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Directors Report of Cals Refineries Ltd.

Mar 31, 2015

Dear Members,

The Directors present their Thirty First Annual Report and Audited Financial Statements for the financial year 2014-15.

1. Financial Summary/highlights on Performance of the Company (Standalone)

(Rs.in million)

Description Year Ended Year Ended

March 31,2014 March 31, 2015

Revenue from Operations - -

Other Income 0.16 3.76

Total Revenue 0.16 3.76

Operational Expenses - -

Employee Benefit Expenses 6.47 6.32

Interest and Finance Charges 0.00 81.90

Depreciation and Amortizations 0.38 0.45

Other Expenses 8.29 17.57

Total Expenses 15.14 106.24

Profit/(Loss) before

exceptional items (14.98) (102.48)

Exceptional Items 5587.67 (47.19)

Profit/(Loss) for the year (5602.65) (55.29)

2. Dividend

As there is no operating income and consequently, no profit is available for distribution as dividend.

3. Reserves

The Company is not having any income and therefore there is no surplus available to be carried forward to Reserves.

4. Brief description of the Company's working during the year/ State of Company's affair

A. Company's operation during the year

This business operation of the Company has been stand still since long. We have to the extent possible, tried to explain the reason behind such situation. The prime reasons for such stagnancy in the business operation was the investigation conducted by the Securities and Exchange Board of India (SEBI) and the restrictive order passed by SEBI in this respect in the year 2011.

The prolonged investigation took approx. 2 years and ended with a negative order against the Company, issued on 23rd October, 2013, restricting the Company from entering into the securities market and altering its capital structure, in any manner effectively for period of 8 years from the date of the order. The Company has challenged that order of SEBI at Securities Appellate Tribunal in December, 2013. Approx. 2 years have elapsed since then, and the matter is still pending before the Tribunal.

The aforesaid incident has grossly affected the status of the Company at large and as a result the business operations of the company have come to a complete stand still.

Since there is no business operation in the Company, the prime responsibility of the Company is limited to the compliances of the various statutory requirements under different laws, rules and regulations, dealing with the litigations and other day to day administrative activities.

In addition to the above, and as apparent from the financial statement, the Company has not had any operational income since a long time and therefore serious thought is required to be taken on how the requisite funds should be arranged to maintain the necessary statuary compliances of the Companies.Being a listed Company with a wide shareholder base of approx. 1.85 lakh shareholders, the costs of compliances remains on the higher side. It is pertinent to note here that the Management of the Company remains vigilant to the necessary compliances, as applicable to the Company.They have ensured that all the requisite compliances are complied with in the given time period of the prescribed law, rules and regulations. Despite of having no operational income and facing the prohibitory orders of SEBI from entering into the market, the Company had managed to efficiently comply with all the applicable compliances and has also not defaulted on the payment of the statutory dues.

Till date the Company has been managing its day to day activity expenses to make the necessary compliances and payment of statutory dues through an arrangement of loan from one of its related parties namely Nyra Holdings Pvt. Ltd., which may not be a viable long term solution. Considering the constraint situation of the Company your Company has also written to the Securities and Exchange Board with a copy to the Registrar of Companies, making prayers, that an exemption be granted to the Company from making its Compliances till the SEBI prohibition is lifted and to allow M/s Nyra Holdings Private Limited to give interest free loans to the company without considering the same to be a default of the provisions of the Companies Act, 2013 and also to modify the SEBI order dated 23rd October 2013, and permit the current promoters (M/s Nyra Holdings Private Limited, in specific) to induct capital / funds against issue of equity. The Company has received no reply till date.

Further, to reiterate, the Company's operation has come to a standstill and no improvements is being made towards implementation of the project of the Company.The contracts and the agreements which were entered by the Company w.r.t the implementation of the refinery project have also lapsed or expired long back. Capital advances, which were made at the implementation stage of the project are either not recoverable or specific performance against the said advances cannot be enforced. The Board of Directors after analyzing the status and also based on the opinion received from legal firms, have decided to write off these advances, land and pre-operative expenses etc. from the balance sheet of the Company, to give true and fair picture of the financial statement. The Board further considered that carrying such advances which have no material value or relevance to the books of accounts would be inappropriate and would not give a true and fair view to the investors/shareholders of the Company.

It should also be noted that such writing off of aforesaid advances, land and pre-operative expense have resulted in substantial change in the profit/loss of the Company as compared to the previous year. The loss for this year is Rs. 5602.65 Million. as compared to the Loss for the previous year of Rs. 55.29 Million.This has further affected the Net worth of the Company, which is now completely eroded.

The Auditor's have also pointed this out in their Report and qualified their opinion, the Board has given their comment on the qualification of Auditor's in the later part of this Report.

Investigation of Serious Fraud Investigation Office (SFIO)

The Members be apprised that the Serious fraud investgation office (SFIO) had initiated an investigation into the affairs of the Company on 4th Day of February, 2015. They were appointed as investigating authority under section 212 of the Companies Act, 2013, the investigation was relating to the issuance of GDRs by the Company in the year 2007 and the proposed GDR issue in the year 2011.

Your Company has provided all the requisite information and lent the necessary support to the officers of SFIO, we have also provided all the documents as enquired by them from time to time.

B. Status of project

Company's Crude Oil refinery proposed in 2007 at Haldia (West Bengal) with a capacity of 5 M MTPA, has now become unviable and is an opportunity lost on account of nonavailability of funds, restrictive order of SEBI having a long lasting impact, pending litigations, unrecoverable advances paid to suppliers on account of non-fulfilment of financial obligations by company in time. As considerable time has lapsed and the company could not raise the required funding in time, all efforts and investments in the project has been reduced to negligible financial value.A discussion containing important milestones, past and present status of the project is given below, which would give a fair idea of how nonachievement of financial closure and other related issues have damaged the prospect of the project revival:

* Allotment of land admeasuring about 400 acres at Haldia by

Haldia Development Agency (HDA), West Bengal

Haldia Development Authority (HDA), vide its memo dated March 25, 2008, offered land admeasuring about 400 acres at Haldia, West Bengal to the Company for setting up the refinery project ('the project'). As per the terms of the said memo, lease premium of Rs. 600 million was stipulated, which could not be paid by the company pending financial closure for the refinery project. Subsequently, the Company entered into a tripartite agreement dated March 19, 2010 along with HDA and West Bengal Industrial Development Corporation Limited (WBIDC). The Company was given permissive possession of the land for a period of six months from the date of the agreement with a condition that the land shall be sub-leased in favour of the Company at the end of six months, subject to compliance with certain conditions. Since the Company could not comply with these conditions, it had requested additional time from WBIDC for the same. WBIDC, while granting such extension, stipulated additional conditions relating to tie up of equity and achievement of financial closure for the project. The Company was not in a position to comply with these conditions as the SEBI order was subsisting and informed WBIDC accordingly requesting further extension. However, WBIDC had not acceded to the Company's request and had withdrawn the permissive possession of land.

In the absence of any development in the project and withdrawal of the permissive possession of land, Cost of leasehold land Rs. 990.71 million, including cost of land development Rs. 196.91 million and civil work of factory building (included in capital work in progress) Rs. 49.64 million are written off.

* Environment clearance

The Ministry of Forest and Environment (MOEF), upon our application, had accorded Environmental Clearance for 5 MMTPA refinery project Company in the past, the Company had revised the capacity of refinery, envisaged in Haldia to 10 MMTPA from 5 MMTPA and had filed an application to Ministry of Environment to enhance the approval for putting up 200,000 bpd equivalent to 10 MMTPA capacity refineries. The Ministry vide its letter dated September 20, 2011 declined the request as Haldia has been notified as a critically polluted area and no new capacity or expansion can be permitted till it is de-notified.

* Civil construction

Initial civil construction was done at the project site and included the boundary wall at the project site. The other necessary construction w.r.t establishment of the refinery was being undertaken in the past. Presently no construction is going on at the site.

* Arrangements to the import of Plant and Machinery (the Refineries) to India:

Initially the Company entered into contracts for relocation of one refinery from Ingolstadt, Germany and had also paid advances for such equipments. However, the Company could not achieve financial closure and fulfill the terms of the said contract, resulting in cancellation of the contract and forfeiture of the advances paid.

Similarly, other advances were also paid to various other suppliers for import of refinery and refinery equipments. These have also now been written off as the company could not achieve financial closure and fulfil the terms of the contracts. Further the Company on March 15, 2011, entered into an Asset Purchase Agreement with Tagore Investments SA (Tagore) (an affiliate of Hardt group) for the CENCO Petroleum Refinery at a cost of US$ 275 million. The Company had also contracted for another set of Refinery equipments from another affiliate of Hardt group namely Amber Energy SA (Amber) at a cost of US$ 142 million. Simultaneously, the Company had entered in to a 'Deed of Novation' with an affiliate of Hardt Group for assuming the contractual obligations envisaged on the supplier under an erstwhile agreement of plant & machinery for which an advance of Rs. 4,583.44 million had been paid. The Hardt Group had agreed to become a strategic investor in the Company and assist it in implementing the refinery project. Abboro Limited (affiliate of Hardt Group) had brought in Rs. 136.52 million as equity during March, 2011 to March, 2012 (out of which 120.76 million already allotted & the balance 15.76 million to be allotted as equity shares). However these agreements have also now lapsed and after the restrictive order of SEBI, their commitment to the project may have diminished.

C. Future outlook

As reported above that the Company has been sailing through rough times for the past few years and the reasons for same were also explained to the extent possible. Presently the management is only concentrating on trying to get rid of the adverse conditions. It would be pertinent to note that the Company's future will be depending on the outcome of the proceeding at SAT, where Company has filed an appeal against the restrictive order of the SEBI issued against the Company on 23rd October, 2013.

In the current circumstances any discussion on the project implementation will be a futile exercise as with passage of time the chances of the survival of the project are getting bleak. The previous contracts, agreements which were entered into w.r.t the implementation of refineries, have expired long back and now not in force, moreover at this moment the Company has no operational project and hence no operational revenues accrues to the Company. Moreover, as reported above, various capital advances, pre-operative expenses, consultancy fee and capital work in progress, were written off from the balance sheet of the Company, just to give true and fair picture of the financials. As submitted above that the Company's future is highly dependent on the outcome of the SAT in the proceedings against the restrictive order of the SEBI.

5. Change in the nature of business, if any

There was no change in the nature of business of the Company during the financial year 2014-15.

6. Material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report.

There are no changes and commitments, which are affecting the financial position of the Company from the end of the financial year, i.e., 31st March, 2015 till the date of this Report. i.e, 07th August, 2015. Though, Ms. Rekha Sarda, the Chief Financial Officer (CFO) of the Company has resigned from the office w.e.f 29th July, 2015. The Company is in the process to identify a suitable person to be appointed as CFO of the Company.

7. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future.

SEBI Vide Interim Order in 21st September, 2011 had issued directions to the Company not to issue equity or any other instruments convertible into equity or alter capital structure in any manner till further directions, which was confirmed on 30th December, 2011. The SEBI further issued a final order dated 23rd October, 2013 against the Company, which operative portions are as under:

a. That the Company will not issue equity shares or any other instruments convertible into equity shares or any other security, for a period of ten years.

b. Vide interim Order dated September 21, 2011 (la ter confirmed through the Confirmatory Order on December 30, 2011), the Company was directed not to issue equity shares or any other instrument convertible into equity shares or alter their capital structure in any manner till further directions . in this context, the Company has already undergone the prohibition imposed vide the Interim Order for a period of approximately two years, in view of this factual situation, it is clarified that the prohibition already undergone by the Company pursuant to the aforementioned SEBI Order shall be reduced while computing the period in respect of the prohibition imposed vide this order. From the above Order it is clear that the Company is restrained from issuing any further equity shares or any other instruments, convertible into equity shares or any other security, effectively for a period of eight years (approx) from the date of the order.

The Company's various efforts to restart the project also failed due to the embargo on issue of new equity by SEBI. The aforesaid order has also compelled the Company to stand still its project and also to struggle to manage funds for its day to day operations.

The aforesaid restrictive order has helped building such circumstances, wherein the Company was not able to move ahead with its project and various contracts and agreements which were entered into and for which advances were paid have expired long back. The Management has taken suitable decision to write off such advances, pre-operative expenses, consultancy fee and capital work in progress to give true and fair picture of the financials, though such writing off has completely eroded net worth of the Company.

The Auditor's of the Company has taken note of the same and qualified their Report raising their apprehension on the going concern of the Company. The management has given their detailed comments on such qualification of the Auditor's at the later part of this Report. Though it is pertinent to note that the ability of the Company to continue as a going concern is significantly dependent on getting a favourable order from SAT and the management is confident for such favourable order.

8. Details in respect of adequacy of internal financial controls with reference to the Financial Statements.

The Company has adequately adopted the procedures to ensure the proper internal control, suitable policies and guidelines as required under various provisions of the Companies Act, 2013 and the Listing Agreement are in place. These policies, e.g. Vigil Mechanism policies/Whistle Blower Policies, Risk Management Policy are meant to adhere the proper guideline, rules and regulations to comply with the requirement of the law, to reduce the possible threats of fraud and to ensure the orderly and efficient conduct of the business of the Company. These policies and guidelines are adequately monitored by the designated Committees of the Board.

The Company apart from the above, has also in place a system of Internal Control adequate in respect to the size and operations of the Company. M/s Hemant K. Agrawal & Associates, had been the Internal Auditor of the Company for the financial year 2014-15. He has been conducting internal audit at regular intervals at every quarter ending. No material discrepancies have reported by him during the period of his Audit. The Company prepares the financial information/Reporting as per the requisite requirements of the Companies Act, 2013 and the Listing Agreement, and place it to the Audit Committee and Board for the approval, once approved the said financial results are submitted to the stock exchange and also placed on the website of the Company.

9. Details of Subsidiary/ Joint Ventures/ Associate Companies The Company neither has any Subsidiary nor any Joint Venture or Associate Company. Since, the Company is not having any Subsidiary accordingly no policy has been formulated for determining Material Subsidiaries.

10. Performance and financial position of each of the subsidiaries, associates and joint venture companies included in the consolidated financial statement.

The Company is not having any Subsidiary, Joint Venture or Associate Company.

11. Deposits

The Company has not accepted any deposits during financial year 2014-15 under the provisions of Chapter V of Companies Act, 2013.

12. Statutory Auditors

M/s Kanu Doshi Associates, Chartered Accountants, (ICAI Firm Registration No.- 104746W) have conducted the audit of the Company for the financial year 2014-15. They have shown their unwillingness to continue as auditor of the Company.

In view of the above, the Audit Committee considered appointment of a new auditor. It was noted that all the operations of the Company including day to day activities are based at Delhi. Majority of the Board members reside in Delhi-NCR and meetings of the Board of Directors are ordinarily held in Delhi. The registered office of the Company is also at Delhi. Hence, the committee agreed to hire services of a CA Firm based at Delhi-NCR. The Committee after review of few profiles of the Auditors, found M/s VATSS & Associates, Chartered Accountants, New Delhi (Firm Registration No.- 017573N), suitable to replace the retiring auditors M/s Kanu Doshi Associates, Mumbai. Consent of the proposed auditors was obtained. The new auditors have agreed to complete the audit for the financial year 2015-16 at the same fees which was being charged by the retiring auditors.

The Board recommends the appointment of M/s VATSS & Associates, Chartered Accountants as the new auditors of the Company for a period of 5 consecutive years commencing from the financial year 2015-16 till the financial year 2019-2020, subject to the ratification of the appointment by the members at every Annual General Meeting. Members are requested to consider and approve the same.

13. Auditors' Report

The Auditors have qualified their Audit Report issued to the Company, by stating the following qualification:

"Attention of the matters is invited to note no. 30(d) of the notes to accounts regarding the financial statements of the Company having been prepared on a Going concern basis, notwithstanding that due to continuous losses incurred by the Company during the past years and current year, the accumulated losses of the Company have far exceeded its net worth resulting in negative net worth on balance sheet date. The Company has written-off a substantial part of its Fixed Asset during the year. This situation indicates the existence of a material uncertainty that may cast a significant doubt on the Company's ability to continue as a Going concern."

The Board considered the aforesaid qualification and recorded its comment as below:

The board noted that the audit qualification has raised the question on the ability of the Company to continue as going concern, as the Company has suffered continous losses in past years and in current year the accumulated losses of the Company have far exceeded its Net Worth resulting in negative Net Worth on the balance sheet date as the Company has written-off a substantial part of its Fixed Asset during the year.

The board had further taken on record that the Losses which the Company has suffered during the previous years were obvious, as the Company was going through the implementation process of the project and the expenses were incurred as pre-operational expenses of the project since 2011, i.e., till the time when SEBI has issued its interim order prohibiting the Company from entering into the capital market, or issuing any kind of securities and altering its capital structure. This order had slowed the project implementation process and related expenses. A final order by SEBI against the company on 23rd October, 2013, which has prohibited the Company from entering into the capital market, or issuing any kind of securities and altering its capital structure for an effective period of approx 8 years from the date of the order. The said order has been challenged at Securities and Appelated Tribunal, for which the proceeding is going on. However this restrictive order has brought this Company to be in a position where no project could be implemented and no source of income could be generated till date, which has in turn resulted into the accumulated losses for the Company over the year.

The Board took note of the auditor's Observation on writing off of substantial part of the Fixed Asssets during the year. The Board recorded that the writing off of the Fixed Assets were required and mandated to give a true and fair picture of the financial statement. The Board noted that the auditors in the meeting of the Board of Directors held on 10th february, 2015 had raised query regarding the sanctity of carrying capital advances in the books, as the enforcing contracts and agreements, mandating these advances earlier given, expired long back. They had wanted board to review the possibility of the recovery of the advances.

The Board thereafter took the legal opinion on this matter from M/s Chauhan and Chauhan, Law Office, Greater Kailash Part-1, New Delhi-110048, The lawyer have considered all the aspect relating to this matter Including evaluation of two core concerns on the issue, i.e,

A. Status of Asiatexx contracts and

B. Options/ Remedies Available Qua Advances Made Relevant extract of the lawyer's opinion is reproduced herein below for ready reference.

A. Status of Asiatexx contracts

* "We, accordingly, are of the opinion conclude that any endevour to claim enforcement or pursue the Asiatexx contract shall prove to be a futile exercise with nil chances of success. We are further of the opinion that the SEBI Order dated 23rd October, 2013 inter alia prohibiting/ banning Querist from not issuing any equity shares or any other instruments convertible into equity shares or any other security, is operative, binding and continues to subsists. Though, an appeal has been filed, however no stay has been granted. As such and presently for this very reason the Querist is not in a position to comply with its obliga tions to issue GDRs.

The company also cannot violate the SEBI . Otherwise also, we are Informed that the Querist has no running business or revenue return or available funds to make balance or equivalent payments under these contracts . At one time, It may have been a viable project but presently It has no takers. Infact, the company is at its worst and facing a severe financial crunch. The project site/ lands given under concessions agreement at Haldia, West Bengal have been cancelled. In absence of such site/land, the Refinery Project it seems cannot be implemented. All these supervening factors are required to be considered in a correct perspective. Necessarily, they further render it futile and imprudent for the Querist to pursue or try to enforce the Asiatexx agreement with Asiatexx or Hardt Group or seek its performance."

* On another note, It Is imperative to point out that Asiatexx, we are informed, is a company devoid of assets. Any proceedings initiated against Asiatexx, even if successful including by a arbitration award in favour Querist, would not result in payments being realized by the Querist. Asiatexx is also likely to resist any proceedings / award on the ground of (a) fraud having been perpetrated against it, (b) no moneys having been received by it consequent to the fraud.

B. Options/ Remedies Available Qua Advances Made

* We further more and am of the opinion that by way of the SEBI Order dated 31st December, 2014 has exercised jurisdiction over the advances paid to Asiatexx contract Also all issues as to Asiatexx contract are open and pending before the SEBI/ SAT Querits itself Is a party to these proceedings. Presently, therefore, to file claims for recovery of advance may not serve any purpose. We believe the Querist should anyways await the final outcome of the SEBI/ SAT proceedings. One of the possible outcome of these proceedings can be that the order of disgorgement is confirmed either to be paid by Gagan Rastogi/ Asiatexx or Sanjay Malhotra. In any event at such stage, the purpose of recovery would be achieved in investor interest. We also note that the SEBI in its capacity as a regulator is bound to deal with the proceeds of disgorgement in terms of Securities and Exchange Board of India (Investor Protection and Education Fund) Regulations, 2009. These Regulations provide for establishment of the Investor Protection fund. Rule 5 of theses Regulations further provide the purposes for which the fund can be utilized. Significantly by way of sub-section 3 of Rule 5 the Board, has to ultlize the amounts disgorged and credited to the fund and the interest accrued thereon to restitute eligible and identifiable investors who have suffered losses resulting from violation of securities laws. Necessarily this adjudication currently underway cannot be pre-empted. Querist must await its outcome as per law.

* We furthermore note that from the circumstances explained above, the advances to Asiatexx should be written off in the books of the Querist so that the financial statements of the Querist reflect true and fair view of the financial position. It be also noted and for this we find support in a Supreme Court Judgment of Salim Akbarali Nanji Vs Union of India (UOi) and Ors.; holding that the concept of writing off debts is a internal management/ accounting procedure to clean up the balance sheet of a company. Such procedure/ decision to write off an advance/ debt can be resorted to even in cases where a party has not exhausted all the avenues for recovery of dues. It has no impact on the right of a party to proceed against the opposite party. Nor does it bar or render nonmaintainable recovery proceedings.

The Board after considering the aforesaid legal opinion and considering that possibility of recovery of the Capital advances or enforceability of such Contract (including novation) against them, is bleak, consented to write off these advances.

The board recorded that the decision of writing off is necessary to give true and fair view of the financial statement of the Company, the Board while taking it on record also decided to write off other Fixed Assets and advances, which is having similar nature as aforesaid and accordingly various advances, fixed assets and Preoperative expenses were written off by the Board. Details of write offs are appropriately explained in the notes to the accounts.

Even if the auditors have qualified their report by raising apprehension on the going concern status of the Company as the Company's networth has been completely eroded due to the decision taken by the management to write off various capital advances and fixed assets. Your management justify its decision, as such writing off is to give true and fair pictures of the financial statement of the Company. Apart from this your management is also hoping to have the positive outcome from the SAT proceedings, which Company has initiated against the restrictive orders of the SEBI, which will considerably determine the future of the Company.

14. Share Capital

The Company's Capital Structure remains unchanged during Financial Year 2014-15.

15. Extract of the annual return

The extract of the annual return in Form No. MGT - 9 is annexed as Annexure -01.

16. Conservation of energy, technology absorption and foreign exchange earnings and outgo

The details of conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows:

(A) Conservation of energy and Technology absorption The Company has not initiated its operations till date, no particulars in respect of conservation of energy and technology absorption have been furnished as per Section 134(3)(m) of the Companies Act, 2013.

(B) Foreign exchange earnings and Outgo

There were no foreign exchange earnings and outgo during the year under review.

17. Corporate Social Responsibility (CSR)

The disclosures as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is enclosed as Annexure-02.

18. Directors

A) Changes in Directors and Key Managerial Personnel: Cessation of Directors:

During the Year under review, Mr. Alexander Walter Schweickhardt ceased to be associated with the Company as a Director on the Board with effect from the end of the business hours on 31st March, 2015 due to vacation of office under Section 167 of the Companies Act, 2013, for not attending any meetings of the Board during the Financial year 2014-15. In spite of giving due notice of the meeting of the Board of Directors and also making him aware about the relevant provisions of the Companies Act, 2013 w. r.t vacation of office of Director, he did not turn up for the meeting.

The Directors would like to place on record their appreciation of the contributions made by Mr. Alexander Walter Schweickhardt during his tenure as the Non- Executive Independent Director.

Appointment of New Directors:

The Board of Directors on the recommendations of the Nomination & Remuneration Committee appointed Mrs. Monika Moorjani, as Additional Directors (in capacity of Independent Director) on 10th February 2015 in compliance to Section 149 and 161 of the Companies Act, 2013 read with Clause 49 of the listing agreement and she will be holding the office of Director till the date of ensuing Annual General Meeting of the Company. Appointment of Mrs. Monika Moorjani as an Independent Director in the Company also fulfills the requirement of appointment of a Women Director as per Rule 3 of Companies (Appointment and Qualification of Directors) Rules, 2014 and Clause 49(II)(A)(1) of the Equity Listing Agreement entered into with Stock Exchange. Reappointment of Directors:

As mentioned above, the office of Mrs. Monika Moorjani as an additional Director in the Company is till the date of ensuing Annual General Meeting of the Company. The Company has received notices under Section 160 (1) of the Companies Act, 2013 from member(s) proposing her candidature for appointment as directors. The Board of Directors has recommended her appointment.

Further, Subject to the provisions of Section 152(6) of Companies act, 2013, Mr. Deep Kumar Rastogi, Director of the Company is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment. Brief resume of directors seeking appointment and reappointment along with other details as stipulated under clause 49 of the listing agreement, are provided in the Notice for convening the Annual General Meeting.

B) Declaration by an independent Director(s) & reappointment, if any

All Independent Directors have submitted declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the listing agreement.

C) Details of training imparted to independent Directors

Every new Independent Director inducted on the Board attends an orientation program in which he/she is familiarized with the strategy, operations and Status of the Company. They are further briefed with history of the Company and also handed over a Copy of the bunch of Company's Annual reports, its Memorandum and Articles of Association, various policies and the Code of Conduct of the Company.

Further, at the time of appointment of an Independent Director, the Company issues a formal letter of appointment outlining his/her role, functions and duties/responsibilities as a Director. The Format of the letter of appointment is provided on our website, a web link thereto is given below: http://www.cals.in/Data/Documents/Cals%20Refineries% 20-%20OD%20-%20Model%20LOI%20-%20Independent % 20Directors.pdf

D) Formal Annual Evaluation

Clause 49 of the Listing Agreement mandates that the Board shall monitor and review the framework of its evaluation. The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual Directors. Schedule IV of the Companies Act, 2013 states that the performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the Director being evaluated. The Independent Directors of the Company in their meeting held on February 10, 2015 reviewed the performance of the Non Independent Directors, in case of our Company, Mr. Deep Kumar Rastogi the Executive chairman of the Company and the Board as a whole. Further, the Board of Directors in their meeting held on May 29, 2015 evaluated the performance of all the Independent Directors based on set questioners circulated to the Board. On the Basis of the above evaluations, the performance of the entire Board, Executive Directors and Independent Directors were found satisfactory, specially taking into consideration of the existing circumstances, in which the Company is operating.

19. Number of meetings of the Board of Directors

The Board met 5 Times during the year, the details of which are given in Corporate Governance report forming part of this annual report. The intervening gap between any two meetings was within the time prescribed under Companies Act, 2013.

20. Audit Committee

During the year, the Audit Committee was constituted with Mr. Sameer Rajpal, Chairman of the Committee, Mr. Pranav Kumar and Mr. Alexander Walter Schweickhardt. However, the office Mr. Alexander Walter Schweickhardtwas vacated, with effect from the end of the business hours of 31st March, 2015 under Section 167 of the Companies Act, 2013, for not attending any meetings of the Board during the Financial year 2014-15. The Committee was reconstituted with the appointment of Mr. Deep Kumar Rastogi as a member of the Committee.

A detail description about the audit Committee is given in the Corporate Governance Report, forming part of the Director's Report. Further all recommendations made by Audit Committee during the year were accepted by the Board.

21. Details of establishment of vigil mechanism for directors and employees

The Members of the Audit Committee recommended to the Board a draft Vigil Mechanism/Whistle Blower Policy as per the requirements of Section 177 of Companies Act, 2013 and Clause 49(II)(F) of the Listing Agreement in their meeting held on 14th November, 2014 and finally accepted and adopted by the Board in the meeting held on February 10, 2015.

A weblink to the policy is mentioned below:

http://www.cals.in/Data/Documents/Cals%20Refineries%20- %20OD%20-%20Vigil%20Mechanism.pdf

22. Nomination and Remuneration Committee

The policy formulated by the Board relating to the remuneration for the Directors, Key Managerial Personnel and other employees and also the Criteria for determining the Qualifications, positive attributes and Independence of a Director pursuant to Section 178(3) of Companies Act, 2013 is annexed as Annexure-03 to this Report.

23. Particulars of loans, guarantees or investments under section 186

The Company has not granted any Loans, extended any Guarantees or made Investments during the Financial year 201415, pursuant the provisions of Section 186 of Companies Act, 2013.

24. Particulars of contracts or arrangements with related parties

The Company has not made any contracts with related parties pursuant to Section 188 of Companies Act, 2013.

However your Company has been obtaining loan from Nyra Holdings Pvt. Ltd. a related party as per Section 2 (76) of the Companies Act, 2013, to meet its day to day financial needs and also to meet the statutory dues and necessary compliances. Such arrangements of obtaining loan from related party falls into the category of material related party transaction as per Clause 49 (VII) of the Listing Agreement.

Further, clause 49 (VII)(C) differentiate the related party transaction and the material related party transaction, it prescribes the limit of the transaction which will be treated as the material related party transaction i.e., "transaction/s with related party being entered individually or taken together with previous transaction during a financial year, exceeds 10% of the annual consolidated turnover of the Company as per the last audited financial statement, will be material related party transaction. Sub Clause (E) of this clause mandates that all material related party transaction shall require approval of the shareholders through special resolution.

As on the date of the Balance sheet of 31st March, 2015, your company has borrowed a sum of Rs. 6.83 Crores from Nyra Holdings Private Limited, however in the financial year 2014-15, the total borrowing from the said related party was Rs. 1.14 Crores. As Company's Turnover as per previous audited Balance Sheet (2013-14) is Nil the aforesaid transaction with Nyra holdings pvt. Ltd. shall be treated as material related party transaction, which requires approval of the shareholders. The Company has circulated the matter in the Notice convening this AGM for the requisite approval of the shareholders.

Moreover, the Company has formulated a policy on materiality of related party transactions and also on dealing with Related Party Transactions which can be downloaded from the link mentioned below:

http://www.cals.in/Data/Documents/Cals%20Refineries%20- %20OD%20-%20RPT%20Policy.pdf

25. Managerial Remuneration:

Disclosure pursuant to Section 197(12) of Companies Act, 2013 and Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided below:

i) The Ratio of the remuneration of each Director to the Median remuneration of the employees of the Company for the year 2014-15:

Directors Nature of Directorship Ratio

Mr. Deep Kumar Rastogi Whole time Director & Executive Chairman N.A.*

Mr. Alexander Walter Non-Executive N.A.* Schweickhardt Independent Director

Mr. Pranav Kumar Non-Executive 1:15.33 Independent Director

Mr. Sameer Rajpal Non-Executive 1:13.63 Independent Director

Mrs. Monika Moorjani Non-Executive Independent Director 1:110.39

*Mr. Deep Kumar Rastogi and Mr. Alexander Walter Schweickhardt, had opted not to withdraw any remuneration during the year.

ii) The percentage increase in remuneration of each Director, CFO, CEO, CS or Manager in the financial year:

There was no increase in the remuneration of any of the Director during the financial year.

The remuneration of CS & CFO of the Company has been increased by 21.83% and 8.72%, respectively from financial year 2013-14.

iii) the percentage increase in the median remuneration of employees in the financial year:

An increase of 16.37% from financial year 2013-14.

iv) the number of permanent employees on the rolls of Company: During the year 2014-15, there were 4 employees on the rolls of the Company, one of the employee left the Company in the middle of the year. Accordingly, as on 31st March, 2015, only 3 employees were there on the rolls of the Company.

v) the explanation on the relationship between average increase in remuneration and Company Performance:

The Company is not into operations since a long, it has recorded huge losses and also maintaining the bare minimum staff required to keep the Company going. The management decided to make a nominal increase in the remuneration of the employees to retain them according to their caliber and expertise and to match up with the growing inflation.

vi) Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company:

Out of the three KMP's in the Company, Mr. Deep Kumar Rastogi, the Whole time Director is not withdrawing any remuneration from the Company.

Apart from him, remuneration of CS & CFO of the Company has been increased by 21.83% and 8.71%, respectively from financial year 2013-14, which was necessary to retain them and to match up the growing inflation. The Company is facing a lot of legal complexities and therefore, qualified and experienced personnel is required to sail the Company out of this adverse situation and hence it was imperative to give them their due raise.

vii) variations in the market capitalization of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer:

The Company had allotted shares at Rs. 10/- each under its last public offer which were later subdivided into face value of Rs. 1/- per Equity Share. The Market Quotations/price of shares as at 31st March, 2015 at BSE compared to the IPO decreased by 91%.

Particulars As at 31st As at 31st Variation March, 2015 March, 2014 (%)

Closing Share Price Rs. 0.09/- Rs. 0.09/- Nil

Market Capitalization (INR) Rs.746456679/- Rs.746456679/- Nil (Market Value per share *No. of Outstanding Shares)

P/E ratio (Market Value per share/EPS) Rs.-0.13/- Rs.-9.00/- -98.56%

viii) average percentile increase already made in the salaries of employees other than managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

There has been no increase in the remuneration of managerial personnel apart from that of KMP's, justification for which has been given in point (vi) above.

ix) Comparison of the each remuneration of the Key Managerial personnel against the performance of the Company

As mentioned in point (vi) above the remuneration of CS & CFO of the Company has been increased by 21.83% and 8.71%, respectively from financial year 2013-14, which was necessary to retain them and also to match up the inflation growth. Since the Company has not recorded any performance as no business operations was recorded, during the year, therefore such comparison of the each remuneration of the Key Managerial personnel against the performance of the Company is not possible.

x) the key parameters for any variable component of remuneration availed by the Directors:

Only the Independent Directors of the Company are withdrawing sitting fee from the Company, nothing else is being paid to the Directors in form of remuneration and hence, there is no variable component.

xi) The ratio of the remuneration of the highest paid director to that of the employees who are not Directors but receive remuneration in excess of the highest paid director during the year:

The ratio of the remuneration of the highest paid director to that of the employees who are not Directors but receive remuneration in excess of the highest paid director during the year is 1:82.64.

xii) The Remuneration is as per the remuneration policy of the Company.

26. Secretarial Audit Report

A Secretarial Audit Report in Form No. MR-3 for the Financial year 2014-15 given by M/s Vineet Gupta & Associates, Company Secretaries is annexed as Annexure-04 with this report.

The following disclosures has been made by the Secretarial Auditor in his report, requiring explanation:

"Share application money for an amount of Rs 1,57,57,463/-remains pending for allotment."

Explanations given:

It has been explained to the Secretarial Auditor that the above mentioned amount of Rs. 1,57,57,463/- is part of FDI, which was received from M/s Abboro Limited, a foreign Body Corporate. This amount is pending for allotment due to the restrictive order of SEBI dated 23rd October, 2013 which has restricted the Company from accessing the Capital markets and/or issuing shares and/or any other instruments convertible into equity or altering its capital structure. Though the Company through its letter dated 12th May, 2015, has asked for a special permission from SEBI, under intimation of Registrar of Companies, NCT of Delhi and Haryana, for the relaxation in its order, so that the equity shares could be allotted to M/s Abboro Limited.

The same fact has been suitably recorded by the Secretarial Auditor in his Report.

27. Risk management policy

Pursuant to the requirements of Clause 49(VI) of the Listing agreement, the Board has constituted the Risk Management Committee and has also laid down the Risk Management Plan of the Company. The Committee is responsible for the monitoring and reviewing of the Risk Management Plan. The Major elements of Risk which may threaten the existence of the Company have been identified and laid down in the Risk Management Plan of the Company. Simultaneously, the Audit Committee of the Company is also looking after the areas of Financial Risk and Controls. The Risk Management System of the Company is working systematically and is commensurate with the Nature, Size and Operations of the Company.

28. Management Discussion and Analysis Report

The Management Discussion and Analysis Report as required under Clause 49 of the Listing Agreement with the stock Exchange forms part of this Report.

29. Corporate Governance Report

A separate Section on Corporate Governance forming part of the Director's Report and a certificate from the Practicing Company Secretary confirming compliance of the Corporate Governance Norms as stipulated in Clause 49 of the Listing Agreement is included in this Annual Report.

30. Listing of Securities

The Securities of your Company are currently listed with Bombay Stock Exchange (BSE) with ISIN- INE 040C01022 and scrip code 526652. The Company has paid listing fee to the Bombay Stock Exchange for the financial year 2015-16. All compliances with respect to the listing agreement is being made in regular course.

31. Directors' Responsibility Statement

In terms of the provisions of Section 134(5) of the Companies Act, 2013, your Directors confirm that -

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis; and

(e) the directors, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

32. Acknowledgements

Your Directors wish to place on record their appreciation for the Cooperation and assistance received from Regulatory Bodies, Government, Bankers, Shareholders, business associates and various other Stakeholders who have extended their valuable, sustained support and encouragement during the year under review.

The Directors would also like to place on record a hearty thanks to the management and the employees of the Company, who have been standing with the Company and giving their tireless support in the adverse circumstances.

For and on behalf of the Board of Directors

(Deep Kumar Rastogi) (Sameer Rajpal) Executive Chairman Director DIN :01229644 DIN :05184612 Place : New Delhi Date : 07.08.2015


Mar 31, 2014

Dear Members,

The Directors present their Thirtieth Annual Report and the Audited Financial Statement for Financial Year 2013-14. Pursuant to the Ministry of Corporate Affairs General Circular 08/2014 No. 1/19/ 2013-CL-V dated April 4, 2014, the Financial Statements and other reports required to be attached to the Annual Report for FY 2013-14 are governed by the relevant provisions, schedules, rules of the Companies Act, 1956. Hence the Director''s Report is prepared in line with the requirements of the Companies Act, 1956.

FINANCIAL RESULTS:

(Rs. in millions) Description Year Ended Year Ended March 31, March 31, 2014 2013

Sales - 0.72

Other Income 3.76 10.32

Total Revenue 3.76 11.04

Purchases - 0.71

Employee Benefits Expense 1.29 7.44

Interest and Finance Charges 20.46 84.28

Depreciation and Amortizations 0.12 0.86

Other Expenses 1.30 15.33

Total Expenses 23.17 108.62

Profit / (Loss) before exceptional

and extraordinary items (19.41) (97.58)

Extra-ordinary Items - (19.72)

Loss for the year (19.41) (77.86)

DIVIDEND:

As there is no operating income and consequently no profit is available for distribution as dividend.

PROGESS OF THE PROJECT AND STATUS OF FINAL ORDER FROM SEBI:

The Company has a plan to set up crude oil refinery in Haldia, West Bengal, however the progress of the project was hampered and it is standstill due to factors beyond the control of the Company, The SEBI, by its ex-parte order No.WTM/PS/ISD/02/2011 dated September 21, 2011, which was later confirmed vide their order dated December 30, 2011, directed your Company not to issue equity shares or any other instruments convertible into equity shares or alter capital structure in any manner till further directions in this regard. The Company in the above matter decided to file an appeal with the Securities Appellate Tribunal (SAT) to seek a solution in the month of August, 2013. SAT vide its order dated August 28, 2013, had directed SEBI to complete the proceedings and issue the final orders after issuing show cause notice to the Company within a period of eight weeks from the date of order, failing which the ex-parte interim order of September 2011 and confirmatory order of December 2011 will stand vacated. Further during the course of the hearings, SAT had also recorded the statement of the Counsel of SEBI, confirming that their investigations in respect of our Company have been completed. As directed by SAT, SEBI had issued a Show Cause Notice dated September 19, 2013 along with supplementary show cause notices, received on later dates, the Company had filed a detailed reply of the said show cause notices to the SEBI, after which the SEBI issued a final order against the Company, of which operative portions are as under:

a. That the Company will not issue equity shares or any other instruments convertible into equity shares or any other security, for a period of ten years.

b. Vide Interim Order dated September 21,2011 (later confirmed through the Confirmatory Order on December 30, 2011), the Company was directed not to issue equity shares or any other instrument convertible into equity shares or alter their capital structure in any manner till further directions. In this context, the Company has already gone the prohibition imposed vide the Interim Order for a period of approximately two years. In view of this factual situation, it is clarified that the prohibition already undergone by the Company pursuant to the aforementioned SEBI Order shall be reduced while computing the period in respect of the prohibition imposed vide this order.

From the above Order it is clear that the Company is restrained from issuing any further equity shares or any other instruments, convertible into equity shares or any other security, effectively for a period of eight years (approx).

Your Company in the above matter has applied for consent order to SEBI and also has challenged the final order of SEBI at the Securities Appellate Tribunal (SAT), for which proceedings are going on.

The members be apprised that there is no change since the last reporting in the status relating to the agreements which was entered with the Hardt Group for purchase of refinery equipment and with the set of refining equipment for which the Company had already contracted and paid advances, however the Company had lost the Bayernoil equipment as it couldn''t fulfill its contractual commitments, the rigorous effort of your Company to restart the project is also failed due to the restraint on issue of new equity by SEBI. Meanwhile the strategic investor in Hardt Group has also stopped infusing further funds due to the said embargo of SEBI order.

However, the members may note that the Company in the past had revised the capacity of refinery envisaged in Haldia to 10 MMTPA from 5 MMTPA and had also filed an application to Ministry of Environment to enhance the approval for putting up 200,000 bpd equivalent to 10 MMTPA capacity refineries. The Ministry vide its letter dated September 20, 2011 declined the request as Haldia has been notified as a critically polluted area and no new capacity or expansion can be permitted till it is de-notified. Further Ministry of Environment and Forest vide its Memorandum Dated 17th September, 2013, has de-notified Haldia from critically polluted areas and will be able to consider the new / expansion projects. The Company plans to approach MOEF for getting the requisite clearances for its expansion once the plans for the same are crystallized.

Presently the core consideration of your Company is to first get rid of the present adverse situation and try to create favorable circumstances wherein it can be decided, how to proceed with the project of the Company, and also to decide the future course of action. It is pertinent to note that the embargo imposed by SEBI since September, 2011 has brought the Company on its back foot. Every plan and proposal, which your Company had decided to execute towards the implementation of the project, has been adversely affected and cannot be executed. Considering the present circumstances, it has become very important to re-think and plan afresh for the future development of the Company and its project implementation subject to some positive outcome from the Hon''ble SAT, to which your management is very hopeful.

The Hardt Group which had agreed to become a strategic investor in the Company and initially assisted the Company in implementing its refinery project and also brought in Rs. 136.52 million during March''11 to March''12, through Abboro Limited (another affiliate of Hardt Group), which allowed your Company to meet its funding for working capital and project activities. Presently the Hardt group is supportive to the Company and awaiting the final decision to be made by Hon''ble SAT, in the appeal of the Company made against the said order of SEBI.

However it is important to note that the contracts which was entered with affiliates of Hardt group have expired as of now, but, your Company is fully committed to come out of the present adverse situation.

STATUS OF FIPB, CCEA APPROVAL:

As already informed earlier the Company''s proposal to issue GDR''s to Tagore and Amber, aggregating to US$ 317 million was initially approved by the Foreign Investment Promotion Board (FIPB) in their meeting held on May 20, 2011. Since the amount of issue had exceeded Rs. 12,000 million, the proposal was recommended to the Cabinet Committee on Economic Affairs (CCEA). However, prior to receipt of the CCEA approval, SEBI in September 2011, issued directions to the Company to not to issue equity or any other instruments convertible into equity or alter capital structure in any manner.

Further pursuant to the SEBI order, FIPB had also withdrawn its approval. The Company had represented to FIPB repeatedly, requesting them to reconsider their decision. However, FIPB had at that time rejected our request vide its letter dated July 23, 2012 in view of change in the FDI Policy with effect from April 1, 2012. The Company again represented to FIPB, stating that the proposal was earlier approved under the then prevailing FDI policy and the delay was on account of factors beyond the Company''s control, which was also rejected by FIPB vide their letter dated November 2, 2012 for want of final orders from SEBI.

Since the SEBI has issued a final order and has restrained the Company from issuing any further equity shares or any other instruments convertible into equity shares or any other security effectively for a period of eight years (approx), it is immaterial to approach the FIPB in the matter.

STATUS OF LAND AT HALDIA:

As the members are aware, the Haldia Development Authority (HDA), had offered land admeasuring about 400 acres at Haldia, West Bengal to the Company for setting up the project, stipulating a lease premium of Rs. 600 million. Since your Company, due to the embargo imposed by SEBI, could not become operational and could not pay the said lease premium pending financial closure, it entered into a tripartite agreement along with HDA and West Bengal Industrial Development Corporation Limited (WBIDC), whereby, WBIDC paid the lease premium and other development charges to HDA and gave permissive possession of the land to the Company for six months from the date of the agreement, subject to compliance with certain conditions. Your Company could not comply with the conditions and requested an extension of time from WBIDC for the same, WBIDC had granted such extension, with certain additional conditions relating to tie up of equity and achievement of financial closure for the project, which could not be complied with due to the subsisting of SEBI''s prohibitory order. The Company had accordingly informed WBIDC, requesting further extension, which was not acceded to and WBlDC had withdrawn the permissive possession.

Your Company has been awarded with the adverse order from SEBI, and it will not be possible for your Company to achieve the financial closure, in any way, till the time SEBI restriction is lifted and Company could enter into securities market, which will lead your Company to be in the position to consider and decide its future course of action and the future strategies, which will ultimately lead to achieving the financial closure. It cannot be denied that the only positive sign as of now with your Company is that the Hardt Group is with us and will be ready to fund the Company in the appropriate manner, once the SAT gives us the positive order in the ongoing matter.

Your management is confident of sourcing the required funds for clearance of the WBIDC dues and getting extensions on annulment of the SEBI order.

DIRECTORS:

Mr. Deep Kumar Rastogi retires by rotation as required under the Companies Act, 1956 and being eligible, offers himself for reappointment.

Mr. R. Rajagopalan, Independent Director resigned from the Board vide his letter dated 23rd October, 2013 and Mr. D. Sundararajan. Managing Director of the Company, resigned from the Board vide his letter dated 24th October, 2013. Their resignations were accepted by the Board of Directors, in their meeting held in November, 2013. The Directors would like to place on record their appreciation of the contributions made by Mr. R. Rajagopalan and Mr. D. Sundararajan during their tenure as the Directors of the Company.

Mr. Pranav Kumar was co-opted as the Independent Director in the capacity of Additional Director on the Board of the Company with effect from 11th March, 2014 and holds office as such up to the ensuing Annual General Meeting. Notice from the shareholders together with necessary deposit proposing his name as Director has been received.

The Company has, pursuant to the provisions of Clause 49 of the Listing Agreements entered into with Stock Exchange, appointed Mr. Alexander Walter Schweickhardt, Mr. Sameer Rajpal and Mr. Pranav Kumar as Independent Directors of the Company. The Company has received declarations from the said Independent Directors of the Company, except Mr. Alexander Walter Schweickhardt, confirming that they meet the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under the said Clause 49. In accordance with the provisions of Section 149(4) and proviso to Section 152(5) of the Companies Act, 2013, these Directors are being appointed as Independent Directors to hold office as per their tenure of appointment mentioned in the Notice of the forthcoming AGM of the Company in accordance with the requirements of the Act and the Articles of Association of the Company.

PUBLIC DEPOSITS:

The Company has not accepted any deposit under section 58A of the Companies Act, 1956, during the financial year under review.

CORPORATE GOVERNANCE:

A separate section on Corporate Governance forming part of the Directors'' Report and the certificate from the Practicing Company Secretary confirming compliance of Corporate Governance norms as stipulated in Clause 49 of the Listing Agreement with the Indian Stock Exchanges is included in the Annual Report.

CORPORATE SOCIAL RESPONSIBILITY:

Pursuant to the provisions of Section 135 of Companies Act, 2013 and Companies (Corporate Social Responsibility policy) Rules, 2014 company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during any financial year shall constitute a Corporate Social Responsibility Committee of the Board consisting of three or more directors out of which at least one director shall be an independent director.

Aligning with the above requirement of the Companies Act, 2013, your Company has constituted a Committee comprising of Mr. Deep Kumar Rastogi, Executive Chairman, Mr. Sameer Rajpal, Non- Executive & Independent Director and Mr. Pranav Kumar, Non-Executive & Independent Director. The Committee is responsible for formulating and monitoring the CSR policy of the Company, its broad terms of reference is

1. To formulate and recommend to the Board, a Corporate Responsibility Policy which shall indicate the activities to be undertaken by the company as specified in Schedule VII of the Companies Act, 2013,

2. To recommend the amount and area of expenditure to be incurred on the various activities, and

3. To monitor the Corporate Social Responsibility Policy of the Company from time to time.

4. Any other item as may be referred to by the Board.

Since the company has no profit during the previous years, there shall not be requirement to fund any CSR activities.

DIRECTOR''S RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to the Director''s Responsibility Statement, the Directors confirm on the basis of information placed before them by the Management and Auditors: -

1. That in the preparation of the annual accounts for the Financial Year ended March 31, 2014, the applicable Accounting Standards read with requirements set out under schedule VI to the Companies Act, 1956, have been followed;

2. That the Company has selected appropriate accounting policies and applied them consistently and made judgment and estimates that were reasonable and prudent so as to give a true and fair state of the affairs of the Company at the end of the financial year and of the Profit and Loss of the Company for the year under review;

3. That the Company has 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; and

4. That the accounts of the Company for the financial year ended March 31, 2014 has been prepared on a going concern basis.

CODE OF CONDUCT:

The Code of Conduct which is formulated by the Company is applicable to all the Directors, Senior Management and Employees of the Company. This Code endorses the idea of good corporate governance and good corporate citizenship. The Code emphasises on Company''s commitment to sustainable development, and a gender friendly workplace, transparency and auditability and legal compliances. While preparing the Code, the Company kept in mind the standards of business conduct, ethics and governance and centers around the following theme:

"All Directors, Officers and Employees of the Company are committed to conducting its business in accordance with the applicable laws, rules and regulations and with highest standards of business ethics. This code is intended to provide guidance and help in recognizing and dealing with ethical issues, provide mechanisms to report unethical conduct, and to help foster a culture of honesty and accountability. Each Director, officer and employee is expected to comply with the letter and spirit of this Code."

AUDITOR''S REPORT:

Auditor''s Report read together with Annexures referred to in Paragraph 3 of the Auditor''s Report do not contain any qualification and do not call for any explanation/clarification.

AUDITORS:

M/s Kanu Doshi Associates, Chartered Accountants, (ICAI Firm Registration No.- 104746W) who are the Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting. It is proposed to re-appoint them to examine and audit the accounts of the Company for next financial year, 2014-15 and to hold office from the conclusion of this AGM till the conclusion of next AGM of the Company. The said Auditors have, under Section 139(1) of the Companies Act, 2013 and the Rules framed thereunder furnished a certificate of their eligibility and consent for re-appointment.

Members are requested to reappoint them and authorize the Board to fix their remuneration and pay out of pocket expenses.

LISTING OF SECURITIES:

Your Company''s securities are currently listed with Bombay Stock Exchange. The Company has paid the listing fees to Bombay Stock Exchange for the financial year 2014-15.

DELISTIING OF GDRs OF THE COMPANY FROM LUXEMBOURG STOCK EXCHANGE (LSE):

BNY Mellon, the Depository of GDRs of the Company, had resigned as the Depository of the GDR''s of the Company w.e.f 28th October, 2013, and given the appropriate time, as per the agreement entered with them by Company, to appoint a successor depository. Your Company tried its level best to find out the suitable depository for the GDR''s of the Company, within the time as stipulated in the notice of resignation of BNY Mellon. While looking for the successor depositories, Company also requested to BNY for the extension in time to find the successor depository. After putting in all its effort, your Company was not able to find any depository for the GDRs to replace the BNY Mellon.

BNY Mellon had issued a notice dated April 08, 2014 for the termination of Deposit Agreement with the Company and instructed the holders of the DRs to convert their holdings into Equity shares on or before July 08, 2014.

Upon expiry of the aforesaid period the Company has received a letter from Luxembourg Stock Exchange on 24th July, 2014 intimating us about the delisting of GDRs from the official list of the Luxembourg Stock Exchange and also to withdraw their trading on the Euro MTF Market of the LSE w.e.f 14th July, 2014. Your Company has paid the Listing Fee to the Luxembourg Stock Exchange for the calendar year 2014.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO:

As the company is not covered in Companies (Disclosure of particulars in report of Board of Directors) Rules, 1988, provisions of Section 217(1) (e) of the Companies Act, 1956 are not applicable.

The details of the foreign exchange earnings and out go during the year have been given in the schedules to the accounts.

PARTICULARS OF THE EMPLOYEES:

There is no employee drawing the salary as prescribed under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975.

ACKNOWLEDGEMENT:

Your Directors wish to place on record their appreciation for the co-operation and assistance received from Regulatory Bodies, Government, Bankers, stakeholders and other business associates who have extended their valuable, sustained support and encouragement during the year under review.

The Directors would also like to thank the management, employee of the Company for showing their strong commitment to sail with the Company in adverse flow.

For and on behalf of the Board of Directors

(Sameer Rajpal) (Deep Kumar Rastogi) Director Executive Chairman DIN :05184612 DIN :01229644

Place : Gurgaon Date : 14.08.2014


Mar 31, 2013

The Directors present herewith the Twenty Ninth Annual Report together with the Audited Accounts of the Company for the year ended March 31, 2013.

FINANCIAL RESULTS:

(Rs. in millions)

Description Year Ended Year Ended March 31, March 31, 2013 2012

Sale 0.72 0.00

Other Income 10.32 7.74

Total Revenue 11.04 7.74

Purchases 0.71 0.00

Employee Benefits Expense 7.44 9.76

Interest and Finance Charges 84.28 8.13

Depreciation and Amortizations 0.86 1.44

Other Expenses 15.33 29.53

Total Expenses 108.62 48.86

Profit / (Loss) before exceptional and extraordinary (97.58) (41.12)

Extra-ordinary Items (19.72) 2,643.05

Loss for the year (77.86) (2,684.17)

DIVIDEND:

As the Company is in the process of implementing the refinery project and there is no operating income, your directors have not recommended any dividend for the year.

PROGESS OF THE PROJECT:

The Company has a plan to set up crude oil refinery in Haldia, West Bengal. During the year, the progress of the project was severely hampered and project implementation has come to standstill due to factors beyond the control of the Company. As stated in the last Annual Report, SEBI, while investigating certain entities in regard to "Market Manipulation using GDR issues" had by its ex-parte order No.WTM/PS/ISD/02/2011 dated September 21, 2011, which was later confirmed vide order dated December 30, 2011, directed our Company not to issue equity shares or any other instruments convertible into equity shares or alter capital structure in any manner till further directions in this regard. The said order of SEBI is still subsisting.

Subsequently SEBI had from time to time sought further information for early completion of the investigations in the matter and also summoned the Managing Director for a Personal Appearance, which was complied with and queries of SEBI were replied to. The Company is regularly following up with SEBI and expects to receive the final orders from SEBI anytime soon, after which the Company will take necessary steps for tie up of funds and start project implementation.

After signing the agreements with Hardt Group for purchase of refinery equipment and with the set of refining equipment for which the Company had already contracted and paid advances, the Company revised the capacity of refinery envisaged in Haldia to 10 MMTPA from 5 MMTPA. It filed an application to Ministry of Environment to enhance the approval for putting up 200,000 bpd equivalent to 10 MMTPA capacity refineries. However, the Ministry vide its letter dated September 20, 2011 declined the request as Haldia has been notified as a critically polluted area and no new capacity or expansion can be permitted till it is de-notified. Meanwhile, the Company lost the Bayernoil equipment as it couldn''t fulfill its contractual commitments. The Company''s various efforts to restart the project also failed due to the embargo on issue of new equity by SEBI. Hardt Group has also stopped infusing further funds pending revocation of SEBI order.

In the light of the above the Company intends to proceed with only a 5 MMTPA refinery on receiving favourable orders from SEBI. The Project cost for setting up of 5 MMTPA refinery with equipments contracted from Hardt Group along with balancing equipments is estimated at around US $ 1 billion, which would be funded by a Debt:Equity ratio of 70:30. The equity requirement will be met by issue of GDRs to the Hardt group and the existing equity.

Hardt Group had agreed become a strategic investor in the Company and assist it in implementing the refinery project and had brought in Rs. 136.52 million during March''11 to March''12, through Abboro Limited (another affiliate of Hardt Group), which enabled the Company to meet its funding for working capital and project activities.

Though the contracts entered with affiliates of Hardt group have expired as of now, Hardt Group has indicated their willingness to extend the same once a favourable order from SEBI is received. The Company is confident of the support of Hardt Group in implementing the project after receiving a favourable order from SEBI.

STATUS OF FINAL ORDER FROM SEBI:

The Company is regularly following up with SEBI and is expecting the final orders anytime soon. However at the same time, as considerable time has elapsed since the ex-parte interim order passed by SEBI in September 2011, the Board has also severally authorized the Executive Chairman and Managing Director of the Company to approach the Securities Appellate Tribunal (SAT) at the appropriate time and to take necessary steps in this regard.

STATUS OF FIPB, CCEA APPROVAL:

The Company''s proposal for issue of such GDRs to Tagore and Amber, aggregating US $ 317 million was approved by the Foreign Investment Promotion Board (FIPB) in their meeting held on May 20, 2011. Since the amount of issue had exceeded Rs. 12,000 million, the proposal was recommended to Cabinet Committee on Economic Affairs (CCEA). However, prior to receipt of the CCEA approval, SEBI in September''11, had issued directions to the Company not to issue equity or any other instruments convertible into equity or alter capital structure in any manner.

Pursuant to the SEBI order, FIPB, had also withdrawn its approval. The Company had represented to FIPB requesting them to reconsider their decision. However, FIPB had rejected our request vide its letter dated July 23, 2012 in view of change in the FDI Policy with effect from April 1, 2012. The Company has again represented to FIPB, stating that the proposal was earlier approved under the then prevailing FDI policy and the delay was on account of factors beyond the Company''s control, which has also been rejected by FIPB vide their letter dated November 2, 2012 for want of final orders from SEBI.

The Company now proposes to take up the matter with FIPB, once the favourable order from SEBI is received.

STATUS OF LAND AT HALDIA:

Haldia Development Authority (HDA), had offered land admeasuring about 400 acres at Haldia, West Bengal to the Company for setting up the project, stipulating a lease premium of Rs. 600 million. As the Company could not pay the said lease premium pending financial closure, it entered into a tripartite agreement along with HDA and West Bengal Industrial Development Corporation Limited (WBIDC), whereby, WBIDC paid the lease premium and other development charges to HDA and gave permissive possession of the land to the Company for six months from the date of the agreement, subject to compliance with certain conditions. Since the Company could not comply with these conditions, it had requested additional time from WBIDC for the same. Though WBIDC granted such extension, it stipulated additional conditions relating to tie up of equity and achievement of financial closure for the project, which could not be complied with as the SEBI order was subsisting. The Company had accordingly informed WBIDC, requesting further extension, which was not acceded to and WBIDC had withdrawn the permissive possession.

The Company has again represented to WBIDC requesting time till March 2014 for complying with the conditions. The strategic investor Hardt group has agreed to provide the required funding to clear the dues of WBIDC, subject to the condition that the Company obtains a favourable order from SEBI and gets the required extension from WBIDC. The management is confident of sourcing the required funds for clearance of the WBIDC dues and getting extensions on annulment of the SEBI order.

DIRECTORS:

Mr. D. Sundararajan retires by rotation as required under the Companies Act, 1956 and being eligible, offers himself for reappointment.

Mr. Sarvesh Goorha, Non- Executive Independent Director of the Company, resigned from the Board vide his letter dated May 25, 2013 and the same was accepted by the Board of Directors, in their meeting held on May 30, 2013. The Directors would like to place on record their appreciation of the contributions made by Mr. Sarvesh Goorha during his tenure as the Non- Executive Independent Director.

Mr. R. Rajagopalan was co-opted as the Additional Director on the Board of the Company with effect from May 30, 2013 and holds office as such upto the ensuing Annual General Meeting. Notice from the shareholders together with necessary deposit proposing their names as Directors have been received.

FIXED DEPOSITS:

The Company has not accepted any deposit under section 58A of the Companies Act, 1956, during the financial year under review.

CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchange, a compliance report on Corporate Governance is annexed as part of the Annual Report.

DIRECTOR''S RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to the Director''s Responsibility Statement, the Directors confirm on the basis of information placed before them by the Management and Auditors: -

1. That in the preparation of the annual accounts for the Financial Year ended March 31, 2013, the applicable Accounting Standards have been followed;

2. That the Company has selected appropriate accounting policies and applied them consistently and made judgment and estimates that were reasonable and prudent so as to give a true and fair state of the affairs of the Company at the end of the financial year and of the Profit and Loss of the Company for the year under review;

3. That the Company has 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; and

4. That the accounts of the Company for the financial year ended March 31, 2013 have been prepared on a going concern basis.

CODE OF CONDUCT:

The Company has established the Code of Conduct which is applicable to Directors, Senior Management and Employees of the Company. This Code is based on fundamental principles, viz. good corporate governance and good corporate citizenship. The Code covers Company''s commitment to sustainable development, concern for occupational health, safety and environment, a gender friendly workplace, transparency and auditability and legal compliance. The Code while laying down, in detail, the standards of business conduct, ethics and governance, centers around the following theme:

"All Directors, Officers and employees of the Company are committed to conducting its business in accordance with the applicable laws, rules and regulations and with highest standards of business ethics. This code is intended to provide guidance and help in recognizing and dealing with ethical issues, provide mechanisms to report unethical conduct, and to help foster a culture of honesty and accountability. Each Director, officer and employee is expected to comply with the letter and spirit of this Code."

AUDITOR''S REPORT:

Auditor''s Report read together with Annexures referred to in Paragraph 3 of the Auditor''s Report do not contain any qualification and do not call for any explanation/clarification.

AUDITORS:

M/s Kanu Doshi Associates, Chartered Accountants, the Auditors of the Company retire at the ensuing Annual General Meeting and have expressed their willingness and eligibility to continue in the office, if reappointed.

Members are requested to reappoint them and authorize the Board to fix their remuneration and pay out of pocket expenses.

LISTING OF SECURITIES:

Your Company''s securities are currently listed with Bombay Stock Exchange. The Company''s Global Depository Receipts (GDRs) are listed at Luxembourg Stock Exchange. The Company has paid the listing fees to Bombay Stock Exchange and Luxembourg Stock Exchange for the financial year 2013-14 and Calendar Year 2013 respectively.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, AND FOREIGN EXCHANGE EARNING AND OUTGO:

As the company is not covered in Companies (Disclosure of particulars in report of Board of Directors) Rules, 1988, provisions of Section 217(1) (e) of the Companies Act, 1956 are not applicable.

The details of the foreign exchange earnings and outgo during the year have been given in the schedules to the accounts.

PARTICULARS OF THE EMPLOYEES:

There is no employee drawing the salary as prescribed under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975.

ACKNOWLEDGEMENT:

Your Directors would like to express their sincere appreciation for the co-operation and assistance received from Regulatory Bodies, Government, Bankers, stakeholders and other business associates who have extended their valuable, sustained support and encouragement during the year under review.

Your Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers and staff at all levels of the Company. We look forward for your continued support in the future.



For and on behalf of the Board

Place : New Delhi (Deep Kumar Rastogi)

Date : July 9, 2013 Executive Chairman


Mar 31, 2012

The Directors present herewith the Twenty Eighth Annual Report together with the Audited Accounts of the Company for the year ended March 31, 2012.

FINANCIAL RESULTS

(Rs. in Millions)

Description 2011-12 2010-11

Other Income 7.74 -

Total Revenue 7.74 -

Emplyee Benefits Expense 9.76 -

Finance Cost 8.13 -

Depreciation & Amortiazation Expenses 1.44 -

Other Expenses 29.53 -

Total Expenses 48.86 -

Profit/(Loss) before exceptional and extraordinary items and tax (41.12) -

Extra-ordinary Items 2643.05 -

Profit/(Loss) before Tax (2,684.17) -

Tax Expense - -

Loss for the year (2,684.17) -

DIVIDEND

As the Company is in the process of implementing the refinery project and there is no operating income, your directors have not recommended any dividend.

PROGRESS OF THE PROJECT

During the second half of financial year 2011-12, the progress on implementation of the project had been considerably slowed down because of events beyond the control of the management. The Company had during the previous financial year tied up with Hardt group, for import of certain refining equipments managed by it at a total cost of US$ 417 million, out of which a major portion amounting to US$ 317 million was to be settled by issuing equity in the form of Global Depository Receipts (GDRs). The said arrangement, apart from reducing the cash outflow burden would have enabled the Company to tie up substantial portion of the equity requirement for funding the project. Apart from the proposed gDr issue as above, Hardt group, through Abboro Limited, Cyprus, has infused funds to the extent of Rs.136.53 million in the Company which enabled the Company to restart the project activities.

The Company had submitted its application to the Foreign Investment Promotion Board (FIPB), Ministry of Finance, seeking their approval for issuance of such GDR to Hardt group. Though FIPB had approved the allotment in their meeting held on May 20, 2011, the matter was recommended by them to the Cabinet Committee on Economic Affairs (CCEA) as the size of the issue exceeded Rs. 12,000 million.

However in the interim, Securities and Exchange Board of India(SEBI), while dealing with certain entities in case of market manipulation by issue of GDRs, had vide its ex-parte order No.WTM/PS/ISD/02/2011 dated September 21, 2011, which was later confirmed vide order dated December 30, 2011, directed our Company not to issue equity shares or any other instruments convertible into equity shares or alter capital structure in any manner till further directions in this regard. The SEBI order has resulted in the Company not being able to proceed with the proposed GDR issue and tie up its Equity. Consequent to SEBI's order, FIPB has also withdrawn its recommendation to CCEA and kept the proposal pending at its end.

The Company had requested Foreign Investment Promotion Board (FIPB) to hold the proposal till receipt of favourable orders from SEBI. However, FIPB, vide its letter dated July 23, 2012 informed the company that it is not acceding to its request as the FDI Policy effective from April 1, 2012 does not allow issue of equity against import of second hand equipments. The Company has, on July 31, 2012 requested FIPB to reconsider its decision as the earlier approval was based on FDI Policy dated April 1, 2011, which allowed the issue of such equity. A favourable response is expected.

Subsequent to the confirmatory order of December 30, 2011, SEBI had called for additional information in January 2012 and also summoned the Managing Director for a personal appearance, which was complied with and all queries of SEBI were replied to. The final order from SEBI in this regard is expected shortly and the project activities are expected to re-commence no sooner the orders from SEBI are received. During March 2011, the Contract for Purchase and sale of Assets related to a decommissioned 90000 bpd Oil Refinery with Lohrmann International GmbH (Lohrmann) was renegotiated whereby the scope of the contract was amended to exclude auxiliary technical services and consultancy services besides reduction in the purchase price for the contract with the stipulation to make the balance payment by May 23, 2011. Since the Company did not have any credit limits it approached one of the potential EPC Contractors, who had agreed to utilize their Bank limits to open the necessary LCs in favour of Lohrmann. However when the application for the LC was submitted, the bankers had insisted on credit worthiness of Lohrmann, which when submitted was not found satisfactory by the banks and the Company lost precious time in setting things right. The supplier could not accede to the Company's request for further extension of time as they had to fulfil their back- to-back commitments and as a result the said contract was terminated with the amounts paid as advance being forfeited. Though the Management had tried to salvage certain important equipment from other sources, it was not successful due to the resources constraints.

The other vendors, with whom contracts had been entered into, for purchase of auxiliary and balancing equipments, have confirmed the availability of these equipments and once a favourable SEBI order is received and financial tie up for the project is completed, these contracts will be revalidated and renegotiated.

The Company had requested West Bengal Industrial Development Corporation Limited (WBIDC) to allow time upto March 31, 2012 for complying with the conditions stipulated by it for handing over the permissive possession of land. Though WBIDC allowed extension of permissive possession it was subject to certain preconditions including payments of interest and achievement of financial closure within a stipulated time. Considering that the time allowed was too short for compliance of these conditions, more particularly since the capacity of the project had also doubled entailing additional costs, the Company had again requested WBIDC to extend the time limit upto March 31, 2012, which was not acceded to by WBIDC resulting in withdrawal of the the permissive possession. However it is understood that the land at Haldia is still available and once the outstanding issues are addressed, WBIDC would have no objections to handing over the permissive possession of land to the Company.

In the interim Hardt group has extended its contracts with the Company and has also expressed keenness to arrange for necessary funds to clear the dues of WBIDC. However as the SEBI order is still subsisting, the funds can be infused only after order from SEBI is received.

The detailed project report for the refinery project has been updated by M/s Chemtex Global Engineers Pvt. Ltd. Based on the desired configuration. Hardt group is in the process of discussions with leading European contractors for implementation of the project on turnkey EPC basis. DIRECTORS

Mr. Deep Kumar Rastogi retires by rotation as required under the Companies Act, 1956 and being eligible, offers himself for reappointment.

Mr. Sameer Rajpal was co-opted as Additional Director on the Board of the Company with effect from January 11, 2012 and as such holds office upto the ensuing Annual General Meeting. Notice from a shareholder together with necessary deposit proposing his name as Director has been received.

Mr. B. Srinivasa Rao, Director of the Company retired from the Board on September 27, 2011. Your directors record their appreciation for the services and support rendered by him during his tenure on the Board of the Company.

FIXED DEPOSITS

Company has not accepted any deposit under section 58A of the Companies Act, 1956, during the financial year under review.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchange, a compliance report on Corporate Governance is annexed as part of the Annual Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to the Directors' Responsibility Statement, the Directors confirm on the basis of information placed before them by the Management and Auditors:-

1. That in the preparation of the annual accounts for the Financial Year ended March 31, 2012, the applicable Accounting Standards have been followed;

2. That the Company has selected appropriate accounting policies and applied them consistently and made judgement and estimates that were reasonable and prudent so as to give a true and fair state of the affairs of the Company at the end of the financial year and of the Profit and Loss of the Company for the year under review;

3. That the Company has 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; and

4. That the accounts of the Company for the financial year ended March 31, 2012 have been prepared on a going concern basis.

CODE OF CONDUCT

The Code of Conduct, as adopted by the Board of Directors, is applicable to all Directors, Senior Management and Employees of the Company. This Code is based on fundamental principles, viz. good corporate governance and good corporate citizenship. The Code covers Company's commitment to sustainable development, concern for occupational health, safety and environment, a gender friendly workplace, transparency and auditability and legal compliance.

AUDITORS' REPORT

Auditors' Report read together with Annexures referred to in Paragraph 3 of the Auditors' Report do not contain any qualification and do not call for any explanation/clarification.

AUDITORS

The Members of the Company in the Annual General Meeting held on September 27, 2011 had appointed M/s. Walker Chandiok & Co., Chartered Accountants, New Delhi and M/s. Arun K. Gupta & Associates, Chartered Accountants, New Delhi as Statutory Auditors of the Company for the financial year ending March 31, 2012.

When the Company informed M/s Walker Chandiok & Co., Chartered Accountants about their appointment, they have expressed their inability to be the auditors for the Financial Year ending March 31, 2012 vide their letter October 25, 2011. In view of this, M/s. Arun K. Gupta & Associates, Chartered Accountants who had accepted the appointment, continued to be the sole Statutory Auditors of the Company for the financial year ending March 2012.

M/s. Arun K. Gupta & Associates, Chartered Accountants, New Delhi retire at the forthcoming Annual General Meeting and have been auditors for the last four Financial Years. In line with the guidelines on the Corporate Governance the Audit Committee and Board has recomended to appoint new Auditor for the financial year 2012-13. Accordingly, it is proposed to appoint M/s. Kanu Doshi Associates, Chartered Accountants, Mumbai as Company's Statutory Auditors for the Financial Year 2012-13.

LISTING OF SECURITIES

Your Company's securities are currently listed with Bombay Stock Exchange. The Company's Global Depository Receipts (GDRs) are listed at Luxembourg Stock Exchange. The Company has paid the listing fees to Bombay Stock Exchange and Luxembourg Stock Exchange for the financial year 2012- 2013 and Calendar Year 2012 respectively.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO

The prescribed details as required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not applicable to our type of Company.

PARTICULARS OF THE EMPLOYEES

There is no employee drawing the salary as prescribed under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975.

FOREIGN EXCHANGE

The details of the foreign exchange earnings and out go during the year have been given in the significant accounting policies and notes to accounts.

ACKNOWLEDGEMENT

The Directors have pleasure in recording their appreciation of the assistance extended to the Company by various officials of the Central Government, the State Government and participating Financial Institutions. The Directors would like to express their appreciation of the co-operation extended by the Company's bankers and employees.

For and on behalf of the Board

New Delhi Deep Kumar Rastogi

August 13, 2012 Executive Chairman


Mar 31, 2011

Dear Members,

The Twenty Seventh Annual Report together with the Audited Statement of Accounts of the Company for the year ended March 31, 2011 is being submitted.

FINANCIAL RESULTS

(Rs. in lakhs)

Particulars 2010-2011 2009-2010

Sales and other Income - -

Profit/(Loss) before Depreciation, - -

Interest, Prior Period Expenses

Less: Interest - -

Less: Depreciation - -

Less: Prior Period Expenses - -

Profit/(Loss) before Tax - -

Income Tax - -

Liabilities Written Back net - -

Profit/(Loss) after Income Tax - -

Balance carried forwarded (674.67) (674.67) from previous year

Net Profit/(Loss) transferred (674.67) (674.67) to Balance Sheet

EPS (In Rs.) - -

DIVIDEND

As the Company is in the process of implementing the refinery project, your Directors have not recommended any dividend.

PROGESS OF THE PROJECT

During the financial year 2010-2011, the Company has made the significant progress in the direction of implementing refinery project. The Company has successfully tied up with Hardt Group, Austria, which is primarily focused in Energy sector, by signing the Assets Purchase Agreements with entities managed by it. The group had invested in used refinery equipments which incidentally when combined with the German refinery bought by the Company can enable it to attain a refining capacity of 10 MMTPA.

The total cost of the equipments from Tagore Investments SA is US $ 275,000,000 (US Dollars Two Hundred Seventy Five Million only). The total cost of the equipments from Amber Energy SA is US $ 142,000,000 (US Dollars One Hundred Forty Two Million only). The aggregate cost of both the refineries amounting to US $ 417,000,000 (US $ Four Hundred Seventeen Million only), will be paid as under:

1. US $ 317,000,000 (US Dollars Three Hundred Seventeen Million only) by way of issue of Global Depository Receipts of equivalent amount to the suppliers of the equipments viz. Amber Energy SA, Panama (US $ 142 mn) and Tagore Investments SA, British Virgin Islands (US $ 175mn).

2. US $ 100,000,000 (US Dollars One Hundred Million only) in Cash after achieving financial closure for the project.

The application to the Central Government has been made for issue of equity in the form of Global Depository Receipts (GDR) against purchase of refinery equipments under the said Assets Purchase Agreements.

Hardt group has subscribed to the Equity of the Company to the tune of US $ 2.7 million by means of preferential allotment and is expected to invest further to take care of some of the working capital requirements. The Company also made the preferential allotment to Nyra Holdings Private Limited, a promoter group Company.

Simultaneously, the Contract for Purchase and sale of Assets related to a decommissioned 90000 bpd Oil Refinery with Lohrmann International GmbH was renegotiated modifying the scope of work, purchase consideration and payment schedule. However as the Company was not able to meet the payment deadlines, the contract was cancelled. But, the Company is still trying its best to get alternate payment options so that the Company doesn't lose the equipment.

The Ministry of Environment and Forests (MOEF) has been approached for obtaining approval for the upward revision in capacity from 5 MMTPA to 10 MMTPA. The Company has also requested West Bengal Government for extension of time for payment of consideration for sub leased land and extension of fiscal incentives for enhanced capacity of the project. WBIDC has extended the time till September 30, 2011 but the Company has requested it to extend till March 31, 2012 which is receiving their attention.

Hardt group is trying to get offers for EPC contract from some of the renowned European contractors and it is likely to be concluded soon. Chemtex Global Engineers Private Limited which prepared the Detailed Feasibility Report for the lenders earlier is presently updating the report for the enhanced capacity of 10 MMTPA.

DIRECTORS

Mr. B. Srinivasa Rao retires by rotation as required under the Companies Act, 1956 and being eligible, offers himself for reappointment.

FIXED DEPOSITS

Company has not accepted any deposit under section 58A of the Companies Act, 1956, during the financial year under review.

CORPORATE GOVERNANCE

The Company has complied with the mandatory provisions of Corporate Governance as prescribed in the Listing Agreement with the Stock Exchanges. A separate report on Corporate Governance is included as a part of the Annual Report along with the Certificate on its compliance.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to the Directors' Responsibility Statement, the Directors confirm on the basis of information placed before them by the Management and Auditors: -

1. That in the preparation of the annual accounts for the financial year ended March 31, 2011 the applicable Accounting Standards have been followed;

2. That the Company has selected appropriate accounting policies and applied them consistently and made judgement and estimates that were reasonable and prudent so as to give a true and fair state of the affairs of the Company at the end of the financial year under review;

3. That the Company has 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; and

4. That the accounts of the Company for the financial year ended March 31, 2011 has been prepared on a going concern basis.

CODE OF CONDUCT

The Code of Conduct, as adopted by the Board of Directors, is applicable to all Directors, Senior Management and Employees of the Company. This Code is based on fundamental principles, viz. good corporate governance and good corporate citizenship. The Code covers Company's commitment to sustainable development, concern for occupational health, safety and environment, a gender friendly workplace, transparency and auditability and legal compliance.

AUDITORS' REPORT

With regard to the qualification in the Auditors' Report read together with Annexure referred to in Paragraph 3 of the Auditors' Report, the explanation is as under:

Since the Company is setting up a refinery project, the exchange differences, interest on outstanding statutory dues and certain indirect expenses not directly attributable to construction have been taken in the statement of Pre- operative Expenses, which forms part of Capital Work in Progress. The above accounting treatment is in accordance with the clarification given by the Department of Company Affairs (Letter No. 2/17/64-PR, dated 29-1- 1964). However, at the time of allocation of Pre-operative Expenses to the respective assets on commissioning of the project, these foreign exchange gain/loss and other indirect expenses not directly attributable to construction shall not be capitalized.

Based on the opinion from an independent eminent lawyer and in the light of certain court judgements, certain services, rendered by foreign suppliers mainly in connection with the purchase of plant and machinery, have been considered to be part of supply of plant and machinery and the Company has been advised that there would be no liability on account of tax deducted at source and service tax. Accordingly, service tax and tax deducted at source amounting to Rs. 5,437,653 and Rs. 6,001,848 respectively has been derecognised in the financial statements and interest cost for non payment of the tax deducted at source for the period from January 1, 2011 to March 31, 2011 amounting to Rs. 218,407 has not been provided for in the financial statements.

Further, in the light of certain court judgements and in line with the Company's position in its income tax returns for the previous years, the interest income earned in those years has been considered to be capital in nature and accordingly the provision for income tax (including of interest thereon) created in respect thereof amounting to Rs. 56,165,790 in those years has been derecognized in the financial statements for the year ended March 31, 2011 and also the interest thereon for the period from January 1, 2011 to March 31, 2011 amounting to Rs. 2,389,182 has not been provided for in the financial statements.

AUDITORS

The Company's Auditors M/s. Walker, Chandiok & Co., Chartered Accountants, New Delhi and M/s. Arun K. Gupta & Associates, Chartered Accountants, New Delhi, retire at the forthcoming Annual General Meeting and are eligible for re-appointment. M/s. Walker, Chandiok & Co., Chartered Accountants, New Delhi and M/s. Arun K. Gupta & Associates, Chartered Accountants, New Delhi have submitted the certificate under Section 224(1B) of the Companies Act, 1956 confirming that their appointment as joint Statutory Auditors, if made, shall be in accordance with the said section.

MANAGEMENT DISCUSSION & ANALYSIS

The Management Discussion & Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement is presented in a separate section forming part of the Annual Report.

LISTING OF SECURITIES

Your Company's securities are currently listed with Bombay Stock Exchange. The Company's Global Depository Receipts (GDRs) are listed at Luxembourg Stock Exchange. The Company has paid the listing fees to Bombay Stock Exchange and Luxembourg Stock Exchange for the financial year 2011-2012 and Calendar Year 2011 respectively.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION

The prescribed details as required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not applicable to our type of Company.

PARTICULARS OF THE EMPLOYEES

There is no employee drawing the salary as prescribed under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975.

FOREIGN EXCHANGE

The details of the foreign exchange earnings and out go during the year have been given in the schedules to the accounts.

ACKNOWLEDGEMENT

The Directors have pleasure in recording their appreciation of the assistance extended to the Company by various officials of Central Government, State Government and participating financial Institutions. The Directors would like to express their appreciation of the co-operation extended by the Company's bankers and employees.

For and on behalf of the Board

(Deep Kumar Rastogi) Executive Chairman

New Delhi August 10, 2011



 
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