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Bharat Petroleum Corporation Ltd.

BSE: 500547 Sector: Oil & Gas
NSE: BPCL ISIN Code: INE029A01011
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NSE 15:54 | 17 Nov 504.00 4.65
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OPEN 503.00
PREVIOUS CLOSE 499.05
VOLUME 373594
52-Week high 550.00
52-Week low 399.34
P/E 15.16
Mkt Cap.(Rs cr) 109,406
Buy Price 0.00
Buy Qty 0.00
Sell Price 504.35
Sell Qty 62.00
OPEN 503.00
CLOSE 499.05
VOLUME 373594
52-Week high 550.00
52-Week low 399.34
P/E 15.16
Mkt Cap.(Rs cr) 109,406
Buy Price 0.00
Buy Qty 0.00
Sell Price 504.35
Sell Qty 62.00

Bharat Petroleum Corporation Ltd. (BPCL) - Auditors Report

Company auditors report

Report on the Standalone Indian Accounting Standards (Ind AS) Financial Statements

1. We have audited the accompanying standalone Ind AS financial statements of BharatPetroleum Corporation Limited ("the Corporation") which comprise the BalanceSheet as at March 31 2017 the Statement of Profit and Loss (including OtherComprehensive Income) the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and a summary of significant accounting policies and otherexplanatory information.

Management's Responsibility for the Standalone Financial Statements

2. The Corporation's Board of Directors is responsible for the matters stated inSection 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these standalone Ind AS financial statements that give a true and fair viewof the state of affairs (financial position) profit or loss (financial performanceincluding other comprehensive income) cash flows and changes in equity of the Corporationin accordance with the accounting principles generally accepted in India including IndianAccounting Standards (Ind AS) prescribed under Section 133 of the Act. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding of the assets of the Corporation and for preventing anddetecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditors' Responsibility

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

4. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.

5. We conducted our audit of the standalone Ind AS financial statements in accordancewith the Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone Ind AS financial statements are freefrom material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Corporation's preparation of the standalone Ind AS financial statementsthat give a true and fair view in order to design audit procedures that are appropriatein the circumstances. An audit also includes evaluating the appropriateness of theaccounting policies used and the reasonableness of the accounting estimates made by theCorporation's Directors as well as evaluating the overall presentation of the standaloneInd AS financial statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide 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 explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India including the Ind AS of thestate of affairs (financial position) of the Corporation as at March 312017 and itsprofit (financial performance including other comprehensive income) its cash flows andthe changes in equity for the year ended on that date.

Other Matter

9. The comparative financial information of the Corporation for the year ended March312016 and the transition date opening Balance Sheet as at April 1 2015 included inthese standalone Ind AS financial statements are based on the previously issued statutoryfinancial statements for the years ended March 31 2016 and March 312015 prepared inaccordance with the Companies (Accounting Standards) Rules 2006 (as amended) which wereaudited by us on which we expressed an unmodified opinion dated May 26 2016 and May 282015 respectively. The adjustments to those financial statements for the differences inaccounting principles adopted by the Corporation on transition to the Ind AS have beenaudited 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 (Auditor's Report) Order 2016 issued by the CentralGovernment of India in terms of sub-section (11) of Section 143 of the Act ("theOrder") and on the basis of such checks of the books and records of the Corporationas we considered appropriate and according to the information and explanations given tous we give in the ‘Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

11. As required by Section 143(5) of the Act we give in "Annexure B" astatement on the matters specified by the Comptroller and Auditor-General of India for theCorporation.

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 bestof 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 theCorporation so far as it appears from our examination of those books;

c) The Balance Sheet the Statement of Profit and Loss (including Other ComprehensiveIncome) the Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account;

d) In our opinion the aforesaid standalone Ind AS financial statements comply with theIndian 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 2015issued by Ministry of Corporate Affairs provisions of Section 164(2) of the Act regardingdisqualification of Directors are not applicable to the Corporation;

f) With respect to the adequacy of the internal financial controls over financialreporting of the Corporation and the operating effectiveness of such controls refer toour separate audit report in "Annexure C";

g) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our knowledge and belief and according to the information andexplanations given to us:

i. The Corporation has disclosed the impact if any of pending litigations on itsfinancial position in its standalone Ind AS financial statements. Refer Note 64 of thestandalone Ind AS financial statements;

ii. The Corporation has made provision as required under the applicable law oraccounting standards for material foreseeable losses if any on long-term contractsincluding derivative contracts.

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

iv. The Corporation has provided requisite disclosures in the standalone Ind ASfinancial statements as to holdings as well as dealings in Specified Bank Notes during theperiod from 8th November 2016 to 30th December 2016. Based onaudit procedures and relying on the management representation we report that thedisclosures are in accordance with the books of account maintained by the Corporation andas produced to us by the management. Refer Note 62 of the standalone Ind AS financialstatements.

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

ANNEXURE A TO INDEPENDENT AUDITORS' REPORT

[Referred to in paragraph 10 under ‘Report on Other Legal and RegulatoryRequirements' in the Independent Auditors' Report of even date to the members of BharatPetroleum Corporation Limited ("the Corporation") on the standalone Ind ASfinancial statements as of and for the year ended March 312017]

(i) (a) The Corporation has maintained proper records showing full particularsincluding quantitative details and

situation of fixed assets;

(b) As per information and explanations given to us physical verification of fixedassets (except LPG Cylinders and pressure regulators with customers) has been carried outby the Management during the year in accordance with the phased programme of verificationof all assets over three years which in our opinion is reasonable having regard to thesize of the Corporation and the nature of its assets. As informed no materialdiscrepancies were noticed on such verification;

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Corporation the title deeds of immovable properties areheld 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 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 beenphysically verified by the Management during the year at reasonable intervals. In respectof inventory lying with third parties these have substantially been confirmed by them. Nomaterial discrepancies were noticed on physical verification of inventories carried out atthe end of the year;

(iii) As informed the Corporation has not granted any loans secured or unsecured tocompanies firms limited liability partnerships or other parties covered in the registermaintained under Section 189 of the Act. Accordingly paragraphs 3(iii)(a) 3(iii)(b) and3(iii)(c) of the Order are not applicable;

(iv) In our opinion and according to the information and explanations given to us theCorporation has complied with the provisions of Section 185 and Section 186 of the Actwith respect to the loans investments guarantees and securities;

(v) In our opinion and according to the information and explanations given to us theCorporation has not accepted any deposits from the public within the provisions ofSections 73 to 76 of the Act read with The Companies (Acceptance of Deposits) Rules 2014and other relevant provisions of the Act;

(vi) We have broadly reviewed the books of account maintained by the Corporation inrespect of products where the maintenance of cost records has been specified by theCentral Government under Section 148(1) of the Act and the rules framed there under and weare of the opinion that prima-facie the prescribed books of account and cost records havebeen made and maintained. We have not however made a detailed examination of the samewith a view to determining whether they are accurate or complete;

(vii) (a) The Corporation is generally regular in depositing with appropriateauthorities undisputed statutory dues

including provident fund employees' state insurance income-tax sales-tax servicetax duty of customs duty of excise value added tax cess and any other materialstatutory dues applicable to it;

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income-tax sales-taxservice tax duty of customs duty of excise value added tax cess and any other materialstatutory dues applicable to it were outstanding as on the last day of the financialyear 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 withrespect to income- tax sales-tax service tax duty of customs duty of excise valueadded 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 hasnot defaulted in repayment of loans or borrowing to financial institutions banksGovernment or dues to debenture holders;

(ix) The Corporation did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year. According to the informationand explanations given to us money raised by way of term loans during the year have beenapplied for the purpose for which those were raised;

(x) During the course of our examination of the books and records of the Corporationcarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us no instances of fraud by theCorporation or on the Corporation by its officers and employees have been noticed orreported during the year nor have been informed of any such instance by the managementexcept for the following instances of fraud identified by the Management:

Incidents of irregularities aggregating to ' 1 crore relating to vendor payments at twoRetail Territories were noticed during the year. Excess payments made on this account tothe vendors have since been recovered except for ' 0.09 crore for which dues of thevendors 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 2015issued by Ministry of Corporate Affairs provisions of Section 197 read with Schedule V ofthe 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 theCorporation is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is notapplicable;

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Corporation all transactions entered into by theCorporation with the related parties are in compliance with Sections 177 and 188 of theAct where applicable and details of such transactions have been disclosed in thestandalone Ind AS financial statements as required by the applicable Indian AccountingStandards;

(xiv) According to the information and explanations given to us and based on ourexamination of the records the Corporation has not made any preferential allotment orprivate 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 ourexamination of the records the Corporation has not entered during the year into non-cashtransactions 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 theReserve Bank of India Act 1934. Accordingly paragraph 3(xvi) of the Order is notapplicable.

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

 

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 *** 6535.06 1990 to 2017
Total 8475.88
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 * 3571.46 1985 to 2015
Appellate Authority ** 6631.08 1985 to 2015
Adjudicating Authority *** 1.74 2010 to 2017
Total 10672.70
5 Finance Act1994 (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: 19581.83

Dues Include Penalty & Interest wherever applicable * Appellate Tribunal includesSales Tax Tribunal CESTAT and ITAT.

** Appellate Authority includes Commissioner Appeals Assistant Commissioner AppealsDeputy Commissioner Appeals Joint Commissioner Appeals and Deputy Commissioner CommercialTaxes Appeals.

*** Adjudicating Authority includes Collector of Sales Tax Sales Tax Officer andDeputy Commissioner Sales Tax Joint/Deputy/Additional Commissioner of Commercial Taxesetc.

~ Period block shall indicate the period interval in which all the disputes under thatauthority have taken place.

ANNEXURE B TO INDEPENDENT AUDITORS' REPORT

[Referred to in paragraph 11 under ‘Report on Other Legal and RegulatoryRequirements' in the Independent Auditors' Report of even date to the members of BharatPetroleum Corporation Limited ("the Corporation") on the standalone Ind ASfinancial statements as of and for the year ended March 31 2017]

1 Area examined

Whether the Company has clear title/ lease deeds for freehold and leasehold respectivelyRs. If not please state the area of freehold and leasehold land for which title/lease deeds are not availableRs.

Observations/ Findings Particulars Area (In Acres)

Remarks

Freehold Land 1159.94 Document of title not verification available for
Freehold Land 7.49

Document of title lying with registration authorities

Note: The above list does not include immovable properties classified as Operating Lease in Ind AS Financial Statements.

2 Area examined

Whether there are any cases of waiver/ write off of debts/ loans/ interest etc. if yes with reasons there of 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

0.31

Waiver of interest

0.15
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 authoritiesRs.

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.

ANNEXURE C TO INDEPENDENT AUDITORS' REPORT

[Referred to in paragraph 12(f) under ‘Report on Other Legal and RegulatoryRequirements' in the Independent Auditors' Report of even date to the members of BharatPetroleum Corporation Limited on the standalone Ind AS financial statements for the yearended March 312017]

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of BharatPetroleum Corporation Limited ("the Corporation") as of March 312017 inconjunction with our audit of the standalone Ind AS financial statements of theCorporation for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Corporation's Management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Corporation considering the essential components of internal controlstated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to Corporation's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Corporation's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing specified under Section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth issued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting were established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Corporation's internal financial controlssystem over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that:

1. pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

2. provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and

3. provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

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

Opinion

In our opinion the Corporation has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 312017 based on theinternal control over financial reporting criteria established by the Corporationconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the ICAI.

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