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Bharat Petroleum Corporation Ltd.

BSE: 500547 Sector: Oil & Gas
NSE: BPCL ISIN Code: INE029A01011
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VOLUME 276472
52-Week high 468.00
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P/E 66.43
Mkt Cap.(Rs cr) 66,140
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OPEN 304.00
CLOSE 303.20
VOLUME 276472
52-Week high 468.00
52-Week low 293.50
P/E 66.43
Mkt Cap.(Rs cr) 66,140
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

TO THE MEMBERS OF BHARAT PETROLEUM CORPORATION LIMITED

Report on the Audit of the Standalone Ind AS Financial Statements

Opinion

1. We have audited the accompanying Standalone Indian AccountingStandards ("Ind AS") Financial Statements of Bharat Petroleum CorporationLimited ("the Corporation") which comprise the Balance Sheet as at March 312022 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Cash Flows and the Statement of Changes in Equity for the year ended on thatdate and a summary of the Significant Accounting Policies and other explanatoryinformation (hereinafter referred to as "the Standalone Ind AS FinancialStatements").

2. 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 Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under Section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Corporation as at March 31

2022 the profit and total comprehensive income its cash flows andchanges in equity for the year ended on that date.

Basis for Opinion

3. We conducted our audit of the Standalone Ind AS Financial Statementsin accordance with the Standards on Auditing

("SAs") specified under Section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Ind AS Financial Statements Section ofour report. We are independent of the Corporation in accordance with the Code of Ethicsissued by the Institute of Chartered Accountants of India (ICAI) together with the ethicalrequirements that are relevant to our audit of the Standalone Ind

AS Financial Statements under the provisions of the Act and the Rulesmade thereunder and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the ICAI's Code of Ethics. We believe that the auditevidence obtained by us is sufficient and appropriate to provide a basis for our auditopinion on the Standalone

Ind AS Financial Statements.

Key Audit Matters

4. Key audit matters are those matters that in our professionaljudgment were of most significance in our audit of the

Standalone Ind AS Financial Statements of the current period. Thesematters were addressed in the context of our audit of the Standalone Ind AS FinancialStatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report:

S.No. Key Audit Matter Auditors' Response
1. Valuation of Investment in E&P Subsidiary (Refer Note 7 and Note 56):
The Corporation has an investment of Rs 7401.37 Crores in 100% subsidiary Bharat PetroResources Ltd (BPRL). This subsidiary along with its stepdown subsidiaries JVs & Associates holds participating interest in various oil / gas blocks for exploration & evaluation development and production activities (E&P).c The following procedures were carried out in this regard:
• We evaluated the design implementation and operating effectiveness of key controls in relation to the annual impairment testing activity carried out by the Corporation for its investments in Subsidiaries.
The Corporation's realisation from these E&P investments is dependent on the continued successful operations / development of reserves resulting in expected earnings and revenue growth of the respective companies. During FY 2021-22 BPRL has relinquished or impaired certain oil and gas blocks on account of changes in circumstances and prospects of the blocks. • We reviewed the audited consolidated Ind AS Financial Statements of BPRL for FY 2021-22 and the independent auditor's report thereon to ascertain if there is any further diminution in the carrying value of the Corporation's investments therein.
The above factors have impacted the value in use of BPRL's assets and consequently the Corporation's impairment analysis in respect of its Investment in BPRL. Accordingly we consider this as a Key Audit Matter. • We evaluated the impairment analysis carried out during the year by the Corporation which included an independent comparison of externally / internally assessed value in use of BPRL's Net Assets with carrying cost of investment in BPRL in the Corporation's Books of Accounts.
2. Computation of Expected Credit Loss (ECL):
Trade receivables and loans granted under the Pradhan Mantri Ujwala Yojana (PMUY) scheme constitute a signi cant component of the total current assets of the Corporation. At each reporting date the Corporation recognizes Lifetime ECL on Trade Receivables using a ‘simpli ed approach' and 12 month ECL on loans are granted under the PMUY scheme wherein we relied on Management's estimates regarding probability of default rates linked to age-wise bucketing of the corresponding asset. Since this is a technical matter based on probable outcome of default we considered this as a Key Audit Matter. Our audit approach consisted testing of the design implementation and operating effectiveness of the internal controls and substantive testing as follows: In respect of loans granted under PMUY the Corporation along with other few industry peers have derived a common methodology for calculating ECL based on the broad category of active and inactive consumers and last re ll date with expected loan recovery period. We checked the working of the same and it is in line with the common methodology document shared with us.
We have evaluated the methodology for age-wise bucketing of trade receivables and key assumptions underlying the probability of default estimates on the same to ascertain that the same were broadly in-line with the Corporation's historical default rates and have considered available information regarding the current economic scenario.
• We selected a few sample outstanding receivable cases having different overdue periods and checked that the computation of ECL has been appropriately carried out in line with the Corporation's policy.
S.No. Key Audit Matter Auditors' Response
3. Evaluation of Contingent Liabilities:
Contingent liabilities disclosed are in respect of items which in each case are above the threshold limit. The Corporation has material uncertain positions including matters under dispute which involves signi cant judgment to determine the possible outcome of these disputes. Contingent liabilities are not recognized in the Standalone Ind AS Financial Statements but are disclosed unless the possibility of an out flow of economic resources is considered remote. In view of signi cant management estimate and judgement involved we considered this as a Key Audit Matter. The following audit procedures were carried out in this regard:
• We examined sample items above the threshold limit for determination of contingent liabilities and obtained details of completed Excise VAT / Sales Tax / Entry Tax assessments demands as well as other disputed claims against the Corporation as on March 31 2022. The Corporation has obtained opinion from tax consultants in various disputed matters. We have relied upon such opinions and litigation history where the Corporation has concluded that possibility of cash out flow is remote while preparing its Standalone Ind AS Financial Statements.
• We have assessed the Management's underlying assumptions in estimating the possible outcome of such disputed claims / cases against the Corporation based on records and judicial precedents made available.
4. Inventories:
Verification and valuation of Inventories and related write down if any is a significant area requiring Management's judgment of estimates and application of accounting policies that have significant effect on the amounts recognized in the Standalone Ind AS Financial Statements. Accordingly we considered this as a Key Audit Matter. Our audit approach involved the following combination of test of control design implementations operating effectiveness and substantive testing in respect of verification and valuation of inventories:
• We evaluated the system of inventory monitoring and control. It was observed that inventory has been physically verified by the Management during the year at reasonable intervals.
Our audit teams have also physically verified on sample basis the Inventories at various locations and compliance with cut off procedures. However since physical verification at certain locations was not possible for us in such cases we have relied on the physical verification of inventory carried out by the Management.
• In respect of inventory lying with third parties we have ascertained that these have substantially been con rmed by them. We also examined the system of records maintenance for stocks lying at third party locations.
• We have also tested the values considered in respect of Net Realisable Value cost of products and verified these on sample basis with the inventory valuation and accounting entries posted in this regard.
S.No. Key Audit Matter Auditors' Response
5. Property Plant and Equipment:
Estimates of useful lives and residual value of Property Plant and Equipment is a significant area requiring Management judgment of estimates and application of accounting policies that have significant effect on the amounts recognized in the Standalone Ind AS Financial Statements. Accordingly we considered this as a Key Audit Matter. Our audit approach involved the following combination of test of control design implementations and operating effectiveness and substantive testing in respect of verification and recording of Property Plant and Equipment:
• We examined whether the Corporation has maintained proper records showing full particulars including quantitative details and situation of xed assets.
The physical verification of Property Plant and Equipment (except LPG Cylinders and pressure regulators with customers) has been carried out by the Management in accordance with the phased program of verification of all assets and necessary accounting entries based on such physical verification have been appropriately posted which were verified by us.
• Changes in the useful life and residual value of class of assets were adopted based on internal evaluation and was also comparable with other entities in the same industry.
• We have tested the computation of depreciation on sample basis.
6. Information Technology
Our procedures included:
A significant part of the Company's financial reporting process is heavily reliant on IT systems with automated processes and controls over the capture storage and extraction of information. A fundamental component of these processes and controls is ensuring appropriate user access and change management protocols exist and being adhered to. We focused our audit on those IT systems and controls that are relevant to preparation of financial statements.
As audit procedures over IT Systems and controls require specific expertise we involved our IT specialist.
Our review of the IT Controls covers the following areas:
These protocols are important because they ensure that access and changes to IT systems and related data are made and authorized in an appropriate manner. As our audit sought to place a high level of reliance on IT systems and application controls related to nancial reporting high proportion of the overall audit effort was in Information Technology (IT) Systems and Controls. We focused our audit on those IT systems and controls that are significant to the Company's financial reporting process. • Physical and Logical Security;
• Change Management;
• Backup Business Continuity and IT Operations.
Our assessment of the IT Controls is performed according to the following approach:
• Understanding the IT environment;
• Information gathering about the control framework surrounding the IT environment;
• Evidence gathering with respect to Control testing;
Accordingly we considered this as a Key Audit Matter. • Review of Implementation of controls testing;
• Review of limited cases to identify whether there had been unauthorized or inappropriate access or changes made to critical IT systems and related data.

Information Other than the Standalone Ind AS Financial Statements andAuditors' Report Thereon

5. The Corporation's Board of Directors is responsible for thepreparation of the other information. The other information comprises the informationincluded in the Management Discussion and Analysis Board's Report includingAnnexures to Board's Report Business Responsibility Report Corporate Governance andShareholder's Information but does not include the Standalone Ind AS FinancialStatements and our audit report thereon.

Our opinion on the Standalone Ind AS Financial Statements does notcover the other information and we do not express any form of assurance thereon.

6. In connection with our audit of the Standalone Ind AS FinancialStatements our responsibility is to read the other information and in doing so considerwhether the other information is materially inconsistent with the Standalone Ind ASFinancial Statements or our knowledge obtained during the course of our audit or otherwiseappears to be materially misstated.

7. If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact tothose charged with governance and review the steps taken by the management to communicateto those in receipt of the other information if previously issued to inform them of therevision.

The other information is expected to be made available to us after thedate of this auditors' report and if we conclude that there is a materialmisstatement therein we are required to communicate the matter to those charged withgovernance.

Board of Directors / Management's Responsibility for theStandalone Ind AS Financial Statements

8. The Corporation's Board of Directors is responsible for thematters stated in Section 134(5) of the Act with respect to the preparation of theseStandalone Ind AS Financial Statements that give a true and fair view of the financialposition financial performance including the other comprehensive income cash flows andchanges in equity of the

Corporation in accordance with the Ind AS and other accountingprinciples generally accepted in India. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Corporation and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Standalone Ind AS Financial Statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.

9. In preparing the Standalone Ind AS Financial Statements Managementis responsible for assessing the Corporation's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless Management either intends to liquidate the Corporationor to cease operations or has no realistic alternative but to do so.

10. The Corporation's Board of Directors / Management isresponsible for overseeing the Corporation's financial reporting process.

Auditors' Responsibilities for the Audit of the Standalone Ind ASFinancial Statements

11. Our objectives are to obtain reasonable assurance about whether theStandalone Ind AS Financial Statements as a whole are free from material misstatementwhether due to fraud or error and to issue an auditor's report that includes ouropinion. Reasonable assurance is a high level of assurance but is not a guarantee that anaudit conducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these Standalone Ind AS Financial

Statements.

12. As part of an audit in accordance with SAs we exerciseprofessional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of theStandalone Ind AS Financial Statements whether due to fraud or error design and performaudit procedures responsive to those risks and obtain audit evidence that is sufficientand appropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

Obtain an understanding of internal financial controls relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. UnderSection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the Corporation has adequate internal financial controls system in place and theoperating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by the Management.

• Conclude on the appropriateness of the Management's use ofthe going concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Corporation's ability to continue as a going concern. If we concludethat a material uncertainty exists we are required to draw attention in ourauditor's report to the related disclosures in the

Standalone Ind AS Financial Statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditors' report. However future events or conditionsmay cause the Corporation to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of theStandalone Ind AS Financial Statements including the disclosures and whether theStandalone Ind AS Financial Statements represent the underlying transactions and events ina manner that achieves fair presentation.

13. Materiality is the magnitude of misstatements in the Standalone IndAS Financial Statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the financial statements may bein uenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the Standalone Ind AS FinancialStatements.

14. We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit ndingsincluding any significant deficiencies in internal control that we identify during ouraudit.

15. We also provide those charged with governance with a statement thatwe have complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

16. From the matters communicated with those charged with governancewe determine those matters that were of most significance in the audit of the StandaloneInd AS Financial Statements of the current period and are therefore the key audit matters.We describe these matters in our auditor's report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

17. As required by the Companies (Auditor's Report) Order 2020("the Order") issued by the Central Government in terms of Section 143(11) ofthe Act and on the basis of verification of the books and records of the Corporation aswe considered appropriate and according to the information and explanations given to uswe give in "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

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

19. As required by Section 143(3) of the Act based on our audit wereport that: a) We have sought and obtained all the information and explanations which tothe best of our knowledge and belief were necessary for the purposes of our audit. b) Inour opinion proper books of accounts as required by law have been kept by the Corporationso far as it appears from our examination of those books. c) The Balance Sheet theStatement of Profit and Loss including Other Comprehensive Income the Statement of

Cash Flow and Statement of Changes in Equity dealt with by this Reportare in agreement with the relevant books of accounts. d) In our opinion the aforesaidStandalone Ind AS Financial Statements comply with the Ind AS specified under

Section 133 of the Act. e) In view of exemption given vide noti cationno. G.S.R. 463(E) dated June 5 2015 issued by Ministry of Corporate Affairs provisionsof Section 164(2) of the Act regarding disquali cation of directors are not applicable tothe Corporation. f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Corporation and the operating effectiveness of such controlsrefer to our separate Report in "Annexure C". g) Being a GovernmentCompany pursuant to the noti cation number G.S.R. 463(E) dated June 5 2015 issued byMinistry of Corporate Affairs the provisions of Section 197 of the Act are not applicableto the Corporation. h) With respect to the other matters to be included in theAuditors' Report in accordance with Rule 11 of the

Companies (Audit and Auditors) Rules 2014 as amended in our opinionand to the best of our information and according to the explanations given to us: i. TheCorporation has disclosed the impact if any of pending litigations on its financialposition in its Standalone Ind AS Financial Statements. (Refer Note 63 of the StandaloneInd AS Financial

Statements) ii. The Corporation has made provision as required underthe applicable law or accounting standards for material foreseeable losses if any onlong-term contracts including derivative contracts. iii. There has been no delay intransferring amounts required to be transferred to the Investor Education and ProtectionFund by the Corporation.

iv. (a) The Management has represented that to the best of itsknowledge and belief no funds (which are material either individually or in theaggregate) have been advanced or loaned or invested (either from borrowed funds or sharepremium or any other sources or kind of funds) by the Corporation to or in any otherperson or entity including foreign entity ("Intermediaries") with theunderstanding whether recorded in writing or otherwise that the Intermediary shallwhether directly or indirectly lend or invest in other persons or entities identified inany manner whatsoever by or on behalf of the Corporation ("Ultimate Beneciaries") or provide any guarantee security or the like on behalf of the UltimateBene ciaries;

(b) The Management has represented that to the best of its knowledgeand belief no funds (which are material either individually or in the aggregate) havebeen received by the Corporation from any person or entity including foreign entity("Funding Parties") with the understanding whether recorded in writing orotherwise that the Corporation shall whether directly or indirectly lend or invest inother persons or entities identified in any manner whatsoever by or on behalf of theFunding Party ("Ultimate Bene ciaries") or provide any guarantee security orthe like on behalf of the Ultimate Bene ciaries;

(c) Based on the audit procedures that have been considered reasonableand appropriate in the circumstances nothing has come to our notice that has caused us tobelieve that the representations under sub-clause (i) and (ii) of Rule 11(e) as providedunder (a) and (b) above contain any material misstatement. v. The dividend declared orpaid during the year by the Corporation are in compliance with Section 123 of the Act.

For Kalyaniwalla and Mistry LLP For K. S. Aiyar & Co.
Chartered Accountants Chartered Accountants
ICAI FRN: 104607W/W100166 ICAI FRN: 100186W
Sd/- Sd/-
Sai Venkata Ramana Damarla Rajesh S. Joshi
Partner Partner
Membership No. 107017 Membership No. 038526
UDIN: 22107017AJOYYP5771 UDIN: 22038526AJOZJL3489
Place: Mumbai Place: Mumbai
Date: 25th May 2022 Date: 25th May 2022

ANNEXURE A TO INDEPENDENT AUDITORS' REPORT

[Referred to in paragraph 17 under ‘Report on Other Legal andRegulatory Requirements' in the Independent Auditors'

Report of even date to the members of Bharat Petroleum CorporationLimited ("the Corporation") on the Standalone Ind AS Financial Statements as ofand for the year ended March 31 2022]

To the best of our information and according to the explanationsprovided to us by the Management of the Corporation and the books of accounts and recordsexamined by us in the normal course of audit we state that:

(i) (a) A. The Corporation is maintaining proper records showing fullparticulars including quantitative details and situation of Property Plant andEquipment;

B. The Corporation is maintaining proper records showing fullparticulars of Intangible assets.

(b) As per information and explanations given to us physicalverification of Property Plant and Equipment (except LPG Cylinders and pressureregulators with customers) has been carried out by the Management during the year inaccordance with the phased programme of verification of all assets over three years. Asinformed no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Corporation the title deeds of all theimmovable properties (other than properties where the Corporation is a lessee and thelease agreements are duly executed in favour of the lessee) disclosed in the StandaloneInd AS Financial statements are held in the name of the Corporation except in cases givenin Statement 1.

(d) As per the information obtained and explanations given to us theCorporation has not revalued its Property

Plant and Equipment (including Right-of-Use assets) or intangibleassets or both during the year.

(e) As per the information obtained and explanations given to us noproceedings have been initiated or are pending against the Corporation for holding anybenami property under the Benami Transactions (Prohibition) Act 1988 (45 of 1988) andrules made thereunder.

(ii) (a) The inventory (excluding stocks with third parties andgoods-in-transit) has been physically verified by the Management during the year atreasonable intervals. In respect of inventory lying with third parties these havesubstantially been con rmed by them. In our opinion the coverage and procedure of suchverification is appropriate considering the size and nature of the business of theCorporation. As per the information and explanations given to us no materialdiscrepancies of 10% or more in the aggregate for each class of inventory were noticed onthe said physical verification carried out by the Management;

(b) The Corporation has been sanctioned working capital limits inexcess of ve crore rupees in aggregate from banks or financial institutions on the basisof security of current assets. As per the information obtained and explanations given tous and as disclosed / demonstrated by the records / reconciliations produced to us for ourverification the quarterly returns or statements led by the Corporation with such banksand financial institutions are in agreement with the books of account of the Corporation.

(iii) (a) During the year if the Corporation has made investments inprovided any guarantee or security or granted any loans or advances in the nature ofloans secured or unsecured to companies rms Limited Liability

Partnerships or any other parties accordingly we have to report asunder:

Rs in Crores
Particulars Guarantees Security Loans Advances in nature of loans
Aggregate amount granted / provided during the year
- Subsidiary 1046.36 - 100.00 -
- Joint Venture - - - -
- Associate - - - -
- Others - - 131.34 -
Balance outstanding as at balance sheet date
- Subsidiary 752.00 - 3444.10 -
- Joint Venture - - 15.00 -
- Associate - - - -
- Others - - 1322.53 -

(b) As per the information and explanations given to us theinvestments made guarantees provided security given and the terms and conditions of thegrant of all loans and advances in the nature of loans and guarantees provided are notprejudicial to the Corporation's interest.

(c) In respect of loans and advances in the nature of loans as per theterms of loans the principal amount is not due during the year. The Corporation has beenregular in the receipt of interest towards the same.

(d) There is no amount overdue for more than ninety days so thequestion of taking reasonable steps to recover principal and interest does not arise.

(e) No loan or advance in the nature of loan granted which has fallendue during the year has been renewed or extended or fresh loans granted to settle theoverdues of existing loans given to the same parties. Therefore the question ofspecifying the aggregate amount of such dues renewed or extended or settled by fresh loansand the percentage of the aggregate to the total loans or advances in the nature of loansgranted during the year does not arise.

(f) The Corporation has not granted any loans or advances in the natureof loans either repayable on demand or without specifying any terms or period ofrepayment. Therefore the question of specifying the aggregate amount percentage thereofto the total loans granted aggregate amount of loans granted to Promoters relatedparties as defined in clause (76) of Section 2 of the Companies Act 2013 does not arise.

(iv) In our opinion and according to the information obtained andexplanations given to us the Corporation has complied with the provisions of Section 185and Section 186 of the Act with respect to the loans investments guarantees andsecurities.

(v) In our opinion and according to the information obtained andexplanations given to us the Corporation has not accepted any deposits from public and itdoes not have any amounts which are deemed to be deposits 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) Maintenance of cost records has been specified by the CentralGovernment under Section 148(1) of the Act and the rules framed thereunder for theproducts manufactured by the Corporation. Such accounts and records as prescribed havebeen so 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 withappropriate authorities undisputed statutory dues including Goods and Service TaxProvident Fund Employees' State Insurance Income Tax Sales Tax Service TaxDuties of Customs Duties of Excise Value Added Tax Cess and any other statutory duesapplicable to it. According to the information and explanations given to us no undisputedamounts payable in respect of Goods and Service Tax Provident Fund Employees' StateInsurance Income Tax Sales Tax Service Tax Duties of customs Duties of Excise ValueAdded Tax Cess and any other statutory dues applicable to it were outstanding as on thelast day of the financial year for a period of more than six months from the date theybecame payable; (b) According to the information and explanation given to us thestatutory dues referred to in (vii)(a) above which have not been deposited on account ofany dispute are as per Statement 2.

(viii) No transactions have been surrendered or disclosed as incomeduring the year in the tax assessment under Income

Tax Act 1961 (43 of 1961) which were not recorded in the books ofaccounts. Therefore question of recording of the income during the year which waspreviously unrecorded in the books of accounts does not arise.

(ix) (a) According to the information and explanations given to us theCorporation has not defaulted in repayment of loans or other borrowings or in the paymentof interest thereon to any lender. Therefore the question of reporting on the period andamount of default does not arise.

(b) The Corporation is not a declared wilful defaulter by any bank orfinancial institution or other lender.

(c) According to the information obtained and explanations given to usthe term loans were applied for the purpose for which the loans were obtained.

(d) On an overall examination of the financial statements of theCorporation funds raised on short term basis prima facie have not been utilised duringthe year for long term purposes. For the purpose of reporting under this clause LPGDeposits received have not been considered as short term funds as the amounts to be repaidduring next 12 months are expected to be insignificant.

(e) The Corporation has not taken any funds from any entity or personon account of or to meet the obligations of its subsidiaries associates or jointventures. Therefore the question of reporting on details thereof with nature of suchtransactions and the amount does not arise.

(f) The Corporation has not raised loans during the year on the pledgeof securities held in its subsidiaries joint ventures or associate companies. Thereforethe question of reporting on details thereof and default if any in repayment of suchloans raised does not arise.

(x) (a) The Corporation did not raise any money by way of initialpublic offer or further public offer (including debt instruments) during the year.Therefore the question of reporting of its application delays or default and subsequentrecti cation if any does not arise.

(b) According to the information and explanations given to us and basedon our examination of the books and records the Corporation has not made any preferentialallotment or private placement of shares or convertible debentures (fully partially oroptionally convertible) during the year.

Therefore the question of complying with Section 42 and Section 62 ofthe Companies Act 2013 and reporting on its utilisation does not arise.

(xi) (a) 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 obtained and explanations given to usno instances of fraud by the Corporation or any fraud on the Corporation has been noticedor reported during the year.

(b) We have not led any report under Sub-Section 12 of Section 143 ofthe Companies Act 2013 in Form ADT-4 as prescribed under Rule 13 of the Companies (Auditand Auditors) Rules 2014 with the Central Government.

(c) As per the information obtained and explanation given by theCorporation a whistle blower complaint is received by the Corporation during the year andthe complaint is under investigation as per the due process set out under the whistleblower policy of the Corporation.

(xii) In our opinion and according to the information obtained andexplanations given to us the Corporation is not a Nidhi

Company. Accordingly paragraph 3(xii)(a b and c) of the Order are notapplicable to the Corporation.

(xiii) According to the information obtained and explanations given tous and based on our examination of the records of the Corporation all transactionsentered into by the Corporation with the related parties are in compliance with

Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the

Standalone Ind AS Financial Statements as required by the applicableIndian Accounting Standards. (xiv) (a) The Corporation has an internal audit systemcommensurate with the size and nature of its business.

(b) We have considered the internal audit reports for the year underaudit issued to the Corporation during the year in determining the nature timing andextent of our audit procedures.

(xv) According to the information obtained and explanations given to usand 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 not required to be registered under Section45-IA of the Reserve Bank of India Act 1934. Accordingly paragraph 3(xvi) (abc and d)of the Order are not applicable.

(xvii) The Corporation has not incurred cash losses in the currentfinancial year and in the immediately preceding financial year.

(xviii) There has not been any resignation of the statutory auditorsduring the year.

(xix) According to the information obtained and explanations given tous and on the basis of the financial ratios ageing and expected dates of realisation offinancial assets and payment of financial liabilities other information accompanying thefinancial statements our knowledge of the Board of Directors and management plans we areof the opinion that no material uncertainty exists as on the date of the audit report thatthe Corporation is capable of meeting its liabilities existing as at the date of balancesheet as and when they fall due within a period of one year from the balance sheet date.We however state that this is not an assurance as to the future viability of theCorporation. We further state that our reporting is based on the facts up to the date ofthe audit report and we neither give any guarantee nor any assurance that all liabilitiesfalling due within a period of one year from the balance sheet date will get dischargedby the Corporation as and when they fall due.

(xx) (a) There are no unspent amounts towards Corporate SocialResponsibility (CSR) on other than ongoing projects requiring a transfer of the unspentamount to a Fund specified in Schedule VII to the Act within a period of six months of theexpiry of the financial year in compliance with second Proviso to Sub-Section (5) ofSection 135 of the said Act.

(b) In respect of ongoing projects the Corporation has transferredamount remaining unspent as at the year end to a special account within a period of thirtydays from the end of the said financial year in compliance with the provisions ofSub-Section (6) of Section 135 of the said Act.

For Kalyaniwalla and Mistry LLP For K. S. Aiyar & Co.
Chartered Accountants Chartered Accountants
ICAI FRN: 104607W/W100166 ICAI FRN: 100186W
Sd/- Sd/-
Sai Venkata Ramana Damarla Rajesh S. Joshi
Partner Partner
Membership No. 107017 Membership No. 038526
UDIN: 22107017AJOYYP5771 UDIN: 22038526AJOZJL3489
Place: Mumbai Place: Mumbai
Date: 25th May 2022 Date: 25th May 2022

Statement 1 (Refer Clause i (c) of Annexure A)

Description of Property Gross carrying value (Rs in Crores) No of Cases Held in name of Whether Promoter Director or their relative or employee Period held indicate range where appropriate Reason for not being held in name of company*
Land 34.59 16 Rajaswa Vibag Jiladhikari Udhamsingh Nagar APIIC Railways Karnataka Industrial Areas Development Board (KIADB) Indian Oil Corporation Limited (IOCL) Hindustan Petroleum Corporation Limited (HPCL) Government of Kerala Government of Maharashtra Deputy Salt Commissioner Bombay Others No 1928-2021 Registration pending with Authorities (in one of the case Title Deed is in the name of Joint Owner)
Right-of- Use Assets 1.06 01 Industrial Infrastructure Development Corporation Odisha No 01-03-1998 Registration pending with Authorities
Building 0.67 01 Government of Kerala No 06-05-2021 Registration pending with Authorities
Land 0.35 03 Others Information not Available Not Available Not Available Document of Title Deed not available for verification
Land 3.43 05 British India Corporation Limited District Magistrate Mathura Railways APIIC BPCL Government of Gujarat Private parties No 1994-2004 Legal Dispute
Land 0.10 02 Railways APIIC No 1985-1994 Land Allotment Case

Statement 2 (Refer Clause vii (b) of Annexure A)

Name of the S.No. Statute Nature of dues Forum where dispute is pending Amount (Rs in Crores) 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 3009.61 2000-2010
High Court 31.65 1995-2010
Appellate Tribunal* 2612.08 1990-2022
Appellate Authority** 58.66 1995-2022
Total 5712.00
2. Customs Act 1962 Duty Interest and Penalty for cases relating to determination of valuation etc. Appellate Tribunal* 4.41 1995-2010
Appellate Authority** 0.08 2015-2022
Total 4.49
3. Income Tax Act 1961 Tax Interest and Penalty demands towards various income tax disputes Appellate Authority** 323.58 2005-2022
2005-2022
Adjudicating Authority*** 1.65
Total 325.23
4. Sales Tax / GST Tax Interest and Penalty demands towards various Supreme Court 2.92 1995-2005
VAT Legislations Sales Tax / VAT / GST disputes High Court 792.88 1980-2022
Appellate Tribunal* 3968.64 1985-2015
Appellate Authority** 1521.19 1985-2022
Adjudicating Authority*** 2.24 2010-2015
Total 6287.87
5. Finance Act 1994 (Service Tax) Duty Interest and Penalty for cases relating to Service Tax disputes Supreme Court 36.73 2005-2015
Appellate Tribunal* 27.89 2005-2022
Appellate Authority** 1.62 2015-2022
Total 66.24
6. The Environment Protection Act 1986 Compensation for environmental damage caused by VOX pollutants Supreme Court 67.50 2020-2022
7. The Mumbai Municipal Corporation Act 1888 Property Tax High Court 23.41 2010-2020
8. Maharashtra Municipal Council / Nagarpanchayat Industrial Township Act Manmad Export Fees Case High Court 22.15 1995-2000
9. National Green Tribunal Act 2010 Compensation for Green Belt Development Supreme Court 2.00 2017-2022
Grand Total 12510.89

Remarks

Dues include Penalty & Interest wherever applicable.

* Appellate Tribunal includes Sales Tax Tribunal CESTAT and ITAT.

** Appellate 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 TaxOf cer 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 18 under "Report on Other Legal andRegulatory Requirements" in the Independent Auditors'

Report of even date to the Members of Bharat Petroleum CorporationLimited ("the Corporation") on the Standalone Ind AS Financial Statements as ofand for the year ended 31st March 2022]

CAG Directions for the year 2021-22

1. Whether the company has system in place to process all theaccounting transactions through IT system? If yes the implications of processing ofaccounting transactions outside IT system on the integrity of the accounts along with thefinancial implications if any may be stated.

The Corporation has a system in place to process all the accountingtransactions through its implemented IT system SAP. As such we have not come across anyaccounting transactions processed outside IT system which would have an impact on theintegrity of the accounts or any financial implications.

2. Whether there is any restructuring of an existing loan orcases of waiver / write off of debts / loans / interest etc. made by a lender to thecompany due to the company's inability to repay the loan? If yes the financialimpact may be stated.

Based on our examination of relevant records of the Corporation and theinformation and findings / explanations received from the Management there were no casesof restructuring of an existing loan or cases of waiver / write off of debts / loans /interest by any of the lenders of the Corporation due to inability to repay the loan.

3. Whether funds received / receivable for specific schemes fromcentral / state agencies were properly accounted for / utilized as per its term andconditions? List the cases of deviation.

Based on our examination of relevant records of the Corporation and theinformation explanations and findings received from the Management funds received /receivable for specific schemes from central / state agencies were properly accounted for/ utilised as per terms and conditions and applicable Ind AS.

For Kalyaniwalla and Mistry LLP For K. S. Aiyar & Co.
Chartered Accountants Chartered Accountants
ICAI FRN: 104607W/W100166 ICAI FRN: 100186W
Sd/- Sd/-
Sai Venkata Ramana Damarla Rajesh S. Joshi
Partner Partner
Membership No. 107017 Membership No. 038526
UDIN: 22107017AJOYYP5771 UDIN: 22038526AJOZJL3489
Place: Mumbai Place: Mumbai
Date: 25th May 2022 Date: 25th May 2022

ANNEXURE C TO INDEPENDENT AUDITORS' REPORT

[Referred to in paragraph 19(f) under ‘Report on Other Legal andRegulatory Requirements' in the Independent Auditors'

Report of even date to the Members of Bharat Petroleum CorporationLimited on the Standalone Ind AS Financial Statements for the year ended March 31 2022]

Report on the Internal Financial Controls Over Financial Reportingunder Clause (i) of Sub-Section 3 of Section 143 of the Companies Act 2013 ("theAct")

We have audited the internal financial controls over financialreporting of Bharat Petroleum Corporation Limited ("the Corporation") as ofMarch 31 2022 in conjunction with our audit of the Standalone Ind AS Financial Statementsof the

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"). 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 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'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") issued by the ICAI and the Standardson Auditing specified under Section 143(10) of the Act to the extent applicable to anaudit of internal financial controls both issued by the ICAI. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial 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 and appropriate toprovide a basis for our audit opinion on the Corporation's internal financialcontrols 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 the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;

2. Provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorizations of management and directors of thecompany; 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 controlsover financial reporting to future periods are subject to the risk that the internalfinancial control over financial reporting may become inadequate because of changes inconditions or that the degree of compliance with the policies or procedures maydeteriorate.

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 March 31 2022 basedon the internal control over financial reporting criteria established by the Corporationconsidering the essential components of internal control stated in the

Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the ICAI.

For Kalyaniwalla and Mistry LLP For K. S. Aiyar & Co.
Chartered Accountants Chartered Accountants
ICAI FRN: 104607W/W100166 ICAI FRN: 100186W
Sd/- Sd/-
Sai Venkata Ramana Damarla Rajesh S. Joshi
Partner Partner
Membership No. 107017 Membership No. 038526
UDIN: 22107017AJOYYP5771 UDIN: 22038526AJOZJL3489
Place: Mumbai Place: Mumbai
Date: 25th May 2022 Date: 25th May 2022

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