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Mangalore Refinery And Petrochemicals Ltd.

BSE: 500109 Sector: Oil & Gas
NSE: MRPL ISIN Code: INE103A01014
BSE LIVE 15:49 | 21 Aug 123.25 -1.35
(-1.08%)
OPEN

124.80

HIGH

128.55

LOW

123.00

NSE 15:58 | 21 Aug 123.40 -1.15
(-0.92%)
OPEN

124.50

HIGH

128.70

LOW

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OPEN 124.80
PREVIOUS CLOSE 124.60
VOLUME 440083
52-Week high 142.75
52-Week low 76.25
P/E 10.35
Mkt Cap.(Rs cr) 21,601
Buy Price 123.25
Buy Qty 1491.00
Sell Price 0.00
Sell Qty 0.00
OPEN 124.80
CLOSE 124.60
VOLUME 440083
52-Week high 142.75
52-Week low 76.25
P/E 10.35
Mkt Cap.(Rs cr) 21,601
Buy Price 123.25
Buy Qty 1491.00
Sell Price 0.00
Sell Qty 0.00

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

Company auditors report

To the members of MANGALORE REFINERY AND PETROCHEMICALS LIMITED Report on theStandalone Financial Statements.

We have audited the accompanying standalone financial statements of MANGALOREREFINERY AND PETROCHEMICALS LIMITED ("the Company") which comprises theBalance Sheet as at 31st March 2016 the Statement of Profit and Loss the CashFlow Statement for the year then ended and a summary of the significant accountingpolicies and other explanatory information.

Management's Responsibility for 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 financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgements and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe 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 financial statementsbased 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 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 financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgement including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2016 and its profit and its cash flows 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 have given in the Annexure A a statement on the matters specified inparagraphs 3 and 4 of the Order.

2. Based on the verification 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 landrespectively.

b. There is one case of write off of debt amounting to ' 0.70 million in addition toCentral Sales Tax on sales to PSU Oil Marketing Companies amounting to ' 2183.92 millionand both are being expensed to the Statement of Profit and Loss the latter has arisen onaccount of prevailing industry practice.

c. The company has maintained adequate records in respect of inventories lying withthird parties. No assets have been received by the Company as gift from Government orother authorities.

3. 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 bestof our knowledge and belief were necessary for the purpose of our audit.

b. In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

c. The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

d. In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section133 of the Act read with Rule

7 of the Companies (Accounts) Rules 2014

e. Disqualification of directors stated under Section 164(2) of the Act is notapplicable to a Government Company as per notification no. GSR 463(E) of the Ministry ofCorporate Affairs dated 05/06/2015.

f. With respect to the adequacy of the internal financial controls over the financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report Annexure B

g. With respect to other matters to be included in the Auditor's Report in accordancewith Rule11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to thebest of our information and according to the explanations given to us:

i) The Company has disclosed the impact of pending litigations on its financialposition in its financial statements-Refer Note 31.14.03 and 31.14.04 to the financialstatements;

ii) The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts.

iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For A.RAGHAVENDRA RAO & ASSOCIATES For SREEDHARSURESH &RAJAGOPALAN
Chartered Accountants Chartered Accountants
Firm Registration Number: 003324S Firm Registration Number: 003957S
Sd/- Sd/-
CA.GOPALAKRISHNA BHAT T. M CA. K SREEDHAR
Partner Partner
Membership No: 019798 Membership No: 024314
Place: BENGALURU
Date: 12th MAY 2016

ANNEXURE 'A' REFERRED TO UNDER PARAGRAPH 1 OF THE REPORT ON OTHER LEGAL AND REGULATORYREQUIREMENTS OF THE AUDITORS' REPORT ON STANDALONE FINANCIAL STATEMENTS.

With reference to Annexure 'A' referred to in paragraph 1 under the heading"Report on Other Legal and Regulatory Requirements" of the Independent Auditors'report to the members of Mangalore Refinery and Petrochemicals Limited on the financialstatement for the year ended 31st March 2016 we report that:

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 verified by the management during the yearbut there is a regular programme of verification 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 suchverification.

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.

ii. We are informed that the inventory of stores and spares are physically verifiedduring the year by the management on a continuous basis as per programme of perpetualinventory. Inventories of other items have been physically verified at the year end thefrequency of which in our opinion is reasonable having regard to the size of the companyand nature of its business. As per the reports submitted by the Company no materialdiscrepancies have been noticed on such verification.

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 and the Company has not given any loan or made any investment coveredunder Section 186 of the Companies Act 2013. Accordingly reporting under clause 3(iv) ofthe Order 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. According to information and explanation given to us the Central Government hasspecified the maintenance of cost records under section 148(1) of Companies Act 2013. Wehave broadly reviewed the cost records maintained by the Company and report that thedirections specified by the Central Government under sub-section (1) of section 148 of theCompanies Act 2013 with regard to maintenance of Cost Records have been complied with.

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 saletax service tax duty of excise value added tax and other statutory dues outstanding asat 31st March 2016 for a period of more than six months from the date theybecame payable.

b. According to information and explanations given to us and as per our verification ofrecords of the Company the disputed tax which are not deposited with the appropriateauthorities as at 31st March 2016 are as follows:

Name of the Statute Nature of the Dues Total Demand (' Millions) Total Amt Paid under protest/ adjusted (' Millions) Period to which the Amount Relates (Financial Year) Forum Where the dispute is pending
Central Sales Tax - Penalty 4.53 Nil 2009-10 Karnataka Appellate Tribunal
Central Sales Tax - Interest 18.33 12.10 2009-10 Karnataka Appellate Tribunal
Sales tax Value Added Tax - Interest 0.43 0.21 2006-07 Appellate Authority - Mangalore
Act1957/ Value Added Tax - Interest 0.13 0.13 2009-10 Karnataka Appellate Tribunal
Central Value Added Tax - Interest 0.66 0.66 2010-11 Karnataka Appellate Tribunal
Sales Act Value Added Tax - Penalty 3.48 Nil 2011-12 Appellate Authority - Mangalore
1956 Value Added Tax - Interest 4.80 2.48 2011-12 Appellate Authority - Mangalore
296.30 296.30 AY 1993-03 Mumbai High Court
10.93 10.93 AY 2003-04 Income Tax Appellate Tribunal - Mumbai
233.50 111.10 AY 2006-07 Income Tax Appellate Tribunal - Mumbai
129.39 129.39 AY 2007-08 Income Tax Appellate Tribunal - Mumbai
Income Tax Income Tax / Interest / 362.49 362.49 AY 2008-09 Income Tax Appellate Tribunal - Mumbai
Act 1961 Penalty 1014.82 1014.82 AY 2009-10 Income Tax Appellate Tribunal - Mumbai
126.72 Nil AY 2008-09 Commissioner of Income Tax (Appeals) - Mumbai
754.77 698.00 AY 2010-11 Commissioner of Income Tax (Appeals) - Mumbai
594.02 297.00 AY 2011-12 Commissioner of Income Tax (Appeals) - Mumbai
546.70 453.70 AY 2012-13 Commissioner of Income Tax (Appeals) - Mumbai
Millions)
The Customs Act 1962

Custom Duty / Interest / Penalty

55.57 Nil 1997-2000 Supreme Court Of India
682.26 Nil 1997-2000 CESTAT - Bangalore
Central Excise Act 1944

Central Excise Duty / Service Tax / Interest / Penalty

23.40 0.30 2009-10 to 2015-16 Commissioner (Appeals) - Mangalore
205.06 37.12 1996-97 to 2013-14 CESTAT - Bangalore
2.33 0.72 2002-03 to 2015-16 Joint Secretary MOF
53.70 21.64 1999-2000 to 2010-11 Commissioner - Mangalore
20.31 1996-97 to 20032004 Supreme Court
Total 5144.63 3449.09

viii. According to the records of the Company examined by us and the information andexplanation given to 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 loans orborrowings from any financial institution and has not issued any debentures.

ix. The Company has neither raised any money by way of initial public offer or furtherpublic offer (including debt instruments) nor has availed any term loans during the year.Accordingly reporting under Clause 3 (ix) of the Order does not arise.

x. During the course of our examination of the books and records of the Companycarried out in accordance with generally accepted auditing practises in India andaccording to the information and explanations given to us we have neither come across anyinstances of fraud by the Company or any instances of frauds on the Company by itsofficers or employees noticed or reported during the year nor we have been informed ofsuch cases by the management.

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. According to the information and explanations given to us the Company is not aNidhi Company. Accordingly reporting under clause 3(xii) of the Order does not arise.

xiii. According to the information and explanations given to us and the records of theCompany examined by us in our opinion all transactions with the related parties are incompliance with Section 177 and 188 of the Companies Act 2013 where applicable and thedetails have been disclosed in the Financial Statements as required by the applicableaccounting 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 explanations given to us the Company has notentered into any non-cash transactions with directors or persons connected with thedirectors during the year. Accordingly reporting under clause 3 (xv) of the Order doesnot 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 reporting under clause 3 (xvi) of the Order does not arise.

For A.RAGHAVENDRA RAO & ASSOCIATES For SREEDHARSURESH & RAJAGOPALAN
Chartered Accountants

Firm Registration Number: 003324S

Chartered Accountants Firm Registration Number: 003957S
Sd/-
Sd/- CA. K SREEDHAR

Partner

CA.GOPALAKRISHNA BHAT T. M Membership No: 024314
Partner
Membership No: 019798
Place: BENGALURU
Date: 12th MAY 2016

ANNEXURE-B TO THE AUDITOR'S REPORT

Report on the Internal Financial Controls under Clause (i) of Sub-section 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 2016 inconjunction with our audit of the standalone financial statements of the Company for theyear 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'). 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.

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 designand operating 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial 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 312016 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 SREEDHARSURESH & RAJAGOPALAN
Chartered Accountants Chartered Accountants
Firm Registration Number: 003324S Firm Registration Number: 003957S
Sd/- CA.GOPALAKRISHNA BHAT T. M Sd/-
Partner CA. K SREEDHAR
Membership No: 019798 Partner
Membership No: 024314
Place: Bengaluru Date: 12th May 2016