Chemicals & Petrochemicals Manufacturers’ AssociationPetrochemicals Industry Associations of...

Chemicals & PetrochemicalsManufacturers’ Association

CPMA

Annual Report

CPMA

The Chemicals & Petrochemicals Manufacturers’ Association (CPMA) is the

apex forum representing the Indian Petrochemical Industry. Established in

1993, the Association offers its member companies in public, private and

joint sector a podium to collectively present their ideas, voice concern

and offer suggestions on issues relevant to the industry and the society at

large. It provides a linkage between the industry, the Government and the

larger society. It interacts with the policy-makers and industry associations

to develop and maintain harmonious business environment which is also

conducive to greater societal well being. CPMA is also member of Asia

Petrochemical Industry Conference (APIC) and represents interests of

Indian Petrochemical Industry in this forum. Other APIC members are

Petrochemicals Industry Associations of Korea, Japan, Taiwan, Malaysia,

Thailand and Singapore.

An Overview

Aims & Objectivesl To protect & promote the interests of its members and Chemicals &

Petrochemicals industry at large.

l To enhance contribution of Chemical and Petrochemical sector to the growth & development of national economy through facilitative policy regime.

l To foster co-operation between the industry and government.

l To convene conferences, seminars, exhibitions, meetings etc to further the objects of the Association.

l To interact with Government on issues relevant for growth of the industry & suggest corrective action for the same.

l To collect, collate and disseminate information of value to the industry regarding policy, key trends, production, trade, technological developments, and industry events, etc.

l To award research studies and analysis with a view to improve the efficiency of production, quality of end products and protection of environment by member companies.

l To organize delegations/visits to facilitate trade & exchange of know-how for overall promotion of the chemical & petrochemical industry in India.

CPMAChemicals & Petrochemicals Manufacturers’ Association

Annual Report 2015-16

Managing Committee K. G. Ramanathan President

Kamal P. Nanavaty Vice President & Member Co-ordination

Mahinder Singh Secretary General

Auditors R.S. Gupta & Co. Chartered Accountants 5A/19, Ansari Road Daryaganj New Delhi-110002

Bankers State Bank of India Kasturba Gandhi Marg New Delhi-110001

HDFC Bank Ltd Nanik Motwani Marg, Fort, Mumbai-400001

Registered Office Vijaya Building 10th Floor, 17 Barakhamba Road New Delhi-110001

Current Office 708, 7th Floor Kailash Building 26, Kasturba Gandhi Marg New Delhi-110001

S N A P S H O T



To,

All CPMA members

CPMA 17th AGM Notice cum AGENDA

Venue : CPMA Office,708, 7th Floor, Kailash Building, KG Marg, New Delhi.

Date : 12th September 2016 (Monday)

Time : 12.00 noon

1. To receive, consider, adopt the audited accounts for the year ended 31st March 2016

2. To receive the report of the Managing Committee for the year 2015-16

3. To appoint auditors to hold office for the conclusion of this meeting until the conclusion of the next annual General Meeting of the Company and to fix their remuneration

4. To elect members of the Managing Committee for the year 2016-17

5. To elect the President and Vice President of the Association for the year 2016-17

6. To form Task Force for upcoming APIC 2018 to be hosted by India

7. To discuss environmental issues facing the industry & contribution to ICPE

8. Any other business with permission of the Chair

By order of the Managing Committee

Chemicals & Petrochemicals Manufacturers’ Association

Sd/-

(Mahinder Singh)Secretary General



Introduction ...................................................................................................................................... 1

General Economic Situation ............................................................................................................. 1

GDP growth and general economic situation ................................................................................... 1

Outlook for 2016-17 ......................................................................................................................... 1

Polymers ........................................................................................................................................... 3

Surfactants ....................................................................................................................................... 3

India’s Petrochemical Capacity (KT) .................................................................................................. 4

India’s Petrochemical Consumption (KT) .......................................................................................... 5

Elastomers ........................................................................................................................................ 6

Aromatics ......................................................................................................................................... 6

Fibre Intermediates .......................................................................................................................... 6

Association Activities ........................................................................................................................ 6

Submission made to the Govt. of India

l Under India-Australia CEPA ......................................................................................................... 6

l Tariff concessions on petrochemicals under India-Thailand FTA ................................................ 6

l Under India-Korea CEPA.............................................................................................................. 7

l Under India-Korea CEPA – Impact on Synthetic Rubber Industry ............................................... 7

l Under India-ASEAN FTA .............................................................................................................. 7

l Under India-PERU FTA ................................................................................................................ 7

l Anomaly in classification of PVC in FTAs with Malaysia & ASEAN............................................... 7

Representations made to the Govt. of India

l Import of uncompounded PVC resin - clearance under wrong HS code .................................... 7

l Rubber Industry in India to Parliamentary Standing Committee ................................................ 7

l Foreign Trade Policy .................................................................................................................... 7

l Potential industry set up at Chahbahar, Iran .............................................................................. 7

l Identification of tariff lines requiring reduction .......................................................................... 7

l Formulating NTMS ...................................................................................................................... 7

l Exclusion of SBR under India-Thailand CECA .............................................................................. 8

l Interaction with Industry Association ......................................................................................... 8

l ID on PET ..................................................................................................................................... 8

C O N T E N T S



Representations made to the Govt. of India

l CD on LNG ................................................................................................................................... 8

l Auction of Coal Linkages ............................................................................................................. 8

l Adverse Impact of FTAs on the Indian Petrochemical Industry .................................................. 8

l Preparation for India’s Intended Nationally Determined Contributions (INDCs) in the context of 2015 Agreement on Climate Change ...................................................................................... 8

l Rubber Industry in India ............................................................................................................. 8

l Recommendations for development of Petrochemical Industry ................................................ 8

Representations made to CII/FICCI/ASSOCHAM

l RCEP ............................................................................................................................................ 8

l FICCI / CII / ASSOCHAM for Union Budget 2014-15 .................................................................... 8

l 23rd SAC Meeting on JPMA .......................................................................................................... 9

l Support for Sector Skill Development Council for Chemicals & Petrochemicals ........................ 9

l Summary of BIS Activities, TX23 Committee supported by CPMA ............................................. 9

CONFERENCES supported / jointly organised by CPMAl Vinyls India 2015 ......................................................................................................................... 9

l Injection Moulding & Blow Moulding International Conference – 2015 .................................... 9

l Specialty Films & Flexible Packaging Global Conference 2015 ................................................... 9

l Indian Petrochem - 2015 .......................................................................................................... 10

l India Energy Week – Argus ElitePlus Conference ..................................................................... 10

CPMA Website .......................................................................................................................... 10

ICPE (Indian Centre of Plastics in Environment) promoted by CPMA members: Brief on activities undertaken during 2015-16 ............................ 10

AWARENESS PROGRAMMES FOR SCHOOL / COLLEGE STUDENTS .......................... 11

LEGAL CASES IN SUPREME COURT/HIGH COURT/NGT DELHI AGAINST USE OF PLASTICS ..................................................................................................................... 11

WASTE MANAGEMENT PROJECTS – ICPE INITIATIVE ................................................... 11

NEWSLETTERS ........................................................................................................................... 11

ICPE WEBSITE ............................................................................................................................ 11

Acknowledgements ................................................................................................................. 12

Auditor’s Report & Accounts................................................................................................ 13

CONTENTS (Contd.)



Introduction

Your Managing Committee has pleasure in presenting the seventeenth Annual Report on the activities of the Association along with the audited Statement of Accounts and the Balance Sheet for the year ending 31st March 2016.

As the apex body of Indian Petrochemical industry, CPMA has completed 24 years, relentlessly working to create and sustain an environment conducive to the growth of the industry. During this period, it has taken several initiatives towards fulfilling its mandated role as the nodal agency for the industry, bringing together the government, industry and society at large; to facilitate growth of the industry as well as the economy. Its efforts towards building synergy between government, industry and society have helped it to maintain its lead as the proactive provider of business solutions through research, issue advocacy and global networking considering the prevailing economic situation.

General Economic Situation

GDP growth and general economic situation

India’s economy grew a tad slower than earlier estimated in the last fiscal year, as the government revised down after factoring in latest data on agriculture and industrial output and released ‘corrected’ GDP data. While for FY15, growth rate was revised down from 7.3 to 7.2%, for FY14 it fell to 6.6 from 6.9%. Gross value added (GVA) was also been revised on almost similar lines. India’s economic growth for the financial year 2016 has been estimated at 7.6% as compared with the revised estimate of 7.2% in the previous year, aided largely by growth in the manufacturing sector. Investment demand remained weak, although it is estimated to pick up to grow 5.3% in 2015-16 from 4.9% in the previous year. Private consumption growth was surprisingly projected at 7.6% during the financial year from 6.2% a year ago, mostly supported by urban demand and despite a rural slump. Economic growth of the country picked up pace in the second quarter of this fiscal year, adding some cheers to the markets and institutions.

Outlook for 2016-17

The Indian economy bucked the trend in 2015 when most of the emerging market economies witnessed significant external vulnerabilities owing to positive external balance and a stable public policy. Although the rising NPAs in the banking system and strong headwinds in the global economy did have an impact on Indian economy, it was largely stable when compared to its peers. The Indian economy currently stands at a strong footing with the interest rate rolling downwards, key macro variables like CAD and fiscal deficit mostly under control and the governments continued push for reforms and ease of doing business. Improvement in macro-economic variables which includes encouraging GDP number (the FY16 advance estimate ahead of expectations), revised GDP projection by IMF for India, an uptick in IIP, drop in trade deficit, supportive figures for CPI & WPI inflation and robust forex reserves and a good monsoon forecast all are supporting the uptrend at a time when

many economies are in turmoil. Broadly speaking, the revived optimism in the economy bodes well for the future. Far more important is that the economy seems to be on an increasingly stable footing. Inflation has fallen by half after floating above 10% for years. When the IMF cut its forecasts for the world economy, it largely spared India. International agencies continue to remain positive on India with an expected growth for 2016 pegged at and around 7.5%. The year 2016 will be closely watched for the government’s ability to push critical reforms and apex banks’ monetary policy stance to support growth. Further, the pay commission suggestion for hikes in payouts for government employees coupled with soft commodity prices are likely to result in a consumption driven growth. The continued accommodative stance and look out for emerging room for more rates easing by the Apex bank is likely to bring in positive sentiments and scope for expansion of the economy.

l GST

Prospects have brightened for the country’s most awaited tax reform, the Goods and Services Tax (GST), with both the Centre and states looking to expeditiously resolve issues that have delayed the roll out of this single levy that will subsume most indirect taxes. GST is expected to add as much as 1.5% to GDP once rolled out by creating an efficient, taxpayer-friendly and leak-proof system. It will also help create a national market for goods and services currently split among states because of state-specific laws.

l Rupee

India is avoiding much of the flack hitting the emerging markets at the moment, coming from both a fear of higher U.S interest rates and the commodity price rout. As a consequence its currency, the rupee, has appreciated along the way, and should by rights continue into 2016. Rupee was the strongest EM currency in 2015 and they expect its resilience to continue into 2016. India’s positive terms of trade and an acceleration of FDI, or inward directed investment from non-residents, are both factors advantaging the currency too. In fact, in-bound investment may become a primary driver of the rupee higher, as analysts at Bank of America include Indian 10-year bonds as a top 10 trade for 2016, highlighting the positive outlook. Investors may be attracted to the potential to reap emerging market level returns in a country with a more stable diversified economy and resilient currency than many other emerging market country’s China included. In a world which has seen a flight from most other EM’s – India may become an exception to the rule – a go-to for investors seeking higher returns put-off by more volatile EM’s and attracted to India’s relative stability.

l CAD

Merchandise exports remain under pressure due to weak demand in major markets such as Euro zone, China, and Organisation of the Petroleum Exporting Countries. On the other hand, while oil imports are expected to remain muted on account of low crude oil prices (CRISIL forecast for

Annual Report 2015-16 2


Brent is $36-41/barrel in fiscal 2017 vis-à-vis an estimated $48/barrel in fiscal 2016), some pick-up is expected in core imports (non-oil, non-gold) on the back of improved domestic consumption and investment demand. At the same time, surplus in the services account is expected to remain moderate. Accordingly, CAD may rise a tad to 1.4% of GDP in fiscal 2017 from an estimated 1.3% in fiscal 2016.

l Inflation

Domestically, the monsoon news has been favourable, but perhaps not as great as some had wished. Progress on the goods and services tax is welcome and money market liquidity has improved substantially, though transmission by banks remains weak. The growth outlook remains for a consumption-led gradual and uneven pick-up. Despite the public capex push and sharply higher foreign direct investment, revival in private investment isn’t imminent; this shouldn’t be surprising. Most importantly, consumer price index (CPI) inflation has been a concern, moving up to be just shy of the 6% mark in June. Core inflation remains worryingly sticky. Empirical evidence of good monsoons lowering food inflation is less robust than the popular rhetoric that makes that claim. Still, inflation is likely to ease later in the year and RBI’s target of 5% by early 2017 should be achievable. The challenge is going to be thereafter: the 4% target for early 2018 is ambitious.

l Uncertainty regarding Crude Oil

The international oil price hit a new four-month low overnight (as on 3rd Aug 2016), while the main US price benchmark remained below the important $40-a-barrel threshold as supply sentiment remained bearish Despite a prolonged dip in raw crude reserves, prices have been under pressure as booming stockpiles of refined products point to an ongoing imbalance between supply and demand. Raw crude stocks in the US recorded a surprise rise last week as returning output in Canada eroded a brief supply deficit. In addition, reports indicated exports from countries in the influential OPEC cartel surged in July. Analysts suggest there will be further pressure on oil in the near future and that the break below $40 would open the door to prices as low as $35 a barrel. But they are not expecting a return to the 13-year lows below $30 seen in February.

l Global Economic Situation

The world economy is projected to expand at 2.4 percent in 2016, roughly at the same insipid pace we experienced last year. On the plus side, commodity importers will maintain their relatively high growth, as the low prices become stable. On the other hand, commodity exporters will continue to face challenges, though even in these economies there should be a slow positive upturn, as commodity prices stabilize and they slowly begin to diversify their economy. Although global growth is projected to accelerate gradually, a wide range of risks threaten to derail the recovery, including a sharper-than-expected slowdown in major emerging markets, sudden escalation of financial market volatility,

heightened geopolitical tensions, slowing activity in advanced economies, and diminished confidence in the effectiveness of policies to spur growth. These risks are compounded by the fact that for many countries policy buffers have eroded substantially, particularly in commodity exporting emerging and developing countries.

l Global Petrochemical Industry

Reviewing the performance of the petrochemical industry in 2015 amidst strengthening global economic trends, it seems that the industry’s performance continued to improve vis-a-vis the year before. However, the year has been quite eventful. For most of 2015, oil prices traded in the range of US$40-60/bbl. However, post-Christmas of 2015, Brent as well as WTI crude oil futures fell to levels seen in 2008-2009, as there is no end in sight for oversupply concerns. As we entered 2016, International benchmark Brent crude had twice set a new near 13-year low of below $28 a barrel, as fears over persistent oversupply reached fever pitch following the news that Iran will return to export markets in January 2016. A slowdown in China that could hit demand was also exacerbating bearish sentiment. As we have entered 2016, some market observers forecasted another year of distress and bearishness for oil futures. US naphtha exports increased in 2015, as refiners continue to seek new outlets for increased production, but growing condensate exports could impact naphtha output. The end of 2015 saw naphtha prices in Asia sink to six-and-half-year low of around US$384/ton CFR Japan, triggered by the sell-off in financial markets and steep losses in overnight crude futures. However, sustained lower oil prices continue to improve the cost competitiveness of Asian Naphtha based polymer producers. Unlike the fluctuations in spot ethylene prices in Asia and Europe, the spot ethylene market in the US continued to fall for the most part of 2015. At the end of the year, spot ethylene hit its lowest levels seen since early 2009, widening the gap between other regions to record highs. However, it is expected that Global Ethylene supply demand would remain tight until 2018 when US based crackers start up.

China continued to add more coal based capacity in 2015 as new plants came on stream. This was particularly evident in the PP market, which pushed domestic PP prices to the same levels with or even below import offers in China for the most part of 2015. The same factor caused PP prices to post a larger decrease than that of PE both in Asia and the Middle East in the second half of the year. European polyolefins markets were hit by a significant number of production outages in H1-2015. In fact PE and PP buyers in Europe expected to be under strong pressure to accept revised conditions from their sellers in 2016 when discussing volumes and pricing, strongly influenced by the 2015 situation, when force majeures led to extreme volatility and price hikes.

A change in the euro/USD exchange rate and the collapse in crude and naphtha prices were principally responsible



changes in supply, with the lack of imports exacerbated by an increase in duties. Producers are generally very confident for 2016, in spite of the arrival of material from some new production units. Asian Propylene market is expected to remain long with new capacities being added. Delays in incremental CTO/MTO units and sub-par utilization of PDH units likely to support margins.

Over the last few years as the global economic landscape and business dynamics continued to change rapidly, several new dimensions have emerged in petrochemical business. These new developments span a wide spectrum like more stringent regulatory compliance norms like REACH, enhanced competitiveness of the US industry on the back of shale gas, new trade dynamics through FTAs and so on, which have all contributed towards making the business environment more complex.

l Indian Petrochemical Industry

Amid uncertain energy and economic environment, India remains a bright spot with steady growth driven by investment in infrastructure and growing middle class. In fact, Indian economy has turned the cornerstone and it’s once again on the growth path. Globally India is being looked at as the bright spot in the global economy. Consumer sentiments are high and growth expectations are reasonable well, which augers well with the petrochemical industry whose growth has a direct relation with the economic growth.

For the Indian petrochemical industry in 2015- the key application industries like packaging, construction, and automobiles actually helped pull up the demand and declining prices resulted in higher offtake by downstream converters for virtually all polymers. GOI’s initiatives like Digital India, Swachh Bharat, Start-up India and Skill development program etc. have started and will eventually a widespread multiplier effect. One can expect them to fuel petrochemical demand in India in the years to come.

A particular boon for the plastics industry is the Swachha Bharat program, which calls for an end to open defecation by 2022. This will require constructing individual cluster and community toilets, cleaning up villages through solid and liquid waste management, and laying pipelines to connect all villages to water supplies by 2019. Plastics producers estimate that this program could add 250,000 m.t./year to polymers demand at just 50% of the program’s achievement.

India witnessed a rebound in auto sales in the second half of 2015 and the trend is expected to continue in 2016 as well. Success of ‘Make in India’ programme will be a game changer and a big boost to manufacturing in the country. Increased focus on agriculture and irrigation will boost the demand for plastics along with GOI’s thrust on infrastructure followed by a good monsoon forecast in 2016 by IMD.

A few of the many such initiatives that are likely to result in new opportunity for industries and positively push the demand for petrochemicals are: Rapid expansion of Metro

Rail Projects across the country and electrification of existing & addition of new railway lines. Construction of national highways, estimated to cross 6,000 km annually - surpassing the previous best. The launch of Smart Cities and emphasis on Rural Development, expected to have a huge demand push for overall petrochemicals sector. In addition to these positives, one cannot undermine the impact of soft oil prices in 2016 either. These are expected to keep the product prices low and thereby likely to bolster demand for petrochemicals besides placing a considerable sum of disposable income in the hands of end-consumers and create increased spending power for them.

Last but not the least, the likely highly anticipated roll-out of Goods and Services Tax (GST) roll-out in 2016 in future would have a very positive impact on the way business is conducted. The opportunities are huge, and the petrochemical industry stands to benefit in a big way.

These proposals and “the focus to support the start-ups will also go a long way in encouraging domestic manufacturing. A number of Indian state-owned energy companies are making major investments to boost their petrochemical activities and are expected to become significant players in the sector. Capacity expansions by several other manufacturers are moving ahead and gradually filling the gap between domestic demand and supply. Overall, the outlook for the petrochemical industry in India is somewhat more positive than it has been recently, as growth in GDP and industrial output is expected to be higher in 2016-17 than in the prior year, and key end-use industries like automotive, packaging, and consumer durables reflect this outlook.

Polymers

The Indian domestic polymer industry (like global industry) is dominated by Polyolefin’s (PE & PP), representing about 73% of all commodity resins consumed in 2015-16. After clocking a subdued growth in 2013-14 the polymer growth in India was higher at 7% in 2014-15. Domestic demand is expected to outpace domestic production.

Polymer import dependency remained high at 33% in 2014-15 and is expected to come down in next two years to ~27%. PP exports was around 720 KT in 2014-15. PE imports in 2014-15 stood at 1499 KT and PVC imports were at 1172 KT in the same period. In 2014-15 net trade deficit of total polymers stood at 2533 KT which was higher than previous year which stood at 1612 KT. However, trade deficit is expected to rise to 2723 KT in 2015-16 and decline to 2019 KT in 2016-17. However, the demand for polymers is expected to grow at ~7% in 2015-16 and see a double digit growth of ~13% in 2016-17. India’s petrochemical industry, like the overall economy, faces near-term challenges, but the long-term growth outlook for the industry remains positive. Capacity expansions by several other manufacturers are moving ahead.

Surfactants

Demand for key surfactant LAB increased by 4.3% in 2014-15



India’s Petrochemical Capacity (KT)

Source: Industry Estimates, A=Actual, E=Estimates

Product 2011-12 A 2012-13 A 2013-14 A 2014-15 A 2015-16 E

Ethylene 3907 3907 3907 3615 5757

Propylene 4141 4141 4371 4230 5126

Butadiene 295 295 295 435 435

Benzene 1260 1260 1260 1315 1492

Toulene 270 270 270 270 270

OX 420 420 420 420 420

MX 90 90 90 90 90

PX 2448 2472 2472 3009 3392

EDC 350 205 190 190 190

VCM 856 856 906 906 981

Styrene 0 0 0 0 0

LAB 530 530 530 530 530

EO 203 208 234 253 268

PTA 3930 3930 3930 3930 5652

MEG 1300 1300 1200 1200 1200

Acrylonitrile 40 40 40 40 40

Caprolactum 70 70 70 70 70

LDPE 205 205 205 205 205

EVA 15 15 15 15 15

LLDPE 965 980 980 980 980

PP 3700 4140 4180 4180 4570

PVC 1335 1345 1402 1402 1482

PS 472 472 472 472 476

PBR 74 74 85 114 124

SBR 20 20 40 140 290

NBR 20 20 20 20 20

EPDM 10 10 10 10 10

VSF 325 325 490 490 490

PSF 1075 1150 1260 1260 1260

ASF 148 166 158 98 98

PPSF 13 13 13 13 13

NFY 58 58 76 76 76

PPFY 18 18 18 18 18

CBFS 1495 1595 1925 1925 1925

CB 935 1027 1040 1040 1040

Total 30993 31627 32574 32961 39005

% Change 2% 3% 1% 18%



India’s Petrochemical Consumption (KT)

Source: Industry Estimates, A=Actual, E=Estimates

Product 2011-12 A 2012-13 A 2013-14 A 2014-15 A 2015-16 E

Ethylene 3370 3767 3784 3816 5525

Propylene 3700 3880 4150 4020 4650

Butadiene 114 113 120 172 241

Benzene 606 593 567 504 530

Toulene 385 447 404 440 520

OX 266 281 278 287 303

MX 85 83 100 140 157

PX 2154 2263 2298 2442 3219

EDC 628 638 652 646 675

VCM 1261 1280 1318 1281 1379

Styrene 520 551 572 617 647

LAB 470 500 509 531 552

EO 167 172 187 188 194

PTA 3852 4106 4398 4641 5098

MEG 1586 1644 1840 1882 2013

Acrylonitrile 113 115 147 152 151

Caprolactum 86 93 96 101 102

LDPE 484 443 444 515 585

EVA 98 116 131 143 152

LLDPE 1183 1240 1236 1328 1546

PP 2792 3142 3253 3509 4148

PVC 1979 2263 2309 2443 2678

PS 248 250 217 238 241

PBR 155 168 170 171 172

SBR 197 239 270 290 306

NBR 31 35 38 45 50

EPDM 28 32 35 33 40

VSF 246 257 278 268 305

PSF 779 812 835 851 869

ASF 86 96 113 101 101

PPSF 4 4 4 5 5

NFY 42 45 45 52 52

PPFY 14 17 12 11 14

CBFS 1400 1545 1450 1430 1520

CB 682 798 880 850 932

Total 29810 32028 33141 34142 39671

% Change 7% 3% 3% 16%



and is expected to maintain the same growth rate in this fiscal as shown in table below. LAB capacity is expected to remain unchanged till 2015-16 and witness an addition of capacity by IOC in 2016-17 taking the total capacity in India to 570 KT in that year. LAB import is expected to decline to 127 KT in 2016-17 before spiking a high of 178 KT in 2015-16. Exports are also expected to decline from 24 KT in 2014-15 to about 2 KT in 2015-16 – almost a 90% fall due to rising imports as a slowdown in production is expected. EO capacity increased from 253 KT in 2014-15 and further is expected to touch 268 KT in the next fiscal. Debottlenecking of EO capacity by RIL in 2012-13 happened and in 2014-15. RIL capacity would also be enhanced from 188 KT in 2014-15 to 203 KT in 2015-16. Demand for EO grew at meagre 0.6% in 2014-15 however it is expected to see an improved growth of around 3.3% in 2015-16 and further to 4% in 2016-17 touching 201 KT.

Elastomers

SBR which accounts for 40% of the total synthetic rubber demand is consumed mostly in the tyre sector. Considering the large amount of SBR that is being consumed in the manufacture of tires and tire products, demand is very much dependent on the automotive industry and tire sectors as a whole. On a positive note, growing use of low-rolling-resistance tires to reduce fuel consumption and decrease CO2 emissions should increase SBR demand. In 2014-15, synthetic rubber demand grew at 5% and is expected to maintain the same growth rate in 2015-16 before improving to 7% in 2016-17. Reliance Industries Ltd. began production at its new 150,000 mt/year SBR plant at Hazira in September last year, which is the largest in India. The plant has capability to produce entire range of dry as well as oil extended grades of emulsion SBR. As shown in table below, SBR demand registered a growth of 7% in 2014-15 and expected to be around 6% in following two years. Imports are expected to significantly reduce by 2016-17 onwards with RIL new capacity coming up to full steam. India is expected to jump three places to become the world’s No.3 car market by 2018. This has fuelled a domestic rush to produce more of the synthetic rubber that is mixed with natural rubber to make tyres. EPDM demand is expected to improve by 2015-16 to a double digit growth of ~21% from a negative growth of 5.7% witnessed in 2014-15. Reliance is the only producer of PBR in India. PBR demand growth rate is expected to improve to 8% by 2016-17 from a low of ~1% in 2014-15.

Aromatics

Overall other key petrochemicals demand in 2014-15 witnessed a growth of 2% and is expected to witness a robust growth of 10% in next fiscal years. Benzene demand witnessed a negative growth of 11% in 2014-15 however is expected to grow at ~5% in 2015-16 with capacity addition lined up by MRPL, IOCL and boost in domestic sales. Exports too are expected to further increase by 2016-17 and touch 1020 KT. Toluene demand registered growth of ~9% in 2014-15 and witness a robust demand growth 18.2% in 2015-16. MXS witnessed a robust growth in demand at 40% in 2014-15. Meanwhile, OX

registered a growth rate of 3.2% in 2014-15. There is no new capacity addition lined up for OX, however, demand is expected to increase to 303 KT in 2015-16.

Fibre Intermediates

In 2014-15, the combined production of fibre intermediates viz. ACN, Caprolactam, PTA and MEG reached 4677 KT of which PTA and MEG constituted 69% and 27% respectively with ACN and Caprolactam together accounting for the remaining 3%. PTA and MEG constituted 52% and 48% of the total 1963 KT fibre intermediates imported in 2013-14. Fibre intermediates exported from India in 2014-15 was 69 KT and is expected to jump to 215 KT in 2015-16 with the addition of new PTA capacity from RIL. ACN had witnessed a robust growth of 27.7% in 2013-14 on the back of pesticide industry doing well however the demand was subdued in 2014-15 and grew at around 4%. PTA import volumes into India (which is another big and growing polyester market in Asia) are also expected to decline after the new plant by Reliance Industries runs at full capacity and touch 115 KT by 2015-16.

IOCL, meanwhile, is taking up detailed feasibility study for 325 ktpa glycol project estimated to cost Rs 3,150 crore. The detailed feasibility report is expected by April 2016. This plant is targeted for commissioning by November 2019. Two more projects have been planned for the petrochemical complex -- 1,200 ktpa PTA plant and petcoke gasification-based synthetic ethanol plant. Both projects are due to be commissioned by September 2021. Caprolactam, which is used to manufacture automobile tyre cord, should benefit from an increase in discretionary spend, once the global economy returns to the growth path. To manufacture one tonne of caprolactam, about a tonne of benzene is required. In 2014-15 demand for caprolactam grew at ~5% and is expected to slow down in coming years to around 1-2%.

ASSOCIATION ACTIVITIES

FTAs

Submission under India-Australia CEPA

CPMA made submission to Joint Industrial Advisor, DCPC highlighting the need to have protection to domestic industry as once tariff concessions are granted to Australia under the CECA, besides new investments, the existing production capacities created by Indian manufacturers with huge investments would be at stake and jeopardize petrochemical products inherent growth potential and undermine its contribution to the national economy

Tariff concessions on petrochemicals under India-Thailand FTA

In response to a communication from the Department of Chemicals & Petrochemicals seeking CPMA’s views on granting tariff concessions on certain petrochemical items under Chapter 39, requested by Thailand for the India-Thailand FTA, CPMA replied and urge the Government not to agree to the Thai



request for market access under zero-for-zero approach under the India-Thailand FTA for the petrochemical items.

Submission under India-Korea CEPA

CPMA made a submission to Director General- Directorate of Revenue Intelligence highlighting the non-compliance of Rules of Origin in imports of styrene butadiene rubber grade 1502 (HS Code – 40021990) and imports of Poly butadiene rubber (HS Code – 40022000) under India-Korea CEPA. CPMA strongly requested to take action against the parties for violating the rules as the regional content was not less than 35% of the FOB value. The same was supported by import data and price data attached along the submission.

Submission under India-Korea CEPA – Impact on Synthetic Rubber Industry

In response to an issue concerning the India-Korea CEPA, CPMA had sent a communication to the DG, Directorate of Revenue Intelligence to bring to notice the goods imported under Indo-Korea CEPA which, did not meet the specific condition of Rules of Origin.

Submission under India-ASEAN FTA

In response to an issue concerning the India-ASEAN FTA, CPMA had sent a communication to the Joint Secretary, Dept. of Commerce – Ministry of Commerce & Industry stating that in the bilateral review of the India-ASEAN FTA Government of India needs to renegotiates the categorization of petrochemical products for the purpose of tariff concessions under the FTA.

Submission under India-PERU FTA

In response to an issue concerning the India-PERU FTA, CPMA had sent a communication to the Joint Secretary (LAC), Dept. of Commerce to bring to notice and negotiate duty-free exports of PE, PP, PET, PSF and PTY from India to Peru during the bilateral FTA negotiations ss there is a complementarity between India and Peru for these products, and it would be mutually beneficial to both the countries.

Submission on anomaly in classification of PVC in FTAs with Malaysia & ASEAN

CPMA made a submission before Directorate of Anti-Dumping & Allied Duties, Ministry of Commerce for review of the classification of PVC in FTAs with Malaysia & ASEAN as domestic industry strongly feels that there is a compelling case for Government of India to revisit, review and renegotiate the categorization of petrochemicals and India’s tariff concession comrnitrnents under the India-ASEAN & India - Malaysia FTAs.

REPRESENTATIONS TO THE GOVERNMENT

Submission on Import of uncompounded PVC resin - clearance under wrong HS code

CPMA made a submission before Joint Secretary – Commerce for review of import of uncompounded PVC resin which was being cleared under wrong HS code and wrong availment of concessional duty on imports was happening from ASEAN which

was causing loss of revenue to GoI. Submission requested to stop this malpractice so that GoI is not deprived of its legitimate revenue and domestic producers of PVC resin are not left to face unjust competition.

Submission on Rubber Industry in India to Parliamentary Standing Committee

CPMA made a submission before Chairman, Parliamentary Standing Committee highlighting how due to zero / low import duty on synthetic rubber and duty concessions allowed to Korea / ASEAN / Singapore / Japan under FTAs, import from these countries have surged. Submission stated, how concessional duty under FTA on synthetic rubber not only affects viability of domestic production but also depresses natural rubber prices which adversely affects returns to the growers, tappers and others associated with the natural rubber industry and substantial revenue loss to government. The Submission urged to review FTAs with Korea, Japan, ASEAN countries incl. Singapore and to explore possibility of excluding synthetic rubbers from tariff concessions. Secondly, levy cess on import of Natural Rubber and Synthetic Rubber to support “Make in India” initiative for five years. Thirdly, provide safeguard duty provisioning to support the domestic industry. Fourthly, eliminate duties on feedstock such as Isoprene, Butadiene & Styrene and lastly incentivize local manufacturing of tyre & rubber goods to capitalize on abundant availability of skilled manpower, technical expertise, availability of both natural & synthetic rubber.

Submission on Foreign Trade Policy

CPMA made a submission to Secretary, Dept. of Commerce highlighting the adverse impact withdrawal of all export incentives like the Focus Market and Focus Product schemes under the new FTP is likely to have on Indian petrochemical exports and made a request to relook at the new MEIS and consider restoring the benefits earlier available to petrochemical exports so that India continues to export petrochemicals.

Submission on Potential industry set up at Chahbahar, Iran

CPMA was asked to take a lead role in preparing report on Potential investment in Chabahar, Iran for Chemicals & Petrochemicals industry in association with other industry forums namely ICC, AMAI, FAI etc. Report was submitted to Ministry of Chemicals & Fertilizers highlighting the details of potential investments in Iran.

Submission on Identification of tariff lines requiring reduction

CPMA made a submission to Director, Department of Chemicals & Petrochemicals requesting to consider renegotiating the categorization of petrochemical products under India’s key FTAs viz the ones with ASEAN, Singapore, Malaysia, Korea and Japan and include these products in the negative list so that these are not subjected to any tariff concessions under the FTAs.

Submission on formulating NTMS

CPMA replied to a letter from Director- PC, Dept. of Chemicals



& Petrochemicals, Ministry of Chemicals & fertilizers giving a list of products for formulation of non-tariff measures.

Submission on exclusion of SBR under India-Thailand CECA

CPMA made a submission to Joint Secretary, Dept. of Commerce, Government of India with reference to the India-Thailand CECA negotiations stating if India offers preferential tariff to Thailand on SBR under the CECA, the recent investments both in private and public sectors will face material retardation and would be facing closure. CPMA requested that SBR be excluded from India’s Offer List to Thailand for preferential tariff under the CECA.

Submission on Interaction with Industry Association

CPMA made a submission before the Under Secretary, Dept. of Chemicals and Petrochemicals requesting to have an interactive meeting with the Hon’ble Minister and brief him on the petrochemical industry and issues facing the industry.

Submission on ID on PET

CPMA made a submission before the Joint Secretary (TRU), Ministry of Finance requesting to consider aligning import duty on PET from the existing 5% to 7.5% to bring it at par with other plastics.

Submission on CD on LNG

CPMA made a submission before the Dept. of Revenue, Ministry of Finance requesting to consider having similar concessional duty on LNG as alternative fuels as Coal etc. allow captive power plants also to import LNG at nil duty similar to power generating plants and remove the disparity.

Submission on Auction of Coal Linkages

CPMA took up the matter of coal linkages on issue reported by its member company having its own captive power plant based on coal. It submitted to Ministry of Coal to retain the existing policy rather than introducing auction of coal linkages/ Fuel Supply Agreements (FSAs) through competitive bidding as a selection process. The current process followed is transparent with clear cut guide lines framed by Central Electricity Authority (CEA) under Ministry of Power including verification for various licences, IEM and actual operating details of the plant supported by physical verification by a team of Coal India

Submission on Adverse Impact of FTAs on the Indian Petrochemical Industry

CPMA made a submission before the Hon’ble Ministry of State for Commerce – Ministry of Commerce and Industry requesting to review all India’s existing FTAs be undertaken. Submission urged that as a general principle key petrochemical tariff lines in chapters 29, 39, 40, 54 and 55 be excluded from tariff concessions under the FTAs currently under negotiation.

Submission on Preparation for India’s Intended Nationally Determined Contributions (INDCs) in the context of 2015 Agreement on Climate Change

CPMA replied to a mail from the Joint Industrial Advisor,

Ministry of Chemicals & Fertilizers, Department of Chemicals & Petrochemicals who was seeking details on petrochemical industry sub-group’s response on green-house gas emission from the sector for different products and technologies. Submission stated as this subsector is very vast and complex producing a very large number of products adopting wide ranging technologies. A study of this nature would demand high and wide knowledge of technologies and processes at different stages which the association is ill equipped to master.

Submission on Rubber Industry in India

CPMA made a submission before Joint Secretary, Ministry of Chemicals & Fertilizers to look into the representation forwarded by one of member companies stating how industry is facing stiff competition from imports from countries namely Vietnam, Korea China, Taiwan, Thailand and Singapore. Letter also stated that 70% of imports are taking place at 2% import duty under India –ASEAN FTA and on the other hand, the import duty on raw materials is 7.5% the other two raw materials, however, attract 2% import duty. The submission urged government to look into increase import duty to 10% on elastomeric yarn and secondly consider reduction of duty to NIL on their raw materials.

Recommendations for development of Petrochemical Industry

CPMA made a submission before the Secretary, Revenue for review of import duties on petrochemical inputs, import duty on polymers and articles of plastics and urged the need for bringing the Indian duty structure closer to developed economies.

REPRESENTATIONS TO CII/FICCI/ASSOCHAM

Submissions on RCEP

CPMA made submissions to National Forums (apart from Ministry of Commerce and DCPC), in reply to their Petrochemical Industry view on RCEP. CPMA replied and requested to consider the product list where no tariff concessions are to be given since there is significant domestic capacity and any import under concessional duty would severely affect domestic production. Letter also mentioned that some products like LDPE and Butyl Rubber for which current import levels are high and significant capacities are being commissioned by domestic manufacturers to meet demand. As these new investments fructify, it is extremely important that these items are excluded from all tariff concessions under the RCEP. Lastly it mentioned India’s offer list (product list) to other RCEP member countries and urged that these be subjected to immediate tariff elimination. Lastly the letter also stated that India would like to seek preferential access to RCEP member country markets with full duty concession for the products which have surplus capacities and these products needs to be exported.

Submission to FICCI / CII / ASSOCHAM for Union Budget 2015-16

CPMA made submission to National Forums for review of import duties on petrochemical inputs; import duty on polymers urged the need for bringing the Indian duty structure closer



to developed economies. Due to adverse fiscal and regulatory environment, investment in petrochemical sector has witnessed significant deceleration. As a result, downstream industry is rapidly becoming more import dependent depriving local value addition and employment. The submission retreated the need to retain the import duty on Polymers like PE, PP, PVC and PS at 7.5%. In addition import duty of PET, which is a plastic raw-material, where India has large capacity and is a net exporter, is still at 5%. The country is adding large capacity of PTA, an input for production of PET. Duty on PTA is low at 5% and needs to be at par with other commodity plastics which is 7.5%. The submission asked for reduction of import duty Naphtha to 2.5% at par with other petrochemical feedstock. Import tariff on key petrochemical inputs EDC, VCM and Styrene may be brought down from 2% to zero. The submission also mentioned to raise the import duty on ABS and SAN from existing 5% to 7.5% and MEG & PTA be raised from existing level of 5% to 7.5% to rationalize the tariff structure. Submission also requested reduction in the excise duty on MMF and Yarns to increase the domestic consumption. Present rate of 12.5% is very high and discriminates MMF with Cotton which has zero excise duty which makes man made textiles, used by masses, expensive.

23rd SAC Meeting on JPMA

CPMA attended the 23rd SAC Meeting on JPMA held on 29th May 2015 under the chairmanship of the Textile Secretary. The meeting was attended by the Jute Commissioner, Representatives from Ministries of Food, Consumer Affairs, FCI, State Agriculture Depts., IJMA, AIFTMA, etc. CPMA sent a proposal of recommendations on exemptions in compulsory packaging for the Jute Year 2015-16 for approval by GOI.

Support for Sector Skill Development Council for Chemicals & Petrochemicals

CPMA is extending its support for setting up of the above Council which is being promoted by FICCI and aided by NSDC financially.

Summary of BIS Activities, TX23 Committee supported by CPMA

23rd Meeting of BIS TX23 Committee on Textile Materials Made from Polyolefins (Excluding Cordage) Sectional Committee -TX 23, held at IIP, Mumbai on 18th March2016.

l Textiles - High density polyethylene (HDPE)/polypropylene (PP) woven sacks for packing fertilizers – Specification’ (Fifth revision of IS 9755:2003) [Doc: TX 23 (1249)] discussed and finalized. The standard is published.

l Textiles - High density polyethylene (HDPE)/polypropylene (PP) woven sacks for packing cement – Specification (Third revision of IS 11652:2000) [Doc: TX 23 (1250)] and, new proposed standard on Textiles – Polypropylene (PP) block bottom valve sacks for packaging of cement – Specification [Doc: TX 23 (1303)] discussed and a sub-committee of selected representatives formed to further discuss this draft standard & finalize

l IS7903:2011 Textiles — Tarpaulins made from high density

polyethylene woven fabric — Specification [Doc: TX 23 (1346)] discussed. Additional testing suggested. Committee to review the same next meeting & finalize draft standard for publication.

l New proposed standard on Textiles - High density polyethylene (HDPE)/polypropylene (PP) woven sacks for packing Polymer materials – Specification [Doc: TX 23 (1367)] discussed. The standard is already circulated to committee members for comments. The draft standard will be taken up for discussion & finalization in next TX23 committee meeting.

BIS TX23 Sub-Committee Meeting discussed Cement packing related standards to review new draft standards ‘Textiles –Polypropylene (PP) block bottom valve sacks for packaging of cement – Specification [Doc: TX 23 (1303)] and, revision of IS 11652:2000 ‘Textiles - High density polyethylene (HDPE)/polypropylene (PP) woven sacks for packing cement – Specification [Doc: TX 23 (1250)]’ and finalized both draft standards mentioned above. The revised draft standards will be circulated to TX23 committee members for comments before publication.

CONFERENCES supported / jointly organised by CPMAVinyls India 2015

The 5th Vinyl India conference, organized by ElitePlus Business Services and CPMA on 10th-11th April at Hotel Grand Hyatt, Mumbai. Like all previous Vinyl conferences, this was a great success and attracted even higher participation. The Vinyl India 2015 attracted approx. 700 delegates from 15 countries and 335 companies. Conference had 43 eminent speakers representing entire chain of Vinyl Industry, Economy and Government sectors.

Injection Moulding & Blow Moulding International Conference – 2015

The 3rd Injection, Blow Moulding & PET International Conference, brought by Elite Plus Business Services and CPMA, was held at Mumbai on 20th and 21st August 2015. Like previous 2 IMBM conferences, this third edition was also a grand success and attracted over 540 attendees from 311 companies representing 11 countries.

Specialty Films & Flexible Packaging Global Conference 2015

The 4th Speciality Films and Flexible Packaging Global Conference – 2015 was held at Hotel Grand Hyatt in Mumbai on 15th - 16th September 2015. The Summit was organized by ElitePlus++ Business Services and CPMA, with over 800 delegates representing approximately 340 companies from over 25 countries. The conference provided a very high level platform to producers of raw materials, both Indian and overseas, all leading converting machinery manufactures from India, EU, South East and Far East, all major converters covering blown films (multilayers), cast and BOPP and BOPET, printing, lamination and post extrusion finishing including automation in material handling and the major end-users from food, pharma, personal care and agri sectors.



Indian Petrochem - 2015

CPMA joined Elite Conferences Pvt. Ltd. in co-organising an International Conference “Indian Petrochem”. Over the years, the popularity of this conference has increased significantly and emerged as a unique forum for interaction between global and Indian petrochem industry. The “Indian Petrochem - 2015” was held on 3rd & 4th November 2015 at Hotel ‘The Lalit’, Mumbai. This conference attracts a wide audience with 300-350 participants from the Indian and global petrochemical fraternity. The focus of this conference was on Indian Petrochemical market, particular the olefins and aromatic chains. The Keynote Address was given by Mr. Vipul Shah, COO – Petrochemicals, Reliance Industries wherein he charted the way forward for the petrochemical industry in India.

India Energy Week – Argus ElitePlus Conference

The first comprehensive energy Summit in India. Attendees have adjudged it as the most exciting and productive energy summit in India. Over 220 attendees representing approximately 93 organizations from 17 countries across the Globe attended the Summit including Switzerland, US, Singapore, Russia, Saudi Arabia, Nigeria, South Africa en all. Highlights of India Energy Week, which aims to draw the international investor to India, included a high-profile conference over two days, at which both the Energy Minister Shri Dharmendra Pradhan, Hon’ble Minister - MOPG and the Power Minister Shri Piyush Goyal made addresses. The conference also featured many captains of the Indian and international energy industry including the International Gas Union, BP, Middle East, the World Economic Forum, IOCl, HPCL, GAIL, RIL, Coal India etc.

CPMA WEBSITECPMA Web statistics shows substantial increase in viewership

from a level of less than 1 lac to 2.26 lac in a month with highest hits registered in April 2015. In fact, maximum hits were registered in the year 2015-16. Every month on an average 3000 new / unique visitors got added.

ICPE (Indian Centre of Plastics in Environment) promoted by CPMA members: Brief on activities undertaken during 2015-16SEMINARS / CONFERENCES / WORKSHOPS / EXHIBITIONS:

Participated in the following Seminars / Conferences / Workshops during the period:

1. IPLEX – 2015 Exhibition at Bangalore International Exhibition Centre from 25th to 27th September, 2015

ICPE participated in the 6th International Plastic Exposition 2015 Exhibition held during 25th to 27th September, 2015 at Bangalore International Exhibition Centre, Karnataka. ICPE had focused its Awareness Programme on the Benefits of Plastics, Issues related to the handling of the waste generated after the use of plastics-mainly from the packaging sector and the scientific solutions thereof with the help of Case Studies, by way of Display Panels, Realities of Plastics were brought forth to the public view. Panels on other methods of plastics recycling also were on display and screened short Awareness Films on the benefits of plastics, various issues and solutions, throughout the exhibition period. Visitors include, Students and delegates from various places of India and abroad.

2. Seminar/Workshop on Role of Women in Swachh Bharat Abhiyan on 1st October, 2015 at SNDT Women’s University, Juhu, Mumbai

ICPE ENVIS Centre and NSWAI jointly organised a Workshop

Month Unique Visitors Number of Visits Pages Hits Bandwidth

Apr 2015 3,718 5,453 21,100 226,761 16.33 GB

May 2015 3,348 4,960 17,224 194,568 15.13 GB

Jun 2015 3,187 4,509 17,758 175,467 14.73 GB

Jul 2015 3,021 4,869 22,074 182,007 10.80 GB

Aug 2015 3,160 4,863 33,814 197,572 12.79 GB

Sep 2015 3,335 4,712 21,140 198,358 12.30 GB

Oct 2015 3,586 5,121 20,825 207,440 11.80 GB

Nov 2015 3,346 4,980 16,464 180,700 11.01 GB

Dec 2015 3,093 4,508 13,107 162,648 10.18 GB

Jan 2016 3,105 4,554 14,510 155,270 9.53 GB

Feb 2016 3,193 4,579 14,738 168,240 9.73 GB

Mar 2016 3,763 5,645 19,086 197,048 13.16 GB

Total 33,212 69,356 271,695 2,647,016 178.17 GB



on the theme – Role of Women in Swatchh Bharat Abhiyan with the support of Department of Resource Management, SNDT Women’s University, Mumbai. Smt. Seema Redkar, Ex-OSD, Solid Waste Management Cell of Brihanmumbai Municipal Corporation (BMC) was a Guest Speaker in the Workshop. In the Workshop Shri Tushar K Bandopadhyay, Technical Director-ICPE explained how all types of plastics could be recycled by one process or other.

3. 6th International Packaging Exhibition India Pack 2015 from 08th – 11th October, 2015 at Mumbai – India.

ICPE had participated in the 6th International Packaging Exhibition, 2015 held during October 08th – 11th, 2015 at Bombay Exhibition Centre, Goregaon, Mumbai. Different types of plastics recycling systems including Co-processing of plastics waste in Cement Kilens, Pyrolysis to fuel and Use of Plastics Waste for Construction of Bitumen Roads were explained by way of display panels, Case study on ICPE and NGO works on segregation projects on Dry Waste from the source of waste generation was also displayed.

4. Industrial Exhibition PLEXPO-2016 from 07th – 11th January 2016 at Gandhinagar, Gujarat

ICPE ENVIS Centre had participated in an Industrial Exhibition Plexpo – 2016 organized by Gujarat State Plastics Manufacturers ‘Association (GSPMA) at Gandhinagar, Gujarat from 05th – 12th January 2016. Shri Nitin Bhai Patel, Minister of Health, Medical Education, Family Welfare, Gujarat visited ICPE ENVIS Campaign and appreciated the ICPE Stall. The stall was provided by GSPMA free of cost and also borne the expenses for printing of the ICPE Display Materials. An estimated ten thousand visitors including students also visited ICPE stall and interacted with ICPE team. ICPE’s Awareness Films were screened with the Stall continuously and easy to understand printed leaflets on source segregations of plastics and other dry waste were distributed among the visitors.

5. National Evaluation-Cum-Interaction Workshop from 17th – 19th February 2015 at New Delhi.

ICPE ENVIS Centre had participated the National Evaluation cum Interaction Workshop was conducted by Ministry of Environment & Forest & Climate Change (MoEF &CC) at New Delhi during 17th – 19th February 2016. The Union Minister and the Secretary-MoEF & CC was present during the Workshop. ICPE ENVIS Centre has an important role in respect of collection and dissemination of relevant environmental information on Plastics to all stake holders.

AWARENESS PROGRAMMES FOR SCHOOL / COLLEGE STUDENTS ICPE regularly conducts awareness programmes in schools and colleges with emphasis on developing right attitude towards

plastics in general and encouraging the students to inculcate the habit of anti-littering and segregation of waste at homes (source) into Dry and Wet to facilitate solid waste management. In 2015 -16 Academic Session, ICPE had organized Awareness Programmes at:

1. Anjum-I-Islam Jr. College, Mumbai on 14th December 2015

2. Mahatma Gandhi Vidyamandi, Mumbai on 31st December 2015

3. Gurukul Grand Union High School and Junior College, Ambernath, on 23rd January, 2016

4 Yogeshwar Hindi Vidyalaya, Ambernath on 27th January, 2016

The school and college principals appreciated ICPE effort for organizing such awareness programmes among the student. The School/College authorities have requested ICE for visiting again for conduct such programmes in future.

LEGAL CASES IN SUPREME COURT/HIGH COURT/NGT DELHI AGAINST USE OF PLASTICS All Technical points in all cases were prepared by ICPE along with all the relevant supporting documents as well as financial support also provided.

WASTE MANAGEMENT PROJECTS – ICPE INITIATIVE1. “Zero Waste Management” Project at New Moti Baugh

Colony, New Delhi

ICPE has provided financial support by bearing the cost of the Plastics Waste to Fuel Conversion plant and also bearing part of the Capital Cost for setting up the overall Project. ICPE is providing Ad-hoc assistance for running the Feedstock Recycling Plant in every month.

2. Segregation of Waste at Source Projects at Select Wards in Mumbai

The projects have been successfully carried out in select Wards in Mumbai with the initiatives of ICPE in association with some NGOs and with the assistance of Brihanmumbai Municipal Corporation since 2002-03. The segregation at source is gaining mass support where awareness programmes were conducted.

NEWSLETTERSFour editions of ICPE ENVIS Eco-Echoes Newsletters were published during the FY and distributed to selected Government Officials includes in MoEF, DCPC, Centre & State Pollution Control Boards, BIS, and Academic Institutions, Associations, all the ENVIS Centres etc. The Newsletters are uploaded in the websites also.

ICPE WEBSITEThe changes / up gradation has been made in the ICPE ENVIS website www.icpeenvis.nic.in which has a large number of visitors.



A C K N O W L E D G E M E N T S

The Managing Committee would like to place on record its appreciation and gratitude to:l All members of CPMA and its Committees for their co-operation and guidance on the affairs of the

Associationl Industry Affairs Group of Reliance Industries Limited for their whole-hearted support and involvement

in the activities of the Associationl Various Ministries and Departments of the Governments of India and State Governments for their

helpful attitude to the industryl Secretary of the Association and members of the staff for their services

On behalf of the Managing Committee

CHEMICALS & PETROCHEMICALS MANUFACTURERS’ ASSOCIATION

Sd/-

(K. G. Ramanathan)President



AUDITOR’S REPORT

To the Members of CHEMICALS & PETROCHEMICALS MANUFACTURERS’ ASSOCIATION

Report on the Financial Statements

We have audited the accompanying financial statements of CHEMICALS & PETROCHEMICALS MANUFACTURES ASSOCIATION, which comprise the Balance Sheet of as at March 31, 2016, and the Statement of Income & Expenditure for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial StatementsManagement is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance of the association in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Association for preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:(a) In the case of the Balance Sheet, of the state of affairs of the Association as at March 31st, 2016(b) In the case of the Statement of Income & Expenditure, of the surplus for the year ended on that date;

Further to above we report that:a. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the

purpose of our audit;b. In our opinion proper books of account as required by law have been kept by the association so far as appears from our

examination of those books;c. The Balance sheet, and Statement of Income & Expenditure dealt with by this report are in agreement with the books of

account.d. In our opinion, the Balance Sheet and Statement of Income & Expenditure comply with the Accounting Standards,

For R.S.GUPTA & CO. Chartered accountant FRN: 001216N

Sd/- (Saurabh Gupta) Partner M.No. 098371Place:- New DelhiDate:- 16.08.2016




1. We hereby certify that the above statement is true & fair to the best of our knowledge and behalf.

2. Balances is regrouped & remerged wherever required.

Sd/- Sd/- Sd/- Mahinder Singh KG Ramanathan Kamal Nanavaty Secretary General President Vice President

Place : New DelhiDate : 16.08.2016

BALANCE SHEET PREVIOUS YEAR LIABILITIES CURRENT YEAR AMT. (Rs.) AMT.(Rs.)

CAPITAL FUNDS: - 1 160,000.00 160,000.00 As per last Balance Sheet 160,000.00 160,000.00 APIC Capital Funds:- 28,589,554.00 As Per Last Balance Sheet 28,753,499.00 3,905,732.00 Add:- Addition During the year 7,707,170.00 28,753,499.00 (3,741,787.00) Less:- Utilised During the year (4,169,520.00) 32,291,149.00 R&D & I A R I STUDY FUND: - 1,754,898.00 As per last balance Sheet 1,754,898.00 - Add:- Addition during the year - 1,754,898.00 - Less: Utilised during the year - 1,754,898.00 CURRENT LIABILITIES & PROVISIONS: - 700,000.00 Advance Recd. From Member Co. - 100,408.00 TDS Payable 57,758.00 81,099.00 Outstanding Expenses/Liabilities 90,915.00 31,200.00 Audit Fee Payable 39,375.00 37,080.00 Liabilities (others) 13,165.00 27,773.00 Sundry creditors 296,910.00 977,560.00 498,123.00 GENERAL FUND: - 876,340.00 As per last Balance Sheet 4,413,202.00 3,536,862.00 Add/Less: excess of Income over 2,186,661.00 expenditure/excess of expenditure over income 4,413,202.00 6,599,863.00 PROFIT & LOSS :- 3,536,862.00 Current Year 2,186,661.00 - 3,536,862.00 Less :Transferred 2,186,661.00 -

36,059,159.00 TOTAL 41,304,033.00



Auditor’s Report

As per our separate report of even date attached.

For R. S. Gupta & Co.

Chartered Accountants

Sd/-Saurabh Gupta

(Partner)

M. No.098371

AS AT 31st MARCH, 2016 PREVIOUS YEAR ASSETS CURRENT YEAR

AMT. (Rs.) AMT.(Rs.)

FIXED ASSETS: - 403,851.00 403,851.00 As per Schedule annexed 326,509.00 326,509.00 INVESTMENTS: - 24,282,318.00 Fixed Deposits 26,937,921.00 25,453,776.00 1,171,458.00 Add: Interest Accured on FDR 1,334,609.00 28,272,530.00

CURR. ASSETS, LOANS & ADVs:- 2,692,148.00 Other Current Assets 3,977,918.00 3,977,918.00

CASH & BANK BALANCES: - 2,692,148.00 6,998.00 Cash in hand 3,792.00 4,279,247.68 SBI Current A/c 5,786,980.00 3,223,137.89 HDFC Current A/c 2,936,304.00 8,727,076.00 7,509,384.00

36,059,159.00 TOTAL 41,304,033.00



PREVIOUS CURRENT YEAR INCOME YEAR Amt. Rs. Amt. Rs.

PREVIOUS CURRENT YEAR EXPENDITURE YEAR Amt. Rs. Amt. Rs.


INCOME & EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31st MARCH, 2016

60,000.00 To Accountancy Chgs. 60,000.00

34,200.00 To Audit Fees 43,125.00

23,238.00 To Affiliation Fee -

11,424.00 To Bank Charges 10,211.00

44,755.00 To Books, Newspapers & 12,632.00 Periodicals etc.

48,000.00 To Businees Promotion & - Meeting Expenses

276,777.00 To Car & Other Hire Charges 169,770.00

3,600.00 To Civil & Plumbing Chgs -

8,315.00 To Computer Running & 3,600.00 Software Exp.

365,550.00 To Contractor Charges 389,400.00

172,486.00 To Tour, Travelling & 1,090,286.00 Conveyance

153,263.00 To Depreciation on 83,840.00 Fixed Assets

- To Foreign Excchange Loss 21,341.00

58,791.00 To Electricity & Water charges 66,168.00

199,363.00 To Internet & Telephone Exp. 196,686.00

73,139.00 To Interest paid- TDS/Service 1,762.00

- To Insurance Expense 1,420.00

296,689.00 To Meeting & Seminar 350,534.00

- To Membership Fee 39,789.00

3,021.00 To Miscellaneous Expense 65,828.00

280,062.00 To Office Maintenance Exp. 309,552.00

1,280,904.00 To Office Rent 1,341,893.00

44,355.00 To Postage & Courier 49,539.00

193,354.00 To Printing & Stationery 167,977.00

4,245,911.00 To Professional Charges 380,576.00

3,997,500.00 To Salary, Wages & Bonus 1,851,617.00

6,675,000.00 By Subscription received 6,900,000.00 from Member Companies

291,430.00 By Interest on Fixed Deposits 297,200.00

- By Interest on Bank

- By Interest on Income Tax 94,611.00

7,667,200.00 By Subscription 962,121.00 (Supplementary)

921,336.00 By Royalty & Branding Charges 950,000.00

- By Other Receipts -

- By Sponsorship Fee 100,000.00

- By Sundry Balance written back 5,798.00

20,000.00 By Registration fees -

- By Short & Excess 3,019.00



PREVIOUS CURRENT YEAR EXPENDITURE YEAR Amt. Rs. Amt. Rs.

PREVIOUS CURRENT YEAR INCOME YEAR Amt. Rs. Amt. Rs.

20,289.00 To Staff Welfare 119,656.00

26,997.00 To Sundry Bal. Written off 78,403.00

3,761.00 To Short & Excess -

112,360.00 To Subscription Charges/Fee 133,146.00

- To Sponsorship Fee 87,337.00

3,536,862.00 To Excess of Income over 2,186,661.00 Expenditure c/d to Balance Sheet

15,574,966.00 TOTAL 9,312,749.00 15,574,966.00 TOTAL 9,312,749.00


Place : New Delhi

Date : 16.08.2016

Auditor’s Report

As per our separate report of even date attached.



Sd/-Saurabh Gupta

(Partner)

M. No.098371




SCHEDULE OF FIXED ASSETS ANNEXED TO & FORMING PART OF THE BALANCE SHEET

AS AT 31st MARCH, 2016


Place : New Delhi

Date : 16.08.2016



Sd/-Saurabh Gupta

(Partner)

M. No.098371

1 Air Conditioner 101,881.00 15% - - - 15,282.00 86,599.00

2 Furniture & Fixture 186,749.00 10% - - - 18,675.00 168,074.00

3 Computer 19,221.00 60% - - - 11,533.00 7,688.00

4 Radiant Heater 2,122.00 15% - - - 318.00 1,804.00

5 Locker 17,086.00 10% - - - 1,709.00 15,377.00

6 Fire Extinguisher 4,819.00 15% - - - 723.00 4,096.00

7 Mobile 12,736.00 15% 6,498.00 - - 2,885.00 16,349.00

8 Printer 1,392.00 60% - - - 836.00 556.00

9 Stablizer 6,286.00 15% - - - 943.00 5,343.00

10 I Pad 51,559.00 60% - - - 30,936.00 20,623.00

TOTAL 403,851.00 6,498.00 - - 83,840.00 326,509.00

W.D.V. AS

ADDITION ADDITION DELETION

DEPRECIATION W.D.V. AS

S. NAME OF ON 1.4.2015

DEP. DURING DURING DURING

FOR THE ON 31.3.2016

No. THE ASSETS (Rs.)

RATE THE YEAR THE YEAR THE YEAR

YEAR (Rs.) (Rs.)

(Rs.) 1st Half (Rs.) 2nd Half (Rs.)



Notes to the Accounts & Significant Accounting Policies

1. Significant Accounting Policies

a) Basis of Preparation

These financial statements have been prepared and presented under the historical cost convention method on the accrual basis of accounting and in accordance with the Accounting Standards issued by the Institute of Chartered Accountants of India and other generally accepted accounting principles and practices prevailing in India as applied consistently by the Association. However, Subscription is recognised only on receipt basis.

b) Use of estimates:

The presentation of financial statements requires estimates and assumption to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/materialize.

c) Investments

Current investments are valued at lower of cost and market value.

2. Depreciation has been charges on the written down value of the assets as per the rates prescribed under Income Tax Act 1961.

3. Previous year figures have been regrouped or reclassified, wherever necessary, to conform to current year’s classification.

For Chemical & Petrochemical Manufacturer’s Association

Sd/- Sd/- Sd/- President Secretary General Vice President

Place : New Delhi Place : New Delhi Place : New DelhiDate : 16.08.2016 Date : 16.08.2016 Date : 16.08.2016



N O T E S

CPMA MEMBERS

Chemplast Sanmar Ltd

DCM Shriram Ltd

DCW Ltd

Engineers India Ltd

Finolex Industries Ltd

GAIL India Ltd

Gujarat State Fertilizers & Chemicals Ltd

Haldia Petrochemicals Ltd

HPCL – Mittal Energy Ltd

Indian Oil Corporation Ltd

Indian Synthetic Rubber Ltd

INEOS Styrolution India Ltd

LG Polymers (India) Private Ltd

Mangalore Refinery & Petrochemicals Ltd

MCC PTA India Corp. Pvt. Ltd.

ONGC Petro Additions Ltd

Reliance Industries Ltd

Supreme Petrochem Ltd

Tamilnadu Petroproducts Ltd

Chemicals & PetrochemicalsManufacturers’ Association

CPMA

708, 7th Floor, Kailash Building 26, Kasturba Gandhi Marg, New Delhi - 110001Ph.: +91-11-43598337, 43612198 l Fax: + 91-11-43598337

Email: [email protected] l Website: www.cpmaindia.com

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