It gives me immense pleasure to report your Company''s performance in a
year that saw unprecedented growth in its 47 year history.
During the financial year 2011-12, our turnover has touched an all time
high of Rs3699 Crores, an increase of 31% and the Profit Before Tax
(PBT) and Profit After Tax (PAT) also augmented to all time high of
Rs915 Crores and Rs636 Crores, an increase of 17% and 22% respectively.
On the operational front, completion of BORL''s refinery at Bina and
HMEL''s Guru Gobind Singh Refinery at Bathinda, the 9th and 10th
grassroot refineries engineered and designed by EIL, commissioning of
New FCC unit of HPCL has further strengthened our position as the
premier consultancy organization in this sector. Our most recent MoU
score of 1.095 which is in ''Excellent'' category for 2010-11 has
improved against the previous year''s score.
While we look back and evaluate our operational and financial
performance, it is vital that we also review current and future
business environment and analyze its effect on our business performance
both in short term and long term.
It is beyond doubt that we have challenging times ahead of us, but I am
confident that owing to our organization''s strong fundamentals,
technical know-how, skill sets, our zeal to excel and above all our
unflinching commitment to succeed, we will face these challenges head
on and continue our growth story.
In the era of globalization, our performance will not solely rely on
domestic business but will be largely dependent on our overseas
performance. Our efforts on widening our global reach have started
yielding some results and we have secured overseas jobs which are
around three times of what we got last year. We have entered into
territories where we have little or no existing presence. Prominent
milestones in our global market strategy include breakthrough jobs in
Venezuela and Kenya, establishment of Jabal EILIOT, our Joint Venture
with IOTL and Jabal Dhahran for tapping business opportunities in Saudi
Arabia, initiating steps for opening a new branch office in Venezuela
to explore business opportunities in South America among many other
The success of our global strategy hinges on rising to the high
expectations of overseas clients, which can be met only with higher
commitment levels across the board, particularly from the Company''s
experienced work-force. The management is actively engaged in
re-orienting the Company''s work force to match its global aspirations.
Summarily, delivery with high quality and on schedule is the key to our
Global Success and we shall continue to focus on global target markets
to increase the proportion of international business in our portfolio
which is a vital constituent for our future success.
The jobs we are securing today, in our country, are with tight
schedules which mean that to maintain our profitability our performance
on the operational matrix has to continuously improve. Completion of
HMEL''s Guru Gobind Singh Refinery in 44 months has set an industrial
benchmark in this sector in the country.
To grow, we need to excel in what we do and we challenge the status-quo
in situations we face every-day, brainstorm and explore the alternative
solutions which are more efficient and results in improved
productivity. These incremental improvements in our systems and
processes will be defining factors in successful execution of our
current and future projects especially in EPC domain. It is our
continuous endeavor to re- review our systems, processes and procedures
and make them more lean and efficient as to ensure improved delivery
both on cost and time matrix for current and upcoming future projects.
We are swiftly converging into a zone where majority of our business
will come from the EPC segment and the key to success is increased
efficiency and cutting costs by standardization and repeating the
designs to the extent possible. I am happy to say that usage of IT, as
a vital tool for achieving higher efficiencies, has improved during
last couple of years and greater efforts are underway to fully harness
information technology to achieve operational excellence.
Effect of recent global economic slowdown on domestic business
confidence and environment has resulted in adoption of Wait and
Watch policy by major players in hydrocarbon sector. This has had an
impact on EIL''s order book also and the inflow of jobs has not been
what we would have desired. Nevertheless, detailed feasibilities and
investment commitments for next phase of expansion and new projects are
already being undertaken by OMCs and as the economic conditions improve
these investments are expected to materialize shortly.
Your Company''s diversification strategy from core hydrocarbon sector is
firmly on track and will be vital for our long term sustainable growth.
We have been harnessing the ample growth opportunities in other related
sectors viz. infrastructure and water management, solar and nuclear
power, city gas distribution and fertilizers, wherein EIL can play a
niche role. Besides developing consulting and EPC service segments in
these areas, your Company shall also target other modes of project
management viz. BOO/BOOT, O&M segments and project development. For
example, on the power sector, we have secured breakthrough jobs in
Nuclear from NPCIL for their Kudankulam Nuclear Plant and in Solar
Power we are engaged in engineering of Power Block of 125 MW Solar
We are also in the process of building engineering and design expertise
in deep-sea engineering and oil and shale gas, the hydrocarbon segments
with high growth potential.
Your Company remains firmly committed to the development of its core
assets - its Human Resource and the overall welfare of its talent pool
continues to remain a top priority. The management took a number of
initiatives to augment its HR best practices during the year, prominent
among them are introduction of reward and recognitions schemes,
implementation of Biometric Attendance System, revision in Pay scales,
allowances & perks for employees at staff level, revision of medical
rules among many others initiatives.
In addition we are in the process of introducing learning management
system to support our training and leadership development plans. The
success of your Company''s robust HR strategies is evidenced by its
enviably low attrition rates of less than 3%.
This year also saw the rewards of many tireless years of dedicated
efforts by our work-force being crowned with success with several
prestigious awards being bestowed on EIL. Prominent among them were
SCOPE Institutional Excellence Awards for 2009-10 conferred by Dr.
Manmohan Singh, the Hon''ble Prime Minister of India for EIL''s overall
organizational performance, SCOPE Meritorious Award for excellence in
Human Resource Management conferred by Smt. Pratibha Devisingh Patil,
the Hon''ble President of India. Other key awards include PSE Excellence
Awards 2011 for excellence in R&D and Technology, ''Sarvashreshtha
Suraksha Puruskar'' (Golden Shield) by the National Safety Council of
India for Occupational Health and Safety, CIDC''s 4th Vishwakarma Award
for Best Project for EIL''s Euro IV Upgradation Project of CPCL, First
Prize from the Institute of Cost and Works Accountants of India (ICWA)
for excellence in Cost Management Practices among many others. While
our efforts are self-less and authentic in spirit, these recognitions
from external boards of eminent judges, is evidence of our progress in
the right direction.
We are confident of maintaining our growth momentum over the next
fiscal given our planned investments, our strong focus on research &
development, human resource best practices, leadership position in the
hydrocarbons and diversification strategies. Further the Company
remains committed to good corporate governance and ethical practices as
per our listing agreement and government guidelines.
I thank you for your unflinching faith in the Company''s growth
potential and look forward to your feedback and advice. The EIL
management joins me in wishing you and your families the very best of
prosperity and good health.
A. K. Purwaha