bharat petroleum corporation limite1

8/10/2019 Bharat Petroleum Corporation Limite1

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CHAPTER-1

INTRODUCTION

A systematic examination of financial or accounting records by a specialized inspecto

called an auditor, to verify their accuracy and truthfulness. A hearing during which

financial data are investigated for purposes of authentication.

The Internal Revenue Service(IRS) conducts two types of audits, called examination of

taxpayer returns, and they are typically conducted using one of two types of procedure

The most common auditing procedure involves correspondence between the service an

the taxpayer or interviews with the taxpayer in a local IRS office. A less common metho

involves field audits whereby IRS officials conduct the audit at the taxpayer's home o

place of business. Treas. Reg. 601.105(b)(1). The service determines which audi

procedure should be followed in a particular case. During an audit, an IRS official ma

question the taxpayer about a particular transaction or transactions that appear on thtaxpayer's return or may conduct a thorough investigation of the taxpayer's entire ta

return.

Although many people fear audits by the IRS, the percentage of returns examined by th

IRS is relatively low. For example, of 108,034,700 returns filed by taxpayers in 1997, th

IRS examined 1,662,641, or about 1.5 percent of the total number of returns. Despite thilow number, several stories surfaced in the 1980s and 1990s regarding abuses by IR

officials, many of which occurred during the audit process. Congress responded by

enacting two "Taxpayer Bill of Rights," first in 1989 and again in 1996. The second ac
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Department perform such duties and functions as are imposed on or undertaken by th

CAG under the provisions of the Constitution of India, or of any law made by Parliamen

Major auditorial functions of Pr.Accountant General (Civil Audit)

1. Audit of expenditure conducted under Section 13 of the Act, includes

Audit against provision of funds

This audit is aimed at ascertaining whether the moneys shown in the Accounts as spen

were legally available for and applicable to the service or purpose to which they had beeapplied or charged.

Regularity Audit

The objective of this audit is to see whether the expenditure conforms to the authority

which governs it.

Propriety Audit

Propriety Audit is directed towards examining the propriety of executive action beyon

the formality of expenditure to its wisdom, faithfulness and economy.

Efficiency-cum-performance or value for money Audit

It is a comprehensive appraisal of the progress and efficiency of the execution o

development and other programmes and schemes wherein an assessment is made as t


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whether these are executed economically and whether they are producing the result

expected of them.

Systems Audit

The concept of the Systems Audit is that if an an in-depth analysis of the mechanics o

the system reveals that it is designed with appropriate controls, checks and balances t

safeguard errors, frauds, etc. Audit can reasonably assume without the necessity of

detailed examination of the individual transactions, that the results produced by th

system would be fairly accurate.

2. Audit of Grants and Loans to various Bodies and Authorities under

Sections 14 and 15 of the Act

This Audit is undertaken on the accounts of authorities and bodies receiving financia

assistance in the form of grants and or loans from Government of India or a State o

Union Territory, subject to certain conditions specified in those sections.

3. Audit under Section 20

This section deals with audit of bodies or authorities which have not been entrusted to th

CAG by or under any law made by Parliament, he shall, if requested so to do by the

President or the Governor of a State or the Administrator of a Union territory having

Legislative Assembly, as the case may be, undertake the audit of the accounts of such

body or authority on such terms and conditions as may be agreed upon between him an

the concerned Government.


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CHAPTER-2

RESEARCH METHODOLOGY

Audit Objectives, Scope, Methodology and Approach

Audit Objectives and Scope

The objective of this audit was to conduct a thorough program audit on all aspects relate

to the Western Diversification Program life cycle. As such, the auditors examined key

internal processes and controls as well as compliance to the Financial Administratio

Act, WDP Terms and Conditions, and Treasury Board Policies with respect to:

Program Design - Review program Terms and Conditions, financial and

performance reporting at the program level, review and document approval

authorities, as well as controls and processes.

Program Operations - Review controls required to ensure due diligence;

review and approve applications in a complete and appropriate manner and

provide persuasive assessments based on relevant documentation to suppor

decisions to approve assistance. Review controls required to ensure responsible

fund management, and to ensure that resources are used efficiently and that

payments and repayments occur in a timely manner.

Review and Evaluation - Review findings of past audit and evaluation

reports and assess the status of actions taken as a result of past studies.


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The scope of the audit included an examination of all activities related to WDP and it

sub-components, including the management control framework in place at departmenta

headquarters and at the four regional offices. The Liaison Office in Ottawa was exclude

from the scope of this audit as it is not involved in the direct delivery of the WDP.

Audit Methodology and Approach

In accordance with the audit objectives and the Government of Canada Internal Audi

Standards, the audit was carried out in three phases: the planning phase, the conduc

phase, and the reporting phase.

During the planning phase, the auditors proceeded with a thorough review of document

provided by the department, and of the Treasury Board Secretariat of Canada policies t

gain an understanding of the overall legislative and policy framework, as well as th

processes relevant to the audit scope. Preliminary interviews were conducted with

departmental corporate and regional personnel to gain greater knowledge of managemencontrols and processes in place for the WDP, and to identify key risks associated with th

delivery of the program.

The purpose of the planning phase was to develop a Risk-Based Audit Program tha

provides a basis for the orderly, efficient, and cost effective conduct of the audit as wel

as a criteria base for assessment.

During the conduct phase, the audit team visited, as per the scope of the audit,

headquarters in Edmonton, and the four regional offices. From these visits, the audit team


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selected documents; conducted interviews, performed project file reviews, and debriefe

management on preliminary findings.

Findings for each line of enquiry were summarized and referenced on fact sheets. Factsheets were prepared for each region and for headquarters and then grouped to reflec

audit findings at the program level.

Key Audit Risks

The audit program was designed to test management's controls that have been develope

to mitigate the following key risks associated with the Western Diversification Program:

The WDP authorities are not renewed on time and expire;

Inadequate due diligence is conducted on projects;

There is a lack of clarity over eligibility criteria and assessment against the

criteria;

Ineligible expenses are funded;

Non compliance to Treasury Board policies or the Financial Administration Act

and

Non compliance with the Treasury Board authorities for the WDP.


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CHAPTER-3

PROFILE OF THE COMPANY

Bharat Petroleum Corporation Limited

Birth of the Company

Bharat Petroleum Corporation Limited forms a new chapter in the history of Indian

industry. Petroleum (derived from Latin Petra - rock and oleum - oil) first came up in

wells drilled for salt. People found it useful as illuminating oil and the demand for i

steadily increased. Samuel Kier, a Pittsburgh druggist, had bottled and marketed

Petroleum as a medicinal cure. To market a deodorised variant, the company had

designed the first primitive refinery in 1852, which was a huge improvised kettle

connected to a metal tank. 'Colonel' Edwin Drake and 'Uncle' Billy Smith drilled a wel

with the specific objective of finding oil, and on 27th August 1859, they 'struck oil' a

Titusvale, in North Western Pennsylvania, USA, at a depth of 69.5 ft.


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The 1860's saw vast industrial development. A lot of petroleum refineries also came up

An important player in the South Asian market then was the Burmah Oil Company

Though incorporated in Scotland in the year 1886, the company grew out of th

enterprises of the Rangoon Oil Company, which had been formed in the year 1871 t

refine crude oil produced from primitive hand dug wells in Upper Burma. The search fo

oil in India began in the year 1886, when Mr. Goodenough of McKillop Stewar

Company drilled a well near Jaypore in upper Assam and struck oil. In 1889, the Assam

Railway and Trading Company (ARTC) struck oil at Digboi marking the beginning of o

production in India.

While discoveries were made and industries had been expanded, John D Rockefelle

together with his business associates acquired control over numerous refineries an

pipelines to later form the giant Standard Oil Trust. In 1928, Asiatic Petroleum (India

joined hands with Burmah Oil Company - an active producer, refiner and distributor o

petroleum products, particularly in Indian and Burmese markets. This alliance had led t

the formation of Burmah-Shell Oil Storage and Distributing Company of India Limited

A pioneer in more ways than one, Burmah Shell began its operations with import an

marketing of Kerosene. This was imported in bulk and transported in 4 gallon and

gallon tins through rail, road and country craft all over India. The company took up th

challenge of reaching out to the people even in the remote villages to ensure every hom

had its supply of kerosene. The development and promotion of the most efficien

kerosene-burning appliances for lighting and cooking was an important part of kerosen

selling activity.


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With motor cars, came canned Petrol, followed by service stations. In the 1930's, retai

sales points were built with driveways set back from the road; service stations began to

appear and became accepted as a part of road development. After the war Burmah She

was established in an efficient and up-to-date service and filling stations to give the

customers the highest possible standard of service facilities.

On 15th October 1932, when civil aviation arrived in India, the company had the honou

of fuelling J.R.D. Tata's historic solo flight in a single engined de Havillian Puss Moth

from Karachi to Bombay (Juhu) via Ahmedabad. Thirty years later, i.e. in 1962, BurmaShell again had the privilege to fuel JRD Tata's re-enactment of the original flight

Burmah Shell also fuelled flying boats, which carried air-mail at slightly higher rates tha

sea transport, at several locations.

Shaping the Future

The core strength of Bharat Petroleum Corporation Limited has always been the arden

pursuit of qualitative excellence for maximisation of customer satisfaction. Thus Bhara

Petroleum, the erstwhile Burmah Shell, has today become one of the most formidabl

names in the petroleum industry. Bharat Petroleum produces a diverse range of products

from petrochemicals and solvents to aircraft fuel and speciality lubricants and market

them through its wide network of Petrol Stations, Kerosene Dealers, LPG DistributorsLube Shoppes, besides supplying fuel directly to hundreds of industries, and severa

international and domestic airlines.


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Dynamic growth post nationalisation and also following nationalisation in 1976, Bhara

Petroleum changed gears and embarked upon a rapid growth path. Turnover, profitabilit

and financial reserves grew by leaps and bounds. Massive expansion and modernisatio

provided a tremendous boost to the company's performance. Large-scale recruitment an

training became critically important to meet the demands of expansion. A transforme

Organisation emerged and the opening up of the Indian economy in the nineties brough

with it more competition and challenges, kindled by the phased dismantling of th

Administered Pricing Mechanism (APM) and emergence of additional capacities in th

region in refining and marketing.

In 1996, Bharat Petroleum went through a process of visioning, involving people at a

levels, which evolved a shared vision and a set of shared values. Based on this, th

company restructured itself, in a proactive move to adapt to the emerging competitiv

scenario. The function-based structure was carefully dismantled and replaced with

process-based one. This made the company more responsive to its customer needs

Bharat Petroleum realises that, in the long run, success can only come with a tota

reorientation and change in approach with the customer as the focal point. Today, Bhara

Petroleum is restructured into a Corporate Centre, Strategic Business Units (SBUs) an

Shared Services and Entities. The organisational design comprises of five customer

facing SBUs, viz. Aviation, Industrial and Commercial, LPG, Lubricants and Retail and

one asset based SBU, viz. Refinery, is based on the philosophy of greater customer focus

The Planned Approach: Increasing globalisation, new products and services, and

innovative marketing have resulted in a very market savvy consumer. The production


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based success philosophy of marketers is now replaced by a customer-oriented

philosophy. Bharat Petroleum has taken cognisance of this particular situation well i

time and has been taking radical steps to keep itself attuned to the changing times

realising that the future belongs to those who listen and adapt to their customers

Strategy Development: the organization recognises that all strategic initiatives mus

conform to the overall vision of the Corporation and mostly to improve the economi

value. The Strategy Development effort at the corporate level had achieved better focu

in the new organisational structure, besides facilitating the SBUs in developing theirespective strategies that lead to an integrated Corporate Strategy. A Business Plannin

process has been put in place that not only provides opportunities for the SBU's to pursu

their visionary goals in consonance with the Corporate Vision, but also continuousl

monitors trends and identifies strategic opportunities for the Corporation.

Brand Management: In the highly competitive scenario, it has become very much

imperative to own dominant brands. The Brand Management team at Bharat Petroleum

endeavours to build and manage a strong brand image reflecting Bharat Petroleum's cor

values of being 'INCARE', viz. INnovative, CAring and REliable. Emphasis had bee

laid on continuously understanding customer behaviour, tracking their changing need

and expectations, and meeting these needs in the most cost-effective manner.

Research and Development : Bharat Petroleum is making distinct efforts towards most o

the Research and Development. Besides the R and D facilities at the Refinery areas an


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the Product Application Development Centre in Sewree in Mumbai, a new state-of-the

art R and D Centre is set up nearby Delhi. The R and D Centre is organised around thre

core groups - Process and Technology Development, Product Application Developmen

and Environmental Engineering.

Human Resources

Over the years, Bharat Petroleum continues to

meet the challenges of the rapidly changing

environment, leading to changes in the marketing

of products and services. In all these changes,

only one factor has remained constant and has

been the source of Bharat Petroleum's strength

and inspiration for any future innovations -

Bharat Petroleum's People. The feeling of

ownership has facilitated all employees tounderstand the complexity of the market and

needs of the customers, and respond to these

needs with innovative initiatives and offerings.

Awards

Bharat Petroleum was applauded with two prestigious Communication Awards at th

Golden Jubilee function of the Annual Association of Business Communicators of Indi

(ABCI) Awards Nite held at the Taj Mahal Hotel, Mumbai on 11th November 2010


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Every year, ABCI recognizes and rewards leading corporates for their excellent

contribution in the field of Business Communication. In fact, it is a mark of prestige to

get an ABCI Award.

BPCL won the Silver Award for its Inhouse Publication, Petro Plus and the Bronze

Award for its Online Web Campaign. BPCL shined at Petrotech 02 Nov 2010 intralink

Bharat Petroleum was awarded the 1st position under the Best Display in Raw Space

category during a spectacular awards ceremony at Petrotech-2010 exhibition at Praga

Maidan, New Delhi.Its website www.bharatpetroleum.in bagged the first prize in the category Most user

friendly website (editors choice) in the India eGov 2.0 Awards 2010. The magazine

eGov is Asia s first and only print -cum-online magazine which is on e-Governance.

BPCL is among the Top 10 Valuable Brands in India. A brand led business design is a

necessity to deliver on the business full potential. With a customer centric approach the

organization has over the years passionately nurtured Brands and this has resulted in th

company enjoying a good status in the Corporate world.

Bharat Petroleum Corporation Limited (BPCL) is an Indian state-controlledoil and gas

company headquartered inMumbai, Maharashtra. BPCL has been ranked 229th in the

Fortune Global 500rankings of the world's biggest corporations for the year 2013.
http://en.wikipedia.org/wiki/Oilhttp://en.wikipedia.org/wiki/Gashttp://en.wikipedia.org/wiki/Mumbai,_Maharashtrahttp://en.wikipedia.org/wiki/Fortune_Global_500http://en.wikipedia.org/wiki/Fortune_Global_500http://en.wikipedia.org/wiki/Mumbai,_Maharashtrahttp://en.wikipedia.org/wiki/Gashttp://en.wikipedia.org/wiki/Oil


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Company History

Bharat Petroleum Corporation ( BPCL) was established in 1952. It is one of the leadin

company in the petroleum sector in India.The 1860s saw vast industrial development. A lot of petroleum refineries als

came up. An important player in the South Asian market then was the Burmah Oi

Company. Though incorporated in Scotland in 1886, the company grew out of th

enterprises of the Rangoon Oil Company, which had been formed in 1871 to refine crud

oil produced from primitive hand dug wells in Upper Burma. The search for oil in Indi

began in 1886, when Mr. Goodenough of McKillop Stewart Company drilled a well nea

Jaypore in upper Assam and struck oil. In 1889, the Assam Railway and Trading

Company (ARTC) struck oil at Digboi marking the beginning of oil production in India.

On 24th January 1976, the Burmah Shell Group of Companies was taken over by th

Government of India to form Bharat Refineries Limited. On 1st August 1977, it wa

renamed Bharat Petroleum Corporation Limited. It was also the first refinery to proces

newly found indigenous crude (Bombay High), in the country.

In 1889 during vast industrial development, an important player in the South Asia

market was theBurmah Oil Company. Though incorporated in Scotland in 1886, the

company grew out of the enterprises of the Chef Rohit Oil Company, which had bee

formed in 1871 to refine crude oil produced from primitive hand dug wells in Uppe

Burma.
http://en.wikipedia.org/wiki/Burmah_Oilhttp://en.wikipedia.org/wiki/Burmah_Oil


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In 1928, Asiatic Petroleum Company(India) started cooperation with Burma oil

company. This alliance led to the formation of Burmah-Shell Oil Storage and

Distributing Company of India Limited. Burmah Shell began its operations with impor

and marketing of Kerosene.

On 24 January 1976, the Burmah Shell was taken over by the Government of India t

form Bharat Refineries Limited. On 1 August 1977, it was renamed Bharat Petroleum

Corporation Limited. It was also the first refinery to process newly found indigenou

crude Bombay High.

In 2003, following a petition by theCentre for Public Interest Litigation, the Supreme

Court restrained the Central government from privatizingHindustan Petroleumand

Bharat Petroleum without the approval of Parliament.[3] As counsel for the CPIL,

Rajinder Sacharand Prashant Bhushansaid that the only way to disinvest in the

companies would be to repeal or amend the Acts by which they were nationalized in th

1970s.

Business area:

BPCL is into exploration, production and retailing of petroleum and petrol related

products.The retail busines unit of BPCL is into marketing of petrol, diesel and kerosen

.It has network of 6553 retail outlets and 1007 kerosene dealers and is partnered with bifood chain companies like McDonald?s, Pizza Hut, Caf?? Coffee Day

Subway, Nirulas , etc.
http://en.wikipedia.org/wiki/Asiatic_Petroleum_Companyhttp://en.wikipedia.org/wiki/Bombay_Highhttp://en.wikipedia.org/wiki/Centre_for_Public_Interest_Litigationhttp://en.wikipedia.org/wiki/Hindustan_Petroleumhttp://en.wikipedia.org/wiki/Bharat_Petroleum#cite_note-Rautray20110304-3http://en.wikipedia.org/wiki/Bharat_Petroleum#cite_note-Rautray20110304-3http://en.wikipedia.org/wiki/Bharat_Petroleum#cite_note-Rautray20110304-3http://en.wikipedia.org/wiki/Rajinder_Sacharhttp://en.wikipedia.org/wiki/Prashant_Bhushanhttp://en.wikipedia.org/wiki/Prashant_Bhushanhttp://en.wikipedia.org/wiki/Rajinder_Sacharhttp://en.wikipedia.org/wiki/Bharat_Petroleum#cite_note-Rautray20110304-3http://en.wikipedia.org/wiki/Hindustan_Petroleumhttp://en.wikipedia.org/wiki/Centre_for_Public_Interest_Litigationhttp://en.wikipedia.org/wiki/Bombay_Highhttp://en.wikipedia.org/wiki/Asiatic_Petroleum_Company


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It also offers full range of automotive engine, gear oils, transmission oils, speciality oil

and greases .It caters to around 8000 industrial customers across India.It also provid

Aviation Turbine fuel (ATF) to its airline customers.

Its LPG business unit ??Bharatgas?? has presence in 25 million

households with 2137 LPG distributors spread across the country.

BPCL has two refineries at Mumbai and Kochi with a capacity of 12 Million Metri

Tonnes Per Annum (MMTPA) and 7.5 MMTPA for refining crude oil. Its subsidiary at

Numaligarh has capacity of 3 MMTPA.

BPCL is one of the supplier of naptha in Andhra Pradesh has committed to AP Transco t

supply sufficient quantities of naptha for operation of its four power station.

BPCL has launched a GPS technology for tracking vehicles for its 5,200 tanker truck

fleet.This system will help the company track the trucks for better logistic efficiency.Thi

will result in prevention of pilferages and fuel adulteration.


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CHAPETR-4

AUDIT REPORT OF BHARAT PETROLEUM

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BHARAT

PETROLEUM CORPORATION LIMITED

Report on the Financial Statements

We have audited the accompanyingFinancial Statements of Bharat Petroleum

Corporation Limited ("the Corporation"), which comprise the Balance Sheet as at Marc

31, 2014, the Statement of Profit and Loss and Cash Flow Statement for the year the

ended and a summary of significant accounting policies and other explanatory

information.

Management's Responsibility for the FinanciaL Statements

The Management is responsible for the preparation of these Financial Statements tha

give a true and fair view of the financial position, financial performance and cash flow

of the Corporation in accordance with the Accounting Standards referred to in sub

section (3C) of Section 211 of the Companies Act, 1956 ("the Act") read with the

General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affair

in respect of Section 133 of the Companies Act, 2013. This responsibility includes th

design, implementation and maintenance of internal control relevant to the preparatio

and presentation of the Financial Statements that give a true and fair view and are fre

from material misstatement, whether due to fraud or error.
http://profit.ndtv.com/stock/bharat-petroleum-corporation-ltd_bpcl/reports-auditor-reporthttp://profit.ndtv.com/stock/bharat-petroleum-corporation-ltd_bpcl/reports-auditor-reporthttp://profit.ndtv.com/stock/bharat-petroleum-corporation-ltd_bpcl/reports-auditor-reporthttp://profit.ndtv.com/stock/bharat-petroleum-corporation-ltd_bpcl/reports-auditor-reporthttp://profit.ndtv.com/stock/bharat-petroleum-corporation-ltd_bpcl/reports-auditor-reporthttp://profit.ndtv.com/stock/bharat-petroleum-corporation-ltd_bpcl/reports-auditor-report


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Auditors' Responsibility

Our responsibility is to express an opinion on these Financial Statements based on ou

audit. We conducted our audit in accordance with the Standards on Auditing issued bthe Institute of Chartered Accountants of India. Those Standards require that we compl

with ethical requirements and plan and perform the audit to obtain reasonable assuranc

about whether the Financial Statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts an

disclosures in the Financial Statements. The procedures selected depend on the auditor judgment, including the assessment of the risks of material misstatement of the Financia

Statements, whether due to fraud or error. In making those risk assessments, the audito

considers internal control relevant to the Corporation's preparation and fair presentatio

of the Financial Statements in order to design audit procedures that are appropriate in th

circumstances, but not for the purpose of expressing an opinion on the effectiveness o

the Corporation's internal control. An audit also includes evaluating the appropriatenes

of accounting policies used and the reasonableness of the accounting estimates made b

Management, as well as evaluating the overall presentation of the Financial Statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to

provide a basis for our audit opinion.


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Opinion

In our opinion and to the best of our information and according to the explanations give

to us, the Financial Statements give the information required by the Act in the manner srequired and give a true and fair view in conformity with the accounting principle

generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Corporation as at March

31, 2014;

(b) in the case of the Statement of Profit and Loss, of the profit for the year ended on tha

date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on tha

date.

Emphasis of matter:

We draw attention to Note 49(c) to the financial statements regarding recognition o

marked to market loss of Rs. 324.35 crore on swap contracts. However, the marked t

market gain of Rs. 521.14 crore to cover the risk on above transaction is not recognise

for reasons stated in the Note. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors' Report) Order, 2003 ("the Order") issued by

the Central Government of India in terms of sub section (4A) of Section 227 of the Act,


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we give in the Annexure, a statement on the matters specified in paragraphs 4 and 5 o

the Order.

2. As required by Section 227(3) of the Act, we report that:

a. we have obtained all the information and explanations, which to the best of ou

knowledge and belief were necessary for the purpose of our audit;

b. in our opinion proper books of account as required by law have been kept by th

Corporation so far as appears from our examination of those books;

c. the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt wit

by this Report are in agreement with the books of account;

d. in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow

Statement comply with the Accounting Standards referred to in sub section (3C) of

Section 211 of the Act read with the General Circular 15/2013 dated September 13, 201of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act

2013, except some disclosures as required under Accounting Standard 19, 'Accountin

for Leases' are not made (Refer Note 43 of attached financial statements);

e. In view of exemption given vide notification no. G.S.R. 829 (E) dated 21st October

2003 issued by Ministry of Corporate Affairs, provisions of clause (g) of sub section (1)

of Section 274 of the Act are not applicable to the Corporation.


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ANNEXURE TO INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirement

in the Independent Auditors' Report of even date to the members of Bharat PetroleumCorporation Limited ("the Corporation") on the financial statements for the year ende

March 31, 2014)

(i) (a) The Corporation has maintained proper records showing full particulars, includin

quantitative details and situation of fixed assets.

(b) As per information and explanations given to us, physical verification of fixed asset

(except as stated below) has been carried out by the Management during the year i

accordance with the phased programme of verification of all assets over three year

which, in our opinion, is reasonable having regard to the size of the Corporation and th

nature of its assets. As informed, no material discrepancies were noticed on such

verification. LPG Cylinders and pressure regulators with customers are not physicallyverified by the Management.

(c) In our opinion and according to the information and explanations given to us,

substantial part of fixed assets has not been disposed off by the Corporation during th

year.

(ii) (a) The inventory (excluding stocks with third parties and inventories in transit) ha

been physically verified by the Management during the year. In respect of inventory lyin

with third parties, these have substantially been confirmed by them. In our opinion, th

frequency of verification is reasonable.


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(b) The procedures of physical verification of inventory followed by the Management ar

reasonable and adequate in relation to the size of the Corporation and the nature of it

business.

(c) The Corporation is maintaining proper records of inventory and no material

discrepancies were noticed on physical verification carried out at the end of the year.

(iii) (a) As informed, the Corporation has not granted any loans, secured or unsecured t

companies, firms or other parties covered in the register maintained under Section 301 o

the Companies Act, 1956 ("the Act"). Accordingly, the provisions stated in paragraph (iii)(b),(c) and (d) of the order are not applicable.

(b) As informed, the Corporation has not taken any loans, secured or unsecured from

companies, firms or other parties covered in the register maintained under Section 301 o

the Act. Accordingly, the provisions stated in paragraph 4 (iii)(f)and (g) of the order ar

not applicable.

(iv) In our opinion and according to the information and explanations given to us, ther

exists generally an adequate internal control system commensurate with the size of th

Corporation and the nature of its business with regard to purchase of inventory, fixed

assets and with regard to the sale of goods and services. During the course of our audit

we have not observed any continuing failure to correct weakness in internal contro

system of the Corporation.


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(v) According to the information and explanations given to us, we are of the opinion tha

there have been no contracts or arrangements referred to in Section 301 of the Act tha

need to be entered into the register maintained under said Section.

(vi) In our opinion and according to the information and explanations given to us, th

Corporation has not accepted any deposits from the public within the meaning o

Sections 58A and 58AA of the Act and the rules framed there under.

(vii) In our opinion, the Corporation has an internal audit system commensurate with th

size and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Corporation i

respect of products where, pursuant to the Rules made by the Central Government o

India, the maintenance of cost records has been prescribed under clause (d) of sub

section (1) of Section 209 of the Act and we are of the opinion that prima facie, th

prescribed accounts and records have been made and maintained.

(ix) (a) The Corporation is generally regular in depositing with appropriate authoritie

undisputed statutory dues including provident fund, investor education and protectio

fund, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and

other statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amount

payable in respect of provident fund, investor education and protection fund, employee

state insurance, income tax, wealth tax, service tax, sales tax, customs duty, excise


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duty, cess and other undisputed statutory dues were outstanding, at the year end, for

period of more than six months from the date they became payable.

(c) According to the records of the Corporation, the dues outstanding of income tax,sales tax, wealth tax, service tax, customs duty, excise duty and cess on account of any

dispute, are as per Annexure A.

(x) The Corporation has no accumulated losses at the end of the financial year and it ha

not incurred cash losses in the current and immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, th

Corporation has not defaulted in repayment of dues to a financial institution, bank o

debenture holders.

(xii) According to the information and explanations given to us and based on the

documents and records produced to us, the Corporation has not granted loans & advance

on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Corporation is not a chit fund or a nidhi / mutual benefit fund

society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Companies

(Auditor's Report) Order, 2003 (as amended) are not applicable to the Corporation.

(xiv) In our opinion, the Corporation is not dealing in or trading in shares, securities

debentures and other investments. Accordingly, the provisions of clause (xiv) of

paragraph 4 of the Companies (Auditor's Report) Order, 2003 (as amended) are no

applicable to the Corporation.


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(xv) In our opinion and according to the information and explanations given to us, th

terms and conditions of the guarantees given by the Corporation, for loans taken by

subsidiary companies and others from banks or financial institutions during the year, ar

not prejudicial to the interest of the Corporation.

(xvi) In our opinion, the term loans have been applied for the purpose for which the loan

were raised.

(xvii) According to the information and explanations given to us and on an overal

examination of the Balance Sheet of the Corporation, we report that no funds raised oshort term basis have been used for long term investment.

(xviii) According to the information and explanation given to us, the Corporation has no

made any preferential allotment of shares to parties and companies covered in the

Register maintained under Section 301 of the Act.

(xix) According to the information and explanations given to us, no debentures have bee

issued by the Corporation during the year.

(xx) The Corporation has not raised money by way of public issue during the year.

(xxi) During the course of our examination of the books and records of the Corporation

carried out in accordance with the generally accepted auditing practices in India, an

according to the information and explanations given to us, we have neither come acros

any instance of fraud on or by the Corporation, noticed or reported during the year

except for following instances of fraud identified by the Management :


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a) The incident of an irregularity of Rs. 0.60 crore by a Corporation Owned Corporatio

Operated retail outlet operator. The amount has since been recovered.

b) The incident of an irregularity of Rs. 0.15 crore relating to the Retail Territory by aofficer. The amount has since been recovered.

c) The fraud of Rs. 0.01 crore in respect of procurement of services committed by an

officer at a Retail Territory. Disciplinary action has been taken against the officer

concerned.


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PROFIT AND LOSS OF BHARAT PETROLEUM CORPORATION

LIMITED

ParameterMAR'14

( Cr.)

MAR'13

( Cr.)

Change

%

Gross Sales 2,71,037.34 2,50,649.27 8.13%

Less :Inter divisional transfers 0.00 0.00 0.00%

Less: Sales Returns 0.00 0.00 0.00%

Less: Excise 10,976.82 10,533.51 4.21% Net Sales 2,60,060.53 2,40,115.75 8.31%

EXPENDITURE:

Increase/Decrease in Stock -1,860.83 -1,508.37-

23.37%

Raw Materials Consumed 2,40,095.30 2,23,309.09 7.52%

Power & Fuel Cost 1,196.89 904.92 32.26%

Employee Cost 2,896.35 2,768.87 4.60%

Other Manufacturing Expenses 5,706.93 4,839.16 17.93%

General and Administration Expenses 1,689.13 1,751.07 -3.54%

Selling and Distribution Expenses 0.00 0.00 0.00%

Miscellaneous Expenses 2,250.54 2,108.13 6.76%Expenses Capitalised 0.00 0.00 0.00%

Total Expenditure 2,51,974.31 2,34,172.88 7.60%

PBIDT (Excl OI) 8,086.22 5,942.88 36.07%


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Other Income 1,468.66 1,844.15-

20.36%

Operating Profit 9,554.88 7,787.03 22.70%

Interest 1,359.08 1,825.24-

25.54%

PBDT 8,195.80 5,961.79 37.47%

Depreciation 2,246.82 1,926.10 16.65%

Profit Before Taxation & Exceptional Items 5,948.98 4,035.69 47.41%

Exceptional Income / Expenses 0.00 0.00 0.00%Profit Before Tax 5,948.98 4,035.69 47.41%

Provision for Tax 1,888.10 1,392.79 35.56%

PAT 4,060.88 2,642.90 53.65%

Extraordinary Items 0.00 0.00 0.00%

Adj to Profit After Tax 0.00 0.00 0.00%

Profit Balance B/F 500.00 500.00 0.00%

Appropriations 4,560.88 3,142.90 45.12%

Equity Dividend (%) 170.00 110.00 54.55%

Earnings Per Share (in) 56.16 36.55 53.65%

Book Value (in) 267.72 229.68 16.57%


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BALANCESHEET OF BHARAT PETROLEUM LIMITED

ParameterMAR'14

( Cr.)

MAR'13

( Cr.)

YoY

%ChangeEQUITY AND LIABILITIES

Share Capital 723.08 723.08 0.00%

Share Warrants & Outstandings

Total Reserves 18,735.68 15,910.94 17.75%

Shareholder's Funds 19,458.76 16,634.02 16.98%

Long-Term Borrowings 0.00 0.00 0.00%

Secured Loans 700.00 700.00 0.00%

Unsecured Loans 11,108.36 4,808.37 131.02%

Deferred Tax Assets / Liabilities 1,360.90 1,655.72 -17.81%

Other Long Term Liabilities 60.74 60.82 -0.13%

Long Term Trade Payables 0.00 0.00 0.00%Long Term Provisions 1,157.31 1,092.01 5.98%

Total Non-Current Liabilities 14,387.31 8,316.92 72.99%

Current Liabilities

Trade Payables 12,166.83 8,883.28 36.96%

Other Current Liabilities 15,562.22 13,417.59 15.98%

Short Term Borrowings 8,183.70 18,058.42 -54.68%

Short Term Provisions 2,668.59 1,661.30 60.63%

Total Current Liabilities 38,581.34 42,020.59 -8.18%
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Total Liabilities 72,427.41 66,971.53 8.15%

ASSETS

Non-Current Assets 0.00 0.00 0.00%

Gross Block 38,163.78 33,674.78 13.33%

Less: Accumulated Depreciation 19,124.27 16,984.37 12.60%

Less: Impairment of Assets 0.00 0.00 0.00%

Net Block 19,039.51 16,690.41 14.07%

Lease Adjustment A/c 0.00 0.00 0.00%

Capital Work in Progress 2,716.06 2,296.30 18.28%Intangible assets under development 0.00 2.53 -100.00%

Pre-operative Expenses pending 349.04 120.91 188.68%

Assets in transit 0.00 0.00 0.00%

Non Current Investments 7,238.10 6,942.10 4.26%

Long Term Loans & Advances 2,826.78 2,108.67 34.06%

Other Non Current Assets 505.81 404.33 25.10%

Total Non-Current Assets 32,675.30 28,565.25 14.39%

Current Assets Loans & Advances

Currents Investments 4,608.79 5,160.90 -10.70%

Inventories 19,071.13 16,690.37 14.26%

Sundry Debtors 4,080.16 4,025.13 1.37%

Cash and Bank 203.76 2,328.86 -91.25%

Other Current Assets 10,869.03 9,252.38 17.47%

Short Term Loans and Advances 819.03 921.95 -11.16%


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Total Current Assets 39,651.90 38,379.59 3.32%

Net Current Assets (Including Current Investments) 1,070.56 -3,641.00 -129.40%

Total Current Assets Excluding Current Investments 35,043.11 33,218.69 5.49%

Miscellaneous Expenses not written off 100.21 26.69 275.46%

Total Assets 72,427.41 66,971.53 8.15%

Contingent Liabilities 7,635.25 9,004.94 -15.21%

Total Debt 20,321.56 23,839.04 -14.76%

Book Value (in) 267.72 229.67 16.57%

Adjusted Book Value (in) 267.72 229.6716.57%


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CHAPTER-5

CONCLUSION

Some progress has been made to improve the management of government office

accommodation but a strategic whole-of-government approach recommended in our 200

report and planned under Works Reform in 2009 has not been fully implemented

Finance does not have a mandate to manage all government office accommodation an

there is still no comprehensive whole-of-government data. The total size, cost and densit

rates of government office space are not known. This lack of baseline information limitFinance s ability to plan for whole -of-government long term office accommodation and

makes it less likely that government will derive maximum benefit from the Works

Reform program. It also makes it difficult to demonstrate the achievement of strategi

objectives and outcomes or for us to offer any opinion on whether the management an

use of office accommodation is more efficient or cost effective than in 2006.

Finance has improved the management of the government office accommodation that i

within its remit. It has adopted a staged transition from a piecemeal to a master plannin

approach. Operationally, Finance has prioritised and successfully relocated around 5 00

staff in the CBD. In doing so it applied some of the principles set out in Works Reform t

the parts of government office accommodation that are centrally managed. It has

consolidated accommodation in the Perth CBD and CBD fringe into fewer buildings an

over 13 000m of space has been moved out of the Perth CBD and CBD fringe. Capita

investment of $163 million on fit outs, upgrades and changes to meet building cod

requirements were required. However, the result was improved office space usage and


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mitigated increases in the cost of leasing office accommodation estimated at $18.1

million a year.

bharat petroleum corporation limite1

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