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: