1. We have audited the attached Balance Sheet of Mangalore Refinery
and Petrochemicals Limited, as at 31st March, 2012, the Statement of
Profit and Loss and also the Cash Flow statement for the year ended on
that date annexed thereto. These financial statements are the
responsibility of the company''s management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis
for our opinion.
3. As required by the Companies (Auditor''s Report) Order, 2003
issued by the Government of India in terms of sub-section (4A) of
Section 227 of the Companies Act, 1956.
We enclose in the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the said Order.
Further to our comments in the Annexure referred under Paragraph (3)
above, we report that:
i. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
ii. In our opinion. Proper books of account as required by law have
been kept by the company so far as appears from our examination of
iii. The Balance Sheet, Statement of Profit and Loss and Cash Flow
statement dealt with by this report are in agreement with the books of
iv. In our opinion, the Balance Sheet, Statement of Profit and Loss
and Cash Flow statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956 and without qualifying our opinion reference is
drawn to note no 30.05 on AS-17 Segment Reporting.
v. Being a Government Company Provision of Clause (g) of Sub-section
(1) of Section 274 of the Companies Act, 1956, is not applicable as per
notification no. GSR 829(E) dated October 21,2003, issued by the
Ministry of Corporate Affairs.
vi. In our opinion, and to the best of our information and according
to the explanations given to us, the said accounts read together with
the significant accounting policies and notes thereon give the
information required by the Companies Act, 1956 in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
a. in the case of the Balance Sheet, of the state of affairs of the
b. in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
c. in the case of the Cash Flow statement, of the cash flows for the
year ended on that date.
Referred to in paragraph 3 of our report of even date
(i) a) The Company has maintained proper records, showing full
particulars, including quantitative details and situation of fixed
b) All the assets have not been physically verified by the management
during the year but there is a regular programme of verification,
which, in our opinion, is reasonable having regard to the size of the
company and the nature of its assets. No material discrepancies have
been noticed on such verification.
c) In our opinion and according to the explanations given to us, the
Company has not disposed off substantial part of fixed assets, during
the year and the Going Concern Concept of the Company has not been
(ii) a) We are informed that the inventories of stores and spares are
physically verified, during the year, by the management on a continuing
basis as per programme of perpetual inventory. Inventories of other
items have been physically verified at the year end, the frequency of
which, in our opinion is reasonable, having regard to the size of the
company and nature of its business.
b) In our opinion and according to the explanation given to us, the
procedures of physical verification of inventory followed by the
management are reasonable and adequate in relation to the size of the
company and the nature of its business.
c) The company is maintaining proper records of inventory. The
discrepancies noticed on verification by the Management between the
physical stock and book records have been properly dealt with in the
books of account and were not material.
(iii) (a) The Company has not granted any loans, secured or unsecured
to companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956.
(b) The Company has not taken any loans, secured or unsecured from
companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the company and nature of its business, with regard to
the purchases of inventory, fixed assets and with regard to the sale of
goods and services. During the course of our audit, we have not
observed any continuing failure to correct major weaknesses in internal
control system of the company.
(v) According to the information and explanation given to us
(a) particulars of contracts or arrangements referred to in Section 301
of the Companies Act,1956 have been entered into and the register
required to be maintained under that Section.
(b) transactions made in pursuance of such contracts or arrangements
have been made at prices which are reasonable having regard to the
prevailing market price at the relevant time.
(vi) According to the information and explanations given to us, the
Company has not accepted any deposits from the public during the year
and hence the directives issued by the Reserve Bank of India and
provisions of sections 58A, 58AA or any other relevant provisions of
the Companies Act, 1956 and the rules framed there under are not
(vii) In our Opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the Cost Records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules. 2011
prescribed by the Central Government under section 209 (1) (d) of the
Companies Act 1956, for maintenance of Cost Records and we are of the
opinion that prima facie the prescribed accounts and records have been
made and maintained.
(ix) a) According to the information and explanations given to us and
as per the records of the company, the Company has been generally
regular in depositing undisputed statutory dues including Provident
Fund, Investor Education and Protection Fund, Employee''s State
Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs
Duty, Excise Duty and other statutory dues with the appropriate
authorities during the year. There are no arrears of undisputed
statutory dues of material nature outstanding for a period of more than
6 months, from the date on which they became payable.
b) According to the information and explanations given to us and as per
our verification of records of the company, the disputed amounts of tax
which are not deposited with appropriate authorities as at 31st March
2012, are as follows:
the Statue Nature of
the Dues Total Amount Period to which Forum where
(Rs. Millions) the amount
relates (Financial Year)
Act, Sales Tax/
Entry Tax/ 321.49 1993-94 to
1998-99 Assessment are
1979. Interest and
1961 Income Tax/
Interest/ 122.48 2005-06 Income Tax
Penalty Commissioner of
Act, 1944 Central
Excise Duty/ 461.09 1996-97 to
Interest/ Ministry of
Duty/Interest/ 647.54 1998-99 to
2009-10 Customs Appel
(x) The Company has no accumulated losses at at 31st March 2012.The
Company has not incurred cash losses during the year and in the
immediately preceding Financial Year.
(xi) According to information and explanations given to us and as per
our verification of the records of the company, the company has not
defaulted in repayment of dues to the financial institutions and banks.
(xii) The Company has not granted any loans or advances on the basis of
the security by way of pledge of share, debenture and other securities.
(xiii) Since the company is not a Chit Fund/ Nidhi/ Mutual Benefit
Fund/ Society, the related reporting requirements are not applicable.
(xiv) The Company was dealing in Mutual Fund Investments during the
Year. Proper Records of Transactions and Contracts have been maintained
and timely entries have been made. The said investments have been held
bythe company in its own name.
(xv) According to the information and explanations given to us, the
terms and conditions of the Guarantees given by the Company, for the
loans taken by New Mangalore Port Trust from Banks and Financial
Institutions, are not prejudicial to the Interest of the Company.
Except for the above, the Company has not given any guarantee, for
loans taken by others, from banks or financial institutions.
(xvi) According to the information and explanations given to us, the
company has availed term loans during the year and the same have been
applied for the purpose for which the Loans were obtained except Rs.640
Million availed at the end of the year invested in deposits with banks.
(xvii) According to the information and explanations given to us and on
an overall examination of the Financial Statements of the Company we
report that the funds raised on short term basis have not been utilized
for long term investment.
(xviii) During the year the Company has not made any preferential
allotment of shares.
(xix) The Company has no outstanding debentures at the end of the year.
(xx) The Company has not raised any money by public issues during the
(xxi) According to the information and explanation given to us, no
fraud on or by the Company has been noticed or reported during the
For MAHARAJ N.R.SURESH & Co For GOPALAIYER AND SUBRAMANIAN
Chartered Accountants Chartered Accountants
Firm Registration No.: 001931S Firm Registration No.: 000960S
CANR SURESH CA S. SUNDAR
Membership No. 021661 Membership No. 202725
New Delhi: 23rd May, 2012