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Updated:20 Feb, 2020, 09:44 AM IST

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Updated:20 Feb, 2020, 09:49 AM IST


1.Your Directors are pleased to present the twenty seventh Annual Report and the Company's audited financial statements for the nine months period ended on March 31, 2016. (July 1, 2015 to March 31, 2016).


During the period under review i.e. July 1, 2015 to March 31, 2016 your Directors declared an interim dividend of Rs.1.50 per equity share for the year 2015–2016. Your Directors recommend that this dividend be declared as the final dividend.


Steep fall in crude oil prices in the period July 2015 to December 2015 resulted in consequent fall in price of the main raw material Styrene Monomer (SM) and your Company's products causing inventory losses to your Company during the first quarter ended September, 2015. The SM prices however stabilised in the second quarter ended on December 31, 2015 and with the low prices of the Company's products, demand improved. The January to March 2016 quarter witnessed upsurge in demand for the Company's main products due to marked improvement in demand for consumer appliances like refrigerators, air conditioners, air coolers and televisions. This coupled with smart pick up in business sentiments, helped your Company earn PBDIT of Rs.10584.07 lacs and profit after tax of Rs. 5604.86 lacs for this financial year of nine months.

Your Company registered a volume growth of 26% in respect of all its manufactured products during the period July 2015 – March 2016 compared to the same period in the previous year.

The domestic Polystyrene (PS) market saw healthy growth of 10.11% in the nine months period of July 2015 to March 2016, while the export of PS grew by 57% in the year under review, as compared to the same period in previous year. With this growth in exports, Company was able to increase share of export volumes to over 35% of total volume sales of Polystyrene. Expandable Polystyrene (EPS) market grew by 9.70% during the nine months period under review. The growth was contributed mainly by packaging industry for white goods and grape boxes apart from construction industry using sandwich panels, 3–D panels and cold storage constructions.

Extruded Polystyrene Insulation Board (XPS) sales volume grew by 79% during the period under review. Continuous efforts are being made to strengthen the distributor network.

SMMA Project (Styrene Methyl Methacrylate)

Your Company proposes to modify one of the three Polystyrene (PS) lines at the plant in villages Amdoshi, Wangani in Maharashtra into a swing line capable of producing either PS or upto 42500 TPA of SMMA. The technology for the modification of the PS line and production of SMMA will be from Polysty Inc. USA. The cost of the project, including hardware and technology fees will not exceed Rs. 600 lacs and shall be met from internal accruals. The plant start–up is expected by end of 2016 and the estimated payback period is two years. SMMA is widely used for optical sheets. Other applications include homeware, office accessories, toys and medical devices.

Disruption in Operations of the Chennai Plant

The operations of the EPS plant in Chennai were disrupted in December 2015 due to the unprecedented rains and flooding in Chennai. The flood waters attained a level of 6 feet inside the plant and damaged inventories, electrical, mechanical equipment and instrumentation as also spares, system hardware, office equipment and furniture. Parts of the compound wall and water pond were also damaged. The Management team and employees worked untiringly to restore operations in a month's time. The Board commends these efforts of the employees in not only restoring operations but also in servicing customers from the plant in Maharashtra. The Company has adequate insurance for its assets and have filed an initial claim of Rs.1092 lacs with the Insurance Company. Your Company is also insured for "Loss of Profit" during the period the plant operations were shut. The Company therefore does not envisage any financial loss on this account. The final report of the surveyor appointed by the Insurers is awaited. In the interim your Company has received an on account claim of Rs. 449 lacs from the Insurance Company.


Management Discussion and Analysis for the period under review i.e. July 1, 2015 to March 31, 2016 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.


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.

SPL 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 to be in 'Excellent' range.

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

Continued implementation of Compliance Management System (CMS) software to track various HSE related statutory compliance.

HSE training conducted as per the Plan. Competence Assessment is done six monthly by practical test. Average competency for last three years is 82.8 % as against targeted 70%.

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.

External Audit of Integrated Management System was conducted by BVC Auditors during March 2016. No major non conformity observed.

Quantitative Risk Assessment done by M/s.Chilworth Technology (Pvt) Ltd in November 2015.

On Site Emergency Management Plan is 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, total 24 nos of "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.

Medical examinations (annual comprehensive and six monthly periodic) for all SPL and contract employees completed during June 2015 and Dec 2015 respectively. No occupational ill health observed during the examination.

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


Shri M P Tarparia (DIN 00112461) and Shri S J Taparia (DIN 00112513), 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 period under review i.e. July 1, 2015 to March 31, 2016 Dr. S Sivaram (DIN 00009900) was appointed as an Independent Director by the Members to hold office for a consecutive period upto September 21, 2019. The members also re–appointed Shri Rajan B Raheja (DIN 0037480) and Shri B L Taparia (DIN 00112438) as Non­Executive Non–Independent Directors liable to retire by rotation. Shri Hasmukh Shah resigned from the Board of Directors of the Company w.e.f. April 7, 2016. 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.

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 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 evaluations 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.

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://>–Programme– For–Independent–Directors.pdf


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.


Your Company transferred an aggregate amount of Rs.26.07 lacs during the period under review i.e. July 1, 2015 to March 31, 2016 to the Investor Education and Protection Fund. The aggregate amount transferred to the fund since January 2002 is Rs. 271.33 lacs.

The unclaimed dividends on equity shares paid in October 2009 will be due for transfer to the Fund in November 2016. Investors who have not yet claimed these dividends are requested to contact either the Company’s' Secretarial Department or the R & T Agents.


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 forms part of the DIRECTORS' REPORT for the period under review i.e. July 1, 2015 to March 31, 2016.


At the plant in Amdoshi, Maharashtra

Various Energy Conservation Programmes were implemented during the period under review i.e. July 1, 2015 to March 31, 2016 which resulted in savings of energy to the extent of 164877 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 been reduced. The revamp of the existing effluent treatment plant and the addition of a set of ultra filtration and R.O. units last year resulted in achievement of "Zero liquid discharge".


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


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 and as advised, 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 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 2014–15 was filed with the authorities on December 22, 2015 well within the due date. M/s.Kishore Bhatia & Associates, Cost Accountants have been appointed as Cost Auditors to audit the cost accounts of the Company for the period July 1, 2015 to March 31, 2016.

Secretarial Auditors

The Company had appointed M/s. Parikh & Associates, Company Secretaries to conduct secretarial audit for the period under review i.e. July 1, 2015 to March 31, 2016. The secretarial audit report for the financial year ended March 31, 2016 is annexed hereto marked as Annexure–2. The Secretarial Auditors' Report does not contain any qualifications or adverse remark.


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: <–On–>Dealing–With–Related–Party–Transactions.pdf. Information on related party transactions are given in Annexure–5 in Form AOC–2 forming part of this report.


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://>–Social– Responsibility.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 report on CSR activities during the year under review is given in Annexure–4 to this report.


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, any event arising from these, likely to impact operations are reported to the Board.


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.


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 guards against victimisation of the whistle blower and also provides for direct access to the Chairperson/CEO/Chairperson of the Audit Committee in exceptional cases.


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.


There are no loans, guarantees or investments under Section 186 of the Companies Act, 2013 as on March 31, 2016.


The extract of the Annual Return in Form MGT–9 is annexed herewith as Annexure–3 to this annual report.


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.


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


Place: Mumbai

Date : April 20, 2016