Sulzer India Ltd Management Discussions

SULZER INDIA LIMITED ANNUAL REPORT 2010-2011 MANAGEMENT DISCUSSION AND ANALYSIS FINANCIAL RESULTS Rs. in Thousands Fifteen Year ended months ended December March 31, 2011 31, 2009 1. Total Income 1,845,310 1,691,104 2. Profit before Taxation 114,829 452,429 3. Provision for Taxation - Current Tax including Fringe Benefit Tax 53,124 144,237 - Deferred Tax (9,081) 13,217 4. Profit after Taxation 70,786 294,975 5. Surplus brought forward from previous year 475,214 270,083 6. Amount available for appropriation 546,000 565,058 APPROPRIATIONS 7. Proposed Final Dividend - 51,750 8. Tax on Proposed Dividend - 8,596 9. Transfer to General Reserve - 29,498 10. Surplus carried to Balance Sheet 546,000 475,214 546,000 565,058 OPERATIONS The overall adverse business climate affected your Company and the total income of the Company for fifteen months registered a growth of 9% over previous twelve months. While the local market conditions were stable, the export market dropped significantly due to continuing difficult market conditions overseas. Falling sales volumes, depletion of margins due to competitive price bids, volatile material prices and implementation cost related to ERP system, i.e. SAP, led to decreased profitability for the given financial period. The Company has initiated program to add some more products to its portfolio and also Lean management system which is expected to improve operational excellence to ensure efficient and reliable processes. The Company has successfully implemented SAP global template on June 01, 2011 with due modifications to suit local operations including legal and taxation framework as a part of Sulzer Chemtech global business applications & IT roadmap. This will help the Company in adopting global businesses processes & ultimately would improve our efficiencies in all operating areas leading towards operational excellence. FUTURE OUTLOOK Demand in hydrocarbon industry stabilized internationally and some large projects are already in pipe line. The hydrocarbon processing industry is projected to recover further although at a slow pace. While the Indian market is showing signs of recovery with an overall upbeat market mode, the big projects, however, are expected to come up only by end of year 2011. The order book of the Company stands at Rs. 11,262 Lacs as of March 31, 2011.