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Mangalore Refinery And Petrochemicals Ltd.

BSE: 500109 Sector: Oil & Gas
NSE: MRPL ISIN Code: INE103A01014
BSE LIVE 15:46 | 22 Sep 127.55 -4.65
(-3.52%)
OPEN

132.00

HIGH

132.00

LOW

125.90

NSE 15:57 | 22 Sep 127.25 -4.65
(-3.53%)
OPEN

130.55

HIGH

131.00

LOW

125.80

OPEN 132.00
PREVIOUS CLOSE 132.20
VOLUME 228461
52-Week high 143.50
52-Week low 78.25
P/E 10.71
Mkt Cap.(Rs cr) 22,354
Buy Price 0.00
Buy Qty 0.00
Sell Price 127.00
Sell Qty 16.00
OPEN 132.00
CLOSE 132.20
VOLUME 228461
52-Week high 143.50
52-Week low 78.25
P/E 10.71
Mkt Cap.(Rs cr) 22,354
Buy Price 0.00
Buy Qty 0.00
Sell Price 127.00
Sell Qty 16.00

Mangalore Refinery And Petrochemicals Ltd. (MRPL) - Auditors Report

Company auditors report

To the members of MANGALORE REFINERY AND PETROCHEMICALS LIMITED

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of MANGALOREREFINERY AND PETROCHEMICALS LIMITED ("the Company") which comprises the BalanceSheet as at 31st March 2017 the Statement of Profit and Loss (including OtherComprehensive Income) the Cash Flow Statement and the Statement of Changes in Equity forthe year then endedand a summary of the significant accounting policies and otherexplanatory information.

Management's Responsibility for the Standalone 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 standalone Ind AS financial statements that give a true and fair view of the stateof affairs (financial position) profit or loss (financial performance including othercomprehensive income) cash flows and changes in equity of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS)prescribed under Section 133 of the Act read with relevant rules issuedthere under.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgements and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit.

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 thereunder.

We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone Ind AS financial statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone Ind ASfinancial statements. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the standalone Ind ASfinancial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India including the Ind AS of thestate of affairs (financial position) of the Company as at 31st March 2017 and its profit(financial performance including other comprehensive income) its cash flows and thechanges in equity for the year ended on that date.

Other Matters

The comparative financial information of the Company for the year ended 31st March2016 and the transition date opening balance sheet as at 1st April 2015 included in thesestandalone Ind AS financial statements are based on the previously issued statutoryfinancial statements prepared in accordance with the Companies (Accounting Standards)Rules 2006 and audited as follows:-a. Opening balance sheet as at 1st April 2015 auditedby a predecessor auditor (M/s. Gopalaiyer & Subramanian Chartered Accountants)and one current auditor (M/s. A. Raghavendra Rao & Associates CharteredAccountants) whose report for the year ended 31st March 2015 dated 22nd May 2015expressed an unmodified opinion on those standalone financial statements b. Financialinformation of the Company for the year ended 31st March 2016 audited by both the currentauditors whose report for the year ended 31st March 2016 dated 12th May 2016 expressedan unmodified opinion on those standalone financial statements

These comparative financial information of the Company for the year ended 31st March2016 and the transition date opening balance sheet as at 1st April 2015 included in thesestandalone Ind AS financial statements were adjusted for the differences in the accountingprinciples adopted by the Company on transition to the Ind AS which have been audited byus. Our opinion is not qualified in respect of this matter.

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 have given in the Annexure A a statement on the matters specified inparagraphs 3 and 4 of the Order.

2. Based on the veri3cation of Records of the Company and based on the information andexplanations given to us we give below a report on the Directions issued by theComptroller and Auditor General of India in terms of Sec 143(5) of the Companies Act2013. a. The company has clear title/lease deeds for freehold and leasehold land exceptfor leasehold land (18.18 acres) costing Rs. 28.82 Million which is in possession of thecompany towards which formal lease deeds are yet to be executed. Refer Note No-5 to thestandalone Ind AS financial statements. b. The company has written off trade receivableconsidered no longer recoverable amounting to Rs. 59.37 million in the Statement of Profitand Loss as these amounts are long pending and disputed by the parties as not payable.Refer Note No-34 to the standalone Ind AS financial statements. c. The company hasmaintained adequate records in respect of inventories lying with third parties. No assetshave been received by the Company as gift from Government or other authorities.

3. 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 purpose 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 the Cash Flow Statement andStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account. d. In our opinion the aforesaid standalone Ind AS financial statements complywith the Indian Accounting Standards specified under Section133 of the Act. e.Disqualification of directors stated under Section 164(2) of the Act is not applicable toa Government Company as per notification no. GSR 463(E) of the Ministry of CorporateAffairs dated 05/06/2015. f. With respect to the adequacy of the internal financialcontrols over the financial reporting of the Company and the operating effectiveness ofsuch controls refer to our separate report in Annexure B. g. With respect to othermatters to be included in the Auditor's Report in accordance with Rule 11 of the Companies(Audit and Auditors) Rules 2014 in our opinion and to the best of our information andaccording to the explanations given to us: i) The Company has disclosed the impact ofpending litigations on its financial position in its standalone Ind AS financialstatements-Refer Note 44.1 and 44.2 to the standalone Ind AS financial statements; ii) TheCompany has made provision as required under the applicable law or accounting standardsfor material foreseeable losses. The Company did not have any long-term contractsincluding derivative contracts and hence question of reporting on losses does not arise.iii) There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company. iv) The Company has providedrequisite disclosures in the financial statements as to the holdings as well as dealingsin Specified Bank Notes during the period from 8th November 2016 to 30th December 2016.Based on audit procedures and relying on management representation we report that thedisclosures are in accordance with the books of account maintained by the Company and asproduced to us by the Management – Refer Note No.–16 to the standalone Ind ASfinancial statements.

For A. RAGHAVENDRA RAO & ASSOCIATES For SREEDHAR SURESH & RAJAGOPALAN
Chartered Accountants Chartered Accountants
Firm Registration Number: 003324S Firm Registration Number: 003957S
Sd/- Sd/-
CA. A. KUMARA BHAT CA. V SURESH
Partner Partner
Membership no: 022041 Membership no: 026525
Place: New Delhi
Date: 17th May 2017

ANNEXURE ‘A' TO INDEPENDENT AUDITORS' REPORT 3 31ST MARCH 2017

(Referred to in our report of even date) i.

a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

b. All the assets have not been physically veri3ed by the management during the yearbut there is a regular programme of veri3cation which in our opinion is reasonablehaving regard to the size of the Company and nature of its assets. As per the reportssubmitted by the Company no material discrepancies have been noticed on such veri3cation.

c. According to the information and explanation given to us and the records of theCompany examined by us the title deeds of immovable properties are held in the name ofthe Company except some leasehold land (18.18 acres) costing Rs. 28.82 Million which is inthe possession of the company towards which formal lease deeds are yet to be executed.Refer Note No-5 to the standalone Ind AS financial statements.

(ii) We are informed that the inventory of stores and spares are physically veri3edduring the year by the management on a continuous basis as per programme of perpetualinventory. Inventories of other items have been physically veri3ed at the year end. Thefrequency of the veri3cation in our opinion is reasonable having regard to the size ofthe company and nature of its business. As per the reports submitted by the Company nomaterial discrepancies have been noticed on such veri3cation.

(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to Companies Firms Limited LiabilityPartnerships or other parties covered in the register maintained under Section 189 of theCompanies Act 2013. Accordingly reporting under clauses 3 (iii) (a) (b) and (c) of theOrder does not arise.

(iv) According to the information and explanations given to us the Company has notadvanced any loan given any guarantee or provided any security to the parties coveredunder Section 185.The Company has not given any loan or made any investment covered underSection 186 of the Companies Act 2013. Accordingly reporting under clause 3 (iv) of theOrder does not arise.

(v) According to the information and explanations given to us the Company has notaccepted any deposits within the meaning of sections 73 to 76 or any other relevantprovisions of the Companies Act 2013 and the rules framed thereunder. Accordinglyreporting under clause 3 (v) of the Order does not arise.

(vi) We have broadly reviewed the records maintained by the Company pursuant to therules prescribed by the Central Government for maintenance of cost records undersubsection 1 of Section 148 of the Companies Act 2013 and are of the opinion that primafacie the prescribed accounts and records have been made and maintained. However wehave not made a detailed examination of the records.

(vii)

a. According to the information and explanations given to us and the records of theCompany examined by us in our opinion the Company is generally regular in depositingundisputed statutory dues including Provident Fund Income Tax Sales Tax Service TaxDuty of Excise Value Added Tax and other statutory dues applicable to it during the yearwith appropriate authorities. According to the information and explanations given to usthere were no undisputed amounts payable in respect of Provident Fund Income Tax SalesTax Service Tax Duty of Excise Value Added Tax and other statutory dues outstanding asat 31st March 2017 for a period of more than six months from the date they becamepayable.

b. According to information and explanations given to us and as per our veri3cation ofrecords of the Company the disputed tax which are not deposited with the appropriateauthorities as at 31st March 2017 are given below.

NAME OF THE STATUTE NATURE OF THE DUES TOTAL DEMAND ( Rs. MILLIONS) TOTAL AMT PAID UNDER PROTEST/ ADJUSTED ( Rs. MILLIONS) PERIOD TO WHICH THE AMOUNT RELATES (FINANCIAL YEAR) FORUM WHERE THE DISPUTE IS PENDING
The Karnataka Sales tax Act1957/ Central Sales Act 1956 Value Added Tax – Interest 0.43 0.21 2006-07 Appellate Authority – Mangalore
Value Added Tax – Interest 4.80 2.48 2011-12 Karnataka Appellate Tribunal
Value Added Tax – Penalty 1.69 Nil 2011-12 Karnataka Appellate Tribunal
Income Tax Act 1961 Income Tax / Interest / Penalty 296.31 296.31 AY 1993-03 Mumbai High Court
10.93 10.93 AY 2003-04 Income Tax Appellate Tribunal – Mumbai
233.58 182.05 AY 2006-07 Income Tax Appellate Tribunal – Mumbai
129.39 129.39 AY 2007-08 Income Tax Appellate Tribunal – Mumbai
362.49 362.49 AY 2008-09 Income Tax Appellate Tribunal – Mumbai
1014.82 1014.82 AY 2009-10 Income Tax Appellate Tribunal – Mumbai
126.72 126.72 AY 2008-09 Commissioner of Income Tax (Appeals) –Mangalore
754.77 754.77 AY 2010-11 Commissioner of Income Tax (Appeals) –Mangalore
594.02 594.02 AY 2011-12 Commissioner of Income Tax (Appeals) –Mangalore
546.71 546.71 AY 2012-13 Commissioner of Income Tax (Appeals) –Mangalore
76.74 38.37 AY 2013-14 Commissioner of Income Tax (Appeals) –Mangalore
35.70 17.75 AY 2014-15 Commissioner of Income Tax (Appeals) –Mangalore
29.78 14.89 AY 2015-16 Commissioner of Income Tax (Appeals) –Mangalore
32.13 16.07 AY 2016-17 Commissioner of Income Tax (Appeals) –Mangalore
The Customs Custom Duty / Interest / 55.57 Nil 1997-2000 Supreme Court Of India
Act 1962 Penalty 721.97 Nil 1997-2000 CESTAT – Bangalore
Central Excise Central Excise Duty / 1.94 0.08 2015-16 Commissioner (Appeals) – Mangalore
Act 1944 Service Tax / Interest / Penalty 4212.15 128.84 2002-03 to 2016-17 CESTAT – Bangalore
1.71 0.75 2002-03 to 2015-16 Joint Secretary MOF
5.82 0.50 2010-11 Commissioner – Mangalore
20.31 - 1996-97 to Supreme Court
2003-2004

(viii) According to the information and explanation given to us and the records of theCompany examined by us the Company has not defaulted in repayment of loans or borrowingto any bank or Government during the year. The Company did not have any outstanding duesto financial institutions or debenture holders during the year.

(ix) The Company has not raised money by way of initial public the year. A sum of Rs.6766.88 million (Previous Year – Rs. 8078.42 million) being unutilized amount ofterm loan availed in the earlier years has been kept in a non-interest bearing account asper the Reserve Bank of India guidelines. Refer Note No.17.4 of the standalone Ind ASfinancial statements.

(x) According to the information and explanations given to us and the books of accountexamined by us no instance of fraud by the Company or on the Company by its officers oremployees has been noticed or reported during the course of our audit.

(xi) According to the information and explanations given to us and the records of theCompany examined by us in our opinion managerial remuneration has been paid inaccordance with the DPE Guide Lines.

(xii) As the Company is not a Nidhi Company and the Nidhi offer or further public offer(including debt instruments) during Rules 2014 are not applicable to it; the provisionsof Clause 3(xii) of the Order are not applicable to the Company.

(xiii) The Company has entered into transactions with related parties in compliancewith the provisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the financial statements as required under theapplicable accounting standards.

(xiv) According to the information and explanations given to us the Company has notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year under review. Accordingly reporting under Clause3(xiv) of the Order does not arise. (xv) According to the information and explanationsgiven to us the Company has not entered into any non-cash transactions with directors orpersons connected with the directors during the year. Accordingly reporting under Clause3(xv) of the Order does not arise.

(xvi) According to the information and explanations given to us the Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.Accordingly the provisions of Clause 3(xvi) of the Order are not applicable to theCompany.

For A. RAGHAVENDRA RAO & ASSOCIATES For SREEDHAR SURESH & RAJAGOPALAN
Chartered Accountants Chartered Accountants
Firm Registration Number: 003324S Firm Registration Number: 003957S
Sd/- Sd/-
CA. A. KUMARA BHAT CA. V SURESH
Partner Partner
Membership no: 022041 Membership no: 026525
Place: New Delhi
Date: 17th May 2017

ANNEXURE 3 B TO THE INDEPENDENT AUDITOR'S REPORT3 31ST MARCH 2017

(Referred to in our report of even date)

Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of MangaloreRefinery and Petrochemicals Limited ("the Company") as of March 31 2017 inconjunction with our audit of the standalone Ind AS financial statements of the Companyfor the year ended 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 (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and effcientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

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 deemed tobe prescribed under section 143(10) of the Companies Act 2013 to the extent applicableto an audit of internal financial controls both applicable to an audit of InternalFinancial Controls and both issued by the Institute of Chartered Accountants of India.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols 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 material weakness exists and testing and evaluating the design andoperating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the 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 financial statements for external purposes in accordance with generallyaccepted accounting principles. 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 financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) Provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's 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 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.

Opinion

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 March 31 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For A. RAGHAVENDRA RAO & ASSOCIATES For SREEDHAR SURESH & RAJAGOPALAN
Chartered Accountants Chartered Accountants
Firm Registration Number: 003324S Firm Registration Number: 003957S
Sd/- Sd/-
CA. A. KUMARA BHAT CA. V SURESH
Partner Partner
Membership no: 022041 Membership no: 026525
Place: New Delhi
Date: 17th May 2017