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Directors Report of Supreme Petrochem Ltd.

Jun 30, 2015

Dear Members,

The Directors are pleased to present the twenty sixth Annual Report and the Company's audited financial statements for the financial year ended June 30, 2015.

1. FINANCIAL RESULTS

(Rs. in lacs)

2014-2015 2013-2014

Income (net of excise) 265253.76 326429.78

Profit before Tax (net of prior period adjustments) 5613.88 4430.32

Tax expenses (net of short/ excess provisions of earlier year) 2043.76 1371.33

Profit after tax 3570.12 3058.99

Balance brought forward from Previous Year (net of adjustment relating to transitional provision) 3336.74 4090.01

Amount available for appropriation 6906.86 7149.00

Appropriation thereof :

Dividend on equity shares (including corporate dividend tax) 1742.21 1693.54

Transfer to general reserve 2000.00 1500.00

Balance carried forward 3164.65 3955.46

2. DIVIDEND

Your Directors recommend a dividend of Rs. 1.50 per equity share for the year 2014-2015. The dividend subject to approval of members at the Annual General Meeting shall be paid to the members whose names appear in the register of members as on date of applicable book closure.

3. REVIEW OF OPERATIONS

The continuous fall in the price of crude oil during October 2014 to December 2014 quarter resulted in a sharp correction in the price of Styrene Monomer (SM) the main raw material for your Company's products. Styrenics market started stabilizing from mid-February and this bought back the customers to the market and encouraged them to start stocking. With improved sentiments in the market place and increased demand your Company could recover the losses incurred during first half of the year under review and earn profits before tax of Rs. 5629.33 lacs for the year. Due to fall in the price of Styrene Monomer, the end product prices also fell resulting in lower revenue numbers.

Sales volume of all products put together including exports was lower by 4.5% as compared to the previous year due to fall in exports. Domestic market volumes were up by 6.7% during the year under review. Exports volumes however, dropped to 25.5% of total sales volumes during the year from 33.3% in the previous year.

Domestic market of Polystyrene (PS) grew by 7.5% during 2014-15 as against a negative growth of 9.7% in the previous year. Expandable Polystyrene (EPS) market grew by 6.5% in 2014-15 in comparison to a degrowth of 5.2% in the previous year. Lower prices of EPS buoyed demand from the cold storage, construction and packaging sectors. Continuous efforts to increase the usage of EPS in construction sector were made during the year.

Exports of PS to Europe was affected due to weakness of Euro currency which made your Company's products far less competitive in comparison to local European product. Exports to Nigeria, Tunisia and Egypt were low due to political unrest and weak economic conditions in these countries. Similarly, non-applicability of concessional duty on Indian exports to Turkey vis-a-vis other exporting countries like Egypt and Korea also adversely affected your Company's export to Turkey, a key market for your company's exports.

XPS sales volume grew by 35% during the year under review. The distribution network has increased your Company's share in various regions of the country. Continued improvement in quality has made your Company the first choice XPS supplier to major and prestigious building projects

4. BUY BACK OF SECURITIES

The Company's offer to Buy Back its equity shares from the open market through stock exchanges on BSE Limited and the National Stock Exchange of India Limited, in accordance with the provisions of the Companies Act, 2013 and the SEBI (Buy Back of Securities) Regulations, 1998 at a price not exceeding Rs. 70/- per share closed on October 31,2014 (The Buy Back opened on May 9, 2014). The Company was able to Buy Back and extinguish 3,36,655 shares thereby reducing the Company's share capital from Rs. 9683.86 lacs to Rs. 9650.20 lacs. The total amount spent on the Buy Back was Rs. 219.24 lacs including brokerage and other charges.

5. MANAGEMENT DISCUSSION AND ANALYSIS REPORT & CORPORATE GOVERNANCE

Management Discussion and Analysis for the year under review as stipulated under clause 49 of the Listing Agreement with Stock Exchanges is presented separately in the Annual Report. The Report on Corporate Governance Forms an integral part of this report. The compliance of 'Corporate Governance' conditions has also been certified by the Auditors and the same is Annexed to the report on Corporate Governance.

6. HEALTH, SAFETY & ENVIRONMENT

1. Health Safety and Environment Management:

Both the Occupational Health and Safety Management System (OHSMS) and Environmental Management System (EMS) continued to be maintained as per the OhSaS 18001:2007 Standard and ISO 14001:2004 Standard respectively.

Your Company has continued implementation of HSE Management Systems under the Guiding Principles of declared "Occupational Health and Safety Policy" and "Environmental Policy".

HSE Performance Index for the period under review stood in 'Excellent' range.

2. Highlights of the HSE Activities implemented during the period under review:

Your Company has additional risk controls (design / engineering) in Manufacturing Plants. It has implemented Compliance Management System (CMS) software to track various HSE related statutory compliance. HSE training is conducted as per the plan. Competence Assessment is done six monthly by practical tests.

The procedures for permit to Work System, Management and Handling of Hazardous Wastes, Management of Change and SOPs for Plant Operations are revised and implemented based on internal audits and reviews. The external audit of Integrated Management System was conducted by BVC Auditors during February 2015 and no major non conformity was observed.

Your Company's on Site Emergency Management Plan was revised by incorporating results of risk registers, observations from mock drills, as well as provision from applicable legal requirements. In order to check adequacy of emergency planning, preparedness and response mechanisms, 24 "Department Level Mock Drills" were conducted in addition to two six monthly full scale mock drills. Environmental Monitoring for effluents and emissions are done (self as well as MoEF approved third party) as per the Environmental Monitoring Plan which was developed in consultation with MPCB Officials. All the parameters are found within the prescribed limits.

The annual comprehensive and six monthly periodic medical examinations for all your Company's employees and contract employees were completed in December 2014 and June 2015 respectively. No occupational ill health was observed during the examination.

The Safety Committee Meetings, Management Review Meetings, and Monthly Performance Review Meetings were conducted as per schedule and required actions were taken on all the points.

7. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Shri Rajan B. Raheja (DIN: 00037480) and Shri B. L. Taparia (DIN: 00112438), Directors of the Company retire by rotation and being eligible offer themselves for re-appointment.

A brief resume of the Directors eligible for re-appointment is given in the report on Corporate Governance.

During the year under review Shri Hasmukh Shah (DIN 00152195), Shri R Kannan (DIN 00380328), Shri M S Ramachandran (DIN 00943629), Shri Nihalchand Chauhan (DIN 00021782) and Ms. Ameeta Parpia (DIN 02654277) were appointed as Independent Directors by the Members to hold office for a period of 5 years upto September 21, 2019. The members also re-appointed Shri M P Taparia (DIN 00112461) and Shri S J Taparia (DIN 00112513) as Non-Executive Non-Independent Directors liable to retire by rotation. Dr. S. Sivaram (DIN 00009900) was appointed as Additional Director during the year under review to hold office upto the date of the ensuing Annual General Meeting. Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges it is proposed to appoint Dr. S Sivaram as an Independent Director on the Board of the Company. The resume of Dr. S Sivaram is given in the notice of the Annual General Meeting.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges.

Your Company has in place criteria for evaluation of performance of the Board, Independent Directors and Non-Independent Directors approved by the Nomination and Remuneration Committee. Annual evaluation of the Board and of the Directors were carried out as follows: The Independent Directors, in their meeting evaluated the performance of the Board, the Chairperson and the Non- independent Directors while the Nomination and Remuneration Committee evaluated the performance of all the Directors. The Board evaluated the performance of the Independent Directors.

Shri N Gopal, Manager, Shri Rakesh Nayyar, Chief Financial Officer and Shri Ravi V Kuddyady, Company Secretary were appointed as Key Managerial Personnel of the Company by the Board of Directors during the year under review. The criteria/policies of the Company for selection of Directors and Remuneration Policy for Directors, Key Managerial Personnel and other Employees are attached herewith marked as Annexure-1 The details of the Familiarisation Programme for Independent Directors are placed on the website of the Company and can be accessed at http:// supremepetrochem.com/pdf/Familiarisation-Programme- For-Independent-Directors.pdf

8. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Companies Act, 2013, your Directors confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) the directors 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 the financial year and of the profit and loss of the company for that period;

(c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the directors have prepared the annual accounts on a going concern basis;

(e) the directors, have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively.

(f) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

9. TRANSFERS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company transferred an aggregate amount of Rs. 21.54 lacs during the year to the Investor Education and Protection Fund. The aggregate amount transferred to the fund since January 2002 is Rs. 245.26 lacs.

The unclaimed dividends on equity shares paid in October 2008 will be due for transfer to the Fund in November 2015. Investors who have not yet claimed these dividends are requested to contact either the Company's Secretarial Department or the R & T Agents.

10. FIXED DEPOSIT SCHEME

In accordance with the terms and conditions governing the Fixed Deposit Scheme and pursuant to provisions of section 74 of the Companies Act, 2013 your Company has exercised the option to repay on March 31,2015 all the Fixed Deposits with accrued interest as at the end of March 31,2015. Accordingly, your Company has repaid all outstanding Fixed Deposits by March 31,2015.

11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO

INFORMATION AS PER SECTION 134(3)(m) READ WITH COMPANIES DISCLOSURE OF PARTICULARS IN THE REPORT OF THE (BOARD OF DIRECTORS) RULE 8 OF THE COMPANIES (ACCOUNTS) RULES, 2014 AND FORMING PART OF THE DIRECTORS' REPORT FOR THE YEAR ENDED JUNE 30, 2015.

A. CONSERVATION OF ENERGY

At the plant in Amdoshi, Maharashtra

Various Energy Conservation Programmes were implemented during the year July 2014 to June 2015 which resulted in savings of energy to the extent of 5,72,229 KWH.

Energy Conservation Programmes namely consisted of following :

1. Use of LED Tube Lights in place of conventional Tube Lights.

2. Use of Variable Frequency Drives (VFDs)

3. Use of high efficiency electrical motors and transformers.

Use of Alternate Energy Sources

Use of natural gas is being made to generate Captive Power to the extent of 2 MW.

At the plant in Manali, Chennai

SPL, Chennai continued its efforts in bringing down unit energy consumption and furnace oil consumption. By improving operations and implementation of various energy conservation efforts, unit furnace oil consumption has started coming down from May-2015 onwards. In the area of water conservation, a revamp of the existing effluent treatment plant was done. A set of ultra filtration and R.O units were added resulting in achievement of "Zero liquid discharge".

B. TECHNOLOGY ABSORPTION

Technology sourced from NOVA Chemical Inc. (for Polystyrene and food grade EPS) and SH Chemical Co. (for EPS) have since been successfully absorbed.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

(Rs. In lacs)

Foreign exchange earnings and outgo 2014-15

a. Foreign exchange inflow 50148.09

b. CIF value of imports including capital goods 217981.99

c. Expenditure in foreign currency 562.61

12. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of the provisions of Section 197(12) of the Companies Act, 2013, read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annual Report. Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annual Report. Having regard to the provisions of the first proviso to Section 136(1) of the Companies Act, 2013 the Annual Report excluding the aforesaid information is being sent to the members of the Company.

The said information is available for inspection at the registered office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. The full Annual Report including the aforesaid information is being sent electronically to all those members who have registered their email addresses and is available on the Company's website.The information required under Section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

a. The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year:

Not Applicable

b. The percentage increase in remuneration of Manager, CFO and Company Secretary

Name Designation % increase in remuneration in the financial year

Shri N Gopal Manager 16.98

Shri Rakesh Chief

Nayyar Financial Officer 15.64

Ravi V Company

Kuddyady* Secretary —

* Since appointed w.e.f. 22.04.2015 the same is not comparable

c. The percentage increase in the median remuneration of employees in the financial year : 10.7%

d. The number of permanent employees on the rolls of Company : 346

e. The explanation on the relationship between average increase in remuneration and Company performance:

On an average, employees received an annual increase of 10%. The operating profits before interest, depreciation and tax was Rs. 9653.51 lacs compared to Rs. 9557.15 lacs in the previous year despite losses incurred in the second quarter due to fall in crude and consequent fall in Styrene Monomer prices. The increase in remuneration is in line with the market trends. The increments are also linked to Company's performance, apart from an individual's performance.

f. Comparison of the remuneration of the key managerial personnel against the performance of the Company:

Aggregate remuneration of Key Managerial Personnel (KMP) in FY'15 (Rs. In lacs) 324.02

Revenue (Rs. In lacs) 265253.76

Remuneration of KMPs (as % of revenue) 0.12

Profit before Tax (PBT) (Rs. In lacs) 5613.88

Remuneration of KMP (as % of PBT) 5.77

g. Variations in the market capitalisation of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year:

Particulars June 30, June 30, % Change 2015 2014

Market capitalization (Rs. In lacs) 80627.39 87382.52 (7.73)

Price earnings ratio 22.58 28.66 (21.21)

h. Percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer:

Particulars June 30, February 21, % Change 2015 1994 (IPO)

Market Price (BSE) 83.65 10 736.50

Market Price (NSE) 83.55 10 735.50

i. Comparison of the remuneration of the key managerial personnel against the performance of the Company:

N Gopal Rakesh Nayyar Ravi V Manager Chief Financial Kuddyady Officer Company (Company Secretary Secretary upto (w.e.f 22.04.2015) 22.04.2015)

Remuneration in FY'15 (Rs. In lacs) 154.78 158.08 11.16

Revenue (Rs. in lacs) 265253.76

Remuneration as a % of revenue 0.06 0.06 —

Profit before tax (PBT) (Rs. In lacs) 5613.88

Remuneration (as % of PBT) 2.76 2.82 —

j. The key parameters for any variable component of remuneration availed by the directors:

Not Applicable

k. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year

None.

l. Affirmation that the remuneration is as per the remuneration policy of the Company:

The Company affirms that the remuneration is as per the remuneration policy of the Company.

13. AUDITORS AND AUDITORS' REPORT

Statutory Auditors

The members in the Annual General Meeting have appointed M/s. G M Kapadia & Co., Chartered Accountants, Membership No.048243 as Statutory Auditors of the Company to hold office until the conclusion of the Annual General Meeting to be held in the calendar year 2018. In accordance with the first proviso of Section 139(1) of the Companies Act, 2013 the appointment of the Auditors is to be ratified by members at every Annual General Meeting. The Auditors have confirmed their eligibility to the effect that the ratification of their appointment,if made, would be within the prescribed limits of the Companies Act, 2013 and that they are not disqualified for such appointment. There are no qualifications or adverse remarks in the auditors' report.

Cost Auditors

Cost Auditors' report for the year 2013-14 was filed with the authorities on December 9, 2014 well within the due date. M/s.Kishore Bhatia & Associates, Cost Accountants have been appointed as Cost Auditors to audit the cost records of the Company for the period July 1, 2014 to June 30, 2015.

Secretarial Auditors

The Company had appointed M/s. Parikh & Associates, Company Secretaries to conduct secretarial audit for the financial year 2014-15. The secretarial audit report for the financial year ended June 30, 2015 is annexed hereto marked as Annexure-2. The Secretarial Auditors' Report does not contain any qualifications or adverse remark.

14. RELATED PARTY TRANSACTIONS

Transactions with related parties during the financial year were in the ordinary course of business and on an arm's length basis. During the year the Company had not entered into any contract or arrangement with related party which would be considered as material in accordance with the policy of the Company on materiality of related party transactions.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at the link: http://supremepetrochem.com/pdf/Policy-On- Dealing-With-Related-Party-Transactions.pdf. Information on related party transactions are given in Annexure-3 in Form AOC-2 forming part of this report.

15. CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company. This Policy has been approved by the Board. The CSR Policy is available on the Company's website at the link: http:// supremepetrochem.com/pdf/Corporate-Social- Responsibilitv.pdf

The Company has indentified the following areas for its CSR activities:

(i) promoting preventive health care and sanitation and making available safe drinking water.

(ii) promoting education, including special education and employment enhancing vocation skills, livelihood enhancement projects, granting of scholarships and building/improving infrastructure at educational institutions.

(iii) protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art; setting up public libraries.

(iv) contribution to the Prime Minister's National Relief Fund or any other fund set up by the Central Government for socio-economic development and relief and welfare of the Schedule Caste, the Scheduled Tribes, other backward classes, minorities and women.

(v) contributions or funds provided to technology incubators located within academic institutions which are approved by the Central Government.

(vi) ensuing environmental stability, ecological balance, conservation of natural resources and maintaining quality of soil, air and water.

(vii) rural development projects.

(viii) Slum rehabilitation.

These activities will be carried out in the villages in proximity to your Company's plants in Maharashtra and Tamil Nadu. The Company is creating a team to undertake approved CSR activities in a planned and efficient manner. The report on CSR activities during the year under review is given in Annexure-4 to this report.

16. RISK MANAGEMENT

Business Risk Evaluation and Management is an ongoing process within the Company. The Company has a robust risk management framework to identify, monitor and minimise risk as also identify business opportunities. As a process, the risks associated with the business are prioritised based on Severity, Likelihood and Effectiveness of current detection.

Risk Management approach is composed of three components:

1) Risk Governance

2) Risk Identification

3) Risk Assessment and Control

Each risk factor is monitored periodically by the Management Committee and any event arising from these, likely to impact operations are reported to the Board.

17. INTERNAL FINANCIAL CONTROLS

Your Company has in place adequate internal financial controls with reference to financial statements. The Company's internal auditors carry out regular checks on the adequacy of the internal financial controls. Company has specific internal auditors for functions such as excise, service tax, VAT and financial controls and systems.

18. VIGIL MECHANISM / WHISTLE BLOWER POLICY

Your Company has established a vigil / whistle blower mechanism which provides a channel to any employer / director to report to the Management concerns about unethical behavior, actual or suspected fraud or violation of code of conduct or policy. The mechanism provides for adequate safe guard against victimisation of the whistle blower and also provides for direct access to the Chairman/CEO/Chairman of the Audit Committee in exceptional cases.

19. MEETINGS OF THE BOARD

Five meetings of the Board of Directors were held during the year. For further details please refer to the report on corporate governance in this annual report.

20. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT

There are no loans, guarantees or investments under Section 186 of the Companies Act, 2013 as on June 30, 2015.

21. EXTRACT OF ANNUAL RETURN

The extract of the Annual Report in Form MGT-9 is annexed herewith as Annexure-5 to this annual report.

22. GENERAL

No disclosure or reporting is required of the following items as there were no transactions on these items during the year under review.

(i) Issue of equity shares with differential rights as to dividend, voting or otherwise.

(ii) Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

(iii) No significant or material order were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.

The Company does not have any Associate/Joint Venture Subsidiary Companies.

There were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal Act, 2013 during the year under review.

23. CHANGE IN FINANCIAL YEAR

In accordance with the provisions of Section 2(41) of the Companies Act, 2013, the financial year of your Company is being changed to April-March instead of the existing July-June financial year. The financial year 2015-2016 will therefore comprise of nine months commencing from July 1,2015 and end of March 31,2016.

24. ACKNOWLEDGEMENT

The Directors are thankful to its Bankers, Customers, Suppliers and other Business Associates/Stakeholders for their continued co-operation and support extended to your Company and to the employees for their dedicated and sincere services to the Company.

For and on behalf of the Board M. P. Taparia Chairman

CIN : L23200MH1989PLC054633

Registered Office :

Solitaire Corporate Park, Building No. 11, 5th Floor, 167, Guru Hargovindji Marg, Andheri-Ghatkopar Link Road, Chakala, Andheri (East), Mumbai - 400 093 Phone : 91 22 67091900; Fax : 91 22 40055681 email : investorhelpline@spl.co.in website: www.supremepetrochem.com

Date : July 21,2015




Jun 30, 2014

Dear members,

The Directors take pleasure in presenting the twenty fifth Annual Report together with Audited Accounts of your Company for the year ended June 30, 2014.

1. financial results

(Rupees in lacs) 2013-2014 2012-2013

Income (Net of Excise) 326429.78 296715.90

Profit before Tax 4399.01 10998.96

Tax expenses 1390.11 3732.45

Profit after tax 3008.90 7266.51 Prior period income (net) 50.09 15.82

Balance brought forward 3058.99 7282.33 from Previous Year

Amount available for 7149.00 1 0922.42 appropriation

Appropriation thereof : Dividend on equity shares 1693.54 2832.41 (including corporate dividend tax)

Transfer to general reserve 1500.00 4000.00

Balance carried forward 3955.46 4090.01

2. DIVIDEND

Your Directors recommend a dividend of Rs. 1.50 per equity share for the year 2013-2014. The dividend subject to approval of members at the annual general meeting in September 2014, shall be paid to the members whose names appear in the register of members as on date of applicable book closure.

3. REVIEW OF OPERATIONS

The markets for your Company''s products continued to be weak in the year under review due to high inflation, wild fluctuations in rupee value, lower growth in industrial production, low consumer confidence and poor offtake of consumer durables. The domestic Polystyrene (PS) and Expandable Polystyrene (EPS) markets declined by 9.5% and 5.2% respectively during the year under review.

The traditional export markets continued to be affected due to uncertain economic and political situation in these markets. Your Company could increase its exports of PS and EPS by changing the focus to other markets/ customers.

The Speciality Polymers and Compounds (SPC) business recorded a marginal increase of 4.6% in volume whereas the Extruded Polystyrene Insulation Board (XPS) business has shown healthy growth over the previous year.

Despite the weak economic conditions in both domestic and international markets your Company could maintain its volumes with a marginal decline of 0.8% during the year under review. With the installation of stable Government at centre, continued excise duty relief to the consumer durables market, increased disposable income in the hands of consumers and improvement in consumer confidence it is expected that the sales volume of your Company''s products will be better in 2014-15 as compared to the year under review.

4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT & CORPORATE GOVERNANCE

Management Discussion and Analysis for the year under review and the report on Corporate Governance as stipulated under clause 49 of the Listing Agreement with Stock Exchanges are presented separately in the Annual Report. The compliance of ''Corporate Governance'' conditions has also been certified by the Auditors and the same is annexed to the report on Corporate Governance.

5. HEALTH, SAFETY & ENVIRONMENT

Both the Environmental Management System and Occupational Health and Safety Management System continued to be maintained by your Company as per the ISO 14001:2004 Standard and OHSAS 18001:2007 Standard respectively.

Your Company has continued implementation of HSE Management Systems under the Guiding Principles of declared ''Occupational Health and Safety Policy'' and ''Environmental Policy''.

HSE Performance Index for the period under review was in the "Excellent" Range.

Your Company has completed 5002 Accident Free Days as on 30th June 2014 which amounts to 13.30 million man-hours of accident free operation.

6. DIRECTORS

Shri M. P. Taparia and Shri S. J. Taparia, Directors of the Company retire by rotation and being eligible offer themselves for re-appointment.

A brief resume of the Directors eligible for re-appointment is given in the report on Corporate Governance.

Shri Satish Raheja resigned from the Board of Directors of the Company w.e.f. May 27, 2014 for personal reasons. The Board places on record it''s appreciation of his invaluable guidance and contribution to the Company as a member of the Board of Directors.

Pursuant to the provisions of the Companies Act, 2013 and of the revised clause 49 of the Listing Agreement with the Stock Exchanges your Company proposes to appoint Shri Hasmukh Shah, Shri R Kannan, Shri M S Ramchandran Shri Nihalchand Chauhan and Ms. Ameeta Parpia as Independent Directors on the Board of the Company. The resume of the Directors is given in the notice of the Annual General Meeting.

7. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:

(i) in the preparation of the annual accounts, applicable accounting standards have been followed, with proper disclosure of any departures;

(ii) the accounting policies are consistently applied and reasonable, prudent judgement and estimates are made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year;

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that the Directors have prepared the accounts on a going concern basis.

8. TRANSFERS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company transferred an aggregate amount of Rs. 21.77 lacs during the year to the Investor Education and Protection Fund. The aggregate amount transferred to the fund since January 2002 is Rs. 223.72 lacs.

The unclaimed dividends on equity shares paid in November 2007 will be due for transfer to the Fund in December 2014. Investors who have not yet claimed these dividends are requested to contact either the Company''s Secretarial Department or the R & T Agents.

9. FIXED DEPOSIT SCHEME

The outstanding fixed deposits as on June 30, 2014 were Rs. 4.33 crores including due but unclaimed deposits aggregating Rs. 24.31 lacs out of which 9 deposits aggregating Rs. 2.12 lacs have been paid as on the date of this report. There are no claimed and unpaid deposits. Pursuant to provisions of Section 74 of the Companies Act, 2013 your Company proposes to repay all outstanding fixed deposits by March 31, 2015.

10. CONVERSATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO

Information as per Section 217(1)(e) of the Companies Act, 1956 read together with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is Annexed hereto forming part of this report.

11. PERSONNEL

Your Company continues to maintain harmonious industrial relations throughout the year. The Directors acknowledge the sincerity and dedication of the employees.

As required by the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of employees are set out in the Annexure to the Directors'' Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956 the Report and the Accounts is being sent to all shareholders of the Company excluding the aforesaid information.

Any shareholder interested in obtaining such particulars may write to the Secretary at the Registered Office of the Company.

12. AUDITORS'' REPORT

There are no qualifications or adverse remarks in the auditors'' report.

13. COST AUDITORS

The Cost Audit Report for the year 2012-13 was filed with the authorities on the due date, December 27, 2013. Kishore A. Bhatia, Cost Accountant has been appointed to audit the cost accounts of the Company for the period July 01, 2013 to June 30, 2014.

14. CHANGE OF REGISTERED OFFICE

Almost all the major activities of the Company are carried out from its Corporate office at Andheri (East), Mumbai. It is therefore proposed for administrative convenience to shift the registered office of the Company to Solitaire Corporate Park, Building No. 11, 5th floor, 167, Guru Hargovindji Marg, Andheri-Ghatkopar Link Road, Chakala, Andheri (East), Mumbai- 400 093 w.e.f from October 1, 2014.

15. ACKNOWLEDGEMENT

The Directors are thankful to its Bankers, Customers, Suppliers and other Business Associates/Stakeholders for their continued co-operation and support extended to your Company.

For and on behalf of the Board

M. P. Taparia Chairman

Place : Mumbai Date : July 18, 2014


Jun 30, 2013

The Directors take pleasure in presenting the twenty fourth Annual Report together with Audited Accounts of your Company for the year ended June 30,2013.

1. FINANCIAL RESULTS

(Rupees in lacs)

2012-2013 2011-2012

Income (Net of Excise) 297254.42 227915.98

Profit before Tax 11004.96 4777.71

Tax expenses 3738.45 1440.25

Profit after tax 7266.51 3337.46

Prior period adjustments (15.82) 199.99

Balance brought forward 7282.33 3137.47 from Previous Year

Amount available for 10922.42 7715.73 appropriation

Appropriation thereof:

Dividend on equity shares 2832.41 1575.64 (including corporate dividend tax)

Transfer to general reserve 4000.00 2500.00

Balance carried forward 4090.01 3640.09

2. DIVIDEND

Your Directors recommend a dividend of Rs. 2.50 per equity share for the year 2012-2013. The dividend subject to approval of members at the annual general meeting in October 2013, shall be paid to the members whose names appear in the register of members as on date of applicable book closure.

3. REVIEW OF OPERATIONS

The year under review was a difficult year with consumer confidence being low, high commodity prices, inflation and sharp depreciation of rupee value. Under these difficult times your Company could manage to grow its volumes by 6.9% over the previous year. This growth was very low compared to the target fixed by the Company for the previous year. This fall in volume growth compared to target was mainly on account of de-growth in domestic Polystyrene and Special Polymer Compounds demand and lower than expected growth in Expandable Polystyrene and export markets. Growth in exports was affected due to continued uncertainty in political and economic situation in various regions of the global economy, bilateral trade agreements between Polystyrene exporting countries in South and North East Asian markets and major Polystyrene consuming countries like Turkey and European Union. In view of the current economic and political situation in the country your Company expects to grow its volumes by about 15% during the year 2013-14.

In Extruded Polystyrene Insulation Board (XPS) the Company is now focusing more on creating a retail sales network to tap into this large potential. The plant loading will improve significantly once the retail segment picks up.

4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT & CORPORATE GOVERNANCE

Management Discussion and Analysis for the year under review and the report on Corporate Governance as stipulated under clause 49 of the Listing Agreement with Stock Exchanges are presented separately in the Annual Report. The compliance of ''Corporate Governance'' conditions has also been certified by the Auditors and the same is annexed to the report on Corporate Governance.

5. HEALTH, SAFETY & ENVIRONMENT

Both the Environmental Management System and Occupational Health and Safety Management Systems continued to be maintained by your Company as per ISO 14001:2004 Standards and OHSAS 18001:2007 specifications respectively. Your Company has continued implementation of HSE Management System under the guiding principles of declared ''Occupational Health & Safety Policy'' and ''Environmental Policy''.

HSE performance index for the period under review stood to be in ''excellent'' range.

Your Company has completed 4637 accident free days as on June 30, 2013 which amounts to 12.46 million man- hours of accident free operation.

6. DIRECTORS

Shri M. S. Ramachandran, Shri Rajan B. Raheja, Shri B. L. Taparia and Shri Nihalchand Chauhan, Directors of the Company retire by rotation and being eligible offer themselves for re-appointment.

A brief resume of the Directors eligible for re-appointment is given in the report on Corporate Governance.

Shri Aziz Parpia, who has been a Director of the Company since inception resigned on April 24, 2013 on account of advancing age. The Board places on record it''s appreciation of his invaluable guidance and contribution to the Company as a member of the Board of Directors and its various Committees.

Ms. Ameeta Parpia was appointed as Director of your Company in the casual vacancy created by the resignation of Shri Aziz Parpia, w.e.f. April 24,2013.

7. DIRECTORS* RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:

(i) in the preparation of the annual accounts, applicable accounting standards have been followed, with proper disclosure of any departures;

(ii) the accounting policies are consistently applied and'', i reasonable, prudent judgement and,estimates are ¦. made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year;

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that the Directors have prepared the accounts on a going concern basis.

8. TRANSFERS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company transferred an aggregate amount of Rs. 1.12 lacs during the year to the Investor education and Protection Fund. The aggregate amount transferred to the fund since January 2002 is Rs.201.95 lacs.

The unclaimed dividends on equity shares paid in November 2006 will be due for transfer to the Fund in December 2013. Investors who have not yet claimed these dividends are requested to contact either the Company''s Secretarial Department or the R & T Agents.

9. FIXED DEPOSIT SCHEME

The outstanding fixed deposits as on June 30,2013 were Rs. 10.27 crores including 121 due but unclaimed deposits aggregating Rs. 45.89 lacs out of which 15 deposits aggregating Rs.7.3 lacs have been paid as on the date of this report. There are no claimed and unpaid deposits.

10. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO

Information as per Section 217(1)(e) of the Companies Act, 1956 read together with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is Annexed hereto forming part of this report.

Uj PERSONNEL-'' . ^

" Your Compaiy continues tb maintain harmonious industrial relations throughout the year. The Directors acknowledge the sincerity and dedication of the employees.

As required by the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of employees are set out in the Annexure to the Directors'' Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956 the Report and the Accounts is being sent to all shareholders of the Company excluding the aforesaid information.

Any shareholder interested in obtaining such particulars may write to the Secretary at the Registered Office of the Company.

12. AUDITORS'' REPORT

There are no qualifications or adverse remarks in the auditors'' report.

13. COST AUDITORS

The Cost Audit Report for the year 2011-12 was filed with the authorities on January 10,2013. The due date for the same was February 28, 2013. Kishore A. Bhatia, Cost Accountant has been reappointed to audit the cost accounts of the Company for the period July 01,2012 to June 30, 2013.

14. ACKNOWLEDGEMENT

The Directors are thankful to its Bankers, Customers, Suppliers and other Business Associates/Stakeholders for their continued co-operation and support extended to your Company. For and on behalf of the Board

M. P. Taparia

Chairman

Place : Mumbai

Date : July 17, 2013


Jun 30, 2012

The Directors take pleasure in presenting the twenty third Annual Report together with Audited Accounts of your Company for the year ended June 30, 2012.

1. FINANCIAL RESULTS

(Rupees in lacs)

2011-2012 2010-2011

Income (Net of Excise) 227915.98 195236.79

Profit before Tax 4777.72 12844.98

Tax expenses 1440.25 4074.69

Profit after tax 3337.47 8770.29

Prior period adjustments 199.99 (1.22)

Balance brought forward 3137.48 3960.55 from Previous Year

Amount available for 7715.73 12729.62 appropriation

Appropriation thereof :

Dividend on equity shares 1575.64 3151.36 (including corporate dividend tax)

Transfer to general reserve 2500.00 5000.00

Balance carried forward 3640.09 4578.26

Your Directors recommend a dividend of Rs. 1.40 per equity share for the year 2011-2012.

2. REVIEW OF OPERATIONS

The new plants for Expandable Polystyrene (including Cup Grade EPS) at your Company's existing site in Maharashtra commenced commercial production from February 2012. The plants are stabilised and products have been well accepted in both the domestic and export markets with your Company receiving repeat orders from its customers in overseas markets.

The increase in installed capacity of Speciality Compounds and Polymers (SPC) to 33500 TPA was implemented in January 2012 by installing 4 new lines.

Domestic Polystyrene market grew by only 1.2% during the year under review due to low growth of economy. Exports from India were substantially lower due to the unrest in the Gulf countries and continuing economic crisis in many European countries. High input prices plus weak rupee squeezed margins during the year under review.

Cup Grade has received good response from the export markets with repeat orders from certain customers. However, there were certain logistics issues in exports of EPS causing delays in the shipments. The same have recently been resolved.

Specialty Polymers and Compounds business of your Company recorded a drop of approx. 20% in volume over the previous year due to political/economic uncertainty in major export markets and difficult business environment in the country.

Extruded Polystyrene Insulation Board (XPS) production was streamlined with environment friendly blowing agent. Your Company's XPS boards under brand name 'INSUBOARD' were successfully used in several large commercial projects, green buildings and in cold storages across the Country. With increased product awareness demand is slowly growing with good response from all parts of the country.

3. MANAGEMENT DISCUSSION AND ANALYSIS REPORT & CORPORATE GOVERNANCE

Management Discussion and Analysis for the year under review and the report on Corporate Governance as stipulated under clause 49 of the Listing Agreement with Stock Exchanges are presented separately in the Annual Report. The compliance of 'Corporate Governance' conditions has also been certified by the Auditors and the same is annexed to the report on Corporate Governance.

4. HEALTH, SAFETY & ENVIRONMENT

Both the Environmental Management System and Occupational Health and Safety Management Systems continued to be maintained by your Company as per ISO 14001:2004 Standards and OHSAS 18001:2007 specifications respectively. Your Company has continued implementation of HSE Management System under the guiding principles of declared 'Occupational Health & Safety Policy' and 'Environmental Policy'.

HSE performance index for the period under review stood to be in 'excellent' range.

Your Company has completed 4272 accident free days and 11.28 million accident free man hours as on June 30, 2012.

5. DIRECTORS

Shri S. J. Taparia, Shri Satish Raheja, Shri Hasmukh Shah and Shri Aziz Parpia, Directors of the Company retire by rotation and being eligible offer themselves for re-appointment.

A brief resume of the Directors eligible for re-appointment is given in the report on Corporate Governance.

6. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:

(i) in the preparation of the annual accounts, applicable accounting standards have been followed, with proper disclosure of any departures;

(ii) the accounting policies are consistently applied and reasonable, prudent judgement and estimates are made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year;

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that the Directors have prepared the accounts on a going concern basis.

7. TRANSFERS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company transferred an aggregate amount of Rs. 49.99 lacs during the year to the Investor Education and Protection Fund. The aggregate amount transferred to the fund since January 2002 is Rs. 200.82 lacs.

The unclaimed dividends on equity shares paid in October 2006 will be due for transfer to the Fund in November 2013. Investors who have not yet claimed these dividends are requested to contact either the Company's Secretarial Department or the R & T Agents.

8. FIXED DEPOSIT SCHEME

The outstanding fixed deposits as on June 30, 2012 were Rs. 1919.77 lacs. There were 123 due but unclaimed deposits aggregating Rs. 36.80 lacs out of which 3 deposits aggregating Rs. 0.65 lacs have been paid as on the date of this report. There are no claimed and unpaid deposits.

9. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO

Information as per Section 217(1)(e) of the Companies Act, 1956 read together with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is Annexed hereto forming part of this report.

10. PERSONNEL

Your Company continues to maintain harmonious industrial relations throughout the year. The Directors acknowledge the sincerity and dedication of the employees.

As required by the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of employees are set out in the Annexure to the Directors' Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956 the Report and the Accounts is being sent to all shareholders of the Company excluding the aforesaid information.

Any shareholder interested in obtaining such particulars may write to the Secretary at the Registered Office of the Company.

11. STATUTORY AUDITORS

The retiring auditors M/s. Parikh & Shah, Chartered Accountants having furnished the necessary certificate u/s. 224(1-B) of the Companies Act, 1956 are eligible for re-appointment. The members are requested to re-appoint the auditors. There are no qualifications or adverse remarks in the auditors' report.

12. COST AUDITORS

The Cost Audit Report for the year 2010-11 was filed with the authorities on December 24, 2011. The due date for the same was December 27, 2011. Kishore A. Bhatia, Cost Accountant has been reappointed to audit the cost accounts of the Company for the period July 01, 2011 to June 30, 2012.

13. ACKNOWLEDGEMENT

The Directors are thankful to its Bankers, Customers, Suppliers and other Business Associates/Stakeholders for their continued co-operation and support extended to your Company.

For and on behalf of the Board

M. P. Taparia

Chairman

Mumbai - 400 021

Date : July 18, 2012


Jun 30, 2011

Dear Members,

The Directors take pleasure in presenting the twenty second Annual Report together with Audited Accounts of your Company for the year ended June 30, 2011.

1. FINANCIAL RESULTS

(Rupees in lacs)

2010-2011 2009-2010

Income (Net of Excise) 194760.83 161455.34

Profit before Tax 12844.98 9018.40

Tax expenses 4074.69 2960.61

Profit after tax 8770.29 6057.79

Prior period adjustments (1.22) (10.30)

Balance brought forward from 3960.55 1945.66

Previous Year

Amount available for 12729.62 7993.15

appropriation

Appropriation there of :

Dividend on equity shares 3151.36 2032.61

(including corporate dividend tax)

Transfer to general reserve 5000.00 2000.00

Balance carried forward 4578.26 3960.55

The performance for the year under review was best so far. The return on net worth before and after tax increased to 43.89% and 29.97% respectively. Return on average capital employed increased to 30.02%. Your Directors recommend a dividend of Rs.2.80 per equity share for the year 2010-2011.

2. REVIEW OF OPERATIONS

The domestic Polystyrene market grew by 15% during the year under review while your Company's Polystyrene sales grew by 18.7% compared to the previous year. This growth was driven by growth in the market for refrigerators, water purifiers and foamed disposable wares. Export volumes increased marginally by 8.6% due to geo-political events in the Middle East and North Africa. Net realisations however showed market improvement due to the policy of selective acceptance of orders giving high net back.

Speciality Polymers and Compounds business grew by 35% in the domestic market due to demand for compounds used in appliances and water purifiers. Additive master batch business doubled over the previous year on acquisition of new domestic and export customers.

Expandable Polystyrene (EPS) production at the Chennai Plant has been optimised. EPS sales grew by 34% over the previous year.

Extruded Polystyrene Insulation boards (XPS) production was further optimised in the year under review.

3. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review as stipulated under clause 49 of the Listing Agreement with Stock Exchanges is presented separately forming part of the Annual Report.

4. HEALTH & SAFETY

Your Company has continued implementation of HSE Management System under the guiding principles of declared 'Occupational Health & Safety Policy' and 'Environmental Policy'. Both the Environmental Management System and Occupational Health and Safety Management Systems continued to be maintained as per ISO 14001:2004 Standards and OHSAS 18001:2007 specifications respectively.

HSE performance index for the period under review stood to be in 'excellent' range.

Your Company has completed 3907 accident free days and 10.26 million accident free man hours as on June 30, 2011.

5. DIRECTORS

Shri B. L. Taparia, Shri Nihalchand Chauhan, Shri R. Kannan and Shri M. P. Taparia, Directors of the Company retire by rotation and being eligible offer themselves for re-appointment.

A brief resume of the Directors eligible for re-appointment is given in the report on Corporate Governance.

6. SUBSIDIARY COMPANIES

As informed in the last report your Company decided not to proceed with SEZ project. It was therefore decided to wind up subsidiary Companies set up for this purpose.

The applications of the Subsidiary Companies viz. "SPL Industrial Park Limited" and "SPL Industrial Support Services Limited" made to Government of India, Ministry of Corporate Affairs for striking off their names from the Register under the Easy Exit Scheme were approved. The consolidated accounts of your Company and the erstwhile subsidiaries are therefore not annexed to this Annual Report. The names of both the Companies were struck off w.e.f. March 15, 2011 and April 23, 2011 respectively.

7. DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors confirm that:

(i) in the preparation of the annual accounts, applicable accounting standards have been followed, with proper disclosure of any departures;

(ii) the accounting policies are consistently applied and reasonable, prudent judgement and estimates are made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year;

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that the Directors have prepared the accounts on a going concern basis.

8. CORPORATE GOVERNANCE

Your Company continued to implement Corporate Governance practices during the period in line with the requirements of Clause 49 of the Listing Agreement with the Stock Exchanges. A separate section titled 'Corporate Governance' has been included in this annual report. The compliance of 'Corporate Governance' conditions has also been certified by the Auditors and the same is annexed to the report on Corporate Governance.

9. TRANSFERS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company transferred an aggregate amount of Rs.0.10 lacs during the year to the Investor Education and Protection Fund. The aggregate amount transferred to the fund since January 2002 is Rs.150.83 lacs.

The unclaimed dividends on equity shares paid in October 2004 and May 2005 will be due for transfer to the Fund in November 2011 and June 2012 respectively. Investors who have not yet claimed these dividends are requested to contact either the Company's Secretarial Department or the R & T Agents.

10. UNCLAIMED SHARES

SEBI vide its circular dated December 16, 2010 amended Clause 5 A to the Equity Listing Agreement with the Stock Exchanges laying down uniform procedure for dealing with unclaimed shares. There were 1091 shareholders with 99650 unclaimed shares on the date of this report. Your Company has sent reminders as stipulated in Clause 5 A to these members at the address given in the application form. If no response is received the Company shall, in conformity with Clause 5 A transfer the unclaimed shares to one folio in the name of Unclaimed Shares Suspense Account.

11. FIXED DEPOSIT SCHEME

The outstanding fixed deposits as on June 30, 2011 were Rs.2215.57 lacs. There were 112 due but unclaimed deposits aggregating Rs.28.88 lacs out of which 4 deposits aggregating Rs.1 lacs have been paid as on the date of this report. There are no claimed and unpaid deposits.

12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO

Information as per Section 217(1)(e) of the Companies Act, 1956 read together with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is Annexed hereto forming part of this report.

13. PERSONNEL

Excellent relations were maintained throughout the year. The Directors acknowledge the sincerity and dedication of the employees which has contributed to the improved operating results.

As required by the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of employees are set out in the Annexure to the Directors' Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956 the Report and the Accounts is being sent to all shareholders of the Company excluding the aforesaid information.

Any shareholder interested in obtaining such particulars may write to the Secretary at the Registered Office of the Company.

14. AUDITORS

The retiring auditors M/s. Parikh & Shah, Chartered Accountants having furnished the necessary certificate u/s. 224(1-B) of the Companies Act, 1956 are eligible for re-appointment. The members are requested to re-appoint the auditors. There are no qualifications or adverse remarks in the auditors' report.

15. APPOINTMENT OF COST AUDITORS

The Central Government has by its order no. 52/120/ CAB-2010 dated December 16, 2010 as clarified by letter dated June 01, 2011 directed a cost audit of the cost accounts maintained by the Company. Kishore A. Bhatia, Cost Accountant has been appointed to audit the cost accounts of the Company for the period July 01, 2010 to June 30, 2011. Audit report will be filed with the authorities within the stipulated time.

16. ACKNOWLEDGEMENT

The Directors are thankful to its Bankers, Customers, Suppliers and other Business Associates/Stakeholders for their continued co-operation and support extended to your Company.

For and on behalf of the Board

M. P. Taparia

Chairman

Place : Mumbai

Date : July 18, 2011


Jun 30, 2010

The Directors take pleasure in presenting the Twenty First Annual Report together with Audited Accounts of your Company for the year ended June 30, 2010.

1. FINANCIAL RESULTS (Rupees in Lacs)

2009-2010 2008-2009

Income (Net of Excise) 161,271.10 139,496.39 Profit before Tax 9,018.40 3,500.57

Tax expenses 2,960.61 1,566.99

Profit after tax 6,057.79 1,933.58

Prior period adjustments (10.30) (15.14)

Balance brought forward

from Previous Year 1,945.66 2,160.19

Amount available for

appropriation 7,993.15 4,078.63

Appropriation thereof:

Dividend on equity shares

(including corporate

dividend tax) 2,032.60 1,132.97

Transfer to general reserve 2,000.00 1,000.00

Balance carried forward 3,960.55 1,945.66

Your Directors recommend a dividend of Rs. 1.80 per equity share for the year 2009-2010.

2. REVIEW OF OPERATIONS

The domestic Polystyrene market grew by 8.5% during the year under review due to all round growth in demand in all product segments. Your Company consciously followed the strategy of exporting only to those countries which gave better netback. This resulted in lower export quantities of 43913 M.T. as compared to 50307 M.T. for the previous year. Demand estimates for the current year continue to remain on a high growth path.

The installed capacity of the Expandable Polystyrene (EPS) plant in Chennai has increased to 27700 TPA from June 1,2010. Your Company is progressively increasing the production rate to achieve optimum capacity utilization. The outlook for the domestic market for EPS remains positive.

Commercial production of Extruded Polystyrene Board (XPS) commenced from August 2009 and commercial supplies have started. The marketing network is being progressively established. Your Company is focusing on exports to those countries which have mandated insulation in buildings for energy conservation.

Specialty Polystyrene (SPS) business witnessed healthy growth during the year under review. The domestic sale grew by 36% whereas the exports grew by 48%. Considering the anticipated growth your Company plans to upgrade SPS capacity by establishing more lines.

3. BUY BACK OF EQUITY SHARES

The offer for buy-back of equity shares which commenced On December 31, 2008 closed on December 04, 2009.

Your Company has bought back and extinguished 1537907 equity shares reducing the paid-up share capital of your Company from Rs. 9,837.65 Lacs to Rs.. 9,683.86 Lacs.

4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review as stipulated under clause 49 of the Listing Agreement with Stock Exchanges is presented separately forming part of the Annual Report.

5. HEALTH & SAFETY

Your Company has continued implementation of HSE Management System under the guiding principles of declared Health & Environmental Policy. Both the Environmental Management System and Safety Management Systems continue to be maintained as per ISO:14001 Standard and OHSAS:18001 specifications.

HSE performance index for the period under review was in the excellent range.

Your Company has completed 3244 accident free days and 9.6 million accident free man hours as on June 30, 2010.

6. DIRECTORS

Shri Hasmukh Shah, Shri Aziz Parpia, Shri M. S. Ramachandran and Shri Rajan B. Raheja, Directors of the Company retire by rotation and being eligible offer themselves for re-appointment.

A brief resume of the Directors eligible for re-appointment is given in the report on Corporate Governance.

7. SUBSIDIARY COMPANIES

The two subsidiaries of your Company viz. SPL Industrial Park Limited and SPL Industrial Support Services Limited have not yet undertaken any activities. The Ministry of Corporate Affairs, Government of India by letter dated June 23, 2010 has exempted your Company from attaching a copy of the Balance Sheet and the Profit and Loss Account of the subsidiary companies and other documents required to be attached under Section 212(1) of the Companies Act, 1956 to the Annual Report of your Company. Accordingly, the said documents are not being attached with the Balance Sheet of the Company. A gist of the financial performance of the subsidiary companies is contained in the report. The Annual Accounts of the subsidiaries are open for inspection by any member/investor and the Company will make available these documents/details upon request by any Member of the Company or to any investor of its subsidiaries who may be interested in obtaining the same. Further, the annual accounts of the subsidiary companies will also be kept for inspection by any investor at the Corporate Office of the Company and that of the subsidiary companies.

8. CONSOLIDATED ACCOUNTS

In accordance with the requirements of Accounting Standards AS21 issued by the Institute of Chartered Accountants of India, the consolidated accounts of your Company and its two subsidiaries are annexed to this Annual Report.

9. DIRECTORS RESPONSIBILITY STATEMENT

Your Directors confirm that:

(i) in the preparation of the annual accounts, applicable accounting standards have been followed, with proper disclosure of any departures;

(ii) the accounting policies are consistently applied and reasonable, prudent judgement and estimates are made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year;

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that the Directors have prepared the accounts on a going concern basis.

10. CORPORATE GOVERNANCE

Your Company continued to implement Corporate Governance practices during the period in line with the requirements of Clause 49 of the Listing Agreement with the Stock Exchanges. A separate section titled Corporate Governance has been included in this annual report. The compliance of Corporate Governance conditions has also been certified by the Auditors and the same is annexed to the report on Corporate Governance.

11. TRANSFERS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company has transferred an aggregate amount of Rs. 150.73 Lacs till date to the Investor Education and Protection Fund since January 2002.

12. FIXED DEPOSIT SCHEME

The outstanding fixed deposits as on June 30, 2010 were Rs. 2069.50 Lacs. There were 124 due but unclaimed deposits aggregating Rs. 27.95 Lacs out of which 18 deposits aggregating Rs. 4.58 Lacs have been paid as on the date of this report. There are no claimed and unpaid deposits.

13. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO

Information as per Section 217(1)(e) of the Companies Act, 1956 read together with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is Annexed hereto forming part of this report.

14. PERSONNEL

Excellent relations were maintained throughout the year. The Directors acknowledge the sincerity and dedication of the employees which has contributed to the improved operating results.

As required by the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of employees are set out in the Annexure to the Directors Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956 the Report and the Accounts is being sent to all shareholders of the Company excluding the aforesaid information.

Any shareholder interested in obtaining such particulars may write to the Secretary at the Registered Office of the Company.

15. AUDITORS

The retiring auditors M/s. Parikh & Shah, Chartered Accountants having furnished the necessary certificate u/s. 224(1-B) of the Companies Act, 1956 are eligible for re-appointment. The members are requested to re-appoint the auditors. There are no qualifications or adverse remarks in the auditors report.

16. ACKNOWLEDGEMENT

The Directors take this opportunity to thank the Companys Bankers for their guidance and support. The Directors are also thankful to Suppliers, Customers and other Business Associates for their continued co-operation and support extended to your Company.

For and on behalf of the Board

M. P. Taparia

Chairman

Place: Mumbai

Date : July 20, 2010

 
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