Panama Petro Ar 2010

8/6/2019 Panama Petro Ar 2010

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PANAMA PETROCHEM LIMITED

Board of DirectorsMR. AMIRALI E. RAYANI ChairmanMR. AMIN A. RAYANI Managing Director & CEOMR. SAMIR A. RAYANI Whole-time DirectorMR. DILIP S. PHATARPHEKAR Independent DirectorMR. MADAN MOHAN JAIN Independent DirectorMR. MUKESH T. MEHTA Independent DirectorMR. MOIZ H. MOTIWALA Independent Director

Company SecretaryMS. NIDHI GUPTA

AuditorsM/S. HABIB & COMPANYChartered Accountants, Mumbai

BankersINDIAN BANKD C B LIMITEDCANARA BANKHSBC BANKSTANDARD CHARTERED BANKHDFC BANKCITI BANK

DBS BANK LIMITEDICICI BANK LIMITEDYES BANK

Listed atBOMBAY STOCK EXCHANGE LIMITED

Registered OfficePlot No: 3303, G.I.D.C. Estate,Ankleshwar 393 002Tel: 91-2646-221 068,Fax: 91-2646-250281Email: [email protected]

Corporate Office401, Aza House, 24, Turner Road.

Bandra (W), Mumbai 400 050Tel: 91-22-42177777Fax: 91-22-42177788Website: panamapetro.comEmail: [email protected]

PlantsAnkleshwar, Daman, Taloja,Mumbai & Dahej

Registrar & Share Transfer AgentsBigshare Services Private limitedE-2, Ansa Industrial Estate,Sakinaka, Saki - Vihar Road,Andheri (E), Mumbai - 400 072MaharashtraTel: 91-22-40430200Fax: 91-22-2847 5207E-mail: [email protected]


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28 th Annual Report 2009-102

28th Annual General MeetingDate : 25th September, 2010Day : SaturdayTime : 11:00 a.m.Place : Plot No. 3303, G.I.D.C. Estate,

Ankleshwar, Gujarat - 393 002

Contents Page

Notice 3-8

Directors’ Report 9-10

Management Discussion & Analysis Report 11

Corporate Governance Report 12-16

CEO Certification 17

Auditors’ Report & Annexure 18-20

Balance Sheet 21

Profit & Loss Account 22

Schedules to Accounts 23-36

Cash Flow Statement 37

ECS Mandate Form 39

Proxy Form/Attendance Slip 40




Notice is hereby given that the TWENTY EIGHTH ANNUALGENERAL MEETING of the Members of PANAMAPETROCHEM LIMITED will be held on Saturday, 25th

September, 2010 at 11:00 A.M. at the Conference Hall of theRegistered Office of the Company at Plot No. 3303, G.I.D.C.Estate, Ankleshwar, Gujarat 393 002 to transact the followingbusiness:

Ordinary Business:

1. To receive, consider and adopt the Audited Balance Sheetof the Company as at 31st March, 2010 and Profit andLoss Account for the year ended on that date togetherwith the Reports of the Auditors’ and Directors’ thereon.

2. To declare dividend on Equity Shares.

3. To appoint a Director in place of Mr. Amirali E Rayani,who retires by rotation and, being eligible, offers himself

for re-appointment.4. To appoint a Director in place of Mr. Samir A Rayani,

who retires by rotation and, being eligible, offers himselffor re-appointment.

5. To consider and if thought fit to pass with or withoutmodifications the following resolution as an OrdinaryResolution :

“Resolved that pursuant to the provisions of section 224and other applicable provisions if any of the CompaniesAct 1956 M/s S. R. Batliboi & Co (Firm Regn. No. 301003E) Chartered Accountants, Mumbai be and are herebyappointed as the Auditors of the Company to hold officefrom the conclusion of this Annual General Meeting until

the conclusion of the next Annual General Meeting ofthe Company in place of M/s Habib & Co CharteredAccountant the retiring Auditors of the Company on suchremuneration as may be fixed by the Board of Directors ofthe Company.”

Special Business:

6. To consider and, if thought fit, to pass, with or withoutmodification(s), the following resolution as an OrdinaryResolution:

“ Resolved that Mr. Moiz H. Motiwala, who wasappointed as an Additional Director of the Company tohold office till the date of the Annual General Meeting,be and is hereby appointed as an Ordinary Director ofthe Company whose office shall be liable fordetermination through retirement by rotation.”

7. To consider and, if thought fit, to pass, with or withoutmodification(s), the following resolution as an OrdinaryResolution:

Resolved that pursuant to the provisions of Section 198,269, 309 and 310 read with Schedule XIII of theCompanies Act, 1956 and the Articles of the Associationof the Company, and other applicable provisions, if any,remuneration of Mr Amirali E Rayani, Chairman andDirector of the Company be and is hereby increased fromRs 50,000 per month to Rs. 2,00,000 per month only

paid as Salary, allowance(s) plus perquisites with effectfrom 1st June, 2010, as per the terms and condition setout in the draft agreement place before this meeting.

Resolved further that in the event of loss, absence orinadequacy of profits, the aforesaid remuneration shallbe the minimum remuneration.”

Resolved further that the Board of Directors of theCompany (including any committee/sub-committee of theBoard) be and is hereby authorised to assign and delegate,from time to time, such work, duties, power andauthorities to the Chairman as it may deem fit and proper.

Resolved further that the Board of Directors and theRemuneration Committee of the Company be and arehereby severally authorised to fix such remuneration andto work out various components of the remunerationpackage as it may deem fit and proper within the overalllimits of the remuneration as approved above.Resolved further that the Board of Directors of theCompany (including any committee/sub-committee of theBoard) be and is hereby authorised to take all necessarysteps to give effect to the aforesaid resolution.”

8. To consider and, if thought fit, to pass, with or withoutmodification(s), the following resolution as an OrdinaryResolution :

“Resolved that pursuant to the provisions of Section198, 269, 309 and 310 read with Schedule XIII of theCompanies Act, 1956 and the Articles of the Associationof the Company, and other applicable provisions, if any,remuneration of Mr Amin A Rayani, Managing Director& CEO of the Company be and is hereby increased fromRs 50,000 per month to Rs. 1,75,000 per month onlypaid as Salary, allowance(s) plus perquisites with effectfrom 1st June, 2010, as per the terms and condition setout in the draft agreement place before this meeting”

Resolved further that in the event of loss, absence orinadequacy of profits, the aforesaid remuneration shallbe the minimum remuneration.

Resolved further that the Board of Directors of theCompany (including any committee/sub-committee of theBoard) be and is hereby authorised to assign and delegate,from time to time, such work, duties, power andauthorities to the Managing Director as it may deem fitand proper.Resolved further that the Board of Directors and theRemuneration Committee of the Company be and arehereby severally authorised to fix such remuneration andto work out various components of the remunerationpackage as it may deem fit and proper within the overalllimits of the remuneration as approved above.

Resolved further that the Board of Directors of theCompany (including any committee/sub-committee of theBoard) be and is hereby authorised to take all necessarysteps to give effect to the aforesaid resolution.”

Notice






“Resolved that pursuant to the provisions of Section198, 269, 309 and 310 read with Schedule XIII of the

Companies Act, 1956 and the Articles of the Associationof the Company, and other applicable provisions, if any,remuneration of Mr Samir A Rayani, Director designatedas Whole Time Director of the Company be and is herebyincreased from Rs 50,000 per month to Rs. 1,50,000 permonth only paid as Salary, allowance(s) plus perquisiteswith effect from 1st June, 2010, as per the terms andcondition set out in the draft agreement place beforethis meeting”

Resolved further that in the event of loss, absence orinadequacy of profits, the aforesaid remuneration shallbe the minimum remuneration.

Resolved further that the Board of Directors of the

Company (including any committee/sub-committee of theBoard) be and is hereby authorised to assign and delegate,from time to time, such work, duties, power andauthorities to the Whole Time Director as it may deem fitand proper.

Resolved further that the Board of Directors and theRemuneration Committee of the Company be and arehereby severally authorised to fix such remuneration andto work out various components of the remunerationpackage as it may deem fit and proper within the overalllimits of the remuneration as approved above.

Resolved further that the Board of Directors of theCompany (including any committee/sub-committee of the

Board) be and is hereby authorised to take all necessarysteps to give effect to the aforesaid resolution.”


“Resolved that pursuant to the provisions of section94(1)(a) of the Companies Act, 1956, and other applicableprovisions, if any, the Authorised Share Capital of theCompany be and is hereby increased from Rs.13,16,00,000 to Rs. 25,00,00,000 by way of addition of1,18,40,000 Equity shares of Rs 10 each aggregating Rs11,18,40,000.

Resolved Further that the Clause V of the

Memorandum of Association of the Company be and ishereby substituted with the following new Clause:

V. The Authorised Share Capital of the Company is Rs.25 crores (Rupees twenty five crore only) divided into2,50,00,000 (two crore fifty lacs) Equity Shares ofRs. 10 (Rupees ten) each.

Resolved Further that Board of Directors of theCompany be and is hereby authorised to take all necessarysteps that may be required to give effect to the aforesaidresolution.”

11. To consider and, if thought fit, to pass with our withoutmodifications(s), as a Special Resolution the following:

“Resolved that in accordance with the provisions ofSection 81(1A) and other applicable provisions, if any ofthe Companies Act, 1956, Foreign ExchangeManagement Act, 1999, Securities and Exchange Boardof India (Disclosure and Investor Protection) Guidelines,

2000 (SEBI Guidelines), Listing Agreements entered intoby the Company with the Stock Exchanges where theshares of the Company are listed, enabling provisions inthe Memorandum and Articles of Association of theCompany as also provisions of any other applicable laws,rules and regulations (including any amendments theretoor re-enactments thereof for the time being in force) andsubject to such approvals, consents, permissions andsanctions of the Securities and Exchange Board of India(SEBI), Government of India (GOI), Reserve Bank of India(RBI) and all other appropriate and/or concernedauthorities, or bodies and subject to such conditions andmodification, as may be prescribed by any of them ingranting such approvals, consents, permissions andsanctions which may be agreed to by the Board ofDirectors of the Company (Board)(which term shall bedeemed to include any Committee which the Board mayhave constituted or hereafter constitute for the time beingexercising the powers conferred on the Board by thisresolution), the Board be and is hereby authorized to offer,issue and allot, , either in India or abroad or in the courseof domestic and/or international offering and/or QualifiedInstitutions Placement (‘QIP’) to Qualified InstitutionBuyers (QIB)/Foreign Currency Convertible Bonds(“FCCBs”)/ Global Depositary Receipts (“GDRs”)/ American Depository Receipts (“ADRs”), through one ormore placements of equity shares/fully convertibledebentures (FCDs)/partly convertible debentures (PCDs)/ non convertible debentures (NCDs) with warrants/ or anysecurities (other than warrants) which are convertible intoor exchangeable with equity shares at a later date (hereinreferred to as “Securities”) not exceeding US$ 20 mn, ifhigher (including green shoe option), as the Board maydetermine in accordance with the SEBI Guidelines andwhere necessary in consultation with the Lead Managers,Underwriters, Merchant Bankers, Guarantors, Financialand/or Legal Advisors, Rating Agencies/ Advisors,Depositories, Custodians, Principal Paying/Transfer/ Conversion agents/ Listing agents, Registrars, Trustees,Printers, Auditors, Stabilizing agents and all otherAgencies/Advisors.

Resolved further that this issue shall be completed

within 12 months from the date of this Annual GeneralMeeting.

Resolved further that the relevant date fordetermination of the floor price of the Securities to beissued by way of this issue shall be the dates(s) of themeeting(s) in which the Board decides to open theproposed issue or the date on which the holder of thesecurities which are convertible into or exchangeable withequity shares at a later date becomes entitled to applyfor the said shares, as the case may be (“Relevant Date”).

Resolved further that the Equity Shares so issued shallrank pari passu with the existing Equity Shares of theCompany in all respects.




Resolved further that the securities to be offered andallotted shall be in dematerialized form.

Resolved further that for the purpose of giving effectto any offer, issue or allotment of Securities the Board,be and is hereby authorized on behalf of the Company

to do all such acts, deeds, matters and things as it may,in absolute discretion, deem necessary or desirable forsuch purpose, including without limitation, thedetermination of the terms thereof, for entering intoarrangements for managing, underwriting, marketing,listing and trading, to issue placement documents andto sign all deeds, documents and writings and to pay anyfees, commissions, remuneration, expenses relatingthereto and with power on behalf of the Company tosettle all questions, difficulties or doubts that may arisein regard to such offer(s) or issue(s) or allotment(s) as itmay, in its absolute discretions, deem fit.

Resolved further that the Board be and is herebyauthorized to appoint Lead Manager(s) in offerings ofSecurities and to remunerate them by way of commission,brokerage, fees or the like and also to enter into andexecute all such arrangement, agreements, memoranda,documents, etc. with Lead Manager(s) and to seek thelisting of such securities.

Resolved further that the Company do apply for listingof the new Equity Shares as may be issued with theBombay Stock Exchange Limited or any other StockExchange(s).

Resolved Further that the Company do apply to theNational Securities Depository Limited and/or CentralDepository Services (India) Limited for admission of theabove said Equity Shares to be allotted on QIP basis.

Resolved further that the Board be and is herebyauthorized to create necessary securities on such of theassets and properties (whether present or future) of theCompany in respect of the facilities obtained as aboveand to approve, accept, finalize and execute facilities,sanctions, undertakings, agreements, promissory notes,credit limits and any of the documents and papers inconnection with availing of the above facilities.

Resolved further that the Board be and is herebyauthorized to delegate all or any of the powers hereinconferred in such manner as they may deem fit.”

By Order of the Board of

DirectorsFor Panama Petrochem Ltd

Place: Mumbai Nidhi GuptaDate : 12th August, 2010 Company Secretary

Registered Office:Plot No. 3303, G.I.D.C. EstateAnkleshwar - 393 002, Gujarat

Notes:

1. A member entitled to attend and vote is entitled toappoint a proxy to attend and vote instead of himself

and the proxy need not be a member of the company.The proxy form should be lodged with the company atits registered office at least 48 hours before thecommencement of the meeting.

2. Corporate Members: Corporate Members intending tosend their authorised representatives are requested tosend a duly certified copy of the Board Resolutionauthorizing the representatives to attend and vote at theAnnual General Meeting.

3. Members/Proxies attending the meeting are requestedto bring their copy of Annual Report to the Meeting.

4. Explanatory statement pursuant to Sections 173 (2) ofthe Companies Act, 1956, in respect of the specialbusinesses proposed to be transacted at the Meeting isannexed hereto.

5. The Register of Members and Share Transfer Books of

the Company will remain closed from Monday the 20thday of September, 2010 to the Saturday the 25th day ofSeptember 2010 (both days inclusive).

6. Payment of dividend as recommended by the Board ofDirectors, if declared at the Annual General Meeting willbe payable to those Shareholders whose names standon the Register of Members of the Company as on 20thSeptember, 2010. In respect of shares held in theelectronic form, the dividend will be payable on the basisof beneficial ownership furnished by National SecuritiesDepository Limited and Central Depository Services (India)Limited for this purpose. Dividend will be paid within 30days from the date of declaration of dividend.

7. Members are requested to notify any change in theiraddress/ mandate/bank details immediately to the sharetransfer Agent of the Company- M/s Bigshare ServicesPvt Ltd.

8. All documents referred to in the Notice are open forinspection at the Registered Office of the Company duringoffice hours on all days except Wednesday and PublicHolidays between 11.00 A.M. and 1.00 P.M. up to thedate of Annual General Meeting.

9. Members desirous of obtaining any information as regardsaccounts and operations of the Company are requestedto write at least one week before the meeting so thatthe same could be complied in advance.

Explanatory Statement pursuant tosection 173(2) of the Companies Act,1956ITEM NO. 6:

Mr Moiz H. Motiwala was appointed as an additional directorof the Company by the Board of Director w.e.f. 12th August,2010 and his tenure of office comes to an end at the ensuingAnnual General Meeting.





Mr Moiz H. Motiwala is a Chartered Accountant by professionand having vast experience in the field of Accounts & Taxationand possess good knowledge of Finance & Accounts.

Hence your Board of Directors recommends the passing ofthe said resolution in the interest of the Company.

Mr Moiz H. Motiwala himself may be deemed to be concernor interested in passing of the above resolution.

ITEM NO. 7 TO 9:

Mr Amirali E Rayani

The Board of Directors of the Company in their meeting heldon 31st May 2010 revised the remuneration of Mr Amirali ERayani from Rs. 50,000 to Rs. 2,00,000 p.m. Mr. Amirali ERayani, aged 65 years is the main promoter of the Companyand is actively associated with the Company since its inceptionand has played a key role in bringing the Company to itspresent heights. Mr. Amirali Rayani is having more than 35years of experience in Petroleum industry.

The abstract of the the terms and conditions contained in thedraft agreement is as follows:

A. SALARY:Rs.2,00,000/- Per month with annual incrementat such rate as may be approved by the Board of Directorsof the company subject to the ceiling of 25% of basicsalary.

B. PERQUISITES:

i. In addition to the salary and commission, Mr. AmiraliE Rayani will be also entitled to perquisites andallowances including medical reimbursement and

leave travel concessions for self and family; club feesand personal accident insurance or such otherperquisites and/or cash compensation in accordancewith the rules applicable to other senior executivesof the company, subject to the condition that totalperquisites ,including the cash compensation ,willbe restricted to an amount equivalent to his annualsalary.

For the purposes of calculating the above, perquisitesshall be evaluated as per Income tax Rules whereverapplicable.

ii. Company’s contribut ion to provident fund,Superannuation fund and Annuity fund to the extent

these are ,either singly or put together ,not taxableunder the Income tax act; Gratuity as per the Rulesof the company and encashment of leave at the endof the tenure will not be included in thecompensation of perquisites.

iii. Car used on the company’s business and telephoneand other communication facilities at residence willnot be considered as perquisites.

iv. In the event of loss or inadequacy of profits in anyfinancial year, Mr. Amirali E Rayani shall be paidremuneration by way of salary and perquisites inaccordance with the limits laid down in Schedule

XIII of the companies Act,1956, or any statutorymodifications therein or enactment thereof, as maybe agreed by the Board of Directors and Mr. AmiraliE Rayani.

C. OTHERS: Reimbursement of actual entertainmentexpenses ,actual traveling and hostel expense for thecompany’s business and/or allowances as per thecompany’s rules.

D. NATURE OF DUTIES:He shall devote his whole time andattention to the business of the company, perform hisduties truly and faithfully and comply with the directivesgiven to him from time to time by the Board, and furthernot disclose to any person, firm or company anyconfidential information.

E. TERMINATION:The Agreement may be terminated

Forthwith by notice in writing on his vacation of office ofDirector by virtue of section 283,284 and other applicableprovisions of the Companies Act,1956 Or By giving 6months notice in writing by either party.

Your Directors recommend the resolution for your approval.

None of the Directors except Mr Amirali E Rayani (directlyinterested) and Mr Amin A Rayani and Mr Samir A Rayani(indirectly interested) is concerned or interested in the saidresolution.

This Explanatory statement is and should be treated as anabstract under Section 302 of the Companies Act. 1956.

Mr Amin A Rayani

Mr Amin A Rayani, aged 37 years is Commerce Graduate andis associated with the Company for more than 10 years. Hehas vast experience and expertise in finance, production andmarketing fields. He had be appointed as Managing Director& CEO of the Company for a period of five years w.e.f 29thJune, 2009 and his appointment was approved by theshareholders in the Annual General Meeting held on 29thSeptember, 2009. The Board of Directors of the Company intheir meeting held on 31st May 2010 revised the remunerationof Mr Amin A Rayani from Rs. 50,000 to Rs. 1,75,000 p.m.



B. PERQUISITES:

i. In addition to the salary and commission, Mr. AminA Rayani will be also entitled to perquisites andallowances including medical reimbursement andleave travel concessions for self and family; club feesand personal accident insurance or such otherperquisites and/or cash compensation in accordancewith the rules applicable to other senior executivesof the company, subject to the condition that total




perquisites, including the cash compensation, willbe restricted to an amount equivalent to twice hisannual salary.


ii. Company’s contribut ion to provident fund,Superannuation fund and Annuity fund to the extentthese are, either singly or put together, not taxableunder the Income tax act; Gratuity as per the Rulesof the company and encashment of leave at the endof the tenure will not be included in thecompensation of perquisites.


iv. In the event of loss or inadequacy of profits in anyfinancial year , Mr. Amin A Rayani shall be paidremuneration by way of salary and perquisites inaccordance with the limits laid down in ScheduleXIII of the companies Act,1956, or any statutorymodifications therein or enactment thereof ,as maybe agreed by the Board of Directors and Mr. Amin ARayani.

C. OTHERS: Reimbursement of actual entertainmentexpenses ,actual traveling and hostel expense for thecompany’s business and/or allowances as per thecompany’s rules.



Forthwith by notice in writing on his vacation of office ofDirector by virtue of section 283,284 and other applicableprovisions of the Companies Act,1956 Or By giving 6months notice in writing by either party.


None of the Directors except Mr Amin A Rayani (directly

interested) and Mr Amirali E Rayani and Mr Samir Rayani(indirectly interested) is concerned or interested in the saidresolution.


Mr Samir A Rayani

Mr Samir A Rayani aged 35 years is associated as Whole-timeDirector (Administration). Mr Samir Rayani is B.E. (Mech.) andhas wide knowledge of production and marketing ofPetroleum Products. He is associated with the Company fromlast five years. The Board of Directors of the Company in their

meeting held on 31st May 2010 revised the remuneration ofMr Samir A Rayani from Rs. 50,000 to Rs. 1,50,000 p.m.



B. PERQUISITES:

i. In addition to the salary and commission, Mr. SamirA Rayani will be also entitled to perquisites andallowances including medical reimbursement andleave travel concessions for self and family; club feesand personal accident insurance or such otherperquisites and/or cash compensation in accordancewith the rules applicable to other senior executivesof the company, subject to the condition that totalperquisites, including the cash compensation, willbe restricted to an amount equivalent to his annualsalary.


ii . Company’s contribution to provident fund,Superannuation fund and Annuity fund to the extentthese are, either singly or put together, not taxableunder the Income tax act; Gratuity as per the Rulesof the company and encashment of leave at the endof the tenure will not be included in thecompensation of perquisites.


iv. In the event of loss or inadequacy of profits in anyfinancial year, Mr. Samir A Rayani shall be paidremuneration by way of salary and perquisites inaccordance with the limits laid down in ScheduleXIII of the companies Act,1956, or any statutorymodifications therein or enactment thereof, as maybe agreed by the Board of Directors and Mr. Samir ARayani.

C. OTHERS: Reimbursement of actual entertainmentexpenses, actual traveling and hostel expense for thecompany’s business and/or allowances as per thecompany’s rules.



Forthwith by notice in writing on his vacation of office of





Director by virtue of section 283,284 and other applicableprovisions of the Companies Act,1956 Or By giving 6months notice in writing by either party.


None of the Directors except Mr Samir Rayani (directlyinterested) and Mr Amin A Rayani and Mr Amirali E Rayani(indirectly interested) is concerned or interested in the saidresolution.


Item No. 10

At present the authorized share Capital of the Company isRs. 13.16 crores. The Company is in the process of expandingits operations, which would require more funds to financethe future business plans of the Company and in thisconnection require to raise further share capital. So it has

been proposed to increase the authorised share capital of theCompany from Rs 13.16 crore to Rs 25 crores.

In terms of the provisions of the Companies Act, 1956 andthe Articles of Association of the Company, Consent of themembers is sought to increase the authorised share capital.

Your directors recommend the adoption of resolution in thelarger interest of the Company.

None of the Directors of the Company may be deemed to beconcerned or interested in the proposed resolution except tothe extent of shares held by them or their relatives.

Item No. 11

The Company is into exports since last 5 years and for thefurther growth and expansion, Company is looking into thepossibilities of acquiring some overseas business. TheCompany requires adequate capital to meet the needs ofgrowing business. To Leverage the available businessopportunities, the Company may opt for issue securitiesthrough Qualified Institutional Placement/foreign currencyconvetible bonds (FCCBs)/global depository receipts (GDRs)of US$ 20mn. A Qualified Institutional Placement (QIP) of theshares of the Company would be less time consuming andmore economical.

Accordingly, the Company may opt for issue of securities byway of a QIP/FCCB/ADR/GDR in terms of the Securities andExchange Board of India (Disclosures and Investor Protection)

Guidelines, 2000 (‘SEBI Guidelines’). There will be no issue toretail individual investors and existing retail shareholders. Theresolution is enabling resolution and the exact price,proportion and timing of the issue of the securities will bedecided by the Board based on an analysis of the specific

requirements after consulting all concerned. Therefore theproposal seeks to confer upon Board the absolute discretionto determine the terms of issue in consultation with the LeadManagers to the Issue.

As per the SEBI Guidelines, an issue of securities shall be madeat a price not less than the average of the weekly high andlow of the closing prices of the related shares quoted on thestock exchange during the two weeks preceding the “relevantdate”.

The “relevant date” for the above purpose, with respect tothe equity shares being allotted means the date(s) of themeeting(s) in which the Board decides to open the proposedissue or in case of securities which are convertible into or

exchangeable with equity shares at a later date, te date onwhich the holder of such securities becomes entitled to applyfor the said shares, as the case may be. The Stock Exchangefor the same purpose is the Bombay Stock Exchange Limited.

In accordance with the SEBI Guidelines, special resolution ofshareholders in accordance with Section 81(1A) of theCompanies Act, 1956 is required for a QIP issue. The specialresolution has a validity period of 12 months before whichallotments under the authority of said resolution should becompleted.

The Board of Directors recommend passing of the SpecialResolution.

None of the Directors is in anyway related or interested in theproposed resolution except to the extent of his/her holdingof equity shares in the Company.

By Order of the Board ofDirectors

For Panama Petrochem Ltd

Place: Mumbai Nidhi GuptaDate : 12th August, 2010 Company Secretary

Registered Office:Plot No. 3303, G.I.D.C. Estate

Ankleshwar - 393 002, Gujarat




Dear MembersYour Directors have pleasure in presenting the Twenty EighthAnnual Report of the company together with the Audited

Statement of Accounts for the Financial Year ended March31, 2010 for your consideration and approval.

FINANCIAL HIGHLIGHTS (Rs. In Lacs)

Particulars As on As onMarch 31, March 31,

2010 2009Net Profit before Tax & Extra –Ordinary Items 3,245.93 1,699.08Prior Period Adjustments 12.70 34.95Net Profit Before Tax 3,233.23 1664.13Less: Provision for Taxes 841.23 496.60Net Profit After Tax 2,392.00 1,167.53

Less : Transfer to Reserves 239.20 116.75Less : Proposed Dividendincluding CorporateDividend Tax 341.64 273.31Net Profit After Appropriations 1,811.16 777.47Profit Brought Forward 3,777.99 2,943.07Profit Carried Forward toBalance Sheet 5,589.15 3,777.99

OPERATIONSThe Company had a sales turnover of Rs. 32,023.73 lacs asagainst Rs. 36,739.24 lacs in the financial year 2008-09. Profitbefore Interest, Depreciation and tax was Rs. 3,245.93 lacs as

against Rs. 1699.08 lacs during the previous year showing agrowth of around 90% as compared to the last year. TheCompany posted a Net Profit of Rs 2,392.00 lacs as againstRs. 1,167.53 lacs in the previous year showing a growth ofmore than 100% as compared to the last year.

Dahej Unit: The Company has got permission to start plantin Dahej SEZ and construction and erection of machinery workis going smoothly and hopeful to start commercial productionby September, 2010. As per the conditions of Governmentnet foreign exchanges should be positive and company ishopeful to fulfill the export criteria.The Company will bemanufacturing and exporting Liquid Paraffin, Petroleum Jelly,Ink Oil, Rubber Process Oil, Lubricating Oil & Greases,Transformer Oil, Antistatic Coning Oil, Mining Oil and CableJelly. The plant will be enjoying Income Tax, Excise, Sales Tax,Duty Free Electricity and Customs Duty benefits

The detailed Management Discussion & Analysis Report isattached hereto with the Director’s Report and should be readas part of this Report.

DIVIDENDIn view of the continual satisfactory performance of theCompany during the Financial Year 2009-10, your Directorsare pleased to recommend a dividend @ 50% i.e. Rs. 5/- pershare (previous year Rs. 4/- per share) for the year ended March31, 2010.

The payment of dividend together with the tax thereonabsorbed a sum of Rs. 341.63 Lakhs.

CARE RATINGWe are glad to announce that your Company got conductedthe credit rating from one of the leading credit rating agencyCARE and is assigned a “CARE A+” rating to the Long TermFacilities and “PR1+” rating to the Short Term Facilities.

LISTING OF SHARESYour Company’s shares are listed on the Bombay StockExchange Ltd. The Company has paid the listing fees for theyear 2009–2010. The Company has applied for listing of shareswith National Stock Exchange.

The application for listing is under process.

CORPORATE GOVERNANCE

Pursuant to clause 49 of the listing agreement with theBombay Stock Exchange Limited the following have beenmade a part of the Annual Report:• Management discussion and Analysis• Corporate Governance Report• Auditors Certificate regarding compliance of conditions

of Corporate Governance.• Declaration on compliance with code of Conduct.

PUBLIC DEPOSITS

During the year under report, your Company did not acceptany deposits from the public in terms of the provisions ofsection 58A of the Companies Act, 1956.

CONSERVATION OF ENERGY, TECHNOLOGYABSORPTION, FOREIGN EXCHANGE EARNINGS ANDOUTGOA. Conservation of Energy: The Company is aware about

energy consumption and environmental issue related toit and is continuously making sincere efforts towardsconservation of energy. The Company is in fact engagedin the continuous process of further energy conservationthrough improved operational and maintenancepractices. Information as required under section 217(1)(e)of the Companies Act, 1956, read with the Companies(Disclosure of Particulars in the Report of Board ofDirectors) Rules, 1988, is given in Annexure A, formingpart of this Report

B. Technology Absorption: The Company has an updatedR & D Center at its Ankleshwar Plant. It is equipped withall the advanced technological facilities with the latestinstruments. The Center is operated by the team of wellqualified and experienced technocrats and Company istrying to get recognised R & D Center from Governmentof India.

C. Foreign exchange earnings and outgo:

i. Export Activities: During the year under review theCompany have made Import/Export as given in (ii)below.

Directors’ Report





ii. Foreign Exchange Earnings and Outgo:(Amount in Rs Lacs)

Total Foreign Exchange Inflow 9276.09 Lacs

Total Foreign Exchange outflow 20202.93 Lacs

PARTICULARS OF EMPLOYEESDuring the financial year under review, none of the Company’semployees was in receipt of remuneration as prescribed undersection 217(2A) of the Companies Act, 1956, read with theCompanies (Particulars of Employees) Rules, 1975, and henceno particulars are required to be disclosed in this Report.

DIRECTORSAfter the last Annual General Meeting, Mr. Moiz H. Motiwalawas appointed as an additional director. In terms of theprovisions of Companies Act, 1956, he hold office until thedate of ensuing Annual General Meeting. His appointmentas an ordinary director of the Company is placed before the

members for consideration.After the last Annual General Meeting, Mr. Rajendra V. Thakkarresigned from the Board.

In accordance with the provisions of the Companies Act, 1956and the Company’s Articles of Association, Mr. Amirali E Rayaniand Mr. Samir A Rayani are liable to retire by rotation andbeing eligible offer themselves for re-appointment. Directorsrecommend their re-appointment.

AUDITORSM/s Habib & Co., Chartered Accountants, Statutory Auditorsof the Company held office until the conclusion of the ensuingAnnual General Meeting and indicated their inability to

continue as auditors of the Company and, accordingly, donot seek reappointment as auditors, at the forthcoming annualgeneral meeting on September 25, 2010.

The Company has received a special notice from a member ofthe Company, under the provisions of section 190(1) of theCompanies Act, 1956, requiring that M/s S.R.Batliboi & Co,Mumbai, be appointed as the statutory auditors of theCompany, from the completion of the forthcoming annualgeneral meeting on 25th September, 2010, to the completionof the next annual general meeting. A certificate under section224(1) of the Companies Act, 1956 regarding their eligibilityfor the proposed appointment has been obtained from them.Your Directors recommend their appointment.

AUDITORS’ REPORTComments made by the Statutory Auditors in the Auditors’Report are self-explanatory and do not require any furtherclarification except the following:

Note No.4 of the main Auditor’s Report states that theCompany has not provided for the Leave Encashment payableto employees which is not in accordance with the AccountingStandard 15 as notified by the Companies (AccountingStandards) Rules 2006.

We would like to state that the Company do not permit anyperson to carry forward their leaves. All the leaves can betaken in the financial year only.

DIRECTORS’ RESPONSIBILITY STATEMENT

In terms of the provisions of section 217(2AA) of theCompanies Act, 1956, and to the best of their knowledgeand belief and according to the information and explanationsobtained by them and save as mentioned elsewhere in this

Report, the attached Annual Accounts and the Auditors’Report thereon, your Directors confirm that:a. in preparation of the annual accounts, the applicable

accounting standards have been followed;b. the Directors have selected such accounting policies and

applied them consistently and made judgments andestimates that are reasonable and prudent so as to givea true and fair view of the state of affairs of the Companyas at 31st March, 2010 and of the profit of the Companyfor the year ended on that date;

c. the Directors have taken proper and sufficient care forthe maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding

the assets of the Company and for preventing anddetecting fraud and other irregularities; andd. the Directors have prepared the Annual Accounts on a

going concern basis.

ACKNOWLEDGEMENT

We thank our Clients, Investors, Dealers, Suppliers and Bankersfor their continued support during the year. We place on recordour appreciation of the contribution made by employees atall levels. Our consistent growth was made possible by theirhard work, solidarity, co-operation and support.

By Order of the Board ofDirectors


Place: Mumbai Amirali E RayaniDate : 12th August, 2010 Chairman

FORM ‘A’ (Amount in Rs.)

As on As onParticulars March 31, March 31,

2010 2009

A) Power & Fuel Consumption

1. Electricitya) Purchase of Units 3,46,908 3,21,453

Total Cost 22,79,461 21,57,033

Rate per Unit 6.57 6.71b) Own Generation

1) Through Diesel Generator NIL NIL2) Through Steam Turbine / NIL NIL

Generator

2. Coal NIL NIL

3. Furnace Oil NIL NIL

4. Diesel Oil NIL NIL

5. Others (Gas)Quantity 63,930 47,642Total Cost 6,40,529 3,78,753Rate per Unit 10.02 7.95




Cautionary Statement

The management Discussion and Analysis Report may containcertain statements that address expectations or projections aboutfuture and might be considered forward looking. Thesestatements are subject to certain risks and uncertainties. TheCompany’s actual performance or results may differ materiallyfrom those expressed in the statement as important factors couldinfluence Company’s operations such as Government policies,economic development, political factors and such other factorsbeyond the control of the Company.

Industry Structure and DevelopmentPanama Petrochem Limited is one of the growing companies inthe field of various grades of petroleum special ty. The Companymanufactures specialty petroleum products for diverse userindustries like printing, textiles, rubber, pharmaceuticals,cosmetics, power and other industrial oil. The Product Portfolioof the Company consists of Transformer Oil, Liquid Paraffin,Petroleum Jelly, Cable Jelly, Ink Oil, Rubber Process Oil, andAntistatic Coning Oil.

The demand for Transformer Oil depends on the developmentof power projects and industrialization in the country. Thedevelopment of Liquid Paraffin and Petroleum Jelly businessdepends on the growth of cosmetics, pharmaceuticals and relatedfields. The Cable Jelly is used as a filling and flooding compoundin the telecom cables. The demand for the Ink Oil is based onconditions in the Printing Ink and Resin manufacturing business.The Rubber Process Oil is used for processing of rubber forautomobile tyres, tube and various rubber products. The AntistaticConing Oil is required in texturing the synthetic yarn like viscose,nylons and polyesters. With the overall improvement in the Indianeconomy since past two years, the general demand for petroleum

products has been steadily improving. The Company has captureda significant share in the market for the various grade ofpetroleum specialty.

The Company manufactures more than 80 product variants usedacross 6-7 broad industry segments. Over the years, the Companyhas nurtured strong relationships with the leaders in theirrespective segments. The Company’s clientele includes BharatPetroleum Corporation, Micro Inks, Alok Industries, Merck, Ciplaand Government Ordinance factories. The products are usuallymanufactured according to the client’s individual specifications,thus enhancing the probability of repeat orders from the clients.

Future Outlook

The aggregate demand of all the key segments in thepetrochemical industry is likely to regain a sharp positive trajectoryover the next 12 months, with key players aiming to ramp upscaleThe Company is planning to expand its operations to withstandagainst the negative market forces. There are considerable profitsfrom all the four plants of the company and the Company ishopeful to override the adverse effects of the price fluctuationsin the petroleum industry by resorting to bulk purchases andcost control measures.

The Company has got permission to start plant in Dahej SEZ andPhase I work is going smoothly and hopeful to start commercialproduction by September, 2010. As per the conditions ofGovernment net foreign exchanges should be positive andcompany is hopeful to fulfill the export criteria.

Opportunities:

Demand for intermediates, dyes, speciality chemicals etc willincrease the demand for petrochemicals. This will result in asignificant growth for this industry. Growing demand from theplastic industry will lead to a strong demand in petrochemicals.The relationship established by the company with the above saidclientele would augur further growth in its business. Moreover,the company has been increasing its presence in the exportmarkets of USA, Africa, Europe and Asia.

The Company has developed a new product i.e. Mining Oil. Thisproduct is still in its testing stage and will than be introduced inthe market for the consumption in the Mining Industries.

Threats:

A steep rise in raw material costs on account of a drastic hike incrude oil prices may affect the profit margins of the company.Changes in Government policies, especially regarding import ofBase Oil will have an adverse impact on the performance of thecompany. However, considering the multifarious purposes forwhich the Base Oil is used and the domestic supplies are notadequate to meet the domestic Demand, the possibilities forsuch adverse changes in Government policies appear to beremote.

Risks and Concerns

The performance of the Company is subject to the GovernmentPolicies for tax structure, interest rates, Export incentives etc.The profitability of the Company depends on the prices andavailabili ty of the Base Oils. The prices of base oil have increasedduring the last year and have resulted in corresponding increasein cost of production. However as a general practice in theindustry, the higher input costs are passed on to the customers.

Human resource / Industrial relationsThe Company recognizes the importance and contribution of itshuman resources for its growth and development and iscommitted to the development of its people.

The Company has cordial relations with employees and staff.There are no industrial relations problems during the year andthe Company does not anticipate any material problems on thiscount in the current year.The management is also committed to help the employees andworkers to sharpen their skills and to improve their knowledgebase for which continuous efforts are made on training anddevelopment.

Internal Control System and their adequacy

The Company has an effective and adequate system of internalcontrol to ensure that all assets are safeguarded against loss andall transactions are authorised, recorded and reported correctly.The Company has set up an Internal Audit Department to reviewthe operational efficiencies. The Department evaluates theperformance of the Company and puts forth its findings andsuggestions before the Audit Committee for its review.


Place : Mumbai Amin A RayaniDate : 12th August, 2010 Managing Director & CEO

Management Discussion and Analysis Report





Pursuant to Clause 49 of the Listing Agreement a Reporton Corporate Governance is given below:

1. Company’s Philosophy on Corporate Governance

Our Company’s Corporate Governance philosophy is tocontinuously strive to attain higher levels of accountability,transparency, responsibility and fairness in all aspects ofits operations. Our business culture and practices arefounded upon a common set of values that govern ourrelationships with customers, employees, shareholders,suppliers and the communities in which we operate.

The Company is conscious of its responsibility as a goodcorporate citizen. The Company values transparency,professionalism and accountability.

2. Board of Directors

The Board had an optimum combination of Executive,Non Executive and Independent Directors. The Companyhad total 7 (seven) directors on the Board on 31st March,2010. Mr Amin A Rayani is the Managing Director of theCompany.

Name of the Director Category No. of posi tions held in& Designation in other Public Companies

Board Committee

Membe- Chairm-rship anship

Mr Badrudin Kasamali 1 Independent 1 Nil NilChairmanMr Amirali E Rayani2 Promoter Nil Nil NilChairmanMr S K Ukani3 Executive Nil Nil NilWhole Time DirectorMr Amin A Rayani 4 Promoter Nil Nil NilManaging Director & CEOMr Samir A Rayani Promoter Nil Nil NilWhole Time DirectorMr Dilip Sobhag Phatarphekar Independent 1 4 1DirectorMr Madan Mohan Jain Independent 2 2 1DirectorMr Mukesh Mehta Independent Nil Nil NilDirectorMr Rajendra V Thakkar Independent Nil Nil NilDirector

1 Mr Badrudin Kasamali resigned from Chairmanship and directorship of theCompany w.e.f. 8th June 2009

2 Mr Amirali E Rayani, Managing Director has taken over as the Chairman ofthe Board and the Company w.e.f. 29th June 2009

3 Mr S K Ukani resigned from directorship of the Company w.e.f. 8th June2009

4 Mr Amin A Rayani, Director has taken over as the Managing Director &CEO of the Company w.e.f. 29th June 2009

Directors’ Attendance Record

During the Financial Year 2009-10, 5 (five) meetings of theBoard of Directors were held on the following dates:9.05.2009, 29.06.2009, 30.07.2009, 31.10.2009 and30.01.2010.

All information, wherever relevant and materially significant,are submitted as part of the agenda papers well in advanceof the Board Meetings and the company Secretary, in

consultation with the Chairman & Managing Director draftsthe agenda of the meetings. Details of attendance of Directorsin the Board meeting during the financial year 2009-10 are

as under:Board of Directors as on Attendance details

March 31, 2010Board Last

Meeting AGM1 Mr. Badrudin E. Kasamali* 1 No2 Mr. Amirali E. Rayani 5 Yes3 Mr. S. K. Ukani* Nil No4 Mr. Amin A. Rayani 5 Yes5 Mr. Samir A. Rayani 5 Yes6 Mr. Mukesh T. Mehta 3 No7 Mr. Rajendra V. Thakker Nil No8 Mr. Dilip S. Phatarphekar 5 No9 Mr. Madan Mohan Jain 4 No

*Mr Badrudin E Kasamali and Mr. S.K.Ukani resigned fromthe directorship w.e.f 8th June, 2009

Disclosure Regarding Re-appointment of Directors in theensuing AGMMr Amirali E Rayani and Mr Samir A Rayani, Directors whoshall be retiring in this AGM, being eligible have offeredthemselves for re-appointment. Brief particulars of thesegentlemen are as follows:

Particulars Mr Amirali Mr SamirE Rayani A Rayani

DIN 00002616 00002674Father’s Name Essabhai Rayani Akbarali E RayaniDate of Birth 26/02/1944 19/12/1975Address Rayani House, 30, Rayani House, 30,

Mount Mary Road, Mount Mary Road,Bandra (W), Bandra (W),Mumbai-400 050 Mumbai-400 050

Designation Chairman DirectorEducation SSC B.ECompanies in which Nil Nilholds DirectorshipCompanies in which Nil Nilholds membership ofcommittees

Shareholding in the 1,57,700 equity 96,000 equityCompany (No. & %) shares (2.70%) shares (1.64%)

Shareholdings of DirectorsDetails of Shares held by Non-Executive Directors as on31.03.2010

Name No. of Shares heldMr. Dilip Phataraphekar 500

3. AUDIT COMMITTEE

Terms of Reference of Audit CommitteeThe Audit Committee shall have the authority toinvestigate into any matter that may be prescribed and

Report on Corporate Governance




the matters listed below and for this purpose the AuditCommittee shall have full access to information containedin the records of the Company and external professionaladvice, if necessary:i. To review financial reporting process, all financial

statements.ii. To recommend appointment/ re-appointment/

replacement/ removal/ Audit fees/ any other fees ofStatutory Auditor.

iii. Reviewing along with management, the listingcompliances, related party disclosures, qualificationsin draft audit report, matters required to be includedin Directors Responsibility Statement, quarterlyfinancial statements before its submission to theBoard, changes in accounting policies, majoraccounting entries based on estimate ofmanagement.

iv. To look into all matters relating to internal controlsystem, internal audit system and the reasons forsubstantial defaults in the payment to the depositors.

v. To review Management Discussion and Analysis offinancial condition and results of operation,statement of significant Related Party Transactionsas submitted by management.

Composition, name of Members of Audit Committee andtheir attendance at Meeting

Name of the Member No. of AC Attendance at theMeetings held Audit Committee

during the year MeetingMr. Badrudin Kasamali @ 4 Nil(Chairman)Mr. Madan Mohan Jain 4 4

(Chairman)Mr. Rajendra V Thakkar 4 NilMr. Mukesh Mehta 4 2Mr. Amin Rayani 4 4Ms. Nidhi Gupta 4 4(Company Secretary)Special InviteesMr. Amirali E Rayani 4 4

@ Mr Badrudin Kasamali resigned from the Committee w.e.f8th June, 2009 and the audit committee was reconstitutedon 29th June, 2009.

4. REMUNERATION COMMITTEE

(a) Terms of Reference of Remuneration CommitteeThe Remuneration Committee shall have the powerto determine the Company’s policy on specificremuneration packages including pension rights andother compensation for executive directors and forthis purpose, the Remuneration Committee shallhave full access to information contained in therecords of the Company and external professionaladvice, if necessary.

(b) Composit ion, name of Members ofRemuneration Committee and their attendanceat Meeting

Name of the Member No. of RC Attendance at theMeetings held Remuneration

during the year CommitteeMeeting

Mr. Badrudin Kasamali @ 1 Nil(Chairman)Mr. Dilip Phatarphekar 1 1(Chairman)Mr. Rajendra V Thakkar 1 NilMr. Mukesh Mehta 1 1Ms Nidhi Gupta 1 1(Company Secretary)

@ Mr Badrudin Kasamali resigned from the Committee w.e.f8th June, 2009 and the remuneration committee wasreconstituted on 29th June, 2009.

(c) Remuneration Policy of the CompanyThe Managing Director and the Whole Time Directorof the Company are entitled for payment ofRemuneration as decided by the Board and approvedby the members as per the provisions of theCompanies Act, 1956. No remuneration was paidto any Non-Executive Directors during the financialyear 2009-10 except sitting fee for attending Boardmeetings and committee meetings.

(d) Details of the Executive Directors’Remuneration for the financial year ended 31stMarch, 2010

REMUNERATION DIRECTORS

Executive Directors Non-

Mr. Amirali Mr. Amin Mr. Samir ExecutiveE Rayani A Rayani Directors

(Rs.) (Rs.) (Rs.) (Rs.)(a) Salary & Allowances 4,86,000 4,50,000 4,50,000 NIL(b) Benefits & Perquisites NIL NIL NIL NIL(c) Bonus / Commission

Additional Salary NIL NIL NIL NIL(d) Pension, Contribution

to Provident fund &Superannuation Fund NIL NIL NIL NIL

(e) Directors Sitting Fee NIL NIL NIL 1,06,000(f) Stock Option Details The Company does not offer any Stock Options.

(if any)

5. SHAREHOLDERS’ GRIEVANCE COMMITTEE(a) Terms of Reference of Shareholders’ Grievance

CommitteeIn compliance with the requirement of the CorporateGovernance under the Listing Agreement with theStock Exchange, the Company has constituted an“Investors’ Grievance Committee” to look intoredressing the shareholders and investors’ complaintsand to expedite the process of redressal of complaintslike transfer of shares, non-receipt of balance sheet,non-receipt of declared dividends etc.

(b) Composit ion of Shareholders’ GrievanceCommittee

Sr. No. Name of the Director Category & Designation1 Mr. Badrudin Kasamali 1 Independent & Non Executive

Director- Chairman2 Mr. S.K. Ukani 1 Executive Director- Member





Sr. No. Name of the Director Category & Designation3 Mr Dilip Phatarphekar Independent & Non Execut ive

Director- Chairman4 Mr. Mukesh Mehta Independent & Non Executive

Director- Member

5 Mr. Amin A Rayani Managing Director & CEO-Member

6 Mr Amirali E Rayani Executive Director- Member1 Mr Badrudin Kasamali and Mr S.K. Ukani resigned from theCommittee w.e.f 8th June, 2009 and the shareholdersgrievance committee was reconstituted 29th June, 2009.

The Committee meets 2 (two) times during the year.

Name & Designation of the Compliance Officer

Ms. Nidhi Gupta, Company Secretary is the ComplianceOfficer of the Company.

Shareholders may xsend their complaint for redressal to theemail ID: [email protected]

During the year, the company received 10 complaints fromthe shareholders, all of which have been resolved to thesatisfaction of the shareholders to the date. There was nopending complaint from any shareholder as on 31st March2010. There are no transfer requests pending at as on 31stMarch, 2010.

6. GENERAL BODY MEETINGS

Particulars of past three Annual General Meetings of theCompany:

No. of SpecialYear Date Venue Time Resolution(s)

passed

2007 29.09.2007 Plot No. 3303, G.I.D.C. Estate, 11:00 1Ankleshwar- 393 002 A.M

2008 29.09.2008 Plot No. 3303, G.I.D.C . Estate, 11:30 N ilAnkleshwar - 393 002 A.M.

2009 29.09.2009 Plot No. 3303, G.I.D.C. Estate, 11:30 3Ankleshwar - 393 002 A.M.

No resolution was put through Postal Ballot in the lastyear and there is no resolution, which is required to bepassed by Postal Ballot at present.

Code of Conduct

The Company has laid down the Code of Conduct for all BoardMembers and Senior Management of the company.

All the Board members and Senior Management of theCompany have affirmed compliance with their Code ofConduct for the financial year ended March 31, 2010. TheChairman and Managing Director has also confirmed andcertified the same. The certification is annexed at the end ofthis Report.

7. DISCLOSURES

(a) Related Party TransactionsThere are no materially significant related partytransactions with its Promoters, the Directors or theManagement, their Subsidiaries or Relatives etc.,

which may have potential conflict with the interestof the company at large. The other related partytransactions are given in point no.9 of Notes onAccounts annexed to and forming the part of BalanceSheet and Profit and Loss Account of the Company.

b) Disclosure of Accounting treatmentIn the preparation of the financial statements, theCompany has followed the accounting standardsissued by the Institute of the Chartered Accountantsof India to the extent applicable.

(c) Non-compliance by the Company, Penalties,Strictures

There were no instances of non-compliance by theCompany, penalties, structures imposed on theCompany by the Stock Exchange or SEBI or anystatutory authority on any matter related to capitalmarkets during the last three years.

d) Disclosure of Risk managementThe Company has initiated the risk assessment andminimization procedure.

(e) Non mandatory requirements

The Company proposes to adopt the non-mandatoryrequirements given in Annexure-3 of Clause 49 ofthe listing agreement in due course of time.

(f) CEO Certification

In terms of the requirements of Clause 49(v) of theListing Agreement, the CEO has submitted necessarycertificate to the Board at its meeting held on 31stMay, 2010 stating the particulars specified under the

said clause

9. MEANS OF COMMUNICATION

(a) At present quarterly/ half-yearly reports are not beingsent to each household of shareholders.

(b) The Quarterly / half-yearly / annual accounts resultsare published in the English and GujaratiNewspapers.

– which newspaper normally published inEconomic Times (English) & Economic Times(Gujarati)

– Any website where displayed

Yes – www.panamapetro.com(c) The Management Discussion and Analysis Report

forms a part of the Annual Report.

10. GENERAL SHAREHOLDERS INFORMATIONi) Annual General Meeting

Day & Date : Saturday, Sept. 25, 2010

Time : 11:00 A.M.

Venue : Plot No. 3303, G.I.D.C.Estate, Ankleshwar-393 002




ii) Financial CalendarEvents Tentative time frameFinancial Reporting for the f irs t 12th of August , 2010quarter ended 30th June, 2010 (Actual)Financial Reporting for the second By 15th of

quarter ending 30th September, 2010 November, 2010Financial Reporting for the third By 15th ofquarter ending 31st December, 2010 February, 2011Financial Reporting for the fourth Last Week ofquar ter ending 31st March, 2011 May, 2011

iii) Dates of Book Closure : 20th Sept., 2010 to 25thSept., 2010 (Both days inclusive)

iv) Dividend Payment Date: within 30 days from thedeclaration of the dividend

v) Listing on Stock Exchanges: The Shares of theCompany are listed on the Bombay Stock Exchange.

vi) Stock Code/ Symbol: 524820 at the Bombay StockExchange

vii) Market Price Data: High/ low of market price of

the Company’s equity shares traded on BSE duringthe last financial year were as follows:Month High Low Month High Low

(Rs.) (Rs.) (Rs.) (Rs.) (Rs.)April 85.45 59.15 October 145.6 116.25

May 122.9 71.65 November 143 117.5

June 132 100.5 December 170 127.8

July 110.4 88 January 185.7 142

August 125 96.15 February 169.8 142

September 142.4 120.15 March 220.9 152

Source: www.bseindia.com

viii) Registrar and Share Transfer Agent & ShareTransfer SystemThe Company has constituted Registrar & ShareTransfer Agent Committee which normally meetstwice in a month to process the share transfer. Theshares of the Company can be transferred by lodgingTransfer Deeds and Share Certificates with theRegistrars & Share Transfer Agents viz. M/s BigshareServices Pvt. Ltd. (Address as mentioned above). TheShareholders have option of converting their holdingin dematerialised form and effecting the transfer indematerialised mode.

Particulars Bigshare Services Pvt. Ltd.

Contact Person Ms Rajshree/ Mr Flavia D’Souza

Address E-2/3, Ansa Indistrial Estates,Sakivihar Road, Saki Naka,

Andheri (East), Mumbai 400 072Telephone No. 91-22-2847 3474

Fax No. 91-22-2847 5207

E mail [email protected]

The Company’s shares are traded in the StockExchange, Mumbai, compulsorily in Demat mode.Physical shares which are lodged with the Registrar& Transfer Agent or/ Company for transfer areprocessed and returned to the shareholders dulytransferred within the time stipulated under theListing Agreement subject to the documents beingin order.

ix) Distribution of Shareholding as on 31st March2010:

Shareholding of Shareholders Share AmountNominal Value of

Rs. Rs. Number % to Total In Rs. % to Total(1) (2) (3) (4) (5)

Up to 5,000 4,149 88.81 49,70,950 8.515,001 10,000 199 4.26 16,08,640 2.75

10,001 20,000 124 2.65 19,10,330 3.2720,001 30,000 52 1.11 13,12,710 2.2530,001 40,000 28 0.60 9,80,550 1.6840,001 50,000 16 0.34 7,37,160 1.2650,001 1,00,000 31 0.66 23,31,190 4.00

1,00,001 and Above 73 1.57 4,45,50,870 76.28Total 4,672 100 5,84,02,400 100

x) Dematerialisation of shares and liquidity: As on31st March 2010 about 76.53% of the Company’sequity paid-up capital had been dematerialized.Trading in equity shares of the Company at the StockExchange is permitted compulsorily in demat mode.

xi) Corporate Ethics: The constant endeavor of PanamaPetrochem Ltd is to enhance the reputation of theCompany and irrespective of the goals to beachieved, the means are as important as the end.The Company has adopted “The Code of Conductfor prevention of insider trading”, which containspolicies prohibiting insider trading. The Company hasalso promulgated Code of Conduct to be followedby Directors and Management.

xii) There are no outstanding Warrants as on the date.

xiii) Plant Locations: The Company has the followingunits located at:

1. Plot No. 3303, GIDC Industrial Estate, Ankleshwar-393 002 Gujarat. Tel: 91-2646-221 068 / 250 281,Email: [email protected]

2. Survey No. 78/2, Daman Industrial Estate, Unit III,Poly Cab Road, Village Kadaiya, Dist. Daman, Daman(UT)-396 210 Tel: 91-260-309 1311, Email:[email protected]

3. Plot No. 127/128, Marol Co-op. Industrial Estate,M.V. Road, Saki Naka, Andheri (E), Mumbai - 400059, Tel: 91-22-2850 1486, Email:[email protected]

4. Plot No. H-12, M.I.D.C., Taloja, Navi Mumbai, Tel:91-22-27411456

xiv) Address for Correspondence: The shareholders

may send their communication grievances/ queriesto the Registrar and Share Transfer Agents at theirAddress mentioned above or to the Company at:Corporate Office:Panama Petrochem Ltd.401, Aza House, 4th Floor, 24, Turner Road, Opp.Andhra Bank, Bandra (W), Mumbai 400 050Phone: 022- 42177777 Fax: 022- 42177788e-mail: [email protected]

On behalf of the Board of Directors

Place: Mumbai Amirali E RayaniDate : 31st May, 2010 Chairman





CEO Certificate on Corporate Governance

To,The Members ofPANAMA PETROCHEM LIMITED

It is hereby certified and confirmed that as provided in Clause 49 I (D) of the listing agreement with the stock exchanges, theBoard members and the senior management personnel of the Company have affirmed compliance with the Code of conductof the Company for the financial year ended 31st March, 2010.

For PANAMA PETROCHEM LIMITED

Place: Mumbai Amin A RayaniDate : 31st May, 2010 Managing Director & CEO

Registered Office :Plot No.3303, GIDC Estate,Ankleshwar - 393 002.

Auditors Certificate on Corporate GovernanceTo,The Members of Panama Petrochem Ltd;

(1) We have examined the compliance of conditions of Corporate Governance by Panama Petrochem Ltd for the year ended31st March, 2010 as stipulated in Clause 49 of the Listing Agreement of the said company with stock exchange.

(2) The Compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination waslimited to procedures and implementations thereof, adopted by the Company for ensuring the compliance of the conditionsof Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

(3) In our opinion and to the best of our information and according to the explanations given to us and the representationsmade by the Directors and the Management, we certify that the Company has complied with the mandatory conditionsof the Corporate Governance as stipulated in the Listing Agreement.

(4) As required by the Guidance Note issued by the Institute of Chartered Accountants of India, we have to state that noInvestors Grievances is pending for the period exceeding one month against the company as per the information furnishedby the Company’s Registrars.

(5) We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiencyor effectiveness with which the Management has conducted the affairs of the Company.

For HABIB & CO.CHARTERED ACCOUNTANTS

D. P. SHROFFPARTNER

Place: Mumbai M. NO. 45417Date : 31st May, 2010 Firm Reg. No. 103479W




To,The Board of Directors,Panama Petrochem Ltd.,401, Aza House, 24, Turner Road,Bandra (W), Mumbai - 400 050

CEO CERTIFICATION

I hereby certify that:

(a) I have reviewed financial statements and the cash flow statement for the year ended 31st March, 2010 and that to thebest of my knowledge and belief:

i) these statements do not contain any materially untrue statement or omit any material fact or contain statements thatmight be misleading;

ii) these statements together present a true and fair view of the Company’s affairs and are in compliance with existingaccounting standards, applicable laws and regulations.

(b) there are, to the best of our knowledge and belief, no transactions is entered into by the company during the year whichare fraudulent illegal or violative of the Company’s code of conduct.

(c) I accept responsibility for establishing and maintaining internal controls for financial reporting and that I have evaluatedthe effectiveness of the internal control systems of the Company pertaining to financial reporting and I have disclosed tothe Auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of whichI am aware and the steps I have taken or propose to take to rectify these deficiencies.

(d) I have indicated to the Auditors and the Audit Committee:

i) significant changes in internal control over financial reporting during the year.

ii) significant changes in accounting policies during the year and that the same have been disclosed in the notes to thefinancial statements; and

iii) instances of significant fraud of which we have become aware and the involvement therein, if any, of the management

or an employee having a significant role in the Company’s internal control system over financial reporting.

For PANAMA PETROCHEM LIMITED

Place: Mumbai Amin A RayaniDate : 31st May, 2010 Managing Director & CEO

Registered Office :Plot No.3303, GIDC Estate,Ankleshwar - 393 002.





Auditors’ ReportTo,The Members ofPANAMA PETROCHEM LTD.,

i) We have audited the a ttached Balance Sheet ofPANAMA PETROCHEM LIMITED, as at 31st March2010, the Profit and Loss account and also the CashFlow Statement for the year ended on that dateannexed thereto. These financial statements are theresponsibility of the company’s management. Ourresponsibility is to express an opinion on these financialstatements based on our audit.

ii) We conducted our audit in accordance with AuditingStandards generally accepted in India. Those Standardsrequire that we plan and perform the audit to obtainreasonable assurance about whether the financialstatements are free of material misstatement. An auditincludes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements.An audit also includes assessing the accountingprinciples used and significant estimates made bymanagement, as well as evaluating the overall financialstatement presentation. We believe that our auditprovides a reasonable basis for our opinion.

iii) As required by the Companies (Auditor’s Report) Order,2003 issued by the Central Government of India interms of sub-section (4A) of section 227 of theCompanies act, 1956, we enclose in the Annexure astatement on the matters specified in paragraphs 4 and5 of the said Order.

iv) Further to our comments in the annexure referred toabove, we report that:

1. We have obta ined a ll the information andexplanations, which to the best of our knowledgeand belief were necessary for the purpose of ouraudit;

2. In our opinion, proper books of accounts asrequired by law have been kept by the companyso far as appears from our examination of thosebooks;

3. The Balance Sheet, Profit and Loss account andCash Flow Statement dealt with by this report

are in agreement with the books of accounts;4. In our opinion, the Balance Sheet, Profit and Loss

account and Cash Flow Statement dealt with bythis report comply with the Accounting Standardsreferred to in sub-section (3C) of Section 211 ofthe Companies Act, 1956 to the extentapplicable except that no provision is madetowards Leave Encashment payable to employeeswhich is not in accordance with the AccountingStandard-15 issued by the Institute of CharteredAccountants of India, amount not beingquantified, its impact on the profit could not beascertained;

5. On the basis of written representations receivedfrom the directors of the Company, as on 31stMarch 2010 and taken on record by the Boardof Directors, we report that none of the directoris disqualified as on 31st March 2010 from being

appointed as a director in terms of clause (g) ofsub-section (1) of section 274 of the CompaniesAct, 1956;

6. Subject to our observation made in para 4hereinabove, in our opinion, and to the best ofour information and according to theexplanations given to us, the said accounts readtogether with the other notes to accounts givenin Schedule ‘Z’ give the information required bythe Companies Act, 1956, in the manner sorequired, give a true and fair view in conformitywith the accounting principles generally acceptedin India:

(a) in the case of the Balance Sheet, of thestate of affairs of the Company as at 31stMarch, 2010;

(b) in the case of the Profit and Loss Account,of the profit of the Company for the yearended on that date;

(c) in the case of the Cash Flow Statement, ofthe cash flows of the Company for the yearended on that date.

For HABIB & CO.CHARTERED ACCOUNTANTS

D. P. SHROFF

PARTNERPlace: Mumbai M. NO. 45417Date : 31st May, 2010 Firm Reg. No. 103479W

Annexure to the Auditors’ Report(Referred to in paragraph iii of our report of even date)

(i) (a) The company has maintained proper recordsshowing full particulars, including quantitativedetails and situation of fixed assets.

(b) As explained to us, all the assets have not beenphysically verified by the management during theyear but there is a regular programme ofverification in a phased manner. In our opinion,the same is reasonable having regard to the sizeof the company and the nature of its assets. Themanagement has explained to us that no materialdiscrepancies were noticed during suchverification.

(c) In our opinion, the disposal of fixed assets duringthe year are not of the significant value so as toaffect the going concern assumption.

(ii) (a) As explained to us, the inventories (except stockin transit) have been physically verified at




reasonable intervals during the year. In respectof inventory lying with bonded warehouse andwith third parties, the same have been taken asper the confirmation obtained. In our opinion,the frequency of such verification is reasonable.

(b) Based on the information given to us, theprocedures of physical verification of inventoriesfollowed by the management are reasonable andadequate in relation to the size of the companyand the nature of its business.

(c) The company is maintaining proper records ofinventory. The discrepancies noticed onverification between physical stocks and bookrecords were not material.

(iii) (a) According to the information and explanationgiven to us, the Company has granted interestfree unsecured advances in the nature of loanto two Companies and to three parties covered

in the register maintained under section 301 ofthe Companies Act, 1956 and the maximumamount involved is Rs.1,62,47,472/- and thebalance at the close of the year is Rs.1,54,17,172/ -.

(b) According to the information and explanationgiven to us, in our opinion except that the samebeing interest free, the other terms andconditions of the loans granted by the companyare prima facie not prejudicial to the interest ofthe company.

(c) As there is no specific stipulation for repaymentof principal and interest, the requirement of

clauses iii (c) & iii (d) of paragraph 4 of the orderare not applicable.

(d) The company has not taken any unsecured loanfrom companies, firms or other parties coveredin the register maintained under section 301 ofthe Companies Act, 1956. Accordingly,requirement of clauses iii (f) & iii (g) of paragraph4 of the order are not applicable.

(iv) In our opinion and according to the information andexplanations given to us, having regard to theexplanation that some of the items are of special naturefor which alternative quotations are not available, thereare adequate internal control procedures

commensurate with the size of the Company and thenature of its business with regard to purchases ofinventory, fixed assets and with regard to sale of goods.During the course of our audit and according to theinformation and explanations given to us, we haveneither come across nor have been informed of anycontinuing failure to correct.

(v) (a) According to the information and explanationsgiven to us, we are of the opinion that thetransactions that the particulars of contracts oragreements that need to be entered into theregister maintained under section 301 of theCompanies Act, 1956 have been so entered.

(b) According to the information and explanationsgiven to us, the transactions made in pursuanceof contracts or arrangements entered intoregister maintained under section 301 of theCompanies Act, 1956 and exceeding the value

of rupees five lacs in respect of each party duringthe year have been made at prices which arereasonable having regard to prevailing marketprices at relevant time.

(vi) According to the information and explanations givento us, the company has not accepted any deposits towhich the provisions of section 58A & 58AA of theCompanies Act, 1956 and the Companies (Acceptanceof Deposits) Rules, 1975 apply.

(vii) The Company has set up in-house internal auditdepartment The Company is in the process of settingup a formal internal audit system to make itcommensurate with the size of the company & nature

of its business.(viii) We have broadly reviewed the books of accounts

relating to materials, labour and other items of costmaintained by the company pursuant to the Rules madeby the Central Government for the maintenance of costrecords under section 209 (1) (d) of the Companies Act,1956 and we are of the opinion that prima facie theprescribed accounts and records have been made andmaintained. We have, however, not made a detailedexamination of the records with a view to determinewhether they are accurate or complete.

(ix) (a) The company is generally regular in depositingwith appropriate authorities undisputed statutory

dues including Provident Fund, Employees StateInsurance, Income Tax, Sales Tax, Wealth Tax,Excise Duty, Cess, and other statutory dues asapplicable with the appropriate Authorities,except that there were few cases of delay indepositing professional tax, customs duty andfurther, undisputed professional tax and taxdeducted at source amounting to Rs. 9127/- andRs. 593948/- respectively has remainedoutstanding as at 31st March, 2010 for a periodof more than six months from the date theybecame payable.

(b) According to the information and explanationsgiven to us, there are no dues of Sales Tax,Customs Duty, Wealth Tax, Excise Duty and Cesswhich have not been deposited on account ofany dispute, except liability in respect of servicetax amounting to Rs.9.30 Lacs, the details of thesame are given as under:

Name of Period Amount Forum whereStatute (Rs.) dispute are

pending

Service Tax F.Y. 2008-09 & 9.30 Lacs Superintendent2009-10 Central Excise

& Customs.






BALANCE SHEET AS AT 31ST MARCH 2010

Sche As at 31/03/10PARTICULARS dule As at 31/03/09

No. (Rs.) Total (Rs.) (Rs.)

A] SOURCES OF FUNDS1 Share Holders Funds :

Share Capital A 58,402,400 47,620,000Reserves and Surplus B 951,343,546 746,307,235

1,009,745,946 793,927,2352 Pending Allotment of Shares C – 10,782,400

(Pursuance to the scheme of amalgamation)3 Share Warrant Application Money D – 6,375,0004 Share Application Money 217,200 217,200

(Transfer from Mobil Petrochem Pvt Ltd -transferor co.)

5 Loan Funds :Secured Loan E 131,802,619 7,235,451

Unsecured Loan F 40,451,504 2,105,822172,254,123 9,341,274

TOTAL 1,182,217,269 820,643,109B] APPLICATION OF FUNDS

1 Fixed Assets : GGross Block 441,985,466 331,958,934Less: Depreciation 57,642,557 45,201,777

Net Block 384,342,909 286,757,156Capital Work in Progress at Cost 88,606,954 2,500,337

2 Investments H 6,860,938 236,5003 Current Assets, Loans and Advances :

Inventories I 977,163,521 302,642,826Sundry Debtors J 768,957,656 553,579,055

Cash and Bank Balances K 308,529,112 181,708,496Loans and Advances L 313,306,983 169,909,959

2,367,957,272 1,207,840,336Less: Current Liabilities and Provisions M 1,667,949,242 679,403,754

NET CURRENT ASSETS 700,008,030 528,436,582

4 Net Deferred Tax Assets/(Liability) N 2,398,439 2,712,533

TOTAL 1,182,217,269 820,643,109

Significant Accounting Policies YNotes to the Accounts Z

The Schedules and notes referred to above formintegral part of the Accounts. For and on behalf of the Board

As per our report of even date PANAMA PETROCHEM LTD.

FOR HABIB & CO AMIRALI E RAYANICHARTERED ACCOUNTANTS CHAIRMAN

D.P.SHROFF AMIN A RAYANIPARTNER MANAGING DIRECTOR & CEOMem No. 45417Firm Reg. No. 103479W NIDHI GUPTA

COMPANY SECRETARYPlace : MumbaiDate : 31st May, 2010





PROFIT AND LOSS ACCOUNT FOR THE PERIOD ENDED 31ST MARCH 2010

Sche 2009-2010 2008-2009PARTICULARS dule (Rs.) (Rs.)

No.

INCOMESalesManufactured Goods 3,293,826,089 3,903,808,066Less: Excise Duty Paid on Manufactured Finished Goods 285,086,218 393,019,974

3,008,739,872 3,510,788,092Traded Goods 187,935,810 160,758,552Processing Charges (TDS - Rs. 38722/- PY - 10,071/-) 5,697,578 2,377,368

3,202,373,260 3,673,924,012Other Income O 22,330,537 27,396,089Increase/(Decrease ) in Stock of Finished Goods P (4,482,806) 12,135,492TOTAL 3,220,220,990 3,713,455,593EXPENDITURERaw Material Consumed Q 2,464,118,167 2,915,911,417Manufacturing Expenses R 7,363,826 5,366,380Employment Cost S 10,295,790 8,907,494Traded Goods (Net) T 164,270,775 154,585,648Operating and Other Selling Expenses U 226,045,344 191,735,745Foreign Exchange Fluctuation (40,955,304) 167,733,315Financial Expenses V 49,000,484 83,013,941Depreciation G 13,259,064 13,167,850Keyman Insurance Premium 1,207,310 1,207,310Loss of Material In Transit (Net) W 1,022,421 1,918,129TOTAL 2,895,627,878 3,543,547,229

NET PROFIT FOR THE YEAR BEFORE TAX AND 324,593,113 169,908,364EXTRAORDINARY ITEMSPrior Period Adjustments (Net) X 1,270,230 3,495,216NET PROFIT FOR THE YEAR BEFORE TAX 323,322,883 166,413,148Less: Current Tax Provision 85,000,000 52,000,000

Add: Income Tax For Earlier Years written back (1,267,565) (764,772)Less: Fringe Benefit Tax - 1,028,675Less: Wealth Tax 76,100 98,000Less/(Add): Deferred Tax Liabilites/(Assets) 314,094 (2,702,158)NET PROFIT FOR THE YEAR AFTER TAX 239,200,254 116,753,403

Less: Transfer to Reserves 23,920,025 11,675,340Proposed Dividend (including tax on dividend) 34,163,945 27,331,155NET PROFIT FOR THE YEAR AFTER APPROPRIATIONS 181,116,283 77,746,908Balance brought forward from previous year 377,798,962 294,307,733BALANCE CARRIED TO BALANCE SHEET 558,915,246 372,054,641

Basic E.P.S 40.96Diluted E.P.S 40.96Significant Accounting Policies YNotes to the Accounts ZThe Schedules and notes referred to above formintegral part of the Accounts. For and on behalf of the BoardAs per our report of even date PANAMA PETROCHEM LTD.

FOR HABIB & CO AMIRALI E RAYANICHARTERED ACCOUNTANTS CHAIRMAN

D.P.SHROFF AMIN A RAYANIPARTNER MANAGING DIRECTOR & CEOMem No. 45417Firm Reg. No. 103479W NIDHI GUPTA

COMPANY SECRETARYPlace : MumbaiDate : 31st May, 2010




SCHEDULES ANNEXED TO AND FORMING PART OF THEBALANCE SHEET AS AT 31ST MARCH 2010

As at 31/03/2010 As at 31/03/2009

(Rs.) (Rs.)SCHEDULE - ASHARE CAPITAL :

Authorised Capital

1,31,60,000 Equity shares of Rs.10/- each 131,600,000 131,600,000(P.Y. - 1,31,60,000 Equity shares of Rs. 10/- each)

131,600,000 131,600,000Issued, Subscribed and Paid up Capital:58,40,240 Equity shares of Rs. 10/- each (Prev year 47,62,000) 58,402,400 47,620,000

58,402,400 47,620,000SCHEDULE - B

RESERVES AND SURPLUS:

Securities Premium AccountOpening Balance 310,073,000 128,120,000Add : Reserve taken over from Mobil Petrochem Pvt Ltd - transferor co. – 181,953,000

Closing Balance 310,073,000 310,073,000

Investment Allowance ReserveOpening Balance 24,434 –Add : Reserve of Mobil Petrochem Pvt Ltd – 24,434

Closing Balance 24,434 24,434

General ReservesOpening Balance 58,410,841 36,331,358Add : Difference between share capital issued and share capital of

Mobil Petrochem Pvt Ltd in the scheme of amalgamation – 10,782,400Less : Liquidation Expenses – 378,257Add : Additions during the year 23,920,025 11,675,340

Closing Balance 82,330,866 58,410,841

Profit & Loss AccountOpening Balance 377,798,960 294,307,733Add : Accumulated Profit of Mobil Petrochem Pvt Ltd – 5,744,319Add : Transfer from Profit & Loss account 181,116,283 77,746,908

558,915,243 377,798,960Less : Transitional Liabilty towards Retirement Benefits – –

Closing Balance 558,915,243 377,798,960

951,343,543 746,307,235SCHEDULE - CPending Allotment of Shares(In pursuance to the amalgamation scheme in the nature of merger,approved by the Ahmedabad High Court order dated 14th November2008 and on scheme finally coming into effect from 25th March 2009,consideration for transfer and vesting of all assets and liabilities ofthe transferor company i.e. Mobil Petrochem Pvt Ltd., issue andallotment of one equity shares of face value of Rs.10 each for everytwo equity shares of Rs.10 each held in transferor company. Total no.of equity shares pending for allotment is 10,78,240 @ Rs.10 each.) – 10,782,400

– 10,782,400





As at 31/03/2010 As at 31/03/2009(Rs.) (Rs.)

SCHEDULE - D

Share Warrant Application Money

(In pursuance to the Special Resolution passed in the Annual GeneralMeeting held on 29th September 2007 the Company has receivedapplication money against the issue on preferential basis of 4,25,000Share Warrants carrying an option/entitlement to subscribe equivalentnumber of equity shares of Rs.10 each on a future date not exceeding18 months from the date of issue at a conversion price of Rs.150 pershare including premium of Rs.140 per share) – 6,375,000

– 6,375,000

SCHEDULE - E

SECURED LOANS :A Term Loans

Financial Institutions – –(Secured Against Specific Vehicles)

Government Organisations – –(Secured Against Specific leasehold land)

[A] – –

B Facilities from BanksCash Credit 131,802,619 7,235,451

(Secured against the hypothecation of stocks, bookdebts and Plant& Machineries (both present & future); Pledge of Fixed DepositReceipts; Further secured by Equitable Mortgages of Company’spresent Immoveable Property situated at Daman, property ofassociate company situtated at Vashi, Navi Mumbai and alsoproperty belonging to relatives of Directors and Personalguarantee of 7 directors of the company)

[B] 131,802,619 7,235,451

Total [A]+[B] 131,802,619 7,235,451

SCHEDULE - FUNSECURED LOANS :

Short Term Loans:

a] from Banks 40,451,504 2,105,822

b] from Others – –

(Repayable within 12 Months Rs. 4,04,51,504 P.Y. 20,15,822)

40,451,504 2,105,822




S C H E D U L E G

F I X E D A S S E T S S C H E D U L E G A S O N 3 1 S T M A R C H 2 0 1 0

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L e a s e h o l d L a n d

6 , 3 2 2 , 9 8 6

1 6 , 0 3 1 , 7 4 7

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2 2 , 3 5 4 , 7 3 3

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6 , 3 2 2 , 9 8 6

2 2 , 3 5 4 , 7 3 3

3

F a c t o r y B u i l d i n g

2 3 3 , 4 3 5 , 6 1 1

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5 0 , 0 0 2

2 3 3 , 3 8 5 , 6 0 9

1 2 , 3 0 3 , 3 9 6

7 , 7 9 5 , 0 7 9

5 8 1

2 0 , 0 9 7 , 8 9 4

2 2 1 , 1 3 2 , 2 1 5

2 1 3 , 2 8 7 , 7 1 5

4

O f f i c e B u i l d i n g

1 2 , 8 8 5 , 3 1 7

8 8 , 3 5 1 , 0 3 2

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1 0 1 , 2 3 6 , 3 5 0

3 9 4 , 8 9 8

6 8 2 , 8 3 4

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1 , 0 7 7 , 7 3 2

1 2 , 4 9 0 , 4 1 9

1 0 0 , 1 5 8 , 6 1 8

5

P l a n t & M a c h i n e r y

3 3 , 1 0 4 , 5 1 0

4 , 4 1 3 , 4 8 7

-

3 7 , 5 1 7 , 9 9 8

1 8 , 9 1 5 , 5 0 4

1 , 3 9 9 , 0 4 4

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2 0 , 3 1 4 , 5 4 8

1 4 , 1 8 9 , 0 0 6

1 7 , 2 0 3 , 4 5 0

6

A i r C o n d i t i o n e r

3 , 6 7 4 , 1 8 8

1 6 , 0 0 0

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3 , 6 9 0 , 1 8 8

3 4 2 , 9 9 5

1 7 4 , 8 4 5

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5 1 7 , 8 4 0

3 , 3 3 1 , 1 9 3

3 , 1 7 2 , 3 4 8

7

O f f i c e E q u i p m e n t

1 , 4 8 8 , 2 4 7

1 4 3 , 6 2 5

-

1 , 6 3 1 , 8 7 3

4 8 2 , 9 1 0

7 4 , 9 3 8

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5 5 7 , 8 4 8

1 , 0 0 5 , 3 3 7

1 , 0 7 4 , 0 2 5

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C o m p u t e r s

3 , 4 9 5 , 5 9 1

4 2 9 , 9 3 6

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3 , 9 2 5 , 5 2 7

2 , 4 4 1 , 9 0 8

3 0 7 , 9 2 4

3 1 2 , 8 3 1

2 , 4 3 7 , 0 0 1

1 , 0 5 3 , 6 8 4

1 , 4 8 8 , 5 2 6

9

F u r n i t u r e & F i x t u r e s

1 0 , 2 7 2 , 9 3 7

1 2 7 , 2 4 4

2 0 5 , 1 5 2

1 0 , 1 9 5 , 0 2 9

1 , 4 4 4 , 2 1 7

6 4 2 , 1 5 3

2 , 1 0 0

2 , 0 8 4 , 2 7 0

8 , 8 2 8 , 7 2 0

8 , 1 1 0 , 7 5 8

1 0

L a b o r a t o r y E q u i p m e n t s

1 , 3 5 1 , 3 0 9

1 , 0 4 0 , 8 8 7

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2 , 3 9 2 , 1 9 6

8 2 7 , 5 8 3

1 2 9 , 1 8 5

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9 5 6 , 7 6 8

5 2 3 , 7 2 5

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5 , 8 7 8 , 8 9 0

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1 , 8 0 8 , 7 4 3

2 7 3 , 4 6 9

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2 , 0 8 2 , 2 1 2

4 , 0 7 0 , 1 4 7

3 , 7 9 6 , 6 7 7

1 2

V e h i c l e s

1 8 , 7 1 9 , 4 4 6

2 , 2 8 9 , 5 1 7

2 , 5 6 1 , 7 9 2

1 8 , 4 4 7 , 1 7 2

5 , 8 0 0 , 7 6 7

1 , 5 4 2 , 6 6 0

5 0 2 , 7 7 4

6 , 8 4 0 , 6 5 3

1 2 , 9 1 8 , 6 7 9

1 1 , 6 0 6 , 5 1 9

1 3

I n t a n g i b l e A s s e t -

S o f t w a r e

7 1 0 , 8 0 1

-

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7 1 0 , 8 0 1

4 3 8 , 8 5 7

2 3 6 , 9 3 4

-

6 7 5 , 7 9 1

2 7 1 , 9 4 4

3 5 , 0 1 0

T o t a l

3 3 1 , 9 5 8 , 9 3 3

1 1 2 , 8 4 3 , 4 7 5

2 , 8 1 6 , 9 4 7

4 4 1 , 9 8 5 , 4 6 6

4 5 , 2 0 1 , 7 7 7

1 3 , 2 5 9 , 0 6 5

8 1 8 , 2 8 6

5 7 , 6 4 2 , 5 5 7

2 8 6 , 7 5 7 , 1 5 6

3 8 4 , 3 4 2 , 9 0 9

1 4

C a p i t a l W o r k

i n P r o g r e s s

-

-

-

-

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-

-

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2 , 5 0 0 , 3 3 7

8 8 , 6 0 6 , 9 5 4

T o t a l

3 3 1 , 9 5 8 , 9 3 3

1 1 2 , 8 4 3 , 4 7 5

2 , 8 1 6 , 9 4 7

4 4 1 , 9 8 5 , 4 6 6

4 5 , 2 0 1 , 7 7 7

1 3 , 2 5 9 , 0 6 5

8 1 8 , 2 8 6

5 7 , 6 4 2 , 5 5 7

2 8 9 , 2 5 7 , 4 9 3

4 7 2 , 9 4 9 , 8 6 2

P r e v i o u s Y e a r

9 1 , 1 1 9 , 8 3 7

2 4 0 , 8 3 9 , 0 9 6

-

3 3 1 , 9 5 8 , 9 3 3

3 2 , 0 3 3 , 9 2 7

1 3 , 1 6 7 , 8 5 0

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4 5 , 2 0 1 , 7 7 7

6 0 , 1 5 5 , 7 4 7

2 8 6 , 7 4 7 , 1 5 6





As at 31/03/2010 As at 31/03/2009(Rs.) (Rs.)

SCHEDULE - H

INVESTMENTS IN SHARES (AT COST)

QUOTED6,200 (Prev year 6,200 ) fully paid equity shares offace value of Rs. 10/- each of Devlopment Credit Bank Ltd. 218,000 218,000(Market Value as on 31.03.2010 Rs.1,99,640/-, P.Y. Rs.1,17,180/-)37,141 (Prev. year Nil) fully paid equityshares offace value of Rs. 10/- each of Indian Bank Ltd. 6,526,938 -(Market Value as on 31.03.2010 Rs. 65,29,388 /-,)

UNQUOTED1,850 (Prev year 1,850) fully paid equity shares of Rs.10/- 18,500 18,500each of Bharuch Enviro Infrastructure Ltd.975 (Prev year Nil) Fully paid equity shares of Rs. 100/- 97,500 -each of Marol Co -Op Ind. Estate

6,860,938 236,500

SCHEDULE - IINVENTORIES :

(As verified, valued and certified by the management)(Valued at cost or net realisable value whichever is lower)a Raw Materials 938,541,405 244,265,950b Packing Material 2,713,883 3,297,222c Finished Goods 35,178,569 41,523,777d Traded Goods 729,664 13,555,877

977,163,521 302,642,826SCHEDULE - J

SUNDRY DEBTORS(Unsecured and considered good)(as verified and certified by the management)a] Outstanding for a period exceeding 6 months 78,316,830 34,660,001b] Others 691,184,296 519,581,924

769,501,126 554,241,925Less: Provision for Doubtful Debts 543,470 662,870

768,957,656 553,579,055[Includes dues from a firm, in which some of the directors arepartners Rs. Nil (previous year:- Rs 5,75,953.04)]

Name of the Firm Current Year Previous Year Max. Balancei) Asiatic Corporation – 575,953 575,953

Total – 575,953 575,953

SCHEDULE - K

CASH AND BANK BALANCESCash on Hand 1,449,959 687,681Balance with Scheduled Banks:In Current Accounts 179,513,130 29,164,518In Fixed Deposits 126,507,199 150,645,881In Unclaimed Dividend A/c 1,058,824 920,116In Margin Money Deposit – 290,300

308,529,112 181,708,496Note: Fixed Deposits includes Rs. Nil P.Y. Rs.63,75,000/- being unutilisedportion out of the preferential issue of Share Warrants.




As at 31/03/2010 As at 31/03/2009(Rs.) (Rs.)

SCHEDULE - L

LOANS AND ADVANCES

(unsecured and considered good)Advances recoverable in cash or in kind or for value to be received 21,634,852 14,290,813Advance to Directors/Officers 5,282,977 6,113,277Loans to Companies 10,134,195 9,373,195Advance tax and TDS 144,630,021 96,836,852Staff Loan 140,195 76,000Balance with PPL Group Gratuity Trust 2,672,178 -Sundry Deposits 3,471,991 2,864,379Balances with Central Excise 52,144,908 20,292,436Interest Receivable on FDR 1,532,835 2,478,469Advance paid to suppliers 71,662,832 17,584,537

313,306,983 169,909,959(Includes due from Companies/Firms in which some of theDirectors are interested Rs.1,54,17,172/-, P.Y. 1,54,86,472/-)

Current Year Previous Year Max. BalanceFrom Companies under the same management -i) Ittefaq Ice & Cold Storage Co. Pvt Ltd. 2,089,195 1,328,195 2,089,195

(Taken over from Mobil Petrochem Pvt Ltd)iv) Panama Builders & Developers Pvt Ltd. 8,045,000 8,045,000 8,045,000

(Taken over from Mobil Petrochem Pvt Ltd)

Total (A) 10,134,195 9,373,195 10,134,195

Advance to Directors/Officers -i) Salimali E. Rayani 1,362,944 1,362,944 1,362,944ii) Vazirali E. Rayani 1,402,912 1,726,912 1,726,912

iii) Amirali E. Rayani 2,517,121 2,973,421 2,973,421iv) P. V. Nikam – 50,000 50,000

Total (B) 5,282,977 6,113,277 6,113,277

Gross Total (A + B) 15,417,172 15,486,472 16,247,472

SCHEDULE - MCURRENT LIABILITIES AND PROVISIONSCURRENT LIABILITIESSundry Creditors for Goods & Expenses 1,354,631,813 545,457,980Advances received against orders 15,970,189 672,614Unclaimed Dividend 1,058,824 920,116

Other Current Liabilities 91,040,230 3,979,8891,462,701,056 551,030,599

PROVISIONSProvision for Income Tax 167,266,822 97,266,822Provision for Wealth Tax 76,100 98,000Provision for Fringe Benefit Tax 1,010,000 1,010,000Provision for Retirement Benefits 2,731,319 2,667,178Proposed Dividend (including tax on distributable profits) 34,163,945 27,331,155

205,248,186 128,373,155

1,667,949,242 679,403,754





As at 31/03/2010 As at 31/03/2009(Rs.) (Rs.)

SCHEDULE - NDEFERRED TAX ASSET/(LIABILITY)

Deferred Tax Asset 5,140,262 5,454,356Less: Deferred Tax Liability (2,741,823) (2,741,823)

2,398,439 2,712,533SCHEDULE - OOTHER INCOMEDividend 94,648 3,590Interest on FDR (TDS Rs. 1498117.37/- PY - Rs. 30,48,415.58/-) 9,553,617 14,042,776Interest on Income Tax Refund 409,422 -Interest received earlier year 58,093 -Interest others 3,273,591 346,947Bad Debts Written Off Earlier Now Realised 480,830 235,850Sundry Credit Balance Written Off 264,556 1,209,197Forfieture of Share Warrant Application Money 6,375,000 -Discount earned from suppliers 218,760 967,871

Insurance claim raised 1,143,304 1,313,228Rent Received 8,500 93,000Vat/Sales tax refund - 2,956,231Octroi Refund Received 304,534 -Excise Refund 145,683 -Assignment of Keyman Insurance Policy at Surrender Value - 6,063,277Miscellaneous Income - 164,122

22,330,537 27,396,089SCHEDULE - PINCREASE / (DECREASE) IN STOCKSClosing stock of Finished Goods 35,178,569 41,523,777Less : Opening stock of Finished Goods 41,523,777 28,151,420

(6,345,209) 13,372,357Add/(Less):Variation in excise duty on opening and closing stock of finished goods 1,862,402 (1,236,866)

(4,482,806) 12,135,492SCHEDULE - QCONSUMPTION OF RAW MATERIALSOpening Stock 244,265,950 870,613,822Add : Purchases 2,968,336,577 2,305,475,258Add : Freight Inward & Octroi 32,659,650 43,960,256

3,245,262,176 3,220,049,336Less : Closing Stock 845,259,342 244,265,950

2,400,002,834 2,975,783,386Add/(Less) : Variation in custom duty on openingand closing stock of bonded stock 64,115,334 (59,871,969)

2,464,118,167 2,915,911,417SCHEDULE - RMANUFACTURING EXPENSESGodown and Storage Rent 1,678,167 548,000Labour charges 1,395,999 940,247Factory Expenses 90,210 97,987Water & Drainage Charges 170,343 202,565Laboratory Expenses 471,790 226,872Power & Fuel Expenses 2,919,990 2,535,787Effluent treatment charges 7,500 5,700Repairs to Plant & Machinery 629,828 809,223

7,363,826 5,366,380




As at 31/03/2010 As at 31/03/2009(Rs.) (Rs.)

SCHEDULE - SEMPLOYMENT COST

Salaries & Wages 8,586,999 7,391,287Employees’ Welfare Expenses 294,960 294,743Retirement Benefits to Employees 64,141 703,357Contribution to Provident and other funds 293,690 295,757Labour Settlement Cost - 20,000Executive Remuneration 1,056,000 202,350

10,295,790 8,907,494SCHEDULE - TTRADED GOODS (NET)Opening Stock 13,555,877 70,104,439Add : Stock of merged company - 530,235Add : Purchases 243,417,568 96,512,169Add : Freight Inward & Octroi 1,309,057 994,681

258,282,503 168,141,525Less : Closing Stock 94,011,727 13,555,877

164,270,775 154,585,648

SCHEDULE - UOPERATING AND OTHER SELLING EXPENSESRent, Rates & Taxes 2,554,986 773,518License Fees 193,495 168,199Advance License Fees 1,143,025 975,454Insurance 6,207,801 6,016,461Advertisement & Marketing Expenses 3,744,083 4,894,383Meeting & Conference - 113,026Deposits not recoverable written off - 875,422Customs Duty Assessment Levy - 286,136Share Listing Expenses 55,000 12,922Postage and Telephone 2,165,307 1,761,213ESIC Assesment Dues - 76,984Expenses on Merger - 1,420,666Electricity Charges 867,362 924,086Travelling and Conveyance 4,206,778 2,613,504Printing and Stationery 652,616 614,076Miscellaneous Expenses 695,643 217,125Loss on Sale of Fixed Assets/Theft 1,979,018 -Short Term Loss on Sale of Shares 99,309 -

Excise Assessment duty paid 620,419 -Staff Training Exp. 866,719 -Filing Fees 37,370 77,551Penalty 656,470 638,888Discount given to customers 4,114,458 4,090,532Directors Remuneration 1,386,000 554,000Directors Sitting Fees 106,000 80,000Sale tax -assessment Tax 340,146 70,805Service Tax - Expense 1,000,325 749,617Membership & Subscription 2,035,094 383,725Sample Expenses 29,070 20,407





As at 31/03/2010 As at 31/03/2009(Rs.) (Rs.)

Legal & Professional fees 3,227,487 4,092,803Donation & Charity 2,918,210 2,540,501

Bad Debts Written Off 6,176,628 11,032,356Provision for Doubtful Debts - 662,870Security Service charges 1,097,057 812,031Demurrage Charges - 4,305,000Hire Charges Paid - 270,700Vehicle Expenses 3,844,810 1,504,781Auditors’ RemunerationAudit Fees 500,000 300,000Tax Audit 20,000 10,000Other Capacity 50,000 31,350Sundry Debit Balance Written Off 651,029 299,713Interest on Delayed Payment of Customs Duty 1,628,105 5,387,257Repairs to :

Building 608,769 825,178Other assets 2,498,339 1,439,910

Sale Promotion Expenses 1,481,995 511,953Selling Expenses 112,742 158,096Packing Charges

Opening Stock 3,297,222 110,400Add : Purchases 70,103,745 47,446,888Less : Closing Stock (2,713,883) (3,297,222)

70,687,085 44,260,065Freight Outwards 72,635,547 67,790,108Brokerage and Commission 4,477,896 4,345,820Export expenses 17,673,150 12,746,554

226,045,344 191,735,745

SCHEDULE - VFINANCIAL EXPENSESInterestFinancial Institution - 9,496Banks 20,478,946 54,976,780

20,478,946 54,986,276Bank Charges 28,521,537 28,027,666

49,000,484 83,013,941

SCHEDULE - WLOSS OF MATERIAL IN TRANSIT (NET):Loss of Material in Transit 1,022,421 5,936,736Less : Insurance Claim Receivable - 4,018,607

1,022,421 1,918,129

SCHEDULE - XPRIOR PERIOD ADJUSTMENTS:Prior Period Expenses 1,397,925 7,290,100Less: Prior Period Incomes (127,695) (3,794,884)

1,270,230 3,495,216




1. Basis of preparationThe financial statements are prepared under the historicalcost convention, in accordance with the AccountingStandards notified under the Companies (AccountingStandards) Rules 2006 and the provisions of theCompanies Act 1956, as adopted consistently by thecompany. All revenue/income and cost/expenditurehaving a material bearing on the financial statementsare recognized on accrual basis, except Dividend Incomewhich is recognized on cash basis.

2. Use of estimatesThe preparation of financial statements requiresmanagement to make estimates and assumptions thataffect the reported amounts of assets and liabilities anddisclosure of contingent liabilities as at the date of thefinancial statements and reported amounts of revenuesand expenses for the year and the difference betweenactual results and estimates are recognized in the periodin which they materialise.

3. Fixed AssetsFixed Assets are recorded at historical cost along withcapitalized portion of specific and allocated expenses.Fixed Assets acquired and constructed are stated athistorical cost including attributable cost and incidentalexpenses, erection/commissioning expenses for bringingthe asset to its intended use.

The carrying amount of assets is reviewed at each BalanceSheet date to determine if there is any indication ofimpairment thereof based on the external/internal factors.An impairment loss is recognized wherever the carryingamount of an asset exceeds its recoverable amount, whichrepresents the greater of their ‘Value in use’. Theestimated future cash flows are discounted to theirpresent value at appropriate rate arrived at afterconsidering the prevailing interest rate & weightedaverage cost of capital.

Capital Work in Progress includes cost of assets at sites,construction expenditure, advances made for acquisitionof capital assets and interest on the funds deployed.

4. Depreciation/Amortization

Depreciation of fixed assets is provided on straight-linemethod at the rates and in the manner prescribed inSchedule XIV to the Companies Act 1956. Additions aredepreciated on pro-rata basis for number of days usedduring the year at the rates prescribed in Schedule XIVof the Companies Act, 1956. Depreciation on assets sold,discarded or demolished during the year is being providedat the rates up to the day on which such assets are sold,discarded or demolished.

Pursuant to Accounting Standard 26 on Intangible Assets,Software Development Charges are amortized over theuseful life of the assets over a period not exceeding 3years.

5. Valuation of InventoriesInventories of Raw Materials, Packing Materials, FinishedGoods and Traded Goods are stated at Cost or NetRealizable value whichever is lower on FIFO basis. Costcomprises of all cost of purchase, cost of conversion andother costs incurred in bringing the inventories to theirpresent location and condition, excluding Cenvat Credit/ Counter Veiling Duty (CVD), VAT set off, Discounts andRebates. The excise duty in respect of closing inventoryof finished goods is included as part of finished goods.Customs duty on stock lying in Bonded Warehouses isincluded in cost. Provision for obsolescence is madewherever necessary.

6. Investments

Long-term Investments are valued at cost. However,provision for diminution in value if any, is made torecognize a decline, other than temporary, in the valueof investments. Current Investments are valued at lowerof cost or fair value.

7. Foreign Exchange Transactions

Foreign Currency transactions are accounted at exchangerates on the date of transaction. Premium on forwardcover contracts in respect of import of raw materials ischarged to Profit & Loss account over the period ofcontract. Amounts payable and receivable in foreigncurrency as at the Balance Sheet date, not covered byforward contracts, are reinstated at the applicableexchange rates prevailing on that date. All exchangedifferences arising on monetary transactions not coveredby forward contracts are charged to Profit & Loss account.

8. Retirement Benefits

The Company has defined contribution plans for postemployment benefits namely Provident Fund. Regularcontributions are made to Provident Fund and chargedto revenue.

The Company has a defined benefit plans namely Gratuity,the liability for which is determined on the basis of anactuarial valuation at the end of the year. Gains and lossesarising out of actuarial valuations are recognizedimmediately in the Profit & Loss Account as income orexpense.

9. Borrowing Cost

Borrowing Costs that are directly attributable to theacquisition, construction or production of qualifyingassets are capitalized till the month in which the asset isready to use as part of the cost of that asset. Interest onworking capital is charged to revenue accounts.

10. Leases

Lease rental in respect of assets taken on “OperatingLease” are charged to Profit & Loss Account over theperiod of lease term.

SCHEDULE FORMING PART OF FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARSCHEDULE - YSIGNIFICANT ACCOUNTING POLICIES





11. Provisions and Contingencies

The Company creates a provision when there is a presentobligation as a result of past event that probably requiresan outflow of resources and a reliable estimate can bemade of the amount of obligation. A disclosure of

contingent liability is made when there is a possibleobligation or a present obligation that will probably notrequire outflow of resources or where a reliable estimateof the obligation cannot be made.

12. Prior Period Adjustment

All identifiable items of Income and Expenditurepertaining to prior period are accounted through “PriorPeriod Adjustment Account”.

Prior period adjustments on account of errors andomissions of transactions relating to prior periods areseparately disclosed in the current year’s financialstatements below the line so that the impact of priorperiod adjustments on the current year financial

statements can be ascertain.13. Revenue Recognition

Revenue from sale of goods is recognized when thesignificant risks and rewards in respect of ownership ofthe goods transferred to the customer and is stated netof excise duty, trade discounts, sales return and sales taxwhere ever applicable. Dividend is recognized on receiptbasis.

14. Taxes on Income

The accounting treatment for the Income Tax in respectof the Company’s income is based on the AccountingStandard on “Accounting for Taxes on Income” (AS 22)as notified by the Companies (Accounting Standards)Rules 2006. The Provision made for Income Tax inAccounts comprise both, current tax and deferred tax.

Deferred tax is recognized for all timing differences, beingthe differences between the taxable income andaccounting income that originate in one period and arecapable of reversal in one or more subsequent periods.Such deferred tax is quantified using the tax rates andlaws enacted or substantively enacted as on the BalanceSheet date. The carrying amount of deferred tax asset/ liability is reviewed at each Balance Sheet date andconsequential adjustments are carried out.

15. Earnings per share

Basic earnings per share are calculated by dividing thenet profit or loss for the period attributable to equityshareholders by the weighted average number of equityshares outstanding during the period. Partly paid equityshares are treated as a fraction of an equity share to theextent that they were entitled to participate in dividendsrelative to a fully paid equity share during the reportingperiod.

For the purpose of calculating diluted earnings per share,the net profit or loss for the period attributable to equityshareholders and the weighted average number of sharesoutstanding during the period are adjusted for the effectsof all dilutive potential equity shares.

16. Cash Flow Statement

Cash Flow statements are prepared in accordance with“Indirect Method” as explained in the AccountingStandards on Cash Flow Statements (AS 3) notified underthe Companies (Accounting Standards) Rules, 2006.

17. Segment Reporting

The accounting policies adopted for segment reportingare in line with the accounting policy of the Company.Segment Revenue, Segment Expenses, Segment Assetsand Segment Liabilities have been identified to segmentson the basis of their relationship to the operating activitiesof the segment. Revenue, expenses, assets and liabilitieswhich relate to the Company as a whole and are notallocable to segments on reasonable basis, have beenincluded under “Unallocated Revenue/Expenses/Assets/ Liabilities”.

SCHEDULE ZNOTES TO ACCOUNTS1. In pursuance to the Special Resolution passed in the

Annual General Meeting held on 29th September, 2007the Company had received 10% upfront money fromthe promoters amounting to Rs.63.75 Lacs in the F.Y.2007-08 against the issue on preferential basis of4,25,000 Share Warrants carrying an option/entitlementto subscribe equivalent number of equity shares of Rs.10each on a future date not exceeding 18 months i. e. 30thJune 2009 from the date of issue at a conversion price ofRs.150 per share including premium of Rs.140 per share.However, on expiry of the said time limit and option notbeen exercised, the said amount was forfeited duringthe year by Company.

2. Contingent Liabilities

As at the As at theyear ended year ended31/03/2010 31/03/2009

(Rs.) (Rs.)(a) Disputed Income-Tax 24.96 Lacs 26.98 Lacs

Liability in appeal

(b) Bank Guarantee 86.31Lacs 77.69 Lacs

(c) Letter of Credit Facility 9826.14Lacs 10286.45 Lacs

(d) Disputed Service Tax 9.30 Lacs NilLiability

The Company does not expect any liability to devolve onit on account of the above referred contingent liabilitiesand therefore no provision is held.

3. Estimated amount of Contracts remaining to be executedon Capital Account & not provided for (Net of Advancespaid) is Rs. 720.60 Lacs (P.Y. Rs.2,992.52 Lacs).

4. As per the Revised Accounting Standard 15 “EmployeesBenefits”, the disclosure of employee benefits as definedin the Accounting Standard are given below:




The amounts (in Rs.) recognized in the balance sheet areas follows:

Defined benefitObligation

2009-2010 2008-2009Present value of fundedobligations 2,790,541 NilFair value of plan assets 2,790,541 NilPresent value of unfundedobligations (59,222) 2,667,178Unrecognized past service cost - -Net liability (59222) 2,667,178Amounts in the balance sheet:

Liabilities 2,731,319 2,667,178Assets 2,79,541 -

Net liability (59,222) 2,667,178The amounts (in Rs.)recognized in the Defined benefit

statement of profit Obligationand loss are as follows:Current service cost 214,927 235,921Interest on obligation 220,042 144,467Expected return on plan assets - -Net actuarial losses (gains)recognized in the year ( 494,191) 322,969Past service cost - -Losses (gains) on curtailmentsand settlement - -Total, included in employeebenefit expense (59,222) 703,357Changes in the present valueof the defined benefitobligation representing Defined benefitreconciliation of Opening Obligationand closing balances thereofare as follows:GRATUITY 2009-2010 2008-2009Opening defined benefitobligation as on 01-04-2008 2,667,178 2,06,3821Service cost for the year 214,927 235,921Interest cost 220,042 144,467Actuarial losses (gains) (370,828) 322,969Losses (gains) on curtailments - -Liabilities extinguished onsettlements - -Liabilities assumed in anamalgamation in the natureof purchase - -Exchange differences onforeign Plans - -Benefits paid - 100,000Closing defined benefitobligation 31-3-2010 2,731,319 2,667,178Changes in the fair value ofplan assets representing Defined benefitreconciliat ion of the opening Obligationand closing balances thereofare as follows:

GRATUITY 2009-2010 2008-2009Opening fair value of plan assets - -Actuarial gains and (losses) 123,363 -Assets distributed on settlements - -Contributions by employer 2,667,178 -Assets acquired in anamalgamation in the natureof purchase - -Exchange differences onforeign Plans - -Benefits paid - -Closing balance of fairvalue of plan assets 2,790,541 -

The major categories of plan Defined benefitassets as a percentage of total Obligationplan assets are as follows:

GRATUITY 2009-2010 2008-2009Government of India Securities 0% 0%High quality corporate bonds 0% 0%Equity shares of listed companies 0% 0%Property 0% 0%Policy of insurance 100% 0%

Principal actuarialassumptions at the balance Defined benefitsheet date (expressed as Obligationweighted averages):

GRATUITY 2009-2010 2008-2009

Discount rate at31st March 2010 8.25% 7.00%Expected return on planassets at 31st March 2009 - -

Proportion of employees optingfor early retirement - -Annual increase in salary costs 5.00% 5.00%

The estimates of future salary increase, considered inactuarial valuation, take account of inflation, seniority,promotion and other relevant factors, such as supply anddemand in the employment market.

GRATUITY 2009-2010 2008-2009Amount for the current andprevious four periods areas follows:Defined benefit pension plans 2009-2010 2008-2009Defined benefit obligation 2,731,319 2,667,178

Plan assets 2,790,541 -Surplus/(deficit) 59,222 (2,667,178)Experience adjustments onplan liabilities (119,231) -Experience adjustments onplan assets (123,363) -Actuarial Loss/(Gain) due tochange in assumptions (251,597) -Actuarial Loss/(Gain) due toparticipant experience (119,231) -Actuarial Loss/(Gain) on liabilities (370,828) -Net Actuarial Loss/(Gain) forthe year (494,191) -





5. Director’s RemunerationDIRECTORS

REMUNERATION Executive Directors Non-

Mr. Amira li Mr. Amin Mr. Sameer Mr. S.K. Execu tiveE. Rayani Rayani Rayani Ukani Directors

(Rs.) (Rs.) (Rs.) (Rs.) (Rs.)

(a) Salary & Allowances 4,86,000 4,50,000 4,50,000 Nil Nil(1,44,000)* (Nil) (Nil) (4,10,000) (Nil)

(b) Benefits & Perquisites Nil Nil Nil Nil Nil(Nil) (Nil) (Nil) (Nil) (Nil)

(c) Bonus / Commission Nil Nil Nil Nil NilAdditional Salary (Nil) (Nil) (Nil) (Nil) (Nil)

(d) Pension, Contribution to Nil Nil Nil Nil NilProvident fund & (Nil) (Nil) (Nil) (Nil) (Nil)Superannuation Fund

(e) Directors Sitting Fee Nil Nil Nil Nil 106,000(Nil) (Nil) (Nil) (Nil) (80,000)

(f) Stock Option Details The Company does not offer any Stock Options.(if any)

* Figures of previous year are mention in brackets.

6. Assets namely moveable assets like bank accounts andvarious deposits taken over under the scheme of

amalgamation under scheme of amalgamation effectedin previous year are still held in the name of the erstwhiletransferor company viz Mobile Petro chem. Pvt. Ltd., thecompany is in the process of getting it transferred in itsname.

7. Excise duty Liability on Manufactured goods lying as on31st March 2010 is provided at Rs. 33.72 lacs (Previousyear Rs. 52.33 lacs). Customs duty on imported materials/ goods lying in customs bonded warehouse as on 31stMarch 2010 is provided at Rs. 721.19 lacs (Previous yearRs. 79.44 lacs)

8. The company’s geographical operations at Ankleshwar,Marol & Daman consist of petroleum products. There areno other business segments related to the company andthat the geographical locations are not subject tosignificantly differing risks and returns. In the opinion ofthe management, segmental reporting based ongeographical locations is not required.

9. As per Accounting Standard 18, notified under theCompanies (Accounting Standards) Rules 2006, thedisclosures of transactions with the related parties asdefined in the Accounting Standard are given below:

List of Related Parties: (Associates):1. Anirudh Distributors Pvt. Ltd2. Dunhill Development Pvt. Ltd3. H.A. Constructions Pvt. Ltd4. Ittefaq Ice & Cold Storage Co. Pvt. Ltd

5. Express Industries6. Express Industries - AOP.7. Iqbal Rayani Consultancy8. Panama Petroleum Products9. Asiatic Corporation10. Iqbal Rayani Consultancy11. Arif Iqbal Rayani Family Trust12. Chemifine13. Diamond Wax Agency14. Monaco Petroleum Pvt. Ltd15. S. R. Realities Pvt. Ltd.16. Panama Builders & Developers Pvt. Ltd17. Pickol Fibrotech

(i) Transactions with related partiesNature Name of the Quantum Maximum Closing

of Related of amount balanceTransactions Party transaction outstanding as on

during 31/03/2010the year

Rent Panama Rs. 1.20 lacs Rs. 0.90 lacs NilPetroleum (Rs. 1.20 lacs)* (Rs. 0.30 lacs) NilProducts

Warehousing Monaco Rs.5.00 lacs Rs. 4.50 lacs Rs. 4.50 lacsCharges Petroleum ( Rs. 1.00 lacs) (Rs. 1.00 lacs) Rs. (0.79 lacs)

Pvt. LtdRent Hussein V. Rs. 1.20 lacs Rs. 0.30 lacs Nil

Rayani (Rs. 1.20 lacs) (Rs 0.30 lacs) (Rs.1.19 lacs)Warehousing Anirudh Rs. 1.50 lacs Rs. 1.35 lacs Rs. 1.35 lacsCharges Dist ributors (Rs. 1.50 lacs) (Rs. 1.50 lacs ) (Rs.1.19 lacs)

Pvt. Ltd.Warehousing I ttefaq Ice & Rs. 5.00 lacs Rs. 4.38 lacs Rs. 4.38 lacsCharges Cold Storage (Rs. 2.50 lacs) (Rs. 2.50 lacs (Rs.1.98 lacs

Co.Pvt. Ltd.Rent Arif A. Rayani Rs. 3.06 lacs Rs. 2.75 lacs Rs. 2.75 lacs

(Nil) (Nil) (Nil)Sale of Goods Asiatic Nil Nil Nil(By Mobil Corporation (Rs. 5.76 Lacs) (Rs. 23.81 Lacs) (Rs.5.76 lacs)PetrochemPvt Ltd)

(ii) Inter Corporate Loans GrantedName of the Quantum of Maximum ClosingRelated Party transaction amount Balance

outstanding as ondur ing the year 31/03/2010

Panama Builders Nil Rs. 80.45 lacs Rs. 80.45 lacs& Developers ( Rs. 80.45 lacs) (Rs. 80.45 lacs) ( Rs. 80.45 lacs)Pvt Ltd (Takenover from MobilPetrochemPvt Ltd)Ittefaq Ice & Rs. 7.00 lacs Rs. 20.28 lacs Rs. 28.28 lacsCold Storage (Rs. 13.28 lacs) (Rs. 20.51 lacs) (Rs. 13.28 lacs)Co. Pvt Ltd.(Taken over fromMobil PetrochemPvt Ltd)

(iii) Transactions with Key Managerial PersonnelName of the Nature Quantum

Key Managerial of Nature of transaction inPersonnel Relationship Amount

Amirali E. Rayani Chairman Managerial Remuneration Rs. 4.86 lacs(Rs. 1.44 lacs)

Amirali E. Rayani Chairman Opening balance of Rs. 29.73 lacsSurrender Value of Keyman (RS. 29.73lacs)Insurance Policy

S.K. Ukani Director Managerial Remuneration Nil( Rs. 4.10 lacs)

Amin A. Rayani Managing Rent Rs. 6.63 lacsDirector & (Nil)CEO

Samir A. Rayani Di rector Managerial Remuneration Rs. 4.50 lacs(Nil)

Samir A. Rayani Director Rent Rs. 7.84 lacs(Rs. 1.20 lacs)

Amin A. Rayani Di rector Managerial Remuneration Rs. 4.50 lacs(Rs. 1.20 lacs)

Akbarali E. Rayani Executive Executive Remuneration Rs. 1.08 lacs(Rs. 2.02 lacs)

Salimali E. Rayani Executive Opening balance of Rs. 13.63 LacsSurrender Value of Keyman (Rs. 13.63 lacs)Insurance Policy

Vazirali E. Rayani Executive Opening balance of Rs. 17.27 lacsSurrender Value of Keyman (Rs. 17.27 lacs)Insurance Policy







Sr. Particulars Current PreviousNo. Year Year

2009 – 2010 2008 – 2009

A. Licensed Capacity (MT) 75000 69000

B. Installed Capacity (MT) 75000 69000

C. Opening Stock: Manufactured Goods (MT) 731.778 618.363Traded Goods: Petroleum Prod. (MT) 216.139 1624.598Others (Nos.) 390 389

D. Actual Production and Purchases ofFinished GoodsManufactured Goods (MT) 74453.809 69668.490Traded Goods: Petroleum Products (MT) 4078.369 1889.287Others (Nos.) Nil 1

E. SalesManufactured Goods(MT) 74665.512 69555.075Traded Goods: Petroleum Prod. (MT) 3083.930 3297.746Others (Nos.) 1 NILValue (Rupees in lacs)Manufactured Goods 30087.40 35107.88Traded Goods 1879.36 1607.58

F. Closing Stock: Manufactured Goods (MT) 520.075 731.778Traded Goods :Petroleum Prod. (MT) 1210.578 216.139Others (Nos.) 389 390

16. Details of Raw Materials consumedThe main raw material consumed is Base Oil, for whichnecessary details are given hereunder:

Consumption for Consumption forThe year ended The year ended

31/03/2010 31/03/2009(MT) (MT)

Base Oil 63946.058 58191.682

Value of imported and indigenous raw materials, stores andspares consumed and percentage thereof to the totalconsumption:

a) Raw Materials

2009 – 2010 (%) 2008 – 2009 (%)

Imported 22677.86 Lacs 92% 27087.09 Lacs 93%

Indigenous 1963.32 Lacs 08% 2072.02 Lacs 07%

b) Stores & Spares

2009 – 2010 (%) 2008 – 2009 (%)

Imported NIL 0% NIL 0%Indigenous 6.30 Lacs 100% 8.09 Lacs 100%

Consumption is arrived at on the basis of opening stock pluspurchases less closing stock and includes the adjustments ofexcess and shortage as ascertained on physical count.

17. Expenditure in Foreign Currency:

2009 – 2010 2008 – 2009Foreign Traveling expenses 31.66 lacs 10.78 lacsPayments for Imports 19894.23 lacs 26493.76 lacsMarketing Expenses 29.08 Lacs 41.71 lacsBank Commission and Usance Charges 236.64 Lacs 522.76 lacsMeeting & Conference Nil 0.99 LacsExhibition Expenses Nil 3.08 LacsDemurrage Charges Nil 43.05 LacsLegal & Professional Fees 2.66 Lacs 7.40 LacsExport Freight Nil 5.47 LacsFixed Assets Nil 14.45 LacsStaff Training Exp. 8.66 Lacs Nil

18. Earnings in Foreign currency (FOB Value of Exports);

2009 – 2010 2008 – 2009

Exports 9276.09 Lacs 7788.21 Lacs

19. C.I.F. value of imports

2009 – 2010 2008 – 2009

Raw Materials 29810.29 Lacs 21758.04 Lacs

20. Inter Unit Transfer & Captive Consumption

Inter Unit transfers are valued, either at factory cost ofthe transferor unit or at sales price plus transport andother charges. Inter Unit transfers amounting toRs.695.85 Lacs (Previous Year Rs.1758.43 lacs) andCaptive Consumption amounting to Rs.NIL (Previous YearRs.NIL lacs) totaling to Rs.695.85 lacs (Previous yearRs.1758.43 lacs) have been reduced from both purchasesand sales during the year. The method adopted is similarto the method adopted in previous year.

21. As per the past practice consistently followed by thecompany, all indirect expenditure incurred at the HeadOffice are allocated to the Daman unit on the basis ofthe turnover ratio for the purpose of working out theprofit of the said unit for availing deduction u/s 80 IB.

22. Current assets, loans & advances are approximately ofthe value stated, except otherwise stated, if realized inthe ordinary course of business. The provision of all knownliabilities, is adequate and not in excess of the amountsreasonably necessary. Balance in sundry debtors, loansand advances, deposits, current liabilities and unsecuredloans are subject to confirmations.

23. Sundry Debtors include Rs.119.81 lacs (P.Y. Rs. 122.89lacs) due for a period exceeding 2 years as on the balancesheet date. In the opinion of the management, the sameare good and recoverable and hence the same has notbeen provided for.

24. Figures for the previous year have been regrouped/ recasted wherever necessary to make them comparablewith the figures of the current year.

As per our report of even date. For and on behalf of theFOR HABIB & CO. Board of DirectorsCHARTERED ACCOUNTANTS

PANAMA PETROCHEM LTD.D.P. SHROFF AMIRALI E RAYANIPARTNER CHAIRMANMem. No. 45417Firm Reg. No. 103479W AMIN A RAYANI

MANAGING DIRECTOR & CEO

Place: Mumbai NIDHI GUPTADate: 31 st May, 2010 COMPANY SECRETARY




CASH FLOW STATEMENTFOR THE YEAR ENDED 31st MARCH, 2010

PARTICULARS As at 31/03/2010 As at 31/03/2009(Rs.) (Rs.)

A Cash flows from Operating Activities:Net Profit Before Tax & Extraordinary Items 324,593,113 169,908,364Adjustment for :Add : Preliminary Exps. W/Off - -

Depreciation 13,259,064 13,167,850Loss on sale/theft of assets 1,979,018 -Short Term Loss on Sale of Shares 99,309 -Prior Period adustment (1,270,230) (3,495,216)Unrealised (Gain) / Loss on foreign exchange (Net) (46,399,667) 6,539,008

Less : Dividend & Interest Income (13,389,370) (14,393,313)Forfieture of Share Warrant Application Money (6,375,000) -Dividend & Dividend Tax (34,163,945) (27,331,155)Taxes (84,122,629) (52,361,903)Surrender Value of Keyman Ins. Policy - (6,063,277)

—————————————————————Deposits not recoverable written off - (875,422)

—————————————————————Net Profit before working capital changes 154,209,663 85,094,936—————————————————————Adjustment for :Trade receivables (217,687,172) (79,921,162)Inventories (674,520,694) 666,337,255Trade and other payables 1,037,253,726 (466,358,888)Transitional Liability towards Gratuity Liability - -Other Receivables (143,397,024) (40,627,111)Deferred Tax Assets 314,094Deferred Tax Asset Taken Over from Mobil Petrochem Pvt Ltd - (2,322)

—————————————————————Net Cash flows from operating activities (A) 156,172,593 164,522,707

—————————————————————B Cash flows from Investing Activities:

Purchase of Fixed Assets (112,843,475) (39,370,289)Capital Work in Progress (86,106,617) (2,500,337)Acquisition of Fixed Assets (Net) (Due to Amalgamation) - (200,398,969)Purchase of shares (8,473,259) -Sales of Share 1,749,512Sale of Fixed Assets 19,642 -Interest received 13,294,722 14,389,723Dividend received 94,648 3,590

—————————————————————Net Cash flows from Investing activities (B) (192,264,827) (227,876,282)

—————————————————————C Cash flows from Financing Activities:

Shares Pending Allotment (Due to Amalgamation) - 10,782,400Change in other Reserves & Surplus (Due to Amalgamation) - 198,504,153Liquidation Expenses Paid (Due to Amalgamation) - (378,257)Share Application Money (Taken over from Mobil Petrochem Pvt Ltd) - 217,200Proceeds from/(Repayment of) Term Loans 124,567,167 (59,604,924)Proceeds from/(Repayment of) Unsecured Loan 38,345,682 1,515,822

—————————————————————Net cash flow from Financing Activities (C) 162,912,850 151,036,394

—————————————————————D Net increase in cash and cash equivalents [A+B+C] 126,820,616 87,682,819

Cash and cash equivalents as at the beginning of period 181,708,496 94,025,678Cash and cash equivalents at the end of period 308,529,112 181,708,496

As per our report of even date.For HABIB & CO. For and on behalf of the BoardCHARTERED ACCOUNTANTS PANAMA PETROCHEM LTD.

D.P. SHROFF AMIRALI E RAYANIPARTNER CHAIRMANM. No: 45417Firm Reg. No. 103479W AMIN A RAYANI

MANAGING DIRECTOR & CEO

Place: Mumbai NIDHI GUPTADate: 31st May, 2010 COMPANY SECRETARY





Information Required as per Part IV of Schedule VI to The Companies Act, 1956(Balance Sheet Abstract and Company’s Business Profile)

1 Registration Details

Registration No. 0 0 0 0 5 0 6 2 Status Code: 0 4

Balance Sheet date: 3 1 0 3 2 0 1 0

Day Month Year

2 Capital Raised during the year (Amt.Rs. In ‘000)Public Issue: Rights Issue:

Bonus Issue Private Placement:

3 Position of Mobilisation and Development of funds: (Amt Rs. In ‘000)Total Liabilities Total Assets

Sources of funds

Paid UP Capital Reserves & Surpluses

Secured loans Unsecured Loans

Application Money

Application of funds: Net Fixed Assets Investment

Net Current Assets Misc. expenditureNIL

Accumulated losses Deferred Tax Asset

4 Performance of Company: (Amt. Rs. In ‘000)Turnover Total expenditure

Profit before tax Profit after tax(+ for profit - for losses)

Earning per share in Rs. Dividend Rate (%)

5 General names of three principal products/services of company: (As per Monetary terms)

(HC Code) 0 0 0 0 0 0 2 7 1 0 1 9 9 0

Product Description: P A N O I L

(HC Code) 2 7 1 2 1 0 9 0

Product Description: P E T R O L E U M J E L L Y

(HC Code) 2 7 1 0 1 9 9 0

Product Description: T R A N S F O R M E R O I L

For and on behalf of the BoardPANAMA PETROCHEM LTD.

Place: Mumbai AMIRALI E RAYANI AMIN A RAYANI NIDHI GUPTADate : 31st May, 2010 CHAIRMAN MANAGING DIRECTOR & CEO COMPANY SECRETARY

+ -+ -0 0 0 0 4 0 . 9 6 0 5 0

0 0 0 3 2 3 3 2 3 0 0 0 2 3 9 2 0 0

0 0 3 2 0 2 3 7 3 0 0 2 8 7 9 0 5 0

- - - N I L - - - 0 0 0 0 0 2 3 9 8

0 0 0 7 0 0 0 0 8 - - - N I L - - -

0 0 0 4 7 2 9 5 0 0 0 0 0 0 6 8 6 1

0 0 0 0 0 0 2 1 7 0 0 0 0 4 0 4 5 1

0 0 0 1 3 1 8 0 3 0 0 0 0 4 0 4 5 1

0 0 0 0 5 8 4 0 2 0 0 0 9 5 1 3 4 4

0 0 1 1 8 2 2 1 7 0 0 1 1 8 2 2 1 7

- - - N I L - - - - - - N I L - - -

- - - N I L - - - - - - N I L - - -




ECS MANDATE FORM

BIGSHARE SERVICES PRIVATE LIMITEDUnit : PANAMA PETROCHEM LIMITED

E-2, Ansa Industrial Estate,Saki-Vihar Road, Sakinaka,Andheri (E), Mumabi : 400 072

Dear Sir,

Payment of Dividend through Electronic Clearing System (ECS)

With reference to the circular Date 31 st May, 2010 received from Panama Petrochem Ltd., I/We hereby givemy/our mandate to credit my/our Dividend on the shares held by me/us under the folio mentioned, directlyto my/our bank amount through the Electronic Clearing System (ECS). The details of the Bank Account aregiven below.

Name of the First /Sole Shareholder:(In block letters)

Folio No. :

Name of the Bank in Full and Branch:

Address and Telephone No. of the Bank:

9 Digit Code No. of the Bank and Branch asappearing on the MICR Cheque issuedby the Bank

Type of Account with Code

Account No. as appearing on the Cheque book

Bank Ledger No. / Bank Ledger Folio No. if any(As appearing in the Cheque book)

I/We enclose a blank cancelled Cheque/photocopy to enable you to verify the details mentioned above.

I/We hereby declare that the particulars given above are correct and complete. If the transaction is delayedor lost because of incomplete or incorrect information. I/We would not hold the Company/ the user instituteresponsible.

Signature of First / Sole Holder

Place :

Date :




PANAMA PETROCHEM LIMITEDPlot No. 3303, GIDC Industrial Estate, Ankleshwar – 393 002, Gujarat

Proxy Form

I/We

of

Being a member/members of above named company, hereby appoint

of or falling him

of or failing him

of

As my/our proxy to vote for me/us on my/our behalf at 28th

Annual General Meeting of the Company to be held at 11.00am on 25th September, 2010 at the Conference hall, Plot No. 3303, GIDC Industrial Estate, Ankleshwar-393 002, Gujaratand any adjournment thereof.

Regd. Folio No.:

Signed

Date

Note :a) The form should be signed across the stamp as per specimen signature registered with the Company.b) The Companies act, 1956 lays down that the instrument, appointing a proxy shall be deposited at the Registered

Office of the Company not less than Forty Eight Hours before commencement of the Meeting.c) A Proxy need not be a member.

Attendance Slip(To be handed over at the entrance of the Meeting Hall)

28 th Annual General Meeting – 25th September, 2010

I hereby record my presence at the Twenty Eighth Annual General Meeting of the Company held at the Registered Office ofthe Company at Conference hall, Plot No. 3303, GIDC Industrial Estate, Ankleshwar – 393 002, Gujarat on Saturday, September25th, 2010 at 11.00 am

Full name of Member (In Block letters)

Regd. Folio No.

No of Shares held

Full name of Proxy (In Block Letters)

Documents

Panama Petro Ar 2010