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Directors Report of INEOS Styrolution India Ltd.

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 periods’ 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 “INEOS Styrolution India Limited” 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 (“Whistleblower 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 “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 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