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Nagarjuna Oil Refinery Ltd.

BSE: 534184 Sector: Oil & Gas
NSE: NAGAROIL ISIN Code: INE453M01018
BSE 15:40 | 17 Jan 4.66 -0.15
(-3.12%)
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4.75

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4.78

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NSE 15:50 | 17 Jan 4.65 -0.15
(-3.13%)
OPEN

4.75

HIGH

4.90

LOW

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OPEN 4.75
PREVIOUS CLOSE 4.81
VOLUME 101913
52-Week high 6.08
52-Week low 2.56
P/E
Mkt Cap.(Rs cr) 200
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 4.75
CLOSE 4.81
VOLUME 101913
52-Week high 6.08
52-Week low 2.56
P/E
Mkt Cap.(Rs cr) 200
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Nagarjuna Oil Refinery Ltd. (NAGAROIL) - Director Report

Company director report

Your Directors present before you the 7th Annual Report of the Company together withthe Audited Accounts for the year ended March 31 2017.

The Financial Results of the company for the year ended March 31 2017 are as under:

A. BUSINESS AND FINANCIAL HIGHLIGHTS

Standalone Financial Results

Particulars 2016-2017 Current year 2015-2016 Previous year
Net Sales/Income from Operations - -
Other Income 0.36 1.54
Total Expenditure
a. (Increase)/Decrease in Stock - -
b. Cost of materials consumed - -
c. Employee Benefits expense 157.39 150.94
d. Purchase of traded products - -
e . Power and fuel - -
f. Other expenses 195.65 167.98
Total 353.04 318.92
Finance cost 12.09 12.01
Depreciation and amortization 2.10 2.12
Profit/(Loss) before exceptional items extra-ordinary items and tax (366.87) (331.51)
Exceptional Items 23622.00 -
Profit/ (Loss) before extra-ordinary items and tax (23988.87) (331.51)
Extra-ordinary items - -
Profit/(Loss) before tax (23988.87) (331.51)
Provision for tax - -
Deferred tax - -
Profit after tax (23988.87) (331.51)
Dividend - equity shares - -
Tax on proposed dividend - -
Balance c/d to Balance Sheet (23988.87) (331.51)
Paid Up equity share capital (Face value of Re.1/- per share) 4281.82 4281.82
Reserves excluding revaluation reserve 8190.59 32179.46
Earnings per share (annualized)- in Rs.
Basic and Diluted (5.60) (0.08)

Financial Summary

The Loss after tax for the year was Rs.23988.87 Lakhs against loss after tax ofRs.331.51 Lakhs for the previous year.

The main contributors to the loss was on exceptional item representing a provision ofRs.23622 lakhs towards diminution in the value of investment in Nagarjuna Oil CorporationLimited (NOCL) in addition to Rs.40000 Lakhs provided in the year 2014-15 consideringthe delay in induction of partner and consequently achieving financial closure forre-assessed cost of project.

Extension of time for holding Annual General Meeting

The Registrar of companies (ROC) Hyderabad has granted extension of time to thecompany for holding the 7th Annual General meeting upto December 31 2017.

Status of the Oil Refinery Project

Your company holds 46.78% of equity share capital of Nagarjuna Oil Corporation Limited(NOCL) which is involved in setting-up a 6 MMTPA refinery project at Cuddalore TamilNadu.

National Company Law Tribunal (NCLT) Chennai Bench has admitted the applications ofthe corporate creditors and initiated the corporate insolvency resolution process underthe Insolvency and Bankruptcy Code 2016. NCLT has appointed an Insolvency ResolutionProfessional for this purpose.

Consolidated Financial Statements

The Company in terms of Section 129(3) of the Companies Act 2013 is required toprepare Consolidated Financial Statements with the Annual Accounts of its AssociateCompany Nagarjuna Oil Corporation Limited (NOCL) in addition to Standalone FinancialStatements for the year ended March 31 2017.

The Company had been perusing with NOCL for the Audited Annual Accounts for the yearended March 31 2017. NOCL has informed that the Annual Accounts for the year ended March31 2017 were under the process of finalization.

NOCL vide letter dated July 28 2017 has informed the Company that National Company LawTribunal had appointed an Insolvency Resolution Professional on July 26 2017 andinitiated the corporate insolvency resolution process under the Insolvency and BankruptcyCode 2016 and that NOCL was not in a position to draw up and provide its Annual Accountsfor the year ended March 31 2017.

In view of the above the Company had sought extension of time for holding 7thAnnual General Meeting from the Registrar of Companies Telangana for a period of threemonths up to December 31 2017 and the same was granted.

The Company despite follow-ups has not yet received the Audited Annual Accounts ofNOCL for the preparation of Consolidated Financial Statements for placing the same beforethe Members of the Company at the Annual General Meeting to be held on December 26 2017.

The Company in order to meet the statutory requirements under Companies Act 2013 andSEBI (Listing Obligations and Disclosure Requirement) Regulations 2015 has convened the7th Annual General Meeting of the Members and is presenting the Audited Accounts withoutincorporating the Consolidated Financial Statements for the year ended March 31 2017 forthe approval of the Members.

Share Capital

The paid-up equity capital of the company as on March 31 2017 is Rs.428181821/-consisting of 428181821 equity shares of Re.1/- each.

Subsidiaries Joint Ventures or Associate Companies:

There has been no change in relation to any subsidiary joint venture or associatecompany during the year.

Accounts of Associates

Please refer Note on Consolidated Financial Statements above.

The Details of Investment of the Company in Nagarjuna Oil Corporation Limited (NOCL) anassociate company is enclosed as Annexure - I

B. DIRECTORS BOARD COMMITTEES KEY MANAGERIAL PERSONNEL AND REMUNERATION

Directors Retiring by Rotation

In accordance with Section 152 of the Companies Act 2013 and the Articles ofAssociation of the Company Mr. K Rahul Raju who is liable to retire by rotation and beingeligible offers himself for re-appointment as Director of the Company subject toretirement by rotation.

Resignation of Director

During the year under review Mr. D Ranga Raju Director of the Company had vide letterdated February 01 2017 resigned from the office of director of the company.

The Board places on record the appreciations for the service rendered by him during histenure as Director of the Company. Declaration by Independent Directors:

The Independent Directors have submitted their disclosure to the Board that theyfulfill all the requirements as to qualify as an Independent Director under Section 149(6)of the Companies Act 2013 as well as SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.

Key Managerial Personnel:

Manager:

The Board has re-appointed Mr K Soma Raju as Manager of the company for a period ofthree years with effect from August 31 2017 subject to the approval of members of theCompany.

There are no changes in relation to Key Managerial Personnel of the Company.

Meetings of the Board

The Board of Directors of your company during the period under review met Five timeson May 28 2016 August 06 2016 September 17 2016 November 08 2016 and February 092017.

Remuneration and other particulars of the Directors/ Key Managerial Personnel/Employees.

The information relating to remuneration and other particulars of the Directors/ KeyManagerial Personnel/Employees as required under Section 197(12) of the Companies Act2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 appears as Annexure - II.

Personnel

In terms of the provisions of Section 197(12) of the Companies Act 2013 read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 a statement showing the names and other particulars of theemployees drawing remuneration in excess of the limits set out in the said rules appearsas Annexure - III.

Committees Audit Committee:

In compliance with the provisions of Section 177 of the Companies Act 2013 andRegulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015(Erstwhile Listing Agreement) the company had constituted an Audit Committee consisting ofqualified and experienced members from various fields. The Committee consists of threeIndependent Directors and one non-executive Director. The Chairman of the Committee is Dr.N C B Nath an Independent Director. The Committee meets periodically to review theinternal audit report quarterly Financial Results and Annual Financial Statements andrecommends its decisions to the Board apart from taking action independently wheneverrequired. The Statutory Auditors and Company Secretary attend the Audit CommitteeMeetings.

The Audit Committee comprises of

Dr. N C B Nath : Chairman - Independent Director
Mr. S R Ramakrishnan : Member - Independent Director
Ms. Lalitha Raghuram : Member - Independent Director
Mr. K S Raju : Member

Nomination and Remuneration Committee:

The Nomination and Remuneration Committee was constituted in compliance with theprovisions of the Companies Act 2013 and Regulation 19 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (Erstwhile Listing Agreement).

The Company has adopted a Nomination and Remuneration Policy for determininginter-alia qualifications positive attributes and independence of a Director mattersrelating to the remuneration appointment removal and evaluation of performance of theDirectors Key Managerial Personnel Senior Management and other employees.

Stakeholders Relationship Committee:

The Stakeholders Relationship Committee was constituted in compliance with theprovisions of the Companies Act 2013 and Regulation 20 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (Erstwhile Listing Agreement).

C. DISCLOSURES Company Policy Matters

Your company's endeavor has always been to maintain transparency and accountability toits stakeholders. In this direction various policies mentioned in the CorporateGovernance Report have been implemented to enable the stakeholders to appreciate thevarious interventions the company has taken.

The implementation of these policies are reviewed periodically by the Board ofDirectors and updated regularly.

Risk Management Policy:

The Board has put in place the Risk Management Policy for the company to addressvarious risks impacting the company.

The company has setup an Enterprise Risk Management System to manage and mitigaterisks.

Policy on Board Evaluation

The Policy on Board Evaluation was adopted with effect from November 10 2014 by theBoard of Directors in compliance of Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.

The purpose of the policy is to assess the effectiveness of the Board as a wholeCommittees of the Board and Individual Directors (Independent and Non-Independent) onregular basis and to take necessary steps for improving the effectiveness of the Board.

The Nomination and Remuneration Committee has devised the methodology identifiedsample tools for evaluation and also laid down the parameters for evaluation ofNon-Executive Directors Independent Directors Chairman Board of Directors andCommittees of the Board.

The Nomination and Remuneration Committee have based on the responses received fromDirectors evaluated the Directors conveyed the opinion of the Committee to theDirectors Committees and the Board.

In view of the evaluation not linked to payment of remuneration the company has optedonly for payment of sitting fees the evaluation has no financial implications on thecompany.

Whistle Blower Policy/Vigil Mechanism

The company has formulated the policy on Whistle Blower/ Vigil Mechanism in compliancewith Clause 49 of Erstwhile Listing Agreement. The same is in conformity with theRegulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015and Section 177(9) of the Companies Act 2013. The Policy aims to prohibit managerialpersonnel from taking adverse personnel action against employees disclosing in good faithalleged wrongful conduct on matters of public concern involving violation of any lawmismanagement misappropriation of public funds among others.

Employees aware of any alleged wrongful conduct are encouraged to make a disclosure tothe Audit Committee.

No personnel of the company were denied access to the Audit Committee.

Corporate Social Responsibility

The provisions relating to Corporate Social Responsibility does not apply to theCompany.

Corporate Governance

Your company firmly believes that building a culture of compliance is more than meetingregulations and standards. Your company is always proactive in meeting mandated standardsand practicing Corporate Governance in spirit and not just the letter of the law.

As mandated by SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015a report on Corporate Governance along with a Certificate from Practicing CompanySecretary on the compliance of conditions of Corporate Governance is annexed hereto. Yourcompany is happy to inform you that there were no adverse remarks/qualifications/reservations raised in the Corporate Governance Report.

Related Party Transactions

There are no contracts or arrangements entered into by the company with related partiesin accordance with the provisions of Section 188(1) of the Companies Act 2013 other thanthe transaction entered into with Nagarjuna Fertilizers and Chemicals Limited pursuant tothe order of the jurisdictional High Courts in relation to the Composite Scheme ofArrangement and Amalgamation between Ikisan Limited Kakinada Fertilizers LimitedNagarjuna Fertilizers and Chemicals Limited and Nagarjuna Oil Refinery Limited.

The Policy on Related Party Transactions appears on the website of the Company atwww.norl.co.in .

Particulars of Loans Guarantees or Investments The company has not provided anyloans guarantees or made investments pursuant to Section 186 of the Companies Act 2013other than executing a Sponsored Undertaking in favor of the lenders of Nagarjuna OilCorporation Limited. Conservation of Energy Technology Absorption Foreign ExchangeEarnings and Outgo

In relation to the information required to be furnished under the Companies Act 2013read with Companies (Accounts) Rules 2014 the company is not undertaking anymanufacturing activity and accordingly there is no information available pertaining toConservation of Energy and Technology Absorption. There is no Foreign Exchange Earningsand Outgo.

Extract of Annual Return

The Extract of the Annual Return for the year ended March 31 2017 appears as Annexure-IV to this report.

Significant and material orders passed by the regulators or courts or tribunalsimpacting the going concern status and Company's operations in future

There were no orders passed by Regulators or Courts or Tribunals impacting the goingconcern status and future business operations of the Company.

Adequacy of Internal Financial Controls

The Company has established and is maintaining internal controls and procedures basedon the internal control over financial reporting criteria established by the Company.

The Board of Directors have evaluated the effectiveness of the Company's internalfinancial controls and procedures and confirm that they are adequate in all materialrespects based on the size and the nature of its business and such internal financialcontrols over financial reporting were operating effectively as at March 31 2017.

Deposits

The Company has not accepted any deposits within the purview of the Companies Act 2013and the Rules made there under during the Financial Year 2016-17.

AUDITORS AND AUDIT REPORT

Statutory Auditors

M/s. M Bhaskara Rao & Co. Chartered Accountants (Firm Registration No-000459S)Hyderabad were appointed as the Statutory Auditors' for a term of five (5) yearscommencing from the conclusion of the 4th Annual General Meeting up to the conclusion ofthe 9th Annual General Meeting subject to ratification by the members of the company everyyear at the Annual General Meeting.

M/s. M Bhaskara Rao & Co have signified their willingness to accept ratification ofappointment and have further confirmed their eligibility under Section 141 of theCompanies Act 2013. The company's Statutory Auditors have also furnished a certificatefrom the Peer Review Board of the ICAI confirming that they have undergone the process ofpeer review.

The Board of Directors in accordance with the provisions of Section 139 of theCompanies Act 2013 and Rules made thereunder commend the ratification of the appointmentof Statutory Auditors for the Financial Year 2017-18 for consideration of the members.

Statutory Audit Report

There are no adverse comments in the Report of the Statutory Auditors' of the Company.

Secretarial Auditor

The Board of Directors have appointed Mr. C S S Krishna Partner M/s KBG AssociatesCompany Secretaries Hyderabad as the Secretarial Auditor of the Company to undertakeSecretarial Audit for the Financial Year 2017-18.

Secretarial Audit Report

The Secretarial Audit Report for the Financial Year 2016-17 appears as Annexure - V tothis Report. There are no qualifications or adverse remarks in the report.

Internal Audit

The Company has a well established system of Internal Audit which carries out audit onRisk Management framework covering all the functions.

An Internal Auditor of the company has been appointed by the Board of Directors incompliance with the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.

D. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 134(3)(c) and 134(5) of the Companies Act 2013 the Board ofDirectors of the Company hereby report:-

(a) in the preparation of the annual accounts the applicable Accounting Standards hadbeen followed along with proper explanation relating to material departures;

(b) the Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;

(c) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

(d) the Directors had prepared the annual accounts on a going concern basis; and

(e) the Directors in the case of a listed company had laid down internal financialcontrols to be followed by the company and that such internal financial controls areadequate and were operating effectively.

(f) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENT

Your Directors place on record their gratitude to the Government of India thefinancial institutions and Company's bankers for their assistance and cooperation.

Further the company places on record its sincere appreciation for the continuingsupport and unstinting efforts of investors associates and all stakeholders.

By Order of the Board
Hyderabad K S Raju
November 08 2017 Chairman