial space have thus created nearly limitless opportunities making it almost a trillion dollar business opportunity in midterm. The commitment for improved infrastructure will ensure all round development of infrastructure facilities, these includes urban infrastructure, highways, roads, mass housing, airports, irrigation projects, drinking water projects etc. With projects of thousands of Crores in the infrastructure and construction segment, the company poised to benefit substantially. There are few players to take up jobs in the sector and your company has over a period developed an expertise in executing these projects effectively and efficiently. Further, the company's adaptability to blend with other company of different culture will certainly help the company to form an alliance for executing specialized projects. Saw Pipes division: The SAW pipes manufacturing unit and recently commissioned state-of-the-art coating plant of the company will ensure the company to tap the tremendous opportunities lies in pipes segment. There is huge requirement for supply of quality pipes for transportation of oil, gas, water and sewerages. Many companies including public sector companies are opting for transportation of the oil & gas through pipe lines as this is most cost effective. These create huge demand of pipes of various diameter and specifications. Considering the current and future prospectus of this business, the company has commissioned its state-of-the-art pipe manufacturing plant. The Company has obtained various certification including prestigious American Petroleum Institute (API) certifications for its manufacturing facilities, these will enable company to meet the qualification criteria of various prospective tenders. Opportunities: The Company's financial strength, project execution capabilities and strong leadership skills is uniquely poised to effectively avail of all opportunities and create new ones going forward. With the ever increasing demand for improved urban infrastructure, the Company's foray into the construction of quality urban infrastructure will contribute significantly to value creation. The Company is committed to allocate resources towards the diverse execution segments. In addition to the development of water segment, the company will continue its ongoing efforts of exploration other diverse and varied activities With growing thrust for infrastructure, changing environment norms and fast pace of change of mind sets nationwide, the infrastructure segment continues to throw exciting opportunities for the company. In addition to the internal strengths, the company has unique quality to forge strategic alliance with other players whether local or global. This has resulted into many successful associations with many major players in infrastructure and pipe segments. Adequacy of Internal Control: Your Company has appropriate internal control system for business processes, with regards to efficiency of operations, financial reporting, compliance with applicable laws and regulations. Clearly defined roles and responsibilities down the line for all managerial positions have been institutionalized. All operating parameters are monitored and controlled. Regular internal audits and checks ensure that responsibilities are executed effectively. The audit committee of the Board of Directors actively reviews the adequacy and effectiveness of internal control systems and suggests improvement for strengthening them, from time to time. The Company has an exhaustive budgetary control system and the management regularly reviews actual performance. The Company has also put in place a well-defined organisation structure, clear authority levels and detailed internal guidelines for conducting business transactions. The Company has a concurrent internal audit system to ensure adequacy of the control system, adherence to management instructions and legal compliances. Audit plans are prepared in advance based on risk assessment. Internal audit also conducts reviews to ensure implementation of its recommendations and suggestions The Audit committee of the Board of Directors periodically review the audit plans, observations and recommendations of the internal and external auditors with reference to significant risk areas and adequacy of internal controls. As per the clause 49 of the listing agreement with the stock exchanges, the management has established adequate internal control procedures over financial reporting. Risk and Concerns: The company has developed built-in procedures and practices to effectively mitigate the adverse affects of the risks involved in the business and has laid down procedures for handling risks in carrying out the business to the best advantage of all stakeholders and to improve the shareholder value and to ensure continuity of business. Risk Management: The company is committed to high standards of business conduct and the risk management with a view to Protect the Company's assets Achieve sustainable business growth Avoid major surprises related to the overall control environment Safeguard shareholder investment; and Ensure compliance with applicable legal and regulatory requirements In order to improve upon the prevalent practices of monitoring the risk environment through the Project Monitoring Cell (PMC) which reports to the Management Committee comprises of Managing Director, Chief Operating Officer, Chief Operating Officer -Commercial and President (Project Execution), the Company also engaged the professional services of external agencies, wherever required, and documented and taken requisite action to mitigate the various risks involved and developed a structure for systematic management of the various risks. In the process risk mitigation and the de-risking strategy is developed covering all the environmental, regulatory, economic, operational, financial, technical and legal & statutory risks. Human Resources and Industrial Relations: To meet the ambitious growth plans of the company, a structured organization with succession planning and strategies for development of the required technical and managerial skills within the organization are being developed. The Company is deputing its personnel for various training programs in established institutions besides in house training so as to improve the managerial and technical skill sets. Your company is following the most favorable human resource policy as prevailing in the industry. The Company believes in peaceful and harmonious relationship with the personnel of all the levels to achieve the targeted goal of the company. Your Company is firmly believes into involvement of personnel into decision making process of the Company. The Company continues to provide growth opportunities to its employees by way of training workshop and by that way to retain efficient and talented employees in the Company. You company following highest level of safety measures for the its most precious assets i.e. human beings. The company is also having a well defined policy for environmental safety. Occupational Health, Safety and Environment Management are given the utmost importance in your Company. There is in place a well defined in-house training program for its employees to upgrade their operating skills. The relations between the Company and the employees were cordial and the Company experienced peace and harmony throughout the year. The Company has well defined policy to recruit qualified with proven track record professionals in operations and business development, which would provide able support to management in its endeavor to scale greater heights. Conclusion: To conclude, your Company has delivered very healthy and historic performance, particularly viewed in the backdrop of the challenging environment the entire Industry faced during the year under discussion. The outlook appears bright on the back of growth initiatives planned in the pipe manufacturing business and the positive outlook for the Infrastructure business. Cautionary Statement: Statement in this Management Discussion and Analysis report regarding the Company s objective, projections about the future, estimates, expectations or predictions including, but not limited to, statements about the Company's strategy for growth, products development, market position and expenditures may be 'forward-looking statements' within the meaning of applicable securities laws and regulations. Actual performance could differ materially from those expressed or implied. Important factors that could make a difference to the Company's operations include economic conditions affecting demand/supply and price conditions in the domestic and overseas markets in which the Company operates or changes in the Government regulations, tax laws and other statues or other incidental factors. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent development, information or events or otherwise