OUR BOUNCE BACK OUR BOUNCE BACK CLEARED PREVIOUS CLEARED PREVIOUS HEIGHTS HEIGHTS

Annual Report 2010

The key challenge that Talawakelle Tea Estates PLC faced during the year under review was to return the Company to profitabilityto bounce back from a period of adversity. How well we coped with this challenge and how high we were able to bounce our business back to well being is what youll read about in the ensuing pages of this Report.
2010 was a landmark year in which we achieved many firsts and best ever resultsall of which bear witness to the fact that our bounce back indeed cleared previous heights of achievement.

2010 >

Annual Report

Chairmans Statement

Resilience, consistency and unwavering focus on strategy yields a year of record achievement. Group NPAT highest on record; Turnover exceeds Rs. 3 billion; quality of teas/prices commanded premium prices at Colombo Tea Auctions; Focus remains on producing excellent teas at competitive prices.
Management Discussion & Analysis
Global tea trade increased; prices continued to be profitable; prices at Colombo Auction reached all time high of Rs. 370.61 per kg; Company achieved production of 6.8 million kg; estate profitability increased; cost of production declined; Rs. 42 million expended on factory development.
CIS UAE Iran Syria Turkey Jordan Iraq Japan Kuwait Libya 35.0% 7.5% 21.9% 3.2% 8.6% 8.0% 18.1% 23.4% 17.0% 7.6%

Financial Review

Aligning with Global Sustainability Management Systems Company Policies on Human Resource, Health and Safety, Environment and Quality and Food Safety

Sustainability Report

With a view to enhancing transparency and public confidence Talawakelle Tea Estates PLC analyses the impact that our activities have had on the economy, the environment and the community.

Corporate Governance

Best practice Corporate Governance regime in place.

Risk Management

Comprehensive Risk Management regime in place.

Board of Directors

Remuneration Committee Report
Annual Report of the Board of Directors on the affairs of the Company
Our Estates and Factories
Statement of Directors Responsibilities

Income Statements

Profit/(loss) before tax

Balance Sheets

Total Assets
Chilaw Kegalle Colombo Gampaha Kandy Nanu Oya Talawakelle
Deniyaya/Urubokka Galle Ambalanthota Matara

Rs. 169.2 million

Profit/(loss) for the year

Rs. 3.5 billion

Rs. 164.5 million

Cash Flow Statements

Net cash from operations Cross Rs. 400 million mark

Ten Year Summary

Audit Committee Report Independent Auditors Report Statements of Changes in Equity Notes to the Financial Statements Subsidiaries Glossary Notice of Meeting Form of Proxy

Investor Information

Market Value The market value of Talawakelle Tea Estates PLC ordinary shares was

128 Enclosed

Highest Lowest Year end
55.00 (17.09.2010) 24.75 (07.01.2010) 46.40
The year under review saw the Group registering NPAT of Rs. 164.5 million, the highest on record and turnover crossing the Rs. 3.0 billion mark
Dear Shareholder, The year 2010 was the first full year of peace in our country distinguished by high economic growth, lower interest rates and a rebound in global tea trade. On this positive note, I take pleasure firstly in welcoming you to the Nineteenth Annual General Meeting of Talawakelle Tea Estates PLC and also in presenting the Annual Report and Audited Financial Statements of the Company for the year ended 31st December 2010. Directorate Dr. R M Fernando and Mr. J M S Brito resigned from the Board with effect from 7th April 2010 consequent to the purchase of the shares owned by Aitken Spence PLC in Hayleys Plantation Services (Pvt) Limited by Dipped Products PLC. We take this opportunity to thank them for their valuable contributions and guidance during their tenure on the Board. During the year, Mr. J A G Anandarajah, Managing Director of Dipped Products PLC and Director of Hayleys PLC and Mr. G K Seneviratne, Director of Dipped Products PLC and Managing Director of Kelani Valley Plantations PLC were appointed to the Board with effect from 29th April 2010. They bring with them proven experience in management of plantation businesses. Corporate Results The Companys turnover for the year under review increased by Rs. 191.1 million over the previous year to Rs. 2.87 billion and recorded a net profit after tax of Rs. 135.19 million, as against a net loss after tax of Rs. 13.8 million in 2009. The consolidated turnover of the Group was Rs. 3.0 billion, an increase of 8.3% over the previous year. The Groups net profit after tax amounted to Rs. 164.5 million, a remarkable turn around from a net loss after tax of Rs. 30.4 million last year. Resilience, consistency and unwavering focus on strategy enabled the Company to face the challenge of returning to profitability. A confluence of factors, such as our persistent emphasis on quality that entailed remunerative prices at the Colombo Tea Auctions and the relatively favourable weather for tea crop, contributed to the turn around during the year. The increase in tea production to Rs. 6.8 million kg from Rs. 6.3 million kg and a significant reduction in borrowings and finance cost also had a positive impact on the years results.

A national standard for Ceylon teas that has wider international accreditation is a necessity, as producers have to presently undertake many quality certifications resulting in duplication of effort and resources. Such a standard will strengthen the countrys competitive position as a preferred source for quality teas. Sri Lanka also needs to enhance the resources committed to industry-related R&D institutions to increase agricultural and industrial productivity. We look to 2011 with confidence with Ceylon tea enjoying a steady demand from overseas markets, barring our concerns of the impact the impending wage increases may have on our results. Acknowledgement I thank all our employees for their hard work and dedication. I also thank our buyers, brokers and bankers for their continued support and my colleagues on the Board for their guidance and contributions in steering the Company to a year of rebound and success.
Mohan Pandithage Chairman 11th February 2011

Tea Industry Overview

The year saw an increase in the global tea trade, with larger volumes being offered at the auction centres around the world, including Sri Lanka. A positive feature was, despite an increase in global production, tea prices were remunerative, with an upward trend to last year. The Colombo auctions recorded the highest price at US$ 3.35 per kg an increase from last year. A global shortfall of around 70 million/kg at the beginning of the year and an increase in consumption narrowed the excess supply from increased production. An increase in domestic consumption in major tea producing countries such as India and China increased consumption from Russian Federation, Iraq, Egypt, Pakistan, Japan, etc. impacted the global demand/supply equilibrium. At the Colombo auctions, demand for tea continued into the first quarter of 2010, though the Western quality season was a disappointment in terms of quality, mainly due to the erratic weather conditions that prevailed. Tea prices reached an all time high of Rs. 370.61 per kg vis--vis the all time high of Rs. 360.45 per kg in 2009, despite the depreciation of the SL Rupee vs the US$ by 3%. All elevations recorded an increase in prices over the previous year, with high growns gaining the most. Total export earnings from tea is expected to exceed last years record and touch US$ 1.5 billion. The major buyers of Ceylon tea during the year was Russia/CIS and the Middle East. The top ten markets account for 78% including Japan. World Tea Production Global production on available statistics (as at December 2010), record an increase in crop from the previous year. Major producer countries such as Sri Lanka and Kenya have increased by 39.5 million kg and Kenya 85.3 million kg respectively. India, with crop shortfalls from North, is 12.7 million kg below last year.

Bought Leaf The intake of bought leaf improved with an overall increase in crop availability in the year. Total production at 1.1 million kg exceeded that of the previous year by 13%. The share of bought leaf in total production in the year was 15.7% of total production and 51.9% of low-grown production. We continued to build up supplier relations and pay incentives to ensure crop intakes, in a competitive market. Moragalla and Handford have increased their production by 55.9% and 12% respectively. Deniyaya and Kiruwaraganga production were 1% and 3% decrease over last year.
Tea Prices Increased by Rs. 19.94/kg Ranked No. 1 at the Colombo Tea Auctions
Prices at the Colombo Auctions continued their strong levels into the first quarter from the fourth quarter of 2009, declining thereafter from the second quarter onwards. A healthy demand for teas from global markets contributed to this development, despite an increase in global production in the year. The National Average at the Auctions was Rs. 370.61 per kg, an increase from Rs. 360.45 per kg from 2009. We maximised market conditions by offering the teas of the required quality demanded by our buyers. A focus on quality and a product differentiation strategy enabled the Company to obtain prices well-above the elevation averages to be ranked the No. 1 RPC at the Auctions for high and low growns in the year 2010.
Our competitive advantage lies in our brands (estate marks). They have carved a niche, a strategic move that has paid rich dividends, that has recognised TTE PLC as a quality conscious company.
TTE PLC Tea Prices 2010 vs 2009
GSA Rs./Kg 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. 2009 Total 2010
310.40 409.35 302.07 360.28 388.15 344.23 431.19 407.07 354.03 379.60 330.58 360.78 418.76 402.12 455.12 406.01 407.56 408.34 346.09 408.31
The first quarter recorded the highest price for our teas in high and low-growns, with a sharp decline in the third quarter for the high-growns. Lowgrowns had less price volatility, with a declining trend towards the year. During the year, Mattakelle retained the distinction of being the mark with the highest average price in the Western catalogue for the second consecutive year. Noteworthy performances were also noted in rankings of Somerset - No. 4, Great Western - No. 5, Wattegoda - No. 9 and Bearwell - No. 10 excluding leafy and green teas in the catalogue. Calsay was ranked No. 1 in the leafy operations and Radella was ranked No. 1 in green teas. Kiruwanaganga in the low grown performed well with their prices significantly improving over the elevation average from the previous year. During the year Kiruwanaganga mark received the highest GSA in the low growns amongst all other RPC estates. Five of our estate marks were within the first ten rankings in the Western high grown and, ten of our high-grown marks and two of our low-grown marks were above their respective national averages. The gross sale average for the year was Rs. 388.21 per kg, which was an increase of Rs. 19.94 per kg when compared to last years GSA of Rs. 368.27 per kg.

Estate Profits and (Loss) - Tea 2010 vs 2009
Rs./million 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. 2009 Total 2010

HG LG Com

6.53 9.12

92.09 9.75

38.48 45.86 84.34
(3.66) (35.92) (36.88) 25.65 7.61 22.71 9.66 (6.99) 3.95 (13.21) (27.22) 18.66

72.66 8.18

34.74 124.20 70.70 35.20

15.65 101.84

80.84 105.44 159.40
People who drive our business
During the year, we had good industrial relations, the challenge being to maximise the favourable ground conditions and increase productivity. Improving welfare and social infrastructure received our attention, with an investment of Rs. 39.9 million made during the year on housing, water and sanitation. Skills and competencies were developed by providing training and development programmes at a
cost of Rs. 3.0 million. In addition, a sum of Rs. 102.2 million was expensed on welfare and related activities such as medical, childcare, housing, sports and recreation. Increase in cost of retention, managing and changing attitudes of our workers are key HRM issues we are currently faced with. Our main challenge next year is to avoid work disruption during the wage negotiations and to have a competitive wage structure.
The total number of employees as at end of 2010 was 10,859.
Field and Factory Development Replanting - Tea
Extent (Hect.) 2008 Uprooted 2008 Planted 2009 2010
High-Grown Low-Grown Total
87.05 55.46 26.11 25.68 113.16 84.64

nil nil nil

63.50 30.00 33.00 32.49 20.45 19.49 95.99 50.45 52.49
Field Development and Fuel Wood Diversification
The total field development expenditure for the year was Rs. 180.8 in. Sustainability of agricultural productivity and earnings is the rational of our on-going field development programme. A key objective of the programme is to increase the VP cover of our estates, now moved up to 64%. During the year, an extent of 52.49 hect. in high and low grown were planted in tea and a total extent of 160.54 hect. of immature tea is presently maintained. During the period 1992 to 2010, an extent of 564.10 hect. in the high growns and 260.15 hect. in the low growns were planted with new tea. The total extent brought into revenue from 2000 to date is 548.78 hect. Dry weather conditions resulted in a large number of plant casualties in the new clearings, with 768,109 plants being resupplied.
Good agricultural and manufacturing practices were implemented to safeguard the new clearings and ensure potential future yields are secured. Fuel wood planting is an integral component of our strategy to be independent from fossil fuels and be environmentally friendly. Under the programme, a concerted effort is underway to ensure adequate fuel wood is available for each estate to be self-sufficient in energy. During the year, we planted 107,305 fuel wood plants and have planted since 2000 an extent of 342.07 hect.

Soil Conservation and Enrichment The Company implements several sustainable agricultural practices (SAPs) on its estates to conserve and enrich the soil. These include contour drainage systems, vetiver grass hedges, vegetative ground covers, stone terraces, the planting of green manure, and shade belts. The Company also adopts Sloping Agricultural Land Technology (SALT) using leguminous plant species in all tea replanting blocks that help in soil conservation and enrichment. Thatching, mulching, chopping, pruning and composting are some of the other practices that are being used to enrich the soil, particularly in the VP fields and in those areas that have been newly re-planted. Selected fields in each plantations are tested every year for organic carbon content and soil PH levels. The required soil PH levels are maintained by the regular application of dolomitic limestone.
Soil Conservation Measures - Wattegode and Mattakelle Estates
Composting in Progress - Logie Estate

Vegetative ground cover

Mechanical shredder

Vetiver grass hedges

Processed compose

Stone terraces

Optimising Water Resources The Company is committed to protecting and sustaining all water sources on our plantations. All water sources on estates have been identified and the necessary conservation measures have been put in place to ensure protection and replenishment of these sources. Through our water management practices we ensure adequate levels of good quality potable water to the estate community, the factories, nurseries, and in some cases to neighbouring villages and towns as well. The Company is setting up riparian forests in several areas and has protected the water way banks with bamboo, vetiver and other soil conserving plants. We have also established 20 metre protection zones around all water sources and five metre buffer zones along all water bodies to prevent any contamination of water sources from agricultural activities. Water from all drinking water sources are tested every year through a well-defined water monitoring and analysis programme. Regular education programmes are conducted for the estate community on the importance of water conservation and the need to protect water sources for the benefit of future generations.
Protecting Water Sources - Water Conservation at Wattegode, Logie and Mattakelle Estates
Waste Management We have put in place an integrated waste management programme to ensure the productive use of all waste generated on estates. The estate community is constantly educated on the importance and value of maintaining a clean environment and on the need for an integrated waste management programme to achieve this objective. Through this programme, all bio-degradable waste is utilised to produce compost which is used for tea fields as well as for the home garden plots of the community. Metal, glass, plastic, rubber and polythene is collected separately and sent for recycling. The functioning of open waste dumps and the burning of waste are now considered undesirable practices and have been halted. With the active participation of key stakeholders, the waste management programme has created a clean, healthy environment and contributed positively to the image and well-being of the estate community.

The Board consisted of ten Directors as at the end of the year: Seven Non-Executive Directors and three Executive Directors, including the Chairman Attendance at these meetings was as follows:

Name of Director

Executive/Non-Executive

Attendance

Mr. A M Pandithage (Chairman) Mr. S T Gunatilleke (Chief Executive Officer) Mr. J A G Anandarajah (appointed w.e.f. 29th April 2010) Mr. Merrill J Fernando Mr. Malik J Fernando Mr. M M M De Silva Dr. Rohan M Fernando (resigned - 07th April 2010) Mr. J M S Brito (resigned - 07th April 2010) Miss Minette Perera (Alternate Director to Mr. Merrill J Fernando) Mr. D C Fernando (Alternate Director to Mr. Malik J Fernando) Mr. G K Seneviratne (appointed w.e.f. 29th April 2010) Prof. U Liyanage Dr. S S S B D G Jayawardena Mr. L N De S Wijeyeratne
Executive Executive Executive Non-Executive Non-Executive Non-Executive Non-Executive Non-Executive Non-Executive Non-Executive Non-Executive Independent Non-Executive Independent Non-Executive Independent Non-Executive
4/4 4/4 3/3 0/4 2/4 2/4 1/1 0/1 0/4 0/4 3/3 2/4 3/4 3/4
Responsibilities of the Board The Board is responsible for: 1. Enhancing shareholder value. 2. Ensuring all stakeholder interests are considered in corporate decisions. 3. Formulating, communicating, implementing and monitoring of business policies, overall strategies and corporate goals to assure sustained growth. 4. Sanctioning major investments and business proposals recommended by the Management Committee. 5. Ensuring Executive Directors have the skills/ knowledge to implement strategy effectively, with proper succession arrangements in place. 6. Ensuring due attention is given to appropriate accounting policies and practices. 7. Setting and communicating values/standards for management. 8. Ensuring information, control, risk management and audit systems are in place and are effective. 9. Ensuring compliance with ethical, statutory, legal, health, environment and safety standards and regulations. 10. Reviewing and approving annual budgets and monitoring performance against them. 11. Appointment of Chief Executive Officer and approval of appointments of senior management. 12. Formulate an effective remuneration, and recognition policy to ensure employee commitment and motivation.

Definition of Golden Shareholder - the holder of the Golden Share.
The concurrence of the Golden Shareholder in writing shall be first obtained to amend the definition of the words Golden Share and Golden Shareholder and the Articles 5 (1) to 5 (12) of the Articles of Association of the Company which deals with the Golden shareholder. The Golden Share may be converted into an ordinary share with the concurrence of the Golden Shareholder and the concurrence of a majority of the shareholders.
The Company shall obtain the written consent of the Golden Shareholder prior to sub-leasing, ceding or assigning its rights in part or all of the lands set out in the Article of Association of the Company. The Golden Shareholder shall be entitled to call upon the Board of Directors of the Company once in every three month period if desired to meet with the Golden Shareholder and/ or his nominees, and the Directors if so called upon shall meet with the Golden Shareholder and/or his nominees to discuss matters of the Company of interest to the State of the Democratic Socialist Republic of Sri Lanka. The Golden Share shall only be held by the Secretary to the Treasury in his official capacity and not in his own name, for and on behalf of the State of the Democratic Socialist Republic of Sri Lanka, or by a company in which the State of the Democratic Socialist Republic of Sri Lanka owns ninety-nine (99) per centum or more of the issued share capital. The Golden Shareholder and/or his nominee shall be entitled to inspect the books of accounts of the Company after giving two weeks written notice to the Company. The Company shall submit to the Golden Shareholder, within sixty (60) days of the end of each quarter, a quarterly report relating to the performance of the Company during the said quarter in a pre-specified format agreed to by the Golden Shareholder and the Company.
The Company shall submit to the Golden Shareholder, within ninety (90) days of the end of each fiscal year, information relating to the Company in a pre-specified format agreed to by the Golden Shareholder and the Company. Golden Shareholder has power to appoint not more than three (03) persons as his proxies to attend on the same occasion at the general meetings.

Financial Reports 2010

Audit Committee Report Independent Auditors Report Income Statements Balance Sheets Statements of Changes in Equity Cash Flow Statements Notes to the Financial Statements 95

Financial Calendar

1st Quarter Report 2nd Quarter Report 3rd Quarter Report Annual Report 2010 19th Annual General Meeting 29th April 2010 30th July 2010 3rd November 2010 11th February 2011 30th March 2011

Audit Committee Report

Role Of The Audit Committee
The role of the Committee, which has specific terms of reference, is described in the Corporate Governance Report on page 60 to 71. Management Audit reports on key control elements and procedures that are selected according to an annual plan, were reviewed. Internal Audits are outsourced to leading audit firms in line with an agreed annual audit plan. Follow up and reviews were held with management to ensure that audit recommendations are being acted upon. The Committee obtained and reviewed statements from the management of the Company as to the mitigatory action taken or contemplated as to risks arising from liquidity, internal control systems and procedures and adequacy of insurance for safeguarding of assets. The Committee obtained representations from the Company on the adequacy of provisions made to possible liabilities and reviewed reports tabled, certifying their compliance with relevant statutory requirements.
COMPOSITION OF THE AUDIT COMMITTEE
The Audit Committee appointed by and responsible to the Board of Directors, comprises of three Non-Executive Directors two of whom are Independent. The Director/CEO and Chief Financial Officer (CFO) attend the meetings and the Chief Financial Officer act as the Secretary. The Chairman and other Executive Directors attend meetings as required. The Chairman of the Audit Committee is Mr. L N De S Wijeyaratne, a Senior Chartered Accountant. The names of the members and their brief profiles are given on pages 66 and 72 to 74 respectively of this report. Their individual and collective financial knowledge and business acumen and the independence of the Committee, are brought to bear on their deliberations and judgment on matters that come within the Committees purview.

External Audits

The Committee held meetings with the External Auditors to review the nature, approach and scope of Audit and the Audit Management Letters of the Group companies. Actions taken by the management in response to the issues raised, as well as the effectiveness of the internal controls in place, were discussed with the Company. Remedial action was recommended wherever necessary. The Audit Committee has reviewed the other services provided by the External Auditors to the Company, to ensure that their independence as Auditors has not been compromised.

(d) Depreciation

Property, Plant & Equipment is recorded at cost, less accumulated depreciation and less any impairment in value.

(b) Cost and Valuation

All items of Property, Plant & Equipment are initially recorded at cost. Where items of Property, Plant & Equipment are subsequently revalued, the entire class of such assets is revalued. Revaluations are made with sufficient regularity to ensure that their carrying amounts do not differ materially from their fair values at the Balance Sheet date. Subsequent to the initial recognition as an asset at cost, revalued Property, Plant & Equipment are carried at revalued amounts less any subsequent depreciation thereon. All other Property, Plant & Equipment are stated at historical cost less depreciation. When an asset is revalued, any increase in the carrying amount is credited directly to a revaluation surplus unless it reverses a previous revaluation decrease relating to the same asset, which was previously recognised as an
The provision for depreciation is calculated on the cost or valuation of all Property, Plant & Equipment other than freehold land, in order to write-off such amounts over the estimated useful lives by equal installments as follows: Buildings Plant and Machinery Furniture and Fittings Vehicles Equipment Computers Mini Hydro Power Plant Roads over 35 years (over the remaining lease period) over 13 years over 10 years over 05 years over 04 years over 04 years over 20 years over 05 years
Replanting and New Planting Tea Rubber over 33 years over 20 years
The cost of areas coming into bearing are transferred to mature plantations and depreciated over their useful life period.

2.3.9 Infilling Cost

The leasehold properties are being amortised in equal amounts over the following periods: Bare Land Mature Plantations Buildings Machinery Improvements to Land over 53 years over 30 years over 25 years over 15 years over 30 years
Where infilling results in an increase in the economic life of the relevant field beyond its previously assessed standard of performance, the costs are capitalised in accordance with Sri Lanka Accounting Standard No. 32 and depreciated over the useful life at rates applicable to mature plantation. Infilling costs that are not capitalised have been charged to the Income Statement in the year in which they are incurred.

2.3.15 Grants and Subsidies
Impairment losses of continuing operations are recognised in the Income Statement in those expense categories consistent with the function of the impaired asset, except for property previously revalued where the revaluation was taken to equity. In this case, the impairment is also recognised in equity up to the amount of any previous revaluation. For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Company makes an estimate of recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the assets recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the Income Statement unless the asset is carried at revalued amount, in which case the reversal is treated as a revaluation increase. Impairment losses recognised in relation to goodwill are not reversed for subsequent increases in its recoverable amount. The following criteria are also applied in assessing impairment of specific assets:

Goodwill

Grants and subsidies are recognised at their fair value where there is reasonable assurance that the grant/subsidy will be received and all attaching conditions, if any, will be complied with. When the grant or subsidy relates to an income item, it is recognised as income over the periods necessary to match them to the costs to which it is intended to compensate on a systematic basis. Grants and subsidies related to assets, including nonmonetary grants at fair value are deducted at arriving at the carrying value of the asset (or are deferred in the Balance Sheet and credited to the Income Statement over the useful life of the asset).
2.3.16 Impairment of Assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Company makes an estimate of the assets recoverable amount. An assets recoverable amount is the higher of an assets or cash-generating units fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used. These calculations are collaborated by valuation multiples, quoted share prices or other available fair value indicators.

Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of the cash-generating unit (or group of cashgenerating units), to which the goodwill relates. Where the recoverable amount of the cash-generating unit (or group
of cash-generating units) is less than the carrying amount of the cash-generating unit (group of cash-generating units) to which goodwill has been allocated, an impairment loss is recognised. Impairment losses relating to goodwill cannot be reversed in future periods. The Company performs its annual impairment test of goodwill as at 31st December.

Intangible Assets

Net gains and losses of a revenue nature on the disposal of Property, Plant & Equipment and other non-current assets including investments have been accounted for in the Income Statement, having deducted from proceeds on disposal, the carrying amount of the assets and related selling expenses. On disposal of revalued Property, Plant & Equipment, amount remaining in Revaluation Reserve relating to that asset is transferred directly to Accumulated Profit/(Loss). Gains and losses arising from incidental activities to main revenue generating activities and those arising from a group of similar transactions which are not material, are aggregated, reported and presented on a net basis.

Expenditure Recognition

Intangible assets with indefinite useful lives are tested for impairment annually as of 31st December either individually or at the cash-generating unit level, as appropriate.
2.3.17 Income Statement Revenue Recognition
(a) Sale of Goods Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue and associated costs incurred or to be incurred can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable net of trade discounts and sales taxes. The following specific criteria are used for the purpose of recognition of revenue: (b) Interest Interest Income is recognised as the interest accrued (taking into account the effective yield on the asset) unless collectibility is in doubt. (c) Dividends Dividend income is recognised on a cash basis. (d) Rental Income Rental income is recognised on an accrual basis. (e) Royalties Royalties are recognised on an accrual basis in accordance with the substance of the relevant agreement. (f) Others Other income is recognised on an accrual basis.

44,714,679 85,663,464 267,435,133 4,586,601 49,107,167 451,507,044 992,077,565
9,686,618 8,413,703 47,480,874 450,049 4,622,196 70,653,440
54,401,297 94,077,167 314,916,007 5,036,650 53,729,363 522,160,484 994,484,801
Additions for the year Rs.
Capitalised disposed during the year Rs.
Capital work-in-progress Total written-down value

76,916,676 626,037,251

19,947,613

(79,462,719)

17,401,570 571,450,533

83,775,834 1,075,853,399

22,025,350

(86,321,876)

19,479,308 1,013,964,109
Note: The assets shown above are those movable assets vested in the Company by Gazette Notification at the date of formation of the Company (22nd June 1992) and all investments in tangible assets by the Company since its formation. The assets taken over by way of estate leases are set out in Notes 4 and 5.
6.(B) Immature/Mature Plantations
Company Permanent land development cost Rs. Roads Immature plantations Rs. Mature plantations Rs. Total Permanent land development cost Rs. Roads Group Immature plantations Rs. Mature plantations Rs. Total
Cost *At the beginning of the year Additions Transfers At the end of the year Depreciation *At the beginning of the year Charge for the year At the end of the year Written-down value as at 31.12.2010 Written-down value as at 31.12.2009
19,626,585 2,064,512 21,691,097
59,198,100 22,026,590 81,224,690
477,362,452 156,714,773 (129,317,104) 504,760,121
1,183,991,896 129,317,104 1,313,309,000
1,740,179,033 310,122,979 (129,317,104) 1,920,984,908
5,877,255 677,159 6,554,414
10,118,837 12,105,062 22,223,899
186,282,062 36,900,869 223,182,931
202,278,154 49,683,090 251,961,244

15,136,683 13,749,330

59,000,791 49,079,263
504,760,121 1,090,126,069 1,669,023,664 477,362,452 997,709,834 1,537,900,879
15,136,683 59,000,791 13,749,330 49,079,263
* The figures above are stated after adjusting for assets handed over to Tea Smallholdings Development Authority. Note: These are investments in immature/mature plantations since the formation of the Company. The assets (including plantation assets) taken over by way of estate leases are set out in Notes 4 and 5. Further investment in immature plantations taken over by way of these leases are shown in the above note. When such plantations become mature, the additional investments since take over to bring them to maturity, will be moved from immature to mature under this note.

National Development Bank Commercial Bank
Primary mortgage over leasehold rights of Somerset, Great Western, Holyrood, Logie and Dessford Estates Concurrent mortgage over stock in trade and debtors for Rs. 100 million and additional mortgage over stocks and debtors for Rs. 50 million Primary mortgage over vehicles bearing WP HS 3257, WP JY 1762, WP JT 4785, WP HA 2354
328,598,649 12,526,737 14,533,934 328,598,649
359,691,719 2,780,600 13,918,597 15,800,580 359,691,719
Primary mortgage bond for Rs. 13 million over 2 numbers of hot water generators Radella and Wattagoda Estates Term Loan Primary mortgage bond for Rs. 14 million over 2 numbers of hot water generators Logie and Dessford Estates Term Loan Hongkong & Shanghai Concurrent mortgage over stocks and debtors for Rs. 65 million Banking Corporation Overdraft Short-Term Loan
28. CAPITAL COMMITMENTS Following are the capital commitments as at the Balance Sheet date:
2010 Rs. million 2009 Rs. million
Approved by the Board and contracted for Approved by the Board and not contracted for

108 108

150 150
29. COMMITMENTS AND CONTINGENCIES No known contingent assets or liabilities exist as at Balance Sheet date other than the matters disclosed in Notes 16 and 18 to the Financial Statements. 30. POST BALANCE SHEET EVENTS There have been no material events occurring after the Balance Sheet date that require adjustments or disclosure in the Financial Statements. 31. RELATED PARTY Disclosures Details of significant related party disclosures are as follows:
31.1 Transactions with the Parent and Related Entities
Nature of the Company Relationship Name of Director Nature of Transaction 2010 Rs. Hayleys Plantation Services (Private) Limited Parent Enterprise Mr. A M Pandithage Mr. S T Gunatilleke Mr. Merrill J Fernando Mr. Malik J Fernando Mr. M M M De Silva Mr. D S Senavirattne Dr. R M Fernando (Resigned w.e.f. 07.04.2010) Mr. J M S Brito (Resigned w.e.f. 07.04.2010) Mr. J A G.Anandarajah (Appointed w.e.f. 29.04.2010) Mr. G K Senaviratne (Appointed w.e.f. 29.04.2010) Hayleys PLC Related Company Mr. A M Pandithage Mr. J A G Anandarajah Data Processing Services Secretarial Services, Office Rent and Management Salaries Providers of Warehousing Services Purchase of Equipments and Chemicals Providers of Maintenance Services to Generator Insurance and Brokering Charges 919,630 10,326,519 997,026 10,750,370 978,727 10,374,104 1,024,783 9,340,518 14,929,831 14,767,579 Managing Agents Fee 23,587,468 Amounts 2009 Rs. 14,144,785
MIT Cargo (Private) Limited Hayleys Agro Products Limited Hayleys Industrial Solutions (Private) Limited

compounds by solubilization and hence increases the degradation rate. In some cases the presence of it also reduces the rate. In addition to fundamental studies, some laboratory and field studies on removal of organics from contaminated soil are also reviewed to show the applicability of this technology. Surfactant adsorption, solubilization, surfactant-enhanced remediation,

Keywords:

biodegradation, density modified displacement. Contents 1. Introduction 1.1 Hazardous waste 1.1.1 Source of organic contaminants 1.2 Soil 1.2.1 Chemical and physical properties of soil 1.2.2 Contaminant-soil interactions 1.3 Site characterization 1.4 Surfactants 1.4.1 Synthetic surfactants 1.4.2 Biosurfactants 2. Mechanism of groundwater pollution by organics 2.1 Role of surfactants 3. Importance of surfactant adsorption in remediation 3.1 Anionic surfactant adsorption 3.1.1 Adsorption isotherm of anionic surfactants 3.2 Cationic surfactant adsorption 3.2.1 Adsorption isotherm of cationic surfactants 3.2.2 Nature of clay and d-spacing 3.2.3 Effect of electrolytes in batch study 3.2.4 Effect of electrolytes in column study 3.2.5 Retention of surfactants in column study 3.3 Nonionic surfactant adsorption 3.3.1 Importance of mineral and organic content
3.3.2 Importance of soil composition 3.4 Gemini surfactant adsorption 3.4.1 Effect of spacer length of cationic gemini surfactant 3.4.2 Effect of structure of anionic gemini surfactant 3.4.3 Zwitterionic surfactant 3.4.3.1 Effect of pH on zwitterionic surfactant adsorption 3.5 Biosurfactant 3.5.1 Structure of biosurfactant 3.5.2 Biosurfactant adsorption 3.5.3 Adsorption from mixture of biosurfactants 4. Importance of solubilization 4.1 Micellar solubilization 4.1.1 Solubilization in single surfactant system 4.1.1.1 Effect of hydrophilic chain length 4.1.1.2 Effect of hydrophobic chain length 4.1.1.3 Effect of HLB value 4.1.1.4 Effect of temperature 4.1.1.5 Effect of electrolyte 4.1.1.6 Effect of surfactant type 4.1.2 Solubilization in mixed surfactant system 4.1.2.1 Anionic-nonionic mixed surfactant system 4.1.2.1 Cationic-nonionic mixed surfactant system 4.1.3 Solubilization in biosurfactant 4.2 Relationship between octanol- and micelle-water partition coefficients 4.3 Microemulsion and supersolubilization 5. Mobilization of NAPLs 6. Degradation of organic hydrocarbon 6.1 Effect of surfactant structure and type on biodegradation 7. Surfactant partitioning to NAPL 7.1 Single surfactant system 7.2 Mixed surfactant system

8. Partitioning of contaminants to soil 9. Surfactant enhanced HOCs removal 9.1 Laboratory studies 9.1.1 HOCs removal from soil using single surfactants 9.1.2 HOCs removal from soil using mixed surfactants 9.1.3 HOCs removal from soil using biosurfactants 9.1.4 Removal of dissolved HOCs from water 9.2 Field studies 10. Concluding remarks References
1. Introduction Widespread use, improper disposal, accidental spills and leaks of organic hydrocarbons like petroleum hydrocarbons, organic solvents, and polyaromatic hydrocarbons (PAHs) have resulted in long-term persistent sources of contamination of soil and groundwater, which becomes a major environmental issue because of their adverse effect on human health. Subsurface contamination by the organic compounds is a complex process and difficult to treat due to many reasons like the tendency of adsorption of contaminants onto the soil matrix, low water solubility, limited rate of mass transfer for biodegradation and so on. As many organic compounds have low solubility in water, so they may leach from the soil for a longer period of time and thus ultimately becomes a continuous source of the soil and groundwater contamination. Since the identification of the pollutants based on toxicity is most important, U.S Environmental Protection Agency (EPA) has listed some toxic organic compounds as priority pollutants [1]. The organic contaminants according to physical state can be classified as two types: (i) solid and (ii) liquid. The liquid organic contaminants are remain as a separate phase in aqueous medium are called nonaqueous phase liquids (NAPLs). NAPLs those are denser than water are called DNAPLs, and those that are lighter are called LNAPLs. LNAPLs include hydrocarbon fuels such as gasoline, heating oil, kerosene, jet fuel, and aviation gas. DNAPLs include chlorinated hydrocarbons such as carbon tetrachloride, 1,1,1trichloroethane, chlorophenols, chlorobenzenes, tetrachloroethylene, and PCBs. NAPLs are
frequently enter into the unsaturated zone as a discrete liquid phase and transported downward because of gravitational and capillary forces [2]. DNAPLs will tend to migrate vertically through the saturated zone and will rest on the bottom of the water table. In contrast, LNAPLs will tend to spread laterally along the water table. During the transportation of NAPLs through the subsurface, a portion of the organic phase also retained with in the pores of the soil matrix as an immobile ganglia or globules due to interfacial forces. There are different technologies available for remediation of the sites contaminated with both organic and inorganic contaminants. U.S. EPA has listed different suitable The technologies used for technologies for remediation of RCRA-listed (Resource Conservation and Recovery Act) organic and inorganic hazardous wastes contaminated sites. remediation of those sites are solidification/stabilization, incineration, soil vapor extraction, bioremediation, chemical treatment, solvent extraction etc. Among those technologies, Cement-based solidification /stabilization (S/S) technology has been identified by U.S. EPA as the best demonstrated available technology for RCRA-listed hazardous wastes. S/S was reported as an established technology, and about 24% of the superfund sites are used S/S technology in the United States. The surfactant-based technologies are under innovative technology, and about 2-3% of the superfund sites are used this technology (see Fig. 1) [3]. A recent review on this topic shows that S/S is mainly useful for the inorganic contaminates but not very effective for the organic contaminates, unless the soil is treated with surfactants [4]. Surfactant based technologies may be useful for the organic contaminants. 1.1 Hazardous waste A hazardous waste can be defined as a waste with a chemical composition or other properties that make it capable of causing illness, death, or some other harm to humans and other life forms when mismanaged or released into the environment [5]. The common sources of hazardous wastes are: (a) industrial wastes, (b) agricultural wastes, (c) household or municipal waste, and (d) medical wastes. Hazardous wastes may pollute the soil, air, surface water, or ground water. Underground pollutants can be carried by underground water flow and can mix with underground water table. Municipal Solid Waste (MSW) can be as hazardous as industrial-generated wastes, and pose serious health problem in storage, handling, and disposal. Waste control, disposal standards, and requirements are not well established in many countries. As a result, absence of clear and comprehensive regulations makes it difficult to exercise

3.1 Anionic surfactant adsorption There are several studies on the adsorption of anionic surfactants on soil [45-50] or soil constituents like alumina [52-55], clay [56-58], sediment [59-61]. Among the anionic surfactants, LAS is the surfactant used extensively in detergents in throughout the world because of its effectiveness, versatility, cost/performance ratio and environmental safety. In general, LAS are not strongly adsorbed on soil surfaces [60]. There are different interactions mechanisms proposed for the adsorption of LAS by different researchers such as hydrophobic [48, 60, 62], specific [46, 60], hydrogen bonding [46], precipitation [37, 58, 63], and electrostatic [60] depending on the soil-specific properties such as, pH, organic matter content, clay content, cation exchange capacity (CEC) and amorphous iron content [64]. Wolf and Feijtel [61] have reviewed the fate of linear alkylbenzenesulfonate (LABS) to terrestrial organisms. Adsorption isotherms are commonly used to describe adsorption processes and these represent a functional relationship between the amount adsorbed and the activity of the adsorbate at a constant temperature [52].
3.1.1 Adsorption isotherm of anionic surfactants: The nature of adsorption isotherm of anionic surfactants on soil or soil constituents is depending on the soil nature or the experimental conditions like pH, presence of electrolyte, organic content of the soil etc. Adsorption of anionic surfactants onto positively charged site of alumina [52, 53, 65] and soil [50] shows typical four-regime isotherm, similar to general adsorption isotherm of ionic surfactants onto oppositely charged solid surfaces. The mechanism of occurrences of typical three or four-regime isotherms have been discussed by many researchers [52, 53, 65, 66]. Adsorption of sodium dodecylbenzene sulfonate (SDBS) on sodium saturated montmorillonite shows no significant amount of SDBS adsorbed (< 0.2 mg/g) but the amount adsorbed is significant when Ca2+ montmorillonite is used [58]. Adsorption isotherm of SDBS on Ca2+ montmorillonite shows (Fig. 6) SDBS sorbed sharply to a maximum at its equilibrium concentration about 1.5 CMC (~1400 mg/L) and then decreased rapidly to zero when equilibrium concentration is about to that of maximum. The shape of the isotherm is similar to that of precipitation curve between SDBS and Ca2+ in CaCl2 solution as the precipitation of Ca(DBS)2 appears to be the primary mechanism for the sorption of SDBS [57, 58]. In further, X-ray diffraction (XRD) study shows SDBS could not enter into the interlayer of the montmorillonite. An organic matter (OM) content of the soil has a significant effect on the adsorption of anionic surfactant on soil. The adsorption of anionic and nonionic surfactants by soil shows a positive relationship between adsorption and the OM contents of soil [47, 49, 67, 68], and also there is a relationship between the adsorption and the clay content [46, 69-71]. A recent study shows the adsorption coefficient of SDS increased with increasing the OM content of the soil [49]. The adsorption isotherms of SDS on different soils can be fitted well with the Freundlich isotherm equation [46, 49]. qm = K f Ce

where qm is the adsorption capacity, Ce is the equilibrium surfactant concentration, Kf is the adsorption coefficient (measure of adsorption capacity), nf is a constant (an indicator of the curvature of isotherm). The adsorption coefficient (Kf) values of different OM soils (OM ranges between 0.052-10.3%) ranged between 1.77 and 82.1. In general, the higher Kf values 15
corresponding to the soils with elevated OM content. It is proposed, SDS and LABS are adsorbed through hydrophobic interaction with the OM of the soil and by ligand exchange and/or electrostatic attraction with kaolinite [45, 49]. Ligand exchange occur according to following mechanism [46]:

OH2 M OH2

+ LABS

OH2 LABS 0

OH M OH2
Adsorption of LABS with different alkyl chain length on sludge shows a linear relationship between the logKi [55]. Ki is the partition coefficient, defined as the ratio of the amount of SDS in the soil and in the equilibrium solution for a given equilibrium concentration. The increase in Ki with increasing alkyl chain length is indicative of hydrophobic interaction controlling the adsorption of LABS on sludge.
3.2 Cationic surfactant adsorption Adsorption of cationic surfactants at solid/liquid interfaces has a wide range of applications, such as detergency, fabric softeners, wetting, ore flotation, and corrosion inhibition etc. Moreover, cationic surfactants have also been suggested for potential use in the remediation of contaminated soils and aquifers [35, 72]. Cationic surfactants are adsorbing strongly onto soil and sediments because of favorable electrostatic interactions with the predominately negatively charged soil mineral surfaces [73]. Thus, the surface of the clay may be greatly modified to become strongly hydrophobic after adsorption of cationic surfactants. Several researchers have studied the adsorption of a variety of cationic surfactants on silica [43, 74-78], soil, clay, and mineral surfaces [35, 48, 72, 79-87]. 3.2.1 Adsorption isotherm of cationic surfactants: The general shape of the cationic surfactant adsorption on soil using a specific example of HDTMA is discussed here. The HDTMA adsorption on soil can be divided into four distinct regions, shown in Fig. 7. In region-I (equilibrium concentration, Ceq < C1), shape of the isotherms varied, depending on the type of cations initially saturating soil clays. The calcium saturated soil shows a linear 16

and column studies have been changed. The adsorbed amounts of the components at higher surfactant concentration in the column studies at full breakthrough were lower by certain factor under continuous flow conditions than the batch studies. The lower degree of surfactant adsorption in column experiments may be attributed to the presence of shear stress during continuous flow conditions, which might counteract formation of surface aggregates and thereby reduce adsorption. 4. Importance of solubilization Solubilization in micellar solution is a promising method for significantly increasing the efficiency of remediation of aquifers contaminated with NAPLs or solids like PAHs [133]. PAHs are hydrophobic pollutants often introduced into subsurface from the sites of creosote wood treatment, coal storage, coke oven plants, and coal tar spillage. Because of the low solubility of these organic contaminants in water, they present in the soil matrix as a long-term source of contaminants, and also pump-and-treat remediation of soils polluted with such contaminants are become difficult. In that case, SER have been proposed as a promising technology for removing low soluble residual organics from contaminated aquifers [2, 37]. This technology is based primarily on two processes: (i) micellar solubilization and (ii) mobilization of entrapped NAPLs due to reduction in interfacial tension. The aspects of solubilization in micellar solution will be discussed in this section and mobilization in the next section. The surfactants exist as monomers below the surfactants CMC and have only minimal effects in the aqueous solubility of organics [134, 135]. Micellar solubilization occurs when the surfactant concentration exceeds the CMC, where the aqueous solubility of organics is enhanced by the incorporation of hydrophobic molecules into surfactant micelles [134-136]. The extent of micellar solubilization depends on many factors, including surfactant structure, aggregation number, micelle geometry, hydrophile/liophile balance (HLB) value, ionic strength, temperature, and the size and chemistry of the solubilizate [14, 137]. 4.1 Micellar solubilization: To quantify the effectiveness of a surfactant in solubilizing a given solubilizate, the molar solubilization ratio (MSR) is used. MSR is defined as the number of moles of organic compound solubilized per mole of surfactant added to the solution. When both the concentrations (surfactant and solubilizate) are expressed in same unit, the MSR is dimensionless. The MSR can be calculated as [135]

MSR = (S SCMC)/(CS CMC)

where S is the apparent solubility of organic compounds at surfactant concentration CS (CS > CMC) and SCMC is the apparent solubility of the organic compounds at the CMC. MSR can be determined from the slope of the linearly fitted line of solute concentration vs. surfactant concentration curve above the CMC. Partitioning of the organic compounds between micelles and monomeric solution is an alternative approach in quantifying the surfactant solubilization. The micelle phase/aqueous-phase partition coefficient (Kmw) is based on the mole fraction ratios, the ratio of mole fraction of the compound in the micellar pseudophase (Xm) to the mole fraction of the compound in the aqueous pseudophase (Xa). Kmw also can be defined as [133, 138]

solubilization, the optimum temperature is also dependent on the hydrophilic chain length [180]. 4.1.1.5 Effect of electrolyte: The addition of electrolyte at low level does not change the solubility of organic compounds in presence of nonionic surfactants but the small changes occur at high electrolyte concentration [144]. At high electrolyte concentration there is a decrease in cloud point and increase in aggregation number due to the salting out of the nonionic surfactant [185]. It is well known that increasing the ionic strength increases the micelle aggregation number and decreases the CMC for ionic surfactants, as a result solubilization power also increases. It has been found that the solubilization power of pyrene in SDS increases by approximately 16% as the NaCl concentration is increased from 0 to 100 mM. 4.1.1.6 Effect of surfactant type: The nonionic surfactants are better solubilizing agents than ionics in very dilute solution, because of lower CMC. In general, the order of solubilizing power of hydrocarbons and polar compounds that are solubilized in the inner core are: nonionics > cationics > anionics, with same hydrophobic chain length [180, 175, 186]. In the study of Paria and Yuet [105] solubilization capacity of naphthalene in presence of cationic surfactants with different head group have been studied. Comparison of solubilization capacity of naphthalene in cationic surfactants, C14PB and C14TAB show there is no difference in solubility as the tail length is similar and the head group area and charge are almost similar. Comparison of solubilization of naphthalene between cationic (C12PB) and anionic (SDS) surfactants with identical hydrocarbon chains (C12) show that the MSR for SDS is lower, about half of that for C12PB. The difference in solubilization is probably due to the adsorption of naphthalene at the micellar surface by electrostatic interactions between the -electrons of naphthalene and cationic micelle. 4.1.2 Solubilization in mixed surfactant system: It has been mentioned earlier that there are few literature available on mixed surfactant systems, most of these studies are concentrated on poly aromatic hydrocarbons [105, 161, 162-164, 166] and a few on chlorinated hydrocarbons [165, 167, 187]. 4.1.2.1 Anionic-nonionic mixed surfactant system: In general, ionic-nonionic mixed surfactants show better solubilization efficiency, exhibiting higher cloud points than those of the single nonionic surfactant, as well as lower Kraft points than those of the single ionic
surfactant. As a result, mixed surfactants could be useful for the application of SER over a wide range of temperature, salinity, and hardness conditions than the individual surfactants [162]. The studies on solubilization of PAHs in anionic-nonionic surfactant mixture show the higher solubility of PAHs in mixed surfactant systems than those in single surfactant solutions at comparable surfactant concentrations [161, 162]. Zhou and Zhu [162] have reported the pyrene solubilization efficiency in mixed surfactant systems in terms of deviation ratio (R) between the MSRexp and the MSRideal (R = MSRexp/MSRideal). When the value of R is greater than 1, there will be a positive mixing effect of mixed surfactants on the solubilization and positive deviation of MSRs from the ideal mixture. In their study, the values of R for pyrene are larger than 1 at any solution composition studied, which indicates that the four anionic-nonionic mixed surfactants studied by them have the positive deviation from ideal mixture (see Fig. 20a). The positive deviation of MSRs from ideal mixture follows the order of SDS-TX-405 > SDS-Brij-35 > SDS-Brij-58 > SDS-TX-100. This mixing effect was found to increase with an increase in the HLB value of nonionic surfactants, also there was a strong negative deviation of the CMC values from the ideal mixture. The larger the HLB of nonionic surfactants in the mixed system, the grater the attractive interaction between the components of mixed surfactants, which result in the greater negative deviation of the CMC from ideal mixture, and then the mixing effect of anionic and nonionic surfactants on solubilization of pyrene becomes grater. In addition, the positive deviation of MSRs from ideal mixture has a maximum for all four mixed systems at the mole fraction of nonionic surfactant between 0.1 and 0.3. Similar results in positive deviation and maximum in R was also found by others [105, 164, 188]. The mole fraction of nonionic surfactants at which maximum in R occurs depending on the surfactant molecular structure. The addition of inorganic ions in ionic-nonionic mixed surfactant systems increases the solubility of organic hydrocarbons [161]. Higher the valence of the inorganic ions higher the efficiency of the solubilization enhancement. 4.1.2.2 Cationic-nonionic mixed surfactant system: Paria and Yuet [105] have studied the solubilization of naphthalene in presence of cationic-nonionic and anionic-nonionic surfactant mixtures. In the mixed systems nonionic surfactant (NP-9) was same, and different chain length cationic surfactants (C10PB, C12PB, and C14PB) were used. The negative deviation in R

(R < 1) was found in this study (see Fig. 20b). The deviations are more pronounced at low mole fractions of NP-9, with the extent of deviation in the cationic surfactant series increasing as C14PB < C12PB < C10PB. In addition, a comparison between similar hydrocarbon chain length cationic and anionic surfactants, C12PB and SDS, show the deviation is more pronounced with cationic surfactant. The negative deviation of R in the cationic-nonionic surfactant mixtures can be attributed as (i) a reduction in surface adsorption of the naphthalene molecules and (ii) the close packing of molecules in the mixed micelle due to a reduction in electrostatic repulsion among surfactant heads. The close packing of surfactant molecules also occurs when the hydrophobic chain lengths are very similar, which may contribute to the increase in deviation from C10PB to C14PB. The difference in deviation between SDS and C12PB may also be explained in terms of adsorption of naphthalene molecules at the micellar surface. 4.1.3 Solubilization in biosurfactant: Biological surfactants have advantages relative to synthetic surfactants for specific applications due their structural diversity, biodegradability, and effectiveness at extreme temperature, pH, and salinity [128]. Due to the environmental friendly nature of the biosurfactants, many researchers have studied solubilization of organic hydrocarbons in presence of biosurfactants for the application in remediation process [22, 128, 189-193]. Most of the researchers have used rhamnolipid biosurfactant for their studies. In the comparison of the effectiveness of anionic rhamnolipid biosurfactant (CMC = 0.0342 mM) and a synthetic anionic surfactant (CMC = 0.424 mM) in solubilizing hexadecane, Thangamani and Shreve [128] found the MSRs for solubilization of hexadecane in rhamnolipid biosurfactant was approximately 20 times more effective that the alkylbenzene sulfonate (ABS) synthetic surfactant. Kanga et al. [193] have compared the effect of biosurfactants and synthetic surfactants on solubilization of naphthalene and methyl substituted naphthalenes (see Fig. 21). The synthetic surfactants have a lower solubilization potential than the biosurfactant, as shown lower enhancement factor E. Although biosurfactants have a higher solubilization potential, the rate coefficients are lower than the synthetic surfactant. They have found that kinetics of solubilization of naphthalene and methyl-substituted naphthalenes in bio (Glycolipids from

microorganisms may or may not have ability to secrete surfactants but adhesion of cell to the surface is one of the major mechanisms [218]. However, it has been shown that increased dispersion does not always lead to increased biodegradation. biodegradation rates [25]. In some cases, surfactants show inhibitory effects on biodegradation [189, 193, 218224]. It has been shown that surfactants inhibit the biodegradation of hydrocarbons by detaching the cells from the liquid/solids-water interface [12, 218]. In some cases surfactants used as a preferential growth substrate by degrading microorganisms [221, 225, 226] and toxicity of the surfactants [227, 228] cause the inhibitory effects on biodegradation. Even, the toxicity of the surfactants to the pollutant degrading bacteria also depends on the surfactants binding to the soil constituents. As an example, the HDTMA adsorbrd to the clay is essentially nontoxic to the pollutant-degrading bacteria in soils whereas aqueous-phase HDTMA shows considerable toxicity [229]. There are many studies on biodegradation of organic hydrocarbons in presence of synthetic [162, 218, 221, 225, 230-237] and biosurfactants [25, 189, 218, 237-239]. It has been found that surfactants have facilitate, retard, or no effect on biodegradation of organic hydrocarbons. The summary of some research work on effect of surfactants on biodegradation of organic hydrocarbons are presented in Table 9, mostly taken from the paper of Liu et al. [232], indicates the effects of surfactants on microbial degradation of HOCs are neither consistent nor have a general trends. degradation of organic hydrocarbons are listed in Table 10. 6.1 Effect of surfactant structure and type on biodegradation: In the surfactant enhanced biodegradation process surfactant should not be biodegradable and should be nontoxic to the biodegradable bacteria. Biodegradation of nonionic surfactants is difficult when the hydrophobic part of the molecule is branched, an aromatic group is present within the hydrophobic part, or ethoxylate chain length of hydrophilic portion is more [249, 221]. Toxicity of surfactants to several soil bacteria related to the HLB values, for a similar chain length higher the HLB values lower the toxicity. Toxicity of nonionic surfactants with ethylene oxide chains lower than six monomers were related to buried in the lipid layer of liposome and caused damage the membrane, long ethylene oxide chains (e.g. 30 monomers) had no effect on membrane permeability [221, 250]. Liu et al. [232] have studied the Different bacteria used for Which indicate three-way interaction among the biosurfactant, substrate, and cell that is crucial to achieving enhanced

= Permittivity in the medium
r, 'r = Electrostatic repulsion among surfactant heads, and the reduced potential energy respectively

0 = Surface potential

= Debye-Hckel parameter
p = Plateau surface excess

Abbreviations

ABS = Alkylbenzene sulfonate CB = Chlorobenzene CDC = Critical desorption concentration CEC = Cation exchange capacity CMC = Critical micellar concentration DNAPL = Dense nonaqueous phase liquid DNT = Dinitrotoluene DTAB = Dodecyl trimethylammonium bromide DMD = Density modified displacement EO = Ethylene oxide EPA = Environmental protection agency HCB = Hexachlorobenzene HDTMA = Hexadecyltrimethylammonium HLB = Hydrophile/liophile balance HOC = Hydrophobic organic compounds IFT = Interfacial tension LAS = Linear alkylbenzene sulfonate LNAPL = Light nonaqueous phase liquid MCL = Maximum contaminants limits MADS = Monoalkyl disulfonate MAMS = Monoalkyl monosulfonate MSR = Molar solubilization ratio NAPL = Nonaqueous phase liquid NP = Nonylphenyl 55
NT = Nitrotoluene OM = Organic matter PB = Pyridinium bromide PO = Propylene oxide QAC = Quaternary ammonium compound RCRA = Resource conservation and recovery act SDBS = Sodium dodecylbenzenesulfonate SDS = Sodiumdodecylsulfate SEAR = Surfactant enhanced aquifer remediation SER = Surfactant enhanced remediation S/S = Solidification/ stabilization TCE = Trichloroethelene XDR = X-ray diffraction

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Surfactants used: (1) water (Control); (2) Tween 60 (synthetic surfactant); (3) Rhodococcus biosurfactant produced on ndodecane; (4) Rhodococcus biosurfactant produced on nhexadecane [268].
Fig. 26: In situ flushing system at the pilot site [278].

Tables:

Table- 1: Typical hazardous substances in industrial waste streams [8].
Industry Chemical Electrical and Electronics Electroplating metal Ind. Leather Mining, Metallurgy Paint&Dye Pesticide Pharmaceutical Pulp & Paper MSW

Arsenic -

Heavy metal

Chlor. Hcarbons

Mercury

Cyanides -

Selenium -

Organics -

Misc. organics include various phenols, benzenes etc.
Table-2: MCL of organic contaminants in water [7] Contaminant Alachor Benzene MCL (mg/l) 0.002 0.005 Health effect Eye, liver, kidney or spleen problems; anemia; increased risk of cancer Anemia; decrease in blood platelets; increased risk of cancer Reproductive difficulties; increased risk of cancer Problems with blood, nervous system, or reproductive system Liver problems; increased risk of cancer Liver or kidney problems Source Runoff from herbicide used on row crops Discharge from factories; leaching from gas storage tanks and landfills Leaching from linings of water storage tanks and distribution lines, coal storage. Leaching of soil fumigant used on rice and alfalfa Discharge from chemical plants and other industrial activities Discharge from chemical and agricultural chemical factories Runoff/leaching from soil fumigant used on soybeans, cotton, pineapples, and orchards Discharge from industrial chemical factories Discharge from industrial chemical factories Discharge from petroleum refineries Discharge from petroleum factories Discharge from textile finishing factories

0.0002

Carbofuran Carbontetra chloride Chlorobenzene

0.04 0.005

Reproductive difficulties; increased risk of cancer
Odichlorobenzene pdichlorobenzene Ethylbenzene Toluene

0.6 0.075 0.7 1

Liver, kidney, or circulatory system problems Anemia; liver, kidney or spleen damage; changes in blood Liver or kidneys problems Nervous system, kidney, or liver problems Changes in adrenal glands
0.07 1,2,4 Trichlorobenzene a 1,2-Dibromo-3-chloropropane
Table 3: Common primary minerals in soils ([9, 10] Primary mineral 1. Quartz 2. Feldspar Orthoclase, Microcline Albite (Plagioclase) 3. Mica Muscovite Biotite 4. Ferromagnesians Hornblende Olivine Amphiboles 5. Magnesium silicate Serpentine 6. Phosphate Apatite 7. Carbonates Calcite Dalomite Chemical composition SiO2 KAlSi3O8 NaAlSi3O8 H2KAl3SiO3O12 (H,K)2(Mg,Fe)2(Al,Fe)2Si3O12 Ca(Fe,Mg)2Si4O12 (Mg,Fe)2 SiO4 Mg, Fe)7(Si4O11)2(OH)2 H4Mg3SiO2O3 (Ca3(PO4))3 Ca(F, Cl)2 CaCO3 Ca Mg (CO)3

9.2 10-2 9.2.4 1.2 10-1 2.5 10-1 1.3 10-1 7.2 10-2 4.9 10-2 6.5 10-2 3.1 10-3 3.0 10-3 2.8 10-3 3.9 10-3 4.1 10-3 4.3 10-3 4.1 10-2 3.7 10-2 8.6 10-2 1.52 10-1 1.8 10-1 1.9 10-1 1.4 10-1 4.7 10-2 1.1 10-1 1.2 10-1 6.7 10-2 1.6 10-2 3.5 10-2 1.70 10-2 1.04 10-1 1.60 10-1 2.9 10-2 2.3 10-2 3.8 10-2 7.15 10-2 8.8 10-2 8.6 10-2 6.7 10-2 3.6 10-2 4.1 10-2 5.2 10-2 4.25 10-2 5.76 10-2 7.5 10-3 9.2 10-2 9.1.3 10

-2 -1 -2 -1

4.61 5.18 4.81 5.24 4.65 5.36 5.21 5.12 5.23 5.33 5.09 5.59 5.61 6.01 5.9 5.57 5.09 5.60 5.57 6.20 6.20 6.10 5.63 6.05 5.91 5.79 5.18 5.53 6.17 5.68 5.72 5.9 5.65 5.86 6.53 6.70 6.70 6.60 5.99 6.50 6.45 6.01 6.41 5.7 6.60 6.60 6.70
[160] [160] [160] [160] [160] [167] [167] [167] [160] [160] [160] [160] [160] [160] [160] [160] [160] [135] [157] [157] [157] [160] [160] [160] [120] [120] [120] [120] [135] [135] [160] [160] [160] [135] [157] [157] [157] [160] [160] [160] [160] [135] [169] [157] [157] [157]
Tween-80 Tween-20 Tergitol 15-S-7 Tergitol 15-S-9 Neodol 25-7 4-NT Tergitol NP-10 Tergitol NP-15 Tergitol NP-40 Brij 35 Tween 80 2,4-DNT Tergitol NP-10 Tergitol NP-15 Tergitol NP-40 Brij 35 Tween 80
1.3 10-1 9.5 10-2 2.9 10-2 3.5 10-2 7.1 10-2 3.77 10-1 3.67 10-1 2.77 10-1 2.81 10-1 4.08 10-1 9.2 10-2 8.7 10-2 8.1 10-2 9.7 10-2 1.18 10-1
6.70 6.60 6.34 6.28 6.49 3.77 3.76 3.67 3.67 3.8 3.75 3.73 3.7 3.77 3.85
[157] [157] [168] [168] [168] [167] [167] [167] [167] [167] [167] [167] [167] [167] [167]
Table 9: Summary of reported effects of surfactants on microbial degradation.
Overall effecta Observation Enhanced bacterial growth rate and increased rate of n-alkane consumption Addition of Alfonic 810-60 or Novel 11 1412-56 enhanced biodegradation of phenanthrene and biphenyl in the presence of aquifer material Extent of biodegradation of phenanthrene in soil increased by low doses of surfactant in absence of surfactantinduced desorption Triton X-100 increased both the rate and extent of mineralization of naphthalene Increased hydrocarbon degradation rate and extent with biosurfactant addition Microorganisms were able to rapidly incorporate significant quantities of octadecane Explanation Surfactant solubilization increases aqueous solubility of hydrocarbon Enhancement may be due to removal from the solid and subsequent partitioning in the aqueous pseudophase No explanation Ref. [231 ] [240 ] [227 ] Although bacterial adherence prevented, there was sufficient aqueous naphthalene concentration Reduction in interfacial tension Liposomes facilitated substrate transport through the microbial cell wall [241 ] [242 ] [217 ]

+ + + + -

Different Tween-type nonionic surfactants enhanced phenanthrene biodegradation Nonionic detergents stimulated growth on hexadecane Enhanced rate of biodegradation of PCBs in ligninsulfonate emulsion Enhancement in biodegradation of chlorinated hydrocarbon in waste water in presence of surfactant No effect on phenanthrene mineralization in soilwater systems at low surfactant dose Aromatic biodegradation by pure cultures either unaffected or slightly stimulated by emulsification of oil Mineralization of phenanthrene inhibited at higher surfactant doses Reduced effectiveness or inhibition observed at higher surfactant concentration Triton X-100 completely prevents mineralization of hexadecane dissolved in heptamethylnonane Decreased biodegradation of HC in emulsantreated oil Degradation of phenanthrene in SDS-TX100 mixture decreases as the mole fraction of SDS in mixture was greater. Solubilization of phenanthrene was increased in presence of SDS but degradation of phenanthrene decreased in presence of SDS.

Fig. 21: Aqueous solubility-enhancement factor (K), first-order rate coefficient (k), and time to reach 99% of the saturation concentration for the naphthalenes family, as calculated by optimizing the first-order saturation model [193].
Fig. 22: Typical phase behavior of microemulsion showing the transition from oil in water (type I) to bicontinuous structure (type III) and water in oil structure (type II); initial volume ratio of oil to water = 1:1 [197].
Fig. 23: TX100 losses into 1,2-DCB organic phases vs. total surfactant concentration at 1:40 phase ratio of 1,2-DCB: water (v/v) [164].
Fig. 24: The desorption percentage (Rd) of phenanthrene by different surfactant systems with various mole ratios of SDS (S) to TX100 (T) [265].
Fig. 25: Biosurfactant-enhanced oil recovery from the model soil at different temperatures. Surfactants used: (1) water (Control); (2) Tween 60 (synthetic surfactant); (3) Rhodococcus biosurfactant produced on ndodecane; (4) Rhodococcus biosurfactant produced on nhexadecane [268].