Ciba India Ltd merged Directors Report

CIBA INDIA LIMITED ANNUAL REPORT 2008-2009 DIRECTORS REPORT To The Members, Your Directors present their Fourteenth Annual Report and the Audited Accounts of the Company for the financial year ended March 31, 2009. RESULTS: (Rupees in million) 2008-2009 2007-2008 Sales: - Domestic Sales (net) 4148 3976 - Exports 915 706 Total 5063 4682 Operating Profit Before Tax and Exceptional Items 303 318 Provision for Tax (Current, Deferred, Fringe Benefit Tax and for Earlier Years) 112 125 Profit After Tax 191 193 Exceptional Items: (i) Change in method of depreciation (net of tax) 72 (ii) Loss on sale of investment (40) 32 - Profit After Tax and Exceptional Items 223 193 Add: Profit & Loss Account, beginning of the year 924 804 Available for appropriation 1147 997 Dividend: - Proposed dividend of Rs. 3.50 per share (2008 Rs. 3.50 per share) 46 46 - Tax on proposed dividend 8 8 Transfer to General Reserve 22 19 Balance retained in Profit & Loss Account 1071 924 Total 1147 997 DIVIDEND: The Directors recommend a Dividend of Rs. 3.50 per Equity Share for the year ended March 31, 2009, on 13,280,819 fully paid-up Equity Shares of Rs.10/- each (previous year Rs. 3.50 per Equity Share). If the recommended dividend is approved by the Members at the forthcoming Fourteenth Annual General Meeting, the dividend including tax thereon will absorb Rs. 54 million. MANAGEMENT DISCUSSION & ANALYSIS: Industry Structure: The chemical industry in India comprises approximately basic chemicals - 60%, specialty chemicals - 25%, and fine chemicals and pharmaceuticals - 20%. This industry is the 12th largest in the world and 3rd largest in Asia. It constitutes around 15% of Indias manufacturing capacity. Your Company is engaged in the business of manufacturing and trading of specialty chemicals and in commoditized products. The Company serves a number of major industries and markets such as paper, plastics, inks and printing, packaging, paints, petrochemicals, automotive, construction, electronics, water treatment, agriculture, mining, extraction, and home and personal care. Our products improve the quality, functionality and the appearance of plastics, coatings and paper, protect people and objects from UV light, enhance the look and feel of home and personal care products, also provide skin and oral hygiene, and support industries to recycle, clean and save water. Our business segments offer integrated solutions to our customers, following a tailored approach to individual customers needs. The markets for specialty chemicals products are highly competitive and unpredictable with the entry of local and overseas producers. The global economic downturn and the consequent severe recession which started in the second half of the financial year under review, began to take effect in many of our customers markets and its severity has become clear. It is a difficult time for the chemical industry and the priority is to ensure that the businesses survive the downturn in the best possible shape. Operating Results: Sales turnover for the financial year under review was up by 8% to Rs. 5063 million, as against a turnover of Rs. 4682 million of the previous year. Domestic turnover has increased by 4% to Rs. 4148 million from Rs. 3976 million. Exports have increased by 30% to Rs. 915 million from Rs. 706 million. Profit after tax stood at Rs. 191 million as against Rs. 193 million of the previous year. On the backdrop of the global economic downturn witnessed since the second half of the financial year under review, the severe recession and competitive business environment, the performance of your Company is considered satisfactory. Business Segment Performance: The business segments comprise the Specialty Chemicals Segment and Other Segments. The Specialty Chemicals Segment includes additives, coating effects chemicals, water treatment and paper treatment chemicals, home & fabric care chemicals and personal care chemicals. Other Segments represents manufacturing under contract and sourcing of products for exports. Sales of additives were down by 6% to Rs. 2032 million from Rs. 2153 million of the previous year. Domestic sales were down by 17% to Rs. 1338 million from Rs. 1609 million whereas exports increased by 27% to Rs. 694 million from Rs. 545 million of the previous year. Lower domestic sales were on account of lower take-off by a major customer due to temporary closure of their EOU production site, product shortage, stiff competition and overall slowdown in the market. Increase in selling prices, wherever possible, partially offset volume loss on sales. New polymer products have shown growth potential. The outlook for the polymer industry seems to be encouraging with additional polymer capacities being lined up by existing customers as well as entry of PSUs in the polymer business. This is expected to open up additional demand and opportunity for polymer additives. With the economic downturn, the automotive and related industries witnessed a slowdown in the second half of 2008-09, resulting in lower demand for lubricant additives. Introduction of new products in the metal working fluid area has somewhat compensated for the lower demand and could partly sustain sales levels. Home and Personal Care business continued the growth momentum in fabric care, colorants and stabilizers, and UV absorbers. This trend is expected to continue with the consistent growth in the Indian FMCC sector. Sales of Coating Effects chemicals have increased by 20% to Rs. 1748 million from Rs. 1462 million of the previous year. Domestic sales have gone up by 17% to Rs. 1548 million from Rs. 1326 million. Exports were up by 47% to Rs. 200 million from Rs. 136 million of the previous year. Business Lines Paints & Coatings and Inks & Printing achieved double digit growth, however, Business Lines Plastics and Electronic Materials witnessed marginal negative growth. Business Line Paints & Coatings took full advantage of the opportunity of the lead free wave in the paint industry by offering environment friendly solutions/products. We expect to further strengthen our position in the architectural and industrial segments. Business Line Inks & Printing has been successful in changing the product mix and good sales in niche areas like ink jet printing and security inks has resulted in profitable sales growth. Business Line Electronic Materials has recorded steady sales during the year. Growth in domestic sales is expected to continue in spite of the global slowdown of the economy. However exports will be lower due to weak global markets. Sales of Water & Paper Treatment chemicals were up by 21% to Rs. 1275 million from Rs. 1058 million of the previous year. Domestic sales have gone up by 21% to Rs. 1262 million from Rs. 1041 million of the previous year. Exports continue to remain insignificant and were down by 19% to Rs.13 million from Rs. 16 million. Sales growth has been driven largely by the paper treatment chemicals due to price increase and the new business gained on new paper machines and projects. The markets faced difficult times with unprecedented price increases in raw materials across all products. Polymers, dyes, fluorescent whitening agents and binders for paper coating were impacted heavily due to the extreme shortage of key raw materials causing a demand supply imbalance. The growth in water treatment chemicals was largely from water solution polymers. The demand for heavy duty polymers increased in specialized applications. Sales to the agriculture sector were impacted due to extreme shortage of chelates causing supply gaps. Detergents and Hygiene sales were lower due to product shortages and supply gaps. Revenue from sourcing activities was Rs. 8 million as against Rs. 9 million of the previous year. Financial Performance with respect to Operational Performance and Cash Flow Analysis: Net sales increased by 8% to Rs. 5063 million compared to Rs. 4682 million of the previous year. Operating profit before tax was down by 5% to Rs. 303 million compared to Rs. 318 million of the previous year, partially due to foreign exchange loss. The net cash flow generated by operating activities was Rs. 76 million compared to Rs. 236 million during the previous year. An amount of Rs. 218 million was generated by investing activities mainly on account of refund of inter corporate deposits and proceeds from sale of investment in subsidiary company. Outlook: The Indian economy has grown at 6.7% of GDP in 2008-09, in the year of global economic downturn and financial meltdown against 9% of GDP in the previous year and 5.5% of GDP projected by economists and global analysts. Notwithstanding several challenges, particularly from the global economy, the Indian economy remained relatively resilient. The global financial crisis did however interrupt the growth momentum in India, despite the strong domestic sources of growth. The industry and services sectors have been affected more by the global economic crisis in relation to the agriculture sector. Compared to the previous year, growth in the infrastructure sector decelerated. Falling global output, employment and global trade affected Indias export performance. Volatility in the inflation outcome witnessed in 2008-09 was unprecedented. Forecasts based on the assessment of the global economic conditions and developments, their impact on the Indian economy as well as domestic cyclical factors, suggest continuation of recessionary conditions and moderation in economic activity in 2009-10. The resounding victory of the government at the recently held general elections promises a stable government at the center and is expected to push forward the economic liberalization process. The economy is expected to grow at the rate of 7-8% depending on the success of the 100-day plan of the new government. Sectors such as construction, cement, steel, automobiles are showing signs of revival. As a part of the global initiative to improve operational efficiency, Project SAP (a new ERP System) went live on August 06, 2008. Innovation and marketing initiatives have helped drive industry and market focus. Customers of your Company are major industry drivers. Business prospects therefore mainly depend upon the development and the performance of such industries. Assuming an upturn in the global and local economic and business conditions, and a relative improvement and stability in the industrial sector, your Company is optimistic about retaining its growth pattern. Opportunities and Threats: The global economic crisis which started from the second half of 2008-09 has severely affected industrial activity and business. The business environment becomes more challenging and competitive, and there is continuous need to introduce innovative and better quality products to suit the needs of the customers. Competition not only poses a threat but also throws open new opportunities. Continuous efforts are made in the areas of product improvement, introduction of innovative products and evolving strategies to meet market demand as well as evaluation of new business opportunities. A challenging business environment, stiff competition in the market place by the entry of overseas and local producers, increase in raw material prices and energy cost, volatility in foreign exchange rates, changes in preferences of consumers, uncertain demand patterns, are perceived as threats. Risks and Concerns: Risks are both internal and external, some of which could be largely anticipated, whereas others could not. Risks are an integral part of any business and the risk profile, to a great extent, depends on the economic and business conditions and the markets and customers we serve. Entry into new markets, product introductions, new projects, business alliances, marketing and distribution channels, manufacturing model, etc., carry inherent risks. The global economic downturn, uncertain demand/supply position, and uncertain increase in raw material prices, are matters of concern. A policy on Risk Assessment and Minimization Measures has been adopted by the Company and the same is reviewed on a periodic basis in order to recognize and reduce exposure to risks wherever possible. The Companys Forex policy offers a natural hedge to currency exposure. Internal Control System: The Internal Audit Department of the Company conducts audits in accordance with the internal audit plan as approved by the Audit Committee of the Board. Periodic audits are conducted in different operational and functional areas at various locations of the Company, including its subsidiary. The objective of such audits is to ensure adequacy of internal control systems and processes, adherence to the Companys policies and guidelines and compliance with applicable statutes. These audits also determine whether adequate controls are in place to mitigate risks. Internal Audit has a follow up process in place to verify the implementation of recommendations made. Special audits are also conducted as directed by the management/Audit Committee. The Group Auditors of the Parent Company also conduct audit of certain functional and operational areas. Subsequent to the implementation of the Project SAP (ERP System) in August 2008, the Group Auditors of the Parent Company and the local internal audit team conducted a post implementation review audit in February 2009. The Audit Committee of the Board of Directors inter-alia reviews the observations made by the internal auditors on the control mechanism and the adequacy of the internal control system, recommendations for corrective actions and implementation thereof, compliance related matters, operations of the Company, adherence to the laid down processes and guidelines. Manufacturing Operations: Manufacturing operations at the Santa Monica Works, Goa, an ISO 9001-2000 certified site, caters to all the business segments, the major being Plastic Additives. It also manufactures textile chemicals under a toll manufacturing arrangement. The site has consistently maintained high quality standards, with 100% of the product batches passing the quality parameters in the first instance. Most of the targets set for the year for energy conservation have been met. The site has a continuous improvement process in which various alternatives for optimum utilization of the manufacturing facility are evaluated and put to use wherever feasible. As part of Lean Manufacturing, 5S system in pilot areas of the site has already been implemented and audited. This system is being gradually rolled-out in other areas of the site to bring about increased productivity. The site is located on land leased from Syngenta India Limited. The lease arrangement has expired on August 31, 2008. Negotiations with Syngenta for renewal of the lease and on site related issues are not yet concluded, and manufacturing operations are carried on at the site. In this regard, reference is also drawn to paragraph 4 of the Auditors Report read with Note No. 13 in Schedule 20 - Notes to Accounts. Manufacturing operations are also carried on at the Ankleshwar facility of Diamond Dye-Chem Limited, a wholly owned subsidiary of the Company. Human Resources: The Company continues to have harmonious and cordial relations with its employees. Training programs and workshops are conducted on a regular basis to enhance the skills and competency of employees. Communication at all levels is encouraged and employees are kept well informed on key matters. Participation of employees in various workshops and programs is encouraged to strengthen team building. As on March 31, 2009, the total number of employees of the Company was 209. Environmental Protection, Health and Safety (EHS): EHS continues to receive the highest priority in all operational and functional areas at all locations of the Company. The Santa Monica Works, Goa (site), complies with all statutory and local regulations relating to EHS and also globally applicable Ciba group guidelines on EHS. Systematic process safety analysis, audits, periodic safety inspections are carried out and suitable control measures adopted for ensuring safe operations at the site. All the processes, wherever required, are backed up by efficient scrubbing systems to take care of any fugitive emissions into the environment. The site has a full fledged Occupational Health Centre. The site enjoys high standards in safety and has a record of no loss time accidents for the last nine years. Ciba group EHS guidelines and applicable legislations on EHS are complied with at the corporate office located at Chandivali, as also in the areas of supply chain-warehousing, transportation and other logistic activities. Social Responsibility and Community Development Initiatives: As ongoing initiatives, the Santa Monica Works (SMW), Coa, supports a number of community development and social welfare programs, and is committed to maintain healthy and cordial relations with its neighborhood. Underprivileged children of the neighboring Government Primary School are provided uniforms, books, all weather shoes and transportation facilities for their study tours. SMW supports the Polio Eradication Programme of the Central Government in the neighboring villages. Around a dozen, local, unemployed village girls are provided help to get gainful self-employment by sponsoring them for tailoring and embroidery classes. SMW also fosters industry-academia interaction by guiding students from Goa University/colleges and faculties like MBA, MCom, BBA, etc., to undergo internship training and project work for a duration ranging from one to three months. Last year six students were given support for their university summer training/projects at SMW. Cautionary Note: Certain statements in the Management Discussion and Analysis section may be forward looking and are stated as required by applicable laws and regulations. Many factors may affect the actual results, which could be different from what the Directors envisage in terms of the future performance and outlook. SUBSIDIARY COMPANIES: Diamond Dye-Chem Limited: Sales turnover for the financial year under review was up by 12% to Rs.1790 million as against Rs. 1592 million of the previous year. Domestic sales were up by 31% to Rs. 495 million as against Rs. 379 million of the previous year. Exports were marginally up by 7% to Rs. 1295 million from Rs. 1213 million of the previous year. Domestic sales and exports of Optical Brightening Agents have gone up in both the Business Lines, Paper and Detergents, as compared to the previous year. However, exports of Color Formers were lower at Rs. 316 million as against Rs. 392 million of the previous year due to the global economic downturn and recessionary conditions which led to lower demand in the second half of the financial year under review. Profit after tax for the year ended March 31, 2009, stood at Rs.118 million as against Rs. 124 million of the previous year. The decline in profit was due to a steep increase in raw material prices on account of rising crude oil prices in the first half of the year under review and increase in energy costs. Due to erratic supplies, gas was replaced by costly high speed diesel. In order to conserve resources, the Directors of Diamond Dye- Chem Limited (DDL) have not recommended a dividend for the financial year ended March 31, 2009. Expansion of the whiteners capacity of the existing plant was completed during the year. Environment protection continues to receive the highest priority, with an intensive focus on behavioral aspects of safety and safety management. There were no loss time accidents during the year under review. Periodic EHS audits were conducted at the Ankleshwar Site. As a part of the global initiative to improve operational efficiency, Project SAP (new ERP System) went live on August 06, 2008. The Report and Accounts of DDL are annexed to this Report along with the statement pursuant to Section 212 of the Companies Act, 1956. However, in the context of mandatory requirements to present Consolidated Accounts, which provides Members with a consolidated position of the Company, including its subsidiary, namely DDL, at the first instance, Members are being provided with the Report and Accounts of the Company treating these as abridged Accounts as contemplated by Section 219 of the Companies Act, 1956. Members desirous of receiving the full Report and Accounts of DDL will be provided the same on receipt of a written request from them. This will help in achieving considerable cost saving in connection with the printing and mailing of the Report and Accounts. Divestment of shares held in Virchow Drugs Limited: Your Company held 8,326,531 fully paid-up equity shares of Rs.10/- representing 51% of the paid-up share capital of Virchow Drugs Limited (Virchow) - a Joint Venture Company. Virchow was in the business of manufacture of an antimicrobial agent Triclosan at its Hyderabad facility. Increase in raw material costs, continuous weak demand, reduction in sales and consequently lower capacity utilization had substantially affected business. As reported last year the net profit shrunk to Rs.2 million as against Rs. 28 million in the previous year 2006-07. Demand contraction for the product Triclosan manufactured by Virchow and non- fruition of orders for anticipated new applications of Triclosan have adversely affected the operations of Virchow, with no visible improvement foreseen in the near future. The Company therefore came to the conclusion that to exit from Virchow would be the only option. By mutual consent the Company exited from Virchow from March 31, 2009, by termination of the JV agreement with the JV Partner (Virchow Group, Hyderabad) by sale of the Companys aforesaid shareholding @ Rs. 5.13 per equity share, aggregating to Rs. 42.71 million approximately, to the designated nominees of the JV Partner. Open Offer of BASF to the shareholders of Ciba, Switzerland, and Ciba India: On September 15, 2008, BASF made a public tender offer to acquire all publicly held shares in Ciba Holding Inc., Switzerland (Ciba), the Parent Company of your Company, at a price of CHF 50 in cash per share. The Board of Directors of Ciba recommended shareholders to accept the offer. The acquisition was completed on April 09, 2009, by BASF holding 95.8% shares of Ciba. Following the acquisition of Ciba shares, on April 10, 2009, a Public Announcement of Open Offer pursuant to the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, for acquisition of 2,656,164 equity shares of Rs. 10/- each fully paid up being 20% of the voting capital at a cash price of Rs. 237.13 per equity share was made to the public shareholders of the Company by BASF. In terms of the said public announcement, the offer opened on June 04, 2009, and will close on June 23, 2009. DIRECTORS: In accordance with Article 107 of the Articles of Association of the Company, Mr. J.S. Bilimoria is liable to retire by rotation and, being eligible, offers himself for re-appointment. Mr. A. Kappeler resigned as a Director of the Company effective October 01, 2008. The Board places on record its appreciation of the invaluable contribution made, and the guidance provided by Mr. Kappeler during his tenure as a Member of the Board. At the Board meeting held on October 23, 2008, Mr. K. Kohler was appointed as a Director of the Company with effect from November 01, 2008, in the casual vacancy caused by the resignation of Mr. Kappeler. Mr. Kohler holds office only up to the date of the forthcoming Annual General Meeting pursuant to Section 262 of the Companies Act, 1956, and Article 109 of the Articles of Association of the Company. Notice has been received from a Member signifying his intention to propose Mr. Kohler as a candidate for the office of Director. The tenure of Mr. C. Newton as Managing Director of the Company would be expiring on August 31, 2009. At the meeting of the Board of Directors of the Company held on June 11, 2009, Mr. Newton was re-appointed as the Managing Director of the Company for a period of one year commencing from September 01, 2009, to August 31, 2010 (both days inclusive). Proposals for appointing Mr. J.S. Bilimoria and Mr. K. Kohler as Directors of the Company and Mr. Newton as the Managing Director of the Company are placed for the approval of the Members. None of the Directors of the Company is disqualified under Section 274(1) (g) of the Companies Act, 1956. As required by the law, this fact has been reported in the Auditors Report. DIRECTORS RESPONSIBILITY STATEMENT: To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 217 (2AA) of the Companies Act, 1956: (i) that in the preparation of the annual accounts for the year ended March 31, 2009, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any. (ii) that such accounting policies as mentioned in Note 2 of Schedule 20 to the Accounts have been selected and applied 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 at the end of the financial year ended March 31, 2009, and of the profit of the Company for that year. (iii) that proper and sufficient care has been taken 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. (iv) that the annual accounts for the year ended March 31, 2009, have been prepared on a going concern basis. CORPORATE GOVERNANCE: A detailed report on Corporate Governance is given as part of the Annual Report along with the Statutory Auditors certificate on its compliance. The Company is in full compliance with the requirements and the disclosures that have to be made in this regard. AUDITORS: S.R. Batliboi & Co., Chartered Accountants, who are the Statutory Auditors of the Company, hold office, in accordance with the provisions of the Companies Act, 1956 (the Act), up to the conclusion of the forthcoming Annual General Meeting (AGM). They have communicated their inability to continue as Auditors of the Company and as such are not seeking re- appointment at the forthcoming AGM. The Company has received special notice from a Member of the Company in terms of Section 190 read with Section 225 of the Act, signifying his intention to propose the appointment of BSR & Co., Chartered Accountants, as the Statutory Auditors of the Company from the conclusion of the forthcoming AGM until the conclusion of the next AGM. BSR & Co., have also expressed their willingness to act as Auditors of the Company, if appointed, and have confirmed their eligibility. Members are requested to appoint BSR & Co., as the Statutory Auditors of the Company from the conclusion of the forthcoming AGM until the conclusion of next AGM at such remuneration as may be fixed by the Board of Directors of the Company. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO: Information required under Section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, with respect to conservation of energy, technology absorption and foreign exchange earnings and outgo is annexed hereto and forms part of this Report. PARTICULARS REGARDING EMPLOYEES: Information as per Section 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, forms part of this Report. However, as per the provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the Report and the Accounts are being sent to all Members excluding the statement of particulars of employees under Section 217 (2A). Any Member, interested in obtaining a copy of this statement, may write to the Company Secretary at the Registered Office of the Company. CONSOLIDATED FINANCIAL STATEMENTS: Pursuant to Clause 32 of the Listing Agreement with the Bombay Stock Exchange Limited, consolidated financial statements have been prepared in accordance with the requirements of Accounting Standard 21 on Consolidated Financial Statements issued by the Institute of Chartered Accountants of India. The audited consolidated financial statements form part of this Annual Report. ACKNOWLEDGEMENT: The Directors thank employees at all levels for their dedicated efforts and contribution in achieving overall satisfactory results despite the global economic crisis, uncertainties in the industry and a challenging business environment. They also express their grateful appreciation for the support and encouragement received from Ciba, Switzerland. The Directors take this opportunity to express their appreciation for the support and cooperation received from customers, vendors, shareholders, banks, and the society at large. For and on behalf of the Board of Directors Place : Mumbai J.S. Bilimoria Date : June 11, 2009 Chairman Annexure to the Report of the Board of Directors Conservation of Energy: FORM A: Disclosure of particulars in respect of Conservation of Energy: A. Power and Fuel Consumption: 2008-2009 2007-2008 1. Electricity: a. Purchased Units (Kwh) 2911164 3678329 Total Amount (Rs.) 27,443,067 30,573,772 Average Rate/Unit (Rs.) 9.43 8.31 b. Own Generation: Generated Units (Kwh) 12566 30120 Total Amount (Rs.) 947,451 487,302 Average Rate/Unit (Rs.) 75.39 16.18 Coal N.A. N.A. Furnace Oil N.A. N.A. Others/Internal Generation N.A. N.A. B. Consumption per unit of production: The Company manufactures a wide variety of products. The products before reaching the finishing stage pass through various operations. It is, therefore, not feasible to furnish the information in respect of consumption per unit of production. FORM B: Disclosure of Particulars with respect to Technology Absorption: Research and Development (R&D): The Company is not. carrying on any R&D activities and as stated in the past reports, the said activity is being carried on by one of the Ciba Group Companies, namely, Ciba Research (India) Private Limited. Technology Absorption, Adaptation, Innovation and Benefits derived therefrom: Efforts made towards adaptation and absorption of technology and innovation and benefits derived therefrom are as under: - As an ongoing process, efforts are made and an evaluation exercise is being carried out for introduction of innovative technology in the areas of manufacturing process, product development, plant utilization, quality control systems, environment protection, health and safety, energy conservation, optimum consumption of utilities, etc. - Benefits derived - improvement in quality and performance of existing products, introduction of new and innovative products, high standards in the areas of environment protection, health and safety, increase in productivity and efficiency, optimum utilization of plant, conservation and optimum use of energy and utilities, etc. - Technology has been adapted and absorbed wherever feasible to suit the local conditions. Foreign Exchange Earnings and Outgo: Details of earnings in foreign exchange and expenditure in foreign exchange are given in the Note 11(k) & (i) of Schedule 20 to the Accounts. For and on behalf of the Board of Directors Place : Mumbai J.S. Bilimoria Date : June 11, 2009 Chairman