THE MEMBERS OF ASHOKA REFINERIES LTD RAIPUR (C.G.)
Report on the Financial Statements
We have audited the accompanying financial statements of ASHOKA REFINERIES LTD.("The Company") which comprise Balance Sheet as at March 31st 2017Statement of Profit & Loss & Cash flow statement for the year ended then and asummary of Significant Accounting Policies and other Explanatory Information which wehave signed under reference to this report.
Managements Responsibility for the Financial Statements
The Companys Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparationand presentation of these financial statements that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe accounting 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 provision 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 judgments 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 financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit. 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 accordancewith the 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 financial statements are free from materialmisstatement. An audit involves performing procedures to obtain audit evidence about theamounts and the disclosures in the financial statements. The procedures selected depend onthe auditors judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. In making thoserisk assessments the auditor considers internal financial control relevant to theCompanys preparation of the financial statements that give true and fair view inorder to design audit procedures that are appropriate in the circumstances an audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonablenessof the accounting estimates made by Companys Directors as well as evaluating theoverall presentation of the financial statements. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our audit opinion onthe financial statements.
Basis of Qualified Opinion
The Company has not complied in respect of the following Accounting Standard notifiedVide Companies (Accounting Standards) Rules 2014:
The accounting policy as referred to in Note No.28(ii)to financial statement to thefinancial statements with respect to the liability on account of Gratuity Liability is notrecognized instead of recognizing the liability for the same as the present value of thedefined benefit obligation at the balance sheet date calculated on the basis of actuarialvaluation in accordance with the notified Accounting Standard 15 on EmployeeBenefits. The consequential impact of adjustment if any owing to this noncompliance on the financial statements is presently not ascertainable.
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects/possible effects of the matters described in the Basisfor Qualified Opinion paragraph the aforesaid 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 of the state of affairs of theCompany as at 31 March 2017and its profit and its cash flows for the year ended on thatdate.
Report on other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order 2016("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the Annexure A a statement on the mattersSpecified in paragraphs 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 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) in our opinion thebalance sheet the statement of profit and loss and the cash flow statement dealt with bythis Report are in agreement with the books of account; (d) Except for the effects/possible effects of the matters described in the para of Basis of Qualified Opinionparagraph 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 receivedfrom the directors as on 31 March 2017 taken on record by the Board of Directors none ofthe directors is disqualified as on 31 March 2017 from being appointed as a director interms of Section 164 (2) of the Act; and (f) With respect to the adequacy of the internalfinancial controls over financial reporting of the Company and the operating effectivenessof such controls refer to our separate report in Annexure B and (g) In our opinion and tothe best of our information and according to the explanations given to us we report asunder with respect to other matters to be included in the Auditors Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014:- i. The Companydoes not have any pending litigations which would impact its financial position. ii. TheCompany did not have any long-term contracts including derivatives contracts for whichthere were any material foreseeable losses. iii. There were no amounts which required tobe transferred to the Investor Education and Protection Fund by the Company. iv. Thecompany had made requisite disclosure in its financial statements (Refer Note No.31 ofstandalone Financial statements)as to holdings as well as dealings in specified bank notesduring the period from 8th November 2016 to 30th December 2016 and are in accordance withthe books of accounts maintained by the company.
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ANNEXURE A TO THE AUDITORS REPORT
The annexure referred to in Independent Auditors report to the members of theCompany on the Standalone financial statements for the year ended 31st March2017 we report that: i) a & b) Based on our scrutiny of the Companys Books ofAccounts and other records and according to the information and explanation received by usfrom the management we are of the opinion that the question of commenting on maintenanceof proper records of fixed assets and physical verification of fixed assets does arisesince the Company had no fixed assets as on 31st March 2017 nor at any time during theFinancial year ended 31st March 2017. c) According to the information and explanationreceived by us as the Company owns no immovable properties the requirement on reportingwhether title deeds of immovable properties held in the name of the Company is notapplicable. ii) The Company is not engaged in trading and manufacturing activities. Hencethe requirement of clause (ii) of paragraph 3 of the said Order is not applicable to theCompany. iii) The Company has not granted any loans or advances in the nature of Loans toparties covered in the register maintained under section 189 of the Companies Act 2013.Hence the question of reporting whether the terms and conditions of such loans areprejudicial to the interest of the Company whether reasonable steps for recovery ofoverdue of such loans are taken does not arise. iv) In our opinion and according to theinformation and explanations given to us the Company has complied with the provisions ofSection 185 and 186 of the Act with respect to the loans and advances made. v) TheCompany has not accepted any deposits from public.
vi) According to the information and explanations provided by the management theCompany is not engaged in production of any such goods or provision of any such servicesfor which Central Govt. has prescribed particulars relating to utilization of material orlabour or other items of cost. Hence the provisions of section 148(1) of the Act do notapply to the Company. Hence in our opinion no comment on maintenance of cost recordsunder section 148(1) of the Act is required. vii) a. According to the information andexplanations given to us and on the basis of our examination of the records of theCompany amounts deducted/accrued in the books of accounts in respect of undisputedstatutory dues including income tax sales tax wealth tax service tax custom dutyexcise duty cess Provident Fund and other material statutory dues applicable to it havebeen regularly deposited during the year by the Company with the appropriate authorities.As informed to us the Employees State Insurance Act Investor Education & ProtectionFund Act are not applicable to the Company and hence they do not have any dues on theseaccount. According to the information and explanations given to us no undisputed amountspayable in respect of provident fund income tax sales tax value added tax duty ofcustoms duty of excise service tax cess wealth tax and other material statutory duesapplicable to it were in arrears as at 31st March 2017 for a period of morethan six months from the date they became payable . b. According to the records of thecompany there are no dues of income-tax Sales Tax Service Tax custom duty wealth taxexcise duty / cess which have not been deposited on account of any dispute except a Tdsdefault of Rs.3124/- payable as per traces information. viii) According to the records ofthe Company the Company has not borrowed from financial institutions or banks orgovernment issued debentures till 31st March 2017. Hence in our opinion the question ofreporting on defaults in repayment of loans or borrowing to a financial institutionsbank government or dues to debenture holders does not arise. ix) The Company did notraise any money by way of initial public offer of further public offer (including debtinstruments) and term loans during the year. Accordingly paragraph 3(ix) of the order isnot applicable. x) During the course of our examination of the books and records of theCompany carried out in accordance with the generally accepted auditing practices in Indiawe have neither come across any instance of fraud on or by the Company noticed andreported during the year nor have we been informed of such case by the Management. xi)According to the records of the Company the Company has not paid or provided forManagerial remuneration for the financial year ended 31st March 2017. Accordinglyparagraph 3(xi) of the order is not applicable. xii) In our opinion and according to theinformation and explanations given to us the Company is not a nidhi company. Accordinglyparagraph 3(xii) of the Order is not applicable. xiii) According to the information andexplanations given to us and based on out examination of the records of the Companytransactions with the related party are in compliance with Sections 177 and 188 of the Actwhere applicable and details of such transactions have been disclosed in the financialstatements as required by the applicable accounting standards. xiv) According to theinformation and explanations given to us and based on our examination of the records ofthe Company the Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year. xv) According to theinformation and explanations given to us and based on our examination of the records ofthe Company the Company has not entered into non-cash transactions with directors orpersons connected to him. Accordingly paragraph 3(xv) of the Order is not applicable.xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bankof India Act 1934
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ANNEXURE B TO THE AUDITORS REPORT
[Referred to in paragraph 1 under "Report on Other Legal and RegulatoryRequirements" of our Report of even date to the members of ASHOKA REFINERIES LIMITEDon the accounts of the company for the year ended 31st March 2017]
We have audited the internal financial controls over financial reporting of AshokaRefineries Ltd ("the Company") as of March 31 2017 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.
Managements Responsibility for Internal Financial Controls
The Companys 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 companys policies the safeguarding of its assetsthe prevention 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 included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditors judgement including the assessment of the risks of materialmisstatement 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 Companys internal financial controlssystem over 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.
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"].
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