Mar 31, 2023
TO THE MEMBERS OF BHARAT PETROLEUM CORPORATION LIMITED
Report on the Audit of the Standalone Ind AS Financial Statements
1. We have audited the accompanying Standalone Indian Accounting Standards (âInd ASâ) Financial Statements of Bharat Petroleum Corporation Limited (âthe Corporationâ), which comprise the Balance Sheet as at March 31, 2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year ended on that date, and a summary of the Significant Accounting Policies and other explanatory information (hereinafter referred to as âthe Standalone Ind AS Financial Statements â).
2. 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 Companies Act, 2013 (âthe Actâ) 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 (âInd ASâ), and other accounting principles generally accepted in India, of the state of affairs of the Corporation as at March 31, 2023, the profit and total comprehensive income, its cash flows and changes in equity for the year ended on that date.
Basis for Opinion
3. We conducted our audit of the Standalone Ind AS Financial Statements in accordance with the Standards on Auditing (âSAs") specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditorâs Responsibilities for the Audit of the Standalone Ind AS Financial Statements section of our report. We are independent of the Corporation 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 Ind AS 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 ICAIâs Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Ind AS Financial Statements.
4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Ind AS Financial Statements of the current period. These matters were addressed in the context of our audit of the Standalone Ind AS 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:
S.No. |
Key Audit Matter |
Auditorsâ Response |
1. |
Valuation of Investment in E&P Subsidiary (Refer Note 7 and Note 56): The Corporation has an investment of Rs.9,601.37 crores in 100% subsidiary Bharat Petro Resources Ltd (BPRL). This subsidiary along with its stepdown subsidiaries, JVs & Associates holds participating interest in various oil/gas blocks for exploration & evaluation, development, and production activities (E&P). The Corporationâs realisation from these E&P investments is dependent on the continued successful operations/development of reserves resulting in expected earnings and revenue growth of the respective companies. BPRL has relinquished or impaired certain oil and gas blocks on account of changes in circumstances and prospects of the blocks. The above factors have impacted the value in use of BPRLâs assets and consequently the Corporationâs impairment analysis in respect of its Investment in BPRL. Accordingly, we considered this as a Key Audit Matter. |
The following procedures were carried out in this regard: ⢠We evaluated the design, implementation and operating effectiveness of key controls in relation to the annual impairment testing activity carried out by the Corporation for its investments in Subsidiary. ⢠We reviewed the audited consolidated Ind AS Financial Statements of BPRL for FY 2022-23 and the independent auditorâs report thereon. ⢠We assessed the Managementâs explanation regarding key factors which have led to significant diminution in value of BPRLâs assets vis-a-vis the previous year and consequent trigger for impairment of the Corporationâs investment in the same. ⢠We evaluated the impairment analysis carried out during the year by the Corporation, which included an independent comparison of externally / internally assessed value in use of BPRLâs Net Assets with carrying cost of investment in BPRL in the Corporationâs Books of Account. |
2. |
Computation of Expected Credit Loss (ECL): Trade receivables and loans granted under the Pradhan Mantri Ujwala Yojana (PMUY) scheme constitute a significant component of the total current assets of the Corporation. At each reporting date, the Corporation recognizes Lifetime ECL on Trade Receivables using a âsimplified approachâ and 12 month ECL on loans are granted under the PMUY scheme wherein we relied on Managementâs estimates regarding probability of default rates linked to age-wise bucketing of the corresponding asset. Since, this is a technical matter based on probable outcome of default, we considered this as a Key Audit Matter. |
Our audit approach consisted testing of the design implementation and operating effectiveness of the internal controls and substantive testing as follows: ⢠In respect of loans granted under PMUY, the Corporation along with other few industry peers have derived a common methodology for calculating ECL, based on the broad category of active and inactive consumers and last refill date with expected loan recovery period. We checked the working of the same and it is in line with the common methodology document shared with us. ⢠We have evaluated the methodology for age-wise bucketing of trade receivables and key assumptions underlying the probability of default estimates on the same, to ascertain that the same were broadly in-line with the Corporationâs historical default rates and have considered available information regarding the current economic scenario. ⢠We selected a few sample outstanding receivable cases having different overdue periods and checked that the computation of ECL has been appropriately carried out in line with the Corporationâs policy. |
S.No. |
Key Audit Matter |
Auditorsâ Response |
3. |
Evaluation of Contingent Liabilities: Contingent liabilities disclosed are in respect of items which in each case are above the threshold limit. The Corporation has material uncertain positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes. Contingent liabilities are not recognized in the Standalone Ind AS Financial Statements but are disclosed unless the possibility of an outflow of economic resources is considered remote. In view of significant management estimate and judgement involved, we considered this as a Key Audit Matter. |
The following audit procedures were carried out in this regard: ⢠We examined sample items above the threshold limit for determination of contingent liabilities and obtained details of completed Excise, VAT/ Sales Tax/ Entry Tax assessments, demands as well as other disputed claims against the Corporation as on March 31, 2023. The Corporation has obtained opinion from tax consultants in various disputed matters. We have relied upon such opinions and litigation history where the Corporation has concluded that possibility of cash outflow is remote while preparing its Standalone Ind AS Financial Statements. ⢠We have assessed the Managementâs underlying assumptions in estimating the possible outcome of such disputed claims/ cases against the Corporation, based on records and judicial precedents made available. |
4. |
Inventories: Verification and valuation of Inventories and related write down, if any, is a significant area requiring Managementâs judgment of estimates and application of accounting policies that have significant effect on the amounts recognized in the Standalone Ind AS Financial Statements. Accordingly, we considered this as a Key Audit Matter. |
Our audit approach involved the following combination of test of control design, implementations, operating effectiveness and substantive testing in respect of verification and valuation of inventories: ⢠We evaluated the system of inventory monitoring and control. It was observed that inventory has been physically verified by the Management during the year at reasonable intervals. ⢠Our audit teams have also physically verified on sample basis the Inventories at various locations and compliance with cut off procedures. However, since physical verification at certain locations was not possible for us, in such cases we have relied on the physical verification of inventory carried out by the Management. ⢠In respect of inventory lying with third parties, we have ascertained that these have substantially been confirmed by them. We also examined the system of records maintenance for stocks lying at third party locations. ⢠We have also tested the values considered in respect of Net realisable value, cost of products and verified these on sample basis with the inventory valuation and accounting entries posted in this regard. |
S.No. |
Key Audit Matter |
Auditorsâ Response |
5. |
Property, Plant & Equipment: Estimates of useful lives and residual value of Property, Plant and Equipment is a significant area requiring Management judgment of estimates and application of accounting policies that have significant effect on the amounts recognized in the Standalone Ind AS Financial Statements. Accordingly, we considered this as a Key Audit Matter. |
Our audit approach involved the following combination of test of control design, implementations and operating effectiveness and substantive testing in respect of verification and recording of Property, Plant & Equipment: ⢠We examined whether the Corporation has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. ⢠The physical verification of Property, Plant and Equipment (except LPG Cylinders and pressure regulators with customers) has been carried out by the Management in accordance with the phased program of verification of all assets and necessary accounting entries based on such physical verification have been appropriately posted which were verified by us. ⢠Changes in the useful life and residual value of class of assets were adopted based on internal evaluation and was also comparable with other entities in the same industry. ⢠We have tested the computation of depreciation on sample basis. |
6. |
Goodwill: The Corporation tests for impairment of Goodwill at each reporting date, or whenever events or circumstances indicate that the implied fair value of goodwill is less than its carrying amount. Accordingly, we considered this as a Key Audit Matter. |
Our Audit Procedures included Test of Details in respect of the following: ⢠Obtained an understanding from the management with respect to process and controls followed by the Corporation to perform annual impairment test related to goodwill. ⢠Obtained the impairment analysis model from the management and reviewed their conclusions. ⢠We assessed the reasonableness of the assumptions used and appropriateness of the valuation methodology applied. ⢠Tested the discount rate and long term growth rates used in the forecast including comparison to economic and industry forecasts where appropriate. ⢠Assessed and validated the adequacy and appropriateness of the disclosures made by the management in the standalone financial statements. |
S.No. |
Key Audit Matter |
Auditorsâ Response |
7. |
Information Technology: A significant part of the Corporationâs financial reporting process is heavily reliant on IT systems with automated processes and controls over the capture, storage and extraction of information. A fundamental component of these processes and controls is ensuring appropriate user access and change management protocols exist and being adhered to. These protocols are important because they ensure that access and changes to IT systems and related data are made and authorized in an appropriate manner. As our audit sought to place a high level of reliance on IT systems and application controls related to financial reporting, high proportion of the overall audit effort was in Information Technology (IT) Systems and Controls. We focused our audit on those IT systems and controls that are significant to the Corporationâs financial reporting process. Accordingly, we considered this as a Key Audit Matter. |
Our procedures included: We focused our audit on those IT systems and controls that are relevant to preparation of financial statements for financial year ended 31st March 23. As audit procedures over IT Systems and controls require specific expertise, we involved our IT specialist. Our review of the IT Controls covers the following areas: ⢠Physical and Logical Security; ⢠Change Management; ⢠Backup, Business Continuity and ⢠IT Operations. Our assessment of the IT Controls is performed according to the following approach: ⢠Understanding the IT environment. ⢠Information gathering about the control framework surrounding the IT environment. ⢠Evidence gathering with respect to Control testing. ⢠Review of Implementation of controls testing. ⢠Review of limited cases to identify whether there had been unauthorized or inappropriate access or changes made to critical IT systems and related data. |
5. The Corporationâs Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Boardâs Report including Annexures to Boardâs Report, Business Responsibility Report, Corporate Governance and Shareholderâs Information, but does not include the Standalone Ind AS Financial Statements and our audit report thereon.
Our opinion on the Standalone Ind AS Financial Statements does not cover the other information and we do not express any form of assurance thereon.
6. In connection with our audit of the Standalone Ind AS Financial Statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Standalone Ind AS Financial Statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
7. 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 to those charged with governance and review the steps taken by the management to communicate to those in receipt of the other information, if previously issued, to inform them of the revision.
The Other information is expected to be made available to us after the date of this auditorâs report and if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.
8. The Corporationâs Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Standalone Ind AS Financial Statements that give a true and fair view of the financial position, financial performance including the other comprehensive income, cash flows and changes in equity of the Corporation in accordance with the Ind AS and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Corporation and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Ind AS Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
9. In preparing the Standalone Ind AS Financial Statements, management is responsible for assessing the Corporationâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Corporation or to cease operations, or has no realistic alternative but to do so.
10. The Corporationâs Board of Directors / Management is responsible for overseeing the Corporationâs financial reporting process.
Auditorsâ Responsibilities for the Audit of the Standalone Ind AS Financial Statements
11. Our objectives are to obtain reasonable assurance about whether the Standalone Ind AS 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 Ind AS Financial Statements.
12. 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 Ind AS 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 financial controls 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 Corporation 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 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 Corporationâs 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 Ind AS 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 auditorsâ report. However, future events or conditions may cause the Corporation to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the Standalone Ind AS Financial Statements, including the disclosures, and whether the Standalone Ind AS Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
13. Materiality is the magnitude of misstatements in the Standalone Ind AS Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the 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 Ind AS standalone financial statements.
14. 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.
15. 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.
16. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Ind AS 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.
17. Other Matters
A. In terms of Ministry of Corporate Affairs (MCA) Order dated June 22, 2022, âBharat Oman Refineries Limitedâ (BORL), a wholly owned subsidiary of the Corporation has been amalgamated with the Corporation. Upon filing the Copy of Order sanctioning the Scheme of Merger (âBORL Schemeâ) with the Registrar of Companies (ROC), on July 1,2022, BORL stands merged with the Corporation. The BORL Scheme has become effective from the appointed date i.e. October 1, 2021. To comply with requirements of Ind AS 103 - (âBusiness Combinationsâ), the restatement of the financial statements has been given effect from the date of control
i.e. June 30, 2021 when BORL became wholly owned subsidiary of the Corporation.
B. In terms of Ministry of Corporate Affairs (MCA) Order dated August 8, 2022, âBharat Gas Resources Limitedâ (BGRL), a wholly owned subsidiary of the Corporation has been amalgamated with the Corporation. Upon filing the Copy of Order sanctioning the Scheme of Merger (âBGRL Schemeâ) with the Registrar of Companies (ROC), on August 16, 2022, BGRL stands merged with the Corporation. The BGRL Scheme has become effective from the appointed date i.e. April 1,2021. To comply with requirements of Ind AS 103 - (âBusiness Combinationsâ), the restatement of the financial statements has been given effect from the beginning of the preceding period i.e. April 1,2021 in the financial statements (being the date of control with respect to BGRL is the date of incorporation of BGRL i.e. June 7, 2018).
C. Accordingly, the figures of standalone financial statements for previous year ended March 31, 2022 have been restated basis the audited standalone financial statements of Corporation on which we have issued our audit report dated May 25, 2022 and standalone financial statements of BORL and BGRL which were audited by other auditors, who have issued an unmodified opinion vide their reports dated May 4, 2022 and May 9, 2022 respectively after considering the elimination / adjustments.
D. With respect to 17(C) above, we have audited the eliminations / adjustments which have been reported in the standalone financial statements. However, we have not issued a separate report on these restated figures since these have been audited by respective auditors in the previous year. The impact of the Business combination has been explained in Note 44 to the Standalone Financial Statements.
Our Conclusion is not modified in respect of the above matters.
18. As required by the Companies (Auditorâs Report) Order, 2020 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, and on the basis of verification of the books and records of the Corporation, as we considered appropriate and according to the information and explanations given to us, we give in âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.
19. As required by Section 143(5) of the Act, we give in âAnnexure Bâ, a statement on the matters specified by the Comptroller and Auditor General of India for the Corporation.
20. As required 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 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 Corporation so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Cash Flow and Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account.
d) In our opinion, the aforesaid Standalone Ind AS Financial Statements comply with the Ind AS specified under Section 133 of the Act.
e) In view of exemption given vide notification no. G.S.R. 463(E) dated June 5, 2015, issued by Ministry of Corporate Affairs, provisions of Section 164(2) of the Act regarding disqualification of directors, are not applicable to the Corporation;
f) With respect to the adequacy of the internal financial controls over financial reporting of the Corporation and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Câ.
g) Being a Government Corporation, pursuant to the notification number GSR 463(E) dated 5th June, 2015 issued by the Government of India, the provisions of section 197 of the Act are not applicable to the Corporation.
h) With respect to the other matters to be included in the Auditorsâ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:
i. The Corporation has disclosed the impact, if any, of pending litigations on its financial position in its Standalone Ind AS Financial Statements. (Refer Note 57 of the Standalone Ind AS Financial Statements;)
ii. The Corporation 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 Corporation.
iv. (a) The Management has represented that, to the best of its knowledge and belief, no funds (which
are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Corporation to or in any other person or entity, including foreign entity (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Corporation (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, no funds (which are material either individually or in the aggregate) have been received by the Corporation from any person or entity, including foreign entity (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Corporation shall, whether, 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 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), as provided under (a) and (b) above, contain any material misstatement.
v. As stated in Note 24 to the standalone I nd AS financial statements, the Board of Directors of the Corporation have proposed final dividend for the year which is in accordance with section 123 of the Act to the extent it applies to declaration of dividend. Final dividend paid during the year in respect of the previous year is in accordance with section 123 of the Act.
vi. In respect of the financial year 2022-23, Corporation has not been mandated to use the accounting software with requisite audit trail facility. Accordingly, proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the corporation only w.e.f. April 1,2023. Consequently, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 is not applicable.
Chartered Accountants Chartered Accountants
ICAI FRN: 104607W/W100166 ICAI FRN: 100186W
Sai Venkata Ramana Damarla Rajesh S. Joshi
Partner Partner
M. No.107017 M. No.038526
UDIN: 23107017BGXHFE3000 UDIN: 23038526BGWQDA7173
Place: Mumbai Place: Mumbai
Date: May 22, 2023 Date: May 22, 2023
Mar 31, 2022
Report on the Audit of the Standalone Ind AS Financial Statements
1. We have audited the accompanying Standalone Indian Accounting Standards (âInd ASâ) Financial Statements of Bharat Petroleum Corporation Limited (âthe Corporationâ), which comprise the Balance Sheet as at March 31, 2022, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year ended on that date, and a summary of the Significant Accounting Policies and other explanatory information (hereinafter referred to as âthe Standalone Ind AS Financial Statementsâ).
2. 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 Companies Act, 2013 (âthe Actâ) 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 (âInd ASâ), and other accounting principles generally accepted in India, of the state of affairs of the Corporation as at March 31, 2022, the profit and total comprehensive income, its cash hows and changes in equity for the year ended on that date.
Basis for Opinion
3. We conducted our audit of the Standalone Ind AS Financial Statements in accordance with the Standards on Auditing (âSAsâ) specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditorâs Responsibilities for the Audit of the Standalone Ind AS Financial Statements Section of our report. We are independent of the Corporation 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 Ind AS 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 ICAIâs Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Ind AS Financial Statements.
Key Audit Matters
4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Ind AS Financial Statements of the current period. These matters were addressed in the context of our audit of the Standalone Ind AS 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:
S.No. |
Key Audit Matter |
Auditorsâ Response |
1. |
Valuation of Investment in E&P Subsidiary (Refer Note 7 and Note 56): The Corporation has an investment of '' 7,401.37 Crores in 100% subsidiary Bharat PetroResources Ltd (BPRL). This subsidiary along with its stepdown subsidiaries, JVs & Associates holds participating interest in various oil / gas blocks for exploration & evaluation, development and production activities (E&P). The Corporationâs realisation from these E&P investments is dependent on the continued successful operations / development of reserves resulting in expected earnings and revenue growth of the respective companies. During FY 2021-22, BPRL has relinquished or impaired certain oil and gas blocks on account of changes in circumstances and prospects of the blocks. The above factors have impacted the value in use of BPRLs assets and consequently the Corporationâs impairment analysis in respect of its Investment in BPRL. Accordingly, we consider this as a Key Audit Matter. |
The following procedures were carried out in this regard: ⢠We evaluated the design, implementation and operating effectiveness of key controls in relation to the annual impairment testing activity carried out by the Corporation for its investments in Subsidiaries. ⢠We reviewed the audited consolidated Ind AS Financial Statements of BPRL for FY 2021-22 and the independent auditorâs report thereon to ascertain if there is any further diminution in the carrying value of the Corporationâs investments therein. ⢠We evaluated the impairment analysis carried out during the year by the Corporation, which included an independent comparison of externally / internally assessed value in use of BPRLs Net Assets with carrying cost of investment in BPRL in the Corporationâs Books of Accounts. |
2. |
Computation of Expected Credit Loss (ECL): Trade receivables and loans granted under the Pradhan Mantri Ujwala Yojana (PMUY) scheme constitute a significant component of the total current assets of the Corporation. At each reporting date, the Corporation recognizes Lifetime ECL on Trade Receivables using a âsimplified approachâ and 12 month ECL on loans are granted under the PMUY scheme wherein we relied on Managementâs estimates regarding probability of default rates linked to age-wise bucketing of the corresponding asset. Since, this is a technical matter based on probable outcome of default, we considered this as a Key Audit Matter. |
Our audit approach consisted testing of the design, implementation and operating effectiveness of the internal controls and substantive testing as follows: ⢠In respect of loans granted under PMUY the Corporation along with other few industry peers have derived a common methodology for calculating ECL, based on the broad category of active and inactive consumers and last refill date with expected loan recovery period. We checked the working of the same and it is in line with the common methodology document shared with us. ⢠We have evaluated the methodology for age-wise bucketing of trade receivables and key assumptions underlying the probability of default estimates on the same, to ascertain that the same were broadly in-line with the Corporationâs historical default rates and have considered available information regarding the current economic scenario. ⢠We selected a few sample outstanding receivable cases having different overdue periods and checked that the computation of ECL has been appropriately carried out in line with the Corporationâs policy. |
S.No. |
Key Audit Matter |
Auditorsâ Response |
3. |
Evaluation of Contingent Liabilities: Contingent liabilities disclosed are in respect of items which in each case are above the threshold limit. The Corporation has material uncertain positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes. Contingent liabilities are not recognized in the Standalone Ind AS Financial Statements but are disclosed unless the possibility of an outflow of economic resources is considered remote. In view of significant management estimate and judgement involved, we considered this as a Key Audit Matter. |
The following audit procedures were carried out in this regard: ⢠We examined sample items above the threshold limit for determination of contingent liabilities and obtained details of completed Excise, VAT / Sales Tax / Entry Tax assessments, demands as well as other disputed claims against the Corporation as on March 31, 2022. The Corporation has obtained opinion from tax consultants in various disputed matters. We have relied upon such opinions and litigation history where the Corporation has concluded that possibility of cash outflow is remote while preparing its Standalone Ind AS Financial Statements. ⢠We have assessed the Managementâs underlying assumptions in estimating the possible outcome of such disputed claims / cases against the Corporation, based on records and judicial precedents made available. |
4. |
Inventories: Verification and valuation of Inventories and related write down, if any, is a significant area requiring Managementâs judgment of estimates and application of accounting policies that have significant effect on the amounts recognized in the Standalone Ind AS Financial Statements. Accordingly, we considered this as a Key Audit Matter. |
Our audit approach involved the following combination of test of control design, implementations, operating effectiveness and substantive testing in respect of verification and valuation of inventories: ⢠We evaluated the system of inventory monitoring and control. It was observed that inventory has been physically verified by the Management during the year at reasonable intervals. ⢠Our audit teams have also physically verified on sample basis the Inventories at various locations and compliance with cut off procedures. However, since physical verification at certain locations was not possible for us, in such cases we have relied on the physical verification of inventory carried out by the Management. ⢠In respect of inventory lying with third parties, we have ascertained that these have substantially been confirmed by them. We also examined the system of records maintenance for stocks lying at third party locations. ⢠We have also tested the values considered in respect of Net Realisable Value, cost of products and verified these on sample basis with the inventory valuation and accounting entries posted in this regard. |
S.No. |
Key Audit Matter |
Auditorsâ Response |
5. |
Property, Plant and Equipment: Estimates of useful lives and residual value of Property, Plant and Equipment is a significant area requiring Management judgment of estimates and application of accounting policies that have significant effect on the amounts recognized in the Standalone Ind AS Financial Statements. Accordingly, we considered this as a Key Audit Matter. |
Our audit approach involved the following combination of test of control design, implementations and operating effectiveness and substantive testing in respect of verification and recording of Property, Plant and Equipment: ⢠We examined whether the Corporation has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. ⢠The physical verification of Property, Plant and Equipment (except LPG Cylinders and pressure regulators with customers) has been carried out by the Management in accordance with the phased program of verification of all assets and necessary accounting entries based on such physical verification have been appropriately posted which were verified by us. ⢠Changes in the useful life and residual value of class of assets were adopted based on internal evaluation and was also comparable with other entities in the same industry. ⢠We have tested the computation of depreciation on sample basis. |
6. |
Information Technology A significant part of the Companyâs financial reporting process is heavily reliant on IT systems with automated processes and controls over the capture, storage and extraction of information. A fundamental component of these processes and controls is ensuring appropriate user access and change management protocols exist and being adhered to. These protocols are important because they ensure that access and changes to IT systems and related data are made and authorized in an appropriate manner. As our audit sought to place a high level of reliance on IT systems and application controls related to financial reporting, high proportion of the overall audit effort was in Information Technology (IT) Systems and Controls. We focused our audit on those IT systems and controls that are significant to the Companyâs financial reporting process. Accordingly, we considered this as a Key Audit Matter. |
Our procedures included: We focused our audit on those IT systems and controls that are relevantto preparation of fnancial statements. As audit procedures over IT Systems and controls require specific expertise, we involved our IT specialist. Our review of the IT Controls covers the following areas: ⢠Physical and Logical Security; ⢠Change Management; ⢠Backup, Business Continuity and ⢠IT Operations. Our assessment of the IT Controls is performed according to the following approach: ⢠Understanding the IT environment; ⢠Information gathering about the control framework surrounding the IT environment; ⢠Evidence gathering with respect to Control testing; ⢠Review of Implementation of controls testing; ⢠Review of limited cases to identify whether there had been unauthorized or inappropriate access or changes made to critical IT systems and related data. |
5. The Corporationâs Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Boardâs Report including Annexures to Boardâs Report, Business Responsibility Report, Corporate Governance and Shareholderâs Information, but does not include the Standalone Ind AS Financial Statements and our audit report thereon.
Our opinion on the Standalone Ind AS Financial Statements does not cover the other information and we do not express any form of assurance thereon.
6. In connection with our audit of the Standalone Ind AS Financial Statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Standalone Ind AS Financial Statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
7. 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 to those charged with governance and review the steps taken by the management to communicate to those in receipt of the other information, if previously issued, to inform them of the revision.
The other information is expected to be made available to us after the date of this auditorsâ report and if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.
Board of Directors / Managementâs Responsibility for the Standalone Ind AS Financial Statements
8. The Corporationâs Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these Standalone Ind AS Financial Statements that give a true and fair view of the financial position, financial performance including the other comprehensive income, cash hows and changes in equity of the Corporation in accordance with the Ind AS and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Corporation and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Ind AS Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
9. In preparing the Standalone Ind AS Financial Statements, Management is responsible for assessing the Corporationâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Management either intends to liquidate the Corporation or to cease operations, or has no realistic alternative but to do so.
10. The Corporationâs Board of Directors / Management is responsible for overseeing the Corporationâs financial reporting process.
Auditorsâ Responsibilities for the Audit of the Standalone Ind AS Financial Statements
11. Our objectives are to obtain reasonable assurance about whether the Standalone Ind AS 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 Ind AS Financial Statements.
12. 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 Ind AS 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 financial controls 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 Corporation 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 the Management.
⢠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 Corporationâs 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 Ind AS 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 auditorsâ report. However, future events or conditions may cause the Corporation to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the Standalone Ind AS Financial Statements, including the disclosures, and whether the Standalone Ind AS Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
13. Materiality is the magnitude of misstatements in the Standalone Ind AS Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the 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 Ind AS Financial Statements.
14. 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.
15. 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.
16. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Ind AS 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
17. As required by the Companies (Auditorâs Report) Order, 2020 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, and on the basis of verification of the books and records of the Corporation, as we considered appropriate and according to the information and explanations given to us, we give in âAnnexure Aâ, a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.
18. As required by Section 143(5) of the Act, we give in âAnnexure Bâ, a statement on the matters specified by the Comptroller and Auditor - General of India for the Corporation.
19. As required 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 which to the best of our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion, proper books of accounts as required by law have been kept by the Corporation so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Cash Flow and Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of accounts.
d) In our opinion, the aforesaid Standalone Ind AS Financial Statements comply with the Ind AS specified under Section 133 of the Act.
e) In view of exemption given vide notification no. G.S.R. 463(E) dated June 5, 2015, issued by Ministry of Corporate Affairs, provisions of Section 164(2) of the Act regarding disqualification of directors, are not applicable to the Corporation.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Corporation and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Câ.
g) Being a Government Company, pursuant to the notification number G.S.R. 463(E) dated June 5,2015 issued by Ministry of Corporate Affairs, the provisions of Section 197 of the Act are not applicable to the Corporation.
h) With respect to the other matters to be included in the Auditorsâ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:
i. The Corporation has disclosed the impact, if any, of pending litigations on its financial position in its Standalone Ind AS Financial Statements. (Refer Note 63 of the Standalone Ind AS Financial Statements)
ii. The Corporation 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 Corporation.
iv. (a) The Management has represented that, to the best of its knowledge and belief, no funds (which
are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Corporation to or in any other person or entity, including foreign entity (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Corporation (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf ofthe Ultimate Beneficiaries;
(b) The Management has represented that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Corporation from any person or entity, including foreign entity (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Corporation shall, whether 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 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), as provided under (a) and (b) above, contain any material misstatement.
v. The dividend declared or paid during the year by the Corporation are in compliance with Section 123 of the Act.
For Kalyaniwalla and Mistry LLP For K. S. Aiyar & Co.
Chartered Accountants Chartered Accountants
ICAI FRN: 104607W/W100166 ICAI FRN: 100186W
Sai Venkata Ramana Damarla Rajesh S. Joshi
Partner Partner
Membership No. 107017 Membership No. 038526
UDIN: 22107017AJ0YYP5771 UDIN: 22038526AJ0ZJL3489
Place: Mumbai Place: Mumbai
Date: 25th May, 2022 Date: 25th May, 2022
Mar 31, 2021
BHARAT PETROLEUM CORPORATION LIMITED
Opinion
1.    We have audited the accompanying standalone Indian Accounting Standards (âInd ASâ) Financial Statements of Bharat Petroleum Corporation Limited (âthe Corporationâ), which comprise the Balance Sheet as at March 31,2021, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year ended on that date, and a summary of the Significant Accounting Policies and other explanatory information (hereinafter referred to as âthe Standalone Ind AS Financial Statements â).
2.    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 Companies Act, 2013 (âthe Actâ) 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, and other accounting principles generally accepted in India, of the state of affairs (financial position) of the Corporation as at March 31,2021, the profit and total comprehensive income, its cash flows and changes in equity for the year ended on that date.
Basis for Opinion
3.    We conducted our audit of the Standalone Ind AS Financial Statements in accordance with the Standards on Auditing (âSAsâ) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditorâs Responsibilities for the Audit of the Standalone Ind AS Financial Statements section of our report. We are independent of the Corporation in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the independence requirements that are relevant to our audit of the Standalone Ind AS 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 ICAIâs 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 Ind AS Financial Statements.
Emphasis of Matter
4.    We draw attention to Note 71 in the the Standalone Ind AS Financial Statements, regarding the impact of Covid 19 pandemic and assessment made by the Management on its business and financial activities. This assessment and the outcome of the pandemic is as made by the Management and dependent on future circumstances.
Our opinion is not modified in respect of this matter.
Key Audit Matters
5.    Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Ind AS Financial Statements of the current period. These matters were addressed in the context of our audit of the Standalone Ind AS 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:
Sr.No. |
Key Audit Matter |
Auditorsâ Response |
1. |
Valuation of Investment in E&P Subsidiary: The Corporation has an investment of Rs. |
The following procedures were carried out in this regard: |
 |
6,276.37 Crores in 100% subsidiary Bharat Petro Resources Ltd (BPRL). |
⢠We evaluated the design and implementation of key controls in relation to the annual impairment testing |
 |
This subsidiary alongwith its step down |
activity carried out by the Corporation for its |
 |
subsidiaries, JVs & Associates holds |
investments in Subsidiaries. |
 |
participating interest in various oil/ gas blocks for exploration & evaluation, development and production activities (E&P). |
⢠We reviewed the audited consolidated Ind AS Financial Statements of BPRL for FY 2020-21 and the independent auditorâs report thereon to ascertain if there |
 |
The Corporationâs realisation from these E&P |
are any signs of permanent dimunition in the |
 |
investments is dependent on the continued |
Corporationâs investments therein. |
 |
successful operations/ development of reserves resulting in expected earnings and revenue growth of the respective companies. |
⢠We assessed the Managementâs explanation regarding key factors which have led to significant dimunition in value of BPRLâs assets vis-a-vis the previous year and |
 |
The continuing COVID-19 pandemic may have impact on global economy and consequently on crude prices. Further, during FY 2020-21, BPRL has relinquished or impaired certain oil and gas blocks on account of changes in circumstances and prospects of the blocks. The above factors have impacted the value in use of BPRLâs assets and consequently the Corporationâs impairment analysis in respect of its Investment in BPRL. |
consequent trigger for impairment of the Corporationâs investment in the same. ⢠We evaluated the impairment analysis carried out by the Corporation, which included comparison of externally assessed value in use of BPRLâs Net Assets with carrying cost of investment in BPRL in the Corporationâs Books of Accounts. |
 | ||
 |
2. |
Computation of Expected Credit Loss (ECL): |
 |
 |
Trade receivables and loans granted under the |
Our audit approach consisted testing of the design and |
 |
Pradhan Mantri Ujwala Yojana (PMUY) |
operating effectiveness of the internal controls and |
 |
scheme constitute a significant component of |
substantive testing as follows: |
 |
the total current assets of the Corporation. |
⢠In respect of loans granted under PMUY, the |
 |
At each reporting date, the Corporation |
Corporation along with other few industry peers have |
 |
recognizes Lifetime ECL on Trade Receivables |
derived a common methodology for calculating ECL, |
 |
using a âsimplified approachâ and 12 month |
based on the broad category of active and inactive |
 |
ECL on loans granted under the PMUY |
consumers and last refill date with expected loan |
 |
scheme, which rely on Managementâs |
recovery period. We checked the working of the same |
 |
estimates regarding probability of default rates |
and it was in line with the common methodology |
 |
linked to age-wise bucketing of the |
document shared with us. |
 |
corresponding asset. The COVID 19 pandemic |
⢠We have evaluated the methodology for age-wise |
 |
may also have an impact on the Managementâs |
bucketing of trade receivables and key assumptions |
 |
estimate of probability of default as on March |
underlying the probability of default estimates on the |
 |
31,2021 . |
same, to ascertain that the same were broadly in-line with the Corporationâs historical default rates and have considered available information regarding the current economic scenario. |
Sr.No. |
Key Audit Matter |
Auditorsâ Response |
 |  |
⢠We selected a few sample outstanding receivable cases having different overdue periods and checked that the computation of ECL has been appropriately carried out in line with the Corporationâs policy. |
3. |
Evaluation of Contingent Liabilities: The Corporation has material uncertain positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes. Contingent liabilities are not recognized in the Standalone Ind AS Financial Statements but are disclosed unless the possibility of an outflow of economic resources is considered remote. Contingent liabilities disclosed are in respect of items which in each case are above the threshold limit. |
The following audit procedures were carried out in this regard: ⢠   We examined sample items above the threshold limit for determination of contingent liabilities and obtained details of completed Excise, VAT/ Sales Tax/ Entry Tax assessments, demands as well as other disputed claims against the Corporation as on March 31, 2021. The Corporation has obtained opinion from tax consultants in various disputed matters. We have relied upon such opinions and litigation history where the Corporation has concluded that possibility of cash outflow is remote while preparing its Standalone Ind AS Financial Statements. ⢠   We have assessed the Managementâs underlying assumptions in estimating the possible outcome of such disputed claims/ cases against the Corporation, based on records and judicial precedents made available. |
4. |
Inventories: |
 |
 |
Verification and valuation of Inventories is a |
Our audit approach involved the following combination of |
 |
significant area requiring Managementâs |
test of control design and substantive testing in respect of |
 |
judgment of estimates and application of |
verification and valuation of inventories: |
 |
accounting policies that have significant effect |
⢠We evaluated the system of inventory monitoring and |
 |
on the amounts recognized in the Standalone |
control. It was observed that inventory has been |
 |
Ind AS Financial Statements. |
physically verified by the Management during the year at reasonable intervals. ⢠   Our audit teams have also physically verified on sample basis the Inventories at various locations and compliance with cut off procedures. However, since physical verification at certain locations was not possible for us, in such cases we have relied on the physical verification of inventory carried out by the Management. ⢠   In respect of inventory lying with third parties, we have ascertained that these have substantially been confirmed by them. We also examined the system of records maintenance for stocks lying at third party locations. |
Sr.No. |
Key Audit Matter |
Auditorsâ Response |
 |  |
⢠We have also tested the values considered in respect of Net realisable value, cost of products and verified these on sample basis with the inventory valuation and accounting entries posted in this regard. |
5. |
Property, Plant & Equipment: Estimates of useful lives and residual value of Property, Plant and Equipment is a significant area requiring Management judgment of estimates and application of accounting policies that have significant effect on the amounts recognized in the Standalone Ind AS Financial Statements. |
Our audit approach involved the following combination of test of control design and substantive testing in respect of verification and recording of Property, Plant & Equipment: ⢠   We examined whether the Corporation has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. ⢠   The physical verification of Property, Plant and Equipment (except LPG Cylinders and pressure regulators with customers) has been carried out by the Management in accordance with the phased program of verification of all assets and necessary accounting entries based on such physical verification have been appropriately posted which were verified by us. ⢠   Changes in the useful life and residual value of class of assets was adopted based on internal evaluation and was also comparable with other entities in the same industry. ⢠   We have tested the computation of depreciation on sample basis. |
6.    The Corporationâs Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Boardâs Report including Annexures to Boardâs Report, Business Responsibility Report, Corporate Governance and Shareholderâs Information, but does not include the Standalone Ind AS Financial Statements and our audit report thereon.
7.    Our opinion on the Standalone Ind AS Financial Statements does not cover the other information and we do not express any form of assurance thereon.
8.    In connection with our audit of the Standalone Ind AS Financial Statements , our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Standalone Ind AS Financial Statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
9.    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.
Managementâs Responsibility for the Standalone Ind AS Financial Statements
10.    The Corporationâs Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Standalone Ind AS Financial Statements that give a true and fair view of the financial position, financial performance, total comprehensive income, cash flows and changes in equity of the Corporation in
accordance with the Ind AS and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Corporation and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Ind AS Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
11.    In preparing the Standalone Ind AS Financial Statements , management is responsible for assessing the Corporationâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Corporation or to cease operations, or has no realistic alternative but to do so.
12.    The Corpoartionsâs Board of Directors management is responsible for overseeing the Corporationâs financial reporting process.
Auditorsâ Responsibilities for the Audit of the Standalone Ind AS Financial Statements
13.    Our objectives are to obtain reasonable assurance about whether the Standalone Ind AS 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 Ind AS Financial Statements .
14.    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 Ind AS 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 financial controls 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 Corporation 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 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 Corporationâs 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 Ind AS 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 auditorsâ report. However, future events or conditions may cause the Corporation to cease to continue as a going concern.
⢠   Evaluate the overall presentation, structure and content of the Standalone Ind AS Financial Statements, including the disclosures, and whether the Standalone Ind AS Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
15.    Materiality is the magnitude of misstatements in the Standalone Ind AS Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the 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 financial statements.
16.    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.
17.    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.
18.    From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Ind AS 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
19.    As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, and on the basis of such checks of the books and records of the Corporation, as we considered appropriate and according to the information and explanations given to us, we give in âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.
20.    As required by Section 143(5) of the Act, we give in âAnnexure Bâ, a statement on the matters specified by the Comptroller and Auditor-General of India for the Corporation.
21. Â Â Â As required 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 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 Corporation so far as it appears from our examination of those books.
c)    The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Cash Flow and Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account.
d)    In our opinion, the aforesaid Standalone Ind AS Financial Statements comply with the Ind AS specified under Section 133 of the Act.
e)    In view of exemption given vide notification no. G.S.R. 463(E) dated June 5, 2015, issued by Ministry of Corporate Affairs, provisions of Section 164(2) of the Act regarding disqualification of directors, are not applicable to the Corporation;
f)    With respect to the adequacy of the internal financial controls over financial reporting of the Corporation and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Câ.
g)    With respect to the other matters to be included in the Auditorsâ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:
i.    The Corporation has disclosed the impact, if any, of pending litigations on its financial position in its standalone Ind AS Standalone Ind AS Financial Statements. (Refer Note 63 of the Standalone Ind AS Financial Statements;)
ii.    The Corporation 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 Corporation.
Chartered Accountants    Chartered Accountants
ICAI FRN 101745W Â Â Â ICAI FRN 101569W
A K Pradhan    Kaushal Muzumdar
Partner    Partner
Membership No. 032156 Â Â Â Membership No. 100938
UDIN: 21032156AAAAAS8621 Â Â Â UDIN: 21100938AAAAAW6386
Place: Mumbai Date: 26th May 2021
Mar 31, 2019
INDEPENDENT AUDITORS'' REPORT TO THE MEMBERS OF
BHARAT PETROLEUM CORPORATION LIMITED
Report on the Audit of the Standalone Ind AS Financial Statements
Opinion
1. We have audited the accompanying standalone Indian Accounting Standards ("Ind AS") financial statements of Bharat Petroleum Corporation Limited ("the Corporation"), which comprise the Balance Sheet as at March 31, 2019, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year ended on that date, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "the Standalone Ind AS Financial Statements").
2. 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 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, and other accounting principles generally accepted in India, of the state of affairs (financial position) of the Corporation as at March 31, 2019, the profit and total comprehensive income, its cash flows and changes in equity for the year ended on that date.
Basis for Opinion
3. We conducted our audit of the Standalone Ind AS 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 Standalone Ind AS Financial Statements section of our report. We are independent of the Corporation in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the independence requirements that are relevant to our audit of the Standalone Ind AS 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 Standalone Ind AS Financial Statements .
Key Audit Matters
4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Ind AS Financial Statements of the current period. These matters were addressed in the context of our audit of the Standalone Ind AS 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:
S. No. |
Key Audit Matter |
Auditors'' Response |
1 |
Computation of Expected Credit Loss (ECL): Trade receivables and loans to LPG consumers granted under the Pradhan Mantri Ujwala Yojana (PMUY) scheme constitute a significant component of the total current assets of the Corporation. The Corporation recognizes Lifetime ECL at each reporting date on these current assets using a ''simplified approach'', which relies on Management''s estimates regarding probability of default rates linked to age-wise bucketing of the corresponding asset. |
Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows: ⢠We have evaluated the methodology for age-wise bucketing of trade receivables and key assumptions underlying the probability of default estimates on the same, to ascertain that the same were broadly in-line with the Corporation''s historical default rates. ⢠We selected a few sample outstanding receivable cases having different overdue period and checked if the computation of ECL is appropriate in line with the Corporation''s policy. ⢠In respect of loans to LPG consumers granted under the PMUY scheme, we reviewed the methodology used for segregating the total outstanding loans into buckets and the assumptions underlying probability of default estimates in respect of the same. Based on discussions with the Management, we understand that this methodology was arrived at after discussion with few industry peers. |
2 |
Investments in E&P Subsidiary: The Corporation has an investment of Rs 5,494.41 Crores in 100% subsidiary Bharat Petro Resources Ltd (BPRL). This subsidiary alongwith its step down subsidiaries, JVs & Associates holds participating interest in various oil/ gas blocks for exploration & evaluation, development and production activities (E&P). The Corporation''s realisation from these E&P investments is dependent on the continued successful operations/ development of reserves resulting in expected earnings and revenue growth of the respective companies. |
The following procedures were carried out in this regard: ⢠We evaluated the design and implementation of key controls in relation to the impairment testing carried out by the Corporation for E&P assets. ⢠We reviewed the audited financial statements of BPRL and the independent auditor''s report thereon to ascertain if there are any signs of permanent diminution in the Corporation''s investments therein. |
3 |
Evaluation of Contingent Liabilities: The Corporation has material uncertain positions including matters under dispute which involves significant judgment to estimate the possible outcome of these disputes. Contingent liabilities are not recognized in the financial statements but are disclosed unless the possibility of an outflow of economic resources is considered remote. Contingent liabilities disclosed are in respect of items which in each case are above the threshold limit. |
⢠We examined sample items above the threshold limit for recognition of contingent liabilities and obtained details of completed Excise, VAT/ Sales Tax/ Entry Tax assessments and demands as on March 31, 2019. ⢠We have assessed the Management''s underlying assumptions in estimating the possible outcome of the disputes. We also considered legal precedence and other rulings in evaluating Management''s position on these uncertain tax positions. Additionally, we considered the effect of new information in respect of uncertain tax positions at beginning of the financial year to evaluate whether any change was required to Management''s position on these uncertainties. |
4 |
Inventories: Valuation of Inventories is a significant area requiring Management''s judgment of estimates and application of accounting policies that have significant effect on the amounts recognized in the financial statements. |
⢠We evaluated the system of inventory monitoring and control. It was observed that inventory has been physically verified by the Management during the year at reasonable intervals. ⢠In respect of inventory lying with third parties, we have ascertained that these have substantially been confirmed by them. Our audit teams have also physically verified on sample basis the Inventories at various locations and compliance with cut off procedures. We examined the system for records maintenance for stocks lying at third party locations. ⢠We have also tested the values considered in respect of Net realisable value, cost of products and verified with the inventory valuation. |
5 |
Property, Plant & Equipment: Estimates of useful lives and residual value of Property, Plant and Equipment is a significant area requiring Management judgment of estimates and application of accounting policies that have significant effect on the amounts recognized in the financial statements. |
⢠We examined whether the Corporation has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. ⢠The physical verification of fixed assets (except LPG Cylinders and pressure regulators with customers) has been carried out by the Management in accordance with the phased program of verification of all assets which was reviewed by us. ⢠The useful life of the major assets was adopted based on internal estimate and was also comparable with other entities in the same industry. We have tested the computation of depreciation on sample basis. |
Information Other than the Standalone Ind AS Financial Statements and Auditors'' Report Thereon
5. The Corporation''s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Board''s Report including Annexures to Board''s Report, Business Responsibility Report, Corporate Governance and Shareholder''s Information, but does not include the Standalone Ind AS Financial Statements and our audit report thereon.
6. Our opinion on the Standalone Ind AS Financial Statements does not cover the other information and we do not express any form of assurance thereon.
7. In connection with our audit of the Standalone Ind AS Financial Statements , our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Standalone Ind AS Financial Statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
8. 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 Ind AS Financial Statements
9. The Corporation''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Standalone Ind AS Financial Statements that give a true and fair view of the financial position, financial performance, total comprehensive income, cash flows and changes in equity of the Corporation in accordance with the Ind AS and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Corporation and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Ind AS Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
10. In preparing the Standalone Ind AS Financial Statements , management is responsible for assessing the Corporation''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 management either intends to liquidate the Corporation or to cease operations, or has no realistic alternative but to do so.
11. The Corpoartions''s Board of Directors management is responsible for overseeing the Corporation''s financial reporting process.
Auditors'' Responsibilities for the Audit of the Standalone Ind AS Financial Statements
12. Our objectives are to obtain reasonable assurance about whether the Standalone Ind AS Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors'' 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 Standalone Ind AS Financial Statements.
13. 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 Ind AS 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 financial controls 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 Corporation 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 Corporation''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 Ind AS 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 auditors'' report. However, future events or conditions may cause the Corporation to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the Standalone Ind AS Financial Statements, including the disclosures, and whether the Standalone Ind AS Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
14. Materiality is the magnitude of misstatements in the Standalone Ind AS Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the 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 financial statements.
15. 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.
16. 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.
17. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Ind AS 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
18. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, and on the basis of such checks of the books and records of the Corporation, as we considered appropriate and according to the information and explanations given to us, we give in "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.
19. As required by Section 143(5) of the Act, we give in "Annexure B", a statement on the matters specified by the Comptroller and Auditor-General of India for the Corporation.
20. As required 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 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 Corporation so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Cash Flow and Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account.
d) In our opinion, the aforesaid Standalone Ind AS Financial Statements comply with the Ind AS specified under Section 133 of the Act.
e) In view of exemption given vide notification no. G.S.R. 463(E) dated June 5, 2015, issued by Ministry of Corporate Affairs, provisions of Section 164(2) of the Act regarding disqualification of directors, are not applicable to the Corporation;
f) With respect to the adequacy of the internal financial controls over financial reporting of the Corporation and the operating effectiveness of such controls, refer to our separate Report in "Annexure C".
g) With respect to the other matters to be included in the Auditors'' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:
i. The Corporation has disclosed the impact, if any, of pending litigations on its financial position in its standalone Ind AS financial statements. (Refer Note 63 of the standalone Ind AS financial statements;)
ii. The Corporation 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 Corporation.
For CVK & Associates |
For Borkar & Muzumdar |
Chartered Accountants |
Chartered Accountants |
ICAI FRN 101745W |
ICAI FRN 101569W |
Sd/- |
Sd/- |
A K Pradhan |
Devang Vaghani |
Partner |
Partner |
Membership No. 032156 |
Membership No.109386 |
Place: Mumbai |
|
Date: 20th May 2019 |
ANNEXURE A TO INDEPENDENT AUDITORS'' REPORT
[Referred to in paragraph 18 under ''Report on Other Legal and Regulatory Requirements'' in the Independent Auditors'' Report of even date to the members of Bharat Petroleum Corporation Limited ("the Corporation") on the standalone Ind AS financial statements as of and for the year ended March 31, 2019]
(i) (a) The Corporation has maintained proper records showing full particulars, including quantitative details and situation of fixed assets;
(b) As per information and explanations given to us, physical verification of fixed assets (except LPG Cylinders and pressure regulators with customers) has been carried out by the Management during the year in accordance with the phased programme of verification of all assets over three years which, in our opinion, is reasonable having regard to the size of the Corporation and the nature of its assets. As informed, no material discrepancies were noticed on such verification;
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Corporation, the title deeds of immovable properties are held in the name of the Corporation, except in cases given below:
Particulars |
Number of Cases |
Net Block ( Rs. in Crores) |
Remarks |
Freehold Land |
9 |
85.20 |
Documents of title not available for verification |
Freehold Land |
11 |
8.34 |
Documents of title lying with registration authorities, as informed |
Freehold Land |
2 |
203.70 |
Mutation Pending, as informed |
(ii) The inventory (excluding stocks with third parties and goods in transit) has been physically verified by the Management during the year at reasonable intervals. In respect of inventory lying with third parties, these have substantially been confirmed by them. No material discrepancies were noticed on physical verification of inventories carried out at the end of the year;
(iii) As informed, the Corporation has not granted any loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act. Accordingly, paragraphs 3(iii)(a), 3(iii)(b) and 3(iii)(c) of the Order are not applicable;
(iv) In our opinion and according to the information and explanations given to us, the Corporation has complied with the provisions of Section 185 and Section 186 of the Act, with respect to the loans, investments, guarantees and securities;
(v) In our opinion and according to the information and explanations given to us, the Corporation has not accepted any deposits from public within the provisions of Sections 73 to 76 of the Act read with The Companies (Acceptance of Deposits) Rules, 2014 and other relevant provisions of the Act;
(vi) We have broadly reviewed the books of account maintained by the Corporation in respect of products where the maintenance of cost records has been specified by the Central Government under Section 148(1) of the Act and the rules framed there under and we are of the opinion that prima-facie, the prescribed books of account and cost records have been made and maintained. We have not, however, made a detailed examination of the same with a view to determining whether they are accurate or complete;
(vii) (a) The Corporation is generally regular in depositing with appropriate authorities, undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Goods and Service tax (GST), Customs Duty, Excise Duty, Value Added Tax, Cess and any other material statutory dues applicable to it;
According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, GST, Customs Duty, Excise Duty, Value Added Tax, Cess and any other material statutory dues applicable to it, were outstanding, as on the last day of the financial year, for a period of more than six months from the date they became payable;
(b) According to the information and explanation given to us, the dues outstanding with respect to Income Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax have not been deposited on account of any dispute, are as per Statement 1;
(viii) According to the information and explanations given to us, the Corporation has not defaulted in repayment of loans or borrowing to financial institutions, banks, government or dues to debenture holders;
(ix) The Corporation did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year. According to the information and explanations given to us, money raised by way of term loans during the year have been applied for the purpose for which those were raised;
(x) During the course of our examination of the books and records of the Corporation, carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, no instances of fraud by the Corporation or on the Corporation by its officers and employees have been noticed or reported during the year;
(xi) In view of exemption given vide notification no. G.S.R. 463(E) dated June 5 2015, issued by Ministry of Corporate Affairs, provisions of Section 197 read with Schedule V of the Act regarding managerial remuneration are not applicable to the Corporation. Accordingly, paragraph 3(xi) of the Order is not applicable;
(xii) In our opinion and according to the information and explanations given to us, the Corporation is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable;
(xiii) According to the information and explanations given to us and based on our examination of the records of the Corporation, all transactions entered into by the Corporation with the related parties are in compliance with Sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the standalone Ind AS financial statements, as required by the applicable Indian Accounting Standards;
(xiv) According to the information and explanations given to us and based on our examination of the records, the Corporation has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, paragraph 3(xiv) of the Order is not applicable;
(xv) According to the information and explanations given to us and based on our examination of the records, the Corporation has not entered during the year into non-cash transactions with directors or persons connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable;
(xvi) The Corporation is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, paragraph 3(xvi) of the Order is not applicable.
For CVK & Associates |
For Borkar & Muzumdar |
Chartered Accountants |
Chartered Accountants |
ICAI FRN 101745W |
ICAI FRN 101569W |
Sd/- |
Sd/- |
A K Pradhan |
Devang Vaghani |
Partner |
Partner |
Membership No. 032156 |
Membership No.109386 |
Place: Mumbai |
|
Date: 20th May 2019 |
Statement 1 (Refer Clause vii (b) of Annexure A)
S. No. |
Name of the Statute |
Nature of Dues |
Forum Where Dispute is pending |
Amount |
Period block to which it relates ^ |
1. |
Central Excise Act, 1944 |
Duty, interest and penalty for cases relating to Determination of Assessable value, Cenvat Credit etc. |
Supreme Court |
1,247.03 |
2000 to 2010 |
High Court |
23.95 |
1995 to 2015 |
|||
Appellate Tribunal * |
1,240.48 |
1985 to 2019 |
|||
Appellate Authority ** |
85.31 |
1990 to 2019 |
|||
Total |
2,596.77 |
||||
2. |
Customs Act, 1962 |
Duty, interest and penalty for cases relating to Determination of Valuation etc. |
Appellate Tribunal * |
7.19 |
2000 to 2010 |
3. |
Income Tax Act, 1961 |
Tax, interest and penalty demands towards various Income tax disputes |
Appellate Authority ** |
10.37 |
2005 to 2019 |
4. |
Sales Tax/VAT Legislations |
Tax, interest and penalty demand towards Sales Tax/ VAT disputes |
Supreme Court |
8.59 |
1995 to 2005 |
High Court |
634.41 |
1980 to 2019 |
|||
Appellate Tribunal * |
3,830.29 |
1980 to 2015 |
|||
Appellate Authority ** |
8,199.01 |
1980 to 2019 |
|||
Adjudicating Authority *** |
95.30 |
1985 to 2015 |
|||
Total |
12,767.60 |
||||
5. |
Finance Act, 1994 (Service Tax) |
Duty, interest and penalty for cases relating to Service Tax disputes |
Supreme Court |
32.86 |
2005 to 2015 |
High Court |
0.51 |
2005 to 2010 |
|||
Appellate Tribunal * |
29.40 |
2000 to 2015 |
|||
Appellate Authority ** |
14.82 |
2000 to 2019 |
|||
Total |
77.59 |
||||
Grand Total |
15,459.52 |
Remarks
Dues Include Penalty & Interest, wherever applicable.
* Appellate Tribunal includes Sales Tax Tribunal, CESTAT and ITAT.
** Apellate Authority includes Commissioner Appeals, Assistant Commissioner Appeals, Deputy Commissioner Appeals, Joint Commissioner Appeals and Deputy Commissioner Commercial Taxes Appeals.
*** Adjudicating Authority includes Collector of Sales Tax, Sales Tax Officer and Deputy Commissioner Sales Tax, Joint/ Deputy/ Additional Commissioner of Commercial Taxes etc.
^ Period block shall indicate the period interval in which all the disputes under that authority have taken place.
ANNEXURE B TO INDEPENDENT AUDITORS'' REPORT
[Referred to in paragraph 19 under "Report on Other Legal and Regulatory Requirements" in the Independent Auditors'' Report of even date to the Members of Bharat Petroleum Corporation Limited ("the Corporation") on the standalone Ind AS financial statements as of and for the year ended 31st March 2019]
1. |
Area examined |
Whether the company has system in place to process all the accounting transactions through IT system? If yes, the implications of processing of accounting transactions outside IT system on the integrity of the accounts along with the financial implications, if any, may be stated. |
Observations/ Findings |
The Corporation has a system in place to process all the accounting transactions through its implemented IT system, SAP. As such, we have not come across any accounting transactions processed outside IT system which would have an impact on the integrity of the accounts or any financial implications. |
|
2. |
Area examined |
Whether there is any 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? If yes, the financial impact may be stated. |
Observations/ Findings |
Based on our examination of relevant records of the Corporation and the information and explanations received from the Management, there were no cases of restructuring of an existing loan or cases of waiver/write off of debts/loans / interest by any of the lenders of the Corporation due to inability to repay the loan. |
|
3. |
Area examined |
Whether funds received/receivable for specific schemes from central/ state agencies were properly accounted for/ utilized as per its term and conditions? List the cases of deviation. |
Observations/ Findings |
Based on our examination of relevant records of the Corporation and the information and explanations received from the Management, Funds received/receivable for specific schemes from central/state agencies were properly accounted for/utilised as per terms and conditions and applicable Ind AS. |
For CVK & Associates |
For Borkar & Muzumdar |
Chartered Accountants |
Chartered Accountants |
ICAIFRN101745W |
ICAI FRN 101569W |
Sd/- |
Sd/- |
A K Pradhan |
Devang Vaghani |
Partner |
Partner |
Membership No. 032156 |
Membership No.109386 |
Place: Mumbai |
|
Date: 20th May 2019 |
ANNEXURE C TO INDEPENDENT AUDITORS'' REPORT
[Referred to in paragraph 20(f) under ''Report on Other Legal and Regulatory Requirements'' in the Independent Auditors'' Report of even date to the members of Bharat Petroleum Corporation Limited on the standalone Ind AS financial statements for the year ended March 31, 2019]
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Bharat Petroleum Corporation Limited ("the Corporation") as of March 31, 2019 in conjunction with our audit of the standalone Ind AS financial statements of the Corporation for the year ended on that date.
Management''s Responsibility for Internal Financial Controls
The Corporation''s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Corporation 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, 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 Act.
Auditors'' Responsibility
Our responsibility is to express an opinion on the Corporation''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing specified under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting were established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the 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 Corporation''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that:
1. pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
2. provide reasonable assurance that transactions are recorded as necessary to permit preparation of 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 financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, to the best of our information and according to the explanations given to us, the Corporation has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2019, based on the internal control over financial reporting criteria established by the Corporation considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the ICAI.
For CVK & Associates |
For Borkar & Muzumdar |
Chartered Accountants |
Chartered Accountants |
ICAI FRN 101745W |
ICAI FRN 101569W |
Sd/- |
Sd/- |
A K Pradhan |
Devang Vaghani |
Partner |
Partner |
Membership No. 032156 |
Membership No.109386 |
Place: Mumbai |
|
Date: 20th May 2019 |
Mar 31, 2018
INDEPENDENT AUDITORSâ REPORT TO THE MEMBERS OF BHARAT PETROLEUM CORPORATION LIMITED
Report on the Standalone Indian Accounting Standards (Ind AS) Financial Statements
1. We have audited the accompanying standalone Ind AS financial statements of Bharat Petroleum Corporation Limited (âthe Corporationâ), which comprise the Balance Sheet as at 31st 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 then ended, and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Financial Statements
2. The Corporationâs 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 Corporation in accordance with the accounting principles generally accepted in India, including Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Corporation and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorsâ Responsibility
3. Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
4. 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.
5. 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.
6. 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 judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Corporationâs 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 Corporationâs Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
7. 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
8. 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 Corporation as at 31st 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
9. As required by the Companies (Auditorâs Report) Order, 2016 issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act (âthe Orderâ), and on the basis of such checks of the books and records of the Corporation as we considered appropriate and according to the information and explanations given to us, we give in the âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.
10. As required by Section 143(5) of the Act, we give in âAnnexure Bâ, a statement on the matters specified by the Comptroller and Auditor-General of India for the Corporation.
11. 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 accounts as required by law have been kept by the Corporation so far as it appears from our examination of those books;
c) The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
d) I n our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act;
e) In view of exemption given vide notification no. G.S.R. 463(E) dated June 5 2015, issued by Ministry of Corporate Affairs, provisions of Section 164(2) of the Act regarding disqualification of directors, are not applicable to the Corporation;
f) With respect to the adequacy of the internal financial controls over financial reporting of the Corporation and the operating effectiveness of such controls, refer to our separate audit report in âAnnexure Câ;
g) 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 knowledge and belief and according to the information and explanations given to us:
i. The Corporation has disclosed the impact, if any, of pending litigations on its financial position in its standalone Ind AS financial statements. Refer Note 63 of the standalone Ind AS financial statements;
ii. The Corporation 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 Corporation.
[Referred to in paragraph 9 under âReport on Other Legal and Regulatory Requirementsâ in the Independent Auditorsâ Report of even date to the members of Bharat Petroleum Corporation Limited (âthe Corporationâ) on the standalone Ind AS financial statements as of and for the year ended 31st March 2018]
(i) (a) The Corporation has maintained proper records showing full particulars, including quantitative details and situation of fixed assets;
(b) As per information and explanations given to us, physical verification of fixed assets (except LPG Cylinders and pressure regulators with customers) has been carried out by the Management during the year in accordance with the phased programme of verification of all assets over three years which, in our opinion, is reasonable having regard to the size of the Corporation and the nature of its assets. As informed, no material discrepancies were noticed on such verification;
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Corporation, the title deeds of immovable properties are held in the name of the Corporation, except in cases given below:
Particulars |
Number of Cases |
Gross Block ('' in Crore) |
Net Block ('' in Crore) |
Remarks |
Freehold Land |
13 |
85.92 |
85.92 |
Documents of title not available for verification |
Freehold Land |
12 |
9.36 |
9.36 |
Documents of title informed as lying with registration authorities |
(ii) The inventory (excluding stocks with third parties and goods in transit) has been physically verified by the Management during the year at reasonable intervals. In respect of inventory lying with third parties, these have substantially been confirmed by them. No material discrepancies were noticed on physical verification of inventories carried out at the end of the year;
(iii) As informed, the Corporation has not granted any loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act. Accordingly, paragraphs 3(iii)(a), 3(iii)(b) and 3(iii)(c) of the Order are not applicable;
(iv) In our opinion and according to the information and explanations given to us, the Corporation has complied with the provisions of Section 185 and Section 186 of the Act, with respect to the loans, investments, guarantees and securities;
(v) In our opinion and according to the information and explanations given to us, the Corporation has not accepted any deposits from public within the provisions of Sections 73 to 76 of the Act read with The Companies (Acceptance of Deposits) Rules, 2014 and other relevant provisions of the Act;
(vi) We have broadly reviewed the books of account maintained by the Corporation in respect of products where the maintenance of cost records has been specified by the Central Government under Section 148(1) of the Act and the rules framed there under and we are of the opinion that prima-facie, the prescribed books of account and cost records have been made and maintained. We have not, however, made a detailed examination of the same with a view to determining whether they are accurate or complete;
(vii) (a) The Corporation is generally regular in depositing with appropriate authorities, undisputed statutory dues
including Provident Fund, Employeesâ State Insurance, Income Tax, Sales Tax, Service Tax, Goods and Service tax (GST), Customs Duty, Excise Duty, Value Added Tax, Cess and any other material statutory dues applicable to it;
According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employeesâ State Insurance, Income Tax, Sales Tax, Service Tax, Goods and Service tax (GST), Customs Duty, Excise Duty, Value Added Tax, Cess and any other material statutory dues applicable to it, were outstanding, as on the last day of the financial year, for a period of more than six months from the date they became payable;
(b) According to the information and explanation given to us, the dues outstanding with respect to income tax, sales tax, service tax, duty of customs, duty of excise, value added tax have not been deposited on account of any dispute, are as per Statement 1;
(viii) According to the information and explanations given to us, the Corporation has not defaulted in repayment of loans or borrowing to financial institutions, banks, Government or dues to debenture holders;
(ix) The Corporation did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year. According to the information and explanations given to us, money raised by way of term loans during the year have been applied for the purpose for which those were raised;
(x) During the course of our examination of the books and records of the Corporation, carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, no instances of fraud by the Corporation or on the Corporation by its officers and employees have been noticed or reported during the year except incidents of irregularities that were reported during Financial Year 2016-17, which have been probed by the vigilance team of the Corporation during the year. We are informed that the matter has been handed over to Central Bureau of Investigation for further enquiry and that the Management is in the process of taking appropriate action.
(xi) In view of exemption given vide notification no. G.S.R. 463(E) dated June 5 2015, issued by Ministry of Corporate Affairs, provisions of Section 197 read with Schedule V of the Act regarding managerial remuneration are not applicable to the Corporation. Accordingly, paragraph 3(xi) of the Order is not applicable;
(xii) I n our opinion and according to the information and explanations given to us, the Corporation is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable;
(xiii) According to the information and explanations given to us and based on our examination of the records of the Corporation, all transactions entered into by the Corporation with the related parties are in compliance with Sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the standalone Ind AS financial statements, as required by the applicable Indian Accounting Standards;
(xiv) According to the information and explanations given to us and based on our examination of the records, the Corporation has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, paragraph 3(xiv) of the Order is not applicable;
(xv) According to the information and explanations given to us and based on our examination of the records, the Corporation has not entered during the year into non-cash transactions with directors or persons connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable;
(xvi) The Corporation is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, paragraph 3(xvi) of the Order is not applicable.
S. No |
Name of the Statute |
Nature of Dues |
Forum Where Dispute is pending |
Amount |
Period block to which it relates^ |
1. |
Central Excise Act, 1944 |
Duty, interest and penalty for cases relating to Determination of Assessable value, Cenvat Credit etc. |
Supreme Court |
898.00 |
2000 to 2010 |
High Court |
123.93 |
2000 to 2015 |
|||
Appellate Tribunal5 |
1,337.77 |
1985 to 2018 |
|||
Appellate Authority6 |
73.03 |
1990 to 2018 |
|||
Adjudicating Authority7 |
10,444.61 |
1990 to 2018 |
|||
Total |
12,877.34 |
||||
2. |
Customs Act, 1962 |
Duty, interest and penalty for cases relating to Determination of Valuation etc. |
Appellate Tribunal* |
5.39 |
2000 to 2010 |
Total |
5.39 |
||||
3. |
Income Tax Act, 1961 |
Tax, interest and penalty demands towards various Income tax disputes |
High Court |
9.01 |
1990 to 2005 |
Appellate Tribunal* |
5.73 |
1990 to 2005 |
|||
Appellate Authority** |
25.53 |
2005 to 2018 |
|||
Total |
40.27 |
||||
4. |
Sales Tax/VAT Legislations |
Tax, interest and penalty demand towards Sales tax/ VAT disputes |
Supreme Court |
2.33 |
1995 to 2005 |
High Court |
588.86 |
1980 to 2015 |
|||
Appellate Tribunal* |
3,651.79 |
1985 to 2015 |
|||
Appellate Authority** |
7,692.84 |
1985 to 2018 |
|||
Total |
11,935.82 |
||||
5. |
Finance Act,1994 (Service Tax) |
Duty, interest and penalty for cases relating to Service tax disputes |
Supreme Court |
31.56 |
2005 to 2015 |
Appellate Tribunal* |
34.34 |
2000 to 2015 |
|||
Appellate Authority** |
0.80 |
2005 to 2015 |
|||
Adjudicating Authority*** |
224.37 |
2005 to 2018 |
|||
Total |
291.07 |
||||
Grand Total |
25,149.89 |
Dues Include Penalty & Interest, wherever applicable.
[Referred to in paragraph 10 under âReport on Other Legal and Regulatory Requirementsâ in the Independent Auditorsâ Report of even date to the Members of Bharat Petroleum Corporation Limited (âthe Corporationâ) on the standalone Ind AS financial statements as of and for the year ended 31st March 2018]
1 |
Area examined |
Whether the Company has respectively? If not, please title/lease deeds are not avai |
clear title/lease deeds for freehold and leasehold land state the area of freehold and leasehold land for which able? |
|
Observations/ Findings |
Particulars |
Area (In Acres) |
Remarks |
|
Freehold Land |
1,161.02 |
Documents of title not available for verification |
||
Freehold Land |
6.97 |
Documents of title as informed lying with registration authorities |
||
Note: The above list does not include immova Lease in Ind AS Financial Statements. |
ble properties classified as Operating |
|||
2 |
Area examined |
Whether there are any cases of waiver/ write off of debts/ loans/ interest etc., if yes, with reasons there for and amount involved. |
||
Observations/ Findings |
The details of cases of waiver/ write off of debts/ loans/ interest by the Corporation during the year are as under: |
|||
Particulars |
''in Crore |
Remarks |
||
Write off of debts |
1.26 |
Write offs approved as per âDelegation of Authorityâ of the Corporation |
||
Write off/Waiver of interest |
4.19 |
|||
Write off of Other claims |
0.01 |
|||
3 |
Area Examined |
Whether proper records are maintained for inventories lying with third parties and assets received as gift/ grant(s) from Government or other authorities? |
||
Observations/ Findings |
- Proper records are maintained for inventories lying with third parties; |
|||
- The Corporation has not received any assets as gift/ grants from Government or other authorities. |
[Referred to in paragraph 11(f) under âReport on Other Legal and Regulatory Requirementsâ in the Independent Auditorsâ Report of even date to the members of Bharat Petroleum Corporation Limited on the standalone Ind AS financial statements for the year ended 31st March 2018]
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Bharat Petroleum Corporation Limited (âthe Corporationâ) as of 31st March 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Corporation for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Corporationâs Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Corporation 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 (âICAIâ). 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, 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 Act.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Corporationâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing specified under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting were established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the 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 Corporationâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companyâs internal financial control over financial reporting 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 companyâs internal financial control over financial reporting includes those policies and procedures that:
1. pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
2. provide reasonable assurance that transactions are recorded as necessary to permit preparation of 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 companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, to the best of our information and according to the explanations given to us, the Corporation has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2018, based on the internal control over financial reporting criteria established by the Corporation considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the ICAI.
For CVK & Associates For Borkar & Muzumdar
Chartered Accountants Chartered Accountants
ICAI FRN: 101745W ICAI FRN: 101569W
Sd/- Sd/-
A. K. Pradhan B. M. Agarwal
Partner Partner
Membership No.: 032156 Membership No.: 033254
Place: Mumbai
Date: 29th May 2018
Mar 31, 2017
Report on the Standalone Indian Accounting Standards (Ind AS) Financial Statements
1. We have audited the accompanying standalone Ind AS financial statements of Bharat Petroleum Corporation Limited (âthe Corporationâ), which comprise the Balance Sheet as at March 31, 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 significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Financial Statements
2. The Corporationâs 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 Corporation in accordance with the accounting principles generally accepted in India, including Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Corporation and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorsâ Responsibility
3. Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
4. 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.
5. 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.
6. 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 judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Corporationâs 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 Corporationâs Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
7. 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
8. 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 Corporation as at March 31, 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 Matter
9. The comparative financial information of the Corporation for the year ended March 31, 2016 and the transition date opening Balance Sheet as at April 1, 2015 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements for the years ended March 31, 2016 and March 31, 2015 prepared in accordance with the Companies (Accounting Standards) Rules, 2006 (as amended) which were audited by us, on which we expressed an unmodified opinion dated May 26, 2016, and May 28, 2015, respectively. The adjustments to those financial statements for the differences in accounting principles adopted by the Corporation on transition to the Ind AS have been audited by us.
Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
10. As required by the Companies (Auditorâs Report) Order, 2016, issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act (âthe Orderâ), and on the basis of such checks of the books and records of the Corporation as we considered appropriate and according to the information and explanations given to us, we give in the âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.
11. As required by Section 143(5) of the Act, we give in âAnnexure Bâ, a statement on the matters specified by the Comptroller and Auditor-General of India for the Corporation.
12. 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 accounts as required by law have been kept by the Corporation so far as it appears from our examination of those books;
c) The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act;
e) In view of exemption given vide notification no. G.S.R. 463(E) dated June 5 2015, issued by Ministry of Corporate Affairs, provisions of Section 164(2) of the Act regarding disqualification of Directors, are not applicable to the Corporation;
f) With respect to the adequacy of the internal financial controls over financial reporting of the Corporation and the operating effectiveness of such controls, refer to our separate audit report in âAnnexure Câ;
g) With respect to the other matters to be included in the Auditorsâ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:
i. The Corporation has disclosed the impact, if any, of pending litigations on its financial position in its standalone Ind AS financial statements. Refer Note 64 of the standalone Ind AS financial statements;
ii. The Corporation 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 Corporation.
iv. The Corporation has provided requisite disclosures in the standalone Ind AS financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016. Based on audit procedures and relying on the management representation, we report that the disclosures are in accordance with the books of account maintained by the Corporation and as produced to us by the management. Refer Note 62 of the standalone Ind AS financial statements.
ANNEXURE A TO INDEPENDENT AUDITORSâ REPORT
[Referred to in paragraph 10 under âReport on Other Legal and Regulatory Requirementsâ in the Independent Auditorsâ Report of even date to the members of Bharat Petroleum Corporation Limited (âthe Corporationâ) on the standalone Ind AS financial statements as of and for the year ended March 31, 2017]
(i) (a) The Corporation has maintained proper records showing full particulars, including quantitative details and situation of fixed assets;
(b) As per information and explanations given to us, physical verification of fixed assets (except LPG Cylinders and pressure regulators with customers) has been carried out by the Management during the year in accordance with the phased programme of verification of all assets over three years which, in our opinion, is reasonable having regard to the size of the Corporation and the nature of its assets. As informed, no material discrepancies were noticed on such verification;
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Corporation, the title deeds of immovable properties are held in the name of the Corporation, except in cases given below:
Particulars |
Number of Cases |
Gross Block (Rs. in Crore) |
Net Block (Rs. in Crore) |
Remarks |
Freehold Land |
13 |
86.70 |
86.70 |
Document of title not available for verification |
Freehold Land |
14 |
10.16 |
10.16 |
Document of title lying with Registration Authorities |
(ii) The inventory (excluding stocks with third parties and goods in transit) has been physically verified by the Management during the year at reasonable intervals. In respect of inventory lying with third parties, these have substantially been confirmed by them. No material discrepancies were noticed on physical verification of inventories carried out at the end of the year;
(iii) As informed, the Corporation has not granted any loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act. Accordingly, paragraphs 3(iii)(a), 3(iii)(b) and 3(iii)(c) of the Order are not applicable;
(iv) In our opinion and according to the information and explanations given to us, the Corporation has complied with the provisions of Section 185 and Section 186 of the Act, with respect to the loans, investments, guarantees and securities;
(v) In our opinion and according to the information and explanations given to us, the Corporation has not accepted any deposits from the public within the provisions of Sections 73 to 76 of the Act read with The Companies (Acceptance of Deposits) Rules, 2014 and other relevant provisions of the Act;
(vi) We have broadly reviewed the books of account maintained by the Corporation in respect of products where the maintenance of cost records has been specified by the Central Government under Section 148(1) of the Act and the rules framed there under and we are of the opinion that prima-facie, the prescribed books of account and cost records have been made and maintained. We have not, however, made a detailed examination of the same with a view to determining whether they are accurate or complete;
(vii) (a) The Corporation is generally regular in depositing with appropriate authorities, undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other material statutory dues applicable to it;
According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employeesâ state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other material statutory dues applicable to it, were outstanding, as on the last day of the financial year, for a period of more than six months from the date they became payable;
(b) According to the information and explanation given to us, the dues outstanding with respect to income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax have not been deposited on account of any dispute, are as per Statement 1;
(viii) According to the information and explanations given to us, the Corporation has not defaulted in repayment of loans or borrowing to financial institutions, banks, Government or dues to debenture holders;
(ix) The Corporation did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year. According to the information and explanations given to us, money raised by way of term loans during the year have been applied for the purpose for which those were raised;
(x) During the course of our examination of the books and records of the Corporation, carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, no instances of fraud by the Corporation or on the Corporation by its officers and employees have been noticed or reported during the year nor have been informed of any such instance by the management, except for the following instances of fraud identified by the Management:
Incidents of irregularities aggregating to Rs.1 crore relating to vendor payments at two Retail Territories were noticed during the year. Excess payments made on this account to the vendors have since been recovered except for Rs.0.09 crore for which dues of the vendors have been withheld. Enquiry process against the concerned officers is underway;
(xi) In view of exemption given vide notification no. G.S.R. 463(E) dated June 5 2015, issued by Ministry of Corporate Affairs, provisions of Section 197 read with Schedule V of the Act regarding managerial remuneration are not applicable to the Corporation. Accordingly, paragraph 3(xi) of the Order is not applicable;
(xii) In our opinion and according to the information and explanations given to us, the Corporation is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable;
(xiii) According to the information and explanations given to us and based on our examination of the records of the Corporation, all transactions entered into by the Corporation with the related parties are in compliance with Sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the standalone Ind AS financial statements, as required by the applicable Indian Accounting Standards;
(xiv) According to the information and explanations given to us and based on our examination of the records, the Corporation has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, paragraph 3(xiv) of the Order is not applicable;
(xv) According to the information and explanations given to us and based on our examination of the records, the Corporation has not entered during the year into non-cash transactions with directors or persons connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable;
(xvi) The Corporation is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, paragraph 3(xvi) of the Order is not applicable.
Statement 1 (Refer Clause vii (b) of Annexure A)
Rs. in Crores
Sr No. |
Name of the Statute |
Forum Where Dispute is pending |
Amount |
Period block to which it relates^ |
1 |
Central Excise Act, 1944 |
Supreme Court |
805.14 |
2000 to 2010 |
High Court |
119.55 |
1985 to 2015 |
||
Appellate Tribunal * |
983.41 |
1985 to 2017 |
||
Appellate Authority ** |
32.72 |
1990 to 2017 |
||
Adjudicating Authority *** |
6,535.06 |
1990 to 2017 |
||
Total |
8,475.88 |
|||
2 |
Customs Act, 1962 |
Supreme Court |
- |
|
Appellate Tribunal * |
5.99 |
2000 to 2010 |
||
Appellate Authority ** |
0.42 |
2000 to 2005 |
||
Adjudicating Authority *** |
- |
|||
Total |
6.41 |
|||
3 |
Income Tax Act, 1961 |
High Court |
9.01 |
1990 to 2005 |
Appellate Tribunal * |
5.73 |
1990 to 2005 |
||
Appellate Authority ** |
9.64 |
2005 to 2017 |
||
Total |
24.38 |
|||
4 |
Sales Tax/VAT Legislations |
Supreme Court |
2.17 |
1995 to 2005 |
High Court |
466.25 |
1980 to 2017 |
||
Appellate Tribunal * |
3,571.46 |
1985 to 2015 |
||
Appellate Authority ** |
6,631.08 |
1985 to 2015 |
||
Adjudicating Authority *** |
1.74 |
2010 to 2017 |
||
Total |
10,672.70 |
|||
5 |
Finance Act,1994 (Service tax) |
Supreme Court |
30.27 |
2005 to 2015 |
Appellate Tribunal * |
189.82 |
2000 to 2015 |
||
Appellate Authority ** |
2.94 |
2005 to 2015 |
||
Adjudicating Authority *** |
179.43 |
2005 to 2015 |
||
Total |
402.46 |
|||
Grand Total: |
19,581.83 |
Dues Include Penalty & Interest, wherever applicable
* Appellate Tribunal includes Sales Tax Tribunal, CESTAT and ITAT.
** Appellate Authority includes Commissioner Appeals, Assistant Commissioner Appeals, Deputy Commissioner Appeals, Joint Commissioner Appeals and Deputy Commissioner Commercial Taxes Appeals.
*** Adjudicating Authority includes Collector of Sales Tax, Sales Tax Officer and Deputy Commissioner Sales Tax, Joint/Deputy/Additional Commissioner of Commercial Taxes etc.
~ Period block shall indicate the period interval in which all the disputes under that authority have taken place.
For CNK & ASSOCIATES LLP For HARIBHAKTI & CO. LLP
Chartered Accountants Chartered Accountants
ICAI FR No.: 101961W/W-100036 ICAI FR No.: 103523W/W-100048
Sd/- Sd/-
Himanshu Kishnadwala Snehal Shah
Partner Partner
Membership No.: 37391 Membership No.: 48539
Place: Mumbai
Date: 29th May 2017
Mar 31, 2016
We have audited the accompanying standalone financial statements of
Bharat Petroleum Corporation Limited ("the Corporation"), which
comprise the Balance Sheet as at March 31, 2016, the Statement of
Profit and Loss, the Cash Flow Statement for the year then ended, and a
summary of significant accounting policies and other explanatory
information.
Management''s Responsibility for the Standalone Financial Statements
The Corporation''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 Corporation 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 of the assets of the
Corporation 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.
Auditors'' 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
thereunder.
We conducted our audit in accordance with the Standards on Auditing
issued by the Institute of Chartered Accountants of India as 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 financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the standalone financial statements. The
procedures selected depend on the auditors'' judgment, including the
assessment of the risks of material misstatement of the standalone
financial statements, whether due to fraud or error. In making those
risk assessments, the auditor considers internal financial control
relevant to the Corporation''s preparation of the standalone 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 accounting policies used and
the reasonableness of the accounting estimates made by the
Corporation''s Directors, as well as evaluating the overall presentation
of the standalone 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 Corporation
as at March 31, 2016, its profit 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, 2016 ("the
Order") issued by the Central Government of India in terms of
sub-section (11) of Section 143 of the Act, we give in the "Annexure A"
, a statement on the matters specified in the paragraphs 3 and 4 of the
Order, to the extent applicable.
(2) As required by Section 143(5) of the Act, we give in "Annexure B",
a statement on the matters specified by the Comptroller and
Auditor-General of India for the Corporation.
(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 Corporation 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. In view of exemption given vide notification no. G.S.R. 463(E)
dated June 5 2015, issued by Ministry of Corporate Affairs, provisions
of Section 164(2) of the Act regarding disqualification of Directors,
are not applicable to the Corporation;
f. With respect to the adequacy of the internal financial controls
over financial reporting of the Corporation and the operating
effectiveness of such controls, we give our separate report in
"Annexure C";
g. With respect to the other matters to be included in the Auditors''
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 Corporation has disclosed the impact of pending litigations on
its financial position in its standalone financial statements  Refer
Note 49 of the standalone financial statements;
ii. The Corporation 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 Â
Refer Note 50 of the standalone financial statements;
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Corporation.
ANNEXURE A TO INDEPENDENT AUDITORS'' REPORT
[Referred to in paragraph 1 under ''Report on Other Legal and Regulatory
Requirements'' in the Independent Auditors'' Report of even date to the
members of Bharat Petroleum Corporation Limited ("the Corporation") on
the standalone financial statements for the year ended March 31, 2016]
(i) (a) The Corporation has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets;
(b) As per information and explanations given to us, physical
verification of fixed assets (except LPG Cylinders and pressure
regulators with customers) has been carried out by the Management
during the year in accordance with the phased programme of verification
of all assets over three years which, in our opinion, is reasonable
having regard to the size of the Corporation and the nature of its
assets. As informed, no material discrepancies were noticed on such
verification;
(c) According to the information and explanations given to us and on
the basis of our examination of the records of the Corporation, the
title deeds of immovable properties are held in the name of the
Corporation, except in cases given below:
Particulars Number of Gross Block Net Block Remarks
Cases (Rs. in
Crore) (Rs. in
Crore)
Freehold land 27 132.90 132.90 Documents of
title lying
with
Registration
Authorities
Freehold land 2 2.26 2.26 Documents of
title not
available for
verification
Leasehold Land
having 9 1.76 1.70 Documents of
title
lease period
of more than lying with
Registration
99 years Authorities
Other leasehold
land 1 0.23 0.09 Document of
title lying
with
Registration
Authorities
(ii) The inventory (excluding stocks with third parties and goods in
transit) has been physically verified by the management during the year
at reasonable intervals. In respect of inventory lying with third
parties, these have substantially been confirmed by them. No material
discrepancies were noticed on physical verification of inventories
carried out at the end of the year;
(iii) As informed, the Corporation has not granted any loans, secured
or unsecured to companies, firms, limited liability partnerships or
other parties covered in the register maintained under Section 189 of
the Act. Accordingly, paragraphs 3(iii)(a), 3(iii)(b) and 3(iii)(c) of
the Order are not applicable;
(iv) In our opinion and according to the information and explanations
given to us, the Corporation has complied with the provisions of
section 185 and 186 of the Act, with respect to the loans, investments,
guarantees and securities;
(v) In our opinion and according to the information and explanations
given to us, the Corporation has not accepted any deposits within the
provisions of Sections 73 to 76 of the Act read with The Companies
(Acceptance of Deposits) Rules, 2014 and other relevant provisions of
the Act;
(vi) We have broadly reviewed the books of account maintained by the
Corporation in respect of products where the maintenance of cost
records has been specified by the Central Government under Section
148(1) of the Act and we are of the opinion that prima-facie, the
prescribed books of account and cost records have been made and
maintained. We have not, however, made a detailed examination of the
same with a view to determining whether they are accurate or complete;
(vii) (a) The Corporation is generally regular in depositing with
appropriate authorities, undisputed statutory dues including provident
fund, employees'' state insurance, income-tax, sales-tax, service tax,
duty of customs, duty of excise, value added tax, cess and any other
material statutory dues applicable to it;
According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, employees''
state insurance, income-tax, sales-tax, service tax, duty of customs,
duty of excise, value added tax, cess and any other material statutory
dues applicable to it, were outstanding, as on the last day of the
financial year, for a period of more than six months from the date they
became payable;
(b) According to the information and explanation given to us, the dues
of income-tax, sales-tax, service tax, duty of customs, duty of excise,
value added tax have not been deposited on account of any dispute, are
as per Statement 1;
(viii) According to the information and explanations given to us, the
Corporation has not defaulted in repayment of loans or borrowing to
financial institutions, banks, government or dues to debenture holders;
(ix) The Corporation did not raise any money by way of initial public
offer or further public offer (including debt instruments) during the
year. According to the information and explanations given to us, money
raised by way of term loans have been applied for the purpose for which
those were raised;
(x) During the course of our examination of the books and records of
the Corporation, carried out in accordance with the generally accepted
auditing practices in India and according to the information and
explanations given to us, no instances of fraud by the Corporation or
on the Corporation by its officers and employees have been noticed or
reported during the year, except for the following instance of fraud
identified by the Management:
Two incidents of irregularities aggregating Rs. 0.25 crore were noticed
in vendor payment relating to the Retail Territory by an officer.
Inquiry against the concerned officer is in progress. The dues of the
vendor have been withheld;
(xi) In view of exemption given vide notification no. G.S.R. 463(E)
dated June 5 2015, issued by Ministry of Corporate Affairs, provisions
of Section 197 read with Schedule V of the Act regarding managerial
remuneration are not applicable to the Corporation. Accordingly,
paragraph 3(xi) of the Order is not applicable;
(xii) In our opinion and according to the information and explanations
given to us, the Corporation is not a Nidhi Company. Accordingly,
paragraph 3(xii) of the Order is not applicable;
(xiii) According to the information and explanations given to us and
based on our examination of the records of the Corporation, all
transactions entered into by the Corporation with the related parties
are in compliance with Sections 177 and 188 of the Act where applicable
and details of such transactions have been disclosed in the financial
statements, as required by the applicable accounting standards;
(xiv) According to the information and explanations given to us and
based on our examination of the records, the Corporation has not made
any preferential allotment or private placement of shares or fully or
partly convertible debentures during the year. Accordingly, paragraph
3(xiv) of the Order is not applicable;
(xv) According to the information and explanations given to us and
based on our examination of the records, the Corporation has not
entered during the year into non-cash transactions with directors or
persons connected with them. Accordingly, paragraph 3(xv) of the Order
is not applicable;
(xvi) The Corporation is not required to be registered under Section
45-IA of the Reserve Bank of India Act 1934.
Statement 1 (Refer Clause vii (b) of Annexure A)
Details of dues outstanding with respect to, income-tax, sales tax,
service tax, duty of customs, duty of excise, value added tax attached,
on account of any dispute:
Rs. in Crores
Sr. Name of the
Statute Forum Where Dispute
is pending Amount Period block to
which it
No. relates^
1 Central
Excise
Act, 1944 Supreme Court 772.57 2000 - 2010
High Court 121.23 1995 - 2015
Appellate Tribunal * 1,060.01 1985 - 2016
Appellate Authority
** 30.67 1990 - 2016
Adjudicating
Authority *** 6,195.35 1995 - 2016
Total 8,179.83
2 Customs Act,
1962 Supreme Court -
Appellate Tribunal * 81.33 1990 - 2010
Appellate Authority
** 2.83 2000 - 2005
Adjudicating
Authority *** 10.54 2000 - 2016
Total 94.70
3 Income Tax
Act, 1961 High Court 7.65 1990 - 2005
Appellate Tribunal * 5.73 1990 - 2005
Appellate Authority
** 1.42 1995 - 2015
Total 14.80
4 Sales Tax/VAT
Legislations Supreme Court 65.38 1995 - 2010
High Court 400.36 1980 - 2016
Appellate Tribunal * 1,114.36 1985 - 2015
Appellate
Authority ** 7,834.13 1985 - 2015
Adjudicating
Authority *** 225.94 1985 - 2000
Total 9,640.17
5 Finance
Act,1994
(Service tax) Supreme Court 31.15 2000 - 2015
Appellate Tribunal * 19.60 2000 - 2016
Appellate
Authority ** 148.88 2000 - 2016
Adjudicating
Authority *** 168.40 2005 - 2016
Total 368.03
Grand Total: 18,297.53
Dues Include Penalty & Interest, wherever applicable
* Appellate Tribunal includes Sales Tax Tribunal, CESTAT and ITAT
** Appellate Authority includes Commissioner Appeals, Assistant
Commissioner Appeals, Deputy Commissioner Appeals, Joint Commissioner
Appeals and Deputy Commissioner Commercial Taxes Appeals.
*** Adjudicating Authority includes Collector of Sales Tax, Sales Tax
Officer and Deputy Commissioner Sales Tax, Joint/Deputy/Additional
Commissioner of Commercial Taxes etc.
Period block shall indicate the period interval in which all the
disputes under that authority have taken place.
ANNEXURE B TO INDEPENDENT AUDITORS'' REPORT
[Referred to in paragraph 2 under ''Report on Other Legal and Regulatory
Requirements'' in the Independent Auditors'' Report of even date to the
members of Bharat Petroleum Corporation Limited ("the Corporation") on
the standalone financial statements for the year ended March 31, 2016]
1 Areas Examined Whether the Company has clear title/lease deeds
for freehold and leasehold respectively? If
not, please state the area of freehold and
leasehold land for which title/lease deeds
are not available.
Observations/
Findings Particulars Area Remarks
(In Acres)
Freehold
land 261.82 Documents of title
lying with Registration
Authorities
Freehold
land 877.10 Document of title not
available for
verification
Leasehold
Land 3.35 Documents of title
lying with
Registration
having
lease Authorities
period of
more than
99 years
Other
leasehold 0.44 Document of title
lying with Registration
land Authorities
2 Areas Examined Whether there are any cases of waiver/write off
of debts/loans/interest etc., if yes, with
reasons there for and amount involved.
Observations/
Findings The details of cases of waiver/write off of
debts/loans/interest by the Corporation during
the year are as under:
Particulars Rs. in crores
Write off of debts 0.0012 *
Waiver of penalty & interest -
*(Rs. 11,512.58)
3 Areas Examined Whether proper records are maintained for
inventories lying with third parties and
assets received as gift/grant(s) from
Government or other authorities?
Observations/
Findings Proper records are maintained for inventories
lying with third parties;
The Corporation has not received any assets as
gift/grants from Government or other
authorities.
For CNK & ASSOCIATES LLP For HARIBHAKTI & CO. LLP
Chartered Accountants Chartered Accountants
ICAI FRN. 101961W ICAI FRN. 103523W
Sd/- Sd/-
Himanshu Kishnadwala Chetan Desai
Partner Partner
Membership No.: 37391 Membership No.: 17000
Place: Mumbai
Date: 26th May 2016
Mar 31, 2015
We have audited the accompanying standalone financial statements of
Bharat Petroleum Corporation Limited ("the Corporation"), which
comprise the Balance Sheet as at March 31,2015, the Statement of Profit
and Loss, the Cash Flow Statement for the year then ended and a summary
of significant accounting policies and other explanatory information.
Management's Responsibility for the Standalone Financial Statements
The Corporation'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 Corporation 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 of the assets of the
Corporation 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 and ensuring their operating effectiveness
and 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.
Auditors' 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
issued by Institute of Chartered Accountants of India as 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 financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the standalone financial statements. The
procedures selected depend on the auditors' judgment, including the
assessment of the risks of material misstatement of the standalone
financial statements, whether due to fraud or error. In making those
risk assessments, the auditor considers internal financial control
relevant to the Corporation's preparation of the standalone financial
statements that give a true and fair view in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on whether the Corporation has in
place an adequate internal financial controls system over financial
reporting and the operating effectiveness of such controls. An audit
also includes evaluating the appropriateness of accounting policies
used and the reasonableness of the accounting estimates made by the
Corporation's Directors, as well as evaluating the overall presentation
of the standalone 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 Corporation
as at 31st March 2015, its profit and its cash flows for the year ended
on that date.
Report on Other Legal and Regulatory Requirements
(1) As required by the Companies (Auditors' 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 give in the Annexure A,
a statement on the matters specified in paragraphs 3 and 4 of the
Order, to the extent applicable.
(2) As required by Section 143 (5) of the Act, we give in Annexure B, a
statement on the matters specified by the Comptroller and
Auditor-General of India for the Corporation.
(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 Corporation 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 written representations received from the Directors
as on March 31, 2015, and taken on record by the Board of Directors,
none of the directors are disqualified as on March 31, 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 Auditors'
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 Corporation has disclosed the impact of pending litigations on
its financial position in its standalone financial statements - Refer
Note 50 of the standalone financial statements;
(ii) The Corporation 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 -
Refer Note 51 of the standalone financial statements;
(iii) There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Corporation.
ANNEXURE A TO INDEPENDENT AUDITORSÂ REPORT
[Referred to in paragraph 1 under 'Report on Other Legal and Regulatory
Requirements' in the Independent Auditors' Report of even date to the
members of Bharat Petroleum Corporation Limited ("the Corporation") on
the standalone financial statements for the year ended March 31,2015]
(i) (a) The Corporation has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) As per information and explanations given to us, physical
verification of fixed assets (except LPG Cylinders and pressure
regulators with customers) has been carried out by the Management
during the year in accordance with the phased programme of verification
of all assets over three years which, in our opinion, is reasonable
having regard to the size of the Corporation and the nature of its
assets. As informed, no material discrepancies were noticed on such
verification.
(ii) (a) The inventory (excluding stocks with third parties and goods
in transit) has been physically verified by the management during the
year. In respect of inventory lying with third parties, these have
substantially been confirmed by them. In our opinion, the frequency of
verification is reasonable.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Corporation and the nature of its business.
(c) The Corporation is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification of
inventories carried out at the end of the year.
(iii) As informed, the Corporation has not granted any loans, secured
or unsecured to companies, firms or other parties covered in the
register maintained under Section 189 of the Act. Accordingly, the
provisions stated in paragraph 3 (iii)(a) and 3 (iii)(b) of the Order
are not applicable.
(iv) In our opinion and according to the information and explanations
given to us, there exists generally an adequate internal control system
commensurate with the size of the Corporation and the nature of its
business for the purchase of inventory and fixed assets and for 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 Corporation.
(v) In our opinion and as explained to us, the Corporation has complied
with provisions of Sections 73 to 76 of the Act read with The Companies
(Acceptance of Deposits) Rules, 2014 and other relevant provisions of
the Act.
(vi) We have broadly reviewed the books of account maintained by the
Corporation in respect of products where the maintenance of cost
records has been specified by the Central Government under sub-section
(1) of Section 148 of the Act and the rules framed there under and we
are of the opinion that prima facie, the prescribed accounts and
records have been made and maintained.
(vii) (a) The Corporation is generally regular in depositing with
appropriate authorities, undisputed statutory dues including provident
fund, employees' state insurance, income tax, sales tax, wealth tax,
service tax, value added tax, customs duty, excise duty, cess and any
other material statutory dues applicable to it.
According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, employees'
state insurance, income tax, sales tax, wealth tax, service tax, value
added tax, customs duty, excise duty, cess and any other material
statutory dues applicable to it, were outstanding, at the year end, for
a period of more than six months from the date they became payable.
(b) According to the information and explanation given to us, the dues
outstanding with respect to, income tax, sales tax, wealth tax, service
tax, value added tax, customs duty, excise duty, cess and any other
material statutory dues applicable to it, on account of any dispute,
are as per Annexure A1.
(c) According to the information and explanations given to us, there
were no amounts which were required to be transferred to the Investor
Education and Protection Fund by the Corporation.
(viii) The Corporation does not have accumulated losses at the end of
the financial year nor has incurred cash losses in the current and
immediately preceding financial year.
(ix) According to the information and explanations given to us, the
Corporation has been regular in the repayment of dues to financial
institution(s), bank(s) or debenture holder(s).
(x) In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Corporation, for loans taken by a joint venture company of the
Corporation from banks or financial institutions, are not prejudicial
to the interest of the Corporation.
(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.
(xii) During the course of our examination of the books and records of
the Corporation, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Corporation, noticed or reported during the year,
except for following instances of fraud identified by the management.
a) The incident of an irregularity of Rs. 0.96 crore by a Company Owned
Company Operated retail outlet operator. An amount of Rs. 0.88 crore
has since been recovered. Legal action has been initiated for recovery
of the balance amount.
b) The incident of an irregularity of Rs. 0.15 crore relating to the
Retail Territory by an officer. The officer concerned has since been
dismissed from services of the Corporation. His dues and the
transporter's dues have been withheld.
ANNEXURE A1
Details of dues outstanding with respect to, income tax, sales tax,
wealth tax, service tax, value added tax, customs duty, excise duty,
cess and any other material statutory dues applicable to it, on account
of any dispute
Rs. in Crores
Sr Name of the Forum Where Dispute Amount Period block
No Statute is pending to which it
relates
1 Central Excise Supreme Court 740.92 2000 to 2010
Act, 1944
High Court 41.67 1995 to 2015
Appellate Tribunal * 875.06 1985 to 2015
Appellate
Authority ** 96.75 1985 to 2015
Adjudicating 6,161.87 1995 to 2015
Authority ***
Total 7,916.27
2 Customs Supreme Court 27.34 1995 to 2010
Act, 1962
Appellate
Tribunal * 94.83 1990 to 2010
Appellate
Authority ** 5.65 1995 to 2015
Adjudicating
Authority *** 919 2005 to 2010
Total 137.01
3 Income Tax High Court 7.65 1990 to 2005
Act, 1961
Appellate
Tribunal * 6.2 1990 to 2005
Appellate
Authority ** 11.38 1995 to 2015
Total 25.24
4 Sales Tax Supreme Court 82.26 1985 to 2010
/VAT
Legislations High Court 331.97 1980 to 2015
Appellate
Tribunal * 756.64 1985 to 2015
Appellate
Authority ** 6,459.02 1985 to 2015
Adjudicating
Authority *** 1,107.94 1990 to 2015
Total l8,737.83
5 Finance Supreme Court 26.50 2005 to 2015
Act,1994
(Service tax)
Appellate
Tribunal * 154.16 2000 to 2015
Appellate
Authority ** 7.22 2005 to 2015
Adjudicating
Authority *** 73.38 2000 to 2015
Total 261.26
6 Bombay High Court 50.29 1995 to 2015
Provincial
Municipal Total 50.29
Corporation
Act, 1949
7 Gujarat Adjudicating
Municipal Authority *** 0.43 2010 to 2015
Act,1963
Total 0.43
8 Bombay Appellate 0:16 2005 to 2010
Prohibition Tribunal *
Act,1949
Total 0.16
Grand Total 17,128.49
Dues include Penalty & Interest, wherever applicable * Appellate
Tribunal includes Sales Tax Tribunal, CESTAT and ITAT.
** Appellate Authority includes Commissioner Appeals, Assistant
Commissioner Appeals, Deputy Commissioner Appeals, Joint Commissioner
Appeals and Deputy Commissioner Commercial Taxes Appeals.
*** Adjudicating Authority includes Collector of Sales Tax, Sales Tax
Officer and Deputy Commissioner Sales Tax, Joint / Deputy/ Additional
Commissioner of Commercial Taxes [Referred to in paragraph 2 under
'Report on Other Legal and Regulatory Requirements' in the Independent
Auditors' Report of even date to the members of Bharat Petroleum
Corporation Limited ("the Corporation") on the standalone financial
statements for the year ended March 31,2015]
Directions indicating the areas to be examined by the Statutory
Auditors during the course of audit of annual accounts of Bharat
Petroleum Corporation Limited (Standalone) for the year 2014-15 issued
by the Comptroller & Auditor General of India under Section 143(5) of
the Companies Act, 2013.
According to the information and explanations given to us we report as
under:
Sr. Areas Examined Observation / Finding
No.
1 If the Corporation has been selected for TheCorporation has not
disinvestment a complete status been selected for
report in terms of valuation of disinvestment during
Assets (including intangible assets and the year.
land) and Liabilities (including committed
and general reserves) may be examined
including the mode and present stage of
disinvestment process.
2 Please report whether there are any cases The details of cases of
of waiver/ write off of debts/ loans/ waiver/ write off of
interest etc., if yes, the reasons there debts /loans / interest
for and the amount involved. by the Corporation
during the year are
as under:
Particulars Rs. in
crores
Write off 0.73
of debts
Waiver of 0.01
penalty &
interest
Total 0.74
3 Whether proper records are maintained for a.Proper records are
inventories lying with third parties maintained for
and assets received as gift inventorieslying with
from Government or other authorities third parties;
b.The Corporation has
not received any assets
as gifts from
Government or other
authorities.
4 A report on age-wise analysis of The age-wise analysis of
pending legal / arbitration cases pending legal /
including the reasons for pendency arbitration cases
and existence / effectiveness of a are as under:
monitoring mechanism for expenditure
on all legal cases (foreign Period No of Active
and local) may be given Cases
. Prior 571
to 2004
FY2004-2009 747
FY 2009-2012 792
FY 2012-2014 1002
FY 2014-2015 897
Total 4009
The above does not include
pending legal cases
concerning tax matters
which are listed in Note
50 of the standalone
financial statements
and also refer to in
clause vii (b) of
Annexure A of this
report.
Sr. Areas Examined Observation / Finding
No.
Reasons of pendency:
Courts / Arbitrators are required
to dispose of the cases as per
procedure prescribed under law.
Parties need to be given
reasonable opportunity of being
heard. Further, Law provides
appeal before higher courts.
Reasons for pendency vary from
case to case.
Existence / effectiveness of
monitoring system for expenditure
on all legal cases(Foreign/Local)
There exists an effective
monitoring system for
expenditure on legal cases. As
informed to us there are no
legal or arbitration matters
pending outside India.
For CNK & ASSOCIATES LLP For HARIBHAKTI & CO. LLP
Chartered Accountants Chartered Accountants
ICAI FRN. 101961W ICAI FRN. 103523W
Sd/- Sd/-
Himanshu Kishnadwala Chetan Desai
Partner Partner
Membership No.: 37391 Membership No.: 17000
Place : Mumbai
Date : 28th May, 2015
Mar 31, 2014
We have audited the accompanying Financial Statements of Bharat
Petroleum Corporation Limited ("the Corporation"), which comprise the
Balance Sheet as at March 31, 2014, 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
The 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 Corporation in accordance
with the Accounting Standards referred to in sub-section (3C) of
Section 211 of the Companies Act, 1956 ("the Act") read with the
General Circular 15/2013 dated September 13, 2013 of the Ministry of
Corporate Affairs in respect of Section 133 of the Companies Act, 2013.
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 auditors'' 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 Corporation''s preparation
and fair presentation of the Financial Statements in order to design
audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the
Corporation''s internal control. 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 sufficient 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 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
Corporation 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.
Emphasis of matter:
We draw attention to Note 49(c) to the financial statements regarding
recognition of marked to market loss of Rs. 324.35 crore on swap
contracts. However, the marked to market gain of Rs. 521.14 crore to
cover the risk on above transaction is not recognised for reasons
stated in the Note. Our opinion is not qualified in respect of this
matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors'' Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of Section 227 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 Corporation 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
Cash Flow Statement comply with the Accounting Standards referred to in
sub-section (3C) of Section 211 of the Act read with the General
Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate
Affairs in respect of Section 133 of the Companies Act, 2013, except
some disclosures as required under Accounting Standard 19, ''Accounting
for Leases'' are not made (Refer Note 43 of attached financial
statements);
e. In view of exemption given vide notification no. G.S.R. 829 (E)
dated 21st October, 2003 issued by Ministry of Corporate Affairs,
provisions of clause (g) of sub-section (1) of Section 274 of the Act
are not applicable to the Corporation.
ANNEXURE TO INDEPENDENT AUDITORS'' REPORT
(Referred to in paragraph 1 under ''Report on Other Legal and Regulatory
Requirements'' in the Independent Auditors'' Report of even date to the
members of Bharat Petroleum Corporation Limited ("the Corporation") on
the financial statements for the year ended March 31, 2014)
(i) (a) The Corporation has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) As per information and explanations given to us, physical
verification of fixed assets (except as stated below) has been carried
out by the Management during the year in accordance with the phased
programme of verification of all assets over three years which, in our
opinion, is reasonable having regard to the size of the Corporation and
the nature of its assets. As informed, no material discrepancies were
noticed on such verification. LPG Cylinders and pressure regulators
with customers are not physically verified by the Management.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
off by the Corporation during the year.
(ii) (a) The inventory (excluding stocks with third parties and
inventories in transit) has been physically verified by the Management
during the year. In respect of inventory lying with third parties,
these have substantially been confirmed by them. In our opinion, the
frequency of verification is reasonable.
(b) The procedures of physical verification of inventory followed by
the Management are reasonable and adequate in relation to the size of
the Corporation and the nature of its business.
(c) The Corporation is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification carried
out at the end of the year.
(iii) (a) As informed, the Corporation 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
("the Act"). Accordingly, the provisions stated in paragraph 4
(iii)(b),(c) and (d) of the order are not applicable.
(b) As informed, the Corporation has not taken any loans, secured or
unsecured from companies, firms or other parties covered in the
register maintained under Section 301 of the Act. Accordingly, the
provisions stated in paragraph 4 (iii)(f)and (g) of the order are not
applicable.
(iv) In our opinion and according to the information and explanations
given to us, there exists generally an adequate internal control system
commensurate with the size of the Corporation and the nature of its
business with regard to purchase 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 weakness
in internal control system of the Corporation.
(v) According to the information and explanations given to us, we are
of the opinion that there have been no contracts or arrangements
referred to in Section 301 of the Act that need to be entered into the
register maintained under said Section.
(vi) In our opinion and according to the information and explanations
given to us, the Corporation has not accepted any deposits from the
public within the meaning of Sections 58A and 58AA of the Act and the
rules framed there under.
(vii) In our opinion, the Corporation has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Corporation in respect of products where, pursuant to the Rules made by
the Central Government of India, the maintenance of cost records has
been prescribed under clause (d) of sub-section (1) of Section 209 of
the Act and we are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained.
(ix) (a) The Corporation is generally regular in depositing with
appropriate authorities undisputed statutory dues including provident
fund, investor education and protection fund, income-tax, sales-tax,
wealth-tax, service tax, customs duty, excise duty, cess and other
statutory dues applicable to it.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees'' state insurance, income-tax,
wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and
other undisputed statutory dues were outstanding, at the year end, for
a period of more than six months from the date they became payable.
(c) According to the records of the Corporation, the dues outstanding
of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty and cess on account of any dispute, are as per Annexure A.
(x) The Corporation has no accumulated losses at the end of the
financial year and it has not incurred cash losses in the current and
immediately preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us, the Corporation has not defaulted in repayment of dues to
a financial institution, bank or debenture holders.
(xii) According to the information and explanations given to us and
based on the documents and records produced to us, the Corporation has
not granted loans & advances on the basis of security by way of pledge
of shares, debentures and other securities.
(xiii) In our opinion, the Corporation is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
(xiii) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003
(as amended) are not applicable to the Corporation.
(xiv) In our opinion, the Corporation is not dealing in or trading in
shares, securities, debentures and other investments.
Accordingly, the provisions of clause (xiv) of paragraph 4 of the
Companies (Auditor''s Report) Order, 2003 (as amended) are not
applicable to the Corporation.
(xv) In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Corporation, for loans taken by subsidiary companies and others from
banks or financial institutions during the year, are not prejudicial to
the interest of the Corporation.
(xvi) In our opinion, the term loans have been applied for the purpose
for which the loans were raised.
(xvii) According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Corporation, we
report that no funds raised on short-term basis have been used for
long-term investment.
(xviii) According to the information and explanation given to us, the
Corporation has not made any preferential allotment of shares to
parties and companies covered in the Register maintained under Section
301 of the Act.
(xix) According to the information and explanations given to us, no
debentures have been issued by the Corporation during the year.
(xx) The Corporation has not raised money by way of public issue during
the year.
(xxi) During the course of our examination of the books and records of
the Corporation, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Corporation, noticed or reported during the year,
except for following instances of fraud identified by the Management :
a) The incident of an irregularity of Rs. 0.60 crore by a Corporation
Owned Corporation Operated retail outlet operator. The amount has since
been recovered.
b) The incident of an irregularity of Rs. 0.15 crore relating to the
Retail Territory by an officer. The amount has since been recovered.
c) The fraud of Rs. 0.01 crore in respect of procurement of services
committed by an officer at a Retail Territory. Disciplinary action has
been taken against the officer concerned.
For CNK & ASSOCIATES LLP For HARIBHAKTI & CO.
Chartered Accountants Chartered Accountants
Firm Registration No. 101961W Firm Registration No.103523W
Sd/- Sd/-
Himanshu Kishnadwala Chetan Desai
Partner Partner
Membership No.: 37391 Membership No.: 17000
Place : Mumbai
Dated : 29th May, 2014
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of Bharat
Petroleum Corporation Limited ("the Corporation"), which comprise
the Balance Sheet as at March 31, 2013, 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 Standards referred to in sub-section (3C) of section 211
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
mis-statement, 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 mis-statement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditors'' 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 sufficient 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 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, 2013;
(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, as
amended by the Companies (Auditor''s Report) (Amendment) Order 2004
(together the ''Order''), issued by the Central 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 to the extent applicable to the Company.
2. As required by section 227(3) of the Companies 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
Cash Flow Statement comply with the Accounting Standards referred to in
subsection (3C) of section 211 of the Companies Act, 1956;
e) Disclosure in terms of clause (g) of sub-section (1) of section 274
of the Companies Act, 1956 is not required as per Notification No. GSR
829(E) dated October 21, 2003 issued by the Department of Company
Affairs.
f) Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under section 441A of the
Companies Act, 1956 nor has it issued any Rules under the said section,
prescribing the manner in which such cess is to be paid, no cess is due
and payable by the Company.
ANNEXURE TO THE AUDITORS'' REPORT
(Referred to in Paragraph (1) of our report of even date on the
accounts of BHARAT PETROLEUM CORPORATION LIMITED for the year ended
31st March 2013)
1. Fixed Assets
a) The Company has maintained proper records showing full particulars
including the quantitative details and situation of fixed assets. In
respect of continuous process plants, the records are maintained on
consolidated basis and not for individual components of the same.
b) The fixed assets of the Company, other than LPG cylinders and
pressure regulators with customers, are generally physically verified
by the Management in a phased manner of two/three years cycle which, in
our opinion, is reasonable having regard to the size of the Company and
the nature of its assets. The Company has identified certain
discrepancies on such verifications which are under reconciliation and
consequent adjustment, which in view of management would not be
material.
c) The disposals of fixed assets during the year are not of a
significant value and do not affect the going concern assumption.
2. Inventories
a) The management during the year under audit carried out the physical
verification of inventories (except those lying with third parties and
in transit) at regular intervals. In respect of inventories lying with
third parties, these have generally been confirmed by them and the
inventory in transit has been verified with subsequent receipts.
b) Taking into consideration the nature of business, we are of the
opinion that the procedures of physical verification and frequency of
such verification is 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 between the physical stocks and
records were not material in relation to the operation of the Company
and the same have been properly dealt with in the books of account.
3. Secured or Unsecured Loans Granted or Taken
The company has not granted or taken any loans, secured or unsecured to
/ from companies, firms or other parties covered in the register
maintained under Section 301 of the Companies Act, 1956. Therefore, the
provisions of sub-clause (b) to (d), (f) and (g) of sub-para (iii) of
para 4 of the Order are not applicable.
4 Internal Control
In our opinion and according to the information and explanations given
to us, having regard to the explanation that some of the items
purchased are of a special nature and suitable alternative sources do
not exist, there is generally an adequate internal control procedure
commensurate with the size of the Company and the nature of its
business for the purchase of inventories and fixed assets and for the
sale of goods and services. During the course of our audit, we have not
observed any continuing failure to correct major weaknesses in the
internal control system.
5. Transactions under Section 301
According to the information and explanation given to us and as
verified by us, there were no transactions exceeding the value of Rs.
five lakhs in case of any party that need to be entered in the register
maintained under Section 301 of the Companies Act, 1956.
6. Public Deposits
According to the information and explanation given to us, the Company
has not accepted any deposits from the public.
7. Internal Audit System
The Company has an internal audit system which is carried out by the
in-house department and also by outsourced firms for certain areas. In
our view, the same is generally commensurate with the size and the
nature of its business.
8. Cost Records
We have broadly reviewed the books of account maintained by the Company
pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956 and are of the opinion that prima facie the prescribed
records have been made and maintained. However, we have not made a
detailed examination of these records.
9. Statutory Dues
a) The company has been generally regular in depositing its undisputed
statutory dues including Provident Fund, Investor Education and
Protection Fund, Employees State Insurance Fund, Income Tax, Sales Tax,
Value Added Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty,
Cess and any other statutory dues as applicable with the appropriate
authorities during the year.
According to the information and explanation given to us, no material
undisputed amounts payable in respect of Provident Fund, Investor
Education and Protection Fund, Employees State Insurance Fund, Income
Tax, Sales Tax, Value Added Tax, Wealth Tax, Service Tax, Customs Duty,
Excise Duty, Cess and any other statutory dues were in arrears as at
31.3.2013 for a period of more than six months from the date they
became payable.
b) The details of disputed dues of sales tax, income tax, customs duty,
wealth tax, service tax, excise duty, cess, etc. which have not been
deposited, are given in Annexure I.
10. The company does not have any accumulated losses at the end of the
financial year and it has not incurred any cash losses during the
financial year covered by our audit or in the immediately preceding
financial year.
11. According to the information and explanations given to us and
based on the documents and records produced before us, the Company has
not defaulted in repayment of dues to Financial Institutions / Banks.
12. According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
13. The Company is not a chit fund or a nidhi/ mutual benefit fund/
society. Therefore, the provisions of clause 13 of Para 4 of the
Companies (Auditor''s Report) Order are not applicable to the Company.
14. According to the information and explanations given to us and as
verified by us, the Company is not dealing or trading in shares,
securities, debentures and other investments.
15. The Company has given guarantees for loans taken by others from
banks or financial institutions, aggregating to Rs. 1,881.44 Crores
where the terms and conditions, in our opinion, are not prima facie
prejudicial to the interest of the Company.
16. On the basis of review of utilization of funds pertaining to term
loans on overall basis and the related information made available to
us, the term loans obtained during the year, prima facie, have been
applied for the purpose for which the loans were raised.
17. According to the information and explanation given to us and on an
overall examination of the Balance Sheet and Cash Flow Statement of the
Company, we report that funds raised on short-term basis have not been
used for long-term investment.
18. According to the information and explanations given to us and
verified by us, the Company has not made any preferential allotment of
shares during the year to parties and companies covered in the Register
maintained under section 301 of Companies Act, 1956.
19. The Company has created necessary securities / charge as per the
debenture trust deed in respect of debentures issued and outstanding at
the year end.
20. The Company has not raised any money by way of public issues
during the year.
21. As represented to us by the management and based on our
examination in the course of our audit, except for the instances at
(a), (b) and (c) below, no other material fraud on or by the Company
has been noticed or reported during the year.
a) The Company has identified a fraud in respect of Petro card
operations committed by two service engineers of an outsourced service
provider amounting to Rs.21.75 Lacs. The said amount has since been
recovered from the party.
b) The Company has identified an incident of irregularity in Public
deposit payments by an employee (since deceased). The matter is under
investigation. The amount of irregularity is around Rs.64 Lacs.
c) The Company has identified a fraud made by an advocate relating to
misappropriation of disbursement of compensation amounting to Rs. 5
Lacs to beneficiaries in LPG accident cases, The amount has since been
recovered.
For and on behalf of For and on behalf of
T R CHADHA & Co. K. VARGHESE & Co.
Chartered Accountants Chartered Accountants
FR No: 006711N FR No:004525S
Sd/- Sd/-
Vikas Kumar Sam Varghese
Partner Partner
Membership No: 75363 Membership No: 216979
Place: Mumbai
Dated: 29th May, 2013
Mar 31, 2012
1. We have audited the attached Balance Sheet of BHARAT PETROLEUM
CORPORATION LIMITED as at 31st March 2012 and the Statement of Profit
and Loss and the Cash Flow Statement of the Company 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 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 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 Central Government of India and further as per
requirement of Companies (Auditor's Report) (Amendment) Order, 2004
in terms of sub-section (4A) of the section 227 of the Companies Act,
1956 we enclose in the Annexure a statement on the matters specified in
paragraph 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph
(3) above, 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 it appears from our examination of the
books.
c) The Balance Sheet and 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 Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement comply with the Accounting Standards
referred to in sub-section (3C) of section 211 of the Companies Act,
1956 to the extent applicable to the company.
e) Disclosure in terms of clause (g) of sub-section (1) of section 274
of the Companies Act, 1956 is not required as per Notification No. GSR
829(E) dated October 21, 2003 issued by the Department of Company
Affairs.
f) Without qualifying our opinion, we invite attention to Note 21 of
Financial Statements regarding recoverability from a Public Sector
Undertaking (PSU) making significant losses, based on the assurances
given by the PSU.
g) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read with the 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:
i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March 2012;
ii) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
iii) in the case of 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 on the
accounts of BHARAT PETROLEUM CORPORATION LIMITED for the year ended
31st March 2012)
1. Fixed Assets
a) The Company has maintained proper records showing full particulars
including the quantitative details and situation of fixed assets except
in respect of items like pipes, valves, meters, instruments and other
similar items peculiar to a continuous process plant.
b) As per the information and explanation given to us, the company has
generally physically verified its fixed assets during the previous
year, other than LPG cylinders with customers, in accordance with the
verification programme and the frequency of verification is reasonable
having regard to the size of the company and the nature of its assets.
The company has identified certain discrepancies on such verifications
which are under reconciliation and consequent adjustment, which in view
of management would not be material.
c) In our opinion, the disposals of fixed assets during the year are
not of a significant value and do not affect the going concern
assumption.
2. Inventories
a) The management during the year under audit carried out the physical
verification of inventories (except those lying with third parties and
in transit) at regular intervals. In respect of inventories lying with
third parties, these have generally been confirmed by them and the
inventory in transit has been verified with subsequent receipts.
b) Taking into consideration the nature of business, we are of the
opinion that the procedure of physical verification and frequency of
such verification is reasonable and adequate in relation to the size of
the company and the nature of its business.
c) The Company is maintaining proper stock of inventory. The
discrepancies noticed on verification between the physical stocks and
records were not material in relation to the operation of the company
and the same have been properly dealt with in the books of account.
3. Secured or Unsecured Loans Granted or Taken
Based on the audit procedures applied by us and according to the
information and explanations given to us, the company has not granted
or taken any loans, secured or unsecured to / from companies, firms or
other parties covered in the register maintained under section 301 of
the Companies Act, 1956. Therefore, the provisions of sub-clause (b) to
(d), (f) and (g) of sub-para (iii) of para 4 of the Order are not
applicable.
4. Internal Control
In our opinion and according to the information and explanations given
to us, having regard to the explanation that some of the items
purchased are of a special nature and suitable alternative sources do
not exist, there is generally an adequate internal control procedure
commensurate with the size of the Company and the nature of its
business, for the purchase of inventories and fixed assets and for the
sale of goods and services. During the course of our audit, we have not
observed any continuing failure to correct major weaknesses in the
internal control system.
5. Transactions under Section 301
a) According to the information and explanation given to us and as
verified by us, there were no transactions exceeding the value of Rs.
five lakhs in case of any party that need to be entered in the Register
maintained in pursuance of section 301 of the Companies Act, 1956.
b) As there are no transactions exceeding the value of Rs. five lakhs
in case of any party that need to be entered in the Register maintained
pursuant to section 301 of the Companies Act, 1956, sub-clause (b) of
sub-para (v) of Para 4 of the Order regarding reasonability of price at
which such transactions have been entered is not applicable.
6. Public Deposits
According to the information and explanation given to us, the Company
has not accepted any deposits from the public.
7. Internal Audit System
The Company has an internal audit system which is carried out by the
inhouse department and also by outsourced firms for certain areas. In
our view, the same is generally commensurate with the size and the
nature of its business.
8. Cost Records
We have broadly reviewed the books of account maintained by the Company
pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956 and are of the opinion that prima facie the prescribed
records have been kept and maintained. We have not made a detailed
examination of these records.
9. Statutory Dues
The company has been generally regular in depositing its undisputed
statutory dues including Provident Fund, Investor Education and
Protection Fund, Employees State Insurance Fund, Income Tax, Sales Tax,
Value Added Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty,
Cess and any other statutory dues as applicable with the appropriate
authorities during the year. According to the information and
explanation given to us, no material undisputed amounts payable in
respect of Provident Fund, Investor Education and Protection Fund,
Employees State Insurance Fund, Income Tax, Sales Tax, Value Added Tax,
Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other
statutory dues were in arrears as at 31.3.2012 for a period of more
than six months from the date they became payable.
The details of disputed dues of sales tax, income tax, customs duty,
wealth tax, service tax, excise duty, cess, etc. which have not been
deposited, are given in Annexure I.
10. The company does not have any accumulated losses at the end of the
financial year and it has not incurred any cash losses during the
financial year covered by our audit and in the immediately preceding
financial year.
11. According to the information and explanations given to us and
based on the documents and records produced before us, the Company has
not defaulted in repayment of dues to Financial Institutions / Banks.
12. According to the information and explanations given to us, the
Company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securities.
13. In our opinion and according to the information and explanations
given to us, the nature of activities of the Company does not attract
any special statute applicable to chit fund and nidhi/ mutual benefit
fund/ societies. Therefore, the provisions of clause 13 of Para 4 of
the Companies (Auditor's Report) Order are not applicable to the
Company.
14. According to the information and explanations given to us and as
verified by us, the Company is not dealing or trading in shares,
securities, debentures and other investments. The shares, securities,
debentures and other investments are held by the Company in its own
name except to the extent of the exemption granted under section 49 of
the Companies Act, 1956.
15. The Company has given guarantees for loans taken by others from
banks or financial institutions, aggregating to Rs. 1818.30 Crores
where the terms and conditions, in our opinion, are not prima facie
prejudicial to the interest of the Company.
16. In our opinion, the term loans obtained during the year, prima
facie, have been applied for the purpose for which the loans were
raised.
17. According to the information and explanation given to us and on an
overall examination of the Balance Sheet and Cash Flow Statement of the
Company, we report that funds raised on short-term basis have not been
used for long-term investment.
18. According to the information and explanations given to us and
verified by us, the Company has not made any preferential allotment of
shares during the year to parties and companies covered in the Register
maintained under section 301 of Companies Act, 1956.
19. According to the information and explanations given to us, 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. As represented to us by the management and based on our
examination in the course of our audit, except for the instances at (a)
and (b) below, no material fraud on or by the Company has been noticed
or reported during the year.
a) The company has identified a fraud at Budge Budge where there was a
shortage in the products lying with a repacker. The cost price of the
products is Rs. 69.93 lacs and the sale value of the same is Rs. 124
lacs. The amount is still pending recovery.
b) The company has identified another fraud made by an advocate
relating to misappropriation of compensation amount deposited for land
acquisition at Bijwasan Installation and other court cases, amounting
to Rs. 188.40 lacs, which has since been recovered.
For and on behalf of For and on behalf of
T R CHADHA & Co. K. VARGHESE & Co.
Chartered Accountants Chartered Accountants
FR No: 006711N FR No:004525S
Sd/- Sd/-
KASHYAP VAIDYA K.VARGHESE
Partner Partner
Membership No: 37623 Membership No: 20674
Mumbai
Dated: 25th May 2012
Mar 31, 2011
1. We have audited the attached Balance Sheet of BHARAT PETROLEUM
CORPORATION LIMITED as at 31st March 2011 and the Profit and Loss
Account and the Cash Flow Statement of the Company 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 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 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 ('the
Order'), issued by the Central Government in terms of Section 227(4A)
of the Companies Act, 1956, we give in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the Order.
4. Further to our comments in the Annexure referred to in paragraph
(3) above, 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 it appears from our examination of the
books.
c) The Balance Sheet and the Profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account.
d) In our opinion, the Balance Sheet, the Profit and Loss Account and
the Cash Flow Statement comply with the Accounting Standards referred
to in sub-section (3C) of section 211 of the Companies Act, 1956.
e) Disclosure in terms of clause (g) of sub-section (1) of section 274
of the Companies Act, 1956 is not required as per Notification No. GSR
829(E) dated October 21, 2003 issued by the Department of Company
Affairs.
f) Without qualifying our opinion, we invite attention to :
i) Note 4 of Schedule X Ã Part B, Notes to Accounts, regarding
impairment of assets wherein, being technical matters subject to
uncertainty we have relied on the estimates and assumptions made by the
Company in arriving at recoverable value of assets, based on desired
margins.
ii) Notes 6 and 7 of Schedule X Ã Part B, Notes to Accounts, regarding
the provision for post retirement benefit schemes and related impact on
provision for current tax, where the Company's position is supported by
legal advice and based on reasonable certainty of obtaining necessary
approvals from tax authorities.
g) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read with the 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:
i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2011;
ii) in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
iii) in the case of 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 on the
accounts of BHARAT PETROLEUM CORPORATION LIMITED for the year ended
31st March 2011.)
(i) In respect of fixed assets
a) The company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets except in
respect of items like pipes, valves, meters, instruments and other
similar items peculiar to a continuous process plants.
b) The Company has carried out physical verification of fixed assets,
other than LPG cylinders with customers, in accordance with the
verification programme and the frequency of verification is reasonable.
According to information and explanations given to us, no material
discrepancies have been reported on such verification.
c) In our opinion, the disposals of fixed assets during the year are
not of a significant value and do not affect the going concern
assumption.
(ii) In respect of inventories:
a) The inventories of finished goods, stores, spares parts and raw
materials, except those lying with third parties and in transit, have
been verified by the management at reasonable intervals. In respect of
inventories lying with third parties, these have been confirmed by them
and the inventory in transit has been verified with subsequent
receipts.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management were generally reasonable and adequate in
relation to the size of the company and the nature of its business.
c) In our opinion and according to the information and explanations
given to us, the company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verification as compared to the records of inventories.
(iii) Based on the audit procedures applied by us and according to the
information and explanations given to us, the company has not granted
or taken any loans, secured or unsecured to / from companies, firms or
other parties covered in the register maintained under section 301 of
the Companies Act, 1956. Therefore, the provisions of sub-clause (b) to
(d), (f) and (g) of sub-para (iii) of para 4 of the Order are not
applicable.
(iv) In our opinion and according to the information and explanations
given to us, having regard to the explanation that some of the items
purchased are of a special nature and suitable alternative sources do
not exist for obtaining comparable quotations, there is an adequate
internal control procedure commensurate with the size of the Company
and the nature of its business, for the purchase of inventories and
fixed assets and for the sale of goods and services. During the course
of our audit, we have not observed any continuing failure to correct
major weaknesses in the internal control system.
(v) In respect of transactions entered in the register maintained under
section 301 of the Companies Act, 1956:
a) In our opinion and according to the information and explanation
given to us, there were no transactions exceeding the value of Rs. five
lakhs in case of any party that need to be entered in the Register
maintained in pursuance of section 301 of the Companies Act, 1956.
b) As there are no transactions exceeding the value of Rs. five lakhs
in case of any party that need to be entered in the Register maintained
pursuant to section 301 of the Companies Act, 1956, sub-clause (b) of
sub-para (v) of Para 4 of the Order regarding reasonability of price at
which such transactions have been entered is not applicable.
(vi) In our opinion and according to the information and explanation
given to us, the company has complied with the directives issued by the
Reserve Bank of India, the provisions of section 58A and 58AA of the
Companies Act, 1956 and the rules framed there under.
(vii) In our opinion, the company has an adequate internal audit system
commensurate with the size and the nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956 and are of the opinion that prima facie the prescribed
records have been kept and maintained. We have not made a detailed
examination of these records.
(ix) According to the information and explanations given to us, in
respect of statutory and other dues:
a) According to the records of the Company, the company has been
generally regular in depositing undisputed statutory dues including
Provident fund, Investor Education and Protection Fund, Employees'
State Insurance Fund, Income tax, Sales tax, Wealth tax, Service tax,
Custom duty, Excise duty, cess and any other statutory dues, with
appropriate authorities during the year. According to the information
and explanations given to us, no undisputed amounts payable in respect
of Income tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty and
Excise Duty were outstanding, at the year end for a period of more than
six months from the date they became payable.
b) The details of disputed dues of sales tax, income tax, customs duty,
wealth tax, service tax, excise duty, cess, which have not been
deposited, are given in Annexure I.
(x) The company does not have any accumulated losses at the end of the
financial year. The Company has not incurred any cash losses during the
financial year covered by our audit and in the immediately preceding
financial year.
(xi) According to the information and explanations given to us and
based on the documents and records produced before us, the Company has
not defaulted in repayment of dues to Financial Institutions / Banks.
(xii) According to the information and explanations given to us, the
Company has not granted loans and advances on the basis of security by
way of pledge of shares and other securities.
(xiii) In our opinion and according to the information and explanations
given to us, the nature of activities of the Company does not attract
any special statute applicable to chit fund and nidhi/ mutual benefit
fund/ societies.
(xiv) (a) The Company does not deal or trade in shares, securities,
debentures and other investments.
(b) The shares, securities, debentures and other investments are held
by the Company in its own name except to the extent of the exemption
granted under section 49 of the Companies Act, 1956.
(xv) The Company has given guarantees for loans taken by others from
banks or financial institutions, aggregating to Rs.1608.76 crores where
the terms and conditions, according to the information and explanations
given to us, and in our opinion, are not prima facie prejudicial to the
interests of the Company.
(xvi) In our opinion, the term loans obtained during the year, prima
facie, have been applied for the purpose for which the loans were
raised.
(xvii) According to the information and explanations given to us, based
on an overall examination of the Balance Sheet and Cash Flows of the
Company, we report that the Company has not utilized funds raised on
short-term basis for long-term investment.
(xviii) The Company has not made any preferential allotment of shares
to parties covered in the register maintained under section 301 of the
Companies Act 1956.
(xix) The Company has created security / charge on the debentures
issued during the year.
(xx) The Company has not raised any money through a public issue during
the year.
(xxi) As represented to us by the management and based on our
examination in the course of our audit, except for the instance at (a)
below, no material fraud on or by the Company has been noticed or
reported during the year.
a) The Company's bank had debited Rs. 29.03 Lacs related to forged
cheques and subsequently reversed the amount based on the Company's
clarifications. There was no financial loss due to this instance.
(Amount in Rs Crores)
Nature of Statute /
Nature Period Block Forum where Dispute is pending
of Dues
Supreme High Appellate Appellate
Court Court Tribunal* Authority**
Customs Act, 1962
(Customs 1995-2000 57.32
Duty Including
Penalty &
Interest, wherever
applicable) 2000-2005 17.35 0.50
2005-2010 0.01
Customs Duty Total - - 74.66 0.51
Central Excise Act,
1944 1985 to
1990 0.14
(Excise Duty
Including
Penalty & Interest,
wherever 1990 to 1995 0.43
applicable)
1995 to 2000 27.93 0.56
2000 to 2005 507.99 282.17 87.25
2005 to 2011 53.08 328.63 43.96
Excise Duty Total 561.06 - 638.73 132.34
Sales Tax/ VAT
Legislations 1980 to 1985 0.04
(Sales Tax
Including Penalty &
Interest, wherever
applicable) 1985 to 1990 0.75 4.10 0.01 21.97
1990 to 1995 33.37 2.45 12.95
1995 to 2000 27.96 200.73 889.65
2000 to 2005 0.23 354.85 7.94 1,847.37
2005 to 2011 26.21 55.69 58.44
Sales Tax Total 0.98 446.52 266.83 2,830.37
Income Tax Act,
1961 1990 to 1995 6.73 0.22
(Income Tax
including
Penalty &
Interest,
wherever 1995 to 2000 0.26 0.48 1.35
applicable)
2000 to 2005 5.51 -
2005 to 2011 0.03
Income Tax Total - 6.99 6.21 1.38
Finance Act, 1994 2000 to 2005 0.36
(Service Tax) 2005 to 2011 1.62 0.94
Service Tax Total - - 1.62 1.31
Grand Total 562.04 453.51 988.06 2,965.90
Nature of the
Statue / Nature
of Dues Adjudicating Joint Board of Grand Total
Authority*** Secretary, Revenue
MDF
Customs Excise Act,
1944 3.25 60.57
0.32 18.16
0.01
Custom Duty Toatl 3.57 - - 78.74
0.14
0.43
28.50
84.20 0.21 961.81
10.68 436.34
Excise Total 94.88 0.21 - 1,427.22
0.04
6.17 0.02 33.02
48.77
10.26 13.88 1,142.47
344.13 2,554.53
28.46 168.80
389.02 - 13.89 3,947.62
- - 6.95
- - - 2.09
- - - 5.51
- - - 0.03
- - - 14.58
0.17 0.54
2.57
0.17 - - 3.11
487.64 0.21 13.89 5,471.26
* Appellate Tribunal includes Sales Tax Tribunal, CESTAT and ITAT.
** Apellate Authority includes Commissioner Appeals, Assistant
Commissioner Appeals, Deputy Commissioner Appeals, Joint Commissioner
Appeals and Deputy Commissioner Commercial Taxes Appeals.
*** Adjudicating Authority includes Collector of Sales Tax, Sales Tax
Officer and Deputy Commissioner Sales Tax, Joint / Deputy/ Additional
Commissioner of Commercial Taxes
For and on behalf of For and on behalf of
B.K.KHARE AND CO. K.VARGHESE AND CO.
Chartered Accountants Chartered Accountants
FR No: 105102W FR No:004525S
Sd/- Sd/-
Padmini Khare Kaicker K.Varghese
Partner Partner
Membership No: 44784 Membership No: 20674
Delhi Delhi
Dated: 30th May 2011 Dated: : 30th May 2011
Mar 31, 2010
1. We have audited the attached Balance Sheet of BHARAT PETROLEUM
CORPORATION LIMITED as at 31st March 2010 and the Profit and Loss
Account and the Cash Flow Statement of the Company for the year ended
on that date, annexed thereto. These financial statements are the
responsibility of the CompanyÃs 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 & Assurance
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 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 (AuditorÃs Report) Order, 2003 (Ãthe
OrderÃ), issued by the Central Government in terms of Section 227(4A)
of the Companies Act, 1956, we give in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the Order.
4. Further to our comments in the Annexure referred to in paragraph
(3) above, 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 it appears from our examination of the
books.
c) The Balance Sheet and the Profit and Loss Account dealt with by this
report are in agreement with the books of account.
d) In our opinion, the Balance Sheet, the Profit and Loss Account and
the Cash Flow Statement comply with the Accounting Standards referred
to in Sub-Section (3C) of Section 211 of the Companies Act, 1956.
e) Disclosure in terms of clause (g) of Sub-Section (1) of Section 274
of the Companies Act, 1956 is not required as per Notification No. GSR
829(E) dated October 21, 2003 issued by the Department of Company
Affairs.
f) Without qualifying our opinion, we invite attention to:
i) Note No. 9 of Schedule X - Notes to Accounts, regarding impairment
of assets wherein, being technical matters subject to uncertainty we
have relied on the estimates and assumptions made by the Company in
arriving at recoverable value of assets, based on desired margins.
ii) Recovery of overdue amount of Rs. 278.54 crores from a party in
whose case arbitration award has been passed and consent terms agreed
between the parties have been filed with the Honourable Bombay High
Court. We have relied on the CompanyÃs representation that the dues are
recoverable as per consent terms and hence no provision is considered
necessary.
g) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read with the 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:
i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2010;
ii) in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
iii) in the case of Cash Flow Statement, of the cash flows for the year
ended on that date.
ANNEXURE TO THE AUDITORSÃ REPORT Referred to in Paragraph (3) of our
report of even date on the accounts of BHARAT PETROLEUM CORPORATION
LIMITED for the year ended 31st March 2010.
(i) In respect of fixed assets
a) The company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets except in
respect of items like pipes, valves, meters, instruments and other
similar items peculiar to a continuous process plants.
b) The Company has carried out physical verification of fixed assets,
other than LPG cylinders with customers, in accordance with the
verification programme and the frequency of verification is reasonable.
According to information and explanations given to us, no material
discrepancies have been reported on such verification.
c) In our opinion, the disposals of fixed assets during the year are
not of a significant value so as to affect the going concern
assumption.
(ii) In respect of inventories:
a) The inventories of finished goods, stores, spares parts and raw
materials, except those lying with third parties and in transit, have
been verified by the management at reasonable intervals. In respect of
inventories lying with third parties, these have been confirmed by them
and the inventory in transit has been verified with subsequent
receipts.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management were generally reasonable and adequate in
relation to the size of the company and the nature of its business.
c) In our opinion and according to the information and explanations
given to us, the company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verification as compared to the records of inventories.
(iii) Based on the audit procedures applied by us and according to the
information and explanations given to us, the company has not granted
or taken any loans, secured or unsecured to / from companies, firms or
other parties covered in the register maintained under Section 301 of
the Companies Act, 1956. Therefore, the provisions of Sub-clause (b) to
(d), (f) and (g) of sub-para (iii) of para 4 of the Order are not
applicable.
(iv) In our opinion and according to the information and explanations
given to us, having regard to the explanation that some of the items
purchased are of a special nature and suitable alternative sources do
not exist for obtaining comparable quotations, there is an adequate
internal control procedure commensurate with the size of the Company
and the nature of its business, for the purchase of inventories and
fixed assets and for the sale of goods and services. During the course
of our audit, we have not observed any continuing failure to correct
major weaknesses in the internal control system.
(v) In respect of transactions entered in the register maintained under
Section 301 of the Companies Act, 1956:
a) In our opinion and according to the information and explanation
given to us, there were no transactions exceeding the value of Rs. five
lakhs in case of any party that need to be entered in the Register
maintained in pursuance of Section 301 of the Companies Act, 1956.
b) As there are no transactions exceeding the value of Rs. five lakhs
in case of any party that need to be entered in the Register maintained
pursuant to Section 301 of the Companies Act, 1956, sub-clause (b) of
sub-para (v) of Para 4 of the Order regarding reasonability of price at
which such transactions have been entered is not applicable.
(vi) In our opinion and according to the information and explanation
given to us, the company has complied with the directives issued by the
Reserve Bank of India, the provision of Section 58A and 58AA of the
Companies Act, 1956 and the rules framed thereunder.
(vii) In our opinion, the company has an adequate internal audit system
commensurate with the size and the nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under Section 209(1)(d) of the Companies
Act, 1956 and are of the opinion that prima facie the prescribed
records have been kept and maintained. We have not made a detailed
examination of these records.
(ix) According to the information and explanations given to us, in
respect of statutory and other dues:
a) According to the records of the Company, the company has been
generally regular in depositing undisputed statutory dues including
Provident fund, Investor Education and Protection Fund, EmployeesÃ
State Insurance Fund, Income tax, Sales tax, Wealth tax, Service tax,
Custom duty, Excise duty, cess and any other statutory dues, with
appropriate authorities during the year. According to the information
and explanations given to us, no undisputed amounts payable in respect
of Income tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty and
Excise Duty were outstanding, at the year end for a period of more than
six months from the date they became payable.
b) The details of disputed dues of sales tax, income tax, customs duty,
wealth tax, service tax, excise duty, cess, which have not been
deposited, are given in Annexure I.
(x) The company does not have any accumulated losses at the end of the
financial year. The Company has not incurred any cash losses during the
financial year covered by our audit and in the immediately preceding
financial year.
(xi) According to the information and explanations given to us and
based on the documents and records produced before us, the Company has
not defaulted in repayment of dues to Financial Institutions / Banks.
(xii) According to the information and explanations given to us, the
Company has not granted loans and advances on the basis of security by
way of pledge of shares and other securities.
(xiii) In our opinion and according to the information and explanations
given to us, the nature of activities of the Company does not attract
any special statute applicable to chit fund and nidhi/ mutual benefit
fund/ societies.
(xiv) (a) The Company does not deal or trade in shares, securities,
debentures and other investments.
(b) The shares, securities, debentures and other investments are held
by the Company in its own name except to the extent of the exemption
granted under Section 49 of the Companies Act, 1956.
(xv) The Company has given guarantees for loans taken by others from
banks or financial institutions, aggregating to Rs. 887.43 crore where
the terms and conditions, according to the information and explanations
given to us, and in our opinion, are not prima facie prejudicial to the
interests of the Company.
(xvi) In our opinion, the term loans obtained during the year, prima
facie, have been applied for the purpose for which the loans were
raised.
(xvii) According to the information and explanations given to us, based
on an overall examination of the Balance Sheet and Cash Flows of the
Company, we report that the Company has not utilized funds raised on
short-term basis for long-term investment.
(xviii) The Company has not made any preferential allotment of shares
to parties covered in the register maintained under Section 301 of the
Companies Act, 1956.
(xix) The Company has created security / charge on the debentures
issued during the year.
(xx) The Company has not raised any money through a public issue during
the year.
(xxi) As presented to us by the management and based on our examination
in the normal course of audit, no material frauds on or by the Company
have been noticed or reported during the year.
For and on behalf of For and on behalf of
B.K.KHARE & CO. K.VARGHESE & CO.
FR No: 105102W FR No: 004525S
Sd/- Sd/-
Padmini Khare Kaicker K.Varghese
Partner Partner
Membership No: 44784 Membership No: 20674
Place : Mumbai
Date : May 27, 2010
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