assam petro-chemicals limited 41 anual report 2011-2012 · 41st anual report 2011-2012 assam...

41st Anual Report 2011-2012ASSAM PETRO-CHEMICALS LIMITED


ContentsContentsContentsContentsContents

Page

1. Notice to the Shareholders 3

2. Directors’ Report 5

3. Annexures to Directors’ Report 11

4. Comments of the Comptroller and Auditor General of India 20

5. Statutory Auditors’ Report 33

6. Annexures to Statutory Auditors’ Report 34

7. Balance Sheet 37

8. Statement of Profit & Loss 38

9. Cash Flow Statement 39

10. Notes to the Financial Statement 40

11. Proxy Form & Attendance Slip 71

12. Nomination Form 72


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ASSAM PETRO-CHEMICALS LIMITEDRegd. Office: 4th Floor, Orion Place,

G.S. Road, Bhangagarh, Guwahati, Assam-781005

NOTICE

NOTICE is given that 41st Annual General Meeting of the members of Assam Petro-Chemicals Limited will beheld on Saturday, 30th March, 2013 at 11.00 am in the registered office (4th Floor Orion Place, G. S. Road,Bhangagarh, Guwahati, Assam-781005) to transact the following business:

A. ORDINARY BUSINESS :

1. To receive, consider and adopt the Company’s Balance Sheet as at 31st day of March, 2012 and theStatement of Profit & Loss for the year ending on that date along with the Directors’ Report andReport of Corporate Governance and Statutory Auditor’s Report and comments of the Comptrollerand Auditor General of India thereto.

2. To consider and appoint director in place of Shri Rajesh Prasad who retires by rotation in pursuanceof Section 256 of the Companies Act, 1956. Shri Rajesh Prasad, being eligible, offers himself forreappointment.

3. To consider and appoint director in place of Shri Digendra Nath Barua, who retires by rotation inpursuance of Section 256 of the Companies Act, 1956. Shri Digendra Nath Barua being eligible, offershimself for reappointment.

4. To consider and appoint director in place of Shri Birinchi Kumar Sarma, who retires by rotation inpursuance of Section 256 of the Companies Act, 1956. Shri Birinchi Kumar Sarma being eligible,offers himself for reappointment.

5. To fix remuneration of the Statutory Auditors.B. SPECIAL BUSINESS6. To consider and if thought fit, to pass the following resolution with or without modification(s) as an

Ordinary Resolution:

“RESOLVED THAT the consent of the Company be and is hereby granted, in accordance with Section293(1)(d) and all other applicable provisions, if any, of the Companies Act, 1956 and the Articles ofAssociation of the Company, to the Board of Directors of the Company, to borrow any sum or sums ofmoney from time to time at their discretion, for the purpose of the business of the Company, whichtogether with the funds already borrowed by the Company, (apart from temporary loans obtained fromthe Company’s Bankers in the ordinary course of business) may exceed at any time, the aggregate of thepaid-up capital of the Company and its free reserves (that is to say, reserves, not set apart for any specificpurpose) by a sum not exceeding 850 crore, and that the Board of Directors be and is herebyempowered and authorized to arrange or fix the terms and conditions of interest, repayment, securityor otherwise as it may think fit.”

By order of the Board of DirectorsPlace: 4th Floor, Orion Place

G.S. Road, Bhangagarh, Guwahati-781005 Sd/- ( CS Uttam Bailung)

Date: 1st March, 2013 Company Secretary

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Notes :

1. A member entitled to attend and vote at the Annual General Meeting is entitled to appoint aproxy to attend and vote on a poll instead of himself and the proxy need not be a member of thecompany. The instrument appointing the proxy should, however, be deposited at the registeredoffice of the Company not less than Forty Eight hours before the commencement of the meeting.

2. Shareholders are requested to bring their copy of Annual Report.

3. Shareholders are requested to inform their respective e-mail id to the company so that corporateinformation may be disseminated promptly.

Explanatory Statement under Section 173(2) of the Act

Item No. 6: To authorize the Board of Directors to borrow money exceeding the aggregate of paid-up sharecapital and free reserve of the company.

Your company is implementing 500TPD Methanol and 200TPD Acetic Acid Project with an estimated projectcost of 1028 Crore at Namrup with a debt equity ratio of 2.5:1. The equity and debt for the project are

294 Cr. and 734 Crore respectively. The company is arranging the debt portion of the capital by way ofborrowing from banks and financial institutions giving collateral security to the lending banks and FIs. As thedebt fund is more than the aggregate of the paid-up share capital and free reserves of the company and it istherefore approval of the members of the company is required under Section 293(1) (d) of the CompaniesAct, 1956 authorising the Board of Directors of the company to borrow any sum or sums of money fromtime to time at their discretion, for the purpose of the business of the Company may exceed at any time, theaggregate of the paid-up capital of the Company and its free reserves by a sum not exceeding 850 crore.Your directors in their 295th meeting held on 13th July, 2012 discussed the matter and decided to recommendfor your approval so that money can be borrowed from the banks and financial institutions for implementationof the expansion project of the company.

None of the directors are interested or concerned in this resolution.

By order of the Board of Directors

Place: 4th Floor, Orion PlaceG.S. Road, Bhangagarh, Guwahati-781005 Sd/-

( CS Uttam Bailung)Date: 1st March, 2013 Company Secretary

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DIRECTORS’ REPORT TO THE SHAREHOLDERS

Your Directors take pleasure in presenting the 41st Annual Report of the company for the Financial Year2011-2012 along with the Audited Annual Accounts for the year ending on March 31, 2012. The year2011-12 didn’t start in a positive note because the company had to start the financial year by the runningmother plant methanol at 50% capacity due to an accident occurred in the reformer section of the plant inthe previous year. The company took shutdown of the plant from 19th June, 2011 to 15th July, 2011 forreplacement of the reformer tubes and other annual maintenance jobs. The company completed themaintenance works in record shortest time of 26 days and started production of methanol in full capacity.

Financial Performance

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

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

Financial Results: ( in Lacs)

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

Revenue from Operation 6671.42 3838.91

Less: Excise Duty -623.78 -358.28

Revenue from Operations (NET) 6047.64 3480.63

Other Income 371.85 388.15

Total Income 6419.49 3868.78

Gross Profit/Loss 516.33 -950.16

Less : Depreciation 175.55 125.1

Interest 0 0

Profit/Loss for the year before prior period adjustment,

exceptional and extraordinary items 340.78 -1075.26

Less: (a) Exceptional Item -0.86 3.38

(b) Adjustment of prior period items 452.58 -23.96

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Profit Before Tax -110.94 -1054.68

Less: Tax Expenses

(a) Deferred Tax 10.39 -13.85

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

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

Balance brought forward from previous year 0 0

Balance carried to Balance sheet -106.21 -1023.83

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

Operations:

During the financial year 2011-12, the capacity utilisation of both the Methanol and Formalin Plants were not

full due to reformer tubes constraint in the first quarter and plant shut down for a period of one month for re-

tubing of Reformer Tubes and Annual Maintenance Works of the Plant. The power supply failures by ASEB in

several occasions also led to lower utilisation of plant capacity. Formalin was manufactured as per the market

demand. Lower utilisation of Formalin Plant was mainly due to shortage of feedstock (Methanol) during the

retubing of reformer in the Methanol Plant and aging of Silver Catalyst which was subsequently replaced.

PLANT PRODUCTION (MT)

FY 2011-12 FY 2010-11

Methanol 26994 17982

Formalin 29888 22906

Capacity Utilization of Plants:

Methanol 82% 54%

Formalin 91% 69%

Sales:

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

Area FORMALIN (MT)

FY 2011-12 FY 2010-11

North Eastern Region 6561.28 5188.83

Bhutan 1482.59 868.57

North Bengal 5645.98 4432.94

South Bengal 7810.83 4233.28

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Purnea/ Adjacent Area 2903.43 1608.26

Patna 5342.61 4831.62

Orissa/ MP/ South Bihar 426.22 165.52

Nepal and Bangladesh 2032.53 1569.6

Other area 125.85 -

Total 32331.32 22898.62

Methanol

North Eastern Region 868.38 1438.47

West Bengal & Bihar 1830.64 1661.48

North India 7870.62 2968.54

Export 911.50 549.33

Total 11481.14 6617.82

Project & Development Activities:

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

I. Approval of PIB, Govt. of Assam

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

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

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

III. Technology Selection for Acetic Acid Project.

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

IV. Project Financing

The estimated cost for implementation of the project is 1028 Crore. Your directors have decided toimplement the project in the debt equity ratio of 2.5:1. The equity portion of the capital will bearranged through preferential allocation of shares to certain strategic investors. The discussions aregoing on with these investors. The Government of Assam has given the commitment for equity funding

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of 140 Crore and Assam Gas Company Ltd. has also given their commitment towards equityinvestment of 25 Crore in the project. The discussions are going on with one of the central PSU fortheir equity participation in the project. Their final commitment is expected to be received soon.

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

V. Environmental Clearance

The Ministry of Environment and Forest, Government of India approved the Terms of Reference(TOR) on the project in their meeting of Empowered Committee dated 12.01.2012. Draft EnvironmentImpact Analysis Report has been prepared and submitted to Pollution Control Board, Assam forpublic hearing. The Pollution Control Board, Assam conducted public hearing for the project on 6th

of September, 2012 in the proposed project site. The final Environmental Clearance is expected tobe received from the Ministry of Environment and Forest after the submission of the report ofpublic hearing by Pollution Control Board, Assam.

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

VI. Natural Gas Supply and Transportation Agreement

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

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

VII. Revamping of Formaldehyde Plant:

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

Dividend:

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

Directors:

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

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Auditors:

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

Human Resource:

Your Board of Directors believe that human resources are the key drivers of sustainable growth anddevelopment of any organisation. Keeping that in mind your directors have been focusing on enhancementof knowledge and skills of the employees of the company. During the year under review couple of in-housetraining programmes were organised and total 35 nos of employees attended in the programmes. Yourcompany also send its employees for outside training to promote their knowledge and skills. During the yearunder review 14 employees were sent for such training programme. As on 31st March, 2012 there were total381 nos of employees on the roll of the company. Out of 381 regular employees, 153 employees are ofOfficers Cadre and remaining 228 employees are of unionized cadre.

Industrial Relations:

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

Particulars of Employees under Section 217 (2A)

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

Recognition :

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

Corporate Social Responsibility (CSR)

The company recognises its strong commitments towards promoting socio-economic development of thelives of the people of the neighbouring areas of the Plant at Namrup. The company spent an amount of

74, 39,920/- for CSR activities during the FY 2011-12. The company has been providing free drinking waterto it neighbouring villages of the plant area, free education to students upto Class X standard, free medicalfacilities and health check-up to the people of neighbouring villages.

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

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

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Particulars as to Subsidiary:

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

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

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

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

(ii) The directors have selected such accounting policies and applied them consistently and made judgmentsand estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of theCompany as on 31st March 2012 and of the profit of the Company for the year ended on that date;

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

(iv) The directors had prepared the accounts for the financial year ended 31st March, 2012 on a ‘goingconcern’ basis.

Compliance Certificate:

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

Acknowledgement

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

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

For and on behalf of the Board of Directors

Place : Guwahati Sd/-

Date: February 12, 2013 (Rameswar Dhanowar)

Chairman

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Particulars Employees under Section 217(2A) of the Companies Act, 1956 read with the Companies(Particulars of Employees) Rules, 1975 for the year ended on 31.03.2012

A. Employed throughout the financial year and in receipt of remuneration of more than 60 lakhs per annum-NIL

B. Employed part of the financial year and in receipt of remuneration of more than 5 lakhs per month

Sl. Name of Qualification Age Designation/ Date of Experience Remuneration Particulars

No. employee Nature of Duties Commencement (Nos of (in ) of last

of Employment years) employment

1 Lalit Nath B.Com 59 Dy. GM(F&A) 03.04.1972 39 18,01,937 M/s AGCC Ltd.

2 Dilip Kr. Bordoloi B.Com, LL.B 59 Sr. Manager 19.10.1976 34 17,89,058

(Marketing)

3 Sasanka Jyoti Khound Ph.D 59 Manager (QC) 02.11.1978 33 7,72,089 Cement

Corporation of India

4 Jadav Ch. Dutta B.Com, LL.B 59 Manager 01.07.1978 33 7,18,625 ONGC Ltd.

(IR & Legal)

5 Achyut Ch. Khound HSLC, ITI 59 Dy. Manager 08.08.1975 36 17,20,625

(Mech.)

6 Ananda Borah B.Com 59 Manager 19.10.1976 34 6,84,727

(F&A)

8 Rahim Ali Class-X 59 Supervisor 01.06.1976 34 5,98,358

(Mech.)

9 Boyen Chetia Class-VII 59 Supervisor 11.08.1973 38 8,18,586

(Mech.)

10 Kameswar Boro Class-X 59 Supervisor 29.01.1973 38 8,47,762

(Boiler)

11 Sarbeswar Mahilary Class-IX 59 Attendant 28.12.1977 34 6,01,961

(Electrical)

12 Arun Kr. Barua HSLC 59 Dy. Manager 01.08.973 39 10,00,000 ONGC Ltd.

( Coordination)

13 Ajit Kr. Sarmah Diploma 59 Dy. Manager 26.03.1976 34 10,00,000 Assam Oil

(Chem) (Production) Company Ltd., Digboi

14 Jagat Gogoi BA 59 Manager 30.11.1973 37 10,00,000 M/s Kartersing

(HRM) & Sons

15 Rikheswar Konwar B.Com 53 Accounts Officer 24.06.1982 29 7,22,965

16 Gajendra Nath Saikia B.Com 59 Dy. Manager 06.02.1979 33 11,78,842

( F&A)

17 Diganta Kalita B. Sc. 59 Dy. Manager 31.08.1977 34 10,01,713 Letakoojan TE

(Store)

20 Rohini Nahardeka HSSLC 59 Dy. Manager 08.09.1975 34 10,67,804 Brahmaputra Valley

( production) Fertilizer

Corporation Ltd.

21 Mahendra Gogoi B.Com 59 Dy. Manager 29.08.1977 34 7,30,065 M/s Jainex Warren(Admn.) Co., Dibrugarh

Note:

1. The remuneration includes regular monthly salary, Company’s Contribution towards PF, Gratuity payment andterminal benefits and pension and medical expenses.

2. There is no employee who is in receipt of remuneration in excess of that drawn by Managing Director/Whole-time Director/ Manager and holds not less than 2% of the equity shares of the company.

3. None of the above employees are related to any director of the company.

Annexure ‘A’

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Annexure ‘B’

Annexure to the Directors’ Report ( 2011-12)

(Additional Information in terms of notification GSR No. 1029 Dated 31st December, 1988 by TheDepartment of Company Affairs)

I. CONSERVATION OF ENERGY:-

A. Energy Conservation Measures taken:-

The process technology adopted in our plants is energy efficient even though it has become oldnow. The Company selected the most developed ICI, Low Pressure Methanol Technology andHumphreys and Glasgow Reformation Process for manufacture of Methanol & DerivadosForestales, Netherland’s technology for manufacture of formaldehyde. The waste heat isrecovered to produce steam required for the process. Hence the heat is not radiated toatmosphere. Water used for cooling in the plant is totally recycled to prevent pollution and loss.Steam condensate are recovered and recycled back from Turbo Generator. The plants are beingoperated to the full satisfaction of Pollution Control Board, Assam.

B. Additional investments and proposals if any being implemented for reduction of the consumption of energy: There was no such proposal.

C. Impact of the measures (A) and (B) above:

The specific consumption of electricity and fuel natural gas was well within the tolerance limit.The company has a pollution free environment.

D. Total energy consumption and specific energy consumption per unit of production.

a. Electricity 2011-12 2010-11

i. Purchase unit (MWH) 13887 11226

Total amount ( Rs. In Crore) 7.41 5.37

Rate per unit(Rs/KWH) Rs. 5.34 Rs.4.79

ii. Own Generation (MWH) 2873 2518

b. Consumption per unit of production 2011-12 2010-11

i) Electricity (KWH)

Unit –II 550 665

ii) Natural Gas (NM3)(Ref)

Unit –II 132 235

II. TECHNOLOGY ABSORPTION: RESEARCH AND DEVELOPMENT (R & D)

1. Specific area in which R & D carried out by the Company: The Company so far has not started fulltime R & D activities except in plant improvement of process and debottlenecking. The Companyshall start R & D activities shortly to identify future diversification.

2. Benefit derived as a result of above R & D : Doesn’t arise

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3. Future Plan of Action

4. Expenditure of R & D

a) Capital

b) Recurring

c) Total Not Applicable

d) Total R & D expenditure

as per % of total Turnover

III. TECHNOLOGY ABSORPTION AND ADAPTATION

1. Efforts in brief made towards technology absorption, adaptation and innovation: APL has been

operating the plant supplied by foreign supplier.

2. Benefits derived as a result of the above efforts, e.g. product improvement, cost reduction, product

development, import substitution etc.: Product quality improved, cost of production & pollution

Problem reduced.

3. In case of imported technology (imported during last 5 years reckoned from the Beginning of the

financial year) following information may be furnished:-

a) Technology imported : DOES NOT ARISE

b) Year of import : -do-

c) Has full technology been fully absorbed :-do-

d) If not fully absorbed, areas where this has

Not taken place, plan of action : -do-

III. FOREIGN EXCHANGE EARNINGS AND OUTGO:

a) Activities relating to exports: Initiative taken to increase export, development of new export market

for products and services and export Plans:

EXPORT SALES 2011-12 2010-11

Methanol 351.55 (MT) 387.500MT in USD

Formalin 358.00 (MT) 232.000MT in USD

b) Total Foreign exchange used and earned: 2011-12 2010-11

i) Earnings in Foreign Exchange (sales) Rs. 11740156.00 Rs.8314338.00

($ 240800) ($182373.5)

ii) Foreign Exchange Out go Rs. 43280568.38 Rs. 34265.00

Continuous efforts are being made to increase exports against foreign currency.

}

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Management Discussion and Analysis Report

Industry structure and developments

The company is engaged in manufacture and marketing of two versatile industrial petrochemical products

i.e. methanol and formaldehyde. The profitability of the company is largely dependent on the price of

methanol in the international market which has direct impact on domestic price of methanol. As regards

production from the plant, there was an unfortunate event of failure of the Reformer tubes in the

reformation section of the plant in July’10 which caused a prolong down-time of the plant and continued

to run the plant at an sub-optimum capacity upto end of 1st quarter of the current financial year. The

company replaced the damaged reformer tubes in July, 2011. Now the plant is running in full capacity.

Opportunities and threats :

The existing methanol plant is twenty four years old and needs major replacements to keep the plant in

healthy operating condition. The cost of production is high due to low capacity of the plant with old technology

resulting in high energy consumption and high fixed cost per ton of product. The present trend in the price

of methanol in the international market which is very volatile due to global macroeconomic factors is

affecting the growth of the industry in the country. The price of formalin is also dependent on the price of

methanol. The company earns more profit by converting methanol to formalin in the formalin plant. The

company has successfully implemented a revamp scheme for increasing the present capacity of formalin

plant by 25% to achieve more profit by converting more methanol to formaldehyde.

Outlook :

The company is embarking upon a massive expansion and diversification scheme by implementing a 500

TPD new methanol plant along with a downstream plant of value added product for production of 200

TPD Acetic Acid at a capital investment of around 1028 crore. M/s Oil India Ltd. has since given the

commitment for the supply of the requisite quantity of Natural Gas for the envisaged new plants.

Participation of Central PSU giant like M/s Oil India Limited is envisaged in the Methanol-Acetic Acid

project based on the very positive responses received from these organizations while taking up the issue

with them. Availability of capital investment subsidy amounting to 30% on the erected cost of the plant

and machineries under NEIIPP thus bringing down capital requirement for the project and very high

profitability of Acetic Acid plant will convert APL into a very profitable and giant petrochemical complex

in the entire North East.

Risks and Concerns

Non availability of an adequate market in the present economic environment in the N.E. region is major

concern of the company because of which the products are required to be transported at high freight

Annexure ‘C’

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cost to the distant market situated at Eastern, Northern and Southern parts of the country which lead to

erodes the profitability. Further there is stiff competition for the products due to existence of a large

number of small and big manufacturers of formalin sector and import of methanol in large quantity.

While the demand of both methanol and formalin in the country is constantly on the rise, domestic

production is also rising due to setting up of new plants especially in case of formalin. The company has

to thrive hard to keep the price of the products competitive in the market. Constant endeavour to improve

efficiency in all fronts and bring down cost is imperative for the company. Revamp of formalin plant for

increasing the capacity and implementation of the expansion and diversification scheme will put the

company on very strong footing and the company will earn handsome profit.

Hike in the price of main raw materials (Natural Gas) by the Ministry of Oil and Natural Gas is a major

concern of the company. This hike is directly affecting the profitability of the company.

Internal Control Systems and their Adequacy :

The company has an effective internal control system which is further strengthened by conducting internal

audit by outside expert farm.

Discussion on Financial Performance with respect of Operational Performance

The financial performance of the company for the Financial Year 2011-12 is discussed in details in the

Directors’ Report.

Material Developments in Human Resources/IR Front, including number of people employed.

The company has been trying to utilize the available man power in the most effective manner to improve

production and productivity with minimum recruitments.

The company has been inducting young professionals during the last few years such that the strength of

the qualified technical persons in the technical disciplines does not get depleted. Induction in the intake

level is planned to be increased in the future with the implementation of the expansion and diversification

scheme undertaken by the company.

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CORPORATE GOVERNANCE DISCLOSURE1. Philosophy on Corporate Governance

The company continues with its efforts to attain the highest levels of accountability andtransparency in every aspect and in all interactions with its stakeholders and the state governmentand also with its employees. The company aims at satisfaction of all stakeholders in a balancedmanner through sustainable growth and profitability.

2. Board of Directors

As on this report date there are 10 members on the Board of the Company. The Board of thecompany is constitutes as per the requirement of Clause 49 of the Listing Agreement. The Boardof Assam petro-Chemicals Ltd. constituted with one whole time director, four nominee directorsfrom the holding company M/s Assam Industrial Development Corporations Ltd. and fiveindependent directors. During the Financial Year 2011-12, there were five meetings of the Boardof Directors held against minimum four meetings. The gap between two consecutive meetingsof the Board of Directors never exceeds four months.

The details of the Meetings of the Board of Directors are as under

Sl. No Date of Board Meeting Board Strength Nos. Of Director Present

1 May 10, 2011 10 8

2 July 16, 2011 10 10

3 September 28, 2011 10 8

4 December 23, 2011 10 6

5 March 03, 2012 10 8

Particulars of Directors including their attendance at Board/Shareholders meeting during theFinancial year 2011-12.

Name of Director Attendance of No. of other No. ofmeetings during FY Directorship(s) Membership(s)/2011-12 Chairmanship(s) of

other BoardBoard Last AGM committees in other

Meetings Companies

A. NOMINEE OF HOLDINGCOMPANYShri Rameshwar Dhanowar 4 Yes Nil NA(Chairman)Shri Jatinderbir Singh, IAS 3 No 5 Nil(w.e.f. 08.07.2011)

Annexure ‘D’

16


Shri Ravi Capoor, IAS 1 No 5 Nil(Upto 07.07.2011)

Shri Rajesh Prasad, IAS 2 No 15 Nil(w.e.f. 01.07.2011)

Dr. J. Balaji, IAS Nil No 15 Nil(Upto 30.06.2011)

Shri S.P. Nandi, IAS 2 No Nil NA(Upto 19.10.2011)

Shri Jiban Choudhury 1 No Nil NA(W.e.f. 20.10.2012)

B. WHOLE TIME DIRECTORShri Ratul Bordoloi 5 Yes Nil NA

C. INDEPENDENT DIRECTORSShri D.N. Barua 5 Yes 1 NilShri A.N. Das 5 Yes Nil NAShri B.K. Sarma 5 Yes Nil NADr. B.K. Das 4 No 1 NilShri Utpal Borah 4 No Nil NA

3. AUDIT COMMITTEE: The Company constituted an Audit Committee under the Chairmanshipof an Independent Director of the company in terms of the Section 293A of the Companies Act,1956 and the Clause 49 of the Listing Agreement.

Sl. No. Name of the Director Status No. of meeting Attendance inattended the last AGM

1 Shri D.N. Barua Chairman 2 Attended

2 Shri A.N. Das Member 2 Attended

3 Shri B K Sarma Member 2 Attended

4 Shri Ratul Bordoloi Member 2 Attended

5 Shri Jiban Choudhury (w.e.f 13.07.2012) Member NA NA

6 Shri Utpal Borah (w.e.f 13.07.2012) Member NA NA

During the Financial Year 2011-12 the company hold only two Audit Committee Meetings of thecompany.

Terms of Reference: The terms of reference/powers of the Audit Committee are as under:

A. Powers of the Audit Committee

1. To investigate any activity within its terms of reference.

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2. To seek information from employee.

3. To obtain outside legal or other professional advice.

4. To secure attendance of outsiders with relevant expertise, if it considers necessary.

B. The Role of Audit Committee includes

1. Oversight of the company’s financial reporting process and the disclosure of its financialinformation to ensure that the financial statement is correct, sufficient and credible.

2. Recommending the Board for fixation of Audit Fee to the statutory auditors appointed bythe Comptroller and Auditor General of India.

3. Approval of payment to the statutory auditors including cost auditors, VAT auditors for anyother services rendered by them.

4. Reviewing with the management, the annual financial statements before submission to theBoard of Directors for approval, with particular reference to:

Matters required to be included in the Directors’ Responsibility Statement to be includedin the Directors’ Report in terms of Sub-Section 2AA of Section 217 of the CompaniesAct, 1956

Changes, if any, in accounting policies and practices and reasons for the same.

Major accounting entries involving estimate based on the exercise of judgment by themanagement.

Significant adjustments made in the financial statements arising out of audit findings.

Compliance with the listing and other legal requirements relating to financial statement.

Disclosure of related party transactions

Qualification of draft audit report.

5. Reviewing with the management, the quarterly financial statement before submissionwith the Board for approval.

6. Reviewing, with the Management, the statement of uses/application of funds raisedthrough an issue (public issue, right issue, preferential issue, etc.), the statement of fundsutilized for the purposes other than for those stated in the offer documents/prospectus/notice and the report submitted by the monitoring agency monitoring the utilization ofproceeds of a public or right issue, and making appropriate recommendation to the Boardto take up steps in this matter.

7. Reviewing with the management, the performance of statutory including cost auditorsand internal auditors, adequacy of internal control system.

8. Reviewing the adequacy of internal audit function, if any, including the structure of theinternal audit department, staffing and seniority of the official heading the department,reporting structure, coverage and frequency of internal audit.

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9. Discussion with Internal Auditors, any significant findings and follow-up thereon.

10. Reviewing the finding of any internal investigations by the internal auditors into matterswhere there is suspected fraud or irregularity or a failure of internal control systems ofmaterial nature and reporting the matter to the Board.

11. Discussion with Statutory Auditors including Cost Auditors before the audit compliancesabout the nature and scope of audit as well as post audit discussion to ascertain any areaof concern.

12. To look into the reasons for substantial defaults, if any, in the payment to the depositors,debenture holders, shareholders (in case of non payment of declared dividends) andcreditors.

13. To review the functioning of the whistle Blower Mechanism.

14. Approval of appointment of CFO (i.e., the whole time Finance Director or any other personheading the finance function or discharging the function) after assessing the qualifications,experience & background, etc of the candidate.

15. Carrying out such other functions as may be specifically referred to the committee by theBoard of Directors and/or other Committee of Directors of the company.

16. To review the following information:

The management Discussion and Analysis of financial condition and results ofoperation;

Statement of significant related party transactions (as defined by the AuditCommittee), submitted by management;

Management letters/letters of internal control weakness issued by the statutoryauditors;

Internal audit reports relating to internal control weakness; and

The appointment, removal and terms of remuneration of internal auditors;

17. Reviewing the financial statements and in particular the investments made by the unlistedsubsidiaries of the company.

4. Remuneration Committee of the Board.

No remuneration committee has been constituted by the Board to determine the remunerationpaid, payable to the whole time director of the company. The company is a Government of Assamcompany all the whole time director(s) is/are selected by the Public Enterprise Selection Board (PESB)of the Government and all the pays and parks of the whole time director are paid by the company asper the government approved pay scale.

The Managerial Remuneration paid to the Managing Director during the FY 2011-12 is as under:

19


Name of Director All elements of Other benefits Service contracts, notice

remuneration package of (in ) period, severance fee.

Directors i.e. salary,

benefits, bonus (in )

Shri Ratul Bordoloi, 9,70,333.00 8,400.00

Managing Director

The company pays sitting fee of Rs. 1000/- each to the members to the board for attending theBoard of Directors and committee meeting of the Board where the particular independent directoris a member. Total sitting fee paid to the directors are as under.

Sl No. Names of the Directors Amount of Sitting Fees (in )

1. Shri D.N. Barua 12000 /-

2. Shri B. K. Sarma 11000 /-

3. Shri A. N. Das 16000 /-

4. Dr. B.K. Das 6000 /-

5. Shri Utpal Borah 5000 /-

5. Shareholders’ Grievance Committee

The company constituted a Shareholders’ Grievance Committee with the chairmanship of anIndependent Director of the Board. There are three members of the Board in the Shareholders’Grievance Committee and they are 1) Shri D.N. Barua; 2) Shri B.K. Sarma and 3) Shri Ratul Bordoloi.The Company Secretary is also the secretary to the committee. The Shareholders’/Investors’Grievance Committee, inter alia, approves issue of duplicate certificates and oversees and reviewsall matters connected with transfer of shares of the Company. The Committee also looks intoredressal of shareholders’/investors’ complaints related to transfer of shares, non-receipt ofannual reports, non-receipt of declared dividend, etc.

6. General Body Meetings

Details of General Body Meetings held in the last three years are given below:

Appointed for a period ofthree years w.e.f.09/09/2010with a provision of extensionupto five years. The presentservice contract will be expireon 08-09-2013 unlessappropriate authorityextends his service contract.Notice Period: Three months.

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General Body Day and Date Time Venue

Meeting

38th AGM Tuesday, 30th September, 2009 11:00 am 4th Floor, Orion Place, G.S.Road, Bhangagarh,

Guwahati-781 005

39th AGM Wednesday, 29th December, 2010 11:00 am 4th Floor, Orion Place, G.S.Road, Bhangagarh,

Guwahati-781 005

40th AGM Monday, 30th April, 2012 11:00 am 4th Floor, Orion Place, G.S.Road, Bhangagarh,

Guwahati-781 005

Special Resolution:

Two special resolutions were passed in the 38th Annual General Meeting of the company held onTuesday, 30th September, 2009. The company passed one special resolution for extension of theservice of the Managing Director of the company for such period until new Managing Director isappointed. The Second Special resolutions were passed by the company to alter the Articles ofAssociation to increase the Directors’ Sitting Fee from 750.00 to 1000.00.

In the 39th AGM the company passed no special resolution.

In the 40th Annual General Meeting of the company held on Monday, 2012 the company passed onespecial resolution to alter the Memorandum and Articles of Association of the company forenhancement of Authorised Share Capital from 17 Cr. to 350 Cr.

Postal Ballot: No special resolution passed through postal ballot in the 40th Annual General Meeting.No special resolution also proposed to be passed in the ensuing 41st AGM of the company throughpostal ballots.

7. Disclosures:

I. There was no transaction of material nature with Directors or Management or their relativeshaving potential conflict with the interest of the company at large.

II. The company failed to comply certain mandatory listing agreement clauses during the lastfinancial year and due to which Bombay Stock Exchange, Mumbai suspended trading ofshares w.e.f. 23.04.2012. The suspension of trading of shares still continues.

8. Brief Resume of the Directors Seeking Re-appointment/Appointment.

1) Shri Rajesh Prasad, IAS

Shri Rajesh Prasad is an Indian Administrative Service (IAS) Officer belonging to 1995 Batchof Assam Meghalaya Cadre having wide experience in Urban Development, Planning,Personnel and General Administration, Health and Family Welfare, Industries and Commerceetc. Shri Prasad is currently holding the post of Managing Director of Assam Industrial

21


Development Corporation Limited and also Commissioner of Industries and Commerce tothe Government of Assam.

Shri Prasad was appointed as a Director of the company w.e.f. 30.06.2011 to fill up the casualvacancy caused due to withdrawal of nomination of Dr. J. Balaji by the holding company. ShriRajesh Prasad is liable to retire by rotation in this Annual General Meeting and being eligible,offers for re-appointment.

2. Shri D N Barua

Shri D N Barua is B.Ch. E (1951), B. Sc, MII Chem E and the first Chemical Engineer of theNorth Eastern Region. Shri Barua was Managing Director of M/s Assam Industrial DevelopmentCorporation Ltd and one of the founder directors of Assam Petro-Chemicals Limited. He ispast president of the Gauhati Stock Exchange, President of FINER. Currently he is presidentof Guwahati Management Association and Director in Pragjyotish Fertilizer & Chemicals Ltd.He is also Advisor to the Indian Institute of Chemical Engineers and a member of the AdvisoryCouncil of IDBI for the North Eastern Region.

Shri Barua has been working as director of the company since 04.02.1987. He was reappointedby the members of the company in 38th Annual General Meeting. He is liable to retire byrotation in this Annual General Meeting and being eligible, offers for re-appointment.

3. Shri B K Sarma

Shri B K Sarma is a B. Sc. (Chemical Engineering) from the prestigious Institute of Technologyof Banaras Hindu University. He joined as Graduate Engineer in 1970 in erstwhile Assam OilCompany and rose to the position of Executive Director of I.O.C.L., Assam Oil Division. ShriSarma has extensive experience spanning over 37 years in Refinery Operations, Technicalservices, trouble shooting process up gradation, Project conceptualization and commissioningof new Refinery units, expansion and modification of process units, marketing ofPetrochemical products etc.

Shri B.K. Sarma was appointed as an additional director of the company on 9.11.2009 andthe shareholders regularized his appointment as director of the company in 38th AnnualGeneral Meeting of the company.

Shri Sarma is not holding directorship in any other public company. He is liable to retire byrotation in this Annual General Meeting and being eligible, offers for re-appointment.

9. General Shareholder Information

i. 41st Annual General Meeting: Saturday, 30th March, 2013 at 11: 00 am

Venue: Registered Office at 4th Floor, Orion Place, Bhangagarh, G.S. Road, Guwahati-781005.Time: 11:00 am

ii. Date of Book Closure/ Record Date: 25th March, 2013, to 30th March, 2013

iii. Financial Year: 1st day of April to 31st day of March of the following year.

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iv. Listing: The shares of the company are listed in Bombay Stock Exchange (BSE), Mumbai andGuahati Stock Exchange, Guwahati. However, the BSE has suspended the trading of the sharesin April, 2012 due to non-compliance with certain clauses of listing agreement.

The shares of the company didn’t quote during the last financial year.

Stock Code: 506267; Scrip ID: ASSAPET

v. Dividend Payment Date: The Directors are not recommending dividend to the shareholdersfor the Financial Year 2011-12.

vi. Unclaimed Dividend:

As per the Companies Act, 1956 any unpaid and unclaimed dividend become due to transferto “Investor Education and Protection Fund” after seven years. There are some amount ofdividend have been laying unclaimed by the valued shareholders of the company since FY2004-05. Details of the dividend unclaimed accounts are as follows:

Financial Year Date of Declaration Amount laying unclaimed Due for transfer

2004-05 12-12-2005 Rs. 41135.00 January, 2013

2005-06 29-12-2006 Rs. 96077.00 January,2014

2006-07 28-12-2007 Rs. 35566.00 January, 2015

2007-08 30-12-2008 Rs. 41687.00 October,2015

2008-09 22-12-2009 Rs. 43226.00 January,2016

2009-10 29-12-2010 Rs. 44263.00 January, 2017

All the shareholders who have not claimed their dividend for abovementioned years arerequested to claim the same before the amount due to transfer.

vii. Share Transfers: All the shares of the company are in physical mode. The company appointedM/s C.B. Management Services (P) Ltd., Kolkata as Registrar and Share Transfer Agent witheffect from 1st of March, 2010. The Share Transfer Agent scrutinises the Share Transfer relateddocuments received and forward the same to the company for endorsement the transfer byboard committee. The shareholders grievance Committee sits for approve the transfer asand when it requires.

Subject to the documents are being valid and complete, share transfer are processed andshare certificates returned within 15-20 days. However your company has appointed anyshareholders grievances/quarries/complaints/share transfer documents may please bedirectly communicated with our Registrar and share Transfer agent in their following address

viii.Share Transfer Agent & Registrar

M/s C.B. Management Services (P) Ltd.P-22, Bondel Road, Kolkata-700 019

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E-mail: [email protected]’s Website: www.assampetrochemicals.co.in

ix. Dematerialisation of Shares and liquidity:

All the shares of the company are in physical mode as on this date. The company is in theprocess of dematerialisation of its shares.

x. There are no outstanding of GDRs/ADRs/Warrants or any convertible instruments as on31.03.2012.

xi. Distribution of Shares as on 31.03.2012

Sl. No. Name of shareholder Nos. Of Shares Capital Percentage ofheld Contribution holding (%)

(in )

1 Assam Industrial Development 8041540 80415400 88.18

Corporation Ltd.

2 Industrial Development 852500 8525000 9.35

Bank of India Ltd.

3 ICICI Bank 90700 907000 0.99

4 IFCI 45350 453500 0.50

5 Others 89857 898570 0.99

Total 9119947 91199470 100

xii. Plant LocationsAssam Petro-Chemicals Ltd.P.O.- Parbatpur, NamrupDistt.: Dibrugarh, Assam-786623

xiii. Address for communications:Assam Petro-Chemicals Ltd.4th Floor, Orion Place. G.S. RoadBhangagarh, Guwahati-781 005E-Mail: [email protected]

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To,

The Board of Directors

Assam Petro-Chemicals Limited

4th Floor, Orion Place, G.S. Road

Bhangagarh, Assam-781 005

Sub.: Certificate Under Clause 49 (IV) (V) of Listing Agreement

The undersigned hereby certify that:

1. We have reviewed Financial Statements and the Cash Flow Statement for the year and that to thebest of their knowledge and belief:

a) These statements do not contain any materially untrue statement or omit any materialfact or contain statements that might be misleading;

b) These statements together present a true and fair view of the company’s affairs and arein compliance with existing accounting standards, applicable laws and regulations;

2. There are, to the best of their knowledge and belief, no transactions entered into by the companyduring the year which are in fraudulent, illegal or violative of the Company’s code of conduct.

3. They accepts responsibility for establishing and maintaining internal controls for financial reportingand they have evaluated the effectiveness of internal control systems of the company pertaining tofinancial reporting and they have disclosed to the auditors and the Audit Committee, deficiencies inthe design or operation of such internal controls, if any, which they are aware and the steps theyhave taken or propose to take to rectify these deficiencies.

4. They have indicated to the Auditors and Audit Committeei. Significant changes in internal control over financial reporting during the year;ii. Significant changes in accounting policies during the year and that the same have been

disclosed in the notes to the financial statements; andiii. Instances of significant fraud of which they have become aware and the involvement

therein, if any, of the management or employee having significant role in the company’sinternal control system over financial reporting.

Sd/- Sd/-Dated: 25.10.2012 (Ratul Bordoloi) (Asim Saha)Place: Namrup Managing Director Dy. GM (F&A)/CFO

Annexure ‘E’

25


ToThe MembersAssam Petro-Chemicals LimitedRegd. Office : 4th Floor, Orion Place,G. S. Road, Bhangagarh, Guwahati – 781 005

We have examined the compliance of the conditions of corporate governance by Assam Petro-Chemicals Limited, for the year ended 31st March 2012 as stipulated under clause 49 of the ListingAgreement of the said Company with concerned Stock Exchange(s) in India.

The Compliance of the conditions of Corporate Governance is the responsibility of the management.Our examination was limited to the procedures and implementation thereof, adopted by the Companyfor ensuring the compliance of the conditions of corporate governance. It is neither an audit nor anexpression of opinion on the financial statements of the Company.

We state that in respect of the investor grievances received during the year ended 31st March 2012,no such investor grievances remained unattended /pending for more than 30 days.

In our opinion and to the best of our information and explanations given to us, we certify that thatthe Company has complied with all the mandatory conditions of the said Clause 49 of the ListingAgreement except for holding the requisite number of Audit Committee Meetings as stipulated inthe said clause.

We further state that such compliance is neither an assurance as to future viability of the companynor of the efficiency or effectiveness with which management has conducted the affairs of theCompany.

Place : Guwahati For Narayan Sharma & Associates Company Secretaries

Date : 25th November, 2012 Sd/-(NARAYAN SHARMA)ProprietorC.P. No. 3844Membership No. FCS 5117

Annexure ‘F’

26


Management Reply to the Statutory Auditors’ Comments

Management Reply

M/s Pragjyotish Fertilizers and ChemicalsLtd. is a defunct company and its AnnualAccounts are pending for finalization forpast several years. Efforts are being madeto finalise the annual accounts of thecompany for all the pending years. On thecompletion of the finalisation, therequired information under Section 212(1) of the Act will be attached with theBalance Sheet of the company.

Auditors’ Comment is noted. Thecompany will charge Profit/loss to thestatement of Profit and Loss at the timeof disposal.

Further reply of the management is notrequired. Management Reply has alreadybeen given in Note No. 28.13 of the noteto Financial Statement

The management is taking corrective stepto update Fixed Asset Register

Sl. No. Auditors’ Comment

1 The documents in respect of SubsidiaryCompany (Pragjyotish Fertilizers andChemicals Ltd. (PFCL) required to beattached with the Balance Sheet of thisCompany as per section 212(1) of theCompanies Act, 1956, have not beenattached. (Refer Note No. 28.20)

2 Unused old catalyst held for disposal

As per Note No. 28.15 “The company iscarrying unused catalyst valued 65.98lakhs which is more than 20 years old. Acommittee has been constituted fordisposal of the same. The loss / gain on salewill be accounted for at the time ofdisposal”. The Company has not identified& charged to Profit & Loss Account, the loss,if any, on impairment of above asset.

3 Fixed Asset – Replacement of ReformerTubes The Company has replaced 42 Nos.of imported reformer tubes costing

3,90,83,964 in reformer section of theMethanol Plant, which has been capitalizedby the Company considering thereplacement as to be “betterment orimprovement” as given in Note No. 28.13.The reasoning given by the management inabove note No. 28.13 is very complex andhighly technical. Thus we are not able toexpress an opinion on the above accountingtreatment made by the Company.

4 i) (a) The Company has not maintainedproper records showing full particularsincluding quantitative details and situationof fixed assets. The records maintained fora part period do not tally with the financialstatements.

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(b) According to the information given tous, Physical verification of fixed assets hasnot been done by the management duringthe year and as such material discrepancieswith financial records, if any, could not benoticed and have not been dealt with in thebooks of account.

ii) According to the information given to us,physical verification of Inventory has notbeen conducted by management during theyear and as such material discrepancies, ifany, could not be noticed. An audit firm wasappointed to conduct stock audit. Theysubmitted their report pointing outirregularities in the stock records. Asinformed to us, steps have been taken/ arebeing taken to regularise those irregularities.

iii) ( b)The Company had also granted loansto Assam Tea Corporation Limited as perdetails given in Note No. 28.14. As per abovedetails, the repayment of principal of loanII was received on 22.10.2009 against thedue date of 10.04.2008 and the interestdue 1,45,941 has not been received sofar. In case of loan I, out of principal 35,00,000, 10,00,000 only was receivedon 16.03.2011 against the due date of07.08.2007. The Balance amount ofprincipal of 25,00,000 is still overdue.Interest accrued and due 19,76,045 hasnot been received so far. Though theCompany is pursuing through Govt. ofAssam for the recovery of the balanceamount of principal and the amount ofinterest overdue, however the steps arenot reasonable in view of long overdues.

(vii) In our opinion, the Company has aninternal audit system commensurate withits size and nature of its business but thescope of internal audit has not been definedand the Internal Audit Report is notcomprehensive.

The Physical Verifications of inventorycouldn’t complete in this financial year butsame has been completed in the FY2012-13.

The company is taking more effectivemeasures to recover the principal as wellas the interest from the borrower.

The scope of new internal auditorappointed for the FY 2-12-13 has been wellspecified.

5

6

7

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COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 619(4) OFTHE COMPANIES ACT, 1956 ON THE ACCOUNTS OF ASSAM PETRO-CHEMICALS LIMITED FOR THEYEAR ENDED 31 MARCH 2012

The preparation of financial statements of Assam Petro-Chemicals Limited for the year ended31 March 2012 in accordance with the financial reporting framework prescribed under the CompaniesAct, 1956 is the responsibility of the management of the company. The statutory auditor appointedby the Comptroller and Auditor General of India under Section 619(2) of the Companies Act, 1956is/are responsible for expressing opinion on these financial statements under section 227 of theCompanies Act, 1956 based on independent audit in accordance with the auditing and assurancestandards prescribed by their professional body, the Institute of Chartered Accountants of India.This is stated to have been done by them vide their Audit Report dated 19 November 2012.

I, on behalf of the Comptroller and Auditor General of India have conducted a supplementaryaudit under section 619(3) (b) of the Companies Act, 1956 of the financial statements of AssamPetro-Chemicals Limited for the year ended 31 March 2012. This supplementary audit has beencarried out independently without access to the working papers of the statutory auditors and islimited primarily to inquiries of statutory auditors and company personnel and a selective examinationof some of the accounting records. Based on my supplementary audit, I would like to highlight thefollowing significant matters under section 619(4) of the Companies Act, 1956 which have come tomy attention and which in my view, are necessary for enabling a better understanding of the financialstatements and the related Audit Report.

Statement of Profit & Loss

Expenses

Depreciation and Amortization expenses (Note 8.1, 8.2 & 8.4)

Amortization expenses (Notes No. 8.4) - 41.23 lakh

A. As per the disclosed accounting policy (Note no. 27-H), the value of the raw material, processchemicals, etc. issued from the stores for use in production is determined on the weighted averagebasis. The value of raw material so issued is amortized over the years based on the actual productionfor the respective year.

The above represents the value of Methanol Synthesis Catalyst (Catalyst) issued (June 2011) forproduction and amortized against actual production during 2011-12 on proportional basis. TheCompany had, however, incorrectly valued the Catalyst issued for use in production on the basis ofthe weighted average rate of Catalyst worked out as on 31 March 2012 instead of that on the date ofconsumption viz. 6 June 2011. This has resulted in overstatement of ‘amortized expenses’ as well as‘loss for the year’ by 5.83 lakh each.

Further, the incorrect Valuation of Catalyst issued has correspondingly resulted in overstatement ofunamortized expenditure-other non-current assets (Note no, 11) by 19.16 lakh.

Comment on Disclosure

Other Disclosure (Note - 28)

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B. Refer note no. 28.15 regarding unused catalyst stock (valuing 65.98 lakh) of more than 20years old held for disposal by the Company. This however, does not include the old stock of MethanolSynthesis Catalyst ICI-51-2 worth 15.95 lakh lying in stores since 1988 as per physical verificationreport of the Store Department dated 31 March 2012 submitted to the Managing Director of theCompany. The disclosure is, therefore, deficient to that extent.

Auditors’ Report

C. Refer Auditors’ qualification (no. 4-III) regarding not identifying and not writing off of theloss against Catalyst (valued 65.98 lakh) lying idle for more than 20 years as the Company hadconstituted a Committee for disposal of the said catalyst. The Managing Director (MD) of the Companyhad, however, issued formal orders for treating material worth 20.12 lakh of the said stock to beobsolete thereby writing it off. No provision for the said writing off has, however, been made despiteclear directions of the MD, which has resulted in understatement of loss for the year to that extent.The Auditors failed to qualify this fact and thus, their report was deficient to that extent.

For and on the behalf of the

Comptroller and Auditor General of India

Sd/-

Place : Guwahati (C.H. Kharshiing)

Date : 27.02.2013 Accountant General (Audit), Assam

3331


AUDITORS’ REPORT

TO THE MEMBERS OF ASSAM PETRO-CHEMICALS LIMITED

1. We have audited the attached Balance Sheet of ASSAM PETRO-CHEMICALS LIMITED as at 31stMarch, 2012, and also the Statement of Profit and Loss and the Cash Flow Statement for the yearended on that date annexed thereto. These financial statements are the responsibility of thecompany’s management. Our responsibility is to express an opinion on these financial statementsbased on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India.Those Standards require that we plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financial statementpresentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003 (as amended) issued by theGovernment of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, weenclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the saidOrder.

4. Further to our comments in the Annexure referred to in paragraph 3 above , we report that :

I. The documents in respect of Subsidiary Company (Pragjyotish Fertilizers and Chemicals Ltd.(PFCL) required to be attached with the Balance Sheet of this Company as per section 212(1)of the Companies Act, 1956, have not been attached. (Refer Note No. 28.20)

II. Changes in the Significant Accounting Policies

During the year, there is a change in the Accounting Policy relating to charging off the valueof catalyst in the Profit & Loss A/c. As per disclosure in Note No. 11 relating to ‘Other Non-Current Assets,’ “The value of Catalyst in the plant has been taken on the basis of Certificateissued by the Engineering Department of the company. This has been amortised as perproduction capacity i.e. 1,00,000 MT, which is a variation of the accounting treatment ofearlier years. The impact of variation on Statement of Profit & Loss is increase in profit by

1,35,57,828/-.”

III. Unused old catalyst held for disposal

As per Note No. 28.15 “The company is carrying unused catalyst valued Rs. 65.98 lakhswhich is more than 20 years old. A committee has been constituted for disposal of the same.The loss / gain on sale will be accounted for at the time of disposal”. The Company has notidentified & charged to Profit & Loss Account, the loss, if any, on impairment of above asset.

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IV. Fixed Asset – Replacement of Reformer Tubes

The Company has replaced 42 Nos. of imported reformer tubes costing 3,90,83,964/- inreformer section of the Methanol Plant, which has been capitalized by the Companyconsidering the replacement as to be “betterment or improvement” as given in Note No.28.13. The reasoning given by the management in above note No. 28.13 is very complexand highly technical. Thus we are not able to express an opinion on the above accountingtreatment made by the Company.

Subject to above

i) We have obtained all the information and explanations, which to the best of our knowledgeand belief were necessary for the purposes of our audit;

ii) In our opinion, proper books of account as required by law have been kept by the companyso far as appears from our examination of those books;

iii) The Balance Sheet, Statement of Profit and Loss and Cash Flow statement dealt with bythis report are in agreement with the books of account;

iv) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow statementdealt with by this report comply with the accounting standards referred to in sub-section(3C) of section 211 of the Companies Act, 1956;

v) The provisions of Section 274(1)(g) of the Companies Act, 1956 regarding “Disqualificationsof Directors” do not apply to this company, being a Government Company, as per notificationNo. G.S.R. 829 (E) dated 21.10.2003 issued by the Ministry of Company Affairs, Governmentof India;

vi) In our opinion and to the best of our information and according to the explanations givento us, the said accounts read together with the Significant Accounting Policies and notesthereon give the information required by the Companies Act, 1956, in the manner sorequired and give a true and fair view in conformity with the accounting principles generallyaccepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the company as at 31st March,2012;

(b) in the case of the Statement of Profit and Loss, of the Loss for the year ended on thatdate; and

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on thatdate.

For L. K. Kejriwal & Co.Chartered AccountantsFirm Registration No. 001368C

Sd/-(CA. Samta Agarwal)PartnerM.No. 068296

Place : G u w a h a t iDate : 19.12.2012

33


ANNEXURE TO THE DRAFT AUDITORS’ REPORT

[ Annexure referred to in paragraph 3 of our report of even date on the accounts of ASSAM PETRO-CHEMICALS LIMITED for the year ended on 31st March, 2012]

(i)

(a) The Company has not maintained proper records showing full particulars includingquantitative details and situation of fixed assets. The records maintained for a partperiod do not tally with the financial statements.

(b) According to the information given to us, Physical verification of fixed assets hasnot been done by the management during the year and as such material discrepancieswith financial records, if any, could not be noticed and have not been dealt with inthe books of account.

(c) The Company has not disposed off substantial part of fixed assets during the year and thusthe going concern concept of the Company has not been affected.

(ii) According to the information given to us, physical verification of Inventory has not beenconducted by management during the year and as such material discrepancies, if any,could not be noticed. An audit firm was appointed to conduct stock audit. They submittedtheir report pointing out irregularities in the stock records. As informed to us, steps havebeen taken/ are being taken to regularise those irregularities.

(iii) (a) The Company has granted loan to its subsidiary M/s Pragjyotish Fertilizers & ChemicalsLimited which is 38,36,585 as on 31st March, 2012. Further, advance for Share ApplicationMoney to the Subsidiary Company is 4,80,000 as on 31st March, 2012. The Companyhas made provision for the full amount i.e. 38,36,585 & 4,80,000 respectivelyconsidering them doubtful.

( b)The Company had also granted loans to Assam Tea Corporation Limited as per detailsgiven in Note No. 28.14. As per above details, the repayment of principal of loan II wasreceived on 22.10.2009 against the due date of 10.04.2008 and the interest due 1,45,941has not been received so far. In case of loan I, out of principal 35,00,000, 10,00,000only was received on 16.03.2011 against the due date of 07.08.2007. The Balance amountof principal of 25,00,000 is still overdue. Interest accrued and due 19,76,045 has notbeen received so far. Though the Company is pursuing through Govt. of Assam for therecovery of the balance amount of principal and the amount of interest overdue, howeverthe steps are not reasonable in view of long overdues.

( c) According to information and explanations given to us, the Company has not taken anyloans, secured or unsecured, from companies, firms or other parties covered in theregister maintained under Section 301 of the Companies Act,1956 and as such, clauses(iii)(e), (f) & (g) of para 4 of the Order are not applicable.

(iv) In our opinion and according to information and explanations given to us, except non-maintenance of Fixed Asset register, no physical verification of Fixed Assets & Inventory,there is an adequate internal control system commensurate with size of the company and

34


the nature of its business for the purchase of inventory, fixed assets and for the sale ofgoods. As informed to us, steps have been taken to correct weaknesses in Internal ControlSystem but still the weaknesses persist.

(v) According to the information and explanations given by the management, there are notransactions that need to be entered in the register maintained under section 301 of theCompanies Act’ 1956.

(vi) According to the information and explanations given to us, the Company has not accepted anydeposits from the public during the year and hence directives issued by the Reserve Bank ofIndia and provisions of sections 58A, 58AA or any other relevant provisions of CompaniesAct,1956 and the rules framed there under are not applicable.

(vii) In our opinion, the Company has an internal audit system commensurate with its size andnature of its business but the scope of internal audit has not been defined and the InternalAudit Report is not comprehensive.

(viii) We have broadly reviewed the Cost records maintained by the company pursuant to theCompanies ( Cost Accounting Records) Rules 2011 prescribed by the Central Governmentunder section 209 (1) (d) of the Companies Act, 1956, for maintenance of Cost records andwe are of the opinion that prima facie the prescribed accounts and records have been madeand maintained.

(ix) (a) According to the information and explanations given to us and as per the records of thecompany, except VAT payable on Natural Gas etc. 41,07,284/- for which liability createdin the earlier years (Note No. 28.19), the company has been generally regular in depositingundisputed statutory dues including Provident Fund, Income tax, Sales tax, VAT, Customduty, Excise duty and other statutory dues with the appropriate authorities during the year.

(b) According to the information and explanation given to us there is no material amount of thedisputed tax etc. which are not deposited with appropriate authority as at 31st March ‘2012.However, the Company has received certain demands and show cause notices for paymentof duty and penalty after the Balance Sheet date as detailed in Note No. 28.11.02 (i) (a).

(x) As per the records of the Company, the Company has accumulated Losses of 1130.02Lakhs (Previous year 1023.82 Lakhs) as on 31st March, 2012 which are less than 50% of itsnet worth. The Company has not incurred cash losses during the year, however it had incurredcash losses in the immediately preceding financial year.

(xi) According to the information and explanations given to us the Company has not defaulted inrepayment of dues to the bank, and the Company has not taken any loans from any financialinstitutions.

(xii) According to the information and explanations given to us, the Company has not grantedany loans and advances on the basis of security by way of pledge of shares, debentures andother securities.

(xiii) The Company is not a chit fund/nidhi/mutual benefit/ society.

35


(xiv) According to the information and explanations given to us, the Company is not dealing ortrading in shares, securities, debentures and other investments.

(xv) According to the information and explanations given to us, the Company has not given anyguarantee for loans taken by others from bank or financial institutions.

(xvi) According to the information and explanations given to us, the Company has not obtainedany term loan during the year.

(xvii) According to the information and explanations given to us, we report that the funds raisedon short-term basis have not been used for long-term investment.

(xviii) According to the information and explanations given to us, the Company has not made anypreferential allotment of shares to parties and Companies covered in the register maintainedunder section 301 of the Companies Act, 1956.

(xix) The Company has not issued any debentures during the year.

(xx) The Company has not raised any money by public issues during the year.

(xxi) According to the information and explanations given to us no fraud on or by the Companyhas been noticed or reported during year.

For L. K. Kejriwal & Co.Chartered AccountantsFirm Registration No. 001368C

Sd/-(CA. Samta Agarwal)

Place : G u w a h a t i Partner Date : 19.12.2012 M.No. 068296

36


BALANCE SHEET AS AT 31ST MARCH, 2012PARTICULARS NOTE AS AT AS AT

NO. 31ST MARCH,2012 31ST MARCH,2011

I. EQUITY AND LIABILITIESShareholder’s Funds a) Share Capital 1 91,259,720 91,259,720 b) Reserves & Surplus 2 637,277,254 647,984,028 c) Money received against share warrantsShare application money pending allotment - -Non-Current Liabilitiesa) Long-term borrowings - -b) Deferred tax liabilities (Net) 3 7,852,514 6,812,815c) Other Long term liabilities 4 7,143,907 6,827,069d) Long-term provisions - -

Current Liabilities a) Short-term borrowings - - b) Trade payables 5 63,792,814 41,642,331 c) Other current liabilities 6 62,907,350 24,540,037 d) Short-term provisions 7 75,152,950 129,108,961

Total 945,386,509 948,174,961II. ASSETS1. Non-current assets a) Fixed assetsi) Tangible assets 8.1 150,155,028 102,178,972 ii) Intangible assets 8.2 483,748 806,246 iii) Capital work-in-progress 8.3 32,435,510 26,625,670 iv) Intangible assets under development - -

b) Non-current investments 9 - 2,000,000c) Deferred tax assets (net) - -d) Long term loans & advances 10 110,389,429 156,111,325e) Other non-current assets 11 13,557,828 -

2. Current assets a) Current investments - b) Inventories 12 96,666,241 96,051,128 c) Trade receivables 13 69,265,476 15,845,223 d) Cash and cash equivalents 14 446,381,746 514,357,302 e) Short-term loans and advances 15 16,655,981 27,285,625 f) Other current assets 16 9,395,522 6,913,470Significant Accounting Policies 27Accompaning Notes to the FinancialStatements(1-28) 28

Total 945,386,509 948,174,961

As per our report of even date attachedfor L.K.KEJRIWAL & CO.Chartered AccountantsFRN : 001368C

For and on behalf of the Board of Directors

Sd/-(Uttam Bailung)

Company Secretary

Sd/-(R.Bordoloi)

Managing Director

Sd/-(A.Saha)

D.G.M.(F&A)

Sd/-(D.N. Barua)

Director

(CA. Samta Agarwal)PartnerM.No. 068296Place : GuwahatiDate : 19.12. 2012

37


Date : 19.12.2012

Sd/-(Uttam Bailung)

Company Secretary

38


CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2012

39


Disclosure Pursuant to Revised Schedule VI to the Companies Act, 1956Notes to the Financial Statements

1. SHARE CAPITALAs at 31st March As at 31st March

PARTICULARS 2012 2011

AUTHORISED SHARE CAPITAL :

150,00,000 (P.Y. 150,00,000) Equity shares of 10 each 150,000,000 150,000,0002,00,000(P.Y.2,00,000)Reedemable Cumm.PreferenceShares of 100 each 20,000,000 20,000,000

170,000,000 170,000,000ISSUED & SUBSCRIBED & PAID UP

Fully Paid up Equity Shares 91,19,947 Shares 91,199,470 91,199,470(8041540 Shares held by AIDCL (Holding Company)

Amount Recd. against Forfeited Shares 15,100 Shares 60,250 60,25091,259,720 91,259,720

The Company had forfeited 15,100 Equity Shares against which a total of 90,750/- was not yet received.The Company has not transferred this amount to Reserves & Surplus

Reconciliation of No. of Shares as at 31.03.2012 & that as at 31.03.2011 is set out below

Equity Shares Equity SharesPARTICULARS AS AT 31.03.2012 AS AT 31.03.2011

Number Amount ( ) Number Amount ( )

Shares outstanding at the beginning 9,119,947 91,199,470 9,119,947 91,199,470Shares issued during the year - - - -Shares bought back during the year - - - -Shares outstanding at the end 9,119,947 91,199,470 9,119,947 91,199,470

SHAREHOLDERS HOLDING MORE THAN 5% OF SHARES

As at 31 March 2012 As at 31 March 2011Names of Shareholders No. of Shares held % of Holding No. of Shares held % of Holding

Assam Industrial DevelopmentCorporation Limited 8041540 88.18% 8041540 88.18%Industrial Development Bank of India 852500 9.35% 852500 9.35%

40



2. RESERVES & SURPLUSAs at 31st March As at 31st March

PARTICULARS 2012 2011

Capital ReserveOpening Balance 13,625 13,625Add : Transferred from Surplus - -

13,625 13,625Capital Redemption Reserve

Opening Balance 11,029,100 11,029,100Add : Transferred from Surplus - -

11,029,100 11,029,100Deferred Capital Subsidy

Opening Balance 390,519 477,302Less : Transferred to Statement of P/L 86,783 86,783

303,736 390,519General Reserve

Opening Balance 738,933,072 721,709,976Add : Transferred during the year - 17,223,096

738,933,072 738,933,072Surplus

Opening Balance (102,382,288) 17,223,096Add / Less : Profit / Loss during the year (10,619,991) (102,382,288)Less : Transferred to General Reserves - (17,223,096)

(113,002,279) (102,382,288)

Total 637,277,254 647,984,028


3. DEFERRED TAX LIABILITIES (NET)

As at 31st March 2012 As at 31st March 2011 PARTICULARS

Deferred Tax Liabilities (Net) Opening Balance 6,812,815 8,197,406 Timing Difference - Depreciation (517,892) (5,248,315) Timing Difference - VRS Expenseses 3,882,615 767,438

3,364,723 (4,480,877) Current Year Deferred Tax Expense 30.90% 1,039,699 30.90% (1,384,591)

Closing Balance 7,852,514 6,812,815

Deferred tax assets and deferred tax liabilities have been offset wherever the Company has a legallyenforceable right to set off current tax assets against current tax liabilities and where the deferredtax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority.

41


4. OTHER LONG-TERM LIABILITIES

31.03.2012 31.03.2011 PARTICULARS OTHERS Earnest Money Dealers 350,000 250,000 Transporters 30,000 30,000 Contractors (Unit-II) - 75,589 Others (CO2 & 100TPD Plant) - 204,591 Contractors 708,037 819,433 Security Deposit Dealers 900,000 800,000 Supplier 396,492 108,231 Transporters 2,112,500 1,829,819 Contractors 956,421 1,371,037 Contractor (Unit - II) 263,105 158,147 CST Security 1,427,352 1,180,222

Total 7,143,907 6,827,069

42


43


44


45


46


47


48


49


50


51


52


53


54


55


Note - 27 Forming part of the Balance Sheet as at 31st March ,2012 and Statement of Profit & Lossfor the year ended 31st March 2012.

SIGNIFICANT ACCOUNTING POLICIES

A. Basis of Preparation of financial Statements:

Financial statements are prepared on accrual basis and under historical cost convention and inaccordance with the Generally accepted Accounting principles in India , the provisions of theCompanies Act, 1956 and Accounting Standards issued under the Companies ( Accounting Standard)Rules ,2006, notified under section 211( 3C) of the Companies Act 1956.

Cash flow statement has been prepared in accordance with the indirect method prescribed inAccounting Standard -3 issued under the Companies (Accounting Standard ) Rules 2006 and asrequired by the SEBI

B. Use of Estimates:

The preparation of financial statements requires estimates and assumptions to be made that affectthe reported amount of assets and liabilities on the date of financial statements and the reportedamount of revenues and expenses during the reporting period. Difference between the actual resultsand estimates are recognized in the period in which the results are known / materialized.

C. Fixed Assets:

Fixed assets are stated at cost net of modvat/cenvat value added tax (wherever credit of the samehave been taken) and include amounts added on revaluation, less accumulated depreciation andimpairment loss, if any. All cost, including financing cost till commencement of commercial production,net of charges on foreign exchange contracts and adjustments arising from exchange rate variationsattributable to the fixed assets are capitalized. In case of assets discarded/retired from active useheld for disposal are stated at their net book value and shown separately in the Notes to FixedAssets. Project under commissioning and other Capital Work-in-Progress are carried at cost comprisingdirect related incidental expenses and attributable interest.

D. Depreciation:

Depreciation on fixed assets is provided on written down value method at the rates and in themanner prescribed under Schedule XIV of the Companies Act, 1956. However, in case of plant &machinery and electrical equipment, depreciation has been charged on straight line method up to95% of the historical cost retaining 5% as salvage value. Similarly for other Assets depreciation hasnot been charged on residual 5 % written down value.

E. Impairment of Assets:

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. Animpairment loss is charged to the Profit & Loss Account in the year in which an asset is identified asimpaired. The impairment loss recognized in the prior accounting period is reversed if there has beena change in the estimates of the recoverable amount, subject to a maximum of depreciated historicalcost.

56


F. Foreign Currency Transactions:

(a) Transaction denominated in the foreign currencies are normally recorded at the exchangerate prevailing at the time of the transaction.

(b) Monetary items denominated in the foreign currencies at the year end are restated at theyear end rates.

(c) Any income or expenses on account of exchange difference on translation is recognized inthe profit & loss account except in cases where they relate to acquisition of fixed assets inwhich case they are adjusted to the carrying cost of such assets.

G. Investments:

Current investments are carried at the lower of cost and quoted/fair value, computed categorywise. Long term investments are stated at cost. Provision for diminution in the value of long terminvestments is made only if such a decline is other than temporary in the opinion of the management.

H. Inventories:

Items of inventories are measured at lower of cost or net realizable value, after providing forobsolescence, if any. Cost of inventories comprises of all cost of purchase, cost of conversion andother cost incurred in bringing them to their respective present location and condition. Cost of raw-materials, process chemicals, stores and spares, packing materials, and other products are determinedon weighted average basis. Cost of production of finished stocks is determined on by absorptioncosting method. In calculating the valuation of unsold finished stock, overhead expenses have beenabsorbed up to the stage of Production only.

I. Other Non Current Asset:

The Value of Non Current Assets includes value of unamortized catalyst which are amortized on thebasis of the utilization certificates of the Engineering Department.

J. Turnover:

Turnover is recognized when goods are supplied/ dispatched and when significant risks and rewardsof ownership of goods are transferred to the customers.

K. Excise Duty:

Excise Duty is accounted on the basis of, both, payments made in respect of goods cleared as alsoprovision made for goods lying in excise bonded tank.

L. Employee Benefits:

Employee benefits are accounted for as per AS-15 issued under the Companies (AccountingStandards) Rules,2006. Company’s contribution to Provident & Pension Fund is charged to Profit &Loss Account. Gratuity and Leave Encashment Benefit are charged to Profit & Loss Account on thebasis of certificate issued by Life Insurance Corporation of India with whom policies are taken, basedon their actuarial valuation. Short –term employee benefit and short term liability are also accountedfor as per AS-15.

57


M. Borrowing Cost :

Borrowing cost that are attributable to the acquisition of qualifying assets are capitalized as part ofthe cost of such assets. A qualifying asset is one that necessarily takes substantial period of time toget ready for intended use. All other borrowing cost are charged to revenue.

N. Employees Separation Costs :

Compensation to employees who have opted for retirement under voluntary retirement scheme ofthe company is debited to the profit and loss account in the year of payment.

O. Provision for Current and Deferred Tax:

Provision for current tax is made after taking into consideration benefits admissible under theprovisions of The Income Tax Act, 1961. Deferred tax resulting from “timing difference” betweenbook and taxable profit is accounted for using the tax rates and laws that are enacted or substantiallyenacted as on the balance sheet date. The deferred tax assets is recognized and carried forward onlyto the extent that there is a reasonable certainty that asset will be realized in future.

P. Provision, Contingent Liabilities & Contingent Assets:

Provision involving substantial degree of estimation in measurement are recognized when there is apresent obligation as a result of post events and it is probable there will be an outflow of resources.Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are notrecognized in the financial statements.

Q. Segment Reporting :

The accounting policies adopted for segment reporting are in line with AS-17 issued under theCompanies (Accounting Standard ) Rules 2006. Revenue expenses have been identified to segmentson the basis of their relationship to the operating activities of the segment and common expenses/income are allocated to segment on a reasonable basis. Management has identified two reportablebusiness segments namely Methanol and Formalin and Siliguri has been identified as a geographicalsegment.

R. Government Grants and Subsidies:

Government grants/subsidies related to depreciable fixed assets are treated as deferred reservewhich is allocated to income over the period and proportions in which depreciation on those assetsis charged. Government grants/subsidies related to revenue (like transport subsidy, power subsidy)are recognized as income in the year of receipt instead in the year to which it pertains due to theuncertainty and abnormal delay attached to the same.

S. Intangible Assets

Intangible Assets are accounted for as required by AS-26 issued under the Companies (AccountingStandard ) Rules 2006.

58


NOTES TO FINANCIAL STATEMENTS FOR THE YEAR 2011-2012.

Note 28: Other Disclosures

28.01 Value of Import on CIF Basis (Figures in )

Particulars For the year ended 31.3.2012 For the year ended 31.3.2011

Capital Goods 3,28,92,842 -

Raw Materials - -

Stores , Spares & Chemicals - -

Note * The company has procured imported Methanol on bond transfer basis for ‘ 1,03,87,726from an importer for which payment was made in Indian Currency.

28.02 Earning in Foreign Exchange (Figures in )


Export of Goods on FOB Basis 1,17,40,157 83,14,338

28.03 Expenditure in Foreign Currency (Figures in )


Expenditure 39635 34265

28.04 Amount Remitted during the year in foreign currency on account of Dividend

(Figures in )


Remittance - -

28.05 Consumption of Raw Materials , Trading Goods , Stores , Spares & Chemicals

(Figures in )Particulars For the year ended 31.3.2012 For the year ended 31.3.2011

Value (%) Value (%)Raw Materials Natural Gas (includingtransmission charges) Imported - - - -Indigenous 244,813,694 100.00% 160,297,703 100.00%Methanol Imported 10,387,726 2.82%* - -Indigenous Captive 97.18% Captive 100.00%ChemicalsImported - - - -Indigenous 3,259,614 100.00% 1,881,623 100.00%

59


Stores & Spares Parts

Imported - - - -

Indigenous 10,252,329 100.00% 14,491,857 100.00%

Catalysts

Imported - - - -

Indigenous 4,123,450 100.00% - -

Note *Calculated in terms of Quantity

28.06 Employees benefits (AS-15)

28.06.01 A General Description on the type of Plans

a) Earned Leave Benefits (EL)

EL per employee accrual is 33 days per year. Two days of EL is earned after 22 days ofcontinuous service by an employee. Accumulation up to 360 days is allowed, out of whichone part is encashable and other part can either be encased at the time retirement oravail leave during the service period.

b) Sick Leave (SL)

SL per employee accrual is 10 days per year and same can’t be encased during theservice tenure. Encashment of 50% of accumulated SL is permitted at the time ofretirement.

c) Gratuity

15 days salary for each completed year of service or part thereof in excess of 6 months ofcontinuous service. The eligibility of gratuity falls due on completion of 5 years ofcontinuous service. The company has taken a policy under “Group Gratuity Scheme” ofemployees with Life Insurance Corporation of India (LICI). The amount payable calculatedby LICI based on membership data provided by the company, actuarial assumption &valuation made by LICI & the balance in the Gratuity Fund is charged to the Statement ofProfit and loss. The APL Employees Gratuity Fund is maintained by LICI in which interestaccrued & payments made by the company are credited and payment of claims made toemployees is debited.

d) Leave Encashment

For the payment of leave encashment at the time of retirement, a policy under “groupleave Encashment scheme” of employees has been taken from LICI. The amount payable,calculated by LICI on the basis of membership data provided by the company, actuarialassumption and valuation made by LICI and the balance in the fund maintained by LICI ischarged to the Statement of Profit and Loss.

60


(Figures in )

Defined Contribution Plan

Particulars Expenses Charged during 2011-12

Employer’s Contribution to Provident Fund 1,70,38,097

and Pension Scheme (164,02,046)

Defined Benefit Plan Group Gratuity Scheme Group LeaveEncashment Scheme

ParticularsValuation Method Projected Unit Credit Projected Unit CreditActuarial Assumptionsa) Mortality Rate LIC(1994-96) Ultimate LIC(1994-96)Ultimateb) Withdrawal Rate 1-3% depending on age 1-3% depending on agec) Discount Rate 8% per Annum 8% per Annumd) Salary Escalation 5% 7%Result of ValuationPV of Past Service Benefit 11,32,21,307 5,43,86,978

( 11,45,38,641) (4,88,95,444)Current Service Cost 43,23,779 95,16,575

(42,28,282) (79,22,684)Total Service Gratuity 19,50,33,396 -------

(19,80,46,647)Accrued Gratuity 13,78,17,239 -------

(13,93,44,961)LCSA 5,72,16,157 1,07,70,623

(5,87,01,686) (1,06,56,135)LC Premium 3,31,961 92,247

( 3,29,357) (91478)Service Tax @ 12.36% 41,030 9501

(33,924) (9422)Recommended Contribution RateFund Value as on Renewal Date 7,86,62,119 5,96,28,035

(7,27,30,155) (3,84,77,590)Additional Contribution for 3,45,59,188 -Existing Fund (4,18,08,486 ) (1,04,17,854)Current Service Cost 43,23,779 42,75,518

(42,28,282) (79,22,684)Total Amount Payable 3,92,55,958 43,77,266

(4,64,00,049) (1,84,41,438)

61


Total expenses recognised in the Statement of Profit & Loss

Debited under head ‘Employees Benefit Expenses’ – Note 22

(Figures in `)Defined Benefit Plan Group Gratuity Scheme Group Leave

Encashment SchemeCurrent Service Cost 43,23,779LC premium 3,31,961

Total 46,55,740(52,59,411)

Current Service Cost 95,16,575LC premium 92,247

Total 96,08,822(80,81,606)

Debited under ‘Prior Period Item’ Note- 25) (Figures in `)

Defined Benefit Plan Group Gratuity Scheme Group LeaveEncashment Scheme

Additional Contribution 3,45,59,188Paid to Fund 1,00,00,000Service Tax 41,030 Total 4,46,00,218

( - )Prepaid from previous year 20,21,403

transferred ( - )

Note : Figures in brackets represent previous year figures

28.7 Segment Information (AS-17) :

The company has disclosed business segment as the primary segment. Segments have beenidentified taking into account the nature of the products, the different risks and returns, theorganization structure and internal reporting system.

Segment revenue, segment results, segment assets and segment liabilities include the respectiveamounts identifiable to each of the segments allocated on a reasonable basis. Inter segmenttransfer have been carried out at average net realized price.

62


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64


28.08 Related Party Disclosure ( AS-18)

a) The company is a state controlled enterprise. Thus related party relationship and transactions withother state controlled enterprises are not required to be disclosed as para 9 of AS-18.b) Related PartyRelationship

i) Holding Company Assam Industrial Development Corporation Limited

ii) Subsidiary Company PragJyotish Fertilisers and Chemicals Limited

iii) Key Managerial Personnel Shri Ratul Bordoloi (Managing Director)

c) Related party transactions during the year (Figures in )

Particulars Assam Industrial PragJyotish Shri Ratul

Development Fertilisers & BordoloiCorporation Ltd. Chemicals Ltd

Relationship Holding Company Subsidiary ManagingCompany Director (KMP)

Investment in Equity Shares - 100,00,000 -(100,00,000)

Advance for Share Application - 4,80,000 -(3,00,000)

Loans - 38,36,585 -(38,36,585)

Salary & other Benefits - - 9,78,733(5,18,710)

Amount Receivable as on 31.3.2012 1,43,16,585 -(Equity shares, Loans & Share application ) - (1,41,36,585)

Amount Payable as on 31.3.2012 804,15,400 - -(Equity Shares) (804,15,400)

Note : Figures in brackets represent previous year figuresThe Related Parties with whom the company has no transactions during the current year or in previousyear have not been disclosed like fellow subsidiaries and relatives of key management personnel.28.09 Earning Per Equity Share ( AS-20)

(Figures in )

Particulars For the year ended 31.3.2012 For the year ended 31.3.2011Numerator: Net profit after TaxBasic (1,06,19,991) (10,23,82,288)*Diluted (1,06,19,991) (10,23,82,288)*Denominator: Average Nos. of Equityshares outstanding during the year

Basic 91,19,947 91,19,947Diluted 91,19,947 91,19,947Nominal Value per share 10 10

65


Earning Per ShareBasic (1.16) (11.68)*Diluted (1.16) (11.68)*Net Profit (1,06,19,991) (10,23,82,288)Average nos. of Equity Share 91,19,947 91,19,947Average nos. of Equity Share 91,19,947 91,19,947for diluted Earning Per Share

* In the Financial Year 2010-2011 the calculation was made on net profit after Tax (‘10, 64,89,343)excluding provision no longer required written back ‘41,07,055.

28.10 Consolidated Financial Statements (AS-21)

Since the financial statements of subsidiary company are not available, the consolidated FinancialStatements could not be prepared and presented as required under AS-21.

28.11 Provisions And Contingent Liabilities ( AS-29)

28.11.01 Movement in Provisions

(Figures in )

Year 2011-2012 2010-2011

Particulars Investment, Debtors Bonus , Others Investment Debtors Bonus , Others

Security, Exgratia Security, Exgratia

Loans Loans

& advances & advances

Opening 11,733,018 803,541 1,568,500 247,500 9,025,701 803,541 3,736,200 182,500

Balance

Add : Provision

during the year 3,487,317 - 3,358,400 205,000 2,707,317 - 1,568,500 217,500

Less : paid,

Written

Back/reduced

during the year - - 1,568,500 217,500 - - 3,736,200 152,500

Closing

Balance 15,220,335 803,541 33,58,400 235,000 1,173,3018 803,541 1,568,500 247,500

28.11.02 (i)Contingent Liability and Commitments Not Provided fora) Claims against the company not acknowledged as Debt

(Figures in )

Sl. No Particulars As on 31.03.2012 As on 31.03.20111 A demand for duty & Penalty levied by the

Commissioner of Central Excise & Service TaxDibrugarh 50,454,714 relating to the periodMarch 2009 to January 2011 was received by

50,454,714 -

66


the company in July 2012 (subsequent tobalance sheet date). The demand is related toinput (Natural Gas) & output (Methanol). TheCompany has filed an appeal before CESTATKolkata (Eastern Bench) on 17.10.2012(subsequent to the Balance Sheet date).

2 The Company has also received another showcause notice in August 2012 (subsequent toBalance Sheet date) relating to the abovesubject matter for the period February 2011to February 2012 for 10,478,225 for whicha reply has already been given.

3 Against a Demand raised by DCT for the year2008-09 relating to non submission of “C”forms for 1,45,965 an appeal was filed beforeDCT Naharkatia . The appeal has already beenheard & the order of appeal is awaited

10,478,225 -

145,965 -

b) Guarantee(Figures in )

Particulars As on 31.03.2012 As on 31.03.2011

Guarantee - -

c) Other money for which the company is contingently liable

Particulars As on 31.03.2012 As on 31.03.2011Other money - -

(ii) Commitments not provided for :

a) Estimated amount of Contracts remaining to be executed in Capital account and not provided for.

(Figures in )


Estimated amount of contract for formalin

revamping project remaining to be executed. 50,00,000 200,00,000Estimated amount of Contract for consultancy onCapital Account Project and Development India Ltd. 43,65,000 43,65,000 ENPRO Project Consultancy Pvt. Ltd. 50,00,000 50,00,000 Tata Consulting Engineers Ltd. 150,00,000 Total 243,65,000 93,65,000 Less : Advance to consultants 1,29,14,141 5354641 Balance 1,14,50,859 40,10,359

67


b) Uncalled liability on shares and other Investment Partly Paid

(Figures in )


Uncalled Liability - -

c) Other Investments

(Figures in )


Other Investments - -

28.12 Capital Work –In –Progress (CWIP)

All expenditure incurred for New 500 TPD Methanol Plant, New 100 TPD Formalin Plant, Methanol RevampingPlant & Formalin Revamping Plant have been shown under CWIP, since these expenditure are related to theseprojects only. No expenses which should have been charged to Profit & Loss, has been included in CWIP

28.13 Fixed Asset – Replacement of Reformer Tubes

The company has replaced 42 nos. of imported Reformer Tubes costing 3, 90, 83,964 in reformer section

of the Methanol Plant. The replacement has extended the useful life of Methanol Plant which is about 23years old. The Reformer tubes were previously replaced in the year 2001-02 and were capitalized in that year.Normally the life of the reformer tubes are about 11 to 12 years and thus were due for replacement but inthe mean time an accident occurred in the reformer section of the Methanol Plant and the company compelledto replace the old tubes during FY 2011-12. The company already claimed 95 % depreciation of original costof the Methanol Plant up to FY 2008-2009. The company did not claim any depreciation on Methanol Plantfor FY 2009-10 and 2010-11 as per the policy and considering the life of the plant. However, by replacing theReformer Tubes the life of the plant gets extended.

Further, in the reformer section of the Methanol Plant originally used tubes were IN -519 Grade. Later thesewere replaced with improved quality tubes – Modified Micro Alloy. Presently the company is using this latestversion of reformer tubes, which are having advantages over the original IN-519. These micro alloy tubeshave I.D. of 110mm against the original of 95.5mm and hence more volume of gas contains in the tubes. Thewall thickness of this present tubes are 7.5mm against the original 11 mm we had with IN -519, and hencemore effective heat transfer across the wall with more improved tube efficiency. Because of the increasedvolume of the tubes, it is capable of processing more natural gas as well as catalyst. Presence of elements likeZirconium (Zr) and Titanium (Ti) in these micro alloy tubes makes them more robust and strong.

In view of above facts, replacement are considered to be “betterment OR improvement”, and thus the abovecost of replacement has been capitalized. 28.14 The company had given loans to Assam Tea Corporation Limited, details of which are as under:

(Figures in )

InterestAccrued &

Due8

19,76,0451,45,941

Amount ofRepaymentof Principal

710,00,00015,00,000

Date ofRepaymentof Principal

616.03.201122.10.2009

Due Dateof Re

payment5

07.08.200710.04.2008

Rate ofInterest

411.00%11.00%

Date ofLoan

308.05.200711.10.2007

Principal

235,00,00015,00,000

Particulars

1Loan -ILoan -II

68


The balance of principal of loan -I 25,00,000 is overdue and interest on none of the loans has been receivedso far. The company is pursuing through Govt. of Assam for repayment of balance amount of principal & theamount of interest over due as shown above. In past also the repayments were received through interventionof Govt. of Assam. The Company is fully hopeful of recovering the full amount of the balance principal andinterest. Thus the principal outstanding 25,00,000 has been considered good but the interest has notbeen recognized as income in view of AS-9 issued by the Companies Accounting Standard Rules, 2006 andprudent accounting principles.

28.15 Unused old catalyst held for disposal

The company is carrying unused catalyst valued 65.98 lakhs which is more than 20 years old. A committeehas been constituted for disposal of the same. The loss / gain on sale will be accounted for at the time ofdisposal.

28.16 Mistake in the Financial Statement of FY 2010-11 corrected in the printed Annual Report.

There was a mistake in schedule no 13 in respect of product wise turn over (Methanol & Formalin) whichwas corrected in printed Annual Report on being pointed out by Comptroller &Auditor General of Indiaauditors. For the purpose of Previous Year figures in the current year, the figures in the printed AnnualReport have been taken as basis.

28.17 Prior Period Items ( Cr.) – Consumption of Stores & Spares 28,75,626.

An amount of 28,75,626 was wrongly debited to consumption of stores & spares parts in the previousyear (FY 2010-2011). The spare part was wrongly issued in the previous year and has been returned back tothe stores in the current year.

28.18 Stock of Natural Gas & Work –In – Progress.

The closing stock of raw material i.e Natural Gas and Closing stock of Work –In-Progress is not valued becausethey are not measurable and these are subject to risk of being flared.

28.19 VAT payable on Natural Gas etc. 41,07,284.

The liability was created in the earlier years on prudent accounting principles. The amount will be writtenback after taking legal opinion

28.20 Documents in respect of subsidiary company ( M/s Pragjyotish Fertilizer And Chemicals Limited)undersection 212(1) of Companies Act, 1956.

The documents required to be attached with Balance sheet of the company as per Section 212(1) of the Actare not available.

28.21 Dues to Micro, Small & Medium Enterprise:

There is no supplier under Micro, Small and Medium Enterprise Development Act, 2006 on the basis ofinformation made available to the company. The company has neither paid any interest in the terms ofsection16 of the above Act nor any interest remain unpaid and no payments were beyond the “appointeddate” to such enterprise during the year ended 31.03.2012. Amount outstanding to these enterprise for theyear ended 31st March 2012 is ` Nil (previous year `Nil)

69


28.22 Branch Offices of the company

The Company has no branch office u/s 2(9) of the Companies Act 1956, the Factory of the Company atNamrup (Assam) is not a branch u/s 2(9)(c) of the Companies Act 1956 because the Head Office of theCompany is situated there.

28.23 The financial statements for the year ended 31st March, 2011 had been prepared as per the then applicable,pre Revised Schedule VI to the Companies Act, 1956.Consequent to the notification of Revised Schedule VIunder the Companies Act 1956, the financial statements for the year ended 31st March, 2012 are prepared asper Revised Schedule VI . Accordingly, the previous year’s figures have also been reclassified to conform to thisyear’s classification. The adoption of Revised Schedule VI for previous year’s figures does not impact recognitionand measurement principle followed for preparation of financial statements.

As per our report of even date attachedfor L.K.KEJRIWAL & CO. For and on behalf of the Board of DirectorsChartered Accountants

FRN : 001368C

Sd/-(R.Bordoloi)

Managing Director

Sd/-(Uttam Bailung)Company Secretary

Sd/-

(D.N. Barua)Director

Sd/-(A. Saha)D.G.M.(F&A)

Sd/-(CA. Samta Agarwal)Partner.M.No. 068296

Place : GuwahatiDate : 19.12.2012

70


Assam Petro-Chemicals LimitedRegd. Office: 4th Floor, Orion Place,

G.S. Road, Bhangagarh, Guwahati, Assam-781005

Proxy Form

I/ We …………………………………….(L. Folio No…………………) being a member of Assam Petro-Chemicals Limitedhereby appoint Shri/Smt……………………………………………………….Resident of………………………………………………..as my/our proxy to attend and vote for me/us/our behalf at the 41st

Annual General Meeting of the company to be held on saturday 30th March, 2013 at 11:00 am at theregistered office and at any adjourned meeting thereof.

Signed this………………..day of 2013

Signature: ………………………………………………………………………….Address: ………………………………………………………………………….

………………………………………………………………………….Nos. of shares held ………………………………………………………………………….

Note: 1. The proxy need not to be a member of the company2. The Proxy Form duly signed and stamped should reach the company’s Registered Office at

least 48 hours before the time of the meeting.

Assam Petro-Chemicals LimitedRegd. Office: 4th Floor, Orion Place,

G.S. Road, Bhangagarh, Guwahati, Assam-781005ATTENDANCE SLIP

I/ We hereby record my/our presence at 41st Annual General Meeting of Assam Petro-Chemicals Limitedheld at 4th Floor, Orion Place, G.S. Road, Bhangagarh, Guwahati-781 005 on Saturday, 30th March, 2013at 11.00 am.

Name of the Share Holder :………………………………………………………………………………….

Ledger Foloi No.: :……………………………………………………………..............………..

Number of Shares held: :………………………………………………….……………………………….

Name of Representative/Proxy (if any) :………………………………………………………………………………….

Signature of Member/Proxy :…………………………………………………...…………………………….

Signature of Representative :………………………………………………………………………………….

RevenueStamp

71


FORM 2B (See rules 4CC and 5D of The Companies ( Central Government’s ) General Rules & Forms, 1956)

NOMINATION FORM (To be filled in by individual applying single or jointly, only up to two persons)I/We…..…………………………. and ………………………………. the holders of shares bearingnumber(s)…………………………………….of Assam Petro-Chemicals Limited wish to make a nomination and dohereby nominate the following persons (s) in whom all rights of transfer and/or amount payable inrespect of the said shares/ debentures shall vest in the event of my/ our death. Particulars of NomineeName:Address:Pin Code-Signature :Date of Birth * :-( * to be furnished in case the nominee is a minor )** The Nominee is a minor whose guardian is ( Name and Address ) …………….............………………….......……… …………………………………………………………………………………....................................................……………………………...…………………………………………………………………………….................................................………....………………………….. ( ** To be deleted if not applicable )

Name , Address and Signature of Share holder (s)Name: Name:Address: Address:Pin Code: Pin Code :Signature:—————————————— Signature:——————————————————Date: ————————————————— Date:———————————————————— Name, Address and Signature of two Witnesses———————————————————————————————————————————————- Name and Address Signature with date1.2.————————————————————————————————————————————————Instructions:1. The nomination can be made by individuals only applying/holding share(s)/ debenture(s) on their own

behalf singly or jointly up to two persons. Non-individuals including Society, Trust, Body Corporate,Partnership Firm, Karta of Hindu Undivided Family or a holder of Power of Attorney cannot nominate.If the shares/ debentures are held jointly by not more than two persons, both will sign the nominationform.

2. A minor can be nominated by a share/ debenture holder and in that event the name and address ofThe Guardian shall be given by the holder.

3. The nominee shall not be a Trust, Society, Body Corporate, Partnership Firm , Karta of HinduUndivided Family or a Power of Attorney holder. A Non-resident Indian can be a nominee on repatriablebasis.

4. Nomination stands rescinded upon transfer of shares/ debentures.5. Transfer of share/ debenture in favour of a nominee shall be valid discharge by the Company against

the legal heir (s).6. The intimation regarding Nomination/ Nomination Form shall be filed in duplicate with Company/

Registrar and Share Transfer Agents of the Company who will return one copy thereof to the share ordebenture holder.

****

72