nagarjuna information systems limited - Nagarjuna Fertilizers

NAGARJUNA OIL CORPORATION LIMITED
AUDITOR’S REPORT
The Members of
NAGARJUNA OIL CORPORATION LIMITED
1. We have audited the attached Balance Sheet of Nagarjuna Oil Corporation Ltd, as at
31 st March, 2007, Expenditure Pending Allocation Account of the company and also
the cash flow statement for the year ended on that date annexed thereto. These
financial statements are the responsibility of the company’s management. Our
responsibility is to express an opinion on these financial statements based on our
audit.
2. We conducted our audit in accordance with the auditing standards generally accepted
in India. These standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
3. As required by the Companies (Auditor’s Report) Order, 2003 as amended by
Companies (Auditors’ Report) Order (Amendment) 2004, issued by the Central
Government of India in terms of sub-section (4A) of section 227 of the Companies
Act, 1956, we enclose in the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we report that:
i) We have obtained all the information and explanations, which to the best of
our knowledge and belief were necessary for the purposes of our audit;
ii)
iii)
iv)
In our opinion, proper books of account as required by law have been kept by
the company so far as appears from our examination of those books;
The Balance Sheet, Expenditure Pending Allocation Account and the cash
flow statement dealt with by this report is in agreement with the books of
account;
In our opinion, the Balance Sheet, Expenditure Pending Allocation Account
and the cash flow statement dealt with by this report complies with the
applicable Accounting standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956;

NAGARJUNA OIL CORPORATION LIMITED
v) On the basis of written representations received from the directors, as on 31 st
March, 2007 and taken on record by the Board of Directors, we report that
none of the directors is disqualified as on 31 st March, 2007 from being
appointed as a director in terms of clause (g) of sub-section (1) of section 274
of the Companies Act, 1956;
vi)
We draw attention to Note 3 under Schedule 9 to the Financial Statements:
Financial Statements for the year are drawn up on a going concern basis on
considering the developments in the financial closure (equity and debt tie up)
and management’s perception of operational and commercial viability of the
project.
vii)
In our opinion and to the best of our information and according to the
explanations given to us, the said accounts read together with other notes
thereon and Significant Accounting Policies give the information required by
the Companies Act, 1956, in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in India:
i) in the case of the Balance Sheet, of the state of affairs of the company
as at 31 st March, 2007;
ii)
iii)
in the case of the Expenditure Pending Allocation Account, of the
expenditure for the year ended on that date;
in the case of the cash flow statement, of the cash flows for the year
ended on that date.
for M. BHASKARA RAO & Co.
CHARTERED ACCOUNTANTS
Sd/-
K MURALIDHAR
Partner
MEMBERSHIP NO.201570
Place: Hyderabad.
Date: 26-04-2007.

NAGARJUNA OIL CORPORATION LIMITED
ANNEXURE
RE: NAGARJUNA OIL CORPORATION LTD.
Referred to in paragraph 3 of our report of even date
(i)
(a) The company has maintained proper records showing full particulars including
quantitative details and situation of fixed assets.
(b) According to the information and explanations given to us all the assets have
been physically verified by the management once during the year under report.
As explained to us, no discrepancies were noticed on such verification.
(ii)
(c) During the year, the company has not disposed off substantial part of the fixed
assets.
The company does not have inventory. Hence clause (ii) of paragraph 4 of the
Companies (Auditors’ Report) Order, 2003 is not applicable.
(iii)(a) According to the information and explanations given to us, the company has not
granted any loans secured or unsecured, to companies, firms or other parties
covered in the register maintained under section 301 of the Companies Act, 1956.
As the company has not granted any loans to such parties, sub clauses (b), (c) and
(d) of clause (iii) of this Order are not applicable.
(b) According to the information and explanations given to us, the company has not
taken any loans secured or unsecured, from companies, firms or other parties
covered in the register maintained under section 301 of the Companies Act, 1956.
As the company has not taken any loans from such parties, sub clauses (f) and (g)
of clause (iii) of this Order are not applicable.
(iv)
(v)
(vi)
In our opinion and according to the information and explanations given to us,
there are adequate internal control systems commensurate with the size of the
company and the nature of its business with regard to purchase of fixed assets.
During the year the company had no purchase of inventory or sale of goods or sale
of services. In our opinion and according to the information and explanations
given to us, there is no continuing failure to correct major weakness in internal
control systems.
(a) In our opinion and according to the information and explanations given to us
and based on the representations by the management, there is no contract or
arrangement that needs to be entered in the register to be maintained under
section 301 of the Act.
(b) In view of the above, clause v (b) of paragraph 4 of the Companies (Auditor’s
Report) Order, 2003 is not applicable.
The company has not accepted any deposits from the public.

NAGARJUNA OIL CORPORATION LIMITED
(vii)
In our opinion the company has an internal audit system commensurate with the
size and nature of its business.
(viii) As the project is under implementation, the provisions of clause viii of paragraph
4 of the Companies (Auditors’ Report) Order, 2003 is not applicable.
(ix)
(a) According to the information and explanations given to us and the records of
the company, the company has been regular in depositing undisputed statutory
dues including provident fund, income tax, customs duty, service tax and other
applicable statutory dues with the appropriate authorities. According to the
information and explanations given to us, there are no arrears of statutory dues as
at 31 st March 2007 which are outstanding for a period of more than 6 months from
the date they became payable.
(b) According to the information and explanations given to us, there were no dues
of income tax/ sales tax/ wealth tax/service tax/ customs duty/ excise duty/ cess
which have not been deposited on account of any dispute.
(x)
(xi)
As the project is under implementation stage the company has no accumulated
losses at the end of the financial year and has not incurred any cash losses in the
financial year under report and in the immediately preceding financial year.
The Company has defaulted in repayment of dues to banks / financial institution as
follows:
Bank / Financial
Institution
Date / Period of
Default
Particulars
Principal O/s
(Rs.)
Interest O/s
(Rs.)
Karur Vysya June 2001 to Devolvement of
0 7,23,78,018
Bank Ltd. March 2007 Letters of Credit
Indian Overseas January 2005 to Devolvement of 18,92,77,976 1,69,07,420
Bank
March 2007 Letters of Credit
UTI Bank Ltd January 2005 to Devolvement of 48,76,35,483 16,56,00,747
March 2007 Letters of Credit
Exim Bank March 2007 Overdue Interest 0 1,85,76,717
(xii)
According to the information and explanations given to us, the company has not
granted any loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
(xiii) The company is not a Chit Fund/Nidhi/Mutual fund/Society. Accordingly the
provisions of clause 4(xiii) of the Companies (Auditor’s Report) Order, 2003 are
not applicable to the company.
(xiv)
The company is not dealing in or trading in shares, securities, debentures and
other investments. Accordingly the provisions of clause 4(xiv) of the Companies
(Auditor’s Report) Order, 2003 are not applicable to the company.

NAGARJUNA OIL CORPORATION LIMITED
(xv)
(xvi)
According to the information and explanations given to us, the company has not
given any guarantee for loans taken by others from any bank or financial
institution.
In our opinion the term loan was applied for the purpose for which it was
obtained.
(xvii) According to the information and explanations given to us and on an overall
examination of the balance sheet of the company, we report that short term funds
were not used for long term investment during the year.
(xviii) According to the information and explanations given to us, the company, during
the year under report, has not made any preferential allotment of shares to parties
and companies covered in the register maintained under Section 301 of the
Companies Act, 1956.
(xix) The company has not issued any debentures during the year.
(xx)
(xxi)
The company has not made any public issue of shares during the year.
Based upon the audit procedures performed and information and explanations
given by the management, we report that no fraud on or by the company has been
noticed or reported during the course of our audit.
for M. BHASKARA RAO & Co.
CHARTERED ACCOUNTANTS
Sd/-
K MURALIDHAR
Partner
MEMBERSHIP NO.201570
Place: Hyderabad.
Date: 26-04-2007.

NAGARJUNA OIL CORPORATION LIMITED
AUDITED ACCOUNTS
31 ST MARCH, 2007

NAGARJUNA OIL CORPORATION LIMITED
BALANCE SHEET AS AT 31 ST MARCH 2007
As at
As at
Particulars Schedule 31.03.2007 31.03.2006
Rupees
Rupees
Sources of Funds
Shareholders' Funds
Share Capital 1 6,845,000,000 5,920,000,000
Reserves and Surplus 2 106,842 106,842
Secured Loans 3 1,595,296,233 1,601,705,916
Total 8,440,403,075 7,521,812,758
Application of Funds
Fixed Assets 4
Gross Block 54,062,074 53,465,906
Less: Depreciation 18,932,847 17,927,909
Net Block 35,129,227 35,537,997
Capital Work in Progress 5 8,070,754,865 6,981,877,419
Expenditure pending allocation account 3,197,053,944 2,642,430,259
Current Assets, Loans and Advances 6
Cash and Bank Balances 4,341,774 14,718,073
Other Current Assets
Loans and Advances 6,746,702 7,686,843
11,088,476 22,404,916
Less: Current Liabilities and Provisions 7 3,200,713,366 2,487,527,762
Net Current Assets (3,189,624,890) (2,465,122,846)
Miscellaneous Expenditure
(to the extent not written off or adjusted) 8 327,089,929 327,089,929
Total 8,440,403,075 7,521,812,758
Accounting policies and Notes on Accounts 9
As per our report attached
For M Bhaskara Rao & Co.,
Chartered Accountants
V K Muralidhar
Partner
Place: Hyderabad
Date: April26,2007
For and on behalf of the Board
Dr.Abid Hussain
Chairman
Shr KS Raju
Shri Minoo R Shroff
Shri S Ramasundaram
Shri Shankarnarayan R Rao
Directors
S Rammohan
Managing Director

NAGARJUNA OIL CORPORATION LIMITED
EXPENDITURE PENDING ALLOCATION ACCOUNT AS AT 31 ST MARCH 2007
As at
As at
Particulars 31.03.2007 31.03.2006
Rupees
Rupees
Salaries & Wages 40,601,579 17,064,342
Contribution to Provident and other funds 4,447,275 2,014,932
Staff Welfare expenses 2,923,210 1,624,668
Rent 5,787,451 4,672,000
Rates & Taxes including Fringe Benefit Tax 3,304,925 17,327
Repairs and Maintenance - Others 2,535,432 1,678,517
Insurance-Office eqpt. & others 1,129,002 1,385,106
Printing & Stationery 548,156 347,624
Postage, Telephone and Telex etc. 1,449,137 1,182,731
Travelling and Conveyance 12,786,353 8,386,608
Advertisement 270,025 265,961
Recruitment & Training 665,429 283,301
Legal & Professional Charges 37,214,292 10,796,167
Directors Sitting Fees 24,000 22,000
Directors Travel Expenses 3,268,432 2,107,226
Auditors Remuneration 593,324 499,909
Loss on sale of fixed assets (Net) 155,843 380,122
Security Expenses 2,281,719 1,863,447
Electricity and Water charges 2,186,315 1,786,751
Miscellaneous Expenses 2,357,408 1,202,038
Depreciation 1,703,733 2,761,487
Interest 417,794,389 300,765,062
Financing Charges 10,966,789 11,247,387
Less: Miscellaneous Income (TDS on Deposits -Rs.2,088/-,
previous year Rs.1,083/-) (370,533) (9,890)
Sub-Total 554,623,685 372,344,823
Brought forward from previous year 2,642,430,259 2,270,085,436
Carried forward to Balance Sheet - Total 3,197,053,944 2,642,430,259
As per our report attached to the Balance Sheet
For M Bhaskara Rao & Co.,
Chartered Accountants
V K Muralidhar
Partner
Place: Hyderabad
Date: April26,2007
For and on behalf of the Board
Dr.Abid Hussain
Chairman
Shr KS Raju
Shri Minoo R Shroff
Shri S Ramasundaram
Shri Shankarnarayan R Rao
Directors
S Rammohan
Managing Director

NAGARJUNA OIL CORPORATION LIMITED
SCHEDULES FORMING PART OF BALANCE SHEET AS AT 31 ST MARCH 2007
As at
As at
Particulars 31.03.2007 31.03.2006
Rupees
Rupees
Schedule 1 - Share Capital
Authorised
2,000,000,000 Equity Shares of Rs.10/- each 20,000,000,000 12,000,000,000
(Previous year 1,200,000,000 Equity Shares
of Rs.10/- each)
Issued, and Subscribed
684,500,000 (Previous year 592,000,000) Equity Shares 6,845,000,000 5,920,000,000
of Rs.10/- each, fully paid
Total 6,845,000,000 5,920,000,000
Schedule 2 - Reserves & Surplus
General Reserve 106,842 106,842
Total 106,842 106,842
Schedule 3 - Secured Loans
From Financial Institution *
Exim Bank-Rupee Term Loan 644,794,874 696,474,012
From Banks - Overdraft *
Karur Vysya Bank - 54,518,562
UTI Bank 487,635,483 487,635,483
Indian Overseas Bank 189,277,976 219,277,976
Hire Purchase Loan *
ICICI Bank 124,997 291,665
1,321,833,330 1,458,197,698
Interest Accrued and Due 273,462,903 143,508,218
Total 1,595,296,233 1,601,705,916
* Repayments falling due in the next twelve months - Rs.769,152,008/- (Rs. 820,082,941/-)

NAGARJUNA OIL CORPORATION LIMITED
SCHEDULES FORMING PART OF BALANCE SHEET AS AT 31 ST MARCH 2007
Schedule 4 - Fixed Assets
Rupees
Gross Block (At Cost) DEPRECIATION Net Block
Additions Deductions/ Deductions/
Particulars As at during Adjustments As at Upto For the Adjustments Upto As at As at
31.03.2006 the Period during the Period 31.03.2007 31.03.06 Period during the Period 31.03.2007 31.03.2007 31.03.2006
Freehold Land 23,541,435 23,541,435 23,541,435 23,541,435
Furniture, Fixtures & Office Equipment 28,386,310 1,610,522 239,700 29,757,132 17,246,353 1,572,815 74,928 18,744,240 11,012,892 11,139,957
Vehicles 1,538,161 5,100 779,754 763,507 681,556 130,918 623,867 188,607 574,900 856,605
Total 53,465,906 1,615,622 1,019,454 54,062,074 17,927,909 1,703,733 698,795 18,932,847 35,129,227 35,537,997
PREVIOUS YEAR 53,875,520 709,335 1,118,949 53,465,906 15,827,426 2,761,487 661,004 17,927,909 35,537,997 38,048,094

NAGARJUNA OIL CORPORATION LIMITED
SCHEDULES FORMING PART OF BALANCE SHEET AS AT 31 ST MARCH 2007
Particulars As at 31.03.2007 As at 31.03.2006
Rupees
Rupees
Schedule 5 - Capital Work in Progress
Site Development 97,228,709 97,228,709
Building under construction 19,543,812 16,876,216
Plant & Machinery:
Equipment at Site * 4,230,038,451 4,144,024,344
Equipment at European Ports** 2,783,782,863 610,752,492
Construction Power 2,150,708 2,150,708
Technical Services 878,798,561 892,026,593
Advance against Capital Expenditure:
Land & Site Development 48,638,543 48,638,543
Plant & Machinery and Others 10,573,218 1,170,179,814
* includes - Rs.69,45,00,104 (Previous year
63,53,62,361) represents Cenvatable Customs
duty.
** Refer to note no.7 of Schedule 9 (II) - Notes
to Accounts
Total 8,070,754,865 6,981,877,419

NAGARJUNA OIL CORPORATION LIMITED
SCHEDULES FORMING PART OF BALANCE SHEET AS AT 31 ST MARCH 2007
As at As at
Particulars 31.03.2007 31.03.2006
Rupees Rupees
Schedule 6 - Current Assets, Loans and Advances
A. Current Assets
Cash and Bank Balances
Cash on Hand 98,109 83,544
Balances with Scheduled Banks
Current Accounts 4,243,665 14,634,529
Sub-Total 4,341,774 14,718,073
B. Loans and Advances
Loans & Advances to Employees 71,050 93,036
Advances recoverable in cash or in kind or
for value to be received
Advances to Suppliers / Services / Others 13,937 155,325
Advance Payment of Tax including TDS 366,751 659,017
Deposits with port and Customs Authorities 581,371 717,811
Deposits with others 4,917,260 4,294,063
Prepaid Expenses 796,333 539,485
Fringe Benefit Tax - 1,228,106
Sub-Total 6,746,702 7,686,843
Total 11,088,476 22,404,916

NAGARJUNA OIL CORPORATION LIMITED
SCHEDULES FORMING PART OF BALANCE SHEET AS AT 31 ST MARCH 2007
As at
As at
Particulars 31.03.2007 31.03.2006
Rupees
Rupees
Schedule 7 - Current Liabilities and Provisions
Current Liabilities
Sundry Creditors
Small Scale Industries Nil Nil
Others * 3,188,944,936 2,482,848,399
Other Liabilities 6,654,320 853,364
Interest accrued but not due 2,204,497 2,203,911
3,197,803,753 2,485,905,674
Provisions
- Taxation 117,064 117,064
- Fringe Benefit Tax - 110,156
- Provident fund 386,675 56,574
- Other staff benefit schemes 2,405,874 1,338,294
Total 3,200,713,366 2,487,527,762
* Includes amount due to Nagarjuna Fertilizers and Chemicals Ltd.,
the Holding Company - Rs.14,78,18,771/- (Previous year
Rs.57,19,46,838/-). Deposit from Tamil Nadu Industrial
Development Corporation Ltd. Rs.23,20,00,000/-.(Previous year
Rs.23,20,00,000)
Schedule 8 - Miscellaneous Expenditure
(to the extent not written off or adjusted)
Preliminary Expenses 327,089,929 327,089,929
Total 327,089,929 327,089,929

NAGARJUNA OIL CORPORATION LIMITED
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31 ST MARCH 2007
SCHEDULE 9 – Accounting Policies and Notes to Accounts
I Significant Accounting Policies:
1. General:
The Company follows accrual system of accounting and recognizes the income
and expenditure on accrual basis unless otherwise stated. The accounts are
prepared on historical cost convention.
2. Fixed Assets:
a. Fixed assets are stated at historical cost less depreciation.
b. Borrowing Costs incurred on acquisition of Qualifying Assets are
Capitalised.
3. Foreign Currency Transactions:
The transactions in foreign currencies remaining outstanding at the end of the
year are translated at the exchange rates prevailing on the date of the Balance
Sheet or at the rate of exchange fixed under contractual agreements. Exchange
gain/ loss on transactions relating to liabilities incurred to acquire fixed assets is
treated as an adjustment to the cost of fixed assets. Exchange gains and losses on
foreign exchange transactions other than those relating to fixed assets are
adjusted in the profit and loss account.
4. Expenditure pending allocation:
Expenditure during construction period other than those directly related to an
asset is included under “Expenditure pending allocation” and is allocated to
various fixed assets at the time of commencement of commercial production, as
determined in accordance with the Generally Accepted Accounting Principles.
5. Depreciation on Fixed Assets:
Depreciation on fixed assets is provided on straight-line method at the rates and
in the manner prescribed in Schedule XIV of the Companies Act, 1956.
6. Retirement Benefits:
The company’s liability towards gratuity and superannuation benefits of eligible
employees is covered by a policy with LIC and the annual contributions are paid /
provided in accordance with this scheme. Leave encashment is provided on the
basis of valuation by independent actuaries, as at date of the Balance Sheet.
1

7. Impairment of Assets:
Impairment of an Asset is reviewed and recognized in the event of changes and
circumstances that indicate that the carrying amount of an asset is not
recoverable. Difference between the carrying amount of an asset and the
recoverable amount is recognized as impairment loss in the statement of Profit
and Loss in the year of impairment.
8. Contingencies:
Losses arising from claims, litigation, assessments, fines, penalties etc., are
provided for when it is probable that a liability may be incurred and the amount
can be reasonably estimated.
II.
Notes to Accounts:
1. Estimated amount of contracts remaining to be executed on capital account and
not provided (net of advances):
Capital Commitments
Plant and Machinery
Foreign Currency Contracts *
Indian Contracts
For the year ended
31.03.07
(Rupees)
2,177,063,587
107,926,296
For the year ended
31.03.06
(Rupees)
2,999,337,704
100,453,154
Technical Services
Foreign Currency Contracts **
Indian Technical Services
2,320,582,342
186,122,946
931,853,107
184,437,720
Land and Site Development 221,633,698 221,245,182
Building and Civil Works 230,652,986 393,211,798
Total 5,243,981,855 4,830,538,665
* Includes difference in foreign exchange translation Rs.429,718,350(Previous
Year Rs.774, 231,383)
** Includes difference in foreign exchange translation Rs.116,006,567 (Previous
Year Rs.169, 827,455)
Most of the Contracts on capital account have expired. Since the financial closure is
expected shortly, the company is renegotiating the terms and most of the contractors
have expressed willingness to continue, which are in various stages of finalization.
Thereafter, the figures mentioned above may undergo a revision based on the
renegotiated contracts.
2

2. Contingent Liabilities:
Claims against the company not acknowledged as debts: Rs. 1,65,000
(Previous year – 1,65,000)
3. Financial Statements:
The financial statements for the year have been drawn up as a going concern based
on the Management’s assessment of the project after taking into account the
following positive developments:
• Project has been appraised by the equity participants and re-appraised by
Industrial Development Bank of India (IDBI) and SBI confirming the
commercial viability.
• Achieved 100% equity participation (Rs.1372 crores) with commitments
from leading industrial groups and others in India and Overseas.
• Term loan of Rs.500 crores sanctioned by IDBI. State Bank of India
(SBI) has also given sanction for Rs 300 crores and Life Insurance
Corporation of India for Rs 85crores. Mandate for syndication given to
IDBI and SBI for tying up the balance Rupee term loan of Rs. 1340
crores. ‘In principle’ sanction aggregating Rs.550 crores has been
received from some banks and the sanction process for the remaining
rupee term loan with other banks is in progress.
• The contracts with ABB Lummus to act as Project Management
Consultants have been renewed. The agreements with other Process
Licensors are in the process of revival and are expected to be finalized
soon.
• Marketing of company’s products in the domestic and overseas markets
have been tied up with oil companies comprising of reputed public and
private sector companies.
• Equipment stored at Cuddalore and ports in Europe are subjected to
regular inspection and technical experts have certified the good
condition of the equipment.
• The Company has obtained and is in the process of obtaining statutory
clearances and approvals.
Despite the delay in execution of the Project, in view of the positive developments
during the year as stated above, the Management perceives that the project is viable
and is confident of implementation of the Project.
3

4. Share Capital
During the year, pursuant to Resolution passed at 15 th Annual General Meeting
held on 25 th September 2006, the Authorised Share Capital of the Company has
been increased from 1,200,000,000 equity shares of Rs.10/- each aggregating to
Rs.12,000,000,000/- to 2,000,000,000 equity shares of Rs.10/- each aggregating
to Rs.20,000,000,000/-.
5. i. Secured Loans:
a) Rupee Term Loan from Exim Bank is secured by mortgage of immovable
properties and hypothecation of the Company’s movable fixed assets both
present and future, including movable Plant & Machinery, appliances, furniture,
vehicles, machinery spares and stores, tools and accessories, whether or not
installed. The loan is further secured by exclusive pledge of equity shares of the
Company held by Nagarjuna Fertilizers and Chemicals Limited of aggregate
face value of Rs. 90 crores.
b) Overdraft from Karur Vysya Bank Limited for interest due and UTI Bank
Limited resulting out of devolvement of foreign Letters of Credit opened by the
respective Banks are secured by a charge created by way of hypothecation of
refinery equipment imported under Foreign Letters of Credit opened with the
respective Banks. The charge is ranking pari-passu with other lenders.
c) Overdraft from Indian Overseas Bank resulting out of devolvement of foreign
Letters of Credit opened by the Bank is secured by a charge created by way of
hypothecation of all the Company’s movable assets and properties present and
future, whether or not installed including movable plants, machineries, goods,
semi-finished and finished goods, consumable stores and spares, stock in trade,
goods in process, movables in transit, bills receivables and book debts. The
charge is ranking pari-passu with other lenders.
All the above loans are further secured by Corporate Guarantee of Nagarjuna
Fertilizers and Chemicals Limited, the holding company.
d) Vehicle Loan from ICICI Bank is secured by the hypothecation of the Car
purchased.
ii.
iii.
UTI Bank has filed an application with Debt Recovery Tribunal (DRT) in June
2005, for recovery of its dues. The Company is in the process of raising the
loan required in full (including UTI Bank loan portion) for the Project and
accordingly mandated IDBI and SBI for syndication. The Company is confident
of achieving financial closure during the year 2007-08,which will enable the
Company to settle the dues to UTI Bank in full.
Of the loan outstanding, Exim Bank has agreed to convert Rs.28 crores into
convertible debentures.
4

6. Land:
Land totaling to 509 acres has been acquired directly by the Company. State Industries
Promotion Corporation of Tamil Nadu Limited (SIPCOT) has acquired 736 acres of
land for handing over to the company. The company has made a part payment, which is
included under Capital Work in Progress. On payment of balance amount, the same will
be transferred / leased to the Company.
7. Equipment:
The Company has entered into an agreement with Uhde GmbH in February 1996 for
supply, dismantling, packing, storage and transportation of Mobil Refinery Equipment
at a cost of DM.284.11 Million. On payment of DM 133.43 Million (equivalent to
Rs.299.76 Crores), Uhde GmbH dispatched part of the equipment, which is received
and stored at Bonded Ware House at Company’s Plant site at Cuddalore. Against the
balance due, the Company had already paid an advance of DM 48.49 Million
(equivalent to Rs. 115.99 Crores) leaving an outstanding of DM 102.19 Million
(equivalent to Rs. 302.72 Crores). The rest of equipment, for which the amount is
outstanding, is retained at European Ports by Uhde GmbH at the risk and responsibility
of the Company.
The Company has subsequently entered into further agreement(s) for storage of the rest
of equipment at European Ports, which inter alia provides for ownership rights and in
case of non-payment of dues to Uhde GmbH, disposal after giving notice to the
Company. The agreement for Storage was valid upto 31 st March 2007 and the
Company has requested Uhde GmbH to extend the agreement for storage till 30 th June
2007 and the Company is confident of getting a positive response from them.
Considering the fact that Uhde GmbH has only constructive right of ownership and
disposal of equipment in the event of non payment of storage charges and based on
legal opinion, the amount of Euro 14.67 Million (equivalent to Rs.85.02 Crores) due to
Uhde GmbH by the Company has been recognised in the Books of account.
Uhde GmbH has agreed for conversion of Euro 14.65 Million aggregating Rs. 84.88
Crores into Equity, which will be effected by the Company after obtaining necessary
approvals.
8. Balances in the accounts of Suppliers, Advances Recoverable and Other receivables are
subject to confirmation.
9. Managerial Remuneration:
Particulars
Managing Director
For the year ended
31.03.2007
(Rupees)
For the year ended
31.03.2006
(Rupees)
Salary 32,85,484 24,00,000
Perquisites 13,79,668 11,10,828
Contribution to Provident Fund
and other funds
5,20,248 3,81,692
Total 51,85,400 38,92,520
5

10.. Auditors’ Remuneration:
S. No Particulars For the year ended
31.03.2007
(Rupees)
For the year ended
31.03.2006
(Rupees)
a) Statutory Audit 4,97,920* 4,00,000
b) Certification 5,612 33,629
c) Out of pocket expenses 89,792 66,280
Total 5,93,324 4,99,909
* Includes service tax of Rs.48,960/- relating to previous year.
11. CIF value of Imports - Nil (Previous year- Nil)
12. Expenditure in Foreign Currency:
Particulars
For the year ended
31.03.2007
(Rupees)
For the year ended
31.03.2006
(Rupees)
a) Foreign Travel 10,67,572 14,00,999
b) Storage charges etc. 8,59,82,561 23,97,39,721
c) Engineering Services 7,02,60,250 5,38,90,000
d) Interest Charges NIL 11,92,07,204
e) Syndication Fee 20,26,500 NIL
f) Books and Periodicals 5,702 5,747
Total 15,93,42,585 41,42,43,671
13. Additional information pursuant to the Provisions of Paragraphs 3 &4 – C of Part –
II of Schedule – VI of the Companies Act 1956 is not furnished since it is not
applicable.
14. Related party transactions:
1. Names of related parties and description of relationship.
a) Holding Company
Nagarjuna Fertilizers and Chemicals Limited
b) Fellow Subsidiaries
Jai Prakash Engineering & Steel Company Limited
c) Key Management Personnel
(i ) Shri. S Rammohan (Managing Director)
(iii) Shri. K S Raju (Director)
(iv) Shri K.Rahul Raju (Director)
(v) Shri P.P.Singh (Director)
6

2. Related party transactions are as under:
Sl.
No
01.
Nature of
transaction
Finance:
Share Application
Money
Holding
Company
2006-2007
35,30,53,162
Key Mgmt.
Personnel
2006-2007
Holding
Company
2005-2006
2,00,00,000
(In Rupees)
Key Mgmt.
Personnel
2005-2006
-
Advances received
14,78,18,771
42,32,62,327
-
02.
Remuneration to
Key Management
Personnel
5,185,400
-
38,92,520
15. Profit and Loss account has not been prepared as the project is under
Implementation.
16. Figures of previous year have been re-grouped wherever necessary to conform to
current year’s presentation / classification.
___________________________________________________________________
Signatures to Schedules “1” to “9”.
As per our report attached to the Balance sheet
For M BHASKARA RAO & CO For and on behalf of the Board
Chartered Accountants
Dr.Abid Hussain
K. Muralidhar Chairman
Partner
Shri. K S Raju
Shri Minoo R Shroff
Shri S Ramasundaram
Shri Shankarnarayan R Rao
Place : Hyderabad
Directors
Date : April 26, 2007
S Rammohan
Managing Director
7

A.Cash flow from Investing activities :
NAGARJUNA OIL CORPORATION LIMITED
CASH FLOW STATEMENT FOR THE YEAR ENDED 31st March,2007
Rs. In Lacs
2007 2006
Particulars Amount Amount Amount Amount
Purchase of Fixed Assets (16.15) (7.09)
Capital Work in progress (10,888.77) (2,114.49)
Expenditure pending allocation (net) (5,527.64) (3,692.03)
Sale of Fixed Assets 1.65 0.77
Misc Expenditure incurred (40.18)
Adjustment towards Current Liablities 7,141.25 5,075.75
Net Cash used in investing activities (9,289.66) (777.27)
B.Cash flow from financing activities
Share Capital 9,250.00 200.00
Proceeds / (Repayment) from long term borrowings (64.10) 690.13
Net Cash from financing activities 9,185.90 890.13
Net increase / (Decrease) in cash and cash
equivalent (103.76) 112.86
Cash and cash equivalent as on 01.04.2006 147.18 34.32
Cash and cash equivalent as on 31.03.2007 43.42 147.18
As per our report attached
For M Bhaskara Rao & Co.,
Chartered Accountants
V K Muralidhar
Partner
Place: Hyderabad
Date: April26,2007
For and on behalf of the Board
Dr.Abid Hussain
Chairman
Shr KS Raju
Shri Minoo R Shroff
Shri S Ramasundaram
Shri Shankarnarayan R Rao
Directors
S Rammohan
Managing Director