Notes to Accounts of Nagarjuna Oil Refinery Ltd.

Mar 31, 2016

1. Rights, Preferences and Restrictions attached to equity shares

The Company has only one class of equity shares having a par value of ? 1/- per share. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

2. The Company has received disclosure from Amlika Mercantile Private Limited (Amlika) informing of amalgamation of Nagarjuna Corporation Limited (NCL) pursuant to a Scheme of Amalgamation approved by the Hon''ble High Court of Bombay at Mumbai on May 2, 2014 which was made effective on June 19, 2014.

3. Pursuant to the amalgamation, following shares in the Company held by NCL stand vested in Amlika.

Shares in the Company held by Nagarjuna Management Services Private Limited, Nagarjuna Holdings Private Limited, Baron Properties Private Limited and White Stream Properties Private Limited that stood vested in NCL pursuant to a Composite Scheme of Arrangement and Amalgamation approved by the Hon''ble High Court of Bombay at Mumbai on September 14,2012.

4. As at the year end, shares in the Company totalling to 13,02,39,652 shares i.e. 30.42% stand vested in Amlika.

5. Aggregate number of shares issued for consideration other than cash 42,81,81,821 Equity Shares of Rs. 1/- each (aggregating to Rs.4,281.81 Lakhs) were allotted as fully paid up pursuant to the Composite Scheme of Arrangement and Amalgamation during the year 2011-12.

6. The Company is in receipt of the advance from Nagarjuna Fertilizers and Chemicals Limited pursuant to the Composite Scheme of Arrangement and Amalgamation which was approved by jurisdictional High Courts in Mumbai and Andhra Pradesh in 2011-12. These advances, in the nature of Loan, are repayable when the company is able to manage its financial affairs and are interest free. The amount is treated as long term borrowings since repayment of the same may not occur in the next twelve months.

7. Represents amount borrowed from a body corporate and is repayable in one bullet repayment at the end of the tenure i.e., October 18, 2015. The loan carries an interest rate 12% p.a. As at the year end, the Company has defaulted in repayment of Principal of Rs.100.00 Lakhs for 166 days (Previous year Rs.Nil) and payment of interest of Rs.2.69 Lakhs, 2.72 Lakhs and 2.71 Lakhs for a period of 258 days, 166 days and 74 days respectively. (Previous year Rs.4.99 Lakhs for 74 days).

8. The Project undertaken by Nagarjuna Oil Corporation Limited (NOCL) is in Construction Stage. Project construction was substantially slowed down from the year 2012-13 due to delay in tying up of equity for a re-assessed cost and effect of ''Thane Cyclone''.

Considering the delay in the induction of a partner and consequently, achieving financial closure for a re-assessed cost of the project, the management, as a prudent measure, made a provision of Rs.40,000.00 Lakhs towards diminution in the value of investment in the year 2014-15. The Company''s management''s efforts to induct strategic investor/s have continued during the current year, and while the financial closure is yet to be achieved, meaningful discussions are going on with good prospective investors, which may culminate in the financial closure being achieved soon. Based on the progress made in tying up of equity, the management is of the opinion that the provision made in the value of the investment is adequate and needs no further provision.

Additional provision, if any, will be made as and when considered necessary.

9. The disclosure required under Accounting Standard 15 "Employee Benefits"

Defined Contribution Plans

The Company makes Provident Fund and Superannuation Fund contribution to defined contribution retirement benefit plans for qualifying employees including whole time directors. Under the schemes the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Provident Fund scheme additionally requires the Company to guarantee payment of interest at rates notified by the Central Government from time to time, for which shortfall if any, shall be provided for.

Contribution to these Defined Contribution Plans, charged off during

Defined Benefit Plans

The employees'' gratuity fund scheme managed by Life Insurance Corporation of India (LIC) is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligations and contribution to the Scheme are routed through Nagarjuna Employees Gratuity Trust which is monitoring the gratuity scheme through LIC. The Company has contributed Rs.1.35 Lakhs to the scheme during the year (Previous Year Rs.0.46 Lakhs)

a. Reconciliation of opening and closing balance of Defined Benefit Obligation

The estimate of rate of escalations in salary considered in actuarial valuation, takes in to account inflation, length of service and other relevant factors.

10. Contingent Liabilities and Commitments (Not provided for):

11. Contingent liabilities not provided for: Nil

12. Commitments:

13. Other Commitments:

i. Commitment on account of ''Sponsor undertaking'' pursuant to the agreement with the lenders and other shareholders of Nagarjuna Oil Corporation Limited, an Associate Company, for funding of project cost overrun, if any, which as at the date of this Balance Sheet are not determinable.

ii. Commitment towards all contracts, deeds, bonds, insurance, Letters of Intent, undertakings, arrangements, policies, agreements (including erstwhile shareholders agreements and investor agreements) and other instruments, if any, relating to oil business undertaking executed by Nagarjuna Fertilizers and Chemicals Limited which stands transferred and vested pursuant to Composite Scheme of Arrangement and Amalgamation, which as at the date of this Balance Sheet are not determinable.

14. Related party transactions (Disclosures as required by "AS-18 Related Party Disclosures")

Names of related parties and description of relationship.

Associates

i. Nagarjuna Oil Corporation Limited

Key Management Personnel

i. Mr. K.S. Raju, Chairman

ii. Mr. K. Soma Raju, Manager

Relatives of Key Management Personnel

i. Mr. K. Rahul Raju, Director, Son of Mr. K S Raju

Enterprises under Significant influence of Key Management personnel or their relatives

i. Nagarjuna Fertilizers and Chemicals Limited

15. Tax Expense:

i) Provision for current tax does not arise since the company has no taxable profits.

ii) Deferred Tax asset (Net):

Deferred tax asset is not recognized on account of unabsorbed depreciation and unabsorbed Business Loss as a measure of prudence.

16. Balances in the accounts of various parties appearing in these statements are subject to confirmations and reconciliations.

17. The figures for the previous year have been restated / regrouped, wherever necessary, to conform to current year classification.

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Mar 31, 2015

1. Corporate Information:

Nagarjuna Oil Refinery Limited ("the Company") was incorporated on November 16, 2010 as a public limited company, primarily engaged in the business of promoting, conceiving, planning, coordinating, executing and monitoring setting up of any business projects relating to extraction of oil by any means within India and/or elsewhere in the world, either directly or through one or more special purpose vehicles and to enter into partnership, agreements, raise funds in order to carry out any one or more of the aforementioned activities.

1.2. Rights, Preferences and Restrictions attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 1/- per share. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

1.2.1. The Company has received disclosure from Amlika Mercantile Private Limited (Amlika) informing of amalgamation of Nagarjuna Corporation Limited (NCL) pursuant to a Scheme of Amalgamation approved by the Hon'ble High Court of Bombay at Mumbai on May 2, 2014 which was made effective on June 19, 2014.

1.2.1.1. Pursuant to the amalgamation, following shares held by NCL shall stand/vest in Amlika.

Shares held by Nagarjuna Management Services Private Limited, Nagarjuna Holdings Private Limited, Baron Properties Private Limited and White Stream Properties Limited shall stand transferred and vested in Amlika (erstwhile NCL) pursuant to a Composite Scheme of Arrangement and Amalgamation approved by the Hon'ble High Court of Bombay at Mumbai on September 14, 2012.

1.2.2. As at the year end, shares totalling to 13,02,39,591 shares i.e. 30.42% shall be held/vest in Amlika.

2.1. Aggregate number of shares issued for consideration other than cash

42,81,81,821 Equity Shares of Rs. 1/- each (aggregating to Rs. 4,281.81 Lakhs) were allotted as fully paid up pursuant to the Composite Scheme of Arrangement and Amalgamation during the year 2011-12.

3.1.The Company is in receipt of the advance from Nagarjuna Fertilizers and Chemicals Limited pursuant to the Composite Scheme of Arrangement and Amalagamation which was approved by jurisdictional High Courts in Mumbai and Andhra Pradesh in 2011-12. These advances, in the nature of Loan, are repayable when the company is able to manage its financial affairs and are interest free. The amount is treated as long term borrowings since repayment of the same may not occur in the next twelve months.

4.1. Represents amount borrowed from a body corporate and is repayable in one bullet repayment at the end of the tenure i.e., October 18, 2015. The loan carries an interest rate 12% p.a. As at the year end, the Company has defaulted in payment of interest of Rs. 4.99 lakhs for 74 days.

5.1 Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006

The Company has not dealt with any Micro and Small Enterprises as defined under the Micro, Small and Medium Enterprises Development Act, 2006 during the year. Accordingly, no disclosures are required to be furnished.

6.1. Pursuant to Schedule II of the Companies Act, 2013, with effect from April 1, 2014, the Company has adopted revised useful life of the assets aligning the same with those specified in Schedule II. The Company has fully depreciated the carrying value of assets, net of residual value, where the remaining useful life of the asset was determined to be Nil as on April 1, 2014 and has adjusted an amount of Rs. 0.05 Lakhs (net of deferred tax of Rs. Nil) from the opening balance of deficit in the Statement of Profit and Loss under Reserves and Surplus. Consequent to the change in the useful life of the other assets, the impact on the depreciation expense for the year is lower by Rs. 0.27 Lakhs.

7.1.The Project undertaken by Nagarjuna Oil Corporation Limited (NOCL) is in Construction Stage. Project construction was substantially slowed down from the year 2012-13 due to delay in tying up of equity for a re-assessed cost and effect of 'Thane Cyclone'. The Company's efforts to induct strategic investor/s, keeping in view the steep increase in project cost and proposed enhancement of Capacity, have continued during the current year.

Considering the delay in induction of partner and consequently, achieving financial closure for re-assessed cost of project, in the opinion of management, there will be certain amount of dimunition in the value of the said investment. The management, as a prudent measure, made a provision of Rs. 40,000.00 Lakhs towards diminution, which it considers to be adequate at this juncture.

Additional provision, if any, will be considered as and when considered necessary.

8. The disclosure required under Accounting Standard 15 "Employee Benefits"

Defined Contribution Plans

The Company makes Provident Fund and Superannuation Fund contribution to defined contribution retirement benefit plans for qualifying employees including whole time directors. Under the schemes the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Provident Fund scheme additionally requires the Company to guarantee payment of interest at rates notified by the Central Government from time to time, for which shortfall if any, shall be provided for.

Contribution to these Defined Contribution Plans, charged off during the year are as under:

Defined Benefit Plans

The employees' gratuity fund scheme managed by Life Insurance Corporation of India (LIC) is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligations and contribution to the Scheme are routed through Nagarjuna Employees Gratuity Trust which is monitoring the gratuity scheme through LIC. The Company has contributed Rs. 0.46 Lakhs to the scheme during the year (Previous Year Rs. 0.68 lakhs)

9. Contingent Liabilities and Commitments (Not provided for):

9.1. Contingent Liabilities not provided for : Nil

9.2. Commitments:

9.2.1. Other Commitments:

i. Commitment on account of 'Sponsor undertaking' pursuant to the agreement with the lenders and other shareholders of Nagarjuna Oil Corporation Limited, an Associate Company, for funding of project cost overrun, if any.

ii. Commitment towards all contracts, deeds, bonds, insurance, Letters of Intent, undertakings, arrangements, policies, agreements (including erstwhile shareholders agreements and investor agreements) and other instruments, if any, relating to oil business undertaking executed by Nagarjuna Fertilizers and Chemicals Limited which stands transferred and vested pursuant to Composite Scheme of Arrangement and Amalgamation.

10. Related party transactions

List of Related parties and their relationships:

Associates

i. Nagarjuna Oil Corporation Limited

Key Management Personnel

i. Mr. K.S. Raju, Chairman

ii. Mr. K. Soma Raju, Manager

iii. Mr. K. Rahul Raju, Non Executive Director

Entities under Significant influence of Key Management Personnel or their relatives

i. Nagarjuna Fertilizers and Chemicals Limited

11 Tax Expense:

i) Provision for current tax has not been made since the company has no taxable profits.

ii) Deferred Tax asset (Net):

Deferred tax asset is not recognised on account of unabsorbed depreciation and unabsorbed Business Loss as a measure of prudence.

12 The figures for the previous year have been restated / regrouped, wherever necessary, to conform to current year classification.

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Mar 31, 2014

1. Corporate Information:

Nagarjuna Oil Refinery Limited ("the Company") was incorporated on November 16, 2010 under the provisions of the Companies Act, 1956, as a public limited company, primarily engaged in the business of promoting, conceiving, planning, coordinating, executing and monitoring setting up of any business projects relating to extraction of oil by any means within India and / or elsewhere in the world, either directly or through one or more special purpose vehicles and to enter into partnership, agreements, raise funds in order to carry out any one or more of the aforementioned activities.

2. Rights, preferences and Restrictions attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 1/- per share. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

4. The Project undertaken by Nagarjuna Oil Corporation Limited (NOCL) is in Construction Stage. Due to delay in tying up of equity for re-assessed cost and effect of ''Thane Cyclone'', the execution of the project was slowed down during the year 2012-13. Keeping in view the steep increase in project cost due to delay and proposed enhancement of Capacity, NOCL decided to induct strategic investor/s operating in similar industry. Five Potential investors have evinced interest in the project and due diligence exercise is in progress.

Considering the status of project which is commercially viable and stage of negotiations with prospective investors, in the opinion of the management, no provision is required to be made towards diminution in the value of investment at the year end.

5. The disclosure required under Accounting Standard 15 Employee Benefits notified by the Companies (Accounting Standards) Rules 2006, is given below.

Defined Contribution Plan

The Company makes Provident Fund and Superannuation Fund contribution to defined contribution retirement benefit plans for qualifying employees including whole time directors. Under the schemes the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Provident Fund scheme additionally requires the Company to guarantee payment of interest at rates notified by the Central Government from time to time, for which shortfall if any, shall be provided for.

Contribution to these Defined Contribution Plan, charged off during the year are as under:

Defined Benefit Plans

The employees'' gratuity fund scheme managed by Life Insurance Corporation of India (LIC) is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligations and contribution to the Scheme are routed through Nagarjuna Employees Gratuity Trust which is monitoring the gratuity scheme through LIC. The Company has contributed Rs. 0.68 Lakhs to the scheme during the year (Previous Year Rs. 1.32 Lakhs)

6. Contingent Liabilities and Commitments (Not Provided for):

6.1. Commitment Shall be Classified as :

6.1.1 Other Commitments :

i. Commitment on account of ''Sponsor undertaking'' pursuant to the agreement with the lenders and shareholders of Nagarjuna Oil Corporation Ltd, a associate, for funding of project cost overrun, if any.

ii. Commitment towards all contracts, deeds, bonds, insurance, Letters of Intent, undertakings, arrangements, policies, agreements (including erstwhile shareholders agreements and investor agreements) and other instruments, if any, relating to oil business undertaking executed by Nagarjuna Fertilizers and Chemicals Limited which stands transferred and vested pursuant to a Composite Scheme of Arrangement and Amalgamation.

7. Related party transactions

a. Names of related parties and description of relationship. Associates

i. Nagarjuna Oil Corporation Limited

Key Management Personnel

i. Mr. K.S. Raju, Chairman

ii. Mr. K. Soma Raju, Manager

iii. Mr. K. Rahul Raju, Non Executive Director

Entities under Significant influence of Key Management personnel or their relatives

i. Nagarjuna Fertilizers and Chemicals Limited

ii. Nagarjuna Agrichem Limited

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Mar 31, 2013

1. Corporate Information:

Nagarjuna Oil Refinery Limited ("The Company") was incorporated on November 16, 2010 under the provisions of the Companies Act, 1956, as a public limited company primarily engaged in the business of promoting, conceiving, planning, coordinating, executing and monitoring setting up of any business projects relating to extraction of oil by any means within India and/ or elsewhere in the world, either directly or through one or more special purpose vehicles and to enter into partnership, agreements, raise funds in order to carry out any one or more of the aforementioned activities.

2. The disclosure required under Accounting Standard 15 "Employee Benefits" notified by the Companies (Accounting Standards) Rules 2006, is given below.

Defined Contribution Plan

The Company makes Provident Fund and Superannuation Fund contribution to defined contribution retirement benefit plans for qualifying employees including whole time directors. Under the schemes the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Provident Fund scheme additionally requires the Company to guarantee payment of interest at rates notified by the Central Government from time to time, for which shortfall if any, shall be provided for.

3. Contingent Liabilities and Commitments:

3.1. Other Commitments :

3.1.1 Commitment on account of ''Sponsor undertaking'' pursuant to the agreement with the lenders and shareholders of Nagarjuna Oil Corporation Ltd, a associate, for funding of project cost overrun, if any.

3.1.2 Commitment towards all contracts, deeds, bonds, insurance, Letters of Intent, undertakings, arrangements, policies, agreements (including shareholders agreements and investor agreements) and other instruments, if any, relating to oil business undertaking executed by Nagarjuna Fertilizers and Chemicals Limited which stands transferred and vested pursuant to the composite scheme of arrangement and Amalgamation.

4. Related party transactions

a. Names of related parties and description of relationship.

Associates ''

i. Nagarjuna Oil Corporation Limited

Key Management Personnel

i. Mr. K.S. Raju, Chairman

ii. Mr. K. Soma Raju, Manager

iii. Mr. K. Rahul Raju, Non Executive Director

Entities under Significant influence of Key Management personnel or their relatives

i. Nagarjuna Fertilizers and Chemicals Limited

ii. Nagarjuna Agrichem Limited

5. The figures for the prevoius year have been restated / regrouped, wherever necessary, to make them comparable.

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Mar 31, 2012

1. Company overview:

a. Nagarjuna Fertilizers and Chemicals Limited (erstwhile NFCL) has during the year undertaken restructuring of its businesses. Accordingly, a Composite Scheme of Arrangement and Amalgamation ("Scheme") was prepared, which was duly consented by the shareholders at the Extraordinary General Meeting held on 15th April 2011 and also received the approval of jurisdictional High Courts of Andhra Pradesh at Hyderabad and Bombay at Mumbai. The restructuring envisaged de- merger of the Oil business undertaking to a separate company named as Nagarjuna Oil Refinery Limited ("NORL"). The scheme also provide for merger of residual business of erstwhile NFCL into its wholly owned subsidiary viz., Kakinada Fertilizers Limited ("KFL") along with the business operations of IKisan Limited (Ikisan). The entire scheme is made effective from 1st April 2011, being the appointed date.

b. Pursuant to the Scheme:

i. Oil Business Undertaking of NFCL was demerged into NORL.

ii. The Effective Date of the Scheme is July 30, 2011 but shall be operative from the Appointed Date i.e., April 1, 2011. The Record Date for determining shareholders eligible to receive shares of NORL was fixed as September 1, 2011.

iii. Equity Shares were allotted to the shareholders of NORL on October 1, 2011 and the accounts of the respective shareholders were credited in electronic mode or share certificates issued, as the case may be. Consequent to the allotment of shares, the existing pre-arrangement issued capital of Rs.5 lakhs stood cancelled.

c. In terms of the scheme:

i. the assets and liabilities of the Oil Business Undertaking vested in the company pursuant to the Scheme, have been recorded at the respective book values, as at the Appointed Date.

ii. The company has allotted and credited to its Share Capital Rs. 42.82 crores comprising of 42,81,81,821 Equity Shares of Rs. 1/- each fully paid-up without payment being received in cash.

iii. the difference between the book value of net assets of Oil Business Undertaking and the face value of NORL Equity Shares issued and allotted has been credited to the capital reserve.

iv. the credit arising on cancellation of pre- existing equity share capital of Rs. 5,00,000/- credited to the Capital Reserve Account.

2.1. The company has only one class of equity shares having a par value of Rs. 1/- per share. Each holder of equity shares is entitled to one vote per share.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

3. Contingent Liabilities and Commitments (Not provided for):

3.1. Commitments shall be classified as:

3.1.1. Other Commitments:

3.1.1.1. Commitment on account of 'Sponsor undertaking' pursuant to the agreement with the lenders and shareholders of Nagarjuna Oil Corporation Ltd, an associate, for funding of project cost overrun, if any.

3.1.1.ii. Commitment towards all contracts, deeds, bonds, insurance, Letters of Intent, undertakings, arrangements, policies, agreements (including shareholders agreements and investor agreements) and other instruments, if any, relating to oil business undertaking executed by Nagarjuna Fertilizers and Chemicals Limited which stands transferred and vested pursuant to a Composite Scheme of Arrangement and Amalgamation.

4. Related party transactions

Names of related parties and description of relationship.

Associates

i. Nagarjuna Fertilizers and Chemicals Limited

ii. Nagarjuna Agrichem Limited

iii. Nagarjuna Foundation

iv. Nagarjuna Oil Corporation Limited

Related party transactions are as under:

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Mar 31, 2011

1 Contingent Liabilities - Nil

2 The Board of the Directors of the company at their meeting held on January 10, 2011, have approved a Composite Scheme of Arrangement and Amalgamation between Ikisan Ltd., Kakinada Fertilizers Ltd (KFL), Nagarjuna Fertilizers and Chemicals Limited (NFCL) and Nagarjuna Oil Refinery Ltd (NORL). The Scheme envisages demerger of the Oil Business Undertaking of NFCL into NORL and merger of the Fertilizer and Micro Irrigation Business of NFCL along with Ikisan ltd, into KFL. The Scheme is subject to necessary approvals, shall be effective from April, 1st, 2011.

The Company has taken necessary steps for filing application and thereafter petition in the High Court of Bombay to give effect to the Composite Scheme of Arrangement and Amalgamation.

3 Related party transactions:

I) Names of Related parties and description of Relationships

A. Holding Company Nagarjuna Corporation Limited

B. Fellow Subsidiaries: Ikisan Ltd

C. Key Management Personnel: NIL

II) Related Party Transactions NIL