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Nagarjuna Oil Refinery Ltd.

BSE: 534184 Sector: Oil & Gas
NSE: NAGAROIL ISIN Code: INE453M01018
BSE 12:49 | 14 Dec 0.99 -0.02
(-1.98%)
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1.03

HIGH

1.03

LOW

0.92

NSE 12:39 | 14 Dec 1.00 0
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OPEN

1.05

HIGH

1.05

LOW

0.90

OPEN 1.03
PREVIOUS CLOSE 1.01
VOLUME 102642
52-Week high 5.64
52-Week low 0.91
P/E
Mkt Cap.(Rs cr) 42
Buy Price 0.93
Buy Qty 995.00
Sell Price 0.97
Sell Qty 500.00
OPEN 1.03
CLOSE 1.01
VOLUME 102642
52-Week high 5.64
52-Week low 0.91
P/E
Mkt Cap.(Rs cr) 42
Buy Price 0.93
Buy Qty 995.00
Sell Price 0.97
Sell Qty 500.00

Nagarjuna Oil Refinery Ltd. (NAGAROIL) - Auditors Report

Company auditors report

To

The Members of

Nagarjuna Oil Refinery Limited

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying Standalone Ind AS Financial Statements of NagarjunaOil Refinery Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2018 and the Statement of Profit and Loss (including Other ComprehensiveIncome) the Cash Flow Statement and the Statement of Changes in Equity for the year thenended and a summary of the significant accounting policies and other explanatoryinformation (herein referred to as "the Standalone Ind AS FinancialStatements").

Management's responsibility for the Standalone Ind AS 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. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding the assets of the Company and for preventing and detecting fraudsand other irregularities selection and application of appropriate accounting policiesmaking judgments and estimates that are reasonable and prudent and design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Standalone Ind AS Financial Statements that give atrue and fair view and are free from material misstatement 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 theAccounting and Auditing Standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder. We conductedour audit of the Standalone Ind AS Financial Statements in accordance with the Standardson Auditing specified under Section 143(10) of the Act. Those Standards require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the Standalone Ind AS Financial Statements are free from materialmisstatement.

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 auditors' judgment 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 sufficient and appropriate toprovide a basis for our audit opinion on the Standalone Ind AS Financial Statements.

Basis for Qualified Opinion

 

The accounts have been drawn up on going concern basis notwithstanding the 100%provision in respect of investment in associate Company Nagarjuna Oil Corporation Limitedfor the reasons stated in Note 4.1 indicating the existence of material uncertainty thatmay cast significant doubt about the company's ability to continue as a going concernpending finalisation of future business plans by the company.

Other Matter

Consolidated Financial Statements of the Company and its Associate have not beenprepared as required under section 129(3) of the Companies Act 2013 for the reasonsstated in Note 4.2.

Our opinion is not modified in respect of this matter.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matter described in the Basis forQualified Opinion Para above the aforesaid Standalone Ind AS Financial Statementsgive the information required by the Act in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in Indiaincluding the Ind AS of the state of affairs (financial position) of the Company as atMarch 31 2018 and its loss (financial performance including other comprehensive income)its cash flows and the changes in equity for the year ended on that date.

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 knowledgeand 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 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 comply withthe Indian Accounting Standards specified under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on March31 2018 taken on record by the Board of Directors none of the Directors is disqualifiedas on March 31 2018 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 does not have any pending litigations on its financial position exceptto the extent stated in Note 22 to the Standalone Ind AS Financial Statements.

ii. The Company did not as at March 31 2018 have any material foreseeable lossesrelating to long-term contracts including derivative contracts.

iii. There were no amounts as at 31st March 2018 which are required to be transferredto the Investor Education 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
Anilkumar Mehta
Partner
Hyderabad May 25 2018 Membership No. 14284

Re: Nagarjuna Fertilizers and Chemicals Limited

Annexure A to the Independent Auditors' report

(Referred to in paragraph 1(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Nagarjuna Oil Refinery Limited ofeven date)

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 31 2018 in conjunction withour audit of the Standalone Ind AS Financial Statements of the Company for the year endedon 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 FinancialReporting" issued by the Institute of Chartered Accountants of India (‘ICAI').These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information 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 obtainaudit evidence about the adequacy of the internal financial controls system over financialreporting and their operating effectiveness.

Our audit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskwhether 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 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 2018 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
Anilkumar Mehta
Partner
Hyderabad May 25 2018 Membership No. 14284

Re: Nagarjuna Oil Refinery Limited

ANNEXURE B TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements' 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 situationof 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) Asthe Company has no inventory reporting under paragraph 3(ii) of the Order does not 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 GST Sales Tax WealthTax Service Tax Customs Duty Excise Duty Value Added Tax Cess and other materialstatutory dues applicable to it with the appropriate authorities and there were noamounts payable in respect of the aforesaid undisputed statutory dues in arrears as atMarch 31 2018 for 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 2018 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
Anilkumar Mehta
Partner
Hyderabad May 25 2018 Membership No. 14284