To
The Members of
Nagarjuna Oil Refinery Limited
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying Standalone Ind AS Financial Statements of Nagarjuna
Oil Refinery Limited ("the Company"), which comprise the Balance Sheet as at
March 31, 2018, and the Statement of Profit and Loss (including Other Comprehensive
Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then
ended, and a summary of the significant accounting policies and other explanatory
information (herein referred to as "the Standalone Ind AS Financial
Statements").
Managements responsibility for the Standalone Ind AS Financial Statements
The Companys Board of Directors is responsible for the matters stated in Section
134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of
these Standalone Ind AS Financial Statements that give a true and fair view of the state
of affairs(financial position), profit or loss (financial performance including other
comprehensive income), cash flows and changes in equity of the Company in accordance with
the accounting principles generally accepted in India, including the Indian Accounting
Standards (Ind AS) prescribed 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 Ind AS Financial Statements that give a
true and fair view and are free from material misstatement, whether due to fraud or error.
AuditorsResponsibility
Our responsibility is to express an opinion on these Standalone Ind AS Financial
Statements based on our audit. We have taken into account the provisions of the Act, the
Accounting and Auditing Standards and matters which are required to be included in the
audit report under the provisions of the Act and the Rules made thereunder. We conducted
our audit of the Standalone Ind AS Financial Statements in accordance with the Standards
on Auditing specified under Section 143(10) of the Act. Those Standards require that we
comply with ethical requirements and plan and perform the audit to obtain reasonable
assurance about whether the Standalone Ind AS Financial Statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
the disclosures in the Standalone Ind AS Financial Statements. The procedures selected
depend on the auditors judgment, including the assessment of the risks of material
misstatement of the Standalone Ind AS Financial Statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal financial control
relevant to the Companys preparation of the Standalone Ind AS Financial Statements that
give a true and fair view in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of the accounting
policies used and the reasonableness of the accounting estimates made by the Companys
Directors, as well as evaluating the overall presentation of the Standalone Ind AS
Financial Statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the Standalone Ind AS Financial Statements.
Basis for Qualified Opinion
The accounts have been drawn up on going concern basis, notwithstanding the 100%
provision in respect of investment in associate Company Nagarjuna Oil Corporation Limited
for the reasons stated in Note 4.1, indicating the existence of material uncertainty that
may cast significant doubt about the companys ability to continue as a going concern,
pending finalisation of future business plans by the company.
Other Matter
Consolidated Financial Statements of the Company and its Associate have not been
prepared as required under section 129(3) of the Companies Act, 2013 for the reasons
stated in Note 4.2.
Our opinion is not modified in respect of this matter.
Opinion
In our opinion and to the best of our information and according to the explanations
given to us, except for the possible effects of the matter described in the Basis for
Qualified Opinion Para above, the aforesaid Standalone Ind AS Financial Statements
give the information required by the Act in the manner so required and give a true and
fair view in conformity with the accounting principles generally accepted in India
including the Ind AS, of the state of affairs (financial position) of the Company as at
March 31, 2018, and its loss (financial performance including other comprehensive income),
its cash flows and the changes in equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best
of our knowledgeand belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required by law have been kept by the
Company so far as it appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss, the Cash Flow Statement and
Statement of Changes in Equity dealt with by this Report are in agreement with the books
of account.
(d) In our opinion, the aforesaid Standalone Ind AS Financial Statements comply with
the Indian Accounting Standards specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on March
31, 2018 taken on record by the Board of Directors, none of the Directors is disqualified
as on March 31, 2018 from being appointed as a director in terms of Section 164(2) of the
Act.
(f) With respect to the adequacy of the internal financial controls over financial
reporting of the Company and the operating effectiveness of such controls, we give our
separate Report in "Annexure A".
(g) 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, in our opinion
and to the best of our information and according to the explanations given to us:
i. The Company does not have any pending litigations on its financial position except
to the extent stated in Note 22 to the Standalone Ind AS Financial Statements.
ii. The Company did not, as at March 31, 2018, have any material foreseeable losses
relating to long-term contracts including derivative contracts.
iii. There were no amounts, as at 31st March 2018, which are required to be transferred
to the Investor Education and Protection Fund by the Company.
2. As required by the Companies (Auditors Report) Order, 2016 ("the Order")
issued by the Central Government in terms of Section 143(11) of the Act, we give in the
"Annexure B", a statement on the matters specified in paragraphs 3 and 4 of the
Order.
|
for M. Bhaskara Rao & Co |
|
Chartered Accountants |
|
Firm Registration No. 000459S |
|
Anilkumar Mehta |
|
Partner |
| Hyderabad, May 25, 2018 |
Membership No. 14284 |
Re: Nagarjuna Fertilizers and Chemicals Limited
Annexure A to the Independent Auditors report
(Referred to in paragraph 1(f) under ‘Report on Other Legal and Regulatory
Requirements section of our report to the Members of Nagarjuna Oil Refinery Limited of
even date)
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section
143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Nagarjuna
Oil Refinery Limited ("the Company") as of March 31, 2018 in conjunction with
our audit of the Standalone Ind AS Financial Statements of the Company for the year ended
on that date
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internal
financial controls based on the internal control over financial reporting 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" issued by the Institute of Chartered Accountants of India (‘ICAI).
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 Companies Act, 2013.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal financial
controls over financial reporting based on our audit. We conducted our audit in accordance
with the "Guidance Note on Audit of Internal Financial Controls over Financial
Reporting" (the "Guidance Note") and the Standards on Auditing, issued by
ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the
extent applicable to an audit of internal financial controls. 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
over financial reporting was 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 system over financial
reporting and their operating effectiveness.
Our audit of internal financial controls over financial reporting included obtaining an
understanding of internal financial controls over financial reporting, assessing the risk
whether 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 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 system
over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Companys internal financial control over financial reporting 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 control over financial
reporting 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 financial statements in
accordance with generally accepted accounting principles, and that receipts and
expenditures of the Company are being made only in accordance with authorisations of
management and directors of the Company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorised acquisition, use, or disposition of the
companys assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial
reporting, 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 controls over financial
reporting to future periods are subject to the risk that the internal financial control
over financial reporting may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal
financial controls system over financial reporting and such internal financial controls
over financial reporting were operating effectively as at March 31, 2018, based on the
internal control over financial reporting 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 issued by the Institute of Chartered
Accountants of India.
|
for M. Bhaskara Rao & Co |
|
Chartered Accountants |
|
Firm Registration No. 000459S |
|
Anilkumar Mehta |
|
Partner |
| Hyderabad, May 25, 2018 |
Membership No. 14284 |
Re: Nagarjuna Oil Refinery Limited
ANNEXURE B TO THE INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory
Requirements section of our report of even date) (i) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars, including
quantitative details and situationof its fixed assets.
(b) According to the information and explanation given to us, the fixed assets have
been physically verified by the Management during the year. In our opinion, the frequency
of verification is reasonable having regard to the size of the Company and the nature of
the assets. According to the information and explanations given to us, no discrepancies
were noticed on such verification.
(c) According to the information and explanations furnished to us, and based on our
review, title deeds of its immovable properties are in the name of the Company. (ii) As
the Company has no inventory, reporting under paragraph 3(ii) of the Order does not arise.
(iii) According to the information and explanations given to us, the Company has not
granted any loans, secured or unsecured, to companies, firms, Limited Liability
Partnerships or other parties covered in the Register maintained under Section 189 of the
Companies Act, 2013. Accordingly, reporting under clauses (a), (b) and (c) of paragraph
3(iii) of the Order does not arise.
(iv) According to the information and explanations furnished to us, the Company has not
granted any loans, nor made any investments or given any guarantees or securities during
the year to any of the parties specified in Sections 185 and 186 of the Companies Act,
2013. Hence, reporting under provisions of paragraph 3(iv) of the Order does not arise.
(v) In our opinion and according to the information and explanations given to us, the
Company has not accepted any deposits. Accordingly, reporting under provisions of
paragraph 3(v) of the Order does not arise.
(vi) In our opinion and according to the information and explanations given to us, the
Central Government has not prescribed maintenance of cost records under Section 148(1) of
the Companies Act, 2013 for the activities of the Company.
(vii) According to the information and explanations given to us, in respect of
statutory dues:
(a) The Company has been generally regular in depositing undisputed statutory dues,
including Provident Fund, Employees State Insurance, Income-tax, GST, Sales Tax, Wealth
Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material
statutory dues applicable to it with the appropriate authorities , and there were no
amounts payable in respect of the aforesaid undisputed statutory dues in arrears, as at
March 31, 2018, for a period of more than six months from the date they became payable.
(b) There were no amounts payable in respect of Provident Fund, Employees State
Insurance, Sales Tax, Income-tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty,
Value Added Tax, Cess and other material statutory dues as at March 31, 2018 which have
not been deposited on account of dispute.
(viii) According to the information and explanations given to us, the Company has not
availed any loans from financial institutions, banks, government or from debenture
holders. Accordingly, reporting under provisions of paragraph 3(viii) of the Order does
not arise.
(ix) According to the information and explanations furnished to us, the Company has,
during the year under report, not raised any monies through initial public offer or
further public offer of any of its securities or term loans. Hence, reporting under
provisions of paragraph 3(ix) of the Order does not arise.
(x) According to the information and explanations furnished to us, no fraud by the
Company, nor any fraud on the Company by any of its officers or its employees has been
noticed or reported during the year under report.
(xi) According to the information and explanations furnished to us by the Company, the
Company has, during the year under report, paid / provided for managerial remuneration in
accordance with Section 197 read with Schedule V of the Companies Act 2013.
(xii) In our opinion, reporting requirement under Paragraph 3(xii) of the order does
not arise since, according to the information and explanations furnished to us, the
Company is not a Nidhi Company.
(xiii) According to the information and explanations furnished to us, the transactions
entered into by the Company with its related parties are in compliance with the
requirements of the provisions of Sections 177 and 188 of the provisions of the Companies
Act 2013.
(xiv) According to the information and explanations furnished to us, the Company has
not made any preferential allotment or private placement of its shares or fully or partly
convertible debentures during the year under report.
(xv) According to the information and explanations furnished to us, the Company has not
entered into any agreements for acquisition of assets from or for transferring its assets
to its directors, or the directors of its subsidiary companies or persons connected with
such directors, for a consideration other than cash, during the year under report.
(xvi) According to the information and explanations furnished to us, the Company
submitted its application for registration under Section 45-IA of the Reserve Bank of
India Act 1934 which is pending clearance by Reserve Bank of India.
|
for M. Bhaskara Rao & Co |
|
Chartered Accountants |
|
Firm Registration No. 000459S |
|
Anilkumar Mehta |
|
Partner |
| Hyderabad, May 25, 2018 |
Membership No. 14284 |
+91-9892691696
