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
3. Contingent Liabilities and Commitments (Not provided for):
3.1. Commitments shall be classified as:
3.1.1. Other Commitments:
18.104.22.168. 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
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
4. Related party transactions
Names of related parties and description of relationship.
i. Nagarjuna Fertilizers and Chemicals Limited
ii. Nagarjuna Agrichem Limited
iii. Nagarjuna Foundation
iv. Nagarjuna Oil Corporation Limited
Related party transactions are as under: