Chennai Petroleum Corporation Ltd Auditor Reports

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Chennai Petroleum Corporation Ltd Share Price Auditors Report

To

The Members of

Chennai Petroleum Corporation Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying Standalone Financial Statements of Chennai Petroleum Corporation Limited ("the Company"), which comprise of the Balance sheet as at March 31, 2024, the statement of Profit and Loss (includingOther Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, a summary of material accounting policies and other explanatory information (hereinafter referred to as "Standalone Financial Statements).

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the Accounting Standards prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2024, and its income), changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing ("SAs") specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India ("ICAI") together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the Rules framed thereunder and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIs Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the Standalone Financial Statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the StandaloneFinancial Statements of the current period. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

We have determined the matters described below to be key audit matters:

Key Audit Matter

How the scope of our audit responded the Key audit matter

1. Measurement of Inventories

a) As at March 31, 2024 the value of Inventory is 7830.91 Crores. This constitutes significant percentage (43.26 %) of the total assets of the Company. a) We have understood the process of the determination of the price of both crude and the finished goods.
b) Inventory comprises of Raw Materials, Finished Goods, Stock in process and Stores and Spares. b) We have evaluated the system of inventory monitoring and its control on a day-to-day basis and also physical verification carried out by the management as on March 31, 2024.
c) Crude is the main raw material for the Company, which comprise both imported and procured in the domestic market. c) We have physically verified the certain crude tanks and product tanks and also other stores and spares items at the yearend along with the technical team.
d) Pricing of the crude depends upon the international crude quote and any fluctuation in the crude price has an impact on the pricing of the finished goods. d) Goods in transit has been verified based on the purchase order raised and the other related documents in this regard.
e) The net realization price is determined for the crude and also for the finished goods based on the subsequent periods quoted price of crude and finished goods as determined internationally. e) In addition to that we have also carried out alternate audit procedures to identify the availability of the inventory at the year end.
f) We have also reviewed the workings relating to net realizable value of the subsequent period which depends on fixation of refinery transfer pricing (RTP) based on the international quotes.
As stated above, considering the significance of the value of the inventory and also price determination requires estimations and judgment about depending on the international market, it is considered as a key audit matter. g) Further we reviewed the write down in the value of inventory along with the realizable value and reason for the same.

2. Provisions and Contingent Liabilities

a) Contingent liabilities disclosed are in respect of items which in each case are above the threshold limit. a) We examined on test check basis the determination of the contingent liability by the management.
b) The assessment of the existence of the present legal or constructive obligation and analysis of the probability of the related payment require the management to make judgement and estimates in relation to the issues of each matter. b) We obtained all the necessary records for our review and enquired with the personnel of legal department with respect to the pending matters and understood the basis of determination of probable /possible obligation.
c) Considering that the above matter involves judgement and estimation, it is considered as key audit matter. c) We also reviewed the necessary legal records and also reviewed the opinion provided by the experts/ counsels/ previous legal precedents available to understand the same on its conclusion.
d) We have relied on the opinions of the Company where Company has considered that the possibility of cash outflow is remote.
e) We have assessed the appropriateness of provisioning based on assumptions made by the management and presentation of the significant contingent liability in the Standalone Financial Statements.

Information other than the Standalone Financial Statements and our Report thereon

The Companys Management and Board of Directors are responsible for the preparation of the other information. The other information comprises the information included in Annual Report, but does not include the Standalone and Consolidated Financial Statements and our auditors reports thereon. The Annual Report is expected to be made available to us after the date of this report.

Our opinion on the Standalone Financial Statements does not cover the other information and we will not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information identified above and in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to Those Charged with Governance and take necessary actions as applicable under the relevant laws and regulations.

Responsibilities of the Management and Those Charged with Governance for the Standalone Financial Statements

The Companys Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity, cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Standalone Financial Statements, Management and Board of Directors are responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.

As part of an audit in accordance with Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

a) Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

b) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3) (i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to Standalone Financial Statements in place and the operating effectiveness of such controls.

c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

d) Conclude on the appropriateness of Management and Board of Directors use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

e) Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation. specified under section 133 of We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial

Statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of section 143(11) of the Act, we give in the "Annexure A", a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. Based on the verification of records of the Company and based on information and explanations provided to us during the audit, we provide here with a report on the Directions issued by the Comptroller and Auditor General of India in terms of Section 143(5) of the Act as "Annexure B".

3. As required by Section 143(3) of the Act, we report that: i. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

ii. In our opinion, proper books of accounts as required by law have been kept by the Company so far as it appears from our examination of those books;

iii. The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity and the Statement of Cash Flows dealt with this report are in agreement with the books of account;

iv. In our opinion, the aforesaid Standalone Financial Statements comply with the Accounting Standards the Act, read with rule 7 of the Companies (Accounts) Rules, 2014;

v. As per Notification no. G.S.R 463(E) dated June 05, 2015, the Government Companies are exempted from the provisions of section 164(2) of the Act, accordingly, we are not required to report whether any of the directors of the Company is disqualified in terms of provisions contained in the said section; vi. With respect to the adequacy of the internal financial controls with reference to Standalone Financial Statements of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure C". vii. The provisions of Section 197 read with Schedule V of the Act, relating to managerial remuneration are not applicable to the Company, being a Government Company, in terms of Ministry of Corporate Affairs Notification no. G.S.R. 463(E) dated June 05, 2015.

viii. With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:

a) The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements. (Refer Note No.33B to the Standalone Financial Statements)

b) The Company has made provision, as required under the applicable law or accounting standards for material foreseeable losses, if any, on the long-term contracts including derivative contracts to the Standalone Financial Statements; and

c) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company. Hence the question of reporting delay in depositing such dues does not arise.

d) i. The management has represented that, to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

ii. The management has represented, that, to the best of its knowledge and belief, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

iii. Based on our audit procedures that are considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that above representations under sub-clause i and ii contain any material misstatements.

e) The final dividend proposed in the previous year and paid by the Company during the year, is in accordance with section 123 of the Act to the extent it applies to payment of dividend.

As stated in Note 29 to the Standalone Financial Statements, the Board of Directors of the Company has proposed final dividend for the year which is subject to the approval of members at the ensuing annual general meeting. The dividend proposed is in accordance with provisions of Section 123 of the Act to the extent it applies to declaration of dividend.

f) Based on our examination which included test checks, the Company has used an accounting software for maintaining its books of accounts which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with.

Annexure ‘A to the Independent Auditors Report

Referred to in paragraph 1 under "Report on Other Legal and Regulatory Requirements" of our report on even date, to the members of Chennai Petroleum Corporation Limited on the Standalone Financial Statements for the year ended March 31, 2024.

In terms of the information and explanations sought by us and given by the Company and the books of account and records examined by us in the normal course of audit and to the best of our knowledge and belief, we state that

i. a) A) The Company is maintaining proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment.

B) The Company has maintained proper records showing full particulars of Intangible Assets.

b) The Company has a regular programme of physical verification of its Property, Plant and Property, Plant and Equipment are verified in a phased manner over a period of three years this programme, a portion of the Property, Plant and Equipment has been physically verified by the management during the year and no material discrepancies have been noticed on such verification. In our of physical verification is reasonable having regard to the size of the Company and the nature

c) The title deeds of immovable properties are held in the name of the Company except in case of certain freehold lands given below, where deeds are yet to be executed:

Description of Property

Gross carrying value ( in Crores) Net Block ( in Crores No. of Assets Held in name of Whether promoter, director other relative or or employee Period held Reason for not being held in name of company
Land freehold Nil Nil 40.69 acres Not applicable Not applicable Not available The Tamilnadu Government has allotted the land for which permission to enter upon the land GO No. 695 dated April 26, 1990 is available. However, assignment deed is not yet executed.
Land freehold 0.18 0.18 50.93 acres Not applicable Not applicable 40 years (1984 to 2024) GO No. 605 dated May 31, 1984 directs to handover the possession of property to Company. However, assignment deed is not yet executed.
Land freehold Nil Nil 95.31 acres Not applicable Not applicable ALIGN=RIGHT>Not Available The Tamilnadu Government has allotted the land for which permission to enter upon the land dated 03.12.2001 & 20.02.2009 in respect of 95.31 acres. However, assignment deed is not yet executed.

d) The Company has not revalued its property, plant and equipment (including right of use assets) or intangible assets or both during the year. Accordingly, reporting under paragraph 3(i)(d) of the Order is not applicable to the Company.

e) There are no proceedings initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

ii. a) The Inventory has been physically verified by the Management during the year. In our opinion, the frequency of such verification is reasonable and procedures and coverage as followed by the Management were appropriate. No discrepancies were noticed on verification between the physical stocks and the book records that were 10% or more in the aggregate for each class of inventory.

b) As stated in Note 19 to the Standalone Financial Statements, the Company has been sanctioned working capital limits in excess of five crore rupees in aggregate form banks and financial institutions on the basis of security of current assets. We have observed that there are no discrepancies in the quarterly statement with such banks as compared to the books of accounts maintained by the Company. However, we have not carried out specific audit of such statements.

iii. The Company has not made any investments in Companies, Firms, Limited Liability Partnerships, and granted unsecured loans to other parties, during the year,

a) During the year the Company has not provided loans or provided advances in the nature of loans, or stood guarantee, or provided security to Joint ventures and Associates. Further the Company does not have any Subsidiaries.

Consequently, the provisions of paragraphs 3(iii)(a)(A) and 3(iii)(a)(B) of the Order are not applicable to the Company.

b) The investments made and the terms and conditions on which the loan has been granted are prima facie, not prejudicial to the Companys interest.

c) In respect of loans, the schedule of repayment of principal and payment of interest has been stipulated and the repayments or receipts are regular. There are no advances in the nature of loans.

d) In the case of loans granted by the Company, there is no overdue amount for more than ninety days in respect of loans given.

e) In respect of loan which has fallen due during the year no loan was renewed or extended or fresh loans granted to settle the overdue of existing loans given to the same parties. There are no advances in the nature of loans.

f) The Company has not given any loans either repayable on demand or without specifying any terms or period of repayment.

iv. In our opinion and according to the information and explanations given to us, the Company did not grant any loan, make any investment and give guarantees or security during the year which requires compliance under Section 186 of the Act. In respect of loans to parties covered under Section 185, provisions of Section 185 of the Act have been complied with.

v. The Company has neither accepted any deposits nor any amounts which are deemed to be deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, reporting under clause 3(v) of the Order is not applicable. We have been informed by the management that no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard.

vi. We have broadly reviewed accounts and records maintained by the Company pursuant to rules made by the Central Government for the maintenance of cost records under Section 148(1) of the Act, in respect of Companys products to which the said rules are made applicable and are of the opinion that, prima facie the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of records with a view to determine whether they are accurate.

vii. a) The Company is regular in depositing undisputed statutory dues including Excise Duty, Goods and Service Tax, Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Duty of Customs, Value Added Tax,Cess and any other material statutory dues, as applicable, to the appropriate authorities. No undisputed amounts payable in respect of these statutory dues were outstanding at the year-end for a period of more than six months from the date they became payable.

b) The statutory dues as referred above in vii(a) that have not been deposited on account of any dispute is as given below: -

Name of the Statute

Nature of Dues

Forum where dispute is pending

Period to which the amount relates (Financial Years)

Gross Amount* ( in Crores) Amount Paid under Protest/ Statutory Deposits ( in Crores)
Central Excise Act,1944 Central Excise CESTAT April 2006 to January 2011, 2012-13 to 2014-15, August 2015 to February 2017 529.81 12.46
Asst. Commissioner of Central Tax (GST) & Central Excise January 2005 to June 2005 0.99 0.00
Sales Tax/VAT Legislations Sales Tax / VAT High Court 2007-08 to 2013-14, 2016-17 (January to March), 2017-18 (April to June), 2014-15 (October to March) 370.95 170.18
Deputy Commissioner 2014-15, 2015-16, 2016-17 97.94 36.71
Central Sales Tax Finance Act, 1994 CST Service Tax Deputy Commissioner CESTAT 1991-92 2009-10 to 2016-17 (Upto June 2017) 1.62 0.00
35.67 0.74
Commissioner of Central Excise (Appeals) 2016-17 & Nov 2015, 2009-11 0.15 0.00
Goods & Services Tax Act, 2017 GST Joint Commissioner (ST) (GST Appeals) 2017-18, 2018-19, 2019-20 279.06 6.88
Commissioner (Appeals) TRAN-1 4.64 0.27
Deputy Commissioner (ST) - LTU III 2018-19 0.01 0.00

Total

1320.83 227.24

*Gross amount includes penalty and interest, wherever applicable.

viii. There are no transactions not recorded in the books of account which have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961).

ix. a) The Company has not defaulted in the repayment of loans or other borrowings or in the payment of interest thereon to any lender.

b) The Company has not been declared willful defaulter by any bank or financial institution or other lender.

c) The Company has utilized the money obtained by way of term loans during the year for the purposes for which they were obtained.

d) According to the information and explanations given to us, and the procedures performed by us, and on an overall examination of the Standalone Financial Statements of the Company, we report that no funds raised on short-term basis have been used for long-term purposes by the Company.

e) The Company has not taken any funds from any entity or person on account of or to meet the obligations of its Associate or Joint ventures. The Company does not have any subsidiary.

f) The Company has not raised loans during the year on the pledge of securities held in its associates or joint ventures. The Company does not have any subsidiary.

x. a) The Company has not raised any money by way of initial public offer or further public offer (including debt instruments) during the year. Accordingly, reporting under paragraph 3(x)(a) of the Order is not applicable to the Company.

b) The Company has not made any preferential allotment or private placement of shares or convertible debentures (fully, partially or optionally convertible) during the year. Accordingly, reporting under paragraph 3(x)(b) of the Order is not applicable to the Company.

xi. a) No fraud by the Company or any fraud on the Company has been noticed or reported during the year.

b) During the year and up to the date of this report, no report under section 143(12) of the Act has been filed by the auditors in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government.

c) As represented to us by the management, there are no whistle blower complaints received by the Company during the year and up to the date of this report.

xii. The Company is not a Nidhi Company. Accordingly, reporting under paragraph 3(xii) of the Order is not applicable to the Company.

xiii. The related party transactions are entered in to by the Company are in compliance with Sections 177 and 188 of Act where applicable, and the details of such transactions have been disclosed in the Standalone Financial Statements, as required by the applicable accounting standards.

xiv. a) In our opinion the Company has an internal audit system commensurate with the size and nature of its business;

b) We have considered the internal audit reports of the Company for the period under audit, issued till date, for the period under audit.

xv. The Company has not entered any non-cash transactions with its directors or persons connected with its directors and hence provisions of section 192 of the CompaniesAct, 2013 are not applicable to the Company.

xvi. a) The Company is not required to be registered under Section 45-IA of Reserve Bank of India Act, 1934.

Hence reporting under paragraphs (xvi) (a) and (b) of the Order are not applicable to the Company.

b) The Company is not a Core Investment Company (CIC) as defined in the regulation made by the Reserve Bank of India. Accordingly, reporting under paragraph (xvi) (c) of the Order is not applicable to the Company.

c) According to the information and explanations given to us, the Group does not have any CIC as part of the Group as per definition of Group contained in the Core Investment Companies (Reserve Bank) Directions, 2016 and hence the reporting under paragraph (xvi) (d) of the Order is not applicable to the Company.

xvii. The Company has not incurred cash losses in the year and also in the immediately preceding financial year.

xviii. There has been no resignation of the statutory auditors during the year. Accordingly, reporting under paragraph 3(xviii) of the Order is not applicable to the Company;

xix. On the basis of the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the financial statements and our knowledge of the Board of Directors and Management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report indicating that Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

xx. As per the information and explanation provided to us and based on the examination of the books of account, in our opinion, a) there are no unspent amounts towards Corporate Social Responsibility (CSR) on other than ongoing projects requiring a transfer to a Fund specified in Schedule VII to the Companies Act in compliance with second proviso to sub-section (5) of Section 135 of the said Act. Accordingly, reporting under clause 3(xx)(a) of the Order is not applicable for the year

b) the Company has informed us that the Company does not have any on-going projects and accordingly, reporting under clause 3(xx)(b) of the Order is not applicable for the year.

Annexure ‘B to the Independent Auditors Report

Referred to in paragraph 2 under "Report on Other Legal and Regulatory Requirements" of our report on even date

Based on the verification of records of Chennai Petroleum Corporation Limited (the "Company") and based on information and explanations given to us, we give below a report on the directions issued by the Comptroller and Auditor General of India ("C&AG") in terms of the section 143(5) of the Act;

Sr. No. Directions under section 143(5) of the Act

Auditors Comment

1. Whether the Company has system in place to process all the accounting transactions through IT system? If yes, the implications of processing of accounting transactions outside IT system on the integrity of the accounts along with the financial implications, if any, may be stated • As per the information and explanations furnished to us and based on the procedures performed by us, the Company has an Enterprise
Resource Planning ("ERP") system (SAP) to process the accounting transactions.
• However, there are few other accounting processes being undertaken through excel spreadsheet like valuation of inventory, interest calculation with respect to borrowings, ageing in the case of trade accounts receivables and suppliers accounts, ageing of capital work in progress, wherein sufficient controls for data integrity have been observed.
2. Whether there is any restructuring of an existing loan or cases of waiver/write off of debts/loans/ interest etc. made by a lender to the company due to the companys inability to repay the loan? If yes, the financial impact may be stated. There are no cases of restructuring of any loan or cases of waiver/ write off of debts/ loans/ interest etc. made by any lender to the Company have been noticed during the financial year 2023-24.
3. Whether funds (grants/subsidy etc.) received/ receivable for specific schemes from Central/State Government or its agencies were properly accounted for/utilized as per its term and conditions? List the cases of deviation. As per the information and explanations furnished to us and based on the procedures performed by us, the funds received /receivable by the Company for specific schemes from Central/State agencies were properly accounted as per the term and conditions.

Annexure ‘C to the Independent Auditors Report

Referred to paragraph 3(vi) under the heading ‘Report on other Legal and Regulatory Requirements of our independent auditors report on even date, to the members of the Chennai Petroleum Corporation Limited on standalone financial statements for the year ended March 31, 2024.

Report on the Internal Financial Controls over financial reporting under Clause (i) of sub-section 3 of Section 143 of the Companies Act, 2013 (the "Act")

Opinion

We have audited the internal financial controls with reference to Standalone Financial Statements of Chennai Petroleum Corporation Limited ("the Company") as of March 31, 2024 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

In our opinion, the Company has, in all material respects, an adequate internal financial controls with reference to Standalone Financial Statements, and such internal financial controls were operating effectively as at March 31, 2024, based on the internal control with reference to Standalone Financial Statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (‘Guidance Note) issued by the Institute of Chartered Accountants of India (‘ICAI).

Managements Responsibility for Internal Financial Controls with reference to Standalone Financial Statements

The Companys management and Board of Directors are responsible for establishing and maintaining internal financial controls based on the internal control with reference to standalone financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls with reference to standalone financial statements of the Company based on our audit. We conducted our audit in accordance with the Guidance Note issued by ICAI and the Standards on auditing prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial control.

Those standards and the guidance note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to Standalone Financial Statements were established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to Standalone Financial Statements and their operating effectiveness.

Our audit of internal financial controls with reference to Standalone Financial Statements included obtaining an understanding of internal financial controls with reference to Standalone Financial Statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls with reference to Standalone Financial Statements.

Meaning of Internal Financial Controls with reference to Standalone Financial Statements

A Companys internal financial controls with reference to

Standalone Financial Statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Companys internal financial controls with reference to Standalone Financial Statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Standalone Financial Statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Companys assets that could have a material effect on the Standalone Financial Statements.

Inherent Limitations of Internal Financial Controls with reference to Standalone Financial Statements

Because of the inherent limitations of internal financial controls with reference to Standalone Financial Statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial

Financial Statements to future periods are subject to the risk that internal financial controls with reference to Standalone

Financial Statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

For G.M. Kapadia & Co.

Satya Ranjan Dhall
Chartered Accountants Partner
Firm Registration No.104767W Membership No. 214046
UDIN: 24214046BKFZPW1611
Place: Chennai
Date: April 24, 2024

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