Summer Project Report on

Financial assets management

Under the guidance of Vivek Saxen , M ana ger Account, IGL Go rakhpur Submitted in the partial fulfillment of the requirement for the award of degree of Master of Business Administration

SCIENCE AND TECHNOLOGY ENTERPRENEURS PARK HARCOURT BUTLER TECHNOLOGICAL INSTITUTE, NAWABGANJ, KANPUR-208002

By: Pankaj priydarshi

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INDEX TOPICS PAGE NO.

1. EXECUTIVE SUMMARY. 5 2. OBJECTIVE. 5 3. INTRODUCTION 6 Overview of Indian retail industry.. 6 Future group. 12 Big Bazaar. 15

4. MARKETING. 20 5. LUCKNOW. 21 Overview of city background.. 21 Demographics 22

6. COMPETITOR ANALYSIS. 23 7. CATCHMENT ANALYSIS. 29 8. CONDUCTING IN STORE ACTIVITIES..40 Ms. Kitchen smart contest. Food-Food channel cookery competition. Nestle (MAGGI) promotional activity. L.G and Electrolux food garnishing competition activity.

9. SWOT ANALYSIS OF BIG BAZAAR. 70 10. CONCLUSION.. 71 11. SUGGETIONS FROM CUSTOMER 72 12. RECOMMENDATIONS.. 73 13. BIBLIOGRAPHY. 74

DECLARATION

I Pankaj Kumar Priyadrshi student of STEP- H.B.T.I of MBA 2nd year, hence by declare that the summer training project report having the title financial asset management of India glycol ltd. If the outcome of my own work & effort and all presented Information is correct to the best of my knowledge. We have tried to include every valid information, which we have gathered from the primary and secondary sources. Thanking You Date: Priydarshi Place: Kanpur MBA I Year (II Semester) Roll No. 1118170064
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Pankaj

Kumar

ACKNOWLEDGEMENT
It was a great privilege and good practical experience to do an industrial training at INDIA GLYCOL LTD., GORAKHPUR. I woul d like \to exp ress my d e e p s e n s e o f g r a t i t u d e t o t h e s t a f f o f financial Department of IGL ,Gorakhpur for their timely support during my training period. Th e gu idance, h elp and co -operation of Viv ek Sa xena , M ana ger Account, IGL Go rakhpur is being a constant source of motivation and giving knowledge about financial activities in an Organization. I would also like to thank Ms. Reetu Singh, Prof. in MBA for her guidance, critical comments, inspirational discussion and helpful support to me in completing this report. I also express my sincere thanks to Mr. R.K. Trivedi, Director STEP- H.B.T.I. f o r p rov id ing us g reat learning environment throughout course duration. I also express my thanks to my parents and family members those always ready to support me morally and give me motivational power to do th is wo rk effectiv ely. I also th anks to my f riend s, wh o put th e ger ms of id ea related to this project and extended their continued inspiration. This training was a good exposure that will definitely help me in my professional career.

OBJECTIVES OF THE STUDY: To discard or remove those Fixed Assets from the Fixed Asset Register, which are not in active use or which are idle.

To discarding or removing those Fixed Assets from the Fixed Asset Register, which are stated at the lower of their net book value.

To check whether the method and the rates of depreciation for the Fixed Assets is appropriate

To ensure Fixed Assets availability where and when needed.

To track fixed assets for the purposes of financial accounting, preventive maintenance, and theft deterrence

PURPOSE OF THE PROJECT: To review the assets which can be physically disposed off in the fiscal year 2010 - 11. To study the accounting of Fixed Assets as per AS- 10, Accounting of the Depreciation on FixedAssets AS- 6 and the accounting of Impairment losses as per AS-28. To check whether the method of depreciation for the FIXED ASSETS is appropriate as per theCompanies Act,1956. To review the Fixed Asset Register and to check for any errors in the register .

To provide the information regarding the procedure of disposal of particular fixed assets and giveinformation about the different methods through which disposal can be done. For Example: sale by public tender, sale though company agent, donating, etc

EXECUTIVE SUMMARY
Playing every stroke of excellence India Glycol Ltd., Gorakhpur, Has set a strong foothold in the chemical industry. With the assistance of a well qualified team, an d b rou ght a superlativ e ran ge of Indu strial Ino rg an ic Che micals and laboratory chemicals etc. Today, IGL is well reckoned as one of the overriding Labo rato ry Ch emic als Manuf actu rers and as th e mo s t p ree min en t Indu str ial Chemical exporter based in India. This report will tell you about how A idle stone could be become a weapon for person who knows its value that mean show chemical transformed into a chemical industry and after a decade it become a part of economic growth of the county. The summer training report entitled financial management of India Glycol Limited asset Financial

Department in India Glycol Limited, Gorakhpur, Uttar Pradesh shows the path of success and building a great valuable product for the development of an industry as well as the presence in the global market. This report provides all the information regarding H o w a n a d v i c e became (India Glycol Ltd.) life of thousands of people. Status of India Glycol Ltd. in India and global market which produce different chemical products indifferent industries. The report also highlighted how many products exported globally by the firm and their presence in the global market as a strong chemical player.

Company Profile
India Glycols Limited is one of the leading manufactures of Glycols, Ethoxylates & PEGs, Performance Chemicals, Glycol Ether & Acetates, Guar Gum and Potable Alcohol. India Glycols Ltd is the First company in the world to produce Ethylene Oxide (EO) / Mono Ethylene Glycol (MEG) from renewable agro route based on molasses, since 1989. The company is the Leading manufacturers of Glycols, Ethoxylates, Performance Chemicals, Glycol Ethers & Acetates, Guar Gum and Potable Alcohol. The company has more than 1,000 customers in various such as Textile, Agrochemical, Oil & Gas, Personal Care, Pharmaceuticals, Brake Fluids, Detergent, Emulsion Polymerisation & paints etc. India Glycols (IGL) was promoted by Vam Organics to manufacture 20,000 tpa of monoethylene glycol (MEG) at Kashipur, UP. It produces diethylene glycol (DEG) and triethylene glycol (TEG) as by-products and ethylene oxide (EO) as an intermediary. The company, controlled by Delhi based Bhartia family was incorporated as UP Glycols, a public limited company and subsequently the name was changed to India Glycols with effect from Sept.'86. The company has its plant located at Kashipur in Uttranchal. The company has one Subsidiary namely IGL Finance Ltd. The companies another subsidiary CDL International ltd is to be amalgamated with the company as per Court orders. The company had technical tie-up with Scientific Design
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Company, US, for the know-how to convert ethanol into MEG. Further it tied up with Sanyo Chemical Industries Ltd. of Japan during 1995-96 to secure world class technology in the field of Industrial Surfactants covering major industries like Textiles, Toiletries etc. The company diversified into the manufacture of ethylene oxide condensates/derivatives and its new plant for this at a cost of Rs.40 Crores has commenced commercial production in Feb.'95. The Company set up an 100% Export Oriented Unit for manufacture of Guar Gum Powder and its derivatives and it has been registered as a 100% EOU. The company has also successfully commissioned speciality surfactants project in collaboration with Sanyo Chemical Industries Ltd in September 1997. During 2000-2001, CDS International Ltd became a subsidiary of the company. During 2001-02 the expansion of EO/MEG was completed and the production for the expanded capacity has also been commenced. In February 2005, the company commissioned enhanced capacity of MEG. The company undertook a scheme to produce RAB (concentrated sugarcane Juice) to product ethanol to supplement feed stock requirement for expanded capacity of MEG. The unit will be fully completed and commissioned by December 2005. The Hon'ble High Court of Uttaranchal vide their order dated July 15, 2004 and Hon'ble High Court of Karnataka vide their order dated September 12, 2005 amended on January 30, 2006 have approved the scheme of amalgamation of M/s. CDS International Limited (100% subsidiary of
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India Glycols Limited) with India Glycols Limited. During 2005-2006, the company commenced production at the newly set up facility to manufacture RAB on 1st February 1, 2006. Production at the new industrial gases plant commenced in January, 2006 and capacity of Oxygen, Nitrogen, Argon are installed with 10400 NM3/Hr, 2828 NM3/Hr, 232 NM3/Hr. A new distillery plant has been set up with an annual production capacity of 66,000 KBL, at Gorakhpur in Eastern UP. The plant has been commissioned in March 2006. The company is enhancing the existing capacity of Glycol Ether division from 17000 MT to 44000 MT. Glycol Ether Acetate capacity is also increased to 18000 MT. The company is diversifying in to the field of herbal farming and for the purpose herbal farms have been leased from Uttaranchal State Government. The company is also setting up Herbal Extraction unit under Foreign Technology Collaboration. The company is also adding

up a Chiller Plant and carrying out modification to use methane blast in place of nitrogen blast. The company is setting up a Turbo Generator of 12 MW capacity.

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Key Information Key Executive

U.S.Bhartia__________________ Chairman & Managing Director

Board of Directors
Jayshree Bhartia______________ Director Pradip Kumar Khaitan__________ Director Jitender Balakrishnan__________ Director Ravi Jhunjhunwala____________ Director Jagmohan N. Kejriwal__________Director Autar Krishna ________________Director R.C. Mishra __________________Director M.K. Rao ____________________Executive Director

Audit Committee
R.C. Misra __________________Chairman Jagmohan N. Kejriwal Autar Krishna

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Investors Grievance Committee

R.C. Misra __________________Chairman U.S. Bhartia Autar Krishna Jagmohan N. Kejriwal

Chief Executive Officer

Rakesh Bhartia

Company Secretary
Lalit Kumar Sharma

Auditors

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INTRODUCTION GLOBAL BASE CHEMICAL INDUSTRIES HISTORY

Chemical industries can be traced back to Middle Eastern artisans, who refined alkali and limestone for the production of glass as early as 7,000 BC, to the Phoenicians w h o p r o d u c e d s o a p i n t h e 6 t h c e n t . BC, and to the Chinese who developed b l a c k powder , a primitive explosive around the 10th cent. AD In the Middle Ages, alchemists produced small amounts of chemicals and by 1635 the Pilgrims in Massachusetts were producing saltpeter for gunpowder and chemicals for tanning. But, large-scale chemical industries first developed in 19th cent. In 1823, British entrepreneur James Muspratt started mass producing soda ash (needed for soap and glass) using a process developed by Nicolas Leblanc in 1790. Advances inorganic chemistry in the last half of the 19thcent. allowed companies to produce synthetic
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dyes from coal tar for the textile industry as early as the 1850s.In the 1890s, German companies began mass producing sulfuric acid and, at about the same time, chemical companies began using the electrolytic method, which required large amounts of electricity and salt, to create caustic soda and chlorine. Man-made fibers changed the textile industry when rayon (made from wood fibers) was introduced in 1914; the introduction of synthetic fertilizers by the American Cyanamid Company in 1909 led to a green revolution in agriculture that dramatically improved crop yields. Advances in the manufacture of plastics led to the invention of celluloid in1869 and the creation of such products as nylon by Du Pont in 1928. Research inorganic chemistry in the 1910s allowed companies in the 1920s and 30s to begin producing chemicals for oil. Today, petrochemicals made from oil are the industry's largest sector. Synthetic rubber came into
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existence during World War II, when the war cut off supplies of rubber from Asia. Since the 1950s growing concern about toxic waste produced by chemical industries has led to increased government regulation and the establishment of the Environmental Protection Agency (1972). The leakage of toxic chemicals at the Union carbide plant in Bhopal India (1984) was the worst industrial disaster in history and heightened public concern for lax environmental regulation for chemical companies in developing countries.

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INDIAN CHEMICAL INDUSTRIES

The chemical industries is one of the earliest domestic industries in India contributing considerably to both the industrial as well as economic growth of the country since it achieved independence in 1947.the industries presently produced around 72000 commercial products which range from toiletries and cosmetics, to plastics and pesticides. The wide and diverse range of products can be broken down into several categories which include inorganic and organic (commodities) chemicals, plastics and petrochemicals drugs and pharmaceuticals, dyes and pigments, pesticides and agrochemicals, fine and specialty chemicals and fertilizers. With primary focus on modernization, the Govt. of India taken has active role in promoting and the growth and development of Indian domestic chemical industries. The Department of Chemical and Petro-chemicals that has been the part Ministry Of Chemicals and Fertilizers since 1991, is responsible for making policy, planning, development and regulation of the industries. In the private sector,several organization including, the Indian chemical manufacturer

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Association, and the Pesticides Fertilizers and Formulators Association of the India, and also the Chemicals and Petrochemicals Association, all work with the prime objective of promoting the growth and development of chemical industry in India.

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Overview
Growing at an average rate of 12.5%, the Indian chemical industry offers a wide spectrum of opportunities for the investors both from India and the world. T h e s i g n i f i c a n t market potential, coupled with the existing pool o f h u m a n resources, and the comprehensive variety of resources in the country make its p r o f i t a b l e destination in the new millennium. In the w o r l d p r o d u c t i o n o f chemicals, Indian industry stands at 12th position. Major segments of Indian chemical industry include

Pharmaceuticals & bulk drugs

In terms of volume and value, Indian pharmaceutical industry ranks 4thand 13th respectively. In 2004, industry was valued at over $6 billion, which is growing at an annual rate of 8 9 %. The industry can be divided into bulk d r u g s s e g m e n t a n d f o r m u l a t i o n s , a n d m a n u f a c t u r e s a b o u t 6 0 , 0 0 0 f i n i s h e d medicines and around 400 bulk drugs that are used in formulations.

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Agrochemicals One of the most dynamic pesticide producers in the world, India is the second largest manufacturer of agrochemicals in Asia. Out of 145 pesticides registered in the country, 85 of a technical grade are locally manufactured.

The country established itself as a global sourcing

base for generic agrochemicals. Petrochemicals and organic chemicals

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The petrochemical sector that primarily comprises polymers, synthetic fibers, fiber intermediates and plastic processing is growing at an annual rate of 14%. At the world level, India stands 9th in terms of polymer consumption and is expected to be the 3rd largest consumer of polymers after USA and China by 2010. To meet the growing domestic requirement, 9 global size ethylene crackers of 700 kt each would need to be set up by 20112012, over and above the present capacity of 24 million tons. Dyes The Indian dye industry is valued at around US$ 3 billion, with exports of a b o u t U S $ 1 b i l l i o n . T h e p e r capita consumption is very low (50 gms) a s compared to average global consumption (400 gms). The industry is highlyfragmented with 50 players in organized sector and 900 in unorganized sector. (400 gms) . The industry has undergone
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tremendous over the years, starting as an intermediate manufacturing industry to a full fledged industry with huge export potential. At present, India's share of the dye output globally stands at 5%, with a manufacturing capacity of 1,50,000 tons per annum. Specialty chemicals Specialty chemicals comprise fine chemicals and performance chemicals. The Indian fine chemical industry is in a growth phase with an estimated worth of US$ 700 million. The industry primarily caters to the pharmaceutical industry. The Indian specialty chemicals industry is valued at an approximated worth of US$ 3 billion. Inorganic Chemicals Characterized by high degree of fragmentation even across high volume product areas, Indian inorganic
chemicals industry account for less than 4.5 % of global market. T h e s e c t o r c o m p r i s e s o f p r o d u c t i o n o f c

h e m i c a l s , s u c h a s s ulphuric acid, phosphoric acid,

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titanium dioxide, carbon black and chlor alkali industry, which forms a major part of inorganic sector

INDIA GLYCOL LIMITED : COMPANY HISTORY India Glycols (IGL), incorporated in 1983, is engaged in the business of manufacturing glycols, ethoxylates and PEGs, performance chemicals, glycol ether and acetates, guar gum and potable alcohol. Promoted by Vam Organics, the company was incorporated under the name as UP Glycols. Since 1989, IGL is the only company in the world that uses renewable agro source based on molasses to manufacture Ethylene Oxide (EO) / Mono Ethylene Glycol (MEG). The companys in-house R&D facility focuses on developing new products and processes. In India, the company is the largest ethoxylate and glycol ether producer thus making it leader in ethylene oxide derivatives/surfactant business. The company exports its products to countries like South East Asia, Middle East, Europe, Australia and USA. It was granted One Star Export House status by the government of India.
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IGL operates subsidiaries namely IGL Finance, IGLCHEM International Pte and Shakumbari Sugar and Allied Industries. The company has base of 1000 customers. Products manufactured by company find applications in area of textile, agrochemical, oil and gas, personal care, pharmaceuticals, brake fluids, detergent, emulsion polymerisation and paints, etc. The company has formed various technical collaborations such as Scientific Design Company Inc, USA for glycols; Press industria AG, Italy for ethoxylates and PEGs; Sanyo Chemical Industries of Japan for performance chemicals; Sulzer Chemtech of Switzerland for glycol ethers and Alfa Laval, USA for extra neutral alcohol. IGL owns an export oriented unit (EOU) that primarily produced 10,000 MTPA of guar products such as guar, treated and pulverised guar gum powder and derivatised guar. It also operates 100% EOU under the name Ennature Biopharma Division. This unit is spread across in an area 47 acres land which leased from the Uttarakhand government. This unit will grow a spectrum of medicinal plants. It will also set up
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supercritical fluid extraction facility (SCFE) at Dehradun that will be used for extraction of dietary food supplements, natural colours, health care, fruits and vegetables, herbal extracts, fruit flavours and fragrances and spice flavours and extracts. The company has installed distillery effluent evaporators at Gorakhpur and the concentrated effluent is burnt in specially designed boilers; the calorific value of the concentrated, effluent generates super-heated steam which is. utilised in the turbo generator with capacity of 12.5 MW for power generation. In FY 2007-08 the company acquired controlling stake in the Shakumbari Sugar & Allied Industries (SSAIL) that is engaged in business of manufacturing sugar. SSAILs manufacturing plant is located in Uttar Pradesh with a crushing capacity of 3200 tones per day (TCD) along with a modern distillery of 40 kl per day (KLPD), producing high quality rectified spirit, ethanol and country liquor and an internal bagasse-fired cogeneration plant of 3 MW catering to the captive power needs of the sugar and distillery units. Future Plans
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India Glycols will focus on various areas in future such as developing cost-effective emulsifier for crop protection chemicals; development of eco-friendly surfactants to replace alkylphenol ethoxylates; development of green demulsifier for crude oil emulsion and setting up an application development laboratory equipped with all sophisticated instruments for various industries.

1983- India Glycols Ltd was incorporated at New Delhi on 19 th November as a p u b l i c l i m i t e d c o m p a n y as U.P. Glycols limited obtained the C e r t i f i c a t e o f Commencement of Business on 3rd February; 1984.The Company was promoted by Vam Organic

Chemicals Ltd. The company manufactures m o n o - ethylene glycol (MEG), diethylene glycol (DEG) and triethylene glycol (TEG). - The company entered

into a technical know-how agreement with `Scientific Design Company Inc., USA (SD) for the supply of process know-how only for the conversion of ethanol into MEG as the
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promoter VAM agreed to advise free of cost on the conversion process of molasses into ethanol.- The company also entered into an agreement with Toyo Engineering India Ltd., for implementing the project within guaranteed cost and time limit.

1986- The name of the Company was changed to `India Glycols Limited' Effective from 4th September. 1988- 70 shares subscribed for by the signatories to the Memorandum of Association. 244, 99,930 shares then issued at par of which 84,69,930 shares to promoters, directors, etc., and Vam Chemicals Ltd., and its wholly owned subsidiaries and 25,00,000 shares to shareholders of Vam Organic Chemicals Ltd., Ram gang Fertilizers Ltd., and Hindustan Wires Ltd., were reserved and allotted. Out of the remaining 135,30,000 shares, the following shares were reserved for preferential allotment: (i)15,00,000 shar e to UTI, (ii) 7,50,000shares to SBI Capital Markets Ltd. (iii) 30,00,000 shares to NRIs on repatriation basis, (iv) 2,50,000 shares to business associates, (v) 10,00,000 shares to farmersa n d r u r a l i n v e s t o r s a n d ( v i ) 1 2 , 2 5 , 0 0 0 s h a r e
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s t o e m p l o y e e s / w o r k e r s o f t h e company as also of the Vam Organic Chemicals Ltd. (Except 12,01,100 shares of the employees quota all shares taken up.) The balance 58,05,000 shares along with 12, 01,100 shares not taken up by employees were offered to the public in July 1988. Additional 33,82,500 shares allotted to retain oversu bscription (7,50,000shares to NRIs, 62,500 shares to business associates,8,12,500 shares to farmers and 17,57,500 shares to public). 1990- The Company received approval for expanding the MEG capacity upto60,000 MT per annum. The Company proposed to diversify into the field of E t h y l e n e Oxide (EO) derivatives and had received letter o f i n t e n t f o r t h e manufacture of 1000 MT per annum of EO derivatives. 1991Steps were initiated to undertake d i v e r s i f i c a t i o n p r o g r a m m e d t o manufacture Ethylene Oxide condensate/derivatives. The Company undertook the expansion of effluent treatment and Biogas generation facilities.

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1992- The Capacity of MEG was enhanced to 25,000 tones per annum.

1995-The company had tied up with Sanyo Chemical Industrial Surfactants C o v e r i n g m a j o r industries

like textiles, toiletries , pharmaceuticals, agrochemicals, paper, lubricants etc.- The Company also proposed to set up facilities for chloral sulphation to produce other specialty chemicals to maintain better quality standards. 1996-The Company was implementing choloro sulphation project. 1996 - The Company was implementing cholorosulphation project. 2003-The Board of Directors at their meeting held on December 4, 2003 have approved the merger of wholly owned subsidiary company CDS International Ltd with the company. The Board of Directors at their meeting held on December 4, 2003 have approved the merger of wholly owned
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subsidiary company CDS International Ltd with the company.

2009- India Glycols Ltd has informed that the Board of Directors of the Company at its meeting held on July 30, 2009, has appointed Shri. Rakesh Bhartia as Chief Executive Officer of the Company. 2010- India Glycols Ltd has appointed Shri Jitender Balakrishnan as Additional Director of the Company w. e. f. August 13, 2010 who shall hold office till the conclusion of Next Annual General Meeting of the Company.

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SWOT ANALYSIS Strength IGL is uniquely positioned as a petrochemical manufacturer through the organic route, and is probably the largest player in the world in its segment. Though the gross block of the company is Rs9.7bn, its replacement cost is estimated to be ~Rs32bn. This along with technological knowhow, would act as a strong barrier for entry, thereby offering competitive safety for the company.T h e K a s h i p u r u n i t i s f u l l y i n t e g r a t e d o n e , t h e r e b y e n s u r i n g o p e r a t i o n a l smoothness. The company is altering its mix in favor of EO derivatives. This offers higher realizations with stability in outlook and prices. Improving product range (180 at present) would also enhance realizations and consequently better margins. IGL has the ability to switch its feed stocks, between molasses, ethanol and sugarcane. Thus, it can procure molasses or ethanol at the start of a season (Oct30

Nov) and rationalize its raw material costs. Its storage facility also enable sit to manage inventories on a higher scale. Weakness IGLs margins could face pressure if MEG prices continue to fall vis-a-vis hikes in prices of molasses and ethanol. While IGL is integrating backwards to reduce the price volatility in its raw materials, the same cannot be eliminateda n d h e n c e w o u l d c o n t i n u e t o d o g t h e o p e r a t i o n s o f t h e c o m p a n y . Newer capacity expansion being undertaken in the M. East (Saudi Arabia & Iran) has the potential to lower the landed cost of imported MEG in India and to impact realizations. C u r r e n t l y ,POY/PSF industry accounts for ~70% of M E G consumption in India and 35% of IGLs revenues. This imparts high sensitivity to an industry and any slowdown in that sector has the potential to impact IGLs earnings. Opportunities IGL has flexibility in using ethanol or molasses a s i t s f e e d s t o c k f o r MEG/EO manufacturing, which can help optimize its raw material cost. By setting up
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co-generation plants, IGL will be able to lower its power costs (12%of net sales in FY08) to 8% of net sales in FY10. Expansions in the polyester industry (Indo Rama, JBF, Reliance and Garden Mills) will ensure off take of IGLs incremental capacity. IGL is diversifying its re venue stream throughventuring into Nutraceuticals, C O2 and Real Estate, which are expected toaccount for ~10% of revenues by FY10 Threats MEG capacity expansion in M. East may dam p e n I G L s o f f t a k e . Additional capacitiesmay imp a c t g l o b a l p r i c e s w h i c h w i l l i m p o s e m a r g i n pressu re. Also, any changes in custom duties on MEG (7.5%) and swing in Rs/USD rates have the potential to dampen realizations and margins. Currently t h e R e l i a n c e g r o u p , w h i c h i s t h e l a r g e s t d o m e s t i c m a n u f a c t u r e r o f M E G , consumes majority of its production in-house. Any sharp scale up in its merchant sales can upset the business prospects of IGL. After Shakumbari expansion, there would be another
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factor influencing the costing structure of IGL namely sugarcane. We have drawn our estimates on cane prices of Rs 125/qntl. Thus,any unfavorable change in the pricing or availability of cane can substantially impair the earnings of the company . IGL is undertaking capex of Rs4.9bn over the next 2 years. There is also a shutdown of 25-35 days envisaged at its MEGf a c i l i t y . A n y d e r a i l m e n t o r d e l a y o f t h e s a m e c o u l d i m p a c t i t s e a r n i n g s substantially. E x p o r ts constitute ~14% of its revenues and any ad v e r s e movement in exchange rate can depress margins. In a scenario where petrochemical companies are experiencing supply shortage and rise in prices of feed stocks, green route (Biomass) players have become competitive. In this backdrop, its capacity expansion by 20% and foray into value added products augurs well for IGLs revenue and margins. Its recentacquisition of Shakumbari has afforded italterna tives (making sugar and/or ethanol), thereby enabling it to capitalize on market conditions.IGL is also setting up cogeneration power plant in Shakumbari and Kashipur that
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will reduce the power cost to <Rs 1perunit. Thus, we estimated power and F u e l c o s t a s a % o f n e t s a l e s t o e a s e t o ~ 8 % i n F Y 1 0 f r o m 1 2 % i n F Y 0 8 . Besides reducing the cost, IGL is also focusing on high margin EO derivative business where prices are more stable and
competition minimal. We estimate th is busin ess to reg ister a CAGR of 1 9% f ro m FY0 8 -10 and attain a size of Rs8.5bn by FY10. The revenue flow from other streams i.e. Nutraceuticals, CO2 plant, property lease and sugar will also help augment by FY10. With inclusion of guar gum powder and industrial gases, revenues from other streams will be~10 % of to tal rev enu es b y FY10 (v/s 3% in FY08 ). In FY10 , we estimate n et revenues of Rs17bn (CAGR 13% from FY08-10), OPM of 27% (+200bps fromFY08) and net profits of Rs2.9bn (v/s Rs1.8bn inFY08). - The company entered into a technical know-how agreement with` Scientific Design Company Inc., USA (SD) for the supply of process knowhow only for the conversion of ethanol into MEG as the promoter VAM agreed to advise free of cost on the converse process of molasses into ethanol. - The company also entered into an agreement with Toyo EngineeringI n d i a L t d . , f o r i m p l e m e n t i n g t h e p ro ject wi thin g uaran teed cost an d time limit. First and only company in the world t o p r o d u c e E t h y l e n e O x i d e ( E O ) / Mono Ethylene
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Glycol (MEG) from renewable agro route based on molasses into ethnol.

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The company also entered into an agreement with Toyo Engineering I n d i a L t d . , f o r i m p l e m e n t i n g t h e project within guaranteed cost andtime limit. First and only company in the world t o p r o d u c e E t h y l e n e O x i d e ( E O ) / Mono Ethylene Glycol (MEG) from renewable agro route based on molasses ,since 1989. Leading manufacturers of Glycols, Ethoxylates, Performance Chemicals, Glycol Ethers & Acetates, Guar Gum and Potable Alcohol. Completely integrated state - of - the - art manufacturing process with emphasisS o n s u p e r i o r q u a l i t y b y d e p l o y i n g i n t e r n a t i o n a l l y p r o v e n t e c h n o l o g i e s , innovative R&D and customized approach. Largest Ethoxylate , Glycol Ether producer and thus leader in Ethylene Oxide Derivatives/Surfactant business in India.

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Global player meeting international specifications and norms, exporting to South East Asia, Middle East, Europe, Australia and USA. Catering to more than 1,000 customers in various end-use industries such as Textile, Agrochemical, Oil & Gas, Personal Care, Pharmaceuticals, Brake Fluids, Detergent, Emulsion Polymerization & paints etc. Offer customer specific products to meet their performance / technical requirements. Customer base includes large MNCs, Public Sector Undertakings and large as well as medium & small Indian organizations.

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