NAGARJUNA OIL REFINERY LIMITED
46
For and on behalf of the Board
K.S. Raju Chandra Pal Singh Yadav
Chairman K Rahul Raju
Directors
Hyderabad Ankita Mathur A. Sudhakara Rao K.Soma Raju
November 8, 2016 Company Secretary Chief Financial Officer Manager
Signatories to Notes "1 to 31"
24. 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 recognised on account of unabsorbed
depreciation and unabsorbed Business Loss as a measure of
prudence.
25. As per the information furnished by Nagarjuna Oil Corporation Limited
(NOCL), it has, subsequent to March 31, 2016, identified and initiated
discussions with a new Overseas Investor Group (‘Potential Investor’) for
funding and implementation of the project. Based on the proposal given
by the Potential Investor, NOCL has submitted One Time Settlement (OTS)
proposal to lenders. The lenders have, in principle, agreed and initiated
sanctioning process. The proposal envisages OTS of the existing loans from
out of amounts to be advanced by the Potential Investor. Further, the
Potential Investor offered to acquire entire equity shares held by the
existing shareholders (other than Tamilnadu Industrial Development
Corporation (TIDCO)) at a price to be determined subject to final valuation
and mutual agreement. The Potential Investor shall infuse further funds,
as may be required, to complete the project and ensure commissioning
in next thirty eight months. The management of NOCL is confident that
the project is viable taking into account the offer made by the Potential
Investor. Accordingly, the financial statements of NOCL have been
prepared on going concern basis.
NOCL's Management considers equity infusion as the key parameter for
demonstrating continuity in the project development. Hence, in view of
all the developments narrated above and based on independent opinion
obtained by NOCL, borrowing costs ` 95,517.94 Lakhs (2014-15:
` 76,088.12 Lakhs) have been capitalised.
26. The balances under creditors for capital purchases in respect of certain
vendors (including micro and small enterprises) of the associate in
consolidation (NOCL) are subject to confirmation and reconciliation.
Certain vendors including micro and small enterprises have made claims
against NOCL towards change of scope, interest charges, storage charges
etc. NOCL shall initiate the process of negotiation and reconciliation on
achievement of financial closure. The effect, if any on these reconciliations
will be accounted for in the year of completion of the process.
27. The winding up petitions filed by 18 vendors (31.03.2015: 13 vendors) of
Associate in Consolidation (NOCL) demanding payment of their dues
aggregating to ` 14,071.47 lakhs (31.03.2015: ` 12,202.00 lakhs) are
pending before the Hon’ble High Court of Madras. As directed by the
Court,NOCL filed a Memo at the last hearing on 6.3.2015 undertaking to
convene meeting with petitioner vendors. Meetings with the vendors were
conducted by April 7, 2015 to arrive at an amicable resolution of the claims
of the petitioner vendors. Subsequently, affidavits have been filed in the
court submitting the minutes of the meetings with the vendors.
28. The Associate in Consolidation (NOCL) has taken necessary steps to
present/defend its position against civil suits by some vendors demanding
payment of their dues aggregating to ` 1,885.61 lakhs (31.03.2015:
` 917.77 lakhs ) and interest thereon.
29. Share of Group in contingent liabilities of associate
Disputed VAT demand -
Disputed Income tax demand 548.84
Disputed Customs Duty demand 4,826.69
Disputed Excise Duty Demand 39.15
Disputed Service Tax Demand 668.07
Claims raised by vendors Amounts not
(Refer note : 26, 27 and 28) ascertained
not acknowledged as debts
30. Balances in the accounts of various parties appearing in these statements
are subject to confirmations and reconciliations.
31. These consolidated financial statements, being presented for the first time,
no comparative figures have been furnished.