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
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%
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
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.
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)
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)
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
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
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,
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
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
Your Directors also recommend the passing of the appropriate
resolutions proposing the appointment of Directors in the notice
convening the AGM.
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
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
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
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
To develop a risk culture that encourages employees to identify risks
and associated opportunities and respond to them with appropriate
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.
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
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
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
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,
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.
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
For and on behalf of the Board
Vadodara Hyung Tae Chang
February 26, 2013 Chairman