BPCL Auditors Report

We have audited the accompanying standalone financial statements of
Bharat Petroleum Corporation Limited ("the Corporation"), which
comprise the Balance Sheet as at March 31, 2016, the Statement of
Profit and Loss, the Cash Flow Statement for the year then ended, and a
summary of significant accounting policies and other explanatory
information.

Management''''s Responsibility for the Standalone Financial Statements

The Corporation''''s Board of Directors is responsible for the matters
stated in Section 134(5) of the Companies Act, 2013 ("the Act") with
respect to the preparation of these standalone financial statements
that give a true and fair view of the financial position, financial
performance and cash flows of the Corporation in accordance with the
accounting principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility
also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding of the assets of the
Corporation and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the standalone
financial statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.

Auditors'''' Responsibility

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

We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
thereunder.

We conducted our audit in accordance with the Standards on Auditing
issued by the Institute of Chartered Accountants of India as specified
under Section 143(10) of the Act. Those Standards require that we
comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether the standalone financial
statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the standalone financial statements. The
procedures selected depend on the auditors'''' judgment, including the
assessment of the risks of material misstatement of the standalone
financial statements, whether due to fraud or error. In making those
risk assessments, the auditor considers internal financial control
relevant to the Corporation''''s preparation of the standalone financial
statements that give a true and fair view in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by the
Corporation''''s Directors, as well as evaluating the overall presentation
of the standalone financial statements.

We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.

Opinion

In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Corporation
as at March 31, 2016, its profit and its cash flows for the year ended
on that date.

Report on Other Legal and Regulatory Requirements

(1) As required by the Companies (Auditor''''s Report) Order, 2016 ("the
Order") issued by the Central Government of India in terms of
sub-section (11) of Section 143 of the Act, we give in the "Annexure A"
, a statement on the matters specified in the paragraphs 3 and 4 of the
Order, to the extent applicable.

(2) As required by Section 143(5) of the Act, we give in "Annexure B",
a statement on the matters specified by the Comptroller and
Auditor-General of India for the Corporation.

(3) As required by Section 143(3) of the Act, we report that:

a. We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit;

b. In our opinion, proper books of account as required by law have
been kept by the Corporation so far as it appears from our examination
of those books;

c. The Balance Sheet, 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 aforesaid standalone financial statements
comply with the Accounting Standards specified under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e. In view of exemption given vide notification no. G.S.R. 463(E)
dated June 5 2015, issued by Ministry of Corporate Affairs, provisions
of Section 164(2) of the Act regarding disqualification of Directors,
are not applicable to the Corporation;

f. With respect to the adequacy of the internal financial controls
over financial reporting of the Corporation and the operating
effectiveness of such controls, we give our separate report in
"Annexure C";

g. With respect to the other matters to be included in the Auditors''''
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:

i. The Corporation has disclosed the impact of pending litigations on
its financial position in its standalone financial statements ? Refer
Note 49 of the standalone financial statements;

ii. The Corporation has made provision, as required under the
applicable law or accounting standards, for material foreseeable
losses, if any, on long-term contracts including derivative contracts ?
Refer Note 50 of the standalone financial statements;

iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Corporation.

ANNEXURE A TO INDEPENDENT AUDITORS'''' REPORT

[Referred to in paragraph 1 under ''''Report on Other Legal and Regulatory
Requirements'''' in the Independent Auditors'''' Report of even date to the
members of Bharat Petroleum Corporation Limited ("the Corporation") on
the standalone financial statements for the year ended March 31, 2016]

(i) (a) The Corporation has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets;

(b) As per information and explanations given to us, physical
verification of fixed assets (except LPG Cylinders and pressure
regulators with customers) has been carried out by the Management
during the year in accordance with the phased programme of verification
of all assets over three years which, in our opinion, is reasonable
having regard to the size of the Corporation and the nature of its
assets. As informed, no material discrepancies were noticed on such
verification;

(c) According to the information and explanations given to us and on
the basis of our examination of the records of the Corporation, the
title deeds of immovable properties are held in the name of the
Corporation, except in cases given below:

Particulars Number of Gross Block Net Block Remarks
Cases (Rs. in
Crore) (Rs. in
Crore)

Freehold land 27 132.90 132.90 Documents of
title lying
with
Registration
Authorities

Freehold land 2 2.26 2.26 Documents of
title not
available for
verification

Leasehold Land
having 9 1.76 1.70 Documents of
title
lease period
of more than lying with
Registration
99 years Authorities

Other leasehold
land 1 0.23 0.09 Document of
title lying
with
Registration
Authorities

(ii) The inventory (excluding stocks with third parties and goods in
transit) has been physically verified by the management during the year
at reasonable intervals. In respect of inventory lying with third
parties, these have substantially been confirmed by them. No material
discrepancies were noticed on physical verification of inventories
carried out at the end of the year;

(iii) As informed, the Corporation has not granted any loans, secured
or unsecured to companies, firms, limited liability partnerships or
other parties covered in the register maintained under Section 189 of
the Act. Accordingly, paragraphs 3(iii)(a), 3(iii)(b) and 3(iii)(c) of
the Order are not applicable;

(iv) In our opinion and according to the information and explanations
given to us, the Corporation has complied with the provisions of
section 185 and 186 of the Act, with respect to the loans, investments,
guarantees and securities;

(v) In our opinion and according to the information and explanations
given to us, the Corporation has not accepted any deposits within the
provisions of Sections 73 to 76 of the Act read with The Companies
(Acceptance of Deposits) Rules, 2014 and other relevant provisions of
the Act;

(vi) We have broadly reviewed the books of account maintained by the
Corporation in respect of products where the maintenance of cost
records has been specified by the Central Government under Section
148(1) of the Act and we are of the opinion that prima-facie, the
prescribed books of account and cost records have been made and
maintained. We have not, however, made a detailed examination of the
same with a view to determining whether they are accurate or complete;

(vii) (a) The Corporation is generally regular in depositing with
appropriate authorities, undisputed statutory dues including provident
fund, employees'''' state insurance, income-tax, sales-tax, service tax,
duty of customs, duty of excise, value added tax, cess and any other
material statutory dues applicable to it;

According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, employees''''
state insurance, income-tax, sales-tax, service tax, duty of customs,
duty of excise, value added tax, cess and any other material statutory
dues applicable to it, were outstanding, as on the last day of the
financial year, for a period of more than six months from the date they
became payable;

(b) According to the information and explanation given to us, the dues
of income-tax, sales-tax, service tax, duty of customs, duty of excise,
value added tax have not been deposited on account of any dispute, are
as per Statement 1;

(viii) According to the information and explanations given to us, the
Corporation has not defaulted in repayment of loans or borrowing to
financial institutions, banks, government or dues to debenture holders;

(ix) The Corporation did not raise any money by way of initial public
offer or further public offer (including debt instruments) during the
year. According to the information and explanations given to us, money
raised by way of term loans have been applied for the purpose for which
those were raised;

(x) 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 and according to the information and
explanations given to us, no instances of fraud by the Corporation or
on the Corporation by its officers and employees have been noticed or
reported during the year, except for the following instance of fraud
identified by the Management:

Two incidents of irregularities aggregating Rs. 0.25 crore were noticed
in vendor payment relating to the Retail Territory by an officer.
Inquiry against the concerned officer is in progress. The dues of the
vendor have been withheld;

(xi) In view of exemption given vide notification no. G.S.R. 463(E)
dated June 5 2015, issued by Ministry of Corporate Affairs, provisions
of Section 197 read with Schedule V of the Act regarding managerial
remuneration are not applicable to the Corporation. Accordingly,
paragraph 3(xi) of the Order is not applicable;

(xii) In our opinion and according to the information and explanations
given to us, the Corporation is not a Nidhi Company. Accordingly,
paragraph 3(xii) of the Order is not applicable;

(xiii) According to the information and explanations given to us and
based on our examination of the records of the Corporation, all
transactions entered into by the Corporation with the related parties
are in compliance with Sections 177 and 188 of the Act where applicable
and details of such transactions have been disclosed in the financial
statements, as required by the applicable accounting standards;

(xiv) According to the information and explanations given to us and
based on our examination of the records, the Corporation has not made
any preferential allotment or private placement of shares or fully or
partly convertible debentures during the year. Accordingly, paragraph
3(xiv) of the Order is not applicable;

(xv) According to the information and explanations given to us and
based on our examination of the records, the Corporation has not
entered during the year 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 Section
45-IA of the Reserve Bank of India Act 1934.

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

Details of dues outstanding with respect to, income-tax, sales tax,
service tax, duty of customs, duty of excise, value added tax attached,
on account of any dispute:

Rs. in Crores

Sr. Name of the
Statute Forum Where Dispute
is pending Amount Period block to
which it
No. relates^

1 Central
Excise
Act, 1944 Supreme Court 772.57 2000 - 2010

High Court 121.23 1995 - 2015

Appellate Tribunal * 1,060.01 1985 - 2016

Appellate Authority
** 30.67 1990 - 2016

Adjudicating
Authority *** 6,195.35 1995 - 2016

Total 8,179.83

2 Customs Act,
1962 Supreme Court -

Appellate Tribunal * 81.33 1990 - 2010

Appellate Authority
** 2.83 2000 - 2005

Adjudicating
Authority *** 10.54 2000 - 2016

Total 94.70

3 Income Tax
Act, 1961 High Court 7.65 1990 - 2005

Appellate Tribunal * 5.73 1990 - 2005

Appellate Authority
** 1.42 1995 - 2015

Total 14.80

4 Sales Tax/VAT
Legislations Supreme Court 65.38 1995 - 2010

High Court 400.36 1980 - 2016

Appellate Tribunal * 1,114.36 1985 - 2015

Appellate
Authority ** 7,834.13 1985 - 2015

Adjudicating
Authority *** 225.94 1985 - 2000

Total 9,640.17

5 Finance
Act,1994
(Service tax) Supreme Court 31.15 2000 - 2015

Appellate Tribunal * 19.60 2000 - 2016

Appellate
Authority ** 148.88 2000 - 2016

Adjudicating
Authority *** 168.40 2005 - 2016

Total 368.03

Grand Total: 18,297.53

Dues Include Penalty & Interest, wherever applicable

* Appellate Tribunal includes Sales Tax Tribunal, CESTAT and ITAT

** Appellate Authority includes Commissioner Appeals, Assistant
Commissioner Appeals, Deputy Commissioner Appeals, Joint Commissioner
Appeals and Deputy Commissioner Commercial Taxes Appeals.

*** Adjudicating Authority includes Collector of Sales Tax, Sales Tax
Officer and Deputy Commissioner Sales Tax, Joint/Deputy/Additional
Commissioner of Commercial Taxes etc.

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

ANNEXURE B TO INDEPENDENT AUDITORS'''' REPORT

[Referred to in paragraph 2 under ''''Report on Other Legal and Regulatory
Requirements'''' in the Independent Auditors'''' Report of even date to the
members of Bharat Petroleum Corporation Limited ("the Corporation") on
the standalone financial statements for the year ended March 31, 2016]

1 Areas Examined Whether the Company has clear title/lease deeds
for freehold and leasehold respectively? If
not, please state the area of freehold and
leasehold land for which title/lease deeds
are not available.

Observations/
Findings Particulars Area Remarks
(In Acres)

Freehold
land 261.82 Documents of title
lying with Registration
Authorities

Freehold
land 877.10 Document of title not
available for
verification

Leasehold
Land 3.35 Documents of title
lying with
Registration
having
lease Authorities
period of
more than
99 years

Other
leasehold 0.44 Document of title
lying with Registration
land Authorities

2 Areas Examined Whether there are any cases of waiver/write off
of debts/loans/interest etc., if yes, with
reasons there for and amount involved.

Observations/
Findings The details of cases of waiver/write off of
debts/loans/interest by the Corporation during
the year are as under:

Particulars Rs. in crores

Write off of debts 0.0012 *

Waiver of penalty & interest -

*(Rs. 11,512.58)

3 Areas Examined Whether proper records are maintained for
inventories lying with third parties and
assets received as gift/grant(s) from
Government or other authorities?

Observations/
Findings Proper records are maintained for inventories
lying with third parties;

The Corporation has not received any assets as
gift/grants from Government or other
authorities.


For CNK & ASSOCIATES LLP For HARIBHAKTI & CO. LLP

Chartered Accountants Chartered Accountants

ICAI FRN. 101961W ICAI FRN. 103523W

Sd/- Sd/-

Himanshu Kishnadwala Chetan Desai

Partner Partner

Membership No.: 37391 Membership No.: 17000

Place: Mumbai

Date: 26th May 2016

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