The Members of
The Andhra Petrochemicals Limited Tanuku.
Report on the Ind AS Financial Statements:
We have audited the accompanying Ind AS financial statements of The AndhraPetrochemicals Limited Tanuku which comprise the Balance Sheet as at March 31 2017and the Statement of Profit and Loss (including Other Comprehensive income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofthe significant accounting policies and other explanatory information.
Management's Responsibility for the Ind AS Financial Statements:
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese Ind AS financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash flows andchanges in equity of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) prescribed underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities selection and application of appropriateaccounting policies making judgments and estimates that are reasonable and prudent anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Ind AS financial statementsthat give a true and fair view and are free from material misstatement whether due tofraud or error.
1. Our responsibility is to express an opinion on these Ind AS financial statementsbased on our audit.
2. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.
3. We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe Ind AS financial statements are free from material misstatement.
4. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the Ind AS financial statements. The procedures selected depend onthe auditor's judgment including the assessment of the risks of material misstatement ofthe Ind AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the Ind AS financial statements that give a true and fair view in order todesign audit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company's Directors as well as evaluating theoverall presentation of the Ind AS financial statements.
5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Ind AS financial statement.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India including the Ind AS of the financialposition of the Company as at 31st March 2017 and its financial performance includingother comprehensive income its cash flows and the changes in equity for the year ended onthat date.
Report on Other Legal and Regulatory Requirements:
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure A a statement on the matters specified in theparagraph 3 and 4 of the Order to the extent applicable.
2. As required by Section 143 (3) of the Act we report that: a) We have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit. b) In our opinion proper books ofaccount as required by law have been kept by the Company so far as it appears from ourexamination of those books. c) The Balance Sheet the Statement of Profit and Loss theCash Flow Statement and Statement of Changes in Equity dealt with by this Report are inagreement with the books of account. d) In our opinion the aforesaid Ind AS financialstatements comply with the Indian Accounting Standards prescribed under Section 133 of theAct read with Rule 7 of the Companies (Accounts) Rules 2014. e) On the basis of thewritten representations received from the directors as on 31st March 2017 taken on recordby the Board of Directors none of the directors is disqualified as on 31st March 2017from being appointed as a director in terms of Section 164 (2) of the Act. f) With respectto the adequacy of the internal financial controls over financial reporting of the Companyand the operating effectiveness of such controls refer to our separate Report in "AnnexureB". g) With respect to the other matters to be included in the Auditor's Reportin accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in ouropinion and to the best of our information and according to the explanations given to us:i. The Company does not have any pending litigations that would impact its financialposition. ii. The Company did not have any long-term contracts including derivativecontracts for which there were any material foreseeable losses. iii. There has been nodelay in transferring amounts required to be transferred to the Investor Education andProtection Fund by the Company. iv. The company has provided requisite disclosures in itsInd AS financial statements as to holdings as well as dealings in Specified Bank Notesduring the period from 8 November 2016 to 30 December 2016 and these are in accordancewith the books of account maintained by the Company.
For BRAHMAYYA & CO. Chartered Accountants Firm Regn No. 000513S
(C. V. Ramana Rao) Partner Membership No.018545
Camp: Hyderabad Date: 23.05.2017
Annexure A to the Independent Auditor's Report:
The Annexure A referred to in our Independent Auditor's report of even date tothe members of THE ANDHRA PETROCHEMICALS LIMITED TANUKU for the year ended 31 March2017. We report that: i) a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets. b) The fixedassets have been physically verified by the management during the year. According to theinformation furnished to us no material discrepancies have been noticed on suchverification. c) The title deeds in respect of all immovable properties are held in thename of the company. ii) Physical verification of inventory has been conducted during theyear by the management at reasonable intervals. The discrepancies noticed on suchverification between the physical stocks and the book records were not material. iii) TheCompany has not granted any loans secured or unsecured to Companies Firms Limitedliability partnerships or other parties covered in the register maintained under section189 of the Companies Act 2013. Consequently clauses 3 (iii) (a) (b) and (c) of theOrder are not applicable. iv) The company has neither given any loans to the directors orany other persons in whom the director(s) is interested nor given/ provided anyguarantee/security in connection with any loan taken by directors or such other persons asper the provisions of section 185 of the Companies Act 2013. The investment made by thecompany in an earlier year does not exceed the limits prescribed under section 186 of theCompanies Act 2013. v) The Company has not accepted any deposits from the public.Consequently the clause 3(v) of the order is not applicable to the Company. vi) We havebroadly reviewed the books of account relating to materials labour and other items ofcost maintained by the Company pursuant to the Rules made by the Central Government forthe maintenance of cost records under sub-section (1) of section 148 of the Companies Act2013 and we are of the opinion that prima facie the prescribed accounts and records havebeen made and maintained. However we have not made a detailed examination of the records.vii) a) According to the information and explanations given to us and on the basis ofexamination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including provident fund employees' stateinsurance income-tax sales-tax service tax duty of customs duty of excise valueadded tax cess and other material statutory dues have been regularly deposited during theyear by the Company with the appropriate authorities.
According to the information and explanations given to us no undisputed amounts arepayable in respect of income tax sales tax service tax duty of customs duty of excisevalue added tax or cess and other material statutory dues which were in arrears as at 31stMarch 2017 for a period of more than six months from the date they became payable. b) Asat 31st March 2017 there have been no disputed dues which have not been deposited withthe respective authorities in respect of Income tax Service tax duty of customs duty ofexcise value added tax and Cess except the following:
|Name of the Statute ||Nature of the Dues ||Amount * (Rs. in lakhs) ||Period to which the amount relates ||Forum where dispute is pending |
|1. The Income Tax Act 1961. ||Tax Deduction at Source ||1.72 ||Assessment Year 2006-07 ||Income Tax Appellate Tribunal Visakhapatnam. |
|2. The Income Tax Act 1961. ||Income Tax ||4.39 ||Assessment Year 2008-09 ||Deputy Commissioner of Income Tax Circle - 1 Visakhapatnam. |
|3. The Income Tax Act 1961 ||Fringe benefit tax ||2.28 ||Assessment Year 2008-09 ||Commissioner of Income Tax (Appeals) Visakhapatnam. |
|4. The Income Tax Act 1961 ||Tax Deduction at Source ||15.68 ||Assessment Years 2008-09 & 2009-10 ||Commissioner of Income Tax (Appeals) Visakhapatnam. |
|5. Central Sales Tax Act 1956. ||Central Sales Tax ||1.55 ||Financial year 2014-15 ||Additional deputy commissioner of commercial taxes Vijayawada. |
|6. Central Sales Tax Act 1956. ||Central Sales Tax ||4.74 ||Financial year 2015-16 ||Additional deputy commissioner of |
|7. Central Excise Act 1944 ||Ineligible cenvat credit on Service tax paid on certain services ||9.60 ||Period from December 2011 to September 2015. ||Commissioner of Central Excise (Appeals) Visakhapatnam. |
*Net of Pre deposits made.
viii) The Company has not defaulted in repayment of any loan installments in respect ofterm loans from financial institutions and banks consequent to the reschedulement of termloan installments by IDBI Bank. ix) In our opinion the Term Loans obtained in earlieryears have been applied for the purposes for which they were raised. x) According to theinformation and explanations given to us no fraud on or by the Company has been noticedor reported during the course of our audit. xi) The company has neither paid nor providedfor any managerial remuneration during the financial year under report. Consequently theclause 3(xi) of the order is not applicable. xii) In our opinion the company is not aNidhi Company. Consequently the clause 3(xii) of the order is not applicable. xiii)According to the information and explanations given to us and on overall examination ofthe records of the Company we report that all transactions with related parties are incompliance with the provisions of sections 177 and 188 of the Companies Act 2013 and therelated party disclosures as required by relevant Indian Accounting Standards aredisclosed in the financial statements. xiv) The Company has not made any preferentialallotment or private placement of shares or fully/partly convertible debentures during theyear under review. Consequently the clause 3(xiv) of the order is not applicable. xv) TheCompany has not entered into any non cash transactions with the directors or personsconnected with them during the year under report. Consequently the clause 3(xv) of theorder is not applicable. xvi) The Company is not required to be registered under section45-IA of the Reserve Bank of India Act 1934. Consequently the clause 3(xvi) of the orderis not applicable.
| ||for BRAHMAYYA & CO. Chartered Accountants |
|Camp : Hyderabad ||Firm Regn. No. 000513S |
|Date : 23.5.2017 ||C V Ramana Rao |
| ||Partner |
| ||Membership No.018545 |
The Annexure B referred to in our Independent Auditor's report of even date onthe financial statements of THE ANDHRA PETROCHEMICALS LIMITED TANUKU.
Report on the Internal Financial Controls over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of The AndhraPetrochemicals Limited Tanuku ("the Company") as of March 31 2017 inconjunction with our audit of the Ind AS financial statements of the Company for the yearended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on "the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India". These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the Ind AS financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of Ind AS financial statements for external purposes in accordance withgenerally accepted accounting principles including Indian Accounting Standards prescribedunder section 133 of the Act. A company's internal financial control over financialreporting includes those policies and procedures that: (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of Ind AS financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the Ind AS financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2017 based on"the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India".
for BRAHMAYYA & CO. Chartered Accountants Firm Regn. No. 000513S
C V Ramana Rao Partner Membership No.018545