TRANSFORMERS AND RECTIFIERS (INDIA) LIMITED ANNUAL REPORT 2008-2009 DIRECTOR'S REPORT Dear Members, Your Directors have pleasure in presenting the 15th Annual Report on the business and operations together with the Audited accounts for year ended 31st March, 2009. The performance of the Company for the year ended on March 31, 2009 is summarized below. (Rupees in Lacs) Financial Results Standalone Consolidated 2008-2009 2007-2008 2008-2009 2007-2008 Turnover 42,507.76 30,186.97 43,049.88 30,570.55 Other Income 1,040.05 576.82 1,080.81 590.77 Total Income 43,547.81 30,763.79 44.130.69 31,161.32 EBIDTA 7,507.72 6,096.51 7,861.11 6,412.87 Interest & Finance charges 691.58 765.66 747.90 810.86 Depreciation & Amortization 251.51 196.42 280.37 215.44 Profit before tax 6,564.63 5,134.43 6,832.84 5,386.57 Taxation 2,152.72 1,824.17 2.253.16 1,864.55 Net Profit after tax 4,411.91 3,310.26 4,579.68 3,522.02 Minority Interest NA NA 56.09 61.69 Net Profit after tax and minority interest 4,411.91 3,310.26 4,523.59 3,460.33 Appropriations: Proposed Dividend 516.94 258.47 516.94 269.02 Tax on Dividend 83.36 42.06 90.54 45.72 Transferred to General Reserve 500.00 350.00 506.89 357.65 Balance carried to Balance Sheet 8,472.03 5,160.42 8,781.42 5,372.20 Dividend: Your Directors recommend a dividend of 40% i.e. Rs. 4/- per Equity Share of Rs.10/- each for the year 2008-09 (Previous year 20% i.e. Rs.2/- per Equity Share), subject to approval of shareholders at the 15th Annual General Meeting. Review of Operations: For the year ended 31st March, 2009, your Company has reported consolidated turnover and net profit after minority interest, interest in associate and taxation of Rs. 43,049.88 Lacs and Rs. 4,523.59 Lacs respectively. As compared to previous year's turnover is up by 41% and net profit after taxation and minority interest is up by 30%. On standalone basis, the Company has reported 41% increase in its turnover to Rs. 42,507.76 Lacs. The net profit after taxation grew by 33% to Rs.4,411.91 Lacs. Public Issue and Utilization of Issue Proceeds: In order to set up of green-field manufacturing facility at Moraiya, near Ahmedabad for manufacturing of 220 KV class & above transformers, to part finance incremental working capital requirements and other corporate objects during December, 2007, the Company came out with an (IPO) of 29,95,000 equity shares of Rs. IOA each at a price of Rs.465/- per share aggregating to Rs.13,927 Lacs through 100% book building procedure. The IPO of the Company had received overwhelming response from the public and issue was oversubscribed by 91.31 times. The shares were listed for trading on the Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE) w.e.f. 28th December, 2007. The details of utilization of said funds are as under: (Rupees in Lacs) Particulars Projections Actual Setting up of green-field manufacturing facility at Moraiya, near Ahmedabad, Gujarat for manufacturing transformers; 6,668 5,874 Towards working capital requirement 3,540 737 Repayment of high cost debts 2,764 2,450 Issue Expenses 955 466 Total 13,927 9,527 Balance Unutilized 4,400 Balance unutilized amount has been temporarily invested in debt mutual funds. Current Status of Project: The Company's expansion project to manufacture transformers of 220 kV and above at Moraiya, District Ahmedabad has been delayed on account of delay in supply of some of the critical machineries. However, it is expected that the new factory will be inaugurated in this quarter and will commence commercial production. There will not be major cost overrun in the project cost. Plans and Prospects: The Transmission & Distribution sector of Power is growing rapidly with Indian sub-continent witnessing growth of around 9-10% in MVA in coming years. At the same time the sector will witness over capacity despite optimistic assumptions, which result in competitive pricing scenario. The Focus of the Company this year will be to start Moraiya operations which will in turn share 20% of the total sales of the Company to optimize it through strategic sourcing, more efficient sub-contracting process and improved plant efficiency. The Company plans to maintain the growth rate with some external market assumption in mind. Depository System & Registrar: Your Company's shares are tradable compulsorily in electronic form. The Company is having connectivity with both the depositories viz. National Securities Depository Limited (NSDL) and Central Depository Services (India) Ltd. (CDSL). Link Intime India Pvt. Ltd. (formerly known as Intime Spectrum Registry Ltd.) is the Registrar and Share Transfer Agent for the Company. The Members are requested to take note of the same and avails its services as and when required. Consolidated Accounts: In compliance with clause 32 and clause 50 of the Listing Agreement with the Stock Exchange and as amended pursuant to the directive of Securities and Exchange Board of India (SEBI), the Company has prepared Consolidated Financial Statements as per the Accounting Standard on Consolidated Financial Statements (AS 21) issued by the Institute of Chartered Accountants of India. The Audited Consolidated Financial Statements along with the Auditor's Report have been annexed with this Annual Report. Order Book: As on 28th April, 2009 the Company has strong order book position of Rs.45,740 Lacs. The table below indicates the division of our order book between our business segments: (Rupees in Lacs) Type of Transformer Order Book as on 28th April, 2009 % Power Transformers 31,702 69% Distribution Transformers 1,786 4% Furnace Transformers 3,239 7% Rectifier Transformers 1,568 4% Export 7,445 16% Total 45,740 100% During the last fiscal the Company has achieved export sales of Rs. 21.09 Lacs. The Company is now concentrating more export business to tap global business opportunities. 'Group' for Inter se Transfer of Shares: As required under Clause 3(1)(e) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 persons constituting 'Group' (within the meaning as defined in the Monopolies and Restrictive Trade Practice Act, 1969) for the purpose of availing exemption from applicability of the provisions of Regulation 10 to 13 of the aforesaid SEBI Regulation are given in Annexure II forms part of this Annual Report. Associates Portfolio: With a view to enhancing operations of the Company, the Company has acquired 50% shareholding in Savas Engineering Company Pvt. Ltd., during year 2008-2009. The main activities of the Company is to manufacture various equipments for transformers manufacturing like vacuum plants etc. The Company has achieved Sales of Rs. 737.07 Lacs and posted profit before tax of Rs. 53.44 Lacs during the year 2008-2009. During the year under review, the Company has acquired 19% shareholding in Benchmark HR Solutions (India) Pvt. Ltd., which is mainly engaged in HR Consultancy Services. The Company has achieved Sales of Rs. 51.20 Lacs and posted EBIDTAof Rs. 3.19 Lacs during the year 2008-2009. Fixed Deposit: The Company has neither accepted nor invited any deposit from public, within the meaning of Section 58A of the Companies Act, 1956 and Rules made thereunder. Re-constitution of Committees: During the year, Mr. Sureshchandra Agarwal was appointed as member of Audit Committee at the Board meeting held on 22nd October, 2009. Mr. Bhaskar Sen ceased to be member in the Management Committee w.e.f. 1st November, 2009 Directors: During the year under review, Mr. Bhaskar Sen cease to be Joint Managing Director w.e.f. 1st November, 2008, However he continue to be Director designated as Non-Executive and Non-independent Director of the Company. Pursuant to the provisions of Section 256 of the Companies Act, 1956 and Articles of Association of the Company, Mr. Bhakar Sen and Mr. Sureshchandra Agarwal, Directors of the Company who retires by rotation at the ensuing Annual General Meeting and being eligible, offers themselves for re-appointment. Details of the Directors seeking re-appointment as required under Clause 49 (VI) of the Listing Agreements entered into with the Stock Exchanges are provided in the Notice forming part of this Annual Report. None of the Directors of the Company is disqualified for being appointed as Director as specified in Section 274(1)(g) of the Companies Act, 1956. The Company has revised the terms and conditions of remuneration of Mrs. Karuna Mamtora, Executive Director and Mr. Satyen Mamtora, Joint Managing Director of the Company, w.e.f, 1st April, 2009, at its Board Meeting held on 28th April, 2009 subject to the approval of the members in general meeting. Directors' Responsibility Statement: Pursuant to the requirements of Section 217(2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, the Directors confirm that: (a) In preparation of annual accounts for the year ended March 31, 2009, the applicable accounting standards have been followed and that no material departures have been made from the same; (b) The Directors have selected such accounting policies and applied them consistently and made judgments 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 and of the profit or loss of the Company for that year; (c) The Directors have taken proper and sufficient care 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; (d) The Directors have prepared the annual accounts for the year ended March 31, 2009 ongoing concern basis. Insurance: Assets of your Company are adequately insured against various perils. Corporate Governance: As stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges, a separate report on 'Corporate Governance' as well as 'Management Discussion and Analysis' confirming compliance, is set out in the Annexure forming part of this report. A Certificate from Practicing Company Secretary regarding compliance with corporate governance norms stipulated in Clause 49 of the Listing Agreement, is annexed to the report on Corporate Governance. Subsidiary Companies: The Company has two subsidiaries namely Transweld Mechanical Engineering Works Limited (wholly owned subsidiary) and Transpares Limited (51% holding). A statement pursuant to Section 212 of the Companies Act, 1956 is attached to the Accounts. In terms of exemption received from Ministry of Corporate Affairs vide letter No.47/191/2009-CL-III dated 19.2.2009, under section 212 (8) of the Companies Act, 1956, the Audited Balance Sheet, Profit and Loss Account, Report of the Board of Directors and Auditors of our subsidiaries have not been attached with the Balance Sheet of the Company. These documents will be made available upon request by any member of the Company interested in obtaining the same. However as directed by Central Government, the brief financial details of the subsidiaries have been furnished under 'Financial details of Subsidiary Companies' forming part of the Annual Report. Further, pursuant to Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company includes financial information of its subsidiaries. These documents will also be available for inspection during business hours at our registered office. Auditors: The Statutory Auditors of the Company, M/s. C.C. Chokshi & Co., Chartered Accountants, Ahmedabad, will retire at conclusion of ensuing Annual General Meeting and being eligible, have offered themselves for re-appointment. The Company has received a written certificate from Auditors stating their appointment, if made, would be within the prescribed limit under Section 224(1B) of the Companies Act, 1956. Auditors Report: The Auditors' Report on the accounts of the Company for the accounting year ended 31st March, 2009 is self explanatory and do not call for further explanations or comments that may be treated as adequate compliance of Section 217(3) of the Companies Act, 1956. Personnel: The relations with the employees have been cordial throughout the year. Your Directors sincerely acknowledge the exemplary dedication of all its employees at all levels which contributed to the improved performance. In accordance with the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975, the particulars of Employees of the Company are furnished in an Annexure forming part of this Report. Particulars required to be furnished by the Companies (Disclosure of particulars in the report of the Board of Directors) Rule, 1988: The particulars as prescribed under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosures of the Particulars in Report of the Board of Directors) Rules, 1988 relating to conservation of energy and technology absorption are set out in Annexure to this Report. Corporate Social Responsibility: The Company is contributing to sustainable development by its economic activities combined with the fulfillment of its social responsibilities relating to the education, health, safety and environment aspects. Acknowledgement: Your Directors place on record their gratitude for the overwhelming support and assistance received from various regulatory and government authorities. Your Directors would like to express and appreciate co-operation received from investors, customers, business associates, bankers, vendors etc. Your Directors also acknowledge the hard work and dedicated efforts put in by the employees of die Company in carrying forward the Company's goal and to look forward to their continued contribution in building Company' rapid growth. By Order of the Board of Directors Place: Ahmedabad Jitendra U. Mamtora Date : 28th April, 2009 Chairman & Managing Director Annexure I to the Directors' Report: Information as per Section 217 (1)(e) read with Company's (Disclosures of particulars In the report of Board of Directors) Rules, 1988 and forming part of the Directors Report for the year ended on 31st March, 2009. 1. Conservation of Energy:- a. Energy conservation measures taken: The Company has an ongoing study to identify and implement energy saving system to reduce energy consumption and cost of production. All new Equipment & Machinery is installed based upon optimum utilisation of energy. b. Additional investment and proposals, if any being implemented for reduction of energy consumption of energy : Nil. Impact of measure at (a) & (b) above for reduction of energy consumption and consequent impact on the production of goods: Nil. Details of total & per unit consumption of energy are as follows. (Rupees in Lacs) Particulars 2008-2009 2007-2008 Electricity: (a) Purchased Units (Kwh) 2,269,314 Units 1,758,655 Units Total Amount (Rs.) Rs. 129.37 Rs. 83.96 Rate / Unit (Rs.) Rs. 5.70 / Unit Rs. 4.77 / Unit 2. Technology Absorption:- The company has not taken any technology in particular or entered into any technology agreement during the period hence the information required as per Form B is not applicable to the Company. 3. Foreign Exchange Earnings & Outgo:- (Rupees in Lacs) Particulars 2008-2009 2007-2008 Earnings 1,798.45 1,399.75 Outgo: Foreign Travel Expenses 49.54 51.95 Import 4,022.45 800.77 Annexure II forming part of Directors Report: The following is the list of persons (in alphabetical order) constituting 'Group' (within the meaning as defined in the Monopolistic and Restrictive Trade Practice Act, 1969) for the purpose of availing exemption from applicability of the provisions of Regulations 10 to 12 of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 ('the said Regulations'), as provided in Clause 3(e) of the said Regulations: Particulars Particulars Aakanksha S. Mamtora Master Pratham Allied Electrical Industries Michael Homawalla Asha Mamtora Ms. Vritika Kiri Ashish Kiri Pramila Mamtora Benchmark HR Solutions (India) Pvt. Ltd. Rajendra Shah Bhaskar Sen Ramesh Mamtora Bipin Mamtora Satyen J. Mamtora Dilip Mamtora Savas Engineering Company Pvt. Ltd. Harish Rangwala Sureshchandra Agarwal Janki Mamtora Transpares Ltd. Jitendra Mamtora HUF Transpower Jitendra U Mamtora Transweld Mechanical Engineering Works Ltd. Karuna J. Mamtora Vandana Mamtora Master Prannay Date : 28th April, 2009 For and on behalf of the Board Place: Ahmedabad Mr. Jitendra U. Mamtora Chairman & Managing Director Mr. Satyen J. Mamtora Joint Managing Director Mr. Tushar Shah Company Secretary MANAGEMENT DISCUSSION AND ANALYSIS THE GLOBAL ECONOMIC SCENARIO: The year 2008 must be a bewildering experience for economists as well as social scientists. The month of October seems to have caused industrial output in most emerging economies to turn negative, as if orchestrated by a common psychology and sentiment of fear. This would certainly be recorded as a rare occurrence in the history of economic globalization. The International Monetary Fund (IMF) has tried to make sense of what had been going on by analyzing many recessions in the last 50 years. It has looked at all recessions between 1960 and 2007 and found that these last, on an average, 12 months. The shortest of these recessions was six month long and the longest over three years. Typically, the peak to trough GDP loss in these recessions has been 2%. However, these recessions were not accompanied by a combination of credit freeze, housing and equity busts. The IMF believes that recession accompanied by credit freeze and housing/ equity busts could see GDP losses which are two to three times greater. This means many slowing economies across the world, which has experienced a cocktail of banking crises, equity and housing bust, will suffer much more and could lose 4-6% output. In some sense, this is already happening in the United States, the epicentre of all the economic maladies. DOES INDIA FALL IN THIS CATEGORY? Whereas it may not possible for India to completely de-couple itself so as to avoid the debris released by the falling western economies, India may still manage to buck the global recession largely based on the buying power of the bottom 80% of the population, which accounts for 67% of the total consumption. Further, India has not had banking crisis and a widespread housing bust. Of course, equities in India have fallen considerably from its peak, like elsewhere in the world. It can be reasonably expected that once the global fear factor wanes, the growth recession in India could get limited to about 2% before the economy bounces back to its trend GDP growth rate of 8%. However, it presupposes that India will get a stable government after the general election being held in 2009. Analysis shows that while companies have been witnessing deceleration in bottomlines since September 2008 quarter, the toplines were growing in double digits. This reflected that demand was intact, albeit at lower realizations. During March Quarter this solace seems to have disappeared. The likelihood of marginal revenue growth raises questions about demand traction in the economy. Given the highly uncertain times, it would be difficult to provide a firm perspective about India Inc's future performance. It is very likely that the prevailing somber mood may take a few more quarters to change for the better. But the continued momentum in government infrastructure spending and a better political scene post general elections may provide some clarity about times to come. POWER SECTOR: The Government has targeted capacity addition of 78,500 raw during the 14th plan (07-08 / 11-12). While equipment orders for 60,000 raw capacity have been placed, 40,000 mw capacity equivalent to Rs. 1,60,000 Crore is awaiting financial closure as funds have dried up on the back of global economic slow down. A planning commission study has put a fund gap of over Rs. 4.5 lakh Crore for the sector after exploring all avenues of debt and equity. This has led to the government exploring ways to enhance funding for power projects. The Reserve Bank of India may soon relax the prudential norms for power sector finance companies such as Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) to enable them to lend more. Under RBI's prudential norms, NBFCs like PFC and REC are required to maintain a capital-to-risk weighted asset ratio (CRAR) of 12%. It is expected that this may be brought down to 9% for Government-controlled power sector NBFCs. Liquidity would also be ensured for the power sector with banks raising their exposure caps for the power sector NBFCs'. The current prudential norms restrict banks to lend 20% and 50% of the capital funds to single borrower and group borrowers (including for REC and PFC) respectively. These limits may be raised to 30% and 70% if RBI agrees to power ministry's proposal. The Government may also allow state-owned Life Insurance Corporation of India Limited (LIC), the country's largest financial institution, to fund individual power projects beyond the existing 10% exposure norm. If accepted, the move will provide a major relief to the Power sector that is awaiting financial closure for generation projects worth 40,000 mw. In 07- 08 the first year of the 11th Five year Plan had seen total capacity addition of 9263 mw. The target addition plan for 08-09 is 11,061 mw; the actual addition during 08-09 is not yet known. The average power deficit is placed at 10.1 percent, while the deficit vis-a-vis peak demand is around 14.6%. It is apprehended that there will be again a shortfall in capacity addition during 08-09, as had been during 07-08. This obviously will adversely impact transformer demand as also transmission planning though with a phase lag. It is projected that by 2010, India shall have a market worth 5.5 billion EUROs for power related projects, Transmission projects and Services, Power Grid Corporation has Rs. 55,000 Crore investment plan till 2012. It is arranging to borrow $ 2 billion (about Rs. 10,000 Crore) from World Bank and Assian Development Bank (A0B) to part finance its plan. It is expected that Power Grid Corporation will get $ 1 billion from World Bank by June 2009 & $ 1 bilion from ADB by 2010-11. Meanwhile, the Government has allocated Rs. 50,000 Crore for modernizing the power sector, and Rs. 10,000 Crore of this will be spent on IT. The IT projects will be in three area - Consulting, Implementation of IT systems and Training. DRIVERS OF TRANSFORMER INDUSTRY: The demand drivers for the Transformers industry are: 1) Generation capacity being added. 2) Strengthening of Transmission network / New Transmission corridors. 3) Ultra Mega Power Projects (UMPP). 4) Increasing penetration in export Market. 5) Replacement Demand. 6) Power Distribution reforms like 'Restructured Accelerated Power Development & Reforms Programme' (R-APDRP) and 'Rajiv Gandhi Grameen Vidhyutikaran Yojana' (RGGVY). THREATS: The Government of India has revised generation capacity addition plan to 90,000 mw for the 11th Plan. The break-up is as follows; Central Sector - 39,865 mw, State Sector - 27,952 mw, Private Sector - 22,183 mw. The entire upward revision is attributable to private sector only, which has gone up from 10,760 mw to 22,183 mw. However, from the trend of slippages in the first two years, it is apprehended that by the end of the 11th plan, the capacity addition will be unlikely to exceed the bandwidth of 55,000 - 60,000 mw. This will adversely impact transformer demand. Out of the 9 Planned UMPPs totaling 36,000 mw, only 4 nos. have been allotted to private players (Mundra to Tata Power, Sasan - Krishna Patnam - Tilaya to Reliance Power). These projects are expected to be commissioned only by the 12th Plan, and as such, no transformer demand for these can arise during 11th Plan. RPL has no capacity that is operational. We must not forget that a UMPP is of unimaginable scale, to be built with super- critical technology that is entirely new to India. It involves meticulous planning and massive resources. OPPORTUNITIES: The replacement demand should be healthy, keeping in view the total installed transformer MVA estimated at 12,00,000 MVA and that shelf life around 25 years. This transformers commissioned in 1980-85 are likely to be replaced in near futures which implies a replacement demand to the tune of 20,000 - 25,000 MVA per annum. Indian products are acknowledged to be technically at par with leading international companies, though aesthetically these products are conceived to be inferior. India is exporting transformers to around 50 countries including USA, Canada, Europe, South Africa, Cyprus, Syria, Iraq & other middle east & Far East countries. However exports have always been low on priority till recently, which trend is changing now as domestic manufacturers have created additional capacity to cater to exports after having serviced domestic demands. Exports during FY09 are likely to exceed 15,000 MVA (about 10% of expected production). We can reasonably expect this to grow by a healthy percentage every year. Summarizing the situation, and considering 10 MVA transformer demand / MW of generation (this is the current trend going), we can arrive at yearly estimate of transformer demand during 11th Plan: i) Attributable to average generation addition = 1,10,000 MVA ii) Yearly Replacement demand (Average) = 22,000 MVA iii) Exports (Average) = 18,000 MVA This totals to 1,50,000 per annum. The demand bandwidth can be taken as 1,50,000 - 1,60,000 MVA/ annum. However, against the backdrop of the global recession, the full impact of which is yet to unfold, and given the highly uncertain liquidity position, it is apprehended that at least during FY 09-10, margins are likely to be under pressure to the extent of 150 - 250 bps. OUTLOOK OF TRIL: Your Company is having a healthy order book of around 457 Crore as at end April, 2009. Further, the new Moraiya Plant is expected to be operational by end of Q1 and sales should be effected commencing Q2. This should contribute to volume growth, at least in the existing range of products during 09-10. Your company should start moving up the value chain starting Q4 by executing orders in 400 kv segment. Contrary to earlier trend, the sales execution pattern may be more skewed in favor of SEBs and Utilities, keeping in view some uncertainties with Industry orders. Thus, while the scenario for India Inc may not look very bright at present. We, at TRIL, do see some bright bulbs on the chandelier. We do not want our company to be an organization whose past is brighter than its future. MAJOR ISSUES & CONCERNS: 1. Dependence on government plans & funds. 2. Any possible sensitivity of private participation in transmission projects. 3. Dependence on imported CRGO, which constitutes bulk cost. 4. Volatility of copper prices. 5. High debtor days in government projects. 6. Delay in implementation of projects. 7. Slowdown in international markets. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY: The Company has a well established system of internal controls and Internal Audit commensurate with its size and complexity of business which monitor efficiency of operations and compliance with relevant laws and regulations. Delegation of power and responsibility for accounting has been issued to ensure Unifrom compliance. Internal audits are conducted by experience firm of chartered accountants in close co-ordination with company's finance department. The findings of the Audit team are discussed internally as well as in the Audit Committee deliberations once in a quarter. The Company is continuously upgrading its internal control system by adding better process control, various audit trails and use of external management assurance services. MAJOR DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT: This year your Company has aligned Organization goals to Departmental goals & Individual goals through Balance Score Card approach. Performance incentive mechanism is extended to staff members apart from Senior Management & Blue collars who were already a part of it. TRIL participated in Geat Place to work and score 77% engagement level. Our productivity levels have improved by 13% over last year giving mor MVA per employee. TRIL has started TQM program with first wave on awareness and focus on Plant cleanliness. 350 man hrs training has been given till date to plant personnel. The company has launched a new suggestion scheme TARIL IDEA BANK to encourage new ideas on focused on plant improvement. FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE: Comparison of various items between Financial Statements For Fiscal Year 2009 and Fiscal Year 2008: (Rupees in Lacs) PARTICULARS Standalone FY 2009 FY 2008 Rs. % Rs. % Net Sales 42,124.04 96.73% 30,044.44 97.66% Trading Sales 23.00 0.05% - - Service Income 360.72 0.83% 142.53 0.46% Other Income 1,040.05 2.39% 576.82 1.87% Total Income 43,547.81 100% 30,763.79 100.00% Raw Material Consumed 29,750.83 68.32% 22,884.80 74.39% Trading Purchases 30.18 0.07% - Manufacturing Expenses 826.75 1.90% 568.92 1.85% Employee Cost 868.01 1.99% 670.42 2.18% Selling, Distribution & Administration Expenses 3,432.51 7.885% 2,378.28 7.73% Decrease/(Increase) in Stock 1,131.81 2.60% (1,835.14) -5.97% Total Expenses 36,040.09 82.76% 24367.28 80.18% EBIDTA 7,507.72 7.24% 6,096.51 19.82% Finance Charge 691.58 1.59% 765.66 2.49% Depreciation 251.51 0.58% 196.42 0.64% PBT 6,564.63 5.07% 5,134.43 16.69% Taxation 2,152.72 4.94% 1,824.17 5.93% Minority Interest PAT 4,411.91 10.13% 3,310.26 10.76% PARTICULARS Standalone Consolidated FY 2009 FY 2008 Rs. % Rs. % Net Sales 42,666.15 96.68% 30,428.02 97.65% Trading Sales 23.00 0.05% - - Service Income 360.73 0.82% 142.53 0.46% Other Income 1,080.81 2.45% 590.77 1.90% Total Income 44,130.69 100% 31,161.32 100.00% Raw Material Consumed 29,486.29 66.82% 22,838.18 73.29% Trading Purchases 30.18 0.07% - Manufacturing Expenses 1,191.37 2.70% 746.50 2.40% Employee Cost 899.41 2.04% 693.69 2.23% Selling, Distribution & Administration Expenses 3,512.89 7.96% 2,446.27 7.85% Decrease/(Increase) in Stock 1,149.44 2.60% (1,976.19) -6.34% Total Expenses 36,269.58 82.19% 24,748.45 79.42% EBIDTA 7,861.11 17.81% 6,412.87 20.58% Finance Charge 747.90 1.69% 810.86 2.60% Depreciation 280.37 0.64% 215.44 0.69% PBT 6,832.84 15.48% 5,386.57 17.29% Taxation 2,253.16 5.11% 1,864.55 5.98% Minority Interest 56.09 0.13% 61.69 0.20% PAT 4,523.59 10.25% 3,460.33 11.10% STANDALONE BASIS: Total income of the Company has stepped up from Rs. 30,763.79 Lacs in FY 2008 to Rs. 43,547.81 in FY 2009, thus there is increase of 41.56% in the total income of the Company. Profit Before Taxation increased from Rs. 5,134.43 Lacs during FY 2008 to Rs. 6,564.63 Lacs during FY 2009. Profit after tax for FY 2009 stood at Rs. 4,411.91 Lacs compared to Rs. 3,310.26 Lacs during FY 2008. CONSOLIDATED: Total income of the Company has stepped up from Rs. 31,161.32 Lacs in FY 2008 to Rs. 44,130.69 Lacs in FY 2009, thus there is increase of 41.62% in the total income of the Company. Profit Before Taxation increased from Rs. 5,386.57 Lacs during FY 2008 to Rs. 6,832.84 Lacs during FY 2009. Profit after tax for FY 2009 stood at Rs. 4,523.59 Lacs compared to Rs. 3,460.33 Lacs during FY 2008. CAVEAT: This section of the Annual Report has been included in adherence to the spirit enunciated in the Code of Corporate Governance approved by the Securities and Exchange Board of India. Shareholders and Readers are cautioned that in the case of data and information external to the company, though the same are based on sources believed to be reliable, no representation is made on its accuracy or comprehensiveness. Further, though utmost care has been taken to ensure that the opinions expressed by the management herein contain its perceptions on most of the important trends having a material impact on the Company's operations, no representation is made that the following presents an exhaustive coverage on and of all issues related to die same. The opinions expressed by the management may contain certain forward-looking statements in the current scenario, which is extremely dynamic, and increasingly fraught with risk and uncertainties. Actual results, performances, achievements or sequence of events may be materially different from the views expressed herein. Readers are hence cautioned not to place undue reliance on these statements, and are advised to conduct their own investigation and analysis of the information contained or referred to in this section before taking any action with regard to their own specific objectives. Further, the discussion following herein reflects the perceptions on major issues as on date and the opinions expressed here are subject to change without notice. The Company undertakes no obligation to publicly update or revise any of the opinions or forward-looking statements expressed in this report, consequent to new information, future events, or otherwise.