D. RISKS AND CONCERNS

CEMENT

The Cement Industry is heavily dependent on Coal for its fuel requirement. While cement capacity is increasing continuously, allotment of coal against linkages is continuously coming down. As a result, the cement industry is adversely affected and its fuel cost is increasing due to purchase of coal from the open market/e-auction and import of coal at higher cost is also a matter of concern.

Similarly, the cement industry mainly depends on rail transport for outward movement of its products and inward movement of raw materials like gypsum, coal etc. Hence inadequate availability of wagons from the Railways is also a cause of concern in view of substantial growth in cement capacity.
 
TYRE
 
The volatility in all major raw material prices, downturn in world economy and the inverted duty structure between tyres and natural rubber puts further pressure on the industry's revenue and profitability.
 
RAYON & TRANSPARENT PAPER
 
The recessionary trend in the Textile sector due to global economic downturn is posing the biggest risk to VFY business.
 
Similarly, the recession in 'Firework' industry and declining domestic demand for T.P. due to cheaper imports remain cause of concern.
 
HEAVY CHEMICALS
 
Further expansion/modernization of the existing Caustic Soda Units may upset the balance in demand and supply of Caustic Soda & allied products.
 
E. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
 
The Company has adequate internal control in all areas of its operation by utilising the services of internal and external audits from time to time and also by its own competent and qualified personnel.
 
F. MATERIAL DEVELOPMENT IN HUMAN RESOURCES AND INDUSTRIAL RELATIONS
 
Measures for the safety of employees, training, welfare and development continue to get high priority at all levels, which are reflected in the improved quality and efficiency.
 
Industrial relations have been cordial in all sections of the Company in the year under review except Spun Pipes Section where the factory is under suspension of work since 2nd May, 2008.