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Assam Petrochemicals Ltd.

BSE: 506267 Sector: Industrials
NSE: N.A. ISIN Code: INE277D01010
BSE 05:30 | 01 Jan Assam Petrochemicals Ltd
NSE 05:30 | 01 Jan Assam Petrochemicals Ltd

Assam Petrochemicals Ltd. (ASSAMPETROCHEM) - Director Report

Company director report

Dear Shareholders

Your Directors have the pleasure in presenting their 47th Annual Report of the companytogether with the audited standalone Financial Statements for the Financial Year ending on31st March 2018.

Financial Highlights (Standalone)

The CompanyRss summarized financial performance (standalone) for the financial yearending on 31st March 2018 is as under:

(Rs in Lakhs)
Particulars As at March 31 2018 As at March 31 2017
Revenue from Operations 9738.66 9338.15
Less: Excise Duty 209.63 940.84
Revenue from Operations (NET) 9529.02 8397.32
Other Income 448.01 345.47
Total Income 9977.03 8742.79
Gross Profit 1376.17 476.40
Less : Depreciation and amortization 146.61 136.33
Finance Cost - 0.66
Profit/Loss for the year before prior period adjustment exceptional and extraordinary items 1229.56 339.41
Less: (a) Exceptional Item 683.36 -
(b) Adjustment of prior period items 10.09 32.35
Profit Before Tax 536.10 307.06
Less: Tax Expenses (8.1) 21.14
Profit /Loss for the year after Taxation 544.20 285.92
Balance brought forward from previous year (2641.38) (2927.31)
Proposed Dividend NIL NIL
Tax on Dividend NA NA
Earnings Per Share (EPS) (in Rs) 5.97 3.14

The Financial Year ending on 31st March 2018 was one of the best performed year of thecompany in its history. The turnover of the company was higher by Rs400 lacs during theyear ending on 31st March 2018 than the previous financial year however the gross profitof the company was higher by Rs899.77 lacs during the year. The company earned a netprofit of Rs544. 20 lacs during the year which was 90.33% higher than the previous year.The Company booked Rs683.36 lacs as exceptional items from the profit of the companyduring the Financial Year ending on 31st March 2018 mainly for release of arrear salaryto the employees for the year 2009-10 and 2010-11. Had the company not booked theseexceptional items your company would have earned a profit of Rs1229.56 lacs during theyear. The Board of Directors of the company took steps for reduction of cost and itresulted in realizing better profit during the year. The Board also engaged outsideagencies to analyse the financial performance of the company during the years 2014-15 and2015-16 in which the company suffered losses. Corrective measures taken by the companywill result better financial performance in the years to come.

The manufacturing expenses of the company reduced by Rs241.07 lacs during the FY2017-18 mainly due to reduction of Natural Gas price by the Central Government and lowerutilization of Methanol plant. The employees benefit expenses and other expenses wereincreased during the FY 2017-18 by Rs619.89 lacs over the previous year.

The company has a subsidiary named Pragjyotish Fertilizers and Chemicals Ltd. (PFCL)incorporated in 2004. This subsidiary company has been a defunct company since its year ofincorporation as the company couldnRst implement the project successfully for which it wasincorporated. Although the company is required to consolidate the financial statements ofits subsidiary company in accordance with the Section 129(3) of the Companies Act 2013but same was not possible as the financial statements of that company have not beenupdated for last few years. It is therefore only the standalone financial statements ofthe company are placed before the shareholders for adoption in the 47th Annual GeneralMeeting. The entire investment made in Pragjyotish Fertilizers and Chemicals Ltd. hasalready been written off in the successive financial statements over the years. TheCompany donRst have any liability towards the subsidiary. The company has moved toGovernment of Assam to allow it to start the winding up procedure in accordance with theCompanies Act 2013.

State of CompanyRss Affairs and Future Outlook

The company has been in petrochemical business for more than four decades. The companyis presently producing Methanol and Formalin in its plants located in Namrup. The companymarketing its products at globally competitive price in India and its neighbouringcountries Bhutan Nepal and Bangladesh. The company is having annual 33000 MT installedproduction capacity for Methanol and 41250 MT installed production capacity for Formalin.The company is also expanding its production capacity by setting up a 500 TPD Methanolplant and a 200 TPD Formalin Plants. The methanol expansion plant is targeted tocommission in September 2019. On commissioning of the new plant the annual methanolproduction capacity of the company will increase from 33000 MT to 198000 MT. With theincreased production the company will cater the increasing demand of the country. The 200TPD Formalin project which is being set up in Boitamari Bongaigaon will give the companycompetitive advantage over the rival producers.

Methanol demand in India has been increasing very rapidly but the domestic productionof methanol is rather declining over the years. As per the report published by NITI Aayogthe domestic production of Methanol in India has fallen by 57% in 2015-16 from 2010-11 atthe same time domestic consumption has risen by 61%. India meets the domestic demand byimporting from middle east countries.

The Ministry of Road Transport and Highways Govt. of India has allowed the use ofM-15 M-85 MD-95 and M-100 as fuel in the country. As per the media report NITI Aayogthe thinktank of the Central Government has moved a cabinet note for approval of theCentral Government to make 15% methanol blending compulsory with petrol. The CentralGovernment has also decided to introduce methanol run 10 buses each in Mumbai and Guwahatishortly. Assam Petro-Chemicals Limited will supply required quantity of Methanol forrunning these buses in Guwahati. The company is about to launch a pilot project to usemethanol as cooking fuel. The pilot project will be launched at Namrup initially and onsuccess of the project same will be launched on commercial basis. Methanol can also beused as fuel in power generation set and run power tiller in agriculture sector Generatorsets with 4 KW and 15 KW are already available in Indian market. With the introduction ofMethanol blending with gasoline and other alternative uses will lead to increase thedomestic demand of Methanol manifold. Assam Petro-Chemicals Limited is being one of themain producer of Methanol in the country and with the increased production capacity thefuture of the company looks very bright.

Di-Methyle Ether (DME) is another efficient fuel and burns with lesser NOx ParticulateMatter (PM) no SOx. It is clean fuel can be used diesel alternative and blend with LPG.It is non-toxic compound and is safe to handle. Assam Petro-Chemicals Ltd is preparing aDPR for setting up a DME plant at Namrup.

Operating Results:

The existing Methanol plant of the company has completed twenty nine years against itsnormal life of fifteen years. The performance of the methanol plant has been very good andsame is possible only due to timely and preventive maintenance of the plant. Your Boardalways stress for optimum utilization of the plant but couldnRst achieve 100% plantutilization during the Financial Year 2017-18 due to erratic Natural Gas supply by thesupplier and power supply interruptions.

Frequent maintenance of its equipments erratic Natural Gas supply and drop of gaspressure power supply interruptions by Assam Power Generation Company Ltd. (APGCL) androutine maintenance works of aging plant had been the stumbling blocks for achievinghigher plant utilization during the FY 2017-18.

The capacity utilization of Formalin project depends entirely on market dynamics. Thecompany produces Formalin from Methanol depending on demand of the market and realizationof higher return on marketing of it. Disruption of power supply from the grid affects theoptimum utliisation of Formalin plant.

Production in MT

Plant Installed Annual Capacity FY 2017-18 FY 2016-17
Methanol 33000 31487 31892
Formalin 41250 38273 43743
Capacity Utilisation of Plants:
Methanol 100% 95% 97%
Formalin 100% 93% 106%

The company remained in its same business of manufacturing and marketing of Methanoland Formalin during the Financial Year 2017-18.

Sales & Marketing:

The company is marketing its products in North Eastern States West Bengal BiharJharkhand Odisha Uttar Pradesh and other North Indian states and also exporting toneighbouring countries viz. Nepal and Bhutan. The Company is giving importance to exportits products for earning foreign exchange and better product price realization.

The Company sold 10963.81 MT Methanol during the FY 2017-18 against 11022.74 MT of theprevious Financial Year The total quantity of Methanol sold was declined in the FY 2017-18as because the company produced lesser quantity due lower capacity utilization of theMethanol plant. The company sold 42541.88 MT of Formalin during the FY 2017-18 as comparedto 43881.17 MT in the previous financial year The company sold lesser quantity of formalincompared to the previous year as because the capacity utilization of Methanol plant duringthe year was lower than the FY 2017-18.

The area wise sales quantity of the companyRss products in the year 2017-18 vis-a-visin the previous year are as follows;


Formalin (in MT)

FY 2017-18 FY 2016-17
North East Region 8223.93 9038.51
North Bengal 9041.94 8329.76
South Bengal 4857.10 6121.49
Purnea / Adjacent Area 15659.44 12426.02
Patna 1981.81 4817.88
Nepal 1697.49 1642.41
Bhutan 1080.17 1505.10
Total 42541.88 43881.17
North East Region 726.93 824.49
West Bengal 1069.32 3318.60
North India 7123.92 4940.34
Nepal 2043.64 1708.02
Odisha Nil 183.69
Bangladesh Nil 47.60
Total 10963.81 11022.74

The company has been taking various steps to increase sales in areas where therealization is better The company opened a new marketing office in Puenea Bihar to doaggressive marketing of formalin in the adjoining areas and Nepal. The company could sell3233.42 MT formalin more than the previous year in that area. The company also held aconsumer meet at Thimphu Bhutan in March 2018. The Board is also taking steps to expendits business in the neighbouring countries Bangladesh and Myanmar. Assam Petro-ChemicalsLtd. is seeing an exponential rise of Methanol demand in the wake of Govt. of IndiaGazetted Notification of Ministry of Road and Highways New Delhi dated 24th May 2018.The said notification introduces flex-fuel Methanol M15 or M100 that allows the newlymanufactured gasoline vehicle fitted with spark ignition engine compatible to run ongasoline blended with 15% methanol (M15) or 100% Methanol (M100) meeting the emissionstandard. While infrastructure build-up for blending or dispensing methanol as automotivefuel still not very clear whether it will be at a grass root refinery or at theretailerRss level the demand and supply gap of methanol in the Indian market continues torise.

Project Activities:

The shareholders are aware that the company is implementing a 500 TPD Methanol and 200TPD Formalin project at an estimated cost of Rs133700 lakhs with the equity contributionof Government of Assam Oil India Ltd. and Assam Gas Co. Ltd. The capital for the projectcost will be raised at debt equity ratio of 2:1. The Government of Assam Assam GasCompany Ltd. and Oil India Limited will contribute Rs17700 lacs Rs2800 lacs and Rs24200lacs respectively as equity capital for the project. The Govt. of Assam alongwith AssamIndustrial Development Corporation Ltd. and Assam Gas Company Limited will hold 51% ofshare capital in the company and the remaining 49% will be held by Oil India Ltd. Theshares held by other than the above entities will be very negligible.

Till the date of this report the company received an amount of Rs8846.31 lacs fromGovernment of Assam and an amount of Rs6853.69 lacs is expected to receive shortly as thelater amount has been provided in the budget for the FY 2018-19. Oil India Ltd. and AssamGas Co. Ltd are expected to infuse their capital during the current Financial Year

The Financial Closure of the project has been achieved as the company executed loanagreement with Punjab National Bank the countryRss second largest public sector bank on27th February 2018 for availing an amount of Rs89067 lacs. The company has starteddrawing of loan amount from the said bank for the implementation of the project.

As informed you in our earlier report that Engineers India Ltd. (EIL) has beenexecuting the 500 TPD Methanol plant with LEPCM responsibility with technology suppled byHalder Topsoe Denmark. The Company entered an agreement with Halder Topsoe Denmark forsupply of technology and key equipment for the 500 TPD Methanol Project. The designengineering works of the 500 TPD Methanol Project is in the final stage of completion. Thecompany has already placed the purchase orders of all the long lead items for the 500 TPDMethanol project. Piling works of the 500 TPD Methanol project has almost completed. Themajor civil contract jobs and reformer packages of the 500 TPD Methanol plant has alreadybeen issued and the works are in progress at full speed. The company is targeting toachieve the commercial production of the 500 TPD Methanol Plant in September 2019. Theprogress of project implementation has been closely monitored by the Government of Assamas its is one of the largest project implemented by any state Government PSU in the state.Your Board is also taking all the necessary steps to start commercial production of theplant as per the schedule.

The Company is also implementing a 200 TPD Formalin project at Dhaknapara in therevenue circle of Boitamari Bongaigaon at an estimated project cost of Rs5200 lacs on"Lump Sum Trun Key" (LSTK) basis.

The Company took the possession of 110 bighas of land allotted by the Government ofAssam for setting up of the Formalin project and Marketing Terminal of CompanyRssproducts. Bids are invited from LSTK contractors for this 200 TPD Project. Once this 200TPD Formalin project commissions the company will have competitive advantage over itsrival formalin producers.

Human Resource Management and Industrial Relations:

In order to optimize the human resource of the Company the Human Resource ManagementDepartment has been continuously playing a pivotal role in terms of sourcing competentpersonnel through manpower planning recruitment of appropriate and competent humanresource train and develop the workforce and to align the work force with the objectivesof the organization. Focus has been given on providing various technical and behavioralinhouse training or outside training for enhancement the existing level of skills andcompetencies of employees working across all levels. The company provided 20 nos. ofTechnical & NonTechnical Training program in-house or externally during the year2017-18. The Company also imparted academic short term training programme to 26 nos. ofstudents during the year.

The manpower strength of the Company as on 31st March 2018 was 326 out of which 169were unionised cadre and remaining 157 nos. were executive cadre employees. The total nos.of woman employees were 35 nos. on rolls of the Company as on 31st March 2018.

The industrial relations scenario of the Company during Financial Year 2017-18 washarmonious and cordial. Most of the issues raised by the APL WorkersRs Union and the APLOfficersRs Association were resolved amicably through discussions.

Logo of the company:

Your Board has adopted a new logo of the company. The company has applied forregistration of the new logo/trade mark with the registration authority. The company hasbeen provisionally using the new logo/ trademark adopted by the Board till theregistration process is completed.

Dividend and transfer to Reserves:

During the Financial Year 2017-18 the company earned a net profit of Rs544.20 lacs butyour directors couldnRst recommend for payment of dividend for the year due to carryforward loss of the preceding financial years.

Unpaid and unclaimed dividend for the previous Financial Years:

Unpaid and unclaimed dividend for the Financial Year 2012-13 and 2013-14 are laying asunclaimed in bank accounts. A good number of our valued shareholders havenRst claimedtheir dividend for those two years. The details are given as under:

Dividend Year Amount unclaimed as on 31st March 2018 (Rs) Due date for transfer to IEPF
2012-13 53307/- 28/02/2021
2013-14 68884/- 28/11/2021

According to Section 124(5) of the Companies Act 2013 the company is required totransfer the above amount to the Investors Education and Protection Fund (IEPF) set up bythe Central Government after expiry of 7 (seven) years from its transfer to Unpaid andUnclaimed account. Accordingly the company transferred unpaid and unclaimed dividendamount of Rs41932/- belonging FY 2009-10 to the IEPF on 5 th March 2018. We thereforeappeal to members who havenRst yet claimed dividend for those years to claimed theirdividend to the company. The shareholders may write to the Company Secretary of thecompany for claiming their unpaid dividend.

The shareholders of the company are aware that according to Section 124(6) of theCompanies Act 2013 and the IEPF (Accounting Audit Transfer and Refund) Rules 2016 asamended the company is required to transfer the corresponding shares of dividend unpaidamount to the Demat account of Investors Education and Protection Fund Authority. Incompliance with the above provisions the company transferred 191431 nos. of equityshares of 436 nos. shareholders on 26th July 2018 for the FY 2009-10.

We would like to inform the shareholders that the shares and the dividend amounttransferred to the Demat account of the IEPF Authority as per law. The shareholders whoseshares have been transferred to IEPF authority can be claimed by filing the online FormIEPF 5. The e-form IEPF -5 is available at www. For any clarification theshareholders may write to the company Secretary of the company or companyRss Registrar or-Share Transfer Agent C B Management Services (P) Ltd. P-22 Bondel Road Kolkata-700 019.

Changes in Share Capital and Issue of Bonus Shares:

There was no change in the share capital of the company during the Financial Year2017-18. The company didnRst issue any fresh share capital during the financial year underreview.

The Board of Directors of the company decided to issue 9 (nine) bonus equity sharesagainst 2 (two) existing shares of the company by capitalizing the available reserves ofthe company. The Share Allotment Committee of the Board fixed 25th May 2018 as the recorddate for determination of eligible shareholders for issue of bonus shares. The ShareAllotment Committee issued bonus shares on 2nd June 2018. After the issue of Bonus Sharesthe paid- up share capital of the company has increased from Rs91199470 toRs501597080.

Disclosure regarding Issue of Equity Shares with Differential Rights/ Employee StockOptions/ Sweat Equity Shares:

The Company didnRst issue any shares with differential rights or Employee Stock Optionsor Sweat Equity Shares during the Financial Year 2017-18.

Extract of Annual Return:

Pursuant to Section 92(3) of the Companies Act 2013 and Rule 12 (3) of the Companies(Management and Administration) Rules 2014 an extracts of Annual

Return in Form MGT-9 for the Financial Year ending on 31st March 2018 is enclosed asAnnexure-RsARs.

Board of Directors and the Number of Board Meetings:

The Board of Directors of the Company is constituted as per the requirement of Section149 of the Companies Act 2013. There were nominee Directors from the holding companywoman Director Independent Directors and Whole Time Director on the Board of the company.The members of the Board of Directors of the company was having required skills andknowledge to run the company. Technocrats finance professionals seasoned politicians andsenior bureaucrats forms the Board of Directors of the company throughout the FY 2017-18.

There were several changes in the Board of Directors of the company during the year2017-18. As the company is a Government of Assam Company the State Government and AssamIndustrial Development Corporation Ltd. keep changing the members of the Board from timeto time. During the year Dr. Ravi Kota IAS (DIN- 07090704) was appointed as director onthe Board in place of Shri V B Pyarelal IAS w.e.f. 3rd June 2017 and Shri Sanat Kalita(DIN-07845004) as directors of the company in places of Shri P K Das (DIN-01667150) by thestate government. Shri Ashutosh Agnihotri IAS (DIN-07574677) was appointed as director onthe Board in place of Shri H K Sharma IAS w.e.f. 7th April 2017 and subsequently ShriAgnihotri was also replaced by Shri Vinod Seshan IAS (DIN-07985959) w.e.f. 20th Nov.2017 by holding company Assam Industrial Development Corporation Ltd.

The members may be aware that the Ministry of Corporate Affair (MCA) Government ofIndia vide Gazette Notification no. G.S.R. 582 (E) dated 13th June 2017 exempted theapplicability of Section 152(6) and (7) of the Companies Act 2013 certain GovernmentCompanies. Since the Central Government has exempted the applicability of the aboveprovisions to a subsidiary company of a Government Company the compulsory retirement ofone third of the retireable directors in every Annual General Meeting is not applicable tothe company Hence no members of the Board of Directors are retiring in ensuing 47thAnnual General Meeting of the company.

Number of Meetings of the Board of Directors:

During the Financial Year 2017-18 the company convened total 9 (nine) meetings of theBoard of Directors and the gap between two consecutive meetings of the Board of Directorsnever exceeded 120 days.

The details of the meetings of the Board of Directors held during the Financial Year2017-18 are given under para Board of Directors in the Corporate Governance Disclosureenclosed as RsAnnexure BRs.

Particulars of Loan Guarantees and Investments under Section 186:

The Company has not given any loan or guarantee covered under the provisions of section186 of the Companies Act 2013 during the Financial Year 2017-18.

Particulars of Contracts or Arrangements with Related Parties:

The company didnRst enter any related party transaction with Promoters Key ManagerialPersonnel or other designated persons which may have potential conflict of interest withthe company

Material Changes Affecting the Financial Position of the Company:

There was no such material changes and commitments in the company which could affectthe financial position from the date of the financial statements of the company for theFinancial Year 2017-18 till the date of signing this report. However the companycapitalized Rs410397610.00 for issue of 41039761 nos fully paid-up bonus shares on2nd June 2018.

Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo:

The details of Energy Technology Absorption Foreign Exchange Earnings and Outgo areas under:

I. Conservation of Energy-

A. Energy conservation measures taken:

The process technology adopted in our plants is energy efficient. The Company selectedthe most developed I.C.I. Low Pressure Methanol Technology and Humphreys and GlasgowReformation process for manufacture of Methanol & Derivados Forestales NederlandRsstechnology for manufacture of Formaldehyde. The waste heat has been recovered to producesteam required for the process. Hence heat is not radiated to atmosphere. Heat exchangersare well insulated to prevent any heat loss. Cooling waters used is heat exchangers aretotally recycled to prevent pollution and loss. Steam condensate are recovered andrecycled back from Turbo Generator The plants are being operated to the full satisfactionof Pollution Control Board Assam.

B. Additional investments and proposals if any being implemented for reduction of theconsumption of energy:

There was no such proposal in the year under review.

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

The specific consumption of electricity and fuel natural gas is well within thetolerance limit. We could have pollution free environment.

D. Total energy consumption and energy consumption per unit of production power andFuel consumption

a. Electricity 2017-2018 2016-2017
i) Purchased Unit (MWH) 15064 15558
Total amount (Rs/ Crores) 12.41 11.92
Rate per Unit (Rs/KWH) 9.00 8.30
ii) Own generation (MWH) 1721 3131
b. Consumption per Unit of production
i) Electricity (KWH)
Unit-II 461 507
Natural Gas (NM3) (Ref)
Unit-II 994 1055

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 full time R & D activities except in plantimprovement of process and debottlenecking. The company will start R & D activitiesshortly to identify future diversification.

2. Benefit derived as a result of above R & D: Does not arise

3. Future Plan of Action: The company donRst have the plan to establish any in houseresearch and development facilities as on this date.

4. Expenditure of R & D:

a) Capital : Not applicable
b) Recurring : Not applicable
c) Total : Not applicable
d) Total R & D expenditure as per % of total turnover : Not applicable

III. Technology Absorption and Adaptation

i) The efforts made towards technology absorption adaptation and innovation: APL hasbeen operating the plant supplied by foreign supplier.

ii) The benefits derived like product improvement cost reduction product developmentor import substitution etc.:

Product quality improved & no pollution related issues faced. Cost of productionincreased due to higher price of raw material.

iii) In case of imported technology (imported during the last three years reckoned fromthe beginning of the financial year)

(a) The details of technology imported :Does not arise
(b) The year of import :Does not arise
(c) Whether the technology been fully absorbed :Does not arise
(d) If not fully absorbed areas where absorption has not taken place and the reasons thereof :Does not arise

IV. Foreign Exchange Earnings and Outgo-

a) a) Activities relating to exports: Initiative taken to increase export developmentof new export market for products and services and export plans.

Export Sales 2017-18 (MT) 2016-17 (MT)
Methanol 2043.64 1755.00
Formalin 2777.66 3147.51

b) Total Foreign exchange used and earned:

Particulars 2017-18 (Rs) 2016-17
i. Earnings in Foreign Exchange (sales) NIL 1259733/-
ii. Foreign Exchange Outgo 5350718 132190/-

**the company earns foreign exchange on the export sale to Bangladesh only. The exportto Nepal and Bhutan were done in Indian Currency only.

Details of Subsidiary:

Your company has a subsidiary company viz. Pragjyotish Fertilizers & ChemicalsLtd. (PFCL). This company was incorporated in 2004 jointly with another State Governmentundertaking Assam State Fertilizer Corporation Ltd. PFCL has not been carrying out anybusiness since its incorporation. This company is under winding-up process. The financialstatements for the Financial Year 2017-18 havenRst been prepared and therefore thefinancial statements of the company could not be consolidated with the financialstatements of the company as prescribed in Section 129(3) & 134(1) of the CompaniesAct 2013 and Companies (Accounts) Rules 2014.

Business Risk Management:

Although the company doesnRst have any specific risk management policy as on this datethe Board of Directors of the company deliberates on threats risks and concerns which maythreaten the continuation of its business or pose threat its existence in its meetings.

The Board reviews the means adopted by the company to mitigate the risk from time totime. The details of risk and concerns of the company are discussed in the ManagementDiscussion and Analysis Report and enclosed as Annexure-C.

Details of Directors and Key Managerial Personnel:

During the financial year there were no changes in Key Managerial Personnel of thecompany. Details of the Directors of the company along with the Directors who wereappointed or have ceased as Director during the year have already been discussed elsewherein this report in details and also stated in the Corporate Governance Disclosure.


The company does not have any outstanding deposit at beginning of the financial yearnor did it accept any deposits from the public during the year.

Statement in Respect of Adequacy of Internal Financial Control with Reference to theFinancial Statements:

Your Directors believe that the Company has adequate internal financial control systemin place and same is commensurate with the nature and size of the business of the company.The company also appoints Chartered Accountant firm as internal auditor of the company tocarry out audit. This enhances the effectiveness of the internal control system further.

Receipt of any commission by Managing Director from Company or for receipt ofcommission / remuneration from it holding or subsidiary:

The company didnRst pay any commission to its Managing Director nor did the ManagingDirector receive any commission from its holding or subsidiary company.

Declaration by Independent Director:

All the Independent Directors have given declarations in the beginning of the financialyear 2018-19 that they meet the criteria of independence as laid down under section 149(6)of the Companies Act 2013.

As per the declaration given and noted by the Board of Directors none of theIndependent Director was disqualified to be appointed or continue as Independent Directorof the company as on 31st March 2018.

Independent Auditor:

The present term of the Independent Auditors SPRK & Co. Chartered Accountants isup to conclusion of the ensuing Annual General Meeting of the company The company being aGovernment Company as per section 139(5) of the Companies Act 2013 the Comptroller andAuditor General of India (C&AG) shall appoint Independent Auditor for the FY 201819.Till this date the company hasnRst receive any communication from the office of C&AGof India. However SPRK & Co. has informed the company that the Office of C&AG ofIndia has reappointed them as Independent Auditors of the company for the FY 2018-19.

Secretarial Auditors:

Appointment of Secretarial Auditor is not necessary for the company as the provisionsof Section 204 of the Companies Act 2013 and the Companies (Appointment &Remuneration of Managerial Personnel) Rules 2014 are no longer applicable for the companyafter being delisted from stock exchange. Hence your Board of Director didnRst appointedany Secretarial Auditor for the FY 2017-18.

Cost Auditors:

Pursuant to the Companies (Cost Records and Audit) Rules 2014 the Company hasappointed M/s Subhadra Dutta and Associates Cost Accountants to undertake the Audit ofthe Cost Records of the Company for the Financial Year 2017-18. The Board of Directorsalso reappointed them as cost auditor of the company for the FY 2018-19 in the same termsand conditions and remunerations.

Corporate Social Responsibility (CSR) Policy:

The Corporate Social Responsibility Committee of the Board of Directors has beenconstituted as per requirements of the Companies Act 2013. The shareholders are awarethat the company didnRst earned average net profit not exceeding Rs5 crore in last threefinancial years therefore the Section 135 of the Companies Act 2013 is not applicable forthe company for the FY 2017-18. However being a responsible public sector organizationthe company continues to discharge its social responsibilities. The shareholders are awarethat the company is providing free education to the students of the neighbouring areas ofthe plants in the schools of the CompanyRss at Namrup.

Audit Committee:

The Audit Committee of the Company is constituted under the Chairmanship of anIndependent Director in terms of the Section 177 of the Companies Act 2013. Although thecompany was not required to constitute an Audit Committee the company constituted thesame for better governance. During the Financial Year 2017-18 the company convened onemeeting of Audit Committee of the company. The details of the meeting of the AuditCommittee held during the financial year 2017-18 and the roles and power of the AuditCommittee are given in the Corporate Governance Disclosure.

Disclosures under Sexual Harassment of Women at Workplace (Prevention Prohibition& Redressal) Act 2013:

The Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013 is a comprehensive piece of legislature covering all the aspects to provideprotection against sexual harassment of women at workplace prevention and redressal ofcomplaints of sexual harassment and for matters connected therewith or incidental thereto.In order to ensure compliance of the provisions of the said Act the Management hasconstituted an Internal Complaint Committee on 29.05.2015. The Internal ComplaintCommittee didnRst receive any complaint and/or incidence of sexual harassment receivedduring the financial year 2017-18.

Corporate Governance Disclosure and

Management Discussion and Analysis Report:

The Corporate Governance Disclosure and Management Discussion & Analysis Report areenclosed as annexure with this Report.

Delisting of Equity Shares:

The Shares of the company were delisted from BSE Ltd. w.e.f. 20th February 2017 as perthe SEBI (Delisting of Equity Shares) Regulations 2009.

Pursuant to Regulation 21 of the SEBI delisting regulations AIDC had given an exitoffer to all the residue shareholders of the company who couldnRst or didnRst participatein the reverse book building process of delisting. The exit offer was closed on 19thFebruary 2018 and several shareholders were accepted the exit offer and transferred theirshares to Assam Industrial development Corporation Ltd.

Directors Responsibility Statement:

Pursuant to the requirement under Section 134 (5) of the Companies Act 2013 withrespect to the DirectorsRs Responsibility Statement it is hereby confirmed that:

(i) In the preparation of the annual accounts for the Financial Year ended 31st March2018 all applicable accounting standards had been followed along with properexplanations relating to material departures;

(ii) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as on 31st March 2018 and of the profitand losses of the Company for that period;

(iii) The Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

(iv) The Directors had prepared the accounts for the Financial Year ended 31st March2018 on a Rsgoing concernRs basis.

(v) The Directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively

(vi) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively

Reply to the comments of the Auditors

The Auditors of the company including the Comptroller and Auditor General of India havemade certain adverse comments or remarks on the financial statements of the Company.According to the Section 134(3)(f) of the Companies Act 2013 it is duty of the Board togive its reply on the same to the members. Accordingly the reply of the Board is given asRsAnnexure DRs.


Your Directors place on record their appreciation of the unstinted support andencouragement extended by the Government of Assam Assam Industrial DevelopmentCorporation Ltd. banks the valued shareholders customers and the employees of thecompany

Your Directors also place on record their sincere appreciation to Oil India Limited forcontinuous supply of Natural Gas as main feedstock for production of Methanol and AssamGas Company Ltd. for transporting Natural Gas to the plant.

We also express the sincere and profound gratitude to NITI Aayog Govt. of India forworking on methanol economy and considering Assam Petro-Chemicals Ltd. as an importantstakeholder in their Methanol endeavor.

Your directors also like to express sincere thanks and gratitude to the dealerstransporters customers and all other stakeholders for their continuous fait and supporton the company

For and on behalf of the Board of Directors
Place: Guwahati (Jagadish Bhuyan)
Date: 28th August 2018 Chairman