South Asian Petrochem Ltd merged Directors Report

SOUTH ASIAN PETROCHEM LIMITED ANNUAL REPORT 2008-2009 DIRECTORS REPORT To Your Directors have pleasure in presenting the 13th Annual Report of your Company together with the audited statement of accounts for the year ended 31st March 2009. Financial results: (Rs. in lacs) 2008-09 2007-08 Turnover and other income 1,13,938 1,04,468 Profit before interest and depreciation 7,181 12,679 Interest 2,690 2,934 Profit before depreciation 4,491 9,745 Profit for the year 2,084 7,413 Provision for tax - Current tax 240 840 - Excess provision relating to earlier years written back - (10) - Deferred tax 244 1,004 - Fringe benefit tax 27 26 Profit after tax 1,573 5,553 Amount brought forward from previous year 12,583 8,394 Amount available for appropriation 14,156 13,947 Appropriation proposed: Dividend proposed on equity shares (Current year @ Re.0.40 p and previous year @ Re.0.50 p per share of Rs. 10/- each) 933 1,166 Tax on dividend 158 198 Balance carried to balance sheet 13,065 12,583 Dividend: Due to the reduction in the profits in the current year, your Directors recommended a dividend @ Re 0.40 p per equity share of Rs. 10/- each for the year ended 31st March 2009 as against the dividend @ Re. 0.50 p per equity share of Rs. 10/- each for the year ended 31st March 2008, subject to the approval of the shareholders in the ensuing Annual General Meeting. Performance: Your Company achieved an all time record production and turnover inspite of the shutdown in September 2008. The turnover of your Company for the year 2008-09 vis-a-vis 2007-08 increased from Rs. 1,04,429 lacs to Rs. 1,16,011 lacs. The profit before tax of your Company decreased from Rs. 7,413 lacs to Rs. 2,084 lacs mainly due to foreign exchange loss on the term loans of Rs. 4,010 lacs charged in the year 2008-09 in terms of the provisions of Accounting Standard 11 as compared to the foreign exchange gain on the term loans of Rs. 1,713 lacs in the year 2007-08. Further there was an increase in the power and fuel expenses by Rs. 1,501 lacs due to sharp increase in the furnace oil cost. This was offset by an increase in the other income by Rs. 953 lacs on account of service charges received. The profits for the year were also impacted because of losses on account of substantial fall in the prices of main raw materials and finished goods. However, your Company took steps to minimise this inventory loss. The coal-based HTM heaters invested in 2007-08, are running satisfactorily, resulting in cost savings as well as de-risking part of the operation from movement of oil prices. Prospects: Your Company is expected to operate at full capacity in the year 2009-10, resulting in improved utilisation of resources. The captive power plant of 8 MW is expected to be commissioned in the last quarter of 2009-10. Development schemes which can save energy and raw material cost, such as, PTA Mechanical Conveyer System and Catalyst change are planned to be undertaken. Barring unforeseen circumstances the Companys performance for the coming year is expected to be satisfactory. Conservation of energy, technology absorption, foreign exchange earnings/outgo: The particulars as prescribed 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 are attached as an annexure to this report. Disclosure under Section 217 (2A) of the Companies Act, 1956: The particulars of employees whose salary exceed the limits as prescribed under section 217 (2A) of the Companies Act, 1956, are given as an annexure to this report. Auditors: M/s Lovelock & Lewes, Chartered Accountants, retire on the conclusion of this Annual General Meeting, and being eligible, offer themselves for reappointment. Directors: Mr. P K Khaitan and Mr. J P Kundra, Directors of your Company, will retire at this Annual General Meeting by rotation, and being eligible, offer themselves for reappointment. The Board recommends their reappointment as Directors of your Company. During the year, Dr. S S Banerjee and Ms. Nandini Chakravorty ceased to be a Director of the Company consequent to the withdrawal of their nomination by the IDBI Bank Ltd and West Bengal Industrial Development Corporation Ltd respectively. The Board of Directors wish to place on record their sincerest appreciation for the contribution made by Dr. S S Banerjee and Ms. Nandini Chakravorty during their tenure. Mr. S K Pai was nominated in place of Dr. S S Banerjee by IDBI Bank Ltd. Mr. S K Pai has been in service and is presently the Chief General Manager in IDBI Bank Ltd. Fixed Deposits: The Company has not accepted any deposits from the public, and as such there are no outstanding deposits in terms of the Companies (Acceptance of Deposits) Rules, 1975. Subsidiary companies Egyptian Indian Polyester Company S.A.E: Your Directors hereby inform that due to difference between the Ministry of Petroleum and Ministry of Transport of Egypt, the land lease agreement, in respect of the place where your Company had planned to set up the project, could not be executed. Consequently, there was a delay in the implementation of the project. Meanwhile, a new piece of land was allotted on free hold basis. The project is now being planned to be set up at a new location. General Authority of Free Zone (GAFI), the nodal agency for free zone projects also appreciated the Companys efforts in identifying new land and agreed to continue to grant free zone status for the project in the new location. For this, necessary application was submitted. The optimum size of plant is being worked out, and your Company is contemplating the revision in the size of plant from 900 TPD to 1200-1500 TPD. Consequently, the project cost has to be re-worked. In respect of its other subsidiary, Egyptian Indian Polyester Company, S.A.E., the first financial year would end only on 31st December 2009. An amount of Rs. 1,195 lacs was paid by the Company as an advance against equity contribution to M/s. Egyptian Indian Polyester Company, S.A.E. Further, an amount of Rs. 127 lacs was paid by the Company as an advance towards expenses to M/s Egyptian Indian Polyester Company, S.A.E. Dhunseri Polycarbonate Ltd: During the year, the Company has been allotted 1,00,20,000 equity shares of Rs. 10/- each amounting Rs. 10,02,00,000, by M/s. Dhunseri Polycarbonate Ltd (DPL). Consequently, your Companys holding in DPL became 99.7%, making DPL the subsidiary of your Company. The remaining shares are held by the other promoter group. Your Company conceived the polycarbonate plant and the technology agreement for the said project was signed with Asahi Kasei Chemicals Corporation, Japan (AKC). The total estimated project cost was assessed at Rs. 2,500 crore. The project is planned to be executed in DPL. When the agreement was signed with AKC, the financial and equity markets were very buoyant. However, due to the current depression, the project would be reviewed once the financial markets revive. South Asian Petrochem USA, LLC: Your Companys wholly owned subsidiary, South Asian Petrochem USA, LLC, has been wound up with effect from 9th April 2008. Consequent to the closure of the said subsidiary, all monies due from it, including the share capital invested was received. The audited financial statements of Dhunseri Polycarbonate Ltd are also attached and form a part of the Companys Annual Report. As required under the listing agreement with the stock exchanges, the audited consolidated financial statements of your Company are also attached and form a part of the Companys Annual Report. The consolidated financial statement does not include the operations of a) South Asian Petrochem USA, LLC, as the Company has been wound up with effect from 9th April 2008, and the transaction during the said period were immaterial. b) Egyptian Indian Polyester Company S.A.E, as the first financial year of the said Company will end only on 31st December 2009. SAPL as a subsidiary of Dhunseri Tea and Industries Ltd: Consequent to the order of the Honourable High Court (Calcutta), Tezpore Tea Company Ltd and UNI Stock Pvt. Ltd. were merged with Dhunseri Tea and Industries Ltd and your Company became a subsidiary of Dhunseri Tea and Industries Ltd. Promoter holding in the Company: During the year, the promoters of your Company, through creeping acquisition, as permitted under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, acquired 28,81,266 shares of the Company, taking the promoters holding from 54.67 % to 55.91 %. Cost Audit: Under the provisions of Section 233B of the Companies Act, 1956, the Central Government did not prescribe any cost audit in respect of companies manufacturing Poly Ethylene Terephthalate (PET) Resin. Directors Responsibility Statement pursuant to Section 217 (2AA) of the Companies Act, 1956: Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, it is hereby confirmed: (i) That in the preparation of the annual accounts, the applicable accounting standards were followed along with proper explanation relating to material departures, if any (ii) That the Directors selected such accounting policies and applied them consistently and made judgments and estimates that were 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 and of the profit and loss of the Company for that period (iii) That the Directors took proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this act for safeguarding the Companys assets and for preventing and detecting fraud and other irregularities (iv) That the Directors prepared the annual accounts on an on going concern basis. Corporate Governance and Management Discussion and Analysis Reports Corporate Governance and Management Discussion and Analysis Reports are set out as separate annexure to this Report. Corporate social responsibility: Your Company recognised that its operations impact a wide community of stakeholders, including investors, employees, customers, business associates and local communities and that appropriate attention to the fulfillment of its corporate responsibilities can enhance overall performance. In structuring its approach to the various aspects of corporate social responsibility, the Company takes account of guidelines and statements issued by stakeholder representatives and other regulatory bodies. Certifications: During 2008-09, your Company received the ISO 14001:2004 accreditation by TUVNORD certification body for environmental management system for manufacture and sale of PET resin. Further, your Company also received BS OHSAS 18001:2007 certification in relation to occupation health and safety management system by TUVNORD certification body and the Company is BS OHSAS 18001 certified. Your Company is also an ISO 9001:2000 certified Company. Award for best EOU: Your Directors have the pleasure to inform you that based on the outstanding export performance of the Company for the year 2006-2007, your Company was given the award of the best EOU (non SSI category: plastic products) by Export Promotion Council for EOUs and SEZs, Ministry of Commerce and Industry, Government of India. Human resources management and environment, health and safety: Health and safety of all employees remains of paramount importance. Over the past few years, much work has gone into making our operations safer and managing our environment impact. A formal EHS department was set up and incorporated in the organisational chart. Safety audit is conducted annually in the plant at Haldia. These are matters of priority and therefore caring for the environment and responsible disposal of wastes are some of the ongoing initiatives. Delisting of the equity shares: As per the approval obtained at the last Annual General Meeting held on 26th July 2008, your Company made an application for delisting of the Companys securities from the Calcutta Stock Exchange. Your Companys shares were delisted from Calcutta Stock Exchange during the year under review. The equity shares of your Company are presently listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). The unsecured foreign currency convertible bonds are listed on the Singapore Exchange Securities Trading Ltd (SGX-ST). Reset in conversion price of FCCBs earlier issued on preferential allotment: Your Company issued 200 zero coupon foreign currency convertible bonds (FCCBs) for an aggregate amount of up to USD 20 million in the year 2007- 08. The initial conversion price of the bonds was Rs. 22.50 per share. However, there was an option in the offering circular dated 16th January 2008 for resetting the conversion price (downwards only) on the reset dates, being 30th November 2008 and the date following each period of six months thereafter up to maturity date. Accordingly, the initial conversion price of Rs. 22.50 per share was reset to Rs. 17.01 per share, as on 1st December 2008. Consequently, 1,12,80,517 additional shares would be required to be issued to Deutsche Bank on conversion, taking their stake from 12.38% to 15.76% Outstanding warrants: As per the approval obtained at the Extraordinary General Meeting held on 8th December 2007, your Company issued 1,40,64,273 convertible warrants on preferential basis to IFC and promoters. Till the date of this report, none of the allotees, exercised the option for the conversion of the convertible warrants to equity shares. The period for exercising the said option will be expiring on 19th June 2009. Utilisation of proceeds from preferential issue: Your company made an allotment of equity shares, warrants and FCCBs in the year 2007-08. Consequently, during the year 2007-08, the Company raised Rs. 7,416.23 lacs by preferential allotment of equity shares and equity share warrants and Rs. 7,864.00 lacs from the issue of the FCCBs. The money raised out of such issue was to be utilised for; i) Equity participation in overseas subsidiaries ii) Retirement of high cost borrowings and iii) Other business purposes including working capital requirements Out of the net proceeds after meeting issue expenses, Rs. 1322 lacs was utilised as an advance towards equity participation/other expenses in the overseas project in Egypt. The balance unutilised money either stands invested in securities or remains with banks. Employees: People continue to be the centre of your Companys winning strategy. Your Companys employees constitute the core of what we offer to our customers. Your Directors wish to acknowledge the dedication and commitment, of all employees, as well as their support and valuable contributions, in achieving and sustaining excellence in all areas of the business. Acknowledgement: The Directors wish to place on record their sincere appreciation for the wholehearted support received from Bank of America, Bank of Baroda, Bank of India, Canara Bank, Citibank N.A, Deutsche Bank, Export-Import Bank of India, ICICI Bank Ltd, IDBI Bank Ltd, International Finance Corporation, Punjab National Bank, State Bank of India, State Bank of Travancore, Syndicate Bank, United Bank of India, West Bengal Industrial Development Corporation Ltd, Haldia Development Authority, office of the District Magistrate of East Midnapore, West Bengal Pollution Control Board, West Bengal State Electricity Board, Ministry of Environment & Forest, Government of West Bengal, Government of Egypt, Governate of Port Said, General Authority for Investment and Free Zones (GAFI), Egyptian Petrochemicals Holding Company (ECHEM), Engineering for the Petroleum and Process Industries (ENPPI), Egypt, the customers, the suppliers, the shareholders and all others associated with the Company. For and on behalf of the Board of Directors Place: Kolkata P K Khaitan Date : 9th May 2009 Chairman Annexure to Directors Report Information pursuant to 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 and forming part of the Directors Report for the year ended 31st March 2009. A. Conservation of energy: Your Company attaches priority to conservation of energy. The activities of the Company in this direction are; a. Energy conservation measures taken: 1. Installed 30 KW centrifugal pump for the water circulation in the chips cutter DM water system through plate heat exchanger. At present, 55 KW motor has been kept as stand by. 2. Modified control circuit for ventilation fan at DG hall. Earlier total ventilation fans are continuously running for dissipation of running engine heat from inside to outside. After modification of control circuit, fan is started automatically through bearing temperature sensor of DG engine. 3. Low-pressure steam is generated from the exhaust flue gas of coal fired heaters. This steam is now utilised for heating furnace oil in DG plant. Earlier electrical energy was used to heat the furnace oil. 4. Bio-diesel (Environment Friendly Fuel) is presently being used in all our forklifts emphasising our commitment to a greener and cleaner environment. b. Additional investments and proposals, if any, being implemented for reduction of consumption of energy Investments and proposals presently under consideration by your Company are: 1. Installation of tube chain mechanical conveyor system for conveying PTA from bags/container to the silo. Existing pressurised and pneumatic nitrogen conveying system will be kept as standby. There will be substantial energy saving due to stoppage of high-powered compressors, apart from reduction in nitrogen consumption. 2. Replacement of electrical heater of furnace oil day tank with steam heater. We are planning to replace the day tank electrical heater with the steam heater which is lying unused. The heater capacity is 15 KW. Therefore the DG auxiliary power consumption will be reduced further. The steam will be available from HTM heater exhaust flue gas. c. Impact of the measures at (a) and (b) above for reduction of energy consumption and consequent impact on the cost of production of goods 1. The energy conservation measures taken by installation of 30 KW centrifugal pump, replacing 55 KW motor driven pump in the cutter DM water system, has an effective saving potential of Rs. 12 lacs per annum. 2. Modified control circuit for ventilation fan at DG hall, results saving of Rs. 2 lacs per annum. 3. Low pressure steam is generated from the exhaust gas of coal fired heaters being utilised for heating of furnace oil in DG Plant, resulting saving of Rs. 19 lacs per annum. The proposed energy conservation measures are expected to yield an annual cost savings of: 1. Rs.170 lacs per annum on account of tube chain PTA conveying system. 2. Rs.7.2 lacs on account of using steam heaters in place of 15 KW rating electrical heaters for day tank at DG power plant. The actual impact on the cost of production, of the measures undertaken/ proposed to be undertaken by your Company to reduce energy consumption, can be measured over the year 2009-2010. FORM A Form for disclosure of particulars with respect to conservation of energy. A. Power and fuel consumption: Current year 2008-09 (April 2008-March 2009) Previous year 2007-08 (April 2007-March 2008) 1. Electricity: (a) Purchased: Units (KWH) 258068.36 100931.00 Total amount (Rs.) 2366999.00 1560757.00 Rate / Unit (Rs./ KWH) 9.17 15.46 (b) Own generation: (i) Through F.O. generator Unit (KWH) 46099540.00 39909720.00 Units per ltr. of Furnace oil (KWH) 4.41 4.48 Cost per unit (Rs.) 5.36 3.73 (Considering only fuel cost) (ii) Through steam turbine / generator NA NA Unit (KWH) Units per Lts. of fuel oil/gas Cost / Unit (Rs.) 2. Coal (Note 1) (a) Consumed Quantity (MT) 19688.98 NA Total cost (Rs.) 89007257.00 NA Average rate (Rs./MT) 4520.66 NA 3. Furnace oil: (For heating) (a) Consumed Quantity (MT) 4077.19 9324.24 Total amount (Rs.) 102396470.66 156156481.36 Average rate (Rs./MT) 25114.50 16747.37 4. Others/Internal generation (a) Purchased NA NA Quantity Total cost (Rs.) Rate/unit B. Consumption per unit of production: Standards Current year Previous year (if any) 2008-09 2007-08 Product: Poly Ethylene Terephthalate Resin: Production quantity (Unit: MT) 192655.37 165008.93 Electricity (KWH/MT) 273.00 240.62 242.48 Furnace oil (Kg/MT) 86.00 21.16 56.51 Coal (Kg/MT) 102.20 NA (Steam coal/ROM coal) Note: 1. Quality of coal-Steam coal / ROM coal; where used - in coal fired HTM heaters for process heating. 2. Process heating was done by coal and partially through FO during the year. Form for disclosure of particulars with respect to absorption: Research and Development (R&D) Research and Development is spread across the business of our Company. Though no specific expenditure was made under the head R & D, constant development efforts were made to increase the efficiency and for cost reduction. 1. Specific areas in which R & D was carried out by the Company - NA 2. Benefits derived as a result of the above R & D - NA 3. Future plan of action - NA 4. Expenditure on R & D: a. Capital: Nil b. Recurring: Nil c. Total: Nil d. Total R & D expenditure as a percentage of total turnover: NA The R & D is integrated to the production and quality control process of the Company and as a result cannot be segregated. The benefits are consequently synergised and not allocated in terms of financial heads. Technology absorption, adaptation and innovation: 1. Efforts, in brief, made towards technology absorption, adaptation and innovation. The Companys plant is based on the technology imported from Zimmer AG, Germany, and the plant is functioning. The Company started commercial production in September 2003. All efforts were made towards technology absorption and adaptation and achieved the required quality of product within a very short duration. 2. Benefits derived as a result of the above efforts, e.g., product improvement, cost reduction, product development, import substitution, etc. Subsequently, a lot of modifications were carried out in the process to improve productivity, reduce the cost of production and also to facilitate new product development. As all process plant equipments were imported, we have lot of scope for import substitution. More priority was given to import substitution as a part of economic development strategies. Import substitution is being done by keeping in view the quality, the performance and its criticality in the system. 3. In case of imported technology (imported during the last five years, reckoned from the beginning of the financial year), the following information may be furnished: (a) Technology imported - None (b) Year of import - NA (c) Has technology been fully absorbed - NA (d) If not fully absorbed, areas where this has not taken place, reasons therefore and future plans of action-NA Foreign exchange earnings and outgo: 1. Earnings in foreign exchange - Rs. 62,744 lacs 2. Foreign exchange outgo - Rs. 37,274 lacs Information on foreign exchange earnings and outgo is contained in Schedule 19 of the notes to accounts. Activities relating to exports: Your Company being a 100% Export Oriented Unit (EOU), all its activities are geared mainly towards exports, the earnings of which are in foreign exchange. Your Companys product (bottle grade PET resins), produced in Haldia plant, is exported to 60 countries so far. Your Company exported total 114,037 MT in 2008-09. The market distribution in terms of quantity is 41% to European Union, 31% to Middle East and Africa, 9% to South America, 7% to the USA and 12% to rest of Asia. Most of the business was with regular customers/ converters and brand owners. Initiatives taken to increase exports: Apart from selling through sales channels and to trading and distributing companies, your Company reduced sales channels and contacted end-users directly, thus developed good relationships with them for long term business and to achieve better bottom line and better brand visibility in the market. Direct contact with customers helped to understand customers specific needs and to guide them for appropriate products and provide them customised services to strengthen relationship. Your Company provides door delivery services to EU and the USA based customers at par with their local producers with strong in house and out sourced logistics team. Your Company also recruited experienced local professional in USA and Europe to strengthen its presence in respective markets. Development of new export markets for products and services: Due to global recession, many banks and countries situation deteriorated and hence your Company reduced its exposure to such market and nations to avoid risk. Your Company sticked to regular and reliable customers worked closely with them to enhance their business and became a part of their business process. Export plans: Your Companys plan for 2009-10 is based on current global supply demand. The Companys focus is on neighbouring countries and moreover it plans to fill the vacuum due to some of the major suppliers exit from the North American and European business. In addition, there are plans to start export to some new regions. There are also plans to go ahead with annual contract with some major customers on long term basis based on the experience of last two quarter of business cycle. MANAGEMENT DISCUSSION AND ANALYSIS Industries structure and developments: South Asian Petrochem Ltd is engaged in the manufacture of Poly Ethylene Terephthalate (PET) resin, having the second largest market share of the PET industry in the country. The product is increasingly used for bottled drinks, beverage, liquor, FMCG and pharmaceutical sector. PET resin represents the building block in the manufacture of PET jars and bottles. PET bottles have manifold advantages vis-a-vis competing products. It is no wonder that PET resin has become the material of choice for the food and beverage packaging industry. Opportunities and threats: The application of PET resin is increasing due to its qualities like purity, strength, transparency, lightweight and safe attributes which makes it one of the leading materials for bottling and packaging today. The carbonated soft drinks market - the principal user of PET bottles together with beverages - an intrinsic part of everyday living in that part of the world, the FMCG sectors preference for to prefer the use of PET bottles due to usage functionality and a growing preference of consumers to view the content prior to purchase represents an attractive opportunity for companies like South Asian Petrochem Ltd. Some of the main threats to PET industry include sharp fluctuation in crude prices and PTA/MEG prices, which are the primary raw materials for the PET resin industry and to control the consequent inventory losses. Increase in production capacity of PET resins within the country and abroad, as well as the competition from polycarbonates, tetrapack and glass bottles are major threats. The Company continues to reconfigure its existing capability and maintains high quality to overcome the threats. Segment-wise or product-wise performance: The Company has two geographical segments - domestic and exports. During the year, the Company earned 58% of its revenue from overseas sales spread across 48 countries. The balance was derived from the domestic sales. Outlook: As a sensitive manufacturer, we are open to various changes in consumer preferences. The PET consumption world wide is increasing and to tap the increasing market demand, the Company is investing in its Egyptian subsidiary company, Egyptian Indian Polyester Company S.A.E. The Company is continuously looking at various cost reduction measures and hopes to maintain the current margins. The Company looks forward to greater reach and significant holding of hands with newer consumers in the years to come. The Company also expects to enhance stakeholder value through a responsible strategy directed at building value over the long-term. Risks and concerns: Risks and prospects are un-separable components of any companys business. The Directors and the Management of your Company keep this in mind in taking all decisions such that no single stakeholder is adversely affected on account of any decision taken by the Company. The Company identified various risks and constituted a Risk Management Committee, comprising heads of departments which meets regularly to assess the risks and minimise their incidence, so that the returns can be maximised. Internal control system and their adequacy: The Company introduces internal control system to ensure that all assets are safeguarded and protected against loss and that the transactions are authorised, recorded and reported correctly. The Executive Director and Sr. V P (Finance) and CFO of the Company oversee the entire internal control systems. To ensure state-of-the art monitoring and control system, the Company is maintaining its books of accounts through Oracle, E-Business Suit, an ERP Software. Further, the Company uses the service of an external firm of Chartered Accountant as internal auditors of your Company who submit reports on quarterly basis. The reports are placed before the Audit Committee and comments and suggestions made by the internal auditors are noted and implemented by the Company. Material development in human resources, industrial relation front: Employee relations in the organisation were cordial and peaceful. The Company consciously and constantly adhered to the policy of investing in human resources. Since inception, the Company successfully recruited the right personnel as per its designed employment plan. Trained personnel are there to manage its operation at various levels. The actual number of personnel employed by the Company as on 31st March 2009 was 228. Cautionary statement: Statements in this Management Discussion and Analysis Report may be forward looking statements within the meaning of applicable securities laws and regulations. These statements are based on certain assumptions and expectations of future events. Actual results could differ materially from those expressed or implied. Important facts that could make a difference to the Companys operations include economic conditions affecting global and domestic demand and supply, raw-material costs and availability, changes in Government regulations, tax regimes, economic developments within India and other factors such as litigation and industrial relations. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statement, on the basis of any subsequent developments, information or events. For and on behalf of the Board of Directors Place: Kolkata P K Khaitan Date : 9th May 2009 Chairman