1. We have audited the attached Balance Sheet of BHARAT PETROLEUM
CORPORATION LIMITED as at 31st March 2012 and the Statement of Profit
and Loss and the Cash Flow Statement of the Company for the year ended
on that date annexed thereto. These financial statements are the
responsibility of the Company''s management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the Auditing Standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis
for our opinion.
3. As required by the Companies (Auditor''s Report) Order, 2003
issued by the Central Government of India and further as per
requirement of Companies (Auditor''s Report) (Amendment) Order, 2004
in terms of sub-section (4A) of the section 227 of the Companies Act,
1956 we enclose in the Annexure a statement on the matters specified in
paragraph 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph
(3) above, we report that:
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
b) In our opinion, proper books of account as required by law have been
kept by the Company so far as it appears from our examination of the
c) The Balance Sheet and the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this report are in agreement with the
books of account.
d) In our opinion, the Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement comply with the Accounting Standards
referred to in sub-section (3C) of section 211 of the Companies Act,
1956 to the extent applicable to the company.
e) Disclosure in terms of clause (g) of sub-section (1) of section 274
of the Companies Act, 1956 is not required as per Notification No. GSR
829(E) dated October 21, 2003 issued by the Department of Company
f) Without qualifying our opinion, we invite attention to Note 21 of
Financial Statements regarding recoverability from a Public Sector
Undertaking (PSU) making significant losses, based on the assurances
given by the PSU.
g) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read with the notes
thereon give the information required by the Companies Act, 1956, in
the manner so required and give a true and fair view in conformity with
the accounting principles generally accepted in India:
i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March 2012;
ii) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
iii) in the case of Cash Flow Statement, of the cash flows for the year
ended on that date.
(Referred to in Paragraph (3) of our report of even date on the
accounts of BHARAT PETROLEUM CORPORATION LIMITED for the year ended
31st March 2012)
1. Fixed Assets
a) The Company has maintained proper records showing full particulars
including the quantitative details and situation of fixed assets except
in respect of items like pipes, valves, meters, instruments and other
similar items peculiar to a continuous process plant.
b) As per the information and explanation given to us, the company has
generally physically verified its fixed assets during the previous
year, other than LPG cylinders with customers, in accordance with the
verification programme and the frequency of verification is reasonable
having regard to the size of the company and the nature of its assets.
The company has identified certain discrepancies on such verifications
which are under reconciliation and consequent adjustment, which in view
of management would not be material.
c) In our opinion, the disposals of fixed assets during the year are
not of a significant value and do not affect the going concern
a) The management during the year under audit carried out the physical
verification of inventories (except those lying with third parties and
in transit) at regular intervals. In respect of inventories lying with
third parties, these have generally been confirmed by them and the
inventory in transit has been verified with subsequent receipts.
b) Taking into consideration the nature of business, we are of the
opinion that the procedure of physical verification and frequency of
such verification is reasonable and adequate in relation to the size of
the company and the nature of its business.
c) The Company is maintaining proper stock of inventory. The
discrepancies noticed on verification between the physical stocks and
records were not material in relation to the operation of the company
and the same have been properly dealt with in the books of account.
3. Secured or Unsecured Loans Granted or Taken
Based on the audit procedures applied by us and according to the
information and explanations given to us, the company has not granted
or taken any loans, secured or unsecured to / from companies, firms or
other parties covered in the register maintained under section 301 of
the Companies Act, 1956. Therefore, the provisions of sub-clause (b) to
(d), (f) and (g) of sub-para (iii) of para 4 of the Order are not
4. Internal Control
In our opinion and according to the information and explanations given
to us, having regard to the explanation that some of the items
purchased are of a special nature and suitable alternative sources do
not exist, there is generally an adequate internal control procedure
commensurate with the size of the Company and the nature of its
business, for the purchase of inventories and fixed assets and for the
sale of goods and services. During the course of our audit, we have not
observed any continuing failure to correct major weaknesses in the
internal control system.
5. Transactions under Section 301
a) According to the information and explanation given to us and as
verified by us, there were no transactions exceeding the value of Rs.
five lakhs in case of any party that need to be entered in the Register
maintained in pursuance of section 301 of the Companies Act, 1956.
b) As there are no transactions exceeding the value of Rs. five lakhs
in case of any party that need to be entered in the Register maintained
pursuant to section 301 of the Companies Act, 1956, sub-clause (b) of
sub-para (v) of Para 4 of the Order regarding reasonability of price at
which such transactions have been entered is not applicable.
6. Public Deposits
According to the information and explanation given to us, the Company
has not accepted any deposits from the public.
7. Internal Audit System
The Company has an internal audit system which is carried out by the
inhouse department and also by outsourced firms for certain areas. In
our view, the same is generally commensurate with the size and the
nature of its business.
8. Cost Records
We have broadly reviewed the books of account maintained by the Company
pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956 and are of the opinion that prima facie the prescribed
records have been kept and maintained. We have not made a detailed
examination of these records.
9. Statutory Dues
The company has been generally regular in depositing its undisputed
statutory dues including Provident Fund, Investor Education and
Protection Fund, Employees State Insurance Fund, Income Tax, Sales Tax,
Value Added Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty,
Cess and any other statutory dues as applicable with the appropriate
authorities during the year. According to the information and
explanation given to us, no material undisputed amounts payable in
respect of Provident Fund, Investor Education and Protection Fund,
Employees State Insurance Fund, Income Tax, Sales Tax, Value Added Tax,
Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other
statutory dues were in arrears as at 31.3.2012 for a period of more
than six months from the date they became payable.
The details of disputed dues of sales tax, income tax, customs duty,
wealth tax, service tax, excise duty, cess, etc. which have not been
deposited, are given in Annexure I.
10. The company does not have any accumulated losses at the end of the
financial year and it has not incurred any cash losses during the
financial year covered by our audit and in the immediately preceding
11. According to the information and explanations given to us and
based on the documents and records produced before us, the Company has
not defaulted in repayment of dues to Financial Institutions / Banks.
12. According to the information and explanations given to us, the
Company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securities.
13. In our opinion and according to the information and explanations
given to us, the nature of activities of the Company does not attract
any special statute applicable to chit fund and nidhi/ mutual benefit
fund/ societies. Therefore, the provisions of clause 13 of Para 4 of
the Companies (Auditor''s Report) Order are not applicable to the
14. According to the information and explanations given to us and as
verified by us, the Company is not dealing or trading in shares,
securities, debentures and other investments. The shares, securities,
debentures and other investments are held by the Company in its own
name except to the extent of the exemption granted under section 49 of
the Companies Act, 1956.
15. The Company has given guarantees for loans taken by others from
banks or financial institutions, aggregating to Rs. 1818.30 Crores
where the terms and conditions, in our opinion, are not prima facie
prejudicial to the interest of the Company.
16. In our opinion, the term loans obtained during the year, prima
facie, have been applied for the purpose for which the loans were
17. According to the information and explanation given to us and on an
overall examination of the Balance Sheet and Cash Flow Statement of the
Company, we report that funds raised on short-term basis have not been
used for long-term investment.
18. According to the information and explanations given to us and
verified by us, the Company has not made any preferential allotment of
shares during the year to parties and companies covered in the Register
maintained under section 301 of Companies Act, 1956.
19. According to the information and explanations given to us, the
Company has not issued any debentures during the year.
20. The company has not raised any money by public issues during the
21. As represented to us by the management and based on our
examination in the course of our audit, except for the instances at (a)
and (b) below, no material fraud on or by the Company has been noticed
or reported during the year.
a) The company has identified a fraud at Budge Budge where there was a
shortage in the products lying with a repacker. The cost price of the
products is Rs. 69.93 lacs and the sale value of the same is Rs. 124
lacs. The amount is still pending recovery.
b) The company has identified another fraud made by an advocate
relating to misappropriation of compensation amount deposited for land
acquisition at Bijwasan Installation and other court cases, amounting
to Rs. 188.40 lacs, which has since been recovered.
For and on behalf of For and on behalf of
T R CHADHA & Co. K. VARGHESE & Co.
Chartered Accountants Chartered Accountants
FR No: 006711N FR No:004525S
KASHYAP VAIDYA K.VARGHESE
Membership No: 37623 Membership No: 20674
Dated: 25th May 2012