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Nagarjuna Oil Refinery Ltd.

BSE: 534184 Sector: Oil & Gas
NSE: NAGAROIL ISIN Code: INE453M01018
BSE 14:04 | 23 Jan 4.12 -0.08
(-1.90%)
OPEN

4.15

HIGH

4.24

LOW

4.10

NSE 13:51 | 23 Jan 4.15 0
(0.00%)
OPEN

4.20

HIGH

4.25

LOW

4.10

OPEN 4.15
PREVIOUS CLOSE 4.20
VOLUME 41718
52-Week high 6.08
52-Week low 2.56
P/E
Mkt Cap.(Rs cr) 176
Buy Price 4.12
Buy Qty 255.00
Sell Price 4.15
Sell Qty 750.00
OPEN 4.15
CLOSE 4.20
VOLUME 41718
52-Week high 6.08
52-Week low 2.56
P/E
Mkt Cap.(Rs cr) 176
Buy Price 4.12
Buy Qty 255.00
Sell Price 4.15
Sell Qty 750.00

Nagarjuna Oil Refinery Ltd. (NAGAROIL) - Auditors Report

Company auditors report

To

The Members of

Nagarjuna Oil Refinery Limited

Report on the Standalone Financial Statements

We have audited the accompanying Standalone Financial Statements of Nagarjuna OilRefinery Limited ("the Company") which comprise the Balance Sheet as at March31 2017 the Statement of Profit and Loss and the Cash Flow Statement for the year thenended and a summary of the significant accounting policies and other explanatoryinformation (here in referred to as "the Standalone Financial Statements"). Management'sresponsibility 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 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 Standalone Financial Statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

Auditor's 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 there under.

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 Standalone Financial Statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone financial statements. The procedures selected depend onthe auditors' judgement including the assessment

of the risks of material misstatement of the Standalone Financial Statements whetherdue to fraud or error. In making those risk assessments the auditor considers internalfinancial control relevant to the Company's preparation of the Standalone FinancialStatements that give a true and fair view in order to design audit procedures that areappropriate in the circumstances. An audit also includes evaluating the appropriateness ofthe accounting policies used and the reasonableness of the accounting estimates made bythe Company's Directors as well as evaluating the overall presentation of the StandaloneFinancial 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 March 31 2017 and its loss and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to Note 11.1 to the standalone financial statements regardingprovision made towards diminution in the value of the investment in Nagarjuna OilCorporation Limited and its adequacy as on March 31 2017 based on the managementassessment for the reasons stated in the said note.

Our opinion is not modified in respect of the above matter.

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 bestof our knowledge and 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 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 Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

(e) On the basis of the written representations received from the directors as on March31 2017 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2017 from being appointed as a director in terms of Section 164 (2) of theAct.

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls we give ourseparate Report in "Annexure A".

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of all pending litigations on its financialposition in its Standalone Financial Statements - refer Note 21.1 to the StandaloneFinancial Statements.

ii. The Company did not as at March 31 2017 have any material foreseeable lossesrelating to longterm contracts including derivative contracts.

iii. There were no amounts as at 31st March 2017 which are required to betransferred to the Investor Education and Protection Fund by the Company.

iv. The Company has provided requisite disclosures in the Standalone FinancialStatements as regards its holding and dealings in Specified Bank Notes as defined in theNotification S.O. 3407(E) dated the November 8 2016 of the Ministry of Finance duringthe period from November 8 2016 to December 30 2016. Based on audit procedures performedand the representations provided to us by the management we report that the disclosuresare in accordance with the books of account maintained by the Company and as produced tous - Refer Note 12.1 to the Standalone Financial Statements.

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 theOrder.

for M. Bhaskara Rao & Co
Chartered Accountants
Firm Registration No. 000459S
D. Bapu Raghavendra
Hyderabad Partner
May 26 2017 Membership No. 213274

Re: Nagarjuna Oil Refinery Limited Annexure A to the Independent Auditors' report

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 NagarjunaOil Refinery Limited ("the Company") as of March 31 2017 in conjunction withour audit of the Standalone Financial Statements of the Company for the year ended on thatdate.

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 FinancialReporting" issued 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 efficientconduct 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 FinancialReporting" (the "Guidance Note") and the Standards on Auditing issued byICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively 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 whether a material weakness exists and testing and evaluating thedesign and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditors' judgement including the assessment of therisks 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 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 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 M. Bhaskara Rao & Co
Chartered Accountants
Firm Registration No. 000459S
D. Bapu Raghavendra
Hyderabad Partner
May 26 2017 Membership No.213274

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 includingquantitative details and situation of its fixed assets.

(b) According to the information and explanation given to us the fixed assets havebeen physically verified by the Management during the year. In our opinion the frequencyof verification is reasonable having regard to the size of the Company and the nature ofthe assets. According to the information and explanations given to us no discrepancieswere noticed on such verification.

(c) According to the information and explanations furnished to us and based on ourreview 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 doesnot arise.

(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 (a) (b) and (c) of paragraph3(iii) of the Order does not arise.

(iv) According to the information and explanations furnished to us the Company has notgranted any loans nor made any investments or given any guarantees or securities duringthe year to any of the parties specified in Sections 185 and 186 of the Companies Act2013. 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 theCompany has not accepted any deposits. Accordingly reporting under provisions ofparagraph 3(v) of the Order does not arise.

(vi) In our opinion and according to the information and explanations given to us theCentral Government has not prescribed maintenance of cost records under Section 148(1) ofthe Companies Act 2013 for the activities of the Company.

(vii) According to the information and explanations given to us in respect ofstatutory dues:

(a) The Company has been generally regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income-tax Sales Tax Wealth TaxService Tax Customs Duty Excise Duty Value Added Tax Cess and other material statutorydues applicable to it with the appropriate authorities and there were no amounts payablein respect of the aforesaid undisputed statutory dues in arrears as at March 31 2017for 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' StateInsurance Sales Tax Income-tax Wealth Tax Service Tax Customs Duty Excise DutyValue Added Tax Cess and other material statutory dues as at March 31 2017 which havenot been deposited on account of dispute.

(viii) According to the information and explanations given to us the Company has notavailed any loans from financial institutions banks government or from debentureholders. Accordingly reporting under provisions of paragraph 3(viii) of the Order doesnot arise.

(ix) According to the information and explanations furnished to us the Company hasduring the year under report not raised any monies through initial public offer orfurther public offer of any of its securities or term loans. Hence reporting underprovisions of paragraph 3(ix) of the Order does not arise.

(x) According to the information and explanations furnished to us no fraud by theCompany nor any fraud on the Company by any of its officers or its employees has beennoticed or reported during the year under report.

(xi) According to the information and explanations furnished to us by the Company theCompany has during the year under report paid / provided for managerial remuneration inaccordance 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 doesnot arise since according to the information and explanations furnished to us theCompany is not a Nidhi Company

(xiii) According to the information and explanations furnished to us the transactionsentered into by the Company with its related parties are in compliance with therequirements of the provisions of Sections 177 and 188 of the provisions of the CompaniesAct 2013.

(xiv) According to the information and explanations furnished to us the Company hasnot made any preferential allotment or private placement of its shares or fully or partlyconvertible debentures during the year under report.

(xv) According to the information and explanations furnished to us the Company has notentered into any agreements for acquisition of assets from or for transferring its assetsto its directors or the directors of its subsidiary companies or persons connected withsuch directors for a consideration other than cash during the year under report.

(xvi) According to the information and explanations furnished to us the Companysubmitted its application for registration under Section 45-IA of the Reserve Bank ofIndia Act 1934 which is pending clearance by Reserve Bank of India.

for M. Bhaskara Rao & Co
Chartered Accountants
Firm Registration No. 000459S
D. Bapu Raghavendra
Hyderabad Partner
May 26 2017 Membership No. 213274