Andhra Petrochemicals Ltd. — Annual Report 2019

May 25, 2019

Regd. Office : VENKATARAYAPURA M (Tanuku) - 534 215 west Goda vari Dist. (A.P.) Tel : 088 19-224075. 224755. ²²⁴⁹¹¹ (7 lines) Fax : 08819-224168 Ecmail : info.tnk@andhrapetrochemicals.com CIN : L23 209AP1984 PLC004635 VVebslte ' wwwandhrapetrochemicals.com

25 May 2019

NO. APUSEC/ORJ12

The Relationship Manager. Corporate Relationship Department The Bombay Stock Exch an ge Ltd., 1" ¹ Floor, New Trading Ring Rotunda Building Phiroze Jeejeebhoy Towers Dalal Street, FORT, MUMBAI 400 001

Dear Sir,

• SUB; Audited Financial Results for the Year ended 31.3.2019 along \"th Independent Auditors Report and Declaration with regard to Audit Report with Unmodified Opinion.
• REF: Company's Scrip code: 500012

With reference to above. we enc lose herewith the following

• 1. Audited Financial Results for the Year ended 31.3.2019
• 1. Declaration with regard to Auditors' Report with Unmodified Opinion
• 1. Auditors' Report on the Financial Statements for the year ended 31.3.2019

This is for your kind information and record.

Thanking you,

Yours faithfully, _______ or LS LIMITED.

(P..HilIrendranath Chowdary) Manag ing Director

End s: As above

-

THE ANDHRA PETROCHEMICALS LIMITED Regd. Office:

VENKATARAYAPURAM (Tanuku) - 534 215 West Godavari Dist. (A.P.)
Tel : 08819-224075, 224755, 224911 (7 Lines) Fax: 08819-224168 E-mail: info.tnk@andhrapetrochemicals.com CIN: L23209AP1984PLC004635 Website : www.andhrapetrochemicals.com

						(Rs. in lakhs)
	Particulars	3 months ended 31.03.2019	Preceding 3 months ended 31.12.2018	Corresponding 3 months ended in the previous year 31.03.2018	Year to date figures for current period ended 31.03.2019	previous year ended 31.03.2018
		Refer Note 2	Unaudited	Refer Note 2	Audited	Audited
I	Revenue from operations	15896.30	17109.36	11375.47	66586.22	53275.26
п	Other Income	77.83	73.98	39.99	271.95	242.77
IП	Total income (I+II)	15974.13	17183.34	11415.46	66858.17	53518.03
IV	Expenses
	a) Cost of materials consumed	10553.97 332.30	13111.17 (197.89)	7984.45 63.21	46395.00 (41.17)	35838.77 1269.51
	b) Changes in inventories of finished goods, work-in-progress c) Employee benefits expense	473.00	569.80	436.64	1926.70	1812.87
	d) Finance costs	100.17	144.54	222.00	591.81	1186.54
	e) Depreciation and amortization expense	267.63	262.91	269.31	1049.48	949.27
	f) Power and Fuel	1042.84	1172.56	971.97	4779.40	4237.12
	g) Excise duty h) Other expenses	1010.25	585.75	817.04	2657.85	1455.26 2042.71
	Total expenses (IV)	13780.16	15648.84	10764.62	57359.07	48792.05
١v VI	Profit/(Loss) before exceptional items and tax (III-IV) Exceptional items	2193.97 ٠	1534.50 ٠	650.84 $\overline{\phantom{a}}$	9499.10 ٠	4725.98 W.
VII	Profit/(Loss) before tax (V+VI)	2193.97	1534.50	650.84	9499.10	4725.98
	VIII Tax expense (including deferred tax)	809.58	535.44	86.72	2515.74	75.91
IX	Profit/(Loss) for the period from continuing operations(VII-VIII)	1384.39	999.06	564.12	6983.36	4650.07
x	Profit/ (Loss) from discontinued operations
XI XII	Tax expense of discontinued operations			۰ ÷.
	Profit/ (Loss) from discontinued operations(after tax) (X-XI) XIII Profit/ (Loss) for the period(IX+XII)	1384.39	999.06	564.12	6983.36	4650.07
XIV	Other Comprehensive Income (net of tax)	(101.27)		(231.42)	(101.27)	(231.42)
XV	Total Comprehensive Income for the period (XIII+XIV) (Comprising Profit/(Loss) and other comprehensive income for the period)	1283.12	999.06	332.70	6882.09	4418.65
XVI	Earnings per equity share (for continuing operations)			0.66	8.22	5.47
	Basic Diluted	1.63 1.63	1.18 1.18	0.66	8.22	5.47
	XVII Earnings per equity share (for discontinued operations) Basic
	Diluted		¥
	XVIII Earnings per equity share (for discontinued &
	continuing operations) Basic	1.63	1.18	0.66	8.22	5.47
	Diluted	1.63	1.18	0.66	8.22	5.47

AUDITED FINANCIAL RESULTS FOR THE QUARTER AND YEAR ENDED 31ST MARCH 2019

of of Accete and Liabilities

	Particulars	As at	(Rs. in lakhs) As at
		31.03.2019	31.03.2018
		Audited	Audited
1	ASSETS
	Non-current assets
	(a) Property, Plant and Equipment	17214.89	18110.04
	(b) Capital Work-in-progress		93.37
	(c) Other Intangible assets	31.20	×.
	(d) Financial assets
	Investments	446.28	536.91
	Other Financial Assets	440.62	363.46
	(e) Deferred Tax Assets (Net)		48.73
	(f) Other non-current assets	5.52	5.52
	Sub-Total - Non-current assets	18138.51	19158.03
$\overline{2}$	Current assets
	(a) Inventories	1907.14	1610.21
	(b) Financial assets
	Investments	1628.08
	Trade receivables	3561.04	3418.10
	Cash and cash equivalents Bank balances other than above	295.41	228.41
	Other Financial Assets	$\sim$ 24.83	w. 21.04
	(c) Other current assets	514.41	241.61
	Sub-Total - Current assets	7930.91	5519.37
	Total - Assets	26069.42	24677.40
	EQUITY AND LIABILITIES
	Equity
	(a) Equity Share Capital	8497.16	8497.16
	(b) Other Equity	14150.92	7268.83
	Sub-Total - Equity	22648.08	15765.99
	LIABILITIES
1	Non-Current Liabilities
	(a) Financial Liabilities
	Borrowings	558.50	1360.19
	(b) Deferred tax liabilities (Net)	362.99
	(c) Provisions	219.61	203.49
	(d) Other non-current liabilities	5.00	5.00
	Sub-Total - Non-current Liabilities	1146.10	1568.68
$\overline{2}$	Current Liabilities
	(a) Financial Liabilities
	Borrowings	64.48	1424.59
	Trade pavables	486.82	569.48
	Other Financial liabilities	817.31	4401.88
	(b) Provisions	294.87	289.31
	(c) Current Tax Liabilities (Net)	117.26	16.69
	(d) Other Current liabilities	494.50	640.78
	Sub-Total - Current Liabilities	2275.24	7342.73
	TOTAL - EQUITY AND LIABILITIES	26069.42	24677.40

$-22 -$

Notes:

1 The above results, reviewed by the Audit Committee, were approved by the Board of Directors at its Meeting held on 25th May, 2019.

2 Directors recommended a total Divedend of Rs.1.50/- (Normal Dividend Re.1/- and Special Dividend Paise 50) per Share for the Financial Year 2018-19.

3 The figures for the quarters ended 31.03.2019 and 31.03.2018 are the balancing figures between the audited figures of the full financial years ended 31.03.2019 and 31.03.2018 respectively, and the published year-to-date figures upto the nine months ended 31.12.2018 and 31.12.2017 respectively.

4 Segmental reporting as per Ind AS-108 issued by the ICAI is not applicable, as the Company is engaged in manufacture of a single line of product.

5 Figures for the previous periods have been regrouped, wherever necessary, to conform to the current period's classification.

Place: Hyderabad Date: 25th May, 2019

P. NARENDRANATH CHOWDARY Managing Director

THEANDHRA PETROCHEMICALS LIMITED

Regd. Office ; VENKATARAYAPURAM (Tanuku) - 534 21 5 West Godavari Oist. (A.P.) Tel : 08819-224 075, 224755 , 224911 (7 Lines) Fax : 088 19-224168 E-mail : info .tnk@ andhrapetrochemicals .com CIN : L23209AP 19B4PLC004635 Website : wwwandhrapetrochemicals.com

25 May 2019

NO. APU SEC/QRJ12

The Relationship Manager, Corporate Relationship Department The Bombay Stock Exchange ltd" 1¹¹ Floor, New Trading Ring Rotunda Building Phiroze Jeejeebhoy Towers Dalal Street , FORT, MUMBAI 400 001

Dear Sir.

Sub: Declaration with regard to Audit Report with Unmodified Opinion . Ref: SSE Scrip Cod e: 500012

Pursuant to Regulation 33 (3)(d) of SEBI (LODR) Reg ulations, 2015 and SEBI Circular NO.C1R1CFD/CMDJ56/201 6 dt. 27.5.2016, we hereby confirm that Mi s C V Ramana Rae & Co., Chartered Ac countants, Statutory Auditors of the Company have issued Auditors' Report, on the Audited Financial Results of the Company for the Financial Year 2018-19, with Unmodified Opinion.

This is for your kind information and record

Thanking you,

Yours faithfully, for THE ANDHRA PETROCHE MICALS LIM ITED , (e-NarenJ:!ra ~~nath Chowdary)

Managing Director

INDEPENDENT AUDITOR'S REPORT

TO THE MEMBERS OF THE ANDHRA PETROCHEMICALS LIMITED, TANUKU

Report on the Audit of the Financial Statements Opinion

We have audited the accompanying financial statements of THE ANDHRA PETROCHEMICALS LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 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 ended on that date, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "the financial statements").

In our opinion and to the best of our information and according to the explanations given to us, the accompanying 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 Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2019, the profit and total 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 financial statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor's Responsibilities for the Audit of the 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 financial statements under the provisions of the Act and the Rules made 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 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 financial statements of the current period. These matters were addressed in the context of our audit of the 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.

D.No.1-88-19, Plot No.135/4, Sector-4, MVP Colony, VISAKHAPATNAM-530 017. A.P., INDIA. Ph : Off : (91-891) 2754071, E-mail : cvramanaraoandco@gmail.com

SL. No.	Key Audit Matter	How our audit addressed the Key Audit Matter
1	Adoption of Ind AS 115 "Revenue from Contracts with Customers"
	Accuracy of recognition, measurement, presentation and disclosures of revenues and other related balances in view of adoption of Ind AS 115 "Revenue from Contracts with Customers" (new revenue accounting standard) The application of the above new	We assessed the various Company's process, contracts entered with various customers to identify the impact of adoption of the new revenue accounting standard. Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows:
	revenue accounting standard involves certain key judgements relating to identification of distinct performance obligations in the contract, determination of transaction price of the identified performance obligations, the appropriateness of the basis used to measure revenue recognized over a period. Additionally, new revenue accounting standard contains disclosures which involves collation of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. Refer Note 2.24 to the Financial Statements	• Evaluated the design of internal controls relating to implementation of the new revenue accounting standard. • Selected a sample of continuing and new contracts, and tested the operating effectiveness of the internal controls relating to identification of the distinct performance obligations and determination of transaction price. We carried out a combination of procedures involving enquiry and observation, re-performance and inspection of evidence in respect of operation of these controls. • Compared these performance obligations with that identified and recorded by the Company. • Considered the terms of the contracts to determine the transaction price including any variable consideration to verify the transaction price used to compute revenue and to test the basis of estimation of the variable consideration. • Performed analytical procedures for reasonableness of revenues disclosed by type and service offerings. We reviewed the collation of information and
		the logic of the report generated from the budgeting system used to prepare the disclosure relating to the periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date
$\overline{c}$		Valuation of Investments in Unquoted Equity Shares of Andhra Pradesh Gas
	Power company Ltd(APGPCL)
	The valuation of the investments	We assessed the managements' approach to

$\mathcal{L}^{\text{in}}_{\text{reg}}$ :

	and involves judgement contin ues to be an area of inhe ren t ris k because qu oted prices are not rea d ily availab le. A, MOU the the between pe e and sha reholde rs, APGPCL its shareholde to each r is entitled receive po we r generated in proportion to its sharehold ing at cost of genera tion pl us 20% of its overhea ds which is substantially lower that the p rice cha rged by DISCOMs. In the absence o f any tran sfer of shares of APGPCL d uring the year unde r a udit the fair value of the sha res ha s been detennined by using "d iscoun ted cash now" me thod in respect ofsavings in cost of power in future yea rs. Refer No te 3.2 to the Fina ncia l	valuation for these investments by perform ing res: the following procedu • We have verified data inputs used in the va luati on mode ls based on historical trend s. • We evaluated the methodology and assumptions use d by management, including rea sona bleness of the d iscounted cas h flows, grow th rate and d iscou nt rate applied by compa ring it w ith the Indian Government Bond rate for a similar pe riod . • We tested the calc ulation of the fair va lue basedon the assumptions ap plied . • We found the d isclosures in the financial statements to be ap prop riate. Conclusion: Based on the work pe rformed and the evid ence obtained , we consider the method ology and assumptions used by management to be app ropriate.
	Statements
3	Estima tion of dec ommtsslorune	and restorati on provisions
	The de te rmina tion and val uati on of provision is highly judgmental by its natu re, as they are based o n assumptions calcula ted that a re impacted by future activi ties and the legislative en vironment in which the compa ny opera tes. Refer No te 2.34 to the Financia l Statements	Our audit procedures to assess the decommission ing provision included the following: • We assessed the valuation me thod ology • We evalua ted the reasonableness o f key assumptions a pplied by the maTldgement to existing provisions. calcula te new and • We tested the calcu lation of the p rovisions. • We checked the accuracy and relevance of the inpu t data used. • We found the d isclosures in the financia l statements to be appropriate. Conclusion: Based on the work pe rformed, we found management's assessment to be reasona ble based on ava ilable ev idence .
4	Unce rtai n tv reeard tn a the ex tension of land lea se reriod.
	unce rtainty of ex tension of The of the Land may lease period an on the have effect goi ng concern status of the Company. the The compa ny has initiated p rocess of renewa l of the lease of the land on which the nlant is	aud it p rocedu res Our included the follow ing: • We ha ve go ne throu gh the terms and cond itions of the VPT's Land renewal lea se policy "e-Tender cum e-A uction" for the allotmen t of the Land o n lon g term lease. • We eva lua ted the reasonableness of the judgment mana gements' that the lease period will be extended for fu rther oeriod of 30 yea rs

located w ith Visakhapatnam Port Tr us t (VPT), w hich will ex p ire on 26.06.2019. There is a possibility of existence of a competitor to the company '0 as per the be procedure adopted by VPT as per its " land lease extension policy." As the com pa ny expects that the at lease will be ex tended for least 30 yea r in its favo ur, the unexpi red pe riod of lease for computing the provision for

basedon the facts that the compdny has absolute right to take ove r the land provided they have to match the highest bid. Further, the competitor the cha nces of bidding by are very insignificant due to the fact tha t the successful bidder has to remit the value of the structures to the compa ny in add ition to the lease ren tals and sec urity deposit. Conclusion: management's judgment We found to be reasonable based on available evidence.

d ismantling cos ts, res ultan t de preciation &amo rtization of va rious fixed assets has bee n consi de red as 30 vears.

Informa tio n Ot her than the Fina ncia l Statements and Auditor's Report The reo n

The Company's Board o f Directors is res ponsible for the preparati on of the other ; information. The other information com prises the information included in the Management Discussion and Analysis, Board 's Repo rt including Annexu res to Board's Report, Business Responsibility Report, Corporate Governance and Sha rehol de r's Information, but does not include the fina ncial statemen ts and ou r auditor's report thereon.

Ou r opinion on the fina ncial statemen ts d oes not cover the other informa tion and we do not express any form of assurance conclus ion the reon.

In connection with o ur audit of the financial sta tements, our responsibility is to read the other information an d, in doing so, conside r whether the o ther info rmation is materially incons isten t with the financial sta teme nts or our knowledge obtai ned d uri ng the cou rse 01 our a ud it or otherwise a ppea rs to be materially misstated .

If, based on the work we have perform ed, we conclu de tha t the re is a material misstatement of this "othe r informati on" , we are req uired to report that fact. We have nothing to report in th is rega rd .

Management's Responsibility for the Financial Statements

The Co mpa ny's Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the prepa ration of these financial statements that give a true and fair view of the financial position, fina ncial pe rformance, total comp rehensive income, changes in equ ity and cas h flows of the Company in acco rdance with the lnd AS a nd other accounting principles generally acce pted in Ind ia. This respons ibility also incl udes maintenance of adequate acco unting reco rd s in accordance with the provisions of the Act for safeguarding the assets of the Company an d for preventing and detecting fra uds and o ther irregularities; selection and application of appropria te accounting policies; making jud gments and estimates tha t are reasonable and prudent; and design, implementation and maintenance of adequa te interna l fina ncia l controls, that were ope rating effectively for ensu ring theaccu racy an d completeness o f the accounting records, relevant to the preparati on and presentation of

the financia l statements that give a tr ue and fair view and a re free from ma terial misstatement, whether du e to fraud or erro r.

In preparing the financial statements, ma na gement is responsi ble for assessing the Compa ny's ability to con tinue as a going concern, d isclos ing. as applicable, matters related to going conce rn and usi ng the go ing concern basis of accounting unless mana gement either intends to liquidate the Com pa ny or to cease o pe rations, or has no realistic a lternative but to do so.

The Board of Directors is responsible for overseeing the Company's financial re porting process.

Aud itor's Responsi bilities for the Audi t of the Financi al Sta tements

Our objectives are to ob tain reaso na ble ass urance about whether the financial statements as a whole are free from material misstatement, whe the r d ue to fraud or error, and to issue an aud itor's re port that incl udes our opinion. Rea sonable assurance is a high level of assurance, but is not a gua rantee that an au d it cond uc ted in accordance with SAs will alw ays detect a materi al missta tement when it ex ists. Misstatements can arise from fraud or error an d a re considered material if, ind ivid ualJy or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these fma ncia l sta tements.

As part of an audit in accordance w ith SAs, we exercise professional jud gment and ma in tain professiona l skepticism throu ghout the aud it. We also:

• Iden tify and assess the risks of material misstatement of the fina nc ial sta tements, whether d ue to fraud or error, design and pe rform a udit procedu res responsive to those risks, and obtain a ud it evidence that is sufficient and a pprop riate to provide .l basis for our op inion. The ris k of not detecting a material misstatement resulting from frau d is h igher tha n for one resulting from error, as fraud ma y involve co llusion, forgery, in tentional om issions, misrepresentations, or the ov erride of in ternal contro l.
• Obta in an understanding o f interna l finan cial controls releva nt to the au d it in order to design audit procedu res that are appropriate in the circu msta nces. Unde r section 143(3)(i) of the Act, we a re also responsible for ex pressing our opin ion on whe ther the Compa ny has ad equa te internal financial controls system in place an d the ope rating effectiveness of such contro ls.
• Evalua te the a ppropriateness of accounting policies used and the reasonableness of accounting estimates and related d isclosu res mad e by mana gem ent.
• Conc lude on the appro pria teness of management's use of the go ing conce rn basis of accounting and, based on the a ud it evidence obtained, whether a material uncertainty exists related to even ts or cond itions that may cast significant doubt o n the Co mpa ny's ab ility to continue as a go ing concern . If we con clude that a material uncertainty ex ists, we are req uired to d raw attention in our audi tor's report to the related d isclos ures in the financial statements or, if such d isclosures are inadequate. to modify our o pinion. Our co nclusions are based on the audit evide nce ob tained up to the d ate o f our au ditor's report. However. future events or cond itions may ca use the Compa ny to cease to continue as a goi ng concern.

•

• Evaluate the overall p resenta tion, structu re and content of the financi al statements. including the d isclos ures, and whether the financial statements represen t the underly ing transactions and events in a manner that achieves fair presentation .

Mate riality is the magnitude of misstate ments in the financial statements that, ind ividually or in aggrega te, ma kes it probable tha t the econom ic decisions of a reasonably know ledgeable user of the financia l sta teme nts may be influenced. We conside r quantitative materiality and qualitative factors in (i) planning the scope of our audit wo rk an d in evalua ting the resul ts of our work; and (ii) to evaluate the e ffect of an y iden tified misstatemen ts in the financia l statemen ts. '

We communicate with those charged with governa nce regarding, am ong other matters, the planned scope and timin g of the a udit and significant aud it find ings, includ ing any significan t deficiencies in internal control tha t we ide ntify d u ring our a ud it.

We also provide those charged with governance with a stateme nt that we have complied with relevant ethical req uiremen ts rega rding independence, and to commu nicate with them all relations hips and other matters that may reasona bly be thought to bea r on our independence, and where applicab le, related safegua rd s.

From the matters communicated with those charged with govern ance, we determine those matters that we re of most significance in the aud it of the financial statemen ts of the curren t pe riod and are therefore the key a udi t ma tters. We describe these ma tters in our aud itor's repor t un less law or reg ulation precludes public d isclosu re about the matter or when, in extreme ly rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of d oing so would reasonably be expected to outweigh the public interes t benefits ofsuch com m unication .

Report o n Othe r Legal and Regu latory Requirements

1. As required by the Companies (Aud itor's Report) Ord er, 2016 (" the Order") issued by the Central Govern men t in terms of Section 143(11) of the Act, we give in "A nnex ure- A" a stateme nt on the matters specified in paragraphs 3 and 4 of the Order.

2. As requ ired by Section 143(3) of the Act, based on our audit we report that

a) We have sought and obtained all the information and explanations wh ich to the best of our knowled ge and belief were necessary for the purposes of our aud it.

b) In ou r opinion, proper boo ks of account as required by law have been kept by the Company so far as it appea rs from our examination of those books.

c) The Balance Shee t, the Stateme nt of Pro fit and Loss includ ing Othe r Comprehensive Income, Stateme nt of Changes in Equity and the Statement of Cash Flow dealt with by th is Report are in ag ree me nt with the relevant boo ks of account.

d) In ou r opi nion, the aforesa id financial sta teme nts comply with the Ind AS specified under Section 133 of the Act, read with Rule 7 of the Companies (Accoun ts) Rules, 2014.

e) On the basis of the written re presentations received from the directors as on March 31, 2019 taken on record by the Board of Directors, none of the d irectors is disquali fied as on March 31, 2019 from bein g appointed as a director in terms of Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial contro ls over finan cial reporting of the Compa ny and the o pe rating effectiveness of such controls, refer to o ur separate Repo rt in ..Annex ure B". Ou r report exp resses an unmod ified op in ion on the adeq uacy and operat ing effectiveness of the Compa ny's internal financial controls over financial reporting. ,

g) With respect to the othe r matters to be included in the Aud itor's Report in accordan ce with the requ irements of sec tion 197(16) of the Act, as amended:

Tbe company has ne ithe r paid nor prov ided any remu ner ati on to any of the Directors of the compdny. Acco rd ingly the q uestion of reporting under the provisions of section 197(16) of the Act does not a rise.

h) With res pect to the other matters to be included in the Aud itor's Report in accordance with Rule 11 of the Companies (Audi t and Aud itors) Rules, 2014, as amended in o ur opinion and to the best of our informa tion and acco rd ing to the ex plana tions give n to us:

• i. The Com pany has disclosed the impact of pend ing litigations on its financial position in its financial statements.
• ii. The Company has made provision, as requ ired unde r the applica ble law or acco unting sta nda rd s, for materia l foreseeab le losses, if an y. on long-term contracts includ ing deri va tive contracts.
• iii. TIle company has obtained a de ma nd draft favoring " Inves tor Education and Protection Fund" for Rs.41.87Lakhs on 20.11201 8 towards unpaid dividends for the year 2010-11, which were to be remitted to the fund on that d ate a nd remitted the sa me on 13th May 2019.

Place: Visakhapatnam Date : 25th May, 2019

ANNEXURE-A TOTHE IND EPEN DENT AUD ITOR S' REPORT

The Annexu re A refe rred to in our Ind ependent Auditor's report of eve n date, to the mem bers of TIlE AN DHRA PFffiOCHEMICAlS UMITED, TANUKU, for the yeel[ ended 31 March 2019. ....e report that:

• i) a) The Com pa ny has maintained proper records showing full particul ars, including quantitative details and situa tion of fixed assets.
• b) The fixed assets ha ve been physically ve rified by the management during the year. Accord ing to the information furnished to us, no material discrepancies ha ve been noticed on such ve rification.
• c) The title deeds in respect of all immovable properties are held in the nam e of the company.
• ii) Phys ical verification of inven tory has been conducted during the yea r by the management at reasonable intervals. The discrepancies noticed on su ch verification between the ph ysical stocks and the book reco rds were not material.
• iii) The Com pa ny has not granted any loans, sec ured or unsecured. to Companies, Firms. Limited liability pa rtnerships or othe r parties covered in the register maintained under section 189 of the Compa nies Act, 2013. Conseque ntly. clauses 3 (iii) (a), (b) and (c) of the Order are no t applicable.
• iv) The company bas ne ither given any loans to the d irectors or any other persons in whom the director(s) is interested nor given/ prov ided an y gue rantee/secunty in connection with any loan taken by directors or su ch other persons as pe r the provisions of section 185 o f the Compa nies Act, 2013. The investment mad e by the compa ny in an earlier yea r does not exceed the limits prescribed under section 186 of the Companies Act. 2013.
• v] The Com pany has no t accepted any deposits from the pu blic. Conseque ntly, the clause 3(v) of the order is not applicab le to the Com pa ny.
• vi) We have broadly reviewed the books of account relating to materia ls. labo ur and othe r items o f cost maintained by the Company pursuant to the Ru les mad e by the Central Government for the ma intenance of cost records unde r sub-section (1) of section 148 of the Companies Act. 2013 and we are of the o pinion that prima fade the prescribed accounts and records have been made and maintained. However. we have not made a detailed examination of the records.
• vii) a) Accord ing to the info rmation and ex plana tions given to us and on the basis of examina tion of the reco rd s of the Com pa ny, amounts deducted/ accrued in the books of acco unt in respect of und isputed statutory dues including provident fund. employees' sidle ins urance, income- tax, sales-tax, service tax, duty of customs, duty of excise, va lue ad ded tax, cess and other material statutory dues helve been regularly deposited during the year by the Com pany with the appropriate a uthorities.

According to the information and ex plana tions given to us, no undisputed amounts a re pa yable in res pec t of income tax, sales tax, serv ice tax, duty of cus toms, d ut), of excise, value ad ded tax or cess and other material statutory dues which were in a rrea rs as at 31" March 2019 for a period of more than six months from the date they became pa yable.

b) As a t 31" March 2019, there have been no disputed du es, which have no t been deposited with the respective a utho rities in res pect of Income tax, Se rvice tax, d UI)' 01 cus toms, duty of excise, value added tax and Cess, exce p t the fo llo ng

Sr. No.	Name of the Statu te	Natu re of the Dues	Amount- [n (Rs. Lakhs)	Period to which the amount relates	where Forum dispute is pending
1.	The Income Tax Act, 1%1.	Income Tax	3.80	Assessment 2008- Year 09	Commissioner of Income To> (Appea ls), Raiahmundrv.
2.	The Income Tax Act, 1%1	Income Ta x	2.21	Assessment Year 2009- 10	Commissioner of Income Tax (Appeals), Rajahmundrv.

Net of Pre d eposits made. •

• vtlll Tbe Compa ny has not defaulted in repdy men t o f an y loan installments in res pect of term loans from financial institutions and banks.
• ix] In ou r opinion, the Term Loons obtained in ea rlier years have been applied for the pur poses for which they were raised.
• x) Accord ing to the information and ex plana tions given to us, no fra ud on or by the Co mpany has bee n noticed or reported d uring the course of ou r a ud it.
• xi) The company has neither paid nor p rovided for an y man ageria l rem uneration d uring the financia l yea r und er report. Consequently the cla use 3(xi) o f the orde r is no t a pp licable.
• xii) In our opinion, the company is not a Nid hi Company. Consequently the clause 3(xii) of the o rde r is not applicable .
• xiii] Accordi ng to the information and ex plana tions given to us and on overall examination of the records of the Compa ny, we report that a ll transa ctions with related parties are in comp liance w ith the provisions o f sections 177 and 188 of the Companies Act, 2013 and the related party d isclosures as required by releva n t Ind ian Acco unting Standards are disclosed in the financial statements.
• xiv) The Compa ny ha s not made any preferential all otment or pri vate placement of shares or fully/partly conve rtible debentures during the year under review. Consequently the clause 3(xiv) of the order is not applicabl e.

• xv) The Company has not entered into any non cash transa ctions w ith the di rectors (IT persons connected with them during the year under report. Consequently the clause 3{xv) of the order is not ap plicable.
• xvi] The Company is no t req uired to be registered und er section 45-IA of the Reserve Bank of India Act, 1934. Consequently the clause 3(xvi) of the order is not applicable.

For C V RAMAN A RAQ & CO., Cha rtered Acco untants Firm Regn No. 0029 ¹⁷⁵ ~~ Pa rtner q,,--- J.l Membership No.225030 ~~

Place: Visakhapa tnam Date : 25th May, 2019

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Annexure "8" to th e Independent Auditors' Report

Report on th e In ternal Financia l Controls over Financial Reporting under Clause (i) of Sub. sectio n 3 of Sertion 143 of th e Companies Act, 2013 ("the Act")

We have aud ited the interna l finan cial controls over financial reporting of T HE ANDHRA PETROCHEMICALS LIMITED ("the Company ") as of 31" March 2019 in conjunction with our au dit of the finan cial statements of the Company for the year ended on that date.

Management's Responsib ility for Interna l Financial Co ntrols

11,e Board of d irectors of the comp<my is responsi ble for establishing and maintaining internal financial controls based on the interna l contro l ove r financial reporting criteria established by the Company considering the essential components of internal contro l stated in the Guidan...-e Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Cha rtered Accountants of Ind ia ('ICAl'). These responsibilities include the design, implementation and ma intenance of adequa te internal financial controls that were operating effectively for ensuring the or derly an d efficient cond uct of its business, including adherence to company's policies, the safegua rd ing 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.

Auditor's Respons ibility

Our responsibility is to express an opinion on the internal financia l controls over financial reporting of the company based on ou r audi t. We cond ucted our aud it in acco rda nce with the Guid ance Note on Aud it of Internal Financial Contro ls over Financial Reporting (tho "Guidance Note") issued by ICAI and the Sta ndards on Audi ting prescribed un der section 143(10) of the Companies Act, 2013, to the extent applicable to an aud it of inte rnal financial controls. Those Standar ds and the Guidance Note require that we com ply with ethical requirements and plan and perform the audi t to obtain reasonable ass urance about whether adequate internal financia l controls over financial reporting was established and ma intai ned and if such contro ls opera ted effectively in all material respects.

Ou r aud it involves pe rforming procedures to obtain audit ev idence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understandi ng of inte rnal financial controls ove r financial reporting. assessing the risk that a material weakness exists, and testing and eva luating the des ign and operating effectiveness of internal contro l based on the assessed risk. The proced ures selected depend on the aud itor's judgment, including the assessment of the risks of material missta temen t of the financial statements, whether d ue to fraud or erro r.

We believe that the aud it evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Com pany's inte rnal financial controls system ove r financial reporting. .

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial co ntro l over financial reporting is a process designed to provide reasona ble assurance regarding the reliability of financial reportin g and the preparation of Ind AS financial state ments for ex ternal p urposes in accordance with generally accepted accou nting principles. A company's interna l financial control ove r financial reporting includes those policies and procedures that

(1) pe rtain to the maintenance of records that. in reasonable detail. accura tely and fairly reflectthe tra nsa ctions an d dispositions of theassets of the company;

(2) provide reasonab le ass urance that transactions are recorded as necessa ry to permit preparation of Ind AS financial statements in accordance with generally accepted accountin g principles. and that receipts and expend itures of the company are be ing made only in accordance with a uthorisations of managemen t a nd d irectors of the compa ny: and

(3) provide reaso nable assurance regard ing preventi on or timely detection of unauthorised acq uisition. use, or d isposition of the com pany's assets that could have a mate rial effect on the financial statementss.

Inheren t Umitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal finan cial controls ove r financial reporting. including the possi bility of collusion or imprope r management override of control s. material missta temen ts due to error or fraud may occur and not be detected. Also. projections of dny evaluation of the inte rna l financia l controls ove r financia l reporting to futu re periods are subject to the risk that the internal financial control ove r financial reporting may become inadeq uate because of changes in cond itions. or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion. to the best of our information and accord ing to theexplana tions given to us, the Company has. in a ll ma terial respects, an adequate interna l financial controls system over financial reporting and such inte rna l financia l controls over fina ncia l repo rting were operating effective ly as at 31 Ma rch 2019, based on the internal contro l over financial reportin g crite ria established by the Company co nsidering the essential com ponen ts of interna l contro l sta ted in the Guidance Note on Audit of Inte rnal Financia l Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For C V RAMANA RAO & CO., Chartered Accountants Firm Regn No. 002917S . ""0-----" ..:... (""l u 0 (~ YA: I K) ' " Partner ~'- ./J, Membership No. ~~

Place: Visakha patna m Date : 25th May. 2019