DIRECTORS’ REPORT

The Directors have pleasure in presenting before you the 6^th Annual Report of the Company together with the Audited Accounts for the year ended March 31, 2016.

The Financial Results and the Consolidated Financial Results of the company for the year ended March 31, 2016 are as under:

A. BUSINESS AND FINANCIAL HIGHLIGHTS

Standalone Financial Results:__ Rs. In Lakhs

The Company proposes to further provide for diminution in the value of investment during the current year in view of the present status of the project coupled with the offer since received by the company from a prospective investor.

Extension of time for holding Annual General Meeting

The Registrar of Companies (ROC), Hyderabad, has granted extension of time to the company for holding the 6^th Annual General Meeting, up to December 29,2016.

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, Tamil Nadu.

The implementation of the Project was impacted by cyclone 'Thane'. The physical completion of the Project as ontiate is 58%.

Consolidated Financial Results Rs. in Lakhs

NOCL has been actively pursuing with strategic investors to participate in equity investment in view of escalation in the project cost.

The company has been approached by Allied Machineries and Resources Holdings Inc., ("AMR") a Company incorporated in Ras Al Khaimah RAS 065114 2014 with principal place of business located at 36-05 Central Park, Dubai International Financial Centre Dubai UAE, to acquire the 77,62,20,000 equity shares held in NOCL at Rs.2.50/- per equity share of face value of Rs.10/- apart from AMR acquiring the entire equity shareholding of other shareholders of NOCL except TIDCO.

AMR, with backing of ultra high net worth individuals, who have strategic interest in the oil and gas sector, have the resources and capabilities not only to implement the current project but also propose to undertake expansion / diversification that will result in economies of scale.

AMR Group is a Dubai based fund with assets exceeding USD 2 billion The AMR Group has high profile investors from China, Japan, Korea and Gulf.

The Group is involved in Aviation, Transportation, Infrastructure, Oil & Natural Resources, Media, Entertainment, Information Technology, Education and Social Services.

AMR is also in discussion with Lenders of NOCL for retiring the debt of the company.

AMR is in the process of completing all its due diligences on NOCL The proposed sale of NOCL shares to AMR is beneficial to the Company in view of NORL having invested substantial funds and being unable to bring further funds to take the Project forward, the Project being at stand still since March '2012, the escalation in the Project cost being to the company's dis-advantage, the Lenders not willing to have further exposure of debt on NOCL in view of the present status of the Project, there being substantial diminution in the value of investment and the offer of AMR being the best as compared to the various offers received by the company earlier in the course of identifying a strategic investor.

In view of the above and various legal cases having been filed against NOCL which could result in its winding-up and non-realization of investment by the shareholder due to loss of value of shares, the Board of Directors of the company considered it necessary to dis-invest the shareholding in NOCL in favour of an investor so as to enable the Project move forward as also enable NORL to realize funds to look at new avenues in the interest of the shareholders.

The sale of shares will also relieve the onerous responsibility of NORL as Promoter of all obligations and comfort provided to the lenders.

The sale of shares held by the company in NOCL will require approval of the Members of the company through a process of Postal Ballot.

The company is issuing notice pursuant to Section 110 of the Companies Act, 2013 read with Companies (Management and Administration) Rules 2014 for obtaining the consent of the Members. The Postal Ballot Notice and Instructions on remote e-voting for postal ballot is appended to the Annual Report at page 50 and page 52. The Members are requested to peruse the documents and exercise their vote either in electronic mode or physical mode in accordance with the instructions and within the timelines prescribed therein.

Share Capital

The paid-up equity capital of the company as on March 31, 2016 is Rs.42,81,81,821/- consisting of 42,81,81,821 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 associate company during the year.

Accounts of Associates

Consolidated financial statements are enclosed along with the financial statements of the company. The Associate considered in the preparation of the consolidated financial statements is Nagarjuna Oil Corporation Limited (NOCL).

Statement containing salient features of the financial statement of subsidiaries/ associate companies/ joint ventures appears as Annexure I to this Report.

There is no material fact that requires mention on the performance and financial position of the Associate other than that mentioned in this report under "Status of Oil Refinery Project."

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 of Association of the Company, Mr. K S Raju who is liable to retire by rotation and being eligible, offers himself for re-appointment as Director of the Company, subject to retirement by rotation.

Declaration by independent Directors:

The Independent Directors have submitted their disclosure to the Board that they fulfill 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 Disclosure Requirements) Regulations, 2015.

Key Managerial Personnel:

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 six times on May 16,2015, June 10,2015, July 23,2015, September 08, 2015, November03,2015 and February 04,2016.

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

The information relating to remuneration and other particulars of the Directors/ Key Managerial Personnel/Employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 appears as Annexure - II

Personnel

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules appears as Annexure - III.

Committees

Audit Committee:

In compliance with the provisions of Section 177 of the Companies Act, 2013 and the Erstwhile Listing Agreement entered into with the Stock Exchanges (now Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015), the company had constituted an Audit Committee consisting of qualified and experienced members from various fields. The Committee consists of three Independent Directors and one nonexecutive Director. The Chairman of the Committee is Dr. N C B Nath, an Independent Director. The Committee meets periodically to review the internal audit report, quarterly Financial Results and Annual Financial Statements and recommends its decisions to the Board apart from taking action independently whenever required. The Statutory Auditors and Company Secretary attend the Audit Committee Meetings.

The Audit Committee comprises of

Dr. NCBNath Chairman-Independent Director

Mr.SRRamakrishnan : Member-Independent Director

Ms. Lalitha Raghuram Member-Independent Director

Mr. KS Raju Member

Nomination and Remuneration Committee:

The Nomination and Remuneration Committee was constituted in compliance with the provisions of the Companies Act, 2013 and Erstwhile Listing Agreement entered into with the Stock Exchanges (now Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Company has adopted a Nomination and Remuneration Policy for determining, inter-alia, qualifications, positive attributes and independence of a Director, matters relating to the remuneration, appointment, removal and evaluation of performance of the Directors, Key Managerial Personnel, Senior Management and other employees. Stakeholders Relationship Committee:

The Stakeholders Relationship Committee was constituted in compliance with the provisions of the Companies Act, 2013 and Erstwhile Listing Agreement entered into with the Stock Exchanges (now Regulation 20 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

C. DISCLOSURES

Company Policy Matters

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

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

The company has during the year drawn-up Policy for preservation and archival of documents that sets out the standard for Classifying, Managing and Storing of records of the Company and Policy on Disclosure of Material Events for the purpose of making disclosures to Stock Exchanges effective from December 01,2015.

Risk Management Policy:

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

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

Policy on Board Evaluation

The Policy on Board Evaluation was adopted with effect from November 10, 2014, by the Board of Directors in compliance of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The purpose of the policy is to assess the effectiveness of the Board as a whole, Committees of the Board and Individual Directors (Independent and Non-Independent) on regular basis and to take necessary steps for improving the effectiveness of the Board.

The Nomination and Remuneration Committee has devised the methodology, identified sample tools for evaluation and also laid down the parameters for evaluation of Non-Executive Directors, Independent Directors, Chairman, Board of Directors and Committees of the Board.

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

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

Whistle Blower Policy/Vigil Mechanism

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

Employees aware of any alleged wrongful conduct are encouraged to make a disclosure to the 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 the Company.

Corporate Governance

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

As Mandated by SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 a report on Corporate Governance along with a Certificate from Practicing Company Secretary on the compliance of conditions of Corporate Governance is annexed hereto. Your company 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 parties in accordance with the provisions of Section 188(1) of the Companies Act, 2013, other than the transaction entered into with Nagarjuna Fertilizers and Chemicals Limited pursuant to the order of the jurisdictional High Courts in relation to the Composite Scheme of Arrangement and Amalgamation between Ikisan Limited, Kakinada Fertilizers Limited, Nagarjuna Fertilizers and Chemicals Limited and Nagarjuna Oil Refinery Limited.

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

Particulars of Loans, Guarantees or Investments

The company has not provided any loans, guarantees or made investments pursuant to Section 186 of the Companies Act, 2013 other than executing a Sponsored Undertaking in favor of the lenders of Nagarjuna Oil Corporation Limited.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

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

Extract of Annual Return

The Extract of the Annual Return for the year ended March 31,2016 appears as Annexure- IV to this report

Significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future

There were no orders passed by Regulators or Courts or Tribunals impacting the going concern status and future business operations of the Company. Adequacy of Internal Financial Controls

The company has established and is maintaining internal controls and procedures based on the internal control over financial reporting criteria established by the Company

The Board of Directors have evaluated the effectiveness of the company's internal financial controls and procedures and confirm that they are adequate in all material respects based on the size and the nature of its business and such internal financial controls over financial reporting were operating effectively as at March 31,2016 Deposits

The company has not accepted any deposits within the purview of the Companies Act, 2013 and the Rules made there under during the Financial Year 2015-16.

AUDITORS AND AUDIT REPORT

Statutory Auditors

M/s. M Bhaskara Rao & Co., Chartered Accountants (Firm Registration No-0004595), Hyderabad, were appointed as the Statutory Auditors'for a term of five (5) years commencing from the conclusion of the 4th Annual General Meeting up to the conclusion of the 9th Annual General Meeting subject to ratification by the members of the company every year at the Annual General Meeting.

M/s. M Bhaskara Rao & Co have signified their willingness to accept ratification of appointment and have further confirmed their eligibility underSectionl41 of the Companies Act, 2013.

The company's Statutory Auditors have also furnished a certificate from the Peer Review Board of the ICAI confirming that they have undergone the process of peer review.

The Board of Directors in accordance with the provisions of Section 139 of the Companies Act, 2013 and Rules made there under commend the ratification of the appointment of Statutory Auditors for the Financial Year 2016-17 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 Associates, Company Secretaries, Hyderabad as the Secretarial Auditor of the Company to undertake Secretarial Audit for the Financial Year2016-17. Secretarial Audit Report

The Secretarial Audit Report for the Financial Year 2015-16 appears as Annexure - V to this 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 on Risk Management framework covering all the functions.

An Internal Auditor of the company has been appointed by the Board of Directors, in compliance with the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

D. DIRECTORS RESPONSIBILITY STATEMENT:

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

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

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

(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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 financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

(f) the Directors had devised proper systems to ensure compliance with the provisions of 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 and the financial institutions and company's bankers for their assistance and cooperation.

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

By Order of the Board

Hyderabad K S Raju

November 08,2016 Chairman