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Bharat Petroleum Corporation Ltd.

BSE: 500547 Sector: Oil & Gas
NSE: BPCL ISIN Code: INE029A01011
BSE 00:00 | 19 Sep 365.10 10.15
(2.86%)
OPEN

356.90

HIGH

366.20

LOW

354.00

NSE 00:00 | 19 Sep 365.05 9.95
(2.80%)
OPEN

357.50

HIGH

366.60

LOW

353.65

OPEN 356.90
PREVIOUS CLOSE 354.95
VOLUME 366197
52-Week high 550.00
52-Week low 324.25
P/E 8.36
Mkt Cap.(Rs cr) 79,199
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 356.90
CLOSE 354.95
VOLUME 366197
52-Week high 550.00
52-Week low 324.25
P/E 8.36
Mkt Cap.(Rs cr) 79,199
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Bharat Petroleum Corporation Ltd. (BPCL) - Auditors Report

Company auditors report

Report on the Standalone Indian Accounting Standards (Ind AS) FinancialStatements

1. We have audited the accompanying standalone Ind AS financialstatements of Bharat Petroleum Corporation Limited ("the Corporation") whichcomprise the Balance Sheet as at 31st March 2018 the statement of Profit andLoss (including Other Comprehensive Income) the Cash Flow Statement and the Statement ofChanges in Equity for the year then ended and a summary of significant accountingpolicies and other explanatory information.

Management's Responsibility for the Standalone FinancialStatements

2. The Corporation's Board of Directors is responsible for thematters stated in Section 134(5) of the Companies Act 2013 ("the Act") withrespect to the preparation of these standalone Ind AS financial statements that give atrue and fair view of the state of affairs (financial position) profit or loss (financialperformance including other comprehensive income) cash flows and changes in equity of theCorporation in accordance with the accounting principles generally accepted in Indiaincluding Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of the assets of the Corporation and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the standalone Ind ASfinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditors' Responsibility

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

4. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made there under.

5. We conducted our audit of the standalone Ind AS financial statementsin accordance with the Standards on Auditing specified under Section 143(10) of the Act.Those Standards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether the standalone Ind AS financialstatements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidenceabout the amounts and the disclosures in the standalone Ind AS financial statements. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the standalone Ind AS financial statements whether dueto fraud or error. In making those risk assessments the auditor considers internalfinancial control relevant to the Corporation's preparation of the standalone Ind ASfinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Corporation's Directors as well as evaluating the overallpresentation of the standalone Ind AS financial statements.

7. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the standalone Ind ASfinancial statements.

Opinion

8. In our opinion and to the best of our information and according tothe explanations given to us the aforesaid standalone Ind AS financial statements givethe information required by the Act in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India includingthe Ind AS of the state of affairs (financial position) of the Corporation as at 31stMarch 2018 and its profit (financial performance including other comprehensive income)its cash flows and the changes in equity for the year ended on that date.

Report on Other Legal and Regulatory Requirements

9. As required by the Companies (Auditor's Report) Order 2016issued by the Central Government of India in terms of sub-section (11) of Section 143 ofthe Act ("the Order") and on the basis of such checks of the books and recordsof the Corporation as we considered appropriate and according to the information andexplanations given to us we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

10. As required by Section 143(5) of the Act we give in "AnnexureB" a statement on the matters specified by the Comptroller and Auditor-General ofIndia for the Corporation.

11. As required by Section 143(3) of the Act we report that: a) Wehave sought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purpose of our audit; b) In our opinionproper books of accounts as required by law have been kept by the Corporation so far as itappears from our examination of those books; c) The Balance Sheet the Statement of Profitand Loss (including Other Comprehensive Income) the Cash Flow Statement and Statement ofChanges in Equity dealt with by this Report are in agreement with the books of account; d)In our opinion the aforesaid standalone Ind AS financial statements comply with theIndian Accounting Standards specified under Section 133 of the Act; e) In view ofexemption given vide notification no. G.S.R. 463(E) dated June 5 2015 issued by Ministryof Corporate Affairs provisions of Section 164(2) of the Act regarding disqualificationof directors are not applicable to the Corporation; f) With respect to the adequacy ofthe internal financial controls over financial reporting of the Corporation and theoperating effectiveness of such controls refer to our separate audit report in"Annexure C"; g) With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our knowledge and belief and according tothe information and explanations given to us: i. The Corporation has disclosed the impactif any of pending litigations on its financial position in its standalone Ind ASfinancial statements. Refer Note 63 of the standalone Ind AS financial statements; ii. TheCorporation has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts. iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Corporation.

For CVK & Associates For Borkar & Muzumdar
Chartered Accountants Chartered Accountants
ICAI FRN: 101745W ICAI FRN: 101569W
Sd/- Sd/-
A. K. Pradhan B. M. Agarwal
Partner Partner
Membership No.: 032156 Membership No.: 033254

Place: Mumbai

Date: 29th May 2018

ANNEXURE A TO INDEPENDENT AUDITORS' REPORT

[Referred to in paragraph 9 under ‘Report on Other Legal andRegulatory Requirements' in the Independent Auditors' Report of even date to themembers of Bharat Petroleum Corporation Limited ("the Corporation") on thestandalone Ind AS financial statements as of and for the year ended 31st March2018] (i) (a) The Corporation has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets; (b) As per information andexplanations given to us physical verification of fixed assets (except LPG Cylinders andpressure regulators with customers) has been carried out by the Management during the yearin accordance with the phased programme of verification of all assets over three yearswhich in our opinion is reasonable having regard to the size of the Corporation and thenature of its assets. As informed no material discrepancies were noticed on suchverification; (c) According to the information and explanations given to us and on thebasis of our examination of the records of the Corporation the title deeds of immovableproperties are held in the name of the Corporation except in cases given below:

Number of Gross Block Net Block Remarks
Particulars Cases (Rs. in Crore) (Rs. in Crore)
Freehold Land 13 85.92 85.92 Documents of title not available for verification
Freehold Land 12 9.36 9.36 Documents of title informed as lying with registration authorities

(ii) The inventory (excluding stocks with third parties and goods intransit) has been physically verified by the Management during the year at reasonableintervals. In respect of inventory lying with third parties these have substantially beenconfirmed by them. No material discrepancies were noticed on physical verification ofinventories carried out at the end of the year; (iii) As informed the Corporation has notgranted any loans secured or unsecured to companies firms limited liabilitypartnerships or other parties covered in the register maintained under Section 189 of theAct. Accordingly paragraphs 3(iii)(a) 3(iii)(b) and 3(iii)(c) of the Order are notapplicable; (iv) In our opinion and according to the information and explanations given tous the Corporation has complied with the provisions of Section 185 and Section 186 of theAct with respect to the loans investments guarantees and securities; (v) In our opinionand according to the information and explanations given to us the Corporation has notaccepted any deposits from public within the provisions of Sections 73 to 76 of the Actread with The Companies (Acceptance of Deposits) Rules 2014 and other relevant provisionsof the Act; (vi) We have broadly reviewed the books of account maintained by theCorporation in respect of products where the maintenance of cost records has beenspecified by the Central Government under Section 148(1) of the Act and the rules framedthere under and we are of the opinion that prima-facie the prescribed books of accountand cost records have been made and maintained. We have not however made a detailedexamination 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 authoritiesundisputed statutory dues including Provident Fund Employees' State InsuranceIncome Tax Sales Tax Service Tax Goods and Service tax (GST) Customs Duty ExciseDuty 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 payablein respect of Provident Fund Employees' State Insurance Income Tax Sales TaxService Tax Goods and Service tax (GST) Customs Duty Excise Duty Value Added Tax Cessand any other material statutory dues applicable to it were outstanding as on the lastday of the financial year for a period of more than six months from the date they becamepayable;

(b) According to the information and explanation given to us the duesoutstanding with respect to income tax sales tax service tax duty of customs duty ofexcise value added tax have not been deposited on account of any dispute are as perStatement 1; (viii) According to the information and explanations given to us theCorporation has not defaulted in repayment of loans or borrowing to financialinstitutions banks Government or dues to debenture holders; (ix) The Corporation did notraise any money by way of initial public offer or further public offer (including debtinstruments) during the year. According to the information and explanations given to usmoney raised by way of term loans during the year have been applied for the purpose forwhich those were raised; (x) During the course of our examination of the books and recordsof the Corporation carried out in accordance with the generally accepted auditingpractices in India and according to the information and explanations given to us noinstances of fraud by the Corporation or on the Corporation by its officers and employeeshave been noticed or reported during the year except incidents of irregularities that werereported during Financial Year 2016-17 which have been probed by the vigilance team ofthe Corporation during the year. We are informed that the matter has been handed over toCentral Bureau of Investigation for further enquiry and that the Management is in theprocess of taking appropriate action.

(xi) In view of exemption given vide notification no. G.S.R. 463(E)dated June 5 2015 issued by Ministry of Corporate Affairs provisions of Section 197 readwith Schedule V of the Act regarding managerial remuneration are not applicable to theCorporation. Accordingly paragraph 3(xi) of the Order is not applicable; (xii) In ouropinion and according to the information and explanations given to us the Corporation isnot 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 ofthe records of the Corporation all transactions entered into by the Corporation with therelated parties are in compliance with Sections 177 and 188 of the Act where applicableand details of such transactions have been disclosed in the standalone Ind AS financialstatements as required by the applicable Indian Accounting Standards; (xiv) According tothe information and explanations given to us and based on our examination of the recordsthe Corporation has not made any preferential allotment or private placement of shares orfully or partly convertible debentures during the year. Accordingly paragraph 3(xiv) ofthe Order is not applicable; (xv) According to the information and explanations given tous and based on our examination of the records the Corporation has not entered during theyear 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 notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.Accordingly paragraph 3(xvi) of the Order is not applicable.

For CVK & Associates For Borkar & Muzumdar
Chartered Accountants Chartered Accountants
ICAI FRN: 101745W ICAI FRN: 101569W
Sd/- Sd/-
A. K. Pradhan B. M. Agarwal
Partner Partner
Membership No.: 032156 Membership No.: 033254

Place: Mumbai

Date: 29th May 2018

Statement 1 (Refer Clause vii (b) of Annexure A)

Rs. in Crores
Name of the Statute Nature of Dues Forum Where Dispute is pending Amount Period block to which it relates^
1. Central Excise Act 1944 Duty interest and penalty for cases relating to Determination of Assessable value Cenvat Credit etc. Supreme Court 898.00 2000 to 2010
High Court 123.93 2000 to 2015
Appellate Tribunal* 1337.77 1985 to 2018
Appellate Authority** 73.03 1990 to 2018
Adjudicating Authority*** 10444.61 1990 to 2018
Total 12877.34
2. Customs Act 1962 Duty interest and penalty for cases relating to Determination of Valuation etc. Appellate Tribunal* 5.39 2000 to 2010
Total 5.39
3. Income Tax Act 1961 Tax interest and penalty demands towards various Income tax disputes High Court 9.01 1990 to 2005
Appellate Tribunal* 5.73 1990 to 2005
Appellate Authority** 25.53 2005 to 2018
Total 40.27
4. Sales Tax/VAT Legislations Tax interest and penalty demand towards Sales tax/ VAT disputes Supreme Court 2.33 1995 to 2005
High Court 588.86 1980 to 2015
Appellate Tribunal* 3651.79 1985 to 2015
Appellate Authority** 7692.84 1985 to 2018
Total 11935.82
5. Finance Act1994 (Service Tax) Duty interest and penalty for cases relating to Service tax disputes Supreme Court 31.56 2005 to 2015
Appellate Tribunal* 34.34 2000 to 2015
Appellate Authority** 0.80 2005 to 2015
Adjudicating Authority*** 224.37 2005 to 2018
Total 291.07
Grand Total 25149.89

Dues Include Penalty & Interest wherever applicable.

* Appellate Tribunal includes Sales Tax Tribunal CESTAT and ITAT.

** Apellate Authority includes Commissioner Appeals AssistantCommissioner Appeals Deputy Commissioner Appeals Joint Commissioner Appeals and DeputyCommissioner Commercial Taxes Appeals.

*** Adjudicating Authority includes Collector of Sales Tax Sales TaxOfficer and Deputy Commissioner Sales Tax Joint / Deputy/ Additional Commissioner ofCommercial Taxes etc.

^ Period block shall indicate the period interval in which all thedisputes under that authority have taken place.

ANNEXURE B TO INDEPENDENT AUDITORS' REPORT

[Referred to in paragraph 10 under ‘Report on Other Legal andRegulatory Requirements' in the Independent Auditors' Report of even date to theMembers of Bharat Petroleum Corporation Limited ("the Corporation") on thestandalone Ind AS financial statements as of and for the year ended 31st March2018]

1 Area examined Whether the Company has clear title/lease deeds for freehold and leasehold land respectively? If not please state the area of freehold and leasehold land for which title/lease deeds are not available?
Observations/ Findings Particulars Area (In Acres) Remarks
Freehold Land 1161.02 Documents of title not available for verification
Freehold Land 6.97 Documents of title as informed lying with registration authorities
Note: The above list does not include 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 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 Crore Remarks
Write off of debts 1.26 Write offs approved as per ‘Delegation
Write off/Waiver of interest 4.19 of Authority' of the Corporation
Write off of Other claims 0.01
3 Area Examined Observations/ Findings Whether proper records are maintained for inventories lying with third parties and assets received as gift/ grant(s) from Government or other authorities? 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 CVK & Associates For Borkar & Muzumdar
Chartered Accountants Chartered Accountants
ICAI FRN: 101745W ICAI FRN: 101569W
Sd/- Sd/-
A. K. Pradhan B. M. Agarwal
Partner Partner
Membership No.: 032156 Membership No.: 033254

Place: Mumbai

Date: 29th May 2018

ANNEXURE C TO INDEPENDENT AUDITORS' REPORT

[Referred to in paragraph 11(f) under ‘Report on Other Legal andRegulatory Requirements' in the Independent Auditors' Report of even date to themembers of Bharat Petroleum Corporation Limited on the standalone Ind AS financialstatements for the year ended 31st March 2018]

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financialreporting of Bharat Petroleum Corporation Limited ("the Corporation") as of 31stMarch 2018 in conjunction with our audit of the standalone Ind AS financial statements ofthe Corporation for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Corporation's Management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Corporation considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India(‘ICAI'). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business safeguarding of its assetsthe prevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Corporation'sinternal financial controls over financial reporting based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting (the "Guidance Note") and the Standards on Auditingspecified under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both issued by the ICAI. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting were established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Corporation's internalfinancial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting isa process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlover financial reporting includes those policies and procedures that: 1. pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; 2. provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and

3. provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the company's assetsthat could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to theexplanations given to us the Corporation has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31st March2018 based on the internal control over financial reporting criteria established by theCorporation considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting issued bythe ICAI.

For CVK & Associates For Borkar & Muzumdar
Chartered Accountants Chartered Accountants
ICAI FRN: 101745W ICAI FRN: 101569W
Sd/- Sd/-
A. K. Pradhan B. M. Agarwal
Partner Partner
Membership No.: 032156 Membership No.: 033254

Place: Mumbai

Date: 29th May 2018