Corporate Profile

The significant achievement during the year under review has been drastic reduction in overhead expenses which declined
from Rs. 3944.77 lacs in the year 2005-06 to Rs. 2798.45 lacs in the year 2006-07, i.e. by Rs. 1146.32 lacs – 29.06%. Yet another achievement is improvement in value addition by 5.06% when compared to the previous year.

However, due to reasons beyond control of the management, the top-line could not be maintained, as evident from the quantity sold during the year under review at 28034 MT against 34422 MT in the previous year. The Company should be able to regain its market share in the current year by focusing on high growth market segments, viz. automobiles and telecommunication. This is reflected from the fact that 5593 MT could be sold in 2 months in the current year showing increase by 5.51% over the previous year. Inspite of not so impressive sales performance, bottom line could almost be protected as earning before interest, tax and depreciation (EBITD) has been Rs. 3411.64 lacs when compared to Rs. 3407.96 lacs in the previous year. Likewise, profit before tax (PBT) at Rs. 1488.64 lacs when compared to Rs. 1546.71 lacs in the previous year and profit after tax (PAT- without considering deferred tax) stood at Rs. 989.67 lacs when compared to Rs. 1054.83 lacs in the previous year. However, after considering deferred tax (provision with no cash outflow) the PAT in the year under review is Rs. 525.16 lacs against Rs. 946.51 lacs in the previous year. In the year under review there was an extra ordinary income of Rs. 269.41 lacs on sale of land and building of Vadodara unit, which in the comparative data of EBITD reflected hereinabove, has not been included.

As reported in the previous year, the Company was involved in intensive study for firming up the expansion plan with novel scheme of establishing a co-generation plant, to achieve globally cost competitive structure with minimal utility generation cost. Now, since the study has been completed, a plan has been firmed up to install requisite production facility adopting state of the art technology viz. (1) agglomeration process for manufacture of PB Latex, (2) HRG with high percentage of grafted rubber content, (3) high capacity SAN plant (6 TPH) on adopting full liquid reactor systemwith catalyst process involving minimal energy consumption, (4) dewatering compounding system to use wet HRG and dry SAN, and (5) co-generation plant to produce electricity and steam for the process and chilled water as well as chilled brine production. On implementation of the expansion program to establish 200 KTPA ABS plant in the 3rd quarter of 2009 -10, the Company would be in a position to achieve cost and quality leadership in the domestic market and become internationally competitive player. Thereafter, your company will diversify the existing HRG plant at Satnoor (M.P) to manufacture Styrene Butadiene latex and other similar lattices catering to various industries viz. paper, textile and construction etc. Considering all these the total production facility of your Company by the year 2010 will be (a) 200 KTPA ABS, (b) 35 KLPA SB Latex, and (3) 7 KTPA saleable SAN. Your Company is endeavoring to work out an appropriate financing strategy for the aforesaid expansion plan.