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Nagarjuna Oil Refinery Ltd.

BSE: 534184 Sector: Oil & Gas
NSE: NAGAROIL ISIN Code: INE453M01018
BSE LIVE 15:29 | 17 Nov 3.88 0.64
(19.75%)
OPEN

3.53

HIGH

3.88

LOW

3.47

NSE 15:51 | 17 Nov 3.90 0.65
(20.00%)
OPEN

3.50

HIGH

3.90

LOW

3.40

OPEN 3.53
PREVIOUS CLOSE 3.24
VOLUME 232074
52-Week high 6.08
52-Week low 2.56
P/E
Mkt Cap.(Rs cr) 166
Buy Price 3.88
Buy Qty 719013.00
Sell Price 0.00
Sell Qty 0.00
OPEN 3.53
CLOSE 3.24
VOLUME 232074
52-Week high 6.08
52-Week low 2.56
P/E
Mkt Cap.(Rs cr) 166
Buy Price 3.88
Buy Qty 719013.00
Sell Price 0.00
Sell Qty 0.00

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 2016 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's responsibility for the Standalone financial Statements The Company's Board ofDirectors is responsible for the matters stated insertion 134(5) of the Companies Act2013 ("the Act") with respect to the preparation of these Standalone financialStatements that give a true and fair view of the financial position financial performanceand cash flows of the Company in accordance with the accounting principles generallyaccepted in India including the Accounting Standards specified under Section 133 of theAct read with Rule 7 of the Companies (Accounts) Rules 2014. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Art for safeguarding the assets of the Company and for preventing and detecting fraudsand other irregularities selection and application of appropriate accounting policies;making judgements and estimates that are reasonable and prudent; and designimplementation 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 Standalone financialStatements that give a true and fair view and are free from material misstatement whetherdue 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 Art 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 involvesperforming procedures to obtain audit evidence about the amounts and the disclosures inthe standalone financial statements. The procedures selected depend on the auditors'judgement including the assessment of the risks of material misstatement of theStandalone 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 Standalone financial Statements that give a true and fair view in orderto de sign audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the Standalone financial statements. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor 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 Art 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 312016 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 312016 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 Art 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 afore said Standalone financial Statements comply with theAccounting Standards specified under Section 133 of the Art read with Rule 7 of theCompanies (Accounts) Rules 2014.

(e) On the basis of the written representations received from the directors as on March312016 taken on record by the Board of Directors none of the directors is disqualifiedas on March 312016 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 II 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 312016 have any material foreseeable lossesrelating to long-term contracts including derivative contracts.

iii. There are no amounts which are required to be transferred to the InvestorEducation 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 theOrder.

for M. Bhaskara Rao & Co
Chartered Accountants
Firm Registration No. 000459S
Hyderabad D. Bapu Raghavendra
May 28 2016 Partner
Membership No. 213274

Annexure A to the Independent Auditors' 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 NagarjunaOil Refinery Limited ("the Company") as of March 312016 in conjunction with ouraudit 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 Art 2013. Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial re porting based on our audit. We conducted our audit inaccordance with the "Guidance Note on Audit of Internal financial Controls overfinancial Reporting" (the "Guidance Note") and the Standards on Auditingissued by ICAI and deemed to be prescribed under section 143(10)of the Companies Act2013 to the extent applicable to an audit of internal financial controls. Those Standardsand the Guidance Note require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated 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 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 onthe 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 ordisposition of thecompany's assets that could have a material effect on the financial statements. InherentLimitations of Internal financial Controls Over financial Reporting Because of theinherent limitations of internal financial controls over financial reporting includingthe possibility of collusion or improper management override of controls materialmisstatements due to error or fraud may occur and not be detected. Also projections ofany evaluation of the internal financial controls over financial reporting to futureperiods are subject to the risk that the internal financial control over financialreporting may become inadequate because of changes in conditions orthat the degree ofcompliance 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 2016 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
Hyderabad D.BapuRaghavendra
May 28 2016 Partner
Membership No. 213274

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 re porting under paragraph 3(ii) of the Orderdoes notarise.

(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 underclauses (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 312016 fora 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 312016 which have notbeen 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 in to 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 underreport.

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

for M. Bhaskara Rao & Co
Chartered Accountants
Firm Registration No. 000459S
Hyderabad D. Bapu Raghavendra
May 28 2016 Partner
Membership No. 213274