| D. |
RISKS AND CONCERNS |
| CEMENT |
Cement Industry is heavily dependent on Coal for its fuel requirement. While Cement capacity is increasing continuously, the allotment of Coal linkages is decreasing. As a result, Cement Industry is depending heavily on the purchase of Coal from open market, e-auction and import of Coal at exorbitant price.
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Outward movement of Cement and Inward movement of raw materials like Gypsum, and Coal are affected due to erratic supply of wagons.
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| Though Cement is the most essential infrastructure input, the Tax on Cement is the highest among the items required for building infrastructure. |
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| TYRE |
| The biggest risk is rising raw material prices specially natural rubber and crude oil prices. |
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| RAYON & TRANSPARENT PAPER |
| Rising pulp prices remain a matter of concern for both VFY & T.P business. The prices of other major inputs for VFY & T.P production viz. coal, sulphur, caustic soda & employees cost have started rising and are likely to harden, which should push up manufacturing costs leading to a reduction in margins from current level. This is also a subject of concern for this Unit. |
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| E. |
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY |
| The Company has adequate internal control in all areas of its operation through internal and external auditors. The system ensures that all transactions are authorized, recorded and reported correctly. The systems and procedures are reviewed continuosly to ensure timely preparation of financial information and safeguarding the assets of the Company. |
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| F. |
MATERIAL DEVELOPMENT IN HUMAN RESOURCES AND INDUSTRIAL RELATIONS |
Industrial relations have been cordial during the year under review except Spun Pipes Section and Hinduthan Heavy Chemicals section where the factories are under suspension of work since 2nd May,2008 and 8th December, 2010 respectively. All safety measures of workers and staff members, their training and welfare get high priority at all levels.
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