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Auditor Report of Mangalore Refinery And Petrochemicals Ltd.

Mar 31, 2023

Mangalore Refinery and Petrochemicals Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of MANGALORE REFINERY AND PETROCHEMICALS LIMITED (âthe Companyâ),which comprises the Standalone Balance Sheet as at 31^stMarch 2023, and the Standalone Statement of Profit and Loss, (including other comprehensive income), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash flow for the year then ended, and notes to the Standalone Financial statement, including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as âthe standalone financial statementsâ).

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (âActâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, including the (Indian Accounting Standards) Rules, 2015, as amended, (âInd ASâ) and the relevant rules issued thereunder, of the state of affairs of the Company as at 31^st March 2023, and its profit (including other comprehensive loss), changes in equity and cash flows for the year ended on that date.

Basis for opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Companies Act, 2013. Our responsibilities under those standards are further described in the Auditorâs Responsibilities for the audit of the standalone financial statements section of our report. We are independent of the company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the rules made there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that, in our Professional judgement, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditorsâ responsibilities for the audit ofthe Standalone Financial Statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the Standalone Financial Statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying Standalone Financial Statements.

The Key Audit Matters	How the matter was addressed in our audit
Contingent Liabilities related to claims against the company/Disputed demands (Refer Note No 45 of accompanying Standalone Financial statements)
There are several claims and litigations pending before various forums against the company which have not been acknowledged as debt by the company and are disclosed as contingent Liabilities. Whether a liability is recognised or disclosed as a contingent liability in the financial statements is inherently judgmental and dependent on a number of significant assumptions and assessments. The eventual outcome of these legal proceedings is dependent on the outcome of future events and unexpected adverse outcomes could significantly impact the Company''s reported profits and balance sheet position. Considering the degree of management judgement in interpreting the various cases, including accounting estimates that involves high estimation uncertainty in relation to the exposure arising out the claims against the company/disputed demand, this matter has been identified as a key audit matter for the current year audit.	Our audit procedure included, but was not limited to the following : â¢ Obtained an understanding of the management process for: s Controls and identification of legal actions initiated in respect of claims and disputed amount against the Company s Assessment of accounting treatment for each such litigation identified under Ind AS 37 and s Measurement of amounts involved. â¢ Obtained an understanding of the nature of litigations pending against the Company and discussed the developments during the year for key litigations with the management and respective legal department of the company. â¢ Assessed management''s conclusions through understanding precedents set in similar cases â¢ Evaluated the adequacy and completeness of disclosures made for their appropriateness in accordance with the applicable accounting standards
Recognition and Measurement Deferred Tax Assets (Refer Note No 25 of accompanying Standalone Financial statements)
As per IND AS 12, Deferred Tax Assets are the amount of income tax recoverable in future periods in respect of (a) deductible temporary differences (b) the carry forward of unused tax losses and (c) the carry forward of unused tax credits A deferred tax asset shall be recognised for the carry forward of unused tax losses and unused tax credits to the extent that it is probable that future taxable profit will be available against which the unused tax losses and unused tax credits can be utilised	Our audit procedure included, but was not limited to the following : â¢ Considered the company''s past and current years taxable profits, taxes paid, obtained details of carry forward losses under income tax and details of estimates of future taxable profits. â¢ Tested the period over which the deferred tax assets on such unused tax losses and unused tax credits would be recovered against future taxable income.

Determination of probable future taxable profit is a matter of judgment based on convincing evidence. Considering the management''s involvement in estimation and judgment of determining the future taxable profits which have a degree of uncertainty, this matter has been determined as a key audit matter.

â¢ Tested the management''s under lying assumptions and judgments in estimating the probable future taxable profits and the existence of sufficient taxable temporary difference against which the unused tax losses or unused tax credits can be utilised by the company

â¢ Assessed the adequacy and appropriateness of the disclosures in the Standalone financial statements.

Property, plant and equipment (Refer Note No 5 of accompanying Standalone Financial Statements)

During the year the company has incurred capital expenditure on various property, Plant and Equipment including the capitalisation of work in progress based on its readiness for intended use as determined by the management. The estimates of useful lives and residual value of Property, Plant and Equipment is a significant area which involves management judgement, technical assessment, consideration of historical experience, anticipated technical changes etc.

Considering the materiality in the context of the balance sheet of the company and the level management judgement and estimates required, the above matter has been determined as a key audit matter

Our audit procedure included but was not limited to

the following :

â¢ Assessed the nature of additions made to PPE and capitalisation of capital work in progress on a test check basis to test whether they meet the recognition criteria as per Ind-AS 16 -Property, Plant and Equipment, including its readiness for intended use as determined by the management.

â¢ Understood, evaluated and tested the design and operating effectiveness of key controls relating capitalisation of various cost incurred.

â¢ Reviewed the judgement and assessment of the management including the nature of underlying cost capitalised, determination of realisable value of the assets, appropriateness of assets lives applied in the calculation of depreciation

â¢ Test checked the depreciation calculation

â¢ Observed that the management has regularly reviewed the judgements and estimation.

â¢ Assessed the adequacy and appropriateness of the disclosures in the standalone financial statements.

Other Information

The Companyâs Board of Directors is responsible for the other information. The other information comprises the information included in the Board Report including Annexure to Boardâs Report, Management Discussion and Analysis, Business Responsibility Report, Corporate Governance and Shareholderâs Information, but does not include the standalone financial statements and our auditorâs report thereon. The above referred information is expected to be made available to us after the date of this auditorâs report.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. When we read the information, If, we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take appropriate actions necessitated by the circumstances and the applicable laws and regulation.

Responsibilities of Management and those charged with governance for the Standalone Financial Statements

The Companyâs Board of Directors are responsible for the matters stated in section 134(5) of the the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and Cash flow of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of 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 control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statement that give true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, the Board of Directors are responsible for assessing the companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to ceases operations, or has no realistic alternative but to do so.

Those Board of Directors are responsible for overseeing the companyâs financial reporting process.

Auditorâs Responsibilities for the audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

â¢ Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

â¢ Obtain an understanding of internal controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) ofthe Companies Act, 2013, we are also responsible for expressing an opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

â¢ Conclude on the appropriateness of the managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the company to cease to continue as a going concern.

â¢ Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditorâs report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditorâs Report) Order, 2020 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act 2013, we give in the âAnnexure Aâ, a statement on the matters specified in the paragraph 3 and 4 of the order, to the extent applicable.

2. Based on the verification of Records of the Company and based on information and explanations given to us, we give here below a report on the Directions issued by the Comptroller and Auditor General of India in terms of Section 143 (5) of the Act:

a. The company process all the accounting transactions through IT system, named SAP. Based on the audit procedures carried out and as per the information and explanations given to us, there were no accounting transactions processed outside the IT system for the year ended 31^st March, 2023 and consequently, no financial implications arise to impact the integrity of accounts.

b. Based on the audit procedures carried out and as per the information and explanations given to us , there is no restructuring of an existing loan or cases of waiver/write off of debt/loans/interest etc. made by lender to the company due to the companyâs inability to repay the loan.

c. Based on the audit procedures carried out and as per the information and explanations given to us, Government grants in the form of interest free loans received from the State Government have been properly accounted and utilised as per the terms and conditions.

3. 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 best of our knowledge and belief were necessary for the purpose 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 standalone Balance Sheet, standalone Statement of Profit and Loss (including other comprehensive income ), the standalone statement of Cash Flows and the standalone 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 financial statements comply with Indian Accounting Standards specified under Section 133 of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014.

e) As per Notification No. GSR 463(E) of the Ministry of Corporate Affairs dated 05-06-2015, disqualification of directors stated under Section 164(2) ofthe Act is not applicable to the Company, since it is a Government Company.

f) With respect to the adequacy of the internal financial controls with reference to financial statement of the Company and the operating effectiveness of such controls, refer to our separate report in âAnnexure Bâ.

g) As per Notification No GSR 463 (E) of Ministry of Corporate Affairs dated 05-06-2015, provisions of Section 197 of the Act as regards managerial remuneration are not applicable to the company since it is a Government Company and

h) With respect to the other matters to be included in the Auditorâs 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 financial statements - Refer Note No 45 to the Standalone 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.

a. The Management has represented that, to the best of its knowledge and belief, as disclosed in the Note

48.11 to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

b. The Management has represented that, to the best of its knowledge and belief, as disclosed in the note

48.12 to the accounts, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

c. Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e) of the Companies (Audit and Auditors) Rules, 2014, as provided under (a) and (b) above, contain any material mis-statement. And

(v) During the year the Company has not declared or paid any dividend.

For SANKAR & MOORTHY ^For RAM RAJ & CO

Chartered Accountants Chartered Accountants

Firm Registration Number: 003575S ^{Firm Re}g^{istration Number:} Â°Â°^2839S

Sd/- ^Sd/-

CA V C JAMES CA VARUN PULIPATI

Partner Partner

Membership no: 022565 ^Membership ^no:256880

Place : Ernakulam Place : Bangalore

Date : 28/04/2023 Date : 28/04/2023

UDIN : 23022565BGRLIK2710 UDIN :23256880BGYVDC6498

Mar 31, 2022

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the accompanying standalone financial statements of MANGALORE REFINERY AND PETROCHEMICALS LIMITED (âthe Companyâ),which comprises the Standalone Balance Sheet as at 31^st March 2022, and the Standalone Statement of Profit and Loss, (including other comprehensive income), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash flow for the year then ended, and notes to the Standalone Financial statement, including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as âthe standalone financial statementsâ).

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (''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 (Indian Accounting Standards) Rules, 2015, as amended, (âInd ASâ) and the relevant rules issued thereunder, of the state of affairs of the Company as at 31^stMarch 2022, and its profit (including other comprehensive income), changes in equity and cash flows for the year ended on that date.

Basis for opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Companies Act, 2013. Our responsibilities under those standards are further described in the Auditor''s Responsibilities for the audit of the standalone financial statements section of our report. We are independent of the company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the rules made there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.

Emphasis of Matter

We invite attention to the following Notes to statement of Standalone Financial Statements;

(a) Note No. 50.1 which states that pursuant to the Scheme of Amalgamation (the ''Scheme'') approved by the Ministry of Corporate Affairs (MCA) vide its order No. 24/3/2021-CL-III dated April 14, 2022, the amalgamating company, the erstwhile wholly owned subsidiary company ONGC Mangalore Petrochemicals Limited (OMPL), has been amalgamated with the Company (the amalgamated company) with effect from April 1, 2021 (the Appointed date) and the financial information in the standalone financial statements in respect of prior period is restated as per Appendix âCâ of Ind As 103 - Business Combination as if the business combination had occurred from the beginning of the preceding period in the financial statements, irrespective of the actual date of the combination. Accordingly, business combination is accounted with effect from April 1,2020.

(b) Note No. 40 which states that, with regard to amalgamation of erstwhile subsidiary company ONGC Mangalore Petrochemicals Limited (OMPL) with the company, as Human Resources (HR) integration with respect to amalgamation is in progress, the Employee Benefits Expenses including Actuarial Valuation in this regards have been considered separately for both companies and possible impact of the changes on account of Human Resources integration could not be quantified and disclosed at this juncture.

(c) Note No. 25.2 which states that pursuant to the scheme of Amalgamation of erstwhile subsidiary company ONGC Mangalore Petrochemicals Limited (OMPL) (''Amalgamating Company'') into and with the Company ( ''Amalgamated Company''), the unused tax losses and unused tax credits of the amalgamating company becomes unused tax losses and unused tax credits of the amalgamated company for the financial year 2021-22 and hence

the company has reassessed and recognised the Deferred Tax Assets on such unused tax losses and unused tax credits based on the probability of earning sufficient taxable profits in the future years in line with Ind AS 12- Income taxes. Accordingly, this has resulted in increase in the Deferred Tax Assets by ''14,554.27 million for the year ended March 31,2022 ('' Nil for the year ended March 31,2021)

Our opinion is not modified in respect of the above referred (a) to (c ) matters.

Key Audit Matters

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditors'' responsibilities for the audit of the Standalone Financial Statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the Standalone Financial Statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying Standalone Financial Statements.

The Key Audit Matters

How the matter was addressed in our audit

Contingent Liabilities related to claims against the company/ Disputed demands (Refer Note No 45 of accompanying Standalone Financial statements)

There are several claims and litigations pending before various forums against the company which have not been acknowledged as debt by the company and are disclosed as contingent Liabilities.

Whether a liability is recognised or disclosed as a contingent liability in the financial statements is inherently judgmental and dependent on a number of significant assumptions and assessments. The eventual outcome of these legal proceedings is dependent on the outcome of future events and unexpected adverse outcomes could significantly impact the Company''s reported profits and balance sheet position.

Considering the degree of management judgement in interpreting the various cases, including accounting estimates that involves high estimation uncertainty in relation to the exposure arising out the claims against the company/disputed

Our audit procedure included, but was not limited to the following:

â¢ Obtained an understanding ofthe management process for:

S Controls and identification of legal actions initiated in respect of claims and disputed amount against the Company

S Assessment of accounting treatment for each such litigation identified under Ind AS 37 and

S Measurement of amounts involved.

â¢ Obtained an understanding of the nature of litigations pending against the Company and discussed the developments during the year for key litigations with the management and respective legal department ofthe company.

â¢ Assessed management''s conclusions through understanding precedents set in similar cases

â¢ Evaluated the adequacy and completeness of disclosures made for their appropriateness in accordance with the applicable accounting standards

demand, this matter has been identified as a key audit matter for the current year audit.
Recognition and Measurement Deferred Tax Assets (Refer Note No 25 of accompanying Standalone Financial statements)
As per IND AS 12, Deferred Tax Assets are the amount of income tax recoverable in future periods in respect of (a) deductible temporary differences (b) the carry forward of unused tax losses and (c) the carry forward ofunused tax credits A deferred tax asset shall be recognised for the carry forward of unused tax losses and unused tax credits to the extent that it is probable that future taxable profit will be available against which the unused tax losses and unused tax credits can be utilised Determination of probable future taxable profit is a matter of judgment based on convincing evidence. Considering the management''s involvement in estimation and judgment of determining the future taxable profits which have a degree of uncertainty, this matter has been determined as a key audit matter.	Our audit procedure included, but was not limited to the following : â¢ Considered the company''s past and current years taxable profits, taxes paid and the impact of the amalgamation of the erstwhile wholly owned subsidiary company ONGC Mangalore Petrochemicals Limited (OMPL) with the Company, obtained details of carry forward losses under income tax and details of estimates of future taxable profits. â¢ Tested the period over which the deferred tax assets on such unused tax losses and unused tax credits including the tax losses and unused tax credits of the erstwhile wholly owned subsidiary company ONGC Mangalore Petrochemicals Limited (OMPL) which amalgamated with the Company would be recovered against future taxable income. â¢ Tested the management''s under lying assumptions and judgments in estimating the probable future taxable profits and the existence of sufficient taxable temporary difference against which the unused tax losses or unused tax credits can be utilised by the company â¢ Assessed the adequacy and appropriateness of the disclosures in the Standalone financial statements.
Capitalisation and useful life of Property, Plant and Equipment (PPE) (Refer Note No 5 of accompanying Standalone Financial Statements)
During the year the company has incurred capital expenditure on various property, Plant and Equipment including the capitalisation of work in progress based on its readiness for intended use as determined by the management. Further, the estimated useful life have been reviewed and revised in respect of certain PPE based on expectations different from previous estimate which involves management judgement, technical assessment, consideration of historical experience, anticipated technical changes etc. Considering the assessment and estimation of the management, the above matter has been determined as a key audit matter	Our audit procedure included but was not limited to the following : â¢ Assessed the nature of additions made to PPE and capitalisation of capital work in progress on a test check basis to test whether they meet the recognition criteria as per Ind-A S 16 - Property, Plant and Equipment, including its readiness for intended use as determined by the management. â¢ Examined the management assessment of the assumptions considered in estimation of useful life. â¢ Examined the detailed internal evaluation including the technical assessment with respect to the changes in useful life of PPE as provided by the management. â¢ Assessed the adequacy and appropriateness of the disclosures in the financial statements including the impact recognised on account of the change in the useful life.

Other Matters

(i) We did not audit the financial statements of the Special Economic Zone Unit of the Company which is erstwhile subsidiary company named M/s ONGC Mangalore Petrochemicals Limited, now amalgamated with the Company in accordance with the Scheme referred to in Note No. 50 to the standalone financial statements of the Company, whose financial statements (before eliminating the inter unit balances) reflect total assets of'' 61,372.23 million as at March 31, 2022, total revenues (including other income) of '' 65,340.68 million, net loss after tax of ''7,869.30 million and total comprehensive loss of '' 7,860.70 million for the year ended 31st March 2022 respectively, as considered in the standalone financial statements of the Company. This financial statements have been audited by other auditor in the capacity as ''Branch Independent Auditor'' whose report dated 09.05.2022 has been furnished to us by the management and our opinion on the Standalone financial statements, in so far as it relates to the amounts and disclosures included in respect of this unit/branch is based solely on the report of such Branch Auditor.

Our opinion above on the Standalone Financial Statements, and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matter

Other Information

The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Board Report including Annexure to Board''s Report, Management Discussion and Analysis, Business Responsibility Report, Corporate Governance and Shareholder''s Information, but does not include the standalone financial statements and our auditor''s report thereon. The above referred information is expected to be made available to us after the date ofthis auditor''s report.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

Responsibilities of Management and those charged with governance for the Standalone Financial Statements

The Company''s Board of Directors are responsible for the matters stated in section 134(5) of the the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and Cash flow of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of 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 control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statement that give true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, the Board of Directors are responsible for assessing the company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going

concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to ceases operations, or has no realistic alternative but to do so.

Those Board of Directors are responsible for overseeing the company''s financial reporting process.

Auditor''s Responsibilities for the audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis ofthese standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

â¢ Obtain an understanding of internal controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing an opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

â¢ Conclude on the appropriateness of the management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the company to cease to continue as a going concern.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2020 (âthe Orderâ) issued by the Central Government of

India in terms of sub-section (11) of section 143 of the Companies Act 2013, we give in the âAnnexure Aâ, a

statement on the matters specified in the paragraph 3 and 4 ofthe order, to the extent applicable.

2. Based on the verification of Records of the Company and based on information and explanations given to us, we

give here below a report on the Directions issued by the Comptroller and Auditor General of India in terms of

Section 143 (5) ofthe Act:

a. The company process all the accounting transactions through IT system, named SAP. Based on the audit procedures carried out and as per the information and explanations given to us, there were no accounting transactions processed outside the IT system for the year ended 31^st March, 2022 and consequently, no financial implications arise to impact the integrity of accounts.

b. Based on the audit procedures carried out and as per the information and explanations given to us, there is no restructuring of an existing loan or cases ofwaiver/write off of debt/loans/interest etc. made by lender to the company due to the company''s inability to repay the loan.

c. Based on the audit procedures carried out and as per the information and explanations given to us. Government grants in the form of interest free loans received from the State Government have been properly accounted and utilised as per the terms and conditions.

3. As required by section 143(3) ofthe Act, 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 purpose of our audit;

b) 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 those books;

c) The standalone Balance Sheet, standalone Statement of Profit and Loss (including other comprehensive income), the standalone statement of Cash Flows and the standalone statement of changes in Equity dealt with by this Report are in agreement with the books of account;

e) As per Notification No. GSR 463(E) of the Ministry of Corporate Affairs dated 05-06-2015. Disqualification of directors stated under Section 164(2) of the Act is not applicable to the Company, since it is a Government Company.

g) As per Notification No GSR 463 (E) of Ministry of Corporate Affairs dated 05-06-2015, provisions of Section 197 as regards managerial remuneration are not applicable to the company since it is a Government Company and

h) 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 financial statements - Refer Note No 45 to the Standalone Financial Statements;

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

(III) There has been no delay in transferring amounts, required to be transferred, to the Investor Education

and Protection Fund by.

(IV) The Management has represented that, to the best of its knowledge and belief, as disclosed in the Note 48.11 to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(V) The Management has represented, that, to the best of its knowledge and belief, as disclosed in the note 48.12 to the accounts, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

(VI) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e) contain any material mis-statement.

(VII) During the year Company has not declared or paid any dividend.

For SANKAR & MOORTHY For RAM RAJ & CO

Chartered Accountants Chartered Accountants

Firm Registration Number: 003575S Firm Registration Number: 002839S

Sd/- Sd/-CA MONY ANANTHASIVAN CA P KARUNAKARA NAIDU

Partner Partner

Membership no: 028519 Membership no: 210603

Place : Calicut Place : Bangalore

Date : 11^th May 2022 Date : 11^th May 2022

UDIN : 22028519AIUWEY4578 UDIN : 22210603AIUWMC1245

Mar 31, 2019

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the accompanying standalone financial statements of MANGALORE REFINERY AND PETROCHEMICALS LIMITED ("the Company"), which comprise the Balance Sheet as at 31^st March 2019, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended on that date and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as "the standalone financial statements").

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("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 Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and the relevant rules issued thereunder, of the state of affairs (financial position)of the Company as at 31^st March 2019, the profit (financial performance including other comprehensive income), changes in equity and its cash flows for the year ended on that date.

Basis for opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

KEY AUDIT MATTER	Contingent liabilities
CRITERIA FOR DISCLOSURE AS KEY AUDIT MATTER	Uncertainty of the outcome & the disputed amount involved
PRESENT STATUS	AUDIT APPROACH
As per Ind AS 37- Provisions, Contingent Liabilities and Contingent Assets, a contingent liability is a possible obligation arising from past events, the outcome of which will be confirmed only on the occurrence or non-occurrence of one or more uncertain future events (Ind AS 37). There are several claims and litigations against the company which in the judgement of the management would not eventually lead to a liability. Hence no provision is made in the accounts for the year under audit. Should there be an adverse outcome, the Company may be liable to pay the disputed amount which may carry interest and/or penalty as decided by the adjudicating authority/statutory authority/court of law.	As per the standard, once recognized as a contingent liability, an entity should continually assess the probability of the outflow of the future economic benefits relating to that contingent liability. If the probability of the outflow of the future economic benefits changes to more likely than not, then the contingent liability may develop into an actual liability and would need to be recognized as a provision. We have reviewed the list of claims and litigations against the company and considered the present status and probability of the outflow of the future economic benefits from the available records and taken written representations. Based on the information provided to us, that the contingent liabilities as mentioned in Note 45 of the Standalone Financial Statements fairly reflect the current position and no provision is called for at this stage.

KEY AUDIT MATTER	Impairment of Assets
CRITERIA FOR DISCLOSURE AS KEY AUDIT MATTER	Assumptions based on technical feasibility, economic feasibility and estimated future cash flows
PRESENT STATUS	AUDIT APPROACH
As per Ind AS 36- Impairment of Assets, for investments in subsidiaries, joint ventures or associates, impairment has to be done when the carrying amount of such investment in the separate financial statement is higher than the carrying amount in the consolidated financial statements of the investee''s net assets, including associated goodwill. ONGC Mangalore Petrochemicals Limited being the subsidiary of Mangalore Refinery and Petrochemicals Limited, has incurred continuous losses which has led to erosion of net worth of the company. It has started making profits only in the last quarter of the current financial year. The management of ONGC Mangalore Petrochemicals Limited has estimated that it will make profits in the upcoming years based on various assumptions and projections which are subject to uncertainties.	We have reviewed assumptions taken for projecting the future cash flows and the basis of criteria for the underlying preparation of these projections. Based on the representations provided to us by the management and the Statutory auditor of the subsidiary company, no impairment is required for the investments made in the subsidiary as at the end of the financial year. (Refer note no. 10 of the Standalone Financial statements).

KEY AUDIT MATTER	Actuarial Gains/ Losses
CRITERIA FOR DISCLOSURE AS KEY AUDIT MATTER	Assumptions taken for valuation of actuarial gain/losses
PRESENT STATUS	AUDIT APPROACH
As per Ind AS 19- Employee Benefits, Actuarial gains or losses refers to an increase or decrease to a company''s estimate of their projected defined benefit obligation as a result of the periodic revaluation of assumptions. This involves a high degree of subjectivity and complexity. The Company uses a range of actuarial methodologies and methods to estimate these provisions. It requires significant judgement relating to certain factors and assumptions which include, but are not limited to, interest rates, inflation trends, rate of increase in salary, regulatory decisions, rate of employee turnover, historical claims information, mortality rate during and after employment and the growth of exposure.	We have reviewed the projections and assumptions made by the company for providing for the actuarial valuation. We have also tested the completeness and accuracy of the underlying data that was provided to the actuaries against a source documentation. Based on the data provided to us and the review made by us, the actuarial estimate of the provision required for employee benefit appear reasonable. (Refer note no. 40 of the Standalone Financial statements).

Information Other than the Standalone Financial Statements and Auditor''s Report Thereon

The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Director''s Report including Annexures to Director''s Report, Business Responsibility Report, Corporate Governance and Shareholder''s Information, but does not include the standalone financial statements and our auditor''s report thereon. The Annual report is expected to be made available to us after the date of this auditor''s report.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Management''s Responsibility for the Standalone 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 financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian accounting standards (Ind AS) specified under section 133 of the Companies Act, 2013.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, the Board of Directors is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

- Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control.

- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3) (i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.

- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

- Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

- Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in Annexure - A, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

a. The company processes all the accounting transactions through IT system. As there were no accounting transactions processed outside the IT system for the year ended 31^st March 2019 closure, no financial implications arise to impact the integrity of accounts.

b. There is no restructuring of an existing loan or cases of waiver/write off of debts/loans/interest etc. made by a lender to the Company due to the Company''s inability to repay the loan.

c. Government grants in the form of interest free loans received from the State Government have been properly accounted and utilized as per terms and conditions.

3. 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 best of our knowledge and belief were necessary for the purpose of our audit;

b. In our opinion, proper books of account as required by law relating to preparation of the aforesaid standalone financial statements have been kept by so far as it appears from our examination of those books and the reports of the other auditors;

c. The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the financial statements;

d. In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014.

e. Disqualification of directors stated under Section 164(2) of the Act is not applicable to a Government Company as per notification no. GSR 463(E) of the Ministry of Corporate Affairs dated 05/06/2015;

f. With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate report in Annexure - B;

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:

a. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Note No. 45 to the standalone financial statements;

b. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses; and

c. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

We refer to our Audit Report dated 13^th May 2019 already issued on the above referred Balance Sheet as on 31^st March 2019, the Statement of Profit and Loss, Cash Flow Statement and the Statement of changes in equity. The said report is suitably amended to comply with the observations of Comptroller and Auditor General of India with respect to the Auditors Report. There have been no changes in the Balance Sheet as on 31^st March 2019, the Statement of Profit and Loss, Cash Flow Statement and the Statement of changes in equity referred in our earlier report dated 13^th May 2019

ANNEXURE ''A'' TO THE INDEPENDENT AUDITOR''S REPORT

(Referred to in our report of even date)

(i) In respect of the Company''s fixed assets:

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

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 nature of its assets. As per the reports submitted by the Company, no material discrepancies have been noticed on such verification.

c. According to the information and explanation given to us and the records of the Company examined by us, the title deeds of immovable properties are held in the name of the Company except some leasehold land costing Rs. 982.37 Million which is in the possession of the company towards which formal lease deeds are yet to be executed. Refer Note No. 5&6 to the standalone financial statements.

(ii) We are informed that the inventory of stores and spares are physically verified during the year by the management on a continuous basis as per programme of perpetual inventory. Inventories of other items have been physically verified at the year end. The frequency of the verification, in our opinion, is reasonable having regard to the size of the company and nature of its business. As per the reports submitted by the Company, no material discrepancies have been noticed on such verification.

(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to Companies, Firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 1 89 of the Companies Act, 2013.

(iv) According to the information and explanations given to us, the Company has not advanced any loan, given any guarantee or provided any security to the parties covered under Section 185. The Company has not given any loan or made any investment covered under Section 186 of the Companies Act, 2013.

(v) According to the information and explanations given to us, the Company has not accepted any deposits within the meaning of sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed thereunder.

(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 Subsection (1) of Section 148 of the Companies Act, 2013 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 and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Income Tax, Goods and Services Tax, Sales Tax, Duty of Excise and other statutory dues applicable to it during the year with appropriate authorities. According to the information and explanations given to us, there were no undisputed amounts payable in respect of Provident Fund, Income Tax, Sales Tax, Duty of Excise and other statutory dues outstanding as at 31^st March, 2019 for a period of more than six months from the date they became payable.

b. According to information and explanations given to us and as per our verification of records of the Company, the disputed tax which are not deposited with the appropriate authorities as at 31^st March, 2019 are given below.

NAME OF THE STATUTE	NATURE OF THE DUES	TOTAL DEMAND (Rs. MILLIONS)	TOTAL AMT PAID UNDER PROTEST/ ADJUSTED (Rs. MILLIONS)	AMOUNT NOT DEPOSITED (Rs. MILLIONS)	PERIOD TO WHICH THE AMOUNT RELATES (FINANCIAL YEAR)	FORUM WHERE THE DISPUTE IS PENDING
The Karnataka Sales tax Act,1957/ Central Sales Act, 1956	Value Added Tax - Interest	4.80	2.48	2.32	2011-12	Karnataka High Court
The Karnataka Sales tax Act,1957/ Central Sales Act, 1956	Value Added Tax - Penalty	1.69	Nil	1.69	2011-12	Karnataka High Court
Income Tax Act, 1961	Income Tax / Interest / Penalty	296.31	296.31	Nil	AY 1993-03	Bombay High Court
Income Tax Act, 1961	Income Tax / Interest / Penalty	10.93	10.93	Nil	AY 2003-04	Income Tax Appellate Tribunal - Mumbai

NAME OF THE STATUTE	NATURE OF THE DUES	TOTAL DEMAND (Rs. MILLIONS)	TOTALAMT PAID UNDER PROTEST/ ADJUSTED (Rs.MILLIONS)	AMOUNT NOT DEPOSITED (Rs.MILLIONS)	PERIOD TO WHICH THE AMOUNT RELATES (FINANCIAL YEAR)	FORUM WHERE THE DISPUTE IS PENDING
The Customs Act, 1962	Custom Duty / Interest / Penalty	71.86	378.71	494.54	1997-2000	Supreme Court of India
		801.39	378.71	494.54	1997-2000	CESTAT - Bangalore
		2125.25	2125.25	Nil	2015-2017	Commissioner of Customs- Mangalore
Central Excise Act, 1944	Central Excise Duty / Service Tax / Interest / Penalty	4,457.60	181.60	4276.0	2002-03 to 2016-17	CESTAT - Bangalore
		2.07	2.07	Nil	2002-03 to 2015-16	Joint Secretary, MOF
		5.82	0.50	5.32	2010-11	Commissioner of Central Excise-Mangalore
		16.29	Nil	16.29	1996-97 to 2003-2004	Supreme Court of India

(ix) The Company has not raised money by way of initial public offer or further public offer (including debt instruments) during the year. The term loans borrowed were applied for the purpose for which they were raised.

(x) According to the information and explanations given to us and the books of account examined by us no instance of fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.

(xi) As per notification no. GSR 463(E) of the Ministry of Corporate Affairs dated 05/06/2015, provisions of section 197 as regards managerial remuneration are not applicable to the Company since it is a Government Company.

(xii) As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it; the provisions of Clause 3(xii) of the Order are not applicable to the Company.

(xiii) The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the financial statements as required under the applicable accounting standards.

(xiv) According to the information and explanations given to us, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review.

(xv) According to the information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with the directors during the year.

(xvi) According to the information and explanations given to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.

ANNEXURE - ''B'' TO THE INDEPENDENT AUDITOR''S REPORT

(Referred to in our report of even date)

Report on the Internal Financial Controls with reference to these Standalone Financial Statements under Clause (i) of Sub-section 3 of section 143 of the Companies Act, 2013 (âthe Act")

We have audited the internal financial controls with reference to financial statements of MANGALORE REFINERY AND PETROCHEMICALS LIMITED ("the Company") as of 31^st March, 2019, in conjunction with our audit of the standalone 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 with reference to 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 with reference to these standalone financial statements 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") issued by the Institute of Chartered Accountants of India (ICAI) and the Standards on Auditing prescribed under Section 143(10) of the Companies Act,2013 to the extent applicable to an audit of internal financial controls. 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 with reference to these standalone financial statements 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 with reference to these standalone financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of internal financial controls with reference to these standalone financial statements, 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 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 internal financial controls system with reference to these standalone financial statements of the Company.

Meaning of Internal Financial Controls with Reference to these Standalone Financial Statements

A company''s internal financial control with reference to these standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control with reference to these standalone financial statements 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 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 financial statements.

Inherent Limitations of Internal Financial Controls with Reference to these Standalone Financial Statements

Because of the inherent limitations of internal financial controls with reference to these standalone financial statements, 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 with reference to these standalone financial statements to future periods are subject to the risk that the internal financial control with reference to these standalone financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Other Matters

As a part of the system audit initiative undertaken by the company, configuration testing on all SAP modules was conducted during the year. No material errors or fraud were observed by us on a testing of representative sample transactions on the potential high-risk control gaps identified by system auditors. The management has also confirmed that the deficiencies in the configurations have since been recalibrated to close all the control gaps.

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial control system with reference to these standalone financial statements and such internal financial controls with reference to these standalone financial statements were operating effectively as at 31^st March 2019, based on the internal control with reference to financial statements 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.

We have considered the deficiencies in control gaps identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the March 31, 2019 standalone financial statements of the Company, and these deficiencies in control gaps do not affect our opinion on the financial statements of the Company.

For SREEDHAR, SURESH & RAJAGOPALAN LLP For MANOHAR CHOWDHRY & ASSOCIATES

Chartered Accountants Chartered Accountants

Firm Registration Number: 003957S/S200145 Firm Registration Number: 001997S

Sd/- Sd/-

CA.S.SUBRAMANIAM CA. P.VENKATARAJU

Partner Partner

Membership no: 025433 Membership no: 225084

Place: Chennai Place: Visakhapatnam (Camp)

Date : 17^th June, 2019 Date: 17^th June, 2019

Mar 31, 2018

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of MANGALORE REFINERY AND PETROCHEMICALS LIMITED (âthe Companyâ), which comprises the Balance Sheet as at 31^st March, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year ended, and a summary of the significant accounting policies and other explanatory information.

Managementâs Responsibility for the Standalone Financial Statements

The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) 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 read with relevant rules issued there under.

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 judgements 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.

Auditorsâ 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 thereunder.

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 auditorâs judgement, 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 Companyâs 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 Companyâs 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, of the state of affairs (financial position) of the Company as at 31^st March, 2018 and its profit (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 the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we have given in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. Based on the verification of Records of the Company and based on the information and explanations given to us, we give below a report on the Directions issued by the Comptroller and Auditor General of India in terms of Sec 143(5) of the Companies Act, 2013.

a. The company has clear title/lease deeds for freehold and leasehold land except for the following

Description	Grouped Under	Area (in Acres)	Amount (Rs. in Millions)	Reference in Financial Statement
Leasehold Land	Property, Plant & Equipment	30.97	36.56	Note 5
Leasehold Land	Capital Work in Progress	236.52	717.31	Note 6

In addition advance has been made to KIADB for 1,050 acres of land amounting to Rs.6,946.81 million for Phase IV for which agreements are yet to be executed.

b. The company has written off trade receivables amounting to Rs.472.34 million to settle long pending disputes between the company and Oil Marketing Companies (Indian Oil Corporation Ltd., Hindustan Petroleum Corporation Ltd. & Bharat Petroleum Corporation Ltd.) & Bangalore Metropolitan Transport Corporation with the approval of the Board of Directors. This amount is being expensed to the Statement of Profit and Loss. Refer Note Nos. 35- to the standalone Ind AS financial statements.

c. The company has maintained adequate records in respect of inventories lying with third parties. No assets have been received by the Company as gift from Government or other authorities.

3. 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 best of our knowledge and belief were necessary for the purpose 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, 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 Accounting Standards specified under Section 133 of the Act.

f. With respect to the adequacy of the internal financial controls over the financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in Annexure B.

g. With respect to other matters to be included in the Auditorâs Report in accordance with Rule11 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 45.1 and 45.2 to the standalone Ind AS financial statements;

ii. According to information and explanations given to us, 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.

iv. Reporting on disclosures relating to Specified Bank Notes is not applicable for year ended March 31, 2018.

We refer to our Audit Report dated 15^th May, 2018 already issued on the above referred Balance Sheet as on 31^st March 2018, the Statement of Profit and Loss, Cash Flow Statement and the Statement of changes in equity. The said report is suitably amended to comply with the observations of Comptroller and Auditor General of India with respect to the Auditors Report. There have been no changes in the Balance Sheet as on 31^st March 2018, the Statement of Profit and Loss, Cash Flow Statement and the statement of changes in equity referred in our earlier report dated 15^th May, 2018.

ANNEXURE âAâ TO INDEPENDENT AUDITORSâ REPORT - 31^st MARCH 2018

(Referred to in our report of even date)

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

c. According to the information and explanation given to us and the records of the Company examined by us, the title deeds of immovable properties are held in the name of the Company except some leasehold land costing Rs.753.87 Million which is in the possession of the company towards which formal lease deeds are yet to be executed. Refer Notes No-5 & 6 to the standalone Ind AS financial statements.

(iv) According to the information and explanations given to us, the Company has not advanced any loan, given any guarantee or provided any security to the parties covered under Section 185.The Company has not given any loan or made any investment covered under Section 186 of the Companies Act, 2013.

(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 subsection 1 of Section 148 of the Companies Act, 2013 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 and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Income Tax, Sales Tax, Service Tax, Duty of Excise, Value Added Tax and other statutory dues applicable to it during the year with appropriate authorities. According to the information and explanations given to us, there were no undisputed amounts payable in respect of Provident Fund, Income Tax, Sales Tax, Service Tax, Duty of Excise, Value Added Tax and other statutory dues outstanding as at 31^st March, 2018 for a period of more than six months from the date they became payable.

NAME OF THE STATUTE	NATURE OF THE DUES	TOTAL DEMAND (Rs. MILLIONS)	TOTALAMT PAID UNDER PROTEST/ ADJUSTED (Rs. MILLIONS)	AMOUNT NOT DEPOSITED (Rs.MILLIONS)			PERIOD TO WHICH THE AMOUNT RELATES (FINANCIAL YEAR)	FORUM WHERE THE DISPUTE IS PENDING
The Karnataka Sales tax Act,1957/ Central Sales Act, 1956	Value Added Tax - Interest	4.80	2.48	2.32			2011-12	Karnataka High Court
	Value Added Tax - Penalty	1.69	Nil	1.69			2011-12	Karnataka High Court
Income Tax Act, 1961	Income Tax / Interest / Penalty	296.31	296.31	Nil			AY 1993-03	Bombay High Court
		10.93	10.93	Nil			AY 2003-04	Income Tax Appellate Tribunal - Mumbai
		362.49	362.49	Nil			AY 2008-09	Income Tax Appellate Tribunal - Mumbai
		1,014.82	1,014.82	Nil			AY 2009-10	Income Tax Appellate Tribunal - Mumbai
		126.72	126.72	Nil			AY 2008-09	Commissioner of Income Tax (Appeals) -Mangalore
The Customs Act, 1962	Custom Duty / Interest / Penalty	55.57	Nil		55.57	1997-2000			Supreme Court of India
		761.68	Nil		761.68	1997-2000			CESTAT - Bangalore
		2125.25	2125.25		Nil	2015-2017			DRI-Mumbai Zonal Unit
Central Excise Act, 1944	Central Excise Duty / Service Tax / Interest / Penalty	22.70	0.73		21.97	2012-13 to 2015-16			Commissioner (Appeals) - Belagavi
		4,199.50	131.90		4067.60	2002-03 to 2016-17			CESTAT - Bangalore
		1.87	1.87		Nil	2002-03 to 2015-16			Joint Secretary, MOF
		5.82	0.50		5.32	2010-11			Commissioner - Mangalore
		26.55	-		26.55	1996-97 to 2003-04			Supreme Court of India

(viii) According to the information and explanation given to us and the records of the Company examined by us, the Company has not defaulted in repayment of loans or borrowing to any bank or Government during the year. The Company did not have any outstanding dues to financial institutions or debenture holders during the year.

(ix) The Company has not raised money by way of initial public offer or further public offer (including debt instruments) during the year. The Term loans borrowed were applied for the purpose for which they have been raised. However in respect of ECB Term loans raised during the earlier years there was some delay observed in the utilization of loans. The year wise drawls and utilisation are as given below

RS. in million

Year	Drawal	Utilisation	Balance as on 31^st March
2011-12	2,550.38	1,910.38	640.00
2012-13	13,773.38	12,334.58	2,078.80
2013-14	20,944.64	7,162.39	15,861.05
2014-15	-	4,156.32	11,704.73
2015-16	-	3,626.31	8,078.42
2016-17	-	1,311.54	6,766.88
2017-18	-	3,807.55	-

As informed to us, the delay in utilization was on account of late submission of the bills, changes in project cost and reduction on account of levy of price reduction clause in final bills. Further during the year 2017-18 the unutilized balance of Rs.2,959.33 million was prepaid by the company.

(xii) As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it; the provisions of Clause 3(xii) of the Order are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with the directors during the year.

For SREEDHAR, SURESH & RAJAGOPALAN For MANOHAR CHOWDHRY & ASSOCIATES

Chartered Accountants Chartered Accountants

Firm Registration Number: 003957S Firm Registration Number: 001997S

Sd/- Sd/-

CA.V.SURESH CA. MURALI MOHAN BHAT

Partner Partner

Membership no: 026525 Membership no: 203592

Place: Chennai

Date: 29^th June, 2018

Mar 31, 2017

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of MANGALORE REFINERY AND PETROCHEMICALS LIMITED (âthe Companyâ), which comprises the Balance Sheet as at 31^st March, 2017, 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.

Managementâs Responsibility for the Standalone Financial Statements

The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) 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 read with relevant rules issued there under.

Auditorsâ Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.

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, of the state of affairs (financial position) of the Company as at 31^st March, 2017 and its profit (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Other Matters

The comparative financial information of the Company for the year ended 31^st March, 2016 and the transition date opening balance sheet as at 1^st 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 and audited as follows:-

a. Opening balance sheet as at 1^st April, 2015 audited by a predecessor auditor (M/s. Gopalaiyer & Subramanian Chartered Accountants) and one current auditor (M/s. A. Raghavendra Rao & Associates Chartered Accountants) whose report for the year ended 31^st March, 2015 dated 22^nd May, 2015 expressed an unmodified opinion on those standalone financial statements,

b. Financial information of the Company for the year ended 31^st March, 2016 audited by both the current auditors whose report for the year ended 31^st March, 2016 dated 12^th May, 2016 expressed an unmodified opinion on those standalone financial statements,

These comparative financial information of the Company for the year ended 31^st March, 2016 and the transition date opening balance sheet as at 1^st April, 2015 included in these standalone Ind AS financial statements were 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 qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

a. The company has clear title/lease deeds for freehold and leasehold land except for leasehold land (18.18 acres) costing Rs.28.82 Million which is in possession of the company towards which formal lease deeds are yet to be executed. Refer Note No-5 to the standalone Ind AS financial statements.

b. The company has written off trade receivable considered no longer recoverable amounting to Rs.59.37 million in the Statement of Profit and Loss as these amounts are long pending and disputed by the parties as not payable. Refer Note No-34 to the standalone Ind AS financial statements.

c. The company has maintained adequate records in respect of inventories lying with third parties. No assets have been received by the Company as gift from Government or other authorities.

3. 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 best of our knowledge and belief were necessary for the purpose 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, 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 Section133 of the Act.

g. With respect to other matters to be included in the Auditorâs 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 44.1 and 44.2 to the standalone Ind AS financial statements;

ii) The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses. The Company did not have any long-term contracts including derivative contracts and hence question of reporting on losses does not arise.

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

iv) The Company has provided requisite disclosures in the financial statements as to the holdings as well as dealings in Specified Bank Notes during the period from 8^th November 2016 to 30^th December 2016. Based on audit procedures and relying on management representation we report that the disclosures are in accordance with the books of account maintained by the Company and as produced to us by the Management - Refer Note No.-16 to the standalone Ind AS financial statements.

ANNEXURE âAâ TO INDEPENDENT AUDITORSâ REPORT - 31ST MARCH 2017

(Referred to in our report of even date)

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

c. According to the information and explanation given to us and the records of the Company examined by us, the title deeds of immovable properties are held in the name of the Company except some leasehold land (18.18 acres) costing Rs.28.82 Million which is in the possession of the company towards which formal lease deeds are yet to be executed. Refer Note No-5 to the standalone Ind AS financial statements.

(iv) According to the information and explanations given to us, the Company has not advanced any loan, given any guarantee or provided any security to the parties covered under Section 185.The Company has not given any loan or made any investment covered under Section 186 of the Companies Act, 2013. Accordingly, reporting under clause 3 (iv) of the Order does not arise.

(vii)

a. According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Income Tax, Sales Tax, Service Tax, Duty of Excise, Value Added Tax and other statutory dues applicable to it during the year with appropriate authorities. According to the information and explanations given to us, there were no undisputed amounts payable in respect of Provident Fund, Income Tax, Sales Tax, Service Tax, Duty of Excise, Value Added Tax and other statutory dues outstanding as at 31^st March, 2017 for a period of more than six months from the date they became payable.

NAME OF THE STATUTE	NATURE OF THE DUES	TOTAL DEMAND (Rs. MILLIONS)	TOTALAMT PAID UNDER PROTEST/ ADJUSTED (Rs. MILLIONS)	PERIOD TO WHICH THE AMOUNT RELATES (FINANCIAL YEAR)	FORUM WHERE THE DISPUTE IS PENDING
The Karnataka Sales tax Act,1957/ Central Sales Act, 1956	Value Added Tax - Interest	0.43	0.21	2006-07	Appellate Authority - Mangalore
	Value Added Tax - Interest	4.80	2.48	2011-12	Karnataka Appellate Tribunal
	Value Added Tax - Penalty	1.69	Nil	2011-12	Karnataka Appellate Tribunal
Income Tax Act, 1961	Income Tax / Interest / Penalty	296.31	296.31	AY 1993-03	Mumbai High Court
		10.93	10.93	AY 2003-04	Income Tax Appellate Tribunal - Mumbai
		233.58	182.05	AY 2006-07	Income Tax Appellate Tribunal - Mumbai
		129.39	129.39	AY 2007-08	Income Tax Appellate Tribunal - Mumbai
		362.49	362.49	AY 2008-09	Income Tax Appellate Tribunal - Mumbai
		1,014.82	1,014.82	AY 2009-10	Income Tax Appellate Tribunal - Mumbai
		126.72	126.72	AY 2008-09	Commissioner of Income Tax (Appeals) -Mangalore
		754.77	754.77	AY 2010-11	Commissioner of Income Tax (Appeals) -Mangalore
		594.02	594.02	AY 2011-12	Commissioner of Income Tax (Appeals) -Mangalore
		546.71	546.71	AY 2012-13	Commissioner of Income Tax (Appeals) -Mangalore
		76.74	38.37	AY 2013-14	Commissioner of Income Tax (Appeals) -Mangalore
		35.70	17.75	AY 2014-15	Commissioner of Income Tax (Appeals) -Mangalore
		29.78	14.89	AY 2015-16	Commissioner of Income Tax (Appeals) -Mangalore
		32.13	16.07	AY 2016-17	Commissioner of Income Tax (Appeals) -Mangalore
The Customs Act, 1962	Custom Duty / Interest / Penalty	55.57	Nil	1997-2000	Supreme Court Of India
The Customs Act, 1962	Custom Duty / Interest / Penalty	721.97	Nil	1997-2000	CESTAT - Bangalore
Central Excise Act, 1944	Central Excise Duty / Service Tax / Interest / Penalty	1.94	0.08	2015-16	Commissioner (Appeals) - Mangalore
		4212.15	128.84	2002-03 to 2016-17	CESTAT - Bangalore
		1.71	0.75	2002-03 to 2015-16	Joint Secretary, MOF
		5.82	0.50	2010-11	Commissioner - Mangalore
		20.31	-	1996-97 to 2003-2004	Supreme Court

(ix) The Company has not raised money by way of initial public offer or further public offer (including debt instruments) during the year. A sum of Rs.6,766.88 million (Previous Year -Rs.8,078.42 million) being unutilized amount of term loan availed in the earlier years has been kept in a noninterest bearing account as per the Reserve Bank of India guidelines. Refer Note No.17.4 of the standalone Ind AS financial statements.

(xi) According to the information and explanations given to us, and the records of the Company examined by us, in our opinion, managerial remuneration has been paid in accordance with the DPE Guide Lines.

(xii) As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it; the provisions of Clause 3(xii) of the Order are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with the directors during the year. Accordingly, reporting under Clause 3(xv) of the Order does not arise.

For A. RAGHAVENDRA RAO & ASSOCIATES For SREEDHAR, SURESH & RAJAGOPALAN

Chartered Accountants Chartered Accountants

Firm Registration Number: 003324S Firm Registration Number: 003957S

Sd/- Sd/-

CA. A. KUMARA BHAT CA. V SURESH

Partner Partner

Membership no: 022041 Membership no: 026525

Place: New Delhi

Date: 17^th May, 2017

Mar 31, 2015

We have audited the accompanying standalone financial statements of MANGALORE REFINERY AND PETROCHEMICALS LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone 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 financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. 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 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 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 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 financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the 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 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 reasonab -leness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the 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 financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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, of the state of affairs of the Company as at 31st March, 2015, and its loss and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we have given in Annexure 1, a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. Based on the verification of Records of the Company and based on information and explanations given to us, , we give below a report on the Directions issued by the Comptroller and Auditor General of India in terms of Sec 143(5) of the Companies Act, 2013...

a) The Company has not been selected for disinvestment and hence reporting on this direction does not arise.

b) There are no cases of waiver/write off of debts, loans/ interest etc other than Central Sales Tax on sales to PSU Oil Marketing Companies amounting to '' 1930.80 million which are being expensed to the Profit & Loss Account, which has arisen on account of prevailing industry practice.

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

d) A report on age wise analysis of pending legal/ arbitration cases is given as Annexure 2 to this report. We report that the Company has in place an adequate monitoring mechanism for tracking expenditure on such legal cases

3. 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 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 dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of the written representations received from the directors as on 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

f) 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 financial statements - Refer Note 31.14.03 and 31.14.04 to the financial statements;

ii) The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts.

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

Annexure 1 referred to under paragraph 1 of the Report on Other Legal and Regulatory Requirements of the Auditors'' Report Re: Mangalore Refinery and Petrochemicals Limited (''the Company'')

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

(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 nature of its assets. As per the reports submitted by the Company, no material discrepancies have been noticed on such verification

(ii) (a) We are informed that the inventory of stores and spares are physically verified during the year by the management on a continuous 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) According to the information and explanations given to us, 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 Companies Act, 2013. Accordingly, the provisions of clause 3(iii)(a) and (b) of the Order are not applicable to the Company and hence not commented upon.

(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 weakness in internal control system of the company.

(v) The Company has complied with the provisions of section 73 to 76 and the rules framed there under with regard to filing of statutory Returns as required under these provisions and the relevant rules, subject however to delay in filing Return.

(vi) We have broadly reviewed the cost records maintained by the Company and report that the directions specified by the Central Government under sub-section (1) of section 148 of the Companies Act, with regard to maintenance of Cost Records have been complied with.

(vii) (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, Income tax, Wealth tax, service tax, Duty of Customs, Duty of Excise, Value added tax, cess and other statutory dues with appropriate authorities during the year. There are no arrears of undisputed statutory dues of material nature outstanding for a period of more than six months, from the date on which they became payable.

(b) According to information and explanations given to us and as per our verification of records of the Company, the disputed dues of tax which are not deposited with appropriate authorities as at 31st March, 2015 are as follows.

Name of the Nature of the Dues Total Total Amt Paid Statute Demand under protest/ (Rs Millions) adjusted (Rs Millions)

The Karnataka Central Sales Tax 4.53 Nil Sales Tax Act 1957/ - Penalty

Central Sales Tax Central Sales Tax 18.33 12.10 Act 1956 - interest

Value Added Tax 0.43 0.21 - Interest

Value Added Tax 0.13 0.13 - Interest

Value Added Tax 0.66 0.66 - Interest

Value Added Tax 3.48 Nil - Penalty

Value Added Tax 4.80 2.48 - Interest

Income Tax Act, Income Tax / Interest / 296.30 296.30 1961 Penalty 10.93 10.93

233.58 111.10

129.39 129.39

362.49 362.49

1014.82 1014.82

126.72 Nil

754.77 698.02

594.02 297.01

Name of the Period to which Forum Where the the Statute Amount dispute is pending Relates (FinancialYear)

The Karnataka 2009-10 Karnataka Appellate Tribunal Sales Tax Act 1957

Central Sales tax 2009-10 Karnataka Appellate Tribunal Act 1956

2006-07 Appellate Authority - Mangalore

2009- 10 Karnataka Appellate Tribunal

2010- 11 Karnataka Appellate Tribunal

2011- 12 Appellate Authority - Mangalore

2011-12 Appellate Authority - Mangalore

Income Tax Act AY 1993-03 Mumbai High Court 1961

AY 2003-04 Income Tax Appellate Tribunal - Mumbai

AY 2006-07 Income Tax Appellate Tribunal - Mumbai

AY 2007-08 Income Tax Appellate Tribunal - Mumbai AY 2008-09 Income Tax Appellate Tribunal - Mumbai AY 2009-10 Income Tax Appellate Tribunal - Mumbai

AY 2008-09 Commissioner of Income Tax (Appeals) - Mumbai

AY 2010-11 Commissioner of Income Tax (Appeals) - Mumbai

AY 2011-12 Commissioner of Income Tax (Appeals) - Mumbai

Name of the Nature of the Dues Total Total Amt Paid Statute Demand under protest/ (Rs Millions) adjusted (Rs Millions)

The Customs Act, Custom Duty / Interest / 101.53 Nil 1962 Penalty 645.97 Nil

Central Excise Act, Central Excise Duty / 10.37 Nil 1944 Service Tax / Interest / Penalty 248.18 23.07

1.24 0.72

54.59 Nil

Total 4617.26 2959.43

Name of the Period to which Forum Where the the Statute Amount dispute is pending Relates (FinancialYear)

The Customs Act, 1996- 2006 Supreme Court Of India 1962 1997- 2008 CESTAT - Bangalore

Central Excise Act, 2011-12 to Commissioner (Ap- 1944 2013-14 peals) - Mangalore

1996-97 to CESTAT - Bangalore 2012-13

2002-03 to Joint Secretary, MOF 2012-13

1999-2000 to Commissioner 2012-13 - Mangalore

(viii) The Company does not have accumulated losses as the end of the financial year . It has however incurred a cash loss during the financial year, but for the immediately preceding financial year, it has made a cash profit..

(ix) According to the 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 financial Institution or Bank or debenture holders.

(x) 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 others from Banks and Financial Institutions are not prejudicial to the interests of the Company.

(xi) According to the information and explanations given to us, the Term Loans have been applied for the purpose for which the Loans were obtained except Rs 11704.73 Million which were invested in deposits with banks.

(xii) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

As per our report of even date attached

For GOPALAIYERAND SUBRAMANIAN For A. RAGHAVENDRA RAO & ASSOCIATES Chartered Accountants Chartered Accountants Firm Registration No.: 000960S Firm Registration No. : 003324S

CA K. R. SURESH CA.GOPALAKRISHNA BHAT T.M Partner Partner Membership No. 025453 Membership No. 019798

New Delhi : 22nd May, 2015

Mar 31, 2014

We have audited the accompanying financial statements of Mangalore Refnery And Petrochemicals Limited ("the Company"), which comprise the Balance Sheet as at March 31,2014, and the Statement of profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India including Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true 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 financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

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

We believe that the audit evidence we have obtained is suffcient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

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.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of Section 227 (4A) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by Section 227(3) of the Act, we report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) 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 those books;

c) The Balance Sheet, Statement of profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, Statement of profit and Loss, and CashFlow Statement comply with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956;

e) 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 notifcation no. GSR 829(E) dated October 21, 2003, issued by the Ministry of Corporate Affairs.

Annexure to Independent Auditors'' Report Referred to in Paragraph 1 under the heading "Report on Other Legal and Regulatory Requirements" of our report of even date.

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

b) All the assets have not been physically verifed by the management during the year but there is a regular programme of verifcation, which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. As per the reports submitted by the company, no material discrepancies have been noticed on such verifcation.

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 affected.

(ii) a) We are informed that the inventories of stores and spares are physically verifed, during the year, by the management on a continuing basis as per programme of perpetual inventory. Inventories of other items have been physically verifed 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 verifcation 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 verifcation 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. And consequently, the reporting requirements of clause (iii) (f) and (iii) (g) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003, are not applicable. (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) a) In our opinion and according to the information and explanations given to us, there is no contract arrangement that needs to be entered in the register required to be maintained in pursuance of section 301 of the Companies Act, 1956.

b) Accordingly, the reporting requirement of clause (v) (b) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003 is not applicable

(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 applicable.

(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, 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. However, provisions of Employees State Insurance Act are not applicable to the Company

b) According to the information and explanations given to us and as per our verifcation of records of the company, the disputed amounts of tax which are not deposited with appropriate authorities as at 31st March, 2014, are as follows:

Name of the Statue Nature of the Dues Total Amount Period to which the amount (Rs. Millions) relates (Financial Year)

The Karnataka Sales Tax Central Sales Tax- Penalty 4.53 2009-10 Act, 1957/ Central Sales tax Act, 1956

Central Sales Tax- Interest 18.33 2009-10

Value Added Tax - interest 0.43 2006-07

Value Added Tax - interest 0.13 2009-10

Value Added Tax - interest 0.66 2010-11

Value Added Tax - Penality 3.48 2011-12

Value Added Tax - interest 4.80 2011-12

Income Tax Act, 1961 Income Tax / Interest / Penalty 122.48 AY 2006-07

Income Tax / Interest / Penalty 56.75 AY 2010-11

The Customs Act, 1962 Customs Duty/Interest /Penalty 105.42 1996-2006

603.02 1997-2008

3.24 1995-2007

Central Excise Act, 1944 Central Excise Duty/ Service 56.33 2000-01 to 2013-14 Tax/ Interest/ Penalty

142.19 1996-97 to 2012-13

0.52 2002-03 To 2012-13

26.72 1999-2000 TO 2012-13

Total 1149.03

Name of the Statue Forum where the dispute is pending

The Karnataka Sales Tax Act, 1957/ Central Sales tax Act, 1956 Karnataka Appellate Tribunal

Karnataka Appellate Tribunal

Appellate Authority - JCCT Mangalore Karnataka Appellate Tribunal Karnataka Appellate Tribunal Appellate Authority - JCCT Mangalore Appellate Authority - JCCT Mangalore

Income Tax Act, 1961 Income Tax Appellate Tribunal - Mumbai Commissioner of Income Tax(Appeals) - Mumbai

The Customs Act, 1962 Supreme Court of India CESTAT - Bangalore Commissioner ( Appeals) - Mangalore

Central Excise Act, 1944 Commissioner ( Appeals)- Mangalore

CESTAT - Bangalore Joint Secretary,MOF Commissioner - Mangalore

Total

(x) The Company has no accumulated losses at at 31st March 2014.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 verifcation 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 by the 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.15,861.05 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 year.

(xxi) According to the information and explanation given to us, no fraud on or by the Company has been noticed or reported during the year.

For GOPALAIYER AND SUBRAMANIAN For A.RAGHAVENDRA RAO & ASSOCIATES

Chartered Accountants Chartered Accountants

Firm Registration No 000960S Firm Registration No 003324S

CA. S KASI VISWANATHAN CA. A.RAGHAVENDRA RAO

Partner Partner

Membership No.026975 Membership No. 007533

Place : New Delhi Date : 20th May 2014

Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying fi nancial statements of Mangalore Refinery And Petrochemicals Limited ("the CompanyÂ), which comprise the Balance Sheet as at March 31,2013, and the Statement of Profi t and Loss and Cash Flow Statement for the year then ended, and a summary of signifi cant accounting policies and other explanatory information.

ManagementÃs Responsibility for the Financial Statements

Management is responsible for the preparation of these fi nancial statements that give a true and fair view of the fi nancial position, fi nancial performance and cash fl ows of the Company in accordance with the Accounting principles generally accepted in India including Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956 ("the ActÂ). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the fi nancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

AuditorsÃ Responsibility

Our responsibility is to express an opinion on these fi nancial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements. The procedures selected depend on the auditorÂs judgment, including the assessment of the risks of material misstatement of the fi nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the CompanyÂs preparation and fair presentation of the fi nancial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the fi nancial statements.

We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given

to us, the aforesaid fi nancial 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:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

b) in the case of the Statement of Profi t and Loss, of the LOSS for the year ended on that date; and

c) in the case of the Cash Flow Statement, of the cash fl ows for the year ended on that date.

Report on Other legal and Regulatory Requirements

1. As required by the Companies (AuditorÂs Report) Order, 2003 ("theOrderÂ) issued by the Central Government of India in terms of Section 227 (4A) of the Act, we give in the Annexure a statement on the matters pecifi ed in paragraphs 4 and 5 of the Order.

2. As required by Section 227(3) of the Act, we report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) 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 those books;

c) The Balance Sheet, Statement of Profi t and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, Statement of Profi t and Loss, and CashFlow Statement comply with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956;

e) 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 notifi cation no. GSR 829(E) dated October 21, 2003, issued by the Ministry of Corporate Affairs.

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

b) All the assets have not been physically verifi ed by the management during the year but there is a regular programme of verifi cation, 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 verifi cation.

c) In our opinion and according to the explanations given to us, the Company has not disposed off substantial part of fi xed assets, during the year and the Going Concern Concept of the Company has not been affected.

(ii) a) We are informed that the inventories of stores and spares are physically verifi ed, during the year, by the management on a continuing basis as per programme of perpetual inventory. Inventories of other items have been physically verifi ed 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 verifi cation 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 verifi cation 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, fi rms 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, fi rms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. And consequently, the reportingrequirements of clause (iii) (f) and (iii) (g) of paragraph 4 of the Companies

(AuditorÂs Report) Order, 2003, are not applicable. (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, fi xed 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) a) In our opinion and according to the information and explanations given to us, there is no contract arrangement that needs to be entered in the register required to be maintained in pursuance of section 301 of the Companies Act, 1956. b) Accordingly, the reporting requirement of clause (v) (b) of paragraph 4 of the Companies (AuditorÂs Report) Order, 2003 is not applicable (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 applicable. (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, EmployeeÂs 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 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.

(x) The Company has no accumulated losses as at 31st March 2013.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 verifi cation of the records of the company, the company has not defaulted in repayment of dues to the fi nancial 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 Benefi t 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 by the 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 fi nancial 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. 2078.80 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 year.

(xxi) According to the information and explanation given to us, no fraud on or by the Company has been noticed or reported during the year.

For MAHARAJ N.R.SURESH AND CO For GOPALAIYER AND SUBRAMANIAN

Chartered Accountants Chartered Accountants

Firm Registration No 001931S Firm Registration No 000960S

CA. N.R.SURESH CA. S. SUNDAR

Partner Partner

Membership No. 021661 Membership No.202725

Place : Mumbai Date : 24th May 2013

Mar 31, 2012

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 audit;

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 those books.

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 account.

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 company asat31stMarch,2012;

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 assets.

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 affected.

(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 applicable.

(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:

Name of the Statue Nature of the Dues Total Amount Period to which Forum where the dispute is pending (Rs. Millions) the amount relates (Financial Year)

The Karnataka Sales Tax Act,1957/ Central Sales tax Act, Sales Tax/ Entry Tax/ 321.49 1993-94 to 1998-99 Assessment are pending before the 1956/The Karnataka Tax on Entry of Goods Act, 1979. Interest and Penalty Assessing Authorities

Income Tax Act, 1961 Income Tax/ Interest/ 122.48 2005-06 Income Tax Appellate Authority and

Penalty Commissioner of Income Tax (Appeals)

Central Excise Act, 1944 Central Excise Duty/ 461.09 1996-97 to 2011-12 Central Excise Appellate Authorities/ Service Tax/ Interest/ Ministry of Finance, Government of Penalty India.

The Customs Act,1962 Customs Duty/Interest/ 647.54 1998-99 to 2009-10 Customs Appel late Authorities. Penalty

(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 year.

(xxi) According to the information and explanation given to us, no fraud on or by the Company has been noticed or reported during the year.

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

Partner Partner

Membership No. 021661 Membership No. 202725

New Delhi: 23rd May, 2012

Mar 31, 2011

We have audited the attached Balance Sheet of Mangalore Refinery and Petrochemicals Limited as at 31st March, 2011 the Profit and Loss Account and the Cash Flow Statement for the year ended on that date together with the schedules annexed thereto which are in agreement with the books of account maintained. 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.

We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about 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 the management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditor's Report) Order, 2003 as amended by the Companies (Auditor's Report) Amendment Order, 2004 issued by the Government of India in terms of section 227 (4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specifed in Paragraphs 4 and 5 of the said Order.

2. Further to our comments in the Annexure referred to 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 purpose of our audit.

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 those books.

iii) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with this report are in agreement with books of account maintained.

iv) In our opinion, the Balance Sheet and Profit and Loss Account and Cash Flow Statement dealt with by this report read with the notes thereon are in Compliance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 to the extent applicable.

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 Department of Company 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 other notes on accounts attached thereto, 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 Company as at 31st March, 2011.

b) in the case of the Profit and Loss Account, of the Profit for the year ended on that date; and

c) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH 1 OF OUR AUDIT REPORT OF EVEN DATE ON THE ACCOUNTS OF MANGALORE REFINERY AND PETROCHEMICALS LIMITED FOR THE YEAR ENDED 31st MARCH, 2011

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

(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) The Company has not disposed off substantial part of fixed assets during the year.

2 (a) We are informed that the inventories of stores and spares are physically verified by the management on a continuing basis as per a 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 and as informed to us, discrepancies noticed on physical verification by the management, which are reported to be not material, same have been properly dealt with in the books of account of the Company.

3. (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.

4. In our opinion and according to the information and explanations given to us, internal control procedures are fairly adequate, commensurate with the size of the Company and nature of its business for the purchase of inventory and fixed assets and with regard to the sale of goods. During the course of our audit no major weakness has been noticed in the internal control systems.

5. According to the information and explanations given to us, Company has not entered into any transactions that need to be entered in a register maintained pursuant to section 301 of the Companies Act, 1956.

6. 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 the provisions of sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed thereunder are not applicable.

7. The Company has an internal audit system which is commensurate with its size and nature of its business.

8. We have broadly reviewed the records maintained by the Company pursuant to the order by the Central Government under Section 209 (1) (d) of the Companies Act, 1956 for maintenance of Cost records in respect of the products of the Company and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

However, we are not required to and have not carried out any detailed examination of such records.

9. (a) The Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employee's State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Cess, Investor Education and Protection Fund, Service Tax 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 following disputed amounts of tax not provided for in the accounts of the Company and not deposited with appropriate authorities as at 31st March, 2011.

Name of the Statue Nature of the dues Total Amount Paid and or Balance Amt Period to which Forum where dispute is pending (Rs. Millions) Provided Outstan -ding the amount relates (Rs. Millions) (Rs. Millions)(financial year)

The Karnataka Sales Sales Tax /Entry Tax/ 1,972.95 1,132.31 840.64 1993-94 to 2007-08 Commercial Tax Appellate Tax Act, 1957/Central Interest and Penalty Authorities/ Sales Tax Act, 1956/ The Hon'ble High Court of Karnataka. Karnataka Tax on Entry of Goods Act 1979 Entry tax Ã Before Govt of Karnataka for conciliation and settlement.

Income Tax Act, 1961 Income Tax /Interest/ 373.90 251.41 122.49 2002-03 to 2006-07 Income Tax Appellate Authorities Penalty

Central Excise Act, 1944 Central Excise Duty/ 360.26 36.08 324.18 1996-97 to 2010-11 Central Excise Appellate Service Tax /Interest/ Authorities /Ministry of Finance, Penalty Government of India.

The Customs Act, 1962 Customs Duty 130.19 Nil 130.19 2004-05 to 2009-10 Customs Appellate Authorities.

10. There are no accumulated losses at the end of the financial year. The Company has not incurred cash losses during the year and in the immediately preceding financial year.

11. 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.

12. The Company has not granted any loans or advances on the basis of security by way of pledge of share, debenture and other securities.

13. Since the Company is not a Chit Fund/Nidhi/Mutual Beneft Fund/Society, the relative reporting requirements are not applicable.

14. The Company was dealing in Mutual Fund investments during the year. Proper records of the transactions and contracts have been maintained and timely entries have been made. The said investments have been held by the Company in its own name.

15. According to the information and explanations given to us and as per the verification of the records of the Company, the terms and conditions of the guarantee 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, Company has not given any guarantee for loans taken by others from banks or financial institutions.

16. According to the information and explanations given to us, the Company has not availed any fresh term loans during the year.

17. According to the information and explanations given to us and as per the verification of the records of the Company, on an overall basis, the Company has not utilized short-term funds for long term purposes.

18. The Company has not made any preferential allotment of share to the parties and companies covered in the register maintained under section 301 of the Act.

19. The Company has not issued any debentures during the year.

20. The Company has not raised any money by public issues during the year.

21. According to the information and explanations given to us and as per the verification of the records of the Company, no fraud either on or by the Company, having a material financial impact, has been noticed or reported during the year.

For S. R. R. K. SHARMA ASSOCIATES For MAHARAJ N.R.SURESH & CO

Chartered Accountants Chartered Accountants

(ICAI Registration No. 003790S) (ICAI Registration No. 001931S)

C.A.S.R.R.K.Sharma C.A. JAYADEVAN N R

Partner Partner

Membership No. 18088 Membership No. 23838

Place: New Delhi

Date: 20th May, 2011.

Mar 31, 2010

We have audited the attached Balance Sheet of Mangalore Refinery and Petrochemicals Limited as at 31st March, 2010, the Profit and Loss Account and the Cash Row Statement for the year ended on that date together with the schedules annexed thereto which are in agreement with the books of account maintained. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about 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 the management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditors Report) Order, 2003 as amended by the Companies (Auditors Report) Amendment Order, 2004 issued by the Government of India in terms of section 227 (4A) 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.

2. Further to our comments in the Annexure referred to 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 purpose of our audit.

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 those books.

iii) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with this report are in agreement with books of account maintained.

iv) In our opinion, the Balance Sheet and Profit and Loss Account and Cash Flow Statement dealt with by this report read with the notes thereon are in Compliance with the Accounting Standards referred to in sub-section (3Cj of section 211 of the Companies Act, 1956 to the extent applicable.

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 Department of Company 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 other notes on accounts attached thereto, 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 Company as at 31st March, 2010.

b) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and

c) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH 1 OF OUR AUDIT REPORT OF EVEN DATE ON THE ACCOUNTS OF MANGALORE REFINERY AND PETROCHEMICALS LIMITED FOR THE YEAR ENDED 31st MARCH, 2010

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

(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) The Company has not disposed off substantial part of fixed assets during the year.

2. (a) We are informed that the inventories of stores and spares are physically verified by the management on a continuing basis as per a 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 and as informed to us, discrepancies noticed on physical verification by the management, which are reported to be not material, same have been properly dealt with in the books of Ãaccount of the Company.

3. (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.

4. In our opinion and according to the information and explanations given to us, internal control procedures are fairly adequate, commensurate with the size of the Company and nature of its business for the purchase of inventory and fixed assets and with regard to the sale of goods and services. During the course of our audit no major weakness has been noticed in the internal control systems.

5. According to the information and explanations given to us, Company has not entered into any transactions that need to be entered in a register maintained pursuant to section 301 of the Companies Act, 1956.

6. 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 the provisions of sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed thereunder are not applicable.

7. The Company has an internal audit system, the scope and coverage of which is commensurate with its size and nature of its business.

8. We have broadly reviewed the records maintained by the Company pursuant to the order by the Central Government under section 209 (1) (d) of the Companies Act, 1956, for maintenance of Cost records in respect of the products of the Company and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we are not required to and have not carried out any detailed examination of such records.

9. (a) The Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Cess, Investor Education and Protection Fund, Service Tax 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 following disputed amounts of tax not provided for in the accounts of the Company and not deposited with appropriate authorities as at 31st March, 2010:

Name of the Nature of Total Amount Paid and or Balance Amt Period to which Forum where

Statute the dues Millions Provided Outsta- nding the amount relates dispute is pending Million Million financial year

The Karnataka Sales Sales Tax/ 1,188.76 377.20 811.56 1993-2008 Commercial Tax

Tax Act, 01957/ Entry Tax/ Appellate Authorities/

Central Sales Tax Interest and Honble High Court of Act, 1956/ Penalty Karnataka. Entry tax - The Karnataka Tax Before Govt, of on Entry of Goods Karnataka for conciliation Act,1979. and settlement

Income Tax Act, 1961 Income Tax/ 244.51 94.93 149.58 1992-2006 Income Tax Appellate Interest/ Penalty Authorities

Central Excise Act, 1944 Central Excise 146.45 41.08 105.37 1996-2007 Central Excise Appellate Authorities Duty/ Interest/ Penalty Ministry of Finance, Government of India

The Customs Act, 1962 Custom Duty 128.82 Nil 128.82 1996-2007 Customs Appellate Authorities

10. There are no accumulated losses at the end of the financial year. The Company has also not incurred cash losses during the year and in the immediately preceding financial year.

11. 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,

12. The Company has not granted any loans or advances on the basis of security by way of pledge of share, debenture and other securities.

13. Since the Company is not a Chit Fund/Nidhi/Mutual Benefit Fund/ Society, the relative reporting requirements are not applicable.

14. Since the Company is not dealing or Trading in shares, securities, Debentures or other Investments, the relative reporting requirements are not applicable.

15. According to the information and explanations given to us and as per the verification of the records of the Company, the terms and conditions of the guarantee 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, Company has not given any guarantee for loans taken by others from banks or financial institutions.

16. According to the information and explanations given to us, the Company has not availed any fresh term loans during the year.

17. According to the information and explanations given to us and as per the verification of the records of the Company, on an overall basis, the Company has not utilized short-term funds for long term purposes.

18. The Company has not made any preferential allotment of shares to the parties and companies covered in the register maintained under section 301 of the Act.

19. The Company has not issued any debentures during the year,

20. The Company has not raised any money by public issues during the year.

21. According to the information and explanations given to us and as per the verification of the records of the Company, no fraud either on or by the Company, having a material financial impact, has been noticed or reported during the year.

For MAHARAJ N.R.SURESH & CO Chartered Accountants (ICAI Registration No. 001931S)

JAYADEVAN N R Partner Membership No. 23838

For S. R. R. K. SHARMA ASSOCIATES Chartered Accountants (ICAI Registration No. 003790S)

G.S.KRISHNAMURTHY partner Membership No. 13841

Place: New Delhi Date: 12th May, 2010.

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