Mar 31, 2022
Your Directors hereby present the 49th Annual Report of your Company together with audited financial statements for the year ended on March 31,2022.
Your Company''s financial performance during the year ended March 31,2022 as compared to previous financial year is summarized below:
('' in lakhs. |
||
Particulars |
2021-22 |
2020-21 |
Period |
12 months |
12 months |
Revenue from Operations |
217,901.56 |
1,63,148.40 |
Other Income |
1,387.89 |
1305.18 |
Profit / (Loss) before Tax |
44,257.82 |
37,607.38 |
Tax Credit / (Expense) |
(12,003.48) |
(9,585.86) |
Profit / (Loss) for the year |
32,254.34 |
28,021.52 |
Other Comprehensive Income |
33.91 |
(72.11) |
Total Other Comprehensive Income for the year |
32,288.25 |
27,949.41 |
Retained Earnings |
||
Opening Balance |
77,500.57 |
49,551.16 |
Add: |
||
Total comprehensive income for the year |
32,288.25 |
27,949.41 |
Less: |
||
Dividends including dividend tax |
35,522.94 |
- |
Closing Balance |
74,265.88 |
77,500.57 |
EPS (Basic?) |
183.40 |
159.34 |
EPS (Diluted?) |
183.40 |
159.34 |
During the year under review, total revenue from operations of your Company was ? 217,901.56 Lakhs as compared to ? 163,148.40 Lakhs during previous financial year with an approx. 34% increase in the total revenue as compared to previous year. Your Company''s profit before tax in financial year 2021-22 was ? 44,257.82 Lakhs as compared to a profit before tax of ? 37,607.38 Lakhs in previous year and the Total Comprehensive Income for the financial year 2021-22 was ? 32,288.25 Lakhs as compared to ? 27,949.41 Lakhs in the previous year.
Considering the performance, and to appropriately reward the Members in view of excellent profits, the Directors earlier declared a special interim dividend of ?192/- per equity share involving a cash outflow of ? 33,764 lakhs. The Directors have now declared a second interim dividend of ? 105/- per equity share involving a cash outflow of ? 18,465 lakhs, at their meeting held on May 26, 2022. The Board has not recommended any final dividend. The total dividend for FY 2021-22 amounts to ? 297/- per equity share and would involve a total cash outflow of ?52,229 lakhs.
The Company is not required to transfer any amount to its reserves and accordingly no amount is transferred to reserves during the year under review.
MANAGEMENT DISCUSSION AND ANALYSIS
As required by Regulation 34(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), a Management Discussion and Analysis Report forms part of this Report and is annexed hereto.
A review of the performance and future outlook of the Company and its businesses, as well as the state of the affairs of the business, along with the financial and operational developments have been discussed in detail in the Management Discussion and Analysis Report, which forms part of this Report.
CASH FLOW AND CONSOLIDATED FINANCIAL STATEMENTS
As required under Regulation 34 of the Listing Regulations, a Cash Flow Statement forms part of the Annual Report. The Company does not have any subsidiaries and hence is not required to publish Consolidated Financial Statements.
BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNELAppointments/Re-appointments
During the year under review:
1. Following directors were appointed at the 48th Annual General Meeting of the Company held on August 13, 2021:
DIN |
Name of Director |
Category |
Resolution number and type |
Tenure |
08830690 |
Mr. Robbie Alphons Maria Buntinx |
Non-Executive and Non-Independent, Chairman of the Board |
Resolution 4, Ordinary Resolution |
w.e.f. August 28, 2020 |
00046815 |
Mr. Vinesh Prabhakar Sadekar |
Non-executive and Independent Director |
Resolution 5, Ordinary Resolution |
For a period of three consecutive years w.e.f. 01 January 2021 |
07533471 |
Mr. Sanjeev Madan |
CFO and Whole-time Director |
Resolution 6, Special Resolution |
For a period of three years w.e.f. 01 January 2021 |
2. During the financial year 2021-22, at its meeting held on February 09, 2022, pursuant to the recommendation of the Nomination and Remuneration Committee, the Board of Directors approved the re-appointment of Mr. Sanjiv Vasudeva (DIN: 06570945) as Managing Director & CEO for a further period of 3 years w.e.f. March 01, 2022 on the terms and conditions detailed in the explanatory statement to the notice convening the Annual General Meeting and the Board recommends his re-appointment for the shareholders'' approval at the ensuing Annual General Meeting.
3. During the financial year 2021-22, no new Director was appointed as Additional Director. However, during the current financial year 2022-23, at its meeting held on April 13, 2022, pursuant to the recommendation of the Nomination and Remuneration Committee, the Board of Directors approved the appointment of Ms. Sandra Martyres (DIN:00798406) as an Independent Director on the Board for a period of 3 years w.e.f. May 16, 2022 and she holds office upto the ensuing Annual General Meeting as an Additional Director. The Board recommends her appointment as an independent director for the shareholdersâ approval at the ensuing Annual General Meeting.
4. Vide resolutions passed at the respective meetings of Nomination and Remuneration Committee and subsequently of the Board of Directors of the Company, on May 26, 2022, it was proposed to recommend the appointment of Mr. Ramesh Chandak (DIN: 00026581) as an Independent Director by the shareholders of the Company at the ensuing AGM, for a term of 3 years with effect from August 12, 2022.
The aforesaid appointments were made pursuant to a detailed evaluation by the Nomination and Remuneration Committee members and their unanimous recommendation to the Board. The Board believed that the new Directors possess the adequate integrity, expertise and experience (including the proficiency), as required for being appointed as âan Independent Directorâ.
Mr. Robbie Alphons Maria Buntinx, Non-executive and Non-independent Director(Chairman of the Board), who retires by rotation and being eligible, offers himself for re-appointment in terms of the Articles of Association of the Company.
During the year, none of the Directors of the Company has resigned and / or ceased to be director.
However, during the financial year 2022-23, subsequent to the completion of second consecutive term as Independent Director, following director has retired as âan Independent Directorâ from the Board and its various Committees.
DIN number |
Name of the Director |
Effective date of cessation |
00116930 |
Ms. Ryna Karani, Independent Woman Director |
May 15, 2022 |
The Board places on record its appreciation for the efforts and contributions from Ms. Ryna Karani during her tenure as an Independent Director of the Company.
0 Policy on Directors'' appointment and remuneration
The policy on Director''s appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of Director and also remuneration for key managerial personnel and other employees, forms part of the Corporate Governance Report annexed hereto.
MEETINGS OF BOARD OF DIRECTORS OF THE COMPANY
During the financial year under review, the Board of Directors duly met five times. The details of the Board meetings with regard to their dates and attendance of each of the Directors thereat have been set out in the Corporate Governance Report.
DECLARATION BY INDEPENDENT DIRECTORS
Ms. Ryna Karani, Mr. Anil Shankar and Mr. Vinesh Sadekar were the Independent Directors of the Company as on March 31,2022.
The Board of Directors of the Company hereby confirms that all the Independent Directors duly appointed by the Company had given the certificate stating that they met the criteria of independence as provided under the Act and the Listing Regulations and they have registered their names in the Independent Directors'' Databank.
The details of performance evaluation of Directors are stated in the section on Nomination and Remuneration Committee
in the Corporate Governance Report annexed hereto.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(3)(c) and 134(5) of the Act, the Board of Directors of the Company confirms that:
i) in the preparation of the annual accounts for the financial year ended March 31, 2022, the applicable accounting standards have been followed along with proper explanation relating to material departures;
ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of financial year and of the profit / loss of the Company for that period;
iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv) they have prepared the annual accounts on a going concern basis;
v) they had laid down internal finance controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.
The Audit Committee of the Board of Directors comprises of all Independent Directors and is constituted as under, as on
March 31,2022:
Name of the Director |
Position in Committee |
Mr. Anil Shankar, Independent Director |
Chairman |
Ms. Ryna Karani, Independent Woman Director |
Member |
Mr. Vinesh Sadekar, Independent Director |
Member |
The terms of reference of the Audit Committee, details of meetings held during the year and attendance of members are set out in the Corporate Governance Report.
During the year under review, the Board has accepted all recommendations of Audit Committee and accordingly no disclosure is required to be made in respect of non-acceptance of any recommendation of the Audit Committee by the Board.
FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS
The Directors are regularly informed during meetings of the Board and its Committees on the activities of the Company, its operations and issues faced by the petrochemicals industry. The details of familiarization programs provided to the Directors of the Company are available on the Companyâs website http://www.ineosstyrolutionindia.com/INTERSHOP/ static/WFS/Styrolution-India-Site/-/Styrolution India/en_US/Company/Familiarization_Programme_%20Independent_ Directors%20 2017.pdf
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and operations of the Company in future.
The Company has not accepted any deposit, within the meaning of Sections 73 and 74 of the Act, read with the Companies (Acceptance of Deposits) Rules, 2014 during the year under review.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
The Company has not granted any loans or made any investments or provided any guarantees or security to the parties covered under Sections 185 and 186 of the Act.
TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the applicable provisions of the Act, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (âthe Rulesâ) as amended, all unpaid or unclaimed dividends which were required to be transferred by the Company to the IEPF were transferred to IEPF Authority. The Company has also transferred shares in respect of which dividend amount remained unpaid/unclaimed for a consecutive period of 7 (Seven) years or more to IEPF Authority within stipulated time. The details of unpaid/unclaimed dividend and the shares transferred to IEPF Authority are available on the Companyâs website at https://www.ineosstyrolutionindia.com/INTERSHOP/web/WFS/Styrolution-India-Site/en_US/-/USD/ViewContent-Start?PageletEntryPointID=investors-investor-dividend.
The Company has already transferred unclaimed dividends and respective shares to the IEPF Authority upto the year 2013. Since the Company had changed its financial year in 2014-15 from April to March, the next transfer of shares would be due in the month of September 2022 and the Company would be making necessary announcements in this regard as per the prescribed timelines. All those shareholders who have not claimed dividends for the year 2014-15 onwards are requested to contact the Company regarding unclaimed dividends at the earliest.
Your Company observes high standards of Corporate Governance in all areas of its functioning with strong emphasis on transparency, integrity and accountability. As required under the Listing Regulations, a detailed report on Corporate Governance along with the CEO and CFO certificate and a compliance certificate thereon from a Practising Company Secretary forms part of this report as Annexure - I.
CORPORATE SOCIAL RESPONSIBILITY
In compliance with the requirements of Section 135 of the Act, the Company has constituted a âCorporate Social Responsibility (CSR) Committeeâ and has also framed a CSR Policy. The details of the policy, composition of the Committee, CSR initiatives, CSR spending during the year etc., have been provided as Annexure - II to this report, as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended from time to time.
The amount required to be spent on CSR activities during the year ended March 31, 2022 in accordance with the provisions of Section 135 of the Act was ? 228.46 Lacs and your Company had spent an amount of ? 234.72 Lacs towards CSR expenses, details of which are stated in Annexure-II.
The Company considers CSR as a part of its corporate philosophy and will continue to ensure that the amounts are adequately spent to ensure compliance in true spirit.
The Company considers CSR as a part of its corporate philosophy and will continue to ensure that the amounts are adequately spent to ensure compliance in true spirit.
Disclosures with respect to the remuneration of Directors, KMPs and employees as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure - III to this Report. Details of employee remuneration as required under provisions of Section 197(12) of the Act read with Rule 5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 form part of this Report. However, the reports and accounts are being sent to the shareholders excluding the aforesaid remuneration. Any shareholder interested in inspection of the documents pertaining to the above information or desiring a copy thereof may write to the Company Secretary.
The details of the Risk Management Policy adopted by the Board of Directors and details of the Risk Management Committee of the Board of Directors are mentioned in the Corporate Governance Report.
PARTICULARS OF CONTRACTS AND AGREEMENTS MADE WITH RELATED PARTIES
All related party transactions which were entered into during the year under review were on arm''s length basis and in the ordinary course of business. There were no materially significant related party transactions entered into by the Company with the Promoters, Directors or the Key Managerial Personnel, who may have a potential conflict with the interests of the Company.
The particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Act in the prescribed Form AOC-2, is provided as Annexure-IV forming part of this report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
A statement highlighting details of the conservation of energy, technology absorption, and foreign exchange earnings and outgo, in accordance with Section 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014 is annexed hereto as Annexure - V and forms part of this report.
There have been no instances of fraud reported by the auditors under Section 143(12) of the Act and rules framed thereunder, either to the Company or to the Central Government.
MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TILL THE DATE OF THE REPORT
There have been no material changes, which have occurred between the end of financial year till the date of this report affecting the financial position of the Company.
As required under Section 92(3) of the Act, the Company has placed a copy of the annual return on its website and the same is available in the Investors Section on (ineosstyrolutionindia.com)
Start?PageletEntryPointID=investors-investor-info
Your Company recognizes and embraces the importance of a diverse Board in its success. We believe that a truly diverse Board will leverage differences in thought, perspective, knowledge, regional and industry experience, age, ethnicity, race and gender, which will help retain our competitive advantage. The Board of Directors has adopted the âBoard Diversity Policyâ, which sets out the approach to diversity of the Board. The Board diversity policy is available on our website https://www.ineosstyrolutionindia.com/INTERSHOP/static/WFS/Styrolution-India-Site/-7Styrolution-India/en_US/ Company/Board_Diversity_Policy_INEOS_2017.pdf.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an adequate system of internal controls in place. It has documented procedures covering all financial and operating functions. These controls have been designed to provide a reasonable assurance with regard to maintaining of proper accounting controls, monitoring of operations, protecting assets from unauthorized use or losses, compliances with regulations and for ensuring reliability of financial reporting. The Company has continued its efforts to align all its processes and controls with global best practices in these areas as well.
The Audit Committee of the Board of Directors, comprising of Independent Directors, regularly reviews the audit plans, significant audit findings, adequacy of internal controls, compliance with accounting standards as well as reasons for changes in accounting policies and practices, if any.
SAFETY, HEALTH AND ENVIRONMENT
Your Company gives highest importance to Safety, Health and Environment (SHE), and encourages and promotes safety awareness in true letter and spirit as an integral part of its work culture.
Process Safety Management (PSM) is an integral part of all changes taking place in the process. Onsite emergency plans have been reviewed and updated by all divisions. Periodic mock drills are conducted at all divisions and reports indicate improved preparedness of employees.
To further strengthen the safety of overall operations and to promote a positive safety culture and transparency, your Company has introduced site specific behavioral based safety (BBS) process at all its manufacturing locations and substantially invested for the improvement of process safety.
Apart from employees, the contractors and workmen are also given exhaustive training on safety, first-aid and firefighting. The Company has appointed and trained safety stewards to promote safety in all divisions. A green belt in and around all factory premises has been maintained to enhance the eco-friendliness. We conduct our operations responsibly with a sustainable approach towards environment.
As required in terms of the IS I4489 for Safety Audit for Industries, the SHE Policy of the Company is annexed hereto as Annexure - VI and forms part of this report.
POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
The Company has in place a policy on prevention of sexual harassment at workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules framed thereunder and Internal Complaints Committees have also been set up at all locations to redress complaints received regarding sexual harassment. During the year, no complaint with allegations of sexual harassment was received by the Company.
M/s. Deloitte Haskins & Sells, Chartered Accountants, (Registration No. 117365W) were appointed as the statutory auditors of the Company from the conclusion of 47th annual general meeting until the conclusion of 52nd annual general meeting of the Company and continue to be the statutory auditors.
The observations made by the auditors in their report read with the relevant notes to the financial statements for the year ended March 31,2022 are self-explanatory and are devoid of any reservation, qualification or adverse remarks.
M/s Devesh Pathak & Associates, Practising Company Secretaries, Vadodara were appointed to conduct the secretarial audit of the Company for the financial year 2021-22, in terms of the requirements of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, framed there under. The secretarial audit report received from M/s. Devesh Pathak & Associates is annexed as Annexure - VII.
The Company is required to maintain the cost records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013 and accordingly such accounts and records are prepared and maintained by the Company.
Pursuant to Section 148 of the Companies Act 2013, the Board of Directors, based on the recommendation of the Audit Committee and upon receipt of their consent to act as Cost Auditors and their confirmation regarding the appointment being in accordance with Section 148 of the Act has appointed M/s. Kailash Sankhlecha and Associates, (Firm''s registration no. 100221), Cost Accountants, as Cost Auditors of the Company, for the Financial Year 2022-23, for conducting the audit of the cost records maintained by the Company for the various products as mandated by the Central Government at a remuneration as mentioned in the notice convening the annual general meeting of the Company.
The Audit Committee has also received a certificate from the Cost Auditor certifying their independence and arm''s length relationship with the Company.
A resolution seeking members'' ratification for the remuneration payable to the Cost Auditors for the Financial Year 202223 forms part of the notice of the 49th Annual General Meeting of the Company and the same is recommended for your consideration and approval.
As per the provisions of Section 177(9) of the Act read with clause 22(1) of the Listing Regulations, the Company is required to establish an effective vigil mechanism for Directors and employees to report genuine concerns. The Company has a policy for prevention, detection and investigation of frauds and protection of whistleblowers (âWhistleblower Policyâ) in place and the details of the Company''s Whistleblower Policy are provided in the Corporate Governance Report annexed hereto.
HUMAN RESOURCE AND INDUSTRIAL RELATIONS
Our employees are the most valuable assets of the Company. We encourage innovation, meritocracy and the pursuit of excellence. The human resource development function of the Company is guided by a spirit of corporate team building and dedication towards strengthening the Company''s systems thereby improving efficiencies and registering growth. All personnel continue to have a healthy, cordial and harmonious approach in problem solving and enhancing Company value at all levels. Despite uncertain economic conditions, the enthusiasm and unstinting efforts of the employees have enabled the Company to maintain leadership in its business areas. The industrial relations during the year remained cordial.
The Company has drawn up a comprehensive human resource strategy (âHuman Resource Strategyâ) which addresses key aspects of human resource development such as:
- Code of conduct and fair business practices.
- A fair and objective performance management system linked to the performance of the businesses.
- Creation of a common pool of talented managers across the organization with a view to increasing their mobility through inter-company job rotation.
- Evolution of performance based compensation packages to attract and retain talent within the organization.
- Development of comprehensive training programs to impart and continuously upgrade the industry / function specific skills, etc.
EMPLOYEE BENEFIT MEASURES UNDERTAKEN DURING THE YEAR
In order to achieve a highly streamlined and productive organization, a transparent and uniform HR policy with a well-defined reporting structure and clear roles and responsibilities has been put in place.
Necessary trainings based on identified needs have been set-up across all functions by the respective heads of departments to enhance the knowledge and competencies of our employees and are being updated and upgraded on a continuous basis. Other initiatives including an improvement of the working environment, the automation of HR processes including the outsourcing of the payroll processor and the installation of a new attendance system have been implemented. Initiatives on improving employee engagement have been implemented with primary focus on employee health and welfare by enhancing the medical and term insurance facilities.
STATEMENT ON COMPLIANCE OF APPLICABLE SECRETARIAL STANDARDS
The Company has complied with all the applicable provisions of mandatory Secretarial Standards, SS-1 and SS-2 issued by the Institute of Company Secretaries of India, during the year under review.
INSOLVENCY AND BANKRUPTCY CODE 2016
Neither any application is made nor any proceeding is pending in respect of the Company under the Insolvency and Bankruptcy Code 2016.
The Company has suitably laid down the Code of Conduct for all Board members and senior management personnel of the Company. The declaration by CEO of the Company relating to the compliance of aforesaid Code of Conduct forms part of the Annual Report.
We thank our customers, vendors, dealers, investors, business partners and bankers for their continued support during the year. We also place on record our appreciation of the contribution made by our employees at all levels, whose hard work, solidarity, cooperation and support helped the Company to sustain during these tough times.
For and on behalf of the Board Mr. Robbie Alphons Maria Buntinx
May 26, 2022 Chairman
Vadodara DIN:08830690
Mar 31, 2018
BOARDS'' REPORT
Dear Members,
The directors take pleasure in presenting the 45th annual report of your Company together with audited financial statements for the year ended on 31 March 2018.
FINANCIAL PERFORMANCE
The financial performance of your Company for the year ended 31 March 2018 is highlighted below:
(INR in Lakhs)
Particulars |
2017-18 |
2016-17 |
Period |
12 months |
12 months |
Revenue from Operations |
195,068.55 |
166,918.41 |
Other Income |
691.72 |
406.76 |
Profit before Tax |
10,313.10 |
10,029.59 |
Tax Expense |
(3,690.56) |
(3,101.61) |
Profit for the year |
6,622.54 |
6,927.98 |
Other Comprehensive Income |
(28.94) |
(44.58) |
Total Other Comprehensive Income for the year |
6,593.60 |
6,883.40 |
Retained Earnings |
||
Opening Balance |
47,327.39 |
41,290.62 |
Add: |
||
Total comprehensive income for the year |
6,593.60 |
6,883.40 |
Less: |
||
Dividends including dividend tax |
(846.63) |
(846.63) |
Transfer to General Reserve |
- |
- |
Depreciation transfer for fixed assets |
- |
- |
Closing Balance |
53,074.36 |
47,327.39 |
EPS (Basic) |
37.66 |
39.40 |
EPS (Diluted) |
37.66 |
39.40 |
The above figures are extracted from the financial statements of the Company as per Indian Accounting Standards (Ind AS). INDIAN ACCOUNTING STANDARDS
The Company has adopted Ind AS with effect from 01 April 2016 with the transitional date as 01 April 2015 pursuant to the Ministry of Corporate Affairs notification dated 16 February 2015, notifying the Companies (Indian Accounting Standards) Rules, 2015. Accordingly, the financial statements for the year ended 31 March 2018 have been prepared in accordance with the Companies (Indian Accounting Standards) Rules, 2015 prescribed under section 133 of the Act and other recognized accounting practices and policies to the extent applicable.
OPERATING HIGHLIGHTS Revenues
Growth across all segments in line with the market has resulted in increase in overall sales turnover of your Company to INR 1,951 crores from INR 1,669 crore in the previous year. Your Company observed growth momentum and positive sentiments in the core industries namely automotive, household & electronics distribution. The Company''s total income (including other income) was placed at INR 1,958 crore for the financial year 2017-18.
Profits
Your Company''s Profit before Tax (PBT) in financial year 2017-18 is INR 103 crores as compared to INR 100 crores in previous year. Profit after Tax (PAT) in financial year 2017-18 is INR 66 crores as compared to INR 69 crores in previous year. Increase in raw material prices impacted profit, however, partially offset by better cost control.
DIVIDEND
Considering the performance, and to appropriately reward the Members while conserving resources to meet future financial requirements, the board of directors recommends a dividend of INR 4/- per equity share of INR 10 each (40%). This dividend is subject to the approval of the Members at the forthcoming annual general meeting and if approved, Members whose name appear on the register of Members on 02 August 2018 will be entitled to dividend. In the previous year, the Company paid a dividend of INR 4/- per equity share of INR 10/- each of the Company.
TRANSFER TO RESERVES
The Company is not required to transfer any amount to its reserves. Hence, no amount is transferred to reserves during the year under review.
SUBSIDIARY, ASSOCIATE AND JOINT VENTURE COMPANIES
The Company does not have any subsidiary companies, associate companies or joint venture during the year under review. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and operations of the Company.
DIRECTORS AND KEY MANAGERIAL PERSONNEL > Appointments/ Re-appointments
During the year under review:
1. Mr. Anil Shankar was appointed as an independent director by the shareholders of the Company at their annual general meeting held on 10 August 2017 for a period of three years effective from 12 August 2016.
2. Mr. Jal R. Patel was re-appointed as an independent director by the shareholders of the Company at their annual general meeting held on 10 August 2017 for a period of three years effective from 01 January 2018.
3. Mr. Nitankumar Duggal was appointed as an additional director and was designated as whole-time director for a period of three years from 31 August 2017 for which approval was accorded by the shareholders of the Company through postal ballot dated 27 October 2017.
4. Mr. Sanjeev Madan was appointed as Chief Financial Officer (CFO), on recommendation of nomination and remuneration committee, effective from 29 January, 2018.
At the 45th annual general meeting following appointments / re-appointments are being proposed:
1. Mr. Sanjiv Vasudeva who retires by rotation and being eligible, offers himself for re-appointment in terms of the Articles of Association of the Company. A brief profile of Mr. Sanjiv Vasudeva is given separately in the notice convening AGM. Your directors recommend his appointment for your approval.
> Retirement/ Resignations
Following directors resigned / retired from their office of directorship in the Company:
Mr. Bhupesh P. Porwal resigned as chief financial officer (CFO) and whole-time director of the Company effective from 01 September 2017. The board thanked him for providing valuable guidance to the Company during his tenure.
Key Managerial Personnel
Mr. Sanjiv Vasudeva, managing director and chief executive officer, Mr. Nitankumar Duggal, whole-time director, Mr. Sanjeev Madan, chief financial officer and Mr. Haresh Khilnani, company secretary, head - legal and compliance were the key managerial personnel of the Company as on 31 March 2018.
MEETINGS OF BOARD OF DIRECTORS OF THE COMPANY
During the financial year under review, the board of directors duly met four times. The details of the board meetings with regard to their dates and attendance of each of the directors thereat have been set out in the report on corporate governance.
DECLARATION BY INDEPENDENT DIRECTORS
Mr. Jal R. Patel, Mr. Anil Shankar and Ms. Ryna Karani were the independent directors of the Company as on 31 March 2018.
The board of directors of the Company hereby confirms that all the independent directors duly appointed by the Company have given the declaration to the effect that they meet the criteria of independence as provided under section 149(6) of the Act.
PERFORMANCE EVALUATION
Pursuant to the provisions of the Act and the Listing Regulations the formal annual evaluation has been carried out by the board of its own performance and that of its committees, chairman of the board and individual directors through oral assessment as well as collective feedback. Board members were requested to evaluate the effectiveness of the board dynamics and relationships, information flow, decision-making of the directors, relationship to stakeholders, company performance, company strategy, and the effectiveness of the whole board and its various committees.
Independent directors were evaluated on the following performance indicators:
- Ability to contribute to and monitor our corporate governance practices;
- Ability to contribute by best practices to address top-management issues;
- Ability to actively contribute towards positive growth of the organization;
- Ability to create positive image of our Company and help our Company wherever possible;
- Commitment to the fulfillment of a director''s obligations and fiduciary responsibilities, including participation in board and committee meetings
Your directors have expressed their satisfaction over the evaluation process.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the provisions of section 134(3)(c) and 135(5) of the Act, the board of directors of the Company confirms that:
i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of financial year and of the profit of the Company for that period;
iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv) they have prepared the annual accounts on a going concern basis;
v) they have laid down internal finance controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.
AUDIT COMMITTEE
The audit committee consists of all independent directors with Mr. Jal R. Patel as chairman and Mr. Anil Shankar and Ms. Ryna Karani as members. The terms of reference of the audit committee, details of meetings held during the year and attendance of members are set out in the corporate governance report.
During the year under review, the board has accepted all recommendations of audit committee and accordingly no disclosure is required to be made in respect of non-acceptance of any recommendation of the audit committee by the board.
DEPOSITS
The Company has not accepted any deposit, within the meaning of section 73 and 74 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014 during the year under review.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Particulars of loans, guarantees and investments covered under Section 186 of the Act form part of the notes to the financial statements provided in this annual report.
TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of section 124 and 125 of the Act, the unpaid and unclaimed dividend pertaining to the year ended on 31 December 2010 which was lying in the Company''s separate unpaid dividend account and remaining unclaimed for a period of seven years, was transferred to the Investor Education and Protection Fund.
Pursuant to the provisions of Section 124(5) and 124(6) of the Act, read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (âIEPF Rulesâ) and amendments thereto, all shares on which dividend has not been paid or claimed for seven consecutive years or more shall be transferred to the demat account of the IEPF authority.
CORPORATE GOVERNANCE
Your Company observes high standards of corporate governance in all areas of its functioning with strong emphasis on transparency, integrity and accountability. As required under the Listing Regulations a detailed report on corporate governance along with the auditors'' certificate thereon forms part of this report as Annexure - I. A detailed review of the operations, performance and future outlook of the Company and its businesses is given in the management discussion and analysis report, which forms part of this report.
CORPORATE SOCIAL RESPONSIBILITY
In compliance with the requirements of section 135 of the Act, the Company has constituted a ''Corporate Social Responsibility (CSR) Committee'' and has also framed a CSR Policy. The details of the policy, composition of the committee, CSR initiatives, CSR spending during the year etc., have been provided as Annexure - II to this report, as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014.
The amount required to be spent on CSR activities during the year ended 31 March 2018 in accordance with the provisions of section 135 of the Act was INR 141.74 lakhs and your Company had spent INR 112.00 lakhs. The said amount was spent on the CSR activities undertaken by your Company mostly in the vicinity of its plants as well as around Vadodara, where the registered office and corporate office of your Company are located. The shortfall in the amount spent on CSR activities during the year on 31 March 2018 was due to lack of proper and need worthy sources for allocation of the funds.
REMUNERATION POLICY
The details of the remuneration policy adopted by the board of directors of your Company are mentioned in the corporate governance report.
A statement of disclosure of remuneration pursuant to section 197 of the Act read with rule 5(1) and rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided as Annexure - III forming part of this report.
RISK MANAGEMENT POLICY
The details of the risk management policy adopted by the board of directors and details of the risk management committee of the Company are mentioned in the corporate governance report.
EXTRACT OF ANNUAL RETURN
The extracts of annual return in Form MGT-9 as required under section 92(3) of the Act read with rule 12 of the Companies (Management and Administration) Rules, 2014 forms part of this report as Annexure - VI
PARTICULARS OF CONTRACTS AND AGREEMENTS MADE WITH RELATED PARTIES TRANSACTIONS
All related party transactions which were entered into during the year under review were on arm''s length basis and in the ordinary course of business. There were no materially significant related party transactions made by the Company with the promoters, directors and key managerial personnel, which may have a potential conflict with the interests of the Company at large.
The particulars of contracts or arrangements with related parties referred to in section 188(1) of the Act in the prescribed Form AOC - 2, is provided as Annexure - IV forming part of this report.
REPORTING OF FRAUDS
There have been no instances of fraud reported by the statutory auditors under section 143(12) of the Act and rules framed thereunder either to the Company or to the central government.
MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TILL THE DATE OF THE REPORT
There have been no material changes which have occurred between the end of financial year till the date of this report affecting the financial position of the Company.
BOARD DIVERSITY
Your Company recognizes and embraces the importance of a diverse board in its success. We believe that a truly diverse board will leverage differences in thought, perspective, knowledge, regional and industry experience, age, ethnicity, race and gender, which will help us retain our competitive advantage. The board of directors has adopted the ''Board Diversity Policy'' which sets out the approach to diversity of the board. The board diversity policy is available on our website www.ineosstyrolutionindia.com.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an adequate system of internal controls in place. It has documented procedures covering all financial and operating functions. These controls have been designed to provide a reasonable assurance with regard to maintaining of proper accounting controls, monitoring of operations, protecting assets from unauthorized use or losses, compliances with regulations and for ensuring reliability of financial reporting. The Company has continued its efforts to align all its processes and controls with global best practices in these areas as well.
The Audit committee of the board of directors, comprising independent directors, regularly reviews the audit plans, significant audit findings, adequacy of internal controls, compliance with accounting standards as well as reasons for changes in accounting policies and practices, if any.
ENVIRONMENTAL HEALTH, SAFETY AND PROTECTION
Your Company gives highest importance to Safety, Health and Environment (SHE), and encourages and promotes safety awareness in true letter and spirit as an integral part of its work culture.
Process Safety Management (PSM) is an integral part of all changes taking place in the process. Onsite emergency plans have been reviewed and updated by all divisions. Periodic mock drills are conducted at various divisions and reports indicate improved preparedness of employees.
To further strengthen the safety of overall operations and to promote a positive safety culture and transparency, your Company has introduced site specific behavioral based safety (BBS) process at all its manufacturing locations and substantially invested for the improvement of process safety.
Apart from employees, the contractors and workmen are also given exhaustive training on safety, first-aid and fire fighting. The Company has appointed and trained safety stewards to promote safety in all divisions. A green belt in and around all factory premises has been maintained to enhance eco-friendliness.
POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
The Company has in place a policy on prevention of sexual harassment at workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules framed there under and complaints committee has also been set up to redress complaints received regarding sexual harassment. During the year, no complaint with allegations of sexual harassment was received by the Company.
STATUTORY AUDITORS
The statutory auditors of the Company M/s. Price Waterhouse Chartered Accountants LLP, Chartered Accountants, (Firm registration number: 012754N/N500016) were appointed as the statutory auditors of the Company from the conclusion of 43rd annual general meeting until the conclusion of 47th annual general meeting of the Company.
The Company has received necessary eligibility certificate and consent under Section 141 of the Act to act as statutory auditors of the Company.
AUDITORS'' REPORT
The observations made by the auditors in their report read with the relevant notes as given in the notes to the financial statement for the year ended 31 March 2018 are self- explanatory and are devoid of any reservation, qualification or adverse remarks.
SECRETARIAL AUDITOR
M/s. Devesh Vimal & Co., Practising Company Secretaries, Vadodara were appointed to conduct the secretarial audit of the Company for the financial year 2017-18, required under section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, framed there under. The secretarial audit report received from them is annexed as Annexure - VII.
COST AUDITORS
The board of directors, on recommendation of the audit committee, has appointed M/s. Kailash Sankhlecha and Associates, (Firm''s registration no. 100221), Cost Accountants, as cost auditors of the Company, for the financial year 2018-19, for conducting the audit of the cost records maintained by the Company for the various products as mandated by the central government at a remuneration as mentioned in the notice convening the annual general meeting of the Company.
A resolution seeking member''s ratification for the remuneration payable to the cost auditors for the financial year 2018-19 forms part of the notice of the 45th annual general meeting of the Company and the same is recommended for your consideration and approval.
A certificate from M/s. Kailash Sankhlecha and Associates has been received, confirming their appointment as cost auditors of the Company, if made, would be in accordance with the limits specified under section 141 of the Act and rules framed thereunder.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
A statement highlighting details of the conservation of energy, technology absorption, and foreign exchange earnings and outgo, in accordance with section 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014 is annexed hereto as Annexure - V and forms part of this report.
VIGIL MECHANSIM
As per the provisions of section 177(9) of the Act read with clause 22(1) of the Listing Regulations, the Company is required to establish an effective vigil mechanism for directors and employees to report genuine concerns. The Company has a policy for prevention, detection and investigation of frauds and protection of whistleblowers (âWhistleblower Policyâ) in place and the details of the whistleblower policy are provided in the report on corporate governance forming part of this report.
HUMAN RESOURCE AND INDUSTRIAL RELATIONS
Our employees are the most valuable assets of the Company. We encourage innovation, meritocracy and the pursuit of excellence. The human resource development function of the Company is guided by a spirit of corporate team building and dedication towards strengthening the Company''s systems thereby improving efficiencies and registering growth. All personnel continue to have a healthy, cordial and harmonious approach in problem solving and enhancing Company value at all levels. Despite uncertain economic conditions, the enthusiasm and unstinting efforts of the employees have enabled the Company to maintain leadership in its business areas. The industrial relations during the year remained cordial.
The Company has drawn up a comprehensive human resource strategy (âHuman Resource Strategyâ) which addresses key aspects of human resource development such as:
- Code of conduct and fair business practices.
- A fair and objective performance management system linked to the performance of the businesses.
- Creation of a common pool of talented managers across the organization with a view to increasing their mobility through inter-company job rotation.
- Evolution of performance based compensation packages to attract and retain talent within the organization.
- Development of comprehensive training programs to impart and continuously upgrade the industry / function specific skills, etc.
EMPLOYEE BENEFIT MEASURES UNDERTAKEN DURING THE YEAR
In order to achieve a highly streamlined and productive organization, a transparent and uniform HR policy with a well-defined reporting structure and clear roles and responsibilities will be put in place. An employee survey together with a top leadership workshop was also conducted to assess the current cultures of INEOS group Companies in India and to identify an ideal common culture across the two entities for better implementation of the respective strategic initiatives.
Necessary trainings based on identified needs are being set-up across all functions by the respective heads of departments to enhance the knowledge and competencies of our employees. Other initiatives including an improvement of the working environment, the automation of HR processes including the outsourcing of the payroll processor and the installation of a new attendance system, are in progress.
STATEMENT ON COMPLIANCE OF APPLICABLE SECRETARIAL STANDARDS
The Company has complied with all the applicable provisions of secretarial standard 1 and 2 issued by the Institute of Company Secretaries of India, during the year under review.
CODE OF CONDUCT
The Company has suitably laid down the code of conduct for all board members and senior management personnel of the Company. The declaration by CEO of the Company relating to the compliance of aforesaid code of conduct forms an integral part of this annual report.
ACKNOWLEDGEMENTS
We thank our customers, vendors, dealers, investors, business partners and bankers for their continued support during the year which made the Company grow successfully. We also place on record our appreciation of the contribution made by our employees at all levels. Our consistent growth was made possible by their hard work, solidarity, cooperation and support. We also acknowledge our gratitude to M/s. INEOS Styrolution Holdings Ltd, United Kingdom for their valuable assistance through their subsidiary companies.
For and on behalf of the Board
18 June 2018 Stephen Mark Harrington
Vadodara Chairman
Mar 31, 2017
BOARDS'' REPORT
Dear Members,
The directors take pleasure in presenting the 44th annual report of your Company together with audited financial statements for the year ended on 31 March 2017.
FINANCIAL PERFORMANCE
The financial performance of your Company for the year ended 31 March 2017 is highlighted below:
(INR in Lakhs)
Particulars |
2016-17 |
2015-16 |
Period |
12 months |
12 months |
Revenue from Operations |
166,918.41 |
177,533.88 |
Other Income |
406.76 |
274.45 |
Profit before Tax |
10,029.59 |
6,024.60 |
Tax Expense |
3,101.61 |
(358.40) |
Profit for the year |
6,927.98 |
6,383.00 |
Other Comprehensive Income |
(44.58) |
(67.26) |
Total Other Comprehensive Income for the year |
6,883.40 |
6,315.74 |
Retained Earnings |
||
Opening Balance |
41,290.62 |
36,527.09 |
Add: |
||
Total comprehensive income for the year |
6,883.40 |
6,315.74 |
Less: |
||
Dividends including dividend tax |
(846.63) |
(846.63) |
Transfer to General Reserve |
- |
(627.68) |
Depreciation transfer for fixed assets |
- |
(77.90) |
Closing Balance |
47,327.39 |
41,290.62 |
EPS (Basic) (in INR) |
39.40 |
36.30 |
EPS (Diluted) (in INR) |
39.40 |
36.30 |
The above figures are extracted from the financial statements of the Company as per Indian Accounting Standards (Ind AS). For the purpose of transition, the Company has followed the guidance prescribed in Ind AS 101, First time adoption of Indian Accounting Standards, with 1 April 2015 as the transition date and IGAAP as the previous GAAP.
INDIAN ACCOUNTING STANDARDS
The Ministry of Corporate Affairs vide its notification in the Official Gazette dated 16 February 2015, notified Ind AS applicable to certain class of Companies. Ind AS replaced the existing Indian GAAP prescribed under section 133 of the Companies Act (''the Act'') read with rule 7 of the Companies (Account) Rules, 2014. For INEOS Styrolution, Ind AS is applicable from 1 April 2016 with the transitional date as 1 April 2015 and IGAAP as the previous GAAP.
The reconciliation and description of the effect of transition from Indian GAAP to Ind AS has been provided in Note No. 43 in the notes to account of the financial statements of the Company.
OPERATING HIGHLIGHTS Revenues
The overall sales turnover of your Company decreased to INR 1,669 crores from INR 1,775 crore in the previous year,
this was mainly due to the lower sales volume on account of demonetization in November and December 2016. Your Company''s total income (including other income) was placed at INR 1,673 crores for the financial year 2016-17.
PROFITS
Your Company''s Profit before tax (PBT) increased by about 66.45% to INR 100 crores from INR 60 crores in the previous year; whilst Profit after tax (PAT) (before Other Comprehensive Income) increased by about 9% to INR 69 crores from INR 64 crores. This increase in PBT was mainly driven by competitive pricing, better margins and inventory gain.
DIVIDEND
Considering the performance, and to appropriately reward the Members while conserving resources to meet future financial requirements, the board of directors recommends a dividend of INR 4/- per equity share of INR 10 each (40%). This dividend is subject to the approval of the Members at the forthcoming annual general meeting and if approved, Members whose name appear on the register of Members on 3 August 2017 will be entitled to dividend. In the previous year the Company paid a dividend of INR 4/- per equity share of INR 10/- each of the Company.
SUBSIDIARY, ASSOCIATE COMPANIES AND JV COMPANIES
The Company does not have any subsidiary companies, joint venture or associate companies during the year under review.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and operations of the Company.
DIRECTORS AND KEY MANAGERIAL PERSONNEL - Appointments/ Re-appointments
At the 44th annual general meeting (AGM) following appointments / re-appointments are being proposed:
1. Mr. Stephen Mark Harrington retires by rotation and being eligible, offers himself for re-appointment in terms of the Articles of Association of the Company. A brief resume of Mr. Harrington is given separately in the notice convening AGM. Your Directors recommend his appointment for the Members'' approval.
2. On the recommendations of nomination and remuneration committee, Mr. Anil Shankar, non-executive and independent director has been appointed by the board as an additional director with effect from 12 August 2016. A brief resume of Mr. Anil Shankar is given separately in the notice convening AGM. Your directors recommend his appointment as an independent director of the Company for the Members'' approval.
3. Mr. Jal R. Patel, non-executive and independent director has been reappointed by the board as an independent director for a term of three years with effect from 1 January 201 8. A brief resume of Mr. Jal R. Patel is given separately in the notice convening AGM. Your directors recommend his reappointment as an independent director of the Company for the Members'' approval.
- Retirement/ Resignations
Following directors resigned / retired from their office of directorship in the Company:
Mr. Sharad Kulkarni resigned as an independent director of the Company effective 12 August 2016. The board thanked him for providing valuable guidance to the Company during his tenure.
- Key Managerial Personnel
Mr. Sanjiv Vasudeva, managing director and chief executive officer, Mr. Haresh Khilnani, company secretary, head -legal and compliance and Mr. Bhupesh P. Porwal, whole-time director and chief financial officer are the key managerial personnel of the Company as on 31 March 2017.
MEETINGS OF BOARD OF DIRECTORS OF THE COMPANY
During the financial year under review, the board of directors duly met four times.. The details of the board meetings with regard to their dates and attendance of each of the directors thereat have been set out in the report on corporate governance.
DECLARATION BY INDEPENDENT DIRECTORS
Mr. Jal R. Patel, Mr. Anil Shankar and Ms. Ryna Karani were the independent directors of the Company as on 31 March 2017.
The board of directors of the Company hereby confirms that all the independent directors duly appointed by the Company have given the declaration to the effect that they meet the criteria of independence as provided under section 149(6) of the Act.
PERFORMANCE EVALUATION
Pursuant to the provisions of the Act and the Listing Regulations 2015, the formal annual evaluation has been carried out by the board of its own performance and that of its committees, chairman of the board and individual directors through oral assessment as well as collective feedback. Board members were requested to evaluate the effectiveness of the board dynamics and relationships, information flow, decision-making of the directors, relationship to stakeholders, company performance, company strategy, and the effectiveness of the whole board and its various committees.
Independent directors were evaluated on the following performance indicators:
- Ability to contribute to and monitor our corporate governance practices;
- Ability to contribute by best practices to address top-management issues;
- Ability to actively contribute towards positive growth of the organization;
- Ability to create positive image of the company and help the company wherever possible;
- Commitment to the fulfillment of a director''s obligations and fiduciary responsibilities, including participation in board and committee meetings
Your directors have expressed their satisfaction over the evaluation process.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the provisions of section 134(3)(c) and 135(5) of the Act, the board of directors of the Company confirms that:
i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of financial year and of the profit of the Company for that period;
iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv) they have prepared the annual accounts on a going concern basis; and
v) they had laid down internal finance controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.
vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.
AUDIT COMMITTEE
The audit committee consists of all independent directors with Mr. Jal R. Patel as chairman and Mr. Anil Shankar and Ms. Ryna Karani as members. The terms of reference of the audit committee, details of meetings held during the year and attendance of members are set out in the corporate governance report.
During the year under review, the board has accepted all recommendations of audit committee and accordingly no disclosure is required to be made in respect of non-acceptance of any recommendation of the audit committee by the Board.
DEPOSITS
The Company has not accepted any deposit, within the meaning of section 73 and 74 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014 during the year under review.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Particulars of loans, guarantees and investments covered under Section 186 of the Act form part of the notes to the financial statements provided in this annual report.
TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of section 124 and 125 of the Act, the unpaid and unclaimed dividend pertaining to the year ended on 31 December 2009 which was lying in the Company''s separate unpaid dividend account and remaining unclaimed for a period of seven years, was transferred to the Investor Education and Protection Fund.
CORPORATE GOVERNANCE
Your Company observes high standards of corporate governance in all areas of its functioning with strong emphasis on transparency, integrity and accountability. As required under the Listing Regulations 2015, a detailed report on corporate governance along with the auditors'' certificate thereon forms part of this report as Annexure - I. A detailed review of the operations, performance and future outlook of the Company and its businesses is given in the Management Discussion and Analysis Report, which forms part of this report.
CORPORATE SOCIAL RESPONSIBILITY
In compliance with the requirements of section 135 of the Act , the Company has constituted a ''Corporate Social Responsibility Committee (CSR)'' and has also framed a CSR Policy. The details of the policy, composition of the committee, CSR initiatives, CSR spending during the year etc., have been provided as Annexure - II to this report, as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014.
The amount required to be spent on CSR activities during the year ended 31 March 2017 in accordance with the provisions of section 135 of the Act was INR 124.40 lakhs and your Company had spent INR 124.27 lakhs. The said amount was spent on the CSR activities undertaken by your Company mostly in the vicinity of its plants as well as around vadodara, where the registered office and corporate office of your Company are located. The shortfall in the amount spent on CSR activities during the year on 31 March 2017 was due to lack of proper and need worthy sources for allocation of the funds.
REMUNERATION POLICY
The details of the remuneration policy adopted by the board of directors of the Company are mentioned in the corporate governance report.
A statement of disclosure of remuneration pursuant to section 197 of the Act read with rule 5(1) and rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided as Annexure - III forming part of this report.
RISK MANAGEMENT POLICY
The details of the risk management policy adopted by the board of directors and details of the risk management committee of the Company are mentioned in the corporate governance report.
EXTRACT OF ANNUAL RETURN
The extracts of annual return in Form MGT-9 as required under section 92(3) of the Act read with rule 12 of the Companies (Management and Administration) Rules, 2014 forms part of this report as Annexure - VI
PARTICULARS OF CONTRACTS AND AGREEMENTS MADE WITH RELATED PARTIES TRANSACTIONS
All related party transactions which were entered into during the year under review were on arm''s length basis and in the ordinary course of business. There were no materially significant related party transactions made by the Company with the promoters, directors and key managerial personnel, which may have a potential conflict with the interests of the Company at large.
The particulars of contracts or arrangements with related parties referred to in section 188(1) of the Act in the prescribed Form AOC - 2, is provided as Annexure - IV forming part of this report.
REPORTING OF FRAUDS
There have been no instances of fraud reported by the statutory auditors under section 143(12) of the Act and rules framed there under either to the Company or to the central government.
MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TILL THE DATE OF THE REPORT;
There have been no material changes which have occurred between the end of financial year till the date of this report affecting the financial position of the Company.
BOARD DIVERSITY
Your Company recognizes and embraces the importance of a diverse board in its success. We believe that a truly diverse board will leverage differences in thought, perspective, knowledge, regional and industry experience, age, ethnicity, race and gender, which will help us, retain our competitive advantage. The board of directors has adopted the ''Board Diversity Policy'' which sets out the approach to diversity of the Board. The board diversity policy is available on our website www.ineosstyrolutionindia.com.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an adequate system of internal controls in place. It has documented procedures covering all financial and operating functions. These controls have been designed to provide a reasonable assurance with regard to maintaining of proper accounting controls, monitoring of operations, protecting assets from unauthorized use or losses, compliances with regulations and for ensuring reliability of financial reporting. The Company has continued its efforts to align all its processes and controls with global best practices in these areas as well.
Audit committee of the board of directors, comprising independent directors, regularly reviews the audit plans, significant audit findings, adequacy of internal controls, compliance with accounting standards as well as reasons for changes in accounting policies and practices, if any.
ENVIRONMENTAL HEALTH, SAFETY AND PROTECTION
Your Company gives highest importance to Safety, Health and Environment (SHE), and encourages and promotes safety awareness in true letter and spirit as an integral part of its work culture.
Process Safety Management (PSM) is an integral part of all changes taking place in the process. Onsite emergency plans have been reviewed and updated by all divisions. Periodic mock drills are conducted at various divisions and reports indicate improved preparedness of employees.
To further strengthen the safety of overall operations and to promote a positive safety culture and transparency, your Company has introduced site specific Behavioral Based Safety (BBS) process at all its manufacturing locations and substantially invested for the improvement of process safety.
Apart from employees, the contractors and workmen are also given exhaustive training on safety, first-aid and fire fighting. The Company has appointed and trained safety stewards to promote safety in all divisions. A green belt in and around all factory premises has been maintained to enhance eco-friendliness.
POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
The Company has in place a policy on prevention of sexual harassment at workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules framed there under and complaints committee has also been set up to redress complaints received regarding sexual harassment. During the year, no complaint with allegations of sexual harassment was received by the Company.
STATUTORY AUDITORS
The statutory auditors of the Company Messrs Price Waterhouse Chartered Accountants LLP, Chartered Accountants, (Firm registration number: 012754N/N500016) were appointed as the statutory auditors of the Company from the conclusion of 43rd annual general meeting until the conclusion of 47th annual general meeting of the Company subject to ratification by the Members every year at the annual general meeting. Based upon the declaration on their eligibility, consent and terms of engagement, your directors propose ratification of their appointment in the 44th annual general meeting until the conclusion of the 45th annual general meeting of the Company.
AUDITORS'' REPORT
The observations made by the auditors in their report read with the relevant notes as given in the notes to the financial statement for the year ended 31 March 2017 are self- explanatory and are devoid of any reservation, qualification or adverse remarks.
SECRETARIAL AUDITOR
Messrs Devesh Vimal & Co., Practicing Company Secretaries, Vadodara were appointed to conduct the secretarial audit of the Company for the financial year 2016-17, required under section 204 of the Act and rules framed there under. The secretarial audit report received from them is annexed as Annexure - VII.
COST AUDITORS
The board of directors, on recommendation of the audit committee, has appointed Messrs Kailash Sankhlecha and Associates, (Firm''s registration no. 100221), Cost Accountants, as cost auditors of the Company, for the financial year 2017-18, for conducting the audit of the cost records maintained by the Company for the various products as mandated by the central government at a remuneration as mentioned in the notice conveying the annual general meeting of the Company.
A resolution seeking Member''s ratification for the remuneration payable to the cost auditors for the financial year 2017-18 forms part of the notice of the 44th annual general meeting of the Company and the same is recommended for your consideration and approval.
A certificate from them has been received to the effect that their appointment as cost auditors of the Company, if made, would be in accordance with the limits specified under of section 141 of the Act and rules framed there under.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
A statement highlighting details of the conservation of energy, technology absorption, and foreign exchange earnings and outgo, in accordance with section 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014 is annexed hereto as Annexure - V and forms part of this report.
VIGIL MECHANSIM
As per the provisions of section 177(9) of the Act read with regulation 22(1) of the Listing Regulations, the Company is required to establish an effective vigil mechanism for directors and employees to report genuine concerns. The Company has a policy for prevention, detection and investigation of frauds and protection of whistleblowers (âWhistleblower Policyâ) in place and the details of the whistleblower policy are provided in the report on corporate governance forming part of this report.
HUMAN RESOURCE AND INDUSTRIAL RELATIONS
Our employees are the most valuable assets of the Company. We encourage innovation, meritocracy and the pursuit of excellence. The human resource development function of the Company is guided by a spirit of corporate team building and dedication towards strengthening the Company''s systems thereby improving efficiencies and registering growth. All personnel continue to have a healthy, cordial and harmonious approach in problem solving and enhancing Company value at all levels. Despite uncertain economic conditions, the enthusiasm and unstinting efforts of the employees have enabled the Company to maintain leadership in its business areas. The industrial relations during year remained cordial.
The Company has drawn up a comprehensive human resource strategy (the âHuman Resource Strategyâ) which addresses key aspects of human resource development such as:
- Code of conduct and fair business practices.
- A fair and objective performance management system linked to the performance of the businesses.
- Creation of a common pool of talented managers across the organization with a view to increasing their mobility through inter-company job rotation.
- Evolution of performance based compensation packages to attract and retain talent within the organization.
- Development of comprehensive training programs to impart and continuously upgrade the industry / function specific skills, etc.
EMPLOYEE BENEFIT MEASURES UNDERTAKEN DURING THE YEAR
In order to achieve a highly streamlined and productive organization, a transparent and uniform HR policy with a well-defined reporting structure and clear roles and responsibilities will be put in place. An employee survey together with a top leadership workshop was also conducted to assess the current cultures of INEOS group Companies in India and to identify an ideal common culture across the two entities for better implementation of the respective strategic initiatives.
Necessary trainings based on identified needs are being set-up across all functions by the respective heads of departments to enhance the knowledge and competencies of our employees. Other initiatives including an improvement of the working environment, the automation of HR processes including the outsourcing of the payroll processor and the installation of a new attendance system, are in progress.
CODE OF CONDUCT
The Company has suitably laid down the code of conduct for all board members and senior management personnel of the Company. The declaration by CEO of the Company relating to the compliance of aforesaid code of conduct forms an integral part of this annual report.
ACKNOWLEDGEMENTS
We thank our customers, vendors, dealers, investors, business partners and bankers for their continued support during the year which made the Company grow successfully. We also place on record our appreciation of the contribution made by our employees at all levels. Our consistent growth was made possible by their hard work, solidarity, cooperation and support.
For and on behalf of the Board
16 June 2017 Stephen Mark Harrington
Vadodara Chairman
Mar 31, 2016
Dear Members,
The directors take pleasure in presenting the 43rd annual report of your Company together with audited financial statements for the year ended on 31 March 2016.
FINANCIAL PERFORMANCE
The financial performance of your Company for the year ended 31 March 2016 is highlighted below:
(Rs. in lakhs)
Particulars |
2015-16 |
2014-15 |
Period |
12 months |
15 months |
Sales and other operating income |
179,811.40 |
164,540.98 |
Other income |
272.24 |
470.02 |
Total income |
180,083.64 |
165,011.00 |
Gross profit before interest, depreciation & tax |
9,565.19 |
8,570.48 |
Less : Interest |
981.08 |
1,264.99 |
Less: Depreciation |
2,720.72 |
2,132.28 |
Profit before tax |
5,863.39 |
5,173.21 |
Less: Provision for tax |
1455.20 |
211.68 |
Less : MAT credit (entitlement) |
(1,455.20) |
- |
Less: Reversal of earlier years tax expense |
- |
(206.57) |
Less: Provision for deferred tax |
(413.42) |
1,665.79 |
Net profit after tax |
6,276.81 |
3,502.31 |
Add: Balance of profit brought forward |
35,820.19 |
33,514.74 |
Amount available for appropriation |
42,097.00 |
37,017.05 |
Appropriations: |
||
Proposed dividend |
703.43 |
703.43 |
Tax on proposed dividend |
143.20 |
143.20 |
Depreciation adjustment as per schedule II of Act |
77.90 |
- |
Amount transferred pursuant to the scheme of amalgamation |
112.10 |
- |
Transfer to general reserve |
627.68 |
350.23 |
Balance of profit carried forward |
40,432.69 |
35,820.19 |
EPS (basic) |
35.69 |
19.92 |
EPS (diluted) |
35.69 |
19.92 |
The previous financial year 2014-15 was of fifteen months from 1 January 2014 to 31 March 2015. Moreover the Hon''ble High Court of Gujarat vide its order dated 26 February 2016 has sanctioned the scheme of amalgamation between Styrolution India Pvt. Ltd (SIN) and the Company with effect from 1 April 2015, appointed date. The amalgamation was completed on 31 March 2016, and effective said date SIN stands dissolved without winding up. Consequently the results for the quarter and year ended 31 March 2016 are strictly not comparable to the results of the corresponding previous periods.
OPERATING HIGHLIGHTS REVENUES
The overall sales turnover of your Company increased to Rs. 1,798 crores from Rs. 1,645 crore in the previous period, at a growth rate of 9.30%. This was mainly due to increase in sales volume and pricing. Your Company''s total income (including other income) was placed at Rs. 1,800 crore for the financial year 2015-16 registering a growth rate above 9%.
PROFITS
Your Company''s profit before tax (PBT) increased by 11.54% to Rs. 58 crores compared to previous period PBT of Rs. 52 crores; whilst profit after tax (PAT) increased by 77% to Rs. 62 crores compared to the previous periodsâ PAT of Rs. 35 crores.
The increase in the PAT was mainly due to the savings in tax expenses on availing the MAT credit which is on account of amalgamation of Styrolution India Private Limited with the Company. Your Company continues to be a market leader in ABS sales.
DIVIDEND
Considering the performance, and to appropriately reward the members while conserving resources to meet future financial requirements, the board of directors recommends a dividend of Rs. 4/- per equity share of Rs.10 each (40%). This dividend is subject to the approval of the members at the forthcoming annual general meeting. In the previous year the Company paid a dividend of Rs. 4/- per equity share of Rs.10/-each of the Company.
The register of members and share transfer books shall remain closed on 6 August 2016.
CHANGE OF NAME OF THE COMPANY
In order to reflect the identity of the Company as an INEOS Group Company, the board of directors of the Company at their meeting held on 4 November 2015 approved the proposal for change of name of the Company to ''INEOS Styrolution India Limited'' or any other name as may be approved by the Registrar of Companies, Gujarat.
The Company after getting the requisite approval of stock exchanges and registrar of companies accorded the approval of the shareholders through postal ballot and e-voting for change of name of the Company.
Thereafter on the application being made by the Company, the central government approved the change of name of the Company to âINEOS Styrolution India Limitedâ w.e.f 18 March 2016.
SUBSIDIARY, ASSOCIATE COMPANIES AND JV COMPANIES
At the beginning of the financial year, Styrolution India Private Limited was the wholly owned subsidiary of the Company, which was amalgamated with the Company during the year.
Significant and material orders passed by the regulators or courts Amalgamation of Styrolution India Private Limited (SIN) (wholly-owned subsidiary) with the company.
The board of directors of your Company at its meeting held on 3 August 2015 had approved the proposal of amalgamation of SIN with the Company, (Appointed date: 1 April 2015) subject to the requisite approvals from the Members/Creditors and other statutory and regulatory authorities, with an intent of aligning the business operations undertaken by both the Companies enabling efficient utilisation of their resources, greater economies of scale, reduction in overheads and other expenses and improvement in various operating parameters. The same will also result, inter alia, advantages of integration of the operations of the said companies, including better resource management and reduction of working capital requirements and create better generation of synergies and further strengthen Styrolution''s presence in the Indian market. Both companies are part of INEOS Group, the world''s leading producer in Styrenics.
Hon''ble High Court of Gujarat sanctioned the scheme of amalgamation (appointed date: 1 April 2015) of | Styrolution India Private Limited'' with ''the Company and their respective shareholders and creditors by passing an order on 26 February 2016. The said order has been registered with Registrar of Companies, Gujarat on 31 March 2016 and accordingly, the Scheme has become effective from 31 March 2016. Hence, the Company does not have any subsidiary, joint venture or associate Company incorporated in India, as on 31 March 2016.
CHANGES IN DIRECTORATE AND KEY MANAGERIAL PERSONNEL
Appointments/ Re-appointments
At the 43rd annual general meeting (AGM) following appointments / re-appointments are being proposed:
1. On the recommendations of nomination and remuneration committee, the board appointed Mr. Sanjiv Vasudeva, executive and non-independent director, as an additional director, managing director and CEO of the Company and as a key managerial personnel of the Company effective from 1 March 2016. A brief resume of Mr. Vasudeva is given separately in the notice convening AGM. Your directors recommend his appointment for the members'' approval.
2. Mr. Stephen Mark Harrington retires by rotation and being eligible, offers himself for re-appointment in terms of the Articles of Association of the Company. A brief resume of Mr. Harrington is given separately in the notice convening AGM. Your directors recommend his appointment for the members'' approval.
3. On the recommendations of nomination and remuneration committee, Ms. Ryna Karani, non-executive and independent director, has been appointed by the board as an additional director with effect from 16 May 2016. A brief resume of Ms. Ryna Karani is given separately in the notice convening AGM. Your directors recommend her appointment as an independent director of the Company for the members'' approval.
4. On the recommendations of nomination and remuneration committee, Mr. Bhupesh P. Porwal, chief financial officer, has been appointed as an additional director and whole-time director with effect from 16 May 2016. A brief resume of Mr. Porwal is given separately in the notice convening AGM. Your directors recommend his appointment for the members'' approval.
Retirement/ Resignations
Following directors resigned / retired from their office of directorship in the Company:
1. Mr. Myung Such Chi resigned from his office as managing director of the Company effective 1 March 2016. The board appreciated and thanked him for his efforts in driving delivery and quality excellence for the Company.
2. Dr. Anke Frankenberger resigned from her office as director of the Company effective 16 May 2016. The board of directors placed on record its appreciation for the services rendered by Dr. Frankenberger during her tenure with the Company.
3. Mr. Ravindra Kulkarni resigned as an independent director of the Company effective 16 May 2016. The board thanked him for providing valuable guidance to the Company during his tenure.
Key Managerial Personnel
Mr. Sanjiv Vasudeva, managing director and chief executive officer, Mr. Haresh Khilnani, company secretary, head - legal and compliance and Mr. Bhupesh P. Porwal, chief financial officer are the key managerial personnel of the Company as on 31 March 2016.
MEETINGS OF BOARD OF DIRECTORS OF THE COMPANY
During the financial year under review the board of directors duly met five times on 18 May 2015, 3 August 2015, 4 November 2015, 4 February 2016 and 16 March 2016. The details of the board meetings with regard to their dates and attendance of each of the directors thereat have been set out in the report on corporate governance
DECLARATION BY INDEPENDENT DIRECTORS
Mr. Jal Patel, Mr. Sharad Kulkarni and Mr. Ravindra Kulkarni were the independent directors of the company as on 31 March 2016 pursuant to the provisions of section 149(10) of the Act.
The board of directors of the Company hereby confirms that all the independent directors duly appointed by the Company have given the declaration to the effect that they meet the criteria of independence as provided under section 149(6) of the Act.
PERFORMANCE EVALUATION
Pursuant to the provisions of the Act and Listing Regulations, the formal annual evaluation has been carried out by the board of its own performance and that of its committees and individual directors through collective feedback. Board members were requested to evaluate the effectiveness of the board dynamics and relationships, information flow, decision-making of the directors, relationship to stakeholders, company performance, company strategy, and the effectiveness of the whole board and its various committees.
Independent directors were evaluated on the following performance indicators:
- Ability to contribute to and monitor our corporate governance practices;
- Ability to contribute by best practices to address top-management issues;
- Ability to actively contribute toward positive growth of the organization;
- Ability to create positive image of the company and help the company wherever possible;
- Commitment to the fulfillment of a director''s obligations and fiduciary responsibilities, these include participation in board and committee meetings
Your directors have expressed their satisfaction of the evaluation process.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the provisions of section 134 (3) (c) of the Act, the board of directors of the Company confirms that:
i) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
ii) They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of financial year and of the profit of the Company for that period;
iii) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv) They have prepared the annual accounts on a going concern basis; and
v) They had laid down internal finance controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.
vi) They have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.
AUDIT COMMITTEE
The audit committee consists of all independent directors with Mr. Sharad Kulkarni as Chairman and Mr. Jal Patel and Mr. Ravindra Kulkarni as members. The terms of reference of the audit committee, details of meetings held during the year and attendance of members are set out in the corporate governance report.
DEPOSITS
The Company has not accepted any deposit, within the meaning of section 73 and 74 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014 during the year under review.
TRANSFER TO GENERAL RESERVE
A sum of Rs. 627.68 lakhs has been proposed to be transferred to general reserve of the Company. An amount of Rs. 40,432.69 lakhs is proposed to be retained in the surplus.
TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND
Pursuantto the provisions of section 124and 125 of the Act, the unpaid and unclaimed dividend pertaining to the yearendedon31 December2008 amounting to Rs. 220/457.00ason31 March2016 which was lying in the Company''s separate unpaid dividend accountant remaining unclaimed for a period of seven years, was transferred to the investor education and protection fund on 8 June 2016.
CORPORATE GOVERNANCE
Your Company observes high standards of corporate governance in all areas of its functioning with strong emphasis on transparency, integrity and accountability. As required under Listing Regulations, a detailed report on corporate governance along with the auditors'' certificate thereon forms part of this report as Annexure -1.
A detailed review of the operations, performance and future outlook of the Company and its businesses is given in the management discussion and analysis report, which forms part of this report.
CORPORATE SOCIAL RESPONSIBILITY
At INEOS Styrolution India Limited, we are committed to the group''s mission of delivering the best solutions, which includes creating a more inclusive and resource-efficient India as a responsible corporate citizen. With our passion for results and entrepreneurial spirit we want to ensure that all our strategic corporate social responsibility (CSR) initiatives actively work towards a more sustainable future. INEOS focus has always been to contribute to the sustainable development of the society and environment.
The strategies and CSR activities during the year 2015-16 were intended to support rural development; promoting education; providing sanitation and purification of water; creating livelihoods for people, especially those from disadvantaged sections of society, in rural and urban India; preserving and promoting social developmental activities that positively impacts the society at large with a minimal resource footprint. The details of such initiatives, CSR spend, CSR Policy, etc., have been provided as Annexure-II to this report, as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014.
In compliance with requirements of section 135 of the Act, your Company has laid down a CSR policy. The amount required to be spent on CSR activities during the year ended 31 March 2016 in accordance with the provisions of section 135 of the Act was Rs. 148.68 lakhs and your Company had spent Rs.85.43 lakhs. The said amount was spent on the CSR activities undertaken by your Company mostly in the vicinity of its plants at Nandesari and Dahej and as well as around Vadodara, where the registered office and corporate office of your Company are located. The shortfall of Rs. 63.25 lakhs in the amount spent on CSR activities during the year on 31 March 2016 was due to lack of proper and need worthy sources for allocation of the funds.
REMUNERATION POLICY
The details of the remuneration policy adopted by the board of directors of the Company are mentioned in the corporate governance report.
RISK MANAGEMENT POLICY
The details of the risk management policy adopted by the board of directors and details of the risk management committee of the Company are mentioned in the corporate governance report.
PARTICULARS OF EMPLOYEES
A statement of disclosure of remuneration pursuant to section 197 of the Act read with rule 5(1) and rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided as Annexure - III forming part of this report.
EXTRACT OF ANNUAL RETURN
The extracts of annual return in form MGT-9 as required under section 92(3) of the act read with rule 12 of the Companies (Management and Administration) Rules, 2014 forms part of this report as Annexure - VI
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013
Loans, guarantees and investments covered under section 186 of the Act, form part of the notes to the financial statements provided in this annual report.
PARTICULARS OF CONTRACTS AND AGREEMENTS MADE WITH RELATED PARTIES TRANSACTION
The particulars of contracts or arrangements with related parties referred to in section 188 (1) of the Act in the prescribed form AOC - 2, is provided as Annexure -IV forming part of this Report.
REPORTING OF FRAUDS
There have been no instances of fraud reported by the statutory auditors under section 143(12) of the Act and rules framed there under either to the Company or to the central government.
MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TILL THE DATE OF THEREPORT
There have been no material changes which have occurred between the end of financial year till the date of this report affecting the financial position of the Company.
BOARD DIVERSITY
Your Company recognizes and embraces the importance of a diverse board in its success. We believe that a truly diverse board will leverage differences in thought, perspective, knowledge, regional and industry experience, age, ethnicity, race and gender, which will help us, retain our competitive advantage. The board of directors has adopted the ''Board Diversity Policy'' which sets out the approach to diversity of the board. The board diversity policy is available on our website www.ineosstyrolutionindia.com
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an adequate system of internal controls in place. It has documented procedures covering all financial and operating functions. These controls have been designed to provide a reasonable assurance with regard to maintaining of proper accounting controls, monitoring of operations, protecting assets from unauthorized use or losses, compliances with regulations and for ensuring reliability of financial reporting. The Company has continued its efforts to align all its processes and controls with global best practices in these areas as well.
Audit committee of the board of directors, comprising independent directors, regularly reviews the audit plans, significant audit findings, adequacy of internal controls, compliance with accounting standards as well as reasons for changes in accounting policies and practices, if any.
ENVIRONMENTAL HEALTH, SAFETY AND PROTECTION
Your Company gives highest importance to safety, health and environment (SHE), and encourages and promotes safety awareness in true letter and spirit as an integral part of its work culture.
Process safety management (PSM) is an integral part of all changes taking place in the process. Onsite emergency plans have been reviewed and updated by all divisions. Periodic mock drills are conducted at various divisions and reports indicate improved preparedness of employees.
To further strengthen the safety of overall operations and to promote a positive safety culture and transparency, your Company has introduced site specific behavioral based safety (BBS) process at all its manufacturing locations and substantially invested for the improvement of process safety.
Apart from employees, the contractors and workmen are also given exhaustive training on safety, first-aid and fire fighting. The Company has appointed and trained safety stewards to promote safety in all divisions. A Green Belt in and around all factory premises has been maintained to enhance eco-friendliness.
POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
The Company has in place a policy on prevention of sexual harassment at workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules framed there under and complaints committee has also been set up to redress complaints received regarding sexual harassment. During the year, no complaint with allegations of sexual harassment was received by the Company.
INSURANCE
Your Company''s assets are adequately insured against risk from fire, riot, earthquake, terrorism, loss of profits and other risks which are considered necessary by the management.
As an additional coverage, a public liability insurance policy is also in place and it has been taken to cover public liability/ties, if any, arising out of any industrial accidents. INEOS group has covered also, the directors'' and officers'' liability under the Act to meet with any eventuality.
STATUTORY AUDITORS
The present auditors of the Company, Messrs B S R & Co. LLP, Chartered Accountants, have expressed their unwillingness to be re-appointed as auditors of the Company upon their retirement at the forthcoming annual general meeting. The board of directors, on recommendation of the audit committee, recommends the appointment Messrs Price Waterhouse Chartered Accountants LLP, Chartered Accountants, (Firm registration number: 012754N/N500016), as the statutory auditors of the Company from the conclusion of 43rd annual general meeting until the conclusion of 47th annual general meeting of the Company subject to ratification by the members every year at the annual general meeting. A certificate from them has been received to the effect that their appointment as statutory auditors of the Company, if made, would be according to the terms and conditions prescribed under section 139 and other applicable provisions of the Act and rules framed there under.
AUDITORS'' REPORT
The observations made by the auditors in their report read with the relevant notes as given in the notes to the financial statement for the year ended 31 March 2016 are self-explanatory and are devoid of any reservation, qualification or adverse remarks.
SECRETARIAL AUDITOR
Messrs Devesh Vimal & Co., Practising Company Secretaries, Vadodara were appointed to conduct the secretarial audit of the Company for the financial year 2015-16, required under section 204 of the Act and rules framed there under. The secretarial audit report pursuant to section 204 of the Act received from them is annexed as Annexure - VII.
COST AUDITORS
The board of directors, on recommendation of the audit committee, has appointed Messrs Kailash Sankhlecha and Associates, (Firm''s registration no. 100221), Cost Accountants, as cost auditors of the Company, for the financial year 2016-17, for conducting the audit of the cost records maintained by the Company for the various products as mandated by the central government, subject to the approval of the members on the remuneration to be paid to the cost auditor. A certificate from them has been received to the effect that their appointment as cost auditors of the Company, if made, would be in accordance with the limits specified under of section 141 of the Act and rules framed there under.
A resolution seeking member''s ratification for the remuneration payable to the cost auditors for the financial year 2016-17 forms part of the notice of the 43rd annual general meeting of the Company and the same is recommended for your consideration and approval.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
A statement highlighting details of the conservation of energy, technology absorption, and foreign exchange earnings and outgo, in accordance with section 134(3)(m)of the Act read with the Companies (Accounts) Rules, 2014 is annexed hereto as Annexure - V and forms part of this report.
QUALITY SYSTEMS AND ISO CERTIFICATION
During the year, Company continued to observe all pre-requisites in maintaining the quality systems and standards and ISO audit methods as required under the guidelines of quality and environmental management systems for ISO certified by UL-DQS.
CODE OF CONDUCT
The Company has suitably laid down the code of conduct for all board members and senior management personnel of the Company. The declaration by CEO of the Company relating to the compliance of aforesaid code of conduct forms an integral part of this annual report.
VIGIL MECHANSIM
As per the provisions of section 177(9) of the Act the Company is required to establish an effective vigil mechanism for directors and employees to report genuine concerns. The Company has a policy for prevention, detection and investigation of frauds and protection of whistleblowers (âWhistleblower Policy") in place and the details of the whistleblower policy are provided in the report on corporate governance forming part of this report.
HUMAN RESOURCE AND INDUSTRIAL RELATIONS
Our employees are the most valuable assets of the Company. We encourage innovation, meritocracy and the pursuit of excellence. The human resource development function of the Company is guided by a spirit of corporate team building and dedication towards strengthening the Company''s systems thereby improving efficiencies and registering growth. All personnel continue to have a healthy, cordial and harmonious approach in problem solving and enhancing Company value at all levels. Despite uncertain economic conditions, the enthusiasm and unstinting efforts of the employees has enabled the Company to maintain leadership in its business areas. The industrial relations during year remained cordial.
The Company has drawn up a comprehensive human resource strategy (the âHuman Resource" strategy) which addresses key aspects of human resource development such as:
- Code of conduct and fair business practices.
- A fair and objective performance management system linked to the performance of the businesses.
- Creation of a common pool of talented managers across the organization with a view to increasing their mobility through inter-company job rotation.
- Evolution of performance based compensation packages to attract and retain talent within the organization.
- Development of comprehensive training programs to impart and continuously upgrade the industry/function specific skills, etc.
EMPLOYEE BENEFIT MEASURES UNDERTAKEN DURING THE YEAR
In order to achieve a highly streamlined and productive organization, a transparent and uniform HR policy with a well-defined reporting structure and clear roles and responsibilities will be put in place. An employee survey together with a top leadership workshop was also conducted to assess the current cultures of INEOS group Companies in India and to identify an ideal common culture across the two entities for better implementation of the respective strategic initiatives.
Necessary training based on identified needs are being set-up across all functions by the respective heads of departments to enhance the knowledge and competencies of our employees. Other initiatives including an improvement of the working environment, the automation of HR processes including the outsourcing of the payroll processor and the installation of a new attendance system, are in progress.
ACKNOWLEDGEMENTS
We thank our customers, vendors; dealers, investors, business partners and bankers for their continued support during the year which made the Company grow successfully. We also place on record our appreciation of the contribution made by our employees at all levels. Our consistent growth was made possible by their hard work, solidarity, cooperation and support.
For and on behalf of the Board
.1/3Ju/ne 2016 Stephen Mark Harrington
Vadodara Chairman
Mar 31, 2015
Dear Members,
The Directors take pleasure in presenting herewith their 42nd Annual
Report together with Audited Accounts and Auditors' Report for the
period ended 31 March 2015.
Financial Performance
The financial performance of your Company for the period ended 31 March
2015 is highlighted below:
(Rs. in '000)
Particulars 2014-2015 2014-2015
Period ended (15 months (15 months
Consolidated) Standalone)
Sales in MTs 155,493 101,574
Sales and other operating Income 22,934,335 16,454,098
Other Income 55,687 47,002
Total Income 22,990,022 16,501,100
Gross Profit before Interest,
Depreciation & Tax 889,513 857,048
Less : Interest 215,898 126,499
Less: Depreciation 317,254 213,228
Profit Before Tax 356,361 517,321
Less: Provision for Tax 21,168 21,168
Less: Reversal of earlier years
tax expense (26,057) (26,057)
Less: Provision for Deferred Tax 166,579 166,579
Net Profit After Tax 189,271 350,231
Add: Balance of Profit
Brought Forward 3,351,474 3,351,474
Amount Available for
Appropriation 3,540,745 3,701,705
Appropriations: 2014-2015 2014-2015
(15 months (15 months
Consolidated) Standalone)
Proposed Dividend 70,343 70,343
Tax on Proposed Dividend 14,320 14,320
Depreciation adjustment as per
schedule II of Companies 8,013 -
Act, 2013
Transfer to General Reserve 35,023 35,023
Balance of Profit Carried Forward 3,413,046 3,582,019
EPS (Basic) 10.76 19.92
(Diluted) 10.76 19.92
Particulars 2013
Period ended (12 months
Standalone)
Sales in MTs 76,964
Sales and other operating Income 12,574,119
Other Income 107,855
Total Income 12,681,974
Gross Profit before Interest,
Depreciation & Tax 912,776
Less : Interest 4,571
Less: Depreciation 133,961
Profit Before Tax 774,244
Less: Provision for Tax 373,345
Less: Reversal of earlier years
tax expense 0
Less: Provision for Deferred Tax (104,131)
Net Profit After Tax 505,030
Add: Balance of Profit
Brought Forward 2,979,786
Amount Available for
Appropriation 3,484,816
Appropriations: 2013
(12 months
Standalone)
Proposed Dividend 70,343
Tax on Proposed Dividend 12,499
Depreciation adjustment as per
schedule II of Companies -
Act, 2013
Transfer to General Reserve 50,500
Balance of Profit Carried Forward 3,351,474
EPS (Basic) 28.72
(Diluted) 28.72
Change in Financial Year:
In compliance with the applicable provisions of the Companies Act 2013,
your Directors have changed the financial year from "January -
December" to "April - March". Accordingly, the year under review was of
15 months i.e. January 2014 to March 2015. Subsequent financial years
will be of 12 months from April 1 to March 31. Accordingly, current
period financial statements are of 15 months and hence not comparable
to previous year.
Review of Operations
Revenues
The overall Sales turnover of your Company on standalone basis
increased to Rs. 1,645 crores from Rs. 1,257 crore in the previous
year, at a growth rate of 32%. This was mainly due to increase in sales
volume. The overall Sales turnover of your Company on consolidated
basis was Rs. 2,293 crores.
Profits
Your Company's Profit before Tax (PBT) on standalone basis decreased by
33% to Rs. 52 crores compared to previous year's PBT of Rs. 77
crores; whilst Profit after Tax (PAT) decreased by 31% to Rs. 35
crores compared to the previous year's PAT of Rs. 51 crores. Your
Company's Profit before Tax (PBT) on consolidated basis was Rs. 36
crores whilst Profit after Tax (PAT) was Rs. 19 crores.
The decline in the PBT and PAT was mainly due to expense incurred by
the Company towards implementation of various strategic initiatives to
further strengthen the Company's competitive position in the market.
These initiatives will ensure that the Company will grow profitably as
a strong market leader even in uncertain economic conditions.
Additionally, the sharp fall in international crude prices in 4th
quarter resulted in inventory loss, which created pressure on market
demand. Your Company continues to be a market leader in ABS sales.
Dividend
Considering the performance, and to appropriately reward the Members
while conserving resources to meet future financial requirements, the
Board of Directors recommends a dividend of Rs. 4/- per Equity Share
of Rs. 10 each (40%). This dividend is subject to the approval of the
Members at the forthcoming Annual General Meeting.
The register of Members and share transfer books shall remain closed on
31 July 2015.
Acquisition of 100 % equity stake in Styrolution India Private Limited
(SIN)
The Board of Directors of your Company at its meeting held on 20
November 2013 had approved the proposal of making SIN as its
Wholly-owned subsidiary by acquiring 100% of SIN's equity shares,
subject to any mandatory approvals, to create better generation of
synergies and further strengthen Styrolution's presence in the Indian
market. Both companies are part of Styrolution Group, the world's
leading producer in Styrenics.
This acquisition proposal is expected to bring manifold advantages to
the Company, including the ability to develop its customer markets,
especially in the household appliances and electrical and electronics
segments, as well as the synergies resulting from streamlined business
operations of the two entities, including administration, raw materials
sourcing, shore tanks utilization, supply chain management, talent
development and sharing of technology know-hows.
Furthermore, this acquisition will also enable Styrolution to evaluate
options for future expansion of ABS capacity on the land available at
the Dahej site in Gujarat to meet the growing demands of the Indian
market. Effective 1 March 2014, SIN became the Wholly-owned subsidiary
of your Company.
Change in Holding Company within Styrolution Group
Subsequent to the previous year end, on 28 January 2014, Styrolution
(Jersey) Limited had transferred its entire holding of 13,189,218 (75%)
equity shares to Styrolution South East Asia Pte Ltd, Singapore.
Accordingly, the holding company of your Company is Styrolution South
East Asia Pte Ltd, Singapore with effect from 28 January 2014.
INEOS acquisition of Styrolution Group
On 30 June 2014, INEOS signed an agreement with BASF to buy out the
BASF's 50% stake in Styrolution, subject to regulatory approvals. This
resulted into an indirect acquisition of control in your Company and
triggered the open offer under Securities and Exchange Board of India
(SEBI) Takeover Rules in India. A public announcement pursuant to
Takeover Rules was given to stock exchanges in India on 4 July 2014
regarding the proposed acquisition and open offer.
A detailed public statement to the shareholders of the Company was
published on 17 November 2014. With effect of 17 November 2014, INEOS
successfully completed the purchase of BASF's 50% share in Styrolution,
so that the Styrolution group of companies is since then Wholly-owned
by INEOS.
Letter of Offer to the shareholders of the Company was sent and closure
of tendering period was 3 March 2015 pursuant to which Company received
2 valid applications for a total of 300 shares which was accepted by
the Acquirer (as defined in the Letter of Offer) and payment was made
through approved banking channels. Consequently, the shareholding of
the Acquirer post Open Offer increased by 300 shares to 13,189,518
representing 75.002% of the paid up capital of the Company.
As per SEBI Takeover Code, Acquirer has to bring down its holding to
75% on or before 12 March 2016 and in compliance thereof, Company had
applied to SEBI for allowing the Acquirer to directly sell the excess
shares i.e. 300 shares through normal trading window at the stock
exchanges, which was approved by SEBI vide its letter dated 20 April
2015. In further compliance thereof, Acquirer on 9 June 2015 had sold
the excess 300 shares through normal trading window thereby bringing
its holding to 75%.
Changes in Directorate
* At the forthcoming Annual General Meeting (AGM), following
appointments / re-appointments are being proposed:
1. During the year under review, Mr. Jal R. Patel, Mr. Ravindra
Kulkarni and Mr. Sharad M. Kulkarni were appointed as independent
directors for the period of 3 years from 1 January 2015 to 31 December
2017 in compliance with the applicable provisions of the Companies Act,
2013. We thank the Shareholders for their support in confirming these
appointments through postal ballot on 26 March 2015. Section 149 (13)
states that the provisions of retirement by rotation of the Companies
Act, 2013 shall not apply to such independent directors. Hence, none of
the independent directors will retire at the ensuing AGM.
2. Mr. H. T Chang has resigned from his office as Director cum
Chairman of the Board effective 18 May 2015. The Board places on record
its appreciation for the services rendered by Mr. Chang during his
tenure with the Company.
3. On the recommendations of nomination and remuneration committee,
the Board appointed Mr. Stephen Mark Harrington, Non-executive and
Non-Independent Director, as an Additional Director and Chairman of
Board of the Company with effect from 18 May 2015. A brief resume of
Mr. Harrington is given separately in the Notice convening AGM. Your
Directors recommend his appointment subject to approval of shareholders
at the forthcoming AGM of the Company.
4. Mr. Myung Suk Chi will retire by rotation and being eligible, has
offered himself for re-appointment in terms of the Articles of
Association of the Company. A brief resume of Mr. Chi is given
separately in the Notice convening AGM. Your Directors recommend his
re-appointment at the forthcoming AGM.
5. Mr. Myung Suk Chi, Executive and Non-Independent Director, has been
proposed to be re-appointed as Managing Director of the Company for a
period of one(1) year w.e.f 1 August 2015 to 31 July 2016. Nomination
and remuneration committee has recommended to the Board for his
re-appointment. Your Directors recommend his re-appointment as Managing
Director at the forthcoming AGM.
6. Dr. Anke Frankenberger, Non-executive and Non-Independent Director
(Woman Director), has been appointed as an Additional Director with
effect from 29 April 2014. A brief resume of Dr. Frankenberger is given
separately in the Notice convening AGM. Your Directors recommend her
appointment subject to approval of shareholders at the forthcoming AGM
of the Company.
7. Mr. Jit Teng Tan, Non-executive and Non-independent Director, Mr.
Ravishankar Kompalli, alternate to Dr. Anke Frankenberger and Mr.
Sushil Roy Ernest Fonseca, alternate to Mr. H. T. Chang, have resigned
from their directorship with effect from 29 April 2014, 12 November
2014 and 18 May 2015 respectively. The Board of Directors wishes to
place on record its appreciation of services rendered by them during
their tenure as Directors of the Company.
8. Mr. Vijay Kamat and Mr. Jit Teng Tan have been appointed as
alternate to Dr. Anke Frankenberger and to Mr. Stephen Mark Harrington
with effect from 12 November 2015 and 18 May 2015 respectively.
Key Managerial Personnel
Mr. Myung Suk Chi, Managing Director & Chief Executive Officer, Mr.
Haresh Khilnani, Company Secretary and Head - Legal and Mr. Bhupesh P.
Porwal, Chief Financial Officer of the Company are Key Managerial
Personnel of the Company as on 31 March 2015.
Board Diversity
Your Company recognizes and embraces the importance of a diverse board
in its success. We believe that a truly diverse board will leverage
differences in thought, perspective, knowledge, regional and industry
experience, age, ethnicity, race and gender, which will help us, retain
our competitive advantage. The Board of Directors has adopted the
'Board Diversity Policy' which sets out the approach to diversity of
the Board. The Board Diversity Policy is available on our website
www.styrolutionabsindia.com.
Declaration by Independent Directors
The Company has received necessary declaration from each independent
director that he meets the criteria of independence laid down in the
Companies Act 2013 and clause 49 of the Listing Agreement.
Deposits
The Company has not accepted any Deposit, within the meaning of Section
58A of the Companies Act, 1956 read with the Companies (Acceptance of
Deposit) Rules, 1975 from the public during the year under review.
Transfer to the Investor Education and Protection Fund
Pursuant to provisions of Section 205A of the Companies Act, 1956 the
unpaid & unclaimed dividend pertaining to the year ended on 31 December
2007 amounting to Rs. 216,255 which was lying in the Company's
separate unpaid dividend account and remaining unclaimed for a period
of seven years, was transferred to the Investor Education and
Protection Fund on 16 June 2015.
Internal Control Systems and their adequacy
The Company has an adequate system of internal controls in place. It
has documented procedures covering all financial and operating
functions. These controls have been designed to provide a reasonable
assurance with regard to maintaining of proper accounting controls,
monitoring of operations, protecting assets from unauthorized use or
losses, compliances with regulations and for ensuring reliability of
financial reporting. The Company has continued its efforts to align all
its processes and controls with global best practices in these areas as
well.
Audit Committee of the Board of Directors, comprising independent
directors, regularly reviews the audit plans, significant audit
findings, adequacy of internal controls, compliance with Accounting
Standards as well as reasons for changes in accounting policies and
practices, if any.
Safety, Health and Environment (SHE)
Your Company gives highest importance to Safety, Health and Environment
(SHE), and encourages and promotes safety awareness in true letter and
spirit as an integral part of its work culture.
Process Safety Management (PSM) is an integral part of all changes
taking place in the process. Onsite emergency plans have been reviewed
and updated by all divisions. Periodic mock drills are conducted at
various divisions and reports indicate improved preparedness of
employees.
To further strengthen the safety of overall operations and to promote a
positive safety culture and transparency, your Company has introduced
site specific behavioral based safety (BBS) process at all its
manufacturing locations and substantially invested for the improvement
of process safety.
Apart from employees, the contractors and workmen are also given
exhaustive training on safety, first-aid and fire fighting. The Company
has appointed and trained safety stewards to promote safety in all
divisions. A green belt in and around all factory premises has been
maintained to enhance eco-friendliness.
Insurance
Your Company's assets are adequately insured against risk from fire,
riot, earthquake, terrorism, loss of profits and other risks which are
considered necessary by the management.
As an additional coverage, a Public Liability Insurance Policy is also
in place and it has been taken to cover public liability/ties, if any,
arising out of any industrial accidents. Styrolution ABS group has
covered also the Directors' and Officers' liability under the Companies
Act to meet with any eventuality.
Statutory Auditors
The Board of Directors, on recommendation of the Audit Committee,
recommends the re-appointment of Messrs B S R & Co. LLP, Chartered
Accountants, (Firm Registration Number: 101248W/W100022), as the
Statutory Auditors of the Company from the conclusion of 42nd Annual
General Meeting until the conclusion of 43rd Annual General Meeting of
the Company. A certificate from them has been received to the effect
that their appointment as Statutory Auditors of the Company, if made,
would be according to the terms and conditions prescribed under
Sections 139 and other applicable provisions of the Companies Act, 2013
and rules framed thereunder.
Auditors' Report
The observations made by the Auditors in their Report read with the
relevant notes as given in the Notes to the Financial Statement for the
period ended 31 March 2015 are self- explanatory and are devoid of any
reservation, qualification or adverse remarks.
Secretarial Auditor
CS. Devesh A Pathak of Messrs Devesh Vimal & Co., Practising Company
Secretaries was appointed to conduct the Secretarial Audit of the
Company for the financial year 2014-15, required under Section 204 of
the Companies Act, 2013 and Rules framed thereunder.
Cost Auditors
As per the requirement of the Central Government and pursuant to
Section 233B of the Companies Act, 1956 the audit of the cost accounts
for Company's products is carried out every year. Pursuant to the
approval of Ministry of Corporate Affairs, Messrs Kiran J Mehta &
Associates, Cost Auditors were appointed as the Cost Auditors for
auditing the Company's cost accounts relating to the Company's products
from the financial year ended on 31 December 2013.
Consumption of energy, technology absorption and foreign exchange
earnings and outgo
A statement highlighting details of the conservation of energy,
technology absorption, and foreign exchange earnings and outgo, in
accordance with Section 217(1)(e) of the Companies Act, 1956 read with
the Companies (Disclosure of Particulars in the Report of Board of
Directors' Rules, 1988) is annexed hereto and forms part of this
report.
Quality Systems and ISO certification
During the year, Company continued to observe all pre-requisites in
maintaining the quality systems and standards and ISO audit methods as
required under the guidelines of Quality and Environmental Management
Systems for ISO certified by UL-DQS. During the year, System
Assessments for ISO 9001:2008 & ISO 14001:2004 were also successfully
completed.
Corporate Governance
Your Company observes high standards of corporate governance in all
areas of its functioning with strong emphasis on transparency,
integrity and accountability. As required by Clause 49 VI of the
Listing Agreement, a detailed report on Corporate Governance alongwith
the Auditors' Certificate thereon forms part of this Report. A detailed
review of the operations, performance and future outlook of the Company
and its businesses is given in the Management's Discussion and
Analysis, which forms part of this Report
Code of Conduct
The Company has suitably laid down the Code of Conduct for all Board
Members and Senior Management personnel of the company. The
declaration by CEO of the Company relating to the compliance of
aforesaid Code of Conduct forms an integral part of this Annual Report.
Human Resource and Industrial Relations
Our employees are the most valuable assets of the Company. We encourage
innovation, meritocracy and the pursuit of excellence. The human
resource development function of the Company is guided by a spirit of
corporate team building and dedication towards strengthening the
Company's systems thereby improving efficiencies and registering
growth. All personnel continue to have a healthy, cordial and
harmonious approach in problem solving and enhancing Company value at
all levels. Despite uncertain economic conditions, the enthusiasm and
unstinting efforts of the employees has enabled the Company to maintain
leadership in its business areas. The Industrial relations during year
remained cordial.
The Company has drawn up a comprehensive human resource strategy (the
"Human Resource" strategy) which addresses key aspects of human
resource development such as:
* Code of conduct and fair business practices.
* A fair and objective performance management system linked to the
performance of the businesses.
* Creation of a common pool of talented managers across the
Organization with a view to increasing their mobility through inter-
company job rotation.
* Evolution of performance based compensation packages to attract and
retain talent within the Organization.
* Development of comprehensive training programs to impart and
continuously upgrade the industry/function specific skills, etc.
Employee benefit measures undertaken during the year
In order to achieve a highly streamlined and productive organization, a
transparent and uniform HR policy with a well-defined reporting
structure and clear roles and responsibilities will be put in place. An
employee survey together with a top leadership workshop was also
conducted to assess the current cultures of Styrolution group Companies
in India and to identify an ideal common culture across the two
entities for better implementation of the respective strategic
initiatives.
Necessary trainings based on identified needs are being set-up across
all functions by the respective Heads of Departments to enhance the
knowledge and competencies of our employees. Other initiatives
including an improvement of the working environment, the automation of
HR processes including the outsourcing of the payroll process and the
installation of a new attendance system, are in progress.
Particulars of Employees
Particulars of employees, as required under Sec 217(2A) of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975, as amended, forms part of this report. However, pursuant
to the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956,
this report is being sent to all shareholders of the Company excluding
the aforesaid information and the said particulars will be made
available at the Registered Office of the Company. The Members
interested in obtaining such particulars may write to the Company
Secretary at the Registered Office of the Company.
Directors' Responsibility Statement Pursuant to Section 217(2AA)
Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors
confirm that:
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed.
ii) they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as on 31 March, 2015 and of the profit of the Company for
the period ended on that date;
iii) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
iv) they have prepared the annual accounts on a going concern basis.
Acknowledgements
We thank our customers, vendors, dealers, investors, business partners
and bankers for their continued support during the year which made the
Company grow successfully. We also place on record our appreciation of
the contribution made by our employees at all levels. Our consistent
growth was made possible by their hard work, solidarity, cooperation
and support.
For and on behalf of the Board
24 June 2015 Stephen Mark Harrington
Vadodara Chairman
Dec 31, 2013
Dear Shareholders,
The Directors take pleasure in presenting herewith their 41st Annual
Report together with Audited Accounts and Auditors'' Report for the year
ended 31st December, 2013.
Financial Performance
The financial performance of your Company for the year ended 31st
December, 2013 is highlighted below:
(Rs. in ''000)
Particulars 2013 2012
Sales in MTs 76,964 74,804
Sales and other operating Income 12,574,119 11,066,061
Other Income 107,855 111,467
Total Income 12,681,974 11,177,528
Gross Profit before Interest,
Depreciation & Tax 912,776 1,083,005
Less : Interest 4,571 15,915
Less: Depreciation 133,961 136,101
Profit Before Tax 774,244 930,989
Less: Provision for Tax 373,345 314,700
Less: Provision for Deferred Tax (104,131) (15,012)
Net Profit After Tax 505,030 631,301
Add: Balance of Profit Brought Forward 2,979,786 2,493,739
Amount Available for Appropriation 3,484,816 3,125,040
Appropriations: 2013 2012
Proposed Dividend 70,343 70,343
Tax on Proposed Dividend 12,499 11,411
Transfer to General Reserve 50,500 63,500
Balance of Profit Carried Forward 3,351,474 2,979,786
EPS (Basic) 28.72 35.90
(Diluted) 28.72 35.90
Review of Operations
Your Directors wish to inform that in context of the GDP growth of 4.8%
in year 2013 and the de-growth of both the auto industry and durable
goods like refrigerator was 5%, the overall Sales turnover of your
Company was Rs. 1,257 crores, which is higher by 14% over the previous
year''s turnover of Rs.1,107 crores. This was mainly due to increase in
sales volume and pricing.
However, Company''s Profit Before Tax (PBT) decreased by 17% to Rs. 77
crores compared to previous year''s PBT of Rs. 93 crores; whilst Profit
After Tax (PAT) decreased by 19% to Rs. 51 crores compared to the
previous year''s PAT of Rs. 63 crores. The decline in the PBT and PAT
was mainly due to one-time expense incurred by the Company towards
implementation of various strategic initiatives to further strengthen
the Company''s competitive position in the market.
These initiatives will ensure the Company to grow profitably as a
strong market leader even in the uncertain economic conditions.
During the year, there is no increase in the paid up share capital of
the Company. Your Company continues to be a market leader in ABS sales.
Acquisition of 100 % equity stake in Styrolution India Pvt Ltd. (SIN)
The Board of Directors of Styrolution ABS (India) Limited (SAI) at
their meeting held on November 20, 2013 had approved the proposal of
making SIN as its Wholly Owned Subsidiary by acquiring 100% of its
equity shares, subject to any mandatory approvals, to create better
generation of synergies and further strengthen Styrolution''s presence
in the Indian market. Both companies are part of Styrolution Group, the
world''s leading producer in styrenics.
This acquisition proposal is expected to bring manifold advantages to
the Company, including the ability to develop its customer markets,
especially in the household appliances and electrical and electronics
segments, as well as the synergies resulting from streamlined business
operations of the two entities, including administration, raw materials
sourcing, shore tanks utilization, supply chain management, talent
development and sharing of technology know-hows.
Furthermore, this acquisition will also enable Styrolution to evaluate
options for future expansion of ABS capacity on the land available at
the Dahej site in Gujarat to meet the growing demands of the Indian
market.
Change of Holding Company within Styrolution Group
Subsequent to the year end, on 28th January, 2014, Styrolution (Jersey)
Limited has transferred its entire holding of 13,189,218 (75%) equity
shares to Styrolution South East Asia Pvt Ltd, Singapore. Accordingly,
the holding company of the Company is Styrolution South East Asia Pte
Ltd, Singapore with effect from 28th January, 2014.
Directors
Mr. Jal R Patel and Mr. Ravindra Kulkarni are retiring by rotation at
the ensuing Annual General Meeting and being eligible have offered
themselves for reappointment.
Dividend
Considering the performance and to appropriately reward the Members
while conserving resources to meet future financial requirements, the
Board of Directors recommends a dividend of Rs. 4/- per Equity Share of
Rs.10 each (40%). This dividend is subject to the approval of the
Members at the ensuing Annual General Meeting.
The register of members and share transfer books shall remain closed
from 21st April, 2014 to 29th April, 2014, (both days inclusive).
Deposits
The Company has not accepted any deposit, within the meaning of Section
58A of the Companies Act, 1956 read with the Companies (Acceptance of
Deposit) Rules, 1975 from the public during the year under review.
Transfer to the Investor Education and Protection Fund
As required in terms of provisions of Section 205C of the Companies
Act, 1956, the unclaimed dividend pertaining to the financial year
ended on 31.12.2006 is due for transfer on 3rd May, 2014 to the
Investor Education and Protection Fund maintained by the Ministry of
Corporate Affairs. Your Directors request the affected shareholders to
claim the same from the Company before the date of transfer or else no
claim for the Dividend shall lie on the Company or on the said fund
post transfer.
Internal Control Systems and their adequacy
The Company has an adequate system of internal controls in place. It
has documented procedures covering all financial and operating
functions. These controls have been designed to provide a reasonable
assurance with regard to maintaining of proper accounting controls,
monitoring of operations, protecting assets from unauthorized use or
losses, compliances with regulations and for ensuring reliability of
financial reporting. The Company has continued its efforts to align all
its processes and controls with global best practices in these areas as
well.
Audit Committee of the Board of Directors, comprising independent
directors, regularly reviews the audit plans, significant audit
findings, adequacy of internal controls, compliance with Accounting
Standards as well as reasons for changes in accounting policies and
practices, if any.
Environmental Health, Safety and Protection
Your Company gives highest importance to Environment, Health and Safety
(EHS), and encourages and promotes safety awareness in true letter and
spirit as an integral part of its work culture.
Process Safety Management- PSM is an integral part of all changes
taking place in the processes.
Onsite emergency plans have been reviewed and updated by all divisions.
Periodic mock drills are conducted at various divisions and reports
indicate improved preparedness of employees.
To further strengthen the safety of overall operations and to promote a
positive safety culture of transparency, your Company has introduced
site specific behavioral based safety (BBS) process at all its
manufacturing locations and substantially invested for the improvement
of process safety.
Apart from employees, the contractors and workmen are also given
exhaustive training on safety, first-aid and fire fighting.
The Company has appointed and trained safety stewards to promote safety
in all divisions. A green belt in and around factory premises has been
maintained to enhance eco-friendliness.
Insurance
Your Company''s assets are adequately insured against risk from fire,
riot, earthquake, terrorism, loss of profits and other risks which are
considered necessary by the management.
As an additional coverage, a Public Liability Insurance Policy is also
in place and it has been taken to cover public liabilities, if any,
arising out of any industrial accidents. Styrolution ABS Group has
covered globally through insurance cover, the Directors'' and Officers''
liability under the Indian Companies Act to meet with any eventuality.
Statutory Auditors
The auditors, B S R & Co. LLP, Chartered Accountants, retire at the
ensuing Annual General Meeting and have confirmed their eligibility and
willingness to accept office, if re-appointed.
Auditors'' Report
The observations made by the Auditors in their Report read with the
relevant notes as given in the Notes to the Financial Statement for the
year ended 31st December, 2013 are self- explanatory and are devoid of
any reservation, qualification or adverse remarks.
Cost Auditors
As per the requirement of the Central Government and pursuant to
Section 233B of the Companies Act, 1956, the audit of the cost accounts
for Company''s products is carried out every year. Pursuant to the
approval of Ministry of Corporate Affairs, M/s. Kiran J Mehta &
Associates, Cost Auditors were appointed as the Cost Auditors for
auditing the Company''s cost accounts relating to the Company''s products
for FY ended on 31st December, 2013.
Consumption of energy, technology absorption and foreign exchange
earnings and outgo
A statement highlighting details of the conservation of energy,
technology absorption, and foreign exchange earnings and outgo, in
accordance with Section 217(1)(e) of the Companies Act, 1956 read with
the Companies (Disclosure of Particulars in the Report of Board of
Directors'' Rules, 1988) is annexed hereto and forms part of this
report.
Quality Systems and ISO certification
During the year, Company continued to observe all pre-requisites in
maintaining the quality systems and standards and ISO audit methods as
required under the guidelines of Quality and Environmental Management
Systems for ISO certified by UL-DQS. During the year, System
Assessments for ISO 9001:2008 & ISO 14001:2004 were also successfully
completed.
Corporate Governance
Your Company observes high standards of corporate governance in all
areas of its functioning with strong emphasis on transparency,
integrity and accountability. As required by Clause 49 VI of the
Listing Agreement, a detailed report on Corporate Governance along with
the Auditors'' Certificate thereon forms part of this Report. A detailed
review of the operations, performance and future outlook of the Company
and its businesses is given in the Management''s Discussion and
Analysis, which forms part of this Report.
Code of Conduct
Company has suitably laid down the Code of Conduct for all Board
Members and Senior Management Personnel of the Company.
The declaration by CEO viz. Managing Director of Company related to the
compliance of aforesaid Code of Conduct forms an integral part of this
Annual Report.
Human Resource and Industrial Relations
Our employees are the most valuable assets of the Company. We encourage
innovation, meritocracy and the pursuit of excellence. The human
resource development function of the Company is guided by a spirit of
corporate team building and dedication towards strengthening the
Company''s systems thereby improving efficiencies and registering
growth. All personnel continue to have a healthy, cordial and
harmonious approach in problem solving and enhancing Company value at
all levels. Despite uncertain economic conditions, the enthusiasm and
unstinting efforts of the employees has enabled the Company to maintain
leadership in its business areas. The industrial relations during the
year remained cordial.
The Company has drawn up a comprehensive human resource strategy (the
"Human Resource" strategy) which addresses key aspects of human
resource development such as:
- Code of conduct and fair business practices.
- A fair and objective performance management system linked to the
performance of the businesses.
- Creation of a common pool of talented managers across Organization
with a view to increasing their mobility through inter-company job
rotation.
- Evolution of performance based compensation packages to attract and
retain talent within organization.
- Development of comprehensive training programs to impart and
continuously upgrade the industry/function specific skills, etc.
Employee benefit measures undertaken during the year
In order to achieve a highly streamlined and productive organization, a
transparent and uniform HR policy with a well- defined reporting
structure and clear roles and responsibilities will be put in place. An
employee survey together with a top leadership workshop was also
conducted to assess the current cultures of Styrolution Group Companies
in India and to identify an ideal common culture across the two
entities for the better implementation of the respective strategic
initiatives.
A training calendar for the year 2013-14 based on identified needs has
been set-up across all functions by the respective Heads of Departments
to enhance the knowledge and competencies of our employees. Other
initiatives including an improvement of the working environment, the
automation of HR processes including the outsourcing of the payroll
processor and the installation of a new attendance system, are in
progress.
Particulars of Employees
Particulars of employees, as required under Section 217(2A) of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975, as amended, forms part of this Report. However, pursuant
to the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956,
this report is being sent to all shareholders of the Company excluding
the aforesaid information and the said particulars will be made
available at the Registered Office of the Company. The Members
interested in obtaining such particulars may write to the Company
Secretary at the Registered Office of the Company.
Directors'' Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors
based on the representation received from the operating management,
confirm that:
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed;
ii) they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as on 31st December, 2013 and of the profit of the Company
for the year ended on that date;
iii) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
iv) they have prepared the annual accounts on a going concern basis.
Acknowledgements
We thank our customers, vendors, dealers, investors, business partners
and bankers for their continued support during the year which made the
Company grow successfully. We also place on record our appreciation of
the contribution made by our employees at all levels. Our consistent
growth was made possible by their hard work, solidarity, cooperation
and support.
For and on behalf of the Board
Mumbai Hyung Tae Chang
February 17, 2014 Chairman
Dec 31, 2012
Dear Shareholders,
The Directors take pleasure in presenting herewith their 40th annual
report together with Audited Accounts and Auditors'' Report for the year
ended 31st December, 2012.
A. Financial Performance
The financial performance of your Company for the year ended 31st
December, 2012 is highlighted below:
(Rs. In ''000)
Particulars 2012 2011
Sales in MTs 74,804 66,714
Sales and other operating Income 11,060,519 9,099,761
Other Income 117,009 112,703
Total Income 11,177,528 9,212,464
Gross Profit before Interest,
Depreciation & Tax 1,067,090 914,230
Less : Interest - -
Less: Depreciation 136,101 139,401
Profit Before Tax 930,989 774,829
Less: Provision for Tax 314,700 267,200
Less: Provision for Deferred Tax (15,012) (32,035)
Net Profit After Tax 631,301 539,664
Add: Balance of Profit Brought Forward 2,493,739 2,090,558
Amount Available for Appropriation 3,125,040 2,630,222
Appropriations:
Proposed Dividend 70,343 70,343
Tax on Proposed Dividend 11,411 11,140
Transfer to General Reserve 63,500 55,000
Balance of Profit Carried Forward 2,979,786 2,493,739
EPS (Basic) 35.90 30.69
(Diluted) 35.90 30.69
B. Review of operations
Your Directors wish to inform that in context of the GDP growth of 5.5%
during the year under review, the ABS demand growth of 130,000 tonnes
(130 KT) showed 11% increase. As such, better inroads could be made in
the two-wheelers, four-wheelers and home appliances segments and in
percentage terms, the growth was to the tune of 9%, 8% and 10%
respectively.
Your Directors are also of the view that in time to come the demand is
expected to grow steadily based on the assumption that capacity
utilization in Auto Sector would be 70% to 75% while in case of
Consumer Durables 65% to 70%.
Your Directors are pleased to report that your Company has achieved
Profit before Tax (PBT) of Rs. 93 Crores and Net Profit (Profit After
Tax) of Rs. 63 Crores in the year under review. (Previous year PBT was
Rs. 77 Crores & PAT was Rs. 54 Crores).
Your Company has achieved sales turnover for the year ended December
31, 2012 of Rs. 1106 Crores, which is higher by 21.56% over the
previous year''s turnover of Rs. 910 Crores. This higher sales turnover
is a result of better price realization in its business segments.
The EBIDTA has also increased from Rs. 106.71 Crores to Rs. 91.42
Crores.
In comparison to the last year, the earning per share has increased
from Rs. 30.69 to Rs. 35.90.
During the year under review, there is no increase in the paid up share
capital of the Company and it has remained at Rs.17.59 Cr.
Your Directors are pleased to inform that your Company continues to be
a debt free Company for the tenth year in succession.
Your Company continues to be a market leader in ABS sales.
C. Styrolution
Your Directors wish to inform that consequent upon formation of 50:50
Global joint venture between INEOS and BASF, for bringing under one
umbrella their key Styrenics business worldwide w.e.f. October 1, 2011,
M/s. Styrolution (Jersey) Limited (formerly known as INEOS ABS (Jersey)
Limited), the acquirer, along with persons acting in concert (PAC) have
in terms of SEBI (Substantial Acquisition of Shares and Takeovers)
Regulations 2011, made a public offer to the shareholders of the
Company, vide Offer document dated January 5, 2012. The cash offer
price is Rs. 606.81 (Rupees six hundred six and paise eighty one only)
for one fully paid up equity share of Rs. 10 each to acquire maximum of
2,931,920 Equity Shares representing balance 16.67% shares in the share
capital of the Company.
The said Open Offer concluded on 6th February, 2012. M/s. Styrolution
(Jersey) Limited along with PACs, named therein as acquirers, acquired
703,075 Equity Shares comprising of 4% of total Equity Share Capital of
the Company and thereby increased their shareholding to 15,356,780
Equity Shares representing 87.33 % of fully paid-up Equity Share
capital of the Company.
Effective from February 14, 2012, the holding Company''s name has
changed from INEOS ABS (Jersey) Limited to Styrolution (Jer- sey)
Limited.
D. Change of Name
In view of change in the corporate structure, the name of the Company
was proposed to be changed and effective from May 1, 2012 the Ministry
Of Corporate Affairs, Office of Registrar of Companies, Gujarat has
approved the new name and accordingly the name of the company has been
changed from INEOS ABS (India) Limited to Styrolution ABS (India)
Limited.
E. Directors
Upon closure of the Open Offer made by Styrolution Global (''Acquirers'')
and the transfer of controlling interest in the Company in favour of
Styrolution (Jersey) Limited, the nominees representing INEOS, Dr.
Gerhard Franken and Mr. Andrew Pizzey have resigned from Directorship/s
effective from March 1, 2012.
M/s. Styrolution (Jersey) Ltd.- the holding Company nominated Mr. Hyung
Tae Chang and Mr. Myung Suk Chi as its Nominee Directors effective from
March 1, 2012 and they were inducted on the Board after complying with
due procedures in this regard.
Mr. S M Kulkami and Mr. Hyung Tae Chang are retiring by rotation at the
ensuing AGM and being eligible have offered themselves for
reappointment.
Mr. R S Agrawal ceased to be the Managing Director upon completion of
his contractual term on December 31, 2012.
The Board has re-designated Mr. Myung Suk Chi as a Managing Director,
for the period from January 1, 2013 to July 31, 2015 (both days
inclusive) on the same terms and conditions approved by the
Shareholders by way of resolution passed through postal ballot on June
19,2012.
Mr. Sushil Roy Fonseca who was appointed on the Board w.e.f. form March
1, 2012 as an Alternate Director to Mr. Hyung Tae Chang, has resigned
from the Board w.e.f. April 24, 2012.
Effective from January 1, 2013, Mr. Jit Teng Tan has been appointed as
additional Director. Your Directors recommend the appoint- ment of Mr.
Jit Teng Tan as a Director liable to retire by rotation.
The Board has also appointed Mr. Ravishankar Kompalli as an Alternate
Director to Mr. Jit Teng Tan on the Board, effective from January 1,
2013.
Your Directors wish to place on record their appreciation for the
valuable contribution made by the retiring directors during their
tenure as Directors during the year under review and also welcome the
new Directors.
Your Directors hereby confirm the compliance of conditions necessary
for appointing Independent Director/s under Clause 49, amended till
date, of the Corporate Governance Code prescribed under the Listing
Agreement.
Your Directors also recommend the passing of the appropriate
resolutions proposing the appointment of Directors in the notice
convening the AGM.
F. Dividend
The Directors are pleased to recommend a dividend of Rs. 4.00 per fully
paid-up Equity Share i.e. 40 % for the financial year ended on December
31, 2012 subject to the shareholders'' approval at the ensuing Annual
General Meeting.
The register of members and share transfer books shall remain closed
from 15th April, 2013 to 19th April, 2013, (both days inclusive).
The Dividend amount upon approval shall be paid to all the
shareholders, whose names shall appear in the Register of Members as on
the book closure date i.e. 15th April, 2013.
G. Transfer to the Investor Education and Protection Fund
As required in terms of provisions of Section 205C of the Companies
Act, 1956, the unclaimed dividend pertaining to the financial year
ended on 31.12.2005 is due for transfer on 6th May, 2013 to the
Investor Education and Protection Fund maintained by the Ministry of
Corporate Affairs. Your Directors request the affected shareholders to
claim the same from the Company before the date of transfer or else no
claim for the dividend shall lie on the Company or on the said fund
post transfer.
H. Contribution to the National Exchequer
A sum of Rs. 153.07 Cr. on account of central excise duty, direct and
indirect taxes and state taxes were contributed/paid to the
National/State exchequer during the year under review.
I. Research and Development
The R&D centre meets with market needs helping customers'' improve upon
the laid out standards. Continuous study for improvement in products
and processes would ultimately benefit one and all.
Your Directors would like to inform that Styrolution ABS is geared up
to contribute to R & D capabilities globally and hopes that it becomes
an important hub for such related activities.
Our proven after sales services to customers results in increased
customer bonding and long term relationships.
J. Risk Management
Your Directors wish to state that Risk management and control practices
have been deployed across all the functions and functional evaluation
of rating probability and impact is being constantly monitored under
the guidance of the Managing Director. Very high ranking risks are
deliberated at the Board level and mitigating steps and measures
applied or to be applied are debated.
Your company is integrating its risk monitoring procedures with the
global Styrolution policies.
The objectives of the Company''s risk management framework comprise the
following :
To identify, assess, prioritize and manage existing as well as new
risks in a planned and coordinated manner.
To increase the effectiveness of internal and external reporting
structure.
To develop a risk culture that encourages employees to identify risks
and associated opportunities and respond to them with appropriate
actions.
The Senior management team forming part of the risk managing
organization conducts an exercise every quarter internally for an
ongoing risk assessment and takes measures and effective steps to
mitigate / reduce impact and control the same from time to time. The
Managing Director gives overall directions in controlling / mitigating
risks generally and is in complete know of the organizational risks
potential. The Company has a proper system to ensure compliance of
legal / regulatory requirements that are applicable to the Company.
K. Environmental Health, Safety and Protection
Your Company gives highest importance to Environment, Health and Safety
(EHS), and encourages and promotes safety awareness in true letter and
spirit as an integral part of its work culture.
Process Safety Management- PSM is now an Integral part of all changes
taking place in the process.
Onsite emergency plans have been reviewed and updated by all divisions.
Periodic mock drills are conducted at various divisions and the reports
indicate improved preparedness of employees.
Apart from employees, the contractors and workmen are also given
exhaustive training on safety, first-aid and fire fighting. The Company
has appointed and trained safety stewards to promote safety in all
divisions. A green belt in and around the factory premises has been
maintained to enhance eco-friendliness.
L. Insurance
Your Company''s assets are adequately insured against risk from fire,
riot, earthquake, terrorism, loss of profits and other risks which are
considered necessary by the management.
As an additional coverage, a Public Liability Insurance Policy is also
in place and it has been taken to cover public liability/ies, if any,
arising out of any industrial accidents. Styrolution ABS group has
covered globally through insurance cover, the Directors'' and Officers''
liability under the Indian Companies act to meet with any eventuality.
M. Auditors and their report
The comments of the Auditors in their report and the notes forming part
of the Accounts are self explanatory and need no comments.
M/s. BSR & Co. Chartered Accountants, Mumbai, the present Statutory
Auditors of the Company have expressed their willingness for their
reappointment and a certificate to the effect that their appointment,
if made, would be in accordance with the provisions of Section 224(1B)
of the Companies Act, 1956 has been received. Your Directors recommend
the appointment and fixing remuneration of M/s. BSR & Co., Chartered
Accountants, Mumbai at the ensuing AGM.
N. Consumption of energy, technology absorption and foreign exchange
earnings and outgo
A statement highlighting details of the conservation of energy,
technology absorption, and foreign exchange earnings and outgo, in
accordance with Section 217(1)(e) of the Companies Act, 1956 read with
the Companies (Disclosure of Particulars in the Report of Board of
Directors'' Rules, 1988) is annexed hereto and forms part of this
report.
O. Quality Systems and ISO certification
During the year the Company continued to observe all pre-requisites in
maintaining the quality systems and standards and ISO audit methods as
required under the guidelines of Quality and Environmental Management
Systems for ISO certified by UL-DQS. During the year, System
Assessments for ISO 9001:2008 & ISO 14001:2004 were also successfully
completed.
P. Corporate Governance
Your Company has implemented clause 49 of Listing Agreement, popularly
known as ''Corporate Governance'', within the stipulated time frame and
took effective steps to meet with compliance standards laid down in the
said clause. It also takes a proactive approach and revisits its
governance practices from time to time so as to fulfill business and
regulatory needs.
The Company has implemented all of the mandatory requirements of the
said clause, as applicable to the Company.
The Statutory Auditor''s Certificate in accordance with Clause 49 of the
Listing Agreement and report on Corporate Governance is annexed
herewith and forms part of this Annual Report.
The Managing Director and the Chief Financial Officer have given a
certificate to the Board as contemplated in sub-clause V of clause 49
of the Listing Agreement.
Q. Management Discussion and Analysis
A Management Discussion and Analysis Report for the year 2012 as
required under Clause 49 of the Listing Agreement is annexed and forms
part of this annual report.
R. Human Resource and Industrial Relations
The human resource development function of the Company is guided by a
spirit of corporate team building and dedication towards strengthening
the Company''s systems thereby improving efficiencies and registering
growth. All personnel continue to have a healthy, cordial and
harmonious approach in problem solving and enhancing Company value at
all levels. Despite severe economic trials, the enthusiasm and
unstinting efforts of the employees has enabled the Company to maintain
leadership in its business areas.
The industrial relations during the year remained cordial.
S. Particulars of Employees
Particulars of employees, as required under Sec 217(2A) of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975, as amended, forms part of this Report. However, pursuant
to the provisions of Section 219(1)(b)(iv)of the Companies Act, 1956,
this report is being sent to all shareholders of the Company excluding
the aforesaid information and the said particulars will be made
available at the Registered Office of the Company. The members
interested in obtaining such particulars may write to the Company
Secretary at the Registered Office of the Company.
T. Directors'' Responsibility Statement Pursuant to Section 217(2AA)
Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors
based on the representation received from the operating management,
confirm that:
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed;
ii) they have selected such accounting policies and applied them
consistently and made judgements and estimates that are reason- able
and prudent so as to give a true and fair view of the state of affairs
of the Company as on 31st December, 2012 and of the profit of the
Company for the year ended on that date;
iii) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
iv) they have prepared the annual accounts on a going concern basis.
U. Acknowledgements
Your Board of Directors thank all the stakeholders - the shareholders,
customers, dealers, suppliers, bankers, and all the other business
associates for the continued support extended by them to the Company
and for their confidence in its management. Your Directors also wish to
place on record their appreciation to the dedicated workforce of the
company.
For and on behalf of the Board
Vadodara Hyung Tae Chang
February 26, 2013 Chairman
Dec 31, 2011
The Directors have pleasure in presenting herewith their 39th report
together with Audited Accounts and Auditors' Report for the year ended
31st December, 2011.
Financial Performance
The financial performance of your Company for the year ended 31st
December, 2011 is indicated below :
(Rs. In '000)
Particulars 2011 2010
Sales in MTs 66,714 66,292
Sales and other operating Income 9,099,761 8,160,126
Other Income 112,703 54,823
Total Income 9,212,464 8,214,949
Gross Profit before
Interest, Depreciation & Tax 914,230 1,166,639
Less : Interest - -
Less: Depreciation 139,401 139,779
Profit Before Tax 774,829 1,026,860
Less: Provision for Tax 267,200 348,000
Less: Provision for Deferred Tax 32,035 21,440
Net Profit After Tax 539,664 700,300
Add: Balance of Profit Brought
Forward 2,090,558 1,544,784
Amount Available for Appropriation 2,630,222 2,245,084
Appropriations:
Proposed Dividend 70,343 70,343
Tax on Proposed Dividend 11,140 11,683
Transfer to General Reserve 55,000 72,500
Balance of Profit Carried
Forward 2,493,739 2,090,558
EPS (Basic) 30.69 39.82
(Diluted) 30.69 39.82
Review of operations
During the year under review, the net sales amounted to Rs. 909.98 Cr.
(Prev. year Rs. 816.10 Cr.). The Operating profit of the Company after
accounting relevant expenses amounts to Rs. 91.42 Cr. reflecting a
decrease by 21.63 % (Prev year Rs. 116.66 Cr. ) and the net profit has
decreased to Rs. 53.97 Cr. (Prev. year Rs.70.03 Cr.).
The earning per share has decreased to Rs. 30.69 from Rs. 39.82 last
year.
During the year, Company has not increased its share capital and it
remains unchanged at Rs 17.58 Cr. Your Board of Directors is pleased
to record Company's debt free status, for the ninth year in succession.
Your Company has faced very credibly during the year inspite of
tremendous volatility in raw material prices. While Acrylonitrile moved
between 2800 US$ to 1800 US$, Butadiene moved between 4200 US$ and 1700
US$. Styrene though was relatively stable and moved between 1500 US$ to
1300 US$. Such kind of volatility has created a huge pressure on the
pricing and margins specially in the last quarter of the year where in
addition there was a sudden change/s in the raw material/s prices and
sudden depreciation of INR by almost 20%.
With increased capacity in the current year, the Company expects to
actively participate in the market and improve market share. With the
technology available from Styrolution Companies your Company will be
able to cater to the customers needs in a better manner.
During the year the Company has increased the capacity and further
steps have been taken to increase the ABS capacity to 110 KT which will
be implemented by 2014. As a first step the SAN capacity is being
increased to 100 KTA and this capacity will be available in 2013.
Your Company continues to maintain its leadership position in the
market.
Styrolution
Consequent upon the formation of 50:50 Global joint venture between
INEOS and BASF, bringing together key Styrenics business of the two
joint venture partners worldwide effective October 1, 2011, M/s.
Styrolution (Jersey) Limited (formerly known as INEOS ABS (Jersey)
Limited), the acquirer, along with persons acting in concert has in
terms of SEBI (SAST) Regulations 1997, made a public offer to the
shareholders of the Company, vide Offer document dated January 5, 2012.
The cash offer price was Rs. 606.81 (Rupees six hundred six and paise
eighty one only) for one fully paid up Equity Share of Rs. 10 each to
acquire maximum of 2,931,920 Equity Shares representing balance 16.67%
of the total Equity Share capital of the Company, which was concluded
on February 6, 2012. Total 7,03,075 nos. of Equity Shares forming 4% of
the Equity Share capital of the Company have been received unto
transfer favouring Styrolution (Jersey) Ltd.
Change of Name
Effective from 1st March, 2012, Styrolution (Jersey) Limited is holding
15,356,780 no. of Equity Shares constituting 87.33 % of the total
Equity Share capital of the Company.
The Board of Directors of the Company at the meeting held on March 1,
2012 has proposed to change the name of the Company from INEOS ABS
(India) Ltd. to Styrolution ABS (India) Limited or such other name as
may be made available from the Ministry Of Corporate Affairs, Office of
Registrar of Companies, Gujarat and subject to approval of the
shareholders.
A Special Resolution for change of name for approval of the
Shareholders is proposed in the AGM Notice at item no. 6.
Dividend
The Directors of your Company are pleased to recommend a dividend of
Rs. 4.00 per fully paid-up Equity Share i.e. 40 % for the financial
year ended on December 31, 2011 subject to the shareholders' approval
at the ensuing Annual General Meeting. Dividend once approved, will be
paid to all those shareholders whose names appear in the Register of
Members as on 16th April, 2012.
The register of members and share transfer books shall remain closed
from 16th April, 2012 to 20th April, 2012, both the days inclusive, for
the purpose of Annual General Meeting and payment of dividend.
Transfer to the Investor Education and Protection Fund
In terms of Section 205C of the Companies Act, 1956, the unclaimed
dividend relating to the financial year ended on 31.12.2004 is due for
transfer in the month of May, 2012 to the Investor Education and
Protection Fund maintained by the Ministry of Corporate Affairs.
Contribution to the National Exchequer
A sum of Rs. 124.33 Cr. on account of central excise duty, direct and
indirect taxes and state taxes was paid to the National Exchequer
during the year under review.
Research and Development
The R & D centre meets with market needs helping the Company to improve
upon the laid out standards. Continuous improvement in product and
process studies have ultimately benefitted all concerned.
INEOS ABS is geared to contribute to R & D capabilities globally and we
hope to become an important hub for such related activities. Our
proven after sales services to customers, results in increased customer
bonding and long term relationships.
Risk Management
Risk management and control practices have been deployed across all the
functions and functional evaluation of rating probability and impact is
constantly monitored under the guidance of the Managing Director. Very
high ranking risks are deliberated at the Board level and mitigating
steps and measures applied or to be applied are debated.
The objectives of the Company's risk management framework comprises the
following :
To identify, assess, prioritize and manage existing as well as new
risks in a planned and coordinated manner.
To increase the effectiveness of internal and external reporting
structure.
To develop a risk culture that encourages employees to identify risks
and associated opportunities and respond to them with appropriate
actions.
The senior management team forming part of the risk managing
organization conducts an exercise every quarter internally for an
ongoing risk assessment and takes measures and effective steps to
mitigate / reduce impact and control the same from time to time. The
Managing Director gives overall directions in controlling / mitigating
risks generally and is in complete know of the organizational risk
potential.
The Company has a proper system to ensure compliance of legal /
regulatory rules and regulations applicable to the Company.
Health, Safety and Environmental Protection
Your Company gives highest importance to Environment and Safety, and
encourages and promotes safety awareness as an integral part of the
work culture.
Process Safety Management - PSM is now an integral part of any changes
in the process.
Onsite emergency plans have been reviewed and updated in all divisions.
Periodic mock drills are conducted at various divisions and the reports
indicate improved preparedness of employees.
Apart from employees, the contractors and workmen are also given
exhaustive training on safety, first-aid and fire fighting. The Company
has appointed and trained safety stewards to promote safety in all
divisions. A green belt in and around the premises has been maintained
to enhance eco-friendliness.
Insurance
Your Company's assets are adequately insured against risk from fire,
riot, earthquake, terrorism, loss of profits and other risks which are
considered necessary by the management.
As an additional coverage, a statutory Public Liability Insurance
Policy has been taken to cover public liability arising out of
industrial accidents. INEOS ABS group has covered globally through
insurance cover, the Directors' and Officers' liability under the
Indian Companies Act to meet with any eventuality.
Directors
Mr. Ravindra Kulkarni and Mr. Myung Suk Chi, Director/s of the Company
are to retire by rotation at the ensuing Annual General Meeting. Being
eligible, they have offered themselves for reappointment and the Board
recommends their reappointment/s.
Your Directors hereby confirm the compliance of conditions necessary
for appointing Independent Director/s under Clause 49, amended till
date, of the Corporate Governance Code prescribed under the Listing
Agreement.
Auditors and their report
Comments of the Auditors in their report and the notes forming part of
the Accounts are self explanatory and need no comments.
M/s. Price Waterhouse, Chartered Accountants, Mumbai, the present
statutory Auditors' of the Company have expressed their unwillingness
for the reappointment. Thus they will retire at the conclusion of
ensuing Annual General Meeting.
Your Board of Directors after Audit Committee/s recommendation has
approved the appointment of the Statutory Auditors subject to the
shareholders' meeting approving the same.
M/s. BSR & Co. Chartered Accountants, Mumbai has submitted a
certificate to the effect that their appointment, if any, would be in
accordance with the provisions of Section 224(1B) of the Companies,
Act, 1956. The Directors recommend the appointment of M/s.BSR & Co.
Chartered Accountants, Mumbai as Statutory Auditors of the Company.
Consumption of energy, technology absorption and foreign exchange
earnings and outgo A statement giving details of the conservation of
energy, technology absorption, and foreign exchange earnings and outgo,
in accordance with Section 217(1)(e) of the Companies Act, 1956 read
with the Companies (Disclosure of Particulars in the Report of Board of
Directors') Rules, 1988 is annexed hereto and forms part of this
report.
Quality Systems and ISO certification
During the year the Company continues to observe all pre-requisites in
maintaining the quality systems and standards and ISO audit methods as
required under the guidelines of Quality and Environmental Management
Systems for ISO certified by DQS, Germany. During the year System
Assessments for ISO 9001:2008 & ISO 14001:2004 were also successfully
completed.
Corporate Governance
Your Company has implemented clause 49 of Listing Agreement, popularly
known as 'Corporate Governance', within the stipulated time frame and
has taken effective steps to meet with its compliance standards. It
also takes a proactive approach and revisits its governance practices
from time to time so as to fulfill business and regulatory needs.
The Company has implemented all of the mandatory and other major
stipulations as applicable to the Company.
The Statutory Auditor's Certificate in accordance with Clause 49 of the
Listing Agreement and report on Corporate Governance is annexed to and
forming part of the Directors' Report.
Mr. R S Agrawal, Managing Director and Mr. D J Shah, Chief Financial
Officer have given a certificate to the Board as contemplated in sub-
clause V of clause 49 of the Listing Agreement.
Management Discussion and Analysis
A Management Discussion and Analysis Report for the year 2011 as
required under Clause 49 of the Listing Agreement is annexed and
forming part of the Directors' Report.
Human Resource and Industrial Relations
The human resource development function of the Company is guided by a
spirit of corporate team building and dedication towards strengthening
the Company's systems thereby improving efficiencies and registering
growth. All personnel continue to have a healthy, cordial and
harmonious approach in problem solving and enhancing Company value at
all levels. Despite severe economic trials, the enthusiasm and
unstinting efforts of the employees has enabled the Company to maintain
leadership in its business areas.
Particulars of Employees
Particulars of employees, as required under Sec 217(2A) of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975, as amended, form part of this Report. However, in
pursuance of Section 219(1)(b)(iv) of the Companies Act, 1956, this
report is being sent to all shareholders of the Company, excluding the
aforesaid information and the said particulars are being made available
at the Registered Office of the Company. The members interested in
obtaining such particulars may write to the Company Secretary at the
Registered Office of the Company.
Directors' Responsibility Statement Pursuant to Section 217(2AA)
Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors
based on the representation received from the operating management,
confirm that:
I) in the preparation of the annual accounts, the applicable accounting
standards have been followed;
ii) they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as on 31st December, 2011 and of the profit of the Company
for the year ended on that date;
iii) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
iv) they have prepared the annual accounts on a going concern basis.
Acknowledgements
Your Board of Directors thank all the stakeholders - the shareholders,
customers, dealers, suppliers, bankers and all the other business
associates for the continuous support given by them to the Company and
their confidence in its management.
For and on behalf of the Board
Mumbai
February 14, 2012 Andrew Pizzey
Chairman
Dec 31, 2010
The Directors have pleasure in presenting herewith their 38h report
together with the Audited Accounts and Auditors Report for the year
ended 31st December, 2010.
Financial Performance
The financial performance of your Company for the year ended 31st
December, 2010 is indicated below :
(Rs. In 000)
Particulars 2010 2009
Sales in MTs 66,292 63,443
Sales and other operating Income 8,160,126 6,062,110
Other Income 54,823 44,473
Total Income 8,214,949 6,106,583
Gross Profit before Interest,
Depreciation & Tax 1,166,639 894,144
Less : Interest - -
Less: Depreciation 139,779 144,853
Profit Before Tax 1,026,860 749,291
Less: Provision for Tax 348,000 300,800
Less: Provision for Deferred Tax (21,440) (41,410)
Net Profit After Tax 700,300 489,901
Add: Balance of Profit Brought Forward 1,544,784 1,175,897
Amount Available for Appropriation 2,245,084 1,665,798
Appropriations:
Proposed Dividend 70,343 61,550
Tax on Proposed Dividend 11,683 10,464
Transfer to General Reserve 72,500 49,000
Balance of Profit Carried Forward 2,090,558 1,544,784
EPS (Basic) 39.82 27.86
(Diluted) 39.82 27.86
Review of operations
The net sales during the year amounted to Rs 816.01 Cr. (Prev. year Rs.
606.21 Cr ).The Operating profit of the Company amounts to Rs. 116.66
Cr. reflecting an increase by 130 % (Prev year Rs. 89.41 Cr) and the
net profit has increased to Rs. 70.03 Cr. (Prev. year Rs. 48.99 Cr).
The earning per share increased to Rs. 39.82 from Rs. 27.86 last year.
The Company has not increased its share capital and it remains
unchanged at Rs. 17.56 Cr.
Your Board of Directors is pleased to record Companys debt free status
for the eighth year in succession.
The Raw material prices continued to be highly volatile and at times
during the year the availability of certain raw materials was
irregular. Monsoon flooding caused further disruption in the production
and consequently expansion related activities were delayed.
Despite the constraints, the Company has managed to grow and expand
its capacities. With effective monitoring of supplies among various
customers and supplying preferred grades to meet their demands, the
Company was able to manage and optimize price realization and increase
in sales.
The automotive industry and durable goods sectors continued their
growth in line with the past trend. This has enabled your Companys
products to be in good demand. There have been instances of customers
resorting to polymer substitution albeit to a very low extent due to
high prices and uncertainties in supplies.
Your Company feels confident to maintain its market leadership and
hopes to register improved performance in the current year also.
Dividend
The Board of Directors recommends a dividend of Rs. 4.00 per equity
share of Rs.10 each. This dividend is subject to the members approval
at the forthcoming Annual General Meeting to be held on 5th May, 2011.
The Dividend once approved will be paid to all those shareholders,
whose names appear in the Register of Members as on 25lh April, 2011.
Last year the Company paid dividend of Rs. 3.50 per equity share of Rs.
10 each.
The shareholders may take note of the General shareholder information
which forms part of Corporate Governance Report.
Transfer to the Investor Education and Protection Fund
In terms of Section 205C of the Companies Act, 1956, the unclaimed
dividend relating to the financial year ended on 31.12.2003 is due for
transfer on 30th April, 2011 to the Investor Education and Protection
Fund established by the Central Government.
Contribution to the National Exchequer
A sum of Rs.134.26 Cr. on account of central excise duty, direct and
indirect taxes and state taxes was paid to the National Exchequer
during the year under review.
Expansion / Modernization
Your Company is in an advanced stage of implementing 110,000 MTs
capacity for which capital expenditure will be met through internal
accruals and all Engineering details and preparations have already been
made.
Research and Development
The R&D Centre meets with market needs helping the Company to improve
upon the laid out standards. Continuous improvement in product and
process studies has helped better quality standards.
INEOS ABS is geared to contribute to R & D capabilities globally and
hopes to become an important hub for such related activities.
The Companys after sales services to customers results in improved
customer bonding and long term relationship ensuring mutual benefits.
Risk Management
The Company has in place a mechanism to inform the Board about risk
assessment and minimization procedures, steps taken and periodical
review every quarter to ensure that management controls risks through a
properly defined framework of risk management and mitigation
procedures.
Health, Safety and Environmental Protection
Your Company gives highest importance to Environment, Health and
Safety. It encourages and promotes EHS awareness as an integral part of
the work culture in the Company and in line with the safety, health and
environment policy laid down by the Company.
The Company is ISO: 14001:2004 (Environment Management System)
certified. The environment has been maintained as per the statutory
requirements and required safety standards are being ensured in all
operations of the Company. A Green belt in and around the premises is
maintained.
The Company has in the current year obtained Environment Clearance and
Consolidated Consent and authorization from regulatory authority for
production of 40000 MT / Annum of HRG powder production.
Insurance
Your Companys assets are adequately insured against risk from fire,
riot, earthquake, terrorism, loss of profits, and other risks which are
considered necessary by the management.
As an additional coverage, a statutory Public Liability Insurance
Policy has been taken to cover public liability arising out of
industrial accidents. INEOS ABS group has covered through a global
insurance cover, the Directors and Officers liability under the
Indian Companies Act.
Directors
Mr. R S Agrawal, the present Managing Directors, term expires on 31st
December, 2011. The Board of Directors at the meeting held on 17th
February, 2011 has considered reappointing Mr. Agrawal as a Managing
Director for a further term of one year i.e. from 1.1.2012 to
31.12.2012. The remuneration terms have been considered by the
Remuneration Committee and approved by the Board. A separate agenda
item in the notice has been placed for consideration of the members.
The proposed resolution gives details relating to the reappointment
terms, remuneration and powers delegated.
Mr. S M Kulkarni and Dr. Gerhard Franken, Director/s of the Company are
to retire by rotation at the ensuing Annual General Meeting. Being
eligible, they have offered themselves for reappointment and the Board
recommends their reappointment/s.
The Directors have steered the Company through a significant growth
phase over the years. The Company has a clear strategy and its business
model is robust. In addition to sitting fees, it is proposed to pay
remuneration of Rs. 3 lakhs each to Mr. Sharad Kulkami, Mr. Jal R.
Patel and Mr. Ravindra Kulkami, - Independent Directors, by way of
commission for a period not exceeding 3 years commencing from 1st
January, 2010.
The above commission is within the permissible limits of the net
profits of the year to be calculated in accordance with the provisions
of the Companies Act, 1956.
The commission is proposed to be paid to them for their valuable
contribution at the Board and its committee meetings as well as time
spent on matters other than at the meetings.
Your Directors hereby confirm compliance of conditions necessary for
appointing Independent Director/s under Clause 49, as amended, of the
Corporate Governance Code prescribed under the Listing Agreement.
Auditors and their report
The Auditors report and the notes forming part of the Accounts are self
explanatory and need no comments.
M/s. Price Waterhouse, Chartered Accountants, Mumbai, Statutory
Auditors of the Company will retire at the conclusion of ensuing
Annual General Meeting and being eligible offer themselves for
reappointment. The Company has received a certificate from the auditors
to the effect that their re-appointment, if any, would be in accordance
with the provisions of Section 224(1 B) of the Companies, Act, 1956.
The Directors recommend the re-appointment of M/s. Price Waterhouse,
Chartered Accountants, Mumbai.
Consumption of energy, technology absorption and foreign exchange
earnings and outgo
A statement giving details of the conservation of energy, technology
absorption, and foreign exchange earnings and outgo, in accordance with
Section 217(1)(e) of the Companies Act, 1956 read with the Companies
(Disclosure of Particulars in the Report of Board of Directors Rules,
1988), is annexed hereto and forms part of this report.
Quality Systems and ISO certification
During the year the Company continued to observe all pre-requisites in
maintaining the Quality and Environment Management systems (ISO
Standards), certified by DQS-UL, India.
During the year, System Assessments for ISO 9001:2008 and ISO
14001:2004 certifications were also successfully completed.
Corporate Governance
Your Company has implemented clause 49 of Listing Agreement, known as
Corporate Governance, within the stipulated timeframe and has taken
effective steps to meet with its compliance standards. A proactive
approach and regular adherence to governance practices from time to
time ensures higher confidence at all levels of Companys personnel.
The Statutory Auditors Certificate in accordance with Clause 49 of the
Listing Agreement and report on Corporate Governance is annexed to and
forming part of the Directors Report.
Mr. R S Agrawal, Managing Director and Mr. D J Shah, Chief Financial
Officer have given a certificate to the Board as contemplated in
sub-clause V of clause 49 of the Listing Agreement.
Management Discussion and Analysis
A Management Discussion and Analysis Report for the year 2010 as
required under Clause 49 of the Listing Agreement is annexed and
forming part of the Directors Report.
Human Resource Development and Industrial Relations
The Board is pleased to record that the Industrial relations continue
to be cordial and employees across all levels have significantly
contributed towards Companys overall efficiency and productivity.
Continuous HR interaction has led to a healthy environment and forged a
relationship of mutual trust.
Human resource development activities have helped in developing an
employee network with a spirit of corporate team building and
dedication towards increasing efficiencies and higher growth. All
personnel continue to have a healthy, cordial and harmonious approach
in problem solving and enhancing Company value at all levels. Despite
challenging times, the enthusiasm and unstinting efforts of the
employees ensures the Companys leadership in its business areas.
Particulars of Employees
Particulars of employees, as required under Sec. 217(2A) of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975, as amended, form part of this Report. However, in
persuance of Sec. 219 (1)(b)(iv) of the Companies Act, 1956, this
report is being sent to all the shareholders of the Company, excluding
the aforesaid information and the said particulars are being made
available at the Registered Office of the Company. Members intrested in
obtaining such particulars may write to the Company Secretary at the
Registered Office of the Company.
Directors Responsibility Statement Pursuant to Section 217(2AA)
Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors
based on the representations received from the operating management,
confirm that:
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed.
ii) they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as on 31st December, 2010 and of the profit of the Company
for the year ended on that date;
iii) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
iv) they have prepared the annual accounts on a going concern basis.
Acknowledgements
Your Board of Directors thank all the stakeholders - the shareholders,
customers, dealers, suppliers, bankers, and all the other business
associates for the continuous support given by them to the Company and
their confidence in its management.
For and on behalf of the Board
Vadodara Dr. Gerhard Franken
February 17, 2011 Chairman
Dec 31, 2009
The Directors take pleasure in presenting herewith their 37th report
together with Audited Accounts and Auditors Report for the year ended
31st December, 2009.
Financial Performance
The financial performance of your Company for the year ended 31st
December, 2009 is indicated below :
(Rs. In 000)
Particulars 2009 2008
Sales in MTs 63,443 58,912
Sales and other
operating Income 6,062,110 6,890,512
Other Income 44,473 66,881
Total Income 6,106,583 6,957,393
Gross Profit before Interest,
Depreciation & Tax 894,144 417,476
Less : Interest 0 0
Less: Depreciation 144,853 146,537
Profit Before Tax 749,291 270,939
Less: Provision for Tax 300,800 102,600
Less: Provision for Deferred Tax (41,410) (11,200)
Net Profit After Tax 489,901 179,539
Add: Balance of Profit
Brought Forward 1,175,897 1,065,794
Amount Available for
Appropriation 1,665,798 1,245,333
Appropriations:
Proposed Dividend 61,550 43,964
Tax on Proposed Dividend 10,464 7,472
Transfer to General Reserve 49,000 18,000
Balance of Profit Carried Forward 1,544,784 1,175,897
EPS (Basic) 27.86 10.21
(Diluted) 27.86 10.21
Review of operations
During the year under review, the net sales amounted to Rs. 606.21 Cr.
(Prev. year Rs. 689.05 Cr.). The Operating profit of the Company after
accounting relevant expenses amounts to Rs. 89.41. Cr. making an
increase by 114% (Prev year Rs. 41.75 Cr. ) and the net profit has
increased to Rs. 48.99 Cr. (Prev. year Rs.17.95 Cr.).
The earning per share has increased to Rs. 27.86 from Rs. 10.21 last
year. During the year, Company has not increased share capital which
remains unchanged at Rs. 17.58 Cr.
Your Board of Directors is pleased to record Companys debt free
status, for the seventh year in succession.
Throughout the year, main raw materials prices remained volatile and
their availability was also uncertain. Despite the difficult market
conditions, your Company could optimize price realization and maintain
sales.
The Company has successfully implemented its expansion plan by
increasing the ABS plant capacity to 80,000 Mts. This shall be
available during current year. In order to meet customer needs, newer
grades have been added to support demands of key customers.
The two and four wheeler automotive industry and durable goods sector
off take continued to maintain robust growth, in line with the past
trend. This has enabled your Companys products to be in good demand.
Your Company is confident of maintaining its market leadership and
continues to show consistent performance during last number of years.
Dividend
The Directors of your Company are pleased to recommend a dividend of
Rs. 3.50 per equity share i.e. 35 % for the financial year ended on
December 31, 2009 subject to the shareholders approval at the ensuing
Annual General Meeting. Dividend once approved, will be paid to all
those shareholders whose names appear in the Register of Members as on
19,h April, 2010.
The register of members and share transfer books shall remain closed
from 19th April, 2010 to 23rd April, 2010, both days inclusive, for the
purpose of Annual General Meeting and payment of dividend.
Transfer to the Investor Education and Protection Fund
In terms of Section 205C of the Companies Act, 1956, the unclaimed
dividend relating to the financial year ended on 31.12.2002 is due for
transfer on 2nd May, 2010 to the Investor Education and Protection Fund
established by the Central Government.
Contribution to the National Exchequer
A sum of Rs. 81.75 Cr. on account of central excise duty, direct and
indirect taxes and state taxes was paid to the National Exchequer
during the year under review.
Expansion / Modernization
Your Company invested necessary capital expenditure generated out of
internal accruals to enable attain the ABS Plant capacity of 80,000
MTs. This will be fully available from Q2-2010 onwards for meeting the
expanding market requirements. Our sales and marketing efforts are
fully geared in retaining our market leadership and maintain the growth
momentum. All attempts are made at the plants and manufacturing units
to integrate marketing needs and opportunities. It is expected that
implementation of new technology will enable better efficiency of the
production and quality of the products, also bringing down the cost of
production.
Research and Development
The R&D centre meets with market needs helping customers improve upon
the laid out standards. Continuous improvement in product and process
studies have helped better controls.
INEOS ABS is geared to contribute to R & D capabilities globally and we
hope to become an important hub for such related activities.
Our after sales services to customers results in customer bonding and
long term relationship ensuring mutual benefits.
Risk Management
Risk management and control practices have been deployed across all the
functions and functional evaluation of rating the probability and
impact is constantly monitored under the guidance of the Managing
Director. Very high ranking risks are deliberated at the Board level
and mitigating steps and measures applied or to be applied are debated.
The objectives of the Companys risk management framework comprises the
following :
- To identify, assess, prioritize and manage existing as well as new
risks in a planned and coordinated manner.
- To increase the effectiveness of internal and external reporting
structure.
- To develop a risk culture that encourages employees to identify risks
and associated opportunities and respond to them with appropriate
actions.
The Senior management team forming part of the risk managing
organization conducts an exercise every quarter internally for an
ongoing risk assessment and takes measures and effective steps to
mitigate / reduce its impact and control the same from time to time.
The Managing Director gives overall directions in controlling /
mitigating risks generally and is in complete know of the
organizational risks potential.
The Company has an adequate proper system to ensure compliance of legal
/ regulatory rules and regulations applicable to the Company.
Health, Safety and Environmental Protection
Your Company gives highest importance to Environment and Safety and
encourages and promotes safety awareness as an integral part of the
work culture.
Process Safety Management- PSM is now an Integral part of any changes
in the process.
Onsite emergency plans have been reviewed and updated in all divisions.
Periodic mock drills are conducted at various divisions and the reports
indicate improved preparedness of employees.
Apart from employees, the contractors and workmen are also given
exhaustive training on safety, first-aid and fire fighting. The Company
has appointed and trained safety stewards to promote safety in all
divisions. Green belt in and around the premises has been maintained
regularly.
Insurance
As at year end 2009, your Companys assets are adequately insured
against risk from fire, riot, earthquake, terrorism, loss of profits,
etc. and other risks which are considered necessary by the management.
As an additional coverage, a statutory Public Liability Insurance
Policy has been taken to cover public liability arising out of
industrial accidents. INEOS ABS group has covered globally through
insurance cover, the Directors and Officers liability under the
Indian Companies act to meet with any eventuality.
Directors
The Managing Director Mr. R S Agrawal, whose term expired on 31st
December, 2009. The Board of Directors at the meeting held on 27th
July, 2009 had considered reappointing Mr. Agrawal as Managing Director
for a further term of 2 years i.e. from 1.1.2010 to 31.12.2011. The
remuneration and terms were considered by specially constituted
Remuneration Committee and reappointment terms recommended by the Audit
Committee. A separate agenda item in the notice is being considered
detailing the reappointment terms, remuneration and powers delegated
for the consideration of the members at the ensuing AGM.
Mr. Jal Patel and Mr. Andrew Pizzey, who are present Director/s, are to
retire at the ensuing AGM. Both of them are retiring by rotation and
being eligible, have offered themselves for reappointment. The Board
recommends their appointment/s.
Mr. Arindam Ghosh has resigned from Alternate Directorship of Mr.
Andrew Pizzey effective from 26th February, 2010.
Your Directors hereby confirm the compliance of conditions necessary
for appointing Independent Director/s under Clause 49, amended till
date, of the Corporate Governance Code prescribed under the Listing
Agreement.
Auditors and their report
Comments of the Auditors in their report and the notes forming part of
the Accounts are self explanatory and need no comments.
M/s. Price Waterhouse, Chartered Accountants, Mumbai, Statutory
Auditors of the Company will retire at the conclusion of ensuing
Annual General Meeting and being eligible offers themselves for
reappointment. The Company has received a certificate from the auditors
to the effect that their re-appointment, if any, would be in accordance
with the provisions of Section 224(1 B) of the Companies, Act, 1956.
The Directors recommend the re-appointment of M/s. Price Waterhouse,
Chartered Accountants, Mumbai.
Consumption of energy, technology absorption and foreign exchange
earnings and outgo
A statement giving details of the conservation of energy, technology
absorption, and foreign exchange earnings and outgo, in accordance with
Section 217(1)(e) of the Companies Act, 1956 read with the Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules,
1988, is annexed hereto and forms part of this report.
Quality Systems and ISO certification
During the year the Company continues to observe all pre-requisites in
maintaining the quality systems and standards and ISO audit methods as
required under the guidelines in this regard. Quality and Environmental
Management Systems for ISO certified by DOS, Germany. During the year
System Assessment for ISO 9001:2008 & ISO 14001:2004 were also
successfully completed.
Corporate Governance
Your Company has implemented clause 49 of Listing Agreement, popularly
known as Corporate Governance, within the stipulated timeframe and
has taken effective steps to meet with its compliance standards. It
takes a proactive approach and revisits its governance practices from
time to time so as to fulfill business and regulatory needs.
The Company has implemented all of the major stipulations as applicable
to the Company.
The Statutory Auditors Certificate in accordance with Clause 49 of the
Listing Agreement and report on Corporate Governance is annexed to and
forming part of the Directors Report.
Mr. R S Agrawal, Managing Director and Mr. D J Shah, Chief Financial
Officer have given a certificate to the Board as contemplated in
sub-clause V of clause 49 of the Listing Agreement.
The Company has made written requests to the stock exchange/s in
relation to pending compliance under Clause 40A of the Listing
Agreement.
Management Discussion and Analysis
A Management Discussion and Analysis Report for the year 2009 as
required under Clause 49 of the Listing Agreement is annexed and
forming part of the Directors Report.
Human Resource and Industrial Relations
The human resource development function of the Company is guided by a
spirit of corporate team building and dedication towards strengthening
the Companys systems thereby improving efficiencies and registering
growth. All personnel continue to have a healthy, cordial and
harmonious approach in problem solving and enhancing Company value at
all levels. Despite severe economic trials, the enthusiasm and
unstinting efforts of the employees has enabled the Company to maintain
leadership in its business areas.
Particulars of Employees
Particulars of employees, as required under Sec 217(2A) of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975, as amended, form part of this Report.
Directors Responsibility Statement Pursuant to Section 217(2 A A)
Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors
based on the representation received from the operating management,
confirm that:
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed.
ii) they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as on 31st December, 2009 and of the profit of the Company
for the year ended on that date;
iii) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
iv) they have prepared the annual accounts on a going concern basis.
Acknowledgements
Your Board of Directors thank all the stakeholders - the shareholders,
customers, dealers, suppliers, bankers, and all the other business
associates for the continuous support given by them to the Company and
their confidence in its management.
For and on behalf of the Board
Vadodara Dr. Gerhard Franken
February 26, 2010 Chairman