Petron Engineering Construction Ltd

1. INDUSTRY TRENDS AND DEVELOPMENTS

After 5 consecutive years of solid growth in the 7-10% range, the rate of economicgrowth in India witnessed a slowdown. The growth decelerated sharply in third quarter offiscal year 2008-09 following the failure of Lehman Brothers in mid of September 2008 andknock-on effects of the global financial crisis on the Indian economy. However, revisedestimates placed by the Government of India on May 29, 2009 indicate that the full-yearGDP growth (2008-09) will be approximately 6.7%, while the outlook for fiscal (2009-10) isprojected to be in the range of 6.0 to 6.6%.

For the first time in 15 years, the Index of Industrial Production (IIP) contracted andwitnessed negative growth in the month of October, 2008. For the fiscal year 2008-09, theindustrial output grew only by 2.6% as compared to around 8.1% a year before.

The demand revival is expected in the fiscal year 2009-10, given the fall in inflation,correction in interest rates and a commitment from the Central Government to stimulategrowth with investments in infrastructure. India is projected to surpass the revised FDItarget of $30 billion for the fiscal year 2008-09. The Indian Government's timely releaseof three stimulus packages to boost the economy has started yielding positive results inkey sectors like power, cement and refineries. Growth fundamentals of the Indian economyremain strong due to a high savings rate, strong banking system, favourable demographicsand a rising disposable income.

Engineering & Construction

During the year, the Division has successfully executed the following contracts:

a. Installation of 4200 TPD green field cement plant of National Cement Company, Lahej,Republic of Yemen

b. The contract for mega polypropylene (line-1) at poly propylene plant of ReliancePetroleum Limited, Jamnagar, Gujarat

c. The electrical contract of Coker plant of Reliance Petroleum Limited, Jamnagar,Gujarat

d. The electrical contract of Sulphur plant of Reliance Petroleum Limited, Jamnagar,Gujarat

e. Milestone achievement towards completion of erection of 500 MW boilers for BharatHeavy Electricals Limited at National Thermal Power Corporation Limited, Kahalgaon (unit 5and unit 7), Bihar

f. The contract for equipment installation, piping & structural work ofpolyethylene expansion project for Equate Petrochemical Corporation, Kuwait

g. The contract for assembly & erection of flare stack for Reliance PetroleumLimited, Jamnagar, Gujarat

The work on the following projects substantially progressed during the year:

a. Mechanical and piping work for naphtha cracker project of Indian Oil CorporationLimited, Panipat, Haryana

b. Piping, equipment erection, heavy lifting, steel structural and painting works forIndian Oil Corporation Limited - MEG project - Panipat, Haryana

c. Mechanical erection works for 8000 TPD cement plant of Grasim Industries Limited,Kotputli, Rajasthan

d. Lump sum turnkey project of HCU/DHT heaters for Bharat Oman Refinery Limited atBina, Madhya Pradesh

e. Mechanical & piping works of HCU/DHT heaters for Bharat Oman Refinery Limited atBina, Madhya Pradesh

f. Power plant erection work for 2X300 MW boilers for Sichuan Fortune projectManagement Co Limited at Adani Power Private Limited, Mundra, Gujarat

g. Erection of boiler Proper (2X600 MW) of Utility Energytech and Engineering PrivateLimited - an associate company of Reliance Infrastructure Limited - at Hisar, Haryana

h. Boiler erection for Bharat heavy Electricals Limited at unit 2 (500 MW) of NationalThermal Power Corporation Limited, Sipat, Bilaspur, Chhattisgarh

i. Electro static precipitator of 600 MW unit for Bharat heavy Electricals Limited atNational Thermal Power Corporation Limited, Sipat, Bilaspur, Chhattisgarh

j. Equipment and piping installation works for DHDT & HGU units at Indian OilCorporation Limited, Vadodara, Gujarat

k. Erection of two SRT furnace & associated piping jobs for Naphtha Cracker unit atEthylene plant for Haldia

Petrochemicals Limited, Haldia, West Bengal I. Mechanical erection of cement plant ofMadras Cements Limited at Ariyalur, Tamilnadu

m. Erection of boiler Proper for 2X300 MW of Utility Energytech and Engineering PrivateLimited - an associate company of Reliance Infrastructure Limited - at Rosa Thermal Powerproject, Rosa, Uttar Pradesh.

Petron Mechanical

During the year, the Division has successfully executed the following orders:

a. Design, engineering and manufacturing of 13 nos. of EOT cranes for Vedanta AluminiumLimfted, Jharsuguda, Orissa

b. Supply & installation of mechanical equipment for Rodding shop project ofVedanta Aluminium Limited, Jharsuguda, Orissa

c. Design, engineering, manufacturing and supply of Skip Hoist Winch for F L SmidthMinerals Private Limited for its Saurashtra Chemicals Limited project at Porbandar,Gujarat

d. Installation of grouping and cleaning system for aluminium smelter project ofVedanta Aluminium Limited, Jharsuguda, Orissa

Electrical & Instrumentation

During the year, this division has successfully executed the following orders:

a. Supply of electrical & instrumentation material for Madras Cements Limited,Jayanthipuram project, Andhra Pradesh

b. Erection, testing & commissioning of electrical & instrumentation equipmentfor Madras Cements Limited, Jayanthipuram project, Andhra Pradesh

c. Installation of electrical & instrumentation items for cement grinding unit atAmbuja Cements Limited, Uttaranchal

d. Design, engineering, procurement, erection, testing and commissioning ofconstruction power for Paradip refinery project of Indian Oil Corporation Limited atParadip, Orissa

e. Erection, testing & commissioning jobs of electrical equipment for sulphur unitof Reliance Petroleum Limited,' Jamnagar, Gujarat

f. Erection, testing & commissioning jobs of electrical equipment for Coker unit ofReliance Petroleum Limited, Jamnagar. Gujarat.

Presently, the following orders of the Division are under execution:

a. Supply of electrical & instrumentation materials for Madras Cements Limited,Ariyalur project, Tamilnadu

b. Erection, testing & commissioning of electrical & instrumentation equipmentfor Madras Cements Limited, Ariyalur project, Tamilnadu

c. Electrical work of Indian Oil Corporation Limited - MEG project, Panipat. Haryana

d. Electrical work for offsite of Bharat Oman Refinery Limited, Bina Refinery, MadhyaPradesh

e. E&l works for India Cement Limited, (line - 2), 2500 TPD cement plant atMalkapur, Andhra Pradesh

f. Electrical supply contract (2x300MW) for Utility Energytech and Engineering PrivateLimited, Rosa TPP, Shahjahanpur, Uttar Pradesh

g. Electrical erection contract (2x300MW) for Utility Energytech and EngineeringPrivate Limited, Rosa TPP, Shahjahanpur, Uttar Pradesh

h. Supply of materials required for balance of plant at 2x250 MW Parichha Thermal Powerproject, Extension - II, unit 5 & 6 for Utility Energytech and Engineering PrivateLimited, at Parichha, Uttar Pradesh

i. Erection, testing & commissioning of electrical system for balance of plant for2x250 MW Parichha thermal power project, Extension - II, unit 5 & 6 for UtilityEnergytech and Engineering Private Limited at Parichha Uttar Pradesh

j. Supply of electrical system for combined cycle Power plant - Stage II for LancoInfratech Limited, Kondapalli, Andhra Pradesh

k. Erection, testing & commissioning of electrical system for combined cycle powerplant - Stage II for Lanco Infratech Limited, Kondapalli, Andhra Pradesh

Rockwool Insulation & Refractory

During the year, the Division has successfully executed the following orders:

a. Refractory work for 10 nos. furnaces for Vedanta Aluminium Limited, Jharsuguda,Orissa

b. Refractory work for Madras cement Limited, Ariyalur, Tamilnadu

c. Refractory work at CDU/VDU heaters Job of Neo Structo Construction Limited forReliance Petroleum Umited, Jamnagar, Gujarat

d. Refractory work for Incinerator & Burners for P.T. Heat Exchangers (Indonesia)at Reliance Petroleum Limited, jamnagar, Gujarat

e. Refractory application for Vasavdatta Cement Limited, Sedam, Karnataka

Petrofab Fabrication

During the year, this division has successfully executed the following orders:

a. Fabrication, painting & assembly of Pressure Reducing Skids, Filtering Skids,Metering Skids, piping etc. for Daniel Measurement Solutions Private Limited, Vadodara,Gujarat

b. Fabrication & painting of RE40 O&X Side/AE40 - V3 O&X Side Blade Mouldframe for Suzlon Energy Limited, Vadodara, Gujarat

c. Fabrication of convection modules and headers of Heurtey Petrochem India PrivateLimited for Chambal Fertilizer and Chemicals Limited - Kota, Rajasthan

d. Fabrication of draft tube cone - Bujagali (free issue material) for Alstom ProjectsLimited, Vadodara, Gujarat

e. Fabrication of Upper Pit Liner - Uri and Upper Cone - Uri for Alstom ProjectsLimited, Vadodara, Gujarat