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