CHENNAI PETRO Auditors Report

INDEPENDENT AUDITORS'''' REPORT To


The Members of Chennai Petroleum Corporation Limited Chennai


REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENTS


We have audited the accompanying standalone IND AS financial statements of Chennai Petroleum Corporation Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2017, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.


MANAGEMENT''''S RESPONSIBILITY FOR THE STANDALONE IND AS FINANCIAL STATEMENTS


The Company''''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone IND AS financial statements that give a true and fair view of the state of affairs(financial position), profit or loss (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (IND AS) prescribed under section 133 of the Act.


This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone IND AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.


AUDITOR''''S RESPONSIBILITY


Our responsibility is to express an opinion on these standalone IND AS financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit of the standalone IND AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone IND AS financial statements are free from material misstatement.


An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone IND AS financial statements. The procedures selected depend on the auditor''''s judgment, including the assessment of the risks of material misstatement of the standalone IND AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''''s preparation of the standalone IND AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''''s Directors, as well as evaluating the overall presentation of the standalone IND AS financial statements.


We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone IND AS financial statements.


OPINION


In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone IND AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the IND AS,


a) of the state of affairs (financial position) of the Company as at 31st March, 2017,


b) its profit/loss (financial performance including other comprehensive income),


c) its cash flows and the changes in equity for the year ended on that date.


OTHER MATTERS


The comparative financial information of the Company on the transition date opening balance sheet as at 1st April 2015 included in these standalone IND AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by the predecessor auditor whose report for the year ended 31st March 2015 dated 23rd May 2015 expressed an unmodified opinion on those standalone financial statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to the IND AS, which have been audited by us.


Our opinion is not modified in respect of these matters.


REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS


1. As required under section 143(5) of the Act, 2013, we give in the Annexure A of our report on the directions/sub-directions issued by the Comptroller and Auditor General Of India.


2. As required by the Companies (Auditor''''s Report) Order, 2016 ("The Order") issued by the Central


Government of India in terms of section 143(11) of the Act, we give in the Annexure B statement on the matters specified in paragraphs 3 and 4 of the Order.


3. As required by section 143(3) of the Act, 2013, we report that:


a) We have sought and obtained all the information and explanations which to the best of 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 the Company 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 Statement and statement of changes in equity dealt with by this Report are in agreement with the books of account.


d) In our opinion, the aforesaid Standalone IND AS Financial Statements comply with the Indian Accounting Standards specified under section 133 of the Act.


e) Clauses referred to section 164(2) of the Act do not apply to directors of Government Companies as per the notification.


f) With respect the adequacy of internal financial controls over financial reporting of the Company and the operating effectiveness of such controls referto our separate report in Annexure C.


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


(i) The Company has disclosed the impact of pending litigations on its financial position in its Standalone IND AS Financial Statements (Refer Note 33 to the Standalone IND AS Financial Statements);


(ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;


(iii) There has been no delay in transferring amounts required to be transferred to the Investor Education and Protection Fund by the Company; and


(iv) The company had provided requisite disclosures in its financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016 and the same were in accordance with the books of accounts maintained by the company.


Annexure- Ato Independent Auditors'''' Report


The Annexure referred to in paragraph 1 of Our Report of even date to the members of Chennai Petroleum Corporation Limited on the accounts of the Company for the year ended March 31,2017.


On the basis of checks as we considered appropriate and according to the information and explanations given to us during course of audit, we report that


a) The Company is in possession of 186.86 acres of Land allotted by Government of Tamil Nadu (classified as Poramboke) for which Assignment deed is yet to be received.


b) There were no material waiver / write off of debts / loans / interest etc. other than waivers /write-offs in the normal course of business which were based on facts of such cases and approved as per the delegation of authority policies of the Company.


c) The Company has maintained adequate records in respect of inventories lying with third parties. No assets have been received as gifts from the Government or other authorities during the year. Proper records have been maintained in respect of grants received from the Government or other authorities.



Annexure- Bto Independent Auditors'''' Report


The Annexure referred to in paragraph 2 of our report of even date to the members of Chennai Petroleum Corporation Limited. On the accounts of the Company for the year ended March 31,2017.


(i) On the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of our audit, we report that:


(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.


(b) The Company has a program of physical verification of its fixed assets by which all fixed assets are verified in a phased manner in a period of 4 years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. According to the information and explanations given to us, no material discrepancies were observed by the management on such verification.


(c) The title deeds of immovable properties are in the name of the Company except in the case of 186.86 acres of land allotted by the Government of Tamil Nadu for which assignment deeds are yet to be received.


(ii) According to the information and explanations given to us, physical verification of inventory has been conducted at reasonable intervals by the management and no material discrepancies were noticed.


(iii) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 189 of the Act. Consequently, the provisions of clauses 3(a) and 3(b) are not applicable.


(iv) The Company has not provided any loan or investments or guarantees or Securities which fall under the purview of section 185 or section 186 of the Act.


(v) According to the information and explanations given to us, the Company has not accepted deposits from the public and consequently the directives issued by the Reserve Bank of India and provisions of section 73 to 76 or any other relevant provisions of the Act and Companies (Acceptance of Deposits) Amendment Rules, 2015 are not applicable.


(vi) We have broadly reviewed the records maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under section 148(1) of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.


(vii) (a) According to the information and explanations given to us, the Company has been regular in


depositing with the appropriate authorities the undisputed statutory dues in the case of provident Fund, employees'''' state insurance, income-tax, customs duty, sales tax and value added tax, cess and any other material statutory dues. To the best of our knowledge and according to the information and explanations given to us, there are no arrears of outstanding statutory dues as at March 31,2017 for a period of more than six months from the date they became payable.


(b) The details of disputed dues of income-tax, sales tax, excise duty, customs duty and value added tax which have not been deposited as on March 31,2017 are given in the Annexure "I" to our report.


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(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of any dues to financial institutions, banks, governments or debenture holders.


(ix) In our opinion and according to the information and explanations given to us, the Company has not raised any money by the way of initial public offer or further public offer (including debt instruments), hence clause (ix) is not applicable.


(x) According to the information and explanations given to us by the Company, no fraud by the company or any fraud on the company by its officers and employees has been noticed or reported during the year.


(xi) Managerial remuneration paid by the Company is as per the section 197 read with schedule V of the Act.


(xii) The Company is not a Nidhi Company; hence clause (xii) is not applicable.


(xiii) Transactions with related parties are in compliance with section 177 and section 188 of the Companies Act, 2013 where applicable and the details have been disclosed in the financial statements as required under the relevant Indian Accounting Standard (IND AS).


(xiv) The Company has not made any preferential allotment or private placement of shares or fully or partially convertible debentures during theyear under review. Accordingly, clause (xiv) is not applicable.


(xv) The Company has not entered into any non-cash transactions with the Directors or any persons connected with him. Accordingly, clause (xv) is not applicable.


(xvi) The Company is not engaged in non-banking financial services therefore clause (xvi) is not applicable


Annexure C to Independent Auditors'''' Report


Report on the Internal Financial Controls under Clause (i) of Section 143(3) of the Companies Act, 2013 ("the Act”)


We have audited the internal financial controls over financial reporting of Chennai Petroleum Corporation Limited (“the Company") as of March 31,2017 in conjunction with our audit of the standalone IND AS Financial Statements of the Company for the year ended on that date.


Management''''s Responsibility for Internal Financial Controls


The Company''''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (''''ICAI''''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.


Auditors'''' Responsibility


Our responsibility is to express an opinion on the Company''''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.


Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''''s judgment, including the assessment of the risks of material misstatement of the Standalone IND AS Financial Statements, whether due to fraud or error.


We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''''s internal financial controls system over financial reporting.


Meaning of Internal Financial Controls over Financial Reporting


A company''''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Standalone IND AS Financial Statements for external purposes in accordance with generally accepted accounting principles. A company''''s internal financial control over financial reporting includes those policies and procedures that:


1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;


2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Standalone IND AS Financial Statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and


3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company''''s assets that could have a material effect on the Standalone IND AS Financial Statements.


Inherent Limitations of Internal Financial Controls over Financial Reporting


Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


Opinion


In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India


For R.Subramanian and Company LLP For S.Viswanathan LLP


Chartered Accountants Chartered Accountants


FRN: 004137S/S200047 FRN: 004770S/S200025


R.Rajaram V.C.Krishnan


Partner Partner


Membership No: 0252 7 0 Membership No: 022167


Place: Chennai Date: 15th May 2017

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