SI Group - India Ltd Management Discussions

SI GROUP-INDIA LIMITED ANNUAL REPORT 2010-2011 MANAGEMENT DISCUSSION AND ANALYSIS FINANCIAL RESULTS RS. LAKHS Year Year ended ended 31.3.2011 31.3.2010 Sales (including Excise Duty) 98,395 73,674 Other Income 694 487 99,089 74,161 Gross (Loss)/Profit 16,454 7,172 Less: Provision for Depreciation & Amortization (1,253) (1,444) Profit/(Loss) Before Tax 15,201 5,728 Less: Provision for taxation (including for prior years) (5,526) (1,538) (Less)/Add: Deferred Tax (Charge)/Credit 360 (69) Profit after Tax 10,035 4,121 Add: Profit & Loss Account Balance B/F 7,309 3,188 Disposable Profit 17,344 7,309 Surplus carried forward 17,344 7,309 OPERATIONS REVIEW The sales turnover at Rs. 984 crores was higher by 33.5% compared to that of the previous year. The increase in turnover was due to both increase in the volumes sold and higher selling prices. The financial performance during the year under review improved due to increase in gross margins on sales. Margins improved due to a concerted effort to create value by extracting more from the existing plants, optimizing the sales realizations, judicious sourcing of raw materials and containment of costs. The internal accruals enabled the company to repay the outstanding debt during the year which significantly reduced the incidence of interest. The Company is in the process of de-bottlenecking its capacity of Isophorone and expects to complete the same by end September 2011. ENVIRONMENT, HEALTH AND SAFETY Your Company continues to be committed to high standards of Safety, Health and Environment. Its systems continue to be certified under ISO 9001, OHSAS 18001 (2007) and ISO 14001 (2004) by Bureau Veritas Certification. Further, in view of the continual efforts in the area of Responsible Carer, the Company continues to be permitted to use the RC logo by the Indian Chemical Council (ICC). The quality of stack emissions, ambient air, noise levels and liquid effluents continues to be closely monitored. They have consistently met the norms set by Maharashtra Pollution Control Board (MPCB) in its consent to operate the plants. New National Ambient Air monitoring Standards (NAAQS) are being followed. Central Pollution Control Board (CPCB) has lifted the ban on any new expansion projects in the TTC area subject to Pollution Load Assessment. During the year, your Company completed the following projects in the area of EHS: (a) Use of RLNG in Cumene Hot Oil Furnace: The Company re-endorsed its commitment towards cleaner environment by switching the fuel in Cumene Hot Oil furnace from FO/LSHS to RLNG since December 2010. This has resulted in adopting a cleaner fuel reducing sulphur dioxide emissions by around 60 kg/day. (b) Efficient Dust Collection System in PAN Flaker room: The old dust collection system in the Phthalic anhydride flaker area was replaced by a new efficient system in December 2010 providing better work environment for the workers in the area. (c) Revalidation of Safety Valves in DAA plant (November-2010): Safety valves of Diacetone alcohol plant were revalidated and are re-routed to a new blow down tank via. a closed safety header in November 2010. The Company further proposes following projects: (a) Use of RLNG in Dowtherm furnace: Re-endorsing its commitment towards cleaner environment, the Company now proposes a fuel switch over in Dowtherm furnace from FO/LSHS to RLNG. This proposal is expected to be implemented by December 2011. (b) Installation of New Internal Floating Roof Tank (IFRT) FB-698 and conversion of fixed roof tank FB-630 to IFRT: To minimize the Benzene emissions from the storage tank to the atmosphere, the Company proposes to install new IFRT FB-698 for Benzene storage and also convert existing fixed roof tank FB-630 to IFRT. This proposal is expected to be implemented by July 2011. (c) Steam Audit: A Steam Audit was conducted through external Energy Audit Consultants in Navi Mumbai complex during the months of March-April 2011. Implementation of recommendations of the Energy Audit Consultants will lead to improving the energy performance of the complex. (d) Revalidation of Safety Valves of PAN, ACP, AMS and AMS-Dimer plant: Safety valves of PAN, ACR AMS and AMS-Dimer plant were revalidated and some of the safety valves are proposed for replacement. (e) General: Periodic medical examination of all employees including contractors workmen was carried out. Awareness programs on health and First Aid Training were also organized for the employees and housewives from nearby villages. In addition, training programs for Logistic Partners were also conducted. A special program on Defensive driving was conducted during the Road Safety Week. The Company has provided Chemical Emergency Response Kit to traffic Police to tackle transit emergency as a first responders. An offsite disaster drill was also conducted which was witnessed by all offsite respondent teams. The Company was awarded the First Prize in Major Accident Hazard (MAH) category during Safety Exhibition held at Thane, organized by DISH, District Disaster Control cell, MARG.