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A Oneindia Venture

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Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Directors Report of Andhra Petrochemicals Ltd.

Mar 31, 2025

Your Directors are pleased to present the Forty first Annual Report on the operational and business performanc
of the Company together with the Audited Financial Statements for the Financial Year ended 31^st March, 2025

CORPORATE OVERVIEW:

Your Company is the manufacturer of Oxo-Alcohols that consist of the Products viz., 2 Ethyl Hexanol, Normal
Butanol and Iso Butanol. Your Company is an Associate of The Andhra Sugars Ltd., and has its Regd. Office
at Venkatarayapuram, Tanuku.

FINANCIAL RESULTS:

The summary of the financial results, which have been prepared as per the Indian Accounting Standards
(Ind AS), for the Year under review along with the Previous Yearâs figures are given below:

(Rs. in lakhs)

	2024-25	2023-24
Net Sales (excl. GST)	50188.75	78867.35
Profit / (Loss) before Interest & Depreciation	482.36	10957.19
Less:Interest	390.19	866.28
Depreciation and Amortization Expense	1457.73	1482.94
Profit / (Loss) after Interest and Depreciation before Extra-Ordinary Items	(1879.56)	8607.97
Exceptional Items	(332.18)	â
Profit / (Loss) Before Tax	(2211.74)	8607.97
Provision for:
Current Tax	â	2494.00
Adjustment of Tax Expense for earlier years	(7.85)	(10.39)
Deferred Tax	(390.83)	(216.11)
Profit / (Loss) After Tax	(1813.06)	6340.17
Other Comprehensive Income	17.23	(19.41)
Total Comprehensive Income for the period	(1795.83)	6321.06
Balance brought forward from previous year	44136.17	37815.11
Profit carried forward to next year	40640.91	44136.17

OPERATIONAL AND FINANCIAL PERFORMANCE:

During the Financial Year 2024-25 under review, your Company has produced 51,489 MTs (Previous year
70,209 MTs) of Oxo-Alcohols. Sales made were 49,032 MTs (Previous year 72,730 MTs) and incurred a Net
Loss of Rs. 18.13 Crores during the Financial year 2024-25 as compared to Net Profit of Rs.63.40 Crores
during the previous year.

Your Company experienced a decline in overall financial performance under review year compared to the previous year due to lower
production in view of short supply of Propylene by HPCL & sharp drop in international oxo-alcohols prices effected the product price
realization, subdued market demand & Lower GDP effected the overall performance.

DIVIDEND:

Due to loss incurred during the year under report, your Directors are unable to recommend any dividend for
the Financial Year 2024-25.

Pursuant to the provisions of Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 the Company has formulated its Dividend Distribution Policy which is available on the
website of the Company at the link www.theandhrapetrochemicals.com.

CONTRIBUTION TO EXCHEQUER:

Over the years, your Company has been significant contributor to the Government Exchequer in the form of
Duties and Taxes, during the Year under review Rs.7.95 crores was paid to the Exchequer as against
Rs.53.65 crores in the Previous Year.

CAPITAL & RESERVES:

Authorised and Paid-up Capital:

The Authorised Capital of the Company is Rs.125.00 crores and the Paid-up Capital is Rs.84.97 crores
Reserves:

The total Reserves position as on 31.3.2025 stood at Rs.435.77 crores as against Rs. 470.72 crores for the Previous
Year.

General Reserve:

During the Year under review, no amount has been transferred to the General Reserve.

MANAGEMENT DISCUSSION AND ANALYSIS:

INDUSTRY STRUCTURE AND DEVELOPMENTS:

The Companyâs main business is manufacture and sale of Oxo-Alcohols. Your Companyâs installed capacity
is 80,000 MT Per Annum. The expected growth rate for Oxo-Alcohols is around 8% to 10% per annum.

The Oxo-Alcohols market is experiencing significant growth given by increasing demand from various
industries like, plasticizers, solvents and lubricants. However, challenges like fluctuations in raw material
prices and stringent environmental regulations could impact the Companyâs operations.

At present, the demand supply gap is fulfilling by our Company, Bharat Petroleum Corporation Ltd (BPCL),
Indian Oil Corporation Ltd., (IOCL), Imports and with substitute product of INA.

OPPORTUNITIES AND THREATS:

Your Company is having tie up with M/s Hindustan Petroleum Corporation Ltd., (HPCL) for supply of propylene.

Your Company is having Anti-Dumping Duties facility on imports from certain countries and hence, expecting
the improvement of sales realisation. The Oxo-Alcohols market has robust demand in applications like
plasticizers and lubricants. Oxo alcohols are a key ingredient in the production of plasticizers, which are
essential for making plastics flexible and durable, especially in the automotive and construction
industries. Oxo-Alcohols are used as intermediaries in the production of various chemicals and are crucial
for manufacturing process in industries like paints, coatings and lubricants. Oxo-Alcohols like Iso Butanol
are also used in the pharmaceutical and pesticide industries. Your Company presently is facing competition
ith M/s Bharat Petroleum Corporation Ltd, M/s Indian Oil Corporation Ltd., in addition to imports & substitute
product of INA.

The prices of raw materials like Propylene, Naphtha and other derivatives which are used in the production
of Oxo-Alcohols can fluctuate significantly impacting profitability. Stringent environmental regulations related
to the production and use of oxo alcohols can also pose challenges to market expansion. The market is
characterized by both large Multi National Companies and regional players with the potential for price
competitive and innovative of applications.

In addition to the above, your Companyâs results may affect in view of the ongoing Russia-Ukraine war,
Israel - Hamas War, US tariff conflicts with various countries in general and in particular with China coupled
with geopolitical tensions.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:

As required by the provisions of Companies Act, 2013 Internal Control Systems Report has been appended
to Independent Auditorâs Report given by Statutory Auditors regarding Financial Year 2024-25. The Company
has internal control systems commensurate with the size of the business operations. A Chartered Accountants
firm is engaged to carry out internal audit covering the entire operations. The audit firm submits internal
audit report periodically with their suggestions and/or corrections. Audit Committee critically deliberates
and reviews such internal audit reports and ensures effectiveness of the control systems through necessary
recommendations.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS:

In the area of Human Resources, the employees are being trained to meet the Plant requirements from time
to time by motivating them in a positive way and the Industrial Relations continued to be cordial throughout
the Year.

The total number of employees employed as on 31.3.2025 is 317.

FUTURE OUTLOOK:

Your Companyâs performance is expected to be reasonably good in view of the forecast of reasonably better
GDP growth for India. However, the disrupted business environment due to Russia -Ukraine War, Israel -
Hamas War and US trade tariff conflicts etc., & geopolitical tensions may impact the performance to some
extent.

Though Company signed Natural Gas (NG) term sheet agreement with GAIL, in the year 2019, the progress
in the GAIL/APGDCL Natural gas pipe laying work got held up & finally the project has been cancelled. New
tenders have been called for laying Natural gas pipeline from Kakinada to Visakhapatnam / Srikakulam.

The Companyâs performance to a large extent is dependent on international supply and demand for the
Oxo-Alcohols products and their prices are influenced by crude oil prices, exchange rate fluctuations and
dumping from the countries which are not covered under Anti-Dumping Duty.

RISKS AND CONCERNS:

Your Company is depending on supply of major raw material i.e., Propylene from a single source, HPCL
Refinery, Visakhapatnam. However, the risk is built in the project evaluation. The Management of the
Company has diluted the risk slightly by developing two alternative sources i.e., BPCL & GAIL for supplying
Propylene in case of emergency need. However, sourcing Propylene from BPCL & GAIL is not economical
due to high logistic costs. Crude oil prices, Exchange rate fluctuations and imports are a matter of concern.

CAUTIONARY STATEMENT:

The statements describing the Companyâs outlook, objectives, projections, expectations, estimations or
predictions may be forward-looking statements based on certain assumptions of future events. Actual
results may differ materially from those expressed or implied, since the Companyâs operations are influenced
by external or internal factors. Your Company closely monitors all major developments likely to affect the
Operations and will respond to meet the potential threats and to gain from any possible opportunities.

DEPOSITS:

During the Year under review, your Company did not accept any deposits within the meaning of provisions
of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

SAFETY, HEALTH AND ENVIRONMENT:

Your Company has in place Safety, Health and Environment Policy.

? Company has completed: 20.11 million accident free Man hours in the last 16 years.

? Total 9120 man-hours during the last year have been used for conducting Safety talks, Safety
induction training and refresher trainings for employees including Contract / Contractor workmen
and truck drivers.

? Safety of Human and Plant assets are of top priority of the company. Continuous training of personnel
at various levels on safety and strict compliance of regulations is ensured which resulted in another
accident-free year.

? Company received National Safety Award - 2024 - CERTIFICATE OF APPRECIATION in
Manufacturing Sector from National Safety Council of India (NSCI).

Health:

Health monitoring of all employees including contract labour & canteen workers is done on regular basis.The
health & wellbeing of our employees became a top priority for the company.

Environment:

Online emission, Ambient air & effluent monitoring are in place. Data is being transmitted online to Central
Pollution Control Board (CPCB) and Andhra Pradesh Pollution Control Board (APPCB) for monitoring.

Insurance:

All the insurable assets of the Company including Plant and Machinery, Buildings and Inventories are insured
on reinstatement value basis.

Land taken on Lease from Visakhapatnam Port Trust

Your Company has taken on lease 75.00 Acres of land from Visakhapatnam Port Trust (VPT) on which the
Oxo-Alcohol Plant has been established. The land is located adjacent to HPCL, Visakha Refinery which
supplies major Raw Materials. In this connection, a Lease Agreement was entered into on 27.6.1989 with
VPT for a period of 30 years which expired on 26.6.2019. During the Financial Year 2019-20, the Company
(APL) has initiated the process of renewal of the Land Lease on which the Plant is located with VPT for a
further period of 30 years with effect from 27.6.2019. Company has submitted its Technical & Financial Bid
against the Tender floated by VPT. As Company was the sole bidder for the Tender, VPT accepted both
Technical Bid & Financial Bid. Later on, VPT has cancelled the tender and issued re-tender. Aggrieved by
the action of VPT, Company has filed a Writ Petition under Article 226 before the Honâble High Court of
Andhra Pradesh.

The Honâble High Court of Andhra Pradesh has allowed the Writ Petition filed by the Company seeking the
cancellation of the VPTâs order dated 18.8.2020, cancelling the Tender Notification dated 7.8.2019 and
fresh Tender Notification dated 24.8.2020 issued by VPT towards the Lease of the Land and directed VPT
to execute the Lease Deed, vide its Order dated 25.2.2022. Further, on 19.3.2022, Company has written a
letter to the Chief Engineer, VPT requesting him to kindly finalise the Land Lease Deed and fix-up the date
for execution of the said Lease Deed. Visakhapatnam Port Trust has filed an Appeal (WA No. 688 of 2022)
on 7.9.2022 before the Honâble High Court of Andhra Pradesh. Arguments were completed and reserved
for Judgement.

Pending execution of Lease Deed, Company has considered provisionally its bid amount for accounting of
âLeasesâ in accordance with Ind AS 116, till the Lease Deed is executed. However, the Company is making
lease rental payments by way of depositing the cheques in Visakhapatnam Port Authoritiesâ Bank Account
(i.e., State Bank of India) as per Companyâs Tender.

FPPCA Charges relating to the Financial Years 2022-23 & 2023-24

The Honâble Andhra Pradesh Electricity Regulatory Commission (APERC), Kurnool has issued orders for
levying Fuel & Power Purchase Cost Adjustment charges (FPPCA) for the Financial Years 2022-2023 and
2023-2024. The estimated liabilities towards the aforesaid FPPCA charges amounting to Rs 308.27 lakhs &
Rs 332.18 lakhs respectively and collecting the same monthly installments along with the regular power

consumption charges. Aggrieved by the Orders, your Company has filed Petitions before the Appellate
Tribunal for Electricity (APTEL), New Delhi.

Pending disposal of above petitions, the Board of Directors have decided to make a provision for Rs.332.18
lakhs for the F.Y. 2024-25 and the balance amount of Rs.308.27 lakhs is considered as âContingent Liabilitiesâ.

LISTING:

The Equity Shares of your Company are listed on the BSE Limited, Mumbai. The Annual Listing Fees for the
year 2024-25 has been paid.

ANNUAL RETURN:

Pursuant to the provisions of Section 92(3) and 134(3)(a) of the Companies Act, 2013, read with Rule
12(1) of the Companies (Management and Administration) Rules, 2014, copy of the Annual Return of the
Company as at 31^st March, 2024 is available on the Companyâs website
www.theandhrapetrochemicals.com.

Details of Designated Officer under Section 89 of the Companies Act, 2013 read with Rule 9 of the Companies
(Management and Administration) Rules, 2014:

Sri G. Adinarayana, CFO & Company Secretary

DIRECTORS:

In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company,
Directors Sri Ravi Pendyala (DIN 03375555) and Sri M S R V K Ranga Rao (DIN 00031720) who were
retired by rotation at the 40^th AGM held on 6.7.2024 and being eligible, were reappointed as Directors.

Sri V Raghunath (DIN 10405110), Nominee Director of M/s APIDC Ltd., was appointed as Director on the
Board of the Company at the 40^th AGM held on 6.7.2024.

Sri M Gopalakrishna, I.A.S., (Retd) (DIN 00088454) and Sri P Venkateswara Rao (DIN 06387165),
Independent Directors were reappointed for a further period of 5 years, for Second Term, from the conclusion
of the 40^th AGM, held on 6.7.2024.

Sri Y S S Suresh (DIN 08589605) will be retiring at the ensuing 41^st AGM and being eligible, offers himself
for being re-elected.

In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company,
Director Sri V Raghunath (DIN 10405110) retire by rotation at the ensuing 41^st AGM, and being eligible has
offered himself for reappointment as Director. His reappointment is being placed for the approval of the
Shareholders at the ensuing 41^st AGM.

Smt (Dr.) D Manjulata (DIN 02788338), Independent Director, who was appointed as Independent Director
(Second Term) will be ceased to be the Director after conclusion of the 41^st AGM. The Board has proposed
her Candidature for appointment as Non-Executive & Non-Independent Director from the date of conclusion
of 41^st AGM.

Dr V N Rao (DIN 00861884), Independent Director who was appointed as Independent Director in the 36^thAGM for a period of 5 years will ceased to be the Director after conclusion of the 41^st AGM.

Sri G S V Prasad (DIN 08797795) Independent Director who was appointed as Independent Director in the
36^th AGM for a period of 5 years, i.e., upto the conclusion of 41^st AGM. The Board has proposed his
Candidature for reappointment from the conclusion of the 41^st AGM as Independent Director for a further
period of 5 years (Second Term).

None of the Directors is disqualified for appointment / re-appointment under Section 164 of the Companies
Act, 2013. Certificate issued by the Practising Company Secretary regarding non-disqualification of Directors
is enclosed (Annexure - A). As required by law, this position is also reflected in the Auditorsâ Report. Details
with regard to the composition of the Board, Meetings of the Board held during the Year and the attendance
of the Directors have been mentioned in the Corporate Governance Report which forms part of this Report.

KEY MANAGERIAL PERSONNEL:

Details of Key Managerial Personnel (KMP) of the Company are as under:

Sl. No.	Name of the person	Designation
1.	Sri K Narasappa	President
2.	Sri G Adinarayana	Chief Financial Officer & Company Secretary

CODE OF CONDUCT:

The Board of Directors enunciated a Code of conduct for the Directors and Senior Management Personnel
which was circulated to all concerned and was also hosted on the Companyâs website
www.theandhrapetrochemicals.com. The Directors and Senior Management Personnel have affirmed
compliance with the Code of Conduct for the Financial Year 2024-25.

AUDIT COMMITTEE:

Audit Committee comprises Non-Executive Independent Directors, Sri P Venkateswara Rao, Dr. Pamidi Kotaiah, and
Dr. (Smt.) D Manjulata, Dr. V N Rao, Sri G S V Prasad and Sri Ravi Pendyala, Non-Executive Non-Independent
Director, as its Members. Sri P Venkateswara Rao is the Chairman of the Committee. The details of the number of
meetings of the Audit Committee held during the Financial Year 2024-25 are given in the Corporate Governance
Report which forms part of this Report.

SECRETARIAL AUDIT:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rules made thereunder, the Board of
Directors have appointed M/s Nekkanti S R V V S Narayana & Co., Company Secretaries (CP No.7839), Hyderabad,
to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for the Financial Year 2024-25 is
included as Annexure - âBâ and forms an integral part of this Report. The Secretarial Audit Report does not contain
any qualification or reservations or adverse remarks.

BOARD EVALUATION:

The performance was evaluated based on the parameters such as structure, meetings, functions, risk evaluation process
adopted, stakeholder value and responsibility, corporate culture, ethics, effectiveness of Board / Committee process
and functioning, contribution of Board / Committee Members to overall effectiveness of the Board / Committee,
avoiding conflict with the Companyâs interests, bonafide discharge of responsibilities in the interest of the Company
and upholding ethical standards, integrity etc.

In terms of Regulation 25 of the SEBI Listing Regulations, 2015, Board took on record the declarations and
confirmations received from Independent Directors.

Independent Directors met on 11.5.2024 & 19.3.2025 for annual evaluation of their own performance and
the performance of the Non-Independent Directors, the Chairman, the Committees, the Board as a whole
and the adequacy of flow of information to the Board and its Committees.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS:

The details of Familiarization Programme for the Independent Directors are furnished in the Corporate
Governance Report which forms part of this Report.

NUMBER OF MEETINGS OF THE BOARD:

The details of the number of Meetings of the Board held during the Financial Year 2024-25 are given in the Corporate
Governance Report which forms part of this Report.

CREDIT RATING:

ICRA Ltd., has retained the Companyâs long-term rating as â[ICRA]A-â and short- term rating reaffirmed at
â[ICRA]A2 â, Outlook on the long-term Rating is âStableâ, assigned earlier to the Rs.94.18 crores Line of
Credit of our Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY THE COMPANY:

During the Year under review, your Company has not given any loans or guarantees covered under the provisions of
Section 186 of the Companies Act, 2013 and details of the Investments covered under the provisions of Section 186
of the Companies Act, 2013, are given in the Notes to the Financial Statements.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Policy provides adequate safeguards against victimisation of the complainant and direct access to the Chairman
of the Audit Committee. The protected disclosures, if any, reported under this Policy will be appropriately and
expeditiously investigated.

The Whistle Blower Policy may be accessed on the Companyâs website at the link: http://
www.theandhrapetrochemicals.com/wp-content/uploads/Whistle-Blower-Policy-1.pdf

RISK MANAGEMENT:

The Risk Management framework of the Company defines the Risk Management approach of the Company, includes
periodic review of such risks, Risk Mitigation measures and reporting mechanism of such Risks. Risk Management
Policy of your Company can be viewed by entering the URL http://www.theandhrapetrochemicals.com/wp-content/
uploads/POLICY-ON-CORPORATE-RISK-MANAGEMENT.pdf in the web browser.

Risk Management Committee comprises Sri P Narendranath Chowdary, Managing Director, as Chairman
of the Committee, Sri M S R V K Ranga Rao and Sri Ravi Pendyala, Non-Executive and Non-Independent
Directors, and Dr. V N Rao and Sri P Venkateswara Rao, Independent Directors, as its Members.

The details of the number of meetings of the Risk Management Committee held during the Financial Year
2024-25 are given in the Corporate Governance Report which forms part of this Report.

Sustainability:

Sustainability is at the core of your Companyâs business development strategy. Your Company firmly believes
in the idea that progress should not come at the expense of the environment and natural ecosystems. The
Company focuses on key sustainability areas such as Decarbonization & Air Emission Control, Water &
Biodiversity Conservation, Health & Safety and Community Development to ensure the long-term sustainability
of its business operations and improve the well-being of communities, preserving the environment and
ensuring long-term economic prosperity.

Your Company recognizes its role in promoting Environmental, Social and Governance (ESG) practices
through its operating devices. Your Company is reviewing its sustainability plan from time to time. Your
Company committed to reduce green house gas emissions. The Company has adopted several key standards
to demonstrate dedication to ESG Principles. The Company has also adopted energy management techniques
such as energy audits and usage of renewable energy to reduce the risk & GHG emissions. Your Company
has certification of ISO 9001:2014 & ISO 45001:2018 and Bureau of Indian Standard Certification for all its
products.

CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE:

Details of composition of CSR Committee are given in the Corporate Governance Report which forms part
of this Report.

As per the provisions of Section 135 and Schedule VII of the Companies Act, 2013 and the Companyâs CSR
Policy, Company had spent an amount of Rs. 2,68,64,978/- towards CSR expenditure for the Financial Year
2024-25. The Report on CSR activities as required under the Companies (CSR Policy) Rules, 2014 is set
out as Annexure - âCâ to this Report.

NOMINATION & REMUNERATION COMMITTEE:

Nomination & Remuneration Committee comprises Dr. (Smt.) D Manjulata, Independent Director, as Chairperson,
Sri M S R V K Ranga Rao, Non-Independent and Non-Executive Director and Dr. V N Rao and Sri G S V Prasad,
Independent Directors, as its Members.

NOMINATION & REMUNERATION POLICY:

The Board of Directors of your Company has, on recommendation of the Nomination & Remuneration Committee,
adopted a Nomination & Remuneration Policy which lays down the framework in relation to the criteria for selection
and appointment of Board Members and remuneration of Directors / Key Managerial Personnel and Senior Management
of the Company. This Policy can be accessed on the Companyâs website at the link: http://
www.theandhrapetrochemicals.com/wp-content/uploads/NOMINATION -REMUNERATION-POLICY.pdf

AUDITORS:

M/s C V Ramana Rao & Co., Chartered Accountants, Visakhapatnam, were appointed as Statutory Auditors
of the Company for a second term of five consecutive Financial Years from 2022-23 to 2026-27 by the
Shareholders at the 38^th Annual General Meeting (AGM). Fixation of their remuneration for the Year 2025Â¬
26 is being placed at the ensuing 41^st AGM for the approval of Members. The total fees paid by the Company
for the Year 2024-25 to the Statutory Auditors for all services rendered by them is Rs. 9.45 lakhs.

COST RECORDS:

Company has complied with the requirement with regard to maintenance of Cost Records as specified by
the Central Government under Section 148(1) of the Companies Act, 2013 read with the Companies (Cost
Records and Audit) Rules, 2014.

COST AUDITORS:

M/s Narasimha Murthy & Co., Cost Accountants, Hyderabad, were appointed by the Board, on the
recommendation of the Audit Committee, as Cost Auditors of the Company for conducting the audit of cost
records for the Financial Year 2025-26 on a remuneration of Rs.2.00 lakhs and appropriate Resolution in
this connection has been included in the Notice calling the ensuing 41^st Annual General Meeting of the
Company for the purpose of your ratification of the said remuneration. Cost Auditorsâ Report for the Financial
Year ended 31^st March, 2024 has been filed with the Ministry of Corporate Affairs on 12.6.2024 i.e., within
the stipulated time.

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

Particulars prescribed under Section 134 (3) (m) of the Companies Act, 2013 read with the Rule 8 (3) of the
Companies (Accounts) Rules, 2014 are given below:

I) CONSERVATION OF ENERGY

1. Steps taken or impact on conservation of energy: New Green Energy Steam Turbine 510 KW
installed. Installation of LED lights and operating less Number of Air Compressors.

2. Steps taken by the Company for utilising Alternate Sources of Energy: Company is buying
power from Open Access.

3. Capital investment on Energy Conservation Equipments: 3.30 Crores

II) TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:

a) Efforts made & Benefits derived:

Technology has been fully absorbed and various innovative ideas enabled the Company to operate the
Plant even above 105% load.

b) Imported Technology: NIL

c) Expenditure incurred on Research & Development: NIL

III) Foreign Exchange Earnings and Outgo: (On cash basis)

(Rs. in lakhs)

	For the year ended 31.3.2025	For the year ended 31.3.2024
i. Earnings	â	â
ii. Outgo	475.52	417.08

PARTICULARS OF EMPLOYEES:

The particulars of employees of your Company drawing a remuneration requiring disclosure under Section
197 (12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration

nf Mananprial Pprcnnnph RiiIpq 0014 ac ampnrlprl frnm timp tn timp arp a? fnllruA/c

Sl No.

Name &
Designation of
Employee

Nature of
employment
/ Category

Qualifications
& Experience

Date of

Commencement
of employment

Age

Last

employed

% of
equity

Whether
related to
any

D ire c to r

Salary

Sri K Narasappa

President

B. Tech

(Chemical),

M.B.A.

44 Years

1.3.2017

M/s ICS-
Senegal,
West Africa

0.001

1,03,90,380.00

G S Ramesh
(upto 30.6.2024)

President

(Marketing)

B.Sc., M.B.A.
(Marketing)

38 Years

8.2.1993

M/s Raasi
Cement

Ltd.,

Hyderabad

43,60,262.00

None of the employees holds (by himself or along with his spouse and dependent children) more than 2% of
the Equity Shares of the Company.

DEMATERIALISATION OF SHARES:

As on 31^st March, 2025, out of the total number of 8,49,71,600 Equity Shares of the Company, 8,16,18,812
Equity Shares constituting 96.05% stand dematerialised.

RELATED PARTY TRANSACTIONS:

As per the provisions of Regulation 23 of the Securities & Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015, your Company has established a Policy on Materiality of
Related Party Transactions and on dealing with the Related Party Transactions and do not attract the
provisions of Section 188 of the Companies Act, 2013.

The Policy on Related Party Transactions as approved by the Board of Directors is available on the website
of the Company. The weblink of the same is http://www.theandhrapetrochemicals.com/wp-content/uploads/
POLICY-ON-RELATED-PARTY-TRANSACTIONS.pdf

There were no materially significant Related Party Transactions entered by the Company with the Promoters,
Directors and Key Managerial Personnel which may have a potential conflict with the interests of Company
at large.

All other Related Party Transactions are placed before the Audit Committee and the Board for approval.
Omnibus approval is granted by the Audit Committee on yearly basis for the said transactions. A statement
giving details of all Related Party Transactions is placed before the Audit Committee and the Board for
review and ratification on a quarterly basis. All transactions entered with the Related Parties during the Year
under review were in the ordinary course of business and on Armâs Length basis.

Since there were no materially significant Related Party Transactions during the Year under review, the
requirement with regard to the details required in AOC-2 is not applicable to the Company.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION AND REDRESSAL) ACT, 2013:

Your Company has in place a Prevention of Sexual Harassment Policy in line with the requirement of the
Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. In compliance
with the provisions of the said Act, an Internal Complaints Committee (ICC) was set up to redress complaints
received regarding sexual harassment. During the Year 2024-25, there were no complaints received by the
ICC.

PARTICULARS OF REMUNERATION:

The information required under Section 197 of the Act and the Rules made thereunder in respect of employees
of the Company, is as follows:-

(a) the ratio of the remuneration of each director to the median remuneration of the employeeof
the company for the Financial Year:

Our Directors draw remuneration only by way of Sitting Fees. The details of the same are provided
in Corporate Governance Report which forms an Annexure to this Report. No other remuneration
is drawn by them. Managing Director does not draw any remuneration. Hence, the ratio of
remuneration of each Director to the median remuneration is not required to be given.

(b) the percentage increase in remuneration of each Director, Chief Executive Officer, Chief
Financial Officer, Company Secretary or Manager, if any, in the Financial Year:

Company was paying Sitting Fees of Rs. 30,000/- for attending each Meeting of the Board and Rs.
25,000/- for attending each Meeting of Committee of the Board (as approved by the Board of Directors
at its Meeting held on 5.11.2020). Other details are as follows:

Name of the Person	% increase in remuneration
Sri K Narasappa, President	NIL
Sri G Adinarayana	NIL
Chief Financial Officer & Companv Secretary

2.08%

(d) the number of permanent employees on the rolls of Company: 317

(e) average percentile increase already made in the salaries of employees other than the
managerial personnel in the last Financial Year and its comparison with the percentile increase
in the managerial remuneration and justification thereof and point out if there are any
exceptional circumstances for increase in the managerial remuneration.

The average increase in salaries of employees other than managerial personnel in 2024-25 was
2.08%. Percentage increase in the managerial remuneration for the Year was Nil.

(f) affirmation that the remuneration is as per the Remuneration Policy of the Company:

The Companyâs Remuneration Policy is driven by the success and performance of the individual
employees and the Company through its compensation package, the Company endeavours to
attract, retain, develop and motivate a high performance staff. The Company follows a compensation
mix of fixed pay, benefits and performance based variable pay.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

There are no significant and material orders passed by the Regulators / Courts that would impact the going
concern status of the Company and its future operations.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE
COMPANY THAT OCCURRED AFTER 31^st MARCH, 2025:

There were no material changes and commitments affecting the financial position of the Company, which
have occurred between the end of the Financial Year 2024-25 to which the Financial Statements relate and
on the date of this Report.

EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS
OR DISCLAIMERS MADE BY THE STATUTORY AUDITORS, COST AUDITORS AND PRACTISING
COMPANY SECRETARY IN THEIR REPORTS:

For the Year under review, there are no qualifications, reservations or adverse remarks made either by the
Statutory Auditors, Cost Auditors or Practising Company Secretary in their respective Reports. The Report
of the Statutory Auditors forms part of the Financial Statements.

Further, no frauds are reported by Statutory Auditors under Section 143(12) of the Companies Act, 2013.
DIRECTORSâ RESPONSIBILITY STATEMENT:

To the best of knowledge and belief and according to the information and explanations obtained by them,
your Directors make the following statement in terms of Section 134(3)(c) of the Companies Act, 2013:

i) that in the preparation of the Annual Accounts for the year ended 31^st March, 2025, the applicable
Accounting Standards have been followed along with proper explanation relating to material departures,
if any;

ii) that Accounting Policies have been selected and applied consistently and that judgements and estimates
made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company
as at 31^st March, 2025 and of the Loss of the Company for the year ended on that date;

iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting
records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of
the Company and for preventing and detecting fraud and other irregularities;

iv) the annual accounts have been prepared on a going concern basis;

v) that the Directors had laid down internal financial controls to be followed by the Company and that such
internal financial controls are adequate and were operating effectively; and

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

COMPLIANCE WITH SECRETARIAL STANDARDS:

Company has complied with the applicable Secretarial Standards issued by the Institute of Company
Secretaries of India and approved by the Central Government.

REPORT ON CORPORATE GOVERNANCE:

As required under Regulation 34(3) of Securities & Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015, the Report on Corporate Governance and the Auditorsâ
Certificate on the compliance of Corporate Governance are annexed (Annexure-âDâ) and form part of the
Directorsâ Report.

ACKNOWLEDGEMENTS:

Your Directors acknowledge the co-operation and continued valuable support received from Central and
State Government authorities, the Promoters - The Andhra Sugars Limited and Andhra Pradesh Industrial
Development Corporation Ltd., (APIDC), Banks, Shareholders, Customers, Hindustan Petroleum
Corporation Ltd., (HPCL) and other Suppliers. Your Directors place on record their deep sense of appreciation

of the valuable contribution made by the employees at all levels.

Place : Hyderabad On behalf of the Board

Date : 24.5.2025 Dr. Pamidi Kotaiah

Chairman

Mar 31, 2024

The Directors are pleased to present the Fortieth Annual Report on the operational and business performance of the Company together with the Audited Financial Statements for the Financial Year ended 31^st March, 2024.

CORPORATE OVERVIEW:

Your Company is manufacturer of Oxo-Alcohols, that consist of the Products viz., 2 Ethyl Hexanol, Normal Butanol and Iso Butanol. Your Company is an Associate of The Andhra Sugars Ltd., and has its Regd. Office at Venkatarayapuram, Tanuku.

FINANCIAL RESULTS:

The summary of the financial results, which have been prepared as per the Indian Accounting Standards (Ind AS), for the Year under review along with the Previous Yearâs figures are given below:

(Rs. in lakhs)
	2023-24	2022-23
Net Sales (excl. GST)	78867.35	68298.16
Profit / (Loss) before Interest & Depreciation	10957.19	5329.76
Less: Interest	866.28	863.62
Depreciation and Amortization Expense	1482.94	1538.73
Profit / (Loss) after Interest and Depreciation before Extra-Ordinary Items	8607.97	2927.41
Exceptional Items	â	â
Profit / (Loss) Before Tax	8607.97	2927.41
Provision for:
Current Tax	2494.00	1153.00
Adjustment of Tax Expense for earlier years	(10.39)	(16.43)
Deferred Tax	(216.11)	(249.96)
Reversal of MAT Credit Entitlement	â-	â
Profit / (Loss) After Tax	6340.17	2040.80
Other Comprehensive Income	(19.41)	(609.63)
Total Comprehensive Income for the period	6321.06	1431.17
Balance brought forward from previous year	37815.11	37658.51
Profit carried forward to next year	44136.17	39089.68

OPERATIONAL AND FINANCIAL PERFORMANCE:

During this Financial Year 2023-24, Plant produced 70,209 MTs (Previous Year 59,616 MTs) of Oxo-Alcohols. Sales during the Year were 72,730 MTs (Previous Year 58,388 MTs). Company posted Net Profit of Rs.63.40 crores during the Financial Year 2023-24 as compared to Net Profit of Rs.20.40 crores during the previous Financial Year.

Overall plant performance in this financial year is better than last year due to increase in the Production & comparatively better realization .

DIVIDEND:

Considering the Companyâs performance for the Financial Year 2023-24 and the need to conserve the Funds to meet its Long-Term growth objectives, your Board of Directors at their Meeting held on 25.5.2024 has declared Dividend of Rs.2.00 (Rupee Two only) per Share (@20% on 8,49,71,600 Equity Shares of face value of Rs.10/- each) involving a total cash outflow of Rs.16.99 crores. The Dividend, if approved by the Members at the ensuing Annual General Meeting of the Company, will be paid to all the eligible Members, involving a total cash outflow of Rs.16.99 crores. The Dividend shall be subject to deduction of Income Tax at source.

Pursuant to the provisions of Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company has formulated its Dividend Distribution Policy which is available on the website of the Company at the link www.theandhrapetrochemicals.com.

The payout of Dividend is in line with the Companyâs Dividend Distribution Policy.

CONTRIBUTION TO EXCHEQUER:

Over the years, the Company has been significant contributor to the Government Exchequer in the form of Duties and Taxes. During the Year under review, Rs.53.65 crores was paid to the Exchequer as against Rs.28.34 crores in the Previous Year, an increase of Rs.25.31 crores over the Previous Year.

CAPITAL & RESERVES:

Authorised and Paid-up Capital:

The Authorised Capital of the Company is Rs.125.00 crores and the Paid-up Capital is Rs.84.97 crores. Reserves:

The total Reserves position as on 31.3.2024 stood at Rs.470.72 crores as against Rs. 420.26 crores for the Previous Year.

General Reserve:

During the Year under review, no amount has been transferred to the General Reserve.

MANAGEMENT DISCUSSION AND ANALYSIS:INDUSTRY STRUCTURE AND DEVELOPMENTS:

Ongoing Russia -Ukraine war, & Israel -Hamas war coupled with geopolitical tensions has effected the Global economy. However, in this disturbed Global economy also, Indiaâs GDP was maintained reasonably better when compared to other countries including China.

Due to the reasonably better GDP growth, your Company improved its profitability & posted Net Profit of Rs.63.40 crores for the Financial Year 2023-24 under review, when compared last year Net profitability of Rs.20.40 Crores

The health & wellbeing of our employees became a top priority for the company.

OPPORTUNITIES AND THREATS:

Estimated demand of Oxo-Alcohols at 3,30,000 MTPA, with healthy growth rate of 8% to 10% per annum, in general, is a good opportunity for the Company with existing capacity of 80,000 MTPA, considering the demand-supply gap in the country even after BPCL plant coming on line. As such, there are no constraints in the Companyâs production capability with Hindustan Petroleum Corporation Limited (HPCL) able to meet full Propylene requirement. Sales realization is also expected to improve on account of Anti-Dumping Duties imposed by Govt. of India on imports from certain countries & forecasted better Indian GDP growth.

However, BPCL Oxo Alcohols competitive prices, dumping of the products and currency fluctuations may impact the Companyâs performance to some extent.

Ongoing Russia-Ukraine war, Israel -Hamas War, coupled with geopolitical tensions may effect on the business environment is going to be a big challenge.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:

As required by the provisions of Companies Act, 2013, Internal Control Systems Report has been appended to Independent Auditorâs Report given by Statutory Auditors regarding Financial Year 2023-24. The Company has internal control systems commensurate with the size of the business operations. A Chartered Accountants firm is engaged to carry out Internal Audit covering the entire operations. The audit firm submits Internal Audit Report periodically with their suggestions and/or corrections. Audit Committee critically deliberates and reviews such Internal Audit Reports and ensures effectiveness of the control systems through necessary recommendations.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS:

In the area of Human Resources, the employees are being trained to meet the Plant requirements from time to time by motivating them in a positive way and the Industrial Relations continued to be cordial throughout the Year.

The total number of employees employed as on 31.3.2024 is 321.

FUTURE OUTLOOK:

Your Company Performance is expected to be reasonably good in view of the forecast of better GDP growth for India. However, the disrupted business environment due to Russia -Ukraine War, Israel -Hamas War & geopolitical tensions may impact the performance to some extent.

Though Company signed Natural Gas (NG) term sheet agreement with GAIL, in the year 2019, the progress in the GAIL/APGDCL Natural gas pipe laying work got held up since more than 2 years due to internal/finance issues.

The Companyâs performance to a large extent is dependent on international supply and demand for these products and their prices which are influenced by crude prices, exchange fluctuations and dumping by sources other than that covered by Anti-Dumping Duty.

RISKS AND CONCERNS:

Your Company is depending for its major Raw Material i.e., Propylene from a single source, HPCL Refinery. However, the risk is built in the project evaluation. Risk is slightly diluted to some extent by sourcing Propylene from GAIL-PATA .

Crude prices, Exchange Rate fluctuations are also a matter of concern.

CAUTIONARY STATEMENT:

The statements describing the Companyâs outlook, objectives, projections, expectations, estimations or predictions may be forward-looking statements based on certain assumptions of future events. Actual results may differ materially from those expressed or implied, since the Companyâs operations are influenced by external or internal factors. Your Company closely monitors all major developments likely to affect the Operations and will respond to meet the potential threats and to gain from any possible opportunities.

DEPOSITS:

During the Year under review, your Company did not accept any deposits within the meaning of provisions of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

SAFETY, HEALTH AND ENVIRONMENT:

Your Company has evolved Safety, Health and Environment Policy.

? Company has been completed 19.05 million accident free Man hours in last 15 years.

? Total 6,236 man-hours used for conducting PEP talks, Safety induction training and refresher trainings for employees including Contract / Contractor workmen and truck drivers.

? Safety of Human and Plant assets are of top priority of the company. Continuous training of personnel at various levels on safety and strict compliance of regulations is ensured which resulted in another accident-free year.

? Company received a prestigious National Safety Award -2023 - SILVER TROPHY (SHRESHTHA SURAKSHA PURASKAR) in Manufacturing Sector from NSCI on 15.3.2024 at Hyderabad.

Health:

Health monitoring of all employees including contract labour & canteen workers is done on regular basis. Environment:

Online emission, Ambient air & effluent monitoring are in place. Data is being transmitted online to Central Pollution Control Board (CPCB) and Andhra Pradesh Pollution Control Board (APPCB) for monitoring.

Insurance:

All the insurable assets of the Company including Plant and Machinery, Buildings and Inventories are insured on reinstatement value basis.

Land taken on Lease from Visakhapatnam Port Trust

Your Company has taken on lease 75.00 Acres of land from Visakhapatnam Port Trust (VPT) on which the Oxo-Alcohol Plant has been established. The land is located adjacent to HPCL, Visakha Refinery which supplies major Raw Materials. In this connection, a Lease Agreement was entered into on 27.6.1989 with VPT for a period of 30 years which expired on 26.6.2019. During the Financial Year 2019-20, the Company (APL) has initiated the process of renewal of the Land Lease on which the Plant is located with VPT for a further period of 30 years with effect from 27.6.2019. Company has submitted its Technical & Financial Bid against the Tender floated by VPT. As Company was the sole bidder for the Tender, VPT accepted both Technical Bid & Financial Bid. Later on, VPT has cancelled the tender and issued re-tender. Aggrieved by the action of VPT, Company has filed a Writ Petition under Article 226 before the Honâble High Court of Andhra Pradesh.

The Honâble High Court of Andhra Pradesh has allowed the Writ Petition filed by the Company seeking the cancellation of the VPTâs order dated 18.8.2020, cancelling the Tender Notification dated 7.8.2019 and fresh Tender Notification dated 24.8.2020 issued by VPT towards the Lease of the Land and directed VPT to execute the Lease Deed, vide its Order dated 25.2.2022. Further, on 19.3.2022, Company has written a letter to the Chief Engineer, VPT requesting him to kindly finalise the Land Lease Deed and fix-up the date for execution of the said Lease Deed. Visakhapatnam Port Trust has filed an Appeal (WA No. 688 of 2022) on 7.9.2022 before the Honâble High Court of Andhra Pradesh and it is pending for adjudication.

Pending execution of the Lease Deed, Company has considered provisionally its bid amount for accounting of âLeasesâ in accordance with Ind AS 116, till the Lease Deed is executed.

LISTING:

The Equity Shares of your Company are listed on the BSE Limited, Mumbai. The Annual Listing Fees for the year 2023-24 has been paid.

ANNUAL RETURN:

Pursuant to the provisions of Section 92(3) and 134(3)(a) of the Companies Act, 2013, read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, copy of the Annual Return of the Company as at 31^st March, 2024 is available on the Companyâs website www.theandhrapetrochemicals.com.

Details of Designated Officer under Section 89 of Companies Act, 2013 read with Rule 9 of the Companies (Management and Administration) Rules, 2014:

Sri G. Adinarayana, CFO & Company Secretary

DIRECTORS:

M/s Andhra Pradesh Industrial Development Corporation Ltd., (APIDC) has withdrawn its Nominee Director, Sri C Rami Reddy, Joint Director, Industries Department, Govt. of Andhra Pradesh, with effect from 6.10.2023 and nominated Sri V Raghunath, Vice Chairman & Managing Director, M/s APIDC Ltd., in his place. The Board of Directors, on the recommendation of the Nomination and Remuneration Committee (NRC), co-opted him as Additional Director with effect from 10.2.2024. As Additional Director he holds office till the date of conclusion of the ensuing 40^th Annual General Meeting.

In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Directors Sri Ravi Pendyala and Sri M S R V K Ranga Rao retire by rotation at the ensuing 40^th AGM.

Sri Ravi Pendyala and Sri M S R V K Ranga Rao, being eligible, have offered themselves for reappointment as Directors. Their reappointment is being placed for the approval of the Shareholders at the ensuing 40^th AGM.

The first term of Sri P Venkateswara Rao and Sri M Gopalakrishna, I.A.S., (Retd) who were appointed as Independent Directors for a period of 5 years with effect from the conclusion of the 35^th AGM, i.e., valid upto 9.7.2024. To avail their experience and expertise, Board of Directors at their Meeting held on 25.5.2024 have reappointed them, on the recommendation of the NRC, for a further period of 5 years. Their reappointment is being placed for the approval of the Shareholders at the ensuing 40^th AGM.

None of the Directors is disqualified for appointment / re-appointment under Section 164 of the Companies Act, 2013. Certificate issued by the Practising Company Secretary regarding non-disqualification of Directors is enclosed (Annexure - A). As required by law, this position is also reflected in the Auditorsâ Report. Details with regard to the composition of the Board, Meetings of the Board held during the Year and the attendance of the Directors have been mentioned in the Corporate Governance Report which forms part of this Report.

KEY MANAGERIAL PERSONNEL:

Details of Key Managerial Personne (KMP) of the Company are as under:

Sl. No	Name of the person	Designation
1.	Sri K Narasappa	President
2.	Sri G Adinarayana	Chief Financial Officer & Company Secretary

CODE OF CONDUCT:

The Board of Directors enunciated a Code of Conduct for the Directors and Senior Management Personnel which was circulated to all concerned and was also hosted on the Companyâs website www.theandhrapetrochemicals.com. The Directors and Senior Management Personnel have affirmed compliance with the Code of Conduct for the Financial Year 2023-24.

AUDIT COMMITTEE:

Audit Committee comprises Non-Executive Independent Directors, Sri P Venkateswara Rao, Dr. Pamidi Kotaiah, and Dr. (Smt.) D Manjulata, Dr. V N Rao, Sri G S V Prasad and Sri Ravi Pendyala, Non-Executive NonIndependent Director, as its Members. Sri P Venkateswara Rao is the Chairman of the Committee. The details of the number of meetings of the Audit Committee held during the Financial Year 2023-24 are given in the Corporate Governance Report which forms part of this Report.

SECRETARIAL AUDIT:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rules made thereunder, the Board of Directors have appointed M/s Nekkanti S R V V S Narayana & Co., Company Secretaries (CP No.7839), Hyderabad, to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for the Financial Year 2023-24 is included as Annexure - âBâ and forms an integral part of this Report. The Secretarial Audit Report does not contain any qualification or reservations or adverse remarks.

BOARD EVALUATION:

The performance was evaluated based on the parameters such as structure, meetings, functions, risk evaluation process adopted, stakeholder value and responsibility corporate culture, ethics, effectiveness of Board / Committee process and functioning, contribution of Board / Committee Members to overall effectiveness of the Board / Committee, avoiding conflict with the Companyâs interests, bonafide discharge of responsibilities in the interest of the Company and upholding ethical standards, integrity etc.

In terms of Regulation 25 of the SEBI Listing Regulations, 2015, Board took on record the declarations and confirmations received from Independent Directors.

Independent Directors met on 11.5.2024 for annual evaluation of their own performance and the performance of the Non-Independent Directors, the Chairman, the Committees, the Board as a whole and the adequacy of flow of information to the Board and its Committees.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS:

The details of Familiarization Programme for the Independent Directors are furnished in the Corporate Governance Report which forms part of this Report.

NUMBER OF MEETINGS OF THE BOARD:

The details of the number of Meetings of the Board held during the Financial Year 2023-24 are given in the Corporate Governance Report which forms part of this Report.

CREDIT RATING:

ICRA Ltd., has retained the Companyâs long-term rating as â[ICRA]A-â and short- term rating reaffirmed at â[ICRA]A2 â, g-term Rating is âStableâ, assigned earlier to the Rs.94.18 crores Line of

Credit of our Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY THE COMPANY:

During the Year under review, your Company has not given any loans or guarantees covered under the provisions of Section 186 of the Companies Act, 2013 and details of the Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to the Financial Statements.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Policy provides adequate safeguards against victimisation of the complainant and direct access to the Chairman of the Audit Committee. The protected disclosures, if any, reported under this Policy will be appropriately and expeditiously investigated.

The Whistle Blower Policy may be accessed on the Companyâs website at the link: http:// www.theandhrapetrochemicals.com/wp-content/uploads/Whistle-Blower-Policv-1.pdf

RISK MANAGEMENT:

The Risk Management framework of the Company defines the Risk Management approach of the Company, includes periodic review of such risks, Risk Mitigation measures and reporting mechanism of such Risks. Risk Management Policy of your Company can be viewed by entering the URL http:// www.theandhrapetrochemicals.com/wp-content/uploads/POLICY-ON-CORPORATE-RISK-MANAGEMENT.pdf in the web browser.

Risk Management Committee which was re-constituted on 8.6.2023 comprises Sri P Narendranath Chowdary, Managing Director, as Chairman of the Committee and Sri Mullapudi Thimmaraja (upto 2.8.2023), Sri M S R V K Ranga Rao (from 8.6.2023) and Sri Ravi Pendyala, Non-Executive and Non-Independent Directors, and Dr. V N Rao and Sri P Venkateswara Rao, Independent Directors, as its Members.

The details of the number of meetings of the Risk Management Committee held during the Financial Year 2023-24 are given in the Corporate Governance Report which forms part of this Report.

Sustainability:

Sustainability is at the core of your Companyâs business development strategy. Your Company firmly believes in the idea that progress should not come at the expense of the environment and natural ecosystems. The Company focuses on key sustainability areas such as Decarbonization & Air Emission Control, Water & Biodiversity Conservation, Health & Safety and Community Development to ensure the long-term sustainability of its business operations and improve the well-being of communities, preserving the environment and ensuring long-term economic prosperity.

CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE:

Details of composition of CSR Committee are given in the Corporate Governance Report which forms part of this Report.

As per the provisions of Section 135 and Schedule VII of the Companies Act, 2013 and the Companyâs CSR Policy, Company had spent an amount of Rs. 2,90,40,980/-towards CSR expenditure for the Financial Year 2023-24. The Report on CSR activities as required under the Companies (CSR Policy) Rules, 2014 is set out as Annexure - âCâ to this Report.

NOMINATION & REMUNERATION COMMITTEE:

Nomination & Remuneration Committee comprises Dr. (Smt.) D Manjulata, Independent Director, as Chairperson, Sri Mullapudi Thimmaraja (upto 2.8.2023), Sri M S R V K Ranga Rao (from 8.6.2023), NonIndependent and Non-Executive Directors and Dr. V N Rao and Sri G S V Prasad, Independent Directors, as its Members.

NOMINATION & REMUNERATION POLICY:

The Board of Directors of your Company has, on recommendation of the Nomination & Remuneration Committee, adopted a Nomination & Remuneration Policy which lays down the framework in relation to the criteria for selection and appointment of Board Members and remuneration of Directors / Key Managerial Personnel and Senior Management of the Company. This Policy can be accessed on the Companyâs website at the link: http://www.theandhrapetrochemicals.com/wp-content/uploads/NOMINATION -REMUNERATION-POLICY.pdf

AUDITORS:

M/s C V Ramana Rao & Co., Chartered Accountants, Visakhapatnam, were appointed as Statutory Auditors of the Company for a second term of five consecutive Financial Years from 2022-23 to 2026-27 by the Shareholders at the 38^th Annual General Meeting (AGM). Fixation of their remuneration for the Year 2024-25 is being placed at the ensuing 40^th AGM for the approval of Members. The total fees paid by the Company for the Year 2023-24 to the Statutory Auditors for all services rendered by them is Rs. 9.60 lakhs.

COST RECORDS:

Company has complied with the requirement with regard to maintenance of Cost Records as specified by the Central Government under Section 148(1) of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014.

COST AUDITORS:

M/s Narasimha Murthy & Co., Cost Accountants, Hyderabad, were appointed by the Board, on the recommendation of the Audit Committee, as Cost Auditors of the Company for conducting the audit of cost records for the Financial Year 2024-25 on a remuneration of Rs.2.00 lakhs and appropriate Resolution in this connection has been included in the Notice calling the ensuing 40^th Annual General Meeting of the Company for the purpose of your ratification of the said remuneration. Cost Auditorsâ Report for the Financial Year ended 31^st March, 2023 has been filed with the Ministry of Corporate Affairs on 27.5.2023 i.e., within the stipulated time.

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

Particulars prescribed under Section 134 (3) (m) of the Companies Act, 2013 read with the Rule 8 (3) of the Companies (Accounts) Rules, 2014 are given below:

I) CONSERVATION OF ENERGY1. Steps taken or impact on conservation of energy:

(a) New Green Energy Steam Turbine (510KW): The energy which was wasting in control valves to reduce HP steam to LP steam has been recovered by installation of Steam Turbine. New Green Energy steam Turbine (Updated) of 510 KW capacity, SIEMENS make commissioned in the month of March. With this turbine we are likely to save power 12,000 KW/day (Rs 3.30 crores / year).

(b ENERGY & STEAM SAVINGS: In this Financial Year, N-Butanol demand was very low especially from April, 2023 to December, 2023. Instead of operating at reduced load, Company decided to operate only 20 days & stop 10 days to save steam & energy. By following this methodology Company saved around Rs 3.15 crores in this year.

2. Steps taken by the Company for utilising Alternate Sources of Energy.

Company could not initiate any steps in this regard in view of the non-viability.

3. Capital investment on Energy Conservation Equipments: Rs.2.52 crores.II) TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:

a) Efforts made & Benefits derived:

Technology has been fully absorbed and various innovative ideas enable the Company to operate the Plant even above 105% load.

b) Imported Technology: NIL

c) Expenditure incurred on Research & Development: NIL

III) Foreign Exchange Earnings and Outgo: (On cash basis)

(Rs. in lakhs)
	For the year ended	For the year ended
	31.3.2024	31.3.2023
i. Earnings	â	â
ii. Outgo	417.08	533.35

PARTICULARS OF EMPLOYEES:

The particulars of employees of your Company drawing a remuneration requiring disclosure under Section 197 (12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended from time to time, are as follows:

Sl No.

Name & Designation of Employee

Nature of employment/ Category

Qualifications & Experience

Date of Commencement of employment

Age

Last

employed

% of equity

Whether related to any

Director

Salary

Rs.

Sri

K Narasappa

President

B.Tech (Chemical), M.B.A. 44 Years

1.3.2017

M/s ICS-Senegal, West Africa

0.001

1,07,28,847.00

Sri

G S Ramesh

President

(Marketing)

B.Sc., M.B.A. (Marketing) 38 Years

8.2.1993

M/s Raasi Cement

Ltd.,

Hyderabad

1,05,89,494.00

None of the employees holds (by himself or along with his spouse and dependent children) more than 2% of the Equity Shares of the Company.

DEMATERIALISATION OF SHARES:

As on 31^st March, 2024, out of the total number of 8,49,71,600 Equity Shares of the Company, 8,14,85,353 Equity Shares constituting 95.90% stand dematerialised.

RELATED PARTY TRANSACTIONS:

As per the provisions of Regulation 23 of the Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has established a Policy on Materiality of Related Party Transactions and on dealing with the Related Party Transactions and do not attract the provisions of Section 188 of the Companies Act, 2013.

The Policy on Related Party Transactions as approved by the Board of Directors is available on the website of the Company. The weblink of the same is http://www.theandhrapetrochemicals.com/wp-content/uploads/ POLICY-ON-RELATED-PARTY-TRANSACTIONS.pdf

There were no materially significant Related Party Transactions entered by the Company with the Promoters, Directors and Key Managerial Personnel which may have a potential conflict with the interests of Company at large.

All other Related Party Transactions are placed before the Audit Committee and the Board for approval. Omnibus approval is granted by the Audit Committee on yearly basis for the said transactions. A statement giving details of all Related Party Transactions is placed before the Audit Committee and the Board for review and ratification on a quarterly basis. All transactions entered with the Related Parties during the Year under review were in the ordinary course of business and on Armâs Length basis.

Since there were no materially significant Related Party Transactions during the Year under review, the requirement with regard to the details required in AOC-2 is not applicable to the Company.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

Your Company has in place a Prevention of Sexual Harassment Policy in line with the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. In compliance with the provisions of the said Act, an Internal Complaints Committee (ICC) was set up to redress complaints received regarding sexual harassment. During the Year 2023-24, there were no complaints received by the ICC.

PARTICULARS OF REMUNERATION:

The information required under Section 197 of the Act and the Rules made thereunder in respect of employees of the Company, is as follows:-

(a) the ratio of the remuneration of each director to the median remuneration of the employees of the company for the Financial Year:

Our Directors draw remuneration only by way of Sitting Fees. The details of the same are provided in Corporate Governance Report which forms an Annexure to this Report. No other remuneration is drawn by them. Managing Director does not draw any remuneration. Hence, the ratio of remuneration of each Director to the median remuneration is not required to be given.

(b) the percentage increase in remuneration of each Director, Chief Executive Officer, Chief Financial Officer, Company Secretary or Manager, if any, in the Financial Year:

Company was paying Sitting Fees of Rs. 30,000/- for attending each Meeting of the Board and Rs. 25,000/- for attending each Meeting of Committee of the Board (as approved by the Board of Directors at its Meeting held on 5.11.2020). Other details are as follows:

Name of the Person

% increase in remuneration

Sri K Narasappa, President

NIL

Sri G Adinarayana

Chief Financial Officer & Company Secretary

NIL

5.61%

(d) the number of permanent employees on the rolls of Company: 307

(e) average percentile increase already made in the salaries of employees other than the managerial personnel in the last Financial Year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration.

The average increase in salaries of employees other than managerial personnel in 2023-24 was 5.61%. Percentage increase in the managerial remuneration for the Year was Nil.

(f) affirmation that the remuneration is as per the Remuneration Policy of the Company:

The Companyâs Remuneration Policy is driven by the success and performance of the individual employees and the Company through its compensation package, the Company endeavours to attract, retain, develop and motivate a high performance staff. The Company follows a compensation mix of fixed pay, benefits and performance based variable pay.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

There are no significant and material orders passed by the Regulators / Courts that would impact the going concern status of the Company and its future operations.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY THAT OCCURRED AFTER 31^ST MARCH, 2024:

There were no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the Financial Year 2023-24 to which the Financial Statements relate and on the date of this Report.

EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE STATUTORY AUDITORS, COST AUDITORS AND PRACTISING COMPANY SECRETARY IN THEIR REPORTS:

For the Year under review, there are no qualifications, reservations or adverse remarks made either by the Statutory Auditors, Cost Auditors or Practising Company Secretary in their respective Reports. The Report of the Statutory Auditors forms part of the Financial Statements.

Further, no frauds are reported by Statutory Auditors under Section 143(12) of the Companies Act, 2013. DIRECTORSâ RESPONSIBILITY STATEMENT:

To the best of knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134(3)(c) of the Companies Act, 2013:

i) that in the preparation of the Annual Accounts for the year ended 31^st March, 2024, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

ii) that Accounting Policies have been selected and applied consistently and that judgements and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March, 2024 and of the Profit of the Company for the year ended on that date;

iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the annual accounts have been prepared on a going concern basis;

v) that the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

COMPLIANCE WITH SECRETARIAL STANDARDS:

Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India and approved by the Central Government.

REPORT ON CORPORATE GOVERNANCE:

As required under Regulation 34(3) of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Report on Corporate Governance and the Auditorsâ Certificate on the compliance of Corporate Governance are annexed (Annexure-âDâ) and form part of the Directorsâ Report.

ACKNOWLEDGEMENTS:

Your Directors acknowledge the co-operation and continued valuable support received from Central and State Government authorities, the Promoters - The Andhra Sugars Limited and Andhra Pradesh Industrial Development Corporation Ltd., (APIDC), Banks, Shareholders, Customers, Hindustan Petroleum Corporation Ltd., (HPCL), Gas Authority of India Ltd., (GAIL), Bharat Petroleum Corporation Ltd., (BPCL) and other Suppliers. Your Directors place on record their deep sense of appreciation of the valuable contribution made by the employees at all levels.

Mar 31, 2019

Dear Shareholders,

The Directors have pleasure in presenting the Thirty Fifth Annual Report of the Company together with the Audited Accounts for the year ended 31^st March, 2019.

CORPORATE OVERVIEW:

Your Company is the sole manufacturer of Oxo-Alcohols in India. The Oxo-Alcohols consist of the products viz., 2 Ethyl Hexanol, Normal Butanol and Iso Butanol. Your Company is an associate of The Andhra Sugars Ltd., and has its Regd. Office at Venkatarayapuram, Tanuku - 534 215, W.G.Dist.

FINANCIAL RESULTS:

Performance of the Company for the Financial Year ended 31^st March, 2019 is summarised below:

(Rs. in lakhs)

	2018-19	2017-18
Net Sales (excl. Excise Duty)	66586.22	51820.00
Profit / (Loss) before Interest & Depreciation	11140.39	6861.79
Less: Interest	591.81	1186.54
Depreciation	1049.48	949.27
Profit / (Loss) after Interest and Depreciation before Extra-ordinary item	9499.10	4725.98
Exceptional items	--	--
Profit / (Loss) before Tax	9499.10	4725.98
Provision for:
Current Tax	2071.12	1000.28
Adjustment of Tax Expense for earlier years	27.18	--
Deferred Tax	417.44	(924.37)
Profit / (Loss) after Taxation	6983.36	4650.07
Other Comprehensive Income	(101.27)	(231.42)
Total Comprehensive Income for the period	6882.09	4418.65
Balance brought forward from previous year	4332.83	(85.82)
Profit carried forward to next year	11214.92	4332.83

OPERATIONAL AND FINANCIAL PERFORMANCE:

During the Financial Year 2018-19, the Plant produced 82,791 MTs (previous year 76,257 MTs) of Oxo Alcohols which works out to 113.4% (approx.) capacity utilization. Sales during the year were 82,818 MTs (previous year 78,049 MTs). Company posted a Net Profit of Rs.68.82 crores during the Financial Year 2018-19 as compared to Net Profit of Rs.44.19 crores during the previous year.

DIVIDEND:

Your Directors are pleased to inform that the Board of Directors has recommended a Dividend of Rs.1.50 paise [Normal Dividend Re.1/- and Special Dividend 50 paise in view of completion 25 years of production] per share (@15% Dividend on 8,49,71,600 Equity Shares of Rs.10/- each)] for the Year 2018-19 commensurate with the Profit earned. The outflow towards payment of Dividend would amount to Rs.15.36 crores inclusive of tax thereon. Dividend, if approved by the shareholders, will be paid to all the eligible shareholders.

CAPITAL & RESERVES:

Authorised and Paid-up Capital:

The Authorised Capital of the Company is Rs.125.00 crores and the Paid-up Capital is Rs.84.97 crores.

Reserves:

The total Reserves position as on 31.3.2019 stood at Rs.141.51 crores against Rs. 72.69 crores in the previous year.

MANAGEMENT DISCUSSION AND ANALYSIS:

INDUSTRY STRUCTURE AND DEVELOPMENTS:

The year 2018-19 was reasonably a good year as Plant could operate at more than 113% capacity and Company could market products at a reasonably good price.

For the year Company posted a Net Profit of Rs.69.83 crores (after Tax).

OPPORTUNITIES AND THREATS:

Estimated demand of Oxo-Alcohols at 2,50,000 MTPA, with healthy growth rate of 8% to 10% per annum, in general, is a good opportunity for the Company with existing capacity of 80,000 MTPA, considering the huge demand-supply gap in the country. With Hindustan Petroleum Corporation Limited (HPCL) able to meet full Propylene requirement it is expected that there will be no constraints in the Companyâs production capability. Sales realisation is also expected to improve on account of Anti-Dumping Duties imposed by Govt. of India on imports from certain countries.

Over and above the imports from existing destinations, imports from newer destinations like Taiwan, Brazil, USA and Japan has become a challenge to the Company.

However commissioning of BPCL Oxo-Alcohols plant at Cochin in 2019/2020, downturn in product price scenario internationally and dumping of the products and currency fluctuations may impact the Companyâs performance and recovery process to some extent.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

As required by the provisions of Companies Act, 2013, Internal Control Systems Report has been appended to Independent Auditorâs Report given by Statutory Auditors regarding Financial Year 2018-19. The Company has internal control systems commensurate with the size of the business operations. A Chartered Accountants firm is engaged to carry out internal audit covering the entire operations. The audit firm submits internal audit report periodically with their suggestions and /or corrections. Audit Committee critically deliberates and reviews such internal audit reports and ensures effectiveness of the control systems through necessary recommendations.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS:

In the area of Human Resources, the employees are being trained to meet the Plant requirements from time to time by motivating them in a positive way and the industrial relations continue to be cordial throughout the year.

The total number of employees employed as on 31.03.2019 is 297.

FUTURE OUTLOOK:

Companyâs performance capability is expected to be good as the Propylene supply from HPCL is good. Company has signed Natural Gas (NG) term sheet supply agreement with GAIL. Natural Gas (NG), which is expected to be available in the last Quarter (Q4) of 201920, may likely to bring down the cost of production. However, the cost benefit will be based on the NG prices which are going to be fixed once in six months. Mainly, the Companyâs performance to a large extent is dependent on international supply and demand for these products and their prices which are influenced by crude prices, exchange fluctuations and dumping by sources other than those covered by Anti-Dumping Duty.

RISKS AND CONCERNS:

The Company is dependent on a single source - HPCL Visakha Refinery for its major raw material i.e., Propylene. Crude prices, exchange rate fluctuations and political instability in the Gulf area are of major concern.

CAUTIONARY STATEMENT:

The statements describing the Companyâs outlook, estimates or predictions may be forward-looking statements based on certain assumptions of future events. Actual results may differ materially from those expressed or implied, since the Companyâs operations are influenced by external or internal factors. Your Company closely monitors all major developments likely to affect the operations and will respond to meet the potential threats and to gain from any possible opportunities.

DEPOSITS:

During the year under review, your Company did not accept any deposits within the meaning of provisions of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

SAFETY, HEALTH AND ENVIRONMENT:

Company has evolved Safety, Health and Environment Policy.

Safety:

Company has completed 13 million accident free man hours in the last 10 years.

Total 8500 man-hours used for conducting Safety trainings for employees including contract workmen induction as well as refresher trainings.

Safety of Human and Plant assets are of top priority to the Company. Continuous training of personnel at various levels on safety and strict compliance of regulations is ensured which resulted in another accident-free year.

- Company has been awarded with Winner (Gold Trophy) for lowest Average Frequency Rate (2013, 2014, 2015 and 2016) and in achieving accident-free year - 2016 in National Safety Awards (NSA) presented by the Directorate General Factory Advice Services and Labour Institute (DGFASLI), Govt. of India on 17.09.2018 at New Delhi.

Health:

Health monitoring of all employees including contract labour and canteen workers is done on regular basis.

Environment:

On line emission, Ambient air and effluent monitoring systems are in place. Data is being transmitted to CPCB and APPCB for monitoring.

INSURANCE:

All the insurable assets of the Company including Plant and Machinery, Buildings and Inventories are insured on reinstatement value basis.

LAND TAKEN ON LEASE FROM VISAKHAPATNAM PORT TRUST

Company has taken on lease 75.00 Acres of land from Visakhapatnam Port Trust on which Oxo-Alcohol Plant has been established. The land is located adjacent to HPCL, Visakha Refinery which supplies major Raw Materials. In this connection, a Lease Agreement was entered into on June 27, 1989 with Visakhapatnam Port Trust for a period of 30 years which expires on June 26, 2019. Your Company has initiated necessary steps to enter into a fresh Lease Agreement for a period of 30 years for continuation of the Lease.

LISTING:

The Equity Shares of your Company are listed on the Bombay Stock Exchange. Listing fees has been paid.

EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return in Form MGT-9, as required under Section 92 of the Companies Act, 2013, is included in this Report as Annexure - âAâ and forms an integral part of this report.

DIRECTORS:

Sri Surinder Kumar Kapoor ceased to be Director, consequent upon his sad demise on 7.6.2018. Your Directors place on regard their commendable appreciation of the valuable guidance rendered by him during his tenure as Director of the Compay.

Sri M R B Punja, Chairman, demitted his office as Director with effect from 5.8.2018. Your Directors place on record their commendable appreciation of the valuable guidance rendered by him during his tenure as Director of the Company.

Dr. P Kotaiah, Independent Director, was appointed as Chairman of the Company with effect from 5.8.2018.

Sri P Narendranath Chowdary was appointed as Managing Director of the Company with effect from 5.8.2018.

Smt. Y V Anuradha, I.A.S., Nominee Director of APIDC, resigned on 18.4.2019. Your Directors place on record their commendable appreciation of the valuable guidance rendered by her during her tenure as Director of the Company.

Sri P Venkateswara Rao was co-opted by the Board at its Meeting held on 5.11.2018 as Additional Director under Independent category. His appointment as Independent Director is being placed for the approval of shareholders at the ensuing 35^th AGM.

The present term of Sri A A Krishnan as Independent Director expires at the conclusion of 35^th AGM. Your Directors propose his appointment for second term as mentioned in the relevant Resolution.

Sri M. Gopalakrishna, I.A.S., (Retd.,) was co-opted by the Board at its meeting held on 25.5.2019 as Additional Director under Independent category. His appointment as Independent Director is being placed for the approval of shareholders at the ensuing 35^th AGM.

In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Directors Sri Mullapudi Thimmaraja and Sri Solomon Arokiaraj, I.A.S., retire by rotation at the ensuing 35^th AGM and being eligible offer themselves for reappointment. Their reappointment is being placed for the approval of shareholders at the ensuing 35^th AGM.

KEY MANAGERIAL PERSONNEL:

Details of Key Managerial Personnel of the Company are as under:

Sl No.	Name of the person	Designation
1.	Sri K Narasappa	President
2.	Sri P Ratna Rao	Senior General Manager (Finance) [CFO]
3.	Sri M V V S V Prasadu	Deputy Secretary & Assistant Manager
	(w.e.f., 25.5.2019)	(Finance)

AUDIT COMMITTEE:

Audit Committee, which was reconstituted on 4.8.2018, comprises of Non-Executive Independent Directors, Sri A A Krishnan, Dr. P Kotaiah, and Dr (Smt) D Manjulatha and Sri Ravi Pendyala, Non-Executive Non-Independent Director, as its members. Sri A A Krishnan is the Chairman of the Committee.

SECRETARIAL AUDIT:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder, the Company has appointed Nekkanti S R V V S Narayana & Co., Company Secretaries (CP No.7839), Hyderabad, to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is included as Annexure - âBâ and forms an integral part of this report.

BOARD EVALUATION:

Pursuant to the provisions of the Companies Act, 2013 and Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Board has carried out a formal process of evaluation of the Board, its Committees and the individual Directors. The performance was evaluated based on the parameters such as effectiveness of Board / Committee process and functioning, contribution of Board / Committee members to overall effectiveness of the Board / Committee, avoiding conflict with Companyâs interest, bonafide discharge of responsibilities in the interest of the Company and upholding ethical standards, integrity and probity etc.

Independent Directors met on 25.5.2019 wherein as per the Report of lead Independent Director the performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors. The evaluation process reflected valuable contribution of members of the Board / Committee thereof.

NUMBER OF MEETINGS OF THE BOARD:

The details of the Number of Meetings of the Board held during the Financial Year 2018-19 are given in the Corporate Governance Report which forms part of this report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY THE COMPANY:

Your Company has not given any loans or guarantees covered under the provisions of Section 186 of the Companies Act, 2013. Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to financial statements.

WHISTLE BLOWER POLICY:

As per the provisions of the Companies Act, 2013 and Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has established a Vigil Mechanism / Whistle Blower Policy for Directors and employees to report genuine concerns on unethical behaviour, actual or suspected fraud or violation of the Companyâs Code of Conduct in prescribed manner. The Policy provides adequate safeguards against victimisation of the complainant and direct access to the Chairman of the Audit Committee. The protected disclosures, if any, reported under this Policy will be appropriately and expeditiously investigated.

The Whistle Blower Policy may be accessed on the Companyâs website at the link: http://www.andhrapetrochemicals.com/Whistle Blower Policy.pdf.

RISK MANAGEMENT:

Your Board of Directors at its Meeting held on 27.3.2015 framed and adopted a Risk Management Policy of the Company to identify and mitigate the risks. The risk management framework defines the risk management approach of the Company and includes periodic review of such risks and also risk mitigation measures and reporting mechanism of such risks. Risk Management Policy of your Company can be viewed by entering the url http://www.andhrapetrochemicals.com/POLICY ON CORPORATE RISK MANAGEMENT.pdf in the web browser.

CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE:

As per the provisions of Section 135 & Schedule VII of the Companies Act, 2013 and Companyâs CSR Policy, Company had spent an amount of Rs.10,72,767/- CSR expenditure for the Financial Year 2018-19. The report on CSR activities as required under Companies (CSR Policy) Rules, 2014 is set out as Annexure - âCâ forming part of this report.

NOMINATION AND REMUNERATION COMMITTEE:

Nomination and Remuneration Committee, which was re-constituted on 4.8.2018, comprises of Dr. (Smt.) D Manjulatha, Independent Director, as Chairperson and Sri A A Krishnan, Independent Director, Sri Mullapudi Thimmaraja and Dr. V N Rao, Non-Independent Directors, as its members.

NOMINATION AND REMUNERATION POLICY:

The Board of Directors of your Company has, on recommendation of the Nomination & Remuneration Committee, adopted a Nomination & Remuneration Policy which lays down the framework in relation to the criteria for selection and appointment of Board members and remuneration of Directors / Key Managerial Personnel and Senior Management of the Company. This Policy can be accessed on the Companyâs website at the link: http://www.andhrapetrochemicals.com/NOMINATION REMUNERATION POLICY.pdf.

AUDITORS:

M/s C V Ramana Rao & Co., Chartered Accountants, Visakhapatnam, were appointed as Statutory Auditors of the Company for the five Financial Years from 2017-18 to 2021-22. Fixation of their remuneration payable for the Year 2019-20 is being placed at the ensuing 35^th AGM for the approval of Members. The total fees paid by the Company for the year 2018-19 to the Statutory Auditors for all services rendered by them is Rs. 6.25 lakhs.

COST AUDITORS:

M/s Narasimha Murthy & Co., Cost Accountants, Hyderabad, were appointed by the Board as Cost Auditors of the Company for the year ended 31^st March, 2019. Cost Auditorsâ Report in respect of Financial Year 2017-18 has been filed with the Ministry of Corporate Affairs on 20^th August, 2018, i.e., within the stipulated time.

COST RECORDS:

Company has complied with the requirement with regard to maintenance of cost records as specified by the Central Government under Section 148(1) of the Companies Act, 2013.

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

Particulars prescribed under Section 134 (3) (m) of the Companies Act, 2013 read with the Rule 8 (3) of Companies (Accounts) Rules, 2014 are given below:

I) CONSERVATION OF ENERGY

1. Steps taken or impact on conservation of energy:

a) ETP aerobic high pressure plant air (6.5 kg/cm²) replaced by low pressure air (0.5 mg/cm²) by installing 60 kw Air Blower. Energy saved till 31^st March, 2019 is around Rs.12.00 lakhs and expected energy savings per annum would be around 6,13,200 units equivalent to Rs.37.00 lakhs per annum.

b) VFD sâ installed on P-856 A/B pumps and Boiler feed water pumps. Energy saved till 31^st March, 2019 is around Rs.13.00 lakhs and expected energy savings per annum would be around Rs.16.00 lakhs per annum.

c) Replaced 600 Nos. 40W Flurocent tubes by 20 W LED bulbs, 150 Nos. CFL tubes (36 W) by 18 W LED tubes, 130 MV lamps (125 W) by 45 W LED fittings. Expected energy savings for the above replacement would be around Rs. 6.50 lakhs/annum

2. Steps taken by the Company for utilising alternative source of energy.

Company could not take up any steps in this regard in view of the non-viability.

3. Capital investment on Energy conservation equipments: Rs.17.00 lakhs.

II) TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:

a) Efforts made & Benefits: Technology has been fully absorbed and various innovative ideas enable the Company to operate the Plant even above 105% load.

b) Imported Technology: NIL

c) Expenditure incurred on R & D: NIL

III) Foreign Exchange earning and outgo: (On cash basis)

(Rs. in lakhs)

	For the year ended	For the year ended
	31.3.2019	31.3.2018
i. Earnings	--	--
ii. Outgo	775.84	433.74

PARTICULARS OF EMPLOYEES:

There is no employee of your Company drawing a remuneration requiring disclosure under Section 197 (12) of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended by the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016.

None of the employees holds (by himself or along with his spouse and dependent children) more than 2% of the Equity Shares of the Company.

DEMATERIALISATION OF SHARES:

As on 31^st March, 2019, out of the total number of 8,49,71,600 Equity Shares, 7,79,98,194 Equity Shares constituting 91.79% stand dematerialised.

RELATED PARTY TRANSACTIONS:

As per the provisions of Regulation 23 of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has established a Policy on materiality of Related Party Transactions and on dealing with Related Party Transactions.

The Policy on Related Party Transactions as approved by the Board of Directors is available on the website of the Company. The weblink of the same is http://www.andhrapetrochemicals.com/POLICY ON RELATED PARTY TRANSACTIONS.pdf .

All transactions entered with Related Parties for the year under review were on armâs length basis and in the ordinary course of business.

All Related Party Transactions are placed before the Audit Committee and the Board for approval. Omnibus approval is granted by the Audit Committee on yearly basis for transactions which are repetitive in nature. A statement giving details of all Related Party Transactions are placed before the Audit Committee and the Board for review and ratification on a quarterly basis.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

Your Company has in place a Prevention of Sexual Harassment Policy in line with the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. In compliance with the provisions of the said Act, an Internal Complaints Committee (ICC) was set up to redress complaints received regarding sexual harassment. During the year 2018-19, there were no complaints received by the ICC.

PARTICULARS OF REMUNERATION:

The information required under Section 197 of the Act and the Rules made thereunder in respect of employees of the Company, is as follows:-

(a) the ratio of the remuneration of each director to the median remuneration of the employees of the company for the Financial Year: Our Directors draw remuneration only by way of sitting fees. The details of the same are provided in Corporate Governance which forms an Annexure to this report. No other remuneration is drawn by them. Managing Director does not draw any remuneration. Hence, the ratio of remuneration of each Director to the median remuneration is not required to be given.

(b) the percentage increase in remuneration of each Director, Chief Executive Officer, Chief Financial Officer, Company Secretary or Manager, if any, in the Financial Year:

Board of Directors at its meeting held on 5.11.2018 has approved enhancement of sitting fees from Rs. 10,000/- to Rs. 20,000/- for attending each meeting of Board and from Rs. 10,000/- to Rs. 15,000/- for attending each meeting of committee of the Board. Other details are as follows:

Name of the Person

% increase in remuneration

Sri K Narasappa, President

Sri P Ratna Rao, Senior General Manager (Finance) [CFO]

Sri M V V S Prasadu, Deputy Secretary & Asst. Manager (Finance)

14.76%

7.00%

Not applicable

(d) the number of permanent employees on the rolls of Company: 297

(e) the explanation on the relationship between average increase in remuneration and Company performance;

On an average, employees received an increase of 0.93%. The increase in remuneration is in line with the market trends. The decreased percentage in the median remuneration compared to previous year is due to pay revision to non-executive cadre employees during the Financial Year 2017-18. A direct co-relation of employee remuneration and Company performance as envisaged in the rules is not feasible considering the qualitative factors involved in measuring performance.

(f) comparison of the remuneration of the Key Managerial Personnel against the performance of the Company:

Particulars		Rs. in lakhs
Remuneration of Key Managerial Personnel (KMP) during Financial Year 2018-19 (aggregated)		99.49
Revenue from operations		66858.17
Remuneration (as % of revenue)		0.15%

(g) variations in the market capitalisation of the Company, price earnings ratio as at the closing date of the current Financial Year and previous Financial Year and percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer in case of listed companies, and in case of unlisted companies, the variations in the networth of the Company as at the close of the current Financial Year and previous Financial Year:

Particulars	Unit	As at 31^st March, 2019	As at 31^st March, 2018	Variation
Closing rate of share at BSE	Rs.	54.65	57.40	4.79%
EPS (Consolidated)	Rs.	8.22	5.47	50.27%
Market capitalisation	Rs./lakh	46436.98	48773.70	4.79%
Price Earnings ratio	Ratio	6.65	10.49	36.61%

Percentage in bracket represents negative percentage.

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

The average increase in salaries of employees other than managerial personnel in 2018-19 was 0.93%. Percentage increase in the managerial remuneration for the year was NIL.

(i) Comparison of each remuneration of the Key Managerial Personnel against the performance of the Company:

Particulars

President

Chief Financial Officer

Company Secretary (w.e.f.18.3.2019)

Rs. in lakhs

Remuneration

Revenue

Remuneration (as % of revenue)

64.96

66858.17

0.10%

34.07

66858.17

0.05%

0.46

66858.17

(j) the key parameters for any variable component of remuneration availed by the Directors: Not applicable as Directors do not draw any remuneration except by way of sitting fees. No remuneration is drawn by Managing Director.

(k) the ratio of the remuneration of the highest paid Director to that of the employees who are not directors but receive remuneration in excess of the highest paid Director during the year:

Not applicable as Directorsâ remuneration consists of only sitting fees. No remuneration is drawn by Managing Director.

(l) affirmation that the remuneration is as per the remuneration Policy of the Company:

The Companyâs Remuneration Policy is driven by the success and performance of the individual employees and the Company. Through its compensation package, the Company endeavours to attract, retain, develop and motivate a high performance staff. The Company follows a compensation mix of fixed pay, benefits and performance based variable pay. Individual performance pay is determined by business performance and the performance of the individuals measured through the annual appraisal process. The Company affirms remuneration is as per the Remuneration Policy of the Company.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

There are no significant and material orders passed by the Regulators / Courts that would impact the going concern status of the Company and its future operations.

DIRECTORSâ RESPONSIBILITY STATEMENT:

To the best of knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134(3)(c) of the Companies Act, 2013:

i) that in the preparation of the Annual Accounts for the year ended 31^st March, 2019, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

ii) that Accounting Policies have been selected and applied consistently and that judgements and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March, 2019 and of the profit of the Company for the year ended on that date;

iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the annual accounts have been prepared on a going concern basis;

v) that the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

REPORT ON CORPORATE GOVERNANCE:

As required under Regulation 34(3) of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the report on Corporate Governance and the Auditorsâ Certificate on the compliance of Corporate Governance are annexed and form part of the Directorsâ Report (Annexure âDâ).

ACKNOWLEDGEMENTS:

Your Directors acknowledge the co-operation and continued valuable support received from Central and State Government authorities, the Promoters - The Andhra Sugars Limited and Andhra Pradesh Industrial Development Corporation Ltd., (APIDC), Financial Institutions, Banks, Shareholders, Customers, Hindustan Petroleum Corporation Ltd., (HPCL), Gas Authority of India Ltd., (GAIL) and other Suppliers. Your Directors also wish to place on record their deep sense of appreciation of the valuable contribution made by the employees at all levels.

On behalf of the Board

Hyderabad Dr. P. Kotaiah

25.5.2019 Chairman

Mar 31, 2018

The Andhra Petrochemicals Limited

DIRECTORS'' REPORT

Dear Shareholders,

At the outset your Directors express profound grief over the sad demise of Managing Director Dr. B B Ramaiah on 14.2.2018 who was instrumental in bringing the Company to the position of what it is today. Also, your Directors express profound grief over the sad demise of Director Sri Surinder Kumar Kapoor on 7.6.2018. Your Directors place on record their warm appreciation of their valuable contribution to the growth and development of the Company.

Your Directors have pleasure in presenting the Thirty Fourth Annual Report of the Company together with the Audited Accounts for the year ended 31^st March, 2018.

CORPORATE OVERVIEW:

FINANCIAL RESULTS:

Performance of the Company for the Financial Year ended 31^st March, 2018 is summarized below:

(Rs. in Lakhs)

	2017-18	2016-17
Net Sales (excl. Excise Duty)	51820.00	32889.89
Profit / (Loss) before Interest & Depreciation	6861.79	1486.90
Less: Interest	1186.54	1558.07
Depreciation	949.27	903.61
Profit / (Loss) after Interest and Depreciation before Extra-ordinary item	4725.98	(974.78)
Exceptional items	--	(115.69)
Profit / (Loss) before Tax	4725.98	(1090.47)
Provision for:
Current Tax	1000.28	--
Deferred Tax	(924.37)	(354.39)
Profit / (Loss) after Taxation	4650.07	(736.08)
Other Comprehensive Income	(231.42)	350.49
Total Comprehensive Income for the period	4418.65	(385.59)
Balance brought forward from previous year	(85.82)	299.77
Profit carried forward to next year	4332.83	(85.82)

OPERATIONAL AND FINANCIAL PERFORMANCE:

During the Financial Year 2017-18, the Plant produced 76,257 MTs (previous year 60,021 MTs) total Alcohols which works out to 104.4% (approx.) capacity utilization. Sales during the year were 78,049 MTs (previous year 58,254 MTs). Company posted a Net Profit of Rs.44.19 crores during the Financial Year 2017-18 as compared to Net Loss of Rs.3.86 crores incurred during the previous year.

DIVIDEND:

As the Directors were of the view that there was a need for the Company to conserve its resources and build Reserves, they could not recommend payment of Dividend for the Financial Year 2017-18.

CAPITAL & RESERVES:

Authorized and Paid-up Capital:

The Authorized Capital of the Company is Rs.125.00 crores and the Paid-up Capital is Rs.84.97 crores.

Reserves:

The total Reserves position as on 31.3.2018 stood at Rs.72.69 crores against Rs. 28.50 crores in the previous year.

MANAGEMENT DISCUSSION AND ANALYSIS:

INDUSTRY STRUCTURE AND DEVELOPMENTS:

2017-18 was reasonably a good year as Plant could operate more than 100% capacity and Company could market products at a reasonably good price.

Over and above the imports from the existing destinations, arrival of imports from newer destinations like Taiwan, Brazil, USA and Japan has become a challenge to the Company.

OPPORTUNITIES AND THREATS:

Estimated demand of Oxo-Alcohols at 2,20,000 MTPA, with healthy growth rate of 8% to 10% per annum, in general, is a good opportunity for the Company with existing capacity of 80,000 MTPA, considering the huge demand-supply gap in the country. As such there are no constraints in the Company''s production capability with Hindustan Petroleum Corporation Limited (HPCL) able to meet full Propylene requirement. Sales realization is also expected to improve over time on account of Anti-Dumping Duties imposed by Govt. of India on imports from certain countries.

However commissioning of BPCL Oxo-Alcohols plant at Cochin in 2019/2020, is likely to downturn in product price scenario internationally and dumping of the products and currency fluctuations may impact the Company''s performance and recovery process to some extent.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

As required by the provisions of Companies Act, 2013, Internal Control Systems Report has been appended to Independent Auditor''s Report

given by Statutory Auditors regarding Financial Year 2017-18. The Company has internal control systems commensurate with the size of the business operations. A Chartered Accountants firm is engaged to carry out internal audit covering the entire operations. The audit firm submits internal audit report periodically with their suggestions and /or corrections. Audit Committee critically deliberates and reviews such internal audit reports and ensures effectiveness of the control systems through necessary recommendations. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS:

In the area of Human Resources, the employees are being trained to meet the Plant requirements from time to time by motivating them in a positive way. Industrial relations continue to be cordial throughout the year.

The total number of employees employed as on 31.3.2018 is 290.

FUTURE OUTLOOK:

Company''s performance capability is expected to be good as the Propylene supply from HPCL got stabilized. However, the Company''s performance to a large extent is dependent on international supply and demand for these products and their prices which are influenced by crude prices, exchange fluctuations and dumping from the sources other than that covered by Anti-Dumping Duty.

RISKS AND CONCERNS:

The Company is depending for its major raw material, i.e., Propylene, from a single source - HPCL Visakha refinery. However, the risk is built in the project evaluation. In addition, crude prices, exchange rate fluctuations and unstable situation in the Gulf area are of major concern.

CAUTIONARY STATEMENT:

The statements describing the Company''s outlook, estimates or predictions may be forward-looking statements based on certain assumptions of future events. Actual results may differ materially from those expressed or implied, since the Company''s operations are influenced by external or internal factors. Your Company closely monitors all major developments likely to affect the operations and will respond to meet the potential threats and to gain from any possible opportunities.

DEPOSITS:

During the year under review, your Company did not accept any deposits within the meaning of provisions of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

SAFETY, HEALTH AND ENVIRONMENT:

Safety:

- Company has completed 12 million accident-free man hours in the last 9 years.

- Total 8000 man-hours used for conducting Safety trainings for employees including contract workmen induction as well as refresher trainings.

- Safety of Human and Plant assets are of top priority to the Company. Continuous training of personnel at various levels on safety and strict compliance of regulations is ensured which resulted in another accident-free year.

- Company has been awarded with Winner (Gold Trophy) for lowest Average Frequency Rate (2013, 2014 and 2015) and in achieving accident-free year - 2015 in National Safety Awards(NSA) presented by the Directorate General Factory Advice Services and Labour Institute (DGFASLI), Govt. of India on 17.9.2017 at New Delhi.

Health:

Health monitoring of all employees including contract labour and canteen workers is done on regular basis.

Environment:

On line emission, ambient air and effluent monitoring systems are in place. Data is being transmitted to CPCB and APPCB for monitoring. Company has installed Energy Conservation Steam Turbine (530 KW) and VFD''s on fresh water pumps to recover the waste heat energy and reduce Power respectively. The expected green gas emission reduction (CO2) is going to be about 4088 MT/annum.

INSURANCE:

All the insurable assets of the Company including Plant and Machinery, Buildings and Inventories are insured on reinstatement value basis.

LISTING:

The Equity Shares of your Company are listed on the Bombay Stock Exchange. Listing fees has been paid.

EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return in Form MGT-9, as required under Section 92 of the Companies Act, 2013, is included in this Report as Annexure - "A" and forms an integral part of this report.

DIRECTORS:

During the year under review Dr B B Ramaiah ceased to be Managing Director consequent upon his sad demise on 14.2.2018.

Sri Surinder Kumar Kapoor ceased to be Director consequent upon his sad demise on 7.6.2018.

Board of Directors at its Meeting held on 4.8.2018 appointed Sri P Narendranath Chowdary as Managing Director for a period of 5 years i.e., from 5.8.2018 to 4.8.2023. His appointment is being placed for the approval of the shareholders at the ensuing 34^th Annual General Meeting. APIDC withdrew the nomination of Sri Kartikeya Misra, I.A.S., and Sri Siddharth Jain, I.A.S., as its Nominee Directors. Your Directors place on record their warm appreciation for the valuable guidance rendered by them during their tenure as Directors of the Company. Sri Solomon Arokiaraj, I.A.S., Nominee of APIDC, was co-opted by the Board at the Board Meeting held on 9.2.2018 as Additional Director. His appointment as Director is being placed for the approval of the Shareholders at the ensuing 34^th AGM.

Independent Directors, viz., Sri M R B Punja, Sri A A Krishnan, Sri Surinder Kumar Kapoor (up to 7.6.2018) and Smt. D Manjulatha have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013.

Dr. P Kotaiah was co-opted by the Board at its Meeting held on 4.8.2018 as Additional Director under Independent category. His appointment as Independent Director is being placed for the approval of shareholders at the ensuing 34^th AGM.

In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Directors Sri Ravi Pendyala and Dr. V N Rao retire by rotation at the ensuing 34^th AGM and being eligible offer themselves for reappointment.

KEY MANAGERIAL PERSONNEL:

Details of Key Managerial Personnel of the Company are as under:

Sl No.	Name of the person	Designation
1.	Sri K Narasappa	President
	(w.e.f., 23.5.2017)
2.	Sri P Ratna Rao	Senior General Manager (Finance)

AUDIT COMMITTEE:

Audit Committee comprises of Non-Executive Independent Directors, Sri A A Krishnan, Sri M R B Punja, Sri Surinder Kumar Kapoor (upto 7.6.2018) and Dr (Smt) D Manjulatha (w.e.f., 4.11.2017) and Sri Ravi Pendyala, Non-Executive Non-Independent Director, as its members. Sri A A Krishnan is the Chairman of the Committee.

SECRETARIAL AUDIT:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder, the Company has appointed Nekkanti S R V V S Narayana & Co., Company Secretaries (CP No.7839), Hyderabad, to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is included as Annexure-"Bâ and forms an integral part of this report. Observation in the said Report, which forms part of this report, with regard to filling the vacancy of Company Secretary is self-explanatory.

BOARD EVALUATION:

The performance was evaluated based on the parameters such as effectiveness of Board / Committee process and functioning, contribution of Board / Committee members to overall effectiveness of the Board / Committee, avoiding conflict with Company''s interest, bonafide discharge of responsibilities in the interest of the Company and upholding ethical standards, integrity and probity etc.

The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors. The evaluation process reflected valuable contribution of members of the Board / Committee thereof.

NUMBER OF MEETINGS OF THE BOARD:

The details of the Number of Meetings of the Board held during the Financial Year 2017-18 are given in the Corporate Governance Report which forms part of this report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY THE COMPANY:

WHISTLE BLOWER POLICY:

As per the provisions of the Companies Act, 2013 and Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has established a Vigil Mechanism / Whistle Blower Policy for Directors and employees to report genuine concerns on unethical behavior, actual or suspected fraud or violation of the Company''s Code of Conduct in prescribed manner. The Policy provides adequate safeguards against victimization of the complainant and direct access to the Chairman of the Audit Committee. The protected disclosures, if any, reported under this Policy will be appropriately and expeditiously investigated.

The Whistle Blower Policy may be accessed on the Company''s website at the link: http://www.andhrapetrochemicals.com/Whistle Blower Policy.pdf.

RISK MANAGEMENT:

CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE:

As per the provisions of Schedule VII of the Companies Act, 2013 and Company''s CSR Policy, there is no average net profit for the three immediately preceding Financial Years, and as such the Company is not required to incur CSR expenditure for the Financial Year 2017-18. The report on CSR activities as required under Companies (CSR Policy) Rules, 2014 is set out as Annexure - "C" forming part of this report.

NOMINATION AND REMUNERATION COMMITTEE:

Nomination and Remuneration Committee comprises of Directors Sri Surinder Kumar Kapoor (upto 7.6.2018) as Chairman and Sri M R B Punja and Sri P Narendranath Chowdary as its members.

NOMINATION AND REMUNERATION POLICY:

The Board of Directors of your Company has, on recommendation of the Nomination & Remuneration Committee, adopted a Nomination & Remuneration Policy which lays down the framework in relation to the criteria for selection and appointment of Board members and remuneration of Directors / Key Managerial Personnel and Senior Management of the Company. This Policy can be accessed on the Company''s website at the link: http://www.andhrapetrochemicals.com/NOMINATION REMUNERATION POLICY.pdf.

AUDITORS:

COST AUDITORS:

M/s Narasimha Murthy & Co., Cost Accountants, Hyderabad, were appointed as Cost Auditors of the Company for the year ended 31^st March, 2018. Cost Auditors'' Report in respect of Financial Year 2016-17 has been filed with the Ministry of Corporate Affairs on 14^th August, 2017, i.e., within the stipulated time.

COST RECORDS:

Company has complied with the requirement with regard to maintenance of cost records as specified by the Central Government under Section 148(1) of the Companies Act, 2013.

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

Particulars prescribed under Section 134 (3) (m) of the Companies Act, 2013 read with the Rule 8 (3) of Companies (Accounts) Rules, 2014 are given below:

I) CONSERVATION OF ENERGY

1. Steps taken or impact on conservation of energy:

(a) Energy Conservation Steam Turbine installation:

Steam distribution analysed in the Plant and found that nearly 13 MT of HP Steam (24 kg/cm² ) was being throttled through control valves to get L.P. Steam (5kg/cm²). As the energy was wasting through the control valves, decided to go for installation of Energy Conservation Steam Turbine of 530 KW. Accordingly 530 KW saturated Steam Turbine Project executed and commissioned in the month of March, 2018. Company is going to save 4235760 units per annum (Rs.2.6 crores/annum).

Above turbine is likely to reduce green gas emission (Co2) to the extent of 3980016 kg (3980 MT) per annum.

(b) VFD (Variable Frequency Device) installed on Fresh Water Cooling Pump reduced the energy to the extent of 115200 units/ annum equivalent to savings of Rs.7 lakhs/annum. Equivalent green gas reduction (Co2) will be around 108 MT/annum.

2. Steps taken by the Company for utilizing alternative sources of energy: -Capital Investment on energy conservation equipmentâs: Rs.1.7 crores

II) TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:

a) Efforts made & Benefits: Technology has been fully absorbed and various innovative ideas enable the Company to operate the Plant even above 100% load

b) Imported Technology: NIL

c) Expenditure incurred on R & D: NIL

III) Foreign Exchange earning and outgo: (On cash basis)

(Rs. in lakhs)

	For the year ended	For the year ended
	31.3.2018	31.3.2017
i. Earnings	--	--
ii. Outgo	433.74	425.51

PARTICULARS OF EMPLOYEES:

None of the employees holds (by himself or along with his spouse and dependent children) more than 2% of the Equity Shares of the Company. DEMATERIALISATION OF SHARES:

As on 31st March, 2018, out of the total number of 8,49,71,600 Equity Shares, 7,73,39,165 Equity Shares constituting 91.11% stand dematerialized.

RELATED PARTY TRANSACTIONS:

The Policy on Related Party Transactions as approved by the Board of Directors is available on the website of the Company. The web link of the same is http://www.andhrapetrochemicals.com/POLICY ON RELATED PARTY TRANSACTIONS.pdf .

All transactions entered with Related Parties for the year under review were on arm''s length basis and in the ordinary course of business.

All Related Party Transactions are placed before the Audit Committee and the Board for approval. Omnibus approval is granted by the Audit

Committee on yearly basis for transactions which are repetitive in nature. A statement giving details of all Related Party Transactions are placed before the Audit Committee and the Board for review and ratification on a quarterly basis.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

Your Company has in place a Prevention of Sexual Harassment Policy in line with the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. In compliance with the provisions of the said Act, an Internal Complaints Committee (ICC) was set up to redress complaints received regarding sexual harassment. During the year 2017-18, there were no complaints received by the ICC.

PARTICULARS OF REMUNERATION:

The information required under Section 197 of the Act and the Rules made thereunder in respect of employees of the Company, is as follows:-

(a) the ratio of the remuneration of each director to the median remuneration of the employees of the company for the Financial Year:

Our Directors draw remuneration only by way of sitting fees. The details of the same are provided in Corporate Governance which forms an Annexure to this report. No other remuneration is drawn by them. Managing Director does not draw any remuneration. Hence, the ratio of remuneration of each Director to the median remuneration is not required to be given.

(b) the percentage increase in remuneration of each Director, Chief Executive Officer, Chief Financial Officer, Company Secretary or Manager, if any, in the Financial Year:

There is no change in sitting fee during the current Financial Year. Other details are as follows:

Name of the Person

% increase in remuneration

Sri K Narasappa, President

Sri P Ratna Rao, Senior General Manager (Finance)

14.62%

9.84%

(d) the number of permanent employees on the rolls of Company: 290

(e) the explanation on the relationship between average increase in remuneration and Company performance;

On an average, employees received an increase of 18.72%. The increase in remuneration is in line with the market trends. The increased percentage in the median remuneration compared to previous year is due to pay revision to non-executive cadre employees during the Financial Year 2017-18. A direct co-relation of employee remuneration and Company performance as envisaged in the rules is not feasible considering the qualitative factors involved in measuring performance.

(f) comparison of the remuneration of the Key Managerial Personnel against the performance of the Company:

Particulars		Rs. in lakhs
Remuneration of Key Managerial Personnel (KMP) during Financial Year 2017-18 (aggregated)		94.00
Revenue from operations		53517.46
Remuneration (as % of revenue)		0.18%

(g) variations in the market capitalization of the Company, price earnings ratio as at the closing date of the current Financial Year and previous Financial Year and percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer in case of listed companies, and in case of unlisted companies, the variations in the net worth of the Company as at the close of the current Financial Year and previous Financial Year:

Particulars	Unit	As at 31^st March, 2018	As at 31^st March, 2017	Variation
Closing rate of share at BSE	Rs.	57.40	25.45	125.54%
EPS (Consolidated)	Rs.	5.47	(0.87)	537.93%
Market capitalization	Rs./lakh	48773.70	21625.27	125.54%
Price Earnings ratio	Ratio	10.49	(29.25)	64.14%

Percentage in bracket represents negative percentage.

The average increase in salaries of employees other than managerial personnel in 2017-18 was 18.72%. Percentage increase in the managerial remuneration for the year was NIL.

(i) Comparison of each remuneration of the Key Managerial Personnel against the performance of the Company:

Particulars	President	Chief Financial Officer
Particulars	Rs. in lakhs	Rs. in lakhs
Remuneration	55.91	38.09
Revenue	53517.46	53517.46
Remuneration (as % of revenue)	0.10%	0.07%

(k) the ratio of the remuneration of the highest paid Director to that of the employees who are not directors but receive remuneration in excess of the highest paid Director during the year:

Not applicable as Directors'' remuneration consists of only sitting fees. No remuneration is drawn by Managing Director (l) affirmation that the remuneration is as per the remuneration Policy of the Company:

The Company''s Remuneration Policy is driven by the success and performance of the individual employees and the Company. Through its compensation package, the Company endeavors to attract, retain, develop and motivate a high performance staff. The Company follows a compensation mix of fixed pay, benefits and performance based variable pay. Individual performance pay is determined by business performance and the performance of the individuals measured through the annual appraisal process. The Company affirms remuneration is as per the Remuneration Policy of the Company.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

There are no significant and material orders passed by the Regulators / Courts that would impact the going concern status of the Company and its future operations.

DIRECTORS'' RESPONSIBILITY STATEMENT:

To the best of knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134(3)(c) of the Companies Act, 2013:

i) that in the preparation of the Annual Accounts for the year ended 31^st March, 2018, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

ii) that Accounting Policies have been selected and applied consistently and that judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March, 2018 and of the profit of the Company for the year ended on that date;

iv) the annual accounts have been prepared on a going concern basis;

v) that the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

REPORT ON CORPORATE GOVERNANCE:

As required under Regulation 34(3) of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the report on Corporate Governance and the Auditors'' Certificate on the compliance of Corporate Governance are annexed and form part of the Directors'' Report (Annexure "D").

ACKNOWLEDGEMENTS:

Your Directors acknowledge the co-operation and continued valuable support received from Central and State Government authorities, the Promoters - The Andhra Sugars Limited and Andhra Pradesh Industrial Development Corporation Ltd., (APIDC), Financial Institutions, Banks, Shareholders, Customers, Hindustan Petroleum Corporation Ltd., (HPCL), Gas Authority of India Ltd., (GAIL) and other Suppliers. Your Directors also wish to place on record their deep sense of appreciation of the valuable contribution made by the employees at all levels.

On behalf of the Board

Hyderabad M R B Punja

4.8.2018 Chairman

Mar 31, 2016

Dear Shareholders,

The Directors have pleasure in presenting the Thirty Second Annual Report of the Company together with the Audited Accounts for the year ended 31^st March, 2016.

CORPORATE OVERVIEW:

FINANCIAL RESULTS:

Performance of the Company for the Financial Year ended 31st March, 2016 is summarized below:

(Rs. in Lakhs)

	2015-16	2014-15
Net Sales (excl. Excise Duty)	33565.83	14026.17
Profit / (Loss) before Interest & Depreciation	(1039.48)	(2879.45)
Less : Interest	1365.73	969.65
Depreciation	982.91	899.95
Profit / (Loss) after Interest and Depreciation before Extra-ordinary item	(3388.12)	(4749.05)
Extra-ordinary items - Insurance Claim received	694.75	---
Profit / (Loss) before Tax Provision for:	(2693.37)	(4749.05)
Current Tax for earlier years	2.15	---
Deferred Tax	(287.67)	(297.14)
Profit / (Loss) after Taxation	(2407.85)	(4451.91)
Balance brought forward from previous year Adjustment of carrying amount of the assets whose remaining useful life is nil as per Schedule II to the Companies Act, 2013 (net of	2919.46	7582.76
deferred tax of Rs.101.53 lakhs)	---	(211.39)
Profit carried forward to next year	511.61	2919.46

OPERATIONAL AND FINANCIAL PERFORMANCE :

During the Financial Year 2015-16, the Plant produced 57,348 MTs (previous year 18,766 MTs), total Alcohols which works out to 79% (approx.) capacity utilization. Sales during the year were 57,245 MTs ( previous year 19,101 MTs). Company had incurred a Net Loss of Rs.24.08 crores during the current Financial Year 2015-16 as compared to Rs.44.52 crores Net Loss incurred during the previous year. Details are given in Audited, unqualified Financial Statements forming part of this Report.

DIVIDEND:

Due to loss incurred during the year under report, your Directors are unable to recommend any dividend for the Financial Year 2015-16.

CAPITAL & RESERVES:

Authorized and Paid-up Capital:

The Authorized Capital of the Company is Rs.85 crores and the Paid-up Capital is Rs.84.97 crores.

Reserves:

The total Reserves position as on 31.3.2016 stood at Rs.34.48 crores against Rs. 58.55 crores in the previous year.

MANAGEMENT DISCUSSION AND ANALYSIS: INDUSTRY STRUCTURE AND DEVELOPMENTS:

The year 2015-16 was somewhat unfavourable to the Company. The economic slowdown globally and particularly in China has adversely impacted Company''s performance. In the light of supply-demand gap for Oxo-Alcohols internationally, product prices were subdued and un-remunerative for the Company. The Company also suffered on account of surge in imports of Oxo-Alcohols at very low prices.

The Company''s operations were restricted to minimize losses but at the same time continued to be in the market. Towards the end of the year Company succeeded in getting Govt. of India to impose Anti Dumping Duty on 2-Ethyl Hexanol from certain countries. Anti Dumping Duty on Normal Butanol was levied subsequently in the following year in April, 2016. Further, the Company has taken up with Govt. of India for levying Anti Dumping Duty on imports from certain other countries that were not covered during the earlier investigation period. Also efforts are on, if possible, to get Anti Dumping Duty on the end product DOP manufactured out of Company''s main product 2-Ethyl Hexanol. The existing Anti Dumping Duties together with those proposed are expected to improve product prices.

During the year under review the Company has received a Loss of Profit Insurance Claim of Rs.694.75 lakhs. Further efforts are on with the Insurance company for settlement of additional amount. For the year the Company has posted a net loss of Rs.2407.84 lakhs, mainly on account of external factors, beyond the control of the Company.

OPPORTUNITIES AND THREATS:

Estimated demand of Oxo-Alcohols at 2,00,000 MTPA, with healthy growth rate of 8 to 10% per annum in general is a good opportunity for the Company with existing capacity of 80,000 MTPA, considering the huge demand-supply gap in the country. As such there are no constraints in the Company''s production capability with Hindustan Petroleum Corporation Limited''s (HPCL) ability to meet full Propylene requirement. Sales realization is also expected to improve over time, firstly on account of Anti Dumping Duties imposed by Govt. of India on imports from certain countries and secondly fructifying Company''s efforts of bringing certain other countries and products in this fold, though it may take some time. With these, some positive developments are likely for the Company.

However, downturn in product price scenario internationally and dumping of the products and currency fluctuations may impact the Company''s performance and recovery process to some extent.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

As required by the provisions of Companies Act, 2013, Internal Control Systems Report has been appended to Independent Auditor''s Report given by Statutory Auditors regarding Financial Year 2015-16. The Company has internal control systems commensurate with the size of the business operations. A Chartered Accountancy firm is engaged to carry out internal audit covering the entire operations. The audit firm submits internal audit report periodically with their suggestions and /or corrections. Audit Committee critically deliberates and reviews such internal audit reports and ensures effectiveness of the control systems through necessary recommendations.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS :

As far as the Human Resources is concerned, the employees are being trained to meet the Plant requirements from time to time by motivating them in a positive way and the industrial relations continue to be cordial throughout the year.

The total number of employees employed as on 31.3.2016 is 286.

FUTURE OUTLOOK:

Company''s performance capability is expected to be good as the Propylene supply constraint from HPCL has since been sorted out. However, the Company''s performance to a large extent is dependent on international supply and demand for these products and their prices which are influenced by crude prices, exchange fluctuations and dumping by sources other than that covered by Anti Dumping Duty.

RISKS AND CONCERNS:

The Company is depending for its major raw material i.e.,

Propylene from a single source, HPCL refinery. However, the risk is built in the project evaluation. Crude prices, Exchange rate fluctuations and political instability in the gulf area are of major concern.

CAUTIONARY STATEMENT:

DEPOSITS:

During the year under review, your Company did not accept any deposits within the meaning of provisions of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

SAFETY, HEALTH AND ENVIRONMENT:

Safety:

Company has achieved 10 million accident free Man hours in last 7 years.

Company has received the following Safety Awards during the year:

Silver Trophy (2nd Level) in National Safety Awards (NSA) -2013 for lowest Average Frequency Rate (2011, 2012, 2013) awarded by Directorate General Factory Advice Services and Labour Institute (DGFASLI), Govt of India, Mumbai.

Certificate of Appreciation (5th level) in National Safety Awards - 2015 for the assessment years 2012, 2013, 2014 by National Safety Council of India (NSCI), Mumbai.

8,500 training man-hours have been organized for employees including contract workman for induction as well as refresher training. Safety of human and Plant assets are of top priority of the Company. Continuous training of personnel at various levels on safety and strict compliance of regulations is ensured which resulted in another accident-free year.

Health:

Health monitoring of all employees including contract labour and canteen workers is done on regular basis.

Environment:

Installation of online effluent quality monitoring station at a cost of Rs.15 lakhs has been done. The data is transmitted to CPCB and APPCB for monitoring. The Company has installed the necessary monitoring equipment for stacks and ambient air.

INSURANCE:

All the insurable assets of the Company including Plant and Machinery, Buildings and Inventories are insured on reinstatement value basis.

LISTING:

The Equity Shares of your Company are listed on the Bombay Stock Exchange. Listing fees has been paid.

EXTRACT OF ANNUAL RETURN:

DIRECTORS:

Board of Directors at their Meeting held on 11.8.2016, appointed Dr. B B Ramaiah as Managing Director for a period of 5 years i.e., from 12.11.2016 to 11.11.2021. His appointment is being placed for the approval of the shareholders at the ensuing 32nd Annual General Meeting.

APIDC withdrew the nomination of Sri Shamsher Singh Rawat, I.A.S., as its Nominee Director from the Board of the Company w.e.f., 30.5.2016. Further it has nominated Sri B Sreedhar, I.A.S., on the Board of the Company and he has been co-opted as Additional Director on the Board of the Company w.e.f., 11.8.2016 on the recommendation of Nomination and Remuneration Committee at its meeting held on 11.8.2016.

Sri B Sreedhar, I.A.S., holds office upto the date of the ensuing 32nd Annual General Meeting (AGM). Resolution seeking his appointment as Director is being placed for the approval of the shareholders at the ensuing 32^nd AGM.

Your Directors place on record their warm appreciation for the valuable guidance rendered by Sri Shamsher Singh Rawat, I.A.S., during his tenure as Director of the Company.

IDBI Bank Ltd., nominated Sri Animesh Kumar Sinha as its Nominee Director on the Board of the Company from 5.4.2016.

All Independent Directors, viz., Sri M R B Punja, Sri A A Krishnan, Sri Surinder Kumar Kapoor and Smt. D Manjulatha have given declarations at the first meeting of the Board of Directors held during the Financial Year 2016-17 (i.e., on 20.5.2016) that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013.

In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Directors Sri Ravi Pendyala and Smt. Y V Anuradha, I.A.S., retire by rotation at the ensuing 32nd AGM and being eligible offer themselves for reappointment.

KEY MANAGERIAL PERSONNEL:

Details of Key Managerial Personnel of the Company are as under:

Sl No.	Name of the person	Designation
1.	Dr. V N Rao	Chief Executive & Chief Operating Officer
2.	Sri P Ratna Rao	General Manager (Finance)
3.	Sri K Raghu Ram	Manager (Finance) & Asst.
	(Up to 2.1.2016)	Secretary

AUDIT COMMITTEE:

Audit Committee consists of three Non-Executive Independent Directors Sri A A Krishnan (Chairman) with Sri M R B Punja and Sri Surinder Kumar Kapoor as its members. Sri Ravi Pendyala, Non-Executive Non-Independent Director was inducted as a Member of the Committee from 6.11.2015.

SECRETARIAL AUDIT:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made there under, the Company has appointed D Hanumanta Raju & Co., Practising Company Secretaries (CP No.7824), Hyderabad, to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is included as Annexure-âBâ and forms an integral part of this report.

BOARD EVALUATION:

Pursuant to the provisions of the Companies Act, 2013 and Securities & Exchange of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Board has carried out a formal process of evaluation of the Board, its Committees and the individual Directors.

NUMBER OF MEETINGS OF THE BOARD:

The details of the Number of Meetings of the Board held during the Financial Year 2015-16 are given in the Corporate Governance Report which forms part of this report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY THE COMPANY:

WHISTLE BLOWER POLICY:

As per the provisions of the Companies Act, 2013 and Securities & Exchange of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has established a Vigil Mechanism / Whistle Blower Policy for Directors and employees to report genuine concerns (unethical behaviour, actual or suspected fraud or violation of the Company''s Code of Conduct) in prescribed manner.

The Policy provides adequate safeguards against victimization of the complainant and direct access to the Chairman of the Audit Committee. The protected disclosures, if any, reported under this Policy will be appropriately and expeditiously investigated.

The Whistle Blower Policy may be accessed on the Company''s website at the link: http:// www.andhrapetrochemicals.com/Whistle Blower Policy.pdf.

RISK MANAGEMENT:

Your Board of Directors at its Meeting held on 27.3.2015 framed and adopted a Risk Management Policy of the Company to identify and mitigate the risks. The risk management framework defines the risk management approach of the Company and includes periodic review of such risks and also risk mitigation measures and reporting mechanism of such risks. Risk Management Policy of your Company can be viewed by entering the url http:// www.andhrapetrochemicals.com/POLICY ON CORPORATE RISK MANAGEMENT.pdf in the web browser.

CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE:

For details of CSR Committee composition, please refer Corporate Governance section of this report.

As per the provisions of Schedule VII of the Companies Act, 2013 and Company''s CSR Policy, as there is no average net profit for the three immediately preceding Financial Years, the Company is not required to incur CSR expenditure for the Financial Year 2015-16. The report on CSR activities as required under the Companies (CSR Policy) Rules, 2014 is set out as Annexure-âCâ forming part of this report.

NOMINATION AND REMUNERATION COMMITTEE:

Nomination and Remuneration Committee consists of Sri Surinder Kumar Kapoor as Chairman and Sri M R B Punja and Sri P Narendranath Chowdary as its members.

NOMINATION AND REMUNERATION POLICY:

The Board of Directors of your Company has, on recommendation of the Nomination & Remuneration Committee, adopted a Nomination & Remuneration Policy which lays down the framework in relation to the criteria for selection and appointment of Board members and remuneration of Directors / Key Managerial Personnel and Senior Management of the Company. This Policy can be accessed on the Company''s website at the link: http://www.andhrapetrochemicals.com/NOMINATION REMUNERATION POLICY.pdf.

AUDITORS:

M/s Brahmayya & Co., Chartered Accountants, Vijayawada, have been appointed as Statutory Auditors of the Company for the Financial Years 2014-15, 2015-16 and 2016-17 by the shareholders at the 30th Annual General Meeting held on 12th September, 2014. Now approval of shareholders is sought for ratification of appointment and fixation of remuneration for the Financial Year 2016-17.

COST AUDITORS:

M/s Narasimha Murthy & Co., Cost Accountants, Hyderabad, were appointed as Cost Auditors of the Company for the year ended 31st March, 2016. Cost Auditors'' Report in respect of Financial Year 2014-15 has been filed with the Ministry of Corporate Affairs on 28th September, 2015 i.e., within the stipulated time.

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

Particulars prescribed under Section 134 (3) (m) of the Companies Act, 2013 read with the Rule 8 (3) of Companies (Accounts) Rules, 2014 are given below:

I) CONSERVATION OF ENERGY

1. Steps taken or impact on conservation of energy:

a) Provision of UPS control supply for certain critical motors to prevent spurious trips due to power dips

b) Interconnection of Naphtha pre-heater and start-up heater of the two reforming units. Earlier, production had to be stopped for decoking of the Naphtha preheater. Now production continues at 40% level and quick come-back is achieved thus saving considerable amount of Naphtha. The cost of the modification is recovered in two decoking operations and has prevented loss of production.

2. Steps taken by the Company for utilisting alternative sources of energy: Company could not take-up any steps in this regard due to poor financial position.

3. Capital Investment on energy conservation equipments: Rs.15.3 lakhs

II) TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:

a) Efforts made & Benefits: Technology has been fully absorbed and various innovative ideas enable the Company to operate the Plant even above 100% load.

b) Imported Technology: NIL

c) Expenditure incurred on R & D: NIL

III) Foreign Exchange earning and outgo : (On cash basis)

(Rs. in lakhs)

	For the year ended	For the year ended
	31.3.2016	31.3.2015
i. Earnings	--	--
ii. Outgo	541.02	225.85

PARTICULARS OF EMPLOYEES:

Statement of particulars of employees of the Company as required under Section 197 (12) of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forming part of this report is annexed hereto (Annexure-"D").

Employee mentioned in the said Annexure is not a relative of any Director of the Company. None of the employees holds (by himself or along with his spouse and dependent children) more than 2% of the Equity Shares of the Company.

DEMATERIALISATION OF SHARES:

As on 31^st March, 2016, out of the total number of 8,49,71,600 Equity Shares, 7,70,38,241 Equity Shares constituting 90.66% stand dematerialized.

RELATED PARTY TRANSACTIONS:

As per the provisions of Regulation 23 of Securities & Exchange of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has established a Policy on materiality of Related Party Transactions and on dealing with Related Party Transactions.

The Policy on Related Party Transactions as approved by the Board of Directors is available on the website of the Company. The weblink of the same is http:// www.andhrapetrochemicals.com/POLICY ON RELATED PARTY TRANSACTIONS.pdf.

All transactions entered with Related Parties for the year under review were on arm''s length basis and in the ordinary course of business.

All Related Party Transactions are placed before the Audit Committee and the Board for approval. Omnibus approval was granted by the Audit Committee on yearly basis for transactions which are repetitive in nature. A statement giving details of all Related Party Transactions are placed before the Audit Committee and the Board for review and ratification on a quarterly basis.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

Your Company has in place a Prevention of Sexual Harassment Policy in line with the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) was setup to redress complaints received regarding sexual harassment. During the year 2015-16, there were no complaints received by the ICC.

PARTICULARS OF REMUNERATION:

The information required under Section 197 of the Act and the Rules made there under in respect of employees of the Company, is as follows:-

(a) the ratio of the remuneration of each director to the median remuneration of the employees of the company for the Financial Year:

Our Directors draw remuneration only by way of sitting fees. The details of the same are provided in Corporate Governance which forms an Annexure to this report. No other remuneration is drawn by them including the Managing Director. Hence, the ratio of remuneration of each Director to the median remuneration is not required to be given.

(b) the percentage increase in remuneration of each Director, Chief Executive Officer, Chief Financial Officer, Company Secretary or Manager, if any, in the Financial Year: There is no change in sitting fee during the current Financial Year. Other details are as follows:

Name of the Person	% increase in remuneration
Dr. V N Rao,	10.18 %
Chief Executive&Chief Operating Officer
Sri P Ratna Rao,
General Manager (Finance)	10.77%
Sri K Raghu Ram,
Manager (Finance)&Asst. Secretary (upto 2.1.2016)	---

(d) the number of permanent employees on the rolls of Company: 286

(e) the explanation on the relationship between average increase in remuneration and Company performance;

On an average, employees received an increase of 3.71%. The increase in remuneration is in line with the market trends. The increased percentage in the median remuneration compared to previous year is decreased due to increase in number of employees during the Financial Year 2015-16 at lower level. A direct co-relation of employee remuneration and Company performance as envisaged in the rules is not feasible considering the qualitative factors involved in measuring performance.

(f) comparison of the remuneration of the Key Managerial Personnel against the performance of the Company:

Particulars Rs. in lakhs

Remuneration of Key Managerial 126.51

Personnel (KMP) during Financial Year 2015-16 (aggregated)

Revenue from operations 33699.69

Remuneration (as % of revenue) 0.38%

Particulars	Unit	As at 31st March, 2016	As at 31st March, 2015	Variation
Closing rate of share at BSE	Rs.	11.05	11.64	(5.07%)
EPS (Consolidated)	Rs.	(2.83)	(5.24)	(45.99%)
Market capitalisation	Rs./lakh	9389.36	9890.69	(5.07%)
Price Earnings ratio	Ratio	(3.90)	(2.22)	75.68%

Percentage in bracket represents negative percentage.

The average increase in salaries of employees other than managerial personnel in 2015-16 was 3.71%. Percentage increase in the managerial remuneration for the year was NIL.

(i) Comparison of each remuneration of the Key Managerial Personnel against the performance of the Company:

Particulars	Chief Executive Officer	Chief Financial Officer	Company Secretary (Up to 2.1.2016)
	Rs. in lakhs	Rs. in lakhs	Rs. in lakhs
Remuneration	84.25	31.35	10.91
Revenue	33699.69	33699.69	33699.69
Remuneration (as % of revenue)	0.25%	0.09%	0.03%

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

Not applicable as Directors do not draw any remuneration except by way of sitting fees.

(k) the ratio of the remuneration of the highest paid Director to that of the employees who are not directors but receive remuneration in excess of the highest paid Director during the year:

Not applicable as Directors'' remuneration consists of only sitting fees.

(l) affirmation that the remuneration is as per the remuneration Policy of the Company:

The Company''s Remuneration Policy is driven by the success and performance of the individual employees and the Company. Through its compensation package, the Company endeavours to attract, retain, develop and motivate a high performance staff. The Company follows a compensation mix of fixed pay, benefits and performance based variable pay. Individual performance pay is determined by business performance and the performance of the individuals measured through the annual appraisal process. The Company affirms remuneration is as per the Remuneration Policy of the Company.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

There are no significant and material orders passed by the Regulators / Courts that would impact the going concern status of the Company and its future operations.

DIRECTORS'' RESPONSIBILITY STATEMENT:

To the best of knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134(3)(c) of the Companies Act, 2013:

i) that in the preparation of the Annual Accounts for the year ended 31^st March, 2016, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

ii) that Accounting Policies have been selected and applied consistently and that judgements and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2016 and of the loss of the Company for the year ended on that date;

iv) the annual accounts have been prepared on a going concern basis;

v) that the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

REPORT ON CORPORATE GOVERNANCE:

As required under Regulation 34(3) of Securities & Exchange of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 the report on Corporate Governance and the Auditors'' Certificate on the compliance of Corporate Governance are annexed and forms part of the Directors'' Report (Annexure "E").

ACKNOWLEDGEMENTS:

Your Directors acknowledge the co-operation and continued valuable support received from Central and State Government authorities, the Promoters - The Andhra Sugars Limited and APIDC, Financial Institutions, Banks, Shareholders, Customers, HPCL, GAIL and other Suppliers. Your Directors also wish to place on record their deep sense of appreciation of the valuable contribution made by the employees at all levels.

On behalf of the Board Hyderabad

M R B Punja

11.8.2016 Chairman

Mar 31, 2014

Dear Shareholders,

The Directors have pleasure in presenting the Thirtieth Annual Report of the Company together with the Audited Accounts for the year ended 31st March, 2014.

FINANCIAL RESULTS:

Performance of the Company for the Financial Year ended 31st March, 2014 is summarised below:

(Rs. in Lakhs) 2013-14 2012-13 Net Sales (excl. Excise Duty) 25929.25 56276.00 Profit / (Loss) before Interest & Depreciation (1039.30) 3148.89

Less: Interest 650.16 860.16 Depreciation 1334.53 1371.63 Profit / (Loss) after Interest and Depreciation before Extraordinary Items (3023.99) 917.10 Less: Extraordinary Items (FSA charges relating to earlier years) -- 453.93 Profit / (Loss) after Extraordinary Items (3023.99) 463.17 Provision for: Current Tax -- 93.40 Deferred Tax (457.14) 151.64 MAT credit entitlement -- (93.40) Excess provision for Direct Taxes of earlier years written back -- (0.34) Profit / (Loss) after Taxation (2566.85) 311.87 Balance brought forward from previous year 10149.61 9837.74 Profit carried forward to next year 7582.76 10149.61

OPERATIONAL AND FINANCIAL PERFORMANCE:

During the Financial Year 2013-14, the Plant produced 26,460 MTs (previous year 66,564 MTs), which works out to 36% (approx.) capacity utilisation. Sales during the year were 29,157 MTs (previous year 64,407 MTs). Lower production was due to non-supply of Propylene by HPCL for revamp of Propylene Recovery Unit (PRU) in the 1st quarter to enhance Propylene production capacity that resulted in shutdown of our Plant for 58 days and a fire accident on 23rd August, 2013 in HPCL''s cooling tower that resulted in shutdown of PRU during most part of the remaining period in this year. Com- pany had incurred a net loss of Rs.25.67 crores during the current Financial Year 2013-14 against profit after tax of Rs.3.12 crores made during the previous year. This is mainly due to non-availability of Propylene for a long period result- ing in 212 days production loss.

DIVIDEND:

In view of the loss incurred during the year under report, your Directors are unable to recommend any dividend for the Financial Year 2013-14.

CAPITAL & RESERVES:

Authorised and Paid-up Capital:

The Authorised Capital of the Company is Rs.85 crores and the Paid-up Capital is Rs.84.97 crores.

Reserves:

The total Reserves position as on 31.3.2014 stood at Rs.105.19 crores against Rs.130.86 crores in the previous year.

The Andhra Petrochemicals Limited

DEPOSITS:

During the year under review, your Company has not invited or accepted any Fixed Deposits from the Public.

SAFETY, HEALTH AND ENVIRONMENT: Your Company has been awarded the 3rd Level of Award SURAKSHA PURASKAR, Bronze Trophy for 2013 (Manu- facturing sector) Group-A by the National Safety Council of India. There is no 1st Level award in this category.

Safety of human and Plant assets is the top priority of the Company. Continuous training of personnel at various levels on safety and strict compliance of regulations is ensured which resulted in one more accident-free year. Your Company has established several process measures and a number of en- vironmental control systems to contain environmental impact and ensures their close monitoring. It may be noted that your Company is always in the forefront and proactive in implementing environment protection measures.

INSURANCE:

All the insurable assets of the Company including Plant and Machinery, Buildings and Inventories are insured on reinstate- ment value basis.

LISTING:

The Equity Shares of your Company are listed on the Bombay Stock Exchange. Listing fees has been paid.

DIRECTORS:

During the year under report, Andhra Pradesh Industrial De- velopment Corporation Ltd., (APIDC) withdrew Sri S V Kanaka Seshu as its Nominee Director from the Board of the Com- pany from 13.8.2013 and in his place Sri K Rajendra Prasad has been co-opted as Additional Director on the Board of the Company with effect from 6.11.2013. Dr. Anumolu Ramakrishna ceased to be the Director of your Company w.e.f., 20.8.2013 consequent upon his sad demise. Your Di- rectors place on record their warm appreciation for the valu- able guidance rendered by Sri S V Kanaka Seshu and Dr. Anumolu Ramakrishna during their tenure as Directors of the Company.

Sri K Rajendra Prasad holds office upto the date of the ensu- ing 30th Annual General Meeting (AGM). Resolution seeking his appointment as Director is being placed for the approval of the shareholders at the ensuing 30th AGM.

In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Directors Sri P Narendranath Chowdary and Sri Ravi Pendyala retire by rotation at the ensuing 30th AGM and being eligible offer them- selves for reappointment.

Individual Independent Directors appointment is placed be- fore Shareholders for approval at the ensuing 30th AGM.

AUDIT COMMITTEE:

Audit Committee consists of four Non-Executive Independent Directors Sri A A Krishnan, Sri M R B Punja, Sri Surinder Kumar Kapoor and Sri Justice G Ramanujam (Retd.) (Chair- man upto 5.11.2013). Sri A A Krishnan is the Chairman of the Committee from 6.11.2013.

CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE:

As required by the provisions of the Companies Act, 2013, Board of Directors at its Meeting held on 24.5.2014 consti- tuted Corporate Social Responsibility (CSR) Committee com- prising Directors viz., Dr. B B Ramaiah, Smt. Anita Rajendra, I.A.S., and Sri A A Krishnan as its Members.

NOMINATION AND REMUNERATION COMMITTEE:

As required by the provisions of the Companies Act, 2013, Board of Directors at its Meeting held on 24.5.2014 consti- tuted Nomination and Remuneration Committee comprising

Directors viz., Sri M R B Punja, Sri Surinder Kumar Kapoor and Sri P Narendranath Chowdary as its Members.

AUDITORS:

M/s Brahmayya & Co., Chartered Accountants, Vijayawada, the present Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

COST AUDITORS:

M/s Narasimha Murthy & Co., Cost Accountants, Hyderabad, were appointed as Cost Auditors of the Company for the year ended 31st March, 2014. Cost Auditors'' Report in respect of Financial Year 2012-13 has been filed with the Ministry of Corporate Affairs on 19.8.2013 i.e., within the stipulated date.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORP- TION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Particulars prescribed under Section 217(1)(e) of the Com- panies Act, 1956 read with Companies (Disclosure of Par- ticulars in the Report of Board of Directors) Rules, 1988 are given in Annexure ''A'' to this Report.

PARTICULARS OF EMPLOYEES:

Statement of particulars of employees of the Company as required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended by Companies (Particulars of Employees) Amendment Rules, 2011 forming part of this Report is an- nexed hereto (Annexure-''B'').

DEMATERIALISATION OF SHARES:

As on 31st March, 2014 out of the total number of 8,49,71,600 Equity Shares, 7,67,79,293 Equity Shares constituting 90.36% stand dematerialised.

DIRECTORS'' RESPONSIBILITY STATEMENT:

It is hereby confirmed:

i) that in the preparation of Annual Accounts, the appli- cable Accounting Standards have been followed along with proper explanation relating to material departures, if any.

ii) that Accounting Policies have been selected and applied consistently and judgements and estimates made that are reasonable and prudent, so as to give a true and fair view of the State of Affairs of the Com- pany at the end of the Financial Year and of the loss of the Company for that year.

iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the Assets of the Company and for preventing and detecting fraud and other ir- regularities.

iv) that the Directors had prepared the Annual Accounts on a going concern basis.

REPORT ON CORPORATE GOVERNANCE:

As required under Clause 49 of the Listing Agreement with the Stock Exchange, the report on Corporate Governance and the Auditors'' Certificate on the compliance of Corporate Governance are annexed and form part of the Directors'' Re- port (Annexure ''C'').

ACKNOWLEDGEMENTS:

Your Directors acknowledge the co-operation and continued valuable support received from Central and State Govern- ment authorities, the Promoters - The Andhra Sugars Lim- ited and APIDC, Financial Institutions, Banks, Sharehold- ers, Customers, HPCL, GAIL and other Suppliers. Your Directors also wish to place on record their deep sense of appreciation of the valuable contribution made by the em- ployees at all levels.

On behalf of the Board Hyderabad M R B Punja 21.7.2014 Chairman

Mar 31, 2013

Dear Shareholders,

The Directors have pleasure in presenting the Twenty Ninth Annual Report of the Company together with the Audited Accounts for the year ended 31st March, 2013.

FINANCIAL RESULTS:

Performance of the Company for the Financial Year ended 31st March, 2013 is summarised below:

(Rs. in Lakhs)

2012-13 2011-12

Net Sales (excl. Excise Duty) 56276.00 59715.57

Profit before Interest & Depreciation 3148.89 7968.88

Less: Interest 860.16 1254.72

Depreciation 1371.63 2265.06

Profit / (Loss) after Interest and

Depreciation before Extraordinary Items 917.10 4449.10

Less: Extraordinary Items

(FSA charges relating to earlier years) 453.93

Profit / (Loss) after Extraordinary Items 463.17 4449.10

Provision for: Current Tax 93.40 1206.00

Deferred Tax 151.64 242.00

MAT credit entitlement (93.40)

Excess provision for Direct Taxes of earlier years written back (0.34) (0.37)

Profit / (Loss) after Taxation 311.87 3001.47

Balance brought forward from previous year 9837.74 7830.05

Profit available for appropriation 10149.61 10831.52

APPROPRIATIONS:

TransfertoGeneral Reserve 500.00

Proposed Dividend on Equity

Shares@5% 424.86

TaxonDistributable Profits 68.92

Balance carried forward to next year 10149.61 9837.74

10149.61 10831.52

OPERATIONAL AND FINANCIAL PERFORMANCE:

During the Financial Year 2012-13, the Plant achieved 91% capacity utilisation with a production of 66,564 MTs (previ- ous year 73,593 MTs). Sales during the year were 64,407 MTs (previous year 73,436 MTs). Lower production is due to non-remunerative prices for some time and shortage of Pro- pylene. Profit after tax during the current Financial Year 2012- 13 is lower at Rs.3.12 crores (previous year Rs.30.01 crores) due to increase in the prices of raw materials with no corre- sponding increase in sale prices of products, increased power cost due to 30% to 50% power cuts imposed by the APEPDCL (met from alternate sources at higher costs), charging of Fuel Surcharge Adjustment (FSA) of the Financial Years 2010-11 (from 2nd Quarter) and 2011-12 as Extraordinary Item.

DIVIDEND:

In view of the steep fall in profit during the year under report, your Directors are unable to recommend any dividend for the Financial Year 2012-13.

CAPITAL & RESERVES:

Authorised and Paid-up Capital:

The Authorised Capital of the Company is Rs.85 crores and the Paid-up Capital is Rs.84.97 crores.

Reserves:

The total Reserves position as on 31.3.2013 stood at Rs. 130.86 crores against Rs.127.74 crores in the previous year.

DEPOSITS:

During the year under review, your Company has not invited or accepted any Fixed Deposits from the Public.

SAFETY, HEALTH AND ENVIRONMENT:

Your Company has been awarded the 2nd Level of Award SHRESHTHA SURAKSHA PURASKAR Silver Trophy for 2012 (Manufacturing sector) Group-A by the National Safety Council of India. There is no 1st Level Award in this category.

Safety of Human and Plant assets is the top priority of the Company. Continuous training of personnel at various levels on safety and strict compliance of regulations is ensured which resulted in one more accident-free year. Your Company has established several process measures and a number of en- vironmental control systems to contain Environmental impact and ensures their close monitoring. It may be noted that your Company is always in the forefront and proactive in implementing environment protection measures.

INSURANCE:

All the insurable assets of the Company including Plant and Machinery, Buildings and Inventories are insured on reinstate- ment value basis.

LISTING:

The Equity Shares of your Company are listed on the Bombay Stock Exchange. Listing fees has been paid.

DIRECTORS:

During the year under report, Andhra Pradesh Industrial De- velopment Corporation Ltd., (APIDC) withdrew Sri M Venkateswara Rao and Smt. Shalini Misra, I.A.S., as its Nominee Directors from the Board of the Company from 17.8.2012 and 12.4.2013 respectively and in their place Sri S V Kanaka Seshu and Smt. Anita Rajendra, I.A.S., have been co-opted as Additional Directors on the Board of the Company with effect from 7.11.2012 and 25.5.2013 respec- tively. Your Directors place on record their warm apprecia- tion for the valuable guidance rendered by Smt. Shalini Misra, I.A.S., and Sri M Venkateswara Rao during their tenure as Directors of the Company.

Smt. Anita Rajendra, I.A.S., and Sri S V Kanaka Seshu hold office upto the date of the ensuing 29th Annual General Meet- ing (AGM). Resolutions seeking their appointment as Direc- tors are being placed for the approval of the shareholders at the ensuing 29th AGM.

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Directors Sri P Narendranath Chowdary, Sri M Thimmaraja and Sri A A Krishnan retire by rotation at the ensuing 29th AGM and be- ing eligible offer themselves for reappointment.

AUDIT COMMITTEE:

As on the date of this report, the Audit Committee consists of five Non-Executive Independent Directors Sri Justice G Ramanujam (Retd.), Sri A A Krishnan, Dr. Anumolu Ramakrishna, Sri Surinder Kumar Kapoor and Sri M R B Punja. Sri Justice G Ramanujam (Retd.) is the Chairman of the Committee. Sri M R B Punja has been inducted as mem- ber with effect from 20.7.2013.

AUDITORS:

M/s Brahmayya & Co., Chartered Accountants, Vijayawada, the present Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

COST AUDITORS:

M/s Narasimha Murthy & Co., Cost Accountants, Hyderabad, were appointed as Cost Auditors of the Company for the year ended 31st March, 2013. Cost Auditors'' Report in respect of Financial Year 2011-12 has been filed with the Ministry of Corporate Affairs on 24.12.2012 i.e., within the stipulated date.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORP- TION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Particulars prescribed under Section 217(1)(e) of the Com- panies Act, 1956 read with Companies (Disclosure of Par- ticulars in the Report of Board of Directors) Rules, 1988 are given in Annexure ''A'' to this Report.

PARTICULARS OF EMPLOYEES:

There is no employee of your Company drawing a remunera- tion requiring disclosure under Section 217(2A) of the Com- panies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended by Companies (Par- ticulars of Employees) Amendment Rules, 2011.

DEMATERIALISATION OF SHARES:

As on 31st March, 2013 out of the total number of 8,49,71,600 Equity Shares, 7,66,85,741 Equity Shares constituting 90.25% stand dematerialised.

DIRECTORS''RESPONSIBILITY STATEMENT:

It is hereby confirmed:

i) that in the preparation of Annual Accounts, the appli-

cable Accounting Standards have been followed along with proper explanation relating to material departures, if any.

ii) that Accounting Policies have been selected and applied consistently and judgements and estimates made that are reasonable and prudent, so as to give a true and fair view of the State of Affairs of the Com- pany at the end of the Financial Year and of the Profit of the Company for that year.

iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the CompaniesAct, 1956 for safeguarding the Assets of the Company and for preventing and detecting fraud and other irregularities.

iv) that the Directors had prepared the Annual Accounts on a going concern basis.

REPORT ON CORPORATE GOVERNANCE:

As required under Clause 49 of the Listing Agreement with the Stock Exchange, the report on Corporate Governance and the Auditors'' Certificate on the compliance of Corpo- rate Governance are annexed and form part of the Direc- tors'' Report (Annexure ''B'').

ACKNOWLEDGEMENTS:

Your Directors acknowledge the co-operation and contin- ued valuable support received from Central and State Government authorities, the Promoters - The Andhra Sug- ars Limited and APIDC, Financial Institutions, Banks, Shareholders, Customers, HPCL, GAIL, and other Sup- pliers. Your Directors also wish to place on record their deep sense of appreciation of the valuable contribution made by the employees at all levels, which enabled the Company to achieve a sustained growth in the operational performance during the year under review.

On behalf of the Board

Hyderabad MRBPunja

20.7.2013 Chairman

Mar 31, 2012

The Directors have pleasure in presenting the Twenty Eighth Annual Report of the Company together with the Audited Accounts for the year ended 31st March, 2012.

FINANCIAL RESULTS:

Performance of the Company for the Financial Year ended 31st March, 2012 is summarised below:

(Rs. in lakhs)

2011-12 2010-11

Net Sales (excl. Excise Duty) 59715.57 45659.29

Profit before Interest & Depreciation 7968.88 9159.27

Less: Interest 1254.72 1710.45

Depreciation 2265.06 2287.75

Profit / (Loss) after Interest and Depreciation 4449.10 5161.07

Provision for:

Current Tax 1206.00 1033.09

Deferred Tax 242.00 1597.72

MAT credit entitlement --- (1032.79)

Excess provision for Direct

Taxes of earlier years written back (0.37) (0.47)

Profit / (Loss) after Taxation 3001.47 3563.52

Balance brought forward from previous year 7830.05 6254.09

Profit available for appropriation 10831.52 9817.61

APPROPRIATIONS:

Transfer to General Reserve 500.00 1000.00

Proposed Dividend on

Equity Shares @5% 424.86 849.72

Tax on Distributable Profits 68.92 137.84

Balance carried forward to next year 9837.74 7830.05

10831.52 9817.61

OPERATIONAL AND FINANCIAL PERFORMANCE:

Your Directors are happy to report that during the year the Plant has operated well achieving 100% capacity utilisation by achieving a production of 73,593 MTs (previous year 57,726 MTs). Sales during the year were 73,436 MTs (previous year 57,472 MTs). This performance of higher production and sales in terms of volume and value is as a result of implementing effective measures, change in product mix and marketing strategies. Inspite of higher Gross Sales of Rs.659.75 crores, profit for the year before tax is lower at Rs.44.49 crores. The contribution on sales was lower on account of raw materials and energy price hikes, higher crude prices, depreciation of rupee, general inflation and lower international product prices consequent upon the creation of additional capacities for the product in international market during the year, which may be absorbed by growth in the sector.

DIVIDEND:

Your Directors have recommended a Dividend of 50 paise per share (@5% Dividend on 8,49,71,600 Equity Shares) for the year 2011-12 commensurate with the profit earned. The outflow towards the payment of Dividend would amount to Rs. 4,93,78,059 inclusive of Tax thereon. Dividend, if approved by the shareholders, will be paid to all the eligible shareholders.

CAPITAL & RESERVES:

Authorised and Paid-up Capital:

The Authorised Capital of the Company is Rs. 85 crores and the Paid-up Capital is Rs. 84.97 crores.

Reserves:

With the transfer of Rs. 5.00 crores to Reserves during the current year the total Reserves position as on 31.3.2012 stood at Rs. 127.74 crores.

DEPOSITS:

During the year under review, your Company has not invited or accepted any Fixed Deposits from the Public.

SAFETY, HEALTH AND ENVIRONMENT:

Safety of Human and Physical assets is the top priority of the Company. Continuous training of personnel at various levels on safety and strict compliance of regulations is ensured which resulted one more accident free year. Your Company has established several process measures and a number of Environmental control systems to contain Environmental impact and ensures their close monitoring. It may be noted that your Company is always in the forefront and proactive in implementing environment protection measures.

INSURANCE:

All the insurable assets of the Company including Plant and Machinery, Buildings and Inventories are insured on reinstatement value basis.

LISTING:

The Equity Shares of your Company are listed on The Bombay Stock Exchange. Listing fees has been paid.

DIRECTORS:

Your Directors express profound grief over the sad demise of Managing Director, Dr. Mullapudi Harischandra Prasad on 3rd September, 2011, who was instrumental in bringing the Company to the position of what it is today and place on record their warm appreciation of his commendable contribution to the growth and developement of the Company.

Board of Directors at its Meeting held on 12th November, 2011, appointed Dr. B B Ramaiah as Managing Director for a period of 5 years i.e., from 12.11.2011 to 11.11.2016. His appointment is being placed for the approval of the shareholders at the ensuing 28th Annual General Meeting.

During the year under report, APIDC withdrew Smt. Nilam Sawhney, I.A.S., as its Nominee Director from the Board of the Company from 21.4.2012. Your Directors palce on record their warm appreciation of her valuable guidance rendered during her tenure as Director of the Company. In her place Sri B R Meena,

I.A.S., Nominee Director of APIDC was co-opted as an Additional Director on the Board of the Company with effect from 19.5.2012. He holds office upto the date of the ensuing 28th Annual General Meeting. Resolution seeking his appointment as Director is being placed for the approval of Shareholders at the ensuing 28th Annual General Meeting.

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Directors Sri M R B

Punja, Sri Surinder Kumar Kapoor and Dr. Anumolu Ramakrishna retire by rotation at the ensuing 28th Annual General Meeting and, being eligible, offer themselves for re- appointment.

AUDIT COMMITTEE:

With effect from 12.11.2011 Sri Surinder Kumar Kapoor, Director, has been inducted as Member of the Audit Committee. Consequent upon his induction, the Audit Committee consists of four Non-Executive Independent Directors Sri Justice G Ramanujam (Retd.), Sri A A Krishnan, Dr. Anumolu Ramakrishna and Sri Surinder Kumar Kapoor. Sri Justice G Ramanujam (Retd.) is the Chairman of the Committee.

AUDITORS:

M/s Brahmayya & Co., Chartered Accountants, Vijayawada, the present Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

COST AUDITORS:

M/s Narasimha Murthy & Co., Cost Accountants, Hyderabad, were appointed as Cost Auditors of the Company for the year ended 31st March, 2012. Cost Auditors' report in respect of Financial Year 2010-11 has been filed with the Ministry of Corporate Affairs on 19.8.2011, i.e., within the stipulated date of 30.9.2011.

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

Particulars prescribed under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in Annexure 'A' to this Report.

PARTICULARS OF EMPLOYEES:

There is no employee of your Company drawing a remuneration requiring disclosure under Section 217(2A) ofthe Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended by Companies (Particulars of Employees) Amendment Rules, 2011.

DEMATERIALISATION OF SHARES:

As on 31st March, 2012 out of the total number of 8,49,71,600 Equity Shares, 7,65,39,159 Equity Shares constituting 90.08% stands dematerialised.

DIRECTORS' RESPONSIBILITY STATEMENT:

It is hereby confirmed:

i) that in the preparation of Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any.

ii) that Accounting Policies have been selected and applied consistently and judgements and estimates made that are reasonable and prudent, so as to give a true and fair view of the State of Affairs of the Company at the end of the Financial Year and of the Profit of the Company for that year.

iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the Assets of the Company and for preventing and detecting fraud and other irregularities.

iv) that the Directors had prepared the Annual Accounts on a going concern basis.

REPORT ON CORPORATE GOVERNANCE:

As required under Clause 49 of the Listing Agreement with the Stock Exchange, the report on Corporate Governance and the Auditors' Certificate on the compliance of Corporate Governance are annexed and form part of the Directors' Report (Annexure 'B').

ACKNOWLEDGEMENTS:

Your Directors acknowledge the co-operation and continued valuable support received from Central and State Government authorities, the Promoters - The Andhra Sugars Limited and APIDC, Financial Institutions, Banks, HPCL, Davy Process Technology Ltd., London, Aker Solutions Pvt. Ltd., Shareholders, Customers and Suppliers. Your Directors also wish to place on record their deep sense of appreciation of the valuable contribution made by the employees at all levels, which enabled the Company to achieve a sustained growth in the operational performance during the year under review.

On behalf of the Board

Hyderabad M R B Punja

21-7-2012 Chairman

Mar 31, 2011

Dear Shareholders,

The Directors have pleasure in presenting the Twenty Seventh Annual Report of the Company together with the Audited accounts for the year ended 31st March, 2011.

FINANCIAL RESULTS:

Performance of the Company for the Financial Year ended 31st March, 2011 is summarised below:

(Rs. in lakhs)

2010-11 2009-10

Net Sales (excl. Excise Duty) 45659.29 13714.27

Profit before Interest & Depreciation 9159.27 486.74

Less: Interest 1689.54 134.93

Depreciation 2287.75 1202.81

Profit / (Loss) after Interest and Depreciation 5181.98 (851.00)

Provision for:

Current Tax (MAT) 1054.00 76.00

Deferred Tax 1597.72 (386.77)

MAT credit entitlement (1032.79) Ã

Excess provision for Direct

Taxes written back (0.47) (2.18)

Profit / (Loss) after Taxation 3563.52 (538.05) Balance brought forward from

previous year 6254.09 6792.14

Profit available for appropriation 9817.61 6254.09

APPROPRIATIONS:

Transfer to General Reserve 1000.00 Ã

Proposed Dividend on

Equity Shares @Re.1/- per share 849.72 Ã

Tax on Distributable Profits 137.84 Ã

Balance carried forward to 7830.05 6254.09

next year

9817.61 6254.09

OPERATIONAL AND FINANCIAL PERFORMANCE:

Your Directors are glad to report that the Modernisation- cum- Optimisation of the Expanded Oxo-Alcohols Plant at an actual cost of Rs.255 crores was completed within the time schedule.

Production of Oxo-Alcohols for the 11 months from 1st May, 2010 was a record 57,726 MTs and sale was 57,472 MTs during the year. Even in the first year of operation after Expansion your Company has achieved Gross Sales of Rs.504.20 crores and Profit Before Tax of Rs.51.82 crores. Overall improvement in operational and marketing performance resulted in the record performance.

DIVIDEND:

In view of the good performance your Directors are pleased to recommend a Dividend of Re.1/- per share (@10% Dividend on 8,49,71,600 Equity Shares) for the year 2010-11. The outflow towards the payment of Dividend would amount to Rs.9,87,56,118 inclusive of Tax thereon. Dividend, if approved by the shareholders, will be paid to all the eligible shareholders.

CAPITAL & RESERVES:

Authorised and Paid-up Capital:

The Authorised Capital of the Company is Rs.85 crores and the Paid-up Capital is Rs.84.97 crores.

RESERVES:

With the transfer of Rs.10 crores to General Reserve during the year 2010-11 the total Reserves position as on 31.3.2011 stood at Rs.102.66 crores.

MANAGEMENT DISCUSSION AND ANALYSIS:

INDUSTRY STRUCTURE AND DEVELOPMENTS: The Expanded Plant, on completion of trial runs during the month of April, 2010, commenced commercial production from 1 May, 2010. The Unit has demonstrated stabilised operations at designed capacity. The market for Oxo-Alcohols business is continuing to grow at around 8-10% per annum. The price trends of raw-materials and finished goods during the year were favourable that resulted in good earnings for the Company. Barring unforeseen circumstances, like increase in raw material prices and volatility in selling prices, the present trends, together with enhanced capacity and improved market share, are expected to result in improved performance of the Company in future.

OPPORTUNITIES AND THREATS:

Your Company's market share has increased in view of the enhanced capacity. Customers' dependence on Imports has comparatively reduced.

Lower production cost of South East Asia and Middle East companies from where bulk of the Imports are witnessed is an area of concern to your Company.

INTERNAL CONTROL SYSTEMS:

Your Company has an established effective Internal Control Systems with regard to various business areas. Internal Audit on a quarterly basis, by an external audit firm, covers detailed audit of all the activities and also the effectiveness of Internal Control Systems. Detailed audit is also carried out covering one specific area in each quarter. The Audit committee of the Board reviews the Internal Audit reports and monitors the implementation of the recommendations.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS:

Your Company continues to lay emphasis on good HR practices to motivate employees at all levels for retention and better performance. Necessary training is imparted periodically to keep the employees abreast with the latest technological developments in their area of operations. Industrial relations continued to be cordial throughout the year. As on 31st March, 2011 the Company has 292 employees on its rolls.

FUTURE OUTLOOK:

The enhanced production capacity and consequent increase in market share of the Company, combined with efficient and economic operation puts the Company in a better position to compete with imports, in spite of it being a small unit in comparison with the world scale capacities.

CAUTIONARY STATEMENT:

The statements describing the Company's outlook, estimates or predictions may be forward-looking statements based on certain assumptions of future events. Actual results may differ materially from those expressed or implied, since the Company's operations are influenced by external or internal factors. Your Company closely monitors all major developments likely to affect the operations and will respond to meet the potential threats and to gain from any possible opportunities.

DEPOSITS:

During the year under review, your Company has not invited or accepted any Fixed Deposits from the Public.

SAFETY, HEALTH AND ENVIRONMENT:

Your Company continues to accord top priority to Safety, Occupational Health and Environment. Pollution control systems are functioning satisfactorily and are being closely monitored to ensure that gaseous emissions and effluents discharged are within the prescribed norms. It may be noted that the year 2010-11 was accident free.

INSURANCE:

All the insurable assets of the Company including Plant and Machinery, Buildings and Inventories are insured on reinstatement value basis.

LISTING:

The Equity Shares of your Company are listed on the Bombay Stock Exchange. Listing fees has been paid.

DIRECTORS:

During the year under report, APIDC withdrew Sri Vinod Kumar Agrawal, I.A.S., as its Nominee Director from the Board of the Company from 20.8.2010. In his place Sri V Nagi Reddy, Nominee Director of APIDC, was co- opted as an Additional Director on the Board of the Company with effect from 27.9.2010. Subsequently he was withdrawn from the Board from 21.5.2011.

IDBI Bank Ltd., withdrew Sri Pradeep Kumar Keshari as its Nominee Director from the Board of the Company from 29.4.2011 and in his place Sri Anirudha Behera has been appointed as its Nominee Director from 20.5.2011.

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Directors Sri Justice G Ramanujam (Retd), Sri A A Krishnan and Dr. B B Ramaiah retire by rotation at the ensuing 27th Annual General Meeting and, being eligible, offer themselves for re-appointment.

The term of office of Dr. Mullapudi Harischandra Prasad as Managing Director expired on 30.9.2010. The Board of Directors re-appointed him as Managing Director for a period of 5 years i.e., from 1.10.2010 to 30.9.2015.

AUDIT COMMITTEE:

Audit Committee consists of four Non-Executive Independent Directors Sri Justice G Ramanujam (Retd.), Sri A A Krishnan, Dr. Anumolu Ramakrishna and Sri Pradeep Kumar Keshari (upto 28.4.2011). Sri Justice G.Ramanujam (Retd.) is the Chairman of the Committee.

AUDITORS:

M/s Brahmayya & Co., Chartered Accountants, Vijayawada, the present Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

COST AUDITORS:

M/s Narasimha Murthy & Co., Cost Accountants, Hyderabad, were appointed as Cost Auditors of the Company for the year ended 31st March, 2011. Cost Auditors' Report in respect of the Financial Year 2009-10 has been filed with Ministry of Corporate Affairs on 13.9.2010 i.e., within the stipulated date of 30.9.2010.

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

Particulars prescribed under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in Annexure 'A' to this Report.

PARTICULARS OF EMPLOYEES:

No employee is drawing a remuneration requiring disclosure under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended by Companies (Particulars of Employees) Amendment Rules, 2011.

DEMATERIALISATION OF SHARES: As on 31st March, 2011 out of the total number of 8,49,71,600 Equity Shares, 5,54,86,611 Equity Shares constituting 65.30% stands dematerialised.

DIRECTORS' RESPONSIBILITY STATEMENT: It is hereby confirmed:

i) that in the preparation of Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any.

ii) that Accounting Policies have been selected and applied consistently and judgements and estimates made that are reasonable and prudent, so as to give a true and fair view of the State of Affairs of the Company at the end of the Financial Year and of the Profit of the Company for that year.

iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the Assets of the Company and for preventing and detecting fraud and other irregularities.

iv) that the Directors had prepared the Annual Accounts on a going concern basis.

REPORT ON CORPORATE GOVERNANCE:

As required under Clause 49 of the Listing Agreement with the Stock Exchange, the report on Corporate Governance and the Auditors' Certificate on the compliance of Corporate Governance are annexed and form part of the Directors' Report (Annexure 'B').

ACKNOWLEDGEMENTS:

Your Directors acknowledge the co-operation and continued valuable support received from Central and State Government authorities, the Promoters - The Andhra Sugars Limited and APIDC, Financial Institutions, Banks, HPCL, Davy Process Technology Ltd., London, Aker Solutions Pvt. Ltd., Shareholders, Customers and Suppliers. Your Directors also wish to place on record their deep sense of appreciation of the valuable contribution made by the employees at all levels, which enabled the Company to achieve a sustained growth in the operational performance during the year under review.

On behalf of the Board M R B Punja Chairman

Visakhapatnam 23-5-2011

Mar 31, 2010

The Directors have pleasure in presenting the Twenty Sixth Annual Report of the Company together with the Audited Accounts for the year ended 31st March, 2010.

FINANCIAL RESULTS:

Performance of the Company for the Financial Year ended 31st March, 2010 is summarised below:

(Rs. in lakhs)

2009-10 2008-09

Net Sales (excl. Excise Duty) 13714.27 24493.84 Profit before Interest &

Depreciation 486.74 4008.52

Less: Interest 134.93 303.34

Depreciation 1202.81 1206.16 Profit /(Loss) after Interest and

Depreciation (851.00) 2499.02 Provision for:

Current Tax 76.00 1223.00

Deferred Tax (386.77) (343.34)

Fringe Benefit Tax - 4.12

Excess provision for Direct

Taxes written back (2.18) (2.97)

Profit / (Loss) After Taxation (538.05) 1618.21 Balance brought forward

from previous year 6792.14 5173.93

Balance of Profit carried

forward to next year 6254.09 6792.14

OPERATIONAL AND FINANCIAL PERFORMANCE:

During the Financial Year 2009-10, the Plant was shut down for 141 days in connection with the Modernisation-cum-Optimisation of the Oxo-Alcohols Plant and for trial runs. This resulted in lower turnover compared to 2008-09. The recessionary trends of 2008-09, which continued in first half of 2009-10, resulted in lower sales realisations.

Operating the Plant for part of the Financial Year and disproportionate fall in selling prices without corresponding reduction in raw material prices resulted in lower financial performance. However, the Company has implemented the Modernisation-cum-Optimisation programme well within the time frame and cost as envisaged originally. This indicates the financial leverage of your Company in the future.

DIVIDEND:

In view of loss incurred by the Company during the year under report and requirement of funds to meet the post Expansion needs (payment of installments to the Banks during the Financial Year 2010-11) your Directors considered it prudent not to recommend any dividend for the Financial Year 2009-10.

CAPITAL & RESERVES: Authorised and Paid-up Capital:

The Authorised Capital of the Company is Rs.85 crores and the Paid-up Capital is Rs.84.97 crores.

Reserves:

The total Reserves position as on 31.3.2010 stood at Rs.76.90 crores against Rs.82.28 crores in the previous year.

DEPOSITS:

During the year under review, your Company has not invited or accepted any Fixed Deposits from the Public.

SAFETY, HEALTH AND ENVIRONMENT:

Your Company continues to accord top priority to Safety, Occupational Health and Environment. Pollution control systems are functioning satisfactorily and are being closely monitored to ensure that gaseous emissions and effluents discharged are within the prescribed norms.

INSURANCE:

All the insurable assets of the Company including Plant and Machinery, Buildings and Inventories are insured on reinstatement value basis.

LISTING:

The Equity Shares of your Company are listed on the Bombay Stock Exchange. Listing fees has been paid.

DIRECTORS:

During the year under report, Sri M. Venkateswara Rao, Nominee Director of APIDC, was co-opted as an Additional Director on the Board of the Company with effect from 22.10.2009. He holds office upto the date of the ensuing 26th Annual General Meeting. Resolution seeking his appointment as Director is being placed for the approval of Shareholders at the ensuing 26th Annual General Meeting.

Sri Surinder Kumar Kapoor was co-opted as an Additional Director on the Board of the Company with effect from 13.5.2010. He holds office upto the date of the ensuing 26th Annual General Meeting. Resolution seeking his appointment as Director is being placed for the approval of Shareholders at the ensuing 26th Annual General Meeting.

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Directors Dr. Anumolu Ramakrishna, Sri P Narendranath Chowdary and Sri M. Thimmaraja retire by rotation at the ensuing 26th Annual General Meeting and, being eligible, offer themselves for re-appointment.

AUDIT COMMITTEE:

Audit Committee consists of four Non-Executive Independent Directors Sri Justice G Ramanujam (Retd.), Sri A A Krishnan, Dr. Anumolu Ramakrishna and Sri Pradeep Kumar Keshari. Sri Justice G Ramanujam (Retd.) is the Chairman of the Committee.

AUDITORS:

M/s Brahmayya & Co., Chartered Accountants, Vijayawada, the present Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re- appointment.

COST AUDITORS:

M/s Narasimha Murthy & Co., Cost Accountants, Hyderabad, were appointed as Cost Auditors of the Company for the year ended 31st March, 2010.

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

Particulars prescribed under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in Annexure ÃA to this Report.

PARTICULARS OF EMPLOYEES:

Statement of particulars of employees of the Company as required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 (as amended) forming part of this Report is annexed hereto.

DEMATERIALISATION OF SHARES:

As on 31st March, 2010 out of the total number of 8,49,71,600 Equity Shares, 5,50,89,486 Equity Shares constituting 64.83% stand dematerialised.

DIRECTORS RESPONSIBILITY STATEMENT:

It is hereby confirmed:

i) that in the preparation of Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any.

ii) that Accounting Policies have been selected and applied consistently and judgements and estimates made that are reasonable and prudent, so as to give a true and fair view of the State of Affairs of the Company at the end of the Financial Year and of the Profit of the Company for that year.

iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the Assets of the Company and for preventing and detecting fraud and other irregularities.

iv) that the Directors had prepared the Annual Accounts on a going concern basis.

REPORT ON CORPORATE GOVERNANCE:

As required under Clause 49 of the Listing Agreement with the Stock Exchange, the report on Corporate Governance and the Auditors Certificate on the compliance of Corporate Governance are annexed and form part of the Directors Report (Annexure C).

ACKNOWLEDGEMENTS:

Your Directors acknowledge the co-operation and continued valuable support received from Central and State Government authorities, the Promoters - The Andhra Sugars Limited and APIDC, Financial Institutions, Banks, HPCL, Davy Process Technology Ltd., London, Aker Solutions Pvt. Ltd., Shareholders, Customers and Suppliers. Your Directors also wish to place on record their deep sense of appreciation of the valuable contribution made by the employees at all levels, which enabled the Company to achieve a sustained growth in the operational performance during the year under review.

On behalf of the Board Visakhapatnam M R B Punja 5-8-2010 Chairman

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