Home  »  Company  »  Bharat Petroleum  »  Quotes  »  Auditor Report
Union Budget 2017-18
Enter the first few characters of Company and click 'Go'

Auditor Report of Bharat Petroleum Corporation Ltd.

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 – 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 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 31,2015]

(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

 
Subscribe now to get personal finance updates in your inbox!