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Directors Report of Assam Petrochemicals Ltd.

Mar 31, 2014

Dear Members,

The Directors take pleasure in presenting the 43rd Annual Report of the company for the Financial Year 2013 - 2014 along with the Audited Financial Statements for the year ending on March 31, 2014.

The Financial Year 2013-14 started with new challenges and expectations. In the backdrop of the sluggish economy and growth of Industrial Sector in the country, the Company performed reasonably well during the year under review. The Company could stand before challenges by achieving the highest turnover in the history of the company.

Financial Performance

In the Financial Year 2013-14 the company posted turnover of Rs. 107.58 crore as compared to Rs. 90.29 crore in the last financial year, which is highest ever achieved by the company in its history. Your company has for the first time achieved turn over more than Rs. 100 Crore. The sales turnoverjumped by 19.14% over the last financial year. The year FY 2013-14 has reported Profit before prior period, exceptional and extraordinary items and tax at Rs. 11.12 crores as compared to Rs. 12.20 Crore in the last financial year. Profit Before Tax (PBT) earned by the company during the year increased by 146.46% from Rs. 4.67 Crore to Rs. 11.51 Crore. Similarly, the Profit After Tax (PAT) increased by 132% from Rs. 4.04 crores to Rs. 9.38 Crore.

The financial results for the financial year 2013-14 compared to those of the previous year are summarized as below:

Financial Results: (Rs. in Lacs)

Particulars As at March 31, As at March 31, 2014 2013 Rs. Rs.

Revenue from Operations 10,758.01 9,029.65

Less: Excise Duty 1,110.59 944.58

Revenue from Operations (NET) 9,647.41 8,085.08

Other Income 637.22 620.71

Total Income 10,284.63 8,705.78

Gross Profit/Loss 1,373.21 1,491.80

Less : Depreciation and amortization 239.95 232.51

Finance Cost 20.74 38.58 Profit/Loss for the year before prior period adjustment, exceptional and extraordinary items 1,112.51 1,220.71

Less: (a) Exceptional Item -0.87 762.58

(b) Adjustment of prior period items -37.79 -8.60

Profit Before Tax 1,151.17 466.73

Less:Tax Expenses

(a) Deferred Tax -130.44 8.61

(b) Excess Provision for income tax written back 0.63 4.92

(c) Current tax 342.63 49.20

Profit /Loss for the year after Taxation 938.35 404.01

Balance brought forward from previous year -842.11 -1,130.02

Amount available for appropriations 96.24 -726.02 Appropriations

Proposed Dividend 114.00 91.20

Tax on Dividend 19.37 14.79

Transferred to General Reserve 23.46 10.10

Balance Carried to Balance Sheet -60.60 -842.11

Earnings Per Share (EPS) (in Rs.) 10.29 4.43

Operating Results

The Methanol Plant of the company is about twenty six year old. This Plant requires frequent maintenance of its equipments to maintain production. Frequent power cut by the Assam State Power Distribution Company Limited and routine shut down for maintenance affected optimum utilization of the Methanol Plant during the Financial Year 2013-14. The capacity utilisation of the Formalin plant is dependant purely on market dynamics. Company produces Formalin according to demand of the market. The Methanol Plant and Formalin Plant capacity utilisation were 87% and 91% respectively during the FY 2013-14.

The capacity of the Formalin Plant was revamped during the financial year 2012-13 from enhancement of its production capacity from 100 TPD to 125 TPD.

The plant operating highlights are given as under:

Plant Production in MT

Annual Capacity FY 13 - 14 FY 12 - 13

Methanol 33,000 28,822 33,547

Formalin 41,250 37,363 34,877

Capacity Utilisation of Plants:

Methanol 87% 102%

Formalin 91% 85%

Sales & Marketing

The company is marketing its products in North Indian States, West Bengal and North Eastern States and exporting to Nepal, Bhutan and Bangladesh. The Company is giving importance to export its products for earning foreign exchange

The company achieved highest sales turnover during the Financial Year 2013-14. The company sold 8028.124 MT Methanol during the year. The favourable market price had helped in achieving the sales turmover of Rs. 107 cr during the year.

The area wise sales quantity of the company''s products in the year 2013-14 vis-a-vis in the previous year 2012-13 are as follows:

Area Formalin (In MT)

FY 13 - 14 FY12 - 13

North East Region 8,010.510 6,914.352

North Bengal 8,678.220 5,695.010

South Bengal 6,980.100 8,810.100

Purnea / Adjacent Area 3,924.530 5,069.220

Patna 9,322.050 10,747.900

South Bihar / Others 308.290 255.140

Bhutan 1,046.620 1,244.990

Nepal & Bangladesh 2,233.070 1,955.120

Total 40,503.390 40,691.832

Methanol (In MT) FY 13 - 14 FY12 - 13

North East Region 992.46 1,024.53

West Bengal 1923.43 2,865.78

North India 3846.62 8,174.93

Export 1265.61 1,582.82

Total 8,028.12 13,648.06

Project & Development Activities

As informed in our earlier reports the company is implementing 500 TPD Methanol and 200 TPD Acetic Acid project adjacent to the existing plants at Namrup. During the Financial Year 2013-14, the company achieved certain significant milestones in implementation. The major achievements are given as under:

A. Cabinet approval for the project:

The Govt. of Assam accorded the much awaited Cabinet approval for implementation of the Integrated 500 TPD Methanol-200 TPD Acetic Acid Project on 14thFebruary, 2014.

B. Technology selection and lepcm contract for methanol plant:

The company selected Holder Topsoe, Denmark as Technology supplier for setting up the 500 TPD Methanol Plant. Engineers India Limited has been selected for award of LEPCM Contract for the Methanol Plant in the Integrated Methanol-Acetic Acid Project.

C. Technology selection for acetic acid plant:

After marathon search for Acetic Acid technology globally, your director have selected Beijing Zeihua Chemical Engineering Co. Ltd. China for Lecence Erreetui, procurement of Proprietary items and supervision of Ereetuin and commissioning of 200TPD Acetic Acid Plant.

D. Financial closure for the project:

With the confirmation received from Oil India Ltd.(49%) and Government of Assam and its companies (51%) for the project for the equity portion of the capital amounting Rs. 393 Crore and signing of the agreement with banks for the entire loan component of the capital amounting Rs. 635 Crore where SBI will work as the lead bank for the consortium of bank extending the loans, the financial closure for the project has been achieved.

E. Environmental clearance for the project and consent to establish from pollution control board, assam Ministry of Environment and Forest, Govt. of India, has accorded Environmental Clearance for the integrated projects vide letter no. F. No. J-11011/469/2011-IA II (I) dated 19th May 2014.

The consent to establish for the project has also been received from Pollution Control Board, Assam on 02.07.2014.

F. Acquisition of land for the project:

(i) Land for the main project site adjucent to the existing plant has been ear marked and site grading works are in progress.

(ii) The No Objection Certificate for acquiring and purchase of land situated within Dilli Tea Estate, required for setting up of raw water pumping station, has been obtained from Govt. of Assam.

G. Natural gas sale and purchase agreement:

Pursuant to the allocation of 0.5 MMCMD Natural Gas by Oil India Limited vide letter no. PLN/1-5/8-418 dated18.12.2013, Natural Gas Sale and Purchase agreement was executed between Oil India Limited and Assam Petro-Chemicals Limited on 26th December, 2013.

Dividend

Keeping in view the Company''s performance and long term growth strategy, your directors have recommended 12.5% dividend on the paid up share capital of the company i.e. Rs. 1.25 per equity share for the year ended on 31st March, 2014. The dividend will be paid subject to approval of the shareholders in the ensuing Annual General Meeting.

Board of Directors

The board of the Company is constituted as per the requirement of Clause 49 of the Listing Agreement and the Companies Act. Shri Rameswar Dhanowar, Shri Utpal Borah and Shri Sanjeev Kr. Choubey were reappointed in the 42nd Annual General Meeting of the company as per Section 256 of the Companies Act, 1956. There were no changes in the composition of the Board of Directors since last Annual General Meeting.

Pursuant to Section 152 of the Companies Act, 2013 Shri Ram Tirath Jindal, Shri Paban Kr. Borthakur and Shri Amrendra Nath Das directors will retire by rotation in the ensuing Annual General Meeting and being eligible, offer themselves for reappointment as directors at the same meeting.

As required under Clause 49 of the Listing Agreement, brief profiles of the directors who are proposed to be reappointment at the ensuing Annual General Meeting are provided in the Corporate Governance Report.

Statutory Auditors

Pursuant to section 619 (2) of the Companies Act, 1956 the Comptroller and Auditor General of India appointed M/s L.K. Kejriwal & Co., Guwahati as the statutory auditors of the company for the Financial Year 2013-14. M/s L.K. Kejriwal & Co. will hold the office till the end of ensuing Annual General Meeting.

The Comptroller and Auditor General of India has not appointed any Statutory Auditors of the Company for the FY 2014-15 till the date of this report.

Human Resource and Safety Management

Human resources are the key drivers of sustainable growth and development of any organisation. Keeping that in mind your Directors have been focusing on capacity building of employees trough training and development. During the financial year 2013-14 the company organised several inhouse training programmes and also sent its employees for attending workshops and seminars organized by other organizations. The Company organized some sports and cultural activities involving employee''s spouse and children as a part of its employee engagement initiatives at Namrup, has helped in developing sense of belongingness, developing positive work culture, etc. within the organization.

The manpower strength of the Company as on 31.03.2014 was 363 out of which 216 were unionised cadre and remaining 147 nos. were in the Executive Cadre.

During the FY 2013-14, the company integrated Safety, Health and Environment Management System for improvement in the areas of prevention of accidents, control of environmental hazards and protection of health in compliance with applicable Safety, Health and Environment (SHE) legislation and standards. The company also organized various in-house and external training programme on Safety, Health and Environment. The company celebrated World Environment Day, Safety Awareness Week, National Safety Day, Earth Hour during the year 2013-14.

Industrial Relations

Your company has been continuously maintaining a peaceful and harmonious relationship between the management and the workers of the company. All the issues that were raised by the Workers'' Union of the company were resolved in transparent manner through discussion. There was no incident of industrial unrest during the year 2013-14.

Particulars of Employees under Section 217(2A)

A list of the employees of the company receiving remuneration and requiring disclosure of particulars under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended is annexed herewith.

Corporate Social Responsibility

The Company is committed towards promoting education, socio-cultural and economic development of the locality by providing free drinking water, education to children upto Class X, Medical & Health checkup facilities to the resident of neighboring villages.

The Board of Directors of the company has constituted a Corporate Social Responsibility Committee of the Board as per requirements of the Companies Act, 2013.

Energy Conservation, Technology Absorption and Foreign Exchange Earning and Outgo:

The additional information in respect of the energy conservation, technology absorption and foreign exchange earnings and outgo, as required by the Companies Act, 1956 as amended by the Companies (Amendment) Act, 1988 is set out in the statement annexed hereto as Annexure ''A''.

Particulars as to Subsidiary

Your company is having a subsidiary company viz., M/s Pragjyotish Fertilizers & Chemicals Ltd. (PFCL). The subsidiary company has not been carrying out any business during the financial year 2013-14. Pragjyotish Fertilizers & Chemicals Ltd. is under winding-up process. The Annual accounts for the Financial Year 2013-14 have not been finalized by PFCL yet and therefore the same could not be enclosed herewith. It is therefore the attachments specified in Section 2012 of the Act could not attached with the Financial Statements of the holding company. As soon as the accounts of the subsidiary are received, that will be forwarded to the shareholders of Assam Petro-Chemicals Ltd.

DIRECTORS RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217(2AA) OF THE COMPANIES ACT, 1956

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 with respect to the Directors'' Responsibility Statement, it is hereby confirmed that:

(i) In the preparation of the annual accounts for the financial year ended 31st March, 2014, all applicable accounting standards had been followed, along with proper explanations relating to material departures;

(ii) 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 as on 31st March 2014 and of the profit of the Company for the year ended on that date;

(iii) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv)The Directors had prepared the accounts for the financial year ended 31st March, 2014 on a ''going concern'' basis.

Compliance Certificate

A certificate from a Company Secretary in Whole Time Practice regarding compliance of conditions of the Corporate Governance as stipulated under Clause 49 of the Listing Agreement is enclosed to this report.

Acknowledgement

Your Directors place on record their appreciation of the unstinted support and encouragement extended by the Government of Assam, Assam Industrial Development Corporation Ltd., banks, the shareholders, customers and the employees of the company.

Your Directors also place on record their sincere appreciation to Oil India Limited for uninterrupted supply of Natural Gas as main feedstock for production of methanol and Assam Gas Company Ltd. for transporting natural gas to the plant.

For and on behalf of the Board of Directors.

Sd/ Place: Guwahati Date: 05/09/2014 (Rameswar Dhanowar) Chairman


Mar 31, 2012

TO THE SHAREHOLDERS

The Directors take pleasure in presenting the 41st Annual Report of the company for the Financial Year 2011-2012 along with the Audited Annual Accounts for the year ending on March 31, 2012. The year 2011-12 didn''t start in a positive note because the company had to start the financial year by the running mother plant methanol at 50% capacity due to an accident occurred in the reformer section of the plant in the previous year. The company took shutdown of the plant from 19th June, 2011 to 15th July, 2011 for replacement of the reformer tubes and other annual maintenance jobs. The company completed the maintenance works in record shortest time of 26 days and started production of methanol in full capacity.

Financial Performance

The Financial Year 2011-12 was not a good year for the company. During the Financial Year the company somehow managed to come out of loss of the last financial year even though there was production loss in the first quarter. During the year 2011-12, the turnover of the company increased by 66.19% over the last financial year and managed to earn profit of Rs. 340.78 lacs for the year before adjustment of the provisioning for expenditures belonging to prior period, exceptional and extraordinary items. The company adjusted Rs. 452.58 lacs as prior period items from the profit of current year. This adjustment of prior period item led the company to show a loss of Rs. 106.19 Lacs in the statement of Profit & Loss for the year ended on 31st March, 2012.

The financial results for the financial year 2011-12 compared to those of the previous year are summarized as below:

Financial Results: (Rs. in Lacs)

Particulars As at 31-03-12 As at 31-03-11

Revenue from Operation 6671.42 3838.91

Less: Excise Duty -623.78 -358.28

Revenue from Operations (NET) 6047.64 3480.63

Other Income 371.85 388.15

Total Income 6419.49 3868.78

Gross Profit/Loss 516.33 -950.16

Less : Depreciation 175.55 125.1

Interest 0 0

Profit/Loss for the year before prior period adjustment, exceptional and extraordinary items 340.78 -1075.26

Less: (a) Exceptional Item -0.86 3.38

(b) Adjustment of prior period items 452.58 -23.96

Profit Before Tax -110.94 -1054.68

Less: Tax Expenses

(a) Deferred Tax 10.39 -13.85

(b) Excess Provision for income tax written back -15.12 -17

Profit /Loss for the year after Taxation -106.21 -1023.83

Balance brought forward from previous year 0 0

Balance carried to Balance sheet -106.21 -1023.83

Earning Per Share (EPS) (in Rs.) -1.16 -11.68

Operations:

During the financial year 2011-12, the capacity utilisation of both the Methanol and Formalin Plants were not full due to reformer tubes constraint in the first quarter and plant shut down for a period of one month for re- tubing of Reformer Tubes and Annual Maintenance Works of the Plant. The power supply failures by ASEB in several occasions also led to lower utilisation of plant capacity. Formalin was manufactured as per the market demand. Lower utilisation of Formalin Plant was mainly due to shortage of feedstock (Methanol) during the retubing of reformer in the Methanol Plant and aging of Silver Catalyst which was subsequently replaced.

PLANT PRODUCTION (MT)

FY 2011-12 FY 2010-11

Methanol 26994 17982

Formalin 29888 22906

Capacity Utilization of Plants:

Methanol 82% 54%

Formalin 91% 69%

Sales:

The highlights of sales in the year 2011-12 with comparison with the figure of year 2010-11 are as follows:

Area FORMALIN (MT)

FY 2011-12 FY 2010-11

North Eastern Region 6561.28 5188.83

Bhutan 1482.59 868.57

North Bengal 5645.98 4432.94

South Bengal 7810.83 4233.28

Purnea/ Adjacent Area 2903.43 1608.26

Patna 5342.61 4831.62

Orissa/ MP/ South Bihar 426.22 165.52

Nepal and Bangladesh 2032.53 1569.6

Other area 125.85 -

Total 32331.32 22898.62

Methanol

North Eastern Region 868.38 1438.47

West Bengal & Bihar 1830.64 1661.48

North India 7870.62 2968.54

Export 911.50 549.33

Total 11481.14 6617.82

Project & Development Activities:

You were informed in our previous report that the company is embarking upon an expansion project for manufacturer of 500TPD Methanol and 200 TPD Acetic Acid. During the year 2011-12, following significant milestones were achieved:-

I. Approval of PIB, Govt. of Assam

The Public Investment Board (PIB), Govt. of Assam approved the implementation of 500 TPD Methanol and 200 TPD Acetic Acid project with a project cost of Rs. 1028 Cr. in their meeting dated 20th December, 2011. In the same meeting, PIB approved the equity investment of Rs. 140 cr. by the Government of Assam.

II. Technology Selection and EPCM Contract for 500 TPD Methanol Plant

The company selected Holder Topsoe, Denmark as technology supplier and M/s Engineers India Ltd. (EIL), New Delhi as Engineering Procurement Construction Management (EPCM) contractor for implementation of 500 TPD Methanol Plant of the company. The work order for the same is to be issued very soon on completion of other necessary formalities.

III. Technology Selection for Acetic Acid Project.

The quest for appropriate technology for implementation of 200 TPD Acetic Acid plant is in progress. The company is in touch with all the major technology suppliers for having the technology licence. Your board expects that the company will be able to finalize the acetic acid technology soon.

IV. Project Financing

The estimated cost for implementation of the project is Rs. 1028 Crore. Your directors have decided to implement the project in the debt equity ratio of 2.5:1. The equity portion of the capital will be arranged through preferential allocation of shares to certain strategic investors. The discussions are going on with these investors. The Government of Assam has given the commitment for equity funding of Rs.140 Crore and Assam Gas Company Ltd. has also given their commitment towards equity investment of Rs. 25 Crore in the project. The discussions are going on with one of the central PSU for their equity participation in the project. Their final commitment is expected to be received soon.

The debt portion of the project capital has been arranged through a loan syndication arrangement with M/s SBI Capital Market Ltd. Final sanction letters have been received from several banks for the entire debt capital. Your Board is expecting that the financial closure will be achieved very soon.

V. Environmental Clearance

The Ministry of Environment and Forest, Government of India approved the Terms of Reference (TOR) on the project in their meeting of Empowered Committee dated 12.01.2012. Draft Environment Impact Analysis Report has been prepared and submitted to Pollution Control Board, Assam for public hearing. The Pollution Control Board, Assam conducted public hearing for the project on 6th of September, 2012 in the proposed project site. The final Environmental Clearance is expected to be received from the Ministry of Environment and Forest after the submission of the report of public hearing by Pollution Control Board, Assam.

Meanwhile, No Objection Certificate (NOC) for drawal of water from the nearby Dilli (Disang) river has been received from the Department of Water Resource, Department of Irrigation and Forest Department Government of Assam.

VI. Natural Gas Supply and Transportation Agreement

The Ministry of Oil and Natural Gas, Govt. of India has allocated 0.5 MMCMD Natural Gas to Assam Petro-Chemicals Ltd. for its expansion project and same will be supplied by M/s Oil India Limited. In this connection letter has been received from Oil India Limited. An agreement will be signed between Oil India Limited and Assam Petro-Chemicals Ltd. for supply of 0.5MMCMD gas soon.

M/s Assam Gas Company Ltd will transport Natural Gas from the Off Take point of M/s Oil India Limited to Assam Petro-Chemicals Limited through a pipeline. Discussions are going on in this regard and an agreement for transmission will be executed with M/s Assam Gas Company Ltd very soon.

VII. Revamping of Formaldehyde Plant:

The Commissioning of revamping of the Formalin Plant at Namrup increasing the capacity from 100 TPD to 125 TPD has been successfully completed on 27.8.2012.

Dividend:

Your Directors could not recommend dividend for the Financial Year 2011-12 because of non-availability of profit during the financial year.

Directors:

The Board of Directors Assam Petro-Chemicals Limited has been constituted in compliance with the Clause 49 of the listing agreement entered with the Stock Exchanges. Shri Jatinderbir Singh IAS, Shri Jiban Choudhury and Shri A.N. Das were reappointed as directors of the company in the 40th Annual General Meeting under the provision of Section 256 of the Act. The holding company withdrawn the directorship of Shri Jantnderbir Singh w.e.f. 05.07.2012 and nominated Shri R. T. Jindal as the nominee director of the company. Dr. B.K. Das an independent director of the company resigned from the directorship w.e.f. 19th December, 2012. The Casual vacancy caused due to resignation of Dr. Das was filled up by appointing CA Sanjeev Kr. Choube w.e.f 19.12.2012.

Auditors:

Pursuant to section 619 (2) of the Companies Act, 1956 the Comptroller and Auditor General of India appointed M/s L.K. Kejriwal & Co., Guwahati as the statutory auditors of the company for the Financial Year 2011-12. M/s L.K. Kejriwal & Co. has also been appointed as statutory auditors by Comptroller and Auditor General of India for the FY 2012-13.

Human Resource:

Your Board of Directors believe that human resources are the key drivers of sustainable growth and development of any organisation. Keeping that in mind your directors have been focusing on enhancement of knowledge and skills of the employees of the company. During the year under review couple of in-house training programmes were organised and total 35 nos of employees attended in the programmes. Your company also send its employees for outside training to promote their knowledge and skills. During the year under review 14 employees were sent for such training programme. As on 31st March, 2012 there were total 381 nos of employees on the roll of the company. Out of 381 regular employees, 153 employees are of Officers Cadre and remaining 228 employees are of unionized cadre.

Industrial Relations:

Your company has been continuously maintaining a peaceful and harmonious relationship between the management and the workers of the company. All the issues that were raised by the workers'' union of the company were resolved in transparent manner through discussion. There was no incident of industrial unrest during the year 2011-12.

Particulars of Employees under Section 217 (2A)

A list of the employees of the company receiving remuneration and requiring disclosure of particulars under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended is annexed herewith as Annexure ''A''

Recognition :

The Government of Assam adjudged your company as the best public sector enterprise of Assam in manufacturing sector for the FY 2008-09 and the award was presented on 11th July, 2012. Shri Ratul Bordoloi, Managing Director of the company was also awarded as the best Managing Director of State Level Public Enterprise under the manufacturing category.

Corporate Social Responsibility (CSR)

The company recognises its strong commitments towards promoting socio-economic development of the lives of the people of the neighbouring areas of the Plant at Namrup. The company spent an amount of Rs. 74, 39,920/- for CSR activities during the FY 2011-12. The company has been providing free drinking water to it neighbouring villages of the plant area, free education to students upto Class X standard, free medical facilities and health check-up to the people of neighbouring villages.

Energy Conservation, Technology Absorption and Foreign Exchange Earning and Outgo:

The additional information in respect of the energy conservation, technology absorption and foreign exchange earnings and outgo, as required by the Companies Act, 1956 as amended by the Companies (Amendment) Act, 1988 is set out in the statement annexed hereto as Annexure ''B''.

Particulars as to Subsidiary:

Your company is having a subsidiary company viz., M/s Pragjyotish Fertilizers & Chemicals Ltd. (PFCL). The subsidiary company has not been carrying out any business during the financial year under review. Pragjyotish Fertilizers & Chemicals Ltd. is under winding-up process. The Annual accounts for the Financial Year 2011-12 has not been finalized by PFCL yet and therefore the same could not be enclosed herewith. The Company made an application under section 212 of the Companies Act, 1956 to the Central Government seeking exemption from the provision of the said section as the final accounts of the subsidiary, M/s Pragjyotish Fertilizers & Chemicals Ltd. (PFCL) for the year ending 31st March, 2012 are not ready. The Central Government has denied the application seeking exemption from enclosing the Annual Accounts of the subsidiary company under section 212 (8) of the Act and advised to avail exemption granted vide their General circular no. 2/ 2011. As the audited Annual Accounts for the FY 2011-12 are not ready and therefore your directors could not attach the same as per the provisional of the Act. As soon as the accounts of the subsidiary are received, that will be forwarded to the shareholders of Assam Petro-Chemicals Ltd.

DIRECTORS RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217(2AA) OF THE COMPANIES ACT, 1956

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 with respect to the directors'' responsibility statement, it is hereby confirmed that:

(i) In the preparation of the annual accounts for the financial year ended 31st March, 2012, all applicable accounting standards had been followed, along with proper explanations relating to material departures;

(ii) 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 as on 31st March 2012 and of the profit of the Company for the year ended on that date;

(iii) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) The directors had prepared the accounts for the financial year ended 31st March, 2012 on a ''going concern'' basis.

Compliance Certificate:

A certificate from a Company Secretary in Whole Time Practice regarding compliance of conditions of the Corporate Governance as stipulated under Clause 49 of the Listing Agreement is enclosed to this report.

Acknowledgement

Your Directors place on record their appreciation of the unstinted support and encouragement extended by the Government of Assam, Assam Industrial Development Corporation Ltd., banks, the shareholders, customers and the employees of the company.

Your directors also place on record their sincere appreciation to Oil India Limited for uninterrupted supply of Natural Gas as main feedstock for production of methanol and Assam Gas Company Ltd. for transporting natural gas to the plant.

For and on behalf of the Board of Directors

Place : Guwahati Sd/-

Date: February 12, 2013 (Rameswar Dhanowar)

Chairman


Mar 31, 2011

To, The Shareholders

The Directors have pleasure to present the Directors' Report for the Financial Year 2010-2011 along with the Audited Annual Accounts for the year ending on March 31, 2011.

Financial Performance

The year 2010-11 started with double set back to the company viz. hike of main raw material natural gas by 174% w.e.f. 31-05-2010 and an accident occurred in the Reformer Section of the Mother plant Methanol on 22-07-2010 which compelled the company to keep the plant in shutdown condition over a period of two months and then run the Methanol Plant at 50% capacity for remaining period of the year. These two events led the company to face huge financial distress in the year 2010-11 and ultimately the company suffered a loss of Rs. 10.78 Crore.

The summary of the financial results of the Company as on 31st March 2011 as well as 31st March 2010 are given below.

Financial Results: (Rupees in Lacs)

Particulars 2010-11 2009-10

Sales and Other Income 4321.281 6138.645 (inclusive of taxes and duties)

Gross Profit/Loss (953.64) 658.07

Less : Depreciation 125.10 134.41

Interest - 0.30

Profit/loss for the (1078.74) 52335 year before tax and extraordinary items

Adjustment of previous - (15.45) period

Provision for taxation (13.85) 228.96

Profit for the year (1064.89) 278.93 after Taxation

Balance brought forward 172.23 417.54 from previous year

Amount available for (851.59) 696.46 appropriation

Appropriations:

a. Transferred to General 172.23 417.54 Reserve

b. Proposed dividend - 91.20

c. Tax on dividend - 15.50

Balance carried to (1023.82) 172.23 Balance sheet

Earning Per Share (EPS) (11.68) 3.06 (in Rs.)

Operations:

During the year 2010-11, your company suffered its production loss considerably because of damage of reformer tubes due to an accident occurred on 22nd, July, 2010 in the Methanol Plant. The production of Methanol was completely remained close for two months and eight days and production could only resumed at 50% capacity after major repairing the plant w.e.f. 27-09-2010. Since your company runs Formalin Plants (both Namrup and Raninagar) with the Methanol Produced in Namrup Plant, the production of Formalin also suffered badly due to the accident. During the year 2010-11 your company could only utilized the Methanol plant at 54% of its installed capacity against 102% in the year 2009-10- As far as the production of Formalin is concerned, your company achieved only 69% capacity utilization against the 95% in the previous year.

PLANT PRODUCTION (MT)

2010-11 2009-10

Methanol-II 17982 33759

Formalin-II 23906 31443

Capacity Utilization of Plants:

Methanol-II 54% 102%

Formalin-II 69% 95%

Sales:

your company made meticulous planning to maintain supply of both methanol and formalin to its regular customers particularly in NE region. West Bengal, Bhutan and Nepal inspite of production constraints due to the accident in the Methanol Plant at Namrup. While planning the distribution of the limited production of both methanol and formalin, emphasis was given on supplies to the customers who are generally dependent on APL for their requirements of methanol or formalin. Such policies conforming to the selective distribution of the products enabled the company to earn the highest net realization from the sales possible in the recession hit global economy.

The Highlights of sales in the year 2010-11 with comparison with the figure of 2009-10 are as follows

Area FORMALIN (MT)

2010-11 2009-10

North Eastern Region 5188.83 5065.21

Bhutan 868.57 1849.25

North Bengal 4432.94 5920.89

South Bengal 4233.28 8894.23

Purnea/Adjacent Area 1608.26 2915.91

Patna 4831.62 12291.40

Orissa/MP/South Bihar 165.52 200.04

Nepal and Bangladesh 1569.6 1771.37

Total 22898.62 38908.9

Methanol

North Eastern Region 1438.47 1214.58

West Bengal & Bihar 1661.48 3699.05

North India 2968.54 9177.07

Export 549.33 954,22

Total 6617.82 15039.92

Project & Development Activities:

A. TEFR for the project

Your directors have got the TEFR integrated for the Methanol Acetic Acid project through M/s Tata Consulting Engineers Pvt. Ltd., Mumbai in which it envisages a total capital requirement of Rs. 1028.00 crores with an excellent viability and profitability for the project with project JRK of 27.41%, post tax payback period of 4.12 yrs, return on investment of 25.59% and average DSCR of 4,307. The required finance lor the project will be arranged with Debt Equity ratio of 2.5:1. Your directors are. expecting that ail the pre- project activities will be completed within 2011-12 and the mechanical completion of the project is scheduled to be completed by end of 2014. To raise the fund for the project, your directors have already been carrying out series of discussions with the Government of Assam and other potential strategic investors The Debt portion of the project finance will he arranged through loan syndication by a professional agency.

B. Appointment of Project Management Consultant:

Your directors have appointed M/s Tata Consulting Engineers Ltd., Mumbai as the Project Management Consultant (PMC) for implementation of the integrated 500 TPD Methanol and 200 TPD Acetic Acid Project. They have been assigned to carry out all the pre-project activities in the First Phase, i.e Preparation of TEFR for Acetic Acid Project, Integrate both Methanol and Acetic Acid TEFRs, preparation of DPR, Evaluation of bids received for 500 TPD Methanol Plant, Float Global Tender for EPC Contract for Acetic Acid Plant and evaluate the same. Carryout the Environmental Impact Analysis (EIA) for the project. Soil testing etc., etc. Considerable progresses have already been made by the PMC on the jobs assigned to them in first phase.

C. Salient Features and Financial Indicators of the Integrated 500 TPD Methanol and 200 Acetic Acid Plant

As per the Integrated TEFR prepared M/s ICE, the salient features of the Integrated project are as follows:

SI. Particulars No

A. Technical Information

1. Daily rated capacities

I. Methanol 415 TPD

II. Acetic Acid 200 TPD

2. Plant stream days 330 days

3. Yearly rated capacities

I. Methanol 136950 TPA

II. Acetic Acid 56000 TPA

4. Project Gestation Period

I. Methanol 36 Months

II. Acetic Acid 24 Months

5. Raw Material Requirements

i. Methanol plant Natural Gas: 0.50 MMSCMD

ii. Acetic Acid plant i. Captive Methanol

ii. Reformed Gas from Methanol Plant

6. Power requirement 5.00 MW Captive Power plant that will be installed under the project.

B. Project Financing without Subsidy With Subsidy

1. Project capital 102800 102090 Cost (Rs.ln Lacs)

Debt Equity ratio 2.5:1 2.5:1

Debt: Rs. in lacs 73400 72921

Equity (RS. In lacs) 29400 29169

2. Capital Investment - 27360 Subsidy (Rs in lacs) including Cenvat.

Financial Performance

1. Annual Realization (RS. in lakh)

i) For the 1st year at 85% load 33655 33655

ii) For 5 initial operating 40436 40436 year at full load(Avg/Yr)

2. Cost of Production (Rs. in lakh)

i) For the 1st year 27363 20853

ii) For 5 initial operating 28729 20125 year at full load(Avg/Yr)

3. Return on investment% 19.79 25.59

4. Payback period (years) 8.27 4.12

5. Internal Rate of Return 18.61 27.41 (project)

6. Internal Rate of Return 27.16 50.44 (Equity) %

7. Net profit alter Tax (avg) lakhs (Yearly) 12426 24803

8. Average debt Service coverage 1.952 4.307 ratio

9. Breakeven capacity % 70.62 59.75

D. Status of the Ongoing Revamping activities of Formalin Plant

The formaldehyde plant is currently being revamped to increase the capacity to 125 TPD and the revamp job will be completed by December, 2011.

Dividend:

Your Directors could not recommend dividend for the Financial Year 2010-11 because of huge financial loss during the year due to the lower utilisation of the plant subsequent to the failure of the reformers of the plant and steep hike in the price of raw materials.

Directors:

The Board of Directors Assam Petrochemicals Limited has been constituted in compliance with the Clause 49 of the listing agreement entered with the Stock Exchanges. Shri Rameswar Dhanowar was reappointed as director of the company in the 39th Annual General Meeting under the provision of Section 255 of the Act. Dr. Bhupati Kr, Das and Shri Utpal Borah were appointed as Director of the Company in the last Annual General Meeting in place of the retiring directors Dr. M. N, Borgohain and Shri D. Gohain in the last AGM.

Dr. J. Balaji, Managing Director of the holding Company Assam Industrial Development Corporation Limited relinquished the office of director of the company w.e.f. 30-06-2011. The Board of Directors have placed on record their appreciation of valuable contributions made and guidance given by him for the growth and development of the business of the Company. Shri Rajesh Prasad, the new Managing Director of the Holding Company filled up the casual vacancy created by Dr. J. Balaji. Shri Prasad was appointed as director of the company w.e.f. 30-06-2010.

Shri Favi Capoor the Principal Secretary to the Govt, Of Assam, Department of Industries and Commerce and a nominee director of the Holding Company also relinquished the office of the Director of the company w.e.f. 01/07/2011. The Board of Directors have placed on record their appreciation of valuable contributions made and guidance given by him for the growth and development of the business, of the Company. Shri Jatinderbir Singh the new Principal Secretary to the Govt. Of Assam, Department of industries and Commerce has been nominated by the holding company to fill up the casual vacancy caused due to relinquishment of the office by Shri Capoor.

Shri Jiban Choudhury who was appointed as director to fill up the casual vacancy arises due to relinquishment of office of Director; by Shri. S. P. Nandi w.e.f. 19-10-2011.

Auditors:

Pursuant to section 619 (2) of the Companies Act, 1956 the Comptroller and Auditor General of India appointed M/s L.K. Kejriwal & Co., Guwahati as a statutory auditor of the company for The Financial Year 2011-12. They will succeed M/s S. Ganguli & Associates

Human Resource:

Your Board of Directors believe that the human resources are the key drivers of sustainable growth and development of any organisation. Keeping that in mind your directors have been focusing on the enhancing

knowledge and skills of the employees of the company. During the year under review couple of in-house training programmes were organised and total 35 nos of employees attended in the programmes. Your company also send their workforce for outside training to promote their knowledge and skills. During the year under review 14 employees were sent for such training programme. As on 31st day of March, 2011 there were total 381 nos of employees were on the roil of the company. Out of 381 regular employees 153 employees are Officers Cadre and remaining 228 employees are unionized cadre.

Industrial Relations:

Your company continuously maintain a peaceful and harmonious relationship between the management and the workers of the company. All the issues that were raised by the Workers' union of the company were resolved in transparent manner through bi-lateral discussion from time to time. There was not a single incident of industrial unrest during the year 2010-11.

None of the employees of the company received remuneration requiring disclosure of particulars under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules. 1975 as amended.

Energy Conservation, Technology Absorption and foreign exchange Earning and Outgo:

The additional information in respect of the energy conservation, technology absorption and foreign exchange earnings and outgo, as required by the Companies Act, 1956 as amended by the Companies (Amendment) Act, 1988 is set out in the statement annexed hereto as Annexure 'A'.

Particulars as to Subsidiary:

Your company having a subsidiary company viz,, M/s Pragjyotish Fertilizers & Chemicals Ltd. (PFCL). The company has not been carrying out any business during the financial year under review. The Board of the PFCL is carrying out winding up process of the company. The Annual accounts for the Financial Year 2010-11 has not been finalized by PFCL yet and therefore the same could not enclose herewith. The Company had made an application under section 212 of the Companies Act, 1956 to the Central Government seeking exemption from the provision of the said section as the final accounts of the subsidiary, MA Pragjyotish Fertilizers & Chemicals Ltd. (PFCL) for the year ending 31st March, 2011. The Central Government has denied the application seeking exemption from enclosing the Annual Accounts of the subsidiary company U/s 212 of the Act. As soon as the accounts of the subsidiary are received, that will be circulated to the shareholders of Assam Petrochemicals Ltd.

DIRECTORS RESPONSIBILITY' STATEMENT PURSUANT TO SECTION 217(2AA) OF THE COMPANIES ACT. 1956

i. Responsibility in relation to financial Statements The financial Statements have been prepared in conformity, in all material respects, with the generally accepted accounting policies in India and the applicable Accounting Standards in a consistent manner and supported by reasonable and prudent judgments and estimates. The Directors believe that the financial position as on 31.03.2011 and the results of operations for the financial year ended 31 03.2011 reflects the true and fair view of state of affairs of the Company. The Books of Accounts have been audited by M/s 5. Ganguli & Associates, Chartered Accountants in accordance with the Generally Accepted Auditing and Accounting Standards.

ii. Going Concern

In the opinion of the Directors, the Company will be in a position to carry on its existing business and the expansion programme and accordingly it is considered appropriate to prepare the financial statements on going concern basis

iii. Maintenance of accounting records and Internal Control

The Company has taken proper and sufficient care for the maintenance of adequate accounting records as required by various statues.

Directors have overall responsibility for the Company's internal control system, which is designed to provide a reasonable assurance for safeguarding assets, reliability of financial records and for preventing and detecting fraud and other irregularities,

Audit Committee supervises the financial reporting process through review of accounting and reporting process. The Internal Auditors appointed by the Company continuously does the internal audit to ensure the adequacy and effectiveness of the internal control system.

Compliance Certificate:

A certificate from a Company Secretary in Whole Time Practice regarding compliance of conditions of the Corporate Governance as stipulated under Clause 49 of the Listing Agreement is enclosed to this report.

Acknowledgement

Your Directors place on record their appreciation of the unstinted support and encouragement extended by Assam Industrial Development Corporation Ltd, the Government of Assam, banks, the shareholders, customers and the employees of the company.

For and an behalf of the Board of Directors

(Rameswar Dhanowar) Chairman

Place : Guwahati Date : 23.12.2011


Mar 31, 2002

The Directors have pleasure in presenting the thirty-first Annual Report together with the audited statement of accounts for the year ended 31st March, 2002.

FINANCIAL RESULTS:

2000-2001 2001-2002 (Rs. in lac) (Rs. in lac)

Sales & other income 3751.89 2715.84

Gross Profit 806.63 84.80

Less: Depreciation 320.31 326.08

Interest 137.58 122.62

Profit for the year before taxation 348.74 (-)263.90

Provision for taxation 33.00 0.00

Profit for the year after taxation 315.74 (-)263.90

Balance brought forward from previous year 1909.93 290.47

Extraordinary item 36.54 60.20

Adjustment of prior years (-)2.89 (-)8.33

Provisions/reserves no longer required 1.37 4.43

Amount available for appropriation 2260.69 82.86

This has been appropriated as under: Proposed dividends:

Equity 54.72 0.00

Preference 0 0.00

Tax on dividends 5.58 0.00

General Reserve 1909.93 0.00

Balance carried to Balance Sheet 290.46 82.86

The comments made by the Comptroller and Auditor General and the managements replies thereto are annexed as Annexure B. The managements replies to the comments of the Statutory Auditors are annexed as Annexure C. A statement on the review of accounts by the Accontant General is also attached as Annexure -D.

In view of the better perfomance in 2000-01 and good liquidity of the Company, the Company has prepaid a loan of Rs. 300 lakhs taken from IDBI at a high interest rate. The Company has taken afresh loan of Rs. 300 lakhs for the reformer retubing and allied jobs. The outstanding liability on term loans as on 31 -03-2002 is Rs. 4.85 crores.

OPERATIONS:

The year under review was the twenty-fifth year of commercial production. The operational highlights during the year 2001-02 with comparative position in the previous year 2000-01 were as follows:

PLANT PRODUCTION (MT.)

2000-2001 2001-2002

Methanol-1 Nil Nil

Methanol-II 25401 21448

Formalin-I Nil Nil

Formalin-II 21077 20489

Petrolite R-50 Nil Nil

Petrolite -M Nil Nil

Liquid Carbon-di-oxide 20.34 14.099

CAPACITY UTILIZATION

2000-2001 2001-2002

Methanol-1 Nil Nil

Methanol-II 77% 65%

Formalin-I Nil Nil

Formalin- II 64% 62%

Production from Methanol Unit was suspended yearlong due to high cost of production. Capacity utilization of Methanol Unit II was 65% against 77% forthe previous year. The Reformer Tubes were changed to Microalloy tubes. Catalyst was changed for reforming, synthesis & desulphuriser. The Reformer was completely revamped along with finned tube cleaning of vital heat exchangers. The plant was, thereafter, successfully operated at 100% load. Production loss was 4970 MT due to reformer retubing shutdown, 447 MT due to power interruption and 135MTdue to non-availability of TG power.

Production from Formalin Unit was kept suspended during the year due to low market demand. Capacity utilization of Formalin Unit II was 62% in comparison with 64% in the year 2000-2001. Due to low market demand stemming mainly from the closure of plywood factories in the northeastern region, the Company had to explore market outside the state, resulting in such low capacity utilization.

Due to lack of market demand for Petrolite R-50 and Petrolite-M, production from the plants continued to remain suspended.

The production of Liquid Carbon-di-oxide produced on need basis as per market demand was only 14.099 MT during the year.

SALES:

The Company despite a long shut down of methanol plant has been able to maintain uninterrupted suply of methanol to dedicated customers and formalin to all customers. This has brought in good customer response and would translate to better sales in coming years.

The highlights of sales in the year 2001-02 with comparative figures in 2000-01 were as follows:

AREA FORMALIN (MT)

2000-2001 2001-2002

North Eastern Region 2763.84 2208.41

Bhutan 1327.54 1235.86

NorthBengal 3003.93 3190.21

South Bengal 3396.32 2894.16

Pumea 3442.09 3443.62

Patna 5747.24 5584.68

Orissa/Madhya Pradesh/South Biha 360.85 956.39

Nepal/Bangladesh 836.08 1056.64

Total 20877.89 20569.97

METHANOL(MT)

North Eastern Region 3337.11 1296.93

West Bengal & Bihar 2685.10 803.96

North India 6699.50 7588.88

South India 2056.84 1277.11

Export 462.74 284.13

Total 15241.29 11251.01

The sales of the products were commensurate to production and the gross turnover for the year was Rs.2718.04 lac.

PROJECTS AND DEVELOPMENT:

After retubing of the reformer, the methanol plant is operating at full load subject to the natural gas supply pressure and power interruptions. The Company is able to market the full production with most of the methanol sold in North Indian market. Encouraged by the market response,the Company is planning to go for debottlenecking of its methanol plant to manufacture 110 TPD with an investment of around Rs.360 lakhs. The Company is also reviewing various options to develop alternate modes of transport as the Company is now totally dependent on road transportation.

DIRECTORS :

Shri R.C. Sehgal was nominated by IDBI as Nominee Director w.e.f. 8th October, 2001 in place of Shri P.K. Biswas.

Shri N.G. Saha was nominated by UBI as Nominee Director w.e.f 1st April, 2002 in place of Shri Mrinal Baishya.

Shri Amulya Hash Goswami was reappointed as Doctor in the last annual general meeting dated 28th December, 2001.

Shri D. Gohain was appointed as Director in the last annual general meeting dated 28th December, 2001 in place of Shri Dinesh Deka, who retired by rotation.

AUDITORS:

M/s Choudhury & Hazarika were appointed as the Statutory Auditors for the year 2001-2002.

INDUSTRIAL RELATIONS :

Industrial relations between the Company and the employees remained cordial during the year.

PARTICULARS OF EMPLOYEES:

None of the employees of the Company received remuneration requiring disclosure of particulars undersection 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The additional information in respect of energy conservation, technology absorption and foreign exchange § earnings and outgo, as required by the Companies Act, 1956 as amended by the Companies (Amendment) Act, 1988 is set out in the statement annexed hereto as Annexure A

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement under sectin 217(2AA) of the Companies (Amendment) Act, 2000 your Directors hereby state :

(i) That the annual accounts for the year ended 31st March, 2002 have been prepared following applicable accounting standards and there is no material departure in this regard.

(ii) That the accounting policies are applied consistently and judgements and estimation are made 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 year and of the profit & loss account for the financial year 2001-2002.

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

(iv) That the annual accounts for the financial year ended 31st March, 2002 have been prepared on a going concern basis.

COMPLIANCE CERTIFICATE:

A certificate from the auditors of the company regarding compliance of conditions of Corporate Governance as § stipulated under clause 49 of the Listing Agreement is attached to this report.

ACKNOWLEDGEMENT:

Your Directors place on record their appreciation of the unstinted support and encouragement extended by Assam Industrial Development Corporation Limited, the State Government and the various lending institutions § & banks and the shareholders of the Company.

By order of the Board

Chairman

Guwahati Dated : 2nd Septermber, 2002

 
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