1. We have audited the attached Balance Sheet of HINDUSTAN 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
3. As required by the Companies (Auditor''s Report) Order, 2003 as
amended by Companies (Auditor''s Report) (Amendment) Order, 2004
(together ''the Order''), issued by the Central Government in terms of
Section 227(4A) of the Companies Act, 1956, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
4. Further to our comments in the Annexure referred to in paragraph
(3) and (4) 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 books and proper returns, adequate for the purposes of our audit,
have been received from the branch not visited by us
c) The Branch Auditors'' report, made available to us, has been
appropriately dealt with while preparing our report.
d) 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 and with audited returns from the branch.
e) In our opinion, the Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956.
f) Disclosure in terms of clause (g) of Sub-section (1) of Section 274
of the Companies Act, 1956 is not required for Government Companies as
per Notification No. GSR 829(E) dated October 21, 2003 issued by the
Department of Company Affairs.
g) Without qualifying our opinion, we invite attention to
i) Note No. 42 of Notes to Accounts, regarding impairment of assets
wherein, being technical matters subject to uncertainty we have relied
on the estimates and assumptions made by the Company in arriving at
recoverable value of assets, based on desired margins.
ii) Note No. 35(b) of Notes to Accounts regarding recognition of
Minimum Alternative Tax (MAT) credit wherein, we have relied on the
management representation that the MAT credit of Rs. 268.77 Crores will
be set off during the period specified in Section 115JAAof the Income
Tax Act, 1961.
iii) Note No. 33 of Notes to Accounts regarding recoverability of
outstanding amount of Rs. 505.53 Crores from Kingfisher Airlines Limited,
wherein we have relied on the management representation that the entire
outstanding will be realised.
iv) Note No. 34 of Notes to Accounts regarding amortization of
ancillary cost over the tenure of External Commercial Borrowings.
h) 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.
Annexure to the Auditors'' Report
(Referred to in Paragraph (3) of our report of even date)
(i) a) The company has maintained proper records showing full
particulars, including 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
b) As explained to us, the Company, having regards to nature and size
of its business, has adopted the practice of carrying out physical
verification of fixed assets, except LPG cylinders and fixed assets of
the erstwhile Kosan Gas Company Undertaking, not handed over, on a
staggered basis, over a period of five years in the case of furniture,
fixtures and office equipment and over a period of three years in the
case of Plant and Machinery and other assets. We were informed that
discrepancies noticed on such verification were not material as
compared to the book records and have been properly dealt with in the
books of account. The existence of fixed assets situated at the
residence of employee has, however, been ascertained on a
c) Fixed Assets disposed off during the year were not substantial and,
therefore, do not affect the going concern assumption.
(ii) a) As explained to us, the inventories were physically verified
during the year by Management at reasonable intervals. In case of
material lying with third parties, certificates confirming sticks held
have been received from them.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories. We were informed that discrepancies noticed on physical
verification, as compared to the book records, were not material and
have been properly dealt with in the books of account.
(iii) Based on the audit procedures applied by us and according to the
information and explanations given to us, the Company has neither
granted nor taken loans, secured or unsecured to / from companies,
firms or other parties covered in the register maintained under Section
301 of the Companies Act, 1956. Consequently, sub-clause (b), (c), (d),
(e), (f) and (g) of sub-para (iii) of para 4 of the Order are not
(iv) In our opinion and according to the information and explanations
given to us, and having regard to the explanation that some of the
items are of a specialized nature, in respect of which suitable
alternative sources do not exist for obtaining comparative quotations,
there are 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.
(v) In our opinion and according to the information and explanation
given to us, there are no contracts and arrangements referred in
Section 301 of the Companies Act,1956 entered during the year that need
to be entered in the Register maintained under that Section.
Accordingly, sub-clause (b) of sub-para (v) of Para 4 of the Order is
not applicable to the Company for the current year.
(vi) In our opinion, and according to the information and explanation
given to us, the Company has complied with the directives issued by the
Reserve Bank of India and the provisions of section 58A and 58AA or any
other relevant provisions of the Companies Act, 1956 and the rules
framed there under with regard to deposits accepted from public. We
have been informed that no order has been passed by the Company Law
Board or National Company Law Tribunal or Reserve Bank of India.
(vii) In our opinion, the company has an adequate internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the cost records maintained by the
Company in respect of the product, pursuant to the rules made by the
Central Government, the maintenance of cost records has been prescribed
under Section 209(1 )(d) of the Companies Act, 1956.We are of the
opinion that prima facie the prescribed accounts and records have been
maintained and being made. We have not, however, made a detailed
examination of these records with a view to determine whether they are
accurate or complete.
(ix) a) According to the information and explanations given to us and
on the basis of our examination of the books of account, the Company,
during the year, has been generally regular in depositing with
appropriate authorities, undisputed statutory dues, including Provident
fund, Investor Education and Protection Fund, Income tax, Sales tax,
Wealth tax, Service tax, Custom duty, Excise duty, Cess and any other
material statutory dues.
b) According to the information and explanations given to us and the
basis of our examination of the books of account, no undisputed amounts
payable in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax,
Customs Duty, Excise Duty, Cess were in arrears, as at March 31st,
2012, for a period of more than six months from the date they became
c) According to information and explanation given to us, the dues
relation to Sales Tax, Income Tax, Customs Duty, Wealth Tax, Service
Tax, Excise Duty, Cess, which have not been deposited on account of
disputes with the relevant authorities, have been reflected in the
Statute Forum Pending Amount Period to which
CCCIT (Appeals) 6.50 Various years
2005 to 2011
Income Tax IW 0.20 2006-07
CESTAT 313.24 Various years
1992 to 2010
Central Commissioner (Appeals) 1.57 Various years
1998 to 2010
Excise High Court 0.12 2005-2006
RA 1.18 Various years
1999 to 2006
CESTAT 64.57 Various years
1992 to 2006
CCEA 0.08 Various years
2004 to 2011
Tax CESTAT 136.20 Various years
2002 to 2010
Board of Revenue 1.89 Various years
1985 to 1987
STAT 526.60 Various years
1985 to 2008
Sales Tax High Court 606.66 Various years
1979 to 2009
Supreme Court 168.98 Various years
2002 to 2007
Commissioner/DCCT/ADC/ 6,880.38 Various years
1976 to 2011
Grand Total 8,707.09
(x) The company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses during the financial
year and in the immediately preceding financial year.
(xi) According to the information and explanations given to us the
Company has not defaulted in repayment of dues to Financial
Institutions, Banks or debenture holders.
(xii) 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.
(xiii) In our opinion and according to the information and explanations
given to us, the Company is not a chit fund and or a nidhi/ mutual
benefit fund/ society. Therefore the provisions of sub-para (xiii) of
para 4 of the Order are not applicable to the Company.
(xiv) According to the information and explanation given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments. Therefore the provisions of sub-para (xiv) of para 4
of the Order are not applicable to the Company.
(xv) In our opinion and according to the information and explanations
given to us, the Company has not given guarantees for loans taken by
others from banks and financial institutions.
(xvi) In our opinion and according to the information and explanations
given to us, the term loans taken during the year, prima facie, have
been applied for the purpose for which they were raised.
(xvii) According to the information and explanations given to us, based
on an overall examination of the Balance Sheet, funds raised on
short-term basis have, prima facie, not been used for making long-term
(xviii) According to the information and explanations given to us,
during the year the Company has not made any preferential allotment of
shares to parties and companies covered in the Register maintained
under Section 301 of the Companies Act 1956.
(xix) The Company has created securities / charge as per the debenture
trust deed in respect of debentures issued and outstanding at the year
(xx) The Company has not raised any money through a public issue during
the financial year.
(xxi) According to the information and explanations given to us and
representations obtained from the management and based on our
examination in the normal course of audit, we report no material fraud
on or by the Company, has been noticed or reported during the year
For and on behalf of For and on behalf of
Om Agarwal& Co. B.K. Khare & Co.
Chartered Accountants Chartered Accountants
FR No:000971C FR No:105102W
K. C. Gupta Devdatta Mainkar
Membership No: 072936 Membership No: 109795
Place : New Delhi
Date : 29th May 2012